In order to evade the restrictions on the development of military aircraft in Germany imposed by the Allied Control Commission, the Albatros Flugzeugwerke of Berlin-Johannisthal established a Lithuanian subsidiary in 1925 as the Allgemeine Flug-Gesellschaft (A.F.G.) Memel. Its first production was a two-seat reconnaissance fighter referred to as the A.F.G.l, but, in fact, an Albatros design, the L.65. A single-bay staggered biplane with aerofoil-section broad I-type interplane struts, the L.65 alias A.F.G.l was of wooden construction with plywood skinning, the first prototype being powered by a 450hp Napier Lion 12-cylinder "broad arrow" water-cooled engine. A second prototype, the L.65-II flown in 1926, was powered by a 565hp Lion and was evaluated by the Reichswehr, but no series production was undertaken.