EAST GERMAN IMPORT, EXPORT AND TRADING ORGANIZATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A005600040002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Sequence Number: 2
• Content Type: REPORT

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CENTRrAI INTELWGENCE AGENCY
h ~ (FO~R~ .We ~AT~hO~ ~ RAE P~O:RT
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any mealne to+1-n ~o~iled perecn~,fp~,prohiblted
by'1sW. it-'
COUNT CRY East Germany
SUBJECT East German Import; Export and
Trading Org~:nizations
fig, PLACE ACQU!_RED '
REPORT
DATE DISTR.-?
31 'December 1954
NO. OF PAGES `,~
I~QUIREMENTy X10: -RD.
REFERENCES ;`
THE SOURCE EVALUATIONS IN THIS REPORT ARE OEBINIT-VE.
7HE APPRAISAL .Of @ONTENT IS TENTATIVE.
(FOR KEY SEE REVERSE)
1. The various specialized agencies of Deutseher InnEn- and AusSerlhandel (.~.A), at
the present time, number seventeen. These DIA agencies (refereed to as :D7As)
are subordinate to the N~nistry of Foreign and Internal German 'grade (Mnisterium
firer Aussen- and Innerdeutschen Handel - MAI) and function as the r~ctua?. export
and import offices of this ministry. -
2. The individual DIAs are guided by general directives and specific ri~structionS
from N1AI, and they have two related function's. in the.export-field.:
a. To seek foreign pureh.asers in their assigned fields for products that were
specific ally manufactured for export in accordance With the foreign trade.
Ply, `'
b. To accept foreign orders for products in their fields r~,d to make contracts
with East German enterprises for the manufactu-re of ~~uch products if they are
not already available for export. ~ ~. ,
3. All enterprises, privately or government-owned, prepare. :a production p3an each
year. This plan is amended or approved by the Ministry to w+hc~h tike enterpri~.
is subordinate, by the MAI, and by agencies of the State- Planning C~omm~s~son. , ,
The approved plan contains, if appliea:ble,~a distinction between products for
domestic consumption and those for export sales; for, at ,;times, items for domestic
consumption are of an inferior quality to those destined for export'.
/~, The MAI allocates sufficient quantities of export products to: satisfy the requre-
menFts of the annual trade agreements with East Bloc states.. These trade agreements,
as well as the entire East German production plan, are amended., if' .nec:es~s~ar-y, and
approved in Moscow. The produrctorl p~lan~s, as well as emxport: and' - n~nport pl'an's of the
various Soviet Satellites,, are inte.~g~ratred.n Moscoca i~rii~ t?he~` over~l7. East Bloc
Economic Plan formulated to satisfy 5~ovet des~r>es. It. is pas+s~ble, though .not
confirmed, -that this coordinating agency is the Council for Economic MutuFZl. Aid
(CEMA )
(NOTE= wo~liiwoton dlilii6fiHee indd' b 'X"i fi~)d didriW-fton br #''J
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5, The MAI notifies the appropriate DIA of the availability of export products aftex
the requirements of the trade agreements have been satisfied. The DIAs then try
to find customers for such producta~whether in East Bloc or Western countries.
C,, In the event a foreign purchaser desires to buy products that are not immediately
available (either all export quanti-cies~.s~e already sold or contracted fort or
the product needs to be i~.ade on special order, such as large installations 1, the
DIAs contract the repaired manufacturers, whether private or government-owned, to
manufa.ct~a.re the desired product. All of these sales must conform to the directives
established by government agencies, ,:.nd frequently they require an amendment to
the annual production plans.
7~ Tho various Deutsche Handelszentralen (German Trade Centers-DHZ) are subordinate
to the pertinent n~.inistries responsible for production and act as their domestic,
i.e., East German, sales and purchasing agencies.. In accordance with State Planning
Commission policies and directives, certain quantities of capital and consumer
goods are made available for domestic consumption. The individual DIiZ contracts
for the production of these goods and sells triem accordingly. These sales may be
to other manufacturers, as is the case of raw~or semifinished goods or parts needed
in the production of other foods or products. Su ;h sales must meet with the approval
of the State Committee for Material PrOCUTemvnv. The sales ma3- ?also be to whole-
sale distribution agencies. of the Government such as the Hande~~oraai3isa~ion;~IO),
Consumer Cooperatives (Konsum), and organizations such as scliou~~, .luspitals~
municipalities, etc.
u. The import requirements of manufacturers and government agencies are funneled to
the pertinent DHZ who is obligated to contract for the import of these materials
with the pertinent DIA. Funds for the purchase of such imports are allocated
by the MAI. These may be ruble cred~_ts in the case of East Bloc purchases or
they may be foreign, hard currency credits andfor barter goods in the case of
Western countries.
9, 'In connection with this financial arrangement, a peculiar situation has developed
in the East German industry. Any organization, whether government-owned or
private, can be sued for nonfulfillment of delivery contracts. Thus it can
happen that manufacturer "A" has contracted to produce and deliver item "7C" to
the enterprise "B". For this product, "A" needs part "Y" which he tasks the
pertinent DHZ to obtain. If part "Y" must be imported, the DHZ asks the
pertinent DIA to import it. The DIA asks the MELI for the necessary rands. It
happens, at times, that the MAI can not make such funds availabl?. Thus, the
DIA can not import part "Y", the DHZ can not deliver part "Y" to manufacturer
"A", and "A"can not deliver his item "X". The waiting customer "B" sues manu-
fu~turer "A" for nonfulfillment of contract and wins the case. "A" sues the
DHZ for the nondelivery of item "Y" ar_d may win the case. If the DHZ loess,
it will sue the DIA for nonimport of item "Y". The DIA will counter that the
necessary funds for the import of item "Y"?were not made available, but the court
may decide that the DHZ should win the case. Should the DIl1 attempt to sue
NIAI, it is unlikely that the case would be accepted by the court. If the case is
accepted, the ministry can simply state that foreign trade commitments are such
that funds could not be made available for the import of item "Y"~ and that such
an import would have damaged the economy and was not originally planned anyway.
The most interesting element in all these court cases is that the fines paid by
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the loser of the suit do no-t go to the tainner, but to -the govern:,:ent treasury.
`1'he loser pays the fines from its profits which it is encoux?^I;ec' '-.o ma lse ~;lle~~--
ever possible or from operational funds allockted to it L-vT the Government.
~~t ?.ny r~Ltc, the ~,overnznent treasury c_1t~rays wins.
l0. Sorre of the DIiZs are in the process of 'aeing converted into wholes le offices
(Grossh"nc_elsl,ontore) ~md will then be suboral,zate to t!le T~inistry of Tr~.de r_n~.
Suppl3r (Ii~_nc?el unc Versor~;-ung), '1'liis he.s alrer.dy been acco.~iplished in the ease
of DHZ -'i'e:~.til.
11. Besiues these Coverruaent c~encic:~ , there is ~,. quasi-~?~iv ate oranization
invo~.ved in the import-export buviness, the Deutsche :larenvertriebsCese11sc1.~.-~ft
(L'6tiV). It lin.s been repor-cec? tlir:t i.l1e D;~V is subordinwte ' o the Politbuero o~ ~~
i,he SED. It executes sales for the procure.nent of he.1lA fcrei~~n currcncJ,
principc:lly tiriti~ capitalistic countries. It is ^1so the purch~sin+?? ~~ency for
~.rticles on the U.S. erabarCo list (the import of industrial d_:iainonds). The
D~?IV is the sole el.port-import r.I;ency c?e~J.in~ faith ~ustri.:.. It furtherii~ore h~-.
~.n ~ ~.i,iost col~plete monopoly on tl~e sale of nitrogen- cnd potusli-bused fer~i,5 ~ ~ ~.~:c~,.
CI1~3JLIli~'~ and NiT;LETEX belonb to the D~e1Vo It is zlunored that ldalter Ulbricht,
lleputy Minister-President, is .~. stoc.~liolc~er of CIICP~D:FA.
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