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LETTER FROM THE NIS OMBUDSMAN

If your company does business in the one of the New Independent States (NIS) of
the former Soviet Union, you should know something about what I do.  Since the
NIS countries began their historic transformation to a market economy, the
Department of Commerce and many other federal agencies have worked
intensively to promote a better business climate there for companies like yours.  As
U.S. Ombudsman for Energy and Commercial Cooperation with the New
Independent States, I coordinate these efforts.   

Business Development Committees  
The U.S. Government supports American companies in the NIS through the
Business Development Committees (BDCs), which now exist for Russia, Ukraine,
and Kazakhstan.  The first BDC was created in 1992, to help identify and remove
obstacles to trade and investment in Russia.  In addition to the Department of
Commerce, BDC participants include the Departments of State, Treasury and
Energy, the U.S. Special Trade Representative (USTR), the U.S. Agency for
International Development (USAID), Eximbank, OPIC, the Trade and Development
Agency (TDA), and representatives of the private sector.  In the BDCs, we
coordinate our efforts closely with U.S. businesses, small and large, to help them
compete fairly in Russia's emerging market economy.  We are in frequent contact
on their behalf with our counterparts in Russia and the other NIS countries.

BDC working groups address business facilitation, market access, standards
conformity, and defense conversion issues.  Ten industry sub-groups work to
remove industry-specific barriers to trade and investment, and to promote new
business.  New programs for 1995 include establishment of a joint commercial tax
dialogue, as well as an ad hoc working group to promote commercial cooperation
between the U.S. West Coast and the Russian Far East.
 
Oil and Gas Framework Agreement
One of our most important successes came recently, when Russian President Boris
Yeltsin issued a decree clearing the way for the long-awaited Oil and Gas
Framework Agreement between our two countries.  This marked the culmination of
an extended effort by the federal agencies involved in the BDC to improve
conditions for U.S. energy companies doing business in Russia.  The decree
exempts Russian oil exporters from mandatory hard-currency exchange
requirements in connection with projects financed by the United States' Eximbank. 
When the Framework Agreement is implemented, hopefully in the near future, it
will enable financing for exports of at least $1.4 billion worth of U.S. oil and gas
industry equipment.   

Other inter-agency successes include support for an aluminum rolling mill to be
built by Hunter Engineering,  progress on a ground-breaking supermarket and food
distribution project by TPC Foods, and advocacy of numerous oil and gas projects
on behalf of U.S. energy companies.  Last year, the U.S. and Russian Ombudsmen
facilitated the signing of a production-sharing contract for the $10 billion Sakhalin
II petroleum exploration and development project in the Russian Far East, and now
two other such projects are in advanced stages of preparation.  Efforts continue, in
cooperation with other BDC agencies, and with individual U.S. companies, to
resolve a variety of issues related to oil and other commercial projects in Russia.

This important work began in February 1994, when Vice President Al Gore and
Secretary of Commerce Ron Brown announced my appointment as the
Administration's Ombudsman for Energy and Commercial Cooperation with the
Russian Federation.  My Russian counterparts are Deputy Minister of Foreign
Economic Relations Nikolai Drozdov, for commercial issues; and Deputy Minister of
Fuel and Energy Anatoly Shatalov, for energy-related issues.  Together, we have
helped smooth the way for billions of dollars of cooperative trade and investment
projects.  On March 9, 1995, my responsibilities as Ombudsman were extended to
cover all 12 NIS countries.

Our work in the BDC and other endeavors will continue in many areas, as the NIS
countries grow in importance for U.S. business.  The increasing pace of reform in
the NIS has taken me recently to Moscow and Kiev with President Clinton, and
more recently to Central Asia--which I will describe in a future letter.  We are
currently preparing for the next meeting of the Gore-Chernomyrdin Commission at
the end of June, as well.  Also on our agenda is the June 5-7 1995 Seattle
conference on trade and investment between the U.S. West Coast and the Russian
Far East.  I look forward to using this space again in the future to keep you
informed of progress in these areas.

Jan H. Kalicki                                   
Counselor to the Department of Commerce &
 U.S. Ombudsman for Energy & Commercial                                 
Cooperation with the New Independent States 

Note: Fore more information on the work of the Ombudsman, the BDCs or other
U.S. Government commercial promotion efforts in the NIS, call BISNIS at (202)
482-4655.
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