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Describes efforts in Russia to move applied research there toward new commercial ventures. Work of Science Minister Mikhail Kirpichnikov; Loan from Germany to purchase scientific equipment; Legislation regarding tax incentives to encourage entrepreneurial research.

Reports that the US State Department compiled a list of 20 Russian research institutes which are suspected of helping Iran's missile program. Decision of the State Department to restrict the flow of US research funds to some of the sites on the list; Involvement of the US Civilian Research & Development Foundation for the Independent States of the Former Soviet Union (CRDF); Difficulty in imposing sanctions against the institutes on the list.