A CONFIDENTIAL Security Branch memo to the Governor, Mr Chris Patten, plays down the impact of piracy and repeated harassment of Vietnamese shipping on Hongkong's status, and has angered Marine Department and shipping industry officials. The Secretary for Security, Mr Alistair Asprey, sent the brief, obtained by the South China Morning Post, to Government House on Tuesday offering ''the line to take''. It outlined the importance of ''distinguishing between piracy and interceptions'' and said interceptions by Chinese authorities in Chinese waters were outside Hongkong's jurisdiction. The memo said the impact had been ''largely limited'' to small coastal trade and noted only two recent attacks of piracy near Hongkong. This contradicts Marine Department figures that list at least 18 piracy cases in the South China Sea so far this year. ''Hongkong's status as a port should not be hindered,'' the memo said. ''Incursions do occur but police liaison is good and effective. Incidents kept to a minimum.'' The paper mentioned high tariffs on consumer goods imported into China but said nothing of smuggling on the Hongkong to Vietnam trade route, which has been targeted by Chinese gunboats waiting just outside territorial waters. The brief comes as Hongkong shipping agents seek news on three Vietnamese ships seized on Thursday night trying to sail past Chinese boats waiting in a convoy. A Scarbrook Shipping spokesman said he believed the ships had been seized in illegal actions, as the goods on board were destined for southern Vietnam. ''Hongkong is a free port, but it is now getting very expensive for us,'' he said. Several Scarbrook ships have been among the 22 seized so far this year, three inside Hongkong waters, according to latest Marine Department figures. The Security Branch brief mentions 12 seizures. The director of the Hongkong Shipowners' Association, Mr Michael Farlie, last night warned of the need for a more hard-line approach in future. ''We can accept the reasons for the blandness at this stage,'' Mr Farlie said. ''But we would like to see stronger language as events evolve and we would hope that full details can be explained fully on an on-going basis to higher authorities.'' The association is preparing to launch Hongkong's merchant shipping problems on the international stage at two major shipping conferences next month. The Director of Marine, Mr Allan Pyrke, refused to comment on the brief, but senior Marine Department officials said it dangerously underestimated the problem. ''We are all wondering who China will pick on next,'' one said. ''Hongkong's port is just too big and too important to be treated with a head-in-the-sand attitude like this.'' The Marine Department is urging Security Branch officials, under instructions from London, to take a non-controversial line to try to get China to stop seizing ships by using safety as a bargaining point. Extensive diplomatic exchanges last year in Beijing, London and Hongkong have yielded no explanations for the apparent anti-smuggling crackdown. Mr Pyrke said that although the pirate attacks were miniscule compared to the massive movement of shipping through the South China Sea, it was of concern.