833.24/829: Airgram
The Ambassador in Uruguay (Dawson) to the Secretary of State
[Received September 9—3 p.m.]
A–473. Department’s circular airgram, August 23, 7 p.m.,90 Department’s circular telegram, August 31, 4 p.m., and Embassy’s telegram no. 792, September 2, 6 p.m.91 Confirming the Embassy’s telegram under reference, the Department is informed that the purport of the three alternatives providing for a simplification of export control as it relates to materials in free supply was presented to the Country Agency, together with a full explanation of the motives [Page 287] behind such a simplification of procedure and of the results which it was sought to obtain. The Uruguayan Government organization recognized certain merits in Alternatives I and II, although neither was regarded in its entirety as adaptable to Uruguay or as an improvement over present control. Alternative III was rejected categorically by the Country Agency as incompatible with its organic and legal functions and as contrary to the spirit of the undertaking entered into with the Government of the United States to participate in joint export control. The motive inspiring the simplification project was construed by the Country Agency only as theory and not as supported by actual conditions existent in Uruguay.
As indicated in the Embassy’s telegram under reference, it is believed it will be possible to reach an accord with the Country Agency on a more simplified export control, but never to the extent indicated in the provisions of Alternative III, nor to the point that Uruguay will relinquish any of its rights or legal obligations to be the final judge as to its requirements and imports. The Embassy outlined in the telegram under reference the simplification process regarded as most feasible and most likely to obtain the assent of the Country Agency to any amendment in present procedure. Authorization was requested from the Department to present to the Country Agency for its consideration the following modifications in export control of materials in free supply:
- (1)
- An adoption of the simplified Import Recommendation form for materials in free supply as suggested in Alternative I and as recommended in Embassy’s airgram A–409 of July 31.92
- (2)
- No change in local implementation of control as established by Decentralization Plan A as it relates to the Country Agency.
- (3)
- The complete and exclusive control of imports of materials in free supply with full onus of the administration of same to pass to the hands of the Country Agency. Implementation of Import Recommendations as at present would provide for consignee control by the Embassy.
- (4)
- The absolute establishment to the maximum completeness of a list of materials in free supply maintained against changing conditions and kept current by frequent periodical additions or deletions.
The authority over exchange and import control vested in the Country Agency is set forth in the law amending its organic powers, which law appears in the Diario Oficial of the Uruguayan Government, number 10307 of January 17, 1941. Other references to this authority will be found in Embassy’s airgram no. A–38 of January 21, 1943,92 and Embassy’s telegram no. 571 of June 10, 4 p.m. The airgram details certain inherent powers of the Country Agency to prohibit imports of commodities which the Uruguayan Government regards as non-essential, [Page 288] while the telegram provides a background for a comprehensive understanding of the Country Agency’s conception of its prerogative in the control of imports.
The Uruguayan Country Agency, through the exercise of its authority over the disbursement of foreign exchange, through its functional power to demand that an importer obtain a permit prior to the embarkation of merchandise, and as a result of its operative prohibitory procedure with respect to the entrance into the country of nonessentials, is endowed with the structural elements of the most rigid of import controls. As the result of a close cooperative understanding with the Country Agency, the Embassy finally has succeeded in circumscribing certain of the latter’s regulatory procedures through a mutual understanding that, provisionally, no obstacles will be placed in the way of fomenting the flow of Import Recommendations.
The Embassy believes that the Department and the Office of Economic Warfare94 will comprehend more clearly the situation which has confronted the Embassy if they take into consideration the fact, already brought to the attention of the Department, that constant arrivals of merchandise licensed for export without import recommendations have moved the Country Agency to the strongest expressions of disapproval. Certain licensings have been regarded as in complete violation of the agreement entered into between the two countries to establish a joint export control, while other actions have been interpreted as approaching the margin of the spirit of the undertaking.
The Embassy has been confronted constantly with the task of mitigating any action which the Country Agency might take under its functional powers to control imports. The recent attitude adopted by the Office of Economic Warfare as described in communications from the Department, which indicates a policy of referring all applications for export licenses not covered by Import Recommendations for the decision of the Embassy and the Country Agency, has produced an alterant most beneficial to the relations between the Embassy and this Uruguayan government organization.
The efforts of the Embassy and those of the Country Agency, once the latter’s attitude was modified favorably, with enthusiastic cooperation from commercial and industrial organizations and the press, to foment the flow of Import Recommendations have brought the average monthly tonnage represented by approved Import Recommendations since the inception of Decentralization Plan A to approximately 10,500 tons or only 500 tons in excess of the 125% of the target tonnage figure.
The Country Agency is not in accord with the Embassy on the point that the complicated procedure exacted from the importer is a contributing factor toward the present restraint in imports. The [Page 289] government organization insists that the only causes of this restraint are economic and psychological. It is true that Uruguay economically is passing through a critical period. The lack of many strategic materials, principally combustibles, is an important contributory cause. The Embassy also agrees with the Country Agency to the extent of admitting that one of the major deterrents to an increase in imports is the present apathetic attitude of Uruguayan trade toward buying, reflected in its apparent determination not to stock or anticipate needs, a course undoubtedly inspired by the belief that the favorable progress of the war could produce, without warning, a complete change in price and marketing conditions.