The Secretary of State to the Chargé in Venezuela (Flack)

No. 1865

The Secretary of State refers to the Embassy’s despatch no. 4146 of March 30, 194315 regarding negotiations with the Venezuelan Government with respect to the inauguration of the decentralization program. The Department appreciates the thoroughness in which the Embassy has gone into this matter with the Venezuelan Government and expresses the opinion that after certain small differences of ideas have been clarified, the program will work to the advantage of both the Governments of Venezuela and the United States.

Numerous despatches, airgrams and telegrams have reached the Department in which various questions regarding decentralization [Page 296] have been raised. These communications have already been answered and therefore will not be repeated in this instruction.

Regarding the specific questions raised in the Embassy’s despatch under reference, all products do not require import recommendations; for example, requirements for United States sponsored projects engaged in the exploration and exploitation of strategic materials do not require import recommendations. The determination of just what is included in this category should be decided in Washington and the Embassy is requested to consult the Department regarding problems that they may have in this connection.

With regard to the three points raised in the Embassy’s despatch on oil companies requirements, the Board of Economic Warfare has been consulted and advises:

Materials for resale in the open market such as greases and lubricating oils must have import recommendations.
Equipment and supplies directly connected with exploration and exploitation do not require import recommendations if special license or war project license has been granted.
Commissary items such as food and drug products must have import recommendations.

It is not considered necessary that definite non-importable lists be established. Each application should be considered on its own merits and recommendations made accordingly. However, both the Import Control Commission and the Embassy should seriously take into consideration the end use of the material desired and approve only such applications that are considered necessary to the war effort or to the economic welfare of Venezuela.

The backlog is no longer a problem. A great many shipments have already been made and some licenses have been canceled upon the request of the applicants. Therefore, it is not necessary or advisable to issue import recommendations for shipments already approved before the decentralization program was inaugurated. Furthermore, a liberal policy of issuing Import Recommendations can now be taken on items in long supply.

Instructions have already been transmitted to the Embassy regarding shipments valued at $25 or less, and the Department wishes to again impress upon the Embassy the fact that the Board of Economic Warfare has made no provision for handling import recommendations of such shipments and neither have the exporters in the United States been informed that import recommendations or export licenses would be required for such shipments. Should the Venezuelan Government insist that import recommendations be issued their action might seriously hamper the operations of decentralization.

Estimates of supply of all allocated materials for the second quarter have already been transmitted to the Embassy. This includes Class B [Page 297] Group I fabricated products containing controlled materials as well as farm machinery, automotive parts and accessories. Third quarter estimates of supply of certain raw materials were transmitted under cover of the Department’s instruction, no. 1855, dated April 24, 1943.16

Regarding pharmaceuticals, medicinals and drugs, import recommendations may be issued for these products without limit taking into consideration that the total of all recommendations issued does not exceed 125% of the target tonnage and also taking into consideration the end use of the materials and whether the consignee and ultimate purchaser are acceptable.

The Embassy is requested to communicate with the Department in the event that other points in connection with the decentralization plan have not been thoroughly clarified.

  1. Not printed; for certain documents transmitted with this despatch, see pp. 291 and 293.
  2. Not printed.