Agreement between the Government of the USSR and the Government of the DPRK regarding Extending a Loan by the Soviet Union to the Government of the DPRK to Pay for Equipment and Materials as Well as the Military Property Supplied to Korea

DRAFT

AGREEMENT

between the Government of the USSR and the Government of the DPRK Regarding Extending a Loan by the Soviet Union to the Government of the Democratic People's Republic of Korea to Pay for Equipment and Materials as Well as the Military Property Supplied to Korea

Due to the fact that the Government of the Union of Soviet Socialist Republics agreed to grant the request of the Government of the Democratic People's Republic of Korea to supply to Korea equipment and materials, as well as military property, and to extend a loan in order to pay for these shipments, the two Governments agreed on the following:

ARTICLE 1

The Government of the Union of Soviet Socialist Republics shall extend to the Government of the Democratic People's Republic of Korea a loan in the amount of ______ million rubles to be used from 1 July, 1949 to 1 July, 1952 in equal annual installments to pay for shipments under this Agreement.  

ARTICLE 2

The loan mentioned in Article 1 of this Agreement and extended to the Government of the Democratic People's Republic of Korea shall be repaid within three years, in equal annual installments, starting as of 1 July, 1952.

ARTICLE 3

For the loan mentioned in Article 1 of this Agreement, the Government of the Democratic People's Republic of Korea shall pay the Government of the USSR 2% annual interest which will be calculated semiannually.

ARTICLE 4

Repayment of the loan and payment of interest shall be made by the Government of the Democratic People's Republic of Korea by way of shipping goods to the Government of the USSR, including ferrous and non-ferrous metals, chemicals and other commodities. In accordance with the agreement between the Parties the repayment of the loan can also be made in gold.

Nomenclature and amounts of goods, as well as prices for the goods intended to be shipped to the Government of the USSR as a repayment of the loan, shall be agreed upon by the Parties 3 months prior to the beginning of the year during which the shipments are going to be made.

Prices for the goods shall be determined taking into account the world prices, i.e. the prices at the primary markets for the specific goods.

ARTICLE 5

In accordance with Article 1 of this Agreement, during the period between 1 July, 1949 and 1 July, 1952, the Government of the USSR shall supply to the Government of the Democratic People's Republic of Korea equipment and materials, as well as military property, in equal annual shipments, on the terms “CIF Korean ports” or “FOB entry railway stations on the Manchuria-Korea border”, for the total amount of __________ million rubles.

Nomenclature, quantity, prices and other terms of delivery shall be determined by the agreement of the Parties.

ARTICLE 6

With the purpose of effecting payments for the loan under this Agreement, the State Bank of the USSR and the Main North-Korean Bank shall open special accounts for each other. The mentioned Banks shall jointly establish the procedure for payments and account keeping under this Agreement.

ARTICLE 7

The Government of the Democratic People's Republic of Korea shall have the right of early repayment of the loan mentioned in Article 1 of this Agreement by supplying the Government of the Union of Soviet Socialist Republics goods or, based on the agreement between the Parties, gold.

ARTICLE 8

This Agreement becomes effective as of the date of its signing.

Concluded in Moscow _______, 1949, in two originals, in Russian and in Korean, both of which shall be equally binding.

Under the authority of the

Government of the Union of

Soviet Socialist Republics

Under the authority of the

Government of the Democratic

People's Republic of Korea