Report, Annex 2 to Council of Foreign Ministers Report 3, Post Surrender Acquisitions in Germany

E. 0. 11652, Sec. 3(E) and 5(D) or (E) DECLASSIFIED of State letter, Aug. 9. 1973 By Dept. NLT- HC INARS Date Annex 2 to CFM 3 POST SURRENDER ACQUISITIONS IN GERMANY The Problem To establish uniform principles governing the acquisition of new interests in Germany; to review and set aside such previous acquisitions as are inappropriate; and to stop unilateral Soviet and French postes surrender acquisitions in Cermany. ARCHIVES "NATIONAL AND REOORDS Discussion of the Problen c SERVICE* A draft directive covering the various aspects of the problem on this subject was prepared for possible U.S. presentation at the Moscow meeting of the CFM. It was not fully presented, however. The Secretary in one of his statements at Moscow pointed out that the United States had not permitted the acquisition of new interests in its Zone. The general problem was also considered by the Coordinating Committee in connection with Economic Principles, and all four delegations agreed that Foreign- owned property in Germany should be subject to German Law and that Control Council approval should be required in the future for all acquisitions of property in Germany by foreign states or their nationals. The US, UK and French delegations took the position that the provisions should be retro- active to the surrender of Germany. The Soviet Delegation did not agree that the provision should apply "to past acquisition made in connection with reparations receipts". The French Delegation reserved its point of view regarding the future regime of Ruhr industries. Military Government laws in the British and American Zones in Germany have continued, since the last meeting of the Council of Foreign Ministers, to be applied so as to enforce a moratorium on new acquisitions in Germany by non-Germans. Although identical Military Government laws exist in the French Zone and the Fronch agreed in principle to a moratorium, both at the Council of Foreign Ministers and in the Allied Control Authority, the degree of actual enforcement by the French is not known. The United States proposal for quadripartite agreement on a moratorium, which was before the Allied