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ID-79-52 1 (1979-10-04)

handle is hein.gao/gaobaazts0001 and id is 1 raw text is: COMPTROLL.SR GENEfRAL OF THE UNITED 6TATE= Pwj I S N .. )IU ( B-159451 OCTOBER 4, 1979 The Honorable Harold Brown The Secretary of Defense Dear Mr. Secretary: Subject: &mproper Blocking of U.S. Funds 1y Office of Foreign Assets Control (ID-79-52) We are reviewing the blocking of the assets of foreign governments and nationals during times of war or national emergency by the Department of Treasury's Office of Foreign) Assets Control. In the course of our review, we have dis- covered what we believe to be an improper blocking of more than $6,000,000 plus interest in Department of Defense (DOD) appropriated funds. We recommend that you take immediate action to recover these funds for the United States. The funds in question were prepayments for undelivered commodities under a DOD scheme to circumvent the 1973 Arab oil embargo in order to continue furnishing petroleum, oil and lubricants to the Republic of Vietnam. DOD furnished these supplies out of appropriated funds as part of the residual supply and support activities on behalf of Vietnam after withdrawal of U.S. military forces. These activities were conducted by a largely civilian force of Americans employed by the Defense Attache Office in Saigon. These prepaid amounts were blocked effective April 30, 1975, under the Foreign Assets Control Regulations and have remained so C to the present time. Enclosure I explains in detail the origin and implemen- tation of the embargo circumvention scheme and the absence of any Vietnamese interest in the blocked funds and shows that the moneys were at all times public funds-Of the United States. Recommendations We recommend that you: -Investigate this matter and verify the infor- mation provided in this report. 110539 (481580) 17

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