The United States blocked a $500 million loan package for Russia's troubled oil industry Tuesday amid criticism of Moscow's ongoing offensive in Chechnya and concern over U.S. business interests in Russia.
The U.S. Export-Import Bank, which was considering the funding, voted to abide by Secretary of State Madeleine Albright's request for the bank not to approve the loan for Russia's Tyumen Oil.
She argued against Ex-Im's approving the loan "for the time being," saying it would not be in the U.S. national interest.
"The Ex-Im Bank board of directors acted in accordance with the secretary's determination," the bank said in a statement.
It was the first time that the State Department invoked its authority under a seldom-used law to block an Ex-Im loan to Russia, a bank spokeswoman said.
The law allows Albright to block Ex-Im loans that would not "clearly and importantly advance United States policy in such areas as international terrorism, nuclear proliferation, environmental protection and human rights."
A State Department official said Albright initially had sought to convince the bank simply to delay its vote on the loan, rather than forcing her to invoke the law.
Albright pressed that point with Export-Import Bank Chairman James Harmon on Tuesday morning at the State Department, but the bank refused to delay the vote. As a result, Albright later sent over a letter asking that the loans not be approved, hours before the bank was scheduled to vote on the funding.
The Clinton administration has come under pressure to block the loans.