SUPPLEMENT TO THE CZECHOSLOVAK-YUGOSLAV INVESTMENT AGREEMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R002200040010-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: November 9, 2016
• Document Release Date: December 18, 1998
• Sequence Number: 10
• Publication Date: July 1, 1948
• Content Type: IR

CLASSIFICATION
COUNTRY
SUBJECT
82=OO:
INFORMATI PORT
Approved For Fj1}
Cpechoelovakia/Yugoslavia
Supplement to the Csechoslovakr-Yugo,
Investment Agreement
25X1A6a
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.
ACQUIRED CIA
OF I 25X1 X6 ~~A SUPPLEMENT TO
REPORT NO.
25X1A6a 25X1A2g
1. The Investment Agreement has a supplementary agreement known as the "Z" agree-
ment? This agreement, which deals with capital investment equipment for the
Yugoslav war industry, is a secret contract. Comments
for the text of the main portion of this tree , was signed on 24 L ay 9 .
2. The value of the deliverie, for which it provides is approximately 800 million
Czechoslovak crowns. This sum is included in the amount of 7.5 billion Czech
crowns envisaged for the Invostzient Agreement.
The "Z" agreement provides for deliveries for the following plants and factoriess
Infantry and Revolver ,Ammnnition Factory
1) Complete installation of an Infantry and revolver ammmition factory.
The part of the plant for raking revolver ammunition has already been
delivered by Llessrs. Sellier & Bedot of Viaein (near Benesov) from
their own surplus material reserves. The rest of the installation is
being delivered by the Brno Arms Factory, part of it being manufactured
by this firm and the resf with the help of other machine fadtories. The
Brno Arms Factory is responsible for the performance of the plant when
erected. A part of the machinery required will not be ordered from the
Czechoslovak firms concerned because Yugoslav is to receive them as
reparation deliveries from Germany and Austria. The Brno Arms Factory
also has to supply special appliances, tools, and dravings. It is also
at the disposal of the Yugoslav authorities should the latter require
technical assistance in assembling or operating the plant. Services
of this kind will be paid for separately.
2) The agreement for the above factory was" signed in-the middle of 1947.
The period of delivery runs to the end of 1968. Up to the present
the name of the place where the factory is to be built has not been
,disclosed. It is known, however, that it viii be installed in under-
ground tunnels.
TATS NAVY j NSRB D R)CUTION
RMY AIR JFBI
NO CT ^.T^-"E in Class. L-1
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D. JC
CD NO.
25X1A2g
DATE DISTR. 27 Dec 1948
NO. OF PAGES 3
OF ENCLS
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GEUTRAL INTELL'Yt JLM`IA&L ICY
b. Plant f o r P ctio of 20 ran to 57 m m Cal ber Ar
1) The firm entrusted with these grders is Skode, which, however, is
not supplying the whole installation, since approx tely 35 per-
cent of the machine tools required are already in possession of the
buyer.
The principal t "es of ammunition which the factory will produce are
shells for 20 in automatic weapons and AP shells of Soviet pattern,
37 m and 45 (?) attn.
3) The plant is not ultra-modern but is about on a par with what would
have been technically up to date in 1934-36.
4) The machinery is to be set up in tunnels,, the location of which is
unknown to Skoda.
5) Generally speaking. the delivery conditions are the same as for the
construction of the infantry and revolver ammunition factory referred
to above. The agreement, which was signed at the end of 1947 provides
for completion of deliveries to be completed by the middle of 19491
c. Plat for Rifles Automatirays~ and fachine Guns
The Brno Arms Factory is to supply this plant. Negotiations on the
matter were still in progress in the middle of Larch 1918, but they have
presumably been completed. The period of delivery runs to the middle of
1949.
d, Explosives Fay
1) The explosives to be produced are nitroglycerine and diglycol powder,
tritol, and industrial explosives.
2) fessrs. Skoda are to deliver the equipment and will collaborate with
the firm Explosia of Semtin for this purpose.
3) The negotiations were started in the middle of 1946 and were suddenly
broken off at the end of 1947. It appears that Poland had offered
to Yugoslavia at a much lower price a complete plant of similar design,
which had been left intact by the Germans in the part of their territory
which went to Poland.
e, Plant for Lam-facture of 75 mm to 3,22 man Medium Caliber Artillery
1) Yost of the machinery required was already in the possession of Yugo-
slavia, or was already available in Czechoslovakia at the and of the
war.
2) Skoda was given the task of planning the layout of the factory and
of delivering any part of the machinery which still remained to be
found.
3) The factory was essentially provisional in nature, and wsL- to be
equipped with out.of date machinery. It production was to be fairly
small.
4) Negotiations concerning the delivery contract for this factory are not
yet complete.
/CGNJTRGL - U.S. CFFICIAI1 ONLY
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 Approved For Release I 999109/D8": CIA-RDP82 U0 57R0022M4'0010-6
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f. Oun Fae ta,
1) Negotiations for building a gun factory have not yet begun. When
constructed the factory will produce 75 mm mountain gone and 105 mm _
light field howitzers.
2) Skoda is designated as the supplier.
3) The forgings and castings win be delivered by the Zenica steel works.
4. The credit of goo million Czech crowns will presumably suffice to cover only
items a, b, and 9, and possibly c of the six projects named above. In any
case the time schedules are likely to be considerably exceeded, The Yugoslavs
refused to employ Czechoslovak technicians, so as to avoid having to disclose
uhsre the plants are to be built. Technically speaking, however, it is almost
inconceivable that the Yugoslavs will prove capable of construiiting is works
and putting them into operation successfully without outside help.
5. The "Z" agreement has been given highest priority in both time and importance
and the Czechoslovak Goverment is fostering it with every means at its
disposal.
6. All deliveries'made under the "Z" agreement are to be paid for in cash within
thirty days of the date of consignment. The Czechoslovak National Bank offers,
however, to pay suppliers an advance installment in the form of a credit not
exceeding 33 percent of the purchase price.
/CCt3 a - U.S. CFFICIAI S CITLY
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Approved For Release 1999/09/08 : CIA-RDP82-00457R002200040010-6