102.1702 France/269

The Ambassador in France (Herrick) to the Secretary of State

No. 8272

Sir: With reference to the recent commercial negotiations between France and the United States,8 and in particular to the objections raised by the French Government to the activities in France of certain agents of the Treasury Department, I have the honor to transmit herewith a copy and translation of a note dated January 27, 1928, from the Foreign Office. In this note, the French Government offers suggestions concerning a procedure, which, if adopted, the French Government thinks would enable our Government to exercise a proper control over the declarations of value made by French exporters, and yet not arouse the susceptibilities of French producers and merchants.

I have [etc.]

Myron T. Herrick

The French Ministry for Foreign Affairs to the American Embassy

The Ministry for Foreign Affairs has, at various times, had occasion to speak to the Embassy of the United States concerning the difficulties which have arisen in France on account of the activities of the agents of the Treasury Department, owing to their claiming the right to examine the books of French firms having business relations with the United States.

On March 6, 1926, in particular, the Ministry for Foreign Affairs handed unofficially to Mr. Johnson, at that time Counselor of the Embassy of the United States at Paris, an aide-mémoire giving the point of view of the French Government in this regard.9

The misunderstanding was happily straightened out by the agreement contained in the notes exchanged last autumn between the two Governments, concerning the customs régime applicable to American products upon their importation into France.10 In the aide-mémoire handed on October 24, 1927, to the Ministry for Foreign Affairs,11 the Embassy of the United States was good enough, indeed, to state that [Page 821] its Government “assures the French Government that if the French Government objects, no investigation of private books and records of French producers, manufacturers or merchants will be made by representatives of the American Government in French territory.”

The French Government, which has already taken note of this undertaking, admits readily on its side that, on account of the collection of ad valorem customs duties in the United States, the American Government desires to exercise a proper control over the declarations of value made by French exporters.

Consequently, it seems desirable to the French Government to seek, in agreement with the Government of the United States, a procedure which would permit the delegates of the American Treasury Department to fulfill their mission in a manner compatible with their obligations, without exceeding the provisions of French law and without arousing the legitimate susceptibilities of French producers and merchants.

This procedure might, in its opinion, be established on the following bases:

The delegates of the American Treasury Department would be attached to the American consular authorities, to whom French exporters must apply for the visaing of their invoices, and would control, by making use of their knowledge of the market and their personal information, the sincerity and exactness of these invoices and the documents which usually accompany them.
When they are in doubt concerning the sincerity or the exactness of these documents, they would proceed to their verification.
In such a case, the exporter would have the choice between the two following methods:
either he would produce the bills of sale, contracts and correspondence relating to the transactions in question. Only such documents as the French customs authorities are themselves entitled to demand for declaration of value could be produced;
or the exporter’s declarations would be submitted to an expert accountant or to a technical expert, or to two experts,—one accountant and the other a technical expert.
The expert or experts, who would be of French nationality, would be chosen by the American authorities from a list drawn up by the French Government. The list of expert accountants would be that at present prepared by the French Government, in execution of the decree of March 22, 1927, creating the diploma of expert accountant. The list of technical experts would be that of the customs experts, among whom the French Administration already chooses its own experts in cases of similar disputes.
It would be understood that verifications of the declarations made by French exporters would only be made in case the American authorities thought it necessary to question the sincerity of a declaration of value. There can be no question, indeed, of subjecting all French exporters doing business with the United States to a permanent control over the elements of their declarations.
The verification thus effected would guarantee French exporters against any new valuation by the American customs, except in case of a suspicion of fraud or substitution of merchandise.

The French Government would be happy to know the opinion of the Government of the United States concerning the foregoing suggestions. It also desires to obtain the assurance that, in a spirit of equitable reciprocity, the French agents who shall eventually be authorized to this effect by it, would be authorized to control the declarations of American exporters under the same conditions as those which it has the honor to propose to-day to the Government of the United States. It believes that, if its suggestions were accepted, they would be of a nature to settle definitely, to the common satisfaction of both countries, the very delicate question of the control of exporters’ declarations of value.

  1. See Foreign Relations, 1927, vol. ii, pp. 631 ff.
  2. Not found in Department files.
  3. See Foreign Relations, 1927, vol. ii, pp. 696703.
  4. See telegram No. 330, Oct. 22, 1927, 11 a.m., to the Chargé in France, ibid., p. 696.