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December 9, 2016
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July 11, 2000
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November 9, 1954
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I DEPART M E M?Vsf A f E Release 00/08/29: CIA-RDP79-01203A00020Q0Y 002-5 Office of Intelligence Research Since the relaxatlon.of trade controls on August 16, 19511., bloc orders for copper wire'and'cable in the UK and West Germany have increased substantially. The UK has approved exports to. the bloc of 9,632 metric tons for the six-month period ending February 15, 1955? Of this amount it is estim- ated that over 5,000 tons were of the types fcr*erly embargoed. This is'as much as was 'shipped.over the entire four-year period 1946-49 when. no controls were in effect. West Germany also has reported'sharp increases in bloc or- ders of copper wire and cable'. It is. sufficiently concerned about this development that it iz}tends.to propose that copper wire and cable be restored to the'itternational embargo list. Soviet bloc imports of copper wire. and cable represent only a relatively, small proportion of Sits,production of copper metal. However) if the recent.inerease.in bloc purchases of copper wire and cable from Western Europe continues the re- sult would be a partial nullification of the COCOM object- ives sought by embargoing raw copper.' INTRODUCTION This report has been prepared'as background for US officials dealing with East-West trade problems. During the recent discussions on the revi- sion of the international. lists, COCOM countries agreed to continue the embargo oneastbound shipments ofcopper ores, concentrates, regulus and matte and. of copper and copper alloy metal, scrap, primary shapes and cer- tain semifinished products. However, uncovered copper and co wire and cable were removed from the embargo list on Aug ust 16,1954.1y 1. See Appendix A for the definition of copper on International List I and for the definition of cop --_ Z - per wire Intelligence Report IR 6709 November 9, 1-951. State Dept. declassification & release instructions on file WEST EUROPEAN EXPORTS OF COPPER WIRE AND CABLE TO THE SOVIET BLOC MEE Approved For Release 2000/08/29 : CIA-RDP79-01203A000200070002-5 SECRET Approved For Relea 000/08/29 : CIA-REP 7a9,~01203A0002 70002-5 -2- Since that date the British Board of trade has approved licensee for export to the block of 9,632 metric tons? of copper wire and cable much of which is of the previously embargoed types. West German officials also have reported a sharp increase in orders for previously embargoed copper wire and cable from the Soviet bloc. If the present level of orders continues, it could partly nullify the obJec'rives sought by embargoing raw copper and semi- finished products. The West German government is sufficiently concerned about the problem that i-0 intends to propose in CCCOM that decontrolled copper wire and cable be restored to the embargo list. . ..Accordingly, it'i's useful?at this time to compare the recent trend in West European orders from the bloc for copper wire and cable with ex- ports prior to the embargo. The countries covered.are UK, Belgium, West Germany and Sweden.3 In 'addition some recently reported covert shipments of copper wire to the bloc are noted. HISTORICAL EXPORTS OF PRINCIPAL EUROPEAN PRODUCERS The UK, Belgium, West Germany and Sweden are the principal West European producers and exporters of copper and copper alloy yire and cable and/or insulated wire and cable. In the base period 1946-49 most UK ex- ports of these products went to Empire countries. Shipments from West Ger- many, Belgium and Sweden. went principally to Western Europe, with lesser amounts going to Africa, Asia and Latin America. Except for Belgium, the Soviet bloc was not an important market for copper wire and cable. The UK exported bout 12,770 metric tons of copper wire and-cable to the Soviet bloc in the period 1946-49, but only about 5,400 tons were of the formerly embargoed types. Of this amount, it is estimated that 120 to 160 tons were of covered wire defined in Appendix A. The UK shipments to the bloc of the types of wire and cable which had been under international control amounted to only about 5 percent of its total exports of uncovered wire and cable during the.base period. 1. The 1oc in this :~eport is de ined as the USSR -M European Satell- ites". Shipments o:' copper wire and cable to Communist China are still prohibited. 2. All tons in this re:?ort are metric tons. 3. Sweden is not .a memaer of COCOM, but has agreed to cooperate in pro- hibiting the exports of International List I items to the bloc. 4. The years 1946-49 h3,ve been selected because this is the most recent period when copper 3ould be exported to the bloc freely although free world demand exceeded supply.. Copper was in tight-supply especially following the outbreak of.the Korean War in mid-1950 and it was subse- quently embargoed to the Soviet bloc. This report was. prepared by the Division of Functional Intelligence ~fr(im information available through October 29, 1954. Approved, For Release 2000/08/29: CIA-RD-0120.3A000200070002-5 Approved For Release 2000/08/29 : CIA-RDP79-01203A000200070002-5 SECRET -3- Data are not available on West Germany's exports of copper and copper alloy wire and cable in 1946 and 1947,.but they are believed to have been small. Shipments of uncovered wire and cable totalled only 1541 metric tons in 1948 and 1949 but increased to 5,081 tons in 1950 and 7,500 tons in 1953. West Germany exported none of the formerly embargoed types of wire and cable to the Soviet bloc in 1946 and 1947 and only 76 tons in 1948-49 or 5 percent of its total shipments. Only 5 tons of insulated wire and cable, presuma- bly non-embargoed types, went to the bloc in 1948-49. Sweden exported 465 tons of uncovered copper wire and cable to the. Soviet bloc in 1946-49 or slightly more than 1 percent of its total ship- ments. Exports. of covered wire and cable were only 1775 tons'in 1946-47, of which 77 tons moved to the European satellites. Belgium was the principal West European exporter of uncovered and covered copper wire and cable to the bloc. Shipments aggregated 15,800 tons in the base period-1946-49 and 5,300 tons in 1950. It is difficult to determine what proportion of these exports were the formerly em. bargoed types because of commodity classifications used. .In the base per- iod 1946-49 and in 1950-a portion of the reported Belgium exports of un- covered copper and copper alloy wire and cable is included with wire bars and rods. Available data for the. last seven months of 1950 indicate that of the total exports of 5,231 metric tons to the satellites. in that year no more than 1,000 tons could have consisted of wire bars. If this same ratio obtained in the base period shipments of uncovered copper wire and cable to the European satellites and the USSR in.1946-49 (table 1), would have amounted to roughly 9,000 metric tons. Belgium shipments to the bloc of covered wire and cable which have not been embargoed totalled about 4,400 metric tons in 1946-49. These shipments were made primarily to the. USSR in 1949. (see. table 1). Except for Belgian shipments to Czechoslovakia, exports of uncovered copper wire and cable from the principal West European producers to in- dividual bloc countries were irregular during the base period of 1946-49. Moreover, with the-exception of Belgian, these exports represented only a small fraction of total exports of uncovered wire,and cable generally less than 5 percent. COMPARISON OF RECENTLY APPROVED UK EXPORTS TO THE BLOC WITH ITS HISTORICAL TRADE PATTERN It is reported-that following the relaxation of controls on copper wire and cable in August 1954 bloc orders for these products placed with UK producers increased much more than anticipated. Since August 16, 1954, the UK has licensed 9,632 metric tons of both covered and uncovered copper wire valued at $7,840,000 for shipment to the bloc. These licenses cover deliver- ies for the six-month period ending February 15, 1955. The UK claims that SECRET Approved For Release 2000/08/29 : CIA-RDP79-01203A000200070002-5 Approved For Release2000/08/29 : CIA-RDP79-01203A000200070002-5 SECRET 4- exports most probably win lie, about 1,000 tons less than those approved because of differences over price, delivereies, etc. It i5. reported., that the sharp. rise in. orders resulted partly from the fact that, producers: had:.; built up. a,backloE of, conditional sales in anticipation of a revision of :the embargo list.. ,Current orders are reported to be falling off. The quantity of copper wire and cable approved for, export to;'the blue' is 75 percent of the 1946-49 amount (covered and uncovered) and 1.93 percent of the largest single bass-year shipments (1949).. The British Foreign. Office did not. indicate fat types of wire and cable were licensed, ..but, a newspaper report indicatei that one company had been granted ,.license,s for insulated wire and cable valued at about $7,000,000. The fact that,this firm reportedly pressured for Soviet orders for some time suggests that most of these orders. are for the formerly embargoed types.defined in-Appen- dix A. If"the distribution of the licensed exr its as between covered and uncovered types'is the same as in the bas: p riod they would include-more than 5,000 tons, of previcurly embargoed c3.t .rice. This is a relatively small proportion of the` hoc's c;,tpp11_y of r .-e copper- but is as much as the UK shipped to the bloc in 'the four-year period 1946-49. Germany. is the only other. West European country for which information is available',on bloc 'orders for copper wire since the relaxation of controls. Here.again.,, as mentioned.in the: introduction, the indications are of a con- ... siderable increase in.orders. If similar trends have developed in Belgium, and Sweden, this would sugges.t.that.the 0000M. objectives sought by embar- going raw copper and semifinished products defined in Appendix A were,. being partly nullified. RECENTLY REPORTED COVERT SHIPMENTS OF COPPER WIRE TO THE SOVIET BLOC No attempt has been made in this report to estimate covert shipments of copper wire because of the difficulty of identifying the products in most.: cases. Numerous reports, however, on copper diversions, suggest that prior to the, relaxation of controls some embargoed copper wire was being diverted to the east. It is repcrted that two different shipments totaling about: 500 metrie'tons of electrolytic coper wire from Sweden moved in transit through Antwerp to the t'SSR in July and August 1954. These covert ship- ments exceeded total reported exports of.Swedish?copper wire and cable to the bloc in 1946-49. It is also reported. - that .254 tons cie . Swedish' copper wire destined for Egypt were diverted from'Rotterdam to Poland in Decem- ber 1953. 1. There is no agreed Intelligence estimate of Me Soviet bloc: production of.Copper. However, the various estimates of.output in 1954 range be tween300,000 tons and 500,000 tons. Approved For Release 2000/08/29: CIA-F=1203A000200070002-5 Approved For Relea 000/08/29 : CIA-RDP79-01203A0002 01-70002-5 SECRET 5 - Some of the recently reported. indirect movements of wire and cable from countries other than Sweden consisted of insulated wire and cable which presumably were not on the embargo list. For example, it was reported that about 1,500 metric tone of plastic insulated high tension wire were shipped from Germany to Moscow in the early part of 1951+. These shipments are probably included in the official German exports shown in table 2. It was also reported that 105 metric tons of electric cables were loaded in Antwerp,on a Swedish , ship. destined.fOt Rumania. However, it is believed that this shipment is,part of'a compensation agreement, between Belgium and Rumania. Approved For Release 2000/08/29 : URP79-01203A000200070002-5 Approved For Releas )00/08/29 : CIA-RDP79-01203A00020 0002-5 SECRET -6-. Appendix A DEFINITIONS OF COPPER ON THE INTERNATIONAL LIST6. a. International L i s t ] ; The following definition of copper to be embargoed as Item 1650 was adopted by COCOM. "Copper, as fo':lows: a) copper ores, concentrates, regulus, and matte; b) copper and copper alloy scrap and old metal; c) copper and copper-base alloys in the form of anodes and cathodes, billets, blocks, blooms, cakes, ingots, ingot bars, pellets, pigs, shot, slabs, s',icks, wire bars and wire rods, and other cant shapes; (d) copper and copper-base alloy semi-finished products., as follows: sheets, strips, plates, rods, pipe and tubing ? " b. International List III. Copper wire and sable, as defined below, +rere removed from the em- bargo list on August 16, 1954 and placed on International List III as item 3652. Shipments o:7 these products to the bloc are ;permitted but must be reported to COCOM. "Copper and copper-base alloy semifinished and finished products, as follows: a) wire (uncovered); b) cable (uncovered); c) insulated wire (single strand conductor), of a diameter of 0.014 inch (0.35mm.) or less." Approved For Release 2000/08/29 : CIA-RBBOSM 203A000200070002-5 IAO ~! 1 ~p ~p 1 1 cltl trti . r-i N N N 1 C 1 N r-I 1 r-11 1 ~-i I 0 N 1 `n 1 W 1 1 (T' F N -.' 1 ( 1 1 a', 1 1 1 1 1 1 1 1 1 1 r-1 a) ?< UII ,Approved For." 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