840.51 Frozen Credits/9583: Airgram
The Acting Secretary of State to the Ambassador in Brazil (Caffery)
A–1020. You’re A–350, February 24, 1 p.m. Since “foreign paper currency” presumably includes dollar currency, paragraph 2 of the circular of the Banco do Brasil appears to contemplate the exportation of dollar currency from Brazil by travelers under appropriate authorization. Paragraph 3 appears to permit the importation of dollar currency into Brazil so long as it is sold to an authorized establishment within 30 days. The Department had understood that under previously existing regulations the Banco do Brasil alone was authorized to export, import or deal in dollar currency and that travelers to Brazil were not permitted to negotiate any dollar currency which they might have in their possession, subject to the exceptions hereinafter noted. The new instructions of the Banco do Brasil seem to abrogate these regulations.
The Embassy will realize that the ability of persons coming to Brazil freely to negotiate dollar currency in their possession will constitute a substantial loophole in the controls over such currency. Furthermore, a complete prohibition against the export of dollar [Page 754] currency from Brazil, except through the Bank of Brazil, would be highly desirable.
In view of the foregoing, the Embassy is requested to report promptly to the Department whether the new instructions abrogate the previous regulations and, if they do, to discuss the matter with the appropriate officials of the Banco do Brasil.
It should be suggested to the Banco do Brasil that dollar currency in the possession of travelers should be taken from them and forwarded to the United States on a collection basis. If the Banco do Brasil wishes to make some exception from this latter provision, it is believed that such exception should be limited to amounts not exceeding $50 for travelers between the United States and Brazil only. In such event the Treasury will release for credit to the account of the Banco do Brasil in the United States all currency purchased from incoming travelers under this arrangement.
If necessary, the informal arrangement whereby the Banco do Brasil cashes up to $250 for American and Brazilian official personnel upon their arrival in Brazil may be continued. In this connection, however, it is believed that such personnel have been adequately warned against carrying dollar currency and that the amount of the exception might now be reduced to $50. Please let us have your views on this point.
The $40 exemption for travelers coming from West Africa may also be continued.
Please keep the Department informed of all developments.