87. Memorandum From the President’s Assistant for National Security Affairs (Scowcroft) to President Ford, Washington, March 29, 1976.1 2
MEMORANDUM
THE WHITE HOUSE
WASHINGTON
ACTION
March 29, 1976
MEMORANDUM FOR: THE PRESIDENT
FROM: BRENT SCOWCROFT [BS
initialed]
SUBJECT: American Equipment Captured in Indochina
The Problem
There are a number of indications that North Vietnam is preparing to sell some U.S. manufactured military equipment it captured in South Vietnam. A U.S. policy position with respect to the possibility of such a sale is required. An interagency study (Tab B) has identified a range of policy options. The Senior Review Group considered this study on February 27, and recommends a policy of public opposition to North Vietnam’s sale of this equipment but quiet cooperation with any friendly countries who actually purchase it.
Background
With the fall of South Vietnam and Cambodia, Hanoi acquired an estimated$6.0 billion worth of U.S. equipment, ranging from sidearms to sophisticated transport and fighter aircraft. The right to war booty under international law gives the Vietnamese clear title to the captured equipment. While the Foreign Assets Control Regulations, issued under the Trading With the Enemy Act, prohibit persons or firms subject to U.S. jurisdiction from unlicensed dealings with North Vietnam in this equipment, our ability to influence and control the movement of the captured equipment, particularly into unfriendly hands, is obviously quite limited.
We have a number of intelligence reports that North Vietnam may be attempting to sell some of this equipment. Moreover, during recent months, representatives of such friendly governments as Singapore and Nigeria have approached the United States for advice regarding potential purchases. We have also received from private arms merchants and other sources several reports of possible equipment transfers. To date, however, there have been no confirmed sales or transfers.
[Page 2]A number of friendly countries want weapons of the type that the Vietnamese captured. We do not at this time supply this equipment, either for policy reasons, lack of available materiel in our inventory or in timely production, or because of funding limitations. It could thus be in the United States interest that captured stockpiles fill these requirements at bargain prices. This action would also forestall unfriendly forces from acquiring these weapons and provide a basis for continuing our defense relationship with friendly countries through future supply of spare parts and rehabilitation services.
Options
An interagency review identified the following alternative responses to attempts by Vietnam to sell captured American equipment:
Option I. Use all practicable means to prevent the outflow of U.S. equipment from Vietnam. We would inform all potential purchasers that we would object to any acquisition and that we would furnish no spares or support for such equipment.
This course of action could minimize criticism by Congress or the public. Its disadvantages are that it could involve the U.S. in lengthy and possibly counterproductive disputes with foreign governments, restrict the arms flow to friendly countries, and still not prevent the equipment from reaching unfriendly hands.
Option II. Attempt to insure that friendly governments acquire the equipment. We would actively encourage friendly governments to negotiate with Hanoi and would assure them of our willingness to furnish spare parts and rehabilitation assistance insofar as legally possible. We would also be prepared to license private transactions by U.S. firms on condition that any subsequent resale be subject to prior USG approval. We would ask purchasing governments to treat the equipment as subject to the same restrictions applicable under the Foreign Military Sales Act with respect to use and disposition.
This approach would be based on the assumption that Vietnam will export much of the equipment in any case, and that it is therefore in the U.S. interest to influence the flow to the maximum extent possible. Although we could not prevent entirely the delivery of equipment to unfriendly governments or groups, we would through this option maximize the amount which would go to friendly countries.
[Page 3]This course of action could produce serious Congressional and public criticism. Licensing U.S. firms to participate in this trade could open the door to heavy pressure for comparable arrangements by oil companies, export-import dealers, and banks.
Option III. Take no formal policy action in advance concerning the captured equipment. We would respond to potential foreign governmental purchasers by stating that we would not look with favor on their acquisition of the equipment, and we would review the question of spare parts on a case-by-case basis. We would take all reasonable steps to inhibit the flow of the equipment to unfriendly hands.
This approach would provide the USG with considerable flexibility, since it would not require us to take action until after Vietnam had made or begun to make its sales. Therefore, we could adjust our responses to the circumstances and to our bilateral relationships with the countries involved.
Despite our efforts to prevent this equipment from falling into the hands of terrorist groups, this course of action could prove inadequate. We could be criticized for not attempting more vigorous efforts to control the flow of the equipment. We could also be criticized for assisting some recipients with spare parts and rehabilitation support, while denying such support to others.
Domestic Legal Considerations
The Department of Justice has reviewed the legal issues that could arise from prohibiting U.S. firms and persons from engaging in such transactions. It has concluded that such a prohibition is fully and directly within Executive authority under present law and regulations, particularly Munitions Control authority delegated to the Secretary of State; various regulations of the Departments of Transportation and Commerce affecting shipment of Munitions List items in U.S. vessels or aircraft; and the Trading With the Enemy Act.
SRG Recommendation
The Senior Review Group has recommended a course of action which is a combination of Options II and III. We would discourage Vietnam from selling this equipment by taking a public stance against the sale; do what we can to impede those countries that oppose us from acquiring this [Page 4] equipment; and discreetly help those countries that are friendly to us if the decide to purchase equipment from Vietnam despite our pronouncement. There is little we can do to prevent the movement of equipment into unfriendly hands and this approach avoids favoring our enemies over our friends. We would hope that an announced policy of not favoring the sale of the equipment would raise doubts concerning availability of U.S. - supplied spare parts and services, thereby reducing both selling price and the number of sales. This case-by-case approach retains maximum USG flexibility concerning whom we cooperate with and, since we would not be actively promoting sales, public and Congressional criticism would be minimized.
More specifically, we would pursue the following course of action:
- — The basic approach of the United States concerning Hanoi’s possible sale of this equipment will be one of quiet cooperation with those countries friendly to the United States who are potential purchasers. The United States will not actively promote such equipment acquisitions, however.
- — The United States will determine its response to requests for spare parts and technical service support on a case-by-case basis, and in accordance with our bilateral relations with the foreign governments concerned.
- — We will not authorize private transactions by U.S. firms, or by persons subject to U.S. jurisdiction. The Department of the Treasury, in coordination with other interested agencies, will be responsible for developing the regulatory definitions, procedures, and restrictions necessary to implement and enforce this policy.
- — The Department of State, in coordination with the Department of Defense, will administer United States cooperation with foreign governments concerning this equipment.
- — United States agreement to cooperate in the provision of spare parts and technical services to a specific foreign government purchasing this equipment will require White House approval.
I concur in this approach, as do Phil Buchen, John Marsh, and Max Friedersdorf. If you agree with this position, the Department of State will release at an appropriate moment a statement indicating that the United States looks with disfavor on the Vietnamese sale of this captured equipment.
RECOMMENDATION
That you approve the approach recommended by the SRG and authorize me to sign the implementing NSDM at Tab A.
Approve [GRF
initialed]
Disapprove
- Source: Ford Library, NSC Institutional Files (H-Files), NSDM Files, Box 64, NSDM 322, American Equipment Captured in Indochina (3). Secret. Sent for action. Ford initialed his approval on page 5. A notation at the top of the first page reads: “The President has seen.” Tab A, a draft NSDM, undated; and Tab B, Department of State report, “American Arms Captured in Indochina,” undated, are attached but not published. For the NSDM as approved, see Document 88.↩
- Scowcroft encouraged President Ford to approve the March 6 Senior Review Group policy recommendations on the sale of American arms captured in Vietnam. Scowcroft also asked the President to approve a NSDM on the issue.↩