LOAN BY THE NETHERLANDS OF AIRBORNE VHF EQUIPMENT TO HUNGARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61S00527A000100180087-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 12, 2016
• Document Release Date: September 6, 2000
• Sequence Number: 87
• Publication Date: March 21, 1958
• Content Type: MEMO

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EDAC D?11.
March 219 1958
ECONOMIC DEFENSE ADVISCRY COMTTEE
MEMORANDUM
To: Chairman., Economic Defense Advisory Committee
From:: Chairman., Working Group I
Subject: Loan by the Netherlands of Airborne VHF Equipment to Hungary
A. THE PROBLEM
1. To consider the proposed loan by the Netherlands of airborne VHF
equipment to Hungary for a period of six months
2. To determine a U.S. position on this recommendation in the light of:
a. Coverage of this equipment under IL I items 1501 and 1517 and
the U.S. position that the embargo on these items should be maintained.
b. U.S. civil aviation policy toward the Sino-Soviet Bloc as approv-
ed by the President on December 92 1957o
B. RECO*TENDATION OF WG I CHAIRMAN AND APPEAL THERETO
The Chairman,, with the concurrence of the State and ICA members and with
the reluctant concurrence of the Commerce member., recommended that the USDEL
be authorized to make no objection to the Netherlands request-for permission
to lend to Hungary for six months four sets of airborne VHF equipment for use
in aircraft operated by Malev but that the USDEL be requested to follow up
with the Netherlands and the question of the order for new equipment 25X6A
which Malev intended to place. The Defense member reserved and subsequently
notified the Chairman that the position of his agency was to object and appeal
to EDAC.
Co BACKGROUND AND ANALYSIS
The memorandum submitted by the Netherlands delegation (Comcom Doe. 29146)
states that "The Hungarian authorities allowed the KLM to operate a regular
civil air service between Amsterdam and Budapest on a reciprocal basis. The
Hungarian Airlines now wish to make use of'their right., and to start a civil
air service between Budapest and Amsterdam. However., lack of radio-communi..ca-
tion equipment Mich is in use in Western Europe,, constitutes an obstruction
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for the aMalev0 to carry out these plans. The Hungarian Airlines intend to order
a number of these VHF apparatus direetly from the manufacturer but they would like
to have the loan of 4 sets from the KLM in view of the fact that the equipment,
which will be ordered, cannot be delivered before the second half of this yew
The American embassy in the Hague in its telegram #1759 dated March 13
pointed out that Malev had been operating regularly once weekly to Schiphol since
February 28. The Embassy has brought this matter to the attention of an official
of the. Ministry of Economic Affairs., who indicated some embarrassment at the appar-
ent discrepancy in Cocom Doc. 2916 but suggested that KGM might have found a
stop-gap solution to the difficulty.
As reported in a telegram from Paris (POLTO 2828 dated March 12) the UK dele-
gate has new notified Cocom informally that he would soon submit an exception
proposal for similar equipment. The U.S. delegate asked him privately if this
was for Hungary and whether it might be the equipment to be ordered from the manu-
facturer mentioned in the Dutch proposal. The stated in the reply 25X6A
that he had no further information at present, than that given to the committee., but
added that it was quite possible that the answer to both questions will be "Yes".
25X6A
In addition to the Dutch and cases, NG I has before it for consideration
(.Amembassy Stockholm Desp. 830 dated Jan. 28) a request submitted to the Embassy
by the Scandinavian Airline System for permission to sell to the Hungarian Airlines,
Malev., instrument landing system equipment purchased by SAS from the U.S. as sur-
plus during 1948-50. At its meeting of March 13 the Chairman of WG I noted that
with one exception the inclination of the group was to authorize Embassy Stockholm
to inform the Swedish authorities that the U.S. has no objection to the sale by
W ,to Malev of the IIS equipment listed in Stockholm Desp. 830., but that a firm
position on this case should not be taken by the group until a reply had been re-
ceived from Stockholm to A-346 of March 4 regarding the issue of whether a U.S.
license for the reexport of this equipment was required.
Paragraph 35 of the NSC paper on the U.S. Civil Aviation Policy Toward The
Sino-Soviet Bloc provides that aviation safety equipment may be exported to
European Satellites. U.S. proposals for a common policy in civil aviation re-
lations with the USSR and the European satellite countries have been discussed
with the UK and have now been submitted to the North Atlantic Council.
The reasons for the Department of Defense? s objection and appeal to EDAC,on
this case will be outlined in a separate Defense memorandum.
Distribution
ED List Parts I & II
WG I (limited)
SECRET
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