The Ambassador in Paraguay (Beaulac) to the Secretary of State

No. 1739

Sir: I have the honor to inform the Department that the Paraguayan Government has promulgated Decree Law no. 13,608, of May 13, 1946, which establishes war indemnities against the Axis Powers. The decree law fixes the amount of indemnity for indirect damages, states that a subsequent law will establish the amount due for direct damages, specifies which enemy assets in the country shall be encumbered toward the satisfaction of these claims, specifies the order of preference of claims, etc.

The sum of G[uaraní] 16,985,515.87 (about US$ 5,261,565) is established as a war indemnity against the Axis Powers for the extraordinary war expenditures incurred by Paraguay during the years 1942, 1943, 1944 and 1945. This sum is stated to be the increase in the cost of the country’s defense program during these years as compared to 1941 as a base. The Embassy understands that the amounts budgeted for the Ministry of National Defense for the years mentioned are those on which the Paraguayan Government based its calculations. The stated sum is the amount claimed by Paraguay for indirect war damages.

The decree also states that a subsequent law will establish the amount to be claimed from the Axis Powers for direct damages to Paraguayan citizens in their life, physical integrity, liberty and interests.

The enemy assets which, according to Decree Law no. 13,608, will be encumbered for the satisfaction of these claims include all those assets (named in the decree law) which have already been taken possession of by the Paraguayan Government, trademarks, patents, and other assets of enemy ownership whose occupation may be directed by the Executive before the conclusion of peace with the Axis Powers.

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The decree law also establishes certain standards to be used in connection with claims that may be presented about alleged ownership of these assets or to show that they are not enemy assets, and states that in the adjudication of such cases as may be presented legal principles and procedures will be followed but that primary importance will be given to the general interests of the Paraguayan nation over private interests without limiting the defense of private interests.

The following priority is established in the payment of war indemnities:

Reimbursement to the General Treasury in the amount of G 16,985,515.87, and
Indemnity for direct war damages suffered by Paraguayan citizens.

From the amounts assigned to the General Treasury certain sums are to be used 1) to finance refugee and colonization centers in Paraguay for the benefit of countries damaged by the war, and 2) for the Paraguayan quota to the United Nations Relief and Rehabilitation Fund (UNRRA).

A copy and a free translation of Decree Law no. 13,608 are enclosed.30

Respectfully yours,

Willard L. Beaulac
  1. Not printed.