811.20 (D) Regulations/6752
Memorandum Prepared in the Office of the Assistant Secretary of State (Acheson)
Memorandum for the Guidance of Appropriate Officers in Reviewing Russian Orders
In reviewing orders already placed by the Russian Government in the United States, as contained in the list of such orders filed by the Russian Government with the President’s Liaison Committee and later delivered to this Department and in passing upon future orders, the principles set forth below should be followed. These orders are chiefly for machinery. Decision upon applications for export licenses for standard commodities, such as, gasoline, animal and vegetable fats, leather, et cetera, will continue to be governed by the applicable directives issued by the Administrator of Export Control.
i. articles which are finished at the present time and await only government permission to be exported or delivered
The policy in regard to articles of this character is to permit the export of such of them as are not needed for the defense program of this country or any other which this Government is aiding to resist aggression, provided the articles are not to be re-exported, are not designed to strengthen any branch of Soviet industry believed to be producing supplies for Germany, and are not railway equipment. More specifically:—
- (a)
- Oil well drilling equipment. Equipment of this character already completed may be exported. Care should be taken to ascertain [Page 738] that the equipment is for drilling or prospecting and is not specially designed for the operation of wells in production.
- (b)
- Equipment for use in producing petroleum from producing wells, mineral (other than coal) extracting equipment, gasoline cracking equipment. The policy of the Department is to disapprove all applications for licenses to export equipment of this character.
- (c)
- Machine tools. It is the policy of the Department to permit the export of machine tools already in existence which are not needed in the defense program in this country or in the programs of other countries which this Government is aiding, unless it is believed that it will strengthen any branch of Soviet industry believed to be lending specific economic aid to Germany.
- (d)
- Railway equipment. It is the policy of the Department not to permit the export of railway equipment such as cars, wheels, axles, etc., and machine tools and other equipment specially designed for the manufacture or repair thereof.
- (e)
- Miscellaneous heavy industrial equipment. It is the policy of the Department to permit the export of miscellaneous heavy industrial equipment, such as steam generating units, crushers, electric furnaces, etc., subject to the same proviso that these items are not needed in the defense program of this country or any other which this Government is assisting and are not designed to strengthen any branch of Soviet industry believed to be producing supplies for Germany.
The foregoing paragraphs are not intended to prevent the export of “all-purpose machines” because they may be utilized for a purpose proscribed above.
In regard to orders now completed and awaiting delivery, it is hoped that review can be promptly made and decision reached either to permit the export, or, if export is denied, to requisition the article.
ii. articles which are now in the course of production
The policy in regard to articles of this character is similar to that outlined above.
If it should appear that the article itself may be needed in the defense program of this country or of any country being assisted by this Government, none the less clearance for the completion of the production of such article should be granted, particularly if it is an article of standard equipment. When the article is completed, the question of permitting its export or requisitioning it may be reviewed in the light of the then existing facts regarding defense needs.
If the article itself, and the productive capacity (including labor supply, component parts and raw materials required to produce it) are not needed in the defense program of this country or of any country being assisted by this Government, clearance for the completion [Page 739] of the production of such articles should be granted, provided that clearance should not be given to any article falling within one of the proscribed classes described under title I hereof.
Upon completion of such articles, their exportation should be permitted without delay.
iii. new orders not yet placed
The policy in regard to future orders not yet placed is also similar to that outlined above. But permission to place an order should not be given until it shall have been clearly established that such action will not conflict with any of the principles enunciated herein. Moreover, special caution should be observed in approving orders where the prices appear to be exorbitant.
If the article and the necessary productive capacity is not presently needed for the defense program of this country or any other country which is being assisted by this Government and it is anticipated that this situation will prevail until the completion of the article in question, permission to place the order should be given unless the article falls within one of the proscribed classes described under title I hereof.
If it appears that the article may be needed in the defense program, none the less permission should be given to place the order, particularly if it is an article of standard equipment. When the article is completed, the question of permitting its export or requisitioning it may be reviewed in the light of the then existing facts regarding defense needs.
Where neither the article nor the productive capacity is needed in the defense program of this country or any other being assisted by this Government, but where the civilian need for the article itself may be considered superior, none the less permission should be given to place the order, particularly if it is an article of standard equipment. When the article is completed, the question of permitting its export or requisitioning it for resale to the proper civilian may be reviewed in the light of the then existing facts. Similarly, where the need of another country outside the lease-lend area may be considered superior, the same procedure should be followed.