379. Telegram 93175 From the Department of State to the Embassy in Venezuela1
93175. Subject: Discussion of New Economic Nationalism Measures with Venezuelan Ambassador. Ref: A. State 90161; B. Caracas 3961.
1. Deputy Assistant Secretary Shlaudeman and other appropriate Department officers today received Venezuelan Ambassador Aguilar accompanied by Felix Rossi, Minister Counselor for Petroleum Affairs.
2. Shlaudeman referred to President Perez’ speech of April 29, recognized importance of that national address and noted great attention it had received in Venezuela and abroad. He said that exact import of speech obviously remained to be defined but that it appeared to have very significant implications for Foreign capital investment in Venezuela. In view of these, and without prejudging course of future action taken to implement President’s speech, Shlaudeman said that predominance of US business interests among some of categories likely to be affected suggested desirability of exchange of views at this time.
3. Shlaudeman noted public interpretation that nationalization of some U.S. investments is involved and said that on this basis he wished restate USG position on such matters. He emphasized that while USG does not question sovereign right to nationalize, provided process is for public purpose and neither arbitrary nor discriminatory, it does expect compliance with international law in terms of prompt, adequate, [Page 1008] and effective compensation. He added that we wanted to be sure there was no misunderstanding on that point.
4. Going on from this point, Shlaudeman said USG attaches great importance to sound, positive, constructive relationship with Venezuela and hopes that implementation of President Perez’ policies may be carried out in manner consistent with these aspirations. USG can understand domestic factors which may have shaped broad outline of President Perez’ speech, although we may not agree with aspects affecting foreign investment. But USG does trust that as GOV moves forward with measures affecting foreign investment in Venezuela this will be done in a manner fully consistent with good relationship which we seek. Toward this end, Shlaudeman said we wish GOV to know that USG looks forward to a constructive dialogue on these matters as the GOV moves ahead in its program.
5. Ambassador Aguilar expressed appreciation and understanding for Shlaudeman’s words and said that he himself was not yet fully in position to comment substantively upon President Perez’ remarks. At same time, he wished to make two points. First of these was that Venezuela has democratic government based upon freely expressed will of the people and conducted in accordance with provisions set forth in Venezuelan constitution. This assures, he said, that implementation of President’s words will involve due process in accordance with constitution. Secondly, Ambassador Aguilar said that public pronouncements by President Perez since his election and highly positive tone of FonMin Schacht’s discussion with Secretary Kissinger have clearly demonstrated friendly and positive attitude of GOV toward United States. He felt sure that this in itself would contribute to constructive implementation in which Shlaudeman had expressed interest. In closing his reply, Ambassador Aguilar added that he felt GOV would certainly favor dialogue of type suggested.
6. In balance of discussion, brief reference was made to interrelationship of these matters with Venezuelan membership in Andean Pact, fact that some other members of pact have already faced up to implementation of Pact’s provisions in a constructive manner, and to mutual desirability from standpoint of both USG and GOV of contributing through meaningful dialogue to anticipating and forestalling erroneous and exaggerated treatment of entire matter in terms of public, press, and other pertinent attitudes.
7. Conversation closed on note that Ambassador would be reporting to his government and would be in further contact thereafter.
8. MemCon will be pouched and further instructions provided septel.
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Summary: Shlaudeman informed Aguilar that the U.S. Government expected prompt, adequate, and effective compensation for the expropriation of U.S. assets in Venezuela. Aguilar assured Shlaudeman that Venezuela would implement any nationalization in accordance with its constitution.
Source: National Archives, RG 59, Central Foreign Policy File, [no film number]. Confidential; Immediate. Drafted by Devine; cleared by Forester, Brookins, and Ganz; approved by Shlaudeman. Telegram 90161 is discussed in the source note to Document 378. Telegram 3961 from the Embassy in Venezuela, May 6, reported on Venezuela’s new economic nationalism measures. (National Archives, RG 59, Central Foreign Policy FIle, D740108–1006)
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