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

CFM Files: Lot M–88: Box 115

Soviet Delegation Draft of Article 35 of a Treaty for the Reestablishment of an Independent and Democratic Austria

secret

[London,] 2nd July 1949.

C.F.M./D/L/49/A/47 (Revised Translation¹)

1. The Soviet Union shall receive for a period of validity of thirty years concessions to oil fields equivalent to 60% of the extraction of oil in Austria for 1947, as well as property rights to all buildings, constructions, equipment, and other property belonging to these oil fields in accordance with list No. 1 and map No. 1 annexed to the Treaty.

2. The Soviet Union shall receive concessions to 60% of all exploration areas located in Eastern Austria that are German Assets to which the Soviet Union is entitled in conformity with the Potsdam Agreement and which are in its possession at the present time, in accordance with list No. 2 and map No. 2 annexed to the Treaty.

The Soviet Union shall have the right to carry out explorations on the exploration areas mentioned in the present article for 8 years and to subsequent extraction of oil for a period of 25 years beginning from the moment of the discovery of oil.

3. The Soviet Union shall receive oil refineries having a total annual production capacity of 420,000 tons of crude oil, in accordance with list No. 3 annexed to the Treaty.

4. The Soviet Union shall receive those undertakings concerned in the distribution of oil products which are at its disposal, in accordance with list No. 4 annexed to the Treaty.

5. The Soviet Union shall receive the assets of the D.D.S.G., located in Hungary, Rumania and Bulgaria; and, likewise, in accordance with list No. 5 annexed to the Treaty, 100% of the assets of the Danube Shipping Company located in Eastern Austria.

6. The Soviet Union shall cede to Austria property, rights and interests held or claimed as German Assets, and shall also cede war industrial enterprises, houses and similar immovable property located in Austria held or claimed as war booty, with the exception of assets mentioned in paragraphs 1, 2, 3, 4, and 5 of the present Article. Austria, on her part, undertakes to pay the Soviet Union 150,000,000 American dollars in freely convertible currency within a period of six years.

The said sum will be paid by Austria to the Soviet Union in equal three-monthly installments of 6,250,000 dollars. The first payment will be made on the first day of the month immediately following the month of the entry into force of the present Treaty. The subsequent three-monthly payments will be made on the first day of the appropriate month.

Payments provided for in the present Article are to be made in dollars of the U.S.A. at the rate of their gold parity value on the 1st September, 1949, that is, 35 dollars for one ounce of gold.

As security for the timely payment of the above-mentioned sums due to the Soviet Union, the Austrian National Bank will issue to the State Bank of the U.S.S.R. within two weeks from the day of the entry into force of the present Treaty, promissory notes to the aggregate sum of 150,000,000 dollars of the U.S.A. to become payable on the dates provided for by the present Article.

7. Juridical position of assets:

a. All former German assets which have become the property of the U.S.S.R. shall not be subject to alienation without the consent of the U.S.S.R.

b. All former German assets which have become the property of the Soviet Union shall remain in general under Austrian jurisdiction, on condition that Austria shall not raise any difficulties in regard to the export of profits or other income (rents) in the form of production or of any freely convertible currency received.

c. The rights, properties and interests, transferred to the Soviet Union as well as the rights, properties and interests which the Soviet Union cedes to Austria shall be transferred without any charges or claims on the part of the Soviet Union or on the part of Austria. Under the words “charges and claims” is understood not only creditor claims arising out of the exercise of Allied control of these properties, rights and interests after 8th May, 1945, but also all other claims including claims in respect of taxes. The reciprocal waivers by the Soviet Union and Austria of charges and claims apply to all such charges and claims as exist on the date when Austria formalises the rights of the Soviet Union to the German assets transferred to it and on the date of the actual transfer to Austria of the assets ceded by the Soviet Union.

8. The transfer to Austria of all properties, rights and interests provided for in paragraph 6 of the present Article, and also the formalising by Austria of the rights of the Soviet Union to the German assets to be transferred will be implemented within two months from the day of the entry into force of the Austrian Treaty.

9. Any disputes which may arise in connection with the application of the provisions of the present Article shall be settled by the means of bilateral negotiations between the interested parties.

In the event of failure to reach agreement by bilateral negotiations between the Governments of the Soviet Union and of Austria within three months, disputes shall be referred for settlement to an Arbitration Commission consisting of one representative of the Soviet Union and one representative of Austria with the addition of a third member, a citizen of a third country, selected by mutual agreement between the two Governments.

1. The original translation of this document is in CFM Files: Lot M–88: Box 115.