Directive will expand the authority of the Export Insurance Agency of Russia (EXIAR) and strengthen Russian exporters’ positions in the implementation of international projects, among other things by providing competitive financing conditions and access to debt financing on more preferential terms.
Reference
The draft federal law On Amending Sections 6-8, Article 3 of the Federal Law On the Development Bank (hereinafter draft law) was submitted by the Ministry of Economic Development.
The objective of the draft law is to improve the legal regulation of the system of state financial support for exports, specifically the mechanisms of insurance support for the export of Russian goods (work, services).
In 2011, the open joint-stock company Russian Agency for Export Credit and Investment Insurance (hereinafter EXIAR) was established under a programme to develop the system of state financial support for export under Article 3, Section 6 of Federal Law No. 82-FZ of 17 May 2007, On the Development Bank (hereinafter Law), with the objective of providing export credit and investment insurance for business and/or political risks.
EXIAR is a wholly owned subsidiary of Vnesheconombank. Under Article 3, Section 8 of the Law, EXIAR’s activity is regulated by Russian Government Directive No. 964 of 22 November 2011, On the Procedure for Export Credit and Investment Insurance for Business and Political Risks.
Risk coverage for capital-intensive international projects (export deliveries of aircraft, large export projects to develop gas transit infrastructure) implemented with the participation of Russian exporters requires complex risk coverage instruments – guarantees.
The provision of guarantees, which ensure the unconditional coverage of payment obligations under a project, is practiced by foreign export insurance agencies. Such instruments are used by agencies in Italy, France and Germany.
Export support through guarantees issued by a national export insurance agency is in compliance with the rules of the World Trade Organisation and the Organisation for Economic Cooperation and Development.
Depending on the specifics and structure of export project financing, EXIAR can provide guarantees in the form of a bank guarantee or surety agreement, in accordance with Russian law.
The adoption of the draft law will make it possible to expand EXIAR’s export insurance authority and strengthen Russian exporters’ positions in the implementation of international projects, among other things by providing competitive financing conditions and access to debt financing on more preferential terms.
The draft law was considered and approved at a meeting of the Russian Government on 5 February 2015.