NATIONAL CORPORATIONS/PRIVILEGED COMPANIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00047R000100140001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 15, 2016
• Document Release Date: October 17, 2002
• Sequence Number: 1
• Publication Date: November 30, 1951
• Content Type: REPORT

CLASSIFICATION
Approved For Release 20
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CENTRAL INTELLIGENCE AGENCY 25X
INFORMATION REPORT
COUNTRY Czechoslovakia s
SUBJECT National Corporations/Privileged companies
THIN DOCUMENT COY TA IX/ 10:.111 [CTINO TON NATIONAL DEFENSE
OI TN[ UNITED /TA T[fl NITNIM 7M[ AN IMO 01 TI TL[ IE1 /[CTION/ 7[>)
AND 7E11 OF THE U.S. CODE, AS AMENDED. ITS TAANSYISSION OR ROVE.
LATION OF ITS CONTENT/ TO ON R[C[IRT OY AN UNAUTNONID[D PARSON IN
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1. The National Corporations described in this report might
bettwe be called Privileged Companies (Vysadni Spolecnost)
in order to,differentiate them from the National Corporations
(Narodni Podnik) which are engaged exclusively in production.
The following were permitted to engage in foreign trade.
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Chemapol
Skloexport (glass)
Keramika
Oleaspol
Centrotex
Hops & Malt
Metrans
Cellulose
Exico
Magnazit
Metalimex
CLASSIFICATION
Mill 51-4D
f
Mexico, Brazil (mostly for selling)
Mexico, Brazil, Venezuela
Argentina, Brazil
none
Argentina, Brazil (for buying)
none
none
none
Argentina (for buying)
none
none
1
DATE DISTR. 30 Nov 1951
NO. OF PAGES 4
NO. OF ENCLS.
{LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
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Poldi
Koospol
Centrokemes
Ko-h-inor
Ferromet
Sutrex
holy (Mines)
Kovo
Ligna
Tabako
Merkuria
none
none
none
none
none
none
none
Argentina, Brazil, Venezuela
none
none
one rep. for Central America and
one for south America.
There are two types of individua]8 who act in behalf of a
Privileged Company: a delegate and a representative. The
latter is often an individual or firm indigenous to the
country with which Czechoslovakia is-doing business. This
individual or firm acts as part or full-time-representative.
of the Czechoslovak. company. A delegate, however, must be
a`nat,ive-born Czechoslovak citizen and his political re-
liability is far more important than his professional
qualifications. The process for selecting such a delegate
is as follows (Kovo is used as a typical Privileged Company):
(a) A foreign post to represent Kovo must exist.
(tt) Kovo belects an individual with the appropriate pro-
fessional qualifications to fill the post and sends
his name to the Cadre Section of the Ministry of.Foreign
Trade. At the same time the name is submitted to
Vice Minister I, who is in charge of supervising the
.,foreign commercial activities of the Privileged
Companies.
The Cadre Section then runs an investigation of the
individual's personal life and background and of. his
political past.
(a) In the case of Kovo, approval for the individual must
also be obtained from the Ministry of Heavy Industry.
(e) The'results of the investigation in (.).are sent to
the Cadre Section of the national KSC organization..
Then the entire case is turned'over to the Ministry
of National Security for review.
The Cadre Section of the national KSC organization
makes a decision on the basis of the review and sends
the decision to the Ministry of Foreign Trade..
The Privileged Company requests the Ministry of Foreign
Trade to procure a passport. The latter in turn
requests a passport from the Ministry of Foreign
Affairs. (It usually takes at least a month to obtain
a passport.)
(h) With the passport in hand the'delegate makes application
to the consular official of the country in question
for a visa.
This process requires at least six months.
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:Merkuria is the most important of the Privileged Companies.
In dealing with-the~West.. Czechoslovakia used three types of
trade arrangements, as-distinguished'from'outright purchase.
These Whenever are any of these compensation, is used, reciprocal trade does all and all thCher".
e
negotiation and coordination before any contracts are signed.
Merkuria thus is an administrative organization standing
between the export-import firm in the West and the Privileged
Company in Czeohoslovakia a 'As far ' as I know, Merkuria has
no dealings with Satellite nations.
The organizatioan~al set-up, which is somewhat similar to a
section of the Ministry of Foreign'Trade, is as follows:
Cadre and
Personnel
Administrative-
Director
Comm of-Al D e
USA reat rit France ' Brazil etc
Desk Chief Desk Chief Desk Chief Desk Chief
For each country in the West there is a Desk Chief who has
a small staff and his files. I do not believe Merkuria has
any representatives in the field; if a Merkuria man is sent
out, it is only for a few days and usually to another country
in Europe.
An example of Merkuria's role in foreign trade follows. Assume
that an item.in the 1951 import plan calls for 100 thousand
K ca worth of sisal, to be obtained via a compensation deal.
Assume. further that Merkuria received an offer from an export
firm in Brazil to deliver a certain amount of sisal, to be
traded against some other commodity, e g glass.. The
following ensues:
(a) Merkuria informs Centrotex that an offer has been made
by a certain firm in Brazil to deliver sisal. Centrotex
instructs its representatives in Brazil to inspect
the sisal for quality. Centrotex of course knows of
the 1951 plan to import 100 thousand Kcs worth of
sisal,
(b) Merkuria informs Skloexport of the name of the Brazilian
importer and the amounts and types of glassware
desired. Can Skloexport deliver the required items
within a given time?
If Centrotex is satisfied with the quality of the
sisal, Merkuria, in consultation with Skloexport, makes
an offer to the Brazilian importer of a given quantity
of glass of a given type as compensation for the sisal.
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(d) If the Brazilian exporter agrees to the plan, Nerkuria
compiles a summary and presents'it to the Ministry of
Foreign Trade for consideration. The summary contains:
Total value of the goods in the transaction
Amount to be imported into the CSR, weight and value
Exchange balance
Amount of glass to be exported, weight and value
Exchange balance
There is a standing directive Which states that Merkuria
should attempt wherever possible to export sufficient
goods (in this case glass) over and above that required
(f)
One from Vice Minister I (Privilged Companies)
One from Plans Section
Statni Barika - One
Merkuria - One
The summary is considered by a commission composed of
representatives from:
Ministry of Foreign Trade - Three
One from Territorial Section
A copy of the summary is also sent to the Statni Banka.
in the compensation deal to cover that portion of the.
transportation costs which the CSR is required to pay.
The oommision renders a decision as to whether contracts
should be signed.
Merkuria concludes a general agreement with the Brazilian
firm. Following this, Skloexport signs a normal con-
tract with the Brazilian importer (if the exporter and
importer are different firms) and Centrotex signs a
contract with the Brazilian exporter for the delivery
of sisal.
From the preceding remarks it is easily seen that Merkuria is
in a pivotal position with regard to trade between Czecho-
slovakia and the West, since Czechoslovakia prefers to import
goods via one of the three trade arrangements mentioned
rather than by outright purchase.
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