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U.S. DEPARTMENT OF STATE
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
 
Feature:  Doing Business in the New Independent States--
A Resource Guide
 
This resource guide is designed to assist U.S. businesses
seeking market opportunities in the New Independent
States.  It was prepared by Juanita Adams, Susan Holly,
and Jim Pinkelman of the Bureau of Public Affairs, in
cooperation with the U.S. Department of Commerce and the
U.S. Agency for International Development.
 
Russia and the other New Independent States (NIS) of the
former Soviet Union are working to strengthen their
fledgling market-oriented economies by expanding foreign
trade and investment.  The economic potential of the NIS
is tremendous, since many of these states have abundant
natural resources, particularly oil, natural gas, and
rare minerals; a large, educated, and literate work
force; and former defense research and development
facilities, now looking for profitable business
opportunities.
 
Russia and the other NIS actively seek foreign partners
and have emphasized the importance of U.S. participation.
Many American companies possess expertise in the key
sectors that these countries want to develop:  energy
resources, agriculture, food processing, transportation
infrastructure, communications, health care, and
technology to protect the environment.
 
Russia and Kazakhstan, for example, have given priority
to the extractive industries and have looked to U.S.
companies with technical  expertise and equipment for
investment, particularly in oil exploration and
development.
 
Similarly, U.S. agribusinesses are sought for their
expertise in large-scale farming operations, as well as
in storage and processing, areas in which the NIS
historically have been weak.  Opportunities for small and
large Western companies also exist in the chemical,
timber and wood processing, textile, and construction
industries.
 
Many opportunities are available for Western service
industries.  Equipment and technical advice are needed to
develop financial, transport, and communications
infrastructure.  Support also is needed for burgeoning
private institutions, such as insurance, banking,
financial markets, long-distance trucking companies, and
telephone systems.
 
The emergence of a prosperous Russia as well as the other
states will add billions of dollars of new growth to the
global economy, which in turn will create exports, jobs,
and investment opportunities for America.  An investment
in Russia's democratic future is an essential investment
in America's future as well.
 
U.S. Government Initiatives
 
The U.S. Government's highest priority for the NIS is to
encourage and aid their efforts to make the transition to
a market economy within a democratic system of
government.  The United States repeatedly stresses its
view to these governments that the economic
transformation they seek requires bold and consistent
policies that foster a market economy domestically and
greater integration into the global economy.
 
To support that integration, the United States works to:
 
--  Normalize relations by removing Cold War-era
restrictions on trade and investment and by negotiating a
network of economic agreements to support expanded
economic cooperation;
 
--  Integrate the NIS into the world economic system by
supporting their membership and participation in
international institutions such as the International
Monetary Fund (IMF), the World Bank, and the General
Agreement on Tariffs and Trade (GATT), when they are able
to assume obligations for membership; and
 
--  Provide external support for market-oriented reform,
including bilateral technical and humanitarian assistance
and macroeconomic support pegged to debt rescheduling and
the IMF program designed to stabilize their economies and
their move to currency convertibility.
 
Assistance to Date
 
A focused program to assist Russian democracy and
development is in the deepest interest of the United
States.  The United States has  provided most of the NIS
with considerable bilateral assistance under the Freedom
for Russia and the Emerging Eurasian Democracies and Open
Markets (FREEDOM) Support Act.  This effort is
coordinated with other Western donors.
 
The United States makes available Commodity Credit
Corporation (CCC) loan guarantees to assure qualified NIS
governments of credit for essential food imports.  As a
result of the Vancouver and Tokyo summit process in 1993,
the United States is providing Russia an assistance
package worth $1.6 billion.  Among its initiatives are
support for private sector development with money
earmarked for enterprise funds, exchanges and training,
direct food and medical aid as well as credits, and funds
for energy and environment sector reform.  The package
also includes trade credits to the Overseas Private
Investment Corporation (OPIC) and U.S. Export-Import Bank
(Eximbank) to guarantee U.S. investments and to the
Department of Commerce for the formation of a business
development committee.
 
Multilaterally, the United States is participating with
the other Group of Seven (G-7) industrialized states in
an aid package of about $30 billion.  Of this, the United
States is contributing $1.8 billion to support
privatization and assist energy productivity and
environmental protection, private sector development, and
financing of additional export and import credits.  The
United States also will target $300 million for other
NIS.
 
Progress in Normalizing Trade Relations With the NIS
The United States has established diplomatic relations
with all of the NIS, has opened an embassy in each one,
is establishing bilateral frameworks for trade and
investment, and has trade agreements that provide the
basis for reciprocal most-favored-nation (MFN) tariff
treatment for all the NIS except Azerbaijan.  Bilateral
investment treaties with Kazakhstan and the Kyrgyz
Republic have entered into force.  Bilateral tax
treaties, granting investors relief from double taxation,
have been concluded with Russia.  The United States has
signed similar treaties with Kazakhstan and Ukraine.
 
U.S. trade and investment in the NIS is increasing,
partly because the U.S. Government has provided several
financing programs.  Total U.S. trade with Russia and the
NIS started from a low base:  In 1992, bilateral trade
amounted to a modest $4.6 billion--a 60% increase over
the same period last year--and U.S. exports of
manufactured goods such as construction equipment, cars,
oil equipment, pumps, and power equipment have more than
doubled.  Both OPIC and Eximbank have expanded their
activities in the NIS and will continue to do so because
of the increase in trade credits to guarantee U.S.
investments.
 
Ultimately, private trade and investment will be the most
important source of direct support for economic reforms.
Only the private sector can help meet Russia's enormous
capital and technology requirements and fuel
restructuring and modernization of its economy.
 
The United States encourages and supports U.S. business
involvement in Russia.  President Clinton made trade and
investment a priority at the 1993 Vancouver summit and
proposed ways to make a breakthrough in these important
areas.
 
--  Vice President Gore and Prime Minister Chernomyrdin
co-chair six working committees known collectively as the
Gore-Chernomyrdin Commission.  Progress continues at the
working level on a range of specific issues in the fields
of science and technology, business development, space,
energy policy, environmental protection, and defense
diversification.  The most recent high-level meeting was
held in June 1994, in Washington, DC.
 
--  The U.S.-Russian Business Development Committee (BDC)
identifies and removes impediments to trade and
investment.
 
--  The United States provides technical assistance to
Russia to improve its export control development.  An
effective Russian export control system will permit the
sale of higher levels of technology to assist Russian
economic reform and modernization.
 
--  Eximbank has approved more than $240 million in loan
guarantees and insurance for transactions in Russia.  In
July 1993, Eximbank signed an Oil and Gas Framework
Agreement with Russia under which secured credit
guarantees of about $2 billion will be extended to
support capital equipment exports for the rehabilitation
of Russia's energy sector.  In March 1994, Eximbank
approved its first transaction under the framework--a
$231 million credit for Permeneft, an oil production
association.  Eximbank has received more than $750
million in additional Government of Russia approved
applications that are eligible for support under this
framework agreement.
 
--  OPIC has approved a $150-million package--$50 million
in loan guarantees and $100 million in investment
insurance coverage--to support the "Polar Lights" U.S.-
Russia joint venture in the oil industry.
 
--  The Trade and Development Agency (TDA) has made a
number of grants for feasibility studies in the NIS,
including a $1.4-million grant for oil and gas
feasibility studies as part of a $3.8-million package.
 
Under the TDA and Commerce Department's Special American
Business Internship Program, 300 additional internships
are being created with U.S. companies for Russian
executives, entrepreneurs, and scientists to acquire on-
the-job training.  The U.S. has opened four American
business centers in Russia in 1994.
 
FREEDOM Support Act
 
The FREEDOM Support Act of 1992 provides a framework for
the U.S. Government to support trade and investment in
the NIS.  It also authorizes the humanitarian and
technical assistance necessary to build free markets and
a larger private sector in the NIS.  The act:
 
--  Increases export and investment guarantees and
insurance available through Eximbank and OPIC;
 
--  Permits TDA to increase the number of feasibility
studies for Western business investment in the NIS;
 
--  Supports continued guarantees of U.S. food exports
under the CCC;
 
--  Authorizes assistance in development of democratic
institutions and creation of indigenous private sector
organizations;
 
--  Encourages programs to establish a legal system that
guarantees individual rights;
 
--  Authorizes introduction of Peace Corps and Democracy
Corps, as well as numerous cultural exchanges; and
 
--  Authorizes founding of America Houses and American
Business and Management Centers to assist U.S. companies
in identifying promising investment and business
opportunities.
 
Where To Turn For Help
The following U.S. Government agencies, addresses, and
other information provide assistance to U.S. firms
seeking business opportunities in the New Independent
States.
 
U.S. Department of Commerce
Business Information Service For the NIS (BISNIS).  The
Department  of Commerce opened the Business Information
Service for the Newly Independent States (BISNIS) in June
1992.  BISNIS provides counseling and commercial
information to U.S. firms and investors interested in
doing business in the NIS.
 
BISNIS also provides U.S. companies with information on
NIS trade and investment opportunities, updates on trade
regulations and legislation, economic and industrial
market data, NIS government and industry contacts, a
calendar of trade promotion events, and information on
sources of financing.  International trade specialists
are available to counsel U.S. companies by telephone and
in person.
 
The center has more than 100 publications on doing
business in the NIS, including commercial overviews on
all 12 countries.  These overviews include summaries of
NIS resources, foreign investment environment, foreign
trade regulations, and overall economic situation.  Other
materials are available on several key topics, including
U.S. Government programs in the NIS, sources of
financing, privatizaton laws, procedures for establishing
an office, regional information, trade promotional
events, NIS and U.S. public and private sector contact
lists, and upcoming trade events.
 
 
Business Information Service For the NIS
U.S. Department of Commerce
 
International Trade Administration
Room 7413
Washington, DC 20230
Tel:  (202) 482-4655
Fax:  (202) 482-2293
Flashfax:  (202) 482-3145
 
U.S. and Foreign Commercial Service (US&FCS).  Western
businesses may find limited facilities, since most of the
NIS have an acute shortage of office and hotel space.
The U.S. and Foreign Commercial Service (US&FCS)  in the
NIS offers an "Office Away From Home" service in Moscow
that can help U.S. firms establishing operations there.
 
This service provides office space, furniture, answering
services, international telephone and fax services, and
referrals to local consultants, law offices, accounting
firms, interpreters, and drivers.  Fees are about half
those of local companies and are assessed only to cover
operating costs.  Staff includes Russians and Americans
experienced in facilitating contacts between U.S. and
Russian firms.  Through a satellite link, businesses also
are assured immediate, reliable, private telephone and
fax connections to offices worldwide.  Contact:
 
U.S. and Foreign Commercial Service, Moscow
Tel:  7 (502) 224-1105 or 7 (502) 224-1106
Telex:  413205 usco su
Fax:  2302101
 
The US&FCS also plans to open American Business Centers
(ABCs) that will help U.S. companies explore trade and
investment opportunities in the NIS by offering critical
business facilitation services such as telecommunications
and computer equipment, office space, market information,
secretarial services, and other assistance.  In 1994,
ABCs are scheduled to open in St. Petersburg,
Novosibirsk, Nizhnevartovsk, and Vladivostok, Russia;
Kiev, Ukraine; Almaty, Kazakhstan; and Tashkent,
Uzbekistan.  ABCs are under consideration for Tyumen,
Nizhniy Novgorod, Volgograd, and Yekaterinburg in Russia
and in Minsk, Belarus.
 
The Department of Commerce has established US&FCS offices
at four U.S. embassies and two consulates in the NIS:
 
Almaty, Kazakhstan
Senior Commercial officer
American Embassy Almaty
99/97 Furmanova Street
Almaty, Kazakhstan
Tel:  (7) (3272) 631-770
Fax:  (7) (3272) 633-883
 
U.S. Mailing Address
AmEmbassy Almaty
Department of State
Washington, DC  20521-7030
 
Moscow, Russia
Senior Commercial Officer
American Embassy Moscow
15 Novinskiy Bul'var
Tel:  7 (502) 224-1105
Fax:  7 (502) 224-1106
 
U.S. Mailing Address
PSC 77-FCS, APO AE 09721
 
St. Petersburg, Russia
Principal Commercial Officer
American Consulate General
St. Petersburg
15 Furshatskaya
St. Petersburg, Russia
Tel:  7 (812) 119-6045 (international)
7 (812) 213-6537 (local)
Fax:  7 (873) 140-5577 (international)
7 (812) 213-6962 (local)
 
U.S. Mailing Address
Box L, APO AE 09723
 
Vladivostok, Russia
Commercial Officer
American Consulate General
Vladivostok
12 Ulitsa Mordovtseva
Tel:  7 (509) 851-1011
Fax:  7 (4232) 268-445
 
U.S. Mailing Address
AmConsul Vladivostok
Department of State
Washington, DC  20521-5880
 
Kiev, Ukraine
Senior Commercial Officer
American Embassy Kiev
7 Kudriavsky Uzviz, 2nd floor
Kiev, Ukraine
Tel:  7 (044) 417-2669
Fax:  7 (044) 417-1419
 
U.S. Mailing Address
AmEmbassy Kiev
Department of State
Washington, DC  20521-5850
 
Tashkent, Uzbekistan
Senior Commercial Officer
American Embassy Tashkent
82 Chelanzarskaya
Tashkent, Uzbekistan
Tel:  (7) (3712) 771-407
Fax:  (7) (3712) 776-953
 
U.S. Mailing Address
AmEmbassy Tashkent
Department of State
Washington, DC  20521-7110
 
 
Establishing Operations
U.S. firms or individuals who want to establish
operations, including joint ventures, in the NIS follow
the procedures designated by each country, which can
include registration, accreditation, and fees.
 
In Russia, for example, registration permits a foreign
firm to carry out financial transactions and to conduct
its activities.  Forms can be obtained from:
 
Moscow Registration Chamber
Russia, l03009 Moscow
Mokhovaya ulitsa l8, BLD., 8-E
Tel:  7(095) 202-29-63 or 7 (095) 201-63-80
 
Once the forms are completed, contact:
Russian Agency for International Cooperation and
Development
Mr. Vitaliy Seryogin, Chief of Department of Registration
of Enterprises With Foreign Investment
Russia, l03009 Moscow
Georgievskiy per., 2
Tel:  7 (095) 292-3932
Fax:  7 (095) 292-8766
 
Accreditation in Russia is more restrictive than
registration and is usually limited to a three-year
period.  Accredited offices of a foreign company are not
legal entities and can conduct business only o behalf of
the local office, not the parent company.  Financial
transactions are prohibited.
 
 
U.S. and Foreign Commercial Service District Offices in
the U.S.  The Commerce Department's district offices tap
into its overseas network to steer U.S. companies into
promising markets.
 
Alabama
Birmingham (205) 731-1131
 
Alaska
Anchorage (907) 271-6237
 
Arizona
Phoenix (602) 640-2513
 
Arkansas
Little Rock (501) 324-5794
 
California
Los Angeles (310) 575-7105
Newport Beach (714) 660-1688
San Diego (619) 557-5395
San Francisco (415) 705-2300
Santa Clara (408) 291-7625
 
Colorado
Denver (303) 844-6622
 
Connecticut
Hartford (203) 240-3530
 
Delaware
(Serviced by Philadelphia, PA)
 
District of Columbia
(Serviced by Gaithersburg, MD)
 
Florida
Clearwater (813) 461-0011
Miami (305) 536-5267
Orlando (407) 648-6235
Tallahassee (904) 488-6469
 
Georgia
Atlanta (404) 452-9101
Savannah (912) 652-4204
 
Hawaii
Honolulu (808) 541-1782
Idaho
Boise (208) 334-3857
 
Illinois
Chicago (312) 353-4450
Rockford (815) 987-4347
Wheaton (312) 353-4332
 
Indiana
Indianapolis (317) 582-2300
 
Iowa
Des Moines (515) 284-4222
 
Kansas
Wichita (316) 269-6160
 
Kentucky
Louisville (502) 582-5066
Louisiana
New Orleans (504) 589-6546
 
Maine
Augusta  (207) 622-8249
 
Maryland
Baltimore (410) 962-3560
Gaithersburg (301) 975-3904
 
Massachusetts
Boston (617) 565-8563
 
Michigan
Detroit (313) 226-3650
Grand Rapids (616) 456-2411
 
Minnesota
Minneapolis (612) 348-1638
 
Mississippi
Jackson (601) 965-4388
 
Missouri
Kansas City (816) 426-3141
St. Louis (314) 425-3302
 
Montana
(Serviced by Portland, OR)
 
Nebraska
Omaha (402) 221-3664
 
Nevada
Reno (702) 784-5203
 
New Hampshire
Portsmouth (603) 334-6074
 
New Jersey
Trenton (609) 989-2100
 
New Mexico
Santa Fe (505) 827-0350
 
New York
Buffalo (716) 846-4191
New York City (212) 264-0634
Rochester (716) 263-6480
 
North Carolina
Greensboro (919) 333-5345
 
North Dakota
(Serviced by Omaha, NB)
 
Ohio
Cincinnati (513) 684-2944
Cleveland (216) 522-4750
 
Oklahoma
Oklahoma City (405) 231-5302
Tulsa (918) 581-7650
 
Oregon
Portland (503) 326-3001
 
Pennsylvania
Philadelphia (215) 962-4980
Pittsburgh (412) 644-2850
 
Puerto Rico
San Juan (809) 766-5555
 
Rhode Island
Providence (401) 528-5104
 
South Carolina
Charleston (803) 727-4361
Columbia (803) 765-5345
 
South Dakota
(Serviced by Omaha, NB)
 
Tennessee
Knoxville (615) 545-4637
Memphis (901) 544-4137
Nashville (615) 736-5161
 
Texas
Austin (512) 482-5939
Dallas (214) 767-0542
Houston (713) 229-2578
 
Utah
Salt Lake City (801) 524-5116
 
Vermont
(Serviced by Boston, MA)
 
Virginia
Richmond (804) 771-2246
 
Washington
Seattle (206) 553-5615
Tri-Cities (509) 735-2571
 
West Virginia
Charleston (304) 347-5123
 
Wisconsin
Milwaukee (414) 297-3473
 
Wyoming
(Serviced by Denver, CO)
 
U.S. Department of State
Office of the Coordinator for U.S. Assistance to the NIS.
The Office of the Coordinator for U.S. Assistance to the
New Independent States is responsible for overall
coordination of U.S. assistance policy and technical
assistance programs (ongoing or planned) for the NIS.
This office is the initial point of contact for U.S.
firms interested in business and investment
opportunities.
 
Senior Adviser
Private Sector Programs
S/NIS/C, Room 1004
U.S. Department of State
Washington, DC 20520
Tel:  (202) 647-2626
Fax:  (202) 647-2636
 
U.S.  Embassies in the NIS.  U.S. embassies in the NIS
countries assist American companies that wish to contact
businesses and officials in these countries.  They
provide information and analysis of NIS developments and
communicate U.S. Government and private sector views to
host governments.
 
Yerevan, Armenia
Harry Gilmore, Ambassador
18 Gen Bagramian
Tel:  (7) (8852) 151-144
Fax:  (7) (8852) 151-138
 
U.S. Mailing Address
American Embassy Yerevan
Department of State
Washington, DC  20521-7020
 
Baku, Azerbaijan
Richard Kauzlarich, Ambassador
Hotel Intourist
Tel: (7) (8922) 92-63-06
 
U.S. Mailing Address
American Embassy Baku
Department of State
Washington, DC  20521-7050
 
Minsk, Belarus
George Krol, Deputy Chief of Mission
46 Starovilenskaya
Tel:  (7) (0172) 34-65-37
Fax:  (7) (0172) 34-78-53
 
U.S. Mailing Address
American Embassy Minsk
APO AE 09723
 
Tbilisi, Georgia
Kent Brown, Ambassador
25 Antonely Street
Tel:  (7) (8832) 98-99-68
Fax:  (7) (8832) 93-37-59
 
U.S. Mailing Address
American Embassy Tbilisi
Department of State
Washington, DC  20521-7060
 
Almaty, Kazakhstan
William Courtney, Ambassador
99/97 Furmanova Street, 480012
Tel:  (7) (3272) 633-405
Fax:  (7) (3272) 633-883
 
U.S. Mailing Address
American Embassy Almaty
Department of State
Washington, DC  20521-7030
 
Bishkek, Kyrgyzstan
Edward Hurwitz, Ambassador
66 Erkindik Prospekt  720002
Tel:  (7) (3312) 22-29-20
Fax:  (7) (3312) 22-35-51
 
U.S. Mailing Address
American Embassy Bishkek
Department of State
Washington, DC  20521-7040
 
Chisinau, Moldova
Mary Pendleton, Ambassador
103 Strada Alexei Mateevici
Tel:  (7) 373 (2) 23-37-72
Fax:  (7) (0422) 23-34-94
 
U.S. Mailing Address
American Embassy Chisinau
Department of State
Washington, DC  20521-7080
 
Moscow, Russia
Thomas Pickering, Ambassador
19/23 Novinskiy Bul'var
Tel:  (7) (095) 252-2451
Fax:  (7) (095) 255-9766
 
U.S. Mailing Address
American Embassy Moscow
PSC-77-FCS, AP0 AE 09721
 
Dushanbe, Tajikistan
Stanley Escudero, Ambassador
Interim Chancery, #39 Ainii Street
Tel:  (7) (3772) 24-82-33
 
U.S. Mailing Address
American Embassy Dushanbe
Department of State
Washington, DC  20521-7090
 
Ashgabat, Turkmenistan
Joe Hulings, Ambassador
Yubilenaya Hotel
Tel:  (7) (36320) 24-49-25
 
U.S. Mailing Address
American Embassy Ashgabat
Department of State
Washington, DC  20521-7070
 
Kiev, Ukraine
William Miller, Ambassador
10 Yuria Kotsyubinskovo, 252053
Tel:  (7) (044) 244-7349
Fax:  (7) (044) 279-1485
 
U.S. Mailing Address
American Embassy Kiev
Department of State
Washington, DC  20521-5850
 
Tashkent, Uzbekistan
Henry Clarke, Ambassador
82 Chelanzarskaya
Tel:  (7) (3712) 77-14-07
Fax:  (7) (3712) 77-69-53
 
U.S. Mailing Address
American Embassy Tashkent
Department of State
Washington, DC  20521-7110
 
U.S. Agency for International Development (USAID)
The Center for Trade and Investment Services provides
specific information about USAID programs and activities.
 
U.S. Agency for International Development
320 - 21st Street, NW
SA-2, Room 100
Washington, DC   20523-0229
Tel:  202-663-2660 or 1-800-USAID 4U (1-800-872-4348)
Fax:  (202) 663-2670
 
U.S. Trade and Development Agency
TDA promotes U.S. exports for major development projects
in the NIS.  It funds feasibility studies, consultancies,
training programs, and other project-planning services
related to major projects.
 
U.S. Trade and Developmen Agency
Regional Director, New Independent States
SA-16, Room 309
Washington, DC 20523-1602
Tel:  (703) 875-4357
Fax:  (703) 875-4009
 
Export-Import Bank of the United States
Eximbank provides insurance, guarantees, and loans to
U.S. exporters and commercial banks to facilitate
financing for the export of U.S. goods and services to
many emerging NIS markets.  Eximbank has legal authority
to extend its programs to all of the NIS.  Its programs
are available in Belarus, Kazakhstan, Russia, Ukraine,
and Uzbekistan.
 
Loan Officer
Eximbank
811 Vermont Avenue, NW
Washington, DC 20571
Tel:  (202) 566-8190
Fax:  (202) 566-7524
 
Overseas Private Investment Corporation
OPIC promotes economic growth in more than 125 developing
countries, including the NIS, by encouraging U.S. private
investment in these countries.  It assists U.S. investors
through three main programs:
 
--  Financing investment programs by direct loans and
loan guarantees;
 
--  Insuring investment projects against political risk;
and
 
--  Providing investor services, including advisory
services, project development funding, investment
missions, computer-assisted joint venture partner
matching, and country and regional information kits.
 
Overseas Private Investment Corporation
1100 New York Avenue, NW
Washington, DC 20527
 
Legal Affairs
Tel:  (202) 336-8423
Fax:  (202) 408-0297
 
Managing Director, Insurance
Tel:  (202) 336-8588
Fax:  (202) 408-0297
 
Finance
Tel:  (202) 336-8475
Fax:  (202) 408-5145
 
U.S. Department of Agriculture
USDA is responsible for commercial export programs and
several food aid programs, including congressional loans,
Food for Peace programs, and commodity grants.  Many
agricultural food commodities are eligible for export
under these programs.  USDA also sponsors technical
assistance programs for the NIS that support the
transition to a private agricultural system.
 
USDA supports the sale of American agricultural products
through the Commodity Credit Corporation (CCC) and the
Export Enhancement Program (EEP).  The CCC guarantees
repayment of short-term loans made to eligible countries,
including the NIS.  The EEP challenges unfair trade
practices by competitors.
 
U.S. Department of Agriculture
Office of Emerging Democracies
Room 6506, South Building
Foreign Agricultural Service
Washington, DC  20250-1000
Tel:  (202) 720-0368
Fax:  (202) 690-4369
 
U.S. Information Agency
USIA is responsible for educational and cultural
exchanges, information programs, internships, and
training activities that support U.S. policy goals and
that promote democratic and economic reforms in the NIS.
In addition to USIA Foreign Service officers posted in
U.S. Embassies in the NIS, USIA's Washington, DC,
headquarters works through a number of private sector
exchange organizations in the United States.
 
U.S. Information Agency
301 - 4th Street, SW
Room 751
Washington, DC  20547
Tel:  (202) 619-5057
Fax:  (202) 619-5958
 
U.S. Department of the Treasury
The Treasury Department provides technical assistance in
macroeconomic policy, government financial operations,
and financial sector reform to support development and
operation of central and commercial banking institutions.
 
U.S. Department of the Treasury
Office of Eastern Europe and
Former Soviet Union Policy
1500 Pennsylvania Avenue, NW, Room 4138
Washington, DC  20220
Tel:  (202) 622-2130
Fax:  (202) 622-2308
 
 
Country Reports
As changes occur in the New Independent States, the
United States is helping to establish and solidify
political and economic institutions and systems that will
foster long-term democracy and prosperity in the region.
The United States is expanding its political, diplomatic,
and economic relations with the NIS as American business
seeks greater trade and investment.
 
Armenia
Capital:  Yerevan
Chief of State:  Levon Ter-Petrosyan
Area:  29,800 square kilometers
Population:  3.4 million
Natural Resources:  copper, zinc, molybdenum, and alumina
Rail Network:  840 kilometers
Road Network: 11,300 kilometers, of which 10,500 are hard
surface
Ports:  none
Airports:  Yerevan
 
Bilateral Trade Agreement/MFN:  entered into force April
1992
Bilateral Investment Treaty (BIT):  signed September
1992; awaits Armenian ratification
Tax Treaty:  negotiations expected in 1994
OPIC Agreement:  signed and entered into force April 1992
U.S. Export-Import Bank (Eximbank):  no
Membership:  IMF, IBRD, EBRD
 
The Armenian leadership is committed to economic reform
and continues to create the governmental and
institutional framework necessary to implement its goals.
Armenia's economy is depressed, the severity of which is
exacerbated by political conflict with Azerbaijan.
 
Trade relations have been brought to a near standstill
because major transportation and trade routes are closed.
Telecommunications, transportation, banking, reliable
power supplies, and office space are in short supply.  In
1992, GDP fell to about one-third of its 1989 level, and
the decline continued in 1993.  Unemployment and
inflation are high.  About 95% of the population is
estimated to live below the poverty line.  Food and
energy are in critically short supply.
 
Despite these difficult economic conditions, however, the
government has moved rapidly on economic reforms.
Agricultural land was largely privatized in 1991,
resulting in a 15% rise in production that year.  Prices-
-except for bread, public utilities, and transport--are
deregulated.  Legislation on property taxes, mortgages,
and banking has been passed or is pending..  In November
1993, Armenia introduced a new national currency, the
dram, replacing former Soviet and Russian banknotes.
 
The country's economy is dominated by its industrial
sector, emphasizing light industry and machine building,
and totally depends on imports of raw materials and
energy.
 
The United States provides significant amounts of
humanitarian assistance to Armenia.
 
Azerbaijan
Capital:  Baku
Chief of State:  Heydar Aliyev
Area:  86,600 square kilometers
Population:  7 million
Natural Resources:  petroleum, natural gas, iron ore,
non-ferrous metals, and alumina
Rail Network:  2,090 kilometers
Road Network:  36,700 kilometers, of which 31,800 are
hard surface
Ports:  Baku
Airports:  Baku
 
Bilateral Trade Agreement/MFN:  signed April 1993; awaits
Azerbaijan Parliament's ratification
Bilateral Investment Treaty:  talks expected in 1994
Tax Treaty:  no negotiations to date
OPIC Agreement:  signed September 1992; awaits Azerbaijan
Parliament's ratification
U.S. Export-Import Bank:  no
Membership:  IMF, IBRD, EBRD,
ECO (Economic Cooperation Organization, which includes
six Islamic states of the former U.S.S.R. and
Afghanistan, Iran, Pakistan, and Turkey)
 
Azerbaijan is moving cautiously toward a market economy.
State enterprises have not been privatized, but many
small private enterprises have sprung up, mostly in the
retail sector.  Progress toward economic reform has been
impeded by the conflict in Nagorno-Karabakh.  The country
has economic potential because of fertile agricultural
land and rich mineral resources, particularly oil and
gas.  Its major industries are oil refining,
petrochemicals, oil production equipment, and light
industries (for example, food processing and clothing
manufacturing).  Western oil companies believe that
Azerbaijan contains one of the largest undeveloped tracts
of oil and gas in the world.  Several oil companies are
negotiating with the government on leases in the Caspian
Sea.
 
Azerbaijan seeks foreign trade, and the government has
adopted some laws aimed at encouraging trade investment.
In September 1993, the manat became the sole legal tender
in Azerbaijan, but it is not convertible.  Export
industries are required to surrender part of their hard
currency earnings to the government.
 
The lack of hard currency reserves severely restricts the
purchase of  imported goods, and there is insufficient
infrastructure to support foreign trade.
 
Belarus
Capital:  Minsk
Chief of State:  Aleksandr Lukashenko
Area:  207,600 square kilometers
Population:  10.3 million
Natural Resources:  forest lands and peat deposits
Rail Network:  87,180 kilometers
Road Network:  98,200 kilometers, of which 66,100 are
hard surface
Ports:  none
Airports:  Minsk
 
Bilateral Trade Agreement/MFN:  entered into force
February 1993
Bilateral Investment Treaty:  signed January 1994;
awaiting ratification
Tax Treaty:  no negotiations to date
OPIC Agreement:  Entered into force June 1992
U.S. Export-Import Bank:  open for short-term cover
Membership:  IMF, IBRD
 
Belarus has declared its intention to create a "socially
oriented market economy," but the pace of reform has been
slow.  Many of the former central planning mechanisms
remain in place.  Belarus has a diversified economy that
gives it one of the higher standards of living in the
former U.S.S.R., including an agricultural sector that is
strong by NIS standards and that supplies most internal
needs.  The industrial sector is biased toward heavy
industry, and virtually all enterprises are state-owned.
 
The government is eager to attract foreign investment and
has introduced legislation to improve the investment
climate.  A bilateral investment treaty was signed during
President Clinton's January 1994 visit to Belarus;
however, it is awaiting ratification by both countries.
Legislation for the treaty will remove restrictions on
the formation of joint ventures, allow leasing of land
and buildings by foreign firms, and permit the sale of
non-profitable enterprises.  Joint ventures with more
than 30% ownership are entitled to export their products
without a license and enjoy a three-year tax holiday on
profits commencing when the company earns its first
profits, if the product is manufactured by the joint
venture in Belarus.
 
Negotiations continue over an exchange rate between
Belarusian rubels and Russian rubles as well as possible
monetary union.  At the end of 1992, the Supreme Soviet
issued a decree mandating that hard-currency earnings
from the export of products made by an enterprise with at
least 30% foreign investment (previously 20%) remain at
the disposal of the enterprise.  All other enterprises
must sell 20% of their hard-currency earnings to the
Government of Belarus and pay a 10% hard-currency revenue
tax.  However, the Government of Belarus is considering
changes which would liberalize these provisions.
 
Georgia
Capital:  Tbilisi
Chief of State:  Eduard Shevardnadze
Area:  69,700 square kilometers
Population:  5.5 million
Natural Resources:  forest lands, hydroelectric power,
manganese, iron ore, copper, coal, and oil
Rail Network:  1,570 kilometers
Road Network:  33,900 kilometers, of which 29,500 are
hard surface
Ports:  Batumi, Poti
Airports:  Tbilisi
 
Bilateral Trade Agreement/MFN:  signed in March 1993;
entered into force August 1993
Bilateral Investment Treaty:  signed March 1994; not yet
entered into force
Tax Treaty:  no negotiations to date
OPIC Agreement:  entered into force June 1992
U.S. Export-Import Bank:  no
Membership:  IMF, IBRD
 
A series of political and internal security crises has
absorbed the energies of the government and worsened the
economic problems associated with the breakup of the
U.S.S.R.  After falling by 60% in 1991-92, net material
product continued to decline sharply in 1993.  Georgia
introduced a coupon currency in April 1993 and left the
ruble zone in July 1993.  The coupon rapidly lost value,
however, due to expansionary monetary and fiscal
policies.
 
Perhaps the largest blow has been the decline in
Georgia's external trade.  Moreover, political
instability has devastated the country's important
tourist industry.  Georgian leaders recognize the need to
create an open investment and trade regime to attract the
foreign capital and expertise necessary to develop
agriculture, light industry, and tourism.  Privatization
of agriculture is proceeding, with more than 40% of
arable land already in private hands.  Tax exemptions for
foreign investors include the exemption of property
contributed by them in accordance with a firm's articles
of incorporation, as well as property for the foreign
investors' personal use and equipment or materials
imported for industrial maintenance.  Tax benefits are
available for specific businesses designated by the
government.  The government recently abolished the
registration fee on foreign partners in joint ventures
and the 15% tax on re-exports.  Other economic reforms
are in the drafting or implementation stages.
 
Georgia's limited availability of convertible currency is
a significant barrier to trade, a problem exacerbated by
the government's surrender requirement on hard currency
earnings of export industries.  Under this rule, Georgian
export industries must surrender part of their hard-
currency earnings to the government for rubles at an
unfavorable rate.
 
Import licenses and export quotas are another barrier to
trade with the United States.  Although the government in
March 1993 lifted the requirement of a general license to
import, licenses are required for certain commodities.
The export of many food and consumer products is either
prohibited or restricted, depending on domestic supplies.
 
Moreover, political instability in western and northern
Georgia has disrupted the main rail and road links with
Russia.  Infrastructure is insufficient to support trade:
Telecommunications, banking, office space, and experience
with Western accounting practices are all in short
supply.
 
Kazakhstan
Capital:  Almaty
Chief of State:  Nursultan Nazarbayev
Area:  2.7 million square kilometers
Population:  17 million
Natural Resources:  petroleum, coal, iron, manganese,
chrome, nickel, cobalt, copper, molybdenum, lead, zinc,
and bauxite
Rail Network:  14,460 kilometers
Road Network:  189,000 kilometers, of which 108,000 are
hard surface
Ports:  Atyrau
Airports:  Almaty
 
Bilateral Trade Agreement/MFN:  entered into force
February 1993
Bilateral Investment Treaty:  signed May 1992; entered
into force January 1994.
Tax Treaty:  signed in October 1993; awaiting
ratification by both the U.S. and Kazakhstan
OPIC Agreement:  entered into force May 1992
U.S. Export-Import Bank:  open for short-term cover
Membership:  IMF, IBRD, EBRD, ADB
 
Kazakhstan Government leaders have repeatedly stressed
their commitment to economic reform.  Although the state
still owns all productive economic sectors, Kazakhstan
has made significant progress in building the legislative
framework for a market economy, and its abundant natural
resources could smooth the transition.  Private market
activity in retail trade is growing fast.
 
Kazakhstan is committed to a policy of encouraging long-
term growth through the exploitation of its extensive
natural resources.  A longer term priority is to develop
processing industries.  Kazakhstan seeks foreign
investment in these activities, and U.S. companies
already are participating.  Foreign exporters can sell
directly to Kazakhstan buyers and can sell intermediate
goods and services to foreign investors in Kazakhstan.
The country is a growing market for U.S. consumer and
capital goods, particularly for use in extractive
industries.  No import licenses are required in
Kazakhstan.  Foreign investment will be required to
increase imports.
 
Formally, no equity or participation limits exist on
foreign investment, though virtually all foreign
investment is through joint ventures.  Export performance
requirements are non-existent, as are local content
requirements and restrictions on foreign personnel or
repatriation of capital.  Capital movements can, in
practice, be constrained by foreign exchange shortages.
Foreign firms are permitted in downstream operations and
were allowed to operate as intermediaries by presidential
decree in January 1992.
 
Kazakhstan introduced its own currency, the tenge, in
November 1993.  The currency is widely used in the local
economy.  Legal restrictions on private currency trading
still exist, and individuals are limited in their
authorized access to foreign currency.  Any company,
however, can participate in the currency auctions as
buyer or seller.  Dollars and rubles are available from
banks, although not immediately on demand.  Kazakhstan
companies are required to exchange for tenge at the
national bank at least 40% of their foreign currency
earnings.
 
Kazakhstan has a developing legal framework, little
experience in and understanding of a market economy, and
a lack of domestic investment capital.  Services are
affected by formal and informal barriers, like antiquated
telecommunications and transportation facilities.
 
Kyrgyz Republic
Capital:  Bishkek
Chief of State:  Askar Akayev
Area:  191,300 square kilometers
Population:  4.2 million
Natural Resources:  coal, natural gas, oil, nepheline,
rare earth metals, mercury, bismuth, gold, uranium, lead,
zinc, and hydroelectric power
Rail Network:  370 kilometers
Road Network:  30,300 kilometers, of which 22,600 are
paved or gravel
Ports:  none
Airports:  Bishkek
 
Bilateral Trade Agreement/MFN:  entered into force August
1992
Bilateral Investment Treaty:  signed January 1993;
entered into force January 1994
Tax Treaty:  under negotiation
OPIC Agreement:  entered into force May 1992
U.S. Export-Import Bank:  short-term credit for
investment
Membership:  IMF, IBRD, EBRD,
ECO (Economic Cooperation Organization--an Islamic
economic bloc, which includes six states of the former
U.S.S.R. and Afghanistan, Iran, Pakistan, and Turkey)
 
The Kyrgyz Republic is one of the poorest former Soviet
republics; it had depended on subsidies from the central
government.  It lacks easily accessible natural
resources, and the availability of energy supplies is
mixed.
 
Nonetheless, the government has constructed a legal
framework for economic reform, including privatization,
joint ventures, foreign trade and investment, free
economic zones, and concessions to foreign investors.  It
was the first of the former Soviet republics to reach a
stand-by arrangement with the IMF and to draw from this
new program.  Its prices are determined by free market
forces.  In February 1994, it hosted the first CSCE
economic seminar on promoting small- and medium-sized
businesses in transition economies.  The Kyrgyz Republic
introduced a national currency, the som, in May 1993.
 
The Kyrgyz Republic's recent law on foreign investment
permits issuance of shares in joint ventures and the
founding of foreign-owned enterprises, promotes
investment in research and development, and sanctions
other forms of economic and technological activity not
prohibited by Kyrgyz laws.  Moreover, tax-exempt status
for foreign investors has been granted in the priority
areas of electronics, machine tool production, tourism,
communications, consumer goods, agriculture, and new
technologies.  As yet, no laws regulate foreign ownership
of private property.
 
The Kyrgyz Republic lacks hard currency, making
repatriation difficult despite liberalized foreign
exchange laws.  Inadequate telecommunications and banking
facilities, as well as steep transportation costs, are
further barriers to trade.
 
Moldova
Capital:  Chisinau
Chief of State:  Mircea Snegur
Area:  33,700 square kilometers
Population:  4.4 million
Natural Resources:  lignite, phosphorites, and gypsum
Rail Network:  1,150 kilometers
Road Network:  20,000 kilometers, of which  13,900 are
hard surface
Ports:  none
Airports:  Chisinau
 
Bilateral Trade Agreement/MFN:  entered into force July
1992
Bilateral Investment Treaty:  signed April 1993;
ratified, now pending entry into force
Tax Treaty:  no negotiations to date
OPIC Agreement:  entered into force June 1992
U.S. Export-Import Bank:  no cover available
Membership:  IMF, IBRD, EBRD
 
The breakup of the former Soviet Union and the movement
toward market prices in trade among the former republics
have greatly affected Moldova's economy.  Moldova must
import oil, natural gas, and coal, mainly from Ukraine
and Russia.  Its products generally are unable to compete
on Western markets, and trade remains oriented toward the
other NIS.  The government has been focused mainly on
internal political crises.
 
Moldova has taken preliminary steps toward building the
framework for a market economy, including basic
legislation for economic reform and privatization.
Moldova introduced its national currency, the lei, in
November 1993.
 
The most significant barrier to U.S. exports is Moldova's
shortage of hard currency with which to pay for them.
The Moldovan Government's limited control over the
separatist Trans-Dniester region presents barriers to
investment in that region.
 
Russia
Capital:  Moscow
Chief of State:  Boris Yeltsin
Area:  17 million square kilometers
Population:  149 million
Natural Resources:  oil, natural gas, coal, phosphorites,
potassium salts, iron ores, gold, diamonds, rare metals,
copper, lead, tin, bauxite, manganese, silver,
molybdenum, graphite, nickel, and uranium
Rail Network:  87,180 kilometers
Road Network:  879,100 kilometers, of which  652,500 are
hard surface
Ports:  Arkhangelsk, Kaliningrad, Kholmsk, Korsakov,
Magadan, Murmansk, Nakhodka, Novorossiysk, Petropavlovsk-
Kamchatskiy, Rostov, St. Petersburg, Tiksi, Tuapse,
Vanino, Vladivostok, Vostochnyy, Vyborg,
Airports:  Khabarovsk, Magadan, Moscow, Novosibirsk, St.
Petersburg, Smara, Syktyvkar, Tyumen, Vladivostok,
Yakutsk, Yekaterinbeurg
Bilateral Trade agreement/MFN:  entered into force June
1992
Bilateral Investment Treaty:  signed June 1992; awaits
ratification
Tax Treaty:  entered into force January 1994
OPIC Agreement:  entered into force June 1992
U.S. Export-Import Bank:  open for medium-term cover
Membership:  IMF, IBRD, EBRD
 
The Russian economy is experiencing a wrenching
contraction as it moves from a command to a free market
system.  GDP decreased by 12% in 1993 (an improvement
from the 19% drop in 1992).  Agricultural production,
chiefly grain and potatoes, accounted for more than one-
half of that of the NIS; it declined by 6% in 1993.
Industrial output fell by 16% and the rate of investment
by 15% in the same year.  Official unemployment was only
1% of the 71-million work force in 1993 (excluding the
estimated 4-5 million who work reduced hours or are on
voluntary leave).
 
Inflation rose to a peak of 30% monthly in January 1993.
It has fluctuated at double-digit rates since then as the
government has pursued various economic policies (such as
raising interest rates, cutting food subsidies, and
delaying debt payments) with limited success.  As of
early 1994, the inflation rate was estimated at 10%.
 
Russia's trade balance was positive in 1993, primarily as
a result of lower grain import requirements, higher
import duties, and reduced use of Western trade credits.
The government has rescheduled its official debt payment
obligations but has been unable to do so with its
commercial creditors.  It has increased official foreign
exchange reserves to about $5 billion in 1993 (to some
extent due to non-payment of commercial creditors.)
Capital flight remains a serious problem.
 
Russia has made significant head- way in privatizing many
economic sectors.  About 50% of GDP is now produced in
the market economy.  As of March 1994, about 15,000 large
state enterprises had sold shares to the public through
auctions; more than 80,000 small firms had been
transferred to the private sector.  There are 270,000
private farms.  Although private and reorganized
state/cooperative farms are increasingly productive and
efficient, privatization has not yet generated efficiency
gains in industry.  About 30% of state-owned housing
(about 8 million dwellings) had been turned over to
private individuals by the end of 1993.  However, state-
subsidized rents and utilities discourage individual home
ownership.
 
Consumers make 70% of their purchases in the private
sector to take advantage of better selection, quality,
and service.  Food availability and real per capita
income have improved or stabilized, but social welfare
problems, such as increased crime and health care
shortages, are serious.  The gap between rich and poor
also has widened; about one-third of the population lives
below the official poverty level.
 
U.S. exports to Russia face significant legal barriers.
Russia is developing the legal framework for its
transition to political democracy and a market economy.
National and regional authorities are creating and
interpreting laws and decrees that often conflict and
overlap.  As a result, negotiations and contracts for
export sales or investments can be complex and
protracted.  In the absence of a commonly accepted and
enforceable commercial code, each contract must embody
the basic provisions of such a code.  Contracts must
likewise protect the foreign partner against
contingencies that might arise in such a situation.  Lack
of transparency, with no single publication yet
comparable to the U.S. Federal Register, compounds the
problems created by fluidity of laws.  Uneven
implementation of laws creates further complications.
Various officials, branches of government, and
jurisdictions apply regulations with little consistency,
and the decisions of one can be overruled or contested by
another.
 
Russian tax laws governing foreign investment and trade
have changed repeatedly.  Duties range from "duty free"
to about 20%.  The value-added tax is 20% for most goods
and is imposed on Russian and foreign legal entities that
carry out commercial activities in Russia.  Excise taxes
on luxury goods range from 10% to 90%.  Profits are taxed
at 38%.  The top income tax rate is 40%.
 
Russia has foreign exchange controls on profit
repatriation by foreign companies and on hard currency
earnings of exporters.  Russian businesses must sell 50%
of their hard currency earnings for rubles.
 
Tajikistan
Capital:  Dushanbe
Chief of State:  Imomili Rakhmanov
Area:  143,100 square kilometers
Population:  5.5 million
Natural Resources:  hydropower potential, petroleum,
brown coal, lead, zinc, uranium, mercury, salt, gold,
natural gas, bismuth, antimony, molybdenum, and tungsten
Rail Network:  480 kilometers
Road Network:  29,900 kilometers, of which 24,400 are
hard surface
Ports:  none
Airports:  Dushanbe
 
Bilateral Trade Agreement/MFN:  entered into force
November 1993
Bilateral Investment Treaty:  further consultations
needed
Tax Treaty:  further consultations needed
OPIC Agreement:  entered into force June 1992
U.S. Export-Import Bank:  no cover available
Membership:  IMF, IBRD, EBRD, ECO (Economic Cooperation
Organization--an economic bloc, which includes six
Islamic states of the former U.S.S.R. and Afghanistan,
Iran, Pakistan, and Turkey).
 
Progress in implementing an economic reform program has
been slowed by unsettled political conditions.  The civil
war damaged the economic infrastructure, limited
industrial and agricultural production, and led to
serious food shortages.  Little progress has been made
toward establishing a market economy.
 
Tajikistan is the only Central Asian country that has not
left the ruble zone and issued an independent currency,
but Russia's reluctance to provide desperately needed
rubles is increasing the likelihood that Tajikistan will
do so.
 
Tajikistan has one of the lowest standards of living and
is one of the most rural of the New Independent States.
Under the former U.S.S.R., its net output in all major
sectors was less than 1.5% of the total for all
republics.  About 40% of the population is engaged in
agriculture and forestry and 20% in industry and
construction.  Much of its territory is high mountains,
from which it obtains minerals and hydroelectric power,
which are the foundation of its economy.
 
Since the country has little capacity for processing raw
materials, these are exported.  Agricultural products and
exports include cotton, fruits and vegetables, and silk.
Tajikistan imports consumer goods, clothing textiles, and
food from other republics.
 
Tajikistan encourages foreign investment to help rebuild
its economy.  Its reform program aims to develop small
and medium enterprises, while continuing state support
for large enterprises.  A major effort will be made to
develop non-ferrous metallurgy.
 
Turkmenistan
Capital:  Ashgabat
Chief of State:  Saparmurad Niyazov
Area:  488,100 square kilometers
Population:  3.7 million
Natural Resources:  petroleum, natural gas, coal, sulfur,
and salt
Rail Network:  2,120 kilometers
Road Network:   23,000 kilometers, of which 18,300 are
hard surface
Ports:  Krasnovodsk
Airports:  Ashgabat
 
Bilateral Trade Agreement/MFN:  entered into force
October 1993
Bilateral Investment Treaty:  under discussion
Tax Treaty:  under discussion
OPIC Agreement:  entered into force June 1992
U.S. Export-Import Bank:  open for short-term coverage
Membership:  IMF, IBRD, EBRD, ECO (Economic Cooperation
Organization--an economic bloc, which includes six
Islamic states of the former U.S.S.R. and Afghanistan,
Iran, Pakistan, and Turkey).
 
The Turkmenistan Government plans to maintain the state's
role in industry, science, health, and national culture,
taking only a few preliminary steps toward a market
economy.  For the next several years, the economy's
primary sectors--oil, gas, minerals, and most
agriculture--have been reserved for state ownership and
control.
 
Turkmenistan aggressively has pursued new export markets
for its energy, mineral, and cotton products and has
broadened its range of import sources.  The collapse of
inter-republic trade has dampened production in key
sectors of the economy, particularly the pharmaceutical,
agriculture, and construction industries.
 
The issuance of its independent currency, the manat, in
1993 has increased the need for the government to move
decisively on controlling government spending, promoting
foreign investment, and a number of other long-awaited
reforms.  A series of laws on foreign investment,
banking, property ownership, and intellectual property
rights were passed in 1992, but these have not translated
into significant support for economic reform.
 
U.S. exports encounter no significant formal barriers,
although the shortage of hard currency and poor
infrastructure for transportation and communications
impede trade.  Government and individual importers rely
heavily on barter arrangements.
 
Varying shares of foreign exchange received from the
export of certain goods must be surrendered to support
the government's foreign exchange fund.  The surrender of
hard currency earnings from exports is made on the basis
of ruble wholesale prices; that is, exporters receive the
equivalent of the domestic ruble price of the goods
exported in return for the foreign exchange surrendered.
 
Ukraine
Capital:  Kiev
Chief of State:  Leonid Kuchma
Area:  603,700 square kilometers
Population:  52 million
Natural Resources:  iron ore, coal, manganese, natural
gas, salt, sulfur, graphite, titanium,
magnesium, kaolin, nickel, mercury, and timber
Rail Network:  22,800 kilometers
Road Network:  273,700 kilometers, of which 236,400 are
hard surface
Ports:  Bredyansk, Ilchevsk, Kherson, Mariupol, Nikolaev,
Odessa, Sevastopol Kerch, and Yuzhnyy
Airports:  Kiev
 
Bilateral Trade Agreement/MFN:  entered into force June
1992
Bilateral Investment Treaty:  signed March 1994
Tax Treaty:  signed 1994; awaiting ratification by U.S.
and Ukraine
OPIC Agreement:  entered into force May 1992
U.S. Export-Import Bank: open for short-term insurance
for U.S. investments
Membership:  IMF, IBRD, EBRD
 
The Ukrainian economy continues to deteriorate, with its
decline recently accelerating.  Price increases for
energy supplies from Russia and irresponsible credit
policies by the government have led to hyperinflation.
Production continues to drop, with overall GDP falling by
20% in 1993.  The financial system is in disarray.  The
Ukrainian coupon exchange rate, 900 to the dollar in
February 1993, dropped to less than 35,000 to the dollar
in 1994.  On February 21, 1994, the government continued
a pattern set in 1993 and announced  massive new
subsidies worth more than $300 million to the
agricultural and industrial sectors.  These will deepen
the state budget deficit and ensure that inflation will
continue at current high levels in the near term.
 
The vast majority of Ukrainian trade is with countries of
the former Soviet Union, and principally with Russia.
Demand for Ukraine's non-agricultural exports--ferrous
metals, steel pipe, machinery and transport equipment--
continues to fall.  Forced to pay high prices for fuel,
Ukraine continues to run large, unsustainable trade
deficits.  Its trade deficit with Russia was more than
$1.5 billion in 1993.
 
Ukraine's dependence on Russian fuel supplies has
crippled its economy.  Ukraine imports 90% of its oil and
most of its natural gas from Russia.  During 1993, Russia
raised fuel prices (although still significantly below
world-market prices) and reduced deliveries to one-half
1992 levels.  Ukrainian authorities have been forced to
cut supplies to industrial enterprises by 40%, reduce
transport services by one-third, and use rolling
brownouts in major cities to preserve supplies.
 
In January 1994, the parliament passed an ambitious
privatization law which envisions transferring one-
quarter of the state enterprises into private hands by
the end of 1994.  The government aims to negotiate a
stabilization program with the International Monetary
Fund which could serve as the basis for a comprehensive
reform effort.
 
 Ukraine encourages foreign trade and investment.  The
parliament has approved a foreign investment law allowing
Westerners to purchase businesses and property, to
repatriate revenue and profits, and to receive
compensation in the event that property is nationalized
by a future government.  An agreement to provide relief
from double taxation has been signed.
 
Ukraine is rich in natural resources.  It has a major
ferrous metal industry, producing cast iron, steel, and
steel pipe.  Its chemical industry produces coke, mineral
fertilizers, and sulfuric acid.  Its manufactured goods
include metallurgical equipment, diesel locomotives, and
tractors.
 
It also is an important agricultural and industrial
region.  It is a major producer of grain and sugar and
possesses a broad industrial base, including much of the
former U.S.S.R's space industry.  Although oil reserves
are largely exhausted, it has important energy sources,
such as coal and natural gas, and large mineral deposits.
 
 
Uzbekistan
Capital:  Tashkent
Chief of State:  Islam Karimov
Area:  447,400 square kilometers
Population:  21.7 million
Natural Resources:  natural gas, coal, gold, uranium,
silver, copper, lead, zinc, tungsten, and molybdenum
Rail Network:  3,460 kilometers
Road Network:  78,400 kilometers, of which 67,000 are
hard surface
Ports:  none
Airports:  Andizhan, Bukhara, Samarkand, Tashkent, Termez
 
Bilateral Trade Agreement/MFN:  signed November 1993;
entered into force January 1994
Bilateral Investment Treaty:  under discussion
Tax Treaty:  under discussion
OPIC Agreement:  entered into force October 1992
U.S. Export-Import Bank:  open for short-term financing
insurance for U.S. investments
Membership:  IMF, IBRD, EBRD, ECO (Economic Cooperation
Organization--an economic bloc which includes six Islamic
states of the former U.S.S.R and Afghanistan, Iran
Pakistan, and Turkey).  The government became a signatory
to the Convention on Settlement of Investment Disputes
Between States and Nationals of Other States in March
1994.
 
The Uzbekistan Government is reforming slowly in order to
avoid social dislocation and potential unrest.  The
government is committed to retaining control over major
economic sectors, including oil, natural gas, metallurgy,
transport, chemicals, and the cotton monoculture.
 
The government encourages foreign investment and joint
ventures to increase national income and jobs.  The
indigenous private sector is growing, with increasingly
active trade contacts abroad, but it is strictly
regulated by the Ministry of Foreign Economic Relations.
The government has provided a key incentive to promote
trade flows and foreign investment through joint
ventures:  A two-year "tax holiday," which for those
investing in government-designated priority sectors
becomes a five-year tax holiday.  Foreign investors pay
fees (on a sliding scale) to repatriate profits, but they
can accept or purchase local products for export in lieu
of cash profits.  In November 1993, after Russia expelled
it from the ruble zone, Uzbekistan issued the som coupon
as an interim currency until conversion to a permanent
currency later in 1994.
 
The slow pace of privatization, complicated laws on
property and foreign investment, and general economic and
political uncertainty will continue to make foreign
investors cautious.  Export licenses are required for
exports of so-called strategic goods, which include
cotton, silk, gold, copper, and mineral fertilizers.
Uzbekistan's industrial and transportation
infrastructures need modernization, for which major
capital investments will be required.  Special
precautions are necessary to ensure safe arrival of cargo
shipped by rail or road transport from Russia and
Ukraine.
 
 
Publications and Electronic Information
Publications and electronic dissemination services of the
following U.S. Government agencies and private sector
organizations can provide assistance to U.S. firms
seeking opportunities in the New Independent States.
 
U.S. GOVERNMENT
U.S. Department of State
 
The State Department provides the following materials and
electronic information services:
 
Dispatch is a weekly magazine that carries major foreign
policy speeches and congressional testimony by senior
government officials; fact sheets and chronologies on
current issues; special features; country profiles and
maps on nations in the news; and treaty actions.    To
subscribe, contact:
 
Superintendent of Documents
U.S. Government Printing Office (GPO)
PO Box 371954
Pittsburgh, PA 15250-7954
Tel:  (202) 783-3238
Fax:  (202) 512-2233
 
Cost:  $91 third-class mail,  $144 first-class mail.
Request List ID-USDSD.  Check or money order should
accompany the order and be made payable to the
Superintendent of Documents
 
Federal Bulletin Board Service.  The U.S. Government
Printing Office (GPO) provides the public immediate,
self-service, and cost-effective access to federal
electronic information.  The Bureau of Public Affairs
provides Dispatch, country Background Notes, daily press
briefings, and special publications on the BBS.
 
Users can immediately access free services on the
bulletin board with a personal computer, modem (settings:
8 bit, no parity, 1 stop bit, speeds 300-9600 baud),
telecommunications software, and telephone line by
calling (202) 512-1387.  There is no charge for browsing
the list of files and searching for keyword terms,
downloading copies of instructional and product
description files or publication schedules, or using
electronic mail to order free product literature or
publications for sale by GPO.
 
Prices are reasonable for downloading files:  The minimum
charge per file is $2 (up to 50 kilobytes); a full
megabyte file costs $15.  For BBS purchases, you may pay
by VISA, MasterCard, or GPO  Deposit Account.  To pay by
credit card, GPO requires 24 hours to validate the
information from the time you register on the BBS as a
new user.  A GPO Deposit Account can be opened by calling
(202) 512-0822 (FAX:  (202) 512-1262).
 
For additional information about GPO's service, contact:
Office of Electronic Information Dissemination Services
Tel:  (202) 512-1530
Fax:  (202) 512-1524
 
Travel Information.  U.S. citizens traveling abroad can
obtain information about the health, security, and
general travel situation in countries around the world
from Consular Information Sheets.  These contain data on
the location of the U.S. embassy or consulate, unusual
immigration practices, health concerns, political
disturbances, unusual currency and entry regulations,
crime and security information, and drug penalties.
Contact:
 
Citizens Emergency Center
Tel:  (202) 647-5225 (recorded information)
Fax:  (202) 647-3000
 
The Consular Affairs Bulletin Board (CABB) enables users
to access the Consular Information Sheets described
above, as well as information on U.S. citizen passports,
visas for foreigners wishing to come to the United
States, acquisition and loss of U.S. citizenship,
international adoptions, and entry requirements for
Americans wishing to travel to other countries.
Information comes from the Overseas Security Advisory
Council's (OSAC) electronic bulletin board, maintained by
the Department of State's Bureau of Diplomatic Security.
For general information call (202) 647-9225.
 
Through the U.S. Government Printing Office, the Bureau
of Consular Affairs provides a number of publications
that offer travel information:  Your Trip Abroad, A Safe
Trip Abroad, and Tips for Americans Residing Abroad.
These publications are available on the BBS and are sold
by the Superintendent of Documents, Washington, DC 20402-
9371 (Tel:  (202) 783-3238; Fax:  (202) 512-2233).
 
U.S. Department of Commerce
The Commerce Department provides information from the
following sources:
 
BISNIS Reference Library.  The Business Information
Service for the NIS reference library is open to U.S.
companies and includes current directories, newsletters,
market research, and other useful publications for
developing trade with the NIS.
 
Summary of Export Controls is a 14-page pamphlet
describing licenses and when and how to apply for them.
Obstacles to Trade and Investment in the New Republics of
the Former Soviet Union reviews barriers and recommends
procedures to NIS governments to accelerate the flow of
trade and investment.
 
Obtain these publications from:
 
National Technical Information Service (NTIS)
5825 Port Royal Road
Springfield, VA 22161-2171
Tel:  (703) 487-4653
Fax:  (703) 321-8547
 
Information also is available through several periodic
publications--BISNIS Bulletin, Search for Partners, and
Commercial Opportunities.  BISNIS Bulletin reports the
latest practical information on market developments and
U.S. Government programs supporting trade and investment
in the region.  Search for Partners identifies NIS
enterprises seeking U.S. business partners for joint
ventures and other long-term business relationships.
Commercial Opportunities highlights NIS companies that
are looking to purchase specific products from U.S.
suppliers.  These publications are sent to U.S. companies
that request to be placed on the official BISNIS mailing
list.
 
BISNIS makes its information and back issues of
publications available immediately through the FlashFax
BISNIS Bank, a 24-hour, 7-day automated phone/fax
information bank, which provides fast-breaking trade
leads and market information.  Access is from a touch-
tone phone.
 
BISNIS
International Trade Administration
Room 7413
Washington, DC  20230
Tel:  (202) 482-4655
Fax:  (202) 482-2293
FlashFax Business Bank:  (202) 482-3145
Internet:  BISNIS1@USITA.GOV
 
The Economic Bulletin Board (EBB) is a personal computer-
based electronic bulletin board, which can be reached
from most PCs equipped with a modem (300, 1200, 2400, or
9600 bps) and standard communications software.  A free,
limited-access service is available to those who would
like to get acquainted with the EBB before subscribing.
Call the EBB and type GUEST when prompted for a User ID.
Guest users may not download actual files but are
encouraged to read bulletins, including several sample
files.
 
The EBB can be reached 24 hours a day, 7 days a week at
(202) 482-3870 (300/1200/2400 bps) using your personal
computer.  Set the PC's communications switches to no
parity, 8 bitwords, and 1 stop bit.  The EBB's 9600bps
service uses US Robotics Dual Standard HST/V.32 modems
and can be reached by calling (202) 482-2584.
 
The EBB is an on-line source for trade leads as well as
for the latest statistical releases from the Bureaus of
Economic Analysis, Census, and Labor Statistics; the
Federal Reserve Board;  the Department of the Treasury;
and other federal agencies.  The EBB offers regular
access to government reports such as daily trade
opportunities, merchandise trade, and economic
indicators.  General topics include foreign trade data,
U.S. Trade Representative press releases, regional
economic statistics, and many others.  EBB files are
continually updated and are available at or within a
short time of their official release.  For further
information call the EBB staff at (202) 482-1986.
 
The National Trade Data Bank (NTDB) is a trade
information library designed to boost export sales.  It
offers access to contacts worldwide with profiles of
screened businesses that are interested in importing U.S.
products.  It also offers the most current and reliable
information about specific industries and countries
worldwide.  This information is updated monthly and
compiled from federal sources such as the Federal
Reserve, the Export-Import Bank, and the Office of the
U.S. Trade Representative.
 
Use the NTDB on any IBM-compatible personal computer
equipped with a CD-ROM reader.
 
Cost:  $360 per year for 12 two-disc issues or $35 an
issue
 
For more information call:
Tel:  1-800-USA-TRADE
For information and phone orders for the NTDB, call the
NTDB help line: Tel:  (202) 482-1986
TDD Access:  (202) 482-1526
 
FedWorld.  FedWorld is a user-friendly electronic on-line
system with more than 100 federally operated on-line
computer systems  under a single umbrella.  These systems
provide practical and highly specialized information
ranging from the Commerce Department's Economic Bulletin
Board, which reports economic indicators such as housing
starts; to the State Department's Consular Affairs
Bulletin Board, which provides visa requirements for
travel to other countries.
 
FedWorld can be directly accessed through the Internet or
via telephone line.  By phone, set modem parity to none,
data bits to 8, and stop bit to 1.  Set terminal
emulation to ANSI or VT100.  Set duplex to full, and dial
FedWorld at (703) 321-8020.
 
From the Internet, connect to fedworld.gov by using the
telnet command.  FedWorld's I.P. address is
192.239.92.201.  Two future features, the File Transfer
protocol and Internet mail, are expected to be highly
popular.  For more information, call (703) 487-4608.
 
Small Business Administration (SBA)
The SBA provides Exporters Guide to Federal Resources for
Small Business:  The World Is Your Market, for smaller
firms that want to export their goods and services.
Call:
 
U.S. Government Printing Office
Tel:  (202) 783-3238
Fax:  (202) 512-2233
 
SBA Online.  SBA Online is a computer-based electronic
bulletin board created to expedite information and
assistance to the small business community.  Operating 23
hours a day, this system provides current information on
SBA publications, services, points of contact, calendars
of local events, on-line training, access to other
federal on-line services, data from other federal
agencies, electronic mail, special interest groups, files
for downloading, and on-line assistance.
 
To access the SBA Online system, use a computer, modem,
phone line, and communications software.  Data
parameters:  N,8,1.
 
Toll Free
9600 bps--1-800-697-INFO
2400 bps--1-800-859-INFO
Washington, DC Area
9600 bps--(202) 401-9600
2400 bps--(202) 205-7265
 
Hotline
(202) 205-6400
 
SBA Answer Desk
1-800-ASK-SBA
 
U.S. Agency for International Development (USAID)
USAID offers the Central and Eastern Europe Private and
Voluntary Organization Contact List, a 127-page
descriptive list of 83 private and voluntary
organizations.  Call:
 
National Technical Information Service (NTIS)
Tel:  (703) 487-4630
Fax:  (703) 321-8547
 
PRIVATE SECTOR ORGANIZATIONS
U.S.-Russia Business Council
1701 Pennsylvania Avenue, NW
Suite 650
Washington, DC  20006
Tel:  (202) 956-7670
Fax:  (202) 956-7674
 
Russian-American Chamber of Commerce
Head Office
Chairman:  John H. French
President:  Dr. Irene Lewis
6200 Quebec Street, Suite 201
Englewood, CO  80111
Tel:  (303) 689-8739
Fax:  (303) 689-8762
 
Branch Offices
909 3rd Avenue, 27th floor
New York, NY  10022-9998
Tel:  (212) 339-5564
Fax:  (212) 935-3121
 
608 Massachusetts Avenue, NE
Washington, DC  20002
Tel:  (202) 674-4444
Fax:  (202) 546-3240
 
American Chamber of Commerce in Russia
Ulitsa Stankevicha 16/4 #1
Moscow, Russia
Tel:  +7-095-229-0514
Fax:  +7-095-271-0994
 
Russian-American Chamber
731 8th Street, SE
Washington, DC  20003
Tel:  (202) 546-3275
Fax:  (202) 546-4784
 
American-Russian
Chamber of Commerce
P.O. Box 7950
Chicago, IL  60680-7950
Tel:  (708) 726-8511
Fax:  (708) 726-1703 or (312) 275-2250
 
U.S.-Kazakhstan Economic
Development Council
c/o East-West Trade and Commerce Group, Inc.
P.O. Box 3648
Princeton, NJ  08543-3648
Tel:  (609) 497-9200
Fax:  (609) 683-1820
 
U.S.-Kyrgyz Business Council, Inc.
700 13th Street, NW
Suite 950
Washington, DC  20005
Tel:  (202) 347-6540
Fax:  (202) 347-6537
 
American-Uzbek Chamber of Commerce
1747 Pennsylvania Avenue, NW
Washington, DC  20006-4604
Tel:  (202) 872-0013
Fax:  (202) 872-0210
 
U.S.-NIS Chamber of Commerce and Industry
P.O. Box 1178
Central Islip, NY  11722
Tel:  (516) 582-9102
Fax:  (516) 582-2159
 
CIS-America Chamber of Commerce
9330 Memorial Drive
Houston, TX  77024
Tel:  (713) 681-8474
Fax:  (713) 682-0721  (###)
 
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