The Ambassador in Brazil ( Berle ) to the Secretary of State

No. 28

Subject: Brazilian Government Establishes New Import Control System.

Sir: With reference to my unrestricted Despatch No. 27 of January 29, 1945,8 bearing the above subject, I have the honor to report that the Brazilian Government has definitely established a restricted import control system.

The new order is vague, especially as regards the period during which it will be effective, but also in various other respects, including the provision affecting “Imports that have been contracted for”. Likewise, many firms are already in doubt as to whether certain products are included in the list of goods now subject to import license control.

The Embassy was successful in having some important items, such as chemicals, pharmaceuticals, and certain electrical goods removed from the list.

With reference to products, such as those of iron and steel, which are still subject to the Decentralization procedure, and now affected by import license control as well, it is understood that approved Preference Bequest Recommendations will be accepted in lieu of import licenses.

A mechanical operation which promises to create difficulty is that of reconciling Brazilian import licenses with American export licensing procedure and allocations. This applies particularly to products not requiring the presentation of Preference Request Recommendations. It is quite probable that at times the Brazilian Government will issue import licenses covering products for which the allocations to Brazil are exhausted, or which cannot be licensed for other reasons by American authorities.

The new Order means that “distressed” steel shipments, which have never been subject to Decentralization, and which have been over and above existing iron and steel quotas for Brazil, may no longer be made except upon presentation of import licenses.

It is expected that the present measure will considerably retard exports from the United States to Brazil, and result in less merchandise being received. Delays here in applying for and receiving licenses; in transmitting them to the United States and other countries [Page 718] by open mail; in presenting them to Brazilian Consulates before Consular invoices will be certified; and in coordinating them at local customhouses with incoming shipments, may well be great, indeed. The Order will enormously augment paper work on both ends, increase the cost of living, and generally stimulate even greater inflation. These factors were repeatedly brought to the attention of the Ministers of Foreign Affairs and Finance. The Order is most unpopular locally, among both Brazilian and American importers, but it represents a gratifying victory for the Brazilian industrial elements that favor it.

Respectfuly yours,

For the Ambassador:
Harold S. Tewell

First Secretary of Embassy
  1. Not printed.