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Armenia, Russia Argue Over Debt Deal

Prague, 18 May 2005 (RFE/RL) -- Armenian and Russian officials engaged in mutual recriminations in Yerevan yesterday over implementation of the November 2002 agreement under which Armenia handed over five key enterprises to Russian ownership in exchange for the writing off of debts totalling some $98 million, RFE/RL's Armenian Service reported.

Russia undertook to modernize those enterprises to enable them to continue to function, but only one of them is currently operational.

Vahan Hovannisian, who is the Armenian co-chairman of the Russian-Armenian commission on interparliamentary cooperation, said Yerevan is "not satisfied" with Russian compliance with its obligations, to which Russian officials responded that they have not invested in the enterprises in question because they hope for tax privileges that will offset the high cost of transporting goods to and from Armenia.

Armenian Defense Minister Serzh Sarkisian pointed out that the enterprises are already exempt from paying taxes.