810.24/263a
The Secretary of State to Diplomatic Representatives in the American Republics Except Argentina
The Secretary of State refers to the circular instruction, file no. 810.24/216D, of April 15, 1943,21 concerning projects under decentralization. [Page 120] Since there appears to be some misunderstanding with regard to the handling of such projects, it is desirable to repeat certain principles.
Some of the confusion has arisen as a result of difference of terminology. A “project” is defined as the material and equipment required to construct a new enterprise or to expand facilities of an existing enterprise, i.e., a capital expenditure. A “program”, on the other hand, is comprised of articles and materials required for maintenance, repair, and operating supplies and production requirements of a particular enterprise.
The Board of Economic Warfare issues two types of licenses for projects and programs:
- 1.
- A WP license—a document used to effect export clearance for all items required to construct an enterprise covered by a United States Army or Navy contract. The materials for such a project are furnished by the Army or Navy from its allocations.
- 2.
- An SP license—a document used to effect export clearance for all items required for any other project or program. This license covers a year’s requirements, broken down by quarters.
SP licenses are issued for projects and programs requiring certification as well as those not requiring certification. The criterion in determining whether a project should be submitted to the country agency for an Import Recommendation is the presence or absence of direct sponsorship by a United States Government agency.
If the project or program is directly sponsored by the Office of Imports of the Board of Economic Warfare, the Defense Supplies Corporation, the Rubber Development Corporation, the Mining Equipment Division of the War Production Board (enterprises holding mine and smelter serial numbers), the Petroleum Administration for War (requirements of oil companies), the Coordinator of Inter-American Affairs, or a similar United States Government agency, the project or program will be licensed without reference to the country agency. A separate provision is made for such projects and programs in the estimates of supply. Since the materials involved are not charged to the estimate of supply for the general requirements of the importing country, such projects and programs do not reduce the essential materials made available to the country agency for issuance of Import Recommendations. Such cases are exempted from submission to the country agency for one or more of the following reasons:
- (a)
- These cases generally relate to the exploration or exploitation of critical materials required by the United Nations and, therefore, use materials which would otherwise be allotted to the war agencies.
- (b)
- Since these cases are officially sponsored by United States Government agencies, the country agency might be placed in a politically embarrassing position if it had to screen and approve materials against the country’s allocation.
- (c)
- It is more expedient to submit bills of materials in Washington where the cases are initiated, financed, and engineered.
The bills of materials for such projects and programs will be transmitted to the Mission for its information and comments. The comments of the Mission, as to the essentiality of the entire project or program as well as the need for particular items of material or equipment, will be considered by the Board of Economic Warfare in screening subsequent SP license applications for the same enterprise.
If the project or program is not directly sponsored by a United States Government agency, an Import Recommendation is required (excepting those outstanding SP licenses for which special provision was made by the Department’s circular instruction under reference). It is suggested that a single Import Recommendation covering a bill of materials for a project or program be used rather than a series of related Import Recommendations; there will then be a single document corresponding to the SP license to be issued in Washington. The country agency can then make its charges quarterly against estimates of supply as made available.
- Not printed.↩