Part 8
There were no changes in the transit controls or shipping controls in Hong Kong in the last 6 months of 1953.
In the field of financial controls, since October 1953, approved gold and bullion dealers have been permitted to import nonresident-owned gold solely for reexport. While in Hong Kong such gold must be in the custody of an authorized bank. Such reexport is allowed only to nonsterling area countries and on production of a valid import license from the country of destination.
IRAN
The right to conduct foreign trade is vested in the Iranian Government by the foreign trade monopoly law of 1931. From time to time the Government grants by decree the right to conduct trade with respect to certain commodities to private individuals and firms.
License Requirements
Exports are controlled primarily through the exercise of financial controls. In general, laws and regulations governing export trade are designed so that commodities that are in short supply, or which would otherwise have to be replaced by imports, may not be exported. Thus there is a standing prohibition against the export of gold and silver in bars, sheets, or coins; cattle, sheep, raw hides, charcoal, matches, butter, sugar, and tea. Also prohibited are exports of arms and ammunition, precious stones other than turquoise and pearls, and archeological articles. Only on rare occasions has the Government authorized the export of any or these commodities.
Decrees currently in effect permit the export of all other commodities without licensing procedure except those under Government monopoly, such as opium, oil and tobacco, and except wheat, flour, barley, legumes, rice, lumber and cotton. Depending on the availability of these last-named commodities, export quotas are established for them each year, and export licenses are issued by the Ministry of National Economy to private individuals or firms to the extent of the quotas established for each commodity.
The issuance of export licenses for lumber and cotton is subject to the approval of the Ministry of Agriculture and the Iran Cotton Co. (an agency of the Plan Organization), respectively. The export of opium and tobacco, which are under Government monopoly, is subject to license of the Ministry of Finance.
Some Iranian exports are effected under barter or clearing agreements which Iran has concluded with a number of countries since 1940, including the U.S.S.R., the Federal German Republic, France, Italy, Czechoslovakia and Poland. Since quota lists under these agreements specify the commodities involved, exports made thereunder are in effect licensed by the agreements themselves.
Regulations promulgated on March 18, 1953, under the Law on the Encouragement of Exports and the Issuance of Licenses to Engage in Foreign Trade of December 22, 1952, require Iranian exporters to submit a preexport declaration, in which they inform the Ministry of National Economy of their intention to export stated commodities to stated destinations. One copy of this declaration is certified by the Ministry and must be returned to the exporter within 48 hours. A second copy goes to the Customs Administration for use in inspecting the goods when they actually leave the country.
Transit Controls
Goods having in transit through Iran may enter and leave the country only at places where customs houses have been established for that purpose. Detailed documentation is required by Iranian customs authorities for goods in transit. In practice, there are very few intransit shipments through Iran.
The reexport of specified goods of foreign origin is permitted under a decree of November 11, 1953, which lists five categories of goods eligible for reexport. Reexport of such goods, however, requires the prior approval of a commission established in the Ministry of National Economy, with representatives from a number of other Government departments. Prior to this decree, reexport, of imported goods was permissible only by decree of the Council of Ministers, which rarely considered reexport cases. The new procedure represents a more workable machinery for the licensing of reexports. It should at the same time provide adequate safeguards against the reexport of strategic items.
Financial Controls
Exporters of Iranian goods must sign an undertaking that the exchange derived from the export will be sold to a bank authorized by the Government to deal in foreign exchange.
ISRAEL
License Requirements
All goods to be exported from Israel (including reexports), with certain minor exceptions such as gift parcels and commercial samples under I£10,000 in value and personal effects of tourists and immigrants, require an export license. The Ministry of Commerce and Industry is responsible for the control of most products. Outstanding exceptions, with the Government department or agency responsible, are as follows:
Military items--Ministry of Defense. Fuel--Ministry of Finance. Citrus--Citrus Marketing Board.
The Ministry of Commerce and Industry may ask for recommendations from other ministries before licensing certain products, for example foods and pharmaceuticals.
Israel voted to support the United Nations Resolution of May 18, 1951, placing an embargo on shipments of arms and related material to China and North Korea.
Transit Controls
The value of intransit trade is small, inasmuch as Israel is bounded on three sides by Arab states with which no legal trade is conducted, but commodities may be entered in bond without becoming subject to export licensing controls. Before reshipment may take place, however, a permit must be obtained from the Office of the Collector of Customs.
Financial Controls
The Israel Government exercises far-reaching control over the use of foreign exchange, and it regularly uses this control to restrict the movement of commodities in international trade. Israeli importers are required to submit comprehensive justifications as to Israel's need for a commodity before they are granted an allocation of foreign exchange. Once the licenses have been granted, it has been to the interest of the Government of Israel to make certain that the commodities are in fact imported and used in the Israeli economy. This identity of interest is a strong safeguard that materials consigned to Israel are not reexported.
ITALY
License Requirements
All commodities listed in the new export tables dated March 16, 1953, as amended, require an export license to all destinations except Somaliland, which is issued by the Ministry of Foreign Trade. Goods not listed in the export tables are exempt from license, but must be exported in conformity with exchange regulations, which vary according to the country of destination and clearing or other financial agreements.
All items require an export license for shipment to the Soviet bloc, including China.
Exports to the Soviet bloc also require bank validations, as virtually all trade with the bloc is conducted under bilateral agreements which specify the commodities that may be traded and the methods by which payment is to be made. Normally, shipments to the East comprise only those commodities specified in a trade agreement with an eastern country. In order to facilitate checking of east-bound shipments, trade with the Soviet bloc is funneled through selected frontier customs points.
The formulation of export-control policy and the administration of the export licensing system are the primary responsibility of the Ministry of Foreign Trade. This Ministry is advised by a special interministerial committee.
Italy is employing import-certificate delivery-verification procedures and carries out end-use checks for shipments to destinations outside the Soviet bloc, particularly for questionable transactions involving goods of a strategic nature. The country of origin is notified if an attempt is made to divert a shipment.
Financial Controls
Financial control over all export transactions is maintained through the licensing system and through implementation of existing exchange-control regulations.
Strict bilateral trade agreements with almost all members of the Soviet bloc have constituted, in effect, a financial ceiling on exports to Eastern Europe. Italian exports to Communist China, with whom there is no trade agreement, must be paid for in hard currency or must be exchanged for goods acceptable to the Italian Government, an arrangement that has severely restricted Italo-Chinese trade. Italian exchange control regulations would not normally permit payment for imports from the Soviet bloc in hard currencies, although sterling is occasionally used in payment for the few items not included in the trade agreements. In certain instances ship charters are completed for sterling when circumstances warrant or it is considered convenient.
Transit Controls
Direct and indirect transit shipments are subject to customs check, which includes a screening of documents, physical inspection of goods in case of doubt and control of the routing of shipments to prevent the use of unnatural and unusual methods of transportation. In the case of indirect transit shipments, a check is also made on the regularity of the transaction from the foreign-currency standpoint. In doubtful or suspect cases, customs, while not empowered to stop transit shipments, is able to delay the transaction until the Ministry of Finance, in conjunction with the Ministry of Foreign Affairs and other agencies, obtains detailed information concerning the final destination. When an investigation discloses that a transaction is not in order, the central administration orders confiscation of the goods and prefers charges against those responsible, if they are Italian nationals.
New regulations published in April 1953, imposed a more strict financial control over indirect transit operations. Prior to this time, certain firms and individuals who were officially authorized to hold foreign currency accounts, were permitted to carry on transit operations without making an application for foreign exchange in each case. The new regulations withdrew this privilege, making it necessary for all transit operators to submit an application to the General Directorate for Currencies of the Ministry of Foreign Trade before purchasing abroad any item listed in part A of the export tables (which include strategic items). A later amendment to this regulation permits a certain flexibility by allowing the transit operator to purchase goods abroad and have them shipped to Italy before making application to the Ministry of Foreign Trade. An operator making use of this provision must submit to the bank which holds his currency account a written commitment that the goods will be sent directly to Italy and not diverted and must obtain the clearance of the General Directorate for Currencies before the goods can be onforwarded through Italy to another country.
Shipping Controls
The Ministry of Merchant Marine has drafted a bill which, when enacted into law, will give the Italian Government the power to exercise control over shipping traffic with countries of the Soviet bloc. The bill contemplates quite severe penalties to be imposed upon owners and masters of ships failing to comply with regulations established by the Ministry of Merchant Marine. Consideration of this bill by Parliament has been delayed for nearly 1 year, however, and there seems to be no immediate prospect that it will be enacted into law.
Penalties
Penalties that may be imposed under Italian law for violations of export-control regulations include (1) imprisonment up to 2 months, (2) fines up to 40,000 lire, and (3) confiscation of the merchandise involved. Persons and firms under investigation for illegal export transactions are denied foreign trading privileges. However, an amnesty law recently passed by the Italian Parliament has resulted in the dropping of all charges outstanding against violators of the export control regulations.
Irregularities under the customs law may be punished by fines from 2,000 to 20,000 lire, while other infractions may incur the penalties contemplated by the penal code.
JAPAN
License Requirements
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.
Transit Controls
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.
Financial Controls
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.
Shipping and Bunkering Controls
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.
REPUBLIC OF KOREA
License Requirements
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.
Financial Controls
Foreign exchange proceeds from exports are subject to the control of the Bank of Korea.
Shipping Controls
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.
THE NETHERLANDS
License Requirements
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 a number 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.
Transit Controls
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.
Financial Controls
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.
Shipping Controls
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.
NORWAY
License Requirements
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.
Transit Controls
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.
Financial Controls
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.
Shipping Controls
The Norwegian Foreign Office announced publicly in April 1953 that the Norwegian war risk insurance group had refused to insure Norwegian vessels delivering 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
License Requirements
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.
Transit Controls
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.
Financial Controls
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.
Shipping Controls
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.
PORTUGAL
License Requirements
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.
Transit Controls
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.
SINGAPORE
Licensing Requirements
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.