FIRST ANNUAL PROGRESS REPORT OF THE INTELLIGENCE WORKING GROUP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00400R000200090007-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 19, 2016
• Document Release Date: November 15, 2006
• Sequence Number: 7
• Publication Date: September 24, 1953
• Content Type: REPORT

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SECURITY INFORMATION Nw
IAC-D-53/4
24 September 1953
INTELLIGENCE ADVISORY COMMITTEE
FIRST ANNUAL PROGRESS REPORT OF
THE INTELLIGENCE WORKING GROUP
Subject progress report is attached for the
information of the IAC members and comment as
desired at an early LAC meeting.
RICHARD D. DRAIN
Secretary
,11 P0/ ..
IAC.--D-53/4
24 September 1953
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IWG/R-13
Control ro. 44K273
18 September 15'53
FI;?J'T ANNUAL PiC'G1 SS RLPOdT OF THE ItWJG
August 1952 - July 1953
1. Authority for the Intelligence Working Group
The Director of Central Intelligence approved. the proposal of the
Director for Mutual Security and the Secretary of State for the estab-
lishment of an Intelligence Working Group (1W1'T) for direct intelligence
support of the Economic Defense Advisory Cormittee (P;D 1C) . The proposal
was inc'orsed by the `ecretary of Defense. TWO Terris of Reference were
approved by the Intelligence Advisory Committee on 25 July 1952
(IAC-.D-53/l) and amended by iAC-i3-53/3.1 of 25 February 19153.
H. Organization of the Intelligence Working Group
The IWG is cor,rr+osed of r;eribers from the intelligence sectors of the
Departments of State, Arne, id,av?r, and Air Force, and the Central
Intelligence Agency. Associate membership is held by the Office of the
Administrator for 14utual Defense Assistance Control of the Foreign
Operations Administration, the Office of the Secretary of Defense, the
Foreign Operations Admi i.nistrati..on, and the Departments of Commerce,
Treasury, and State (Economic Defense Staff and Office of Munitions
Control). Any other agency having interest or competence in the field
of economic defense intelligence may be invited to sit with the Group.
CIA/DR provides the Chairman +.nd the Executive Secretary.
During the past year fourteen subgroups were established to provide
I[rWG with specialized research and technical advice in specific fields of
economic defense. Five of the subgroups are currently operative. The
others have completed their assignments.
III. Purpose of IWO and Relationship to EIC
The UWTG is unique within the U.S. Government in acting as an inter-
agency service facility for the review, coordination, and production of
timely economic intelligence which is directly applicable to current or
impending problems of economic defense policy or operations and is not
exclusively within the mission or responsibilities of any existing
agency or interagency groups. Its purpose, as stated in its Terms of
Reference is "to develop and. furnish intelligence to the EDaC for policy
making and operations in the economic defense field ...and to develop
closer continuous relationships among the opcre.etions, policy-formulation,
and intelligence-research elements engaged in the economic defense rogram.
This document contains pinformation affecting the
S-E-C-R-E-T national defence of the Cried --tat" within the
mo I- -- a
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U .S . OFFICIALSOI\TI,Ye
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The role of the IWG differs from that of the Economic Intelligence
Committee (EIC) which is responsible for "fundamental economic
research...relating to the national security." The IWG looks to the
EIC and other research facilities for basic research support.
IV. Responsibilities and Accomplishments of the IWG
A list of all cases which have been formally placed before the
IWG for consideration will be found in Tab A. Most of these cases
have resulted in the preparation of papers (listed in Tab B) which
have been furnished to EDAC components.
The major responsibilities placed upon the IT-TG under its Terms
of Reference, together with an indication of the IWG's progress during
the past year in meeting them, follow:
A. Responsibility: Prepare or arrange for the preparation
of reports which present the best available economic intelligence on
problems of concern to the EDW.
Progress: The IWO has prepared twenty-one papers involv-
ing research and analysis in particular fields of economic defense
(Tab B). Ten wore concerned primarily with strategic commodities while
six were in the field of shipping intelligence. The remainder involved
export controls generally. The IWG is now being used as the mechanism
through which intelligence studies of the Soviet bloc supply position and
strategic uses in the bloc of specific commodities are prepared, reviewed
and coordinated.
B. Responsibility- Provide current intelligence to the )AC
in response to specific requests or on its on initiative.
Progress: The IWG has been instrumental in providing
current, intelligence to assist action agencies in meeting their current
or impending problems of economic defense policy or operations. Of
nineteen papers of this nature prepared by IWG, fifteen have been
significant items of intelligence in the shipping and commodity move-
ment .fields contributed by the ONI member for use by EDAC (see Tab C).
In addition, several urgent requests by action agencies have been
handled under the aegis of the IWG directly by analysts in the several
intelligence agencies, time not having permitted the matter to be
formally placed on the IWG agenda for review.
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The effort made by f?!G to establish procedures for the
collation of current intelligence for the purpose of providing action
agencies with the processed intolli_gencc they require as a basis for
preventive and/or remedial action is covered in the statement of progress
under subsection D and Tab D, follo:aing,
C. Responsibility: Determine the necess-i.ty, desirability, and
feasibility of o wining further information or intelligence concerning
the subject matter of specific reports or to fill specific gaps, and
recommend action by appropriate agencies to meet these needs.
Progress:
1. Ln IWG subgroup was established in response to a
specific request of the EIC Subcommittee on Requirements and Facilities
for Collation. to prepare "a consolidated set of requirements for
collection...on East-West trade". This subgroup was instructed to
ascertain existing guidance to collection agencies, formulate recommenda-
tions for over-all priority requirements for collection, identify
critical deficiencies in fulfilling such requirements, and make
appropriate corrective recommendations (see Section V.).
2. ~rn IWG paper, "Report on COCOM Statistical
Reporting," pointing out inadequacies and deficiencies in the reporting
system, was forwarded to EDAC to be used by that Committee as the basis
for the preparation of an instruction to the U.". Delegate to COCOM.
3. Various agencies have formulated and served
detailed collection requirements upon appropriate collection agencies
to obtain further information or intelligence concerning the subject
matter of specific reports or to fill specific gaps.
D. Responsibility: Arrange for the mobilization of the
economic data and analyses relevant to appropriate needs of the EDAC.
Progress: Four principal developments (see Tab D) having
bearing on the above responsibility, wore:
1. Recommendation for the establishment in CIA of
a unit to process current economic defense intelligence and to collate
such intelligence for use of the operating agencies. This recommcnda-
tion was approved and the unit has been set up.
2. Establishment of uniform procedures for the
production and approval for release of ILJG papers.
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3. Preparation of recorlnended instructions to the
field for the lateral distribution of current intelligence on suspected
diversion of controlled commodities to the Soviet bloc was coordinated
through the IWG.
It. Transmittal of a memorandum to appropriate
officials of SOVMFIT and J19A listing four categories of information about
Soviet bloc equipment that is of significance to the IWG and the FDAC
agencies, and requesting distribution to IWG of all analyses falling
within those categories.
V. Major Problems and Objectives
A. Statcrecnt of U.S. Policy Pertinent to IWG Activities
The new U.S. policy directive in the field of economic
defense will guide EDAC and IWG activities during the coming year.
Particularly pertinent are the following objectives requiring intelli-
gence support as outlined in this directive: (1) Improve the availa-
bility and utilization of current intelligence in matters relating to
enforcement of controls which have been agreed by the free world;
(2) Develop ancillary measures, including control over transit trade
and transshipment, free port activities, financial controls, and black-
listing, to improve implementation and enforcement of agrucd control
systems, particularly control over strategic commodities; (3) tighten
the control list criteria and review the strategic rating of commodities
on the control lists to provide for the selection of comodities which
contribute significantly to the Soviet war potential.
B. Discharge of IWG Responsibilities under New Policy
1, To provide the intelligence support essential to
the implementation of the new U.S. policy, the IWG must intensify its
efforts to make current economic defense intelligence available to action
agencies. A major forward step has been the creation, at the request of
TWG, of the current intelligence unit within CIA. This unit cannot
operate at maximum effectiveness, however, unless ways are found to assign
higher priorities to the collection of information relevant to economic
defense. It also may be appropriate for the TrIG to inquire into the
causes of delay in the transmission to Washington of East-West trade
information and its dissemination to appropriate agencies. Approval and
implementation of proposed instructions for lateral distribution of
East-West trade information in the field should facilitate the prevention
of trade control violations.
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2. The tightening of the criteria for the selection
of commodities which contribute significantly to the Soviet bloc war
potential will place an additional work load of commodity review and
analysis upon the IWG. It will require increased vigilance on the part
of the intelligence agencies in the detection of changing economic
vulnerabilities within the bloc. The extent of this work load will be
dependent upon the outcome of the programs being developed by the
action agencies having responsibilities under this new policy directive.
3. The full potential of the If1G for intelligence
support has not yet been utilized by action agencies or working groups
of the EMC structure. IWG/AM-8, distributed in EDAC as EDAC D-)48,
establishes a mechanism by which E!1AC agencies (and working groups
within the EDAC-ACEP structure) may request direct intelligence support
from the TWG. These established procedures are assisting the action
agencies and interagency work groups in drawing upon the IWG facilities.
In furthering this effort to maximize the contribution of the IWG as
the focal point of intelligence support for economic defense, CIA is
now putting through the Group for review and coordination most of its
intelligence, including commodity analyses, which formerly went directly
to other working groups. It is hoped that the objective of realizing
the full potential of the IWG will be reached during the coming year.
airman
Intelligence Working Group
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LIST OF ALL IWG CASES
August 1972 -July 19,
IWG Designation
IWG Case No. 2
DIG Case No. 3
IA1G Case No. 14
PPTG Case No. 5
IWG Case No. 6
IWG Case No. 7
IWG Case N-. 8
IWG Case No. 9
IWG Case No. 10
F,I'G Case No. 11
]WG Case 11.o. 12
1WG Case No. 13
IWG Case No. 14
IWG Case No. 15
IWG Case No. 16
IWG Case No. 18
]WG Case No. 19
IWG Case No. 20
IWG Case No. 21
IWG Case No. 22
DIG Case No. 23
IWG Case No. 24
IWG Case No. 25
IWG Case No. 26
IWG Case No. 27
1WG Case No. 28
1WG Case No. 29
Title
Proposed Shipment 2,000 Tons Copper from Turkey to
Communist China
Soviet Bearing Production and Procurement
Prior Commitments
Greek Shipping Cartel
Greek Flag Merchant Ships Trading with Communist
Far East
DDR Procurement Efforts
Collection Requirements on East-West Trade
Belgian Ships for USSR
Merchant Shipping Intelligence
Danish Tanker APSIiERON
Chinese Communist Trade
Radar Carried by SS FRYDRYK CHHOPIN
Sale of TAVIRA (forurerly ATLANTIC II, now PRACA)
to Poland
Activities of INTERCONTINENTAL AIRWAYS
Alleged Refuelling of Polish Ships with Iranian Oil
Delivery of Antimagnetic Schooner by Finland to the
Soviet Union
Cargoes of Oil Carried by Polish Ship RYSY,
Rotterdam to Gdynia
East-West Monetary Transfers in Germany
Exploitation of Intelligence on Soviet Materiel
(Foreign Equipment)
EDAC Operational Memorandum for IWG Activities
Diversion of Korean Scrap to Communist Destinations
Western Repair and Construction of Merchant Vessels
for Soviet Bloc
Activities of FRITZ DIEPEN
Chinese Communist Procurement of Power Generating
Equipment
Illegal Sale of MDAP Armament to Eastern Europe
Bunkering of Vessels in China Trade
Soviet or Satellite Chartered Vessels and Merchant
Vessels Trading with the Communist Bloc
N. V. Philips Co., Eindhoven, the Netherlands
Spectrograph for Institut for Anorganische Technologie
der TechnischenHochschule, Vienna, Austria
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J,WG Designation
IWG Case No. 30
NG Case No. 31
1WG Case No. 34
IWG Case No. 35
IWG Case No. 36
IWG Case No. 37
IriJG Case No. 38
1WG Case No. 39
IWG Case No, 40
1WG Case No. 41
NG Case No. 42
IWG Case No. 43
IWG Case No. 44
DIG Case No. 45
IWG Case No, 46
IWG Case No. 47
IWG Case No. 48
IWG Case No. 49
IWG Case No. 50
IWG Case No. 51
IWG Case No. 52
Sale of Italian-Built Ship to Bulgaria
EDS Request for Technical Analysis of Repairs to
Soviet Vessels in Port of Antwcrp, 1949-1952
Request for Intelligence Evaluation of Soviet Bloc
Cobalt Production Capabilities vs. Requirements
Request for Intelligence Study on the Movement,
Including Transshipment, of Strategic Commodities
from the Middle East to the Soviet Bloc
Smuggling from the Ryukyus
Polish Coal Situation
Intelligence Data for U.S. Delegate to CHENCOM
Intelligence Requirement - Transit Trade Involving
Sweden and Switzerland
Finnish Tanker Fixture for China Run
U.S. Mining Equipment for Expansion of Spanish
Pyrites Production
Reported Movement of Rails from Antwerp, Belgium,
to Constantsa, Rumania, by Costa Rican, Turkish
and Italian Vessels
Dissemination of Economic Dcfcnse Intelligence in
the Field
Communist China - French Barter Deal for Nitrogenous
Fertilizer
Request for Information on Strategic Importance of
Hides and Leather to Soviet Bloc, Particularly
Communist China
Financial Operations of the Soviet Bloc in its
Economic Relations with the Free World
Soviet Efforts to Procure Aircraft Parts and
Components
Strategic Importance of Dichlorodifluoromethano
(Freon 12) to the Soviet Bloc
Swiss Bank Financing of Strategic Exports to the
Soviet Bloc
The Tractor Situation in the Soviet Bloc
Diversions to the Soviet Bloc of Strategic Materials
Originating in Non-COCOM Countries (South :Africa:
lead; Bolivia, tin, tungsten)
Strategic Importance of Magnetic Recorders and/or
Reproducers to the Soviet Bloc
Strategic Importance of Yyanite to the Soviet Bloc
Pharmaceuticals: Communist China's Supply Position
in Antibiotics, Anti-Malarials and Sulfanonides
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LIST OF ALL 1WG STUDIES COMPLETED OR IN PROCESS
August 1952 -July 1953
7WG Designations
3W,gG/M"~M-4
IWG/.AM-9
IWG/AM-10
IWG/D-1
1MG/D-2
IWG/D-3
1WG/D -5
I?MG/D-6
F,4G/D-7a
IWG/D-8c
IWG/D-12
IWG/D-19
IWG/D-31
IWG/D-33 a
E,TG/R-1
TUG/R-5
IWG/R-6
1WG/R-7
%`IWG/R-8
:IWG/:R-9
IWG/FE-1
Table of New Construction in hand and on Order in
Western Countries for USSR Merchant Fleet -
June 1952
Glycols - Item IL 1727
Conveyor Belting and Item 310b - Power Driven
Conveying Equipment
Danish Tanker iPSHERON
Utilization of Soviet Bloc Merchant Shipping
Intelligence by the United States Coast Guard
ONI Report on Western Shipyard Services to Soviet
Merchant Fleet, 1 January -'30 June 1952
Soviet Metallurgical Techniques
Chronology of CCCOM Transit Trade Control Discussions
Specification Sunmarics for Soviet Ships Repaired in
Antwerp Yards, 19119 - 1952
R, sponse to ODt' Questions Regarding Soviet Bloc
Cobalt Position
Japanese Security Export Controls on Trade with
China - 19)45/195 2
Movement of Scrap Metals from the Middle East - 1952
Strategic Importance of Dichlorodifluoromethane
(Freon 12) to the Soviet Bloc
Strategic Importance of liagnctic Recorders and/or
Reproducers to the Soviet Bloc
Alleged Refuelling of Polish Ships with Iranian Oil.
Communist China's Imports of Ammonium Sulfate
Report on CCCOM Statistical Reporting
Soviet Bloc Kyanite Position
Examples of the Role of Swiss Banks in Financing of
East-West Trade Since 29 August 1952
The Tractor Situation in the Soviet Bloc
Material for Use in China Committee
'~ A11 of these studies were complcted in the period August 1952 - July 1953
except those marked with a single asterisk.
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LIST OF ,LL 3MG CUR.271 T INTEL?,IG7TiCB CONTRIBUTIONS
Iugust 19-72~July 13~~^
IGJG Designation
I?M,TG/AM-7 Finnish Tanker Fixture for China Run
r'C,/D-l0 ONI Information on Movements of Specified Ships
IMG/D-13 ONI Information Regarding Mershiip IIOT'GH 1 CRCI ;NT
I7TG/D-1 ONI Contribution - Cargo Information on Vessels
in China Trade
I?nTG/D-15 ONI Information Regarding SS :HUZA.FFER
IWG/D-16 ONI Information on Greek P? crship Tft LI"S
CMI Information on "Shipments of Strategic Materials
through the Bosphorus to the Soviet Bloc from
28 August to 31 December 1952"
T-TG/D-1C OKI Information on Movement of Strategic Materials
from China to Poland
I?TG/D-21 ONI Contribution - Shipment of Strategic 4at~,rials
from Beirut, Lebanon
TTG/D-22 01i'l Contribution - I?ictal :crap '.ovomonts to Poland
RIG/D-24 ONI Information Regarding is erchant Vessels in the
China Trade
DTG/D-25 CMI Contribution - Cargoes Transshipped at Famburg
for Czechoslovakia
7u,TG/D-26 ONI Contribution - Strategic Commodity Movements to
Soviet Bloc
IT'G/D-27 ONI Contribution - Voyage of Portugeso Mership TIMOR
from Europe to Hong Kong and Macao, January -
February 1953
IWG/D-28 ONE Contribution - Cargoes Transshipped via Hamburg
for Czechoslovakia
FTG/D-29 CNI Contribution - Transmittal of Merchant Marino
Intelligence Regarding Dunker Controls
JWG/R-3 CI Statement on Radar Reportedly Carried by
SS F RYDRYK CIOPIN
I??WG/R-L. Shipment of Steel Plates from Japan to Eastern Germany
IWG/ID-1 Foreign Sale of Fastax High Speed Film
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PRINCIPAL DLVE'LOPI:JNTS IN THE MOBILIZ{ITION OF ECONO a.C
D;T'. REL;_V..ET TO 1N EDS OF F:DAC
1. Establishment of Procedure for Processing Current Economic Defense
Intelligence
In response to a request of the Steering Grouo (now Executive
Oommittoe) of ETI'.C, PIG prepared and forwarded to CIA a paper
(DWG/C'I-2 of 5 Fcbruary 1953, as amended 3 March 1953) which pointed
up the deficiencies of then-existing arrangements "for processing the
considerable amount of raw intelligence and incom.pletcly-ev-:luatcd
intelligence now being received regarding Soviet bloc procurement
activities." This paper recommended that "the CIA designate a unit
within that 4ency to process current East-Nest trade intelligonc;.....,
for the purpose of serving through the DIG the needs of the EDAC
structure." By memorandum of 16 March 1953, the Assistant Director
for Research and Reports, CIA, approved. the establishment of such a
unit. It is now functioning on a limited basis and is expected to be
in full operation by mid-September.
2. Establishment of IWG Procedures
Administrative memorandum, 8, prepared by IWG and distributed
by the Executive Secretary, EDAC, throughout the IDAC structure, provided:
(a) uniform procedures for the production and subsequent approval for
release of IGWG intelligence, (b) furnished a summary of current pertinent
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instructions covering diseom,;_nation of econonic defense intelligence to
U.S. Government agencies end foreign nationals, and (c) outlined proce-
dures to be followed in the establishment of I?TG subgroups and in the
production of T-TG reports.
3. Lateral Field Dissemination of East-West Trade Information
At the request of the Chairman, ED1C Steering Group (now Executive
Comm:i.ttce), the IZ'JG undertook to coordinate the interagency preparation
of instructions to field roprescnte.tives for lateral distribution of
current intelligence concerning suspected diversions of strategic corgi
modities to the Soviet bloc. It is understood that the Department of
Defense will issue similar instructions to its intelligence representa-
tives overseas upon receipt of a agreed instructions to the Foreign
Service covering State, Commerce and CIA.
4. Intelligence Exploitation of Soviet Bloc Equipment
The BIG distributed to each of its three Service members, to Chief,
SOVIL T, CIA, and to the Director of the Joint Material Intelligence
Agency (now Joint Technical Intelligence Subcommittee of JIC) a memoran-
dum listing four general categories of information about Soviet bloc
equipment of significance to the IZb'G and the ED".C agencies. Cooperation
of the Director, JTIS, was requested to insure that relevant analyscs
and intelligence prepared by his Agency were furnished to the I?A'G. Such
analyses have been useful in connection with the development of intelli-
gence on the quality and composition of commodities and methods of produc-
tion within the Soviet bloc.
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IWG INTELLIGENCE SUPPORT TO THE ECONOMIC DEFENSE PROGRAM
ADMINISTRATOR OF MUTUAL
DEFENSE ASSISTANCE CONTROL ACT
(P.L. 213, 82nd CONGRESS)
SECRETARY OF COMMERCE
(P.L. 11, 81st CONGRESS)
ADVISORY COMMITTEE
ON EXPORT POLICY
ECONOMIC DEFENSE
ADVISORY COMMITTEE
(EDAC)
(1, 6-16)
EDAC EXECUTIVE
COMMITTEE
(EDAC/EC)
(1, 7-9,15,16)
Export Control Programs
Application and Enforcement
Cargo Transport Controls
Transit Trade
Economic Defense Programs
and Policy
Decreasing Reliance
Far Eastern Economic Defense
S4
(ACED)
6-10, 13-16)
OPERATING
COMMITTEE (OC)
(1, 6-10, 13-16)
~. (SPECIAL
JOINT COMMITTEES)
INTELLIGENCE
WORKING GROUP (IWG)
Members Responsible
to the IAC
Associate
Members
Construction and Mining
Transportation
Metal-Working Machinery
General Industrial Equipment
Iron and Steel
Nonferrous Metals
and Minerals
Chemicals and
Agricultural Products
Electronics
Electrical
Rubber
fl
i
di
d li
h
D
PARTICIPATING AGENCIES
NUMBERS ON CHART INDICATE PARTICIPANTS
ow
nes
n
cate
e
NOTE:
as
of intelligence support from IWG
1.
CIA 7. DEFENSE (
OSD) 13. AGRICU
LTURE
2.
STATE (R) S. STATE (E)
14. INTERIO
R
3.
G-2 9. COMMERC
E 15. MDAC
4.
ONI 10. TREASURY
16. FOA
5.
AFOIN 11. ODM
17. STATE (
OMC)
6.
AEC 12. EX-IM BAN
K
SECRET
SECURITY INFORMATION
177
JOINT COMMITTEE
ON
EXPORT CONTROL LEVELS
(JCECL)
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