Coll 28/65 ‘Persia. Perso-Soviet Commercial Relations.’ [‎214r] (428/482)

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of State for Foreign Affairs on the 14th April last. To date, no reply has been
received from the Persian Government, either to the memorandum in question
or to the Legation’s oral representations on the subject.
The Government of the United States has taken cognisance of the fact
^hat, with the exchange of ratifications on the 22nd June, 1932, the Perso-Soviet
Jonvention has now fully come into force. As the Persian Government has
previously been informed, my Government considers that the most-favoured
nation clause of the Provisional Agreement of the 14th May, 1928, between the
United States and Persia entitles American trade with Persia to privileges
equivalent to those accruing to Soviet trade under the Perso-Soviet Convention,
and, in my Government’s judgment, it does not appear that such privileges are
accorded to American trade under any of the provisions of the present trade
monopoly regulations of Persia. In particular, after a careful examination of
the recently amended foreign trade monopoly law, my Government is of the
opinion that the so-called bank guarantee plan incorporated in article 8 (/) (2) of
that law fails to afford American trade with Persia, if such was its intent,
facilities equivalent to those granted to Russian trade under the terms of the
Perso-Soviet Convention.
From the standpoint of the American exporter, my Government finds
especially burdensome the two essential requirements conditioning the issue of
import permits under the Persian trade monopoly law, which Soviet importers
in Persia are not required to fulfil, and which therefore appear to be of a nature
discriminatory against American trade with Persia : namely, the requirement
to export Persian goods before importing an equivalent amount of foreign goods;
and the requirement to sell to the Persian Government foreign exchange to
the value of such exports. Furthermore, it appears that, under the newly
amended trade monopoly law, an importer not wishing to avail himself of the
bank guarantee plan, may import goods only up to 95 per cent, of the value of his
export certificate, a stipulation not applied in the case of Soviet trade, and
therefore also discriminatory in fact against American trade with Persia. In
addition, mention may be made of the flexibility enjoyed by Soviet commerce in
the matter of balancing exports against imports, in contrast to the provisions of
article 8 (/) (2) above referred to, under which importers of American goods must
effect such a balance within six months, not from the date of actual importation,
but from the date of receiving an import permit.
My Government desires me to reiterate at this time its view that the
monopolisation and percentage allotment of import quotas in favour of Soviet
trade is incompatible with the most-favoured-nation principle, and that, to
the extent that this practice results in an adverse effect on American trade, it
regards such monopolisation and percentage allotment of quotas as constituting
additional discrimination against American trade with Persia. I am instructed
to add that an early expression of the Persian Government’s views in the above
matters would be appreciated.
Accept, &c.
CHARLES C. HART.