RUSSIA'S ASSAULT on Chechnya continues, yet the U.S. government seems set to provide fresh aid to Russia that will indirectly help its war effort. Moreover, the intended recipient of this aid, Tyumen Oil Co., may not be deserving: Tyumen is said to practice the kind of capitalism that has laid Russia low. After Tyumen gained control of a large Siberian oil field last month, depriving British-American rival BP Amoco of ownership, the European Bank for Reconstruction and Development called the transfer ownership "a sham" and "wholly contrary to the concepts of fairness and transparency."

So why is the United States preparing to assist Tyumen? The answer is that the proposed aid comes from the Export-Import Bank, an executive-branch agency set up to promote exports. The bank gets money from the federal budget--around $750 million a year--then uses it to subsidize lending to foreigners, who in turn use the cash to purchase U.S. exports. The bank's charter does not require it to consider the foreign policy implications of its efforts, so it is not bothered by the Chechnya conflict. It is not required to take a view on crony capitalism, though it protests that Tyumen's style of business is more honorable than some say.

The bank's export subsidies amount to corporate welfare and are questionable at the best of times. Defenders point out that other governments subsidize exporters, so U.S. firms would lose business if they lacked the bank's help. This defense is not completely convincing: In other areas, the United States virtuously resists copying other countries' bad policies. American law forbids U.S. firms to offer bribes in other countries, even though this imposes a competitive disadvantage; the Ex-Im Bank itself eschews environmentally dubious projects, even though this carries a commercial cost as well.

But even if there is a case for keeping the Ex-Im Bank in business, there is surely no case for letting the proposed Tyumen loan go ahead as planned. The administration has recently attacked foreign investors in Sudan's oil fields on the ground that they were assisting the government's war against its southern peoples. It can hardly espouse the opposite policy in the Russia-Chechnya case. The State Department has the power to hold up the loan to Tyumen and ought to do so.