199. Memorandum From the Deputy Assistant Secretary of State for Economic Affairs (Kalijarvi) to the President of the Export-Import Bank (Waugh)1
SUBJECT
- Eximbank Credits to CSC Steel Enterprises
In your memorandum of August 21, 19562 you requested the Department to consider the question as to whether future Eximbank credits are to be granted to steel enterprises in the CSC which are members of the steel export cartel.
The State Department believes the most feasible course of action is to operate with the presumption that the credit should be refused if the applying firm is a member of the export cartel. However, exceptional cases may arise in which there are overriding political or [Page 482] economic reasons for granting the credit which necessitate a departure from this basic anti-cartel policy. In order to carry out this policy it is recommended the Eximbank inform interested Government agencies at the earliest possible time when an applicant or prospective applicant for a credit is a member of the steel export cartel. Such a system of case-by-case review would enable any interested Government agency to give the Eximbank prompt guidance as to any special factors involved while at the same time permitting maximum action in support of this Government’s anti-cartel policy.
If the credit is denied on the basis of the cartel factor, it is further recommended that the applicant firm be advised of the reason and informed the matter would, of course, be reconsidered should it choose to disassociate itself from the cartel.