COMMISSION OF THE EUROPEAN COMMUNITIES 
§fe-_ • COM (91) 458 final 
Ilv L Brussels, 15 November 1991 
Proposal for a 
on the conclusion by the European Economic Community of an Agreement in the 
form of a complementary exchange of letters between the European Economic 
Community and the Union of Soviet Socialist Republics on a credit guarantee 
for exports of agricultural products and foodstuffs to the Soviet Union 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
Subject: Approval of an Agreement in the form of a complementary exchange of 
letters between the European Economic Community and the Union of 
Soviet Socialist Republics on a credit guarantee for exports of 
agricultural products and foodstuffs to the Soviet Union 
The Council introduced a credit guarantee of 500 mio ECU for exports of 
agricultural products and foodstuffs to the Soviet Union in Regulation (EEC) 
No 599/91 (0J 1991, L67/21). This Regulation was amended on October 21 last, 
with a view to extending the EEC guarantee to purchases of products 
originating in Bulgaria, Czechoslovak la, Hungary, Poland, Romania, 
Yugoslavia, Lithuania, Latvia and Estonia. Deliveries from Yugoslavia are 
suspended for the time being. 
Article 2 of the Regulation refers to an Agreement to be concluded with the 
USSR concerning the various conditions under which the guarantee shall be 
extended by the Community. In line with this Article, an exchange of letters 
was negotiated with the Soviet Union by the Commission in consultation with a 
Committee composed of representatives of the Member States. This Agreement 
was approved by Council Decision 91/73/EEC of July 8, 1991 (OJ 1991, L 
202/39). The Agreement will enter into force on the day of its signature by 
both parties. 
The possibilities of deliveries under the credit guarantee from the said 
countries, requires a complementary Agreement with the USSR. It is submitted 
that a complementary letter is more suitable in view of the present situation 
in the USSR than an amendment to the first exchange of letters, notably 
because the latter solution could imply new discussions in the USSR on a text 
that has already been approved by the relevant USSR authorities. The 
Commission felt that there were no objections to a new exchange of letters 
provided the substance of the first letter is not changed. 
The text of tfea complementary exchange of letters, and Chapter I I in 
part icular,provides that the provisions of the first exchange are applicable 
mutatis mutandis to the second exchange with one exception only: the Article 
which stipulates that the three Agreements which are required for the credit 
operation (Guarantee Agreement, Loan Agreement and Exchange of Letters) are 
to be signed on the same day. The exclusion of this provision makes it 
possible to conclude the three Agreements referred to above without having to 
await the approval of the complementary exchange of letters by both sides. 
As regards the identity of the borrower, the following understanding was 
reached with the Soviet side: the Vnesheconombank will be the sole borrower 
of the loan (the repayment of which is guaranteed by the EEC) and the USSR 
will guarantee the obligations of this bank vis-a-vis the Communities. In 
practice, this means that the USSR has accepted a side letter in which it 
engages in indemnifying the EC in case the Community banking syndicate calls 
on the EEC guarantee following a default by the Vnesheconombank. This 
2s 
solution is in line with the approach that was proposed in a letter of the 
Commission President to the Finance Ministers of the Member States of 
September 24, 1991. 
Approval of the complementary Agreement by the Council and the Government of 
the USSR is required to allow so-called triangular operations under the 
credit operation. After approval, the purchase of products in the countries 
concerned can start. Approval by the Council is, therefore, urgently 
required. 
-2> 
Proposal for a 
COUNCIL PECISIQN 
on the conclusion by the European Economic Community of an Agreement in the 
form of a complementary exchange of letters between the European Economic 
Community and the Union of Soviet Socialist Republics on a credit guarantee 
for exports of agricultural products and foodstuffs to the Soviet Union 
The Council of the European Communities, 
Having regard to the Treaty establishing the European Economic Community, and 
in particular Articles 113 and 235 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Parliament, 
Whereas Regulation (EEC) 599/91 (1), as last amended by Regulation (EEC) No 
3281/91 (2) introduced a credit guarantee of ECU 500 million for exports of 
agricultural products and foodstuffs to the Soviet Union; 
Whereas Regulation (EEC) 599/91 provides for the guarantee to cover not only 
contracts for supply of agricultural products and foodstuffs between the 
Soviet Union and undertakings in the Community, but also contracts of supply 
of these goods between the Soviet Union and undertakings established in 
Bulgaria, Czechoslovakia, Hungary, Poland, Romania, Yugoslavia, Lithuania, 
Latvia and Estonia; 
Whereas Article 2 of the said Regulation refers to an Agreement to be 
concluded between the Community and the Government of the USSR on the 
conditions under which the guarantee shall be extended by the Community; 
whereas the said Agreement was approved on behalf of the European Economic 
Community by Council Decision 91/73/EEC of 8 July 1991 (3); 
Whereas the possibilities for deliveries under the credit guarantee from 
Bulgaria, Czechoslovakia, Hungary, Poland, Rumania, Yugoslavia, Lithuania, 
Latvia and Estonia requires a complementary Agreement between the European 
Economic Community and the Union of Soviet Socialist Republics; 
Whereas the Agreement in question was negotiated by the Commission in 
consultation with a Committee comprised of representatives of the Member 
States, 
(1) 0J No L 67, 5.3.1991, p. 21. 
(2) OJ No L 310, 12.11.1991, p. 1. 
(3) OJ No L 202, 25.7.1991, p. 39. 4 
Has decided as follows: 
Article 1 
The Agreement in the form of a complementary exchange of letters between the 
European Economic Community and the Union of Soviet Socialist Republics on a 
credit guarantee for exports of agricultural products and foodstuffs to the 
Soviet Union is hereby approved on behalf of the European Economic Community. 
The text of the Agreement is attached to this Decision. 
Article 2 
The President of the Council is hereby authorized to designate the person 
empowered to sign the Agreement in order to bind the Community. 
Done at Brussels 
For the CounciI 
The President 
AGREEMENT (REV 5) 
in the form of a complementary exchange of letters between 
the European Economic Community and the Union 
of Soviet Socialist Republics on a credit guarantee 
for exports of agricultural products and foodstuffs 
to the Soviet Union 
A. Letter No 1 
Sir, 
With reference to the exchange of tetters on a credit guarantee for exports 
of agricultural products and foodstuffs to the USSR, signed on I 
hereby confirm the understanding on the following complementary Agreement 
between the European Economic Community and the Union of Soviet Socialist 
Republics: 
I. The credit guarantee provided by the European Economic Community shall 
also cover the purchase and importation to the USSR of agricultural 
products and foodstuffs originating in Bulgaria, Czechoslovakia, Hungary, 
Poland, Romania, Yugoslavia, Latvia, Lithuania and Estonia. The amount up 
to which the credit guarantee may be used for purchases in these 
countries, will be indicated to the Government of the USSR by the EC 
Commission. 
II. The provisions in the exchange of letters mentioned above shall apply 
mutat is mutandis to the purchase and importation of agricultural products 
and foodstuffs from the countries listed under Chapter I. This provision 
does not apply to Chapter II, first paragraph, fourth alinéa of the 
exchange of letters mentioned above. 
I propose that this Agreement will enter into force on the date of your 
reply. 
I should be obliged if you would confirm that your Government is in agreement 
with the above. 
Please accept, Sir, the assurance of my highest consideration. 
On behalf of the Council of the 
European Commun i t i es 
[/Us 6 
(REV 5) 
B. Letter No 2 
Sir, 
I have the honour to acknowledge receipt of your letter of today's date, 
which reads as follows: 
"With reference to the exchange of letters on a credit guarantee for 
exports of agricultural products and foodstuffs to the USSR, signed on 
, I hereby confirm the understanding on the following complementary 
Agreement between the European Economic Community and the Union of Soviet 
Soc i a Ii st RepubIi cs: 
I. The credit guarantee provided by the European Economic Community shall 
also cover the purchase and importation to the USSR of agricultural 
products and foodstuffs originating in Bulgaria, Czechoslovakia, Hungary, 
Poland, Romania, Yugoslavia, Latvia, Lithuania and Estonia. The amount up 
to which the credit guarantee may be used for purchases in these 
countries, will be indicated to the Government of the USSR by the EC 
Commission. -^ 
II. The provisions in the exchange of letters mentioned above shall apply 
mut at Is mutandis to the purchase and importation of agricultural products 
and foodstuffs from the countries listed under Chapter I. This provision 
does not apply to Chapter II, first paragraph, fourth alinéa of the 
exchange of letters mentioned above. 
I propose that this Agreement will enter into force on the date of your 
reply. 
I should be obliged if you would confirm that your Government is in agreement 
with the above." 
I have the honour to confirm that my Government is in agreement with the 
contents of your letter. 
Please accept. Sir, the assurance of my highest consideration. 
For the Government of the 
Union of Soviet Socialist Republics 
} 

ISSN 0254-1475 
COM(91) 458 final 
DOCUMENTS 
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