585 



were delivered under Lend-Lease and remained in the hands of the 

 Soviet Union after World War II. The major element in the disparity 

 between the U.S. and Soviet figures was the determination of which 

 goods were essential to the Soviet war effort — the United States did 

 not try to collect for those goods — and which were civilian goods not 

 consumed by the end of the war. In addition, there were problems in 

 setting an appropriate rate of interest and repayment schedule for the 

 Lend-Lease debt. The U.S. negotiating position was recently summar- 

 ized by Sidney Weintraub, Deputy Assistant Secretary of State for 

 International Finance and Development : 



The original value of all lend-lease equipment provided the Soviet Union dur- 

 ing World War II is estimated at $10.8 billion. This figure excludes both mer- 

 chant and naval vessels which, for technical reasons, were not included under 

 the lend-lease agreement. 



In lend lease settlement negotiations with all our allies including the Soviet 

 Union, it was our policy to seek payment only for those goods which had useful- 

 ness in the civilian economy. After repeated requests for an inventory of these 

 "civilian-type" articles in the Soviet Union went unanswered, the United States 

 estimated their value at approximately $2.6 billion. 



In reaching agreements with our other World War II allies, we settled for a 

 percentage of the value of the "civilian-type" equipment. As noted in this testi- 

 mony to which this explanation is appended, the U.S. Government has made 

 specific settlement offers of $1.3 billion and $800 million. Both offers were rejected 

 by the Soviet Union. Our present negotiations are approaching a figure which 

 will compare favorably with the final terms reached with other lend-lease re- 

 cipient countries.* 5 



The Soviet Union and the United States agreed on the amount of the 

 Soviet Lend-Lease debt on October 18, 1972. The total debt was finally 

 assessed at $722 million, of which the Soviet Union paid $12 million 

 on the day of the agreement. $24 million is to be paid on July 1. 1973. 

 $12 million on July 1, 1975, and the balance in 28 equal annual install- 

 ments of $24,071,429 through the year 2001. The Soviet Union is per- 

 mitted four postponements provided interest is paid at an additional 

 three percent a year. The settlement covers all Soviet World War II 

 indebtedness to the United States. However, Soviet repayment of the 

 debt is contingent on U.S. extension of MFN status to the Soviet 

 Union. At the same time, the Soviet Union executed an operating 

 agreement with the Eximbank which provides that its foreign trade 

 enterprises would receive equal treatment with those of other U.S. 

 trade partners in all credit matters — amount of credit, interest rate 

 and repayment provisions. 



Settlement of the Soviet debt and the President's determination' 

 that Eximbank financing .for the Soviet Union is in the national in- 

 terest removed most major governmental restrictions on credit trans- 

 actions. Xot only are direct Eximbank credits available, but the way is 

 now open for private individuals and institutions to extend Exim- 

 bank-guaranteed credits — both short term and long term — to the So- 

 viet Union. 96 Because of Eximbank's unique role in U.S. foreign trade, 



05 U.S. Conrjress. House. Committee on Government Operations. Delinquent International 

 Debts Owed to the United States. Hearings before a subcommittee of the Committee on 

 Government Operations, House of Representatives, 92d Cong.. 1st and 2d sess.. 1072. 

 p. 125. 



90 The Jackson Amendment and similar legislation could prohibit the Soviet Union from 

 participating in U.S. Government credit operations. See above, U.S. Restrictions on Im- 

 ports from the Soviet Union; the Issue of Most-Favored-Nation Treatment, p. 53. 



