An interdepartmental meeting was held on March 8, 1956, to discuss the Soviet request for a trade office in Vancouver, and the Czechoslovak trading company Omnitrade in Montreal. Representatives of the Departments of Trade and Commerce, Justice, Citizenship and Immigration, Finance, the Secretary of State, and of the R.C.M.Police attended, as did representatives of the several interested Divisions of this Department. The meeting's recommendation on the Soviet request will be put up to you shortly by Economic Division in the form of a draft memorandum to Cabinet.¹⁰⁴ The purpose of this memorandum is to seek your approval of the recommendation on Omnitrade.

2. Omnitrade, a subsidiary of a large Czech concern, was incorporated in Canada in May 1947 under federal law as an import-export company. After the communists seized control of the Czech Government in February 1948, they took over the parent company of Omnitrade. From information in the possession of the RCMP it is clear that in 1949 Omnitrade was used by the Czech authorities not only as a commercial organization but as an instrument to further their interest in other fields. For example, the manager of Omnitrade was advised to use the Czech diplomatic bag for forwarding certain information to Prague, and he was ordered to send a sum of money to the Czech Foreign Minister who was then in New York.

3. Between 1950 and 1954 Omnitrade was more or less dormant. Czech interest in it was renewed late in 1954, however, and by the end of 1955 we had received five applications for non-immigrant visas from Czechs who said they were going to work for the company in various capacities ranging from president to technician. Three of these applicants were granted visas and two of them have actually arrived in Canada. The remaining two applications have been held up pending an investigation of the company. One of these pending applications is that of the president, Ladislav Pospisil.

4. It was the opinion of the meeting that Omnitrade is quite likely to engage in espionage and other improper activities. It was considered, however, that if it were closed down, the only result would be an equivalent expansion of the Czech Consulate General in Montreal and the development of the same activities under consular immunity. Consequently, it was thought that provided certain conditions were laid down Omnitrade was the least dangerous form for Czech commercial representation to take.

5. Mr. Smith, representing Citizenship and Immigration, explained that his Department would be prepared to issue non-immigrant visas valid for one year but subject to renewal to Czech nationals who wished to come to Canada to work for Omnitrade. As they would be expected to stay here over a year, they would have to be able to meet our health requirements before the visas were issued, but our stage B requirements would be waived in these cases.

6. It was recommended, therefore, subject to your approval, that Mr. Ford call in Mr. Hruska, the Czech Minister, and inform him that we would be ready to facilitate the issuance of non-immigrant visas to the Czech staff of Omnitrade, provided that the following conditions were met:

(a) the Czech Legation should provide us with a list of the present staff of Omnitrade in this country, whether Czech, Canadian or other nationality, and advise us subsequently of any changes;

(b) Omnitrade should employ only three Czech nationals - if training in Czechoslovakia is necessary, then Canadian employees could be trained there - if they wish Ladislav Pospisil to come here, and if there are already three Czechs on the staff, then one should be withdrawn to make room for him;

(c) Omnitrade should continue to hold a federal charter and submit the required information annually to the Secretary of State Department; and

(d) Omnitrade should operate on ordinary commercial premises in Montreal (clearly separate from those of the Czech Consulate-General) so that all concerned would understand that it enjoyed no consular immunities or privileges.

7. We also recommend for your consideration, if you agree to Mr. Hruska being spoken to on these lines, that Mr. Ford should take the opportunity of telling him how dissatisfied we are with the unfriendly treatment accorded our staff in Prague by the Czech authorities.¹⁰⁵ A further memorandum? is being prepared in this Division, and will be sent to you shortly, listing our grievances on this score.

G.G. CREAN