COORDINATING COMMITTEE REPORT BY THE CHAIRMAN OF THE SUB-COMMITTEE ON EXPORT CONTROLS 19TH TO 22ND MAY 1959

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62-00647A000200090001-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 25
• Document Creation Date: November 16, 2016
• Document Release Date: March 24, 2000
• Sequence Number: 1
• Publication Date: August 26, 1959
• Content Type: REPORT

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C ON P I D E N TI AL
090001;-1
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E
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COCCM Dcounent Sub-C(59)4
COORDINATING CCLIIaTTEE
REPORT BY THE CHAIRIAAN OF THE SUB-CO +i'iiU TTEE
ON
EXPORT CONTROLS
BELGIUM. (LUXEW1B0UnG)
+tr. Blondiau (Chairman)
Mr. de Meester
4r. koirier
itANCE
Lr. Varnoux
Mr. 'oirier
{fr. Guinebault
ITALY
Mr. Cortese de Bosis
iir. Zilocchi
1rr. Paoli
NORWAY
19th to 22nd May, 1959.
CANADA
DENMARK
Mr. Henrichsen
Mr. Lund
GERMANY
Dr. Kruse
Mr. Campbell
Mr. von Hahn
Ar. Vaeth
htr. Mitsui
Mr. Tokuhisa
Mr. Eguchi
Mr. Nebashi
TURKEY
Mr. Oktay Iscen
UNITED STATES
14r. Allen
Mr. Goinga
Mr. Borton
Mr. Anderson
A r. Mac Caffrey
Mr. Smith
Mr. Holman
C O N F I D E N T I A L
GREECE
NETHERLANDS
UNITED KINGDOM
air. Wood
Mr. Browning
Mr. Smith
State Dept. declassification instructions on file
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C08OM Document Sub-C(59)2'
CONTENTS
Paragraphs gages
I.
Arproval of the 6genda
1-7 3
II.
Chairman's Report on the last
meeting
8
3
III.
Diversions
9
- 63
3 - 31
Cases to be considered
10
- 39
3-7
Possible loopholes in trans-
actions involving non-1ember
Countries
40
- 55
7-9
Exchange of information on East-
West traders involved in the
shipment of strategic commodities
to the Sino-Soviet Bloc
56
- 63
10 - 11
IT.
Review of existing procedures
64
- 135
11- 19
(a) I.C./D.V. Procedure
64
- 118
11 - 17
(b) T.A.C. Procedure
119
- 135
18-19
V.
Revision of the Commodity Identi-
fication Aanual
136
- 137
20
VI.
Publication of amendments to the
new Lists
138
- 149
20 - 21
VII.
Proposal to establish a Working
Group of control service officials
150
- 163
21 - 23
VIII.
Statistics on Secondary Controls:
Dependent Overseas Territories
164
- 167
23
IX.
Cooperation by Non-Aember Countries
168
- 169
23-24
1.
Addresses of Authorities coopera-
ting in the export controls system
170
- 171
24
11.
Next Aeeting
172
24
III.
Other questions
173
Text submitted by the United States
concerning the exemption granted to
Government agencies in the context
of the I.C./D.V. procedures.
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1. APPROVAL OF THE AGENDA
Annex to COCOM Document 3486)
1. While concurring in the agenda, the UUI? D STATES Delegate observed: (a)
that Item 3(c) would appear to be appropriate for discussion in either the Sub-
Committee proper or in the Working Group which the United States anticipated
would be set up for the examination of diversion cases; and (b) that Item 3(d)
appeared to be an item primarily for consideration by the Sub-Committee itself.
2. The United States Delegate further suggested that Item 3(bXl) (Diversion of
Argentine Borax) be combined with Item 3(b)(3) of the agenda inasmuch as the
United States had submitted a diversion case on Argentine borax (COCOM Doe.
3528) which would be considered under the latter item.
3. The approval of the Agenda Cave rise to an exchange of views regarding
Item 7(a) which concerned a German suggestion for the creation of a Working
Group composed of control service officials which would study the problems ari-
sing from the interpretation of the International Lists and the Administrative
Principles.
4. The F1-ENCH Delegate considered that this problem had a political aspect
and did not lie within the competence of the Sub-Committee but in that of the
Coordinating, Committee.
5. The GE6AN Delegate pointed out that his proposal was intended simply to
allow of a comparison of points of view between officials responsible for apply-
ing the controls.
6. The UNITED STATES Delegate expressed the view that Item 7 of the agenda
would appear to be a matter more appropriately for consideration by the Coordi-
nating Committee, except for certain specific problems which might be discussed
bilaterally.
7. The CHAIN having observed that he would take care that the political
aspect of the matter should not be touched on, the SUB-COMMITTEE approved the
Agenda set out in the Annex to COCOM Document 3486.
II. CHAfliAAN'S REPORT ON THE LAST TING: POSSIBLE COM,wENTS
COCOM Document No. Sub-C(59)1 B)
8. The Chairman's report on the Sub-Committee's previous meeting did not give
rise to any special comments.
III. DIVEitSIONS
(a)
9. In accordance with a United States proposal, the examination of diversion
cases was intended (1) to determine where closer cooperation among the partici-
pating countries could or might have frustrated a diversion and (2) to appreciate
to a closer extent the complexities of the diversions, the devious routes uti-
lised, and a clear identification of the techniques.
(b) Cases to be considered
(i) Attempted Diversion of Boracite (COCOA Document 3468)
10. The Sub-Committee examined the case referred to in COCOM Document 3468
which concerned an export of 6,700 tons of boracite from Turkey to Greece.
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11. The TURKISH Delegate stated that his authorities had issued the export
licence asked for against an IC No. 1225 issued by the Bank of Greece. On the
5th March 1959 the Greek vessel ",4artha" had loaded the 6,700 tons of boracite
and had left Turkey on the 11th March. The Turkish authorities had subsequently
been informed by telegram of the fraudulent nature of the transaction. It was
to be noted moreover that it had been impossible to trace the exact address of
the Greek importer. Upon receipt of this telegram, the Turkish authorities had
got into touch with the Greek authorities: as the shipment had been paid for
f.o.b. by the Greek importer, the goods belonged to the latter.
12. The GREEK Delegate in his turn provided the following details: the
6,700 tons of boracite involved had been intended at the outset for delivery to
Yugoslavia. The following conditions had at that time been stipulated for the
issue of an import certificate: (a) a credit was to be opened in Yugoslavia, (b)
the exporter was to provide a Yugoslav import certificate, (c) a 100% guarantee
was to be paid and a document certifying the arrival of the goods in Yugoslavia
was to be submitted within two months. The Greek trader had been unable to
comply with these cunditions. When the Greek Government had been informed that
the boracite consigned to Greece was in fact on the way to the Soviet Bloc, they
had ordered the ship to roturn to port at the Piraeus. The action taken by the'
Greek authorities had been forcible and had involved serious risks because the
injured parties might claim damages in Court. Since the seizure of the goods,
the Greek legal authorities had been preparing this case. The Delegate stated
furthermore that payment had been made to the Turkish exporter in dollars and
not within the normal framework of the Greco-Turkish clearing arrangements.
13. In this connection the CHAIR Y10 pointed out that as Greece had not at the
present time liberated their payments, it was necessary to act with circumspec-
tion before issuing an export licence. The Chairman added that it seemed to him
that certain Turkish trading companies were unaware of the status of borax.
14. The TURKISH Delegate stated that as a licence was required for the export
of this product, it appeared surprising that Turkish companies should not know
of its strategic nature. Nevertheless a reminder would be sent on this subject
to the companies concerned.
15- The UNITED KINGDOM Delegate stated that as a United Kingdom firm seemed
to have been involved in this matter in the capacity of agent for the owner of
the ship and to have sent the captain the order to return to port, the United
Kingdom authorities were at present carrying out an enquiry to determine the
degree of responsibility of this firm and whether their action constituted a
violation of the laws of the United Kingdom.
16. The GE W N Delegate noted with satisfaction that the goods had returned
to Greece, but asked whether there was not still a risk of their being diverted
to an illegal destination.
17. The TURKISH Delegate replied that obviously Greece did not consume such
a large quantity of borax and that it was now the task of the Greek authorities
to dispose of it legally. In reply to the Italian Delegate, who asked whether
the goods had been imported finally into Greece or only unloaded in transit,
the Turkish Delegate said that according to the information he had received, any
re-export from Greece would have to be authorised by the Greek authorities. In
answer to a question from the French Delegate, the Turkish Delegate stated that
his authorities had not yet received the DV certificate concerning this consign-
ment.
18. As regards the identity of the importer, the Sub-Committee noted that the
IC had been issued in the name of a firm which had no existence in Greece and
that the individual involved, although living in Frankfort on the Main, was not
registered in Western Germany and thus the Federal German authorities had no mean.
of taking; action against him.
19. The UNITED STATES Delegate wished to stress the fact that, as his country
was the principal world exhorter of borax, the United States authorities had per-
fected over a number of years a system of control for this product, regarding
which frequent attempts at diversion were made. Pointiug out that cooperation
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'between participating countries had made it possible to frustrate the present
s.ttempt, the Delegate stated that this was an appreciable result but that it
would be still better to prevent such operations entirely. It was with that
object in mind that the United States Government made certain first of all of
the integrity of the parties to a transaction and of the regularity of their
participation in the commerce in question; basing themselves moreover on an es-
timate of the annual needs of the countries concerned, the United States autho-
rities judged whether the quantity whose export was envisaged was or was not
normal and, when the order was higher than the known needs, end-use checks were
carried out. The United States Delegation, while making no claim that this
system was infallible, nevertheless recommended its application by other Member
Governments.
2G. The CHAIiULAN summed up the discussion of this case by noting that this,
diversion had been prevented thanks to close cooperation between Member Govern-
ments and that the Greek and Turkish Governments were to be commended for the
prompt and effective measures which they had taken once the attempted diversion
had been discovered. Now however that the boracite had been unloaded in Greece,
all necessary precautionary measures should be taken to assure that the material
should be finally disposed of in conformity with the Committee's agreed procedures
and to an approved ultimate destination. The Greek Government would certainly
have the full cooperation of all Member Governments in this connection. There
should also be emphasised the importance of continued cooperation between Member
Governments, not only in this case where only participating countries were invol-
ved, but also in other cases, particularly those involving large shipments of
strategic commodities to non-member countries.
(ii) Diversion of Argentine Borax
COCOM Document Sub-C(59)1-0-paragraph 26(2) of the Annex; COCOM 3528)
21. The Sub-Committee studied the United States memorandum (COCOM Doc. 3528).
In this paper the United States Delegate informed the Sub-Committee that the
United States endeavoured to keep currently informed on the development of new
strategic mineral resources in certain non-member countries which might give rise
to new strategic control problems. The United States and certain other Member
Governments had followed the practice of reporting such problems to the Committee
or Sub-Committee with suggestions for corrective action. Member Governments able
to wake contributions in this field were encouraged to do so.
92. The case under consideration concerned the purchase by the Communist
Chinese Trade Mission in London of large quantities of Argentine borax. A
Belgian firm, acting as a commission agent, had intervened and had turned the
order over to a German firm owned by a German businessman who was reported to
control several companies. The order then passed into the hands of a Liechten-
stein firm who handled the commercial negotiations with the Argentine producer
and exporter of the borax. The complexity of the channels was such that at
least five intermediaries were involved between the Chinese purchasers and the
-rgentine exporter. The actual operation had been carried out in the following
manner: an export licence for 1,000 tons of borax had been issued for despatch
to the Netherlands. The goods had been loaded in January and in April 1958 on
board Polish vessels ostensibly destined to the Netherlands but actually destined
for Gdynia and thence to Communist China. As far as payment was concerned, a
Belgian firm had opened a revolving letter of credit in favour of the Liechten-
stein firm. 611 these precautions had had to be taken by the traders because at
the time Argentina was re-examining her system of controls to the Sino-Soviet
Bloc and had temporarily suspended the issue of export licences for that area.
23. The UNITED STATES Delegate said that, despite the fact that the Argentine
had now instituted controls which would make a repetition of this diversion un-
likely, borax continued to be sought by the Bloc from all possible sources and
that extreme caution should be exercised by all Member countries in licensing
borax exports. The Delegate pointed out that, in keeping with the recommendation
of the Sub-Committee at its November 1958 meeting, the names of the countries in-
volved in this case had been included in the United States memorandum but a
letter code had been substituted for the names of firms and indivdduals. The
Delegate added that he was prepared to make the names of firms and individuals
involved available to other Delegations in accordance with thh wishes of the Sub-
Committee.
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24. In reply to a question from the Chairman, the United States Delegate
stated that the Argentine Government was not prepared to institute the T.A.C.
procedure at present.
25. The BELGIAN, FRENCH, GERMAN and ITALIAN Delegates pointed out that
in the absence of the T.A.C. procedure, the customs services in their countries
would not be able to hold up a consignment of Argentine borax in illegal transit
to the Sino-Soviet Bloc. It would consequently be desirable to obtain from the
Argentine Government either the adoption of the T.A. Certificate itself or at
least an assurance that that Government would accept the holding up by the
customs services of the transit country of a consignment of borax of Argentine
origin passing in transit through the territory of a participating country on
the Vay to the Sino-Soviet Bloc.
26. The CHAIRMAN added that in order to intervene in cases of ts'anait of
Argentine borax, the administrative authorities in participating countries
would need to be able to quote a legal text.
27. The UNITED STATES Delegate pointed out that as the Argentine
Goveftment had undertaken not to export borax to the Sino-Soviet Bloc, the
application of the I.C./D.V. procedure should suffice to prevent any
diversion of this product when expor a1 nm the Argentine. He nevertheless
undertook to inform his Government of the misgivings of certain other
Delegations with a view to determining what further steps might be feasible.
28. The CHAIRMAN summed up the discussion by saying that, pending the
result of the steps taken by the United States Government in order to
secure application of the T.A.C. procedure by the Argentine Government
for shipments of borax, it would be advisable for Member Governments to
advise their customs services at ports of entry to keep a very careful
watch on all shipments of Argentine borax, whatever the destination.
This would be an unofficial measure pending the institution of the T.A.C.
procedure.
29. The examination of the case described in COCOM Document 3528 also
brought up the question of the mention in the Committee of the names of the
firms implicated. As several Delegations were opposed to this practice,
the United States Delegation stated that they were prepared to continua
the examination of this question bilaterally wits the interested
Delegations. (See also in this connection paragraphs 56 to 63 below.)
30.? The BELGIAN Delegate nevertheless reserved the right to verify
whether the opening of a letter of credit by the Brussels firm involved
ought not to fall within the scope of the financial controls carried out
by the Belgian authorities.
31. The CHAIRMAN, in summing up, pointed out that the application in
this particular case of the T.A.C. procedure might perhaps have enabled
the various countries of transit to hold up the goods. He suggested
moreover that each country having a citizen involved in this affair should
endeavour to discover what methods might have been used in contravention
of national regulations.
32. This diversion case having involved a firm in Liechtenstein, the
FRENCH Delegate asked to what procedure the export of strategic items to
this country was subject.
33. The SUB-COMMITTEE noted that Liechtenstein did not cooperate in the
Committee's control systems, did not issue ICs and that the end-use documents
- obtained on several occasions by the Belgian authorities - consisted of
declarations signed by the importer. It appeared consequently to be advisable,
in the case of exports to Liechtenstein of relatively large quantities of
strategic items, to carry out enquiries as to the end-use before issuing
the licence.
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(iii) Other Diversions
(COCOM Document 3531)
COCOM Document Sub-C(59)28
34. The Sub-Committee then studied the memorandum submitted-by the
United Kingdom Delegation (COCOM Document 3531) concerning an illegal des-
patch of roller bearings covered by Item 1601. It was stated in this
memorandum that the United Kingdom authorities had delivered an
Import Certificate for the import of the bearings involved and that
this I.C. bore a triangle as the bearings were to be sent to
Switzerland. The United Kingdom trader having applied for a "waiver"
licence permitting him to dispose of the goods without importation into
the United Kingdom and to have them sent to Switzerland via Rotterdam,
the United Kingdom authorities had had certain doubts and had asked for
a Swiss I.C. beforehand. As this had hot been obtainable, no "waiver"
licence had been issued. As to the original United Kingdom I.C., this
could not be recovered from Italy. It was found subsequently that this
document had been communicated to United States exporters and that on the
strength of this the United States authorities had erroneously issued an
export licence. The goods had been despatched to Naples, then reconsigned
to Rotterdam and from there sent to China. Proceedings had been taken
against the United Kingdom firm.
35. The UNITED KINGDOM Delegate reminded the Sub-Committee that this
matter had already been cursorily examined during their last meeting.
The present full account showed the complexity of the diversion methods
which had been employed and the Delegate stressed that only the application
of the I.C./D.V. procedure had made it possible to discover this operation.
36. The GERMAN Delegate remarked that the starting-point for this
diversion had been the circumstance that it had been possible for an
I.C. issued for an Italian firm to be presented in the United States. He
announced that his Delegation intended to submit certain suggestions with
the aim of ensuring that ICs should be better followed up after being
issued. (See paragraph 73 below.)
37. Answering a question put by the Belgian Delegate, the UNITED KINGDOM
Delegate stated that the triangular IC provided for prior importation `..into
the United Kingdom but that the re-export to Switzerland would only have been
authorised upon presentation of the Swiss Government's Blue Certificate.
38. The UNITED STATES Delegate recalled that certain particulars of this
case had previously been reported by the United States in COCOM Document 3269
and that the case had also been discussed during the November 1958 Working
Group session. The Delegate expressed gratification that the United Kingdom
authorities had pursued the case and that the United Kingdom firm involved
had been brought to trial.
39. The CHAIRMAN summed up by saying that this matter had revealed once
again the need for licensing servicba to recuperate un-used documents.
He also pointed out that in this particular case the Swiss IC ought to have
been required before the issuing of a United Kingdom IC bearing a triangle.
(c) Examination of Possible Loopholes in Transactions involving
non-Member Countries
(i) Yu olaia
40. In this connection the Sub-Committee studied the United Kingdom
memorandum (COCOM Document 3530) concerning the United Kingdom's experiences
in their commercial re ations with Yugoslavia. From this memorandum it
appeared that the'documents issued'by Yugoslavia under the IC/DV procedure
IL
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sometimes varied and in general left mach to be desired. In the case summarised
in COCOM Document 3530, the operation had not been finalised as the United
Kingdom authorities had suspected a fraudulent attempt and the United Kingdom
Government wished to know what had been the experiences of other Member
Governments in this context.
41. The ITALIAN Delegate referred to a similar case recently noted in
his country. The Italian authorities having considered that the end-use
certificate given by a local chamber of commerce was inadequate, the
proposed transaction had not been carried out.
42. The UNITED STATES Delegate stated that his authorities had also
had highly unsatisfactory experiences in this field. They had endeavoured
to obtain duplicates of ICs forwarded through official channels and considered
that the documents supplied by the Yugoslavs - oven when they emanated from the
Federal Chamber of Foreign Trade - did not always provide the required security.
This was even more the case as regards DV Certificates and the United States
authorities considered that the bast guarantee consisted in making sure that
the quantities of goods to be exported were reasonable as compared to the known
needs of Yugoslavia.
43. The FRENCH Delegate stated that, besides the end-use certificates
issued by the Federal Chamber of Foreign Trade, French departments had received
Delivery Verification Certificates from Yugoslavia. The Delegate considered
that, without proceeding through diplomatic channels to a material verification
of the end-use - an operation which was outside the competence of the
authorities of participating countries - it should be possible for the
services of the other countries participating in the Committee to obtain
documents similar to thcse received by French departments.
44. The BELGIAN Delegate stated that Belgian Governmental services had
received photocopies of documents oountorsigned on the back by the Federal
Chamber of Foreign Trade.
45. The GERMAN Delegate asked whether the United States Government could
endeavour to ascertain from the Yugoslav Government what were the official
documents to which the authorities of Member States could give credit and also
the names and addresses of the Yugoslav authorities entitled to issue and
receive control documents.
46. The ITALIAN Delegate asked whether, in the same process, the United
States Government would be able to obtain copies of the official Yugoslav
End-Use Certificate.
47. The UNITED STATES Delegate stated that his Government had not as
yet been able to obtain copies of the End-Use Certificate; he would never-
theless transmit to his authorities the suggestions which had just been
pat forward.
48. The CHAIRMaN sftmmed up this exchange of views by noting that there
still existed some confusion regarding Yugoslav control documents. The
Sub-Committee would be grateful if the United States Government could
obtain exact details as to the receivable documents.
(ii) ku a
49. The GERMAN Delegate referred to the case of a German firm which,
after the Federal authorities had refused them a licence to export a List
I item to the U.S.S.R., had stated that they would be able to carry out the
operation through Austria, when they would obtain an IC and a DV Certificate.
The Delegate stated that he had himself examined the Austrian control
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documents: the IC was almost identical with the document established by the
Coordinating Committee, and as for the DV Certificate, it stated that the
goods were "under the control of the regulation for Austrian foreign commerce".
Thus* in this case it had been shown to be possible, with the authorisation
of the Austrian Ministry of Commerce, to import an embargoed item into Austria
and to re-eiport it from there to the U.S.S.R.
O. The BELGIAN Delegate stated that the Belgian governmental services
only authorised a strategic export to Austria after a special study of the
end-use and after assfiring themselves in particular that the importing firm
was an industrial company adapted to the consumption of the goods concerned.
Replying to a question from the French Delegate, the Delegate stated that his
Government were unable to make enquiries outside the scope of the IC/DV
procedure, but that the name of the consumer firm frequently appeared on the I'C.
51. The GERMAN Delegate pointed out that although the name of the consumer
firm appeared on the IC, it did not appear on the DV Certificate. It was
difficult to refuse an export licence, because it was possible that the
importer would. place the goods in stock and re-sell them at a later date; the
end-user indicated was not necessarily the real one. The Delegate then
quoted other cases where, while issuing ICs, the Austrian authorities had
not concealed their intention to re-export the goods to the Soviet Bloc; in
a recent case, the German department concerned had written to the competent
Austrian Ministry in order to draw their attention to this fact: they had
received a reply to the effect that the Austrian authorities saw no necessity
to cancel the IC, but that naturally the German authorities were at liberty
not to accept it.
52. The CHAIRMAN noted that it would be advisable to re-examine exactly
what procedure was in force regarding Austria; he recalled that in the past
it had been understood than in certain cases the Austrian authorities, when
issuing an IC, reserved for themselves the possibility of informing the
exporting country confidentially that it would be preferable not to issue
any export licence upon presentation of the IC referred to.
53. The UNITED STATES Delegate referred to COCOM Document 3260 as
containing a statement of the extent of Austrian controls, adding that,
despite frequent approaches in an effort to obtain Austrian agreement to
adopt TAC controls, the Austrian Government had thus far been unwilling to
adopt that procedure. He invited attention to the austrian State Treaty
and Austria's changed status as perhaps accounting for Austria's position
with respect to the imposition of export and transit controls. While
voicing confidence in the sincerity of Austrian official cooperation in
IC//DV procedures, he said that the United States nevertheless conducted
end-use checks in cases where such action might appear to be desirable and
commended similar action to other Member Governments. The Delegate
expressed gratification that the German authorities had refused to grant
exhort licences in the two cases mentioned by the German Delegate, despite
the issuance of Austrian ICs, and expressed the hope that other Member
Governments would take like action in a similar situation.
54. The SUB-COMMITTEE recommended that the question of Austria should
be re-examined from the outset for its next session.
(iii) weden
55. The GERMAN Delegate confirmed that the customs arrival documents
issued by Sweden and called ":Ztillsedel" were completely valid. They could
thus be accepted wthout reserve as justification.
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(d) Exchange of Information between Delegations on East-West Traders
thvolvbd in the Shipment of Strategic Commodities to the Sino-Soviet
Bloc
(Secretariat Paper No. 105)
56. The CHAIRMAN drew the Sub-Committee's attention to the Secretariat
Paper No. 105, which had been prepared by the United States Delegation and
in which the anonymity of the firms involved was respected.
57. An exchange of views ensued regarding this question of anonymity.
The GERMAN Delegate referred to the discussions which had taken place a
few years previously in the Coordinating Committee on the question of a
possible "Black List"; A large number of countries, including Germany,
had at that time stated that their legislation did not allow of their
accepting the establishment of such a list, at any rate as far as concerned
their own citizens. The Delegate emphasised that this was a political
matter and, pointing out that the Coordinating Committee had always avoided
naming firms involved in any given affair, he stated the view that any
change in this rule would have to be debated in the Committee itself. For
their part, the German Delegation could state at once that they did not
favour such a change.
58. The UNITED KINGDOM Delegate stated that on the ladt occasion when
this question had been examined in the Coordinating Committee, the control
systems and the documentation in use had not attained their present degree of
efficacity and the means of verifying Soviet activities were much more
limited. The United Kingc'om Delegation believed that the time had come to
undertake the study of the question of an internaticnal observation list.
While recognising that certain legal difficulties might have to be resolved,
the Delegate stressed that a possible observation list should hot be
confused with a "suspension list" of the type which existed in the United
States and on which appeared the names of persons and firms to whom the
United States Government refused export privileges. The United Kingdom
authorities kept an observation list and the firms thereon had suffered
no suspension measures but were under special surveillance. The United
Kingdom Delegation would have no objection to exchanging with other
delegations the names appearing on the various national lists and they
considered that any system whose object was to prevent exchanges likely
'to be dangerous from the strategic point of view would be perfectly
legitimate provided it involved no discrimination of a legal nature.
59. The ITALIAN Delegate stated that this proposal involved very
serious considerations, both political and legal. A distinction should
be made between an exchange of information on a given firm and the
establishment of an observation list. The Italian Delegation considered
that this was not a matter for decision by the Sub-Committee and that it
would perhaps be more suitable if a proposal could be submitted in writing
and discussed in the Coordinating Committee.
60. The FRENCH Delegate believed it would be difficult to discuss item
3(d) on the Agenda without knowing the names of the firms involved. He
recognised nevertheless that the matter was complex and needed to be
approached with extreme care. The French Delegation considered it a
matter for regret that a firm which had infringed the controls on a single
occasion should appear indefinitely on a special list. It would moreover
be desirable that, when a Member Government asked the reason why one of their
citizens appeared On another Government's observation list, adequate
explanations should be given, failing which the whole matter should be studied
afresh by the two interested Governments. The Delegate stated furthermore that
if it were decided to proceed to exchanges of information in this field,
reciprocity should be assured. The French Delegation held the view that this
question lay outside the Sub-Committee's terms of reference and should be
forwarded to the Coordinating Committee.
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61. The JAPANESE Delegate stated that his authorities might be prepared to
communicate the names of their citizens who had been found guilty but not those
of individua]s or.Sxs under suspicion.
62. The UNITED STATES Delegate associated himself with the view expressed by
his United Kingdom colleague as to the desirability of examining the question of
an observation list. He stated that in the United States there existed published
lists of the firms to whom export privileges were refused and separate lists of
firms suspected of fraudulent activities but in respect of whom no administrative
steps had been taken owing to lack of sufficient tangible proof; The United
States Delegation considered that, despite the efficacity of the IC/DV and other
control systems, there was no doubt that the surest way was to deal only with
reliable firms. For this reason, without envisaging the establishment of an
international observation list, the United States Dole gation hoped that the
Sub-Committee might be able to carry out rewarding exchanges of information
on doubtful firms. The information supplied in Secretariat Paper 105 was
intended to serve as a basis for enquiries which interested Governments might
instigate later on.
63. After a further exchange of views, the CHAIRMAN summed up by saying that
this question went beyond the Sub-Committee's terms of reference. The Sub-
Committee agreed to refer to the Coordinating Committee the question of
exchanges of information on East-West traders involved in the shipment of
strategic commodities to the Sino-Soviet Bloc. This question might be
examined at that level from two aspects:
(1) the possible communication of names of firms in participating countries;
(2) the possible communication of names of firms in non-participating countrief
(this last category could also be sub-divided into:
(i) non-Member countries cooperating in the control system;
and (ii) non-Member countries not cooperating in the control system).
In view of the fact that this matter had been placed on the Sub-Committee's
agenda on the initiative of the United Kingdom and United States Delegations,
these latter might submit a document to the Coordinating Committee in order to
prepare- the discussions.
As to Secretariat Paper No. 105, the Sub-Committee omphasised the utility of this
document, which viould enable Member Governments to identify those of their citizals
who were involved and to carry out the necessary investigations.
IV. REVIEW OF EXISTING PROCEDURES
(a) IC/DV Procedure
(i) Return of unused ICs to issuing Authorities
COCOM Document Sub-C.(59) 1, paragraph 17)
64. The CHAIRMAN reminded the delegates that at the Sub-Committee's previous
meeting he had pointed out the danger of leaving unused ICd in the hands of
traders. He asked whether any Member Governments had made new arrangements
in this connection.
65. The GERMAN Delegate stated that since the Sub-Committee's last
session his authorities had reviewed their procedure and had found that
although the texts stipulated that unused ICs should be returned to the
competent departments, in practice this happened only rarely. The German
authorities had now decided to require importers to prove within a given
period that the goods covered by an IC issued by the Federal authorities had
actually been imported, or failing this, to send back the IC to the office
which had issued it. The German Delegation would be glad to learn whether
other participating countries applied a similar procedure.
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66. The JAPANESE Delegate stated that after the Sub-Committee's previous
session the Japanese Government, by a Ministry of Commerce circular issued at
the beginning of the year, had officially invited importers to send back unused
ICs to the competent authorities. In the event of the loss of an IC, when the
importers asked for a second IC to replace the missing one, the competent
department scrutinised the information submitted and only issued a second IC
if thoy were convinced of the bona Lidos of the request. To avoid wrongful
use of the document then granted, tho Japanese officials indicated on the
document itself that it was a second IC in replacement of a document which had
gone astray.
67. Tho ITALIAN Delegate statod that according to the rules which his
Govornmont had put into force importorw must inform the compotont departments
within four months of the action takon on an IC and must return it if it had not
boon implemented. Only in exceptional cases where doubt existed as to the use
made of an IC was an enquiry carried out through diplomatic channels.
68. The CANADIAN Delegate stated that importers were obliged, before the end
of the period of validity of an IC, to notify the approximate date of arrival of
the goods.
69. The UNITED STATES Delegate stated that after the Sub-Committee's last
session his authorities had changed the procedures applied In the case of third
countries not cooperating in the controls, to which they had previously been in
the habit of sending ICs. In such cases importers were now invited to make sure
that an IC was really required by the authorities of the exporting country, and
should this not be the case, they were required to send back unused ICs to the
issuing office: these documents were then cancelled. The United States
officials had found that the majority of ICs issued for imports originating in
countries not cooperating in the system had been returned to them. The Delegate
added that in certain exceptional cases his Government had had recourse to
diplomatic channels in order to obtain the return of an unused IC; it would
be useful if all Member Governments were to adopt this procedure.
70. The FRENCH Delegate stated that since 1958 the competent departments in
France had not noticed any irregularities in this connection, either in the case
of transactions between participating countries or of those involving third
countries.
71. The BELGIAN Delegate stated that this question had not constituted
any problem in his country, where unused documents had always been sent back
to the issuing offices.
72. The CHAIRMAN concluded that there had been a marked improvement as
regards the matter examined and that the results would certainly be satisfactry.
73. In connection with relations between Member
cSttaates, ethe nable GERMAN Delegate
gate
submitted the following proposal: when an export
of strategic goods from one participating country to another was refused, it would
be advisable for the a untry having issued the IC to be notified of this refusal.
Two methods would be possible: (i) the IC could be sent back through official
channels by the country having refused the export licence, (ii) the IC could be
handed to the individual uon~e~ ~d a but the ~ipo~ eng ~ ~t o 1~ thusbreeuperate
of the refusal of the req es export
the IC which had become unuseable. as to
this
proc 74. hto FRENCH
later on wethereorrnotritswould be peas blef r?him to e
undertook
accept this proposal.
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(ii) Transmittal of duplicate ICs to non-Member Countries - Problem of
non-Member Country Information
COCOM Document Sub-C.(59) 1, paragraph 17 of Annex)
75.' The FRENCH Delegate reminded Delegates that at the close of its Novemter
1958 session, the?Sub-Committee had recommended that the competent departments
of Member Governments should send to the authorities of non-Member countries
duplicate copies of the ICs they issued. The French officials, putting this
recommendation into effect, had begun by sending duplicates to the non-Member
countries adequately informed as to the IC/DV procedure and the motives for the
duplicates. Thep were however certain non-Member countries who were unaware of
the utility of the duplicates and the French Delegation felt that it would be
desirable for the authorities in these countries to know that they would
receive duplicates and to be aware of the use which they should make of them.
In particular it would be useful to warn them of the danger of issuing export
licences upon presentation of corrected ICs or copies. It would be helpful
to know which were the Member Governments responsible for informing non-Member
countries about this procedure.
76. The UNITED STATES Delegate stated? that his Government had already
explained the procedure to the Argentine Government; he would nevertheless
suggest to his authorities that they should make a fresh approach to the Argentine
authorities in this matter. The United States Government for their part sent
duplicates of ICs as soon as they know the names and addresses of the competent
departments in the various countries.
77. The GERMAN Delegate stated that it would be useful if all Member
Governments indicated the non-Member countries to which they sent duplicates.
The Federal German authorities sent duplicates of ICs to Austria, the Argentine,
Chile, Mexico, Peru and the Union of South Africa.
78. The CANADIAN Delegate stated that his authorities sent duplicates of
ICs to the competent departments in various non-Member countries and the Delegate
said that he would hand in a list of these to the Coordinating Committee. In
certain cases, the duplicates were sent to the 8anadian Commercial Counsellors
in the countries concerned.
79. The TURKISH Delegate stated that his authorities sent duplicates of
ICs to all the non-Member countries referred to in COCOM documents.
80. The ITALIAN, JAPANESE and NORWEGIAN Delegates stated that as a rule
their authorities sent duplicates of ICs to all cooperating non-Member countries.
They undertook to supply complete lists of the countries to which their authoriti?
sent the duplicates through diplomatic channels.
81. The GERMAN Delegate emphasised that it might be difficult in certain cases
to distinguish between cooperating non-Member countries and non-Member countries
which did not cooperate in the control system. In his view the first step should
be to determine exactly to which non-Member countries Member Governments sent the
duplicates of the ICs they issued.
82. The FRENCH Delegate stated that his authorities were at present sending
duplicates of ICs to Rhodesia, to the Union of South Africsa, to Malta and to
Austria. The Delegate stated that at the present moment the addresses of he one.
competent officials in eettain Member countries were unknown - Portugal, f
The Delegate suggested that it would be useful to send a circular letter to the
Governments of non-Member countries to inform them of this procedure.
83. Following a further exchange of views, the SUB-CCUMITTEE agreed that the
best method of informing non-Member countries of the use which should be made of
the duplicates of ICs would be to annex to these duplicates an explanatory note
which it would be for the Coordinating Committee to draft. The Sub-Committee
consequently recommended to the Coordinating Committee:
(a) to agree a text for an accompanying letter to be forwarded to non-
Member countries with duplicates of ICs;
(b) to invite Delegations to submit to the Secretariat a list of the non-
Member countries to which their authorities sent duplicates of ICs.
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84. The JAPANESE Delegate then pointed out that his Government had discovered
certain irregularities in the application of the system by Nigeria. In a certain
case the original of the Nigerian IC had been sent direct by the Nigerian importer
to the Japanese exporter, while the duplicate had been sent by the Nigerian import
to the Japanese Ministry for Foreign Affairs; moreover, it had been impossible
for the Japanese departments to distinguish the original from the duplicate. The
Delegate asked whether other Member Governments had met with similar difficulties.
85. The GERMAN Delegate took note of his Japanese colleague's query and under-
took to inform the Secretariat, for the Sub-Committee's next session, what had been
his Government's experience in this respect.
86. The UNITED KINGDOM Delegate stated that his Government, who had extensive
trade relations with Nigeria, had not noticed any irregularity in this connection
up to the present. On the Chairman's suggestion, the Delegate agreed to recommend
to his authorities to scrutinise carefully awe again the procedure applied by the
Nigerian Government and, if necessary, to invite the latter to remedy any defects
which might exist.
(iii) Exchange of Information on Irregular Practices and Discussion on
possible Oorrective Action
(COCOM Document Sub-C.(59) 1, paragraph 60)
87. The UNITED STATES Delegate referred to his Delegation's statement during
the Sub-Committee's previous session (COCOM Document Sub-C.(59) 1, paragraph 60)
which had mentioned two categories of problems, the first of which might be termed
transitory and the second relating to the basis for the enforcement of the embargo.
As to the transitory problems, the United States Delegation had nothing to add and,
for the second category of difficulties, the Delegate recalled that he had already
suggested (see paragraph 62 above) the adoption of a special watch system to be put
into force for known traffickers.
88. On the first point, as the JL ANE$E Delegate had indicated that the
authorities in Singapore and Nigeria were continuing to send ICs for items no
longer on the International Lists, the UNITED KINGDOM Delegate stated that the
new Lists had been transmitted upon publication to all United Kingdom overseas
territories; he would nevertheless bring this matter to the attention of his
authorities.
89. On the second point, the UNITED KINGDOM Delegate stated that since the
coming into force of the new Liste, his Government had strengthened their methods
of surveillance and to avoid wrongful descriptions of goods had adopted a now
system which was not expected to permit discovery of traffickers but which would,
they believed, discourage potential traffickers.
90. The CHAIRMAN, in summing up, expressed the hope that, in line with the
recommendations put forward in the Sub-Committee's previous session, the other
Member Governments would take the necessary stops to increase their vigilance.
(iv) Procedure to be followed in the case of Shipments of Strategic
Commodities to Government Agencies of Member Countries
(COCOM Document 946.6)
91. The ITALIAN Delegate stated that his Delegation had asked for this matter
to be placed on the agenda because they considered that in the case of exports
which it was known would be delivered to Government bodies in participating
countries it was not necessary to call for an IC, as the normal commercial papers
should suffice. The Italian Delegation would nevertheless be glad to know what
procedure was followed by other participatin_; countries in this respect.
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92. The CANADIAN and GERMAN Delegates stated that their authorities did not
require an IC in such cases and were satisfied with a certified copy of the
Government order.
93. The UNITED KINGDOM Delegate stated that this was also the practice
followed in his country when orders emanated from mLlitary authorities.
94. The FRENCH Delegate stated that in his view it would be useful to define
what should be understood by the term Government agency. The S.N.C-~,F. (French
National Railway) for instance was considered in France to be a Government agency
and it would be desirable that it should be so regarded by the other participating
countries.
95. The BELGIAN Delegate considered that when an order constituted a commercial
operation it should be dealt with in accordance with the IC/DV procedure. Hila
authorities believed that the only exemptions from this procedure should be
contracts issued by the Army or any other body of such a nature.
96. The GERMAN-Delegate considered that there were two catepries of.c.onsigtaees
which could be exempted from the necessity to send ICs: on the one hand, a Govern
meat agency or institution having no commercial interest and being under the control
of a Ministry, and, on the other hand, companies such as the S.N.C.F. for instance
where there was a certainty that they would not import goods in order to re-export
them illegally to the Soviet Bloc.
97;' The IT4LIAN Delegate noted that the drawing of a distinction between
nationalised cclipanies and companies under State control gave rise to an
identification problem. and that it would be sufficient to grant a derogation
for orders emanating from Ministries or from Government agencies.
98. The UNITED STATES Delegate then read out the text of a United States
regulation defining what the United States Government considered to be a Govern-
ment agency. (This text is reproduced as an Annex to the present document.)
99. The GERMAN Delegate stated his view that the text provided by the United
States Delegation constituted a minimum: for instance, railways and postal
services, which were public utilities, ought to be considered as Goverment
agencies. Then there ire other cases of nationalised companies, such as
Renault or Volkswagen. In this respect Member Governments should be left
free to decide whether or not ICs should be called for. On the other hand, the
IC/DV procedure should be applied automatically to companies which were more
commercial than industrial.
100. The FRENCH Delegate pointed out that as the United States had brought in
the idea of public services, companies such as the S.N.C.F, or Air France, which
in the main were financed by the State, should be exempted according to the terms
of the United States regulations. The Delegate concurred in the German Delegations
suggestion to leave to the discretion of Member Governments the decision to exempt
from the IC/DV procedure certain highly important industrial companies. As to
the distinction the United States made between domestic air lines and international
lines, the Delegate emphasised that in Eurobe there were no purely domestic air
lines, so that-the exemption would have to be extended to the international lines
when-they were considered as public services.
101. The UNITED STATES Delegate stated that such a distinction did of course
exist in the United States regulations, but that if the Sub-Committee agreed upon
another definition, his authorities would in that case amend their interpretation.
102. The UNITED KINGDOM Delegate reserved his position until after he had had an
opportunity to give careful study to the text provided by the United States. He
nevertheless emphasised the practical difficulties which might arise in drawing up
an inventory of the nationalised companies in the various participating countries;
in point of fact it would be practically impossible to keep such an inventory up
to date. The United Kingdom Delegation were in favour of maintaining the present
system for the time being.
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103. The DANISH Delegate expressed himself in favour of maintaining the
present system.
104. The TURKISH Delegate stated that in h1s country no distinction was made
between Government agencies and other categories of companies. The IC/DV system
was applied in all cases.
105. After a further exchange of views, the SUB-COMMITTEE agreed 'b af3bmftiftfited
of the United States regulations to the Coordinating Committee, while formulating
a reserve regarding the distinction between domestic air lines and international air
lines. It was agreed furthermore that no change should be made in the procedure
at present in force (COCOM Document 946.6) until the Coordinating Committee had
worked out a definition of Government agencies and taken a decision as to the
procedure which should be applied uniformly by Member Governments to these agencies.
(v) ,Excha a of Current S ecimens of IC/DV forms
COCON Document 3525)
106. The CANLDI&N, UNITED KINGDOM and UNITED STATES Delegates handed
specimens of their ICs and DVs to each Delegation.
107. The UNITED KINGDOM Delegate drew the Sub-Committee's attention to his
Delegation's memorandum (COCOM Document 3525) in which it was stated that as from
the 1st May 1959 United Kingdom Import Certificates were being issued from the
Export Licensing Branch and no longer from the Import Licensing Branch. The ICs
themselves had not been noticeably altered: the address of the issuing office had
naturally been changed and the certificates were perforated with a symbol of a
crown and the date of issue.
108. The CHGIRMtaN then invited Delegations to supply to the Secretariat, for
transmission to all Member Governments, copies of their ICs and DVs as currently
in use.
109. The FRENCH Delegate pointed out that as a French exporter had recently
submitted to his authorities a Hong Kong IC which differed from the usual form,
the competent French departments had waited to grant the export licence until
receipt from the Hong Kong authorities of the duplicate of this IC. As this
duplicate was similar to the original document, the French departments had
supposed that the Hong Kong authorities had decided to make a change. They
would be glad to receive confirmation on this point.
110. The CHAIRMItN invited the UNITED KINGDOM Delegate to draw his Government's
attention to this matter and recommended that whenaver a Member Government changed
the form of the documents they used, they should inform other Member Governments
and submit copies of the alt ed document to the Coordinating Committee.
(vi) Discussion of Possible Changes in IC/DV procedures
113. The GERMAN Delegate stated that his Government had found that one of the
principal causes of the hostility of trading circles to the embargo measures
agreed by the Coordinating Committee was the difficulty exporters encountered in
despatching goods to other Free World countries. The German Government therefore
wished to submit two proposals whose aim was to simplify the procedures in force:
(1) the extension of the use of global ICs for periods up to six months or even
a year in the case of companies carrying on regular trade in the same commodity
with a company in another participating country, provided that both parties
enjoyed a good reputation; (2) establishment of a set of documents relating to
a transaction and making available the history of that transaction.
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112. The CHAIRMAN stated that the majority of participating countries used
global ICs covering a given period. As to delivery verification, it should be
possible to sot up an accounting system of the current account type on the basis of
ICs issued and deliveries effected. The CHAIRMAN asked whether, as exporting
countries, Member Governments accepted global ICs and if necessary agreed to issue
several licences up to the total quantity covered by such an E.
113. The FRENCH Delegate stated that the competent departments-in France
accepted the global ICs sent to them and, in view of the advantages of this
procedure, they would examine the possibility of issuing them themselves.
114. The ITALIAN Delegate stated that when, upon presentation of an IC, the
Italian departments issued an export licence which was not used, its validity
could be extended, which amounted to extending the validity of the IC. The
Italian Government could see no objection to the principle of a general adoption
of'this procedure.
115. As to the second German proposal, the Sub-Committee noted that they were
not in a position to discuss this usefully in the course of the present session
and the GERMAN Delegate undertook to submit to the Coordinating Committee a written
proposal which might be studied at the Sub-Committee's next session. The Sub-
Committee agreed furthermore to propose to the Coordinating Committee the wider
use of global ICs (1) in so far as such documents would cover regular trading and
(2) on condition that the exporters and importers concerned enjoyed the entire
confidence of their authorities, Export licences issued on the basis of such ICs
would cover either the total quantity stated on the IC and would be renewable, or
a fraction of that quantity, in which latter case successive licences could be
prepared.
(vii) Discussion of Problems in connection with the Issuance of and
Rdauests for ICs due to Insufficient Commodity Detail
(COCOM Document 35
116. The UNITED STATES Delegate referred to the memorandum submitted by his
Delegation (COCOM Document 3518) which set out briefly the problems encountered
by the United States authorities as a result of an inadequate description of the
goods for which either an export licence or an IC was requested, together with
the methods to which the competent departments had recourse in order to solve
these problems. The United States Delegation would be glad to learn whether
other Member Governments had met with similar difficulties and, if so, how they
had solved them.
117. The GERMAN Delegate stated that the competent authorities in Germany
frequently received applications for ICs which designated the goods by the name
of the producing firm, which excluded all possibility of exact identification.
This problem generally arose in cases where the importer had not asked for an IC
on his own initiative, but because he had been requested to do so by the
authorities in the exporting country responsible for the issue of the licences.
In order to solve this difficulty, the departments granting export licences, when
calling for an IC, should indicate the exact definition in the International Lists
and the number of the item involved.
118. The SUB-COMMITTEE took note that this method solved the problem referred
to by the United States Delegation. In consequence they recommended that depart-
ments in exporting countries, when requiring an IC, should indicate to the applicant
exporter the number of the item on the international embargo lists covering the
product involved.
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W Examination of the Turkish Reply to the estionnaire
(COCOM Document 3195.12
119. The Sub-Committee noted that this reply called for no special comment.
(ii) Transit Statistics on its from Sweden and Switzerland
COCOM Document Sub-C.(59 1, paragraph 48 and the Addenda to COCCI
Documents 3195.6 and 3340.7 respectively.)
120. The CHAIRMAN reminded the Sub-Committee that at their previous session,
when studying the replies to the T.A.C. questionnaire, they had noted that these
gave no indication of exports from Sweden or Switzerland to the Sino-Soviet Bloc
passing in transit through participating countries. Belgium and the United
States had given particulars as to consignments coming from Switzerland. The
Chairman asked whether, since the last session, other participating countries
had recorded cases to be notified.
121. ' The FRENCH Delegate stated that no transit to the Sino-Soviet Bloc had
been recorded in his country for goods coming from Sweden. Very little transit
of goods from Hwitzerland had been notified and the last instance had related to a
non-strategic item.
122. The GERMAN Delegate stated that the German customs did not keep statistics
in this connection. However, as they had not received any copies of the export
licences which would have accompanied goods in transit, the German officials
concluded that there had not been any transit of this nature.
123. The JAPANESE Delegate stated that no T.A. certificates had been received
or granted by the Japanese authorities in 1958.
124. Referring to the Addendum to COCOM Document 3340.7, the UNITED STATES
Delegate enquired as to the reason why the Belgian officials had granted a T.A.
certificate covering the shipment to China of a commodity coming from Switzerland.
125. The BELGIAN Delegate stated that it was in conformity with the regulaticos
drawn up by the Coordinating Committee in 1955 and according to the arrangements
set out in COCOM Document 2114 that the competent Belgian department, upon
presentation of a copy of the Swiss export licence, granted a transit authoriseton
certificate, since the Swiss Government did not issue such documents. In reply to
a further query from the United States Delegate, the Belgian Delegate explained
that the document thus Issued by the authorities in his country was a Belgian
transit authorisation and not a T.A. certificate of the type instituted by the
Coordinating Committee.
(iii) Utilisation of the T A C
Scheme when a. resident of a participating
_acts as a principal in a transaction involving the shipment
c4 goods to the Soviet Bloc from a country not cooperating in the Scheme
126. The Sub-Committee agreed to resume the discussion of this question in
the course of the following session and after the competent departments had had
an opportunity for adequate study of the United States Delegation's memorandum
(COCOM Document 3519).
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COCOM Document Sub-C (59) 2S
(iv) Advantages of the Exchange of T.A. Certificates between Participating
Countries
127. The Sub-Committee confirmed the value of such exchanges and recommended
that each Delegation;should deposit with the Committee's Secretariat an adequate
number of T.A. certificates for distribution to participating countries.
(v) Other Questions: Possible recommendations to the Committee on the
subject of Austria and itzerland
(COCCM Document Sub-C.(59 1, paragraph 43)
128. The HERMAN Delegate pointed out that the loopholes in the control system
stemmed from the non-participation in the T.A.C. Scheme of certain cooperating
non-Member countries, especially Switzerland. It would be highly desirable
thoroforo to porsuado the Swiss authorities to apply the T.A.C. procoduro as a
transit country, particularly in tho port of Baslo.
129. The UNITED STATES Delegate briefly summarized the nature of Swiss
controls, emphasizing the need on the part of all Member countries to assure
themselves, prior to licensing, of the intended final destination of all
strategic shipments moving through Switzerland. The Delegate added that, since
the last List review, the Swiss Government had again been approached in an
effort to obtain an expansion of Swiss controls over in-transit shipments, which
now extended to Atomic Energy and Munitions List items. He said that the matter
was still under consideration by the Swiss Government and undertook to inform
the Committee as soon as their position had been clarified.
130. The SUB-COMMITTEE were unanimous in considering that only active
participation by Switzerland in the T.A.C. Scheme would make it possible to close
the wide loophole which now existed. In consequence, they recommended that the
Coordinating Committee should seek a way to obtain a firm undertaking from the
Swiss Government in this matter.
131. Turning to Austria, the CHAIRMAN remarked that a great deal of
re-exporting was done from that country and suggested that the aims in this
regard too should be the same as in the case of Switzerland.
132. The GERMAN Delegate thought that it might be difficult for the Austrian
authorities to institute transit control because of their Treaty with the U.S.S.R.
It would be of interest to learn exactly what regulations were at present in
force in Austria regarding exports.
133. The CHAIRMAN pointed out that it was clear from COCOM Document 3340.8
that Austria was particpating effectively in the IC/DV scheme.
134. The UNITED STATES Delegate stated that his authorities had a:s d the
Austrian authorities to participate in the T.A.Q. Scheme, but had never received
a definite reply. The Austrian authorities nevertheless accepted without demur
that the United States authorities should carry out end-use checks and keep an eye
on the transit of their own goods through Austria. The Delegate reminded his
colleagues in this connection of his statement about the controls carried out by
Austrian officials (see paragraph 53 above).
135. The SUB-COMMITTEE recommended that the Coordinating Committee should
seek means to obtain the participation of the Austrian Government in the T.A.C.
Scheme. They took note nevertheless that the Treaty binding Austria to the
U.S.S.R. might constitute an obstacle to this.
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COCOM Document Sub-C (59) 2B
V. REVISION OF E COMMODITY IDENTIFICATION MANUAL
(COCOM Document Sub-C.(59) 1, paragraphs 61 and 62)
136. The UNITED-STATES Delegate announced that the work of revising the
Commodity Identification Manual was half completed; it was hoped to obtain a new
delivery towards the middle of the summer. The competent officials in the United
States hoped that other Member Governments would let them have any suggestions.
137. The Sub-Committee expressed their gratitude to the United States
Delegation for the considerable volume of work achieved by the United States
officials, which was of the highest interest to all. It was agreed that after
a study by the technical services in other participating countries, their
Delegations to the Coordinating Committee would transmit any observations to
the United States Delegation.
VI. PUBLICATION OF AMENDMENTS TO THE NEW LISTS, ESPECIALLY THE ATOMIC
ENERGY LIST
138. The CHAIRMAN recalled that the complete version of the new International
Lists had been issued on the 19th December 1958 as Document 3300 and that since
that date three amendments had appeared; he asked Delegations if corresponding
publication had boon arranged in all participating countries.
139. The ITALIAN Delegate stated that List Is which had come into effect on
the 15th Auguest 1958, had been reproduced, not in the Official Journal, but in
a Ministry of Foreign Trade Circular. As to the Atomic Energy List, work was
in progress, in particular the adaptation of the text to the Brussels Nomenclature.
O. The GERMAN Delegate stated that the new Lists had been published, but
that the competent officials were meeting with great difficulties owing to the
successive appearance of amendments affecting very important items and often
cancelling one another out. It was of course necessary for the national
authorities to group the amendments before publishing them.
141. The FRENCH Delegate stated that the new Lists (including the Munitions
List and the Atomic Energy List') had formed the subject of a Notice published
in the Official Journal on the 10th January, 1959. Associating himself with
the remarks made by his German colleague regarding amendments, the Delegate
stated that in French these appeared every six months.
142. The UNITED STATES Delegate stated that the new Lists I and IV had been
issued in November 1958; the revised Atomic Energy List would appear on the 21st
May 1959. The Delegate also reported on the administrative changes effective
1st June 1959 with respect to the United States licensing of certain Munitions
List items (see COCOM Document 3533).
143. The UNITED KINGDOM Delegate stated that the new International Lists -
including the revised Atomic Energy List - had been published on the 28th
January, 1959. The Delegate associated himself with his German colleagues's
remarks as to the difficulties created by the successive amendments made by
the Coordinating Committee.
144. The CANADIAN Delegate stated that the now Lists I and IV had been
published on the 28th August, 1958; these Lists were brought up to date periodically.
145. The JAPANESE Delegate stated that the new Lists I and IV had been
published on the 15th August, 1958 and the new Atomic Energy List on the
27th January, 1959.
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COCC Document Sub-C (59) 28
146. The BELGIAN Delegate stated that the new Lists I and IV had been published
in October 1958, but that before pronouncing the new Decree necessary to the
publication of the revised Atomic Energy List ahd the amendments to Document 3300,
the Belgian authorities wished to group them to some extent.
147. The DANISH Delegate stated that the new Lists had been published in
February 1959 and that amendments appeared as and when decisions were taken in
the Committee.
148. The NETHERLANDS, NCIAN and TURKISH Delegates stated that their
Delegations to the Coordinating Committee would communicate the required information
later on.
149. An exchange of views ensued regarding a German proposal for a compilation
of the administrative texts concerning the Lists and the SUB-COMMITTEE concluded by
recommending:
(1) that Governments should arrange for the publication of the amendments
within reasonable time (for example, on a quarterly basis);
(2) that Delegations should send to the Secretariat an up-to-date inventory
of the publications concerning the Lists which had appeared since the
15th August 1958 in their countries. In future, as and when such
publications came out, Delegations should inform the Secretariat and
deposit a copy of the document concerned. A dossier would thus be
constituted and kept in the Secretariat at the disposal of Delegations
wishing to consult it. Moreover, a comprehensive document would be
compiled by the Secretariat on this basis and transmitted to Member
Governments;
(3) It was understood that these proposals would not be retroactive but
would come into force at once.
VII. PRCPOSAL TO ESTABLISH A WORKING GROUP OF CONTROL SERVICE OFFICIALS TO
STUDY THE MATTERS NOTED BELOW:
(a) Problems arising in connection with the interpretation of the Lists
and the Administrative Principles
150. The GERMAN Delegate stated that the aim of his proposal was to enable
the officials responsible for issuing licences in the various participating
countries to consult one another on questions which did not call for recourse
to the Coordinating Committee. This Working Group would not have the right to
take decisions or even to make proposals, and if an important question arose it
would be referred to the Coordinating Committee.
151. The ITALIAN Delegate said he shared his German colleague's views and
believed it would be useful if the officials responsible for implementing the
controls could meet to share their experiences. It would be desirable that
such a working group should reach rapid conclusions on certain practical matters.
152. The FRENCH Delegate stated that in view of the complexity of the problems
presented by the interpretation of the Lists and of the Administrative Principles,
the Coordinating Committee ought to be informed of them. The "marginal" cases,
which were comparatively rare, might be very important and in France instructions
had been given that, when they arose, the departments issuing licences should
advise the French Delegation, who in their turn would bring the matter before the
Coordinating Committee if they judged this necessary.
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153. The UNITED STATES Delegate associated himself with his French colleague
and expressed the view that problems of List interpretation should be handled by
the Coordinating Committee. Obviously an official could not be prevented from
consulting his opposite number in another participating country on a particular
question, and in fact such a practice had much to recommend it, but this should
not lead to the setting up of a working group. If a complex problem arose, the
safest method would be to co u]t the Coordinating Committee; in the United States
Delegation's view, time spent on such consultations was used in the beat interests
of the security of all participating countries.
154. The BELGIAN Delegate associated himself with his French and United
States colleagues. He also felt that questions of interpretation ought to be
dealt with by the Coordinating Committee.
155. The GERMAN Delegate emphasised that such a working group would not have
the task of establishing an interpretation for any given item on the Lists, but
merely of carrying out an exchange of views on the customary practices in the
different countries. If divergencies of view were found to exist on any matter,
the consulting country would be required to refuse the export licence or to
refer the question to the Coordinating Committee for decision. The Delegate
took note that the Sub-Committee were unable to reach agreement on this proposal,
but he insitted nevertheless that the departments responsible for implementing
the controls should take advantage of the existence of the Coordinating Committee
and submit to it more frequently the questions on which they experienced doubts.
156. The ITALIAN Delegate stated the opinion that the German proposal did not
call for codification within the framework of the Coordinating Committee's
procedures. It was a practical proposal and an initiative which, in his Delggtion'e
view, could be followed if necessary. The Delegate reserved the right to revert to
his matter in the Coordinating Committee.
~57. The SUB-COMMITTEE noted that they were unable to reach agreement on the
German proposal, which they forwarded to the Coordinating Committee. No objection
was raised, however, to the principle of written consultations between the
officials implementing the controls in the various participating countries.
158. The FRENCH Delegate indicated that, in the event of bilateral consultations,
the position adopted by the two countries would be binding only as far as they
themselves were concerned.
(b) Treatment of non-specialised parts
(COCOM Document 3532)
159. The UNITED KINGDOM Delegate referred to his Delegation's memorandum
(COCOM Document 3532) and pointed out that, as the United Kingdom authorities
only required export licences in the ease of items on the strategic Lists and
some other items subject to economic control, no licence was necessary for the
export of certain non-specialised parts which could he used to make up
oscilloscopes. The Delegate emphasised that this fact did not constitute
a serious strategic problem because an oscilloscope obtained by assembling
such parts would not be very useful to Communist countries; nevertheless the
United Kingdom Government wished to avoid infringing the terms of Administrative
Principle No. 4 and would be interested to learn whether other Member Governments
had encountered the same problem and how they had resolved it.
160. The BELGIAN, CANADIAN, DANISH, ITALIAN, NETHERLANDS, TURKISH and
UNITED STATES Delegates stated that this problem did not arise in their
countries, where all exports to the Sino-Soviet Bloc were subject to licensing.
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COCOM Document Sub-C (59) 2B3
161. The FRENCH, GERMAN and JAPANESE Delegates stated that only items on the
International Lists were subject to licensing in their countries. The Japanese
Delegates added, however, that so far no problem had arisen in connection with
the application of Administrative Principle No. 4.
162. The UNITED KINGDOM Delegate noted that in order to resolve this problem,
his Government would have to envisage the amendment of their control system so as
to cover parts which were apparently non specialised.
163. The SUB-COMMITTEE agreed to draw. the Coordinating Committee's attention
to this matter and recommended that licensing services should take particular
care to avoid the export to the Sino-Soviet Bloc of spare parts intended in fact
to be combined to form an embargoed item.
VIII. STATISTICS ON SECONDARY CONTROLS: RELATING TO DEPENDENT OVERSEAS
TERRITORIES
(COCOM Document Sub-C.(59) 1, paragraph 78)
164. The FRENCH Delegate stated that, after obtaining information from the
authorities in Overseas Territories, the competent French officials had found
that no List IV items had been exported from these territories to the Sino-
Soviet Bloc during 1958 and the first quarter of 1959.
165. The UNITED KINGDOM Delegate stated that the statistics for dependent
overseas territories were incorporated in the returns submitted to the Coordinating
Committee by the United Kingdom. As regards other Commonwealth countries, the
United Kingdom authorities did not consider that any useful purpose would be
served by insisting that they should supply statistical returns: almost all these
countries applied a control system similar to that in force in the United Kingdom.
166. The UNITED STATES Delegate stated that the authorities in his country
submitted monthly statistical returns for List I and List IV. Panama and all other
territories dependent on the United States subjected all List IV items to licensing.
Turning to a more general aspect of the question of statistics, the Delegate
wished to stress the importance of this aspect of the Coordinating Committee's
work. Having had occasion to note the considerable time which elapsed before the
United States statistical services were in a position to compile full reports
regarding exports of List IV items, the Delegate urged that all participating
countries should make an effort to speed up the submission of these details.
Although he was aware of the cogent reasons which justified certain delays,
the Delegate nevertheless wished to emphasize once again the importance of these
statistics.
167. The SUB-COMMITTEE noted that the rules laid down by the Coordinating
Committee were being followed in overseas territories. He noted that certain
delays might occur in communicating statistics, some of which were based on
exports carried out and not on licences issued.
IX. NON-MEMBER COUNTRY COOPERATION
(a) Study of Statistics on ICs issued during the First Half-of-1958
(COCOM Document 3340.8)*
168. The SUB-COMMITTEE noted, upon examination of COCOM Document 3340.8,
which dealt with statistics on ICs issued during the first half of 1958 for
imports from non-member countries and Dependent Overseas Territories of member
countries, that these countries cooperated in the IC/DV system to an appreciable
extent.
* The BELGIAN, DANISH, FRENCH and UNITED STATES Delegations pointed out a
aunber of material errors, which were later rectified (see the Second
Corrigendum to COCOM Document 3340.8B).
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COCOM Document Sub-C (59) 2E
(b) Study of Statistics of IC/bV Issuances and Receipts since the
Previous Meeting
169. The Sub-Committee considered that there was no further need to ask
Member Governments to supply statistical returns for ICs and DVs issued or
received by their services. They agreed that at the following session they
would examine whether a further compilation of this nature would serve a useful
purpose,
X. ADD OF AUTHORITIES COOPERATING IN THE SYSTEM OF EXPORT CO LS
(Secretariat Paper No. 103
170. The FRENCH Delegation made the following remarks (1) the heading of
this document should indicate that it also deals with dependent overseas
territories of participating countries and not only with non-member countries;
(2) in the case of Algeria, it should be noted that this territory, which is
closely linked to France, should appear in the document listing the addresses
of member countries, in the following form: Delegation ggnerale du Gouvernement
en Algdrie, Alper: (3) import certificates for French Overseas Territories are
issued by the following service: D$partement de la France d'Outre-Mer, Direction
des AffcfiMe 6conomigues, 27 rue Oudinot, Paris.
171. The Sub-Committee noted that Secretariat Paper No. 103, publishing as
it did the addresses of authorities in dependent overseas territories and in non-
member countries responsible for implementing the control procedures, was most
useful. It might be desirable at a later date to draw up a similar document
grouping the addresses of responsible authorities in participating countries;
this question might be examined after Greece and Portugal had made known the
exact addresses of their official departments.
Xi. 11EXT MEETING
172. The Sub-Committee agreed to recommend to the Coordinating Committee
that Its next meeting should take place in six monthst time, that is, in
November 1959.
XII. O-r'HER QUESTIONS
173. The members of the Sub-Committee, during their session in Rome, were
provided with an opportunity to visit the customs services at the Ciampino
Airport and at the port of Naples. These visits enabled delegations-to make
fruitful comparisons between the methods practised locally and those normally
employed in their own countries.
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OOAIFIDENTIAL ARM TO
COCOM Document Sub-C (59) 2B
TEXT SUBMITTED BY THE UNITED STATES DELEGATION
CONCERNING
THE EXEMPT ION GRANTED TO GOVR h 1T? AGENCIES
UNDER THE IC/DV SYSTEM
[See CH. IV (a) (ivv
The term "government agency" is construed as follows by the United
States Export Control Authorities:
(a) National governmental departments operated by government paid
personnel performing governmental administrative functions:
e.g., Finance Ministry, Ministry of Defense, Ministry of
Health, etc.
(b) National government owned public service entities; e.g.,
nationally owned railway, postal, telephone, telegraph,
broadcasting, and power systems, etc..
The term "government agency" does not include government
corporations, quasi-government agencies, and state enterprises
engaged in commercial, industrial, and manufacturing activities;
such as petroleum refining, production, and distribution plants,
mines, steel mills, retail stores, automobile manufacturing plants,
airlines, or steamship lines which operate between two or more
countries, etc.
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