RELATION OF IMPORT-EXPORT TRADE MONOPOLIES TO DOMESTIC CONSUMERS AND SUPPLIERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00046R000300130015-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: June 4, 2001
• Sequence Number: 15
• Publication Date: December 23, 1953
• Content Type: REPORT

Approved For Release 2001/09/06 : CIA-RDP82-00046R000300130015-8
COUNTRY
DATE DISTR. 23 Dec. 1953
SUB]ECT Relation of Import-Export Trade NO. OF PAGES 3
Monopolies to Domestic Consumers and
Suppli
THIS IS UNEVALUATED INFORMATION
25X1X
1. In conformity with the decree of August 1948 establishing import-export
trade monopolies in Czechoslovakia, no Czechoslovak consumer of im-
ported goods or producer of exported goods was,allowed to'have any
sort of trade connections abroad. For the Czechoslovak consumer and
producer, the import-expor.t'monopolies were the sole.suppliers of
foreign goods and the sole purchasers for foreign trade. For the
foreign purchaser and producer, the Czechoslovak import-export mono-
polies were the sole suppliers of Czechoslovak goods and their only
Czechoslovak customers. The only direct contact of Czechoslovak con-
sumers and producers with foreign trade representatives was when one
of the Czechoslovak trade monopolies specifically asked for assistance
concerning technical or quality details, but even in such cases the
specialist acted as a representative of the monopoly in question and
not as a representative of his firm. The Czechoslovak firms were not
kept informed about foreign market conditions.
2. Unlike the national corporations, import-export monopolies were not
organized as profit-making enterprises. All losses by the monopolies
were made up by the Ministry of Finance, which kept separate accounts
for each trade monopoly and a general accounting of all foreign trade.
The monopoly did, however, have to fulfill all of the conditions
of its contracts with Czechoslovak producers and consumers. If a
monopoly failed to meet conditions either of delivery terms or of
quality terms stated in a contract, it had to pay a monetary penalty,
by way of default, to the other member of the contract. Paying these
penalties raised oertain,difficulties, as it was not possible to
include penalty costs in the monopoly's yearly financial plan. Each
cause for penalty (default an contract) was investigated by the control'
sections of the monopoly in question''and of the Ministry for Foreign
Trade, and by the Ministry of State Control.
-CANb'-IDElAL
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The trade contracts concluded between the Czechoslovak trade monopolies
and their domestic consumers and suppliers had no direct connection
with contracts between the monopolies and foreign purchasers and
suppliers. The domestic contracts were usually concluded at the be-
ginning of each year and fixed the prices and delivery terms for the
goods which were to be delivered throughout the year. These prices did
not vary according to the actual price paid or received by the trade
monopoly to or from the foreign firm, as these variations could not
be taken into consideration within the planned economy. The Czecho-
slovak industrial enterprises always had to have a basis for calculation
which would not be upset by fluctuation of prices on the foreign market.
In fact, the price paid to the Czechoslovak producer of goods for export
was usually higher than the price which the trade monopoly would receive
for the goods on the Western market, while the price paid to the foreign
supplier for goods to be imported was usually higher than the price
which the trade monopoly received from its domestic customers. Trade
between Czechoslovakia and the other Eastern Bloc countries was not so
frequently a deficit transaction, as the goods were exported or imported
at prices agreed on at the beginning of every year and the prices in
Communist countries did not fluctuate so much as prices fluctuated in
the West. Under such a situation it is perfectly clear that the
financial statements of the Czechoslovak industrial enterprises did
not give a true picture of their financial position; neither the prices
for raw materials imported nor the prices received on products exported.,
as calculated by the enterprises, corresponded to the actual prices
paid Or received abroad..
4. The domestic purchase and selling prices of Chemapol AS were set up
in the autumn of 1948. The prices were based on the average of the
prices actually paid or received during 1947 and the first half of
1948. With few exceptions, these prices still held as of 1952. Chema-
pol's prices for goods imported for the chemical industry did not vary
for consumers in different parts of the country, as the prices were
fixed by reference to an average of foreign prices plus an average of
transportation costs, but when Chemapol was importing a type of goods
for customers outside of the chemical industry as well as for customers
within the chemical industry, Chemapol had to set its price for each
customer separately on the basis of its particular foreign source
and the particular transportation costs. This price was set, however,
at the beginning of each planned year. This distinction between import
prices for goods imported for the chemical industry alone and for
goods imported both for the chemical industry and for other industries
was a result of the fact that Chemapol had been created from the Commer-
cial Department of the Czechoslovak Chemical Enterprises National
Corporation, where it had been possible to dictate standard prices 25X1X
to the chemical industry but not to other parts of the econo
5. Prices were not fixed for those items which were imported or exported
irregularly in small quantities. Prices for such items usually con-
formed to the price actually paid or received. (The import price,
in such a case, would be the price paid for the goods, plus the cost
of transportation, franco railroad freight oar, destination factory,
plus three percent for the trade monopoly). Some examples of standard
prices follow:
a. Chemapol's domestic sales price for pyrite of 48% sulphur content
was 1,060 crowns per ton dry weight, franoo railroad freight oar,
destination station. (This price was still valid in the plan for
1953). In 1951 the purchase price of such pyrite abroad was 900
crowns per ton, o.i.f. Hamburg or Stettin, and the oharges for
taxes, transloading, and transport to.the factory were about 300
crowns per ton.
CONFIDENTIAL
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CONFIDENTIAL 25X1A
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Chemapol's domestic sales price for Italian sulphur lumps was
3,135 crowns per ton, franco railroad freight car, destination
station. (This price was still valid in the plan for 1953).
In 1951 the purchase price abroad was 4,500 crowns per ton, franco
railroad freight car, Tarvisio ron the Italian-Austrian borde7,
and the cost for transport to tie plant in Czechoslovakia was 455
crowns per ton. Under these conditions, 4,990 tn. of sulphur
were imported into Czechoslovakia in 1951, and about the same
quantity under approximately the same conditions was imported in
19%.
e. First quality charcoal was purchased by Chemapol for export at
242.40 crowns, franco railroad freight car, Czechoslovak border
station, and sold to firms in Switzerland for 178 crowns, franco
railroad freight oar,.Czeohoslovak border station.
or import trade practices of these monopolies
CONFIDENTIAL
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