Bocld:32276271.. Page 30 With U.S. dollar channels blocked, other, less desirable, avenues would remain open to Cuba for bank transfer of convertible currencies such as Sterling, Swiss francs, Canadian dollars, etc. If the British and Canadians could be persuaded to prohibit remit- tances in their currencies in behalf of Cuba, the latter's capability to move funds through banking channels would be further curtailed, and transfers in other curréncies, such as Swiss francs, would be relatively easy to detect and monitor. While it is unlikely that British and Canadian cooperation would be forthcoming in this degree, these countries could still make a valuable contribution to the campaign against Castro-Communist subversion by providing intelligence concerning major transactions in their currencies by Cuba. 4, Transfers by Diplomatic Personnel We know that convertible currencies have been carried to Latin American countries illegally by diplomatic representatives and couriers of both Cuba and the Bloc countries, under the protection of their diplomatic immunity. This form of transfer can be diminished through the rupture of diplomatic relations - with Cuba by those countries in Latin America which have not already taken such action. However, the diplomatic facilities of other Bloc countries would probably remain available to Cuba in some Latin American nations. 5. Transfers Through Trade Subterfuge An effective method of disguising transfers of funds for subversive purposes is to give such transfers the appearance of legitimate payments for items received in trade. In one technique, goods may be sent to a Cuban addressee by a subversive in the export-import business in a Latin American country bearing an erroneous invoice. A shipment having an actual value of $10,000 can be invoiced and paid for at $12,00Q,thus achieving a direct transfer of $2,000 from Cuba to the Latin American country whence the shipment originated. Such eee. 5
transfers of funds could be eliminated only by the interruption of all trade between Cuba ana other Latin American countries. And even if this were achieved, the same technique could be used, although at greater cost and with much more difficulty, to transfer Cuban. funds to Latin America via France, for example, through a third party French Communist import-export firm. Another commercial technique for transferring funds from Cuba directly to Latin America, through trade, is by means of uncompensated exports. As an example, a— Cuban source might send $5,000 worth of Cuban publica- tions to a leftist bookstore in Chile. The bookstore would not pay Cuba for the publication, but instead would use the proceeds of the sale for subversive pur- poses. This method also could be fully controlled only by an interruption of trade with Cuba, 6. Relative Importance of Transfer Methods : All of the above mechanisms are usable, and pro- bably all are employed now. However, since large sums can now be transferred readily through banking institutions, with small risk of loss or exposure, this method is considered to be the most significant and is deserving of the greatest attention in an action program. Next in importance probably is the transfer of currencies by diplomatic personnel - a procedure involving small risk of loss or exposure... Transfers by Legal or illegal travellers are considered to be less important in view of the risks involved, the physical. limitations on amounts which can be carried by individuals and the avallability of other means. Trade subterfuge would presently appear to be of least significance, since such arrangements involve more difficulties than any of the other available methods. IIT, Actions. Recommended l. The actions proposed herein, when added to those alneady proposed for controlling the movement of sub- Docid: 32276221. Page 31
4 versive persons, propaganda and arms, will serve to inhibit directly Cuba's effectiveness in financing sub- version in Latin America. It must be acknowledged how- ever, that Cuba's efforts to provide convertible currency to subversives in other Latin American countries cannot be rendered wholly ineffective by these measures alone, Complementary steps designed to reduce the ability of Cuba to acquire foreign exchange will also be required - to constitute a full attack on the problem. 2. The following actions are recommended as promising to have some significant effect: a. Establish regulations blocking (1) the unlicensed transfer of U.S. dollars to Cuba; : (2) the unlicensed transfer of U.S. dollars directly or indirectly from Cuban accounts to free world countries; and (3) all other unlicensed transactions with Cuba or Cuban nationals; or transactions involving property in which there is a Cuban interest. oe These actions should be taken only following the development of detailed implementing instructions by the State and Treasury Departments and their final evaluation in light of other considerations which bear on the matter. by, Seek opportunities to pursuade Latin American nations which have not done so to sever diplomatic relations with Cuba. c. Increase intelligence efforts to gain information concerning: (1) the size and location of Cuban accounts in free world banking institutions; Docld:322776221 -Page 32
(2) transfers of funds from these accounts to recipients in Latin America; and (3) Cuban movement of currencies to other Latin American countries by legal and illegal travellers, including diplomatic personnel. d. Where locally feasible, encourage Latin American nations to impound funds of know Castro- Communist organizations. . e. Encourage Latin American countries to enlist the cooperation of their financial institutions in detecting suspicious accounts and in exposing transfers of funds for subversive purposes. f. Seek, using appropriate means, to induce Canada, Great Britain, and other NATO countries to provide information on the direct or indirect transfer of significant amounts of their currencies by Cuba or Cuban nationals to other Latin American countries, g. As applicable, persuade Latin American countries to sever all direct or indirect trade relations with Cuba, except those involving sale to Cuba of foodstuffs and medicines. h. Encourage Latin American countries to establish surveillance of known or suspected Communist controlled businesses to inhibit trans- fers of funds to subversives through such estab- lishments. 1. Encourage Latin American countries to. ex~ pose and publicize illegal transfers of funds for subversive purposes. Docld: 32276221 Page 33
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- 2. TABLE OF CONTENTS Introduction Nature and. Scope of the Problem Direct Actions to Impede Legal Movement o Propaganda Materials l. Political Actions 2. Intelligence Actions 3, Covert Actions 1, Intelligence Actions Surveillance and Reporting Actions 3. Political Actions. 4, Technical Agsistance Actions Bocld:322762271.. Page 35 Direct Actions to Impede Illegal Movement of - Propaganda Materials PAGE