Trading with the enemy ban extended

On 16 February 1915, at a meeting of the Privy Council at Buckingham Palace, King George V issued a proclamation on trading with the enemy in occupied territories. The London Gazette published it the same day. The proclamation extended the British bans on trading with the enemy to areas that as a result of the war had come under military occupation, both enemy and Allied.

The bans of 1914

From the first days of the war British subjects had been forbidden to trade with the enemy. The bans were introduced by successive royal proclamations: of 5 August 1914, supplemented on 12 August to cover Austria-Hungary, and then the more comprehensive proclamation of 9 September. In September Parliament also passed the Trading with the Enemy Act, which laid down penalties for breaking the bans. Who counted as an “enemy” was decided not by nationality but by place of residence or business. Transactions were forbidden with anyone who lived or carried on business in the territory of Germany or Austria-Hungary, and after the outbreak of war with Turkey also of the Ottoman Empire, regardless of nationality.

After six months of war this territorial criterion was no longer enough. The Germans occupied almost all of Belgium, neutral Luxembourg, part of northern France including Lille, and large areas of the Kingdom of Poland. Formally these lands remained the territory of Allies or of a neutral state, although in practice the Germans ruled them. Conversely, the Allies had occupied some of the German colonies, such as Togoland, Samoa and New Guinea, and in Kamerun the port of Duala. Formally these lands were still enemy territory.

Friendly and hostile occupation

The proclamation introduced two new concepts. “Territory in friendly occupation” meant enemy lands that had come under the effective military occupation of Britain, its allies or a neutral state. They were to be treated in the same way as British or Allied territory, so trade with them ceased to be forbidden. “Territory in hostile occupation”, by contrast, meant British, Allied or neutral lands occupied by the enemy. From then on all the bans applied to them as to an enemy state. Where earlier regulations referred to the outbreak of war, for such territories the moment at which they had come under occupation was to be taken into account.

Whether a given area was in friendly or hostile occupation, and from when, was to be decided by a certificate from a person authorised by one of the Secretaries of State. It was binding and final. The proclamation also left a loophole: the government could permit specific transactions by licence, issued to individuals or to whole classes of persons, and lay down special rules for particular occupied territories and their inhabitants.

The change had practical consequences. Business partners in occupied Belgium or northern France were put on the same footing as residents of Germany, and dealings with them became a crime for Britons unless the government had licensed them. The aim was to ensure that no money or goods reached the occupier. At the same time the way opened for legal trade with the German colonies taken by the Allies. In the following months London tightened the rules further. In December 1915 a new act made it possible to ban trade also with persons and firms in neutral countries deemed to be associated with the enemy.