Foreign Relations of the United States, 1949, Council of Foreign Ministers; Germany and Austria, Volume III

CFM Files: Lot M–88: Box 143: USDel Working Paper Series

[Translation]

Memorandum by the Soviet Delegation at the Council of Foreign Ministers ¹

secret

[ Paris ,] June 19, 1949.

[Consultations on Germany and the Austrian Treaty]

The Delegation of the USSR, in connection with the discussion of the proposals concerning Germany and Austria in the closed sittings of the Council of Foreign Ministers of June 15 and 16 of this year and also taking into account the memorandum of Mr. Schuman dated June 17 [12?]² with respect to the Austrian Treaty, communicates the following:

1. Re: The German Question.

The Delegation of the USSR maintains its proposals on paragraph 3 (a) (ii) in the wording as presented earlier, that is: “There must exist an equilibrium in the movement of essential goods and in the movement of not-so-essential goods between the Western Zones on one hand and the Eastern Zone and Berlin on the other hand”.

As to the paragraph 5 of the draft of Mr. Acheson of June 15,³ the Delegation of the USSR has no objections to the wording of this paragraph, provided a reference is included in this paragraph as to transit.

In accordance with the above, the final wording of paragraph 5 will be as follows: “To achieve the objective stated in the preceding paragraphs and in order to improve and supplement the agreements with respect to communications between the Eastern Zone and the Western Zones and between the Zones and Berlin, and likewise with respect to transit, the Occupation Authorities, each in their respective zones, shall take measures to assure the normal functioning of rail, water and road transport, and, of the postal, telephone and telegraph communications”.

2. Re: The Austrian Treaty.

The draft of the agreement of the Four Ministers is attached. In this draft, the Delegation of the USSR has taken into consideration the exchange of views which took place in the closed sittings of the Four Ministers and also proposals contained in the memorandum of the three Delegations of June 17, 1949.

The Delegation of the USSR also takes notice of the declaration of the three Delegations in the memorandum of June 17 regarding their agreement with the proposal of the USSR that the former German assets which are to be transferred to the Soviet Union are not subject to any alienation without the consent of the USSR. As to the reservation contained in paragraph 2 of the memorandum of the three Delegations of June 17, the Delegation of the USSR cannot agree that the docks are not former German property and for that reason cannot accept the reservation referred to above.

The Delegation of the USSR likewise considers it necessary to insist on its proposals as to the export of profits and as to the order of settlement of disputes as has been stated in paragraph 7“b” and paragraph 8 of the Soviet proposals of January 24, 1948.⁴

[Annex]

Draft Agreement of the Four Ministers on the Austrian Treaty by the Soviet Delegation at the Council of Foreign Ministers

secret

[ Paris , June 19, 1949.]

The Ministers have agreed:

a) That the frontiers of Austria shall be as they were on January 1, 1938;

b) that the Treaty for Austria shall provide that Austria shall guarantee the protection of the rights of Slovene and Croat national minorities in Austria;

c) that reparations shall not be exacted from Austria, but that Yugoslavia shall have the right to seize, retain or liquidate the Austrian property, rights and interests on Yugoslav territory;

d) that the Soviet Union shall receive from Austria $150 million in freely convertible currency to be paid during six years;

e) that the final settlement shall include:

1) transfer to Austria of all property, rights and interests retained or claimed as German assets and transfer of war industrial enterprises, liveable houses and similar real-estate property located in Austria which are retained or claimed as war booty; the precise definition of categories of war booty transferred to Austria will be entrusted to the Deputies (except the oil assets and the property of the Danube Shipping Company, which are being transferred to the Soviet Union under other paragraphs of Article 35 of the Treaty indicated in the USSR proposals of June 24, 1948, as revised) and which are retained as a rule under Austrian jurisdiction.

In accordance with this, the assets allocated in Hungary, Rumania and Bulgaria, and also 100% of the assets of the Danube Shipping Company located in Eastern Austria are being transferred to the Soviet Union in accordance with the list which will be agreed upon by the Deputies.

2) That these rights, property and interests which are being transferred to the Soviet Union, as well as rights, property and interests which the Soviet Union cedes to Austria shall be transferred without any encumbrances and claims, either on the part of the Soviet Union or on the part of Austria. At the same time, it is understood that the words “encumbrances and claims” mean not only creditors’ claims which arise out of the exercise of the Allied control over these property, rights and interests after May 8, 1945, but also all other claims and demands including those referring to taxes. It is also understood that the reciprocal waiver of the Soviet Union and Austria of encumbrances and claims refers to all kinds of encumbrances and claims to the extent as they will exist on the date when Austria puts into official form the rights of the Soviet Union to the German assets transferred to the Union and on the date of the actual transfer to Austria of the assets ceded by the Soviet Union;

f) that all former German assets transferred to the ownership of the USSR are subject to no alienation without consent of the Soviet Union;

g) that Austria shall not put any obstacles to the export of profits or other income in the shape of production or freely convertible currency;

h) that the disputes which might arise in the application of the provisions of the article concerning the German assets in Austria must be settled on the basis of bilateral negotiations between the interested parties;

i) that the Deputies of the Ministers shall resume their work promptly for the purpose of reaching an agreement not later than September 1, 1949 on the draft treaty as a whole.

1. Copies of this memorandum in Russian were delivered to the Western Delegations June 19. The source text is a translation by the United States Delegation. In the records of the United States Delegation this translation was given the designation USDel Working Paper/46.
2. Ante, p. 1053.
3. The reference here is to USDel Working Paper/32 Rev. 6, June 15, p. 1055.
4. Under reference here is CFM(D) (L) (48) (A)1, the Soviet proposal on German Assets. The text of this proposal is printed in Foreign Relations, 1948, vol. ii, p. 1448.