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1992. naintalned Its debt sorvice on schedule, repaying both the full 

 obligation of the Soviet Union's outstanding GSU 102 credits and that 

 of the successor Commonwealth of Independent States (CIS), as well as 

 the debt Issued exclusively to the Russian Government. 



I will be referring specifically to Russia In this testimony with 

 regard to commercial credits, because the states of the Former Soviet 

 Union (FSU) will each require a different type of program — ranging 

 from conmerclai credits to concessional aid. 



Russia has been involved since last fail In negotiations with the 

 Paris Club of official creditors to reschedule the debt of the Soviet 

 Union. During Paris Club rescheduling negotiations, it Is standard 

 practice condoned by the Club for debtors to build arrearages. 

 Unfortunately. Russia's rescheduling has dragged out far longer than 

 anticipated due both to disagreement among the creditors over the 

 amount of repayment required In 1993. and to the controversial 

 negotiations between Russia and Ulcralne over debt obligations.. 



It Is within this context that Russia has fallen behind In meeting Its 

 GSU 102 repayment obligations; arrearages now amount to $600 million; 

 and some of the banlcs have gone to the CCC with their claims. 



Clearly, as long as Russian arrearages remain, it Is not eligible to 

 exercise purchases under a GSU 102 program. Once a Paris Club 

 rescheduling is completed, and Russia brings current the remaining 

 outstanding arrearages. It technically would be eligible. However, 

 there are questions about whether Russia Is "credit worthy" under 

 statutory requirements of the Food. Agriculture. Conservation and 

 Trade Act of 1990 (1990 Farm Bill). 



Is Russia A Comreercial Or Concessional Uarket? 



I would like to deal with the Issue of "credit worthiness' under the 

 1090 Farm Bill, because it impacts greatly on what we will do with our 

 Russian market over the next 3-5 years. 



When Uembers of Congress wrote the 1990 Farm Bill, they included two 

 specific statutory restrictions on the Export Credit Guarantee 

 Program. 



In addition to the restriction against using the program for foreign 

 policy or debt rescheduling purposes, a second restriction puts 

 "credit worthiness" or debt servicing conditions in place: 



"The (kMimodity Credit Corporation shall not make credit guarantees 

 available in connection with sales of agricultural c ommodities to any 

 country that the Secretary determines cannot adequately service the 

 debt associated with such sale." 



Even before the 1990 law. I would note, credit risk Judgments were 

 operational in the Export Credit programs. The CCC Charter has 

 permanent underlying principles to protect the assets of the 



