840.51 Frozen Credits/9438

The Secretary of State to the Ambassador in Peru (Norweb)

No. 2206

Sir: For your information and for that of the appropriate members of your staff, there is herewith transmitted a memorandum29 entitled “Analysis of Peruvian Control Measures in the Light of the Resolutions Adopted at the Inter-American Conference on Systems of Economic and Financial Control”. As the title indicates, the memorandum represents a study of the extent to which the Peruvian laws, decrees and regulations governing undesirable financial and commercial transactions comply with the requirements of the resolutions adopted by the Inter-American Conference on Systems of Economic and Financial Control. The study was compiled on the basis of the information available to the Department and it is designed to serve as a guide in Washington as well as to point out certain deficiencies in the local controls which should be considered by you and your staff with a view toward discussions with the appropriate authorities of the Peruvian Government. Similar studies with respect to the other American republics have already been compiled or are in the process of completion.

While the evolution leading to the adoption of the laws presently in force in Peru has been slow, in general, Peru has adopted legislation which provides a satisfactory basis for the implementation of the aforementioned resolutions. Of great importance throughout has been the excellent cooperation between the Embassy and the Peruvian Government. At least until recently, the main weakness in the Peruvian controls has been a failure vigorously to administer the laws in effect. It would appear from recent despatches, however, that the Embassy’s efforts toward securing a more effective administration [Page 727] of the controls are bearing fruit and that the Peruvian authorities are now pursuing a policy which, if carried to completion, may well lead to the complete elimination from the economic life of Peru of all persons whose activities are deemed inimical to hemispheric defense. It is hoped that this policy will be continued and will be applied with equal vigor to undesirable persons of Peruvian citizenship as well as to those of enemy nationality.

In view of the recent developments in the administration of the Peruvian controls, it is suggested that a reclassification of the Peruvian Proclaimed List be undertaken in accordance with the principles set forth in the circular instruction of December 17, 1942,30 which suggests certain classifications of persons on the Proclaimed List. With respect to delisting firms from the Proclaimed List, the Department is generally in accord with the procedure outlined in despatch no. 5877 of January 18, 1943,30 in which it is suggested that firms adopt new names while the former names remain on the list. Care should be taken, however, to insure that the old names, and whatever good will may attach to them will not be used as a means of permitting Axis interests to regain their lost power in the future. In either case, however, a statement that this Government is prepared to delist business enterprises when their transfer to desirable persons is accomplished or their undesirable elements are removed, may, it is suggested, prove an added inducement for the effective administration of the Peruvian laws.

The memorandum transmitted herewith was prepared prior to the receipt of despatch no. 5877 of January 18, 1943, and despatch no. 6050 of February 5, 1943,31 each of which shows improvements in particular phases of the economic control program. No attempt has been made to revise the memorandum by reason of these recent developments and it should, of course, be read with that in mind.

It is requested that, after you have had an opportunity to examine the enclosed memorandum, you advise the Department as to any sections or statements of the analysis with which you are not in agreement. However, if you are in agreement, you are authorized, in your discretion, to inform the appropriate Peruvian authorities of the deficiencies in their control system and to suggest remedial measures.

Very truly yours,

For the Secretary of State
Dean Acheson
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