CFM Files
United States Delegation Journal
USDel (PC) (Journal) 55
The Commission agreed to set up a subcommission, composed of any interested members of the Commission, to consider Annexes 6, 7 and 8 dealing with Industrial, Literary and Artistic Property; Contracts, Prescriptions and Judgments; and Prize Courts.
The Yugoslav amendment (CP(IT/EC)Doc. 64)91 to Article 67 (Claims against Germany) providing that Italy should recognize and facilitate the transfer of German assets in Italy to the Allied and Associated Powers was lost 7 to 11, with 22 abstentions. The Commission approved the U.S. amendment (CP(IT/EC) Doc. 69)92 providing that Italy would facilitate such transfers as were determined by the Powers occupying Germany responsible for the disposition of German assets.
The Yugoslav amendment (CP(IT/EC)Doc. 62)93 to Article 69 (Italian Property on the Territory of the Allied and Associated Powers) concerning definition of Italian assets, was defeated 16 to 4.
The Ukrainian amendment (CP(IT/EC)Doc. 70)94 to Article 69 (Italian assets on the Territory of the Allied and Associated Powers) providing that liquidation of the assets should be liquidated without burdening Italian reconstruction or the balance of payments and that the liquidation should be supervised by the Four Ambassadors in Rome, was considered favorably by the Soviet representative. M. Aroutiunian (USSR) said that when the Soviet Delegation had agreed to Article 69 in the CFM discussions it had not yet consulted the Italian Government. However, the Soviet Delegation, realizing the importance of foreign assets to the Italian economy, had based its acceptance of the article on the understanding that liquidation of these assets would not delay Italian reconstruction or lay a further burden on the Italian balance of payments. Since the Ukrainian amendment did not add anything contrary to the spirit of Article 69 he asked that it be accepted by his partners on the CFM. He emphasized that during the discussion of reparations it was agreed that commodity payments would be supervised by the Four Ambassadors. He did not see why such countries as Brazil, Mexico and Venezuela which held Italian vessels should be permitted to retain these without supervision [Page 589] of the Four Ambassadors. He suggested that Articles 66, 68 and 69 laid a greater burden on Italy than did the reparation article and asked the other drafting powers to support the Ukrainian amendment.
Mr. Thorp (US) said the Ukrainian amendment was clearly contrary to the agreed text of the CFM. It created a new distinction between the occupied countries and those which were not occupied, a distinction which would have implications beyond Article 69; it placed a new limit on the rights of the Allied and Associated Powers to Italian assets by relating the liquidation of these assets to Italian reconstruction and balance of payments; and it asked that the Four Ambassadors exercise a judicial function with respect to fixing the amount of claims, different from the function exercised in connection with reparation for the USSR. Furthermore, he pointed out that Article 69 had been under consideration for many months and that it would be rather difficult to consider a new approach to the problems arising under the Article at this late date. He added that the U.S. Delegation intended to negotiate a bilateral agreement with Italy by which the larger part of the assets would be returned to Italy, only certain private claims of U.S. citizens being met out of the Italian assets in the U.S. He suggested that supervision by the Four Ambassadors would not result in a more favorable settlement and that the adoption of such a scheme would give rise to legislative difficulties in the U.S. The U.S., he concluded, supported the agreed text.
M. Alphand (France) agreed with M. Aroutiunian that foreign assets were important to a country’s balance of payments and pointed out that France, having foreign assets in many European countries, had stressed the importance of these assets to France. He suggested, therefore, that enemy assets should not be given more favorable treatment than the foreign assets of the United Nations.
The Ukrainian amendment was defeated 14 to 5 with 1 abstention, U.S., Australia, Belgium, Brazil, Canada, China, Ethiopia, France, Great Britain, India, New Zealand, Netherlands, USSR and Union of South Africa opposing; Byelo-russia, Poland, Czechoslovakia, the Ukraine and Yugoslavia favoring; and Greece abstaining.
Article 70 (Debts) was adopted, the Polish and Yugoslav representatives withdrawing their amendments (CP(Gen)Docs. 1 O 5 and 1 U 23, respectively) and Article 70 was approved unanimously as drafted.
Mr. Wilgress (Canada) then explained the Canadian amendment to Article 71 (General Economic Relations) extending the time limit from 18 months to three years [C.P. (Gen.) Doc. 1. F. 1.]. Italy, he explained, would need a longer period of time than 18 months to conclude the treaty negotiations necessary to establishing normal [Page 590] trade relations. One of the chief problems for Italy would be to obtain foreign exchange and during the period of readjustment it would need protection against any United Nation seeking a market in Italy. He suggested that any time limit adopted should recognize the inevitable need for readjustments in the post-war world. The Treaty of Versailles, he pointed out, obligated Germany to grant most-favored-nation treatment unilaterally for a period of 5 years. Because of this Germany was not able to adopt an independent trade policy. However, the clause under the consideration of the Commission provided for reciprocal most-favored-nation treatment and would allow Italy to pursue an independent commercial policy. The interim period, he explained, would work to Italy’s benefit and would not give special privileges to any one country. He suggested that the extension of the time period would not conflict with any of the international commitments entered into by the countries represented at the Conference. It would be too much to hope that the post-war adjustment could be made in two years, and therefore Canada asked the Drafting Powers to reconsider their decision and extend the time period to three years.
M. de Carbonnel said that the time period had been discussed very fully during the Council meetings and that the Council had been faced with two difficulties; the wish to restore to Italy its normal right to negotiate trade agreements and formulate commercial policy and its desire to provide a period of time during which Italy could rebuild her commercial policy and be protected against aggressive commercial policies of other United Nations. He suggested that the period of 18 months was a reasonable period and pointed out that France had concluded a trade agreement with Italy in February of 1946.
The Canadian amendment was then voted on and carried by the Commission 12 to 8. The preamble of Article 71 without the time period and paragraph (a) were adopted unanimously.
- Not printed.↩
- For text, see C.P. (Plen) Doc. 26, report of the Commission, vol. iv, pp. 338, 353.↩
- See ibid., 359.↩
- See ibid.↩