ECONOMIC INTERACTION BETWEEN THE USSR AND THE WEST (S-09108)

Created: 10/10/1975

OCR scan of the original document, errors are possible

CENTRAL INTELLIGENCE AGENCY

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FOR:

SUBJECT*

Bruce Gulliver OSD/ISA/IEAD Department of Defense

Economic Interaction Between the USSR arid the West

response to your request forto be used in Dr. shields' interview withStar nextmrief reviewavailability and terms of recent Western creditsUSSR; Western support for construction projectsUSSR; the flow of Western technology to the USSR;economic activity in the West.

let me knowan be of further assistance.

Office of Economic Research

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Interaction Between tho USSR and the West

Western Credits to the USSR

In the past two years, the USSR has received credits2 billion,0 million in untied Eurodollar borrowing8 billion in credits tied to Western exports. Of the trade5 billion are general purpose credit lines to support Soviet purchases,8 billion extended by France3 billion extended by the United Kingdom0 million extended by Canada0 million extended by Italy In addition, the USSR has received project associated credits from Japan2 billion, from West Germany40 million, and from Italy54 million. All the trade credits provide' subsidized interest rates ranging. Except for the West German credits, which are subsidized by the exporting firms, tho respective Western governments are paying the interest subsidy.

Western Construction Activity in the USSR .

The USSR performsall construction activity on its territory, withew exceptions. East European labor has been used on various projects, but the only known instances of the use of Western labor have been the use of Finnish labor in the construction of hotels in the USSR and the proposed 'use of French and Swedish labor in further hotel construction. Western technicians, however, often are employed to supervise theinstallation of Western supplied equipment, as at the FIAT plant at Tog'liattigrad and at the Kama truck plant. In addition, the USSR often'contracts with Western engineering firms to design" industrialotels', and international trade centers

Western Technology Transfers to the USSR

The USSR within the last few years has signed various types of economic, science, and technology cooperation agreements with all significant industrial Western nations. Under these umbrella agreements, the USSR has signedgreements with private firms, includinggreements with US firms. These agreements call for, among other things, the exchange of experience in research and development, some joint-research projects, and exchange of personnel. Western firms often are motivated by the prospect of equipment sales to the USSR, but some are genuinely interested in mutual noncommercial benefits from such exchanges. In addition, Western firms continue to

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RELEASE AS SANITIZED

trictly commercial basislicenses, processes, and other types of technology to the USSR, and the USSR makes Similar sales to the West. The USSR also benefits from the technology "embodied- in advanced machinery and equipment purchased from the West.

Soviet Economic Activity in the West

The USSR has equity interest in at leastnterprises in the West {see the alphabetical listing). Largely concentrated in Western Europe, these establishments operate in accordance with the laws in the countries in which they are situated. The companies fall into three major categoriest finance and insuranca institutions, shipping agencies, and firms established to promote exports of Soviet-produced products.

The most visible of the Soviet-owned firms in thethe banks and insurance companies!. The largest of theseMoscow NaroohyBank of London and Banque Commercialedu Nord of Paris. Each of these banks has assetsof two billion dollars and moremployees. bank also has branches in Beirut and Singapore. in Western "Europe include Wozchod HandelsbankHandelsbankonaubankndUnited Bank in Luxembourg. The USSR alsoankthe Russo-lranian Bank. The USSR's

insurance operations include Garant Vorsicherungs inSea and Baltic General Insurance Company in London,and OstseeHamburg. All of the above institutions are entirely

Tho USSR also has varying degrees of equity interestargo numbor of companies to facilitate Soviet shipping and to promote Soviet exports. ew notable exceptions. Scaldia-Volga in Belgium, among other things, operates an auto assemblyhe equity investment and the size of the staff are small, often not much morewo or three man office.

Oct 75

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American Trade Joint Stock Company (AMTORG)

Anglo-Soviet Shippingtd. Banquo Commercial pour I'Europe

du Word (BCEN) Belarus Equipment Belgium-Soviet Trade Company

(BELSOBlack Sea and Baltic General

Insurance Company, Ltd. DonaubanX East-Kent Agencies East-Kest Agencies East-West Trading East-west United Bank El org

Ethiopian-soviet Trade Co. (ETHSO) Perchlaex

Garant. Koneistooneistooncla

Konela Horge nil Hatreco Bll AB

Hoscov Narodny Bank, Ltd. <KJJB)

mnd-Beirut Branch

MNB-singapore Branch Hafta-B

Nafta td Ost-Kest Handelsbank Pacific International Freight-liners, Ltd. Buscebols Russo-Iranian Bank Scaldla-Volgia

Schwartzmecr und Ostsee Transport-verBicberungs-Aktlengesellschaft (SOVAG)

Singapore-Soviet Shipping CO.

(SOSIAC) Slava

Sogo and...eboyl

Technical and Optical Equipment, Ltd. Transworld Marine Agency. (Antverp) Transworld Marineotterdam) OHO Plant, Ltd.

United Orient Shipping and Agency

Company, Ltd West*African Automobile and Technical

Engineering Company (WAATECO) Worchod.

United States United Kingdom

France Canada

Belgium

Doited Kingdom

Austria

Belgium

Netherlands

United Kingdom

Luxembourg

Netherlands

Ethiopia

Belgium

Austria

Plnland

Norway

Finland

Norway

S"eden

United Kingdom Lebanon Singapore Belgiua

United Kingdoa West Germany

Canada

Belgium

Prance

Iran

Belgium

West Gernany

Singapore

Prance

Prance

Epain

Italy

Prance

Finland

United Kingdom Belgium Netherlands United Kingdom

Japan

Nigeria Svi tierland

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UNCLASSIFIED

Original document.

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