COORDINATING COMMITTEE RECORD OF DISCUSSION ON EXPORT OF EQUIPMENT FOR THE MANUFACTURE OF EMBARGOED GOODS TO NON-MEMBER COUNTRIES IN FREE WORLD MARCH 17TH, 1960

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62-00647A000200020074-8
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: December 9, 2016
• Document Release Date: August 20, 1998
• Sequence Number: 74
• Publication Date: March 28, 1960
• Content Type: MIN

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CONFIDENTIAL
March 28th. 1960 COCOM Document No. 3925
COORDINATING COMM
RECORD OF DISCUSSION
ON
EXPORT OF EQUIPMENT FOR THE MANtFkCTURE OF EMBARGOED GOC?S
TO NON4F21BER COUNTRIES IN FREE WORLD
March 17th, 1960
Present: Belgium (Luxembourg)y Denmark, France, Germany, Italy, Japan,
Turkey, United Kingdom, United States.
Reference: 0000M Document No. 3890.
1. The CH1IRMILN drew the attention of the Committee to the question
which had been raised by the German Delegation concerning the export of
equipment for the manufacture of embargoed goods to certain non-member
countries in the Free World and whether it would be desirable to obtain
an assurance that the goods would hot be exported to the Soviet Bloc.
The German Delegate had also enquired whether other Member Countries
had been faced with a similar problem. He invited Delegates to give
the views of their authcrities.
2. The UNITED STATES Delegato said that his authorities were grateful
to the German Delegate for having raised this problem. They recognised
the difficultly irvolvo:? and felt that the problem could become more
significant as new Governments emerged in the less developed areas of the
world and as less developed areas proceeded with industrialisation.
The practice of the United States in this respect was as follows:
controls were maintained over various commodities and technical data
which were not on the International Lists even if these were consigned
to destinations outside the Sc'riet Bloc. These controls enabled
investigation to be madi of the use to which the material would be put.
If there were evidence that the material would be used to produce
embargoed goods for the Soviet Bloc the United States authorities would
refuse an export licence. In addition, certain controls were exercised
over the export to the Bloc of goods produced abroad from certain
United States technical data. The provisions of the Mutual Defense
Assistance Control Act were also effectively relevant in this context.
The Delegate commented that these remarks broadened the scope of the
German question to refer to technical data, which he was sure was
consistent with the German intent.
3. The Delegate continued that his authorities agreed with the
prima facie view of the German Government that it was desirable to
try to obtain an assurance that embargoed goods produced on equipment
obtained from Member Countries should hot be exported to the Bloc.
The problem was of course easiest to deal with when the goods were
already under some form of control to destinations outside the Soviet
Bloc. In a case where a Member Country maintained no controls over
the export of a commodity or technical data to non Bloc destinations,
but where there was evidence that the export would be used for the
production of embargoed goods for the Bloc, that Member Country might
nevertheless find feasible ways to prevent embargoed products from
reaching the Bloc. The Delegate added that his authorities felt
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COCOM Document No. 3925.
that the maximum exchange of information in th, Committee on practical
problems of this kind would he to the benefit of all Member Countries.
COCOM discussion of such problems was desirable also because of the
light such discussions could throw on the adequacy of the COCOM lists.
The exchange of information itself could be of great benefit to
Member Countries even if no agreement were sought or reached in the
Committee on uniform action to be taken.
4. The UNITED KINGDOM Delegate asked if the German Delegation could
be more specific concerning this particular problem. The United
Kingdom authorities felt that it was no more than a hypothetical
question. Member Countries already took steps to see that the
eventual end-use was the one originally stated and that any know-how
involved was safeguarded. It did not seem necessary to seek further
assurances which might give offence to legitimate customers and
which in any case could not be enforced. As far as the Commonwealth
countries and Dependent Overseas Territories were concerned, they
were all in a position to control List I exportato the Soviet Bloc.
His authorities would certainly study further any specific case
quoted by the German Delegation.
5. The ITALIAN Delegate said that his authorities were glad that
this question had been raised by the German Delegation since they
presumed it stemmed from concrete facts. In their opinion it would
be difficult to ask for a guarantee from the country of destination.
They would appreciate supplementary information about the case submitted
by the German Delegation in order to see whether it would then be
possible to work out some form of control, based perhaps on the
periodical exchange of information on such exports to third countries.
6. The FRENCH Delegate said that the remarks made by his United
Kingdom colleague with reference to the British Commonwealth also applied
to the countries of the :trench Community. The p_robleri raised by the
German Delegation, however, referred to nun-member countries. 6
statistical approach to the problem would not be easy since Finland
was the only non-member country for which statistics were at present
required. The French authorities considered that it would be
extremely difficult to trace equipment that had been sent to non-
member countries but they were willing to participate in a discussion
on the means by which this might be done. If a concrete case occurred,
they would make enquiries to determine whether the embargoed goods had'
in fact been exported to the Bloc and would take precautions to ensure
that no breach was opened in the control system by this means.
7. The BELGIAN Delegate said that it was his authorities[ under-
standing that the problem was concerned with the export of embargoed
equipment only to completely non-member countries, i.e, countries of
the British Commonwealth or French Community were not involved.
They considered that many difficulties would arise from the praotical
point of view: even if a guarantee were given it would be difficult
to be certain that it was honoured. There was, moreover, a risk of
exerting an unfavourable influence on commercial relations if non-
member countries were asked for assurances as to the de tin -tdon of
the goods they produced with this equipment. For these reasons
the Belgian authorities hhd never sought such assurances. They
felt that the bast procedure would be to study each case individually.
The Delegate continued that until now the export of embargoed equipment
from Belgium to non-member countries was forbidden unless a guarantee
had been obtained that it would not be reexported to the Soviet Bloc.
This guarantee did not cover the export of goods made with this
embargoed equipment.
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COCOM Document No. 3925
8. The DANISH Delegate commented that it would be very difficult
to control the reexport of goods from non-member countries. He felt
that the most satisfactory solution would be to extend the cooperation
of non-member countries in the COCOM control system.
9. The UNITED STATES Delegate said that in general the cooperation
of non-member countries was good. This did not mean that Member
Countries should not guard against the possibility of frustration
wherever they could. The fact that non-member countries already
cooperated satisfactorily indicated that such cooperation as might
be sought in terms of the problem the German Delegation had
raised could be achieved without disrupting commercial or political
relations.
10. The JAPANESE Delegate said that the position of his authorities
was the same as that of the United Kingdom: they did not favour the
German suggestion that guarantees should be sought because of the
administrative difficulties involved. It would be difficult to decide
the coverage of the equipment in question because it might manufacture
both embargoed and non-embargoed goods.
11. The GERMAN Delegate thanked the Members of the Committee for the
views they had expr3ssed. He assured his French and United Kingdom
colleagues that his authorities had no problem with exports to
countries of the French Community, the British Commonwealth and
Dependent Overseas Territories. The problem lay with the uncommitted
countries, the non-cooperating non-member countries. His authorities
were well aware of the practical problems which might be involved,
as for example, the danger of harming normal business relations
mentioned by the Belgian Delegate, The conclusion to be drawn
would seem to be that all !ember Countries should do their utmost
in a discreet way to a-void the frustration of the COCOM controls.
12. The UNITED STATES Delegate pointed out that his own remarks
had been based on the assumption that the problem encompassed the
export of non-International List I commodities to non-member countries
where they might be used for the production of embargoed goods.
13. The FRENCH Delegate asked his United States colleague what
problems could arise where the export of non-embargoed equipment
was concerned? In the first place, it would be impossible to ascertain
what was produced from exported raw materials. For example, non-
embargoed steel plates might well be used in the construction of a
machine for making ammunition. In the second place it should be
remembered that non-embargoed equipment could be exported to the Soviet
Bloc direct.
14. The UNITED STf'tIS Delegate further stated that the problem with
respect to goods that were not internationally embargoed was perhaps
less obvious in Member Countries where the control system was limited
to the COCOM embargo. In the United States it was natural and
logical to take into consideration certain commodities which were
not covered by the international embargo and the United States
Delegate understood that such items were prominently involved in
the German presentation of this problem. It was obvious that the
export of certain types of non-embargoed equipment to non-member
countries could be used to facilitate the supply of embargoed
products to the Soviet Bloc.
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15. The GERMAN Delegate said that he felt that part of the discussion
might be somewhat theoretical. Each Member Country took the responsibility
for applying the controls agreed by its authorities, which was the COCOM
system as far as most of them were concerned. All Member Countries
would certainly regret the fact that finished embargoed products might
be exported to the Soviet Bloc from a non-member country but it would
seem impossible to impose conditions on the sale of non-embargoed
equipment to non-Communist non-member countries whereas the Bloc could
purchase such equipment without limitation.
16. The FRENCH Delegate commented on the United States reference
to the level of controls applied by the Members of the Committee. A
certain number of products :rhich were not caught by the International
Lists were caught by a special list of the Ministry of National Defence
and represented a stricter form of control.
17. The UNITED KINGDOM Delegate agreed with his German colleague
tMember Countries should simply do their utmost to avoid the
frustration of the control system.
18. The UNITED STATES Delegate said, with respect to the remarks
of his French colleague, that his own observations had not been
directed towards any particular country. The fact, however, that
some Member Countries went beyond the COCOM controls indicated that
the problem in this area was greater than some Delegations had
indicated. He felt that the German Delegate's summing up had not
been in terms of the ideal solution but rather in tems of what
had been heard at the present. discussion of the practices currently
applied by the Members of the Committee. Finally, the Delegate
might wish to refer to this subject again at a later date.
19. The GERMAN Delegate confirmed that his summing up had dealt
with the views expressed at the present meeting.
20. The CHAIRMAN summed up the discussion by saying that the lack
of decision inthe present debate was probably because there was a
certain variety in relations with non-member countries. Some
cooperated fully, others with varying shades of success. The beat
general solution was obviously to improve this cooperation. Some
Delegations had informed the Committee how they dealt with the typo
of case under discussion; other Delegations had said that controls
would be difficult to enforce. It was well known that it was
possible to insert certain conditions in ordinary commercial
contracts, for instance limiting production to certain areas.
Finally, all Member Countries should try to obtain the maximum
possible within the limits of the case. If assurances were not
observed there might be indirect ways of dealing with such problems.
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