EXPORT SALES PRICES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A005400610007-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 20, 2016
• Document Release Date: December 4, 2007
• Sequence Number: 7
• Publication Date: December 3, 1954
• Content Type: REPORT

COUNTRY East Germany
SUBJECT Export Sales Prices
PLACE
ACQUIRED
DATE OF
INFO.
THIS DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL DEFENSE
OF THE UNITED STATES, WITHIN THE MEANING OF TITLE IN, SECTIONS 793
AMP 794. OF THE U. S. CODE. AS AMENDED. ITS TRANSMISSION OR REVEL-
ATIO.M OF ITS CONTENTS TO OR RECEIPT BY AN UNAUTHORIZED PERSON
1S PROHIBITED BY LAW THE REPRODUCTION OF THIS FORM IS PROHIBITED.
Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610007-1
GL IATiON 13 ECRET
CTRL - I AGENCY REPORT
FORMATION REPORT CD NO.
1. last, Yt "al.. pricen for products sold to no .'Soviet Bloc count?ies
-e.re n-ot ,*dt rily indicative of the manufacturing costs of the product, -
While these latter costs are included in the calculations* the factor of
competitive prices for thA same product on the world market in non-Soviet ,
Bloc countries is used to determine the export sales price. In general
terms, the export sales price is determined as follows. 25X1
a. The manufacturer of a product for export informs the DIA organization
handling the export order of the manufacturing costs. This includes all
expenses involved in the manufacture of the product? The DIA adds
prescribed profit quotas and the cost of shipping the product to an export
harbor 4Akwr station from which the product would normally leave the
country,
b. Sales representatives in non-Communist Bloc countries constantly submit
quotations of sales prices of products exported by other countries,
These sales prices from competitors are used to establish a maximum sales
price for the East German product which can compete favorably with the
sales prices offered by other countries. A relationship is then establish
ed between the total DLIE costs, including a satisfactory profit and the
optimum sales prices developed to compete on the world market. This
relationship is expressed by a coefficientby which the DLE sales price
is multiplied in order to find the export sales price expressed in foreign
currency*
The following is a hypothetical example. A certain type of radio receivers
Type "A"if costs 150 DIME to manufacture, pack, and ship to a -potential
customer country. A similar radio, built by a competing country, sells ih
the same potential customer country for - the equivalent of 3,5Q
s} owz,-
Ahmmunt, 41111M-~" I
? ~,~. snttrild IV tie
STAT# X
AF(1( X
CLASSIFICATION'
DATE DISTR.
NO. OF PAGES
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
3 December it 54
2 25X1
THIS IS UNEVALUATED INFORMATION 25X1
'$I Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610007-1
 Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610007-1
SECRET
which costs 150*00 D to produce, ship, and sell is sold.for about
$46-50 or $47,50* This, of oourse, is. out of all proportion to the
price of the radio if free money market conversions were used. 150 DME
type of product. The coefficient applicable to DME and pound sterling
conversion varies from .25 to .1. The latter factor seldom goes that
low, however.
2. It happens at times that the East Germ snm ernment decrees that a certain,
product be sold at less than cost for vari us reasons, such as prestige,
desire to damage the industry or economy of a competitor country, or need
to acquire hard-currency foreign credits*
on th lin open exchange is worth approximately 33.33 DMW
approximately $7.93?
d? These co version coefficients are prepared to at least four decimal
places. It has been observed, however, that the conversion doefficient
from DUE to U.S. currency fluctuates between .'3 and .33 for machinery
exported by DIA-Invest-Export, depending upon the country and the specific
Approved For Release 2007/12/04: CIA-RDP80-0081 OA005400610007-1