REEXPORT OF STRATEGIC COMMODITIES FROM LATIN AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T01049A000200020011-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 16
• Document Creation Date: November 16, 2016
• Document Release Date: January 4, 2000
• Sequence Number: 11
• Publication Date: May 5, 1950
• Content Type: MEMO

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-4- 4- Approved FAsohaim .?.2ppfri01049A000200020011-2
(91414
Project: ZPUO
To:
OFFICE 01? REPORTS AND ESTIMATES
kr,.41100.11.11=19.n...fteausto
Date; 5 y 3.950
From: Publications Division, Projects Planning
Subject: Rismwart 0t stratigio 00mmolitiss from Latin Amerios
fildittagniaLitsisal
aljut intsr011 (
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tice on the subject above.
JEWconfirms your delivery of this proj?st this date.
ibility of a coordinated (study on this subject
=glared et s later dates
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Approved
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OFFICE OF REPOR.TS AND ESTIMATES
Eggitsdaaktialismatemalin
Date: 5- (\NI SI)
To: D(
Pros: Publications Division, Projects Planning
Subject: Qize4stsik- btAt GSThJYYk(Aittli 6(nrLa4tiPuv.in-ccr4,,
?tateceprt of Proiects
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SECRET
14 April 1950
NEMORANDUM FOR: D/Pub, ORE
ATTENTION Nr. 25X1A
SUBJECT Request for Information re Re-exports of
Strategic Commodities from Latin American
RERENCE
?
?
Our Case #K-1388
25X1A
1. In a recent discussion with Mr. 111111 Nr. of
this office was informed that various agencies of the govern-
ment are maintaining records on strategic commodities exported
from the United States to Latin America and then re-exported
to Europe.
2. This office is particularly interested in information
of this type, and especially that which would indicate the
U.S. shippers, the Latin American consignee and the European
consignee.
25X1A
3. It has occurred to us that a cardinated study of
this type of activity might prove to be of great value not
only to GPO but to other elements of the government. Such
a study might also include information on purchases in
Latin America made by Russia and the satellites or their
front organizations.
4. It is requested that your office explore the
possibilities of ORE's initiating such a study and indicate
to this office the results of such inquiries.
5. Nr. 1111111 extension 2710, may be called upon for
additional information if necessary.
25X1A
Actin lel', Intelligence uppor
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ROUTING AND RECORD SHEET
INSTRUCTIONS: Officer designations should be used in the "To" column. Under each comment a I i ne should be drawn
across sheet and each comment numbered to correspond with the number in the "To"co I umn. Each officer should initial
(Check mark 1 nsuf fi ci anti before further routing. This Record and Routing Sheet should be returned to Registry.
..
FROM:
ISB 14 April 1950
NO.
DATE
TO
ROOM
DATE
OFFICER'S
INITIALS
COMMENTS
NO.
REG' D
F0'0
L D/Pub ORE
Mr.r...-
2318
1-4-r.e.--
2.
25X1A
3.
11.
5.
6.
7.
8.
9.
10.
11.
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12.
13.
14.
15.
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FORM NO.
31.10
SECRET
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I-4Ra
Note: The clansiacation of this memorandum must be raised to conform
to the classification of the draft it covers,
Date 4 May 1950
MOB/111MM FOR GRIEF, PUELTGATIONS DIVISION
SUBJECT: Transmission of Draft Report 519
ENCLOSURE: _116.7221.1p of Strategic Commodities from Latin America
1, Enolosure is forwarded herewith for review and, if required,
Thr formal coordination with the departmental intelligence organi?
zations.
not
20 This draft report has( been coordinated informally with the
organizations checked below:
RikkuJAM:
p/di
Dim
PiTr
PME
D/FE
piNs
tvtA
DAB
Limu
DAC
Other
ggIa142SAL
State (OM)
Army (ip/dsusa)---
Navy (ONI)
Air (AID)
Other
3. Maps end/or Graphics to be included in thin report and
arrangements completed for their production by the Map Division or
the Presentation Staff are as fellows:
4. 92MOMIEL
25X1 A
111.1111)11
Deputy
EconomicitSRL_
Division
Fetl...?0,11.?
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SECRFT
Plga"."
1 /thy
wic;'arrare 2$rnnolls 47
Re-oxports of Strate4c Quiroditifrn Latin Anericc
Refers-noel :!'"WROV,:-Ualitla of 14 April 19b0 from ultincr tIhief* IntolIIP
httentioni Fr. Low
tl'Airrr
. There is little evidence cc treneshipment or re-exort of
strntogie sommt,ditiee fro the United rt.173e.6 to 'Europa) thronla
T.,,,,tirtAstriosn countries. There it sons evidence of ottompted
trensehipsonts, Such inetcto hi,ve cone to the TAtention
of this ()trios 4-ire listed in Appet.dix 1.
greHter ftane tthi* tins is the export r
strzteeic neterinls ProrixLtin Ameritmn countries
inzludiew nottally copper. lends 1-ino, InOnstrirl
41th rerArd to persetrsph i of the referenclq the rconosio
'44rfAre -2,1ranch of Dfle is of the opinion that It is desir,-
nble, to ascertain if any studio)* ere in process, or ate pr
P0A01 within the Government, thst deal with the *cosset,:
fArpsots of 'Latin Anerieess position in the cold wer end In
P possible Altars emergency. If sot* this h?Adsch is of t1..
opinion thst such R study shonle. include en sn*Vtls tf
Lt.n.,.noricpn trade vith rorope1 the poseibtlitr of TeTalel
tion in oNport controls osid of com.ordintAed ecentnic 1Trh,
fr,re nw7sures in the event of' wsr,
Pitt present export licensing procedure, purticanrly a* it
naests mhipfoents to Lfltin America, le discussed in, Appendix 2.
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APPTIOI4 I
A. This report of traneshipments Wah made on the bests of the goesen1
catecorine foued in the US lA end ID nets. There are no reports of
trennehipments iu the following;
Caul equipmeet
Oonetructien aad conveying equiprent
7lectric powor apraretue
7ribere
)441181 werkine mechinery
erecinion instrueents
eubber and. rubber producte
Zclentific equepment, preeiftion instrumfelts. etc.
Steel mill products
evideuce available in the files of Nceneale 'ftrfare Breath
ie to traasehipments of strategic items via :Latin Americe le
iedicated blew..
ite?Leit.41-19.6.41.111.Le?vP
a, etate Despetee to liereaw, Fe. 908, dated e6 December 1949.
Inxilviduel named 4delslaw Drone*, of Argeetine reportedly I*
collaboratioa witn kelish operator Antoni Jaroesewice re trans-
sittements. Letter connected with attempte to secure carbon
elecit for shipment vie aottcrdam or Antwere to Csechosieeeien
tire leduetre.
Ala AL) pt.:au:La
dated 9 Juee 1949: Guillermo Arinee TOletROG,
Belivien eeile now lace:tee in Small reported to be nemegling
1n4ustriel diemeedr to Argentina to be turned over to Soviet
2)Kilegrgy for shipment.
b. dated 24 April 1949; David Laft reportedly Yee pria-
c#61 contact in (lhile re etteepte by ?olio h legation (Beetoe
eiree) officials to eecure nitrates, copper, etc. Thee attempts
%fere epparently eneucceseful except with respect to 4nentral4
cluntrY traneeniemente of copper.
C. Stet, Detpetch to Moetevideo, Mo. 196. dated 6 May 1949; COSTISZX
of Uruguee hnd eede prelitinery errangemente to tort graphite
electrodes throu4h eentevidee to ru of BueitTe,st. but Were
uneuecessful.
d. State Despatch A-63, deted 21 J.ky 49; local rumors have been
circuleting in India to the effect that the Auestene ere pure
ehening mice in lrezil and Argentine, but investigation by US
eWJastities discloses GO StMhtuattatiME evidence.
4 there to eecoefireed evidence of traneenipment of indmstrial
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diamonds from thie country through Vu. &1a, but to definitely
snabWintieta the allegation.
f. %Annear-- of eopper. lead and Xi= (indigenoue production an in-
portant :7ert of the export tr-de of morel Latin Asericso rif;lf?
and beer-nee of their etrLAegic significance here considered. 'Mere
ere nucus reports of shipsentr ty Chile end Yexioo of ocyper to
testern Earevven nestinatione vis westAfra Turoputat intermediuriee,
report kttted 17 March 1960 from the Anericn retessY (gssie0) trutteetes
that sithouilh Onere de kIsozico aseects it lium,e refused to suPPlY slectro-
lytie copper ta the Soviet., the record shows that only sode*t diligence
durinG 1949. Purthersore, the Intassy believes that Cobre
will not be able to imAsuent this elleged _policy of non-s&le to the
toeviet4 protatile thipmeate in 16b0 to 9tviet destinition, total.
t4000 tons againet 1941 deliveries of 4,600 tons,
Slane precition mwfhinery (of the typo desired ty ut,..44i1) is not in
great daxLut In 14,tin Ameries, (developments in those countries
requiring hnnvy construotlan 4quip=5,nt0 drilling machinery, 0.c.), it
is nut believed that thre have been i! nm in thin line.
1urtherre, such shipnente could be easily detected because of their
incongruoue natiare.
11;41
ft, Sotto Jetch 110? 1066 dated 24 Dee. 19491 An unverified report
emanattnc from e United i',.tates shipping coiapauy office indictee the
trassehient of uso4 drilling machinery froo Venezuela to Trisste
for Asstrin. Although the e,overnment keeps a close watch on imports
of drilling machinery, it is passible that seconi-h-4 dealers might
export certain quentitiee,
, There is an unconfirmed report of an attempted purchnee in the United
noses of a considerable olrAaity of steel Ornes to be ehipped to
Curacao, there to be loaded with petroleum Ilroducte (usepecified) for
shiponnt to un annetsifind dftstisation, prenusably Chine. There here
also been indier,tions of unusually large shipments from thin country
of tetra-ethyl 1664 to Mexico with the ultimate deetination unverified.
C. Th',t there is *mall possibility of traneshimente of 'petrolle.m
stem is indicated by a etatement of the Creole Wetroleus Corporation
to the effect that every precrolion will be eeercised to prec1u4o the
possioility of the F.ovielit orbit uWm-tele roeTuiring excessuipmant
such as drill pipe, ri-e, en4 tubing,
EA.Lg
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25X1A b
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Source rsoorts thmt 100 P 4
engines consigned to RAP, Trinidad* wore restencilled
to V.0.Tschnopormimort* P=aeoow.
Aeration lecionales de Colombia*
(aV1A,10,) has been purchasing what is believed an abnormal number
of tires (moat'. of Leine, used on planes of the W-3 type. 4 number
of which are ia oper&tion in curtain countri.:s. Thare is a nrennAp-
tioc of tmneshipment.
c. state 463-patch to Jiera no. 7,), eated 16 Jae. 19o0Z Falai of DUIAOS
4ires reportomly engagou in transaction whereby Csechoslovekis iU
receive ....endue arernIt. Will Se .fgccorg7lished throu4h intomedierr
naxelt _ottermann locatei in 7-urich her planes will be flown for
trrnenrapment.
dated 25 raroh 1649: Unverified report of shipment
from Italy to Buenos Aires of contraband for orentuel tmnsahiptient
to Odessa. ;74:ise despatch indicates purchase by Albert :6ori.
iknd Co 4;:,4y (It&lian) of surplus US army trucks from ItElian aovernm.
Thr shipment to Argentina for eventual ship4ent to ussa.
dated Cot. 1948x .i'urchse of 600-1000 surylue trucks
by Eym,a :qchaele Co.* Chicseo, for shipment to Eritich fAxinee from
whence they will be ship ed to USSR,
tit P19011Aa4094k
a. W.te Depirtmat Deily Summery* 3 Deo, 1945: It h!la been reported that
the chief reason for Eulgarian interest in sendinG a tracts mission to
Arcentina is the hope th,t ltulgarir could use Argentina es a channel
to obtain US goods denied export licensee.
114 (71A Memo dated 16 NOY. 194S; Hungry is making rratee4tentr to set up
Purchasa44 360nOY In Cuba. Sem,1 stmo indicates that Amerivtn mannfactur-
ers have been assured thNt Hungsri,sn purchases could be rmted through
Holland aAd Pilrium. The presumption is that Cabe, 14 to be used for the
ilaxe purpose.
dlted 4,lay 19419: Indiottions thlt at port of La
Gueriara in Vencenel? freight ie being transferred directly froag
ehi-ft to foreign vassal*. Presuglably the 1%xity of oontrols in this
pert v)eraits Such transshipment Athont anzi custom, control.
It is, believed that much US equipment ostensibly destined for Peru is:
bland: re-exported, 'p.rtrzierily to It%ly. This belief substantiated la-
font that Peru ia incapable of absorbing szonomiolly all the incon,ng
materUl and osovuee the col-dollar relationship would not permit math
volume of 113
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Contact with Commercial Intelligence hraneh of the Department of
Comme,as falls to reveal any evidence ta that office of substhatial
tranlehipmeato of strateGio items through Latin. America to the
Aloe. Orto flagrant example, however, was the ,4tempted
shlmont of carbon bleat frola the United States via Mexico to the
3oviet floc which rqsuitsd ia the suspension of license privileges
for two exl-ort firt,I. This report Is reproduced belmq:
::11,e1 Journal of Commerce, 7 Yobrunry 1915()
cxport privilegeh oz :me ;4ex1ota concerns.
InoluaiLz their ?lvileeen ol Partie'AAinC in
shipments a* either consignees or forwirders, htkv0
iMen suinued for violmtiOn of export control rag-
ultl'ind, Olt announced.
,ftor retiev,..00th firms were found to have
Sz.en p.4,rt ia an attempts4 shiT;ment of carbon 01,01(
trathet, 0, to .li;urot,,eah countries without license
throact tbe subtertugs of snipping to Mexico anti
tA'mqssuipping to JAirepe. A1ex4ieder H. Donna, who
operates an orU t NeXi04 City ktrin
-* jietrib-lidora Exclusivn. A.A., was fouled to have
purchased the cmrbou sit:ea la Texas*, shipped it to
A&mit140 under eroort declarutiol* falsely namtn?
aiself as the ultimkIte cometemse, z,nti. then resold
it for shipment to .1mrope.
The suspension prevents Damao for 9eriol Or
W.4thei frOlt 00144: & perty in thk4 exportatiox of
.:ny commodities ppearl on the t)IT :;%asitive -int.
.A.so incinded was 1.0J*Ci0 YernJaez,
Reference is made to State Circular eirgram of Ld January 190, In
which the nepartnente,41-9emmere::- and state have expressed their
concern over the transshipment of various commodities of U. k5.
origin thrzAngh eo4r-, couutries to Fistern Parapet, .
Ue direct export of such comi444ttlue from Latin filiWriCa. This
airgrNm roquested all U. S. missions is netin iss-trica to tsomrat
out
. The possible effectivemest of,
coopero.tion in the United 61tAtes by Au'rican Cor-
,nerAloal having subsidiary campmates in Latin America pro-
or exporting stret*gic comodities,
o. QOtaiainc the ooatrol of exports of strategic commodities from
matin amarici-,n countri(,* by suSsidiery companies of Ameriwh
firms ty 3020W44 care-.ct 4nprot.ch throu:L:h the ;,er,-len 3srviee
vith the subsidinry
e, aata4%iithment o: effective parallel export controls, (athk,r
formai or iilfort,aa, by Lttin amerieen countries similar to those
now under negotiation with certein ,.oestern ,,:nropeaa countriss.
'
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the iont is,t14 fereeee
control of copper, load, and
ties in reeponoe to this eirgram have uow ben
fassibilities of trAce ipent are a ik.ly la iie of this
country,* critical dollar position which has result
ntrol over imports. Yurthernore? all esporte must be
and applications ere elosely sorutinixed. Strategic mate
duos& in Argentixa are either locally consumed or kept from the
*rid market, as in the case of tungstee, by high production costs,
otietiOn with perent compenies in the lJtellted States havieg
subsidiaries in Argentina would *sem the poet effective approach to
theproblem,
rather t
the beet pr re,
by the government i
*Jitney and venalit
roduction of cop?*
f world production
in the United Stet**
isitonwith parent eonpeny in the United, States,
roach to Soliviaa subsidiary, is believed
The establishment of effectiee export control
hought impracticable in view of the twin-
the Bolivian buttaucrecy? Although Bolivian
ad and sloe reprecents a *mall preportion
ablishment of market* for th,4oe products
Fount/on of stockAle purchasee) is believed
advieeble to ecure favormble Bolivian reaction to imposition of
port control*.
h
er
54
lifle are extren
mince the
Uwe Nast
*factory 4fle
=sent could not
cOezo4tties 1
a
Giblet toe
nation* r ader t
t point,
subsidiaries
roblem of
sport control,
v, and irregular
rob?blc the use of
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'Te-Dre'T
Cuba
Insofer as kAovn, nO treneehipeente have been sled, thrcrell
Ocoee, ena the embesay believes all Cuban exporte of iodioatee
eetereele ore to the U. $*
ee Dominican aepablie
There hae never been any trade of coeseqmenee between the
Deninleee Republic and Eactern gurape, nor does the county:
produte any of the strategic comeodities ia question. The
eftbesse bellevee that control thtough parent comeanies in thm
eould-be the moat satiefectoee toothed of control.
eiseador.
Peeposed steps-veuld ue 1f?otive itnct otiota1s aTe in
seepathe with tenti-eueeiea steps teemed esseetial by the U. :ek,
government, although there is no indication that the situation
is especially epplicable to 4cue8or.
el Salvador
The production of strategic eieerals in RI
eeeligible, ane in 1.940. all vent to the U. S.
Guatemele
Control throudh he -parent compaey in the Uated A9.1,04 is
considered the best approech. The establishment of general expert
controls is not considered advisable unless, unity Of action
throeghoet Latin America could be achieved. It is emphasised that
Guatemale is not en ineortent exporter or importer of stretegic
materials.
10. Haiti
Ther e is no traeeehipment of the only etrateele
produced in this territore. nenely. steel*
11, Honduras
Poseibility of transehipmeat throe, this couutry %a doubtful;
ehipnents of oepper, lead ancil xinc either from or through Honduras
are eegligible. Establishment of general export controls is not
advocated except on concrete evidence of prejudicial shipmeets
Vrem Honduxes.
le. Mexico
Traesehipeent from Mexico to Soviet bloc destinations of
etrateeic comeoeltios appears to be negligibie et the present tte.
le, kicarneux
tnee eel:Aber produces nor exports copperf lead, or 4inc.
The webesey believe* that an approach through parent companies in
the U, S. would be the most effective means of control end thet
controls by eicaregun would be indicated only as an extreme elearere.
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4.
IA.
18.
Rt1
art not o asidered of anat
No special deuce of tru4pnt available at tht tine;
ny believes it would not be difficult to secure par el
catrol if so desired,
18. Uragua7
Aetioa throu iJ S.pGttons
e approach. it is p1nted out thRt
tive export c4a rol 5 e* and thut
licibIe.
s ao evidence at this ti
U, 3, are being diverted frost Vend els
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APPUDI4 II P4KUNT ,IXVORT
"SIN
a7, TO4A3/1
, tit commodities, fez which a validated export license is required
to any destination are found in what is known ae the Positive
Lit, 7or :loch commo4tt7 au th* ;Positive List the wares of controls
is desiLated as either wRw or wiOw. The ores. wAw has been rade-
fined to loclude all dostinatione outtiie the Western Hemisphere.
All other areas, except Canada, fall within? the wO* category. Latin
kaerion countries, therefore, are now classed as wOw destinations
nod Ara excluded iron cantro15 applying t* sk* destintAions.
2. ,4'or the purposes ur administering export eontrol, there have been
developed ,the lit (embargo) list, and the lb (quantitative control)
Itet. The area of control for all easoolity categerien contain/4C
IA iter44 is liao4 and therefore, licenses i:4411 re4sired oo 111 oxperts
for all deetinations except '!...nantn, Control is exereised over
Imeh IP items as 0,-.44 be easily transshipped And to non-security
items the export of which is controlled for reasons of short supply
in the United fitmtes. the remainder of the Positive Asti, tP.st ie,
13 items not easily transshipped, require licensee only to
destinations.
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