MEMO FOR RECORD: (SCAPIN - 2070)
FEP/BWA/sh
31 December 1949
1. The following memoranda were issued by General Headquarters, Supreme Commander for the Allied Powers to the Japanese Government on the dates indicated in connection with control of foreign exchange and foreign trade:
a. AG 091.3 (22 Sep 45) ESS, SCAPIN 44, 22 September 1945, subject: Controls over Exports and Imports of Gold, Silver, Securities and Financial Transactions.
b. AG 130 (22 Sep 45) ESS, SCAPIN 45, 22 September 1945, subject: Control of Financial Transactions.
c. AG 091.31 (9 Oct 45) ESS, SCAPIN 110, 9 October 1945, subject: Import of Essential Commodities.
d. AG 160 (30 Oct 45) ESS/FI, SCAPIN 211, 20 October 1945, subject: Contracts by Persons in Japan with Foreign Concerns.
e. AG 091.31 (10 May 45) ESS/IE, SCAPIN 943, 10 May 1945, subject: Reports Relative to Import-Export Commodities:
f. AG 091.31 (9 Aug 48) ESS/FTC, SCAPIN 1926/1, 19 November 1948 subject: Return from Abroad of Commercial Quantities of Manufactured Articles for Repair and Return to Owner.
g. AG 091.31 (9 Mar 49) ESS/FTC, SCAPIN 1982, 9 March 1949, subject: Import Procedure.
2. The overall purposes of the memoranda referenced in a., b., and d. of paragraph 1 above were to protect and preserve the foreign exchange assets possessed by and available to the Japanese Government and its nationals and to prevent the flight of capital from Japan. The memoranda in c., e., f. and g. of paragraph 1 pertain to certain procedural aspects of imports into Japan.
3. The Foreign Exchange and Foreign Trade Control Law, Law No. 228 of 1949, was enacted by the Japanese Diet on 30 November 1949 and became effective 1 December 1949, as to certain portions thereof by the issuance of orders, ordinances and regulations under the law primarily affecting exports and related exchange transactions. Additional sections of the law, pertaining primarily to imports and related exchange payments become effective 1 January 1950 by issuance of additional orders, ordinances and regulations. The law and the orders, ordinances and regulations thereunder were all approved by GHQ, SCAP.
4. It is considered that law and the orders, ordinances and regulations issued thereunder constitute sufficient safeguards for the purposes authorized by memorandum to the Japanese Government of agencies thereof.
5. In accordance with the policy of placing responsibility for commercial operations upon the Japanese Government, under principles of free enterprise, the present SCAPIN instructs the Japanese Government that, effective from the date of the SCAPIN, it will supervise and authorize the import of goods into Japan in accordance with the provisions of the Foreign Exchange and Foreign Trade Control Law.
6. In order to permit overall control and surveillance by SCAP of the limited foreign exchange currently available to Japan, approval by SCAP is required for
a. Trade plans and foreign exchange budgets approved by the Ministerial Council prior to their implementation by the Japanese Government;
b. All changes in the basic rate of exchange;
c. The designation of currencies to be authorized for foreign exchange purposes;
d. Measures pertaining to the manner or degree of concentration of foreign exchange;
e. The export or import of gold, silver or other precious metals;
f. Any other matters which may be later designated by GHQ, SCAP in order to exervise proper control and surveillance over foreign exchange.
7. Approval by SCAP prior to initiation of negotiations for procurement by agencies of the Japanese Government of imports for Japanese Government account is considered necessary to ensure minimum governmental activity in foreign trade and to avoid criticism which may arise from unnecessary or improper activities of the Japanese Government in foreign trade.
8. Property or cargo owned by the occupation forces or agencies thereof, cargo derived from American Aid programs, and cargo reimbursed in part or whole from American Aid programs or for which transportation has been paid from such programs is defined not to be subject to the provisions of the Foreign Exchange and Foreign Trade Control Law unless specifically stipulated by SCAP. Importation of such cargo will continue to be governed by existing instructions in connection therewith.
9. Prior approval of SCAP is also required for transactions relative to property which is within the jurisdiction of the Civil Property Custodian by reason of the existence therein of the interest of a non-Japanese national on or since 7 December 1941, with the exception of transactions which have already been authorized by memorandum to the Japanese Government or agencies thereof.
10. Direct communication between appropriate agencies of the Japanese Government and GHQ, SCAP, is authorized in order to facilitate settlement of operational problems and procedures arising pursuant to this SCAPIN.
11. Concurrences: ESS/CON ESS/PF
ESS/DF CPC
ESS/FEF ESS/BFE
B. W. Adams 26-8593
F. E. P.