REDRAFT, CFEP STAFF STUDY NO. 16 (DRAFT DTD 7 JUNE 1955)*

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP63-00084A000100160008-1
• Release Decision: RIFPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 12, 2016
• Document Release Date: October 2, 2000
• Sequence Number: 8
• Content Type: STUDY

Approved For Release 20O rr a-R OWai0MPkOftn In ERU File*
Redraft, CCFFEP Shaft t No. 16 (draft dtd 2 une )#
In reading the text below, note that words underlined are new text re-
commended for insertion, words in parentheses are existing text which
is recommended for deletion.)
Analysis of Problems and Deficiencies of Enforcement
The problems and deficiencies in the enforcement program may be placed
into to categories -- one mating to the multilateral aspects, the other
to the unilateral or bilateral phases. Strictly speaking, it is difficult
to separate the two since activities in which we engage unilaterally cannot
fail to have some effect on our multilateral relationships.
(A) Multilateral Problems and Deficiencies in Enforcement
(1) Negotiating Delays and Difficulties. (On the international
side) The development of the enforcement program by CG/ 0____C*i/CHINCmi has
been achieved only with considerable negotiating delays and difficulties.
Agreements on TAC and UK Transactions Controls were part of a quid pro
quo for the August 1954 list reduction. Five months of additional nego-
tiations were required before these controls actually were (implemented)
instituted. The adequacy in practice of individual PC implementation
of the controls and their impact on the patterns of East-West trade have
yet to be determined, and th_:r_ctionnoofeguivalent controls in nosy-PCs
is still in the negotiating stage.
The systems of controls
~2) Non-Uniformtts of Controls Among PCs.
of the individual PCs inevitably are non-uniform inasmuch as they are
elements of the legal-administrative framework of individual states. In
spite of agreement ?upon common objectives in COCCI, the technicalities
inherent in local customs regulations, licensing procedures and the like
yrovir de OR oy? ortunities for both real and assumed inequities in controls.
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The stimulus of private competition, national rivalries and divisive
propaganda tend to magnify these essentially technical problems unduly
to the general detriment of mutual confidence in a Joint effort.
-3) Inadequate Legal Bases for Controls. Without adequate legal
bases not only is it impossible to exercise satisfactory licensing .
controls, including the use of end-use checks and other precautionary
measures, but it is also difficult to imose strong enough punitive
action to deter violations of controls. Laws in force in some countries
greatly restrict the normal collection of caz ercial intelligence. Althou
a generalization attempting to characterize the inadequacies of foreign
administrative and legal systems with respect to trade control laws and
regulations would not be meaningful, it would be correct to assert that
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the laws and regulations of the United States are markedly more useful in.
support of the economic defense program than are those of most other PCs.
The availability of and the approval accorded to administrative auas3F-
legal) sanctions in the United States exceed considerably their acceptance
and utilization in other PCs.
t4) Lack of PC Enthusiasm for Enforcement. The lack of enthusiasm
for the enforcement program is based on a number of factors. Possibly
the most important of these is the (current) political climate prevailing
in Europe at this time, vhich influences the attitudes of PC governments
toward the entire control program. As the hope for coexistence grows, it
can be expected that enthusiasm for the program will diminish. The interest
of individual PCs in conducting an aggressive enforcement prograa- is affected
not only by the manifestations of change in the climate of the cold war
tliahBloc actions may intimate from time to time but also by the variant
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basic philosophies underlying the acceptance by b each PC of a role in a
multilateral trade control effort.
More specifically there are the following:
a) Reluctance of some countries to adopt enforcement mea-
sures unless all interested countries adopt similar
measures,
b) Emphasis of foreign Government economic agencies on
trade promotion rather than trade control.
c) Confidential nature of controls in some countries.
d) Understaffing of enforcement agencies of foreign coun-
~~.rrr.u~.~r.rw r~r
tso Insufficient orientation of enforcement per-
sonnel re the objectives of the program and inads.
guate experience in handling multinational gEoblems
in coordination with other PCs.
.r~.~rrrr....rr
e) Reluctance of foreign enforcement personnel to discuss
mutual problems with O.S. embassy officers. Lack
investigative initiative where local inadequacies msy
r.r~wwr ~~i ~.w .~~~r.wrr
be bro. bt to light.
f) (Poor or unreliable) Inadequate intelligence informa-
tion; (inability) adiffiicculy (to investigate) of inve
tip (unevaluated) on the basis of limited (intel-
ligeace) information.
*(Additional problems arise from the non-uniformity of controls
between PC's and from inadequate legal bases for such controls. Without
# This paragraph is recommended for deletion since it has been included and
expanded upon in (2) and (3) above. The last sentence is recommended for
deletion since it in general duplicates the points made in d) and e) above.
-o-
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adequate legal bases not only is it impossible to exercise satisfactory
licensing controls, including the use of and-use checks and other pre-
cautionary measures, but it is also difficult to impose strong enough
punitive action to deter violations of controls. A corollary problem
is the frustration of the officials responsible for the implementation
of controls caused by personnel shortages and other factors.)
(5) Technical Descriptions of Controlled Items Co licates Enforcer
meat. The task of the enforcement official is made difficult by the
detail and technical nature of the description of certain controlled
items. The distinction between a controlled and uncontrolled item
depend upon a technical difference which the average enforcement official
is not trained to recognize. There are inadequacies in existing
available instructional material for the use of enforcement officials in
the various PCs.
(6) Professional Bast-blest Traders. A sizeable number of profes-
sional East-lest traders has always been available to the Bloc for the
procurement of strategic counodities. They are experienced in commercial
matters and possess an on-the-spot faro~tliarit3- with East-West trade
PoiWMise
e t re s a oo
tart challean to the
enforcement
ia is ofthe individual PCs.
7 Inadequate Enforcement by PCs of Lists II and III. The utilit
I controls is measurable direr
timeliness of the statistical reports which the PCs have agreed to males
to COCCU. Having been forced to a recognition of prior inadequacies of
their performance, the PCs agreed in COCC6i in December, 1954 on a revised
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program to which adherence was promised. It was agreed that monthly
statistics would be submitted on the movement of goods subject to con,.
`trcls ~ecificaLl~ it was a rend to report on the issuance of export
s for each item on
1. 11. II~ t
Aam c Ener and the
h
tions List for shininen C
;w,, ,?, t to the European Soviet B c .
'ut...-n.er...Yr~srN.~.a,~...Er ,~. ~:-f~sT~.4
wrasa&reed tortsim3larl~ on export licenses
~e f.Q_,,p~i_tem, on the,.China Special List for shi_ent to
d} o ,th, ores RWrts were to be submitted no later thin tronp
fh~.Y1.Iw MY..W.~,K~.:i~.'YKMi4.i~il.l.~uM,t4.i+/T~u-4M.~hq.1~.Pd!+~4:.E'J .a
months after the end of the month reported on I~t wa awed to that
the monthl statistics include information on the LuU..S&ggg),U
Me_lqac
of com,,,,.,liancewith this revised pro,ram, ~,bttaaat rience
indicates that constant insistence will be required to obtain these data.
.~t+Ywwa..e~YMa+?t1 f.tiYV1-ay~wl+-+'r+wa?4Nt i'J?~~bCR+3sYlS~.~`- _ W~Y~+~+~
uantitative control ( II has had a verp_limiited success Lu.
P 4:t as,~, -8 9~xotas as r set tl~e~ ~uentl y aecaswdat~ a49sire to trade
.tbtsx than .. t.~-q .#. v ,,~. s snter etatics-
,,,~s~tt~n hasoerorltted practically unrestricted shiomsnts oaf
C.e.,,,LI commodities.
(8) The C~Differ^ential. Perhaps the most ,active and trouble,.
some problem in the enforcement area is that'caused by the differential
level of controls over trade with the Soviet bloc in Europe and in Como
man4st China. At the time of the 1954 List reduction the PCs agreed that
the List changes-would not be applicable to trade with China, that exports
to the Soviet bloc (Europe) should not frustrate those covering trade
with China,, and exports to the Soviet bloc in Europe should not be approved
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if it ms likely that they would be diverted to China. There has
been little evidence of denial of exports undor these circumstances.
In fact, the quantity and value of known diversions to China via the
European Soviet Bloc (Europe) and ;;estern countries have been sig-
nificant. Diversions of non-I/L I goods to China have been facilir-
tated by the removal from licensing, except for direct chi ent to
China, of most I/L III and China Special List items and by the appli-
cability of IC/DV to inly Munitions, AE and I/L I and II items, and of
TAC to only Munitions, AE and I/L I items.
In spite of the first se_v_en_~rob].~s eruamerated Rabove. at present
the multilateral enforcemaat sgstem is ba],a ce rea n re q
tive and both the past efforts made by W I ~Tn #Sp*
its behalf and furthor efforts of the same general character. (of the
rr~n r~w_._ ._.w+w
problems referred to above only the last (relating to the differential
level of controls) is a serious ons.) the last? roblemgs_ 8, e
China Differential ~t resent is so serious as to ra recent a ma or
disiu tive element in the ovoi-all controls system. The Chins embargo
can be avoided legally by means of directing shipments to ostensible
in stern Euro . Forebearanoe to use this technique
depaods not upon tangib3pre~ventive measures but B m the nature of the
..wrti
b3 ctivee Intent and will of and arernment. (However with
the) n~ of general resistance by the PCs to any broad extension of
controls (albeit small) plus the desire on the cart of most PCs to reduce
(the level of) China controls to the COCM levelsj.t is most doubtful if we
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can obtain any tightening of enforcement measures applicable to China trade,)
fect3t/;e means aPgeas t~g_be a 4D..3a.
at the same time to eliminate this technique of avoidance of erect c ar-gl ,
On the other hand, H1.oc Eur~ o~eanortso re in a ~Pirc.i ca1_1,~,,,ed g?
mB@t. t~de~uanst8 ~8d@,,,.,ti~on 3t~,_'1;lle 11@Cees,~#~Y...~4~r ~~,#~.,~.._},4..
obtain embargoed ~oocls indirectlky~ therefore i~ oe~a as added burden
both as respects the cost of securin_the~,~oode and the certainty~oP their
arrival at the tine and in the condition requiredF Our future course of
action in this area is dependent an the outcome of the over-all review of
security trade control policy, in j>articular that covering trade with China.
It should be noted that the criteria for an evaluation of the rtance of
trade to China are not necessarily the same as those established for the
1954 review of controls relative to the uuro
f?rcabilit~of controls is direotlJ related to the comos3i.a~ of the list
of Rpqa
For the other problems, 1 - ). we can (only) point to the PCs de-
ficiencies as they occur and press for the small modifications required to
effect improvements. To this end the exchanges of teams of technical em-
perts initiated by the United States can go far to impress upon the PCs
the importance which we attach to effective enforcement and provide an
orientation for foreign goverment (of) relatiN to U.S. policies, stand.
ards and procedures,
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