SOVIET METHODS OF ECONOMIC PENETRATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000600020036-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: November 16, 2010
• Sequence Number: 36
• Publication Date: March 24, 1952
• Content Type: REPORT

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CLASSIFICATION 13'CT /Stf;iTm T.t:E ra-Tnt
} CENTRAL INTELLIGENCE AGENCYSC
INFORMATION REPORT
DA :r
PAGES :?
no OF
NCLS.
NO. OF E
MISTED BELOW)
SUPPLEMENT TO
REPORT NO.
.... 11 .., . --......
THIS IS UNEVALUATED INFORMATION
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The e euisition of Cwnershio or fcr?rol of Cornorations through Stock
iiurcha es or tither '",ears
1. _1oviets are net, interested) in indiscriminate economic operations simply
for the purpose of ^ainin? central of corporations. Any operation carried
on ,gill have: a n?ccif is purpose. !`or exa'~ple, a "resident" buys
a brewery. fh12 i' :Line for a specific purpose; to give the resident a
neoi lo--mate cover to "ivc him a large source of income. A brewery
is ideally suited because it in usually a highly profitable type of business.
;tincther highly intcrentinn activity for the Soviets is gaining control of
the banks. Frem the vantage point
or a bank, economic pressure can be app ec In riget, places b,- :-?Lr::din,
or denyin,? loons, and business act.tviticz can be very conveniently watched.
Malin has p?:t, all soviet activity on a basis of "Khozranchot", that is,
any activity should Justify it self .tit+ out a subsidy form liosCow'. Thus,
all activities ore expected to be financed out of profits from
'business activities
2. J. Soviet citizen stationed acroad is in no position to purchase stock in a
foreir;n concern. Thin to always done by residents. T,e precaution is
always taken of drawing up t}c necessary documents for sale or transfer of
Lh enterprise an.] securing tti.e rosident's signature before he assumes
cor:trol of the enterprise. These docur^ent are then guarded in a safe. Should
'e nominal osier prove recalcitrant, he could be eliminated without endanaor-
SECRET
CLASSIFICATION SECRET /- CU:tITY INF GUh' TICN
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SECRIr /SECC;RITi INFCU.MATIOH
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in
always retain a ea
control of t,,e rest through puppets. As mentioned before, a legalized
a.ithorization of sale or transfer is obtained beforehand and retained in the
possession of the Soviets.
The Extension of Loans or Credit Accommodations.
Soviets .rranee for -. national of another coontrf to aye n p
ion of the funds, and to move into the co-'ntry where the funds are to be
used. A local resident Rn,ld draw suspicion on himself were he suddenly
to gain possession of a .;text deal of money.
The Establishment of Holdino Corporation;; ,jr joint, Stock Companies.
The pretense is always maintained that nationals of the countries wherein the
dorporatio.3 are located, hold a dominant interest. Actually, the Soviets
t 1 s+ Klt of tip stock in their own hands and have effective
when 1..nirge oumc of m?rey .re trufaferred from one country to another, the
r ominal ossess-
The USSR is little interested in granting foreign loans for it needs funds
for its own domestic build-up. Secondly, the USSR prefers to work for the
decline of a _foreign country'" economy rather than to aid in strengthening
it. A country with a di7rup't d economy is fertile ground for Communist
expansion; a strong'econony ,rill naturally orient itself toward the US.
However, the USSR would be willing to five tempora hel in a articular
where benefits would accrue to the USSR.
6. The Satellites are pimply colonies. Soviet officials have just as much
freedom of action thorn as tiny would in the USSR itslef. However, few
loans have been extended to the Satellites, for the Soviet policy is for
these countries to rely upon their own finances and their own natural
resources.
Furnishing of Technical Assistance
The general policy
is to brim natives to the ou or training in their specialty and also
for political indoctrination. Upon return to their own countries they take
up the work For which they had trained, and at the same time execute orders
from the USSR without attracting attention to themselves, as would a Soviet
citizen in a similar osition, Man Chinese were trained in the USSR for this
purpose.
10. The policy in respect to labor unions is very flexible and may be improvised
according to the specific situation. Soviet agents, nationals of the
countries in which they are working, are provided with plenty of money, the
source of which is impossible to trace. In a democratic country, almost
anything; can be done with money. Resident agents do not usually, work through
the acknowledged leaders of the unions, but try to set up counter-leaders
Controlling or Influencing Labor Or anizations throu h Subversive Leadership
or by her Means.
SECRL'E/SECLRITt, INFO tMATION
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:i;.' r,T i5tcu:MITY INFO) 4/tTION
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(,rie techn =>e is to 'r,sn'le picnics, concerts and dances., Besides being a
success socially, those .,:Ca?rs will yield a profit which will be turned over
very ostentatiously to +,.a s.-ton for charitable work. The actual proceeds
may haws been vary 5 All, butt 3o7i.t funds may be used secretly to increase
the total or even to -:over a loss. In this way, a counter-leader will build
u_, a reputation as a champion or t>e rank-and-file members. The eventual
goal is to squeeze out those leaders who are not oriented towards the USSR.
Devices for Avoidine Exoort and Other Controls
12. Soviet agents do not nor tally attempt to bribe customs officials. This
would be too expensive. The usual procedure for sale of a shipment of
goods in a foreiffn country is the following: The Soviet trade
representativ visits the po en;..~. uy r with a sample of the goods to be
sought. The mnrehant, wn o kno,m beforehand how much will be needed
to get the ^o0 3 past cnitoms, un?.tertakes this part of the transaction for
he can accomplish iL r,.ore cheaply and safely. When he places his order
for the hoods he takes into account this expenditure for customs. The USSR
is responsible only for bringing the goods as far as the border, after
which the merchant takes over. Experience has demonstrated that
deals ccnc it ided in this manner arc rutually more profitable.
Trade /trreementn rr Barter Deals for Strategic Materials.
13. Preferred items c" imnort int^ the USSR are finished machines and instruments.,
which are often st?-P ed9 and coated in the USSR. Thus the Soviets avoid the
expense of devclooin~, and testing the machines.
Ili. In rencral, straight b rter arrangements are avoided, because they must
usually be limited to a single country and involve only certain commodities.
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