117. Telegram From the Embassy in Yugoslavia to the Department of State0

1178. Department for OSD. Paris for CINCEUR and DEFREPNAMA; Bonn for USAREUR. In informal meeting today with Bruner, Foreign Secretariat, form and content document terminating military aid discussed (Embassy telegram 1142).1 Bruner outlined type of document which Yugoslavs will present for discussion at next negotiating session. Document will be “memorandum of understanding" noting mutual agreement terminate military aid and specifying that bilateral and other agreements relating to military aid are considered as terminated. (Embassy requests list of such other agreements by telegram and copies by pouch.) Other points cover Yugoslav title to military material received under program; agreement on transfer of minesweeper title; agreement carry out OSP signal corps contracts “commercial basis”; agreement complete training with funds made available prior aid termination; departure all AMAS staff by March 31, 1958; agreement that other agreements between two governments which might have military aspect be considered as purely economic (this point relates to use of funds generated by surplus sales for defense support projects such as Jadranski Put); agreement to start negotiations for purchase military equipment on commercial basis and use on reimbursable basis of US supported facilities in Europe; undertaking of Yugoslav Government to honor certain residual commitments under bilateral agreement, e.g., obligation not to transfer title, use of material in harmony UN Charter, etc.

Bruner stated that Yugoslavs anxious press forward with final termination document along lines outlined above and would appreciate receiving our views on such a document at next negotiating session. It is Embassy’s impression on basis Bruner comments and position at negotiating sessions that Yugoslavs will insist on specific abrogation of bilateral agreement.

On question minesweepers, our position on December 12 cutoff date reiterated (Department telegram 688).2 Bruner indicated that once [Page 309]agreement reached on this point, agreement for passage of title to Yugoslavia could be incorporated into final “memorandum of understanding.” Embassy anticipates on basis conversation with Bruner that Yugoslavs will probably accept December 12 date (and requirement reimburse payments made under contract since that date) but will resist efforts introduce Navy contracting team on grounds that no further negotiations on contract amendment necessary beyond incorporation of agreement to transfer title in “memorandum of understanding.” Since this point will be raised at next meeting, would appreciate being informed legal requirements necessitating presence in Yugoslavia of Navy contracting team.

Assuming Yugoslavs, as Embassy expects, insist on abrogation 1951 agreement,3 Embassy believes it would also be useful to have available information on implications such abrogation on future military equipment purchases.

Department’s comments on Yugoslav termination proposals requested. Further negotiating schedule tentatively scheduled for February 14 at which time Yugoslavs will wish discuss both minesweeper contract and termination document.

O’Shaughnessy
  1. Source: Department of State, Central Files, 768.5–MSP/2–758. Confidential. Repeated to Paris and Bonn.
  2. Telegram 1142, January 29, reported on the third negotiating session on the termination of the U.S.-Yugoslav military aid program and requested instructions on the form and content of a document formally terminating the agreement. (Ibid., 768.–5–MSP/1–2968) In telegram 668 to Belgrade, February 5, the Department of State replied that the question of the form and content of a terminating agreement was under study and a reply would be sent as soon as possible. (Ibid.)
  3. Telegram 688, February 5, outlined the U.S. position on payment for minesweepers under construction for Yugoslavia as a part of the canceled mutual assistance program. (Ibid.)
  4. For text of the Military Assistance Agreement signed in Belgrade, November 14, 1951, see 2 UST 2254.