S/S–NSC Files, Lot 63 D 351, NSC 111 Series
Draft Report by the National Security Council1
Report by the National Security Council Regarding a Review of its Determinations Under Section 1302 of the Third Supplemental Appropriation Act, 1951
1. This report is submitted pursuant to Section 1302 of the Third Supplemental Appropriation Act, 1951, which requires that the National [Page 1204] Security Council report its determinations, quarterly, to the Appropriations and Armed Services Committees of the Senate and of the House of Representatives, the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives. The present report is made as of October _____, 1951,* and covers actions taken during the entire period when Section 1302 was in effect.
background
2. Section 1302 of the Third Supplemental Appropriation Act, 1951 (Public Law 45, approved June 2, 1951), directs that, unless the National Security Council makes an exception upon an official determination that such exception is in the security interest of the United States, no economic or financial assistance shall be provided to any foreign country which, after fifteen days following its enactment, exports or knowingly permits the export of certain named categories of commodities to the Soviet Bloc during any period in which the armed forces of the United States are actively engaged in hostilities in carrying out a decision of the Security Council of the United Nations. In order to be eligible for economic or financial assistance each country must certify that after the prescribed period it has not exported or knowingly permitted the export of the prohibited items to the Soviet Bloc.
3. The Act required that the Secretary of Defense certify to the Economic Cooperation Administrator a list of arms, or armaments or military matériel or articles or commodities which may be used in the manufacture of arms, armaments, or military matériel, or shipment of which to the Soviet Bloc is embargoed by the United States in the interest of national security. The list in question was certified on June 5, 1951.
considerations governing national security council action
4. The Council has carried out its responsibilities under Section 1302, having in mind that foreign countries should certify that they were not shipping to the Soviet Bloc any article specified on the list certified to the Economic Cooperation Administrator by the Secretary of Defense. To this end, immediately upon the passage of the statute, the Department of State informed foreign governments of the requirements of Section 1302, especially that of certification.
5. It was impossible for any country to provide the necessary certification within fifteen days of the passage of the Act because of the [Page 1205] time required both for the United States to compile and transmit the lists of commodities, and for the countries affected by Section 1302 to determine whether their export policies and procedures could be adapted so as to enable them to certify. Accordingly, an interim general exception was approved for all countries affected by Section 1302 in recognition of the degree to which the strength of the free world depends on assistance from the United States and in recognition of the importance of maintaining that strength. The interim general exception provided the Council an opportunity to make an orderly examination of the situation with respect to each country which did not certify. On the basis of such examination, the Council has made determinations in respect to each of these countries, except Argentina, Ceylon and Guatemala which are referred to in paragraph 16 below. Efforts were continued by the Department of State throughout the period under review to obtain certifications, and 24 countries had furnished certificates by October _______.
6. In considering whether the security interests of the United States required the granting of exceptions to countries which did not certify, the Council was guided by a number of major considerations. No country for which an exception was made was known to be shipping arms, ammunition, implements of war, or atomic energy materials to the Soviet Bloc. The Council evaluated the adequacy of a country’s control over its exports to the Soviet Bloc of items of strategic significance. The Council also considered the contribution of the aid programs to the strength of the free world and the probable effects on essential imports from the Soviet Bloc (such as coal, lumber, and grain) resulting from discontinuance of exports to the Bloc. In addition, in considering each specific country, the Council took into account such other factors in the particular case as had significant bearing upon United States security.
7. Thus the Council has reached its decision in each instance upon the basis of all pertinent elements of the problem. Exception has been made only when, in a careful weighing, a determination to make exception was found on balance to be in the interest of United States security. Specific country exceptions, affecting 36 countries were made by the Council in the period ending October ______.
8. Negotiations which have had the objective of bringing the export controls of the free nations over trade with the Soviet Bloc into closer conformity with those of the United States were initiated soon after the inception of U.S. security export controls in 1948 and have been pursued continuously since that time. Since 1949, the major trading countries of Western Europe have cooperated closely with each other and with the United States and Canada in developing and carrying [Page 1206] out security controls over exports of strategic goods to the Soviet Bloc. Representatives of most of the participating Governments maintain regular contact through a committee on security export controls located at Paris. As a result of discussions in this committee which have taken place during the period under review, the number of items which are included on the international list as items of primary strategic importance has been further increased. This list now includes approximately 95 percent of the commodity categories on the U.S. primary strategic lists for embargo to the countries of the Soviet Bloc. These countries are also agreed on the need to restrict exports to the Soviet Bloc of goods of secondary strategic significance—that is, goods which if shipped in quantity would make a significant contribution to the war potential of the Soviet Bloc.
9. In the case of Latin America, discussions along these lines have taken place pursuant to the April 7, 1951 resolution of the Latin American Foreign Ministers Conference to the effect that the American Republics agree to cooperate fully with one another in the adoption of effective measures of economic defense and security controls. Discussions of trade controls have also taken place with other countries receiving U.S. aid.
10. As a result of the Resolution of May 18, 1951 by the General Assembly of the United Nations, recommending that every state apply an embargo on shipment to Communist China and North Korea of arms and related items, there are in effect in many friendly countries controls over the shipment of such items to China. The countries actively supporting the arms embargo include the principal allies of the United States which receive economic or financial assistance from this country.
details of national security council action
11. In making the general interim exception, the Council had under consideration 66 countries. These are listed in Appendix A to this report together with an indication of the action with respect to each. The National Security Council on June 18 determined that Canada was not receiving assistance of the type contemplated by Section 1302. The Ryukyus were covered as a United States dependency in the Council’s determination on Japan. Although Sweden was included since it was receiving United States assistance at the time of the interim general exception, Sweden ceased to receive assistance from the United States during the quarter ending September 30. Hence, the provisions of Section 1302 were no longer applicable to Sweden.
12. Twenty-four of the countries receiving United States economic or financial assistance have certified that after June 18, 1951, they did not export or knowingly permit the export to the Soviet Bloc of the [Page 1207] items contained on the list certified by the Secretary of Defense. Hence, the interim general exception for these countries has been replaced since June 30 by their certification under Section 1302. In view of the responsibilities placed upon it by the provisions of Section 1302, the Council directed its Special Committee on East-West Trade to continue its examination of the trade of the countries that have certified and to see that periodic renewals of the certification as required by the Section are received. The countries which have provided the necessary certification under Section 1302 are the following:
| Bolivia | Nepal |
| Costa Rica | Nicaragua |
| Cuba | Panama |
| Dominican Republic | Paraguay |
| Ecuador | Peru |
| Ethiopia | Philippines |
| Greece | Republic of Korea |
| Haiti | Saudi Arabia |
| Indochina (Cambodia, Laos, Viet Nam) | Spain Thailand |
| Jordan | Trieste |
| Liberia | Yugoslavia |
| National Government of the Republic of China |
Renewals of certification by these countries have been obtained as required at the termination of their validity period of 30 days.
13. As rapidly as adequate data could be made available, the National Security Council has reviewed the trade patterns of the countries receiving U.S. aid and believed to be exporting to the Soviet Bloc items on the list certified by the Secretary of Defense. The work of preparing the necessary reports and trade analyses has been done by the Special Committee on East-West Trade of the National Security Council. This committee, which was originally created to assist the Council in the performance of its responsibilities under Section 1304, Public Law 843 (81st Congress, second session) is made up of representatives of the following departments and agencies whose staffs have contributed heavily of their time in the preparation of these reports: the Departments of State, Treasury, Defense, and Commerce; the National Security Resources Board; the Office of Defense Mobilization; the Economic Cooperation Administration; the Joint Chiefs of Staff; the Central Intelligence Agency; the Export-Import Bank: and the Office of the Special Assistant to the President. The Secretaries of the Treasury and Commerce, the Director of Defense Mobilization, the Economic Cooperation Administrator, and the Chairman, Export-Import Bank have participated with the Council in its actions under Section 1302.
[Page 1208]14. As a result of these activities, the National Security Council has replaced the interim exception with a specific country determination in the case of the following countries:
| Afghanistan | Italy |
| Austria | Japan |
| Belgium | Jordan |
| Brazil | Lebanon |
| Burma | Libya |
| Chile | Luxembourg |
| Colombia | Mexico |
| Denmark | Netherlands |
| Egypt | Norway |
| El Salvador | Pakistan |
| France | Portugal |
| Honduras | Southern Rhodesia |
| Iceland | Syria |
| India | Turkey |
| Indonesia | United Kingdom |
| Iran | Uruguay |
| Iraa | Venezuela |
| Ireland | Western Germany |
| Israel |
15. As required by Section 1302, the National Security Council has immediately reported to the appropriate Congressional committees all exceptions made under Section 1302 together with the reasons therefor. In addition, the National Security Council has transmitted together with the exception an analysis of the trade with the Soviet Bloc of countries for which a specific exception has been made.
16. No action has been taken since the date of the general interim exception on Argentina, Ceylon and Guatemala, which have not certified in accordance with Section 1302. Certain factors with respect to these countries were still under review by the National Security Council when Section 1302 was repealed.
17. The foregoing exceptions and certifications were under continuing review. They did not give blanket approval to shipments of strategic materials. They were exceptions made in the light of circumstances prevailing at the time of the NSC determinations.
18. The Council directed that the trade with the Soviet Bloc of each country receiving aid should be kept under continuing scrutiny by its Special Committee on East-West Trade and that efforts should be continued to seek additional measures consistent with over-all United States security interests toward minimizing the flow of strategic items to the Soviet Bloc from such countries. During the period under review this continuing scrutiny has not disclosed any developments which would require revision or withdrawal of any of the exceptions which had been made.2
[Page 1209]- The source text was circulated to members of the National Security Council under cover of memorandum by Executive Secretary Lay, dated October 23, which noted that the draft report was prepared by the Special Committee on East-West Trade. Lay’s memorandum stated that if the report was approved by the Council, it would be recommended that the Council direct its declassification and transmit copies to the relevant Congressional committees.↩
- To be dated as of the date of signature by the President of the Mutual Defense Assistance Control Act of 1951, which repeals Section 1302. [Footnote in the source text.]↩
- By memorandum action as of November 5, the National Security Council approved the source text and directed that it be declassified and transmitted to the committees of Congress designated in Section 1302. (NSC Record of Action 579. November 5: S/S–NSC Files, Lot 66 D 95, Record of Aetions–1951)↩
- Documentation concerning each of these 21 NSC Determinations, including country studies and supporting memoranda, is in the S/S–NSC Files, Lot 63 D 351, NSC Determinations No. 2-8, No. 9-17, and No. 18-21.↩
- Certification in accordance with Section 1302. [Footnote in the source text.]↩
- Exception to Section 1302 made in the security interest of the U.S. [Footnote in the source text.]↩
- Not receiving U.S. aid. [Footnote in the source text.]↩
- Certification in accordance with Section 1302 [Footnote in the source text.]↩
- Exception to Section 1302 made in the security interest of the U.S. [Footnote in the source text.]↩
- The exception for Norway made by NSC Determination No. 3, dated June 14, 1951, was superseded by the exception made for Western European members of NATO in NSC Determination No. 18, dated September 21, 1951. [Footnote in the source text.]↩
- Under jurisdiction of U.S. authorities. [Footnote in the source text.]↩
- Not receiving U.S. aid. [Footnote in the source text.]↩