Licenses from the Japanese Ministry of International Trade and Industry are required for exports of any commodity on the Japanese export control list. No exports to North Korea have been permitted since the outbreak of the Korean War. Exports to Communist China are limited to nonstrategic items. Exports of strategic items to any other communist bloc country are strictly controlled.
Strategic items embargoed by Hong Kong to Communist China are licensed for export to Hong Kong by Japan only if an essential supply certificate has been issued by the Hong Kong Government, and on exports of lesser strategic items the Japanese licensing authorities require end-use checks or reliable evidence that reexport to Communist China is unlikely.
End-use checks are made also on suspicious exports of strategic items to other destinations and the import certificate-delivery verification procedure has been utilized since April 1, 1953.
Intransit cargo is offloaded under customs supervision and is normally kept in a bonded warehouse or other area under the complete control of customs officials.
All offloaded intransit cargo is subject to the same export regulations as indigenous exports.
For balance-of-payments reasons, Japan closely controls its receipts and expenditures of foreign exchange. These controls are not related to security measures except indirectly in connection with trade with Communist China and the Soviet Union.
Trade with these areas is largely confined to barter transactions which must be settled on the basis of back-to-back or escrow letters of credit approved by foreign exchange banks.
Since June 1951 it has been required that bills of lading issued by carriers for strategic items licensed for export must contain a “Notice to carrier” stating that delivery of the goods to countries other than the destination designated in the export license is prohibited without the express permission of the licensing authority.
Japanese shipowners have been notified that Japanese vessels are not authorized to carry strategic goods to Communist China from Japan or from any other country unless shipment has been licensed by a COCOM country.
Administrative measures also have been adopted to prevent foreigners from chartering or using Japanese vessels to carry contraband goods to Communist China or North Korea. The Ministry of Transportation has announced that applications for approval of a bare boat or time charter of a Japanese vessel to a foreigner must show that the charterer has guaranteed that during the period of the charter the vessel will not enter any port in Communist China or North Korea with strategic goods on board the vessel unless the shipment has been licensed by a COCOM country.
The Ministry of International Trade and Industry furthermore has instructed Japanese oil companies not to furnish fuel bunkers to any vessels carrying strategic goods to Communist China or North Korea unless the shipment has been licensed by a COCOM country.
Foreign trade in the Republic of Korea is governed by regulations issued by the Ministry of Commerce and Industry. Licenses are required for all exports to all destinations and are issued by the Ministry of Commerce and Industry only to registered foreign traders, or to manufacturers for their own products. A certificate of final destination (or pledge to submit such a certificate) must accompany all exports license applications.
Registration as a foreign trader is canceled when a trader does business with individuals or juridical persons under a Communist government. Delivery of arms, ammunition and other goods for military use to enemy countries is a criminal offense.
Foreign exchange proceeds from exports are subject to the control of the Bank of Korea.
Vessels engaged in foreign trade are required to submit their manifests upon entry into an open port and are prohibited from proceeding to a foreign country except by way of an open port. Transshipment from one vessel engaged in foreign trade to another is prohibited unless authorized by the Collector of Customs. Vessels engaged in domestic trade cannot load export goods unless the goods are shipped in bond.
All exports from the Netherlands are subject to export licenses. Export licenses for industrial commodities are issued by the Central Bureau of Imports and Exports (CDIU) at The Hague, which has delegated this authority to anumber of so-called trade-control boards. For agricultural products, licenses are granted by the Ministry for Agriculture, which for a large number of commodities has delegated this function to the “agricultural-monopoly holders.” The latter are state-supervised and semiofficial organizations, similar to the trade-control boards.
In certain instances, the exporter may make out his own export license which must be dated and initialed by an officer of the CDIU.
Goods passing in transit through the Netherlands, including strategic commodities, are not subject to any controls except for a customs check to insure that goods in transit leave in the same form in which they have entered.
The Netherlands has adopted import certificate-delivery verification procedures.
All transactions of a Netherlands resident involving payment of moneys to or from a party abroad are subject to a foreign-exchange license, issued by the Netherlands Bank. The export license generally includes the authorization of the banks for the proposed transaction.
The Netherlands instituted voyage controls in May 1953, aimed at preventing the carriage of strategic commodities by Netherlands ships to Communist China and North Korea except pursuant to special permission.
All commodities to be exported to any destination require export licenses. The licensing authorities using existing powers can prevent the export of any item for security reasons.
Goods which are to pass through the territory of Norway may be reexported without license only if it is clearly stated by their conveying documents that the goods are going straight to foreign destination. If the reexport does not take place within 90 days, a Norwegian export license must be secured. The destination listed on the original documents must remain the same, and the goods may not be transformed in any way during their stay in the country. The customs authority applies a control to that effect. There are no free-port areas in Norway.
Norway has adopted import certificate-delivery verification procedures.
Strict exchange controls are maintained by the Government through the Bank of Norway. The granting of an export license carries with it the obligation on the part of the exporter to relinquish the foreign exchange to the Bank of Norway as soon as received from the foreign buyer; a maximum of 60 days is allowed between export and remittance, although under certain circumstances the Government may grant the exporter an extension of time. Transfers of capital from Norway require the prior approval of the Bank of Norway.
The Norwegian Foreign Office announced publicly in April 1953 that the Norwegian war risk insurance group had refused to insure Norwegian vesselsdelivering strategic articles to Communist Chinese and North Korean ports. The foreign office also announced that Norwegian ships had not violated the United Nations resolution prohibiting the shipment of strategic material to Communist China and North Korea. Several allegations that they had done so had been investigated and found to be unjustified.
Pakistan’s export controls are exercised under the authority of the Imports and Exports (Control) Act, 1950 (Act No. XXXIX) as amended by the Imports and Exports (Control) Amendment Act, 1953 (Act No. IX of 1953), which extends the life of the 1950 act for 3 years, until April 18, 1956. The act empowers the Central Government to prohibit, restrict, or otherwise control the import or export of goods of any specified description, or regulate generally all practices and procedures connected with the import or export of such goods. Under an export trade control notification of 1948, which is still in effect, numerous categories embracing strategic or short-supply materials have been established for which no licenses are granted. Pakistan prohibits the reexport in their original form of all imported materials regardless of origin except in specific cases, each of which is examined on its own merits. With respect to goods of domestic origin, Pakistan encourages exports to all countries of such goods as are surplus to her own requirements and encourages shipments to the dollar area by placing selected items on an open general license specifically applicable to the dollar area.
Pakistan has issued special transit regulations to govern trade passing through that country to Afghanistan. Strict control is maintained, moreover, at the ports to insure against unauthorized transit shipments.
Pakistan has promulgated exchange control regulations which insure the surrender to the State Bank of Pakistan or its authorized agents of all foreign exchange derived from export transactions.
The Control of Shipping Act, 1947 (Act XXIV), approved by the Central Government as amended by Ordinance V of June 22, 1951, provides for the control of shipping. Under this act a shipping authority appointed by the Central Government licenses vessels of both Pakistan and foreign registry which participate in coastal traffic. This act was recently extended through March 31, 1959.
All exports are subject to licensing under regulations issued in 1948 except that export licenses are not generally required for shipments to Portuguese overseas provinces. Portugal’s export trade with the Soviet bloc is not important and consists almost entirely of cork, which is not on any strategic or restricted list. The Portuguese colonies exert varying degrees of export control. On January 23, 1952, the Government of Macao adopted a trade-control system which requires a license for the import and the export of strategic materials. Strategic materials are shipped from Portugal to Macao only against import certificates issued by that province.
Portuguese controls over goods in transit are not wholly effective in that no export license is required if goods in transshipment are reexported within 60 days after being placed in bond.
Financial control is exercised over all exports as a part of the license control system.
Colonial legislative authority for control of imports and exports is exercised under the Control of Imports and Exports Ordinance of 1950, which places the issuance of all licensing, both general and special, under the absolute discretion of the Controller of Imports and Exports. Under this general authority, all exports are carefully controlled. Strategic commodities, in particular, are controlled in accordance with UK-adopted strategic trade controls with respect to exports to all Soviet bloc destinations. In addition, a special list of goods is embargoed to Communist China and North Korea, and subject to Essential Supply Certification if such goods are to be exported from Singapore to Hong Kong. Amendments to the latter embargo list adopted by the United Kingdom are promptly reflected in Singapore.
Many commodities are subject to special licensing controls under exchange restrictions or emergency regulations. The only exemptions to licensing are goods transitting the colony on a through bill of lading, and those shipments customarily exempted in international trade, such as parcel post shipments under $50, etc.
Goods which transit the port of Singapore without offloading are subject to no control. Goods which are landed in the colony for the purpose of transshipment on a through bill of lading to another destination are also subject to no local license or declaration, as long as such goods remain in the custody of the harbor board or of the agent of the ship from which landed. Transshipment goods not on through bills are treated as reexports, and are subject to full export control.
The United Kingdom Control of Trade by Sea Order (China and North Korea) 1953, went into effect in Singapore on March 31, 1953. Since that time, measures taken to implement the order effectively have included placing all bunkering of ships, either coal or oil, of over 500 gross registered tons, on a local licensing basis. This places bunkering under the control of the Controller of Exports and Imports. Voyage licensing of vessel is under the control of the Master Attendant.
Under the new foreign trade regime, Turkish exports are grouped in two lists. List I contains all Turkish export commodities, the export of which is unrestricted unless they also appear on list II. A simple customs exit declaration based on the exporter’s application is all which is necessary to realize list I exports. List II designates commodities requiring export licenses. The export license can be obtained from the Ministry of Economy and Commerce or agencies so designated by the said Ministry. List II items may also be exported by certainGovernment or semigovernmental agencies only. The list II commodities subject to such licensing procedure are as follows: cereals (barley, wheat, rye, corn, oats, and rice) and cereal products (semolina, macaroni, starch, noodles, flour); animal products (butter); dried fruits and nuts (pistachios shelled or unshelled, seedless dried raisins); minerals and mineral products (asbestos, copper, copper waste and scrap, copper plates, bars and wires); copper alloys and copper alloy products; barite; steel and iron waste and scrap; zinc ore; zinc mixed with lead; iron ore and pyrites; pig iron; iron products and waste and scrap; ferro-manganese; graphite; calco-pyrite; chrome ore; lead ore; sulphur ore; stone coal; mineral waste; coke and coke dust; manganese ore; molybdenum; tin waste; raw materials for textiles (cotton linters, greasy wool); vegetable oils (olive oil, margarines); tobacco and opium (tobacco processed and leaf, opium); creosote and xylol; sodium fluoro-silicate; toluol; mineral oils mixed with phenol and naphtha; straw; pistols and ammunition.
There is no large amount of intransit trade in Turkey. All intransit goods arriving in Turkey, however, must carry on all shipping documents (including bill of lading and ship manifest) and outer containers the name of the Turkish port, the phrase “in transit to” and the name of the city and country of destination.
Generally, goods moving intransit through Turkey may be imported only through customs warehouses.
Extensive documentation, including a reexport license, is required for clearance by the Turkish Customs Administration.
Export-control measures are designed for two purposes: (1) to keep a check on outgoing strategic or short-supply materials, and (2) they are instituted also for foreign-exchange reasons. For price-checking purposes in order that foreign-exchange losses can be prevented, exporters must register with agencies designated by the Ministry of Finance. Customs authorities do not permit exportation without a certificate of registration and destination. All foreign currency receipts are turned over to the Central Bank of Turkey.
The export control system in the United Kingdom is similar to but not identical with that of the United States. It is administered by the Board of Trade. Although the present system grew out of measures originally promulgated at the start of World War II, its primary purpose now is the safeguarding of the country’s requirements of strategic and short-supply goods, and the restriction of the flow of such items to undesirable destinations. The United Kingdom security trade control program was instituted in 1947.
The United Kingdom export control mechanism operates in the following manner:
The consolidated order, which encompasses all the items subject to control, is a published document and revisions are issued in the form of statutory orders which are also published in the Board of Trade Journal (an official weekly). The list is arranged into three schedules. The first schedule lists goods which, in general, cannot be exported to any destination without a license. The second schedule lists additional goods (mostly foodstuffs) which, in general, can be exported to any destination without a license. The two schedules are, however,subject to two qualifications. Firstly, a limited number of goods included in the first schedule can be exported without license to destinations within the British Commonwealth (except Hong Kong), Ireland, and the United States. Such goods are listed in the third schedule. Secondly, no goods, even those included on the second schedule, can be exported without license to China, Hong Kong, Macao, or Tibet.
The extent of the restriction on individual items is reflected in the administration of the control. Strict control is maintained over items which are prohibited exportation to certain areas, as, for instance, aircraft, firearms, ammunition, atomic materials. The exportation of a wide range of goods of strategic importance, including rubber, to Communist China is prohibited, as is the exportation to the Soviet bloc in Europe of a somewhat narrower range of commodities. The export to the Soviet bloc of many other items is subject to limitations as to quantities permitted to be shipped. In addition, there is the great bulk of items on which control is achieved through case-by-case scrutiny of individual license applications.
The United Kingdom has had in effect since November 1951 a system whereby about 250 items of strategic importance arriving from other countries are subject to transshipment control. Individual licenses are required for all of the items on the licensing list before any of the goods, after being landed in the United Kingdom, can be transshipped to any destination other than the British Commonwealth (except Hong Kong), Ireland, and the United States. In administering the control, the British authorities normally grant licenses when they are satisfied that the goods will not be diverted to the Soviet bloc, China, etc., contrary to the wishes of the exporting country.
The United Kingdom has effectively implemented import certificate-delivery verification procedures.
In order to restrict further the flow of strategic goods to China and as an additional measure of control, a statutory order (titled the Control of Trade by Sea (China and North Korea) Order, 1953) was made on March 13, 1953, pursuant to which the Ministry of Transport and Civil Aviation is empowered to control all shipping to China and North Korea. In essence, the order applies to all British ships having a gross tonnage of 500 tons, limits the type of trade in which the ships may engage and the voyages which may be undertaken, affects the class of cargo or passengers which may be carried, and imposes certain conditions on the hiring of ships. Approximately a hundred items are listed in a schedule which is an integral part of the license issued under the order in question. These items are banned from carriage to China in British flag vessels.
While formal shipping controls were not adopted until March 17, 1953, British shipping circles were kept under fairly close scrutiny by the Government ever since the adoption on May 18, 1951, by the Additional Measures Committee of the United Nations of the resolution to apply economic sanctions against China as a result of her aggressive intervention in Korea.
Complementary controls over the bunkering of vessels carrying strategic cargo (as defined in the Shipping Control Order) to China were adopted at the same time that the order affecting shipping became operative. These controls are administered by the Ministry of Fuel and Power on an informal basis, in cooperation with British oil companies which deny bunkers to ships carrying strategic cargo to China.
The Department of Commerce is responsible for controls over nearly all commercial exportations from the United States under the Export Control Act of 1949, as extended.
The Department of State is responsible for control over the exportation of arms, ammunition, and implements of war; the Atomic Energy Commission administers controls over the export of major atomic energy items; and the Department of Treasury administers controls over the exportation of gold and narcotics. All such items required export licenses, and shipments to the Soviet bloc are not permitted.
All commodities exported to any destination, except Canada, from the United States, its territories and possessions are subject to export control. There are three main techniques utilized in the administration of such controls:
1. Shipments of commodities contained in the Positive List1are under control to virtually all destinations;
2. For some commodities, a general license is authorized permitting exportation to virtually all friendly destinations without requiring that an export license be issued;
3. All commodities, whether or not on the Positive List and irrespective of any general license provisions, are under licensing control to subgroup A destinations (i.e., Soviet Bloc, including Communist China and North Korea), Hong Kong and Macao.
The Comprehensive Export Schedule published by the Bureau of Foreign Commerce (BFC) of the Department of Commerce must be consulted in order to determine whether a validated license is required for the exportation of a given commodity to a specific destination as well as to determine other export control regulations of the Commerce Department. The Comprehensive Export Schedule is supplemented 2 or 3 times a month by BFC’s Current Export Bulletin. The Secretary of Commerce’s Quarterly Report to the President and the Congress reports major policy changes and activities of the Department of Commerce in carrying out its export control activities.
The two main policies as indicated in the Export Control Act which is administered by the Department of Commerce are export controls for security and for short supply reasons. The objective of security controls as embodied in the Export Control Act of 1949, as extended, is to exercise the necessary vigilance over exports from the standpoint of their significance to the national security. The controls were designed to deny or restrict the exportation of strategic commodities to the Soviet bloc in order to impede the buildup and maintenance of the Soviet war potential. Shipments of all commodities to Communist China and North Korea are embargoed while shipments to the European Soviet bloc, Hong Kong, and Macao are either denied or restricted. In addition, all proposed shipments of strategic commodities to all destinations, except Canada, are carefully scrutinized to assure that the goods will not be transshipped or diverted to unfriendly hands. The Commerce Department has developed procedures to prevent the frustration of our own export controls which would result from shipping a strategic item to a country which (1) ships identical or closely similaritems to the Soviet bloc, or (2) would use the American item directly in the manufacture of strategic items for the Soviet bloc.
In order to prevent the transshipment abroad of United States commodities, the Department of Commerce also has regulations covering the unauthorized movement of United States commodities after they leave United States shores. These regulations generally referred to as the “destination control” provisions are designed to prohibit the reexportation from the country of ultimate destination except upon written authorization from BFC. These regulations also restrict ships, planes or other carriers from delivering United States origin goods to other than the destination specified on the export control documents. In addition, the United States participates in the international IC/DV (import certificate—delivery verification) system described elsewhere in this report.
In addition to United States export controls for security reasons, it is necessary to administer export controls for short supply reasons in order to protect the domestic economy from the excessive drain of scarce materials and to reduce the inflationary impact of abnormal demand. Such controls are usually exercised by means of export programs or quotas fixed by the Secretary of Commerce. The easing of supply programs in recent months has led to the prompt lifting of nearly all domestic controls over materials: such actions have generally been followed by the relaxation of related export controls for short supply reasons. Thus, export controls for short supply reasons do not play as important a part as before in comparison with security controls.
1The Positive List of Commodities is a current list contained in the Comprehensive Export Schedule showing the commodities which require a validated license from the Bureau of Foreign Commerce of the Department of Commerce.
A validated export license is required for the exportation from any seaport, land frontier, airport, or foreign trade zone in the United States of certain strategic goods in transit through the United States which originate in or are destined for a foreign country. The commodities so controlled are the ones which are identified on the United States Department of Commerce Positive List by an asterisk.
Department of Commerce Transportation Order T-1 denies any United States-registered vessel or aircraft authority to carry items listed on the Positive List, or arms, ammunition and implements of war or fissionable material, to any Soviet bloc destination, Hong Kong or Macao without a validated license issued by BFC or other appropriate licensing agencies or the express permission of the Under Secretary of Commerce for Transportation. This order includes shipments from foreign ports as well as from the United States.
Department of Commerce Transportation Order T-2 has the effect of preventing the transportation of any commodities directly or indirectly to Communist China, North Korea, or areas under their control, by United States-registered vessels or aircraft. It also prohibits American ships and aircraft from calling at any port or place in Communist China.
A validated license is required for delivery in United States ports of specified types of petroleum and petroleum products to foreign vessels, if the foreign carrier has called at any point under Far Eastern Communist control, or at Macao, since January 1, 1953, or will carry commodities of any origin from the United States destined directly or indirectly for any such point within a period of 120 days in the case of a vessel, or 30 days in the case of any aircraft. This regulation also requires that if a carrier is registered in or under charter to a Soviet-bloc country or is under charter to a national of a Soviet-bloc country it will be necessary to apply to BFC for a validated license.
American petroleum companies at certain foreign ports are prohibited withouta Treasury Department authorization from bunkering any vessel bound for a Communist Far East port or Macao or which is carrying goods destined for Communist China or North Korea. Similar restrictions apply to the bunkering by these companies of vessels returning from Communist Far East ports or Macao.
The Foreign Assets Control Regulations, administered by the Treasury Department, block the assets here of Communist China, North Korea and their nationals and prohibit unlicensed dealings involving property in which Communist China, or North Korea, or their nationals, have any interest. The regulations prevent the use of United States financial facilities by those countries and their nationals. These regulations also prohibit the unlicensed importation of goods of Chinese Communist or North Korean origin.
Treasury regulations also prohibit Americans, including foreign subsidiaries of United States firms, from participating in the purchase or sale of certain important commodities for ultimate shipment from any country outside the United States to the countries of the Soviet bloc. These transactions controls, which are complementary to the United States export control laws, are administered by the Treasury Department under Foreign Assets Control Regulations.
Statistical Tables
Table 1.—Free-world trade with Soviet bloc, 1948 through 1953
[In millions of United States dollars]
1Includes $9 million imported by United States from Outer Mongolia.
Table 2.—Exports of principal free-world countries to Soviet bloc, 1951, 1952, and 1953
[In millions of U. S. dollars]
Note.—Soviet bloc countries are Albania, Bulgaria, Czechoslovakia, Soviet Zone of Germany, Hungary, Poland, Rumania, U.S.S.R., Outer Mongolia, and China (data as far as possible refer to Mainland China, including Manchuria and Inner Mongolia). Exports include reexports for the following countries: Anglo-Egyptian Sudan, Australia, Ceylon, Gold Coast, Hong Kong, India, Ireland, Japan, Malaya, Mexico, New Zealand, Pakistan, United Kingdom, and United States. All other countries exclude reexports.
Source: Official trade statistics of listed countries, compiled by U. S. Department of Commerce.
Table3.—Imports of principal free-world countries from the Soviet bloc, 1951, 1952, and 1953
[In millions of U. S. dollars]
Note.—Soviet Bloc countries are Albania, Bulgaria, Czechoslovakia, Soviet Zone of Germany, Hungary, Poland, Rumania, U.S.S.R., Outer Mongolia, and China (data as far as possible refer to Mainland China including Manchuria and Inner Mongolia).
Source: Official trade statistics of listed countries, compiled by U. S. Department of Commerce.
Table4.—Free-world exports to the Soviet bloc, monthly, 1952 and 1953
[In millions of U. S. dollars]