Foreign Relations of the United States, 1951, Korea and China, Volume VII, Part 2

446G.119/8–2751

Memorandum by Ashley G. Hope of the Office of Chinese Affairs to the Deputy Director of That Office (Perkins)¹

secret

[Washington,] August 27, 1951.

Subject: Efforts to Prevent Smuggling from Macao to Communist China.

CA has been investigating the possibilities of preventing smuggling from Macao to Communist China in two ways, (1) through the imposition of control by Hong Kong over its exports to Macao, and (2) through bringing pressure to bear upon the responsible authorities to institute in Macao a control over its re-exports and transshipments.

1. With regard to the first, a telegram was sent by the Department on July 17 to London² advocating the adoption by Hong Kong of a system of control over its exports to Macao, based on export licenses which would be issued only if supported by import certificates issued by the Macao Government. The British Foreign Office agreed to request the Hong Kong Government to make such an arrangement and agreed to a parallel approach by the US Consul General in Hong Kong. The Foreign Office did not agree that the US Embassy in Lisbon should inform the Portuguese Government of the proposed agreement and of the threat of an embargo by Hong Kong should the proposed license system fail. It suggested instead, that the British COCOM Representative approach the Portuguese Representative there with a view to soliciting their cooperation. The Department agreed to the suggestion of the British Foreign Office and at the same time instructed the US Consul General at Hong Kong to approach the Hong Kong Government to make the arrangement suggested. Subsequently, the US Consul General at Hong Kong reported that the arrangement suggested had been made but reiterated its belief that no arrangement could be effective which depended upon the exercise of control by the Macao Government, and advocated the imposition of an embargo on US exports to Macao. Action on the suggestion by the US Consul General at Hong Kong is pending, in order to allow a certain period of grace, during which it is presumed it will become apparent to the Hong Kong Government that the fears of the US Consul General are justified. At the end of that period we are thinking of advocating the imposition by Hong Kong of some system of rationing on its exports of embargoed items to Macao.

As an additional measure in effecting a strict control over exports to Macao, the Department thought that the Hong Kong Government should investigate a syndicate of smugglers, and requested the US Consul General at Hong Kong to bring the matter to its attention.

2. Apart from such control as Hong Kong could place over its exports to Macao, it appeared desirable for the Government of Macao to institute a strict control over its re-exports and transshipments. On August 15, the Department accordingly sent a telegram for the attention of the British Foreign Office, suggesting that the British Representative at COCOM might bring this matter as well to the attention of the Portuguese Representative at COCOM, with a view to soliciting the cooperation of Portugal in imposing the necessary reform on Macao. The telegram, No. 925 of August 17,³ to which you have referred, states that the Foreign Office has agreed that the British Delegate to COCOM will approach the Portuguese COCOM Delegate as suggested but doubts that any real progress can be made until COCOM convenes again next month. The assumption mentioned in this telegram that the US Representatives are also discussing the matter with Portuguese Representatives at both Paris and Lisbon, apparently refers to the additional measure suggested in the Department’s telegram of August 15. Up to the present time, the Department has not requested the US Representatives at Paris and Lisbon to approach the Portuguese. According to Mr. Ainsworth, RA, it is not believed that any approach through the vehicle of COCOM would result in bringing sufficient pressure upon Portugal to clean up on Macao. In order to have Portugal take the drastic action required in regard to Macao, it will be necessary to approach the Portuguese Government through Lisbon but, in view of the extreme pressure required, agreement must first be reached down the line in the Department. The Portuguese desk appears at this time to have little interest in bringing the necessary pressure to bear on the Portuguese Government. S/ISA has requested DRF to prepare a comprehensive survey by September 15 of the smuggling situation in Macao, and this report should come in good stead in convincing the Portuguese desk and other officers concerned of the necessity of taking the drastic action contemplated with respect to Macao,⁴

1. Drafted by Harrison Lewis of the Office of Chinese Affairs.
2. Telegram 368, not printed (493.539/6–2251).
3. From London, not printed (493.539/8–1751).
4. This memorandum bears the following handwritten notation by Mr. Perkins, addressed to Messrs. Hope and Lewis: “Let’s watch the Sept 15 deadline (last sentence) & then start pushing.” See telegrams 1612 and 1634, November 1 and 3, pp. 2042 and 2046, and despatch 350, November 13, from Lisbon, p. 2047.