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Dissemination Authorised
Assistant Director
Office of Current Intelligence
THE ENGINEERING DIRECTORATE OF THE USSR
Office of Research and Reports CENTRAL INTELLIGENCE AGENCY
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FOR EWORD
Activities concerning the procurement and distribution ofend items by the USSR havo been concealed from Free World observers. Because of the scarcity of data concerning Soviet national defense operations, it has been difficult to determine the foreign trade mechanisms that have been employed for the procurement of military end items by the USSR and other members of the Sino-Soviet Bloc. This report deals with the Soviet Engineering Directorate, which is responsible for procuring, within the USSR, certain items of military equipment destined for export to other countries of the Bloc and to the Free World. It is responsible for externally purchasing certain raw materials and items of equipment of direct military importance to the USSR. This Directorate also coordinates the activities of similar directorates within the European Satellites.
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CONTENTS
Summary
I. Early Development
Postwar Period
Organization .
Methods of Operation
Procurement from the Free World . . .
Procurement Within the Sino-SovietDistribution to the Free World
Distribution to the Sino-Soviet
Other Functions
Number*
Directorate Complex .
Appendixes
Appendix A. Exsmples of Procurementthe Soviet EngineeringFree World Countries and withBloc Countries in the
Appendix B. Personnel Connected with the Soviet
Engineering Directorate
Appendix C. Personnel Connected withof the
Appendix D. Source Reference*
Table
Known Minimum Chinese Communist Purchases from the Soviet Engineering
ORR)
THE ENGINEERING DIRECTORATE OF THE USSR*
Summary
The Engineering Directorate of the USSR, currently believed to be subordinate to the Chief.Directorate of Economic Relations (GUES) (which is now attached directly to the Council ofasart of the Ministry of Foreign Trade. Thehas been operating in some form since at5 in the procurement of certain military end items and related goods for export from the USSR. In the years before World War II thisoperated openlyection under the Peoplesof Foreign Trade. During the war years, as external procurement of military goods incressed because of Lend-Lease opc rations, the status of the organisation was raised to thatn the postwar period the Directorste has oporated not only for external procurement of strategicmilitary materials for the USSR but also as an exporter of military and quasi-military goods to the other members of the Sino-Soviet Bloc. TheDirectorste openly operated in certain Free World countries in the earlier postwar period. As the tensions of the cold war mounted and as Free World trade controls on strategic exports to the Bloc developed, procurement sctivities of the Engineering Directorate In the Free World became more clandestine. No overt Soviet publication6 has mentioned the Directorate. The distribution of military and quasi-military equipment to otherof the Sino-Soviet Bloc has continued8 with particular emphasis oh shipments from the Engineering Directorate toChina during the period of the Korean War-
slavia. Since that time
J several instances
The first postwar evidence of the export of militarya non-Bloc country by the Engineering Directorstehipmfnfwas sent to I
several instances
in which the Soviet Engineering Directorate has been involvedIn the shipment of arms to certain Free World countries through the medium of Czechoslovakia. These military exports appear toart of the new Soviet policy aimed particularly towarjLtha: countries of the Middle East. Finally.]
the evolution of an Engineering Dl rectoraivhroughout the Sino-Soviet Bloc. This complex points torester coordination of the military and quasi-military trade activities of the Bloc.
I. Early Development.
The Engineering Directorate (Inzhenernoye Upravleniye) ofMinistry of Foreign Trade (Mlnieterstvo Vneshneyevolved from the old Engineering Sectionof the Peoples Commissariat of Foreign TradeVneshney Torgovli NKVT). The date ofthis Engineering Section is not known, but available recordsthe Section was operational as part of the Sovietin Prague An examination ofofficials of the Skoda enterprises and the Sovietduring theeveals that thehad personnel attached to this Commission for theprocuring armaments, as well as equipment forrom Skodaersonnel of theSection also procured technological data and plans relating toand processing of military itoms such as
Negotiations in the esrlierere conducteduch more overt manner than the current methods ofemployed by personnel of the Engineering Directorate. For example, personnel employed by the Soviet Purchasing Commission in Prague openly informed Skoda representatives in0 that paymentm artillery equipment procured from Skoda would be made from funds remitted by the Engineering Section of the Peoples Commisssriat of Foreign Trade to Skoda's account in the Chase National Bank of Now It is also-known that as early5 the Engineering Section employed Czechoslovak nationals in Prague. 4/
Other examples exist which point to the overt nature of theoperations of the Engineering Section5 publication listed the Engineering Section among the Import combines of the USSR as follows:
Engineering Section of the Foreign Trsde Commissariat of the USSR, abbreviated to ngineering Section of the NKVT,ioscow. Has charge ofmportation of articles of /nfllltarv/
* Procurement efforts from Skoda during this periodmm artillery guns andm projectiles, and machinery for the manufacturem andmm projectiles.
Serially numbered source references are to sources listed
Throughout this report. Russian names in quoted materialas transliterated by tho
Other information concerning the existence of the Engineering Section as well as concerning its general function of externallyrrulitary equipment for the USSR can be obtained from aof Lend-Lease operations. An examination of various ship manifests listing Lend-Lease equipment destined for the USSR shows that the consignee was "NKVT Injenerny Otdel. Moscow,/
A check of Lend-Lease shipping manifests also shows thatthe consignee of the goods sent to the USSR was listed as NKVT. An examination of the order number markings reveals,that these goods had the Soviet organisational designator assigned to the Engineering Section. 7/
No information is available to mark the exact date on which the Engineering Section achieved the statusirectorate, but this probably occurred during the period of Lend-Lease operations when the external military procurement efforts of the USSR wereigh level. Lend-Lease shipping manifests show that theSection was tho consignee for military end-use items in Januaryut that the "Injernernoe Upravlenle NKVT USSR" was the consignee on some manifests in the latter half7 It Is interesting to note that In7 the Amtorg Tradingwas procuring radio equipment in the US for the Engineering Directorate of the USSR. 9/
The last observed reference published by the USSR thatthe existence of the Engineering Directorate was anof the assignment of Ya. Ya. Saltanov to the Engineeringof the Ministry of Foreign Tradeeputy No other mention of personnel assigned to or detached from theDirectorate has been noted since in Soviet publications.
n. Postwar Period.
In the postwar period the activities of the Engineering Directorate have been largely concealed from the Free World. Two important reasons for the departure of the Engineering Directorate from the more orthodox and overt methods of procurement and distribution of foreign trade probably haven increased desire on the part of the USSR to conceal from the West the procurement sndof military end items In the sphere of Soviet foreign tradehe Free World's embargo on the shipment of strategic goods to the USSR and other members of the Sino-Soviet Bloc.
When the Free Worldystem of trade controls against members of the Sino-Soviet Bloc, the procurement problems of the Engineering Directorate in non-Bloc areas increased because most of the items desired by this Directorate fell into the category ofgoods. Consequently, procurement efforts by personnel of the Engineering Directorate assigned to various posts in the Free World had to be handled either through clandestine trade channels or through
In addition to the departments enumerated above. T
pwriuaaia operations have "NKVTransport Department. Engineering Ad-
strstion, Moscow.
it is quite plausible that parimeiit Handling transportation functions is stUlSee Figurehich shows the evolution of the Engineering
IV. Methods of Operation. Functions.
By an examination of intelligence data dealing with particular activities of the various aspaKrnants* it has been possible to ascertain some of the major functions performed by the Engineering Directorate of the USSR,
In general, the Engineering Directorate functionsrocurement agency (both intra-Sino-Soviet Bloc and in the Free World) of military equipment and goods destined for military end use. It also servesistributor of military equipment to other countries of the Sino-Soviet Bloc. On only one occasion has the Engineering Directorate "directly" exportedon-Blochough evidence indicates that it has ihdirectly authorized Czechoslovak exports to non-Bloc nstions.
In addition to its military procurement functions, the Engineering Directorate has engagedumber of other activities. Within the Sino-Soviet Bloc the Directorate has been observed as an
organization which hat rendered assistance aimed at building andetwork of civil airlines. It also has given assistance to certain Bloc nations to improve their marine facilities. The Engineering Directorate also appears to be providing military tech- -nical assistance to lmprove^the national defense technology of certain Bloc nations. Finally, the Directorate has been observedur-chaser of certain scientific instruments for research at various Soviet educational institutionB.
1. Procurement from the Free World.
J,
Following the conclusion of World War II, theDirectorate operated, either directly or through the personnel of various Soviet trade organizations, in the procurement of goodsilitary use from non-Bloc countries. With the mounting tensions of the cold war and the introduction of Free World tradeowever, the procurement activities of the Directorate were greatly impeded in the West because they were largely directed toward the acquisition of strategic goods for the USSR.
procurement efforts by the ee World countries on a
Engineering Directorate wereTnaae in large scalehe major areas of operation appear to* have been Western Europe and the US. Transactions involvingand communications equipmont, precision instruments, and various typee of engines were carried out with Belgium, the UK,the Netherlands, Sweden, Switzerland, and the US.*
The effects of trade controls on the export of strategic goods to the Sino-Soviet Bloc .undoubtedly .played an importantn the official withdrawal of the Engineering Directorate from non-Bloc marketsuyer of strategic goods. After the imposition of trade controls, the clandestine activities of the Directorate increased considerably.and it became apparent that most of its operations in the Free World were conducted in this manner. In recent years, efforts on the part of the Directorate to obtain strategic goods from the West have prohably been attempted through covert means. It Is likely that Directorate personnel assigned to posts in the Free World have assumed the disguise of orthodox Soviet trading representatives and that many transactions handled by the orthodox trading organizations actually have been negotiated for the Engineering Directorate.
2. Procurement Within the Sino-Soviet Bloc.
Although the Soviet Engineering Directorate prima*-rilyhaBbeenan exporter of military end items and equipment to other members of the Sino-Soviet Bloc, it has, nevertheless,an extensive contact system throughout the Bloc and has been known to import various types of equipment, ^particularly communica* tions equipment, from the more highly Industrialized Satellites --
" More detailed information concerning these transactions is given in Appendix A.
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Czechoslovakia, East Germany, ando facilitate these transactions, It has been reported that contacts exist, for example, between certain technical enterprises of Eastndand Soviet personnel interested in military procurement for the USSR. Personnel of the Engineering Directorate throughout the Bloc apparently purchase materials for the USSR's nationaleffort as they are needed.
As In the prewar period, the Engineering Directorate^as continued to employo approve equipment produced in foreign factories for export to the USSR. Personnel performing this function have been observed in Free World and Satellite countries. In the more highly industrialized Satellite countries such as East Germany and Czechoslovakia, inspectors from the Engineeringhave been assigned such duties as "negotiating productioninspecting equipment and directingp toersonnel in East Germany had been addressed by military rank even though they wore civilian clothes, but since that time they have preferred to be addressed as
1 Distribution to the'Free World.
Examination of available information on the'failed to reveal any indication of this organizationin the postwar period to any ,Free Worldnegotiations for the export of military tires to Yugoslavianoted Ibatv"" Vtj-j, intiuii
L"dt mr*ctorate hasbeyond the borders of the
the Engineering Directorate ha.
ineep.
4. Distribution to the Sino-Soviet Bloc.
One of the moet important functions of thehas been to serve"ocal point for the distributionequipment as well as militsrvitems to thenf (he Sino-Soviot Bloc. 1
members of the Sino-Soviot Bloc. 1
' to the substantial efforts of the Directorate in
WPfjlyWg Is-'fa quantities of military equipment to the members of
the Sino-Soviet" '
it is seldom possible to obtain exact information as io me
typos of equipment that the Directorate is exporting to tho Blocdefense
show
In general, |
that all the departments ol the Engineering Directorate naveoeen active in distributing military ond items to the Sino-Soviet Bloc. Aviation equipment, land armaments, electrical and electronic goods, and marine products have,een exported to Bloc members through Engineering Directorate channels. Also, Soviet technicians under Directorate control, have been active in sssisting other Bloc countries.
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During the period of ihe Korean War, substantialof equipment were seat by the Engineering Directorate toEaat.
: The table indicatesredit distributed among the idantifien ana unidentified department, It represents only minimum known payments to the Engineering .Di^ rectorate and does not accountarge amount of equipment that may have beenloaned Or given outright to the Chinese Communists by the USSR.
ther Functions.
. One apparent function of the Engineering Directorate, particularly observed in the European Satellites, has been the assistance provided to certain countries for the purpose oftheir civil airlines. Activities of this type have been noted in Bulgaria. Poland, and
' The Engineering Directorate also has been active9 in aiding Sino-Soviet Bloc countries in the development of port installations in the supplying of marine equipment, both for port
use and for use aboardof
the Directorate helping in Satellite snip repair both on theand in the Black Seaechnical assistanceequipment have also been extended to thet has been noted that Soviet shipbuildingon.an Engineering Directorate Department 6currently involved in aiding the Chinese in shlpbuildinfi
L on occasion,
the Engineering uinciunw nilroeareinent sgency for scientific equipment for certain research institutions of the USSR.
. / r
procurementce that time.
"mu UVKUin procurement activities for the Soviet Atomic Energy program bsfors. It is possible that atomic
piy-urwment rrorri the Engineering Directorate to tho Ail-Union Association for Technical Industrial Import. This
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The table follows on
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Known Minimum Chinese Communist Purchases from the Soviet Engineering Directorate a/
umulative Total
Million Rubles and Percent of Identified Payments for Each Department
Rubles Percent Rabies Percent Rubles Percent Rubles Percent Rubles Percent Rubles Percent
(land armaments)
electronics)
marine equipment)
Total (identified payments)
Unidentified payments
Total payments
a.
s
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. 2
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information, however, may have referred onlyransfer offor procurement and not to the assumption of technical control of
the
existencelose-working relationship between the Directorate and various Soviet factories working on defense production. They indicate that the Engineering Directorate has negotiated directly with these fsctories for the export of equipment produced oncontract for distribution to other Bloc
B. Control Numbers.
Toystem of control over the procurement and shipment of commodities falling within the jurisdiction of the Engineeringystem of control numbers, similar in their basic form to those employed by the orthodox trading organisations of the Ministry of Foreign Trade, is used for most transactions. The most important of these control numbers are the contract, the rakaz-naryad (order requisitionnd trans numbers',
The contract systemumber assigned atransaction or group of transactions. The componentthe Engineering Directorate contract are as follows: designator which signifies that the Engineering Directoratethe order, separated from the remaining digits ofhe year in which the order was placed,indicated by the first digit following thehethe Directorate concerned with the specific type of goodsthe contract, which is determined from the secondhe last throe digits, which make up In addition to these component parts, thehas been known occasionally toountry designatordigits, normally separated from the rest of the contract by41/ For example,ould beindicating that the Engineeringontracterial, It should be noted that in most cases thoby the Engineering Directorste does not make use of the coun-
1*
Theryad (order requisition number) Is apparently an authorization toarticular commodity,eries of
* ) is moat frequently seen as the designator for the Engineering Directorate, other designators have been employed to identify contracts of this Directorate. In England, contracts used by Directorate personnel were sometimes marked with Also, it has been observed that during the Lend-Lease period, goods consigned to the Engineering Section, in addition to the) designstor, sometimes)) designator.
) designator of the Engineering Directorste dates back at least to0 period, when markings of goods procured from the Skoda Company and destined for tile Engineering Section of the NKVT bore the
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n accordancepecific allocation. This device is seen in Engineering Directorate shipments to other members of the Sino-Soviet Bloc. The component parts of the gaksz-naryad are as follows:n Engineering Directorate designation, sepsrated from the remaining digitshe department handling the order, determined by the first digit following thehe country designator to which the goods are to be delivered,fromigits following the department number; and theigits, which appear to functionerialor example,3 would be Interpreted as indicating that the Engineering)as shipping aviation equipment toossible serial number
The Engineering Directorate also uses trans numbers which consist ofigits which indicate to frontier authorities the destinationhipment and tho raznaryadka* applying to it.
V. Engineuring Directorate Complex.
As the process of consolidation of the Satellite countriespolitical and economic Bloc progressed, it became apparentnational defense establishments of these countries wouldtype of organisation, similar to the Soviet Engineeringto perform the functions of procurement and distributionneeded for national defense. Because the USSRhad been supplying these countries with military endogical development for an Engineering Directorsteevolve throughout the Soviet Bloc. These counterparts ofEngineering Directorate,! "
operate as subordinate organs oi their respective Foreign Trade Ministries. ists the names of the Satellite organizations which comprise the network of Engineeringfunctioning within the Sino-Sovieto Engineering Directorates have been noted in Albania, Communist China, or East Germany. From available information it is apparent that shipments to Albania and Communist China are probably handled either by orthodox organizations of their respective Ministries of Foreign Trade or by logistic organs of their national defense establishments. Although no Informationvailable concerning the existence of any specific counterpart of the Soviet Engineering Directorate in East Germany, it is known that unspecifiedfrom the Soviet Engineering Directorate has been shipped to the Ministry of the Interior of the GDR. It is also known that the Soviet Directorate maintains liaison officers in Esst Germany. It is probable, therefore, that some department within the Ministry of the'Interior is currently performing the function of snoering'
* The raznaryadkaocument containing information onand address of the consignee as well as instructions onmsrklngs of the shipment.Following p.
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DrSlrtlUiNG DlKECTCWTl CCVf^X
soviet tNaiN.tM.nc hsi-orate
Bulgarian Engineering Department (INZHOTOELJ.Solla **
Chin* (Relationship through orthodo* wgaflttaBons of the CM-nee* Foreij" Trade Ministry; no Engineering Department noted)
Chief Technical Directorate (HLAYNI TECNNICM SMAVA)-
HmgvMo Technical Dwnorate*6
North Korean Engineering Department ONZHENERNYY OTOEU" Polish Engineering Department **
Rumanian Technical Directorateucharest"
Albania (RelabonsrUp probably through the Albanian Ministry of Foreign Trede; no Engineering Department noted)
East Qermefly (No equMaient Department or Directorate hai been noted: however. USSR maintains in tneiaison officer of the Engineering Adminttirabon in Uceec-*}
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These organizations, comprising the Complex, work very closely with the Soviet Engineering Directorate. Before their emergence, the Soviet Directorate carried on negotiations with the Satellites largely through the orthodox trading organizations of their respectiveof Foreign Trade. Now that the Satellite countries have Engineer-ing Departments operating, the Soviet Directorate is negotiating more transactions with the Complex and less with the orthodox trading
It is difficult at this time to determine the degree ofhas been achieved by tho Soviet Engineering Directorate. coordination exists is evidenced by the consignee numbersthe Complex.
Although the members of the Complex have primarily transacted
business with the parent Soviot Engineering Directorate.
negotiations among several of the Satellite'
counter parts of the Engineering These working relationships among the various Satellite members point to anattempt to coordinate the functions of the national defenso procurement program of the Soviet Bloc. This would appear toogical development, in view of tho Bloc Warsaw Treaty ofCooperation, and Mutual Assistance ofhichamong itsrovision to provide "whateverbodies may be deemed necessary" to facilitate joint defense
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APPENDix D
SOURCE REFERENCES
Soma information regarding the earlier activities of thein prewar Czechoslovakia were obtained from, datathe files of the Department of the Army. AGO. DepartmentGerman Military Section. These data are cataloguedof the Soviet Purchasing Commission,9 andthe activities of the Soviet Purchasing Commission Information abstracted from these files willin the appropriate source roference by listing Sovietin Czechoslovakia and the folder number from whichwere.
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AGO, Department Hp cords Branch. German Military
Section. Soviet Purchasing Commission In Czechoslovakia, foldersnd. S. Eval. Doc.
GSUSA. art IV, nd.
R. Eval. .Doc.
R. Eval. Doc.
Army. AGO, Department Records Branch, German Militaryolder s. Eval. Doc.
Commerce, International Reference Service. Doing Business with Russia, voloppendix. 4. U. Eval. RR 2,
Ch', b/
Eval. RRIA. bid. Ihid.
Eval. RR 3.
i *
57.
CIA. he Ministry of Foreignthe, 9. TS "
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SOVin OvMCEMK
Bulgarian Engineering Departmentofia **
China (Relationship through oithodo* organizations ot IMFore*gn Trade Ministry; no Engineering Department noted)
Ciechotioveri Chief Technical Directorate (HtAVN?PRAVA)**
Hungaryirectorate"
North Korean Engineering Department ONZHENERNYY OTDEU" PWlih Engineering Department**
Rumanian Technical Directorateuchareit **
Albania (Relationship probably through the Albanian Ministry of Foreign Trade; no Engineering Department noted)
EMJ Germany (No equivalent Department or Directorate has been noted; however, USSReia-son ofhcef of me Engineering Administration in Moscow)
Arm i
Original document.
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