740.34112A/8–2644
The Secretary of State to the Ambassador in Paraguay (Beaulac)
The Secretary of State refers to despatch no. 2390 of August 26, 1944 with regard to consignee control for Paraguay. The Department and the appropriate officials of the Foreign Economic Administration have given consideration to the specific problems in Paraguay involved in the approval of license applications in the name of unknown consignees and recognize the difficulty faced by the Embassy in this connection. However, in view of the present shipping and supply situation it is not deemed practicable to revise the procedure presently in effect. This Government has taken the position that as goods become in free supply in this country and shipping space is available for transportation to other countries in this hemisphere export controls with regard to this merchandise should be relaxed in so far as this can be accomplished without undue relaxation of restrictions on pro-Axis firms and individuals. As a result of this policy many types of merchandise have been placed under general [Page 1465] license and it was recently decided, effective November 1, to eliminate Form 138 (Statement of Cargo Availability) for all of South America, except Argentina. This step was taken some time ago in so far as Central America and the Caribbean countries are concerned. There is therefore no present check on shipments of merchandise under general license unless the consignee is included in the Proclaimed List in which case the shipment would be stopped by the customs officers.
With regard to the statement that Paraguay’s economic dependence and geographic position with regard to the Argentine are such as to encourage cloaking operations between the two countries, the Embassy is informed that the Department and the Foreign Economic Administration are giving consideration to means of assuring that merchandise ordered by firms in the other American republics is not transshipped or diverted to Argentina. The Department’s circular telegram of September 15, 194423 is pertinent in this connection and the possibility of taking further action in this regard is currently under discussion.
As of interest to the Embassy there is enclosed a copy of a memorandum24 on consignee control which reviews recent developments in this field.