WEEKLY INTELLIGENCE SUMMARY NO. 76

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000300060012-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: January 29, 1999
• Sequence Number: 12
• Publication Date: August 23, 1949
• Content Type: SUMMARY

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Weekly Intelligence Sunriiary No. 76
2Z August 1949
Exemption of Yugoslavia from the terms of the US-UK Satellite
aviation policy will bring substantial advantages to that country.
After the expected UK concurrence in this exemption has been obtained,
there will be no further opposition to the exchange of air rights
with Yugoslavia or the sale of aviation equipment to this Satellite,
provided these transactions are considered by the contracting western.
country to be in its national interest. In view of the increased
tension ith they USSR, Yugoslavia will now desire to exploit immedi.-
ately the opportunities afforded. (Item No. 1, A)
The USSR has now formalized the hitherto loosely integrated Soviet
Bulgarian civil air services through organization of a new stock cori-
pany known as TABSO. (Item No. 2, C)
It now appears that the Deputy Foreign Ministers will. conclude
their conference in London without having resolved the controversial
issue of railway rolling stock. Although the Foreign Ministers in-
structed the Deputies to clarify the term "war booty" which lies at the
root of this problem, the Soviet representative, insisting that the
terms of reference did not include $Imoveable" war booty, has refused to
discuss the entire rolling stock issue. Unless it is possible to
achieve agreement at the Ministerial level, therefore, the rolling
stock problem will probably be left for bilateral. settlement in direct
Austrian-Soviet negotiations outside the framework of the treaty.
(Item No. 3, B)
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SECTION II. CURRENT DEVIMOP IE'NTS
CIVIL AVIATION
1. Exemption of Yugoslavia from the terms of the US-UK Satellite avia-
tion policy will bring substantial advantages to that country. After
the expected UK concurrence in this exemption has been obtained, there
will be no further opposition to the exchange of air rights with Yugo-
slavia or the sale of aviation equipment to this Satellite, provided
a' given transaction is considc rod by any contractin ; western coun!1r, to
Ue in its nutiorial in k'c; to
In view of the increased tension with the USSR, Yugoslavia will
now desire to exploit immediately the opportunities afforded. Its
civil air fleet, known to be in extremely poor condition, may have been
depleted by Soviet removal of aircraft following the recent dissolution
of the joint Yugoslav-Soviet airline JUSTA. In any case, a substantial
portion of the fleet is probably non-operational in view of the diffi-
culties Yugoslavia has experienced in acquiring the necessary spare
parts and equipment against western opposition.
Yugoslavia has long desired to establish air connections with
Western Europe. As the only present Yugoslav outlet is through Prague,
Yugoslavia will now intensify its efforts to establish direct services
to non-Cominform areas. While the relaxation of policy will not enable
Yugoslavia to acquire combat aircraft from the West, it can substantially
increase the potential airlift capabilities of the Yugoslav Air Force by
bolstering its civil air.fleet. In case of hostilities, moreover, Yugo-
slavia would be able to use an expanded fleet of transport aircraft for
moving high priority freight from western sources.
The relaxation of aviation restrictions with regard to Yugoslavia
is dependent upon the continuation of the present Tito-Kremlin breach.
Any political development in Yugoslavia, therefore, which again brings
this Satellite in line with Kremlin policy, would automatically rein-
state the former policy. (Secret)
2. The USSR has now formalized the hitherto loosely integrated Soviet-
Bulgarian civil air services t rough organization of a new stock com-
pany known as TABSO. The company, which presumably has absorbed the
Bulgarian State Airlines (I3VL), doubtless conforms to the pattern of
other Soviet-sponsored joint aviation companies such as the Soviet-
Rumanian airline TARS and the Soviet-Hungarian airline MAZOVIaET. A
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novel feature of this recent move, however, appears to be that Soviet
exports to Bulgaria carried by TABSO will be exempt from Bulgarian
excise taxes on the ground that they are a Soviet contribution to
Bulgaria's capital assets. There is no reason to believe, however,
that Soviet air policy will be more generous toward Bulgaria than it
has been toward Rumania or Hungary. While the USSR has required its
Satellite airlines to provide all necessary ground facilities and in-
stallations, it has done little to assist them in modernizing their
flying equipment. (Confidential)
SURFACE TRANSPORTATION
3. It now appears that the Deputy &2:2k n Dinistera will conclude
their conference in London without having resolved the controversial
issue of railway rolling stock. Although the Foreign Ministers in-
structed the Deputies to clarify the term "war booty, which lies at the
root of this problem, the Soviet representative, insisting that the
terms of reference did not include "moveable" war booty, has refused to
discuss the entire rolling stock issue.
As a result, there is no clarification of the status of over 500
locomotives and 1,100 freight cars owned by the Austrian Federal Rail-
ways prior to the Anschluss in March 1938. Although this equipment has
not been removed from Austria, the USSR has placed its CCCP mark on it
and claimed it as war booty. The US, desirous of insuring that
sufficient transport equipment will remain at the disposition of Austria
to meet the needs of its economy, has discussed with the French and
British Delegations a proposal which is drafted without specific mention
of the war booty issue, but which would recognize Austrian title to the
pre-Anschluss equipment under dispute as well as equipment acquired by
the Austrian Federal Railways since 8 May 1945. Due to the Soviet posi-
tion, however, this proposal has not been discussed in open session, and
unless it is possible to achieve agreement at the Ministerial level, the
rolling stock problem will probably be left for bilateral settlement in
direct Austrian Soviet negotiations outside the framework of the treaty.
(Secret)
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