694.0031/2–1848: Circular Airgram
The Secretary of State to Diplomatic and Consular Officers
Washington, February 18, 1948—8:10 a. m.
References are Department’s Circular Airgrams Reopening of Private Trade with Japan, July 22, 19471 and Amendment to same, September 4, 1947,2 and SCAP Circular 8, 30 August 1946, transmitted under cover Foreign Service Serial 667, Jan 17, 1947.3 All regulations and practices outlined in references above stand with exception of following:
- 1.
- National quota restrictions on number of commercial entrants into Japan now abolished. Governments may sponsor as many traders as they desire, although, except in case of banks, insurance, shipping, and similar service companies, only two representatives from one firm will be permitted in Japan at a time.
- 2.
- Entry permits valid for 45 days after issuance in Tokyo, henceforth will permit each commercial entrant to stay in Japan for 60 days. Extensions may not be granted where trader is using hotel and other logistic facilities desired by waiting applicants. However, if entrant [Page 949] can supply his own logistic support he may be permitted to stay indefinitely as “semi-permanent” resident and secure entry permits for his dependents and clerical assistants.
- 3.
- Applicants wishing to sell to and buy from Japan and those wishing to regain & operate prewar properties or examine prospects for investment in Japan contributing to rehabilitation of Japan will receive equal consideration for entry permits. Commercial entrants may seek restoration of their properties, and may also exercise limited powers of attorney for others seeking such restoration.
- 4.
- Export and import contracts will continue to be made between trader and Boeki Cho, the Japanese Board of Trade. Contracts subject SCAP approval but SCAP is not party thereto. Dollars or other acceptable currencies will be medium of exchange. For your info, SCAP has recently reached agreement with UK whereby sterling may be accepted for Japanese exports within specific limitations.
- 5.
- Transactional mail is now permitted, though formal contracts by mail or wire must be concluded with Boeki Cho, not Japanese dealer with whom preliminaries are conducted; payment is made through commercial letters of credit in favor of Boeki Cho.
- 6.
- Japanese firms are not now permitted to appoint agents outside Japan, but foreign firms, subject to SCAP approval, may appoint Japanese agents within Japan.
- 7.
- SCAP will approve certain “link transactions,” arrangements whereby raw materials from abroad are processed in Japan, payment to be in form of part of finished product or in acceptable currency.
- 8.
- Cotton textiles, silk, and tea may now be bought by private traders in Japan, and list of available goods in airgram of July 22 has been substantially increased. Certain machinery and specialty items may be had on order. Only commodities on SCAP-approved import programs may be sold to Japan. Principal items on current program are: animal glue; asbestos; quebracho; borax; carbon black; coking coal; dyes and toners; dye intermediates; fats, oils, and waxes and materials from which they are derived; flint ball; crystalline graphite; gums, resins, and balsams; iron ore; pig iron; kaolin; natural lacquer; lead; manganese ore; mica; petroleum products; rosin; rubber (crude, scrap, latex); silicon steel sheets; soda ash; talc; tanning materials; tin plate; tungsten concentrate; tungsten and dumet wire; bristles; raw cotton, hides and skins; jute; ramie; rayon pulp; raw wool.
- 9.
- SCAP has announced that nations not having diplomatic representation in Japan may apply for permits either through U.S. Department of State or through the diplomatic mission representing their interests in Japan.
- 10.
- Suggest making above changes known to appropriate officials Government to which you are accredited and pointing out trade with [Page 950] Japan is consistent with objectives of occupation; and that Japan must export in order to become self-supporting.
Marshall