Foreign Relations of the United States: Diplomatic Papers, 1944, General: Economic and Social Matters, Volume II

740.00112A European War 1939/36579a

The Secretary of State to Diplomatic and Consular Officers in the American Republics

Washington, April 27, 1944.

Confidential List of Unsatisfactory Consignees (Supplement No. 3)

Sirs: Reference is made to the circular instructions of November 25, 1941,³⁷ February 20, 1943, and March 15, 1943,³⁸ concerning the Confidential List of Unsatisfactory Consignees.

An agreement has recently been reached between the Department and the Foreign Economic Administration as a result of which the maintenance of the Confidential List is now the primary responsibility of the Division of World Trade Intelligence of the Department of State.

The Department desires to assure that the inclusion of all names currently on the Confidential List is warranted by existing circumstances. The Missions are requested to review carefully all names on the List in their respective jurisdiction and to forward a report recommending the deletion of any names for which there are insufficient grounds for continued inclusion.

The following constitute the grounds presently regarded as the basis for inclusion of a name on the Confidential List:

(1) Identification with the ownership or management of a Proclaimed List firm.

(2) Variation in the style of a Proclaimed List firm or alias of a Proclaimed List national.

(3) Persons and firms whose names would be included in the Proclaimed List except for special considerations.

(4) Undue trade with Proclaimed List firms.

(5) Cloaking in connection with merchandise subject to Allied controls.

(6) Inclusion in the Schedule of Special Blocked Nationals.

(7) Evidence of pro-Axis sympathies or activities which, although not strong enough to warrant Proclaimed List action, nevertheless indicates that the person or firm should not be permitted to receive United States exports.

(8) Persons and firms, without regard to their political sympathies or affiliations, who are engaged primarily in the exploitation of commodity shortages through the charging of exorbitant prices to the detriment of the war effort. These names are distinguished by the symbol (#) preceding the name.

The Missions are requested to give particular attention to the following considerations in their review of the Confidential List:

(1) A considerable number of cases have been included in the Confidential List because of a suspicion, arising from their connection with a Proclaimed List firm, that they might engage in cloaking activities on behalf of the listed firm. In many instances the Proclaimed List firm has subsequently been liquidated or sold to satisfactory purchasers. In such cases the Mission should, in the absence of other unfavorable information, consider the advisability of recommending the names involved for deletion from the Confidential List.

(2) Names in class (7) above should be reviewed periodically in order to assure that the current evidence warrants continued retention on the Confidential List.

(3) Any names included in the List for the reasons mentioned under (8) above should be carefully reviewed with a view to the deletion of those cases in which it is believed that the activities of the firm can now be satisfactorily controlled through the exercise of the Mission’s licensing power under the decentralization program. The denial of import recommendations may be accompanied by a statement that this Government does not approve the issuance of an export license in the particular instance because of unfavorable reports which have been received concerning the consignee. This method of control is usually preferable in this type of case since it offers an opportunity for the exercise of judgment by the Missions concerning the specific items involved.

(4) Cases of type (3) above should be reviewed in order to determine whether inclusion in the Proclaimed List may be preferable in the light of present conditions.

The Missions are requested to include in their reports any suggestions which they may have with respect to the operation of the Confidential List in their countries.

The last paragraph of the circular instruction of March 15, 1943, referred to the anticipated effect of export control decentralization on the Confidential and Watch Lists and it was stated that the Confidential List would be continued for an indefinite period, at least until it was determined to what extent the decentralization program would be applied. The modifications of the decentralization program in the last six months have resulted in the removal of many commodity groups from the import recommendation system. The Confidential List, in addition to its use by the Missions in connection with the administration of the import recommendation system, is used by the Foreign Economic Administration in screening shipments requiring special licenses and those under general license when the weight is over a gross ton. The Export Control Watch List has been largely eliminated and most export license applications are only screened against the Proclaimed and Confidential Lists.

Very truly yours,

For the Secretary of State:

Dean Acheson

37. Foreign Relations, 1941, vol. vi, p. 307.
38. Latter two not printed.