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. Last Updated: 07/27/2016

S. Korea Says Russia Offers $550M in Arms

SEOUL, South Korea -- Russia has offered to sell South Korea $550 million worth of military hardware, with half of the cost covered by debts it owes Seoul, South Korean officials said Monday.

South Korea agreed to provide Moscow with $3 billion in long-term, low-interest loans in a deal linked with the old Soviet Union's establishment of diplomatic relations with Seoul in 1990.

South Korea extended $1.47 billion in loans until the mid-1990s, when it stopped further installments after Moscow failed to pay back the interest. The outstanding debt has now swelled to $1.95 billion.

In a letter in July, Russia offered to sell South Korea tanks, missiles and helicopters worth $550 million, said Yoo Byung-suk, an official at South Korea's Finance and Economy Ministry.

Russia proposed that South Korea pay half the total in cash and cover the other half with the outstanding debt, he said. Yoo said his government was studying the Russian proposal.

South Korea previously purchased $370 million worth of Russian military hardware and industrial raw materials in a deal linked with the loan package.

Russia last year sealed $5.7 billion worth of arms deals to developing countries, according to a new report by the U.S. Congressional Research Service

Since 1998, Russia has signed deals worth $19.8 billion, or 22.6 percent of all sales to developing countries.

(AP, MT)