INQUIRY FROM MR. GEORGE MURPHY, JOINT CONGRESSIONAL COMMITTEE ON ATOMIC ENERGY, CONCERNING ICL SALES TO SB COUNTRIES AND COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000200130060-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 12, 2016
• Document Release Date: December 6, 2001
• Sequence Number: 60
• Publication Date: February 3, 1971
• Content Type: MF

25X6
Approved For Release 2002/05/17 : CIA-RDP73600296R000200130060-0
Approved For Release 2002/05/17 : CIA-RDP73600296R000200130060-0
" Approved For Release 2002/05/17 : CIA-RDP73B0029,6R000200130060-0
By KENNETH OWEN
A rela xa ti on of the we-stern
embargo system for computer
sales to the Soviet -Union may
be iiid i C a ted if u Acgfizia.1
of a major sale by
:/- Liturro.t.tglAs are confirmed.
tt'kt.,,Acsr:rding tc,,..tittetet reports, five
':a6:V.- .;.5.5C)0`-eornputers have
been (yrdered, one of which may
already be installed in Moscow.)
: If true, this would represent the
sale of computers laNer and taster
than any previously exported to the
Snviet Union I mom the west. (The
55C0 is midway in power between;
the I.B.M. 360/50 and the 360/65
/ ; iI-
he lar-ci- LI.: M. macnine
Wiistalled in east Fairole, to date
.a 360(40 in .C.:70,..hoslovakia.)
i :, AVM:. Russian il.5.500s are ex-
' ctia5d to be st.tritpiied together v?itta
!:
more than ft,0 I...2600 icrnitinas.
1 Soviet siisteins, prograrrim'ing and
i- maintenance people have been i-e-
l ecivin-g trainsing ay Burroughs,
I Detroit.'
ti- -IV .. .i-H-Txpo)-t licences for four targ
1)1.'itirtish computers oraiNeal by t.-.:,
1 Soviet lint.on :have not yet OetNi
1 granted by Use bo,,r(7---ot *Trade.
Them, comprise tw , /.(...t?19ott,,As
for the lmtrttitttute , t, 4,-h-eiettrgy
Physics in St-tpui.thov. near M os-
cow: and two :;', ste-m- 4/70i: tor
. Gosplan, the central Soviet plan-
rung agency, w replace an emstittg
14150. t
1 The di ffictilli.es of selling to east
i
Europe and to the Soviet Union in
articular were described by
Arthur Hemphreys, managing, dir-
ector of tnternationa Uompttcrs,
in evidence to a subcommittee of
Inc Seice: Coramictec on Stcencte,
and TtschrOngy mat week. Because
of the crboryo system, he said,
consiaic rabic " market subtlety"
was required.
.!;oviet customers, sir. Hum-
phreys inclielted. often insisted on
orderini..? nein, were not per-
tnteriunoee the embargo rules. As
a rcsuit, was often not sure
whether it had gained an order or
not.
Over the next two to thrice
months, he added, T.C.L. could ri.ct
substantial Soviet business. Lut
we might not ;',;,et "Ti
Burroughs order follows the wetting-
up ny the company Ot itoea.si
European sales branch bared mt??
Freybourg, :t;?,,itzeriand
icsr-
LONDON TIMES, 2/e)/(0
_
The strategic embargo list which
defines the items which may not be
exported to east Euroise is pro-
duced by "Cocorn IN:.to
coordinating. committee concerned
with mternational export controls
and east/west trade.
4 Sol:trware grantintt the
f Rom:rt.:4015 a licence 1(1 11Iartu
f..ZVIVX1' the iris 0. This has
Orotz,,int ICL Ktivaies there to a
Britain's ICI, was the first computer manniao.
turer to find a market in Eastern Europe, and
now has a substantial lead there. But last
growing competition has this year produced a
dramatic drop in ICUs Comecon sales. Ivan
.Berenyi reports on the situation, and on the steps
IQ, is now taking.
In ilithiarta. toe Japanese, won
)
i aye been strength gathering streng. in
j .
astern Europe for some tinie,
iiiti their first SUCCORS with the
tside of 20 Facoin 270/30 coin-
i putcrs made by Fujitsu, and are
ilso tOportud to he negotiatin-
.2.. licence agreement. In film
ii.ary, the French CH is agith
leaning the field with two of its
smaller machines. the EMC 531
and SIP. In :MU factured locally
under licence. --- computers?Russia has an
EverYwhere ICE finds itself enor?mus demand for powerful
IiitriPr DPW pl eStitirt`?fr0111 COM pill er,;--but in obtaining: ex-.
Siemens in Ilitneary and t'../.echo- port licences- ?in the fn:so--'01.
sMval-iia. from Uni k or in Yugo.: present coCom pint.,.,Ktts
sfavia and C5echnsInvaki(1. from, in Rnssia. The...--cntuation is
the Control Data Corporation in cmiirale....thinsy.k.r.t.,,icus favoured
East Germane and even hi _..,...mm,-, position will make life
Priam], where ICI, had granted easier in a lot of ways, but
a software licence to the ELWRO: partial/ally in its relation with
slat(' Plat in Wroclaw. Ole Mi1shpriborintorg, the central
Japanese are involted in large- Russian import/export agency.
scit i o ne?_?111ationS. Most of the 1.ISSR'5 major
USSR hones
As a result 1CI.i's hopes must
be. -increasingly vested in the
..Russian market, and accredita-
tion fit prestunably lead to an
increase in the sales force there.
ICUs success depends to a large
extent on its ability to sell large
machines to the Russians. The
difficulty is not in selling -the
ne biggest threat of all.
eames, predietahly, from IBM,
..vhich has moved in with a ven-
geance and now leads the mar-
ket in Yugoslavia and East
Cermany while also being i.head
or the British manufacturer in
Romania and Bulgaria. This
sudden reverse is really no fault
of ICUs?with a ,.ales force of
119 in East Europe, compared
with 20 in Russia. sales are
running more (IT less neck-and-
neck in the two areas. The real
reasons are that the Comecon
countries are eai.:_er for IBM
yin:chines partly because they are
developing a similar range of
their own.
organisations are (wet'. 10 buy
computers, but 'Ii; make the best
use of its resources ICE must
devote its attention to those
which actually have the currency
to spend. To ensurp this, good
?relations with Mashpriborintorg
and- the Ministry of Foreign
Trade arc essential.
ICUs special trading status is
also significant because of the
particuhar nature of the com-
puter industry, and the granting
of this status reflects Russia's
urgent need for Western cor?-
linters as much as ICUs success
in the Russian market.
Indeed, so far ICE has had to
face no major ompetition in
Russia. Rut how long will this
continue, and how soon will the
Russians be able to satisfy their
own need.s with .domestic- pro-
ducts?-
According to. Ralph Land, who
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is imulaget USSt
branch, the Ituistan., Lave re?
i?ttettt'.01-11011aFirr..-11 that.
art hou-1! tiit.,y are k.,ak.1.2. tO ur?
chase t:i.,n-Iptctors Croric t hut'
ate 01 1)!)) to tlictr own
recptirements ill OW
thr t,nitlttte. 1Ci.? is 1111111,101-11 of
amoS to. t tor a considerable
period. ,,ince the itussian the
Nolottilecn( Ill'ngt'ltillt)te Is lap'
gi''stnii lowl.t and, even when
the now miteltmes are to
lion, it will lake some time tor
thorn to provide nil orreplatAe
aiternaltvo to ,ICI;s well-
established ranges.
convinced that
sotitlofjresz-ing ehcati with the
productIon of tilu-d gellerittion
etamputers, -the Ilussbuis Wilt ii59
step up the production 01 eNtst.
big second generation machines
such as the Min.:1; series and the
earn-b. There have been no at-
tempts to phase these out.
Compelitiorl trim she West,
says Mr Land is at present
mostly confined to two concerns
--Siemens and Bulb E. Siemens
has only one m.irkeling man in
Russia, who reprserns the full
range of Siemeru products. .
1Ftit Iwo SW a Hoy XDS
machineA.
The tonI a the field is made
up by Japanese manufacturers?
Nitacht. Tosinba and Nippon
Eleetric---who, llalph Land feels,
certain0 make an impres-
sion in due omrsc, particularly
in the Soviet 1.'ar East. Their
handicap is sheer physical dis-
tance z.uni thmr present dupen-
deuce on American technology.
The only known sole to date has
bean by Nippon Electric, which
has installed a medium-sized
NEM; 2200-1200 computer at it
refrigeration plant in north-
western Lithtlania.
Whatever challenge the future
brint.:s, ICI, is in a uniquely
.strong position in the USSR to
meet it., The competition will
ceitainly --7row, but, as Ralph
Land pointsouV;*--the.;corripany
has accreditation, good -equip-
ment compatible with Russia's
long-term aims, a remarkable
sales total of just below :30
machines and it competent sales
-
and support learn which will
now be considerably enlarged.
Cha xrige
The company 'nit one ['mil-
l-inter installation ir the country,
at Moscow's Institute of Automa-
tion, where a number of systems
people are workitn.; " on eon-
tract," but they are not con-
cerned with extending the
market, only with'. isuplementa-
lion.
Mr. Land feels that a stronger
challenge is represented by Bull-
GE, who can expect some help
from the extensivo Rosso-French
scientific co-oiler:4ton projects.
The merger bety:wn GE and
Honeywell's computer interests
could also have an effect.
"Honeywell did not want to go
to Russia," says La '10, "but the
merger could well take them in
and we expect increased compe-
tition from the iie-op." Sales
total three machines, two
GE 425s and a
As for the wholly American
companies, there seems to he
little to fear at present. though
Ralph Land says he has also
heard the persistent rumour that
200 IBM machines are on order.
We tend-to discount it, hut we
might just wake up one day to
find it's true. Certainly, if they
match the effort they have been
making in East Europe, they will
be immediately felt."
? And apart front IBM? "We !
know that the Russians have
visited the U.S., and went to see ;
Burroughs, CDC and Univac. We
alto know that negotiations with
Burroughs reached an advanced
Stage, but there is no clear-cut .
evidence of sales so bp: apart
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Approved For Release 2002/05/17 : CIA-RDP73600296R000200130060-
By KENNETH OWEN
A relaxation of the western
embargo system for computer
sales to the Soviet Union may
bet indicated if unsiiiiciai
reports,,.-of a major by
litirmiJihs are confirmed,
lAccorOing to,.
Vnese reports five
? 'computcrs have
been ordered, one of whicn may
already be installed in Moscow.)
If true, this would repre.sent the
. sale of computers larger and faster
than any previiiiisly exported to the
Soviet lirtion from the west. l.Tho
V. 'til,I.5500 is midway in power between
1 the I.B.M. 360/50 and the 360/65'l
( (The largest I.B.M. machine
i
'-? tqnstaned in east Europe to date
is a 360/40 in Czechoslavagia.1
011ie. Ii USSi 2,1-1 le.5500ii are CIN-
'' / Pected to be sulaplied togcther with
more than 50 1..2600 term?ina's.
Soviet systems, programming and
[maintenance people have Utica re:-
ceiving? train,ing ax BorroiGhs,
I Deitoit.\
?,... / , F.xpott licences for four large
.i'Britisli computers oreitned h% the.
Soviet Union have not yet been
granted by the Bo reT?l?ftti.Trade.
1 ?rhese comprise tw , I..C.i,,i-190tAs
for the Instiinve c ?l?gh-energy
Physi in Setpuiebov, near Mos-
cow; and two Sp stem 4/70i; for
1 Goisplan, the centriii Soviet p1-an-
rung ,a.gerv.,-y, to replace an existing
4/50. f
1 The diffieulftli.es of sating to east
Approved
. .; "'.
Europe and to the Soviet U?rtion
pa ri iedhnr wen.: de ;sic ii bed by
Arthur Humphreys, managing dir-
ector of international Computers,
in evidence to a suboommittee of
the F'...ilect Coraminee on Sencnc.-e
and Technology last wee-la Because
ol the ombargo system, he sa90,
considerable "'market subtlety''
was required.
customers, Mr. Hum-
piercys indienesia, often insisted an
ordering Items w?ti;i1-1 were not per-
mitted tinder die embargo rules. As
a result, I.C.f was often not sure
whether it had pined an ceder or
not.
Over the next two 'to three
months, he Added, ICE. could get
substantial Soviet business. But
we might not get it." Tbt rItPorte-ii
Burrou2ns order follows tire t,efiing-
up by the company of an east'
European sales branch based tin
Freyhourg. Switzerland.
The strata-cc emborgol.st. which
delanes the items which may not be
exported to cast re-leiro2e is pro-
duced by "Cocom", a Nato
coordinating committee concerned
wild, international export controls
and east/west trade.
I ,O.NDON TIKES , 2,/2 5/70
-
=.
"
..41- ?
-5
at: %far/
? ;
? SotbM'are develftTsA for Inter-
naliortal Competers' 1900 ficeties
of mac-hints is no tie made avail-
able under licence with a new
Polish computer, the OD-RA-
1304, deliveries of which have
now begun. rhe hardware firm
Ei,WRO (Wrociawskie Zak-
lady Eiektroniczne).
_This association could well lead
to future sales of I.C.L. comp'dters
in Poland, since the 1304 uses
transistors and is not as advanced
i as the third-generation 1960-scrics
mach;nes from I,C.I.. The Polr,h
, computer could therefore have a
i relatively short life of ilerliaps
; three '.eats, white generating a
familiarity with 1900 software and
l, a potential demand for the faster,
? ..more reliable British machines.
'Ibis strengthening of I.C.L.'s
psn,sition is significant at a time
when, under the direction of the
Soviet Union. the east European
countries are tending to stand:IA-Owe
? ----' on computers derived trod-, the
;;;;Vi 300 series. An agreement was
signed lii sioscow last month by
a. It C.t.niecon countries i or the
...,.,.;'.Isamii of a faintly al
computers. known as RI AD and
modelled on the current IBM range.
"fhe lic-en -711;-; Z.:. f,t1.-Ceale-ii i. ' WiLh
J.C.L. pent-lite me tiares.tricted use
of all 1900-series m5ftdeane. This in-
..? cludcfs the (?;.aarEe ova:rating
\ i
? fiVSACNIIS, pro-
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By KENN ET 17-1 OWEN
facterrer also pravidef; reprints of
I.C.I. manuals, and systems tapes
which are identicat to those oi
I.(' I..
On rue hardware side, the spe:.?i-
heal ions of the 1304 are much more .
basic than those at? the 1904,
ts ciosest parallel. Periph