MEMORANDUM FOR MR. DULLES FROM AAB

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R000800010018-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 14, 2016
• Document Release Date: December 9, 2002
• Sequence Number: 18
• Publication Date: June 11, 1959
• Content Type: MF

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? MEMORANDUM FOR: Mr. Dulles:
ructions apply.
After you have noted, I 'will send this
on to Bob Amory for comment and preparation
of an appropriate reply for your
signature.
STAT
(DATE)
STAT
FORM NO.
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 THE SECRETARY OF COMMERCE
WASHINGTON 25, D. C.
Mr. Allen Dulles, Director
Central Intelligence Agency
Washington 25, D. C.
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Dear Mr. Dulles:
Executive l Lgistrg
/ .., -7-k-
The Department of Commerce under the Export Control Act
of 1949 has certain responsibilities for the control of technical
data the export of which to certain destinations is considered
inimical to the national security. The Department also has long
standing responsibilities in representing American business and
industry in governmental matters.
Since technical data may be transferred by observation
and/or discussion, in addition to writings, the East-West exchanges
in the industrial and technical fields represent a possible avenue
for the uncontrolled export of significantly strategic technical
data. This Department recently suggested to the Department of
State - a copy of my letter of May 8, 1959 to Secretary Herter is
attached - that greater Commerce participation in the East-West
Exchange Program was necessary in order that these responsibilities
might be properly discharged. Among these suggestions we believe
Commerce representation on the Committee on Exchanges of the USIB
would be desirable and our responsibilities, both from the stand-
point of control of technical data and representation of American
business and industry, could be brought into the picture while
evaluation of specific exchanges is being made.
Ambassador W. S. B. Lacy, Special Assistant to the
Secretary of State, in a reply of June 2, 1959 suggested that we
direct such a request to you, the Chairman of the USIB. Accordingly,
if it is agreeable to you, I would like to designate Mr. John W.
Shepard of our Export Policy Staff to be the Department's repre-
sentative on the Committee on Exchanges when industrial or technical
exchanges are being considered and evaluated.
Sincerely yours,
Secretary of Commerce
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The Honorable
The Secretary of State
Washington 25, D. C.
Dear Mr. Secretary:
On July 18, 1956, Secretary of Commerce Sinclair Weeks wrote
both Secretary of State John Foster Dulles and Under Secretary Herbert
Hoover, Jr., outlining the concern of the Department of Commerce relative
to the East-West Exchange program, both from the Department's statutory
responsibility under the Export Control Act for the control of technical
data and for its responsibility as liaison with the business community.
Since that time, the United States has entered into and largely completed
an extensive exchange program with the U.S.S.R., which includes exchanges
of a highly technical and industrial nature in many strategically
important fields. On the basis of a study of the nature, scope and
procedures currently utilized for the implementation of this program,
a proposal by the U.S.S.R. for extension of the two-year U.S. - U.S.S.R.
exchange agreement of January 27, 1958, and recent information relative
to the U.S. - U.S.S.R. electronics exchange, the Department believes
certain changes in operation of this program are essential in order to
permit the Department to adequately discharge its responsibilities.
Before making suggestions, which are contained in the attachment hereto,
and which, we believe, if adopted, will assure that the national security
interests are adequately safeguarded, we believe a brief description of
the recent electronics exchange may serve to focus the problem.
During the past two months a group of U.S. electronics
industry representatives and technicians visited the U.S.S.R. as a
reciprocal visit to a U.S.S.R. group who visited the U.S. in the latter
part of 1958. The Department of Commerce, as we believe should be the
case, was not accorded the opportunity to participate in the evaluation
of the advantages and disadvantages of such an exchange; the itiner-
aries of the groups, either in the U.S. or the U.S.S.R.; the selection
of the U.S. team members; or consultation with U.S. plants, laboratories
or facilities or team members prior to the visits by the U.S.S.R. team
or the departure of the U.S. team to the U.S.S.R. It is now clear that
certain members of the U.S. team took to the U.S.S.R. certain materials
which, under the Department of Commerce export control regulations,
require licenses for export to all destinations except Canada. It is
also clear that a number of these items, and possibly some of the
technical data, which were given to the U.S.S.R. personnel, were under a
presumption of denial licensing policy from the U.S. and also on the
international embargo security trade control list. Not only, therefore,
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were U.S. export control regulations violated, but the U.S. has
violated its commitments to the other Coordinating Committee countries.
The matter is, however, more difficult because of the official
sponsorship of the exchange, and the assumption that several U.S.
Government Agencies actively responsible for the program were apparently
aware of the intent to use these materials and/or technical data for
exchange purposes.
While the Department of Commerce does not have evidence of
corresponding violations in other exchanges, either on visits of
U.S.S.R. groups to the U.S. or U.S. groups to the U.S.S.R., we believe
such violations have and will continue to occur unless remedial pro-
cedures of the type suggested in the attachment are adopted.
We wish to emphasize that the Department, in suggesting these
modifications, does not intend to erect barriers which would serve to
make the exchange program difficult or impossible of implementation.
The Department recognizes the objectives of that program and is well
aware of the high importance given to the program by the Department of
State and the intelligence community. On the other hand, the Department
is equally aware of its responsibilities under the Export Control Act
and believes firmly that, for the program to be fully effective, the
interests and responsibilities of each agency and department receive
adequate consideration, both in the original determinations and during
the course of the actual exchange.
If you concur in these changes, we shall be glad to assist
in making the necessary arrangements to place these modifications in
effect.
A copy of this letter has been transmitted to the Bureau of
the Budget.
Sincerely yours,
/s/ Lewis L. Strauss
Secretary of Commerce
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Attachment to letter dated May 8, 1959, from Secretary of Commerce
Lewis Strauss to Secretary of State Christian Herter, subject:
East-West Exchange Program and Technical Data Controls.
Suggestions for modifying present procedures for implementation of the
East-West Exchange Program.
1. The Department of Commerce should be represented on the
Committee on Exchanges of the U.S. Intelligence Board when technical or
industrial exchanges are under consideration. This would permit the
introduction into the initial consideration of the advantages and dis-
advantages on any proposed exchange of the Commerce technical data
export regulations. The Department has available in its BFC and EDSA
organizations competent technical personnel with special knowledge of
the business and industrial community as well as expert knowledge of
the strategic importance of technical data which might be compromised
by visits of Soviet bloc technicians, engineers and industrialists to
U.S. plants, laboratories and facilities. These personnel, who also
are, in many cases at least, cognizant of developments in the U.S.S.R.,
should be able to make a valuable contribhtion from that side of the
picture.
2. Because of the Department's long standing responsibility
as liaison with the business community, as well as its continuing
program of working closely with industry on matters of national security
and defense, the Department of Commerce should assume the principal
responsibility of securing the necessary cooperation of U.S. business
in the implementation of any approved exchanges in the technical/
industrial fields including the itineraries of the visiting groups
in the U.S. It is not intended, of course, that these activities
would be determined solely by the Department's personnel, but rather,
the Department would participate fully therein and would make the
necessary arrangements with the'business community. Additionally,
the Department should participate in the selection of U.S. personnel
to make up the U.S. group and in the establishment of proposed itiner-
aries of such groups in the Soviet bloc country.
Through these activities, the Department would be able
to acquaint U.S. business receiving Soviet bloc groups, and U.S.
group members going to Soviet bloc countries, with the export control
regulations covering technical data and commodities, give advice as
to the extent to which disclosures were permissible, either on a
general license or validated license basis, and provide authorization
for disclosures where it had been determined such disclosures were
in the interests of the exchange program and the U.S. national
security. It is believed that the specialized knowledge possessed by
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this Departmentts personnel concerning the nature, operation,
personnel and technical characteristics of the U.S. industrial and
business community, as well as the close relationship of the
Departmentts personnel with bu"siness, will add greatly to the
effective implementation of the exchange program. In carrying out
this responsibility, it may be necessary and desirable for a Commerce
employee well-versed in the export control regulations, as well as in
the activities of the particular industrial field involved, to call
upon prospective host plants, laboratories or facilities prior to a
proposed visit or, on occasion, to accompany the Soviet bloc visitors
on their tours.
3. Arrangements should be made, in connection with approved
exchanges, to obtain from U.S. groups going to the Soviet bloc country,
a formal comprehensive report of the information obtained or observa-
tions made so that it may be made available to the U.S. Government
and/or industry. While to date it appears little or no information of
value to U.S. business has been obtained, that which may have been
obtained has been made available only on an informal basis. There
should also be a full oral debriefing of U.S. members of a group.
Similarly, U.S. businessmen should be debriefed with regard to visits
by foreign teams to their plants. By participating fully in these
activities, I believe the results of the exchanges can be made more
useful than in the past. The Department, through its Office of
Technical Services, has a ready means of informing business of infor-
mation obtained.
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