Lend-Lease Agreement

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AGREEMENT BETWEEN THE GOVERNMENTS OF THE UNITED STATES AND THE U. S. S. R. ON THE DISPOSITION OF LEND-LEASE SUPPLIES IN INVENTORY OR PROCUREMENT IN THE UNITED STATES

The Government of the United States and the Government of the Union of Soviet Socialist Republics, in order to provide for the orderly disposition in their mutual interests of the undelivered articles which were in inventory or procurement in the United States, prior to the cessation of active military operations against the common enemy, for the purpose of providing war aid to the Union of Soviet Socialist Republics under the act of Congress of ~1arch 11,1941, as amended, agree as follows:

Article l

All articles and services undertaken to be provided by the Government of the United States under this agreement shall be made available under the authority and subject to the terms and conditions of the act of Congress of March 11, 1941, as amended, and any acts supplementary thereto.

Article II

Within such periods as may be authorized by law, the Government of the United States undertakes to transfer to the Government of the Union of Soviet Socialist Republics, and the Government of the Union of Soviet Socialist Republics agrees to accept subject to the right of inspection referred to in article V, those articles which are or will be available to the Government of the United States for transfer to the Government of the Union of Soviet Socialist Republics out of articles that are included in the requisitions set forth in schedule I~A or in the categories of articles set forth in schedule I-B and that were in inventory or procurement in the United States for the purpose of providing war aid to the Union of Soviet Socialist Republics, but were not transferred, prior to the date of the signature of this agreement.

The Government of the Union Soviet of Republics undertakes to pay the Government of the United States in dollars, for the articles transferred to the Government of the Union of Soviet Socialist Republics under this article, an amount to be determined as set forth in schedule II, and interest thereon, according to the terms and conditions set out in that schedule. The obligation of the Government of the Union of Soviet Socialist Republics to make payment in dollars in accordance with the terms of this agreement may be discharged by the delivery of gold, which will be valued at the buying price for gold provided in the provisional regulations issued under the Gold Reserve Act of 1934 as the same may be in effect at the time of each delivery.

Schedule I-A, Schedule I-B, and Schedule II, which are annexed hereto, are made a part of this Agreement.

Article III

Changes may be made from time to time by mutual agreement of the parties in the list of requisitions and categories in schedule I-A and schedule I-B.

The Government of the Union of Soviet Socialist Republics shall be released from its obligation to accept articles under the provisions of article II upon payment to the Government of the United States of any net losses to the Government of the United States, including contract cancellation charges, resulting from the determination of the Government of the Union of Soviet Socialist Republics not to accept such articles.

The Government of the Union of Soviet Socialist Republics reserves the right, without payment as provided in the foregoing paragraph, not to accept articles which cannot be made available by the Government of the United States in complete units as specified in the approved requisitions or written requests of the Government of the Union of Soviet Socialist Republics, or in the offerings mad e by the United States Government, relating to such articles and units.

Article IV

Within such periods as may be authorized by law, the Government of the United States undertakes to aid in the movement to the Union of Soviet Socialist Republics of the articles provided under article II by furnishing American flag shipping and related services so far as it deems necessary to supplement Soviet flag shipping and so far as it is consistent with the national interest of the United States, and the G6vernment of the Union of Soviet Socialist Republics agrees to pay the Government of the United States for such shipping and related services as may be made available under the provisions of this article in an amount and on terms and conditions set forth in schedule II.

Article V

The Government of the United States will, in lieu of granting any warranty express or implied with respect to articles transferred to the Union of Soviet Socialist Republics, assign to the Government of the Union of Soviet Socialist Republics any assignable rights which it may have against the suppliers, inland carriers, or other private contracting agencies for breach of warranty, or any assignable claims for loss of or damage to articles prior to transfer to the Government of the Union of Soviet Socialist Republics. The Government of the Union of Soviet Socialist Republics shall have the right of inspection of articles prior to delivery. The Government of the United States undertakes to use its best efforts to provide appropriate assistance to the Government of the Union of Soviet Socialist Republics to effectuate a satisfactory settlement with the suppliers, inland carriers, or other private contracting agencies of any claims of the Government of the Union of Soviet Socialist Republics covered by the aforesaid assignment.

The Government of the United States agrees that the provisions of article V of the Mutual Aid Agreement of June 11,1942, shall not apply to supplies made available to the Government of the Union of Soviet Socialist Republics under the provisions of article JI of this agreement.

Article VI

The provisions of this agreement shall not apply to those articles which the Government of the Union of Soviet Socialist Republics has agreed to purchase and the United States Government has agreed to transfer under the terms and conditions of the letter dated May 30, 1945, from the Foreign Economic Administrator to the Chairman of the Government Purchasing Commission of the Soviet Union in the United States.

Nothing in this agreement shall modify or otherwise affect the final determination, under the act of March 11, 1941, as amended, and the Mutual Aid Agreement between the two Governments of June 11, 1942, of the terms and conditions upon which the Government of the Union of Soviet Socialist Republics has received aid except for the articles and services made available under the provisions of this agreement.

Article VII

This agreement shall take effect as from this day's date.

In witness whereof the undersigned, duly authorized by their respective Governments, have signed the present agreement in duplicate in Washington on the 15th day of October 1945.

 

For the Government of the United States:

(Signed) LEO T. CROWLEY.

 

For the Government of the Union of Soviet Socialist Republics:

(Signed) LEONID G. RUDENKO.

 

 

SCHEDULE I

(Schedule I-A and Schedule I-B contain voluminous detailed information concerning the materials and equipment to be supplied under the Agreement.)

 

SCHEDULE II

The terms and conditions upon which articles are to be transferred and shipping and related services rendered by the Government of the United States to the Government of the Union of Soviet Socialist Republics under the provisions of this Agreement are as follows:

A. Definiiions..-1. The term "contract price" means the contract price f. o. b. point of origin, or the price computed by the United States Government f. o. b. point of origin in cases in which contracts are written on terms other than f.o.b. point of origin (confirmed by proper documents), which is paid by the United States Government to the contractor. The contract price shall be evidenced by a specific contract in cases where specific contracts have been entered into by a United States Government procurement agency in pursuance of an approved requisition or other written request of the Soviet Government Purchasing Commission or to fulfill 6fferings made by the United States to the Union of Soviet Socialist Republics for the war programs of the Union of Soviet Socialist Republics. In cases where articles so requested or offered are not procured on contracts placed by a U.S. Government procurement agency in part or in whole specifically for the Union of Soviet Socialist Republics but are procured by a United States Government procurement agency on general war supply contracts without specification of the particular ultimate recipient or recipients, the contract price shall be the average contract price (as computed by the United States Government) f.o.b. point of origin paid by the United States Government procurement agency for similar articles.

2. The term "the fair value of the articles" means: (a) In the case of nonfoodstuffs, in the aggregate, the contract price less 10 percent of such contract price; (6) In the case of foodstuffs, the price (as computed by the United States Government) at which the United States Government sells similar articles in similar quantities in the United States to other foreign governments at or about the time of transfer to the Union of Soviet Socialist Republics.

3. The term "Inland point of origin" means the factory in the case of articles in production or under contract for production at the time of the signing of this agreement and in the case of articles completed at the time of the sighing of this agreement the point at which such articles are then situated or their immediate next destination if the articles are in transit.

B. Unless otherwise provided by mutual agreement, transfers of articles to the Government of the Union of Soviet Socialist Republics shall take place, in the case of nonfoodstuffs, immediately upon delivery of the articles at the inland point of origin, and in the case of foodstuffs, immediately upon the loading of the articles on board ocean vessels in a United States port, and title and risk of loss with respect to articles shall pass upon transfer to the Government of the Union of Soviet Socialist Republics; provided, that any article which shall not have been transferred to the Government of the Union of Soviet Socialist Republics as above set forth prior to 3 months following the time of the signing of this agreement or 3 months following the time of notice to the Government of the Union of Soviet Socialist Republics of the availability of the articles, whichever is the later, shall be deemed to be transferred to the Government of the Union of Soviet Socialist Republics upon such date, and the Government of the Union of Soviet Socialist Republics shall thereafter assume complete financial responsibility for the articles.

All articles made available shall be properly packed or prepared to meet the requirements of ocean shipping. The invoice delivered by the Government of the United States as certified by authorized officials of the Government of the Union of Soviet Socialist Republics with respect to articles transferred under article II shall be final. The Government of the Union of Soviet Socialist Republics shall, with respect to foodstuffs transferred, supply the Government of the United States with the necessary number of ship manifests and signed on-board bills of lading with related invoices, packing lists, and other documents, whenever the foodstuffs are transported on a vessel not under the control of an agency of the Government of the United States.

C. The amount, which the Government of the Union of Soviet Socialist Republics shall pay the Government of the United States, for articles transferred under the provisions of article II of this agreement, shall be the sum of the following items set forth in subparagraphs 1 and 2:

1. The fair value of the articles.

2. The costs incurred subsequent to transfer for storage, inland transportation, inland accessorial charges, and port accessorial charges normally incurred by cargo in accordance with the custom of the port.

In the case of nonfoodstuffs, such costs shall be evidenced by bills of lading, warehouse receipts or other appropriate invoices, which shall be certified by the Government of the Union of Soviet Socialist Republics to represent true charges. Upon presentation of such documents to the Government of the United States by the Government of the Union of Soviet Socialist Republics the Government of the United States will pay the carrier, warehouse or other contracting agency, as the case may be. The Government of the Union of Soviet Socialist Republics undertakes to identify by marking on the bill of lading, warehouse receipt, or other documents involved, the requisition and contract numbers and shipping marks or a description of the articles covered by such documents.

In the case of foodstuffs, such cost is included in the fair value of the article determined in accordance with subparagraph (1) above.

D. The amount which the Government of the Union of Soviet Socialist Republics shall pay the Government of the United States for shipping and related services made available under the provisions of article IV of this agreement shall be determined on the basis of applicable rates established by the Government of the United States, which shall be subject to acceptance by the Government of the Union of Soviet Socialist Republics.

E. Payment of the total amount determined as set forth above in paragraphs C and D shall be made by the Government of the Union of Soviet Socialist Republics, on or before July 1, 1975, in 22 annual installments, the first of which shall become due and payable on July 1, 1954. The amounts of the annual installments shall be as follows:

Each of the first 4 installments shall be in an amount equal to 2.5 percent of the amount determined as set forth above; each of the second 4 installments shall be 3.5 percent of said determined amount; each of the third 4 installments shall be 4.5 percent of said determined amount; each of the fourth 4 installments shall be 5.5 percent of said determined amount; and each of the last 6 installments shall be 6 percent of said determined amount.

Nothing herein shall be construed to prevent the Government of the Union of Soviet Socialist Republics from anticipating the payment of any of the installments, or any part thereof, set forth above.

If by agreement of both Governments it is determined that, because of extraordinary and adverse economic conditions arising during the course of payment, the payment of a due-installment would not be in the joint interest of the United States and the Union of Soviet Socialist Republics, payment may be postponed for an agreed upon period.

 

Interest on the unpaid balance of the total amount determined as set forth above in paragraphs C and D shall be paid by the Government of the Union of Soviet Socialist Republics at a fixed rate of 23/8 percent per annum accruing from July 1, 1946. Interest shall be payable annually, the first payment to be made July 1, 1947.

 

For the Government of the United States:

(Signed) LEO T. CROWLEY.

 

For the Government of the Union of Soviet Socialist Republics:

(Signed) LEONID G. RUDENKO.

 

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