V. "What do you suggest?" MrB. "I suggest leaving it out. Isn't the penalty point for delay in

delivery enough?"

V. "Are you a reliable partner, do you think, Mr Brownie? Oh, please, don't frown. I'm only joking. I hope it'll never come to that, so I could agree to having it out. But, Mr Brownie, since this is our first transaction, somehow for order's sake I'd like to get from you a Bank guarantee that in any emergency case if it happens that the contract is cancelled just somewhere in the middle and we have already paid you for the part of the equipment delivered, and if there's no sense for us to retain it,

we will at that

I get our money back ~ and with interest at 5 per cent . How about it?"

373

Mr В.

V. Mr В.

"This is reasonable, Mr Vetrov, but I hope the picture

be as gloomy as all this."

"I agree, but just in case."

"O.K. And one more point. Isn't O.I per cent penalty too much

just for delay in notifying you about shipping the goods? I

can't imagine that it may occur now anyway when it takes

few seconds to send a telex to that effect. Don't you think that

this point is groundless and should be out, too?"

"But it may occur through an oversight, and we want you to be

responsible for notifying us about shipment in time."

Mr В.

V.

Mr В.

"All right, then say so without a threatening tone to that."

"Then it doesn't belong under the Sanctions Clause."

"No, it does not. Moreover, there's a point about our notifying

you in the Shipment Clause, and I believe that obligates

accordingly. We can be satisfied with that, can't you?"

V.

Mr В. V.

"Maybe we can."

"How very nice of you. Thank you. That's it then."

"By the way, Mr Brownie, before I forget — I want you

know that we're against training of our personnel in clai

rooms. They're supposed to operate the equipment to I

delivered. So we want the agreement to provide that trainii

Mr В.

V. Mr В.

V.

can only be carried on at works shops."

"I fully agree with you there, Mr Vetrov. No problem. Now

what are we supposed to discuss next?"

"The Force Majeure and Arbitration Clauses. Shall we meet to

morrow morning? 10 o'clock as usual?"

"All right. See you tomorrow, Mr Vetrov, Mr Svetov,Mr

Popov."

"Goodbye, Mr Brownie, Mr Hudson, Mr Meterson."

TEXT 13 B. THE SYSTEM OF BANKS SERVICING SOVIET FOREIGN ECONOMIC RELATIONS

The restructuring of the USSR's monetary and credit system is part of the general peres troika of the management of the Soviet national economy and foreign economic activities giving branch ministries and their associations and enterprises direct access Jo the foreign market, ll includes the establishment of specialized banks and the change-over of all banking activities to a new commercial basis.

Five specialized banks liave been established: Promstroibank of the USSR (Industrial Construction Bank), Vnesheconombank of the USSR (Bank for Foreign Economic Affairs), Agroprombank of the USSR (Agro-Industrial Bank), the USSR Bank for Wage, Savings and Population Credit and Zhilsotsbank of the USSR (the Bank for Hous­ing, Municipal and Social Development of the USSR) intended to assist the acceleration of social development in all areas. Gosbank (State Bank) of the USSR is the central Soviet bank and heads the whole banking system.

The first three form a system of banks servicing foreign economic activities of Soviet foreign trade associations and firms belonging to the Ministry of Foreign Economic Relations and branch ministries.

The USSR Vnesheconombank is one of the world's major com­mercial banks. It has branches in the capitals of the Union republics

and in Vladivostok, Izmail, Novorossiisk, Odessa, Sochi, Leningrad andsome other cities, and abroad as well.

Vnesheconombank is a shareholder in the Moscow Narodny Bank (Mosnarbank) in the UK and its branches in Lebanon and Singapore, in Eurobank in France and in banks in Austria, Luxemburg and the FRG.

To be able to carry out banking operations linked with the Soviet Union's international payments of a trade and non-trade nature, Vnesheconombank has a network of some 2,000 correspondent banks including 500 major foreign banks in more than 130 countries.

Apart from the usual banking operations servicing Soviet foreign Economic ties and handling credit-clearing transactions, Vnesheconombank now renders new services, i.e. provides its currency nsk insurance to cover export-import operations and extends credits in foreign currency to Soviet enterprises.

The USSR Promstroibank (formerly called Stroibank - the Bank for (Construction) is engaged in financing and crediting projects to be built abroad and services industry, construction, transport and comummunications. Beginning with 1991 Promstroibank is a joint-stock commercial bank providing clearing and credit services to enterprises operating direct on the foreign market where Vnesheconombank has no branches of its own.

The USSR Agroprombank (now also a joint-stock commercial bank) is engaged in financial operations in the field of the country's agro-industrial complex and cooperative societies.

A network of new commercial, cooperative and joint-stock banks has been created for servicing different fields of national economy. More than 200 of them have appeared since 1988. For example, Industry Service", Moscow was set up in 1990.

A Bank Council consisting of 12 people has been set up to run monetary circulation, discuss projects, improve credit and settlement relations and coordinate the activities of the state and republican banks.

The first international commercial bank in the USSR was set up in 1989 with the help of French, German, Austrian, Italian and Finland tanks as well as three Soviet banks: Promstroibank, Agroprombank and Vnesheconombank. Its name is Intermosbank (International Moscow Mink) and its main aim is to finance newly established joint ventures.

An interbank association called "Menatep" comprising as of Janu-arу 1991 18 commercial banks, 2 insurance agencies and several dozen of enterprises was set up. It is a joint-stock association and sells shares publicly to individuals and companies.

The restructuring of the Soviet banking system is aimed at improv­ing and facilitating credit and settlement servicing of the Soviet Monomy as a whole, at ensuring the expansion of the country's participation in the international division and cooperation of labour, at achieving higher economic growth rates and at regulating the whole system of state and republican banks.

374

375