TEXT: RUSSIA TO JOIN PARIS CLUB OF CREDITOR NATIONS
(Marks Russia's further integration into global community)

Denver -- An agreement has been reached in principle that will pave the way for Russia's full membership in the so-called "Paris Club" of creditor nations.

The Paris Club is the group of nations that meets on a case-by-case basis to reach a common approach on rescheduling or reducing the debt service on official loans to their countries.

Following is the text of a fact sheet released June 20 at the annual summit of heads of state and government of the seven leading industrial nations and Russia:

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Denver -- Agreement was reached today between Russia and the Chairman of the Paris Club on principles for full Russia participation sitting as a creditor country. The agreement marks another milestone in Russia's integration in the international economic community.

The Paris Club is the group of major creditor countries that provides debt relief to developing countries that have encountered financial difficulties. The Paris Club members reschedule or, where needed, reduce debt service on loans that had been extended by creditor governments.

At Helsinki, Presidents Clinton and Yeltsin set as a goal achieving Russian participation in Paris Club during 1997. Today an understanding was reached on the basis for Russia's participation. This understanding provides a framework that must be approved by the full Paris Club in the near future.

As part of this understanding Russia has agreed to adjust downward its claims as basis for entry. It will then offer countries same rescheduling or reduction terms as the Paris Club.

Russia's claims on developing countries will be adjusted to take into account the difficulty of valuing Soviet era claims, the relief Paris Club creditors have already provided, the debtor countries' poverty levels and the special circumstances where the Soviet Union was the predominant military creditor.

These adjustments will have to be implemented in negotiations between Russia and individual debtors, but it is now likely that for the heavily indebted poorest countries, particularly in Africa, these adjustments combined with Paris Club treatment will lead to reduction in debtor obligations to Russia by more than 90 percent.

The agreement puts Russia on the same standing as the rest of the Paris Club. It is an important part of this agreement that, consistent with Paris Club rules, Russia will not collect pariah debt while Paris Club is not doing so.

(Paris Club Members: France, Germany, Australia, Austria, Belgium, Canada, Denmark, Spain, United States, Finland, Ireland, Italy, Japan, Norway, Netherlands, Untied Kingdom, Sweden, Switzerland. There are a few additional ad hoc member countries.)

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