The Federal Law dated 18 July 2011 No. 236-FZ "On amendment of certain legislative acts of the Russian Federation in order to improve the mechanism of insurance of export credit and investments against entrepreneurial and political risks", amends a number of regulatory acts and improves the mechanism for insurince against such risk.
More specifically, the law stipulates that the Bank for Development and Foreign Economic Affairs (Vnesheconombank) will create an open joint-stock company, the main purpose of which will be to provide insurance services to exporters of export of Russian goods (works, services) and investors outside the Russian Federation ("the Agency"). The activity of the Agency will not be subject to licensing.
On 13 October 2011 the Federal Tax Service of the Russian Federation registered the Agency for export credits and investments insurance (EXIAR) with a charter capital of 30 billion rubles.
The Agency is headed by deputy chairman of Vnesheconombank, Petr Fradkov, son of the former prime-minister, Mikhail Fradkov.
The main purpose of the Agency is to support of Russian export by means of insurance of credit and political risks for medium (up to 2 years) and long-term (up to 20 years) export and financial credits, and insurance of Russian investments abroad against political risks.
The Agency will promote Russian export of equipment and technologies, provide insurance support to Russian exporters on the foreign markets, create and implement an up-to-date system of financial support of export with the Agency's insurance coverage, and increase the transparency of Russian export operations and international investments.
The Agency's services will be available for Russian exporters of goods, works or services; Russian investors investing abroad; foreign contractors of the above-indicated entities, and Russian and foreign banks which finance the relevant transactions. Receipt of insurance premium to the bank account within the established time limit releases them from administrative liability for unapplied receipts (if the insurance indemnity is not below the established amount).
According to the Ministry of Economic Development and Trade, the Agency will be able to cover export supplies up to an amount of $20 billion per year. The Ministry plans to achieve this target by the end of 2012.
By the end of November 2011 the Russian Government took another step towards the development of this type of insurance by way of Government Decree No. 964 dated 22 November 2011 "On the procedure of export credits and investments insurance against entrepreneurial and political risks" and approved the "Rules for export credit insurance" ("the Rules").
The Rules establish the requirements which should be included in the insurance rules, determine the participants of legal relationship, specified the insured amount limits (not more than 90% of the insured value for an export credit and investment for insurance against entrepreneurial risks and not more than 95% of the insured value for insurance against political risks).
Furthermore, this Decree establishes the requirements to ensure financial stability of the Agency's insurers (in particular, it specified that a company's charter capital as at the time of state registration should amount to 30 billion rubles), the requirements of a company's activity in connection with providing it with the financial support of Vnesheconombank, government subsidies, budget investments and state guarantees.
The Decree also sets out the procedure and forms for exercising control over the Agency's activity and repealed Government's Decree No. 100 dated 19.02.2008 which had established the procedure for the mentioned insurance activity carried out by Vnesheconombank.
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