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Last Updated: Thursday, 10 July, 2003, 11:17 GMT 12:17 UK
Investors plan Tsarist debt 'stunt'
Painting by Horace Vernet from the Hermitage Museum
If Russia won't pay, its painting are ours, say investors
The Russian Government has condemned a group of French investors who are trying to seize Russian art in lieu of long-repudiated Tsarist-era debts.

L'Association Francaise des Porteurs d'Emprunts Russes (AFPER), whose members own Russian bonds issued before the 1917 Bolshevik Revolution, have asked a Paris court to confiscate items in a touring exhibition.

The exhibits at the Army Museum in Paris come largely from St Petersburg's Hermitage Museum, in an event intended to celebrate 19th-century Franco-Russian friendship.

The Russian Foreign Ministry said the application was a "publicity stunt", and pointed out that historic debts had been definitively settled by an agreement in 1997.

Seizing up

The court application is the latest in a series of increasingly desperate attempts by AFPER to force Moscow to concede.

Tsarist-era Moscow City bond
Tsarist-era debts are settled, Moscow says
In recent months, it has sought the seizure of a Russian naval training vessel, as well as a villa in Deauville.

Both Russian and French Governments consider the issue settled since 1997, when Moscow agreed to pay Paris $400m (244m).

But AFPER says the settlement was inadequate, and is demanding 340m euros (235m; $386m).

In all, says AFPER, there was some 150bn euros-worth of French capital in Russia before 1917, which contributed to the enrichment of the country.

Historic haggling

AFPER may have little chance of achieving satisfaction in its current dispute, but the case underlines one of the complications of post-Soviet Russia.

Hermitage Museum
The Hermitage Museum is the home of the disputed items
Disputes over Tsarist-era debts, as well as claims concering pre-revolutionary property ownership, have been rife in recent years - although few petitioners have been as tenacious as AFPER.

More pressing is the issue of the debts run up by the Soviet Union, which borrowed heavily from Western banks throughout its history.

Moscow has more or less come to terms with its many commercial and sovereign creditors, but many still resent paying back the debts of a discredited former regime.

Most East European countries were able to pay off any debts they had before the collapse of communism, but Russia - and some other constituent states of the Soviet Union - entered the 1990s massively in debt.

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