TRADING AND COOPERATION WITH HUNGARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001700050031-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: March 10, 2006
• Sequence Number: 31
• Publication Date: March 1, 1973
• Content Type: IM

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c////6rIz- /,-M 7 -'-/
DIRECTORATE OF
INTELLIGENCE
2bX1
Confidential
Intelligence Memorandum
Confidential
ER IM 73-34
March 1973
Copy No.
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Trading and Cooperation with Hungary
Once the issue of most-favored-nation (MFN) status is resolved, the United States
should be able to increase substantially the size and scope of its trade with Hungary.
Unlike other East European countries, Hung: ry offers considerable freedom for foreign
firms to gain access to and deal with industrial enterprises. The Hungarian market is
especially attractive for US firms that are interested not only in direct hard currency
sales but also in compensation deals and cooperative ventures.
Hungary's record trade deficits in 1970 and 1971 Ie,l to the introduction 01' a
stabilization program in 1972. The government remains cautious in 1973 but a substantial
expansion of I-iungarian trade with the West is expected through 1975 and beyond.
Hungary's hard currency debt position is relatively favorable, and I-lungarian bankers are
unusually resourceful in debt management.
US trade with Hungary is small (only US $35 million in 1972), and 'Its composition
is narrow. Agricultural and food products are the main commodities traded in both
directions. Because of the lack of MFN status, Hungary has not made a major effort
to sell in the US market and has, with its high tariff schedules, discouraged imports of
US manufactures.
Most of Hungary's trade with the rest of the industrial West is conducted under
trade and cooperation agreements, which normally provide for the mutual extension of
import quotas. These quotas provide the framework for Hungarian trade with the West
and give Western partners effective market protection and a negotiating basis for expanding
sales. The Hungarians have persistently sought to eliminate Western quotas, which now
cover about 20'%%-30% of their exports to the West. Several major trading partners, including
West Germany, the United Kingdom, and Austria, have agreed unilaterally to attempt to
remove most quotas in 1973-74.
Although Hungary is interested in acquiring the new technology and skills needed
to penetrate Western markets, it has made :;paring use of large orders for machinery and
equipment. Hungary hopes to rely increasingly on coopcrativ: ventures to serve these
purposes, but the aggregate value of the cooperative ventures formed thus far has been
small and has generated little in the way of' exports. Hungarian law now permits Western
equity investment in domestic enterprises, but it is unlikely that significant amounts of
foreign investment will be allowed.
Note: Comments and queries regarding this publication are welcomed. They may be
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The Economy in the 1970s
I. Since late 1971, when runaway investment and a record trade
deficit exposed weaknesses in the New Economic Mechanism (NEM) and
aroused Soviet concern, the Hungarian economy has been under a
stabilization prograni.I This included a mild recentralization program
announced in November 1972, marked by the creation of a State Planning
Commissirn. Cutbacks in imports and in the rate of increase of investment
and industrial output helped Will the 1971 trade deficit of $490 million
into a surplus of more than $125 million in 1972. Import controls had
their greatest impact on purchases of consumer goods from the Wes! and
machinery and equipment front ('onununist countries. Purchases of
machinery and equipment from the West in 19972 still increased :11 a
moderate rate because of backlogs of orders from earlier years. Successful
efforts to stimulate exports played a major role in reversing the trade
picture; sales to both the East and the West hoontcd by 2 1 as solid gains
were achieved in all major ,~oimnodity categories.
2. Plans for 1973 call for continued caution, i , part beca,lse the
earnings from exports, especially of agricultural products, are subject to
sharp fluctuations. Investment, which remains under firm budget and credit
controls, will be permitted to rise at an annual rate of I0`,%% after being
held to a 2% annual increase in 1972. Other planned increases are much
the same as in 1972 -- 4%-5'X% in national income, 5''~ ~i'':? in industrial
output, and 77%-8;'% in trade with both socialist and non-socialist countries.
3. Although some of the overall targets of the 1971-75 plan probably
became outdated after the disruptions in 1971, the economy seems hack
on the track toward the planned 5','r-a-ycargrowth in national income. Total
foreign trade was planned to grow by 7 -8% a year, and trade with the
West was slated for a 6 annual increase. The plan for Irade with the West
probably is unrealistic because of the dependence of the economy on
imports from the West. Some pause in the rate of machinery purchases
front the West may he jt;stified while the economy digests large imports
in: recent years, but Hungary is likely to become increasingly dependent
on hard currency imports to support industrial output and, ultimately,
domestic cortsumptic'-n.
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4. Imports from the West can be stepped up without risking major
payments difficulties. Hungary's outstanding hard currency debt was
estimated at some $500 million at the end of 1971, and debt service
payments represented about one-fifth of hard currency exports, a relatively
light burden by East European standards.
US-Hungarian Trade
5. US-Hungarian trade has more than tripled since 1965 but
amounted to only between $35 million and $36 million in 1971 and 1972
(see Table 1). Hungary has incurred a sizable deficit in this trade - $80
million during 1965-72 - which has been financed by hard currency
earnings from other sources and probably by private US credits. Most of
US-Hungarian Trade
1968
11.2
3.8
15.0
1969
7.1
4.1
11.2
1970
28.1
6.2
34.3
1971
27.7
7.8
35.5
1972
22.6
12.7
35.3
the US-Hungarian trade is comprised of a narrow range of agricultural
commodities. In 1970-71 the sale of soybeans and soybean cakes for high
protein feed amounted to 63% of total US exports to Hungary; other
agricultural product and hides accounted for another 8;f% In addition, most
US machinery exports in 1971 consisted of agricultural equipment, including
tractors, harvesters, and planting and cultivating machines. Hungary's most
successful exports to the United States have been canned hams and shoulders
(following the Polish tradition), with sales of $2.5 million in 1970 and
$3.3 million in 1971 -- more than two-fifths of Hungarian exports to the
United States in both years.
6. In marked contrast to the modest volume of trade with the United
States, Hungarian trade with the rest of the industrial West, led by West
Germany, Italy, and Austria, reached about $1.5 billion in 1971, or more
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than 25% of total Hungarian trade. Most imports from the West are
machinery and equipment, semi-manufactures. and chemicals.
7. Hungary is enthusiastic, and perhaps unrealistic, about the
prospects for increasing imports, especially machinery, from the United
States. In August 1972, Jozsef Molnar, the Commercial Counselor to the
United States, stated that a Hungarian study projected annual imports from
the United States of $100 million to $120 million within two or three
years after MFN was granted and reciprocal tariff reductions took place.
Hungary probably has in mind a wide range of products in line with its
plans for restructuring the economy under the new economic reform.
Increased attention is being paid to developing consumer-related industries
(food, textile, and paper), and plans have been made to expand production
of fertilizer, pesticides, synthetic fibers, and rubber products. In addition
to the imports needed to support these efforts, computer equipment and
office equipment are likely areas for the expansion of US sales to Hungary.
In return, Hungary hopes to sell the United States consumer goods, i:lcluding
textiles, furniture, and ceramics, and to increase sales of foodstuffs,
especially canned ham and wine.
8. The development of US economic relations with Hungary, and
especially US exports, depends to a large degree on the implementation
of the special features of the NEM introduced in Hungary in 1968. Under
the NEM, the power of ministries was reduced and industrial enterprises
were given the right to draw up plans for output, product assortment, and,
within limits, investment. Guided by the NEM's new price system,
enterprises were free to buy and sell where their advantage was greatest,
domestically or abroad. The Hungarians also created a system of multipliers2
to bridge the gap between domestic and foreign trade prices. Exporting
enterprises and foreign trade organizations receive the actual trade prices
converted to forints by the multiplier; importers pay the actual foreign
exchange coat plus tariffs (for hard currency imports) or import sales tax
(for ruble imports). The designers of the NFM hoped these changes would
make trading organiz:ttions more responsive to foreign markets.
9. Enterprises are now less insulated from the world :,iarket. The
largest firms can conduct their own foreign trade negotiations rather than
going through a specialized trade agency. Wider contact with Western firms
is generally encouraged and enterprises are granted the legal right to initiate,
implement, and conclude production sharing agrel'ments. In practice,
2. These multipliers (60 forints to the dollar and 40 orints to the ruble) represent the average
cost of obtaining dollars and rubles through exporting.
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however, partners in cooperative arrangements are usually brought together
by Hungarian foreign trade organizations or specialized trade agencies. In
any case, a license must be obtained if the cooperation agreement requires
subsidies or other government support.
10. Enterprises have not moved very quickly to cope with their
exposure to competition. A recent Hungarian Survey of large enterprises
that are allowed to engage in foreign trade, including trade organizations
themselves, revealed that only 371/0 of the companies had one or more
full-time emrioyees assigned to market research. Of the foreign trade
organizations, only 12% were studying competitive conditions in their
markets, 12% were watching trends in their own product lines, and only
8`/n were trying to assess the impact of their advertising. Most enterprises
were found to depend primarily on trade fairs and professional journals
for information. Only 54% even looked at the catalogs of their competitors.
1 1. The government, for its part, has been slow to expose enterprises
to market forces. Lesigned above all to prevent market disruption, the price
reform and the new system of trade multipliers fell short of reflecting actual
cost conditions. For example, the Hungarians esti,aate that housing rents
are only 30% and coal 55/0 of cost, while the price of light industrial goods
exceeds cost by 32%. As of 197 1, free pricing reportedly covered 40% of
industrial output with the remaining 60% subject to varying degrees of
control, including fixed prices, price ceilings, and sp,;cified ranges of
fluctuation. At the consumer level, only 24% of retail trade turnover came
into the sphere of free pricing. Simih1rly, the trade multipliers were set
at calculated average costs of foreign exchange, and as a result a substantial
portion of foreign trade required massive subsidies. In 1968 these subsidies
reportedly amounted to 70% of' the value at domestic prices of' all ruble
exports and 60% of the vaiue of' all hard currency exports.
12. The t-Iungacians are trying gradually to reduce price distortions
and foreign trade subsicli,~s. Retail prices of heavily subsidized dairy products
were hiked in 1973 and uieac prices are scheduled to be raised in 1976.
Since 1971, Foreign trade subsidies - formerly distributed according to
individual enterprise requirements -- were distributed on the basis of an
entire industry, thus rewarding efficient enterprises within an industry and
penalizing inefficient ones. The government, however, continues to avoid
more drastic measures, such as closing down inefficient enterprises.
13. In addition to the indirect effects of price and foreign trade
subsidies on the flow of trade, administrative controls are also maintained
by the state through a system of licensing all foreign trade transactions.
Licenses, issued by the Ministry of' Foreign Trade, are dispensed freely for
imports of industrial raw materials. For other imports, licensing is employed
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to fulfill barter agreements with other Communist countries or to hold the
line on excessive hard currency purchases. In addition to licenses, the state
relies heavily on tariffs and quotas to keep firms from abusing their new
freedom to deal more directly in foreign trade.
14. In 1968, Hungary introduced a three-column tariff system,
comprising some 3,000 line items, to control imports from the West. On
the average these tv.riffs are high; the Hungarians themselves calculate the
average tariff burden on imports at 20%%, compared with 14% that their
products encounter in Western countries. The range of rates is quite wide
within commodity groups, as well as from one group to another, as shown
in summary form in Table 2. The range among commodity groups reflects
relative dependence on various types of imports. Industrial materials -- iron
ore, copper, nickel, petroleum, textile fibers, raw hides, and rubber - :L.rry
either no tariff or relatively low rates. To protect the Hungr.-ian dome. tic
market from disruption, semi-finished products bear hit-,her rates and
machinery and consumer goods the highest rates.
15. The range within groups is accounted for in great part by the
difference among the three schedules. In the bottom range are preferential
rates for imports roue the less developed countries. Intermediate rates are
charged on imports from industrialized countries that extend MFN
treatment to Hungarian goods, apparently either on a de facto basis or
by formal agreement. These ranged in 1968 from entire exemption to 5%
ad valorem for raw materials, 5% to 20%o for semi-finished products, and
40% to 50% for machinery, consumer goods, and other finished products.
The levels for manufactures are well above those generally applied on an
MFN oasis by Western industrial countries. The highest rates are for other
industrial countries, including the United States. Most of them are exactly
double the intermediate rates.
16. The practical effect of the tariffs is hard to determine because
of state intervention. Exemptions are granted for some goods admitted
under negotiated quotas, for imports by favored organizations, and probably
for other purposes. Exemptions were granted on a broad scale in 1968,
followed by a tightening up in 1969. In 1970-71, exemptions again appear
to have uccn freely granted in view of the spurt in imports from the West,
especially in 1971. As a matter of policy, however, there. has been little
disposition to grant exemptions to the high rates applied to US goods. The
government is not inclined to spend money where it does not earn money.
Moreover, Hungary considers that its high tariffs can be a useful bargaining
tool in bilateral and multilateral trade negotiations to reduce tariff and
non-tariff barr;crs.
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Hungary: The Range of Hungarian Tariffs
for Selected Product Groupsa
Commodity
Ranges of
Tariff Rates
Living animals
0-50
Meats and other animal foods
15-80
Coffee, tea, and spices
10-100
Grain
0-25
Milled products, malt, and starch
5-50
Sugar and sugar products
30-80
Alcohol and alcoholic drinks
0-150
Tobacco
10-90
Copper products
0-8
Mineral fuels and distilled products
0-30
Inorganic chemicals
0-35
Organic chemicals
0-55
Fertilizer and plastic products
10-75
Rubber, synthetic rubber, and rubber goods
3-45
Raw and processed hides
5-60
Leather goods
20-70
Wood and paper products
0-50
Synthetic and artificial fibers
5-25
Wool and other animal fibers
5-20
Cotton
0-20
Linen
5-10
Thread
10-50
Cloth
30-100
Knit goods
25-60
Cloth garments
25-70
Footwear
25-50
Iron, steel, and products
0-50
Copper and products
u40
Aluminum and products
0-30
Machines, instruments, and equipment
20-65
Vehicles
20-60
a. Based on ad valorem rates in 1968 and on averages in each category. Despite
subsequent reduction of machinery rates, machinery and ,onsumer goods
continue to face the highest rates. Examples of high rates for Lr> three-column
tariff include: 100% for planing machines, drilling ;;,achines, and most lathes;
and 80% for excavators, concrete mixers, coal mining machinery, and machinery
for the production of house components. Personal motor cars, men's shoes, and
stockings and panty hose also have an 80% three-column tariff.
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The Role of Quotas
17. Another serious constraint on the freedom of action of Hungarian
enterprises in foreign trade is the set of quantitative restrictions (QRs), or
quotas, negotiated in agreements with most Western trading partners. QRs
extended by Hungary to Western exporters presumably represe,.~ a limit
on what the Hungarian importer as well as the Western exporter can do
without special authorization. Conversely, Western import quotas limit sales
by Hungarian exporters. In practice, the Western quotas, in spite of
Hungary's pertinacious efforts to get them raised or entirely removed, often
go unfilled.
18. Most trade agreements provide for quotas on Hungarian exports
of textiles, clothing, and leather products. These are specified in some detail.
Some agreements also inciude ceilings on Hungarian deliveries of ceramics,
furniture, camping equipment, and bicycles, and on exports of steel,
aluminum, selected chemical products, and electrical equipment. Many
agricultural and food products are subject to ceilings, particularly canned
vegetables; frozen fruit; fruit juices, preserves, and concentrates: meat; and
sugar, pastry, and confectionery. All told, 20% to 30% of Hungary's exports
to the industrial West are covered by quotas.
19. Hungary, in turn, sets country quotas for deliveries from its
Western partners. These quotas are normally filly used, presumably because
they reflect an intent to buy. Quotas apparently do effectively limit sales
opportunities for Western firms trying to break into the Hungarian market.
This is especially true for Western firms in countries that do not have trade
agreements with Hungary. Special orders for key equipment, agricultural
commodities, or other materials directly supported by the government
obviously are not affected by quotas or tariffs.
20 Hungary's major Western trading partners have agreed that in
1973-74 they will unilaterally reduce the number of products covered by
QRs or even eliminate QRs entirely. The long-term agreement (1970-74)
with West Germany, Hungary's leading trade partner in t;ie West, provides
that West Germany will strive to remove QRs during the life of the
agreement. This was qualified in a separate West German statement to the
effect that West Germany would not "exclude the possibility of having
to maintain exceptionally, and for weighty reasons, certain quantitative
restrictions" beyond the life of the agreement. The agreement negotiated
with Benelux in 1971 states as an objective the elimination of quotas by
the terminal year, 1974. The agreement with the United Kinp''om negotiated
in March 1972 providec' for the elimination of quotas in 1973-74 with
certain exceptions - mainly, it appears, in textiles and agriculture. The
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Common Market presumably will take over the negotiation of QRs for its
members some time in the near future which may have the effect of slowing
the process of reducing QRs.
21. Austria appears to have gone the furthest in reducing restrictions.
In a new five-year agreement with Hungary concluded in October 1972
the. Austrians consented to abolish restrictions during 1973-74, subject to
an escape clause that would allow Austria to reimpose restrictions to avoid
market disruption. Hungary will continue to maintain quotas for Austrian
goods, but imports will be permitted to grow about 40% in the five-year
period.
22. As quotas arc eliminated, there is the prospect tiiat increasing
use will be made of other types of market p:oteetion by Western importing
countries, especially enforcement of fair pricing.3 Some trade agreements
with Hungary already contain provisions, presumably at the initiative of
the Western partner, covering pricing practice. The West German agreement
was accompanied by an exchange of letters providing for "fair market"
prices; and the agreement with Benelux called for the use of a "world
market" price standard where applicable. In both cases, questions arising
on pricing are to be referred to the mixed commissions set up in the
agreements. No more precise provision is made in either agreement. As a
matter of practice, West European countries have tolerated East European
sales at prices far below the prices prevailing for generally similar Western
goods.
23. Hungarian intentions regarding import quota reductions are not
clear. Even if country quotas are eliminated, however, the Hungarians can
always fall back on global quotas, licenses, and other import controls. Fo
example, in 1972 the quotas for consumer goods imports from the West
were cut back by 15?%-20%.
Western Machinery .:nd Cooperation Ventures
24. The Hungarians want more Western technology, but their fear
that a large hard currency trade deficit could jeopardize the NEM has led
to a cautious import poi;cy. Known Hungarian orders for Western machinery
and equipment declined sharpy to $15 million in 1972, compared with
$105 million in 1971. Although these figures are believed to be much
smaller than actual orders, they do give an indication of general trends.
Presumably, the Hungarians are only taking a breather before once more
placing larger orders.
3. Fair pricing provisions are often included in bilateral trade agreements in order to discourage
dumping by the Communist signatory.
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25. Included in the few large contracts to be completed in the next
few years are textile machinery from West Germany, the United Kingdom,
and France ($60 million); an ethylene plant from Linde. of West Germany
($37 million); installations for a complex fertilizer plant and a urea plant
from Gexa of France ($21 million); and an installation to produce ammonia
from Kellogg International of the United Kingdom ($20 million). Some
of the equipment for this last plant is to be procured in the United States.
About $14 million worth of the Kellogg contract is covered by a UK
guaranteed credit that carries an interest rate of 5.5%% a year and a repayment
period of eight years from the estimated date of completion of the plant.
Orders from the United States include a $6.8 million contract with Corning
Glass for know-how, technical assistance, and equipment for a glass factory;
a :u? .5 million slab reheating furnace for carbon and silicone steel front the
Rust Furnace Company; and :BM computers for the Gyor Railroad Car
Factory.
26. The Hungarians appear to he more interested in procuring
equipment through cooperative production sharing ventures than through
straight contract orders. The main attraction of cooperative ventures is that
they provide a means to make partial payment in goods and to avoid tariff
and quota restrictions. Hungary has been one of the leaders in Eastern
Europe in seeking cooperative ventures with the West. The pace of entering
new agreements has stepped up since the introduction of the economic
reform in January 1968. The government now provides financial assistance
for enterprises that enter into production sharing agreements that promise
increased foreign exchange earnings or improvement in the quality of
production.
27. Cooperation agreements reached include agreements for processing
and joint production for both domestic and third country markets. Joint
or mixed commissions have the task of supervising these trade and
cooperation agreements. A key factor in many A the agreements is the
exemption of the output of cooperative ventures from QRs and, in the
case of sales to third countries, from tariffs. Hungary, like other East
European countries, places great weight on such an exemption, probably
in the hope that sales from such agreements will become substantial in
fields where there is little prospects of eliminating QRs.
28. Hungary has also set up an agency entrusted specifically with
establishing and administering cooperative deals. Intercooperation: Co., Ltd.,
created in 1970, has 20 shareholders, including the foreign trade enterprises,
the Ministry of Foreign Trade, the Foreign Trade Bank, and the National
Committee for Technical Development. In addition to bringing together
potential partners and assisting in business negotiations, Intercooperation
also attempts to find credit sources for the venture and can even participate
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directly with its own financial means. Intercoo,!eration's authority stops
short of final approval of cooperative ventures; all proposal deals ]]lust
he approved by !h government's Inter-Departmental Commission.
29. Hungary has by ?'ar the largest number of cooperative ventures
Willi the West of any East European country. The aggregate value of the
cooperation ventures, however, is small and they have generated very little
in the way of exports -- apparently less than $10 million in 1971. Flux gary
claims to have entered 27 cooperative agreements during 1963-67, 26 in
1968, and 42 in 1969
30. Production sharing arrangements with the West include motor
vehicles, agricultural equipment, machine tools, communications equipment,
pharmaceuticals, and synthetic fibers. Among the Western firms involved
are Steyr-Daimler-Pitch of Austria (buses and agricultural machinery), llerliet
of France and Volvo of Sweden (buses), Maschinenfabrik
Augsburg-Nucrnberg (MAN) of' West Germany (trucks), the White Motor
Corporation of Cleveland (diesel engines), Renault (diesel engines), lndustrie
Werke Karlsruhe of West Germany (shipping containers), Thomson-Houston
of France (closed circuit color television sets), Krupp of' West Germany
(automatic and numerically controlled lathes), Ratcir Forest of Franco
(metalcutting machine tools), Fiat (gas turbines for powerplants), Cranab
of Sweden (bucket cranes), Ciba-Geigy of Switzerland (plant protection
preparations), Siemens of West Germany (X-ray components and computer,
telecommunications, and medical equipment), the Sandoz Pharmaceutical
Company of Switzerland, and the Osterreichische Stickstoffwerke of Austria
(herbicides and artificial fibers). The 1971 deal with MAN is a 10-year
production sharing agreement whereby MAN will supply the Raba
engineering plant in Gyor with drivers' cabs and other parts in exchange
for r.-give and chassis components produced in Hungary. The agreement
4. Hungarian reporting is believed to overstate the actual number of cooperative agreements.
Apparently included are not only agreements of long duration but also some important single
transactions. Known production sharing agreements totaled about 55 by the end of 1972.
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`-A'ON F) OP, NTI A1,
allows Ilungary to export (he I'IIIISIl('(1 Irurks to I?;tslrrn VIII-)w, West
(;trnurny, Vrarcc, and Austria. In the inilial stage, MAN is to supply
Coil) pollen IS worth about 50 million l)enL;clre Marks t';i i.7 million at
197I exchange rates).
31. Cooperative ventures involving touris11r are one of the 11rom
attractive possibilities for Western limns because they ()Ifer ninth greater
assurance of hard currency c;urIlings Iha11 (to production ventures. Of IIIe
five known atgreentents in this are;a, three involve US Iilnls. In I()(>(, Ilungary
signed an agreeuu?nl with 'l'ower lulernalional. Ink.. for ;I hotel -- the I)IIIII
Intercontinental -- in litdap(-sl. Ilttng'ary 1)1ovi(l('tl the rile and sonic e;Ipila1
anti 'l'ower I)rovitlecl advisers 111(1 c;Illital in Iel11111 for ;I share of gross
(,''''ills. In a filter agreement, Shelf Cl: 11I11iled Stales mid the Nethella11(ls)
was to hell) Construct Shell g,;Isoli11e stations in Ilungary ;111(1 Io supply
nr,nnagenlenl, a(lvice, an(I Western goods aunt pills. I lu11g,arian a)'enkies welt'
to own tit,, stations. In I')72, Bank Anicricard ;unuo It eed HIM it would
soon heCorne the first hank credit card accepted in Ilun)';Iry. 111115%, the
Hungarian N:;lional 't'ourist Association, way; to launch a nnercl1:1111 s
acceptance program lhroughoul Ilm,?,;Iry.
32. The lIungarians Itav_? been willing to form jointly owned
conrl,anies Willi Western firms, but all I'ortned thus I; ark headqu;emceed
outside Ilungary. '1?hc Ilungariami state far11l, I3;tholim. and file 11S'irnn. Corn
System Production (('I'S), brunet a joint wilt!);Inv caplet ('I'S-A(; registered
in Zug, Switzerland.
I m-oAIIIcriian
Tecltno('orl)oration. was established in 11;Iy I'.I7' ;end is registered ill
Amsterdam and ('r cacao. This enterprise 00,;' I tun! ;u i,~n owne(1) is
concernetl with market research and sates 01' A Rune;ui:In Iis,ur s:Ibslitulr
called fibrin bioptast. Other join( Co111pa11ies include two In London
(Me(lichange and Medibase) created for the manufacture and salt'.; of
batteries and cells, one ill Franck ('lechn(tr;urs) to promote sates of
Ilungarian machine tools, and one in Italy devoted 1o the sale of Ruing;Ili;u1
textile products. The newest joint enterprise to he se; up is that established
on it filly-Fifty basis by (I) the ('licn)olin)pex foreign trade enterprise and
the National Oil and Gas Industry 't'rust iI' Ilung;uy and (2) the
State-owned Schoeller-13leckn)ann Stahlwerke AG of Austria. This
company -- which will mainly handle sales Of' yeti-t)!Cun), chemical, and
pharmaceutical equipment -- is registered as Internationale Gesellschal*t luer
Erdoeltechnische, ('hemische tu)d I'harnuv.eutische Anlaixn Mantels Gnihll.
The joint company will be managed on it parity basis by a Ilung;'ri;ur and
an Austrian director.
Approved For Release 20WtAW!1a1U1*3A&fG0875R001700050031-1
 Approved For Release 2GQ6LQ i ~C
IA-F D i 8 A i 00875R001700050031-1
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CONFIDENTIAL
Approved For Release 2006/04/19 : CIA-RDP85T00875R001700050031-1