740.00112A European War, 1939/4014a
The Secretary of State to Diplomatic Representatives in the American Republics
Sirs: Reference is made to Strictly Confidential Circular Instruction of August 28, 1941 entitled “Procedures and Policies on Maintenance of the Proclaimed List of Certain Blocked Nationals”, File No. 740.00112A European War 1939/966A.
There is enclosed a copy of a confidential list of unsatisfactory consignees41 which has been prepared and used by the Office of Export Control in passing on license applications. To date the Department [Page 308] has had nothing to do with the preparation of the confidential list. Recently the Department concluded arrangements with the Economic Defense Board, which now administers Export Control, to have the maintenance of the confidential list handled by the Department. The list is to be revised by the Department on the basis of the information contained in the Department’s files and on the basis of your recommendations. The Export Control authorities have informed the Department that the list is mainly composed of individuals who have been reported as being associated in one way or another with firms on the Proclaimed List or with other firms which the Export Control authorities have considered to be unsatisfactory consignees. The primary purpose of the confidential list as presently constituted has been to prevent “cloaking” activities by such individuals on behalf of the firms with which they are identified. On the other hand there are a considerable number of firms on this list which have not yet been considered for the Proclaimed List and the individuals associated with such firms are also included.
The Department is now engaged in checking the list against its files in order to identify all cases which have an “A” rating in the Department’s records on the basis of unfavorable information in the Department’s possession, but which are not yet included on the Proclaimed List. As soon as these “A” cases have been identified the Export Control authorities will recheck the list to indicate each name which is associated with either a Proclaimed List firm or with the “A” cases and a revised confidential list will then be put into effect which will contain only the “A” cases and the names of persons who, according to Export Control’s records, are identified with either an “A” firm or a Proclaimed List firm. All other names now on the list will be eliminated pending receipt of a report based upon your review of the list.
It is contemplated that the “A” cases referred to above will be reviewed as rapidly as possible with a view to proposing most cases for inclusion on the Proclaimed List. In the future the confidential list will be confined in the main to three types of cases:
- (1)
- Individuals who are identified with Proclaimed List firms either as owners, partners, directors, stockholders, employees, et cetera, but who have not been recommended for individual listing on the Proclaimed List. Experience has shown that such persons frequently are utilized as “cloaks”, but it is not desirable to include many such individuals on the Proclaimed List until their status as an actual cloak is established.
- (2)
- Firms and individuals being considered for the Proclaimed List, i.e., firms with an “A” rating which will go onto the Proclaimed List in a short time, but which can be put under immediate control by including the name on the confidential list.
- (3)
- Persons and firms who would be included on the Proclaimed List except for special considerations, i.e., the “A–S” cases.
The Department recognizes the many difficulties inherent in the maintenance and operation of a confidential list, but for the present at least it appears necessary to maintain such a list as a complementary control to the Proclaimed List. The confidential list will be kept as small and as flexible in operation as is feasible. Cases should not generally be recommended for the confidential list merely because the evidence is not strong enough to warrant inclusion on the Proclaimed List, except in the case of firms or individuals who are associated with Proclaimed List firms in which event they should be automatically recommended for the confidential list. The mission should exercise its discretion in determining when circumstances make it advisable to recommend such individuals for the Proclaimed List rather than the confidential list. Whenever the activities of particular individuals are responsible for a firm being placed on the Proclaimed List such individuals should generally be recommended for the Proclaimed List along with the firm. Even in such cases, however, there may be special circumstances which make it preferable to recommend the individual for the confidential list rather than the Proclaimed List.
In reviewing the enclosed list it is requested that the mission report as soon as possible on all cases which: (1) should not be included on either the confidential or the Proclaimed List; (2) should be considered for inclusion on the Proclaimed List. In both cases the essential facts should be furnished or reference made to prior reports covering the case. Whenever a case should be considered for the confidential list because of special circumstances, these circumstances should be stated and an “A–S” rating recommended.
It is recognized that many of the names relate to obscure individuals whom it may be difficult to identify and your report on such cases may be postponed until you receive a copy of the revised confidential list. At that time it will probably be desirable to recheck many of the cases to determine whether the individual is still associated with the firm which resulted in the inclusion of his name.
Copies of this instruction are being forwarded directly to the missions for distribution to the consulates with such further instructions as the missions deem advisable. In this connection it is assumed that the missions will furnish the consulates with such portions of the list as are applicable to the different consular districts. The reports of the consulates on this matter should, as on other Proclaimed List matters, be made through the mission. The Department will endeavor in the future to forward to the mission and the consulates at regular intervals subsequent revisions of the confidential list. Although the existence of a so-called “gray list” or confidential list has been referred [Page 310] to in the press and elsewhere the Department desires that the existence of the list and the nature of its operation be treated as confidential.
Very truly yours,
- Not printed.↩