ECONOMIC DEFENSE ADVISORY COMMITTEE U.S. POSITION PAPER FOR COCOM DISCUSSIONS ON ANCILLARY CONTROLS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64-00014A000100120013-5
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 12, 2016
• Document Release Date: July 11, 2000
• Sequence Number: 13
• Publication Date: May 10, 1954
• Content Type: MEMO

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rICT A I
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MM" EDAC D?83a
May10, 195
ECONOMIC DEFENSE ADVISORY COMMITTEE
U. S. POSITION PAPER FOR COCOM DISCUSSIONS
N A C CO OiB
The attached position paperon ancillary controls has been
cleared in the Executive Committee session of May 6 for
transmittal to the U. S, Delegate to COCOM,3
NOTE: EDAC D=83 (May 6) was circulated to Paris only
and did not contain certain final revisions
proposed by Commerce,
Irving I, Kramer
Executive Secretary'
*DOC Exempt Letter On File*
'Dist r
EDAC (including 0/S
EC
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U. S. POSITION PAPER FOR COCOM DISCUSSIONS
ON ANCILIARY CONTROLS
I. Commodity Lists for Ancillary Controls
Ancillary controls ?i.es, TAG Schemed Transactions Controlsa and the IC/DV
list should include all items subject to agreed control and restriction and
Munitions and Atomic Ener items. If a PC prefers not to apply a ._particular
xrocedt'~re. such as the IC DV system to any part of the list it should demonstrate
to the Committee that it is exercising satisfactory alternate controls,
While previously the U.S. had been prepared to accept a TAG list con-
siderably shorter than the present I/L?s I and II, it is now felt that the
current 0000M review will result in a relaxation of control sufficient to
permit the application of the TAG and other devices to the reduced lists.
Since the new lists will contain only items which all PCs have agreed are of
importance to the bloc?s military potential, these items must be controlled
effectively by ancillary measures as well as by export licensing.
A. uniform list covering all controlled items would have several advantages-.
a) Administrative convenience in the operations of the several systems;
b) Elimination of loopholes resulting from the existence of lists with
varying coverage;
c) Increased effectiveness in the enforcement of quantitative controls
(e.g. ? since no embargo items should be moving to the bloc, QC items
without TAC?s can be presumed to be illegal diversions; without TAO
applicable to QC items it cannot be determined easily '.1hether or rct
a shipment of a QC item actually falls under a quota.)
The USDEL should support a proposal for the publication of the International
Lists; each PC should publish the lists in whatever form is most convenient for
its purposes but without indication of the fact that the public list has been
agreed internationally. The published lists would assist officials responsible
for the enforcement of ancillary controls by making it easier for them to identify
strategic items moving in transit. A published list would also serve to put
exporters on notice as to which commodities require special precautionary handling.
It would thereby make it easier for the business community to engage in legitimate
trade and would at the same time help to enlist their informal cooperation in
enforcing the controls through trade association and other business activities:.
II, Transit Authorization Certificate (TAG) Scheme
The USDEL should press for the early adoption of
the TAC Scheme which should
subject to agreed control and restriction and Munitions
and Atomic Energy items,
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It is recognized that there may be a problem of physical identification
of certain commodities covered by the scheme,, In order to simplify this
situation the French have proposed the so-called 11R11 Procedure under which
ships manifests would be marked with the letter ltRtt to alert customs officials
as to which shipments are covered by the TAC scheme,, It is considered that
this proposal,has merit and would be acceptable to the U.S, if modified, for
example, by requiring that exporters apply the symbol ("Rt1) to bills of lading
rather than manifests,, Therefore, the USDEL should consult with the French to
work out a revised French proposal which can be supported by the U.S,
It has been the U.S. experience in connection with its Destinational
Control statement placed on all commercial invoices and bills of lading that
the latter document is a suitable one for special marking since it is widely
used for customs and commercial banking purposes and for land as well as sea
shipments. On the other hand, the ships manifest has several disadvantages:
it is made up by the ship?s master after loading, is not sufficiently detailed
for proper identification, is not ordinarily used by customs officials, and
can be changed enroute,,
The USDEL should offer to undertake for the Committee or assist it in the
preparation of illustrative materials to be circulated to the customs officials
of the PC's and cooperating countries as an additional aid to identification of
those shipments examined in spot-checks or suspected of intended illegal diversiIbn,
III0 Financial or Transactions Controls
The USDEL and/or Embassy London should informally
recLues t the draft text
of or a memorandum outlining the proposed UK transactions 3gislation and
should continue to seek a clarification of the intent of the UK to adopt trans-
actions controls at an early date,
IV. IC/DV System
The USDEL should request that the Committee confirm itf agreement on
the applicability of the IC V system to all items subject to agreed control
and restriction and Munitions and Atomic Energy items. If the system is not
applied to either of the latter two lists satisfactory alternate system should
be demonstrated,
V. Dependent Overseas Territories
The USDEL should press for confirmation and/or agreement by the P("-D_
that all ancillar as well as primary controls are or wi 7 7 be undertaken _ n,
Territories
v`...a wi ur~VGCO++.L ~/75~
etc. Those PC-?-s with overseas territories should also be pressed to furnish
the Secretariat with descriptions of the security trade controls of their
territories with special notation where they are not in conformity with COCOM
agreements.
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VI - Non-COCOM Countries
The USDEL might summarize for the Committee its understanding of the status
of bilateral or multilateral ne otiations with the principal non-PCBs for the
institution of enforcement controls Switzerland Sweden Yugoslavia Austria,
and Latin America and should re nest the other PCBs to submit an additional
information which they may have (e.g, - British Commonwealth countries in
addition to the above mentioned countries,) The USDEL should propose that:
(a) durink the current COCOM enforcement discussions the important
~a'177'G1TlAan n nvn ~~(? 8 ... ?4..., ,,. _4-J - .2 _
the capitals as significant steps are agreed to by the Cow.
(b) following agreement btT the PCBs bilateral or multilateral dis=
cussions for the ado on of parallel ancillary controls be entered
into as appropriate with the above countries plus Lebanon Tani erg
Spain Egypt. Syria. I~ rae? n Spanish Moro o cc o and Iceland. s
In order to prevent a frustration of COCCM controls it would be desirable to
undertake these negotiations during the period between the time of COCOM
agreement and the date the controls are scheduled to take effect.
VII. COCOM Procedures for Diversions and e-----ate
The USDEL should press for early implementation of the CG instruction on
diversions and leakages,
The U.S. has the following remarks on the principles contained in the
instruction:
1) Self-explanatory
2) Self-explanatory
3) Discussions on specific cases will be between the interested delegates
or their de
i
t
d
s
gna
e
representatives who may be customs or enforcement
experts. Notification of the details of the case to the Committee is
not mandatory; however, it is recommended that the delegate coordinating
the discussion as a minimum notify the Chairman, COCOM, that talks are
being held by the particular delegates and as appropriate, identify the
commodity and give a general dharacterization of the case, As a case
develops the informal group may decide that the case should be brought
before the whole Committee to illustrate particular loopholes in COCOM
controls, new diversion methods, or for other special reasons. The
case may be presented in a full or a sanitized version.
In the initial stages of the implementation of the instruction the
Secretariat can, as requested render secretarial assistance, distribute
case information, and follow-up on action responsibilities.
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5) Self-explanatory
The other delegates should be encouraged to submit "closed" cases to the
Committee when such cases may assist the Committee in devising new and improved
control procedures,
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