840.51 Frozen Credits/9026a: Airgram
The Secretary of State to the Ambassador in Argentina (Armour)
A–516. As the Embassy is aware, this Department and Treasury have been collaborating on an ad hoc freezing program for certain Argentine entities. The purposes of this program and kind of entities it should cover have been fully explained to the Ambassador and to other officers of the Embassy. The Treasury Department has, however, suggested the desirability of redelineating the functions of this program and the responsibilities of our missions in Argentina thereunder.
In general, entities which are not on the Proclaimed List and which fit within one of the following categories should be recommended or carefully considered for ad hoc freezing:
- (1)
- Individuals or enterprises which are believed to be engaging in financial, trade, or other operations on behalf of enemy (including Proclaimed List) interests.
- (2)
- Individuals or enterprises which are engaging in pro-Axis activities, but which, for political or other reasons, are not eligible for the Proclaimed List. In such cases the Embassy should consider and report on whether political considerations which preclude public listing also preclude ad hoc blocking.
- (3)
- Individuals or enterprises closely connected with Proclaimed List firms in cases in which accounts of such firms may be used for operations on behalf of Proclaimed List nationals. (Recommendations for ad hoc freezing in such cases should ordinarily be made concurrently with recommendations for Proclaimed List action.)
In addition, accounts in the United States may be subjected to ad hoc freezing where the beneficial ownership of such accounts is not clear and where there is reason to believe that such accounts may involve enemy interests or the interest of undesirables and where it appears desirable to prevent the use of those accounts pending clarification regarding the names and political activities of the real owners.
Accounts within the United States of persons blocked ad hoc may be blocked until such time as the interested parties demonstrate the absence of enemy interest therein and the desirability of unblocking such accounts.
Ad hoc freezing as applied to an individual or firm outside of the United States is instituted by designating such person a “special blocked national.” Banks, other financial institutions, shipping concerns, [Page 467] etc. which handle a substantial volume of business transactions for foreign accounts are advised of the names of persons designated as special blocked nationals. No payment or commercial or financial transaction in which any special blocked national has an interest may be effected except as authorized by a Foreign Funds Control license. A “special blocked national” is entitled to the privileges of general licenses, except that such person is not entitled to the privileges of any general license which by its terms is limited to a national or nationals of a country named therein, and, in addition, a “special blocked national” is not entitled to the privileges of General License No. 53. It is emphasized that ad hoc freezing should not be considered as a permanent alternative to the Proclaimed List and that the Embassy’s efforts should in general be directed to clearing up the status of persons, with a view either to including them on the Proclaimed List or to giving them a satisfactory rating and releasing them from United States controls. It is clear that such a course will not in every occasion be desirable, but it should be considered the general objective.
The Embassy and Consulates, in connection with their regular reports concerning undesirable activities, are requested to recommend ad hoc freezing action in such cases where it is deemed desirable.
Please transmit this to the Consulates.