740.00112A European War 1939/27590
Memorandum by the Ambassador in Brazil (Caffery) to the President of the Brazilian Defense Commission (Portella)79
[Translation]
[Rio de
Janeiro,] December 30, 1942.
The Embassy has received instructions from Washington80 regarding the problems previously discussed in connection with the correlation of controls between the United States and Brazil. The following points have been considered in the instruction:
- 1.
- It is desired to establish a definite understanding between the two Governments in regard to the policy to be followed in connection with enemy firms subject to Brazilian controls. The principal point is that the firms shall not be taken off the List until such time as the Brazilian authorities have permanently nationalized such firms, and until all undesirable elements and factors have been removed, including personnel.
- 2.
- While an understanding covering such terms is being studied,
the Embassy is authorized to:
- a)
- Issue licenses to American firms to transact business with firms in which the Economic Defense Commission has established an effective intervention or administration for the purpose of nationalization or liquidation;
- b)
- Inform you that the Embassy will not recommend the inclusion of Brazilian firms in the Proclaimed List of Certain Blocked Nationals by reason of their doing business with firms subject to intervention or administration under the above mentioned conditions.
- 3.
- It is expected that, in accordance with our conversations of last week, the use of these licensing powers will, so far as possible, be limited to individual cases after consultation with the Brazilian authorities regarding the facts and conditions applying to each case. We are informed by the Department of State that, although it realizes the necessity of temporary administration prior to nationalization, it wishes to avoid any general premature action, and it is assumed that the Brazilian authorities expect us to grant facilities only in particular cases where the nationalization policy is being actively pursued. [Page 746] Transactions covering exports from the United States to firms included in the Proclaimed List which are subject to administration shall continue under licenses granted in the United States, upon recommendation by the Embassy. Of course it is assumed that all transactions will be carried out in accordance with the orders and in the name of the administrator.
- 4.
- The Department of State assumes that the administrators of Proclaimed List firms will not be involved in transactions with other enemy firms (included in the Proclaimed List of Certain Blocked Nationals) which are not subject to administration.
- 5.
- The Department of State requests that we take up with you the matter of publicity to be given to these agreements, in the hope that the subject of these facilities may be kept on an unofficial basis and no general notice of it be given to the public.