400.119/3–850: Circular airgram
The Secretary of State to All Diplomatic Offices 1
From State and Commerce. The Department of Commerce will announce Wednesday morning, March 8, the expansion of Country Group R, effective March 20, 1950, to include all export destinations except Canada (including Newfoundland and Labrador) to which US export controls are not applicable and except the following destinations in North and South America which represent reconstituted country Group O:
North America
Northern Area
- Greenland
- Miquelon and St. Pierre Islands
Southern Area
- Mexico (including Cozumel and Revilla Gigedo Islands)
- Central America:
- Guatemala
- British Honduras
- El Salvador
- Honduras (including the Bay Islands)
- Nicaragua
- Costa Rica
- Panama, Republic of
- Bermuda and Caribbean
- Bermuda
- Bahamas
- Cuba (including Isle of Pines)
- Jamaica
- Haiti (including Gonave and Tortue Islands)
- Dominican Republic
- Leeward and Windward Islands
- Barbados
- Trinidad and Tobago
- Curacao (Netherlands West Indies)
- French West Indies
South America
Northern Area
- Colombia
- Venezuela
- British Guiana
- Surinam (Netherlands Guiana)
- French Guiana (including Inini)
Western Area
- Ecuador (including the Galapagos Islands)
- Peru
- Bolivia
- Chile (including the islands Sala-y-Gomoz, Juan Fernandes, San Felix, San Ambrosio, and Easter Island)
Eastern Area
- Brazil (including the islands St. Paul, Fernando Noronha, and Trinidad in South Atlantic)
- Paraguay
- Argentina
- Falkland Islands
The R Procedure up to this date has included Europe, Asiatic USSR, Turkey, Metropolitan North Africa, the United Kingdom, Ireland, and Iceland. Country Group O has included all other countries except Canada (including Newfoundland and Labrador). For further detail, refer to circular airgram of November 4, 1949, 8:20 a. m. Action being taken was generally forecast in reference circular airgram above.
The extension of the R procedure to new destinations has been under consideration for some months. This action has been taken to meet the following objectives: (1) To avoid the export to China and other Communist [Page 79] dominated Far Eastern countries of all strategic commodities controlled to Eastern Europe for other than normal civilian uses, and (2) to provide for preshipment screening of such commodities to all likely transshipment points to the Soviet orbit. The expansion of country group R now provides security control for all areas bounding the Communist bloc as a whole and for all areas which have normally been dominant transshipment points or which, because of their location along world trade routes normal to trade from the US to the enlarged Communist bloc make them potential transshipment points. The Western hemisphere has been excepted from the R procedure primarily for the following reasons:
- (1)
- There is little normal ocean traffic from the US to the rest of the world via these destinations.
- (2)
- The American Republics are very close to the US economically.
- (3)
- The US Government is better informed about commercial activity in the American Republics than in other areas of the world.
- (4)
- US business has many more contacts there than elsewhere, thus providing channels for trade information.
- (5)
- US trade has a larger stake in these markets than in any other area, except Europe, and would be definitely inclined not to endanger that stake by permitting transshipment.
While these reasons have led to the current exception of the Western Hemisphere, consideration is being given to the later inclusion of all Western Hemisphere destinations, except Canada.
The expansion of the country Group R means that for all commodities on the U.S. Positive List (Part 399 of Comprehensive Export Schedule No. 27) which are designated for control to R countries only, effective March 20 are controlled to the expanded country Group R. This action in no way affects the control of commodities currently controlled to RO destinations.
An analysis of US exports to determine the maximum percentage of US export trade which will hereby be subjected to control, based on third quarter 1949 trade figures, indicates that no more than 5% of uncontrolled trade would be subjected to control by this action. During the third quarter, 21% of total value of US exports was subjected to control. The increase thus represents a 25% increase in the trade subjected to control.
The Office of International Trade believes that the increased license applications intake which will result can be controlled without an appreciable decrease in the time required to process run of the mine applications. At present, 90% of all applications are processed within five working days of receipt by OIT and 94% within ten days of receipt. The impact on licensing personnel is further decreased by the announcement to be made on March 9 of the decontrol of approximately 60 steel commodities. It is expected that the combined result [Page 80] of these two actions will lead to a net increase in applications not in excess of 15% of the current load.
This is background information which Missions may utilize at their discretion in discussion with government to which accredited. [State and Commerce.]
- This airgram was drafted by J. Mishell George, Assistant to the Director of the Office of International Trade, Department of Commerce.↩