740.00112A EW/8–1646: Airgram
The Acting Secretary of State to the Ambassador in Argentina (Messersmith)
A–816. Reference your airgram no. A–858 of August 16, 1946 concerning undesirable trade contacts.
Your understanding that there is nothing except the blocking of certain funds by Treasury to prevent American or Argentine firms from dealing with former Proclaimed List entities is correct. (Such blocking, however, applies only to German-owned firms, and does not effectively prevent transactions with the blocked firm.) The Undesirable Trade Contacts program is a service to American firms, and no effort is made to police relations with ex-PL firms, or to force American exporters to follow the recommendations of the Commerce Department.
Inquiries received by the Commerce Department from American firms are answered with the form letter sent under transmittal slip, [Page 320] July 10, 1946. You should note that the form letter states only that non-merit deletions from the Proclaimed List are “not recommended as agents or distributors for American firms”. The form letter is sometimes supplemented with an oral indication of the nature of the adverse information concerning the firm involved. Concerning transactions involving merely purchase or sale of merchandise the Commerce Department takes no position, but in response to inquiries from American firms with respect to such transactions, it likewise often indicates orally the nature of the evidence against such firms. Inquiries received by you from American firms should be answered in line with the form letter under reference, and you may in your discretion confidentially inform American firms of the reasons for considering a specific firm as undesirable.
The Department believes that inquiries in the nature of the specific questions raised on page 2 of your airgram no. A–85825 may generally be handled in accordance with the foregoing policy and procedure. As an indication of how the Commerce Department’s program may be made applicable abroad, however, answers to each of your inquiries are given seriately below:
- 1. and 2.
- If Argentine firms and individuals inquire concerning either transactions or agency relationships with “merit deletions” they should be informed that the firm was deleted from the Proclaimed List without prejudice. If the inquiry concerns “non-merit deletions” the Argentine inquirer should be informed that the United States Government takes no position in the matter, in as much as it has no jurisdiction over the activities of Argentine nationals. You may, however, point out to the inquirer that in general firms which were deleted from the List for reasons other than merit are expressly “not recommended” to American firms as distributors or agents. In your discretion you may also indicate why the firm in question is considered undesirable as an agent or distributor for an American firm.
- 3. and 4.
- No concerted effort is being made to prevent purchase and sales transactions between American firms and ex-Proclaimed List firms. However, the United States Government naturally does not like to see close business relationships, even of a non-agency-distributorship character, develop between United States firms and spearhead firms. Wherever possible the Commerce Department discusses with American firms the possibility of obtaining their requirements from, and disposing of their merchandise to, friendly foreign firms. You should likewise, whenever it is feasible, attempt to direct American business toward Argentine firms which are politically satisfactory.
- 5.
- With respect to Argentine distributors appointing former Proclaimed List firms as sub-dealers, see answer to questions numbers 1 and 2 above. American firms, upon inquiry, should be informed that [Page 321] former Proclaimed list firms (hard core or non-merit deletions) are not recommended as sub-agents or dealers.
- 6.
- This problem is the crux of the entire Undesirable Trade Contacts Program. Such inquiries are, as indicated above, answered by a form letter stating that former Proclaimed List firms (other than those deleted without prejudice) are not recommended as agents or distributors for American firms. Please refer to Circular Instruction dated March 20, 1946 and Instruction no. 134, August 6, 1946.26