HISTORY OF ECONOMIC DEFENSE SUPPORT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64-00014A000100050027-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: November 9, 2016
• Document Release Date: July 13, 1998
• Sequence Number: 27
• Publication Date: July 29, 1954
• Content Type: REPORT

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HISTORY OT ECONOMIC DEFENSE SUPPORT
Background
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-Int,elligenIce support to the policreaking and action agencita in
the economic defense field was undertaken by the CIA in the spring of
1948 with the assignment of the responsibility to the Economic Divieion
of ORE* This responsibility was transferred to the Economic Analysie
Division of ORE when ORE was abolished in November 1950* When the
Economic Analysis Division was eOlit into an Analysis Division and an:
Economic Defense Division on 1 June 1952, economic defense intelligence
support became the responsibility of the latter*
The economic defense program of the U8 Government has been based
rpoi a nuMber of NSC policy directivesliand Congressional enactment:5A/
the i ntation of which required intelligence support, particularly
intelligence about Soviet bloc economic eapabilities and Soviet bloc
needs for imports from the rest of the world* The need for intelli-
gence was expressed in specific requests to CIA to participate on;
continuing basis in support of various *epees of the economic defense
program from pOlicy-meking to operating levels* It was.also expressed:'
57"-Principel N directives: ESC decision of 17 Dec. 1947 to stop
shi nta of short supply or strategic commodities to the Soviet
bloc; NSC 91/I; NSC 104/2; NSC 122/1; NSC 152/2 and 3.
y Beals: legislation: Trading with the Act, 2 July 1940; Section
117(d) of the Economic Cooperation Act of 1948; Export Control Act
of 1949 (Public Law lls 81st Congress); *Cannon Amendment',
suPPlemontal Appropriation Act of 1951; Sec* 1304 (Public Lew 643s
81st Congress); nem Amendment Third Supplemental Appropriation Act
of 1951, Sec, 1302 (Public Law 45, 82nd Congress); AUtual Defense
Assistance Control Act of 1951 (Public Law 213, 82nd Congress)*
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seocificall7 in NSC policy directives 104/2 and 152/30 Intelligence
support for the program was recognized-by the Agency as a part of its
responsibility for production and coordination of economic intelligence
co the Soviet bloe0
'First participation in the economic defense program stemmed from a
request by the Assistant Secretary of Commerce for International
Affairs in the spring of 1948 for CIA assistance in the drafting of a
list of strategic commoditiosfor control of exports to the Soviet bloc.
This early interagency work progressed through several stages: (1) prep-
aration of an initial list for US control purposes; (2) drafting of
lists for initial discussions with other countries for controls on an
irternational basis; (3) refinement of the various lists through adop-
tion of criteria for inclusion of items and definitions of the specifie
itens. This refinement of the lists was necessary for the negotiations
which were undertaken in the Paris Coordinating Committee (CoCom)
beginning early in 19504 During this early period intelligence an the
Soviet bloc economy was largely undeveloped. Neverthelesss because the
bloc was passing through a difficult period of economic reccmerys it
was possible for industry and commodity specialist': to compile a list
or commodities 'which were generally agreed to be important to that arse
for development of its war-making capabilities*
With the enactment of the Export control Act of 1949 (jaY 1949)
the Secretary of Cemmeroe requested participation of CIA in the
Advisory Committee on Requirements (ACR) later renamed the Advisory
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Cceeeittee oa Expoet Policy (ACEP) and its eperating comnittee avid
oUbeopmitteas. Tee DCI agreed to Agency participation and a staff
I, her of the Economics Division in ORE was named to represent the
Agency. Activities involved (a) the reviee of the short-sop:Ey esme.
nodities remeintns under war-time controls to determine whether and
to whet extent thy could be decontrolled, and (b) the development of
the control lists of items significant to Soviet bloc war-potential
for both US controls and for the negotiation of parallel action by
aid-rocipient countries. Intelligence support for this participation
sam drawn from industry, commodity and scientific intelligence special-
lets in various components of the Agency. By 1 June 1950 the US =port
control program was well advanced and the early stages in the develop-
Nent of the international control structure in CoCom were completed.
PrinelmLiammt Activities
The. prineipel economic defense support activities mos, be summtrised
under two general headings: (1) providing the intelligence basis for
the strategic ratings of items considered for inclusion on the export
control lista/ end for revisions of these lists; (2) providing intel-
ligence to the action agencies for the enforcement of ',carols.. The
latter includes intelligence for the development of ancillary measures
financiels shipping, transshipment as well as intelligence on
transactions whit* may result in diversions of controlled items to the
bloc in violation of existing central regulations.
F-133 exi7OWcontroilistej international (Cocom) lists; China
Control list; Battle Act nets.
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In connection with these support activities a tueber of other
Nnotions are performed, Direct participation in interagency economic
defense committees and working groups has been a means of making intile
ligence available directly to polleyemakieg and action agencies in
eonnectionvith epecific problems, (See attached chart.) In additien,
on many occasions intelligence officers have rendered on-the-spot
support to US delegations conducting negotiations abroad on economic
defense natters, There has been active participation in the preparation
of collection requirenents for economic defense, for both the overt and
covert collection agencies. There should also to mentioned the eerrbeing
of requests from various parts of CIA, for information about the economic
defense progrem, status and accomplishments of international negotiAnlions
in this field, and other related information, These requests have
included requeste from the Legislative Liaison Office for informetion to
answer qesctione asked by Coogreseren. Finally, papers stbeitted to the
FSC Planning Board and the NSC are reviewed for the DCI and mire
In the di barge of the coordination-of...intelligence function,
certain mechanisms have been est up for the interagency review and pro-
duction of intelligence for economic defense and for bringing repre-
sentatives of the intelligence agencies and action agencies into closer
working relationships. Specifically, the Intelligeeentlnerking Group and
the Diversion Contra Net (both discussed in later sections) were set
up to aecomplich these purposes with respect to particular activities.
The history of intelligence support for these activities, is
outlined in the following sections.
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Exports of strategic goods from the Free World to the Soviet bloe
are controlled through a program of embargo on selected items, quantieative
restrictions on additibnal items and surveillance over certain other Ltems
not subject to embargo or quota, The security controls are administeeod
through a system of export licensing based on export control lists.
The items are placed on the lists, redefined or deleted in accordance with
criteria designed to identify items that are of strategic importance to
the Soviet bloc.
In the development and subsequent revision of the security export
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control lists, the action agencies urgently need Intelligence on the
Soviet bloc with respect to the particular item or items under consideration,
Such intelligence includes estimates of Soviet bloc capability to produce
the item degree of dependence on imports from non-Soviet areas, 1:120
patterns with military applications indicated, and information on Soviet
procurement attempts, shortages and technology. The intelligence support
is important not only in placing new items on the lists under accepted
technical definitions but also in connection with proposed revisions in
definitions and deletion of items. These proposals reflect primarily
pressures for increased trade with the Soviet bloc but they often have
serious security implications. The intelligence must, therefore, be
As finally developed the international control structure consisted
of two distinguishable patterns of control applicable through COGOM
against the European Soviet bloc and through =HOCH against Commeniet
China. The COCOH controls consisted of three separate lists corresponding
to the above-mentioned control categories (embargo, quantitative control
and surveillance) and the CHINGOM controls included an embargo of all
the items in the COCOM lists plus an extended list of supplementary
items,
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pinpointed to precise sizes, grades, and technological characteristics
to show explicitly which of the items contribute significantly to the
Soviet war potential.
Items currently on the export control lists have been selected
from hundreds of items -- raw materials, industrial products and equip-
ment -- reviewed by the cognizant interagency and international committees.
Within the past six months each of the approximately 450 items or cate-
gories, constituting the international lists as of 1 July 1954, has been
reconsidered for retention, redefinition, downgrading, or deletion from
the lists.
With the formation of ORR (November 1950) the Economic Analysis
Division was designated to provide intelligence support to the action
agencies responsible for strategic export controls. Initially intele
ligence was supplied primarilythrough the ACE? committee structure
which included an interagency policy committee, its operating subcommittee
and a large number of technical task groups. Division personnel repre-
sented CIA in all of these interagency committees and working groups -
which were responsible for the development and revision of the export
control lists.
When an interagency advisory committee was set up under provisions
of the Mutual Defense Assistance Control Act of 1951, the DirectOr for
Mutual Security requested CIA participation. The AD/RR was designated
as the CIA representative on this committee which became known as the
Economic Defense Advisory Committee (EDAC). Following the formation
within ORR of the Coordination Area and the Economic Defense Division
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(June 1952). Chief, Coordination became the CIA representative on
the EDAC Executive Committee. Chief, D/E was named as alternate on
both EDDA? and its Executive Committee. Other D/E personnel were
Appointed to serve on working groups and subcommitteeP, including
the Staff Committee which drafted the initial Battle Act lists*
The technical task groups initially set up under ACEP were re.
constitued to serve both advisory committee structures. Subsequently
a joint committee at the operating level was established to make
recommendations to both the ACEP and the MAC. The relationships among
the various interagency groups serving the economic defense agencies
is shown in the chart on page 22,
Intelligence was made available directly at meetings of the
interagency committees or by the submission of brief intelligence
papers and.at'times by detailed research reports on important com-
modities or related groups of commodities. At the task group level
the primary function of the CIA representatives was to contribute
the intelligence section of the fact sheets prepared by the technical
task groups. D/E analysts, accompanied by specialists from the re-
search divisions (D/M, DA and DP) have participated in as many as
29 technical task groups concurrently. At the operating committee
level the CIA representatives participated in the review of reports
from the task groups which served as a basis for the committee
17761;7gi7117-latter half of 195, the facilities of the interagency -
Intelligence Working Group (described on page2)) were utilized in
the production and coordination of intelligence requested in connec-
tion with the determination or the reconsideration of strategic
ratings. The list review, however, was so accelerated in the spring
of 1954 that it was impracticable to process the intelligence through
the IWG?
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recommendations regarding strategic ratings. The primary function
of D/E personnel in these reviews was to see that intelligence
previously given was properly interpreted and to introduce new
intelligence,
Pursuant to MSG 152/3 a systematic interagency review of the
US Master Export Security list in terms of new and more restricted
Criteria was begun in early January 1954, The UK proposal to the
US for the immediate adoption of a short control list precipitated
an acceleratedritem-by-item review of all commodities on the Inter-
national Lists, first for discussions in trilateral sessions (US,
UK and Prance) and subsequently in COCOM. This program involved
intensive support activity including (a) preparation of intelligence
on a wide range of strategic items, (b) virtually daily attendance
at meetings of the Joint Operating Committee and its informal working
groups
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When OKa was organized, it was anticipated that a small staff
in the then Economic Analysis Division (later DP) by drawing upon
the resources of CIA, particularly those of the research divisions
of ORE, could provide the intelligence required by the agencies ro-
sponsible for the security export controls. The ORR research program
as it was developed, however, required such concentration on long term
1/ The number of analysts assigned to this work was increased from feur
to six with the formation of DP in June 1952.
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research that comparatively little time was available from industry
and commodity specialists for current support work. As a result,
the small staff mentioned above engaged in research to the extent of
their limited facilities in an effort to fill the void.
During the accelerated review of the international (COCOM) lists,
March-June 1954, industry and commodity specialists from the Research
Area of ORR, along with several from OSI, participated actively in
the production and presentation of intelligence required in the re-
consideration of the strategic rating of items on the COCOM lists.
Following the completion of this phase of the work, full responsibility
for the production of commodity intelligence in support of the econonic
defense agencies was assigned to the Research Area.
With respect to commodity intelligence, DP will continue to be
responsible for meeting the intelligence requirements of the action
Agencies by (a) continuing representation of CIA on the interagency
committees and working groups, (b) receiving the requests for intel-
ligence support, (c) advising the appropriate staff in the Research Area
regarding intelligence required to meet these requests, (d) the inter-
agency coordination of this intelligence through IWG, and (e) making
the intelligence available to the action agencies either directly or
through the ACEP-EDAC committee structure. DA is faced with a serious
problem in endeavoring to meet these responsibilities in view of the
transfer on 1 July 1954 of 5 analysts from DA to the Research Area,
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Enforcement Intellicaolumn
Enforcement of export controls baa been a continuing concern of
the US Gavernment. The basic instrument of control has been the
requirement of licenses for export to particular destinations of
items an the security contra lists, To prevent frustration of US
export controls, the US has required exporters to obtain licenses
to export items on the DS control lists to most destinations outside
the bloc. Congressional insistence =international cooperation in
this effort took the form of certain requirements embodied in
legislative enactments. The program of international controls
through the CO-COCOM structure in Paris Was undertaken on the
initiative of the US in connection with this legislation.
In all these efforts intelligence support has been a basic
requirement. In the processing of license applications and in
making end-use checkn, intelligence about foreign buyers was needed
to establish their statues as legitimate end-users. CIA furnished
some intelligence in unevaluated form directly to the Department of
Commerce and to the Comptroller's Office of EGA. ORR provided
evaluated intelligence on a limited basis to these agencies and to
the interagency R Procedure Committee. This work was the basis
for the original effort within CIA to develop a file of individuals
and firms engaging in or suspected of engaging in diverting controlled
strategic items to the bloc.
con(d) Foreign Assistance Control Act of 19/48, "Cannon
ndment", "Kern .Amendment", and Battle Act.
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The enactment of the "Cannon Amendment" in September 1950 and
the drafting of BSC 91 in October and November were the occasion
for establishing the BSC Special Committee on East-West Trade* The
Committee was set up at the Assistant Secretary level to determine
whether the trade of aid-recipient countries conformed to the require-
ments of that Amendment. Chief* Economics Division of ORE was
selected by the DCI to represent the Agency on the committee* Sub-
sequent to the establishment of ORR, the Chief of the ECOMOMies
Defense Division (then called the Economic Analysis Division)
became the CIA member. When the "Cannon Amendment" was replaced
by the "Kem Amendment*" the Special East-West Trade Committee engaged
in similar activities in connection with the requirements of that
legislation* including the problem of Presidential exceptions for
limited shipments of prohibited goods by aid-recipient countries*
Intelligence was an important ingredient basic to the findings of
the committee. This committee was replaced by the Economic Defense
Advisory Committee under the Battle Act but withsomewhat different
terms of reference*
Following the enactment of the Battle Act and the growing
pressure in, Western Europe for foreign markets* the need for improv-
ing the collection and processing of current intelligence on strategic
trade transactions became increasingly evident. The following
section describes the steps taken to date to meet this need*
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The objective of the intelligence support for the strategic trade
control program, initiated 'early in 1933, is to provide action agenciet;
of the government with current intelligence required to support the
effective implementation and enforcement of Free World 0000Dmic defenso
measures, This centralized intelligence support was needed because of the
inadequacy of incomplete and uncoordinated departmental intelligence*,
The organization of a staff to carry out this program was initiated
during the second quarter of 1953, in response to a request of the
Economid Defense Advisory Committee (EDAC) on the basis of a staff stu4
by the EDAC Intelligence Working Group (IWG). This program was given
strong impetus by NSC 132/2 of 31 July 1953 which directed the, followirg
course of action:
"Improve the availability and enhance the utilization ofcurrent
intelligence in matters relating to the enforcement of controls."
To realize this objective it was necessary to arrange for (a) the
rapid flaw of current Easte4rest trade intelligence materials to this
central point from all sources geographically and from all. levels of
classification, (b) the processing of these materials into pertinent,
significant and readily useable fors, and (c) the development of pro-
cedures and administrative machinery for bringing the resulting intelli-
gence to the attention of the action agencies.. This required the
development of a new Current Reference facility, provision for Transactions
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Analysis and channels to action agencies. An-additional function,
included in the initial proposal, was that of trade analysis, which was
intended to integrate the results of transactions analysis (largely
relating to clandestine trade) with normal overt trade intelligence and
provide meaningful aggregates of strategic trade movements to the Soviet
bloc. This would provide a basis for support on policy problems relating
to the structure and administration of strategic trade controls and to
basic estimates of Soviet bloc requirements, capabilities and vulne:ce.
abilities, Although this third function was not approved, there has been
an increasing recognition of the need for this type and degree of exploi-
tation of international trade intelligence on the Soviet bloc.
The Current Reference Service, as developed, includes the operation
of a central master file of all available strategic trade intelligence
material, classified and cross-referenced by, commodity, individual or firm,
and country involved in strategic East-West trade transactions? This
service is designed primarily to facilitate detection and analysis of
procurement efforts, transactions and trade movements which constitute
evasions of strategic controls. It is also the basis for D/E representa-
tion on the EDAC Administrative Action Panel and for rendering intelligence
support to the Panel program which aims tos
!withhold U.S. Government privileges and facilities from foreign
firms and individuals and from U.S. citizens domiciled abroad an
account of activities willfully conducted by them in violation of
security controls of East-West trade0"
Transactions Analysis includes the screening, analysis, evaluation
and clearance of intelligence on transactions, shipments and Soviet bloc
procurement efforts involving strategic commodities,. This oeration,
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supported by the Current Reference Service, is the basis for D/E repre-
sentation on the Diversion Control Net (DCN)? consisting of representativ s
of the Departments of State, Defense, Commerce, Treasurers the FOA (MDAC)
and CIA, The DON, which began operations in January 1954, was established
by the Economic Defense Advisory Committee to coordinate intelligence
support with action-agency efforts to prevent the diversion of strategic
materials to the Soviet bloc, A continuous, direct substantive liaison
is also maintained with each of the action agencies in the economic defense
field and with other elements of CIA concerned with East-West trade
intelligence.
The strategic trade intelligence program was operated during the
eecond half of 1933 with a skeleton staff? This was occasioned by time
required for clearances of recruited staff and in basic intelligence
training of new professional personnel. The need for onetheejob training
further slowed the implementation of the new program. The major activities
during that period consisted of a variety of efforts aimed at improving
and speeding up the inflow of the required intelligence materials and
the development of a central file of classified trade intelligence material
as the basic facility for current intelligence support to aotiod agencies
in this field,
By mid-1954, the classified file and the procedure necessary for its
efficient operation had been brought to dubstantial maturity as themost
complete source of timely strategic trade intelligence available to
U.S. officials. The level of operations is indicated by the scanning of
over 2300 documents and carding of 5-600 documents monthly during the second
quarter of 19545,
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The recent assumption of the responsibility for rendering intelli-
gence support to the EDAC Administrative Action Panel, in response to
repeated requests during the past year, will be only partially effective
because of a lack of staff for this activity. Some useful results will
be realized from the close liaison between CIA name intelligence files
and the related resources of the Department of Commerce. However, it will
rot be possible to conduct an adequate amount of name intelligence research
to make CIA support of the Administrative Action Panel program hilly
offective.
In the Transactions Analysis operation procedures have been developed
for the timely collation, analysis and clearance of intelligence on
strategic trade transactions and for presentation of the remelts of this
processing to action agencies by means of direct flash reporting and by
participation in weekly meetings of the Diversion Control Het. Screening
of incoming current intelligence materials by Transactions analysts has
resulted in the selection for preliminary investigation of 2-300 reports
of suspect activities per month in 1954. These preliminary investigationy
Lave resulted in the further selection of approximately 60 cases per
!tenth deemed to warrant the attention of the Diversion Control Not and
Foreign Service posts or to require further surveillance, research or
initiation of supplementary collection,. To the extent possible during
1954, compilations of diversion case materials and reports on the magnitude
ct clandestine trade in selected cormodities have been prepared in response
to requests by action agencies and U.S. officials engaged in international
negotiations relating to strategic trade controls.
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With the limited staff available during the past year, it has not
been possible to respond adequately to repeated requests from action
agencies for analyse? in depth which would indicate the extent and pattern
of evasions of controls and the volume of strategic trade diversions.
Furthermore, existing facilities are not adequate to satiefy the require-
ments of the new and expanded enforcement program on which the U.S. Govern-
ment has recently embarked in connection with the revision of the inter-
national control structure.
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Shipping Control?mErt
Controls over the sale and charter of ships to the Soviet bloc
and over ship repairs and bunkering were regarded by the economic
defense agencies as being necessary measures in an effective economic
defense program designed to restrict the rate of growth of the Soviet
bloc war potential, especially to make more effective the controls
on exports to Communist China, Intelligence on the Soviet bloc
merchant fleet, shipbuilding facilities, shipping engaged in Soviet
bloc trade, ship cargoes, ships being built and repaired for the
bloc inliestern shipyards, and on other aspects of the shipping
picture was needed by the action agencies in order to develop ade-
quate measures in the shipping field&
Certain of this intelligence was being produced in the Services
Division and in the Industries Division. OLU was producing intelli-
gence an ship movements, to some degree on cargoes, and on ship-
building facilities. State and Commerce were also doing some work
in this field for Departmental use. There was need for a central
point within the intelligence community to which action agencies
could turn to obtain intelligence in this field and to present their
needs for additional support. From the standpoint of the intelligence
agencies, coordination of intelligence in this field for support of
the action agencies was highly desirable. To accomplish these pur-
poses, at least in some measure, a Transport Controls Desk, manned
1
by two to three analysts, was activated in D in. August 1951.
'Oxtgt1uLTly in the Measures Branch; became a part of the Strategic
ontrols support Branch in August 19530
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Vexing upon and working closely with SitaA.I/SH and OI,
inta .igence of the nature outlined above was prepared for use of
the interagency committees in the development of shipping controls
and for use in, negotiations In. COMM for the institution of inter.
national controls.
The =Oar role of this D/E support activity has been that of
cooraination of the intelligence relevant to shipping control prOblemm
and pointing up such intelligence for the needs of the action
agencies. This role has led to olose working arrangements with the
act Lon agencies. 2gRitAtee occasions, at the specific request of
mmagenoies,
Finmyls .Controls Intalllence Support
Prior to Juno 1954 the United States was the only couctinrubich
had adopted transaction controls for the specific purpose or
f
strengthening the system of security export contrels.. On 1 Jima
1954 Canada adoptod transaction controls Until about 1953 the
need tor intelligonce on the financing of transactions in violation
or the export dontrols has not been considered general-3;y as vrgent as
intaligence on other aspects of the econonic defense program* It has
=theme considered a reeponstbility of CIA to provide intelligence ?
regarding UN citizens and firm engaged influencing suspect. Ead trade.
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Nevertheless, an effort has been made to keep the financing
of East-gest trade diversions under surveillance and some intelli-
gence of this nature has been produced for particular needs In
connection with Strategic Trade Intelligence Support the financial
aspect of diversions is an integral part of the intelligence picture*
A special study of the financing of East.West trade diversions wan
undertaken in 1954* Basic research an the Soviet bloc gold and
foreign exchange situation, undertaken in ORR and the Economic
Intelligence Committee, will contribute considerable background
for dealing with problems of concern to the economic defense
commity*
Itftaligence support to economic defense in the financial field
has been in the main a part time assignment of one individual* The
intelligence on financing of individual transactions cases is being
recorded and filed in the Current Reference Service files and is
made a part of each transaction case, but the analysis of these bits
and pieces remains the part-time assignment of one analyst*
Early in 1954 a subgroup of the Intelligence Working Group
reviewed the need for financial interfigence in support of economic
defense and the facilities then available for providing such intelli-
gence support, The report carried a Proposal for laproving this
support. The proposal is being reviewed :by the action agencies from
the standpoint of their needs: and priorities for support,
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Sanitized - Apipjp- ved For Release : CIA-RDP6U0014A000100050027-8
Production of Coordinated Inten_IV..asice
At the request of the Director of Mutual Security and the
Secretary of State, with the approval of the Director of Central
Intelligence and the Secretary of Defense, the Intelligence Working
Group was established in July 1952* Its Terms of Reference were
approved by the IAC. The fundamental purpose of the T.WG was to
provide at the working level an interagency mechanism for (a) draw.
ing directly upon the resources of all components of the intelli-
gence commmetty in the production and coordination of intelligence
in direct support of the EDC, and (11) maintaining a close working
relationship beteeen representatives of the intelligence and action
agencies* DiE has provided the Chairman and the Secretariat, includ.
lug the Executive Secretary.
The IWG has served as a focal point for the production, review
and coordination of intelligence indirect support of the Economic
Defense Advisory Committee and other economic defense agencies*
Since its inception the IWG has given consideration to 75 problems
formally placed before it by member agencies* Thirty-six studies
covering financial, commodity and shipping problems in the economic
defense fields have been completed under IWG auspices* Inadditicest
40 information doceasents of current significance, primarily concern
lug mevement of specified veseels and/or diversions of strategic
commodities to Soviet destinations, have been issued*
y"fir:M71725 July 1952, as amended*
Sanitized - Approved For g,egO13.FIA-RDP64-00014A000100050027-8
Sanitized - Agwved For Release : CIA-RDP6 014A000100050027-8
S-E-C-R-E=T
Under its assigned mission to assist in improving the collec-
tion and utilization of intelligence the IWO recommended the estab-
lishment in CIA of a unit to process current economic defense
intelligence and to collate such intelligence for use of operating
agencies. This recommendation vas subsequently implemented by CIA
through the Strategic Trade Branch. The IWO also developed recom-
mended instructions to the field for the lateral distribution of
intelligence on suspected diversion of controlled commodities
to the Soviet bloc. Fourteea sUbgroups have been established to
provide IWG and EDACerith specialized research and tedhaimal
intelli-
gence advice in specific fields of economic defense. An exhaustive
examthation vas made of the nsed for intelligence in the US
Goverameat on external financial operations of the Soviet bloc.
rATG efforts to establish a comprehensive pattern of US
? Governmeat requirements for the covert collection of economic
defense information have not yet been successful. This problem
has beeome 'urgent in, terms of the meds or the enforcement program
for adequate and t1y intelligence on diversions of strategic
commodities to the Soviet bloc.
Sanitized - Approved For F.v .,:i1A-RDP64-00014A000100050027-8
ONO PIMP
Sanitized - Approved For Release:
CIA-RDP64-00014A000100050027-8
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