FIRST ANNUAL PROGRESS REPORT OF THE INTELLIGENCE WORKING GROUP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61S00750A000700070055-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 9, 2016
• Document Release Date: February 28, 2001
• Sequence Number: 55
• Publication Date: September 24, 1953
• Content Type: REPORT

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IAC-D-53/4
24 September 1953
INTELLIGENCE. ADVISORY COMMITTEE
FIRST ANNUAL PROGRESS REPORT OF
THE INTELLIGENCE WORKING GROUP
Subject progress `report is attached for. the
information of the IAC members and comment as
desired at an early IAC meeting.
25X1A
ecretary
IAC-D-53/4
24 September 1953
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IWG/R-13
Control No. 445273
18 September 1953
FIRST ANNUAL PRCGRTSS REPORT OF TI!E IWG
August 1952 - Tuly 1953
1. Authority for the Intelligence Working Group
The Director of Central Intelligence approved the proposal of the
Director for Mutual Security and the Secretary of State for the estab-
lishment of an Intelligence Working Group ( JG) for direct intelligence
support of the Economic Defense Advisory Cormnittee (TD1C). The proposal
was indorsed by the Secretary of Defense. P'G Terris of Reference were
approved by the Intelligence Advisory Comm _ttee on 25 July 1952
(IAC-D-53/J-) and amended by TAC-D-53/3.1 of 25 February 1953.
IT. Organization of the Intelligence Working Groin
The 174CY is con iosed of members from the intelligence sectors of the
Departments of State, Ar; T, Tavy, and Air Force, ar d? the Central
Intelligence Agency. Associate membership is helc' by the Office of the
Administrator for ,,utual '.)efense Assistance Control of the Foreign
Operations Administration, the Office of the Secretary of Defense, the
Foreign Operations Admnistrati..on, and the Departments of Commerce,
Treasury, and State (Economic Defense Staff and Office of Munitions
Control). Any other agency having interest or competence in the field
of economic defense intelligence may be invited to sit with the Group.
CIA/RR provides the Chairman and the Executive Secretary.
During the past year fourteen subgroups were established to provide
IWG with specialized research and technical advice in specific fields of
economic defense. Five of the subgroups arc currently operative. The
others have completed their assignments.
III. Purpose of IWG and Relationship to EIC
The 111,G is unique within the U.S. Government in acting as an inter-
agency service facility for the review, coordination, and production of
timely economic intelligence which is directly applicable to current or
impending problems of economic defense policy or operations and is not
exclusively within the :mission or responsibilities of any existing
agency or interagency groups. Its purpose, as stated in its Terms of
Reference is'tio develop and furnish intelligence to the EDt-iC for policy
making and operations in the economic defense ficld...and to develop
closer continuous relationships among the operations, policy-formulation,
and iiltelligencc-research elements engaged in This document
contains information affecting the
national cefence of the Ur.i:od gates within the
S -E -C -R -E-T eaning of the La's (title 1,8, U S
U ." CFFICI '.LSONT, 1 :. e 3 481. The viA ;
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The role of the IWG differs from that of the Economic Intelligence
Committee (EIC) which is responsible for "fundamental economic
research...relating to the national security." The IWG looks to the
EIC and other research facilities for basic research support.
IV. Responsibilities and Accomplishments of the IWG
A list of all cases which have been formally placed before the
IWG for consideration will be found in Tab A, Most of these cases
have resulted in the preparation of papers (listed in Tab B) which
have been furnished to EDAC components.
The major responsibilities placed upon the IWO under its Terms
of Reference, together with an indication of the IWG's progress during
the past year in meeting them, follow:
A. Responsibility: Prepare or arrange for the preparation
of reports which the best available economic intelligence on
problems of concern to the MAC.
Progress: The DTG has prepared twenty-one papers involy-
ing research an an ysis in particular fields of economic defense
(Tab B). Ten were concerned primarily with strategic commodities while
six were in the field of shipping intelligence. The remainder involved
export controls generally. The IWG is now being used as the mechanism
through which intelligence studies of the Soviet bloc supply position and
strategic uses in the bloc of specific commodities are prepared, reviewed
and coordinated.
B. Responsibility: Provide current intelligence to the KDAC
in response to specific requests or on its own initiative.
Progress: The IWG has been instrumental in providing
current intelligence to assist action agencies in meeting their current
or impending problems of economic defense policy or operations. Of
nineteen papers of this nature prepared by IWG, fifteen have been
significant items of intelligence in the shipping and commodity move-
ment fields contributed by the ONImember for use by EDAC (see Tab C).
In addition, several urgent requests by action agencies have been
handled under the aegis of the IWG directly by analysts in the several
intelligence agencies, time not having permitted the matter to be
formally placed on the IWG agenda for review.
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The effort made by IWG to establish procedures for the
collation of current intelligence for the purpose of providing action
agencies with the processed intelligence they require as a basis for
preventive and/or remedial action is covered in the statement of progress
under subsection D and Tab D, following.
C. Responsibility: Determine the necessity, desirability, and
feasibility of obtaining further information or intelligence concerning
the subject matter of specific reports or to fill specific gaps, and
recommend action by appropriate agencies to meet these needs.
Progress:
1. :;n IWG subgroup was established in response to a
specific request of the EIC Subcommittee on Requirements and Facilities
for Collation. to prepare "a consolidated set of requirements for
colloction.4.on East-West trade". This subgroup was instructed to
ascertain existing guidance to collection agencies, formulate recommenda-
tions for over-all priority requirements for collection, identify
critical deficiencies in fulfilling such requirements, and make
appropriate corrective recommendations (see Section V.).
2. :gin IWG paper, "Report on COCOM Statistical
Reporting," pointing out inadequacies and deficiencies in the reporting
system, was forwarded to EDAC to be used by that Committee as the basis
for the preparation of an instruction to the U.,`:,. Delegate to COCOM.
3. Various agencies have formulated and served
detailed collection requirements upon appropriate collection agencies
to obtain further information or intelligence concerning the subject
matter of specific reports or to fill specific gaps.
D. Rosponsibilit a Arrange for the mobilization of the
economic data and analyses relevant to appropriate needs of the EDAC.
Progress: Four principal developments (see Tab D) having
bearing on the above responsibility, were:
1. Recommendation for the establishment in CL' of
a unit to process current economic defense intelligence and to collate
such intelligence for use of the operating agencies. This recommenda-
tion was approved. and the unit has been set up.
2. Establishment of uniform procedures for the
production and approval for release of I6WG papers.
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3. Preparation of recommended instructions to the
field for the lateral distribution of current intelligence on suspected
diversion of controlled commodities to the Soviet bloc was coordinated
through the ItTG.
z,.. Transmittal of a memorandum to appropriate
officials of SOVNLIT and JMIA listing four categories of information about
Soviet bloc equipment that is of significance to the IW G and the FDIC
agencies, and requesting distribution to IWG of all analyses falling
within those categories.
V. Major Problems and Objectives
A. St.atemcnt of U.S. Policy Pertinent to IWG Activities
The new U.S. policy directive in the field of economic
defense will guide EDAC and IWG activities during the coming year.
Particularly pertinent are the following objectives requiring intelli-
gence support as outlined in this directive: (1) Improve the availa-
bility and utilization of current intelligence in matters relating to
enforcement of controls which have been agreed by the free world;
(2) Develop ancillary measures, including control over transit trade
and transshipment, free port activities, financial controls, and black-
listing, to improve implementation and enforcement of agrucd control
systems, particularly control over strategic conriodities; (3) tighten
the control list criteria and review the strategic rating of commodities
on the control lists to provide for the selection of commodities which
contribute significantly to the Soviet war potential.
B. Discharge of 1WG Responsibilities under New Policy
1, To provide the intelligence support essential to
the implementation of the new U.S. policy, the IWG must intensify its
efforts to make current economic defense intelligence available to action
agencies. major forward step has been the creation, at the request of
DIG, of the current intelligence unit within CIA. This unit cannot
operate at maximum effectiveness, however, unless ways are found to assign
higher priorities to the collection of information relevant to economic
defense. It also may be appropriate for the IWG to inquire into the
causes of delay in the transmission to Washington of East-West trade
information and its dissemination to appropriate agencies. Approval and
implementation of proposed instructions for lateral distribution of
East-West trade information in the field should facilitate the prevention
of trade control violations.
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2. The tightening of the criteria for the selection
of commodities which contribute significantly to the Soviet bloc war
potential will place an additional work load of commodity review and
analysis upon the IWG. It will require increased vigilance on the part
of the intelligence agencies in the detection of changing economic
vulnerabilities within the bloc. The extent of this work load will be
dependent upon the outcome of the programs being developed by the
action agencies having responsibilities under this now policy* directive.
3. The full potential of the DIG for intelligence
support has not yet been utilized by action agencies or working groups
of the ED1C structure. 1WG/AM-8, distributed in EDAC as EDAC D-148,
establishes a mechanism by which E11C agencies (and working groups
within the EDAC-11CEP structure) may request direct intelligence support
from the BiG. These established procedures are assisting the action
agencies and interagency work groups in drawing upon the IWG facilities.
In furthering this effort to m=aximize the contribution of the IWG as
the focal point of intelligence support for economic defense, C11 is
now putting through the Group for review and coordination most of its
intelligence, including commodity analyses, which formerly went directly
to other working groups. It is hoped that the objective of realizing
the full potential of the ZWG will be reached during the coming year.
Intelligence Working Group
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IWG Designation
August X92 - July 193
LIST OF ALL 174G CASES
IWG Case
No.
2
Proposed Shipment 2,G00 Tons Coper from Turkey to
Communist China
Soviet Bearing Production and Procurement
DIG Case
No.
3
Prior Commitments
1WG Case
No.
4
Greek Shipping Cartel
IWG Case
No.
5
Greek Flag Merchant Ships Trading with Communist
1WG Case
No.
6
Far East
DDR Procurement Efforts
LWG Case
No.
7
Collection Requirements on East-West Trade
1WG Case
N
8
Belgian Ships for USSR
IWG Case
No.
9
Merchant Shipping Intelligence
1WG Case
No.
10
Danish Tanker APSIIERON
1T4G Case
No.
11
Chinese Corununist Trade
IWG Case
No.
12
Radar Carried by SS FRYDRYK C HOPIN
1WG Case
No.
13
Sale of TAVIRA (formerly ATLANTIC II, now PRACA)
to Poland
1WG
Case
No. 14
Activities of INTERCONTINENTAL AIRWAYS
IWG
Case
No. 15
Alleged Refuelling of Polish Ships with Iranian Oil
1WG
Case
No. 16
Delivery of Antimagnetic Schooner by Finland to the
Soviet Union
f Oil Carried by Polish Ship RYSY,
C
argoes o
Rotterdam to Gdynia
1WG C ase No. 18
1WG Case No. 19
Exploitation of Intelligence on Soviet materiel
ment)
n E
ui
(F
i
IWG Case No.
1WG Case No.
IWG Case No.
20
21
22
q
p
ore
g
EDAC Operational Memorandum for 1WG Activities
Diversion of Korean Scrap to Communist Destinations
Western Repair and Construction of Merchant Vessels
viet Bloc
f
S
or
o
1WG Case No. 23
Activities of FRITZ DIEPEN
1WG Case No. 24
Chinese Communist Procurement of Power Generating
i
t
E
pmen
qu
1WG Case No.
25
Illegal Sale of MDAP Armament to Eastern Europe
1WG Case No.
26
Bunkering of Vessels in China Trade
IWG Case No.
27
Soviet or Satellite Chartered Vessels and Merchant
with the Communist Bloc
Tradin
l
V
g
s
esse
1WG Case No. 28
N. V. Philips Co., Eindhoven, the Netherlands
IWG Case No. 29
Spectrograph for Institut for Anorganische Technologie
der TechnischenHochschule, Vienna, Austria
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1WG Designation
IWG Case No. 30
]WG Case No. 31
IWG Case No.
IWG Case No.
IWG Case No.
1WG Case No.
IWG Case No.
1WG Case No.
34
35
36
37
38
39
No. 40
I O Case No. 41
DIG Case No. 42
IWG Case No. 43
IWG Case No. 44
IWG Case No, 45
1WG Case No. 46
IWG Case No. 447
IWG Case No. 48
IWG Case No. 49
IWG Case No. 50
IWG Case No. 51
IWG Case No. 52
Title
Sale of Italian-Built Ship to Bulgaria
Request for Intelligence Evaluation of Soviet Bloc
Cobalt Production Capabilities vs. Requirements
Request for Intelligence Study on the Movement,
Including Transshipment, of Strategic Commodities
from the Middle East to the Soviet Bloc
Smuggling from the Ryukyus
Polish Coal Situation
Intelligence Data for U.S. Delegate to C}-RNCOM
Intelligence Requirement - Transit Trade Involving
Sweden and Switzerland
Finnish Tanker Fixture for China Run
U.S. Mining Equipment for Expansion of Spanish
Pyrites Production
Reported Movement of Rails from Antwerp, Belgium,
to Constantsa, Rumania, by Costa Rican, Turkish
and Italian Vessels
Dissemination of Economic Defense Intelligence in
the Field
Communist China - French Barter Deal for Nitrogenous
Fertilizer
Request for Information on Strategic Importance of
Hides and Leather to Soviet Bloc, Particularly
Communist China
Financial Operations of the Soviet Bloc in its
Economic Relations with the Free World
Soviet Efforts to Procure Aircraft Parts and
Components
Strategic Importance of Dichlorodifluoromethane
(Freon 12) to the Soviet Bloc
Swiss Bank Financing of Stratcgic.Exports to the
Soviet Bloc
The Tractor Situation in the Soviet Bloc
Diversions to the Soviet Bloc of Strategic Materials
Originating in Non-COCOM Countries (South Africa:
lead; Bolivia,~tin, tungsten)
Strategic Importance of Magnetic Recorders and/or
Reproducers to the Soviet Bloc
Strategic Importance of Kyanitc to the Soviet Bloc
Pharmaceuticals: Communist C hinats Supply Position
in Antibiotics, Anti-Malarials and Sulfanorrddes
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LIST OF ALL T9G STTTDIES COMPLETED OR IN PROCESS
August 1952 - July l93
IWG Designations
IWG/AM-L
IWG/AM-9
IWG/AM-10
DTG/D-1
IWJG/D-2
IWG/D-3
IWG/D -5
ITJG/D-6
YKG/D-7a
IWG/D-8c
IWG/D-12
IWG/D-19
IWG/D-31
IWG/D-33a
fl G/R-l
IWG/R-5
IWG/R-6
IWG/R-7
,1WG/R-8
*1WG/R-9
Tv G/FE-1
Table of Now Construction in !land and on Order in
Western Countries for USSR Merchant Fleet -
June 1952
Glycols - Item IL 1727
Conveyor Belting and Item 310b - Power Driven
Conveying Equipment
Danish Tanker APSIMRON
Utilization of Soviet Bloc Merchant Shipping
Intelligence by the United States Coast Guard
ONI Report on Western Shipyard Services to Soviet
Merchant Flect, 1 January 30 June 1952
Soviet Metallurgical Techniques
Chronology of CCCOM Transit Trade Control Discussions
Response to OD1,55 Questions Regarding Soviet Bloc
Cobalt Position
Movement of Scrap Metals from the Middle East - 1952
Strategic Importance of Dichlorodifluoromethane
(Freon 12) to the Soviet Bloc
Strategic Importance of Magnetic Recorders and/or
Reproducers to the Soviet Bloc
Alleged Refuelling of Polish Ships with Iranian Oil
Communist China's Imports of Ammonium Sulfate
Report on CCCOM Statistical Reporting
Soviet Bloc Kyanite Position
Examples of the Role of Swiss Banks in Financing of
East-West Trade Since 29 August 1952
The Tractor Situation in the Soviet Bloc
Material for Use in China Committee
All of these studies were completed in the period August 1952 - July 1953
except those marked with a single asterisk.
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LIST OF ALL IZnTG CURttPNT INTELLI.GRNCr CONTI IBUTIONS
August 1992 July l9
IWG Derignat_i.on
ISJG/AM-7
I?',n/n-10
IYG/D-13
I?,TG/D -14
74G/D-15
1MG/D-16
U? P -17
I JG/D -18
IIMIG/'D - 21
17,-,G /D -2 2
1 JG/D-2!4
iwo/ D-25
MG/D-26
F G/D-27
IWG/D-28
T IG/D-29
IWG/R-3
I?-JG/R-l4
]9G/ID-1
Finnish Tankcr Fixture for China Run
CNI Information on Movcmonts of Specified Ships
CNI Information Regarding Mership IIOLGII I RC IL?,NT
O4I Contribution - Cargo Information on Vessels
in China Trade
ONI Information Regarding SS MTJZAFFER
ONI Infor nation on Greek PMiershi.p TTELL S
CMI Information on "Sliipments of Strategic Materials
ONI Information on Movemen
from China to Poland
CNI Contribution - Shipment of Strategic 'at~rials
from Beirut, Lebanon
U ITT Contribution - I etal EcrEp Movements to Poland
ONI Information Regarding ;: erchant Vessels in the
China Trade
ONI Contribution - Strategic Commodity Movements to
Soviet Bloc
ONI Contribution - Voyage of Portugeso Mership TIMOR
from Europe to Hong Kong and Macao, January -
February 1953
ONI Contribution - Transmittal of Merchant Marine
Intelligence Regarding Bunker Controls
CL'. Statorcnt on Radar Reportedly Carried by
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P'.'1INCIP .L DLVELOPiLLNTS IN TP_'? MOBILIZATION OF ECONOL'IC
. D.1T.. R LLVANNvT TO N IW OF M IC
1. Establishment of Procedure for Processing Current Economic Defense
In.teil-i.genc e
In response to a request of the Steering Groin? (new Executive
Committee) of EDi.C, ING prepared and forwarded to CI12a paper
(TiTG/C.I-2 of [ February 1953, as amended 3 March 1913) which pointed
up the deficiencies of then-e,d sting arrangements "for processing the
eon~:idcrablc amount of raw intelligence and. incompletely-evaluated
intelligence now being received regarding Soviet bloc procurement
activities." This paper recommended that "the CL, designate a unit
within that Agency to process current East West trade intelligence.....
for the purpose of serving through the FTG the needs of the ED.LC
structure." By memorandum of 16 March 1953, the Assistant Director
for Research and Reports, CIA, approved the establishment of such a
unit. It is now functioning on a limited basis and is expected to be
in full operation by mid-September.
2. Establishment of IWG Procedures
Administrative Memorandum, PTG/A17-8, prepared by IWG and distributed
by the Executive Secretary, ED-1C, throughout the EDiC structure, provided:
(a) uniform procedures for the production and subsequent approval for
release of IT-JG intelligence; (b) furnished a summary of current pertinent
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TAB D
instructions covering dissem nation of econoi,.i-c defense intelligence to
U. s. Government ag rci.cs and foreign nationals; and (c) outlined proce-
dures to be follow..-.d in the establishment of hUG subgroups and in the
production of FJG reports.
3. Lateral Field Dissemination of East-West Trade Information
At the request of the Chairman, ED.iC Steering Group (now Executive
Committe(--;), the I