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. Last Updated: 07/27/2016

Moscow Tries to Ease Missile Row With U. S.

Moscow moved Wednesday to defuse a conflict with the United States over the sale of missile technology to India and other Third World countries that is threatening Russia's entry into the lucrative space technology business.

The Russian move came as Prime Minister Viktor Chernomyrdin prepared for talks in Washington where Russian sales of equipment with potential military applications will figure high on the agenda.

In a report apparently timed to precede the visit next week, The New York Times said Wednesday that a Russian company had tried to ship 80 tons of solid rocket fuel to Libya. Quoting U. S. intelligence sources, the report said that the Serbian-brokered shipment was recently intercepted in Ukraine.

President Bill Clinton has sent a letter to President Boris Yeltsin warning that Russian companies could face economic sanctions unless they halted such exports, according to U. S. press reports.

Russia made clear its concern over the U. S. threat Wednesday when Foreign Minister Andrei Kozyrev said the two countries had to negotiate a common solution on a dispute over a proposed $400-million sale by Moscow of cryogenic rocket engines to India. The threatened sanctions would torpedo a deal negotiated over the past year allowing Russia its first access into the $3. 2-billion-a-year commercial satellite launch industry.

The Krunichev rocket factory, which makes the rocket engines that are to be sold to India, recently signed the first deal to launch commercial satellites for the United States on its Russian Proton rocket.

But the deal and a general agreement giving Russia a fixed share of the market until the year 2000 have been delayed because of U. S. concerns, mostly on the sale of rocket technology to India and nuclear reactors to Iran.

According to The New York Times, President Clinton offered Russian companies the chance to launch satellites and build space stations for profit if they controlled missile exports.

Deputy Prime Minister Alexander Shokhin of Russia returned Wednesday from discussions in Washington on the issue.

Russia maintains that the rockets it is selling to India are inappropriate for military use because they use unstable liquid fuel.

Kozyrev said the question of the sale of rockets to India was a "technical dispute" and that "Russian experts view the shipments differently than their U. S. colleagues", according to Itar-Tass.

He also said that Russia was more interested than the United States in observing the Nuclear Nonproliferation Treaty because most countries that are potential new producers of atomic arms are its near neighbors.

The general director of Russia's space agency, Yury Koptev, said in a recent interview that Russia was now balancing between the sale to India and the possibility of accessing Western markets.

He acknowledged that the lucrative Indian deal could provoke sanctions, cutting Russia off from opportunities for other satellite launches.

Koptev told Interfax that Russia had spent the last year negotiating with the United States on a bilateral deal to give Russia a quota of 12 commercial satellite launches between 1996 and the year 2000.

He estimated that this would earn Russia about $200 million a year.

As for the rocket fuel chemicals reportedly discovered in Ukraine, The New York Times said that customs documents had been prepared to hide the fact that Libya was the destination, of the shipment.

It said Washington had tipped off Ukraine about the chemicals and the shipment was seized.

The chemicals - ammonium perchlorate, which can be used to make rocket fuel - were reportedly made by a Moscow company, Pavoks. Attempts to reach the company for comment Wednesday were unsuccessful.