The American Ambassador in Brazil (Caffery) to the Brazilian Minister for Foreign Affairs (Aranha)78

No. 1942

Excellency: I have the honor to refer to the note of Your Excellency of October 8, 1943, number DEC/373/832.1 (42) (22)76 attaching a Memorandum79 proposing the partial modification of the existing procedure now being followed by the Carteira de Exportação [Page 157] e Importação of the Bank of Brazil, with the collaboration of my Embassy, in handling Preference Requests for the importation of materials from or via the United States.

The Memorandum described above was referred to my Government which has offered certain suggestions in view of existing conditions. I, therefore, now have the honor to transmit for Your Excellency’s kind consideration a new Memorandum on the subject, on which representatives of the Carteira, my Embassy and the Commercial Counselor of Your Excellency’s Embassy in Washington are in agreement.

I submit this having in mind the provisions of Your Excellency’s note of October 8, referred to previously.


Memorandum of Agreement on Supplementary Decentralization Plan

It is recognized that under the present changing wartime conditions the exportation of commodities from the United States covered by the Decentralization Plan must be assisted in so far as possible by flexible controls which themselves are contingent upon the availability of supply. With this in mind and recognizing the importance of utilizing to the fullest extent possible every ship sailing for Brazil, the following principles chosen on the basis of the prevailing supply conditions will govern the exportation of products from the United States to Brazil.

The importation of products subject to estimates of supply or allocations made to Brazil (short supply) will continue to require Preference Request Recommendations.
The importation of products which are considered to be in free supply will not require Preference Request Recommendations or Export Licenses.
The importation of products which while not considered in short supply, are subject to manufacturer’s export quotas or similar restrictions of the War Production Board or other Agency of the United States Government, will not require Preference Request Recommendations. The representative in the United States of the Carteira de Exportação e Importação do Banco do Brazil, the Commercial Counselor of the Brazilian Embassy, will, however, be notified of the granting of every quota assigned to Brazil.
In case any materials in short supply may temporarily become available in such quantities as to make possible the satisfaction of export demands, the Foreign Economic Administration will have the authority, while this exceptional supply contion [condition] lasts, to [Page 158] grant Export Licenses even if the corresponding applications are not covered by Preference Request Recommendations. It is nevertheless understood that applications accompanied by Recommendations or to which Recommendations have been issued are to have preference over all others. Distressed materials and used machinery and equipment not subject to allocations may be exported without an accompanying Recommendation provided the exportation is in the interest of the war effort and the economy of Brazil. Applications for Export Licenses or Statements of Cargo Available for materials of this category will receive preferential treatment if accompanied by Recommendations.
Preference Request Recommendations will not be required where the goods have a value of dollars twenty-five or less.
Shipment of all commodities to Brazil will be made, insofar as possible, within the quotas established by the monthly shipping programs and in accordance with the following procedure: (a) materials for special projects or under the Lend Lease program will continue to be shipped within the quotas established by the monthly shipping programs; (b) materials considered by the Carteira as essential to the Brazilian economy, whether requiring Preference Request Recommendations or not will have preference within available shipping and available cargoes, and (c) materials not considered by the Carteira as essential to the Brazilian economy will be shipped only when, either for lack of cargo or for technical reasons, the ships will not be able to take any more essential materials. The representative of the Carteira will, as heretofore, participate in the preparation of the monthly shipping programs.
While the impossibility of controlling individual shipments is recognized, the representative of the Carteira in the U. S., the Brazilian Commercial Counselor, in order to assist in the execution of paragraph 6 above, will furnish a list of all those commodities the shipment of which the Brazilian authorities consider essential to the maintenance of their basic economy.
In order that the representative of the Carteira in the United States, the Brazilian Commercial Counselor, may keep himself currently informed of the execution of the above plan, the War Shipping Administration will currently furnish the office of the Brazilian Commercial Counselor with a copy of each “eligible cargo list” as soon as it has been prepared for distribution.
In order to insure the complete employment of space on vessels voyaging between Brazil and the United States the appropriate authorities of the United States Government will give consideration to [Page 159] any proposal received from the Brazilian Government for the shipment of products to the United States observing for such purposes however the provisions of General Import Order M–63.
  1. Copy transmitted to the Department by the Ambassador in his despatch No. 13671, December 2; received December 10. This supplementary agreement by an exchange of notes was authorized in Department’s telegram No. 4145, November 6, midnight (832.24/2501).
  2. Not printed.
  3. Supra.