May I use EXIAR’s services when importing products or services to Russia, and when conducting transactions with organisations based in Russia?
- EXIAR is a state institution providing support for exports, and in accordance with Russian Government Decree No. 964 dated 22 November 2011 (the Agency’s Mandate), does not have the right to support projects which are not export-related.
May I use EXIAR’s services when shipping goods or services to Customs Union countries?
- Yes, absolutely. Shipments of goods or services to Customs Union countries qualify as exports. In addition, the ECAs of Customs Union countries have signed cooperation and/or reinsurance agreements, meaning that projects to export Russian goods and services to these countries are able to benefit from comprehensive support. It also allows support to be provided to joint projects involving Russian and Customs Union companies exporting jointly produced products/services to third countries.
Does the agency provide cargo insurance?
- In accordance with Russian Government Decree No. 964 dated 22 November 2011 (the Agency’s Mandate), the agency provides export credit and investment insurance against commercial and political risks, including reinsurance. EXIAR does not provide cargo insurance.
Does EXIAR provide support to high-tech exports?
- In accordance with the Agency’s Mandate, EXIAR has the right to provide insurance coverage for exports of any goods and services, excluding commodities (crude oil, natural gas, coal, timber, etc.).
Does EXIAR provide services to trading companies which are not themselves the manufacturers?
- Yes. Naturally, it is necessary to confirm Russian involvement in the production of goods which are shipped.
Is EXIAR an insurance company in the traditional sense of the word? Is EXIAR governed by a particular regulatory document?
- EXIAR is not an insurance company in the traditional sense of the word, but a state export support institution. General insurance law does not apply to the agency’s activities, which are governed by Russian Government Decree No. 964 dated 22 November 2011.
Where are EXIAR’s regional offices located?
- EXIAR currently has regional offices in the Far Eastern Federal District (Vladivostok) and in Belarus (Minsk).
May I use EXIAR’s services when exporting goods or services to countries with a heightened level of risk (e.g. Ukraine, Iran, Iraq or Afghanistan)?
- Strictly speaking, the agency has no restrictions on supporting exports to a particular country. That said, approval from the Board of Directors is required for transactions involving “difficult” countries.
Can EXIAR provide assistance in identifying customers abroad?
- Although identifying foreign partners does not directly relate to the agency’s functions, EXIAR is willing to provide assistance when communicating with other state export support bodies which do offer this service to Russian exporters. One of the main roles of the Russian Export Center – a state export support institution offering a one-stop service – is to help identify foreign partners abroad.
Can EXIAR provide assistance in interacting with Russian trade representative offices abroad?
- Although assistance in interacting with Russian trade representative offices abroad does not directly relate to the agency’s functions, EXIAR is willing to provide assistance when communicating with other state export support bodies which do offer this service to Russian exporters. One of the main roles of the Russian Export Center – a state export support institution offering a one-stop service – is to help identify foreign partners abroad, including via Russian trade representative offices. A list of countries where Russian trade representative offices are based can be found on the REC website.
Is EXIAR willing to work with a participant of an export transaction which is not the direct exporter (i.e. the manufacturer)?
- Yes, a manufacturer may contact EXIAR for preliminary work on a project. However, the insured can only be the actual exporter, or the lending organisation involved in structuring the transaction (depending on the selected insurance product).
Can the insured be a company based outside Russia?
- Yes. The agency has the right to provide support to subsidiaries of Russian manufacturers which are registered abroad. Naturally, it is first necessary to undergo a legal analysis of the legislation of the country to ascertain the validity of a policy provided by the agency in the respective jurisdiction.
What criteria is used by the agency to define a small or medium-sized enterprise?
- The agency only applies one criterion when defining a company as an SME – annual turnover must be below RUB 2 billion.
Are any special insurance solutions available to smaller exporters?
- Absolutely. In addition to the regular insurance products, SME exporters may take advantage of specialised insurance products, including working capital financing insurance and export factoring insurance.
Does a transaction have to meet a minimum value requirement for the agency to review it?
- EXIAR provides insurance coverage for contracts of any value.
Is an agency insurance premium subject to VAT?
- An agency insurance premium is not subject to VAT.
What is the average time taken to conclude a transaction?
- The term to conclude an insurance agreement depends on the selected insurance product and the availability of information needed to move forward. On average, it takes between 10 and 30 days to conclude an insurance contract.
What parameters are used to calculate an insurance premium?
- There are three main criteria used to calculate an insurance premium:
— The level of risk associated with the overseas counterparty
— The level of risk associated with the destination country
— Delivery time frames and payment terms
- There are three main criteria used to calculate an insurance premium:
How is payment made for an insurance premium? Can payment be spread across several instalments?
- An insurance premium is usually paid for as a lump sum; however, in exceptional cases an insurance premium can be paid for in instalments When paying in instalments, insurance payments can be made at equal time intervals (once per month/quarter/six months/year) or according to an individual schedule.
In what currency must an insurance agreement/contract be concluded?
- The currency of an insurance agreement is based upon the currency of the underwritten payment obligations i.e. the currency of the export contract (supplier credit insurance), loan currency (buyer credit insurance or working capital financing insurance), the currency of reimbursement from the issuing bank (confirmed letter of credit insurance).
Is it necessary to appear in person at one of EXIAR’s offices in order to conclude an insurance agreement?
- Work to prepare an insurance contract can be conducted via email. Original copies of documents may be sent by express post.
In the event of having to make an insurance claim, how long does it take for EXIAR to pay indemnity?
- The period between making a claim and receiving indemnity depends on the selected insurance product and the specific circumstances surrounding the occurrence of an insured risk. On average it takes between 90 and 210 days.
What does the extent of insurance coverage provided depend on?
- The agency can cover up to 95% of losses arising from political risk and up to 90% of commercial risk. The insured therefore inevitably carries a part of the risk (deductible), which in turn creates an incentive to take every necessary measure on their part to reduce the level of risk. The level of insurance coverage may be less if there are other substantial risk factors (a “difficult” destination country, the overseas counterparty having a “complex” financial standing, a lengthy transaction time frame).
If a borrower does not fulfil their credit obligations to the bank, EXIAR will pay indemnity to the bank. Does EXIAR assume subrogation rights for the entire loan sum, or just a part of it?
- If EXIAR pays indemnity to the bank, only subrogation rights for the value of the indemnity are transferred to the agency.
What is a waiting period?
- The agency does not acknowledge the insured’s loss at the moment of non-payment by the buyer, but at the end of a designated waiting period. This is necessary in order to confirm the occurrence of a loss (i.e. to rule out any technical delays, and to factor in a specific counterparty’s payment history or the specific features of the country in which the organisation is based). The standard waiting period is set by the agency in the insurance rules for each product, although it may alternatively be set differently for a specific project. Please note that this period varies from product to product, and ranges from 60 to 180 days.
Is additional security required for transactions with EXIAR?
- If the buyer is unable to fulfil their payment obligations, then when reviewing the transaction, provision may be made for additional security for the fulfilment of the buyer’s obligations (collateral, guarantee from third parties, etc.).
How is the insurance period and term determined?
- The insurance period is determined based on the term of the counterparty’s payment obligations. In other words, it is the actual period of risk of the counterparty failing to pay. Despite the fact that the insurance period is applicable to all EXIAR products, it is only firmly fixed in short-term export credit insurance agreements (WTO). For other products it is essentially based on the term of the counterparty’s payment obligations, i.e. at the moment the insurance agreement is signed, it is not possible to precisely denote its start and end points.
In which regulatory document is it specified that with an EXIAR insurance agreement, the exporter is freed from administrative liability in the event of non-arrival of foreign currency earnings to Russia?
- The relevant provisions are enshrined in articles 3 and 4 of Federal Law No. 236-FZ dated 18 July 2011, “On the introduction of amendments to separate legislative acts of the Russian Federation in order to improve the mechanism of insuring export credits and investments against commercial and political risks”..
I represent an SME exporter. We need a bank loan in order to fulfil an export contract. What can EXIAR offer us?
- We run a programme which provides working capital financing insurance for SME exporters. It enables companies to attract financing at the pre-export stage, thereby solving the issue of security. The following comprises security for the bank:
— A pledge and/or a guarantee in a format and form which meets the agency’s requirements.
— Collateral (or transfer) of rights of claim under the export contract. In the absence of a concluded export contract on the date of signing the credit agreement, the conclusion of a collateral (or transfer) agreement for future rights of claim under the export contract, or the conclusion of a collateral (or transfer) agreement at the same time as the conclusion of the export contract, in a format and form which meets the agency’s requirements.
— An EXIAR insurance agreement.
- We run a programme which provides working capital financing insurance for SME exporters. It enables companies to attract financing at the pre-export stage, thereby solving the issue of security. The following comprises security for the bank:
I export goods. My customer wants to get a loan for a particular shipment. Is there any way I can assist in this process?
- Our buyer credit insurance programme enables a foreign partner to obtain a loan for purchasing Russian-produced goods. The product is designed to protect the bank financing the project from the risk of a loan default.
I export goods. In order to make up for a shortfall when providing deferred payment to my customer, I need to attract financing after the shipment has been delivered. What product can EXIAR offer me in this instance?
- In cases like this, EXIAR can cover against the risk of the foreign counterparty’s failure to fulfil their obligations using one of two products: supplier credit insurance, or short-term receivables insurance. Using export earnings as loan security, a bank can then provide post-export financing.
I want to attract financing for my export projects. Which banks can I work with?
- You can contact any commercial bank that has been accredited by the agency under the working capital financing insurance programme for exporters (an up-to-date list of accredited banks can be viewed on the agency’s website). Please note that you may also contact Eximbank of Russia for these purposes – a specialised state bank focusing on supporting exports with which EXIAR runs special joint programmes.
I export high-tech products. Are there any special financing terms I can rely on?
- Yes. EXIAR and Eximbank of Russia (both state export support institutions) have developed special programmes helping to lower the cost of credit. You can find out more about the instances in which special financing terms are available for an export contract by visiting http://www.eximbank.ru/hitech/.
I want to cover risks for a one-off export shipment. What product is available to me?
- We run a supplier credit insurance programme, which is designed to protect Russian companies from the risk of non-payment by the overseas buyer. Policies cover deliveries of goods made on credit terms.
I regularly export the same type of goods, and would like to cover the risk of non-payment for my entire customer portfolio.
- We run a short-term receivables insurance programme, which is designed to protect Russian companies from the risk of non-payment by overseas buyers. Policies cover recurrent shipments of similar goods to customers based abroad, in which payment has been deferred by up to 365 days.
Our contract is based on a confirmed letter of credit, but the Russian bank is unwilling to confirm the letter of credit provided by the overseas bank. Can EXIAR help in this instance?
- In this situation you should use confirmed letter of credit insurance, whereby EXIAR covers the risk of non-payment by the bank issuing the letter of credit for the confirming bank. With this product, the confirming bank can confirm the overseas bank’s letter of credit.
I would like to invest in a foreign company, but I’m afraid of the political risks. Does EXIAR offer a product which covers these risks?
- We run a political risk insurance programme, which is designed for Russian companies investing in other countries. Insurance is extended to the amount invested, and corresponding investment returns.
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