Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

366. Action Memorandum From Helmut Sonnenfeldt of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, October 20, 1970.

SUBJECT

• French COCOM Case; Your Potential Involvement

In June, the French submitted to COCOM their proposal to sell to Poland certain machinery and technology required to produce a line of integrated circuits. The request also included an expansion of the number and type of silicon transistors to be produced by the Polish plant approved for export by COCOM last October.² This particular case involves only $7 million, but is the second stage of the French/Polish industrial venture, the total value of which might exceed $50 million. You will recall that the first stage (involving silicon transistors) was approved last October only after lengthy inter-agency debate and French intercession with you. It was made clear then to the French that the U.S. decision in no way established a presumption for approval of subsequent transactions.

In the present case, all agencies concerned (Defense, State and Commerce) agreed that qualitatively and quantitatively transferring the technology and production equipment in the French request involved a substantial increase in the security risk over last year’s case. The quality and quantity of the devices to be produced exceed the needs implicit in the stated end use, and have direct military potential. Further, neither the USSR nor any Eastern European country has the capability at this time to manufacture the integrated circuit systems commercially, and the acquisition of this technology has been high on the Soviet shopping list. It is considered that the Soviets would probably have access to any Western electronic technology acquired by Poland. Finally, the agencies considered that approval of this case would make it almost impossible to maintain COCOM embargoes on this line of important technology (obversely, there is the possibility that, if their request is not approved, the French might proceed with the sale and thumb their nose at COCOM). Thus, in light of the unanimity within the bureaucracy not present in the case last year, we cleared (with General Haig’s concurrence) a cable stating the U.S. objection. Copy is attached at Tab A.³

Predictably, the French were upset at the U.S. objection. Late on October 16, Lucet sent me an aide-memoire for transmission to you (Tab B).⁴ I told the French that the note would be studied with care, but that they should understand that there was unanimity within the U.S. Government on this case unlike the situation which prevailed last year. In short, I gave the French no basis for encouragement. On October 17, Alphand called in Culley (DCM in Paris) and gave him a similar note (Tab C).⁵ The notes point out the considerable importance the French place on this deal, and also indicate that the French read more into the favorable American decision of last year than they should have. The French proposed to send a team to Washington to furnish us with additional information which, they say, it is not possible to provide within COCOM because of potential competition in the Polish market. The French insist that the transfer of technology will not create any strategic difficulties in the military field.

Prior to Lucet’s transmittal of the note to me, Phil Trezise met with his French counterpart who happened to be here and provided him with a copy of the aide-memoire Lucet later sent me. Trezise told him that we were willing to hold meetings with a French team of technicians, as well as individuals who could review the political aspects. Having received Trezise’s report, Culley also told Alphand the same thing. The French will very soon propose a date for the arrival of their team.⁶

There are two possible directions which this issue can take. One possibility is that once the French team arrives, the solid phalanx of agency opposition will begin to crumble, with State finally favoring the deal, and with Defense remaining opposed on security grounds. At some point the issue will then be sent here for arbitration as it was last year. The other possibility (probably more remote) is that the agencies will remain solidly opposed, and the French then will expect you or the President to reverse the bureaucracy by a political decision. At that point you may want to take up the issue with the President. Regardless which direction the matter takes, the issue will be sticky, particularly in light of our own negative decision in the case of the catalytic cracker for Poland.⁷ The other COCOM members are cagey in playing this one. Apparently, the UK, Dutch, Italians, Germans and Japanese are not happy with the French request on security grounds, but may not wish to buck the French (the UK increasingly feels that the French are getting away with more in COCOM than others). Commercial factors are also at play. These others may very well consider that if the French have their way on this case, then a quid pro quo can be demanded which would involve a loosening of the COCOM restrictions for future cases—which would benefit their own commercial interests.

Recommendation:

That you approve the general line of “no encouragement” which I took with the French.⁸

That, since State has already agreed to receive the French team, you agree that there is no need for you to become involved at this point (I shall of course continue to monitor the action).⁹

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Country Files-Europe, Box 677, France, Volume VII 10/70-3/71. Secret. A handwritten note by Kissinger dated October 31 reads: “Hal—Lucet has asked about the French request to cooperate on nuclear diffusion plant. Where does it stand? Please let me know by opening of business November 5.” In an attached November 4 note Sonnenfeldt reported that he dealt with the question in a separate memorandum of the same date.
2. The French request was pursuant to the lifting of U.S. objections. See Document 365.
3. Telegram 167672 to USOECD, October 12; not printed.
4. Not found.
5. Telegram 14224 from Paris, October 17; not printed.
6. The meetings were held November 16-17; see Document 367.
7. See Document 319.
8. Kissinger initialed the Approve option.
9. Kissinger initialed the Agree option and wrote below it: “Inform Lucet of State conv[ersation] with French team.” Sonnenfeldt wrote below that: “I called Lucet 11/3 to note that State will receive French team.”