ECONOMIC DEFENSE ADVISORY COMMITTEE Reference Manual on Economic Defense (First Revision)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01203A000100020001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 104
• Document Creation Date: November 16, 2016
• Document Release Date: March 8, 2000
• Sequence Number: 1
• Publication Date: November 25, 1953
• Content Type: REGULATION

DJ$ M(Peviewar Of GW~
G It mviains ?srrormation of CIA
int ?vt Mat must remain
tea,:9ti s4 at T S C
Authority, HR 10.2
25X1A9a
ED1iC D-62
November 25, 1953
ECO? 'fir r";cti E ~kD IP F.~ E
Refer cn?re M` r~~,a] orb ~r..o ,c jic Dq#en (L'irs '4Z -s E vision)
Transmitted herei,,i th are corOtes of a revised "R.ef erence Yea real
on Economic De Tense" for the attention of personnel in the RDAC a enci es
concerned with the va:rious aspects of security trade control pro Ararns
and policies. This document supersedes the Reference Manual cn Lconormc
Defense transmitted to 1 D C meembor agenci -s and to overseas posts in
May, 1952. Go- pies of the earlier Manual should he destroyed. Copies
of the revised Reference Manual are being tra:.sudtted to over seas posts..
This manual is intended to provide a cor]i!_atic)il of reference
material, insisting the full text of basics po?.ictr it ect ves, program
dos:an;eltc adm?:nistrr?.t:ive . e ;mil ions T?c;y~L' lirtg to t'_? e ccc~rzo~r: _c
defense as of Noveirl)er 23, lc)53. It is hoped that rir ~ g this ma.--
,.
t
tori ~- tog,:' t1~;'r in a `" :.sig1e document d 11 be of a.SS~.C ~#'rr'E. to operating
officers in the a-re.ue?1stioY: and i.nt'r?rete.,t o of irestrLc i.ores andC'r/,Tip
h as bear. compiled In L ~ ~C
Other co The Reference Manual
OtmmiAr?io-ations
in coordination with other E ! C agencies. I t is sun lor;efltary tc other
reference docti Hems E,nd orientation materiel given general distribution
and to Foreign Service Reporting, instructions,,
It is planned to issue sumplements as necessary to keep the
Q
Reference Manual up to date,
httention is directed, to the need for appropriate security pre-
cautions in the ?handling of this document.
Irvin ; 14 Knower
Exec"itive Secretary
Dj sstr. IbUation:
i~bCr(including; overseas)
EC
Special overseas list
Security >.rormat`~'2
OGA declassification & release instructions on file
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1
Documant No,
Review at this document by CIA has
data I'm"ned that
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11 Lf- t~,, 10
d'. hsss no cbIo Lion to declass
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Security: Information
November 23, 1953
ECONOMIC DEFENSE ADVISORY COI ITTEE
REFMPMM, MT3'JAL ON EOONa TIC DEFENSE
(J ixst Rev si:o'n
Certain materials in this Manual contain
information affecting the National Defense
of the United States within the meaning of
the Espionage Act, Title 18 USC, Sections
793 and 794, Transmission or revelation
of their contents in any manner to an
unauthorized person is prohibited by law.
Security Information
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Security information
REFERENCE hANUAL ON ECONOMIC DEFENSE
(First Revision)
Introduct,or Nate; This revised manual is intended to
provide, to U.S. officials in hashin.gton and in the field, a
compilation of basic reference material on United States
security trade control policies and programs. An earlier
document of this nature was issued in May 1952; that document
has been largely superseded by subsequent developments and
should be destroyed. It is hoped that bringing this material
together into a single volume and making it generally avail-
able will result in more widespread familiarity with the
substance of the economic defense program and will be of
assistance to operating officers in the preparation and inter-
pretation of instructions and other communications. Supple-
rents will be issued as necessary to keep this manual up to
date.
An effort has been made to include in this manual the
full text of the policy directives, important administrative
regulations, and key program documents relating to economic
defense. The table of contents also notes key reference
documents and orientation material which are given wide-
>pread distribution in'Washington and to overseas posts but
which are not reproduced in the reference manual. This
manual is supplementary to such materials an d,to Foreign
service Reporting Instructions.
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Security- Irfomation
.TABLE O'ff' CONTENTS
GENLRAL U.S. POLICY
A.
I44uttt 1 Defense Aos .starsce Control kct of 3.951
(I?ubiic Law 213 - 81st Congress)
i. 4
B.
Policy Di g" * : t m se cti .Ecrinornic Da.Vonzc Atppr ov ;d .
Erxtio1122''i:7_ve Branch tff ctive July i1f+ 195 ),mud actions to the ir-react
of the control system on the economic, political and financial situation
of our allies and to their views and intentions.
30. Consult
Securit. Information
f
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30. Consult with other )rincinal free world nations before entering
into new major economic defense programs,
31. Seek to ' der onstrate to free world nations, on all,ropriate
occasions, the risks of excessive reliance on the Soviet bloc as a
trade ooartner for the free world.
32. Encourage and facilitate the flow of trade within the free
world, including, the entry of co: odities into the United States by
re uction of trade barriers, *-articularly when the effect of such action
would be to decrease the reliance of the free world on the Soviet bloc.
33.. Encourage and sup.)ort, by al?- reasonable moans, the develop-
ment of alternative maiikets and sources of sup ly within the free world,
so as to reduce de-)enden.ce of free world countries on Soviet bloc markets
and sources of supply.
34. Seek-to provide safeguards designed. to miia:imize the ire iecliate
.0_'i: ect. of a sudden reduction or cessation of trade initiated by the
Blc: c.
35. Adiinister current US programs such as economic developmenty,
mi '.nary nrocurer::ent, defense support, stoc1.pilin cn(I similE r activities,
in such a way as to take into account t',e im-)act on the econo.ndc defense
program , and, -)articulaxly, the objective of decreasing; the free world is
reliance on Soviet bloc trade.
Z. = Z_ kMMMLb
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- 11(a)
In the foregoing document, the following amendments, approved
by the Executive Branch November 6, 1953, should be inserted as
new paragraph No. 17 (old paragraph 17 renumbered to become No. 18
and subsequent paragraphs renumbered accordingly) and paragraphs
Nos. 37 and 38
17. Hong Kong and Macao are colonies of friendly countries
and their economic needs should be viewed in that light. However,
the relationship of the economies of Hong Kong and Macao with that
of Communist China is so close that the risk of the circumvention
and frustration of economic defense controls toward Communist China
is greater through transactions with these western colonies than
through similar transactions with other free world countries. This
danger is greater in the case of itisacao because of its history of
uncontrolled trade and the unreliability of its export controls.
It is therefore necessary to take special care in the control of
transactions with Hong Kong and Macao.
Toward, Special Areas
37. In applying controls, accord to Hong Kong treatment
consistent with that generally accorded cooperating countries while
employing such special care as may be necessary to prevent frustra-
tion of economic defense controls on transactions with Communist
China.
38, To the same end apply more stringent controls on
trade with hacao as may be appropriate.
Olowdow
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AN ACT
To provide for continuation of authority for
the regulation of exports, and for other
purposes
Be it enacted by.the Senate and House of Representatives of the.United States
of America in Congress assembled. That this Act may be cited as the "Export Control
Act of 1949."
SEC. 1, (a) Certain materials continue in short supply at home and abroad
so that the quantity of United States exports and their distribution among import-
ing countries affect the welfare of the domestic economy and have an important
bearing upon the fulfillment of the foreign policy of the United States.
(b) The unrestricted export of materials without regard to their
potential military sigpificance may affect the national security?
DECLAR41014 OF 'POLICY
SEC, 2, The Congress hereby declares that it is the policy of the United
-States to use export controls to the extent necessary (a) to protect the domestic
economy from the excessive'drain of scare materials and to reduce the infla-
tionary impact of abnormal foreign demand; (b) to further the foreign policy of
the United States and to aid in fulfilling its international responsibilities;
and (c) to exercise the necessary vigilance over exports from the standpoint of
their significance to the national security.
SEC. 3. (a) To effectuate the policies set forth in section 2 hereof, the
President may prohibit or curtail the exportation from the United States, its
Territories, and possessions, of any articles, materials, or supplies, including
technical data, except under such rules and regulations as he shall prescribe.
To the extent necessary to achieve effective enforcement of this Act, such rules
and regulations may apply to the financing, transporting, and other servicing of
exports and the participation therein by any person,
(b) The President may delegatethe power, au thority,.and discretion
conferred upon him by this Act to such departments, agencies, or officials of
the Government as he may deem appropriate.
(a) The authority conferred by this section shall not be exercised
with respect to any agricultural commodity, including fats and oils, during any
period for which the supply of such commodity is determined by the Secretary of
Agriculture to be in excess of the requirements of the domestic economy, except
to the extent required to effectuate the policies set forth in clause (b)-or
clause (a) of section 2 hereof,
CONSULTATION AND STANDARDS
SEC. IL. (a) In determining which articles, materials., or supplies shall be
con i #e& 9 6be ' W*/~P i l P, 0+ w(~" raZpf shall
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be limited, any department,agency, or official making these determinations shall
seek information and.. advice, from the several. executive .,departments and independent
agencies concerned with aspects of opr domestic a- id foreign policies and operations
having an important bearing on exports.
(b) In authorizing exports, full utilization of private competitive
trade:. channels -shall-be encouraged insofar as practicable,. giving consideration
:.to the interests- of. small business, merchant exporters as well as producers, and;
established and new exporters, and provisions shall be made for representative;
trade consultation to that end. In addition, there may be applied such other
standards or criteria as may be deemed necessary by the head of such department,
or agency,,, or official to carry out the policies of this Act,
VIOLATIONS
SEC. ; , . in: case of the violation of any provision of this Act or ,.any regula-
tion, order, or license issued hereunder, such violator or violators, upon convic-
tion, shaLl be. punished by a fine of not more than p10,,000 or by imprisonment for
not more than one year ,or by both such fine and imprisonment.
ENFOk CEMONT
. SEC, , 6, :(a) To . the extent necessary or.appropriate to the enforcement, of this
Acts..the-head 'of any, department or agency exercising any functions hereunder (and
officers or employees of such department or agency specifically designated by the
head thereof) may make such investigations and obtain such information from,
require,.-such reports. or the keeping of such records by, make such. inspection of'.
the-books, records, and other writings, premises,., or property of, and. take the
sworn testimony of, any person. In addition, such officers or employees may.
administer oaths or affirmations, and may by subpoena require any person to appear
and testify or to appear and produce books, records, and other writings, or both,
and in the case of contumacy by, or refusal to obey a subpoena issued to, any
such :person, . the district court of the United States for any district in which
such-.person: is f )und..or resides or transacts business, upon application`, 'and after
noti:c:e .to:any. such person and hearing, shall have jurisdiction to issue axe order
requiring such person to. appear and give testimony or to appear and produce books,
records, and, other writings, or both, and any failure to obey ;suchorder;of the
court may be.punished.Jby such court as .a contempt thereof.
(b) No person shall be excused from complying with any requirements
under-.this section because,of his privilege against self-incrimination, but the
immunity provisions of the Compulsory Testimony Act of February 11, 1893 (27
Stat., i43), shall apply with respect to any individual who specifically claims
such privilege,
(e) No department, agency,, or official exercising any functions
under this Act shall publish or disclose information.obtained hereunder which is
deemed confidential or with reference to which a request for confidential treat-
ment is made by the person furnishing such information unless the head of such'
department or agency determines that the withholding thereof is contrary. to the
national interest,
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EXEMPTION FROM ADMINISTRATIVE PROCEDURE
SEC. 7. The functions exercised under this Act shall be excluded from the
operation of the Administrative Procedure Act (60 S tat. 237), except as to the
requirements of section 3 thereof.
QUARTERLY REPORT
SEC, 8. The head of any department or agency or official exercising any
functions under this Act shall make a quarterly report, within forty-five days after
each quarter, to the President and to the Congress of his operations hereunder,
DEFINITION
SEC. 9, The term "person" as used herein shall include the singular and the
plural and any individual, partnership, corporation, or other form of association,
including any government or agency thereof.
EFFECT 014 OTHER ACTS
SEC. 10, The Act of February 15, 1936 (leg Stat. 1140), relating to the
licensing of exports of tinplate scrap, is hereby superseded; but nothing contained
in this Act shall be construed to modify, repeal, supersede, or otherwise affect
the provisions of any other laws authorizing control over exports of any commodity.
SEC. 11,. This Act shall take effect February 28, 1949, upon the expiration of
section 6 of the Act of July 2, 19110 (511 Stat. 711), as amended. All outstanding
delegations, rules, regulations, orders, licenses, or other forms of administrative
action under said section 6 of the Act of July 2, 19140, shall, until amended or
revoked, remain in full force and effect, the same as if promulgated under this
Act.,
TERMINATION DATE
SLC. 12. The authority granted herein shall terminate on June 30, 1953, or
upon any prior date which the Congress by concurrent resolution or the President
may designate.
Public Law 33, 82nd Congress, extended this Act until June 30,
1953.
Public Law 62, 83rd Congress, extended this Act until June 30,
1956,
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- 15 - November 12, 1953
ACEP PROGRAM DETERMINATION NO. 1100
To: Director
Bureau of Foreign Commerce
Subject: U.S. Master Export Security List, Attributes and
Standards (ACEP Document No. 100)
There are hereby established:
(a) The U.S. Mas.ter Export, Security Lis t; and
(b) Attributes and Standards for placing items on
U.S. Master Export Security List
The new Attributes and Standards shall supersede immediately
the present export security criteria . The establishment of the
new list, C,:,nd transfer of items from present U.S. Department of
Commerce "U.S. Security Export Control. Lists" shall proceed in
accordance with the procedure set forth on page 11 of this Program
Determination.
ACEP PD No. 238 and Amendment 1 and the provisions of ACEP
PD No. 28 Amendment 60 with respect to criteria are hereby revoked.
-.r. -T
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ACEP PROGRAM DETERMINATION NO. 1100 Pago 16
I. U. S. MASTER EXPORT SECURITY LIST
The single U. S. Master Export Security List shall consist of
the parts described below;
Part A Atomic Energy Material - includes source material,
fissionable material and facilities for the production
of fissionable material as defined by the Atomic Energy
Commission. Such listing concurrently reflects the
coverage in this area provided in Title I, Categories
A Dn.d B of the Battle Act Lists as adapted from the
AEC List for that purpose.
Pert B Arms, Ammunition and Implements of War - includes the
arms, ammunition and implements of war listings as
established by the Office of Munitions Control of the
Department of State. These listings reflect the
coverage provided in Title I, Categories A and B of
the Battle Act Lists as adapted for that purpose.
Part C Other Items Controlled by the U.S. to the Soviet Bloc -
Includes the various security listings employed by
the Department of Commerce in its control to the Soviet
Bloc (except for certain additional control to Communist
China end North Koren which is provided for in Part D
of the list) and Title I, Categories A and B, and Ti-ule
II of the Battle Act Lists as adopted for thBtpurpose
and also reflecting agreed international controls as
reflected in. I/'L I (not covered in Parts A and B above)
I/L II and I,L III. Part C shall be divided into three
sections as follows:
Section I Includes items for which agreements are in
force in. CoCom for effective embargo to the
Soviet Bloc, including the five IA items
appearing on Category B of Title I even
though formal multilateral agreement to em-
bargo was not reached by CoCom countries as
compared to other acceptances of the 'itle I,
Category B:..Lis.t.,
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Page 17
ACEP PROGRAM DETERMINATION NO. 1100
Section. II Includes.items for which agreements are in
force in. CoCom for effective quantitative
control to the Soviet Bloc, including the
listing of items agreed internationally
for quantitative control even though they
may be separately listed in Section III
below fora more stringent control by the
U.S
Section III Includes items (a) which are the subject
of strictly bilater,-:l export control action.,
(b) which ere the subject of unilateral
control action, (c) which are regarded as
negotiable for either rnultila tern 1 or bilat-
eral export control (whether or not such
negotiation has in fact been. under"c,cken.)
end as to which provisional unilateral
action mny or may not be currently taken.
Part D Items Controlled to Communist China - includes the listing
for control to Communist China and North Korea. this
part is. to be divided into three sections which would be
similCnr in type to those described under Part C, end
a Part D, Section IV listing the items excepted from
control. This Part D may be further utilized for
special listings keyed to particular area problems in
situations either of interrintlon.al tension involving a
threat of imminent weir, or of limited warfare in defiance
of the U. S. or U;.. N. security interest.
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ACEP PROGRAM DETERMINATION NO. 1100
Page 18
II. ATTRIBUTES FOR DETERMINATION OF ELIGIBILITY OF ITEMS
FOR PLACEMENT ON THE U.S. MASTER EXPORT SECURITY LIST
The sole function. of the security attributes is to determine eligi-
bility of no. item .for consideration. for placement on the U.S. Master
Export Security List.
A. One or more of the following dttributes shell be possessed by
materials or equipment (Including technical data and. services)
if such are to be considered for restrictive control for
security reasons in a situation of international tension not
involving the threat of imminent war in. defiance of the U. S.
or of the U. N.
1. Atomic Energy Materials and Equipment:
a. Any materiel (raw or processed) containing by weight
0.05% or more of uranium; thorium, or any combination
thereof; 1/
b. Any fissionable material; 1/
c. Any equipment or device capable of the production of
fissionable mnterial and cny impor .ant component part
especially designed for such equipment or device. 1/
2. Arms, Ammunition, nn.d Implements of War. 2/5/
3. Materials and equipment (by types and grades) which are
designed specially or used principally for the development,
production. or utilization of arms, ammunition, implements
of war, and atomic energy materials. 4. Materials and equipment (by types and grades) which incor-
porate advanced technology or unique technological know-
how (including production know-how), having important
direct or indirect militery or atomic energy application,
the acquisition of which may reasonably be expected to
permit a significant advance in Soviet Bloc technology
over the level of development already achieved or expected
to be achieved within a period of short duration. 1/4/
5. Materials and equipment (by types and grades) in which the
Soviet Bloc has an actual or potential deficiency (a) that
is of a magnitude or nature constituting an. important
obstacle to the maintenance of or increase in activities
of high importance, direct or indirect, to its military,
power and ((b) that the Soviet Bloc canot overcome through
its own resources within a period of short duration.
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Page 19
B. In. a situation of international tension involving a threat of
Imminent war, or in a situation of limited warfare, in
defiance of the U. S. or of the U. N., all material or equip-
ment (including technical data and services) which meet the
attributes listed in (A) above shall be considered for re-
strictive control for security reasons, and in addition
thereto other items shall be considered for restrictive con-
trol for security reasons based upon such further attributes
as may be p~trt,inen.t and appropriate or for reasons of over-
riding U. S. policy, 31!6/
Footnotes
1/ This attribute is applicable to the implementation of the
Atomic Energy Act of 1946 which is under the jurisdiction
of the Pttomic Energy Commission and related to the imple-
mentation of the Battle Act by the Director of Foreign
Operations.
2/ This attribute is applicable to the development of the
Munitions List which is administered by the Department of
State and related to the implementation of the Battle iict
by the Director of Foreign Operations.
3/ These attributes relate to the implementation of the Export
Control Act of 19+9 as amended, and are related to the
implementation of the Battle Act by the Director of Foreign
Operations.
k/ The target area currently involved in these attributes is
the Soviet Bloc. (excluding Communist China and North
Korea) which is currently defined to include Albania,
Bulgaria, Czechoslovakia, Estonia, Eastern Germany,
Hungary, Latvia, Lithuania, Poland and Danzig, Rumania,
U.S.S.R.
Materials and equipment should riot generally be deemed to
possess this attribute if they are materials or equipment
primarily intended for civilian use unless they possess
high military importance and are readily convertible into
arms, ammunition or implements of war.
6?/ The target area currently involved is Communist China
and North Korea.
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ACEP PROGRAM DETERMINATION NO. 1100
Page 20
III STANDARDS FOR PLACEMENT OF ITEMS ON U.S. MASTER EXPORT
SECURITY LIST
The function of the standards is to provide tests which must be met
in- a reasonable demonstrable manner, for the placement (including
retention or dcletion) of an. eligible item on the U. S. Master
Security List and the appropriate part thereof'.
A.. Placement of Items on Part A (Atomic Energy) of U. S. Master
Export Security List
An item shall be placed on Part A of the List if it possesses
Attribute No 1 en.d is listed for export control by the
atomic Energy Commission..
B. Placement of Items on Part B (Arms.etc ) of U. S Master
Export Security List.
An. item shall be placed on. Part B of the List if it possesses
Attribute No 2 and is listed for export control by the
Depa rtmen.t of State.
Placemen.t of Items on Part C-I (Embargo) of U. S. Master
Export Security List. 1
An item shell be placed on Part C-I if it meets 811 of the
following Standards:
Ste.n.dard No, 1. The item possesses one or more Attributes
Nos 3, and 5, and provided that:
(a) With respect to Attribute No. 4;
(1) The know-how is extractable from the material
or equipment involved; and
~2) The application of the know-how is not confined
to items predominantly of civilian uses; and
(3) The Soviet Bloc is not reasonably expected to
achieve the advance in technology afforded bj
the material or e; uipwen.t to be embargoed
within the period of time required to obtain
multilateral agreement on embargo and its ef-
fective implementation; and
(4) A lesser degree of restriction than embargo
cannot reasonably be expected to prevent the
extraction. of the know-how from the material
or equipmen.t involved
Approv
1k f c-
%0q1U h ardsoof
c-III.
QVrTTRTnnV TNFi'fMGrPTT\T
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ACEP PROGRAM DETERMINATION NO. 1100 Page 21
(b) NTi.th respect to Attribute No. 5:
(1) The deficiency is not judged to be of a character that
would induce the Soviet Bloc to remedy it with a speed
or to a degree that would make the net effect of an.
embargo unfavorable to the security interests of the
free world; and
(2) A lesser degree of restriction. than embargo cannot
reasonably be expected to create or maintain ra Soviet
Bloc deficiency ns defined in the Attribute; and
(3) The embargo will create or maintain c Soviet Bloc
deficiency either in'the material or equipment to be
embargoed or in. other materials or equipment as defined
in. the Attribute; and
(4) The Soviet Bloc is not reasonably expected to be able
to overcome the deficiency during the time involved in
establishing the necessary embargo control and achieving
its effective implementation, except by diversion of
materials or facilities of comparable or greater
importance to its military power; and
(5) The embargo is not reasonably expected to induce the
Soviet Bloc to overcome the deficiency without causing
serious impairment of activities other than those
related to that deficiency but which are of comparable
or greeter importance to its military power.
Standard No. 2. The coverage already afforded by the placement
of related items on. the U. S. Master Export Security List is
inadequate to achieve U. S. Security objectives.
Standard No. 1,n agreement is in force in CoCom for effective
embargo of the item to the Soviet Bloc.
D. Placement of Items on Part C-II (ugntitntive Control) of U. S.
Master Export Security List. l/
An. item shall be placed on Part C-II if it meets all of the
following Stgndnrds:
Standard No. 1. The item possesses either Attribute No. 4 or
Attribute- No. 5, provided that
(.a) With respect to Attribute No. 4, the Attribute as condi-
tioned under (a) (1) grid (2) of Standard No. 1 for
Part C-I is met but:
I/ If a listed item is reopened by CoCom for chgnge of control,
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(1) The technology cannot be effectively separated by
designing types or grades of commotieies to permit
embargo listing but is susceptible to a licensing
guide approach which may reasonably be expected to
succeed in preventing the transmission of the tech-
nology; or
(2) A lesser degree of restriction than. embargo can.
reasonably be expected to prevent the extraction of
the technology from the material or equipment in-
volved; and
(3) The Soviet Bloc is not reasonably expected to
achieve the advance in technology afforded by the
material or equipment to be 4uantito Lively con-
trolled within the period of time required to ob-
tain, multilateral agreement on quantitative control
and its effective implementation.
(b) With respect to Attribute No. 5:
(1) The deficiency is not judged to be of a character
that would cause the Soviet Bloc to remedy it
with a speed or to a degree that would make the
net effect of quantitative control unfavorable to
.the security interests of the free world; and
(2) A lesser degree of restriction than embargo can
reasonably be expected to create or maintain a
Soviet Bloc deficiency as defined in the Attribute;
and
(3) Quantitative control will create or maintain as
Soviet Bloc deficiency either in the material or
equipment to be embargoed or in other materials or
equipment as defined in the Attribute; and
(4) The Soviet Bloc is not reasonably expected to be
able to overcome the deficiency during the time
involved in establishing the necessary quantitative
control and achieving its effective implementation,
without diversion of materials or facilities of
comparable or greater importance to its military
power; and
(5) Quantitative control is not reasonably expected to
induce the Soviet Bloc to overcome the deficiency
without causing serious impairment of activities
other than. those related to that deficiency but
which are of comparable or greater importance to
its military power.
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ACEP PROGRAM DETERMINATION NO. 1100
Page 23
Stenderd No. 2. The coverage already afforded by the place-
ment of related items on the U. S. Master Export Security
List is inadequate to achieve U. S security objectives.
Standard No. 3. An agreement is in force in CoCom for
effective quantitative control of the item to the Soviet
Bloc.
E. Placement of Items on Part C-III Individual Item Control)
cif U. S. M^ster Export Security List.
(Explanatory Note: This Part comprises items the export of
which to the Soviet Bloc the U. S. hes determined should
be subjecL?d to control and for which there is no current
multilateral agreement by CoCor to controls identical with
those of the U.S.)
An item shill be placed on Part C-III if it meets both
Standards No. 1 end 2 and either Standard No. 3 or 4.
Standard No. 1. The item possesses one or more of Attributes
Nos . 3, 4, and 5, and Standard No. 1 under Part C-I or
Standard No. 1 under Part C-II is met.
3tan.d2rd Noo2. The coverage already afforded by the place-
ment of related items on the U. S. Master Export Security
]:gist is inadequate to achieve U. S. security objectives.
Standard No. 3. It can be reasonably expected that U.S.
negotiations would be successful in obtaining satisfactory
multilateral control by CoCom provided, however, it is
reasonably clear that such negotiations or resulting control
would not cause:
(a)
An expenditure of good will or bargaining power
disproportionate in terms of U
interests; or
S. netional security
(b)
An undue impact on the economic, political, or fin-
onciel situations of the member countries.
Standard No. k. Where the U. S. does not intend to seek
multilateral control by CoCom or has not been successful
in obtaining adequate control agreement by CoCom:
(a) It is reasonably demonstrated that U. S. controls
would be effective in the light of nvailcble world
supplies and the controls imposed by other actions;
or
(b) There ore overriding U. S. policy considerations.
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ACEP~RfOORAM DETEtMINATI6N-No. 1100 Page 21
NOTE: The degree of control to be applied to an item on Part
C-I shell be determined on the merits of each item in, terms
of (d) the possibility of achieving effective control; includ-
ing the use of licensing guides, and (b) any overriding con-
siderations of U.S policy.
F. Placement of `Items on Part D (Communist China Control) of
Master Export Security List.
(Explanatory Note: This Part is divided into four Sections:
China Embargo; D-II, China Juanti to Live Control; D--III, China
Individual Item Control and D-IV, Exceptions.)
Part D-I (China Embargo). An, item shall be placed on IartD-II
of the U.S, Faster?E~xport Security List if it meets the
following Standard:
Standard No.. 1 The item is listed on Parts A, B, C-I,
C-II, or International List III, or the special China
List.
Part D-II Chinn uentitativeControl ..,. An item shall
be placed on Part D II of the U S Moe ter Export
Security List if it meets the following standard:
Standard N 1. An agreement is in. force multilaterally
for effective 4uantitntive control of the item to
Communist China .
Part D-III (China Individual Item Control . An. item shall
be placed on Part D-III of the U.S. Master Export Security
List if it meets one of the following standards and is
not listed in. Part D-I or DryII;
Standard No-l. The item is considered appropriate for
control in. view of (a) the nature of aggression. or
threat of aggression., or (b) overriding considerations
of U.S. Policy.
Standard No. 2. An agreement is in. force with Japan
for effective restriction of the item to Communist
China .
Pert D-IV (Exceptions) . An item shall be placed on
Part D-IV if it has been determined that the item is not
to be restricted to Communist China.
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ACEP Program Determination No. 1100
DEVELOPMENT rF NEW U.S. MASTER EXPORT SECURITY LIST
The new U.S. Export Security List shall be maintained by the Depart-
ment of Commerce. The AEC and the Office of Munitions Control,
Department of State, are to review the items presently controlled
by them, and a:ivise the Department of Commerce what items are to be
included in Parts .A and B of the new list.
LISTING OF ITEMS
In. order to expedite transition, to the new list -
1. The following items shall be placed on Part C-I without
further review, for the time being:
(a)
All items presently on U.S. List I.
(b) The five Battle let Title I, Category B items now
onI/1II.
(c) All other Battle Act Title I items not included in
Parts A or B of the U.S. Master Security List.
2. Ill items on U.S. II shall be placed on part C-II (the
five Battle Act items shall show the appropriate cross-reference
to Part C-I) . For any other items on. I/L II for which the U.S.
has determined more restrictive controls are essential, there shall
be appropriate cross-references to Part C-III wherein the U.S. con-
trol will be described.
3. Part C-III. Subject to an early review as to whether any
particular item possesses the new attributes and meets the standards,
the following shall be placed on Section III:
The I-A items (n.ot covered by the Battle Act) .
4c)
Such additional items as are in process of negotiation.,
or for which decisions have been made for unilateral
action.
The degree of U.S. control for each item on Section. III shall be
that called for by the particular program determination or notice
of action.
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4. Likewise in establishing the new Part D, Sections I,` II and
III applicable to Communist China, the items presently agreed for.
multilateral embargo shall be immediately- listed in. D-I, with past
facto review scheduled for an early date. Similarly, Part D-II
shall list the item or items presently agreed for multilateral
quantitartiv.e control.
With reference to Part D, Section III, and subject to a later review
as to whether retention. of any particular item is in. order, shall be
listed immediately:
1. The uncovered residue of U.S. List .C-III and former I-A
and II-B items.
Unogreed: res.iduol of U.K. supplemental China List.
3. The confirmed residual as to the 40U embargo items bf
Part III-I.. of the Japanese Bilateral List as currently
agreed..
4.* Items covered by, Part III-B of the Japanese Bilateral
List as currently agreed.
5.* N.E.S. category excluding minor exceptions to U.S:
control to Chinn
(* In.cludes..items controlled for overriding U.S. policy reasons.)
Part D-IV. Items excepted from control to Communist China
shall:be listed in this Section.
IDENTIFICATION OF ITEMS
l., in designating the. particular listings on the new U.S.
Master..Ex.port Security List, the present identification. numbering
of items shall be retained in so far as practicable to minimize
confusion.
2. Wherever .an .item appears on. two sections of the 'list there
shall be -pproprin.te cross-references clearly indicating which
listing: governs, the U.S. control.
3. Items lis.ted in Part C-III shall contain coded references
showing,;(a). the international control status; (b) character of
U.S. control to the Soviet Bloc; and (c) character of U.S. control
to friendly countries.
Is l John D. Garrett
John D. Garrett
Executive Secretary
Advisory Committee on Export
Policy
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ACEP PR0(GRA1?s DETERNINATIUN NO, 502 April 25, 1951
To: Director
Office of :International Trade
Subj-.at: Export Policy for Licensing Commodities to R Subgroup A Tiestina-
tions other than Communist China and North Korea (bee PD-361 and
Amendments Thereto for the Latter Areas) (OC Doc. 596, 596.1 and
Staff 1-Temorandun dated April 16, 1951)
Program Determination No. 472 and Supplement 1 are consolidated and
revised to read as follows;
"A validated export license shall Ve required for the export to Sub-
Group A destinations of any commodity whether or not included on the Positive
List.
The following policies shall gover. the licensing of commodities for
export to R Subgroup A destinations other than Communist China and North Korea:
1. Items in short supply shall be denied,
2.
Items on U.S. Lists I and IA shall be denied,
3. All other commodities on tho Positive List which are destined for such
areas, whether shipped directly or indirectly, shall be denied; however, theOIT
may refer to the R Procedure Subcommittee for its recommendation applications
for such commodities which in its opinion should be approved.
4, U.S. Class IC items which are not on the Positive List shall be denied
by OIT if the export is in excess of minimum. quantities; the UIT shall approve
the export of minimum quantities of such commodities,
5. All other commodities not on the Positive List shall (a) in general be
approved; though (b) the OIT may in any specific case reduce or deny licenses for
particular shipments,
6. The OIT shall report monthly to the Executive Secretary of ACEP the
licenses applied for, the quzn tities approved, and the quantities denied for all
commodities which are not on the Positive List and all IC commodities on the
Positive List, for export to these destinations. The kCEP will recommend the
future policy to govern the licensing of those items, including the possible
transfer of the items to other controls categories and advice to OIT as to whether
any item on the U.S. IC List should be dealt with mote stringently or more
leniently in the future."
John D. Garrett
Executive Secretary
Advisory Committee on Export Policy
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August 13, 1953
ACEP PROGRAM DETERMINATION NO. 361 Amendment 10
To: Director
Office of International Trade
Subject: Policy, Procedure'and Licensing Criteria for
Processing Export License Applications for
Hong Kong and Macao (OC Document No. 1083)
(This Amendment supersedes PD 361 Amendment 9; Part A has been
revised; Part B remains unchanged.)
The Office of International Trade is authorized to take the
required actions with respect to processing export license
applications in order to implement the U.S. Licensing Policy
for Hong Kong and Macao nsset' forth below:
A. U.S. LICENSING POLICY FOR HONG KONG
1 . All Positive List Items and any Rated Items not on the
Positive Lis tt
Validated licenses may be issued for items in this cate-
gory within the limits of availability* for consumption
in Hong Kong, and for transshipment or resale to non-
Soviet Bloc destinations provided 'shipments do not in-
volve:
(a) accumulation of inventories beyond normal levels;
(b) other questionable security risks;
(c) materials, (or identical items), regardless of
source, which will be utilized in Hong Kong as raw
materials or as capital equipment in the production
of! any item a significant quantity** of which is
being exported directly or Indirectly to Communist
China, North Korea, Macao or Far Eastern destinations
of the USSR.
d) rated materials (or identical items) which, regardless
of source, are being exported from Hong Kong to
Communist China, North Korea, Macao or F,. r Eastern
destinations of the USSR in significant quantity.**
Hong Kong requirements for short supply items shall be
determined in accordance with the usual procedure in effect
for non-Soviet Bloc countries taking into consideration Hong
Kong's rother -sourd 's'--6f ziupply"and' Hong Kong "s E.X?pirts '.a'-u.th
orized or unauthorized to all destinations.
** In determining such "quantities OIT should consult as approp-
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ACE? PD NO. 361 Amendment 10
Page 29
Shipments to Hong Kong of any rated or Positive List
item should be denied if any of the conditions is
(a) thru (d) above is involved.
2. Items neither R?~ te~d nor on the Positive List-
Licenses for commodities in this category shall
normally be validated, or shipment may be permitted
under general license, unless available evidence
indicates:
(a) an abnormal accumulation of inventories in
Hong Kong, or
(b) the commodity of U.S. origin is likely to move
from Hong Kong to Communist China, North Korea,
Macao or Far Eastern Destinations of the USSR,
or
(c) materials (or identical items) will be utilized
in Hong Kong for the production of any item a
significant quantity of which is being exported,
directly or indirectly, to Communist China, North
Korea, Macao or Far &s tern destinations of the
USSR.
Genera?1 Provisions
(a) Notwithstanding the provisions of Paragraphs 1 and
2 above, OIT is authorized to approve individual
cases of $1,000"or less where, in its judgment,
such shipments would not frustrate U. S. export
licensing policy to Communist China, North Korea,
Macao or Far Eastern destinations of the USSR.
(b) License applications for shipment of nny Positive
List or any rated item to Hong Kong shall be denied
where there is reasonable evidence the!t the par-
ticular shipment is likely to be transshipped
directly or indirectly to any Soviet Bloc destinri-
ti ons .
License applications for shipment of non-Positive
List, nonrated items to Hong Kong shall be denied
where there is reasonable evidence that the par-
ticulcr shipment is likely to be transshipped directly
or indirectly to Communist China, North Korea, Macao,
or Fer Eastern destinations of the USSR.
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ACEP PD NO. 361 Amendment 10
(c) For purposes of this Program Determination, shipments
by Hong Kong to Macao are to be regarded in the same
manner as shipments to Communist China unless they
are determined by the U.S. to be necessary to meet
minimum essential short-term requirements for local
consumption in Macao. (See U.S. Licensing Policy for
Macao below.)
B. U.S. LICENSING POLICY FOR MACAO
1. Treatment of Rated and Short-Supply Items Appearing on
the Positive Lit and IC Items not. on the Positive List
Exports to Macao of items in this category directly or
via Hong Kong or other intermediate points shall be denied
except where they are judged to fall within the limits
of aveilability and meet all of the follcwing criteria
(a) ,,they are found necessary to meet minimum essential
short-term local requirements;
(b) they are supported by formal requests of the Portu-
guese Government, backed by evidence of Macao's total
requirements and proposed sources of supply; and
an investigation has 4-coons tra ted that there is no
likelihood the propose: export will be made avail-
able to the Soviet Bloc.
2. Treatment of Residual Items
(a) All other items may b licensed directly or via
Hong Kong or other intermediate points only to meet
demonstrated short-term requirements for local con-
sumption. Otherwise exports should be denied.
(b) License applications for items in this category should
be denied where there is a probability that unauth-
orized diversion of pproposed shipments may occur,
directly or indirectly, to communist China, North
Korea, or Far Eastern destinations of the USSR.
(c) License applications for items in this category should
,&*lao, be. denied where the item or arty ident.cal
Item . Is utilized iri..Maceo 'or, the production of,, any
item. which ia,~eing.exported, directly or indirectly,
to Communist China, North Korea, or Far Eastern
destinations of the USSR.
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ACEP PD NO. 361 Amendment 10
(d) Shipments of any such commodity should be denied
where there is evidence: that:
(1) it will be transshipped, directly or indirectly,
or
(2) this item or any identical item is utilized in
Macao for the production of any item which is
being exported directly or indirectly, to Sub-
group A destinations (other than Communist
China, North Korea, and Far Eastern destinations
covered in (b) and (c) above) unless the proposed
transshipment or transaction is clearly indicated
on the export application and the item and qua n-
tity thereof are such es would be approved by
OIT for direct shipment from the United States to
the appropriate Subgroup A destinations.
/s/ John D. Garrett
John D. Garrett
Executive Secretary
Advisory Committee on Export
Policy
0601" - SECURITY INFORMATION
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SECURITY INFORMATION SECURITY I JFORIVIATION
ACEP PROGRAM DETERMINATION NO, 810 (Revision 1) August 3, 1953
To: Director
Office of International Trade
Subject: U.S. Security Export Policy and Procedure Governing U.S. Strategic
Exports to Friendly Foreign Countries (ACEP Program Determination
No. 610 (Consolidated Reports 3 and Li))
1. Purpose
This program determination sets forth the UQS. security export polioy and pro-
cedure governing the treatment of export license applications for ::hip.?nent of
items on U.S. Lists I, 1k, II and IIB from the United States to friendly foreign
countries, except those for which equivalent security export policies and
procedures are, or may be subsequently, separately set fc:th :ri other program
determinations or notices of action.
II. Effect
This program determination supersedes all other program detexmninations and
notices of action (including amendments, revisions and Qupplonents) inconsistent
herewith, particularly Program Determinations 381, 660 and 250-?R, and Notices of
Action in the 77 and 79 series.
III. Explanation of Terms
A. "Soviet Bloc" shall be understood to include: U.S.S.R. (inclusive of
Latvia, Esthonia and Lithuania); Poland, Czechoslovrakia, Hungary, Rumania,
Bulgaria, klbania, Soviet Zone of Germany (including Soviet Sector of Berlin),
Communist China (including Manchuria), and North Korea.
B. "Friendly Foreign Countries" shall be understood to include all
countries other than Soviet Bloc countries. Countries for which equivalent
security export policies and procedures are separately set forth currently
include South Korea, Formosa, Hong Kong, Macao, Finland an d?Yugoslavia.
C. "Item and Identical Item" shall be understood to mean the item as
defined in a particular listing on a U.S. Security Export Control List issued
by the Department of Commerce. Where a listing includes commodities distinctly
different from the item in question, it shall be understood to include only
that part of the definition which covers the prospective expert and other com-
modities within the listing, if any, which could be substituted for it with
reasonably equal effect.
D. "Assurances and Adequate Assurance" shall be understood to mean either
an express commitment from the government of the country of destination that it
will exercise the degree of control referred to elsewhere in this program
determination over shipments of identical items to the Soviet Bloc; or a
reasonable presumption of the existence of such de facto controls or conditions
of trade drawn from information provided by the government concerned or other
available information. This presumption should be communicated to the country
concerned if it is considered by the appropriate agencies that this would be
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IV, Items on U.S. Lists I and IA
A. General Policy
In general, OIT shall approve export; license applications for the ship-
ment of items on U.S. Lists 1 and 1k to friendly foreign countries (1) where there
is adequate assurance that the country of destination will not knowingly permit
exportation of identical items to the Soviet Bloc, directly or indirectly, or
(2) where it is clear that the non-approval of such license application(- will
have no significant effect. in elimination or decreasing such exports,
B. General Procedure
;1, Where OIT is not satisfied that there is an adequate. assurance of
embargo of a particular item to the Soviet Bloc by the country of destination,
OIT shall consult with other U.S. Government agencies as appropriate, to
determine whether there is an adequate assurance or whether it would be desirable
to request such an assurance from the government of the country concerned,
a, Lhere UIT and the..agencies consulted agree that there is an
adequate ,).ssurance of embargo.from a;country, UIT may approve export licenses to
that country for the item covered by the assurance, or uIT may take such other
licensing action as is agreed by the consulting agencies,
b. there UIT and the agencies consulted agree that there is not an
adequate assurance and that the government of the country-. concerned should be
approached for an assurance, UIT shall approach the country's Iission in Washing-
ton. If, after a reasonable effort has been :made by UIT, an adequate assurance
is not received, UIT shall further consult the relevant agencies to determine if
a more formal approach by the Department of State is necessary.
c. I+here OIT and the agencies consulted agree (1) that there is not
an adequa~i,e assurance, (2) that the government of the country concerned should
not ba approached for an assurance, and (3) that export license applications for
the item to the country of destination should be denied, then UIT shall deny
export applications for the particular item to the country of destination until
such time'as an adequate assurance is received.
d. When UIT. and the consulting agencies do not reach unanimous
agreement,, concerning the adequacy of an assurance or the course of action to be
pursued, or when OIT or any of the consulting agencies deem it appropriate, par-
ticular cases and problems shall be referred by OIT to the ACEP structure for
review and advice, ~vhere such referral is made, UIT shall hold without action
the particular case or cases involved pending final resolution.
2, Where adequate assurance of embargo is not received, the following
procedures shall be applied' as- appropriate:
a. Where OIT and the consulting agencies agree that all of the
following conditions prevail., license:applications shall be approved in the
absence of an assurance:
Approved(Flpr lpaikgsg$9P j9 ~/P thglAtlemDP17t% 0~1e0cA 000101000001-2
clearly shows that an assurance cannot be expected from the subject country,
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(2) where it is judged that the continued withholding of
approval on relevant license applications will have no significant effect in
eliminating or decreasing the subject exports, and
(3) .\here it is clear that the willingness of the subject country
to provide assurances on other items will not be materially reduced by the approval
of the subject cases.
b, Where OIT or any of the, consulting agencies, for reasons other
than in a, above, recommend approval of export licenses for the item involved
despite the absence or inadequacy of assurance, UIT shall submit to the ACEP
structure an appropriate document explaining why the assurance cannot be obtained
or why the assurance is inadequate, setting forth relevant information including
that supplied from the government concerned, and indicating justification for the
recommended approval action.
e, there OIT and the consulting agencies agree to the desirability
of continuing to withhold approval of license applications and-agree that out-
right denial action would have an adverse effect on the possibility of receiving
non-frustration assurances, UIT shall continue to withhold both approval and
denial action,
d. Where OIT and the consulting agencies agree that actual denial
action on the subject cases should be taken, UIT shall document the item problem
concerned and submit it to the ACEP structure for action. A determination, that
export licenses for any item should be denied shall be made by the ACEP structure
only if the effectiveness of such action in reducing exports of the item from
the country of destination to the Soviet Bloc would be of greater significance to
the security interest of the United States than the significance of the adverse
effects of the denial on the country concerned. UIT shall thereafter process
export license applications to the country concerned for the item involved in
accordance with the program determination resulting from such review: by the ACEP
structure,
3. tiuhenever, as a result of continuing review, there should be reason-
able indication that a country is not observing its embargo assurance for an
item, OIT shall subject export license applications for the item to that country
to. review in accordance with the policy and procedures of this program determina-
tiono
C, Special Provisions
1? CG/COCOM Countries. These countries shall be deemed to'have rendered
adequate assurances of embargo on all I/L I items, unless there is reasonable
evidence that a particular country is shipping or may ship an I/L I item to the
Soviet Bloc contrary to CG/COCO4.principles.
2. Coordination with HDAC Let. Care shall be taken to achieve maximum
feasible consistency with activities of the hDAC Administrator. In general, OIT
shall be guided by the following principles.:
a, 1dhen a country's reply to the United States is deemed an adequate
assurance of embargo policy or the existence of a de facto embargo for an item,
rmination, unless
this shall be deemed adequate assurance under this program dete
it
em
r
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-. Security Inform on
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dad"Op - Security Information M 35
b, Where an item is shipped by a country to the Soviet Bloc and U.S.
aid is terminated under the NiJAC Act, UIT may either deny export license appli-
cations for the item to that country, or OIT may hold export license applications
without action pending referral to the ACEP structure under paragraph IV, B, 2,
hereof.
a. Where an item is shipped by .a country to the Soviet Bloc and an
exception is granted under the NiDAC Act, OIT should review export license appli-
cations for the item to that country, seeking advice of the consulting agencies.
In those cases where OIT and the agencies consulted agree that export license
applications for the item to the country should be approved on the basis of the
substantive reasons leading to the ItiIDAC exception, OIT may approve export licenses
accordingly. In all other instances, export :License applications shall be handled
under either of paragraphs IV, B, 1, a or d as appropriate.
3, Austria. It is recognized that' 'the Austrian Government cannot now
render adequate assurances within the requirements of the program determination.
The Vienna Screening Committee should be notified that it will be expected to
carry out this policy in so far as practicable. Its favorable recommendations
on export applications involving shipments of U.S. List I and IA items from the
United States to Austria shall generally be accepted by OIT as adequate assurances.
h. Commitments by Foreign Governments. It should be understood, with
respect to any assurances which may be given by a friendly. foreign country, that
there is no commitment on the part of the foreign government to prevent the ful-
fillment of specific shipments under governmental obligations, contracts or trade
agreements entered into prior to the date of the request for assurance; provided
that such prior commitment is specific as to the item or items involved, that
the'foreii; government undertaken to minimize shipments of such items to the
Soviet Bloc', Notwithstanding this general rule, particular cases involving
specific problems may be reviewed by UIT in accordance with the general procedure
under IV, Be
Exceptions for Small Cases. As an exception to this policy, OIT is
authorized to approve export license applications involving U.S. List I and IA
items for shipment to friendly foreign countries where the total dollar value of
the items in an individual export application does not exceed x,1,000; provided,
however, that OIT shall exercise diligence to assure that this exception provision
is not used to contravene the objectives of this policy.
6. New Strategic Items. For new items added to the U. S. Lists I and
IA, items raised to this strategic classification from a lower strategic classi-
fication, and items which receive this strategic classification as a result of
changes in definition, the foregoing policy and procedure generally shall not be
applied until after the request for parallel action has been made to friendly
foreign countries and they have had a reasonable time in which to give a defini-
tive response, or shall be applied in accord with the provisions of the program
determination authorizing the strategic action,
7, Parts and Components. As an exception to the foregoing procedure,
OIT is authorized to approve export license applications involving parts and com-
ponents which are of U. S. Lists I or IA strategic classification for friendly
foreign countries provided the following criteria are met%
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a. The parts and components are for machines or equipment being
produced for or used by the United States Armed Forces, or for direct use by the
Armed Forces of a NATO country, or for the combined commands of such countries;
or for direct use by. the Armed Forces of such other friendly countries, or for
the combined commands of such other friendly countries, as may be determined in
consultation with the Department of Defense and other appropriate agencies.
b, The parts are for use in the maintenance, repair or operation of
machinery or equipment required for defense or other-essential purposes, and
which is already in use and will remain in the country of destination.
c. The parts Tiill not be used in the assembly of new machines or
equipment except for purposes in paragraph a., above.
. d. The parts (including accessories and attachments) are such as
normally find use with the parent equipment to permit its fullest normal utiliza-
tion (e..g., drag line equipment for an excavator shovel) which is already in use
and will remain in the country of destination, for use in defense or other
essential activity.
e, In the case of spare parts which are on U. S. Lists I and IA,
and which otherwise would be subject to the procedure set forth in this program
determination, a further criterion shall be imposed, namely; The parts must not
be readily interchangeable with a similar product of domestic manufacture in the
country of destination.
V. Items on U.S. Lists II and IIB
A. General Policy
In general, OIT shall approve export license applications for the ship-
ment of items on U.S. Lists II and IIB to friendly foreign countries (1) where
.there is adequate assurance that the country of, destination will not knowingly
permit the exportation of identical items to the Soviet Bloc in quantities or
under arrqngements which contravene the security objectives of an export control
program mutually agreed upon between the United States and the country concerned,
or (2) where it is clear that the non-approval of such license application will
have no significant effect in eliminating or decreasing such exports.
B. General Procedure
1. OIT shall approve export licenses of U.S. List II and IIB items to
friendly foreign countries, except in the circumstances described below.
2. OIT shall review U.b. List II and IIB items in order to identify
those which are problem commodities. In addition, UIT shall review the relevant
export data of friendly foreign countries in U.S. List II and IIB items to
determine situations where there are circumstances with respect to exports from
a country which indicate that the security interests of the United States may be
adversely affected. A list of such situations by commodities and countries
shall be kept on a current basis as a guide to the categories of export license
applications which require review. This review shall be for the purpose of
determining whether shipments from the United States would contribute significantly
PIMP I v YW R61 '#%&2O 'x051 ~ A-KD -O' c-60(+9MI0 2Soviet Bloc.
qRNR%V0- Security Information
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3. Where OIT has identifiedta".case in accordance with the provisionsof
the preceding paragraph where it believes that it may be inappropriate to approve
such case, OIT shall consult other U.S. Government agencies as appropriate to
determine (a) whether there is an adequate assurance for this purpose, (b)
whether it would be desirable to request such an assurance: from,the government
of the country concerned, (c) whether export license applications for the item
to the country concerned should be denied, or (d) whether other appropriate
licensing action should be taken.
a. Where OIT and the agencies consulted agree that there is an
adequate assurance or condition of trade within the terms of this policy, 0IT'
may approve export licenses to the country of destination for the item covered
by the assurance, or OIT may take such other licensing action as is agreed by
the consulting agencies.'
b. Where OIT and the agencies consulted agree that.there is not an
adequate. assurance and that the government of the country concerned should be
approached for an assurance, OIT shall approach the country's Mission in Wash-
ington. If, after a reasonable effort has been made by ulT, an adequate assur-
ance is not received, UIT shall further consul the relevant agencies'to
determine if a more formal approach by the Department of State is necessary,
c. where, OIT and the agencies consulted agree (1) that there is
.not an aii quate assurance, (2) that the, government of the country concerned
should not be approached for an assurance, and ()) that export license applica-
tions for the item to the country of destination should be denied, then OIT
shall copy export applications for the particular item to the country of destina-
tion until such time as an adequate assurance is received,
d. When UIT and the consulting agencies do not reach unanihous
agreement. concerning the existence of an assurance, its adequacy, the"likeli-
hood or degree of contribution from U.S. exports of an item, or the course of
action to be pursued, or when UIT or any of the consulting'agencies deem it
appropriate, particular cases and problems shall be referred by UIT to the ACED
structure for review and advice. Where such referral'is made,, UIT shall hold
without action the particular case or cases involved pending final resolution.
}i. lrahere adequate assurance is not received, the following procedures
shall be applied as appropriate:
a, Where OIT and the consulting agencies agree that all of the
following conditions prevail, license applications shall be approved in the
.
absence of an assurance:
(1) Where the negotiating history of the. item clearly shows
that an assurance cannot be expected from the subject country.
(2) Where it is judged that the continued withholding of
approval on relevant license applications will have no significant effect in
eliminating or decreasing the subject exports, and
(3) Where it is clear that the willingness of the subject
country to provide assurances on other items will not be strongly affected by the
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Security In ormation
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A :'S
b. Where OIT or any of the consulting agencies, for reasons other
tharr,.n a. above, recommend approval of export licenses for the item involved
despite'the absence of or inadequacy of assurance, OIT shall submit to the ACEP
structure an appropriate document explaining why the assurance cannot be obtained
or why the assurance is iriac.equate, setting forth relevant information including
that supplied from the government concerned, and indicating justification for
the recommended approval action,
it. Where OIT and the consulting agencies agree to the desirability
of continuing to withhold approval of license applications and agree that outright
denial action would have an adverse effect on the possibility of receiving non-
frustration assurances, UIT shall continue to withhold both approval and denial
action
d. Where OIT and the consulting agencies agree that actual denial
action on the subject cases should be taken, OIT shall document the item problem
concerned and submit it to t:he ACEP structure for action. The ACEP structure
shall review the problem and evaluate the balance of net security interest on
the basis of relevant factoxs including: (a) the effectiveness of denial in
restricting exports of the item from the country of deattination to the Soviet
Bloc; (b) the likelihood and extent of contribution of the proposed U.S. export
to the country's ability to maintain or increase its shipments of the item to
the Soviet Bloc; (c) the effectiveness of denial in preventing the contravention
of U.S. security export controls; (d) the adverse effects of denial upon the
country concerned and the U.S, security interest, A determination that export
licenses for any item to be denied shall be made by the ACEP structure only if the
effectiveness of such action in reducing exports of the item from the country of
destination to the Soviet Bloc would be of greater significance to the security
interest of the United States than the significance of the adverse effects of the
denial on the country concerned, OIT shall thereafter process export license
applications to the country concerned for the item involved in accordance with
the program determination resulting from such review by the ACEP structure.
. Whenever, as aresult of continuing review, there is reasonable
indication that a country is not observing its assurance for an. item, or that
additional U.S. exports of an item may contribute importantly to the country's
ability to maintain or increase its exports of the item to the Soviet Bloc, OIT
shall'subjeot export license applications for the item to the country concerned
to review in accordance with the policy and procedures of this program determina-
tion.
C. Special Provisions
1. Coordination with NIDAC Act, Care shall be taken to achieve maximum
feasible consistency with activities of the NiDAC Administrator;
2, Austria. Favorable recommendations of the Vienna Screening Com-
mittee on export applications involving shipment of U0S. Lists II and IIB items
from the United States to Austria shall generally be accepted by OIT as adequate
assurances,
'L Securit Information
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siibOYM! - Security Information 39 ..
3. Prior Commitments. Due regard should be given to prior commitments
of a friendly foreign government to ship identical items to the Soviet Bloc.
h. Exceptions for Small Cases. The provisions of paragraph IV, C, 5
shall be applicable to items on U.S. Lists II and IIB.
New Strategic Items. The provisions of paragraph IV, C, 6 shall be
applicable to items on U.S. Lists II and IIB.
6. Parts and Components. The provisions of paragraph IV, C, 7 shall
be applicable to items on U.S. Lists II and IIB,
VI. Capital Equipment and Production Materials
A. General Policy
In addition to the requirements of IV and V above, when capital equipment
or production materials on U. S. Lists I, IA, II, IIB bear a close, direct and
important relationship to, and will be used for, the production of I, IA, II or
IIB end-items, export licenses for such capital equipment or production materials
in general shall be issued where the requirements of IV and V above are satisfied
with respect to the end-items,
B. General Procedure
;1. OIT shall establis,i lists of capital equipment and production
materials on U. S. Lists I. IA, II and IIB and correlated products on these
security :lists which bear a close, direct and important relationship to the
capital equipment and production materials. These lists shall be reported to
the A.CEP structure and OIT shall use them as guides in carrying out the general
security export policy in this program determination. These lists shall be kept
under continuing review by OIT. Subsequent additions, deletions and modifications
shall. be reported to the ACE!' structure.
2. OIT shall utilize the advice of the consulting agencies as approp-
riate in carrying out this policy. Where OIT' and the consulting agencies are not
in agreement concerning particular cases, problems or the course of action totbe
pursued, OIT shall submit the cases or problems to the ACEP structure for review
and advice. Where such referral is made, uIT shall hold witiout action the
particular case or cases involved.
VII. Transshipment
A. General Policy
OIT shall deny export license applications for shipment to any destina-
tion of items on Un S. Lists I, IA, II, IIB, and IC which are on the Positive
List, and. short supply items which are on the Positive List, where there is
reasonable evidence that the particular shipment may be transshipped, directly or
indirectly, to the Soviet Bloc. This policy shall be applied even though other-
wise the exportation would be approvable under this program determination,
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r
rmazion
.40
. General Procedure
1. In determining whether transshipment may take place, due consid-
eration should be given (a) to the extennt.of.export controls exercised in the
country of destination, (b) to the effectiveness of these controls, including
controls over transit shipments and free trade areas, and (c) to the appear-
ance in the export transaction of a party or, parties found by OIT to be so
unreliable as to require denial of export license applications in which they
are involved,
2. OIT shall,utilize the advice of the consulting agencies as approp-
riate in carrying out this,policy. Questionable cases should be referred to' the
ACEP structure for advice.
VIII. Genera],
Nothir.g herein shall conflict with the authority of uIT to' deny export
license applications on grounds of non-conformance with export regulations, or
to return without action (iIA) or otherwise process eases in accordance wi:rh
general' adxnnistra wive practice. Nor shall this program dete..mination alter
in any way the authority of ulT to process export license applications in
accordance with short supply principles.
IX. Reports
OIT shall submit to the ACED structure quarterly reports on its activities
in carrying out this program determination.
John D. Garrett
John' D. Garrett
Executive Secretary
Advisory Committee on Export Policy
Security Information
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T-1
December 8, 1950
U. S. DEPARTMENT OF COMLRCE
Office of the Under Secretary
Washington 25, D. C.
TITLE 32A.._NATIONAL D FENSL, APPL14DIX
Chapter IX -- Under Secretary for Transportation, Department of Commerce
transportation Order T-9
Part 1101-?-Shipping Restrictions
This order is found necessary and appropriate to promote the national defense
and is issued pursuant to the authority granted by section 101 of the Defense Pro-
duction Act of 1950. Consultation with industry in advance of the issuance of this
order has been rendered impracticable by the need for immediate issuance,
See,
1101,1. Prohibited transportation and discharge,
1101.2 Applications for adjustment of exceptions.
1101.3 Reports.
1101.4 Records.
1101.5 Defense against claims for damages.
1101,6 Violations.
Authority: 09 1101.1 to 1101,6, issued under sec. 701, Pub, Law 774, 81st
Gong. Interpret or apply secs. 101, 705, Pub. Law 771k, 81st Cong. sec. 101, E.O.
10161, Sept. 9, 1950) 15 F. R. 6105.
1101.1 Prohibited transportation and discharge. No person shall transport
in any ship documented under the laws of the United States or in any aircraft
registered under the laws of the United States any commodity at the time on the
Positive List (as amended from time to time) of the Comprehensive Export Schedule
of the Office of International Trade, Department of Commerce (15 CFR Parts 370-399),
any article on the list of arms, ammunition, and implements of war coming within
the meaning of Proclamation No. 2776 of April 15, 194b, issued pursuant to section
12 of the Joint Resolution approved November !t, 1939 (54 S tat. 10; 22 U.S.C. L62),
or any commodity, including fissionable materials controlled for export under the
Atomic Energy Act of 1946 (10 CFR Parts 10 and 50S, to any destination at the time
in Sub-Group A of the Comprehensive Export Schedule (15 CFR 371.3 (a)), to Hong
Kong, or to Macao, and no person shall discharge from any such ship or any such
aircraft any such commodity or article at any such port or at any other port in
transit to any such destination, unless a validated export license under the
Export Control Act of 1949 or under section 12 of said Joint Resolution approved
November 4, 1939, has been obtained for the shipment, or unless authorization for
the shipment has been obtained from the Under Secretary for Transportation. This
prohibition applies to the owner of the ship or aircraft, the master of the ship
or aircraft, and any other officer, employee or agent of the owner of the ship or
aircraft who participates in the transportation. The consular officers of the
United S, orbW l # #t4 a 20 M3n AaFAW'A9-G42o Ao ti'40002001-2
Positive Lst and will advise whether commodities are currently on that List,.
 4 r
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as 1101.2 Applications for adjustment or exceptions. Any person affected by
any provision of this part may file an application for an adjustment or exception
upon the ground that such provision works an exceptional hardship upon him, not
suffered by others, or that its enforcement against him would not be in the inter-'
est of the national defense program. Such an application may be made by letter or
telegram addressed to the Under Secretary for Transportation, Washington 25, D.C.,
reference T-l. If authorization is requested, any such application should specify
in detail the material to be shipped, the name and address of the shipper and of
the recipient of the shipment, the ports from'which and to which the shipment is
being made and the use to which the material shipped will be put. The application,
should also specify in detail the facts which support the applicant's claim for an
exception.
'1 1101.3 Reports, Persons subject to this part shall submit such reports to
the Under Secretary for"Transportation as he shall require, subject~to the terms
of, the Federal Reports Act,
1101.1 Records. Each person participating in any transaction covered-by
this part -shallretain in his possession, for at least two years,, "records of ship-
ments-in-sufficient detail to permit an audit that determines for each transaction
that the provisions of this part have been met. This does not 'specify any particu--
lax' accounting method and does not require alteration of the system of records''
customarily maintained, provided such records supply an adequate basis for audit,
Records may be retained in the form of microfilm or other photographic copies
instead of the originals,
0 ].101,5 ' Defense against claims for damages. No person shall be held liable
for damages'or penalties for any default tinder any contract or order which shall
result directly or indirectly from compliance with this part or any provision,
thereof, notwithstanding that this,part or such provision shall thereafter be
declared by judicial or other competent authority to be invalid.
1101,6 Violations, Any person who wilfully violates any provisions of this
part'or wilfully conceals a material fact or furnishes false information in the
course of operation under this part is guilty of a crime and upon conviction may
be punished by fine or imprisonment or both. In addition, administrative action
may be taken against any such person, denying him the privileges generally accorded
under this part.'
This part shall take effect on December 8, 1950.
ffea7
PH:LIP B. FLEiiING
Under Secretary for Transportation
L r. Doc, 50-11490; Filed, Dec. 8, 1950;'l2:20, p,m.7
Co-mm--7276
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43 - December 16, 1950
U. S. MPAIMMM OF COMMERCE
Under Secretary for Transportation
TITLE 32k--NATIONAL DEFENSE, A t'EieDIX
Chapter IX--Under Secretary, for Transportation,, Department of Commerce.
[Transportation Order T-2/
Part 3,302--Shipping Restrictions; Communist China
This order is found necessary and appropriate to promote the national defense
and is issu.ed.pursuant to the authority granted by section .101 of the Defense Pro-
duction Act of 1950. Consultation with industry in advance of the issuance of
this order has been rendered impracticable by the need for immediate issuance,
Sec.
1302.1 Prohibition of movement of American carriers to Communist China.
1302.2. Prohibition on transportation of goods destined for Communist China.
1302.3 Persons affected.
1302,4 Reports.
1302,5 Records.
1302.6 Defense against claims for damages.
1302.7 Violations,
Authority: 88 1302.1 to 1302.7 issued under sec, 701, Pub, Law 7Th, 81st
Cong. Interpret or apply secs. 101, '705, Pub..Law 774, 81st Cong,. sec..101,
E.O. 10x61, Sept. 9, 1950, 15 F. R. 6105.
9 1302!.1 Prohibition of movement of American carriers to Communist China,
No person shall sail, fly, navigate, or otherwise take any ship documented under
the laws ofthe United States or any aircraft registered under the laws of the
United States to any Chinese Communist port or to any other place under the control
of the Chinese Communists.
1302.2 Prohibition on transportation of goods destined for Communist China,
No person shall transport, in any ship documented under the laws ofta United
States or in any aircraft registered under the laws of the United States, to
Communist Chinese ports or to any other place under the control of the Chinese
Communists, any material, commodity, or cargo of any kind. No person shall take
on board any ship documented under the laws of the United States or any aircraft
registered under the laws of the United States any material, commodity, or cargo
of any kind if he knows or has reason to believe that the material, commodity, or
cargo is destined, directly or indirectly, for Communist China. No person shall
discharge from any ship documented under the laws of the United States or from any
aircraft registered under the laws of the United States, at any place other than
the port where the cargo was loaded, or within territory under the jurisdiction of
the United States, or in Japan, any material, commodity, or cargo of any kind
which he kniows or has reason to believe is destined for Communist China.
9 1302,3. Persons affected. The prohibitions of this part apply to the
owner of the ship or aircraft, to the master of the ship or aircraft, and to any
other officer, employee, or agent of the owner of the ship or to any other person
who part P f y% .r &eR eot b Z"-' -e IA-RDP79-01203A000100020001-2
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9 1302.4 Reports. The owner of any ship documented under the laws of the
United States or or a~"ny aircraft registered under the laws of the United States which
is making a voyage to Communist China at the time this part is issued shall report
this fact promptly to the Under Secretary for Transportation, Department of Com-
merce, Washington 25, D.C., and advise what steps he has taken to comply with the
requirements of @ 1302.1. The owner of any ship documented under the laws of the
United States or any aircraft registered under the laws of the United States which,
at the time this part is issued, is carrying any material, commodity, or cargo whic
which the owner, the master of the ship or aircraft, or any other officer,
employee or agent of the owner, knew or had reason to believe was destined for
Communist China shall report this fact promptly to the Under Secretary for Trans-
portation, Department of Commerce, Washington 25, D.C., and advise what disposition
has been or will be made of such cargo. Persons subject to this part shall submit
such reports to the Under Secretary for Transportation) Department of Commerce, as
he shall require, subject to the terms of the Federal Reports Act.
9 1302,5 Records. Each person participating in any transaction covered by
this part shall retain in his possession, for at least two years,, records of
voyages and shipments in sufficient detail to permit an audit that"will determine
for each transaction that the provisions of this part have been met. This provis-
ion does not require any; particular accounting method and does not require alteraji
tion of the system customarily maintained, provided-such records supply an adequate
basis for audit. Records may be retained in the form of microfilm or other photo..
graphic copies instead of the originals,
-?.9'1302.6.. Defense against cladms for damages. No person shall be held liable
for damages or penalties for any default under any contract or order which shall
result directly or ind;i'Fectly from compliance with this part or-any provision,
thereof, notwithstanding that this part. or such: provision shall thereafter be
declared by judicial or other competent authority ?to be invalid..
"1302.7. Vi.ul a ,-ions, Any person who wi.lful.l.y violet c s anyT provisions of
this part or wil.f uliy conceal?~ a material fact or furnishes false information in
the course of operation under this part is guilty of a crime and upon Conviction
may be punished by fine or imprisonment or both. In addir.ion, achn:inistrative
action may be taken against any such person, denying him the privileges' generally
accorded under this par b,
Amendment,. This part may be amended by the Under Sr-,,,.reward for Transporta-
tion, $epartment of Commerce, pursuant to delegation pyev.tou:,ly made to him
(15 F.R.'8739)?
This part shall take effect immediately, subject to section 7 of the Federal
Register Act (49 Stat. 502, . 1;4: U,S,C, see. 307),
Notet The reporting requirements. of this part have been approved by the
Bureau of the Budget under the Federal Reports Act.
L.:'E'_!
CI{ARLS.-SAVO R
Secretary of Commerce
CF .R. Doc, 50_12029?, Filed, Dee,.10, 1950; 11101 a.mj
Dec. 16, 1950
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TITLE 46 - SHIPPING
Chapter II .. Federal Maritime Board, f!aritime Administration,
Department of Commerce
SUBCHAPT?'R B - REGULATIONS AFFECTING MARITIME CARRIrRS
Part 221 - Documentation, Transfer or Charter of Vessels
General Order 58, 2nd Revision7
Notice and public procedure on the following order are impracticable
and contrary to the public interest, because the immediate revision of
General Order 58 is required to prevent the transfer of control. of vessels
to aliens contrary to the interest of the national defense of the
United States.
Revised General Order 58 (Section 221.6 of this Part), published
in the Federal Register issue of November 17, 1,945 (10 F. R. 14210),
is hereby revised and divided into two new sections, designated
Section 221.5 and Section 221.6, which shall read as follows:
Sec. 221.5 Approval of certain sales, mortgages, leases, charters,
deliveries, or transfers-)c vessels of less than 0 feet overall length
and less than 50 horse o to aliens or agreements therefor;'of trans-
fer to foreign registry and flag; of contracts for construction of such
vess+els for aliens; of the transfer of control of corporations owning
sucz,vessels; and of he departure such vessels from United States
ports before United States documentation, Subject to the exceptions
stated in Sec. N1.6 hereof, the Department of Commerce, Maritime
Administration, hereby grants the approval required by Sec. 37 of the
Shipping Act, 1916, as amended (40 Stat. 901; 46 U.S.C. 835), to the
following transactions:
(a) the sale, mortgage, lease, charter, delivery, or transfer,
and agreement for the sale, mortgage, lease, charter, delivery or
transfer to any person not a citizen of the United States of any vessel
or interest therein, owned in whole or in part by any person a citizen
of the United States or by a corporation organized under the laws of
the United States or of any State, Territory, District, or Possession
thereof, which vessel is under forty (40) feet overall length and less
than 50 horsepower and is not documented under the laws of the United
States or the last documentation of which was not under the laws of
the United States;
(b) the transfer to, or placing under, any foreign registry or
flag of any such vessel;
(c) the entrance into any contract, agreement, or understanding
to construct a vessel of less than forty feet overall length and less
than 50 horsepower within the United States for, or to be delivered to,
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a person not a citizen of the United States;
(d) the making of agreements cr the effecting of understandings
whereby there is vested in or for the benefit of any person not a
citizen of the United States the controlling interest or the majority
of the voting power in a corporation which is organized under the laws
of the United States or any State, Territory, District, or possession
thereof and which owns no vessel of 140 ft. or more overall length or of
more than 50 horsepower and which transaction is not otherwise subject
to the.provisions of Section 37 of the Shipping Act of 1916, as
amended; and
(e) the departure from any port of the United States of any
vessel of less than forty feet overall length and less than 50 horsepower
which was constructed in whole or in part within the United States, has
not been documented under the laws of the United States, and has never
cleared for any foreign port.
As used in this section, the term "overall length" shall mean the
length of the vessel as measured from and to end over the deck excluding
sheer; the term "horsepower" shall mean manufacturer's rated horsepower;
and the term "documented" shall mean registered, enrolled, or licensed.
Sec. 221.6--Exceptions to approvals granted by Sec. 221.5, Approval
granted by Sec. 2 1. shall not apply to:
(a) demise or bareboat charters;
(b) any transaction involving the transfer of the ownership,
possession, or control of any vessel, or of any interest therein
(including charters), to any person (not a citizen of the United States)
residing in the Soviet Union, Latvia, .Lithuania, Estonia, Poland,
Czechoslovakia, Hungary, Rumania, Bulgaria, Albania, North Korea, the
Soviet Zone of Germany, Manchuria, or Communist China;
(c) any transaction involving the transfer of the ownership,
possession, or control of any vessel, or of any interest therein
(including charters), to nationals of, or citizens of the Soviet Union,
Latvia, Lithuania, Estonia, Poland, Czechoslovakia, Hungary, Rumania,
Bulgaria, Albania, North Korea, the Soviet Zone of Germany, Manchuria,
or Communist China;
(d) the transfer of any vessel to the registry of or the placing
of any vessel under the flag of the Soviet Union, Latvia, Lithuania, Estonia,
Poland, Czechoslovakia, Hungary, Rumania, Bulgaria, Albania, North Korea,
the Soviet Zone of Germany,2anchuria,, or Communist China,
Effective Dater The effective date of this order shall be the date
of publication in the Federal Register...
Dated June 13, 1951
Authority: Secs. 221.5 and 221.6
issued under sec. 19, 41 Stat. 995,
sec. 204. 49 Stat. 1987 as amended
Cochrane
E. L.-Cochrane
Maritime Administrator
Maritime Administration
Department of Commerce
Al dIv*dGFdd l 6se 2a QQ%W,%t C FQ&&9P1 49 4 QP ?ed;
1.6 U.S.C. 835.
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TITLE 46 - SHIPPING
Chapter II - Federal Maritime Board, Martitime Administration
Department of Commerce
SUBCHAPTER B ?- REGULATIONS AFFECTING MARITIME CARRIERS
AND RELATED ACTIVITIES
Part 221 .. Documentations Transfer or Charter of Vessels
General order 58, 2nd Revision, Supp. lJ
Section 221.5(e) of General Order 58, 2nd Revision (Section
221.5(e) of this Part), published in the Federal Register issue of
June 16, 1951 (16 F. R. 5768) is hereby superseded and revised to read
as follows:
"(e) The departure from a United States port, without any
transfer to foreign ownership or registry being involved,
whether to another United States port or to a foreign
port, before it has been documented under the laws of the
United States, of any vessel owned by a citizen or citizens
of the United States, constructed in whole or in part within
the United States, which has never cleared for any foreign
port:
(1) regardless of size, to be used wholly for
pleasure;
(2) of less than five (5) net tons, for use in
fisheries or trade."
Effective Date: This order shall be effective on the date of
Publication in the Federal Register.
Dated: August 20, 1953
(sgd) Louis S. Rothschild
Louis S. Rothschild
Maritime Administrator
Maritime Administration
Department of Commerce
Authority: sec. 19, 41 Stat. 995, Sec. 204, 49 Stat. 1987, as
amended; 46 U.S.C. 171 , 876. Interpret or apply sec. 37, 40 Stat. 901,
as amended; 46 U.S.C. 835. Published in the Federal Register Sept. 2,
193 (18 FR 5296).
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TREASURY LETTER TO U.S. OIL COMPANIES ON BUNKERING
August 14, 1952
As you know, the Secretary of the Treasury on December 17, 1950,
issued the Foreign Assets Control Regulations under Section 5(b) of
the Trading with the Emeny Act, as amended. A copy of these
Regulations is enclosed for your information.
The Treasury Department is aware that for some time in the
past, foreign branches and foreign subsidiaries of American oil com-
panies, including foreign companies controlled by two or more American
oil companies, have been cooperating with the Department of State on
a voluntary basis with a view to insuring that petroleum products, made
available for bunkering and other purposes to vessels in the Far East,
would be furnished only in accordance with the security interests of
the United States. It is understood that such voluntary cooperation
in this respect has from time to time presented policy, administrative
and legal difficulties for American interests involved. The Treasury
Department has accordingly been requested by the Department of State
to advise American oil companies of the effect of the Foreign Assets
Control Regulations upon the delivery and sale by the companies of
bunkers and other petroleum products to Vessels carrying cargo destined
for Communist China or North Korea.
The Foreign Assets Control Regulations prohibit United Statesooil
companies and their foreign branches and foreign subsidiaries, except
as appropriately authorized, from supplying bunkers and other petroleum
products to vessels destined for Far Past Communist ports or Macao or
to vessels, which though not so destined, are carrying cargo destined
for Communist China or North Korea. Accordingly, your company and its
foreign branches and foreign subsidiaries, including any foreign company
controlled by your company jointly with another American oil company or
companies, are hereby directed under the Regulations to deny at Pacific
Ocean, Indian Ocean, Red Sea and at Eastern :Mediterranean ports in the
Levant area including Cyprus, bunkers and other petroleum products to
(a) any vessel which the company involved has reasonable cause to believe
may be sailing for Far East Communist ports or Macao, and (b) any vessel
not so destined but which the company involved has reasonable cause to
believe is carrying cargo ultimately destined for Communist China or
North Korea,
If, as respects (a) above, the company involved has reason to
believe that the vessel is carrying solely cargo not of a strategic
nature or, as respects (b) above, if the company has reason to believe
that the cargo ultimately destined for Communist China or North Korea
is not of a strategic nature, application may be made to the local
United States Consul for special authorization to allow the delivery
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TITLE 46 - SHIPPING
Chapter II - Federal Maritime Board, Maritime Administration,
Department of Commerce i/
SUBCHAPTER B - REGULATIONS AFFECTING i'MARITI P. CARRIERS
Part 221 Documentation, Transfer or Charter of Vessels
L eneral Order 59, Revise?
General Order 59 (Sec. 221.7 A roval of charters of certain
vessels to aliens) is hereby revise as set forth be ow. General Order
59 (10 F.R. 14969) and General Order 59, Amendment 2 (15 F.R. 6964),
heretofore in effect, are superseded by this revision. Other amendments
to General Order 59 were heretofore revoked (14 F.R. 829).
General Order 59, Revised, shall read as follows:
Sec. 221.7 Approval of charters of certain vessels to aliens.
The Department of Commerce, lMar1 time Administrations hereby
approves under Sections 9 and 37 of the Shipping Act, 1916,,as
amended (52 Stat. 964; 40 Stat. 901; 46 U.S.C. 808 and 835) the
charter to a person not a citizen of the United States of any .
vessel (including space in such vessel) documented under the laws
of the United States, or the last documentation of which wasi.,urdder
the laws of the United States, or owned in whole or in part by any
person a citizen of the United States, or by a corporation organ-
ized under the laws of the United estates or of any State, Territory,
District or possession thereof, for a'period not more than six (6)
months, or for a voyage or voyages the duration of which will,
probably not exceed six (6) months, except
(1) demise or bareboat charters;
(2) a tank vessel for an ooean voyage or voyages
between foreign ports, or from United States
to foreign ports, excluding, however, voyages
from United States or Caribbean ports to
Canadian ports;
(3) for the carriage of cargoes of any kind to or from the
Soviet Union, Latvia, Lithuania, Estonia, Poland,
Czechoslovakia, Hungary, Rumania, Bulgaria, Albania,
North Korea, the Soviet Zone of Germany, {Manchuria,
or Communist China;
(4) extension or renewals of a charter approved by" this
General Order 59, Revised. The Maritime Administration
l/ The new chapter head note is an interim designation designed to
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will consider each request for such an extension or
renewal on its merits,
(5) for use in the fisheries.
A copy of any such charter, asce eutx sdyt,?*b bh is
approved by this General Order 59, Revised, shall be
filed with the Secretary of the Maritime Administration
as soon as may be practicable but in any event not later
than twenty (20) days after the beginning of the charter
period or within such further time as may be permitted
by the Maritime Administration.
This General Order 59, Revised (Sec? 221.7) shall be effective as
to all charters entered into on and?iafter January 2L, 1951.
E. L. Cochrane,
Maritime Administrator
Maritime Administration
January 22, 1951 Department of Commerce
Authority: Sec. 19, iii Stat. 995
Sec. 204, 9 Stat. 1987,
as amended; 146 U.S.C. 11114,
876, Reorg, Plan No. 21 of
1950, 15 F. R. 3178. Interpret
or apply sec. 9, 39 Stat. 730,
as amended, sec. 37, 40 Stat. 901,as
amended; L6 U.S.C. 808, 835.
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of the bunker,' supplies or other petroleum products involved. For
purposes of this le tter, cargo shall be deemed to he'of a strategic
nature if it is (a) any commodity on the list of arms, ammunitions,
and implements of war coming within the meaning of Proclamation No.
2776, April 15, l9Li8; (b) any commodity, including fissionable
materials, controlled for export under the Atomic 1nergy Act of 1946;
or (c) any item on the United States Positive Listp In approved
cases the United States Consul will issue an authorization in writing
to the company involved to bunker the vessel. and supply such other
petroleum products as may be desired. If an application is not
approved, the United States Consul will issue a statement, to. that
,effect. in writing.
The ar?plicati.on to the. Consul will be regarded as constituting
a request for a license under the Regulations and approval thereof
'by the Consul as constituting a license theretulder, while a denial
thereof by the Consul will be regarded as denial of the .application
fpr, a license.
Very truly yours,
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TR^ASURY .LETT R TO U.S. OIL Cf `4PANIFS ON BUN RING
April 15, 1953
Reference is made to our letter of August 4. 1952, to your
company relating ,to the impact of the Foreign Assets Control Regula-
tions on deliveries of bunkers and other petroleum products by
United States oil companies and their foreign branches and subsidiaries
to vessels bound for Far East communist ports or Macao or to vessels
not so destined but carrying cargo destined for Communist China or
North Korea.
It is understood that at the present time a number of United
States oil companies and their foreign branches and subsidiaries
are cooperating with the Department of State on a voluntary basis,
insofar asthey consider themselves able to do so, with a view to
insuring that petroleum products made available for bunkering and
other purposes to vessels on return voyages from the Far East would
be furnished only in accordance with the security interests of the
United States. The policy of voluntary cooperation in this field, it
is understood, has from time to t.,e created policy, administrative,
and legal difficulties for the American interests involved. The
Treasury Department has accordingly been requested by the Department
of State to advise American oil companies of the effect of the Foreign
Assets Control Regulations upon the delivery and sale by the companies
of bunkers and other petroleum products to vessels returning from
voyages to Far East ports.
The Foreign Assets Control Regulations prohibit United States
oil companies and their foreign branches and foreign subsidiaries,
except as appropriately authorized, from supplying bunkers and other
petroleum products to vessels returning from voyages to Far East
communist ports or 7acao or to vessels returning from voyages on
which, although they did not call at any communist Far East port or
Macao, the company involved has reasonable cause to believe that they
were refused bunkers or other petroleum products by United States oil
companies or their foreign branches or subsidiaries on the outbound
voyage in compliance with the instructions contained in our ab-e-
ment:ioned letter of August L, 1952. Accordingly, your company and
its foreign branches and foreign subsidiaries, including any foreign
company control:Led by your company jointltr with another American oil
company or companies, are hereby directed under the Regulations to
deny-at Pacific Ocean, Indian Ocean, Red Sea, and :astern Mediterranean
ports in the Levant area, including Cyprus, bunkers and other petroleum
products to (a) any vessel which the company involved has reasonable
cause to believe is returning from any Far last communist port or Macao,
and (b) any vessel returning from a voyage to any other Far East port
if the company involved has reasonable cause to believe that such
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-53 -
vessel was refused bunkers or other retroleum products on its outbound
voyage by United States oil companies or their foreign branches or
subsidiaries in compliance with the instructions contained in our
letter of August L , 1952.
If, as respects (a) above, the company involved has reason to
believe that the vessel carried solely cargo not of a strategic nature
on its outbound voyage, application may be made to the local United
States Consul for special authorization to allow the delivery of the
bunker supplies or other petroleum products involved unless the company
involved has reasonable cause to believe that such vessel was refused
bunkers or other petroleum products on its outbound voyage by United
States oil companies or their foreign branchescor subsidiaries in
compliance with Treasury instructions to United States oil companies
set forth in our letter of August Li., 1952. Cargo shall be deemed to
be of a strategic nature for the purposes of this letter if it is
deemed to be of a strategic nature under our above-,mentioned letter
of August ., to wit, if it is (a) any commodity on the list of arms,
ammunitions, and implements of war coming within. the meaning of
Proclamation No. 2776, April 15, 1948; (b) any commodity, including
fissionable materials, controlled. for export-under the Atomic Energy
Act of 1946, or (c) any item on the United States Positive List. In
approved cases the United States Consul will issue an authorization
in writing to the company involved to bunker the vessel and supply
such other petroleum products as may be desired. If An application
is not approved, the United States Consul will issue a statement to
that effect in writing..
The application to the Consul will be regarded as constituting a
request for a license under the Regulations and approval thereof by the
Consul as constituting a license thereunder, while a denial thereof by
the Consul will be regarded as denial of the application for a license.
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- Security Information
-54 -
February 9, 1953
ACEP PROGMivi DETERMINATION NO. 955
To: Dir.3ctor
Office of International Trade
Subject; Restriction of Exportation, Including Bunkering, of
Petroleum and Petroleum Products to Foreign V&ssels
and Planes in the United States
(OC Docum?,nt ivo. j(9t and Supple,,m.:nts 1, 2 and 3)
1,,, UIT is authorized to limit or deny the export,_4tion, including
bunkering, of petroleum and petroleum products.to foreign
vessels and p1an;,s ?in the United Sta.t:s, its territories and
possessions, ,is required to avoid significant U.S. contribu-
tion to the ability of such vessels and planes to carry on
trade and traffic contrary to the security export controls
and obj,:ctivs of the United States.
2,, Spc,cifically, UIT shall limit or deny, as appropriate to achieve
this purpose, deliveries of these commodities to
(a) vessels or planes regist3red in, or under charter to,
any country or national of Subgroup A,-,and
(b) vessels or planes of any other foreign registry when
(1) bound for or from Macao or any Far Eastern Com-
munist port, or (2) carrying any comrnoditcs mani-
fested or destined, directly or indirectly, to
those destinations.
3.. To implement this determination, OIT is authorized to institute
such export control regulations and take such export cortrcl actions
as arc, nucesse-ry and appropriate, including: (1) to revoke,
amend or otherwise change; General Licenses Ships' Stores and
Plane Stores;. (2) to require submission of certifications by
authorized agents of the carriers located in the United
Statos; and (3) to take appropriate actions on export license
applications.
/s/ John D Garrett
John D. Garrett - - -
xocutive Secretary
Advisory Committee on Export Policy
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-- - LI W Security Information
DEPAf,TMDNT OF STATE INSTRUCTION
No, CA-691 August 12, 1953
Subject: FOREIGN ASSETS CONTROL, PART 505,
To% Certain American Diplomatic and Consular Posts,
EXCON
Page 55
The Department has been requested by the Treasury Department to transmit
the following information, The information and the attached Regulations should
serve as a basis both for answering inquiries and for reporting to the Depart-
ment any alleged violations of the Regulations*
"The Secretary of the Treasury, effective June 29, 1953, issued new
Regulations entitled (Regulations prohibiting transactions involving
the.shipment of certain merchandise between foreign countries' published
as Part 505 of Title 31 of the Code of Federal Regulations. Two copies
of the new Regulations, amended as of July 22, 1953, are enclosed,
"Under these Regulations persons in the United States are prohibited
from participating in the purchase or sale of certain commodities for
ultimate shipment from any foreign country to any country of the Soviet
bloc except pursuant to Treasury license, The commodities affected are
those which are included on the United States Positive List and followed
on that List by the letter A. (This list of items is equivalent to
international list I and list II'A) The prohibition is also specifically
applicable to arms, ammunition, implements of war, helium, gold, narcotics
and atomic energy materials,
"This action, taken by the Treasury as a part of its Foreign Assets
Control program, supplements the United States export control laws, The
export control laws cover exportations from the United States to the
Soviet bloc, but up to now it has not been illegal under United States law
or Regulations for persons in this country to participate in the supplying
of strategic goods from a third country to a Soviet bloc country other
than Communist China or North Korea,
"The new order by the Treasury prohibits persons in the United States
from purchasing or selling, or arranging the purchase or sale, of commodi-
ties outside the United States for ultimate shipment to the Soviet bloc;
when the transactions would be inconsistent with the controls of this
country and of friendly foreign nations,
"It is desired that each addressee transmit to the Foreign Assets
Control, via the Department, any information coming to addressee's atten-
tion which indicates that any person within the United States has, in the
manner specified in the Regulations, participated, or is likely to par-
ticipate, in any transaction, including any transshipment, involving the
shipment of the specified commodities from any foreign country to the
Soviet bloc. It is desired that any such information be as detailed as
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NO: CA-691 Securi Information
(Security Classification)
Page 56
possible setting forth in full, to the extent feasible, the names and
addresses of all parties concerned, including the names and addresses of
intermediaries and financial establishments which are in any way engaged in
the transaction. Information forwarded. by addressee should also include,
if possible, the names and sailing dates of the vessels or aircraft
involved, the numbers of relevant bills of lading and the marks and
numbers of crates and packages involved,
"Details are also desired as to the method of financing such trans-
actions, i.e., financial institutions concerned, amounts involved, accounts
used (including the names in which such accounts are held, or, if they are
numbered accounts, the numbers), whether payments were or are to be made
by :Letter of credit (and if so the number) by documentary draft, clean
draft, telegraphic transfer, etc.
"It is, of course, recognized that in many instances complete informa-
tion as requested above may not be obtainable but it is requested that as
full information as possible be supplied."
Any information which might come to your attention on violations of the
above mentioned Regulations of the Treasury Department should be reported
promptly in reproducible despatch form, The despatch should tie addressed to
the Department in accordance with standard instructions,
The Department of Defense concurs in the foregoing instruction,
For your background informations It should be noted that the regula-
tions are not aimed at Soviet bloc trade legitimately conducted under strict
regulation of the International Security Control system, although it is recog-
nized that certain such transactions by residents of the United States will now
be subject to Treasury license. The newly issued regulations are intended to
fill a gap in U.S. controls under which heretofore traders in the United States,
without violating any U.S. regulation, could have arranged transactions whereby
strategic goods would reach the Soviet bloc -- either in contravention of other
countries' security controls, through loopholes in the existing control system,
or via countries without adequate controls,
You will note that the regulations have been worded in such a way as to
cover Un-1ted States residents who are effectively controlling the operations of
an overseas firm. What constitutes effective control in this sense must be
determined on the facts of each case, but it is not believed that this will
present any major difficulties.
Enclosures:
Two copies of Treasury Regulations
amended as of July 22, 1953,
- Security Information
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Page 57
EXCERPTS Fi uivi CUCUii t'iANUAL
General Rules of Procedure:
12. These have been developed informally and have not been codified, Gen-
erally speaking, however, they are as follows:
} Although in general it is envisaged that the CG will meet quarterly
(CoGom Doc 53), a special meeting will be convened at the request
of any member (CoCom Doc 66).
CoCom is competent, to examine any question within the CG's terms
of reference at the request of any PC (CoCom Doc 66).
c) hen all CoCom delegates are authorized by their respective govern-
t
men
s to accept a recommendation of CoCom, that recommendation
takes eft forthwith without waiting for the next meeting of CG
(CoCom Docs 66 and 180)
Recommendations agreed to by CoCom will be assumed to be accepted
by. all PCs unless a reservation is entered within 30 days (CoCom
Doe 180). This period may be shortened in specific cases by general
agreement,
e) 'Mere must be unanimous agreement on all CoCom final recommendations
(CoCom Doe 53). In view of principles (c) and (d) above, this is
understood to mean that final recommendations do not become binding
on PCs unless they have been unanimously accepted by governments.
This does not apply to separate understandings among various PCs,
such as the Tripartite Agreement.
f) Although it is not a formal principle, it is generally understood
that agreements reached in CG/CoCom represent a, minimum level of
control and that any PC has the right in its own interest to impose
more restrictive. controls and to take unilateral measures to
enforce such controls. The U.S. position in this respect was
stated. in CoCoin.boo 212, concerning the Tripartite Agreement. In
general, the 1J,3. controls are mere: extensive than those agreed to
in CoCom and, to a lesser extent, this is true of some other PCs.
INTERNATIONAL LISTS
7. Formal criteria have never been established by.CoCom to govern the
inclusion of items in I/L I, II or III9 The initial I/L I was based on the U.S.
I -A list as partially accepted and modified into theA.nglo-French List. Subse-
quent additions to.I/L I and I/L II up until the time of the Tripartite Agree-
ment, were based on ad hoc considerations,
8. As described in Section VIII, the U.S, proposed in January and Niarch
1950, that the criteria for the U.S. I-B List be adopted by CoCom for I/L II.
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N
-
"PIMM
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58
9, At; the London Tripartite conference, the criteria for the U.S. I -k and I-B
liets were used in developing the Tripartite embargo and quantitative control lists!.
New criteria were drawn up for the exchange-of-information lists. In submitting the
Tripartite Agreement to the CG on November 29, 199550 the tripartite powers outlined
the criteria employed in drawing up the three control lists (CoCom Doe 213). As a
matter of interest, these criteria are given below:
a.) Embargo:
(1) Items which are designed or used principally for the production
and/or development of arms, ammunition and implements of war.
(2) Items which would contribute significantly to the war potential
of the Soviet Bloc where the items incorporate advanced tech-
nology or unique technological know-how. This applies only to
goods sufficiently important to the war potential of the Soviet
Bloc that the absence of an embargo would permit a significant
advance in Soviet Bloc technology over its present level of
development,
(3) Items which would contribute significantly to the war potential
of the Soviet Bloc in that the items, if embargoed, would main:
train or create a critical deficiency in the war potential of
the Soviet Bloc.
b) Quantitative Control:
Items which are highly important from the point of view of their
contribution to the war potential of the Soviet bloc and of which
;..the high strategic character is directly related to- the quantitative
extent to which they may be exported to the Soviet bloc.
c) Exchange of--Information:
.Items of potential strategic significance for which information
presently available on the Soviet Bloc needs is insufficient to
establish clearly the necessity for control on types indicated,
Note: The: words "war potential" used in the above criteria should be
interpreted as meaning the followings liar potential is to be
viewed from both the short term and the long term aspects. It
includes (a) items of direct military application. It may also
include amongst others, selected items which represent (b)
sectors of industry in which strategic and industrial interests
are very closely mingled and where the items.. concerned can
easily and quickly be turned over f rom- peaceful .uses to-the
manufacture of war equipment or other direct military applica-
tion; and (c) other industrial fields which serve to support the
basic economy of a country and which therefore support either a
peacetime or wartime economy.
March 31, 1951
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4mkwksm
59
ADMINISTRATION PRIiiCIPLES CONCERNIIJG LISTS
1. The following administrative principles concerning lists have been agreed
to: (CoCom Doe 167, November 1, 1950) et seq.):
a) Second-hand items; The description of arty item on the International
L
ists includes that item in either new or second-hand condition.
Varieties of items: when the description of ar,y item on. the lists
contains no qualifications or specifications, it is regarded as
including all varieties of that item. Category and sub-category
captions are only for convenience in reference and do not affect
the interpretation of item definitions.
e) Components: Any item (including plants) containing one or more
s
li
t I components should generally be treated as though it were. on
List I when the List 1 component or components are a principal ele-
ment of the item in value or quantity and can be feasibly removed
or used for other purposes.
Component Parts: The object of the List I and II controls should not
be d
f
t
d b
f
e
ea
e
y the export o
component parts.
Design data etc.: The object of the List I and II controls should
not be de- feated by the export of design data, manufacturing tech-
nique, and specialized, tools for making any controlled items.
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Informal Summary of Procedures for Repor ti n Trrad A; reeem_e_t t Nego iia-
,Minns and Shipments of International List I tame b~ COCOM Coun_ tries
to the Soviet Bloc
International List I Items
COCOM Document 471 (revised) dated January 31, 1952 sets forth
the principles and procedures for the, discussion in GOCOM for th e
shipment to the Soviet Bloc of items of embargo nature. The types
of transactions affected are of two kinds: (1) Future Commitments
and (2) Prior Commitments. With respect to future commitments,
member governments are obligated to inform the Coordinating Committee
in advance of the proposed' trade negotiations with the Soviet Bloc
country concerned and must present the information in detail in
accorr3cnce with the guide contained in Annex B of Document 471 (re-
vised). In all cases the proposed trade negotiations need.not be
discussed in COCOM in aJvance of the negotiations with the Soviet
Bloc country. However, this'can only apply in a few exceptional
cases where the circumstances of the trade negotiations make it
impossible to inform 'the Committee before the member government
enters into definite commitments involving exceptions. In these
cases, the member government is required to inform the Committee of
the full details of the transaction entered into as soon as pnssible
after I.;he negotiaatians are completed. In such cases the guide con-
tained in Annex B of Document 471 (revised), must also be folli?wed.
A slightly different procedure applies with respect to shipments
of List I items 'classified as prior commitments. The definition of
a prior commitment is "contractual or other .;bligations entered int,-
prior to the date of introduction of control of the item coneerned".
When shipments of prior commitment items occur, the appropriate
monthly statistical returns to the Coordinating Committee shculd in-
dicate the considerations regarding the decision reached to ship the
item concerned. With respect to information filed with the Conrdino-
'tim.g. Committee concerning the shipment of prior commitment items;
sny member p,overnmen.t m,,,y request further amplifying details of each
transaction.
B. International List II Items
COCOM Document 470 contains the principles agreed to by COC0M
for the reporting of shipments of List II items. C0COM Document 777
(or 1277) amplifies these principles in more detail. There are sev-
eral categories of items fulling under List II each with a different
method of reporting. The description for the reporting to C000M of
shipments made in each category is as follows:
(1) Exports, in Excess of Agreed uotra Limits
Proposed exports by any country in excess of the agreed
quota 'Limits with respect to List II items that have been assigned
definite quotas will only be permitted in accordance with the prin-
ciples and procedures governing exceptions as set forth in C000M
DocurA o0' F61'#N6ase IkJ ': ribes
the e eptions procedure for nternationa Is I ems.
IT - SECURITY INFORMATION
 Approved For Relea~/05~till R 7Q0001 00020001-2
Page 61
(2) Prior Notification. Items
At the Consultative Group meeting held in. January 1932 it
was agreed that certain. List II items were of such importance that
it would be desirable to require the exporting country to notify
COC0M in advance of any definite commitment to ship the item. This
special treatment is accorded the four List II items, contained on
the Title II Category B list of the Bottle Act, but which had not
been accepted by COCOM for addition to. International List I, These
items Ere: 2470 2475, 2480 and 2635.
It must be fully realized that the procedure adopted for these
four items only require prior notification to the Coordinating Com-
mittee and not prior consultation as is the case with respect to
International List I items in.volvin.g, future commitments. However,
,n. practice, the term 'prior notification' in. this case has resulted
in COC0M actually discussing the proposed commitment. This is true
in the case of the shipment of aluminum (Item 20) by Norway to
various Soviet Bloc countries,
(3) Prior Consultation Items
In the case of one International List II item COCOM has
agreed that the member governments should be consulted in advance
before the item is exported. This procedure applies to various
kinds of ships as described in item 2415 (0) and (b). However there
is no definite procedure prescribed for the method of reporting of
these items Presumably the exporting countries need not report
to COCOM the full details of the trade agreement or barter trans-
action under which the items are to be exported., but again, in prac-
tice, as is true in the case of the prior notification items, member
governments present fairly full details regarding the trade agree-
ments under which the items are to be exported.
(4) 3 (d) Items 12uid .pro uo
The relevon.t paragraph of COCOM Document 470 applying to
III D items reads as follows:
"items will be controlled with full regard to their
strategic importance, as revealed by discussion in.
the Coordinating Committee, and in keeping with the
principle that exports will be permitted only to the
extent required in order to obtain imports from the
Soviet bloc which are essential to sustain the basic
economy and thereby support the defence effort.
Exports of these items will not be permitted for
the purpose of maintaining or developing export
markets in. the Soviet bloc or for similar purposes,,'
Where trade agreements exist governing the exchange
of goods between particular countries, exports of
these items will.. not be.:. permitted outside the frame-
work of the trade agreements, except in the case of
officially-approved barter or compensation arrange-
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SECURITY :INFORMATION
Page 62
Trcnsoctions involving the export of 3(d) items may be auth-
orized by the government concerned without prior discussion in the-
coordintw tin.g committee, but the government should inform the com-
mittee of the considerations on which this decision was bused, pre-
f erubly at the time the t the r pprovo l of the export, is reported to
the committee in. monthly stotisticcl terms, When the export trElns-
raction. is included under the terms of a trade agreement which has
nlreody been discussed in the Committee, it is ou'ficient merely
to refer to the ,?pproprio to COCOM Document describing the trade
ogreemen.t, Member governments may be asked, however., whether the
trade f:igreement is being carried out in accordance with the general
pnttern envisioned tat the time when it was signed,
The main. criticism of this procedure is that there is no defi-
nite un.derstondin.g as to wh^t m-~v be considered on n-dequaLe justifi?_
cntion for the shipment of a 3(d) it m As explained in the :.bove
p,rragroph the member government may refer to a trade agreement pre-
viously discussed by the committee as a justification; but, in cases
where this does riot occur the member government may submit what-
ever justification it considers necessary. Since the principle
covering 3(d) items only require thct on adequate quid pro quo be
received in.. return., member governments c&n merely indicate wh, t
item oJ: groups of items they consider was received as the quid pro
quo s
uota Items
Most of the Internn.tionnl :List II items f~:all into this
cotegory When n member country keeps its shipments of these items
within its notional Quota it need not justify the, export in any
respec::,. It merely ha.s to report to the Committee either the licen-
ses issued during a specific month or nctucl exports made during the
same pr:;riod
(61 Un,-llocoted Reserve uotc
In all cases where quotas hWe been. established there is ti
small unr?.llocnted quote which is port of the global quota. Exports
author_.zed ragrinst the reserve quote should be reported to the
Committee immedintclyo In the event any government desires to use
more than, twenty-five per cent of the reserve quota; it should con-
sult the committee in odvnnce of exporting the item con.cerned. In.
the D tter instance the member government mr,-,y be requested to sup-
ply some details recording the; trnnsr cti.on, but this is not neces-
sarily true in all ct ses,y
(7) Other Reports to the Committee
Member governments ,re required t six month intervals,
to submit statements to the Committee setting forth the export policy
which each government is following with respect to individual List
II items, The strternents are usually due on April 1st t,nd October
1st of each year but this may very by a few weeks if the Committee
so decides . These semi u^ t,,:) er c s i ended to be o e
comp ~ft F9tri _Re 4ni p / 11 1, a 0a~1 A&~
kjl~ll
SECURITY INFORMATION
 amPOPOP- S C[`itIT`i L FOIiNiATION
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future trends if possible and to provide the basis on which further decisions on
the maintenance or alteration of the existing controls can be made. These state-
ments do not usually contain much detail regarding individual trade agreements
which the member countries have with the Soviet Bloc.
International List III Items
The principles and procedures governing this group of items are contained
in COCOM Document no, 207, Annex C. and reprinted in Document 922, Member govern-'
mints are required to submit monthly returns of exports or licenses issued for
these items. No justification regarding thecircumstances surrounding the shipment
of the item need be supplied to the Committee. However, the Committee is supposed
to review the quantities exported for ouch item, whenever necessary, with the view
of restricting further exports if it appears that the strategic rating has been
altered due to an increased demand by the Soviet Bloc.
D, China Embargo List
All Reference Munitions List items, International Lists I, II, III and
certain supplementary items are embargoed to Communist China un1 North Korea,
Exceptions for the shipment of International List I and II items must be justified
in accordance with procedures prescribed in CLGOh Document 471 (revised), For
International List III and the supplementary items, a different exceptions procedure
is in effect. For these items, a member country can make an exception to the
embargo rule without prior consultation with the China Committee. However, an ex-
pgst facto justification is required on the basis of the following criteria:
"Exports to Communist China of items on List III
and the supplementary list should be permitted only in
only in very special circumstances and when the
exporting Member country considers that the item
exported will not contribute to Communist Chinas
military strength and will be used for civilian
purposes. Such exceptions should be reported to
the Coordinating Committee as promptly as possible
after the fact and in any event in the Monthly
Statistical Returns with an indication of the
considerations governing the shipment of the item,
It is understood that any participating government
may avail itself of the facilities of the China
Committee for a full advance discussion of special
cases which may arise. With respect to information
filed with the Committee concerning shipment of any
such items to Communist China any member government
may request further details."
E. Exchof General Information on Trade Agreements
Participating Countries agreed at the CG meeting on November 29, 1950
(COCa'i Doe, 21 $), to give COCOM general information concerning the results of
trade negotiations with Soviet bloc countries and any other information that would
be helpful, particularly as to the demand in the Soviet bloc for particular items.
It is left to each Participating Country to decide on the best way of making this
in ormation ai b o be d v e o k th actua negotia-
to yvie9 or te~lease ~$b/6 / ' C 1 fSP 9-V1s20skaki 0 0001-
Ap7
~. SLOURITY INFOFdviATION
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614-.
COCOM Doc 470
(UANTITA_TIVE CONTROL - PRINCIPL! S AND PROCEDIRES
(NOTE: For convenience in reference, this Document reproduces below the
final text of the agreed "Directive for the Disposal and Treatment of
Items on International List II." The text is as proposed in Annex B to
Consultative Group Paper 17 and as subsequently modified and approved
pursuant to paragraphs 16-22 of Consultative Group Paper V.)
- --- - - - - - - - - - - - -
A - GENERAL PRINCIPLES.
1. Exports to the Soviet bloc of items on List II should be
limited with full regard to the strategic importance of the
item and to the objective of preventing any increase in the
Soviet war potential, it being understood that the strategic
character of these items is directly related to the quantities
which may be exported to the Soviet bloc. (This reaffirms
principles already agreed in CCCOM.)
2. The export of List IT goods should not exceed the minimum quan-
tity which the exporting country finds to be required in order
to ensure the continued importation from the Soviet bloc of
goods which are essential to sustain its basic economy and
thereby support its defense effort.
B - PROCEDURE.
Is Any items on List IT which on the basis of the latest informa-
tion available meet the agreed embargo criteria will be placed
on List I.
2. Any items on List II which on the basis of the latest informa-
tion available do not meet the criteria agreed for List II will
be placed on List III for continued exchange of information and
the prevention of excessive shipments.
:3. Items remaining on List II thereafter, or subsequently placed
on List II, will be treated as follows:
a)
Quantitative limits will be set for individual items wherever
the available information permits a reasonably accurate and
defensible judgment from a security viewpoint. These limits
will be apportioned among the participating countries in
relation to their exports to the Soviet bloc in the past-.
war period, except where such a period is agreed to be mani-
festly inequitable to one or more of the. participating
countries,
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Doc 470 (Contd)
b) In accordance with existing practice, where it is agreed
that the item may be comparable in strategic importance to
the items already on List I, no exports will be permitted
until the strategic rating of the item has been clarified.
c) Where it is agreed that recent exports have been above the
estimated critical level to such an extent that any further
exports in the near future can reasonably be expected to
contribute directly to an increase in the war potential of
the Soviet bloc, the Coordinating Committee shall examine
whether as a temporary measure exports should be more severely
restricted and, if necessary, denied.
d) Where the latest available information does not permit
agreement on reasonably accurate and defensible quanti-
tative limits, from a security viewpoint, the items will
be controlled with full regard to their strategic im-
portance, as revealed by discussion in COCOM, and in
keeping with the principle that exports will be permitted
only to the extent required in order to obtain imports
from the Soviet bloc which are essential to.sustain the
basic economy and thereby support the defense effort.
Exports of these items'will not be permitted for the pur-
pose of maintaining or developing export markets in the
Soviet bloc or for similar purposes. Where trade agree-
ments exist governing the exchange of goods between par-
ticular countries, exports of these items will not be
permitted outside the framework of the trade agreements,
except in the case of officially-approved barter or com-
pensation arrangements.
Quantitative limits may be revised or reapportioned among the
participating countries by agreement in the Coordinating
Committee.
Exports by any country in excess of the limits agreed will only
be permitted in accordance with the principles governing excep-
tions to the security controls as set out in COCOM Document 471-
6. Each Government will submit to the Coordinating Committee in
addition to the monthly statistics on all List II exports in
accordance with existing arrangements, a semi-annual statement
setting forth the export policies which it is following with
respect to individual List TI items in its trade with individual
countries or the Soviet bloc. Any major changes in export poli-
cies will be reported without delay.
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COCONi Doe 171 Revised
.. 66
JAN. 31, 1952
EXCEPTIONS TO SL,CURITY CONTROLS .. ?HIigCIPLETS AND P.0CLDURES
(As revised January 21., 1952 - CG Paper paragraph 26)
GENERAL F'RINCIPIES
1., Subject to the special considerations involved in prior commitments,
exceptions to the general rule of embargo in respect of List I items and to
agreed quantitative limits in respect of List II items will be made only when
an exporting country would otherwise face the loss of supplies from the Soviet
bloc which are essential to sustain its basic economy and thereby support
its defense effort.
FUTURE C07194ITMEN 'S
2. Governments will inform the Coordinating Committee, in advance and
in detail, regarding any trade negotiations or proposed transactions which
may re;;ult in such exceptions and will invite the views of other members of
the Cornimittee. (It is recognized that there may be a few exceptional cases
where the exigencies of the trade negotiations make it impossible to inform
the Committee before entering into commitments involving exceptions. If such
arises occur, the Committee will be informed as soon as possible thereafter.)
PRIOR COM.LI
3. It is recognized that prior commitments, i.e., contractual or other
obligations entered into prior to the date of introduction of the control of
the item concerned, may have to be fulfilled if an official commitment of a
participating government is involved, or if, in the absence of an official
commitment, that government decides, having due regard to the strategic
importance of the goods and to the probable consequences of not allowing the
commitment to be honoured that the export should not be prevented. Where a
trade agreement provides for the supply of goods under general headings, the
government concerned will make every effort to meet its commitments by sup-
plying only those goods to which there is no security objection. In all
cases where exceptions are made in order to fulfill prior commitments , the
appropriate monthly statistical returns to the Coordinating Committee will
indicate the considerations governing the decision reached. With respect
to information filed with the Coordinating Committee concerning prior commit-
ments, any Government may request further amplifying details.
NO7I31 The following Annexes were agreed in the Coordinating Committee on
J
8
anuary 2
, ].952:
Annex A - Procedure for Submission of F. ceptions.,
nn ex B Guide for informin the Coordinat' C
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COORDINATING COM'sITTFE
COCOIvi Doc. No, 1277
CONTROL OF LIST II I ThS
1, General. List. II items are controlled on the basis of the general princi-
pies set o~' ut in COCONi -Document No. 470, The Coordinating Committees s recommendations
14 respect.of individual items for the year 19,53 are shown in the attaehed sheets, A
Ariy subsequent additions or amendments will be circulated for insertion in this
document. The controls for 1952 were shown in COCON Document 777.
2. Quotas. The Coordinating Committee has fixed global and individual national
quotas incases where available information permitted a reasonably accurate and,
defensible judgment from a security viewpoint. The Committee will at any time
consider a readjustment of these quotas on the basis of new information brought.
before it. Quotas apply to the calendar year 1953..
3. Control under axag h 3(d) 'of COCO?i Document No. 170,
The relevant paragraph of 00001 Document No
470 reads as follows; -
"Items will be controlled with full regard to their strategic
importance,-as revealed by discussion in the Coordinating Com-
mittee and in keeping with the principle that exports will be
permitted only to the extent required in order to obtain imports
from the Soviet Bloc which are essential to sustain the basic
economy and thereby support the defense effort. Exports of
these items will not be permitted for the purpose of maintain-
ing or developing export markets in the Soviet Bloc or for
similar purp+oses.. Nhere trade agreements exist governing the
exchange-of goods between particular countries, exports of
these items will not be permitted outside the framework of
the trade agreements, except in the case of officially
approved barter or compensation arrangements."
The Coordinating Committee has agreed statements, as shown in the attached
sheets, on the strategic importance of some of these items in the form of "licensing
guides" for the use of control authorities or in the form of notes reflecting points
made in discussion,
4. .. For certain items, for special reasons, it has been agreed that no exports
,will be allowed, save in exceptional cases, without prior notification to the Coordi-
nating Committee in some cases or prior consultation in others,
5, Modified 3(d) treatment. In certain other cases resulting from disagreement
as to the size of a quota defensible from a security point of view, it has been
agreed that exports may be authorized up to.the limits shown herein and will be
controlled according to the 3(d) procedure (paragraph 3 above) in excess of those
limits.
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COCON Doe. No. 1277
Exceptions.: Proposed exports by any country in excess of the agreed quota
4.imi.'ts will only be permitted in accordance with the principles and procedures
governin ; exceptions as set out in COCOM Document No, 171 (Revised) and C'COM Docu-
ment No, 623,
7, Unallocated Reserve Quota. In all cases where quotas have been established
there is a small unallocated gaota. This allows flexibility for Governments which
4ind it necessary to exceed their national quotas by small amounts or for Govern-
ments which have no national quota and wish to make unforeseen or token shipments,
4xports authorized against the reserve quota should be reported to the Committee
immediately. Any Government desiring in the course of 1953 to use more than 256 of
the reserve quota (or such other percentage as the Committee may fix in individual
oases), should consult the Coordinating Committee,* The. Committee's Secretariat
Will circulate figures fortnightly to show what quantities of the unallocated quotas
or particular items have been used, what quantities still remain to be used, and
any decision of the Committee to change the above-mentioned figure of 25% in
respect of any particular item,
8? Justifications of 3(d) Exports.. Transactions involving the export of 3(d)
items may be authorized by the Government concerned without prior reference to the
C' ordinat::Lng Committee, but the Government should inform the Committee of the con-
siderations on which its decision was based, ;preferably at the time that the
approval of the export is reported to the Committee in monthly statistical reports,
In the case of small continuing exports which are part of a larger order, the con-
siderations governing the order as a whole should preferably be reported at the
time the first shipment appears in the monthly return sheets. When the export
transaction has been envisaged under the term!; of a trade agreement which has already
been discussed In the Committee, it will be sufficient to refer to the appropriate
COCCNi Document concerning the trade agreement? Governments may be asked, however,
whether the trade agreement is being carried out in accordance with the general
pattern envisaged at the time when it was signed,
90 Maintenance of Quota Records.. Formal records of quantities of List II
items exported under quota are kept on the basis of monthly statistical returns to
the Committee. These returns should be compiled and forwarded to the Committee as
quickly as possible after the month concerned and should show in each case whether
they are based on export licences approved (or renewed) or actual shipments,.
loo Other Reports to the Committee. Statements setting out the export policy
which each Government is following with respect to individual. List- II items will
be submitted to the Coordinating Committee at six-month2,y intervals, These state-
ments are intended to be more comprehensive than the monthly statistical. returns,
to indicate future trends if possible and to provide a 'oasis on which further
decisions on the maintenance or alteration of the existing controls can be made.
Discussion of quotas for 1954 is intended to follow proposals made by 15th September
1953 (see COCOTVI Doe. No. 1270)?
11, The control of some items as shown in the following pages is provisional or
pending and may be modified as a result of decisions later in the year. Such
decisions will be made the subject of revised pages for this document,
NOTE. Ita is understood that Governments will not raise objections unless either
they have serious grounds to believe that they themselves would t 't use
Atop rdcfotRe a .f20tRWG5h '~ ,I F 6 a 0~a4, ii OQA q P 14tanca
of the request would leave a margin too small for contingencies that could
reasonably be expected to arise,
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.'69
NOTES International List II, as amended from time to time, constitutes the only
official listing and definition of the items under quantitative control.
For convenience in reference, the attached sheets contain the definitions
currently appearing in that List but do not replace it as the official text.
In so far as feasible,. new sheets will be issued periodically to"bring thi3
document up-to-date,
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COCOri Doc, N o, 1277
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.. 70
SUIIi.RY of
IMPORT CERTIFICATE/DILLIVLR VLRIFICATION SYSTEM
(Prepared in the U.S. Delegation to CG/CUCUNN/CHINCOII], August 18, 1953)
1. Summary
2. Operational Details (as of August 15, 1953)
a) Issuance of ICs and DVs
b) Responsibility of exporting country when a valid IC
has been presented
c) Means of transmitting ICs and DVs
d) Penalties
e) Recommended standard forms
f) Names and addresses of issuing authorities
g) Commodity coverage of IC/DV system
3. Cooperation with Third Countries
a) Switzerland
b) Sweden
c) Austria
d) Yugoslavia
e) Latin America
f) Dependent Overseas Territories,
1. Summai:ys
For all International. List I items and the majority of International List II
items, the authorities of the exporting country make the issuance of an export
license to another participating country conditional upon the presentation of an
Import Certificate (IC) issued by the importing country on the basis of a formal
declaration by the importer to the authorities of his own country that the goods
in question will enter the econorry of the importing country or be diverted only
with the approval of the authorities issuing the Import Certificate. Upon request
of the exporting country, the importing country will also verify that the goods
have been delivered by issuing a Delivery Verification (DV). This scheme, adopted
in May 1951 (COCOMi Doc. 370) as a compromise solution to the transit trade problem
is stall in operation.
2. 22erat,.ional details:
a. ]:Issuance of ICs and DVs:
Ti Participating Countries have agreed to issue a certificate certifying
that an importer resident in their country intends to bring certain
strategic commodities (see sub-item 2 g below) into the customs jurisdic-
tion of that country, or, if not to be imported, that he will not divert
the commodity to another destination without approval of his Government.
This certificate is made available to the prospective importer for
transmission to the exporter who, in turn, presents the certificate to
the authorities in his own country in order to obtain an export license.
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Participating countries have also agreed to issue a form upon the request
that certain strategic commodities have arrived
in
verif
nt
g
y
ry
fan exporting cou
within the customs jurisdiction of the importing country. This form is made avail-
able to the importer for transmission to the exporter who, in turn, presents it
to the authori;,ies in his own country as proof that the transaction was completed
n adcordance with the terms and conditions of his export license,
(-i3:) Participating Governments have agreed that the arrangements which
in which
th
t
e way
o
they might make with their own traders with regard
these forms should be applied for was entirely a matter for themselves
but certain suggestions were made concerning the points to be included
in declarations to be made by applicants for these forms, These sug-
gestions can be found in Annex A to CUCLM Doc. 378. The procedures
followed by participating countries before issuing Import Certificates can
be found in COCOM Doe, #1279.
Responsibility of exportin
country when a valid IQ has been ~present ;fit'
CCCON affirmed the responsibility of the exporting country for assuring
itself that shipments of strategic goods are not intended for diversion. Whenever
reasonable doubt exists as to the bona fide nature of a transaction, a check by
the. exporting country is~considered most appropriate, even though valid ICs were
produced. When the exporting country has evidence that the goods will be diverted
even though a valid.IC has been presented, it is incumbent upon the, exporting
country to refuse the license application and, at its discretion, notify the
.mporting country of the reasons for its action. (COCCM DOC. 1279)'.
e, Means of transmitting ICs -and DVst
It was agreed that, in general, the forms should be despatched through com-
mercial channels from trader to trader. In some cases, however, these certificates
might pass.through diplomatic or some other government to government channel (OUCcM
Doe, 371). In cases where an exporting country decides to refuse a license appli-
cation because of suspected diversion even though a valid IC has been presented,
COG CM agreed it may be appropriate for the exporting country to return the IC to
the importing country through government channels for invalidation (CUCOM Doc. 1279).
d. Pelti na,,,_ es,
Tha requirement that the IC/bV system be based on penalties is implied
,in the agreement that if the exporter cannot produce a t)V, an examination should
take place and if a diversion has occurred, the exporter or importer -- whoever is
responsible - . should be prosecuted (Appendix B to CUCUTM1 Doe. #304). A brief
description of the penalties imposed in the participating countries is contained
in COCOM Doe, #1279)
s, Recommended standard forms
The Committee agreed (COCOM Doc. 378) to recommend the use of standard forms
or as near standard as possible. It was also agreed that the fore should be
printed in the language of the issuing country but in all cases should include an
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. 72
English or French version or both. Copies of the recommended IC , and DV forms are
annexed to COCONi Doc, 378,, Specimens of the. actual forms in use in all partici..-
pating oorintries except Japan have been distributed as annexes to COCUNi Doc. 107.
The Japanese forme have' been distributed as COCO1i Doc. 1187,
f. Names and addresses of issuing authorities;
The names and addresses of the authorities in all participating countries
where ICs and IVs may be, obtained are compiled in COCONi Doc. 953 (including one
cprri.gendum dated November 25, 1952, and annex nun, ber.2 dated April 13, 1953),
g? Commodity Coverage of the ICDV S stem;
Participating Governments have agreed that with the exception of cases
where the;;r have received all necessary guarantees as to the end use of the strategic
goods-for which export licenses have been requested. Governments should require
import cex'tificatpa and delivery verification forms to be presented for all items
op the. Niuni tions List and on List I, for certain List II items selected by them,
ad ,far items which, owing to marginal differences in definition between national
lists and. the International Lists, did not appear to. be covered by the latter,
(COCONi Doc,. 9146) The exceptional cases mentioned 'above (where all necessary guar
.aitees have been received)) have generally been interpreted to cover cens.gnments
W a government or semi-government agency; in such cases, bilateral governmental'
arrangements can be -made in lieu of the" ICDV tV stem ! (CUCOPi Sub-0/52/17). The Com-
mittee has recognized the fact that the import certificate in itself offered little
security unless it were followed up by a request for a delivery verification form,
which provides an a posteriori check (COCOil Sub-C/53/31 Revised)..
Z,Tper,ation with third countries
The ,Committee has agreed to seek the cooperation of a number of third
countries in applying the ICDV system,` either by issuing ICs upon request of a. par-.
t4.c .pa.ting country or requiring an I IC before exporting strategic goods to a ,partici-
pating country or both;
(a) s3witz?rland;
The ICDV system as adopted in CUCO11i is based in part pn a system urii-
laterally adopted by Switzerland in 1950. For strategic importt> from participating
countries the-Swiss issue "Blue Certificates" which are comparable to the ICs used
by CCOp 11- countries Appendix B CuCOL Doc, 304) and CUCOh has agreed. to make, use of
these forma (Doc. 303). Switzerland: does not, however, issue Delivery Verification
forms. . In January 1953" the Commit tee' agreed to invite Switzerland to require ICs
and DVs for Swiss strategio exports to participating countries, The Committee has
not yet been informed of the'Swiss response to this proposal. The Committee'has.
agreed, however, to issue ICs and DVs if requested by the Swiss and the Committee
has requested that Switzerland consult the original exporting participating
country before permitting the re-export of strategic goods to third countries
(cocci Doe, 1123).
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(b) Swedena
The Committee agreed to invite Sweden to cooperate fully in the ICDV
Pystem (LOCUM Doc. 1123). The Committee has not yet been informed of the Swedish
response,
(c) Austria
The Committee agreed to request Austria to issue "import certificates"
for shipments of items on the Munitions List, List .I and List 11 (COCOili Docs 11111
and 1215). The Austrian version of the Import Certificate is known as: an
'!Endverwendungsbescheiningung'and is issued by the Bundesministerium fur Handel
and Industrie (COCQN Doc. 1279). The Committee also agreed.to make use of the
Austrian watch list (COCOX Doc. 982) when approving export licenses based on an
Austrian import certificate in order not to approve exports to Austrian enterprises
which have been confiscated by USIA (Russian abbreviation for Administration of
Soviet Enterprises in Austria).
(d) Yugoslavia:
C000M agreed to inform Yugoslavia of the purpose of the ICDV system and
to inform Yugoslavia that all participating countries will issue ICs and DVs upon
request for all goods common to the Yugoslav control lists (contained in Doc, 1093)
and the Paris Group Munitions List, List I and List II (COCUM Doc. 12111 Revised),
the Committee has not yet been informed of the Yugoslav response to this approach,
(e) Latin America;
CUCOii agreed that the U.S. should approach the governments of other
American countries with a view to bringing these countries into the ICDV system on
a limited basis, namely that they should require ICs and DVs before exporting a
limited number of commodities (COCOivi Doe. 6117). In February 1953, the Committee
was informed that only three Latin American countries -- Colombia, Costa Rica and
Haiti -- had thus far agreed to use the ICDV system; some governments either had
no strategic exports or considered their existing controls adequate, namely the
Dominican Republic, El Salvador, Honduras, Nicaragua, Uruguay and Venezuela. Other
Latin American countries have the problem under study (CUCaM Doc. 1123).
(f) Dependent Overseas Territories::
The Committee has agreed to make use of the ICDV system when exporting
strategic commodities to certain Dependent Overseas Territories. A list of the
names and addresses of authorities in 28 U.K. Dependent Overseas Territories to
whom reesuests for ICs and DVs should be sent is contained in COCOIvi Doc. 1096
(including 5 Addenda). It should be noted
Ct that
Da oc. special and system of entation
similar to the IC is used in Hong Kong e
DVs are also available in Niacao (COCO-ki Doc 919).
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IDOCUIiMTS RELATING Tu THE ICLDV SYSTETT
COCOM DOCUISNTS
*304, 353, *371, *378, 06, *407
41:L, 412, 417, 429, 434, 465
479, 518, 565, 635, 644, 647
676, 688, *755 and Addendum, 861'
897, 933, *946, *953 and Addenda
954, 996, 999, 1011, 1062, 1073
1089, 1093, 1096, 1116, *1123, 1141
1142, 1159, 1187, 1207, 1214 Revised,
1218, 1224, 1230, 1232, *1279?
COLON SUB-C0IMIT E DOCUMENTS
Sub-0(51)1
Sub-C(51)15
Sub-0(52)2 (Revised)
Sub-C(52)17
Sub-C(53)21
*Sub-C(53)31 (Revised)
* NIost iz,nportant documents.
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STATEMENT OF THE CHAIRMAN OF THE UNITED STATES
DELEGATION TO THE CONSULTATIVE GROUP
January 15, 1952
I deeply appreciate this opportunity to discuss with you.some of the problems
cf mutual interest which have developed since our meeting here last July. You will
recall, I am sure, my discussion of the Kem Amendment which had been adopted by tke
u.S. Congress a short time before and my emphasis on the political realities whic1
~hat legislation reflected. (CG Paper IV B, Annex A, July 19, 1,951)
I mentioned then that the President in signing th'o Kem :amendment called for
more flexible and practicable legislation on the subject with which it dealt. After
most careful and detailed Congressional review reflecting the serious concern of the
Congress and the American people regarding the flow of strategic goods to the
Soviet Bloc, Public Law 213, the Mutual Defense Assistance Control Act of 1951, was
enacted by Congress.
This Act, the so-called Battle. Act, provides, we believe, a realistic basis
for U.S. participation in constructive measures for oontr,.lling.trade with the
Soviet Bloc in the mutual security interests of the free nations. Your governments
are already familiar with the provisions of the Act. They have been described in
d9tail in the aide memoire transmitting to your governments the initial determina.-
t.ons under the Battle Act. We are aware that your governments have been concerned
that the Battle Act, by its toxins or in its administration, might jeopardize the
ecieting multilateral framework for dealing with security export control problems
in the Consultative Group and the Coordinating Committee. This concern is under-
standable, particularly in view of the fact that the time limits set in the
legislation necessitated certain decisions by the Administrator without opportunity
fpr as full consultation with the Coordinating Committee countries as we would
have wished. It was not the intent of the legislation, nor is it the intention of.
the Administrator, to impair multilateral efforts to obtain adequate security
controls. The major purpose of the legislation is to strengthen the security,
control effort through further international cooperation. We, therefore, welcome
this opportunity to discuss the Battle Act and the manner in which its administra-
tion and the operations of this group can be mutually supporting.
We wish it to he clearly understood that it is the intent of the United States
Government to strengthen international cooperation in the field of mutual security.
United States policy, as expressed in part in the Battle Act, looks toward
increased cooperative action in the security control field not only among the
Western European nations receiving United States assistance but among all other
free nations as well.
The United States regards the Coordinating Committee as the forum in which to
discuss problems relating to the control of strategic exports from Vgestern Europe
to the Soviet Bloc. The United States, to the fullest extent consistent with the
provisions of the Battle Act, will take account of existing or future Coordinating
Committee arrangements. In making the initial determinations as to the list of
commodities of primary strategic significance which should be subject to embargo,
the Administrator has, with few exceptions, adopted International List I and the
arms and atomic energy categories already agreed by the Coordinating Committee
countries for embargo to the Soviet Bloc. This was a clear recogniticn of the
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.. TES
careful and effective work done by the Coordinating Committee in developing lists
of commodities the export of which to the Soviet Bloc would contribute signifi-
cantly to its war potential.
In relating Coordinating Committee activities to U.S. administration of the
Battle Act, it is necessary to have a clear understanding of the statutory .
requirements imposed on the Administrator and on the President. The Administrato
is required to recommend to the President termination of aid to any country which
knowingly permits the export of Title I commodities to' the Soviet Bloc. Ivith
respect to Category A (the munitions and atomic energy list), it `is mandatory
that aid be terminated. No exception is permitted, with respect to. items in
Category B?of Title I, the President may in his discretion direct the continuance
of aid to a 'country which has exported such an item to the Soviet Bloc "when
unusual' circumstances indicate the cessation of aid would clearly be detrimental
to the security of the United States,," in making such a determination, the
? President' will take into account "the contribution of such country to 'the mutual.
security of the free world, the importance of such assistarice to the security of
the United States, the strategic importance of imports received from countries
of the-Soviet Bloc; and the adequacy of such country's controls over the export
to' the Soviet Bloc of items of strategic importance." It is clear from the
history of -the legislation that this provision must be reserved for the truly
exceptional circumstances.
Title II of the Act provides that the United States shall negotiate a prograr
for controlling exports of strategic items not subject to embargo under Title I,
The initial determination made under Title II includes 28 item listings which,
in the view of the United States, particularly require the application of stringe3
export control measures. Although the United States has urged the addition of a
number of these items to International List I. a major consideration in including
them on. the initial Title II List rather than Title I, was our recognition of
the status of consideration of those items in the Coordinating Committee. The
Title ]:I List also includes certain items recently agreed for?additiori to
International List I. Rubber and tin are included since they are of such
importance to current western defense e fforts as to require the particular
attention of the Administrator under the terms of the Act,
I think it will be clear from what I have said about the provisions of the
Battle Act that there are a number of specific issues. which our Governments rpust
face if we are to achieve a maximum degree of harmony between the operations-of'
the Coordinating C'ommittee and the operations of the United States Government
under the Battle Act, One such question relates to future changes in the lists;
'what procedures should be followed in considering additions to the lists under
Title I or Title II of the Battle Act? A second has to do with publicity: How
can the requirements of adequate publicity in administering the Battle Act best
be met consistent with the need for security in the 'implementation of COCOE
export controls? A third, and perhaps the most difficult question relates to the
handling of exceptions under the Battle Act, On each of these points we have
certain suggestions and statements which we wish to put before the members of
this group for consideration.
1, Addition of Items to the Battle Act Lists
With
the i,Cl1~Ct1f "C~.4a.tag~f'POl4(~Ab12A01
s ni es no o ad ur her items Lo either the Title I
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,or Title II Lists until there has been an opportunity for discussion of the propose'
addition in the Coordinating Committee.- In making a final determination as to the
addition of new items to the Battle Act Lists, the Administrator will take full
account of the Coordinating Committee discussion and of the views of individual
countries expressed therein. It is recognized by all, I 'am sure, that the Adminis-
trator has responsibility for making the final decision on the items which he will
list,
2. Publicity
The Battle'Act requires close consultation with a number-of committees of
Congress concerning actions taken under the Act. Aside from the formal requirement;
of the Act, the Administrator intends to cooperate closely with the Congress and to
consult with the committees named in the Act regarding major problems with which he
will be confronted. It will'be necessary to advise the Congressional committees on
'various aspects of discussions with other governments concerning the Battle Act and
their activities related to it. Such reports will be kept on a confidential basis
to the maximum possible extent. s4th respect to the 7-page generalized listing of
Title I, Category B, the United States has not made public disclosure of the list.
However, at the time the aide memoire was presented we requested your views on the
publication of that list. We would like to be in the position to release this list
promptly, were compelling reasons to arise requiring a further disclosure of the
Category B list than has been made heretofore. It is not now intended to publish
the detailed Title I, Category B, list,. Should publication later appear necessary
we will, of course, consult with you.
It might be noted at this point that with respect to the general question
of public relations in this field, we believe that there are important advantages
to be gained from a positive effort to keep not only official circles fully infor'me
but so far as possible the general public as well,
Exceptions
Finally, we have the problem of exceptions under Title I,.Category B. We
recognize that, under present circumstances,.the urgency of Western requirements
for a few commodities from the Soviet Bloc has enabled the Bloc in some cases to
obtain items which are subject to the embargo provisions of Title I of the Battle
Act. We believe we must find a way to avoid such shipments in the future and that
together we can do so. Clearly, this calls for an immediate and more'.effective
marshalling of our combined resources, through this and all other international
agencies in which our governments are associated in mutual security endeavors.
The United States Government is prepared to consider exceptions when no
feasible alternative to the shipment of Title I, Category B, items can be found.
The ability of the Administrator to make a finding in accordance with the exception
provisions of the Act will depend upon the availability of full and complete inform:
tion on the circumstances involved. COCOh has had, of course, a procedure for con-
sidering exceptions to the embargo of International List I items. In view of our
desire to have COCOMMM participate in the most meaningful way, we would welcome its
information and views concerning the circumstances surrounding the proposed export
of Title I, Category B item. Accordingly, we propose the following changes in the
present COCO111I procedure.. The United States suggests that Coordinating Committee
Document 1471 be amended to provide for discussion on all proposed exports of items
appearing on the Title I, Category B list, whether coming under the heading of
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prior or future commitments, before the shipment is made or the commitment is
undertaken. This action should assure adequate discussion of all aspects of a
prospective shipment; would provide interested countries and the Administrator
with the views of participating governments regarding the case; and it is hoped,
suggest a means of avoiding the proposed shipment.
Insofar as existThg prior commitments are concerned, we are unable to
express definitive views since details regarding the commitments and the problems
They may present have not been available. However, it is only fair to state that
.t is our belief that there may be many prior commitments which the countries con
Gerned do not need to fulfill and which, in line with the CuCO11i understanding and
changed circumstances should be voided. Moreover, it is likely that many of the
shipments which might be made under the present prior commitment procedure of
COCOM would not meet the exception criteria of the Battle Act. In any case, an
adequate appraisal of the problem of prior commitments and an acceptable means of
dealing with it depends on the availability of full information. Zue hope that in
the course of this meeting you will be able to present.enoiugh details so that
together we can discuss means of handling the problem. 'It seems probable from the
information we have already received, that more time is required to measure the
problem accurately, 'Therefore, we wish to suggest that the Consultative Group
countries agree to suspend shipments, that is, institute a "'moratorium" on actual
exports of Title I. Category B, items, to the Soviet Bloc for the necessary period,.
This suspension would be without prejudice to the eventual fulfillment of the
commitments if it is determined that circumstances justified exceptional treatment
under the Battle Act, We are particularly anxious that urgent problems be pre-
sented for discussion at the earliest possible moment.
In closing these remarks, I should like to emphasize that we wish to be as
realistic and constructive as possible in seeking with you the ;proper answer to the
problem of export controls in our mutual security interests. %e believe that
through cooperative action we can find the means of adequately controlling the flow
of strategic goods to the Soviet Bloc. We are prepared to devote every effort to
the attainment of this objective.
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Report on Advisory Group as Revised;
(Paris, 22 November 1949)
1. It was agreed to recommend that the informal Group, which
has so far consisted of Belgian, French, Italian, Netherlands,
United Kingdom and Unted'States representatives, should continue
to meet in an advisory capacity. The Governments of Denmark and
Norway should be invited to become members of the Group and the
Governments of Sweden and Switzerland should also be asked to
participate. The general feeling of the Delegates was that the
Group should continue to meet in Paris. The Group should meet as
often as might be required.
2, Botween'meetings, the Chairman in consultation with s:pre-
sentatives of the governments cQnccrnod and with the assistance of
a Secretary, an Assistant Secretary or secretaries together with
appropriate working committees would make necessary arrangements
for the accomplishment of the objectives of the Group.
3. The future work of the Group should be:
(a) to consider matters arising from the implementation of
an agreed policy for the control of exports on grounds of security
with the object of achieving the greatest possible uniformity and
efficacy of action amongst the gove rnm