AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS between the European Coal and Steel Community and the Russian Federation extending the Agreement between the European Coal and Steel Community and the Russian Federation on trade in certain steel products for the period 1 July to 30 September 1997

Letter from the Commission of the European Communities

Sir,

1. I have the honour to refer to the Agreement between the European Coal and Steel Community and the Russian Federation on trade in certain steel products signed on 7 December 1995, as extended for the period 1 January to 30 June 1997, and to propose that, pending the completion of negotiations on a new bilateral steel agreement and of the formal procedures for its entry into force, the present ECSC Agreement as already extended for the period 1 January to 30 June 1997 should be extended by a further period of up to three months (i.e. from 1 July to 30 September 1997). If the new agreement enters into force before 1 October 1997, the present ECSC Agreement shall expire on the day on which the new agreement enters into force.

2. The quantitative limits for the period 1 January to 30 September 1997 shall be as shown in the Annex to this letter. These limits represent 10/12ths of the Russian Federation's quantitative limits for 1996 (including certain switches between product groups within the same product category) and are without prejudice to the level at which quantitative limits for 1997 might be agreed with the Russian Federation under a new bilateral agreement.

3. Export licences issued by the Russian Federation during 1997 in accordance with the provisions of this exchange of letters and counted against the limits set out in the Annex hereto will be counted against the overall limits established for 1997 in the new agreement when the latter enters into force.

4. In conclusion, I have the honour to propose that, if this letter and its Annex are acceptable to your Government, this letter and your confirmation shall together constitute an agreement between the European Coal and Steel Community and the Russian Federation, which shall enter into force on the date of your reply.

Yours faithfully,

For the Commission of the European Communities

ANNEX

RUSSIAN FEDERATION

>TABLE>

Letter from the Government of the Russian Federation

Sir,

I have the honour to acknowledge receipt of your letter of 18 July 1997 which reads as follows:

'Sir,

1. I have the honour to refer to the Agreement between the European Coal and Steel Community and the Russian Federation on trade in certain steel products signed on 7 December 1995, as extended for the period 1 January to 30 June 1997, and to propose that, pending the completion of negotiations on a new bilateral steel agreement and of the formal procedures for its entry into force, the present ECSC Agreement as already extended for the period 1 January to 30 June 1997 should be extended by a further period of up to three months (i.e. from 1 July to 30 September 1997). If the new agreement enters into force before 1 October 1997, the present ECSC Agreement shall expire on the day on which the new agreement enters into force.

2. The quantitative limits for the period 1 January to 30 September 1997 shall be as shown in the Annex to this letter. These limits represent 10/12ths of the Russian Federation's quantitative limits for 1996 (including certain switches between product groups within the same product category) and are without prejudice to the level at which quantitative limits for 1997 might be agreed with the Russian Federation under a new bilateral agreement.

3. Export licences issued by the Russian Federation during 1997 in accordance with the provisions of this exchange of letters and counted against the limits set out in the Annex hereto will be counted against the overall limits established for 1997 in the new agreement when the latter enters into force.

4. In conclusion, I have the honour to propose that, if this letter and its Annex are acceptable to your Government, this letter and your confirmation shall together constitute an agreement between the European Coal and Steel Community and the Russian Federation, which shall enter into force on the date of your reply.

Yours faithfully,`

I have the honour to confirm that the above is acceptable to my Government and that your letter, this reply and the attached Annex together constitute an agreement, in accordance with your proposal.

Yours faithfully,

For the Government of the Russian Federation

ANNEX

RUSSIAN FEDERATION

>TABLE>