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Committee on Foreign Investment in the U.S. (1)
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Committee on Foreign Investment in the U.S. (1)
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The original documents are located in Box 115, folder "Committee on Foreign Investment
in the U.S. (1)" of the L. William Seidman Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Some items in this folder were not digitized because it contains copyrighted
materials. Please contact the Gerald R. Ford Presidential Library for access to
these materials.
AGENDA
Meeting of
Committee on Foreign Investment
in the United States
May 20, 1975
2:30 p.m.
Treasury Department, Room 4426
1.
Proposed press announcement of formation
of Committee
2.
Advance Consultations
a. Progress Report
b. Proposed Cable to U.S. Embassies
3.
Organization and Staffing of Office on
Foreign Investment in the United States
GERALD FORD LIBRARY
JUN 4 REC'D
Department
to:
The Committee on Foreign of the Treasury
Investment in the United Statesce of the
Assistant Secretary for
June 4, 197 International Affairs
room.
date.
Office of International
Investment
For your information.
James A. Griffin,
Secretary
FORD & LIBRARY GERALD
room 5100
ext. 2386
5794
May 28, 1975
SUMMARY OF MINUTES
jus
First Meeting of
Committee on Foreign Investment
in the United States
May 20, 1975
2:30 P.M.
Treasury Department, Room 4426
Representatives:
Treasury Department
Chairman - Jack F. Bennett, Under Secretary
Gerald Parsky, Assistant Secretary
James A. Griffin
William Witherell
Allen E. Clapp
Jerry Nisenson
Dennis O'Connell
Department of State
Paul H. Boeker, Deputy Assistant Secretary
Richard J. Smith
Steve Bond
Department of Defense
Roger E. Shields, Deputy Assistant Secretary
Department of Commerce
John K. Tabor, Under Secretary
Lawrence Fox, Deputy Assistant Secretary
Stanley Katz
CIEP
John Niehuss, Assistant Director
GERALD LIBRARY ? FORD
OMB
Edward Sanders, Deputy Associate Director
John Huhs
- 2 -
Membership
Under Secretary Bennett, who had been designated by
Secretary Simon as the Treasury Representative and
Chairman of the Committee, asked the other government
departments for the names of their designated representa-
tives.
They were as follows:
Department of State: Assistant Secretary
Thomas O. Enders
Department of Defense: Assistant Secretary
Robert Ellsworth
Department of Commerce: Under Secretary
John K. Tabor
Assistant to the President for Economic Affairs
L. William Siedman
Council on International Economic Policy:
Acting Executive Director John M. Dunn.
Press Release on the Formation of the Committee
The draft of a press release by the Treasury was
reviewed by the Committee. The CIEP representative stated
his belief that the press release should make clear that
private investors would not be required to give notice and
consult with the U.S. Government in advance of making
major investments but should note that the Committee would
review any such investments that it became aware of. The
consensus of the Committee was, however, that there should
be a presumption on the part of private investors that
they should consult on major investments. The press
release was re-drafted to specify the Secretary of the
Committee as a contact point for those private investors
wishing to initiate such consultations.
Cable to U.S. Embassies
The Committee discussed a draft cable to U.S.
Embassies on the new administrative procedures on foreign
investment in the United States. It agreed that advance
consultations with foreign governments should be applied
in a non-discriminatory fashion to all governments.
Mr. Parsky emphasized the necessity of being able to assure
- 3 -
Iran and other oil producer states that this was the case.
However, to meet a concern of the State Department, the
instructions in the cable were phrased so that it would
not appear that the United States was violating any of its
Friendship Commerce and Navigation treaties. The cable,
which was transmitted on May 23, instructed the Embassies
to transmit the press release and Executive Order to their
host governments.
Status of Advance Consultations
Mr. Parsky reported that he had already contacted a
number of OPEC governments (Saudi Arabia, Iran, Kuwait,
UAE, and Qatar) on the U.S. Government's desire for advance
consultations on their major investments in the U.S.
Saudi Arabia has agreed to discussions of major prospective
investments within the framework of the joint commission
and has stated that it is holding equity investment in
individual U.S. firms to a maximum of 5% of outstanding
stock. No other country has given a final reply to the
U.S. request, but several initial reactions were noted by
Mr. Parsky. Iran had expressed concern about provisions
for consultations being applied only to oil producer
governments, which it viewed as discriminatory and has sought
assurances that the procedures will apply to all governments.
Kuwait gave preliminary indications that it does not want
formal procedures for consultations.
Organization and Staffing of Office on Foreign Investment
The Committee reviewed a paper by the Commerce
Department on the staffing and organization of the Office
of Foreign Investment in the United States. Mr. Bennett
commented that the office should bring to the attention of
the Committee any major investments of which the Committee
might not have been aware.
Individual Cases
LIBRARY GERALD FORD
Mr. Bennett felt that the Committee should have no
formal guidelines but should consider investments on a
case by case basis.
The Committee reviewed a letter from a member of the
Public Service Commission of the District of Columbia
to the Domestic Council asking for the U.S. Government's
views as to the appropriateness of a private placement of
first mortgage bonds and preferred stock by the Washington
Gas Company with a foreign (Kuwait) source. The Committee
agreed that Mr. Bennett should sign a letter to the
Commissioner stating that the Committee sees no reason
- 4 -
for this transaction to be a matter of concern for the
Federal Government.
Future Meetings
Mr. Bennett indicated that meetings would not be
held on a regularly scheduled basis, but would be called
only as the need arose.
FORD & LIBRARY GERALD
MAY 21 1975
Dear Commissioner Stratton:
This is in response to your letter of April 29
to Mr. James Cannon of the Domestic Council concern-
ing possible efforts by the Washington Gas Company
to seek private placement of first mortgage bonds
and preferred stock with a foreign source. In your
letter you requested the U.S. Government's views as
to the appropriateness of the proposed transaction.
A new high-level Committee has been formed
within the Executive Branch to review proposals for
investments which, in the judgment of the Committee,
might have major implications for U.S. national in-
terests. The Committee has been informed of the
proposed investment and, on the basis of the facts
presented to it, sees no reason for this transaction
to be a matter for concern to the Federal Government.
Sincerely yours,
(Signed) Jack F. Bennett
Jack F. Bennett
Chairman
Committee on Foreign
Investment in the
United States
The Monorable
William R. Stratton
Commissioner
Public Service Commission
OI the District of Columbia
1625 I Street, N.W. Suite 204
GEAAL FORD TERRARY
Washington, D.C. 20006
OASIA/OII/JGriffin:lj:May 21, 1975
Department of the TREASURY
NEWS
WASHINGTON, D.C. 20220
TELEPHONE W04-2041
AMPARTMENT OF THE TREASURY
THE
1789
FOR IMMEDIATE RELEASE
May 21, 1975
FORMATION OF COMMITTEE ON FOREIGN INVESTMENT IN
THE UNITED STATES
Pursuant to Executive Order 11858 signed by President
Ford on May 7, 1975, Secretary of the Treasury William E.
Simon has designated Under Secretary For Monetary Affairs
Jack F. Bennett to be chairman of the new interagency
Committee on Foreign Investment in the United States. The
designated representatives of other Government departments
and agencies are: Thomas O. Enders, Assistant Secretary
for Economic and Business Affairs, Department of State;
Robert Ellsworth, Assistant Secretary for International
Security Affairs, Department of Defense; John K. Tabor,
Under Secretary, Department of Commerce; the Assistant
to the President for Economic Affairs, L. William
Seidman; and John M. Dunn, Acting Executive Director of the
Council on International Economic Policy.
The major tasks of the Committee are to assess general
trends and significant developments in foreign investment
and to review investments in the United States which, in the
judgment of the Committee, might have major implications for
the U.S. national interests. The Committee is also respon-
sible for considering proposals for such new legislation or
additional administrative action as may be appropriate. The
Committee will, as appropriate, seek the advice of other
parts of the Government.
The Committee held its first meeting on May 20. The
Committee reviewed procedures being developed for advance
consultations with foreign governments on their major
prospective investments in this country. It is anticipated
that consultations with foreign governments will take
place through diplomatic channels. Private investors wish-
ing to consult on major foreign investments in the United
States should contact the Secretary of the Committee on
Foreign Investment in the United States, Room 5100, Main
Treasury, Washington, D.C. 20220 (telephone number 964-2386).
WS-315
GERALD
LIBRARY
- 2 -
The Committee also reviewed the plans for the new
Office on Foreign Investment in the United States being
established by the Secretary of Commerce in order to
carry out his functions under Executive Order 11858. The
Office will be located in the Domestic and International
Business Administration and will be headed by Deputy
Assistant Secretary Lawrence A. Fox. The new Office will
obtain, consolidate, and analyze information on foreign
investment in this country and will also submit to the
Committee reports, analyses, data, and recommendations
relating to foreign investment in the United States,
including recommendations as to how information on such
investment can be kept current.
o0o
May 28, 1975
SUMMARY OF MINUTES
First Meeting of
Department
to The Committee on Foreign of the Treasury
Investment in the United Statesce of the
Assistant Secretary for
June 4, 197 International Affairs
room.
date.
Office of International
Investment
Represe
Treasur
Chai
For your information.
Departi
Depart
James A. Griffin,
y
Secretary
Depart
GERALD LIBRARY FORD
CIEP
OMB
room 5100
ext. 2386
5794
OFFICIAL USE ONLY
117 REC'D
ARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
SECRETARY
June 26, 1975
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN INVESTMENT
IN THE UNITED STATES
SUBJ: Draft Chapter on Foreign Investment in Energy
Industry of IEA Proposed Program
At its meeting on June 30-July 2, the Governing Board
of the IEA will have before it a proposed program which has
been prepared by the Standing Group on Long-Term Cooperation.
Attached is a draft chapter of the long-term program which
was approved by the Energy Resources Council on June 26
and which is the basis for negotiating instructions for the
U.S. delegation to the Governing Board meeting.
Since this chapter involves certain commitments by the
participating countries with regard to their policies on in-
ward investment in all aspects of the energy cycle, it has
been brought to my attention for possible review by the
Committee on Foreign Investment in the United States.
I have carefully reviewed this chapter from the stand-
point of consistency with U.S. policy on inward investment,
and in my view it is consistent with our current policy.
Accordingly, I plan to so advise the Energy Resources Council.
However, if any member of the Committee on Foreign Investment
in the United States feels that the Committee should meet on
this matter, I will convene a meeting for the afternoon of
June 27 or the morning of June 28 to discuss it. Therefore,
if any member of the Committee feels that a meeting is
necessary, please inform me as soon as possible so that
arrangements can be made.
Charbhooz
Charles Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
QEILITY FORD LIBRARY
Attachment
OFFICIAL USE ONLY
JUN 27 REC'D
OF
DEPARTMENT THE 1789 TREASURY
THE
THE DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
gws
ASSISTANT SECRETARY
June 26, 1975
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN INVESTMENT
IN THE UNITED STATES
SUBJ: Draft Chapter on Foreign Investment in Energy
Industry of IEA Proposed Program
At its meeting on June 30-July 2, the Governing Board
of the IEA will have before it a proposed program which has
been prepared by the Standing Group on Long-Term Cooperation.
Attached is a draft chapter of the long-term program which
was approved by the Energy Resources Council on June 26
and which is the basis for negotiating instructions for the
U.S. delegation to the Governing Board meeting.
Since this chapter involves certain commitments by the
participating countries with regard to their policies on in-
ward investment in all aspects of the energy cycle, it has
been brought to my attention for possible review by the
Committee on Foreign Investment in the United States.
I have carefully reviewed this chapter from the stand-
point of consistency with U.S. policy on inward investment,
and in my view it is consistent with our current policy.
Accordingly, I plan to so advise the Energy Resources Council.
However, if any member of the Committee on Foreign Investment
in the United States feels that the Committee should meet on
this matter, I will convene a meeting for the afternoon of
June 27 or the morning of June 28 to discuss it. Therefore,
if any member of the Committee feels that a meeting is
necessary, please inform me as soon as possible so that
arrangements can be made.
Charles Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
GERAL FORD LIBRARY
Attachment
CHAPTER V
LEGISLATIVE AND ADMINISTRATIVE OBSTACLES
AND DISCRIMINATORY PRACTICES
A. Legislative and Administrative Obstacles
Without prejudice to the rights of each Participating
Country to promote the safety of its citizens, to protect
its environment and to exercise control over its natural
resources and national economy, the Participating Countries
agree to work towards the identification and removal of
unreasonable legislative and administrative obstacles to
the achievement of the overall objectives of the Program.
Participating Countries undertake to inform the
Agency of new legislative and administrative obstacles
as soon as practicable.
Each Participating Country shall periodically submit
lists of existing legislative and administrative obstacles
to the Agency in succinct and comparable form.
B. Discriminatory Practices
1. Participating Countries recognize the desirability
in light of the objectives of the Program of not affording
less favorable treatment to nationals from other Participating
Countries than that afforded to nationals of their own
countries with respect to all stages of the energy cycle,
##
to the extent permitted by their law.
GERALD FORD LIDRARY
2. Each Participating Country shall take account of the
principle set out in (1) above:
a) In the application of existing legislative and
administrative regulations;
b) With respect to the introduction of new legis-
lation, administrative regulations or practices;
3. The obligation set out in (2) above shall apply in
particular to:
a) Restrictions or fiscal burdens on energy
investments by other Participating Countries and on the
purchase and sale of energy and equipment related to energy
production and transportation between Participating Countries;
b) The enforcement of rules of competition, with
the aim of preventing enterprises, public or private, from
maintaining discriminatory practices against the nationals
of other Participating Countries.
C. Periodic Review
As part of the periodic overall review under the
Program, the Agency shall examine the efforts of each
Participating Country with respect to this chapter.
OROA GREATO LIBRARY
JUL 7
OF
LIMITED OFFICIAL USE
STATE THE TREASURY
3HE
DEPARTMENT OF THE TREASURY
1789
WASHINGTON, D.C. 20220
JUL 3 1975
MEMORANDUM FOR MEMBERS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
Subject: Rumanian Government Investment in U.S. Coal Mine
Attached for your information are the following:
(1) An incoming telegram from the U.S. Embassy in
Rumania (Bucharest 2933) reporting that the Government of
Rumania has been negotiating with a U.S. firm, the Island
Creek Coal Company, for a joint venture to open a coal mine
in Virginia;
(2) The text of an outgoing cable to the Embassy in-
structing them to remind the Rumanian Government of our
expectation that it will consult with us on its proposed
investments here;
(3) A second incoming cable (Bucharest 2947) indicating
that the GOR and Island Creek signed an "umbrella" agreement
on July 1st;
(4) Copies of articles on the transaction which appeared
in the morning newspapers; and
(5) A copy of guidance that we prepared for use by
Treasury Department officials in responding to press inquries.
As the investment is by a foreign government and is of
a significant character, I shall call a meeting of the Committee
to discuss it as soon as we have additional details.
Charles A. Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
LIBRARY
LIMITED OFFICIAL USE
7-7
JUL 7
OF
CILIMITED OFFICIAL USE
THE
THE 1789 TREASURY
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
gros
JUL 3 1975
MEMORANDUM FOR MEMBERS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
Subject: Rumanian Government Investment in U.S. Coal Mine
Attached for your information are the following:
(1) An incoming telegram from the U.S. Embassy in
Rumania (Bucharest 2933) reporting that the Government of
Rumania has been negotiating with a U.S. firm, the Island
Creek Coal Company, for a joint venture to open a coal mine
in Virginia;
(2) The text of an outgoing cable to the Embassy in-
structing them to remind the Rumanian Government of our
expectation that it will consult with us on its proposed
investments here;
(3) A second incoming cable (Bucharest 2947) indicating
that the GOR and Island Creek signed an "umbrella" agreement
on July 1st;
(4) Copies of articles on the transaction which appeared
in the morning newspapers; and
(5) A copy of guidance that we prepared for use by
Treasury Department officials in responding to press inquries.
As the investment is by a foreign government and is of
a significant character, I shall call a meeting of the Committee
to discuss it as soon as we have additional details.
Charlelof Charles A. Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
GERALD LEBRARY ? FORD
LIMITED OFFICIAL USE
TREASURY
MESSAGE
THE
RECEIVED AT
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PAGE 01 BUCHAR 02933 301730Z
53
ACTION EUR-12
INFO OCT-01 ISO-00 COME-00 EB-07 FTC-01 CIAE-00 INR-07
NSAE-03 SP-02 AID-05 NSC-05 CIEP-01 TRSE-00 SS-15
STR-04 OMB-01 CEA-01 L-03 H-02 PA-01 PRS-01 USIA-06
OPIC-03 INT-05 FEAE-00 EURE-00 /083 W
128389
P R 3015232 JUN 75
FM AMEMBASSY BUCHAREST
TO SECSTATE WASHDC PRIORITY 3331
INFO AMEMBASSY BERLIN
AMEMBASSY BUDAPEST
JEMBASSY MOSCOW 2460
Z
AMEMBASSY PRAGUE
AMEMBASSY SOFIA
AMEMBASSY WARSAW
AMEMBASSY VIENNA
RM, 2049-CMT BRANCH BLDG.
TELECOHMUNICATIONS
JUN 30 3 03 PM '75
TREASURY
LIMITED OFFICIAL USE BUCHAREST 2933
E.O. 11652: N/A
TAGS: EINV, EMIN, RO, US
SUBJECT: GOR/ISLAND CREEK JOINT VENTURE IN U.S. COAL MINE
REF: (A) STATE 131714; (B) STATE 121276
GERALD ? FORD
1. SUMMARY: GOR AND ISLAND CREEK COAL CO. ON THRESHOLD OF
SIGNING
A FRAMEWORK AGREEMENT FOR $150 MILLION JOINT VENTURE TO
OPEN NEW VIRGINIA COAL MINE. GOR WOULD INVEST $50 MILLION
FOR ONE-THIRD INTEREST FOR WHICH IT WOULD RECEIVE ONE-THIRD
OF MINE'S PRODUCTION OF COKING COAL. WE HAVE NOT BEEN
APPROACHED BY GOR TO REQUEST CONSULTATIONS UNDER TERS OF
ADMINISTRATIVE PROCEDURES REGARDING FOREIGN INVESTMENT AND
THEREFORE SOLICIT DEPARTMENT'S GUIDANCE WHETHER SUCH CONSULTATIONS
BELIEVED NECESSARY. END SUMMARY.
LIMITED OFFICIAL USE
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GERALD FORD LIBRARY
2. ISLAND CREEK TEAM, LED BY FORMER SENATOR GORE, HAS BEEN
IN BUCAREST PAST WEEK NEGOTIATIO $150 MILLION JOINT VENTURE
WITH GOR FOR COAL MINE TO BE OPENED ON ISLAND CREEK-OWNED SITE
BETWEEN ROANOKE AND BRISTOL, VIRGINIA UP TO THIS POINT NEGOTIATIONS
HAVE PROCEEDED RATHER FASTER THAN U.S. FIRM FIRST CALCULATED.
AND IT IS NOW ANTICIPATED THAT FRAMEWORK AGREEMENT CAN BE SIGNED
BEFORE GORE'S DEPARTURE TOMORROW.
3. AS CURRENTLY AGREED, EQUITY SHARES IN JOINT VENTURE WOULD
BE SPLIT TWO-THIRDS FOR ISLAND CREEK, ONE-THIRD FOR GOR. ISLAND
CREEK'S CONTRIBUTION WOULD BE IN FORM OF MINING
PROPERTY WHICH IT VALUES AT 100 MILLION. FOR ITS
SHARE GOR WOULD PUT UP 30 MILLION IN CASH AND LETTERS OF
CREDIT SPREAD OVER THREE YEARS FOR EQUIPMENT REQUIRED TO GETOW
MINE IN
OPERATION.
4. ISLAND CREEK WOULD ACTUALLY OPERATE MINE UNDER MANAGEMENT
CONTRACT. TWO PARTNERSH OULD SPLIT RIGHTS TO COAL PRODUCTION
IN ACCORDANCE WITH EQUITY RATIO. IN ADDITION, GOR WOULD HAVE
OPTION TO PURCHASE HALF OF ISLAND CREEK'S SHARE OF OUTPUT AT
MARKET PRICE. WITH RESERVES ESTIMATED AI 40 MILLION TONS, GORE
ESTIMATES POTENTIAL COAL EXPORTS TO GOR FROM THIS MINE TO BE IN
EXCESS OF $1 BILLION OVER MINE'S EXPECTED 25-30 YEAR LIFE.
5. UMBRELLA AGREEMENT WOULD PROVIDE GOR SPECIFIED PERIOD OF
TIME (60 OR 90 DAYS) TO GIVE ITS APPROVAL TO JOINT VENTURE. IN
INTERIM ISLAND CREEK AND GOR WILL CONTINUE
TO WORK ON CONTRACTUAL
AGREEMENT, DRAFIS OF WHICH ARE NOW FAIRLY FAR ADVANCED FOLLOWING
LINE BY LINE REVIEW. FINAL SIGNATURE EXPECTED BY GORE ABOUT
JANUARY. ISLAND CREEK WILL, HOWEVER, BEGIN CERTAIN PREPARATORY WORK
(SITE CLEARANCE) IMMEDIATELY AFTER UMBRELLA AGREEMENT.
SIGNED.
6. JOINT VENTURE HAS REPORTEDLY BEEN NEGOTIATED IN ATMOSPHERE
FREE OF CUSTOMARY GOR CONDITIONS, WHICH APPEARS TO BE TESTIMONY
TO ROMANIAN DETERMINATION TO SECURE LONRYATERM SMLRCES OF COCONG
COAL. GOR HAS EXERCISED UNACCUSTOMED RESTRAINT IN DISCUSSIONS
OF COUNTER-PURCHASES. LIST WILL BE PROVIDED TO ISLAND CREEK
LIMITED OFFICIAL USE
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PAGE 03 BUCHAR 02933 331730Z
AND PARENT FIRM OCCIDENTAL OF COMMODITIES WHICH GOR EXPECTS
TO HAVE IN EXCESS (UREA MENTIONED EXPLICITLY).
REPORTEDLY, HOWEVER, NO EFFORT HAS BEEN MADE TO INSERT
COUNTER-PURCHASE PROVISION INTO AGREEMENT. MOREOVER, THERE HAS
BEEN NO GOR LINKAGE OF APPROVAL OF THIS INVESTMENT WITH
CONGRESSIONAL ACCEPTANCE OF TRADE AGREEMENT.
7. ONLY MAJOR PROBLEM RELATED BY ISLAND CREEK TEAM IS QUESTION
OF LEGAL INCORPORATION. ROMANIAN NEGOTIATORS SIMPLY UNABLE TO
FATHOM U.S. CONTRACT LAW. THEY HAVE ASKED AT VARIOUS TIMES TO
RECEIVE COPIES OF VIRGINIA CONTRACT LAW AND ENTIRE INTERNAL
REVENUE CODE. ISLAND CREEK, WHILE PATIENTLY. ANSWERING QUESTIONS,
HAS SUGGESTED ROMANIANS ENGAGE U.S. COUNSEL. GOR APPARENTLY
CHARY, HOWEVER, ABOUT INCURRING ADDITIONAL EXPENSE.
8. WE HAVE BROUGHT TO ATTENTION OF ISLAND CREEK GENERAL COUNSEL
NEW ADMINISTRATIVE PROCEDURES ON FOREIGN INVESTMENT PREVIOUSLY
DISTRIBUTED TO APPROPRIATE GOR MINISTRIES. GENERAL COUNSEL,
WHO STATED HE UNAWARE OF THESE PROVISIONS, INDICATED HE KNEW OF
NO GOR INTENTION TO REQUEST CONSULTATIONS ON PROPOSED INVESTMENT.
9. ON QUESTION OF LIKELY DOMESTIC REACTION TO JOINT VENTURE
AMBASSADOR AEWED GOR WHETHER GORE FORESAW CONGRESSIONAL OPPOSITION.
GORE RESPONDED THAT HE HAD NO REASON TO EXPECT ANY STRONG ADVERSE
REACTION, ALTHOUGH HE COULD IMAGINE THAT GOR INVESTMENT MIGHT
GIVE RISE TO FEW SPEECHES ON FLOOR OF CONGRESS.
10. ACTION REQUESTED. IN VIEW OF SPECIAL FACTORS RELATIVE TO
THIS FOREIGN INVESTMENT PROPOSAL--FOREIGN GOVERNMENT INVOLVED BEING
SOCIALIST AND INVESTMENT BEING MADE TO SUPPORT EXPORT OF NATURAL
RESOURCE--EMBASSY ASKS WHETHER THIS IS ONE OF "FEW
EXCEPTIONAL CASES" (PARA 3, STATE 121276). WHICH
COMMITTEE ON FOREIGN INVESTMENT WOULD WISH TO REVIEW. IN EVENT
COMMITTEE WILL CONSIDER THIS PROPOSAL, WE REQUEST INDICATION
OF PROBABLE TIMING OF DETERMINATION OF OUR ATTITUDE TOWARD
CONSULTATIONS. IF CONSULTATIONS WITH GOR ARE DEEMED APPROPRIATE,
WE DEEM IT EXTREMELY DESIRABLE THAT GOR BE INFORMED AS SOON
AS POSSIBLE.
BARNES
LIMITED OFFICIAL USE
LISAARY GERALD 8 FORD
LIMITED OFFICIAL USE
DRAFT TELEGRAM
July 2, 1975
TO
: Amembassy Bucharest
11
SUBJ: GOR/Island Creek Joint Venture
REF : -(A) Bucharest 2933; (B) State 121276
1. Department appreciates Embassy report on proposed
Island Creek joint venture.
2. Embassy's report is being brought to the attention of
the interagency Committee on Foreign Investment.
3. As para 2, Ref. B, indicates USG expects foreign
governments to consult with us on their major prospective
investments in this country. Embassy should inform GOR
that their proposed investment should be subject to
such consultations. Embassy should call Treasury press
release of May 21, which refers to use of diplomatic chan-
nels, to GOR attention. We would be interested in GOR
views on manner they would like to proceed on consultations.
4. Any additional information on this project which
Embassy can supply as negotiations proceed will be appre-
ciated, and we will keep Embassy informed of developments
here.
LIMITED OFFICIAL USE
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OF
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ACTION EUR-12
INFO OCT-01 ISC-00 SP-02 AID-05 EB-07 NSC-05 CIEP-01
TRSE-00 SS-15 STR-04 OMB-01 CEA-01 CIAE-00 DODE-CO:
PM-03 H-02 INR-07 L-03 NSAE-00 PA-01 PRS-01 20
COME-00 FRB-03 FEA-01 INT-05 CES-03 FTC-C1 023163 1096
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R 011 4007 JUL 75
FM AMEMBASSY BUCHAREST
TC SECSTATE WASHDC 3338
BLDS
INFO AMEMBASSY BERLIN
AMEMBASSY BUDAPEST
AMEMBASSY MOSCOW
AMEMBASSY PRAGUE
AMEMBASSY SOFIA
AMEMBASSY WARSAW
AMEMBASSY VIENNA
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E.O. 11652: N/A
TAGS: EINV, EMIN, RO, US
SUBJECT: GOR/ISLAND CREEK JOINT VENTURE IN U.S. COAL MINE
REF: BUCHAREST 2933
ISLAND CREEK REPRESENTATIVE INFORMED EMBASSY THAT SENATOR GORE AND
ILIESCU OF MFT SIGNED UMBRELLA AGREEMENT TODAY.
BARNES
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GERALD ? LIBRARY FORD
Wall Street Journal
Journal of Commerce
(Thurs. July 3, 1975)
(Thurs. July 3, 1975)
ERCE, Thursday, July 3, 1975
Occidental
Occidental Sets
Signs Joint
A Coal Venture
Mining Pact
Journal of Commerce Special
With Rumania
LOS ANGELES - Occiden-
t ad Petroleum Corp. an-
nounced Wednesday that a
preliminary agreement pro-
Oil Firm to Develop Virginia
viding for a joint venture to
develop a deep mine to pro-
Mine, Rumania to Invest
duce more than a million tons
per year of high-grade coal in
$50 Million Under Plan
Buchanan County, Virginia,
was signed Tuesday in Buch-
arest, Romania.
By a WALL STREET JOURNAL Staff Reporter
The agreement was signed
LOS ANGELES-In what was described
by former U.S. Sen. Albert
as a "capitalist business investment," Ru-
Gore, now/ chairman of the
mania and Occidental Petroleum Corp.
board of Island Creek Coal
signed a preliminary agreement to develop
The New York Times - July 3, 1975
U.S. and Rumania in Coal Accord
The Occidental Petroleum Corporation announced yes-
terday that it had reached a preliminary agreement with the
Government of Rumania on a $50-million joint venture coal
mining project for a one-million ton a year deep mine in
Bupchanan County, Va.
FORD LIBRARY & GERALD
QUESTION - What is the U.S. Government position on the
preliminary agreement signed between Occidental
Petroleum Corporation and the Rumanian Govern-
:
ment on the development of a coal mine in
Virginia?
ANSWER
- We understand that the Rumanian Government and
Occidental Petroleum Corporation have concluded
a preliminary agreement which is subject to
formal approval by the parties involved within
sixty days. The U.S. Government has not been
involved thus far but we expect the Government
of Rumania to consult with us before finalizing
the transaction inasmuch as the proposed in-
vestment falls within the terms of reference
of the Committee on Foreign Investment in
the United States. Foreign governmental
investment of a significant character is involved.
FORD & LIBRARY GERALD
MELVILLE E. BLAKE, JR.
OII/OASIA - Ext. 5794
HOME PHONE 320-4713
July 3, 1975
OF
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DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
ASSISTANT SECRETARY
July 14, 1975
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN INVESTMENT
IN THE UNITED STATES
SUBJECT: Meeting of Committee on Foreign Investment
July 18, 1975
Several developments indicate the desirability of
holding an early meeting of the Committee on Foreign In-
vestment in the United States. I would be grateful,
therefore, if you or your representative could attend a
Committee meeting on July 18, 1975, at 3:00 p.m., in
Room 4426 of the Main Treasury Building.
The principal issue requiring discussion is the position
that the U.S. Government should take on foreign investment
in the energy sector as one aspect of our overall policy
toward foreign investment in the United States. The need to
define our policy arises because of the critical relation-
ship between investment in energy and the other aspects of
the program on long-term.cooperation that is being de-
veloped in the International Energy Agency. At the same
time, foreigners have indicated specific interest in
investing in the U.S. energy sources. The instant case is
the Rumanian Government/Island Creek preliminary agreement
on a joint venture in a U.S. coal mine.
The Committee should also review the arrangements
being made with foreign governments on their major prospec-
tive investments in the United States. Although foreign
governments have been advised that we expect them to engage
in advance consultations, the intent and mutual advantages
arising out of advance consultations may not be fully realized.
For example, the American Embassy at Bucharest indicates that
the Rumanian Government does not fully realize that we regard
the need to engage in advance consultations as resting with
foreign governments.
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As a separate matter, the Committee should take up a
private request that the Committee examine the effect of
an opinion issued by the Accounting Principles Board on the
amortization of goodwill on the competition between U.S.
and foreign firms seeking to acquire U.S. firms. It is
asserted that this opinion gives foreign investors a com-
petitive advantage over U.S. firms in making acquisition
offers.
Materials relating to the above subjects will be
distributed by midweek.
Charles A. Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
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DEPARTMENT OF THE TREASURY
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WASHINGTON, D.C. 20220
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN INVESTMENT
IN THE UNITED STATES
SUBJECT: Meeting of Committee on Foreign Investment
of July 18, 1975
Attached for your information are the following
materials for the Committee's meeting of July 18:
Rumanian Government Investment in U.S. Coal Mine
(1) An incoming cable from the U.S. Embassy in Rumania
(Bucharest 3183) reporting on the GOR's reaction to
our suggestion that it consult with us regarding its
proposed investment in a coal mine in Virginia.
(2) A copy of an earlier outgoing circular cable (State
121276) requesting all posts to inform their host
governments of the new U.S. arrangements with respect
to inward investment.
Effect of an Accounting Practice on Foreign Investment
in the United States
(1) A copy of a letter from Charls E. Walker, President
of Charls E. Walker Associates, to former Under
Secretary Bennett discussing an accounting practice
which he says results in foreign companies having an
advantage over U.S. companies in bidding for other
U.S. companies.
(2) A copy of a memorandum from Charls E. Walker on the
accounting ruling.
(3) A copy of a letter from me to SEC Chairman Garrett
transmitting Mr. Walker's letter requesting a
statement of the Commission's views on it.
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Other materials relating to the investment provisions
of the IEA program on long-term cooperation and the Rumanian
coal mine transaction have been distributed previously.
Additional papers may be sent to you in advance of
the meeting.
Charles A. Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
GERALD ? FORD
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THE
DEPARTMENT OF THE TREASURY
WASHINGTON. D.C. 20220
ASSISTANT SECRETARY
July 17, 1975
MEMORANDUM FOR MEMBERS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE U.S.
SUBJECT: Romanian Investment in a U.S. Coal Mine
In connection with the July 18 meeting of the
Committee, I thought it might be useful to summarize
the facts and report on a preliminary discussion of
the proposed Romanian investment which took place in
the July 11 meeting of the East-West Foreign Trade
Board.
The Issues
As Mr. Cooper's memorandum of July 14 indicated,
the principal issue for discussion is the position
that the U.S.G. should take on foreign investment in
the energy sector as one aspect of our overall policy
toward foreign investment in the United States. In
addition, there is the question of whether an invest-
ment by a foreign government of a nonmarket economy
country should be treated any differently than a foreign
investor from the private sector.
Proposed Investment
The framework agreement signed July 1 by the GOR
and the Island Creek Coal Co. (a subsidiary of Occidental
Petroleum) calls for a $150 million joint venture to
open a new Virginia coal mine. The GOR would invest
$50 million for a one-third interest for which it would
receive one-third of the mine's production of coking
coal. In addition, the GOR would have an option to
purchase half of Island Creek's share of the output at
FORD LIBRARY
the market price. With reserves estimated at 40 million
tons, Island Creek projects potential coal exports to
Romania from this mine to be in excess of $1 billion
over the mine's expected life of 25-30 years. The GOR
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DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
July 17, 1975
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN INVESTMENT
IN THE UNITED STATES
SUBJECT: Meeting of Commission on Foreign Investment
of July 18, 1975
Attached are two papers on aspects of the issue of
access by IEA investors to the U.S. energy sector, a
topic that will be discussed at tomorrow's meeting of the
Committee on Foreign Investment in the United States.
Charlebor
Charles A. Cooper
Acting Chairman
Committee on Foreign Investment
in the United States
Attachments: a/s
GERALD R FORD
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DEPARTMENT OF THE TREASURY
REASURY THE 1789
WASHINGTON, D.C. 20220
ASSISTANT SECRETARY
July 17, 1975
TO:
Members of the East-West Foreign
Trade Board
The Secretary of Labor
Members of the Working Group
SUBJECT: July 11 Meeting of the Board
Attached is a summary record of the meeting
of the Board on July 11.
If you feel the report is inaccurate in some
significant respect, please get in touch with
me, Bob Vastine, or Ed Rendall (184-2612).
Heard J. Pandy
Gerald L. Parsky
Attachment
CONFIDENTIAL
Determined to be Administrative. Marking
Date 8/4/82 By p
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DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
1789
ASSISTANT SECRETARY
July 16, 1975
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
Subject: Investment by IEA Countries in the U.S.
Energy Industry
Attached is a policy paper on the above subject which
I will be discussing at the International Energy Agency
(IEA). The paper is still in draft form and I would
appreciate any thoughts you might have on this subject.
We will be discussing this at the Committee meeting on
Friday.
Gerald L. Parsky
Attachment
ANVUSIT GERALD R. FORD
THE SECRETARY OF THE TREASURY
TREASURY
WASHINGTON 20220
AUG 11 1975
MEMORANDUM TO MEMBERS OF THE COMMITTEE ON FOREIGN
INVESTMENT IN THE UNITED STATES
SUBJECT: Designation of Edwin H. Yeo, III as
Chairman of the Committee
Before his departure from Washington,
Secretary Simon asked me to inform you that he has
designated Edwin H. Yeo, III to be Chairman of the
Committee on Foreign Investment in the United States
effective immediately upon his confirmation as
Under Secretary of the Treasury for Monetary Affairs,
succeeding Jack F. Bennett. Mr. Yeo was confirmed
by the Senate on August 1, 1975.
Stephen Gardner
Acting Secretary
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