SENIOR INTERDEPARTMENTAL GROUP ON INTERNATIONAL ECONOMIC POLICY (SIG-IEP)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00049R000501360011-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 21, 2016
• Document Release Date: July 28, 2008
• Sequence Number: 11
• Publication Date: September 20, 1982
• Content Type: MEMO

Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
WASHINGTON, D.C. 20220
September 20, 1982
NSC review completed - may be declassified in full
UNCLASSIFIED
(WITH SECRET ATTACHMENTS)
DHS Review Completed.
MEMORANDUM FOR THE VICE PRESIDENT
THE SECRETARY OF STATE
THE SECRETARY OF DEFENSE
THE SECRETARY OF AGRICULTURE
THE SECRETARY OF COMMERCE
THE ATTORNEY GENERAL
THE DIRECTOR, OFFICE OF MANAGEMENT
AND BUDGET
CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS
ASSISTANT TO THE PRESIDENT FOR
NATIONAL SECURITY AFFAIRS
ASSISTANT TO THE PRESIDENT FOR
POLICY DEVELOPMENT
UNITED STATES TRADE REPRESENTATIVE/
DIRECTOR OF CENTRAL INTELLIGENCE /
SUBJECT Senior Interdepartmental Group on International
Economic Policy (SIG-IEP)
Attached please find the minutes from the SIG-IEP meeting
held September 16.
In addition, please find a new, revised set of minutes for
the September 9 meeting. (Please destroy the September 9 minutes
sent previously.)
Attachments
Executive Secretary
David E.'Pickfor
UNCLASSIFIED
(WITH SECRET ATTACHMENTS)
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
 Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
SENIOR INTERDEPARTMENTAL GROUP--INTERNATIONAL ECONOMIC POLICY
September 16, 1982
4:30 p.m.
Old Executive Office Building (Room 305)
NSC review completed - may be declassified in full
Agriculture
Secretary Block
Justice
Jonathan Rose
Office of the Vice President
Admiral Daniel Murphy
Donald Gregg
USTR
Ambassador Brock
OMB
David Stockman
OPD
Roger Porter
CEA
Geoffrey Carliner
NSC
Norman Bailey
Roger Robinson
Dennis Blair
The Chairman stated the purpose of the meeting was to
discuss possible sanctions that might be considered to be
imposed by the United States and its allies in exchange for the
current U.S. unilateral sanctions imposed in December 1981 and
June 1982 in reaction to events in Poland. He
stated that it was not the intent of the United States to make
any proposals nor was the United States looking for a way out
of the sanctions but that since there were indications that
the Europeans wanted to discuss alternatives the U.S. Government
needed to consider what these alternatives might be.
Secretary Shultz reviewed the overall objectives of the West
toward the USSR and analyzed the sanctions that were
intended as a reaction to the events in Poland and-that were
to be lifted in the event the President's conditions for
SECRET
Classified by MELeland
Declassify OADR
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
 Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
SECRET
improvement of the situation in Poland were met. He then
reviewed the other unified allied actions toward the--Soviet
Union that might be considered as part of a long range economic
relations with the Soviet Union. He stated that, as he was
responsible for preparing for the talks with the Europeans,
he needed to have a set of measures that would have clarity and
would effect the Soviet Union, could be sustained, and could
have broad Western support.
The group then reviewed elements that might be included
in an alternative sanctions package. The first element was
credit on which some work had begun before the Versailles Summit,
and on which some progress had been made at Versailles, and on
which more work was needed to get agreement on concrete credit
restrictions and a monitoring body. The second item was confirming
and expanding COCOM. The third area related to restriction of the
export of oil and gas technology on'any future contracts with the
Soviet Union. The fourth area was alternative energy sources. If
any alternative package is agreed to, it must be at least
as painful to the Soviet Union as the current sanctions
and must be broadly supported by Europe and Japan. There was
then discussion as to which of the sanctions might have the most
impact on the Soviet Union.
Secretary Baidrige raised the problem of specific hardship
cases as well as unintended effects of the sanctions.
The group concluded that Secretary Shultz should hold
discussions with his allied counterparts with the broad instruc-
tion that any alternative package should cause equal pain to the
Soviet Union as that presently being inflicted by existing
sanctions. If no European offer results from his discussions,
the SIG-IEP would then re-evaluate the situation. Any questions
about consultations with the Europeans would be referred for
'response to Secretary Shultz.
The group also decided that there should be an IG to con-
sider the Department of Commerce's guidelines for exceptions to
the denial order and come up with suggestions about where and
when exceptions might be made.
The CIA was urged to proceed quickly with the intelligence
estimate presently underway with the results of the pipeline
sanctions.
All agreed that current sanctions will continue to be
imposed but that the United States is prepared to listen to
any allied proposals for alternative sanctions against the
Soviet Union.
SECRET
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
 Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
SECRET
The-meeting concluded with the instruction that a
status report for transmittal to the President should be
prepared on the alternative package and on the methods for.
considering alternatives to existing sanctions.
Classified by 14ELeland
Declassify OADR
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
 Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
SECRET
NSC review completed - may be declassified in part
MINUTES
SENIOR INTERDEPARTMENTAL GROUP ON INTERNATIONAL ECONOMIC POLICY
September 9, 1982
2:00 p.m.
Indian Treaty Room, OEOB
Attendees
Treasures
Secretary Regan (Chairman)
Marc Leland
Peter Wallison
State
James Buckley
Robert Morris
Defense
Secretary Weinberger
Fred Ikle
Agriculture
Secretary Block
Commerce
Secretary Baldrige
Lionel Olmer
Sherman Unger
Justice
William French Smith
Jonathan Rose
CIA
William J. Casey
Office of Vice President
Admiral Daniel Murphy
Donald Gregg
USTR
Ambassador Brock
John Ray
Dennis Whitfield
CEA
Martin Feldstein
Paul Krugman
OMB
Fred Khedouri
Steve Farrar
Robert C. McFarlane
OPD
Ed Harper
NSC
Norman Bailey
Henry Nau
Roger Robinson
The Chairman introduced the sole agenda item, the oil and
gas equipment and technology export sanctions on the Soviet
Union.
There may be a meeting at foreign minister level with the
Europeans. Counsellor Buckley stated that the four areas that
were being developed for eventual discussion were: '(1)'key
categories of oil and gas equipment to be jointly embargoed
in future; (2) credit restraint; (3) strengthening of COCOM
procedures; and (4) development of secure energy sources.
SECRET
Classified by MELeland.
Declassify OADR
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
 Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
SECRET
Secretary Baldrige reported on the situation with reference
to penalties imposed on European companies as a result of violation
of our sanctions. The denial orders will cover only oil:and gas
equipment, services and technology. Dresser and Creusot are
bringing legal actions to block the denial orders. The effect of
the sanctions ranges from $75 million to $600 million over three
years.
In response to a question, Mr. Baldrige stated that Q's and
A's would be provided and also suggested that the measures he
referred to as preventive rather than punitive.
Secretary Weinberger then reported on his contacts with
European leaders. He stated that Prime Minister Thatcher agrees
with our goals but constantly reiterated her unemployment problems.
We should find out actual effect on John Brown. She urgently
wants a way out of the impasse. We should make the point about
the sanctity of the contracts our companies signed with their
licensees and also see where we may be able to assign supply
contracts to affected European companies.
Ambassador Brock reported on his conversations with representa-
tives of eight European countries. Many European governments are
now advising their companies not to use U.S. technology. The
Europeans don't want any meeting which will be publicized. The
French don't want to meet at all for the time being. They don't
think we understand the impact of our measures in Europe and are
convinced we are engaging in economic warfare.
All agreed that the negotiating positions must be presented
as enhancing or strengthening measures and under no circumstances
as the President "caving in."
Secretary Baldrige read the statement he proposed to make
to the press at his press conference that afternoon.
A discussion ensued over the reason for sanctions and the public
presentation of those reasons.
The Chairman instructed that papers be circulated for an
IG-IEP meeting on negotiating positions, followed by a SIG-IEP
meeting September 16 to approve them for referral to the NSC.
Classified by ' IET eland
SECRET Declassify OADR
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0 - ---.
 Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0
NSC review completed - may be declassified in full
EXECUTIVE SECRETARIAT
Routing Slip
ACTION
INFO
DATE
INITIAL
1
DCI
2
DUCI
3
E IR
4
D/ICS
5
DDI
6
DDA
7
DDO
8
DDS&T
9
Chm/NIC
10
GC
11
IG
12
Compt
13
D/EEO
14
D/Pers
15
D/OEA
16
C/PAD/OEA
17
SA/IA
8
A0/DCI
19
C/IPD/0IS
20
21
22
SUSPENSE
zE
Approved For Release 2008/07/28: CIA-RDP84B00049R000501360011-0