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A Congressional Approach to Clarifying Credit Worthiness 



In seeking to address the Intent of credit worthiness requirements, I 

 would like to point to language In a letter dated May 30. 1991 from 

 Chairman De La Garza and 9 other House Members to the Secretary of 

 Agriculture, seeking to clarify the Intent of the 1990 legislation. 



The letter's content Is worthy of your study, because I believe It 

 captures the essence of the problem we are confronting In the case of 

 Russia. It concluded with the following: 



"Finally, the overall national Interest of the United States should be 

 the predominant factor In the Secretary's determinations regarding 

 whether or not to extend export credit guarantees to requesting 



countries We encourage you to Interpret section 202(f) so as not to 



prevent appropriate sales or establish such stringent standards for a 

 country's 'ability to service the debt' associated with export credit 

 guarantee sales that market access and development and the broader 

 national interest are harmed by the application of this provision. 

 Credit guarantees are expected to be repaid under criteria established 

 by the Department of Agriculture and the programs are Intended to - 

 facilitate exports to comparatively higher credit risk countries. 

 Balancing all the factors mentioned above will undoubtedly require 

 difficult Judgments. However, we understand the economic risks 

 Inherent In a program of this nature, and we will support you when. In 

 your best Judgment, export credit guarantees are extended in the final 

 analysis to benefit the national Interest." 



I would also call your attention to Senate Resolution 117, passed In 

 May 1991, which also covers the issue of credit guarantees to the then 

 Soviet Union. The Resolution calls for the Administration In 

 evaluating requests for agricultural credit guarantees to consider not 

 only current financial and debt service criteria, but also "(3) 

 National assets which demonstrate an ability to repay.' and "(4) 

 Market-retention, Including an assessment of whether the absence of 

 United States credit guarantees would Jeopardize Important foreign 

 markets." 



This work already done by you and your colleagues in Congress has set 

 an excellent and appropriate basis for junending current legislative 

 I anguage . 



The Barter Option 



Apart from Intermediate credits, we should also more fully explore 

 possibilities in the mandated Barter provisions, is there funding to 

 purchase Russian oil or minerals for our Strategic Petroleum Reserve 

 (SPR) or other strategic stockpiles? Should we consider seeking to 

 use enriched uranium purchases from Russia authorized under existing 

 programs In a way to securltlze a GSM credit program or for a direct 

 barter? How can we work with other key agencies like the Department 

 of Defense In Its defense conversion programs to possibly deal with 

 implementing sales of our farm commodities? 



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