740.00112A European War 1939/27590
The Secretary of State to the Ambassador in Brazil (Caffery)
No. 4541
Washington, May 28, 1943.
The Secretary of State refers to the Embassy’s despatch no. 10425 of March 15, 1943,92 submitting a review of the administration of the Brazilian economic and financial controls by the Economic Defense Commission.
In answer to the two specific questions raised in the last paragraph of this despatch, the Ambassador is instructed as follows:
- 1.
- The Ambassador is authorized to reply to the Economic Defense Commission in response to its memorandum dated February 4, 1943, that this Government has found satisfactory the terms of the Commission’s memorandum. It is suggested that the Embassy may wish to agree with the Commission upon a concrete formula to be used by the Commission in notifying the Embassy of the final disposition of specific cases, which in turn might be used by the Embassy in recommending such cases for removal from the Proclaimed List. The principal point to be covered, of course, in such a communication by the Economic Defense Commission will be (a) the question of a satisfactory transfer of the enemy ownership in cases to be subjected to vesting; and (b) satisfactory provision with respect to the elimination of undesirable personnel.
- 2.
- With respect to the question of the blocking of funds in the licensing of transactions between United States firms and Proclaimed List nationals and in indemnifying persons of Brazilian nationality whose beneficial, as distinguished from nominal, interests in seized firms are eliminated, the Department is disposed to give full weight to the effect of the system of controls which has been created by the Brazilian Government. Accordingly, in such cases, the Department is in agreement that any payments to be made to such persons, should be made in accordance with the provisions of the Brazilian controls and that no special efforts need be made by the Embassy to work out special blocking arrangements except possibly in cases where exceptionally large amounts are involved or where there is reason to believe [Page 760] that the ostensibly local interest is, in fact, an enemy interest and where the Embassy believes that it would be contrary to the interests of the war effort to permit a particular person to receive substantial amounts of free funds. The determination of these matters is left to the Embassy’s discretion to be worked out in cooperation with the Brazilian authorities. Where a transaction is involved in which the Embassy must obtain specific authority from the Department before issuing a particular license, the Department will take the foregoing factors into consideration in passing upon the Embassy’s request for authority.
- Not printed.↩