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15 May 1951

Original: English


held at Government House, Jerusalem, on Tuesday,
15 May 1951, at 10.15 a.m.

Mr. Palmer

(United States)

Mr. de Boisanger(France)
Mr. Aras(Turkey)
Mr. de Azcarate Principal Secretary

1. Consideration of Working Paper W/62 concerning blocked accounts

The CHAIRMAN recalled that the Commission had had a lengthy exchange of views concerning the note which it had received from the Egyptian Government on the subject of blocked accounts, which note appeared to have been addressed to the British Government and to have been communicated for information to the countries represented on the Conciliation Commission. He now wondered, however whether the letter had really been addressed to the British Government, as he had just received a copy of a note identical in substance which the Government of Iraq had addressed to the United States Ambassador in Baghdad and, he thought, to the Ambassadors of France and of Turkey in Baghdad.

The Chairman felt that the question should be clarified by asking, for instance, Mr. Furlong in London to inform the Commission whether the Government had received the note from the Government of Iraq; or perhaps it would be preferable, as Mr. Aras had suggested, to request the United States Embassy in London to obtain the required information in an informal manner.

This was agreed.

Working Paper W/62, prepared by the economic adviser, dealing with the situation with regard to Arab accounts blocked in Israel in relation to the releases of sterling to Israel by the British Government on 19 January 1951, then came under consideration. The CHAIRMAN stated that after reading the working paper, which he thought was very informative and interesting, and in the light of the numerous conversations which he himself had had on the subject with members of the Government of Israel, he felt that the members of the Commission should consider drawing the attention of their respective governments to the question, which was important for all of them. The United States Embassy in Israel, and also Mr. McGhee during his visit to the Middle East, had already taken an interest in it. However, before suggesting to the governments of the countries represented on the Commission that they intervene to speed up a settlement of the matter, it would be necessary to wait and see whether the British Government had been seized of the question by the Arab Governments.

Mr. ARAS (Turkey) shared the Chairman’s view and also thought that, at the appropriate time, the intervention of the governments of the countries represented on the Conciliation Commission might be considered, as the Commission had not achieved the positive results which it had hoped for from its own interventions. However, in order to be able to intervene effectively, the governments should have before them all the elements of the problem, which the Commission should explain to them in detail.

Mr. de BOISANGER (France) found it difficult to understand why, at the time of releasing sterling to Israel, the British Government had not made a distinction between Jewish assets and the Arab assets blocked in Israel. He wished to ask the economic adviser whether he understood the reasons for that attitude, which might lead to the conclusion that the British Government acknowledged the validity of the measures taken by Israel to block the accounts belonging to Arab refugees.

Mr. SERVOISE (Economic Adviser) thought that it was difficult to express an opinion on that point. It was only possible to make assumptions of which the most likely was that the British Government had merely been guided by international law according to which a bank was subject only to the legislation of the country in whose territory it was situated. The British Government had probably not felt it necessary to make an exception to that rule by making a distinction, when releasing the sterling, between Jewish assets and the assets belonging to Arab refugees.

Mr. ARAS (Turkey) observed that although the rules of international law might be as indicated by the economic adviser, it was none the less true, as Mr. de Boisanger had pointed out when referring to the events which followed the Russian revolution, that when a country’s national interests were involved or when it was possible to refer a question for decision to an international authority — in the present case the United Nations — a government could take steps to protect those national interests or to observe the decision of an international authority.

Mr. de BOISANGER (France) felt that the question remained obscure. There was no doubt that in this matter the British Government had been in a difficult position, and the Commission should avoid taking any action which might embarrass that government.

The CHAIRMAN agreed with that view but pointed out that it was to the Government of Israel that the governments represented on the Commission might address themselves.

Mr. BARCO (United States)X thought that it would certainly be desirable for the Commission to take steps to find out whether the note which it had received from the Egyptian Government had also been sent to the British Government and, if so, whether any action had been taken in that connection. However, it should not be forgotten that, as the United Kingdom no longer had control of the funds in question, which following the releases and in January 1951 had become the property of Israel, it was now too late to ask the British Government to take any practical steps in favour of the accounts belonging to Arab refugees. At the present time, all that the British Government could do was to give its political support to the Commission’s efforts.

Mr. SERVOISE (Economic Adviser) remarked that the notes from the Government of Egypt and the Government of Iraq had indeed been overtaken by events. It was now no longer possible to say, as in the note from the Egyptian Government dated 19 April 1951 (AR/43), that “it would be possible for the British Government, which was for thirty years the Mandatory power in Palestine, to bring about such unfreezing, all the more so as part of the assets of the former Government of Palestine still remain in the possession of the British Government ...” Since 19 January 1951, the date of the release made to Israel by the British Government, the latter no longer had control of the funds. The economic adviser therefore wondered whether it was necessary to await the reply of the British Government concerning the action which it had taken on the note from the Egyptian Government before trying to persuade the Government of Israel to make a gesture of good will by unfreezing the Arab assets at present blocked in Israel banks.

Mr. ARAS (Turkey) recognized that events had overtaken the note from the Arab Governments. However, in order to be able to judge the situation with full knowledge of the facts and to decide what measures might be taken, the Commission should find out whether the note had been addressed to the British Government or not. That was a small point which was nevertheless important.

The CHAIRMAN stated that nobody had a keener desire to see the question settled than he himself. However, he agreed with Mr. Aras that it was indispensable to be informed on that point before approaching the Government of Israel.

He added, following a remark by Mr. de Boisanger, that he would inform the member of the United States Embassy who was charged with obtaining unofficially the required information that it was necessary that the Commission should have the information as soon as possible.

Miscellaneous items

Mr. de BOISANGER (France) asked whether any information was available concerning the last meeting of the Arab League, and the Information Officer, Mr. JANKOWSKI, stated that there had not yet been any news in the press in that connection. He said that he would hand to the members of the Commission as soon as possible a note summarizing any information which he received.

The meeting rose at 11.45 a.m.

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