TRADE AGREEMENT WITH RUSSIA. (Hansard, 13 March 1934)

§ LORD MOUNT TEMPLE
My Lords, on behalf of my noble friend Lord Peel, I beg to ask the Question standing in his name.

§ THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (EARL STANHOPE)
My Lords, I must apologise to the House that when the Trade Agreement was discussed in your Lordships' House last week I was not sufficiently acquainted with the details of Article 5 to make the matter quite clear to your Lordships. In my own defence, perhaps, I might say that that Article of the Agreement was somewhat outside the terms of the two Motions on the Paper, but none the less I regret that I was unable to make the position clear at that time. I am, therefore, all the more grateful to my noble friends, Lord Peel and Lord Mount Temple, for giving me this opportunity.
Your Lordships are, of course, aware that it is impossible to sue the diplomatic representative of a foreign Power in a British Court, owing to his diplomatic immunity. The Soviet Government realise that as they are the trading power for trade with the U.S.S.R. it would raise considerable difficulties if their Trade Representative, who has diplomatic immunity under this Agreement, could not be sued before a British Court, and therefore they were prepared to undertake to be responsible for all trade agreements with the Soviet Government, on condition that those agreements were countersigned by their Trade Representatives and that those Trade Representatives became responsible. There were two classes of cases. One was the case where the contract is made direct with the Trade Representative or his deputies, and 150 the second where a contract was made with one of those State economic organisations to which the first part of my noble friend's Question refers. In either case the contract must be signed by the Trade Representative or one of his deputies, and it must be countersigned by the Special Representative, who is referred to in the Agreement. In other words, the contract has to be signed by two people. Of course it is quite a common commercial procedure that a cheque or other document has to be countersigned by two representatives of a company or organisation, and so the Soviet Government said that these contracts must be signed and countersigned by these two individuals. The Special Representative will actually be resident in this country, and he will be easily available for countersigning any contract.
As regards the first part of my noble friend's question, I should find considerable difficulty in giving an exhaustive list of the organisations to which Lord Peel refers. Trade in the U.S.S.R. is to some extent in the hands of semi-independent organisations, although actually they were set up under the authority of the U.S.S.R. Government and are under their control, but none the less the Government are not responsible for individual transactions. There are, for example, semi-independent organisations such as Exportkleb, which deals with the export of grain, and Exportles, which deals with the export of timber, and in addition there are trade organisations outside the U.S.S.R., such as Arcos, which is a British company.

§ LORD MOUNT TEMPLE
May I interrupt the noble Earl for a moment? Then, I understand this is the position, that anybody trading from this country with Russian organisations do so at their peril unless (a) the contract is countersigned by the Trade Representative and (b) by the Special Representative as well. Is that the position?

§ EARL STANHOPE
That is correct. I was going into it further. My noble friend will see that of course these semi-independent organisations can be sued in the courts of law in the same way as an ordinary company, but they will not get behind them the guarantee of the Soviet Government unless a contract is signed by the Trade Representative or one of his deputies and countersigned by 151 the other individual. Therefore, my noble friend will see that there is no advantage whatever in publishing a list of names of these semi-independent organisations. It will give no security to anybody doing trade with them that their names are or are not published in the Board of Trade Journal; but what will be published in the Board of Trade Journal is the names of the Soviet Trade Representative and his two deputies and the individual who will countersign the contracts. All that anybody trading with 152 these organisations will have to do is to ensure that the contract is countersigned by these individuals, and to see that these are the names which have appeared in the Board of Trade Journal. I hope I have made the situation clear to my noble friend.

§ LORD MOUNT TEMPLE
I have to thank the noble Earl for his very clear statement.