TRANSMITTAL OF DRAFT - FOURTH ANNUAL PROGRESS REPORT OF THE ECONOMIC DEFENSE INTELLIGENCE COMMITTEE.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62-00328A000100510062-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 9, 2016
• Document Release Date: February 13, 2001
• Sequence Number: 62
• Publication Date: September 25, 1956
• Content Type: MF

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EDIC/R 3 (DRAFT)
Control No,, 2242
25 September 1956
M1 ORANDUM FOR: Economic Defense Intelligence Committee
FROM : Vice-Chairman, EDIC
SUBJECT : Transmittal of DRAFT Fourth Annual
Progress Report of the Economic Defense
Intelligence Committee.
to Attached hereto is a draft of the Fourth Annual Progress
Report of EDICO
2e This report is transmitted for review prior to
consideration at the next EDIC meeting,
25X1A9a
Vice-Chairman
Attachment:
Draft of Fourth Annual Progress Report of the Economic
Defense Intelligence Committee,,
Distribution:
Cato D - (A-U)
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NOFORN
EDIC/R 3 (DRAFT)
Control Nom 2242
25Sept
ember 1956
FOB AN WAS. PR ROSS MoRT OF THE
ECONOMIC D- INTBLLIGENCE CO IT
1 Ju1v 3 9S~ ~0 June 956
S C?RQ.E- T
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EDIC/R 3 (DRAFT)
TABLE OF CONTENTS
Page
I Introduction , 0 0 0 0 0 0 0 0 0 0 0 0 a 0 a 0 0 0 0 0 1
II, Summary of Activities
IIIo EIC Progra 0 .. d 0 0 c o o o 11 0 0 e 000 0 0 a. 2
111, Genet. al p o O O o . e 00 a ! 000. 0 0000 2
R- Support for Con nudity Controls,
Cn `Support for Analysis of Soviet Bloc Trade
Tactics , 0 0 0 0 e o 0 0 0 0 0 0 0 0 a o 0 0
11),
Support for Analysis of Trade in Decontrolled
Commodities and Exceptions Shipments, a s, 0 0 3
E Efforts to Improve Collection
.Fut re Activities, a 0 , n 0 0 0 0 R o a 0 0 a 0 0
?ABS
A,, Completed FDIC Reports,
13, Corioleted FDIC Cases
;,, EDIC Cases Pending
D, Documents Distributed to EDIC Members
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NOFORN
EDIC/R3 (Di AF`T)
Control No. 2242
25 September 1956
ECONOMIC DEFENSE INTELLIGENCE COMMITTEE
FOURTH ANNUAL PROGRESS REPORT
1"955 = 30 June 1256
The Economic Defense Intelligence Committee (FDIC) has continued
to function effectively in accomplishing its dual purpose to (a) "de-
velop and furnish intelligence to the Economic Defense Advisory
Committee (EDAC or policy making and operations in the economic;
defense field" J and (b) "develop closer continuous relationships
among the operational, policy-forrulationa and inte1/
igence~-research
elements engaged in the economic defense program?"
During the past year, EDIC served the economic defense community
by identifying important intelligence problems in this field and
bringing them to the attention of appropriate EDAC agencies, To
illustrate, the Committee proposed the adoption of more systematic
procedures for the identification of unembargoed commodities which
have become of strategic importance to the Sino=Soviet Bloc as a
result of recent scientific and technological developments. In line
with this activity, a study of the increased strategic significance
of boron substances as a component of high energy fuels was prepared
for EI)AC and subsequently was brought to the attention of the NSCO
A follow-up interagency study group on high energy fuels was conducted
under FDIC auspices. Special attention also was given to current
Bloc technological developments in the field of radio and television
transmitters?
Terms of Reference, IACD-53/4 25 July 1952.
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III' SuMnna of Activities
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EDIC/R 3 (DRAFT)
EDIC continued to serve as a mechanism for providing coordinated
intelligence support to the responsible agencies on economic defense
matters., For example, EDIC participated in coordinating the intellige-
ence used by the EDAC structure for the determination in December 1955
January 1956 of the U.S. position on COCOM IL.II quotas. During the
year ended 30 June 1956, studies were completed on Bloc procurement
from the Free LJorld of a number of strategic commodities such as
coppers mercury, and nickel, as well as other studies on the Bloc0s
supply position in commodities of special economic defense interest
such as diamonds, In addition, periodic reports were prepared on
Bloc sales of gold in Free :world countries, on Bloc orders for ships
in western yards, and on deliveries of both new and used ships to the
Bloc,, EDIC also provided current intelligence to action agencies on
diversions of strategic materials to the Bloc.
Other significant activities of the Economic Defense Intelligence
Committee included the review of pertinent reports of individual
agencies, the establishment of a comprehensive pattern of requirements
for both overt and covert collection of economic defense intelligence,
and the review of important research and/or collection deficiencies
in this field.
III. EDI C Program
During the fiscal year there was a marked increase in the
number of coordinated reports and "cases" covering other activities
completed by EDICO Eight intelligence reports were issued (TAB A)
and nine intelligence "cases" were completed (TAB B). On 30 June 1956
action was pending on eleven additional cases (TAB C). Intelligence
documents of interest to operating departments of the economic
defense community continued to be distributed by the EDIC Secretariat
(TAB D).,
B., Su. rt for Comrnodit Controls
As illustrated in the accompanying tabs, EDIC initiated or
coordinated the production of intelligence on the supply and utilization
in the Bloc of a number of commodities of economic defense interest.
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EDIC/R=3 (DRAFT)
25X1 C
Ca Support for Analysis of Soviet Bloc Trade Tactics
Earlier EDIC annual reports have indicated the continuing
interest which the Committee has taken in the analysis of Bloc trade
tactics. This interest has been concerned largely with the offers
of strategic materials by the Bloc to Western Europe. During the
past year, EDIC produced a study of Bloc exports of machinery and
transportation equipment
25X1 C
D? Support for Analysis of Trade in Decontrolled Commodities and
Exceptions Shipments
EDIC has frequently considered the effects on East-West trade
of the 1954 revision of the strategic commodity lists. Accordingly,
on the basis of official trade statistics and special reporting by
U.S. foreign posts, State/OIR prepared a study on this subject,,
A similar analytical problem was raised during 195556 by
the rapidly increasing use of "exceptions" procedures for the shipment
to Communist China of commodities under embargo to China but not to
the rest of the Bloc. The practical importance of the problem was
emphasized by continuing foreign pressure to reduce the differential
controls against Communist China. Consequently, a proposal was
forwarded to ICA/MDAC to set up an EDIC working group to make a
periodic review and analysis of the trends, patterns, and strategic
significance of CHINCOM "exceptions" shipments.
E. Efforts to Improve Collection
During the year, EDIC substantially achieved its longstanding,
objective of establishing comprehensive U.S. Government instructions
for the collection and reporting of economic defense information.
For this purpose it was necessary to review all the standing collection
requirements and instructions of the Government pertaining to economic
relations with the Sino-Soviet Bloc and to identify important out-
standing deficiencies?
a3=
S-E R-F--T
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25X1C
25X1 C
The success of this effort has been reflected in the
substantial improvement of COCOM statistical reporting
the strengthening of CIA arrangements in the field for
the collection and dissemination of economic defense information,
the preparation of an Economic Defense Intelligence Reporting Guidef,
and the taking of various important steps to improve the reporting
of economic defense information by overseas personnel of the armed
forces.
All pertinent reporting instructions issued during the past
year to the U.S, Foreign Service (also applicable to other UOSG Govern-
ment personnel overseas) were revised, consolidated 1and coordinated
through EDIC0 These new instructions have been issued as a confi-
dential supplement to the Foreign Service Manua.
IV. Future Activities
In the light of the pending UoS0 Government review and the
probable revision of economic defense policies and programs, it
is anticipated that EDIC will continue to make a contribution to
the economic defense program through participation in both the
programming of intelligence research for economic defense and in
the production of coordinated intelligenceo In addition,' EDIC
currently plans to continue its focus on the identification of
commodities which are of increasing importance to the Bloc as a
result of new scientific and technological developments, To a
large extent, however, the long-run future activites of this
Committee will be dictated by a revised U.S. economic defense
policy, and by subsequent negotiations in COCOM?
25X1A9a
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EDICA-3 (DRAFT)
TAB A
Completed ERIC Rees
I July 1955 ? 30 June 1956
Desimation
Date Issued
EDIC/R'2
Third Annual Progress Report of
11 Oct 1955
(Thc-Dm53/7 )
ERIC/ID-13,
the Econonic Defense Intelligence
Committee.
Sine. Soviet Moe Exports of Machine y
22 Aug 1955
Suppl0 1
and Transport Equipment to the Free
World., 1952.195Li 0 ,
ERIC 15
Ad IIoc Working Group report "Intelligence
14 Sep 1955
(Revised)
EDIC/ID-15
Relating to the Use of Boron Substances
as Fuels"
flICC Working Party Report on "The Use
9 Dec 1955
(Second Revision)
EDIC/ID-16
of Boron Substances in Fuels",
Free World Deliveries of New and Used
2 Nov 1955
(Revised)
Ships to the Sino-Soviet Bloc in 1954
and Proposed Construction as of
1 July 1955
EDIC/D18
Revision of Foreign Service Instructions
31 Jan 1956
IDIC/IDm20
for Reporting on Economic Relations
irsth the Sino-Soviet Bloc.
Soviet Gold Sales in Free World Markets,
8 Feb 1956
IC/ID 23
JamaayyJune 19550
Sino-Soviet Bloc Shipbuilding
18 Apr 1956
ERIC/ID-Soviet Bloc Procurement of Nickel
30 Mar 1956
1955? (CIA)
--K restatement of the IW'0 Terms of Reference as approve s)
bringing up to date .certain name designations and document references
following the change of name of the Intelligence working Group (TWO
to the, Economic Defense Intelligence Committee (FDIC).
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