695.0031/7–2247: Circular airgram
The Secretary of State to American Diplomatic and Consular Officers
Opening of Limited Private Trade in Korea:—Entry of traders into south Korea in limited numbers will be permitted beginning July 15. Traders will be furnished food and lodging accommodations, and transportation facilities within south Korea, by the U.S. Army Military Government in Korea (USAMGIK), at commercial rates payable in dollars. Facilities will be provided only in the capital city of Seoul and in the port city of Pusan. Special arrangements for trips to other cities in south Korea may be made if trade possibilities exist.
Applications from U.S. nationals abroad representing U.S. firms are made by firm in U.S. to Dept of Commerce. If U.S. applicant abroad does not represent U.S. firm he applies through American [Page 712] Consul to Dept of Commerce. Non-U.S. nationals or U.S. nationals not in U.S. representing foreign firms should have firm apply through its government to USAMGIK through U.S. Consul General at Seoul. Then U.S. national if approved by USAMGIK may apply to nearest consulate for U.S. passport.
At outset, applications to visit south Korea will be considered only for following purposes:
- (a)
- To purchase goods available for export, or to make arrangements for future purchases of potential exports, or to sell raw materials which Korea requires.
- (b)
- To provide commercial services, such as insurance and shipping, to facilitate movement of exports and imports ketween Korea and other countries.
When making application, applicant should furnish detailed statement of the purpose of the visit, explaining whether it is to purchase goods, develop future markets, or to make arrangements for furnishing raw materials. Applicants should also furnish information indicating financial responsibility, a record of experience in handling the type of commodities which will be available for export from South Korea, or in the absence of such experience, the applicant should be prepared to provide reasonable proof that his visit will contribute to the restoration of Korean trade (and the Korean economy). Applicants receiving final approval by USAMGIK will then apply for passports in the usual manner. Representatives of insurance, shipping, and banking companies should file their applications directly with State Dept.
Due to the fact that all foreign exchange assets must be very carefully controlled and expended only for south Korea’s most essential imports, trade will be carried on only in dollars or other currencies usable for procurement of essential imports for south Korea. All imports and exports of south Korea will be controlled through the issuance by USAMGIK of import and export licenses. The negotiation of price and the consummation of transactions will be between the buyer and seller, subject to confirmation by USAMGIK. For the time being no commercial exchange rate will be established. Foreign exchange receipts of Korean exporters will be held in special accounts by USAMGIK and will be available to Korean importers for the procurement of essential imports. USAMGIK will permit the exporter 180 days to use his earned foreign exchange for imports; if he does not do so, he will receive payment in Korean currency for his exports and the foreign exchange will be made available to other importers. The arrangement also includes provisions whereby an exporter may transfer his interest in earned foreign exchange to others under USAMGIK regulations.
[Page 713]Stocks and production from plants under direct USAMGIK control will continue to be sold through a government agency. Insurance on export shipments may be obtained either through insurance companies operating in south Korea or by coverage obtained in the United States by the consignee.
Preliminary advice from USAMGIK indicates availability of the following general classes of Korean products:
- wicker baskets
- fish creels
- graphite
- tungsten
- fluorite
- mica
- ginseng
- lead
- zinc
- porcelain clay
- fish and other marine products (including lavar, agar agar, shark fin)
- leaf tobacco
- raw silk
- handicraft goods, such as lacquerware
- molybdenum
Transactional communications, involving actual purchase and sales contracts, and also the exchange of samples, are now permissible under regulations administered by USAMGIK.