This report was commissioned by the Nuclear Threat Initiative in 2002. Prepared by Battelle Memorial Institute, this study explored the availability of debt instruments, studied the construct and operations of successful debt swaps and cooperative Russian programs for lessons learned, provided a recommended construct for a Russian Nonproliferation Fund, and made recommendations to NTI about a path forward to promote debt for nonproliferation.  Battelle utilized the services of a Russian legal firm and a Russian economic analysis NGO for additional research, which are attached as Appendices II and III in a separate file.

The report provides recommendations and options, based on research, as to how a debt exchange could be structured.  At the time of this report, debt for nonproliferation was a concept; now, it is a recognized mechanism that can be utilized as a tool to assist in the reduction of weapons of mass destruction. The U.S. Congress passed the Russian Federation Debt for Nonproliferation Act of 2002, which was signed by President Bush in September 2002.  The G8 Global Partnership, which commits the G7 to provide 20 billion USD over 10 years to Russia to reduce the threat of WMD, was announced in July 2002.  Debt exchange is recommended as a way that G7 members can meet their financial obligations.