CERTAIN ASPECTS OF THE ORGANIZATION OF SOVIET ECONOMIC OPERATIONS IN AUSTRIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00810A004101100003-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 14, 2016
• Document Release Date: September 13, 2001
• Sequence Number: 3
• Publication Date: October 5, 1954
• Content Type: REPORT

CLASSIFICATION
Approved For T NO
25X1A
COUNTRY
INFORMATION REPORT
Aus tr is/USS R
CD NO.
DATE DISTR.
5 October 1954
SUBJECT
Certain Aspects of the Organization of Soviet
NO. OF PAGES
13
25X1A
Economic Operations in Austria
NO. OF ENCLS.
(LISTED BELOW)
c.
SUPPLEMENT TO
REPORT NO.
I 1. Chief Directorate of Soviet Property Abroad'. _ roperty
the administrative direc:tiqr, of the'
- : office of GUSIMZ, the
7 thief Directorate of Soviet Property A oa . F nerly an inde-
dent agency with ministerial status, GUSIMZ has been, since abo
May 1953, a part of the Soviet Ministry of Foreign Trade. The
director of GUSIMZ, Vasdilt Sergeyev, Is a Deputy 'Minister of Foreign
Trade; his staff deputy for Austria is Lebedyev (ftu). The routine
direction of Soviet properties in Austria, however, is done by the
Second Directorate of GUSIMZ, headed by Kurmazenk? (fnu). Other
main offices of GUSIMZ are: the Commercial Section, the Exchange
and Finance Section, and directorates for the geographical areas of
Germany, Hungary, Rumania, Bulgaria, and the Far East.
There is a special directorate for WiFinl,:AG, in East Germany.
When the Soviets
World War II, an ets
'Wr,rl
75091" MY "Iff organized. The
abbreviations USIA have since-been used widely to designate all Soviet
economic operations in Austria: in fact, USIA is not the overall
administration in Austria but merely the main Soviet economic oper-
ation, based on the industrial holdings. Other important Soviet
economic agencies, which are not subordinate to USIA although admin-
istered by GUSIMZ, are: the Soviet Oil Administration (SMV), the
Soviet-controlled Danube Steamship Company (DDSG) with its subordi-
nate for4, riling agency Juschwneschtrans, the Soviet Military Bank
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and the Soviet Trade Delegation. Other agencies apparently complete-
t.1 ,ly separated from GUSIMZ include the Soviet Steamship Company (SDGP),
Erzherzog Karl Platz 4, Vienna II, and Sovexportfilm, Brahmsplatz S,
Vienna IV.
3. Until 1953, these Soviet economic operations were not coordinated in
Austria. Each agency dealt directly with its superior office in the
Soviet government and financial differences----for example, between USIA
and the SMV--were settled on the Moscow level. During the summer of
1953, however, an office to coordinate the Above economic operations
was established on the third floor of the Trattnerhof. The director
of this office is the plenipotentiary in Austria of the Soviet Minister
for Foreign Trade. His name is S. A. Zholnin and he arrived in Vienna
i_ ng October 1953. He has a staff of between 12 and 15 Soviet citizens:
there are no Austrians in the offiee.l
4. Since Zholnin is concerned with economic operations, he is presumably
subordinate in theory to the top Soviet economic policy body for Austria,
the Economics Division in the Hotel Imperial, which is made up of rep-
resentatives from the Soviet ministries of Defense and Foreign Affairs.
In practice, the only routine contact between the operational offices
subordinate to Zholnin and the Imperial appears to be in connection with
shipments under the authority of the Soviet military command, which must
be released by the military authorities before they can be handled by the
Soviet-controlled commercial organizations.
A chart of the main Soviet economic operations in Austria is attached as
Annex I to this report.
Central Administration of USIA. The largest of the Soviet economic
operations in Austria is USIA, the industri :4nd merchan-
dising complex based on approximately 300 Austrian
firms. The Cents a1 Ad stration of 1111'+.1, f' 1, Vienna I.
is heads by Ge ral Dire otor _FNtr - Ale ovi , , who was
head of the :7ov t Trade Dele ..:.mn in V ' a from Aft 1949. He
has three dsput `' -e n kov (fnu)l USIA Deputy Directi I'br Production;
Anatolly jai
Rozhkov( ), Deputy Director for Personnel, The secret "First Section"
of USIA, wch has certain security and communications functions, is one
of the highest offices in the USIA Central Administration and is believed
to report directly to the General Director.
7. The USIA Central Admiration has eight staff offices known as
sections. They are: ` c, Comrnert , Plans, Bookkeeping, Legal, Labor
and Wages, Housekeep
changes of importance
Auction. There have been no recent
and Pro
ire ff organization. The chiefs of
various staff sections T3 y rert directly to the General Director
as well as to the deputy for their specific function,
8. Below the Central Administration staff are the actual operating divisions
of USIA, which are organized according to the different industrial
branches and, excepting A/O Ort which directs the USIA retail stores,
are concerned with the production and commercial management of the plants
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within their jurisdiction. On the same working level are Wien Film:
which distributes Soviet Orbit films, and the USIA "trade minry",
the Central Commercial Bureau (see below). The following are the -&-
'main operating divisions of USIA (100 is probably the Russian;abbrev-
iation for administrative division):
Division
Address Branch
A/0 Pod~omnik Trattnerhof 1 Heavy machinery
Erster Stock
Vienna I
A/O Marten Trattnerhof 1, Metallurgical eq4pment and
roducts
i
i
A/0 Kabel Trattnerhof 1,
Vienna I
A/0 Textil Trattnerhof 1,
Vienna I
V A/0 Less/
A/0 Zement
mng p
n
Electrical equipment industries
Light industries
Lothringerstrasse 4, Forestry and agriculture
Vienna IV
Kaerntner Ring 6, Construction
Vienna I
A/0 Kraska Trattnerhof 1,
Fuenfter Stock,
Vienna I
A/O Ort Argentinierstrasse
Vienna IV
Chemical industries including
certain food industries
9. A chart of the overall organization of USIA from the ventral Admin-
istration down to the operating divisions is attached as Annex II
to this report.
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10. Except for the establishment of Zholnin's office there have been
no important changes which affect the USIA orga during the
past gent years, From October 1953 until about g
sa . r3+` 1954,
however, a special commission of about 20 persons, led by Rukhlenko
(fnu), from the former Soviet Ministry of State Control made a
complete survey of the USIA complex. Apparently as a result of this
inspection, the former food division of USIA (A/0 Vkus or Ora) was
merged with the chemical division A/0 Kraska. Persons who were re-
placed, presumably a:3 a result of the inspection, inc1te: \Filimonov
(fnu), former Deputy Director of USIA for General Questia and Light
Indusstry?; s Vasilyev (fnu), foster Deputy Director for Co mercial
Matters; V. Krivoshein,'former Director General of USIA.
11. Although there is, in theory, a clear breakdown between staff and
operating divisions of USIA, in fact a considerable amount of over-
lapping and sharing of personnel takes place. It is possible for a
Soviet official to hold a staff job and a position in one of the
operating divisions at the same time. An example of sharing of
personnel is that the assistant directof for personnel in A/0 Zement
also handles the personnel problems of the Central Commercial Bureau,
A fir ple concerning personnel matters is that the CPSU and
,Ko onol organizations of the Central Commercial Bureau and A/O Ort are
merged,.
12. ical Operating Division of USIA. A typical operating division within
USIA. would be headed by -a general director. His principal deputies
would be: an assistant director for personnel; a chief engineer, who
is the deputy for production; a deputy for commercial matters; and a
chief bookkeeper. There are normally six staff sections within a USIA
operating division, all of which report directly to the geeral director
as well as to certain of the deputies, of which the deputy for commercial
matters is usually the most important.2 The six staff sections are:
production, plans, legal matters, commercial matters, supp2,yiAKIi0j, and
finance. A chart of a typical operating division of USIA is a aZed as
Annex III to this report.
13. The Central Commercial Bureau (KZB). Compared with an average operat-
ing division of USIA, the Central Commercial Bureau (Kaufmaennische.,
Zentralbuero - KZB) at Stalinplatz 10, Vienna I, is a relatively small
office. The main function of the KZB is to supervise transactions
between USIA and purchasers in t] e Soviet Orbit. In this work1it is
subordinate to the Commercial Sion of the Central Administration,
the director of which, ,Ca,a,diy Fedorovich Lesnov, is the central
coordinator for all commercial activities of USIA. The acting director
of the KZB is S. P. Avdeyev.3
114. The main item of USIA trade with the Soviet Orbit handled by the KZB
is trade with the USSR. Trade with the USSR is based on compensation
contracts concluded between the individual USIA supplier and the
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2
appropriate Soviet trading agency, with prices figured in dollars.
Between 60 and 70 percent of all KZB business is USSR trade, which
is the responsibility of a separate section of the KZB.
15. Trade between USIA and the Soviet Satellites is based on overall
goods exchange agreements concluded between the KZB and the foreign
trade ministries of the Satellite states. It is the responsibility
of the deputy director of the KZB, who is assisted by an adviser for
each of the Satellite countries.' Current trade agreements with the
various Satellites call for the following levels of trade, including
both imports and exports: 5
Hungary - $8,000,000
East Germany - Not yet signed
Czechoslovakia - $1,000,000 ?
Poland -- 61.000#000
Rumania - $3,000,000
Bulgaria - $3,000,000
16. Although USIA firms are continually experiencing financial difficulties,
the KZB always shows a profit.? The total profit of the KZB for 1952
was 1009000,000 Austrian schillings.
17. Directly under the KZB director, is a special section with two Soviet
officials who control four trading firms of the USIA complex. A.V.
Annekov is director of the following trading firms; Eisen and Stahl
A.G., Wiener BrUckenbau and Eisenkonstruktions A.G. and Henhapel--
Heine Eisenwarenhandel A.G. A certain D. S. Izbekov is the director
of Raab-Karcher GmbH. These four firms serve as trading a of
the KZB and do not operate on a commercial profit-and-lose
. _ _. 1___ _11L
fun
p --
on is
-- -
v
d/i
Their
commodities such as coal, oil, and crude ores. As a res . 4 Be
firms appear as participants in transactions with non-Aust 'an firms,
other USIA firms, other Soviet--controlled business such as the SMV and
non-USIA Austrian firms. In addition to centralizing procurement of
certain basic items within USIA, this Trading Firm Section appears to
provide an additional means for the Soviets to extract profit from the
USIA complex.
18. There arm tw other offices in the KZB the functions of which are not
known ve y clearly even to KZB employees. One is the Konjunktur Buero,
headed bytKuzmin'(fnu), who is believed not to be under the authority
of the KZB's acting director. Kusmin reports directly to the Chief of
the USIA O -cc al Section, G. F. Lesnov, and to Deputy Director for
Commercial Matters Krutke. The Konjunktur Buero is allegedly concerned
with pricing levels and methods in Western European countries. The
other, even less well known, of the dublious KZB offices allegedly has
the mission of developing trade between the USSR and Western European
firms.
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19. There s also a raps
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expediting the release of goods intpo into Auata a military
freight. Its duties consist of liai ' .th the 1,t r authori-
ties # the Hotel Imperial with Jusch s w.si other
transport firms. There is a Houseke tAX}_. $ nd a
Trophy' Propert Section which is left over from war
"booty" operations and is, for all practical purposes, defunct.
The Economic Analysis section of the KZB consists of a female
senior ana ytt named T. S. Pogodina and her assistant Kovalenko
(fnu).
Attached as Annex IV to this report is a chart of the KZB.
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21.
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Throughout the Ministry of Fordgn Trade and GUSIMZ
to midst a systm of dual authority in which subordinate
ice directors are subject to two bosses. For example, the general
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comment. Presumably the duties of the cormiercial deputy in a USIA
in uitrial operating division would include supervision of the sales
office as well as the coordination of sales with production. The sales
offices for the main USIA operating divisions are:
Marten
Podjomnik
Kabel
Kraska9
Metalcarbon
Brucknerstrasse 2,
Vienna IV
Everkon,
Prinz Eugenstrasse b8,
Vienna IV
Ein-und Verkaufsstelle der
Elektrischen Industrie,
Vienna IV
Ludwig Masel,
Gusshausstrasse 6,
Vienna IV
-w-
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Ein-und Verkaufsstelle der
Chemisehen Industrie,
Brucknerstrasse 2,
Vienna IV
H,pdroxegen,
Gusshausstrasse 24,
Vienna IV
Letex,
Hollandstrasse 16,
Vienna II and
Favoritenstrasse 42,
Vienna IV
Les,,., Ein-#nd Verkaufsstelle der
Land and Forstwirtschaftlichen
Betriebe, Vienna IV
25X1A omment, The role of the KZB might be described as that of a
trade ministry. Its primary fu:ation is to supervise USIA's export
trade with the Soviet Orbit and it should not be mistaken, as it
frequently is, for the central commercial authority of the USIA
complex. Presumably it exercises no authority over USIA's Austrian
commercial activities, except possibly in its relation to the four
special trading firms described above.
2 5X1A Comment. An Austrian well-placed in the USIA complex reported
that the responsibility for negotiating the compensation agreements
with the Satellites was assigned to the KZB at about the beginning of
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2 5X1A Comm ent. Presumably the agreements are made on a yearly basis,
If, then, the exchange with East Germany is assumed to be about $1,000,000
and it is assumed that all USIA exports are compensated for by equivalent
imports, an estimate of total annual USIA exports to the Soviet Orbit of
about $25,OW,000 can be made. This figure, in fact, corresponds closely
to Austrian estimates.
MELComment. This agreement was concluded on about 1 February 1954.
2 5X1N Comment. Considering the nature of the KZB's services in the trade
field, for which a percentage of the turnover is apparently extracted, 25X1A
the profitability of the institution is not surprising.
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THE XL Q SOME': EC(IOKIC O TIONS D AUSTRIA
Moscow
,Deputy for Austria to the
Minister of Foreign Trade
S. A. Zholnin
Trattnerhof 1,
Vienna I
Soviet Trade
Delegation in
Austria,
(Veneshtorg),
Wohllebengasse 4,
Vienna IV
Older
Petr Piorov
Danube Steamship
Company (DDSG),
Handelskai 201,
- - -
Vienna II.
General Director
SUA*M
Al' r Karachev i
Juschwneschtrans,
Wohilebengasse 8,
Vienna IV
G mar
Vasiliy Airkhipov
USIA,
Trattnerhof 1,
Vienna I
Qs1 Direct4w
PBtr A. Grichin
Soviet Military
Bank,
Trattnerhof 1,
Vienna I
Q 7. trector
'a `Alexandravieh
Savin
,Soviet Oil
Administration
I(SW).
Kantgasse 1,
!Vienna I
neral Director
gori Sidorenko.i
* Reportedly a trading firm.
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T O-PG 'IZATION OF USLk DCO TO Te' OPFRATnZG DIVISIONS
General Director
of
USIA
------------- -
ySoviet IAnstrian
S T A F F
O P E R A T I N G
Textil
Babel J 1;w._,.._____
Deputy for
Commercial Matters
S E C T I O N S
Commercial
Supply
Bement'!
Lest
D I V I S I O N S
j Wien-Pile
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Deputy for
Production
Finance
I
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Production
Chief Engineer,
Deputy for
Production
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ORGANIZATION OF AN OPERATING DIVISION OF USIA
General
Director
Assistant
Director,
Personnel
Deputy for
Commercial
Matters
Chief
Bookkeeper
Sr. Legal
Adviser
Commercial Supply
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ORG""IZATTCN OF THE CENTRAL rm;RCIAL BUREAU (KZB1
Konjunktur Alleged E`W
Bureau Trade Office
Deputy
Director
KZB
I\
Econcnic
Analysis
Trade
with USSRI
ookkeeping
Senior Referenten
for Individual
Satellite Areas
',Transport
!Sr, Legal:,, Chief i
Adviser Bookkee er1
/AKHO
Trading
Firms
Trophy
Property
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