9
tne nala objoctiv* ofxport control poller, namely, toor reetreln the movement of orltloal end etrateglo ooanoditiso to the oountrlea of Eeetern Europe, le being thwarted In verlooe ware,
aek of sueoeea In the efforta to persuade aom to eooperatsncontrolled entrepoty eleedeetlne and other Indirect etteepte by the OSSR and eetelUtee to obtain etrategle Iteae fron thend other Western eoaroes,y reeale ofref eurplna ec^psen* to eoontrlea in the Soviet orbit.
Beoause of increaelne; evidence of an acute supply position In tbe Soviot orbit with respectUDber of critical Items, tbe proeentat
bort statement regarding the lexerteaoe of Swedenource of ball bearing* for Eastern European countries.
Son exanploa of eotrepot trade which apparently Is sot now subject to effootlve government control.
" 1
A eerlea of examples of Indirect or clandestine shipssaws of all besrlDco through Switesrland to coontriee of Eastern Europe,
Bell
o a
8^3
aafl T-
reference to the iimeem* of ball countries la tbe Soviet orbit. It should be recalled that aaeblasry lor the eaenfaetuxe of ball bearings is inclosed la thelxt aad that ball bearings warelassification, that ia(insteadmbargo) In order to sake theroposals for export ooatrol core acoeptahle to Sweden end Svltawrlaaa, iaxortant European prodooere of hall bearings, and because It was anticipated tba* these countries would be lees inclined to adopt the mors reetriotira expert control.
i This aeserandni has not been ooordimted with the Intelligence or^anl nations of the Dspartoaute of Stats, Any, Bavy, and tbe Air Force.
Tn previous Intolllgonc* Itomoraada (nflotloMd above) amnplM have been given of the tranaahiprent of strategic and eritloBl oocnoditlis ofrigin through third countries to ultimate destination la Eastern Europe,losalr related eltuatloa ia oalled to attention bj Enoloenre b, which presents exaoplea of entrepot trndo involving etratogio ooaaioditlss which, together with tranaahlpoont trade, represents an Importantin the adolnliitratlon of the export control program.
The exanples presented lnC of indirect shipments of ball-beerlnga through Switzerland to countries of Eastern Europe Indicate diaerepanoles an between the export trade controls of the Trlsone of Germany and OS export control policy ead some deficiency Is tbe controls exercised by the Swiss Governcent and the nllitary authorities la Austria.
Thr Bprassmt of OS Amy eurplos equipment froa Europe to tha Soviet orbit, as illustrated by the exanples given In enclosure D, is alpilflcaat In coaneotioa withxport control polloy because of the large volnwe of Buch equipment sold at bargain prices, and bocauae of the probable adlltsxy application of such equipment. In the coseTiulor tractors. It nay ba noted Out thay are, for the nost part, powered by Diesel engines of types included in theist. FUtheraore, tha large laaabors of such tractors, and of other equipment of types Inolodod in thaList, whlob ware involved in the Army surplus disposal program, njeeaaarilyearing on considerations, both of classification and of the quantities to be licensed for export.
WHKWti OP a, ulUSH aKHTLTKRE
Saeden Is at praaant the Soviet bloo'e aoat source of ball and roller bearings. In teras both of Quality
Tbe preaent production capacity of the Wiiah halX bearing Industry laat0azlti per daytUllcoar Tear, 0 prcdootlce. saa curtailed,ecausehortage of labor, and la oetlaated atwedish produotlon oapaolty oceparea eith the eetin*ted eapaelty&aT countries, in adlllona of celts, as fallej preeer (preaenthe united. '
3.' Such expert statistic* as the Swedish are In terse ef toe* rather than anlta and sbee that la bearings, parts and aeeessories, valoed at trier. This eases to have constituted aboutercent ,ef tha totalhioh la eetlaeted0otalr ee^ted'produo the year eas distributed as folloasi .
1 AtUUatlca on tbe produotlon and exportSaedlah Industry an! by tha Covcrnaent; henos It Iswith coaplet* oonfldance because of faatcrs la particular, tba figures thloh are giT<rathe use of knoan paroentages of iglue. toview of the aeny different types ofndflguree are not likely.vanth* results inheek fairly well" "VT
Q
Perooot of Totel*
HA
Total Produotlai
Ocaoitlo hequireewntt
Exports to other
Marshall oountrlea
ToUl to Harshsll eountrloo
Export, to USSR
Exports to Piolcad
to other Sttellitee
6
Totel to Soviet Bloo
Exports to bpaln
txporta to countries outside Europe
0
m
Ho statistics aro eve lie hie either of product:or of export of'-BOavio^nil
4. export quotes fixed by various trade aeree*eate In off set doriof moot8 (with acne ovarlarcdae with7ate of exeoutloD of the egrooaent) provldedfor shlpeeot of beerlnxsjypsrtawprji end scoeBBOrles at the following vtdueoi
Coontrr
Iujoalevia
l.OOO.OOO
qpplmentary llets aar hare inoreaaed the
Flnniah quotaroner.
Total
ho quotaa for beer Inge sere fixed in tho agreementElhough it .ia known thatamell aauxmt was ehipped to Romania, trade with Rusania haa practically ceased due to the oontroreray over fbaainlan OBtiooaliration of Swedioh Induatries. Offloltl Swedlah etatlatloa do not diaeloae trade of any kind with albanla, Although the quota llete vith the Soviet Zone of Germany do not include bearings, Swedish-corned subsidiaries in the teat era tone of Geraany (as sell ae ln the UK, France and other countries)onsiderable amount of rev material, prinarily steel, from Sweden.
Thus, if ease ellocbnce la made for miscellaneous shipments of this sort, the aetual tottl of exports to Iron Curtain countries was very oloee to the amount which had teen contemplated la tha trade agraenents. The distribution onoog these countries, however, was not quite In accordsnee with the quoteai tbe USSR got less, and Finland acre, then planned. It should also be noted that there is eonaldarable evidence of trenaohlpaoat of bearings fron the Satellites to the USSR.
trade agreements negotiated Inuotas for tbe USSRremain the ease. Except for these two countries thereslight increase in HuoUa established in tr&de agreementsthe Soviet orbit countrloe within the lest year.
bearlnga have always constituted en Important item intrade between Sweden end the countries now Included in the Sweden in the postwar period has used bearings aa anelement In negotiating trade agreeaenta with these countries.
The volune of trade in bearings between oweden and tho Jot Jet bloc countries end the alight increase in quotas established in trade agreements
negotiated within tha last few months do not indicate an intention on the pert of Sweden to conform with US export control policy on this highly strategic commodity.
entrepot trade appears to be an entirely legal ohanoal through whloh tha sovlot Bloo can obtain etretaglo aatarlala. lo export permits era required by aoat countries for re-export of goods which have been held in bond aod which have not been entered through the Oustoas, Two exanples of this type of trade, taken frea recently received re parte, are euaaerised.
an attempt was made by CaecbcSlovakia toabstaotlal qoantity of carbon black frea tbe United States through England. The Englishan entrepot ear chant, placed the orderew lork exporter she spoiled for andi export license ano, la eupport of the application,ritish Importumber. Tha las Xcrk exporter placed the order with toother lew Tort firs which la turn filed ItSDufaeturer of earbon black. Because the British Intermediary ess nothe UK Carbon Black Isportere Association, on Investigation ensued which disclosed tbat the British laport license number was fictitious ond that the shipment was destined for Cseehoalovekla. Ccoeequently, the US expert license was SDSpeodad.
la believed to be en sotrepot shipment Involved0 pounds of thlureaubber ohetdoalxported tale year frea
1
the united SUtestaerlGod, rla Antwerp, rolloeiag this shipment, the ease Swiss fire, (lleeoba of Deole) Inquired for tn odd Itetrlo tons of the Mae product. This quantity ia eare than fire tines greater than tha total OS consumptionear. The OS eenufaotarer to shoe tbe inquiry sea referred took no action on the request.
haa recently
stated that entrepot trade is cot only not Illegal but In fact ia actually enooursged by the Brltleh Govarnaent. Itnteresting to note this tualoesaeSD'a reaction to what be undereUode to to the rreaent sUtua of United SUUa policy. lie haa aide the further Interesting coaneat that if the Onltod States were to indioaU clearly that the export of carbon blade to Eastern European countries should not be permitted the British Government Mould support this policy, but that in the absence of such en explicit policy that Governmentit difficult to cooperate effectively.
Severalthat satsoslvs Indirect
l tssu-ings have bom effeotsd through eelt terlaod to Eastern da-opeen coontrioa. That* bearings arc usually of Osraan origin aod ara purohaasd ln the fceitern Zoos of Germany with Oaroan marks by Swiaa agents and Uported by irregular asthode into jeitaexlaod. Sobes-qnsotly amisa freight forwarderarrange their trensshlnssnt to eastern Euroj- under credit* opened by Interaadlarlea Kith the gchwcltarlecfaa natalt. Lucerne. The folloolngee? representative trans- tci' eotlcas or attsspts to procure tall bearingshreap Seltoarlsnd.
all bearings Talusdere delivered to Ruaanle fron Saltierland. 9
a ehlpssntall beerings valuedwiss francs arrived ln Ruaanle fron the doles frontier.
the periodanuary tohirteen ship-of ball bearings fron Settserland to Hungary and Rusanls wereof these shlpssntaearings Inases for
oltisste ahlpsant to Budapest, wore purohseed dlreotly by NIX (Hungarian $
Heavy lotus tryaaspsst, and Alfred Scrtll. Baden, mxJifi&z MusitlL srloh, ami fiflartff-Prtinr Logeno. nil If ^ess wereoth of Zurich. Twenty-three easesogs bars PDrohassd by IfrifMlr Zurich, freaLvgano, end ;. .
and frjg,artrtfr, Zurich, for ultimate oorjlgneeot to OlUr, Bucharest. ,
llhat Oanlpol of Prague In9 plcocd
aa urgent reouaat *ithb suppliers0 Terr light ball bearings of0 series. Thesa are special purpose precision aircraftfor use In aircraft and aircraft Inatraasnts. tbether or not this order has bean filled has not yet been reported. Since the Quantity is believed to be far In excess of preaentr craft produotlon require-sents. It Is possible that tbe request le of Soviet origin.
Indicateonsiderable deaand exists Inball and roller bearings for delivery to togoslsvis and thehave been reported fcr single row ball bsarlga, deep-grooveing-alot type) of extra narrov light serlea, light aeries, andfar double row eeIf-aligning roller bearings, aedloe ssrlesitapered roller bearings of sedlue narrow aeriee and eedlun aide series.
according to the reports,eliveries bars been sade to the OSSR end Yugoslavia. One of tbalfTBdalsa engineer located at Igeoenleurbureau, St Orausstreese A, Badsn. (lerUl has been reported on nesjeroua times la ooBneeUon with covert ball bearing trade and also tha procurementay equlpnent for la stem
Europeanhlpwente are handled, for tba bjossj part, by the Swiss
Tl.
thoy are handled by ths Mapped traDsport agency, a
o
5* Infanoation that rastern European countrloo, othorare Involved in this trace, continues to be reported. For
mm
9 OS exporter receivedrequostuotation on spherical roller tearing* from Urtin Kjelgasrd of Vejle, Denssrk.^aoQU reveeled that these bearings tore destined (or Rusanls. The Denies (lift? cuthorltles inforead tlio OS exporter's Copenhagenfshould etteapt to re-ex;>ort thoeo bearings, under no condition tould he^be^ grantedxport license.
'SKCRRT
4, . Berler of the unitedoe da Uaiiteux, Broseels,ater D8 typea to tho Cseohoslovuk Ministry of Technics, 8ana
i-T-
tractors having beenfron Ctactoei ovekia to .tha and others balng used fay tha Czechoslovak Ooaaiusurt Tor projects." Three tractors acid by this Belgian firn ar* JOsOBavSj to be In una ncwr In th* strip ooul nines of Be stem Bchaoda.
5. Too firltlsh flresi InternaUcnal Uarksters,ndwlUlaa Batey,othetting Hillondon Til (the forntsr often seekingof theererpins tractors to Eastern iiuropeenately, one or both of theae fire* offeredbrand newf^ Caterpillar D3 Traetoraach ror export to Tie Sweden. Tb* 'nan* of the Swedish fin* in au yet not known, Ths sea* offer was oad* by Uondlol of. lUlan^er^awveo':
aborei
Crawler tra ctcrs.efsdtadSts tM
construction, bat also for odlltaryiparpbBse.
m?WMlL,
ow jlnief^eotJfsxe; arl
p:kxyfi *s^
In Cwchoaloveklfl, 'notleoly in atri?ced;t*
Original document.
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