589 



The foreign businessman who wants to buy from or sell to the Soviet 

 Union generally conducts his business with a Soviet foreign trade 

 organization which specializes in a given line of imports or exports. 

 The Soviet foreign trade organization has a somewhat ambivalent 

 status. On the one hand, it is an official agency of the Ministry of 

 Foreign Trade which conducts its foreign trade operations in strict 

 accordance with governmental dictates. On the other hand, it is a 

 juridical person under Soviet law which can possess property, acquire 

 rights to property under its name, incur obligations, and sue or be 

 sued. 105 The foreigner may enter contracts with a foreign trade orga- 

 nization, as long as the organization is operating in accordance with 

 the charter which is granted to it by the Soviet Government. In short, 

 the foreign trade organization has a legal status which is somewhat 

 similar to that of Western corporations. Some legal complications 

 may arise in foreign trade transactions, however, because of the Gov- 

 ernment's foreign trade monopoly. The Ministry of Foreign Trade 

 may refuse to issue or revoke an export license. There are also strict 

 Soviet regulations to prevent the foreign trade organization from 

 making contracts that the state considers contrary to national 

 interests. 



Arbitration of foreign trade disputes involving Soviet foreign trade 

 organizations must normally take place under the auspices of the 

 Soviet Foreign Trade Arbitration Commission, a panel of 15 Soviet 

 nationals which convenes in Moscow. While Western specialists 

 acknowledge that the Commission's procedures have been generally 

 fair, the United States has insisted that parties to a dispute should 

 have the right to have arbitrators from a third country, in accordance 

 with the Arbitration Rules of the Economic Commission for Europe. 

 The latter procedure was agreed to in the U.S.-Soviet trade treaty, 

 although parties to a dispute are permitted to decide upon any other 

 form of arbitration which they mutually prefer. 



For the American corporation considering the export of commod- 

 ities embodying new technology, Soviet laws dealing with protection 

 of patents, trademarks, and copyrights are a crucial consideration. 106 

 Soviet laws and practices have changed considerably in recent years. 

 The widely publicized Soviet practice of buying prototypes and copy- 

 ing them is no longer the most prevalent method of acquiring foreign 

 technology. Soviet leaders have apparently concluded that the older 

 method did not enable Soviet industry to keep pace with the rapid 

 growth of technological innovation in the rest of the world. Not only 

 did it inhibit Western corporations from exporting technology to the 

 Soviet Union, but Soviet enterprises frequently found that by the 

 time a prototype was obtained from the West and readied for pro- 

 duction, it was already obsolescent. Moreover, as Soviet expenditures 

 on research and development grew, Soviet leaders became more con- 

 cerned about protecting Soviet innovations. 



Symbolic of the Soviet leadership's new attitude toward the inter- 

 national exchange of technology and know-how was their ratification 



i 05 Giffen, op. cit., pp. 152-156. 



108 For a more detailed discussion of this aspect of Soviet law, see Samuel Plsar. Coexist- 

 ence and Commerce (New York: McGraw-Hill Book Company, 1970), pp. 336-374. 



