Suspension of Cover for Russia and Belarus

In view of the Russian attack on Ukraine the Federal Government suspended the granting of Export Credit Guarantees (so-called Hermes Cover) and Investment Guarantees of the Federal Republic of Germany for Russia and Belarus on Thursday, 24.02.2022, until further notice. Any applications for export credit guarantees and investment guarantees in respect of these countries will not be processed. Besides, an EU-wide ban on export credit and investment guarantees for Russia entered into force on Saturday, 26.02.2022. 

Any already existing export credit and investment guarantees will continue to protect exporters, financing banks and investors against bad debt losses and political risks in Russia and Belarus.

After receiving the letter informing about the increase of risk of 21.03.2022, any manufacturing, deliveries/services and disbursements under buyer credits may only be made with prior consent of the Federal Government. The same applies to the provision of (covered) contract bonds. 
 Regarding Wholeturnover Policies/revolving cover, the following shall apply: Cover for deliveries already made will continue to exist. Any new deliveries made after 02.03.2022 are not covered.

The current situation constitutes a change in the legal and factual situation. Offers of cover cannot normally turned into a final commitment to cover. Therefore, the  policyholder should, by all means, contact Euler Hermes before signing the contract with his foreign customer.

What you can do depends on what is stipulated in the export contract. Contractual penalties are not covered under manufacturing risk cover or buyer credit cover. The same applies to Wholeturnover Policies/revolving cover. 

Please try to persuade your customer to apply for an exemption so that the payment can be made in the contractually agreed currency. If your customer pays in rouble via a C account, the following shall apply:

The above explanations do not predetermine when a payment into a C account results in a (political/commercial) event of loss.Further clarifications are under way.

It is still possible to process orders from buyers in these countries against advance payment.If you receive the money before you dispatch the goods, the transaction does not involve any risk for the Federal Government. The money will not be set off against older, unpaid accounts receivable, if it is explicitly designated as advance payment for goods to be dispatched soon. 
 The waiver of the provisions in the General Terms and Conditions governing the offsetting of monies received will not release you from your obligation to take all necessary and suitable measures dictated by sound business practice to mitigate any loss. The Federal Government therefore presupposes that the new business against advance payment helps to settle and/or pay existing debts; this will be checked in the event of a loss if necessary.Existing contracts which provide for a delayed payment term can be changed to advance payment prior to the dispatch of goods.

Regarding Wholeturnover Policies/revolving cover, the following shall apply: Such dispatches are not covered by the Federal Government and need not be reported.

Deliveries under existing supplier credit and buyer credit guarantees continue to be possible if you can demonstrate to us that it is actually possible to deliver the goods and a functioning method of payment exists. Deliveries require the explicit consent of the Federal Government. Pursuant to the General Terms and Conditions you are obliged to check in the individual case whether there are any risk increasing circumstances which must be reported to the Federal Government and require its consent. Bank collateral is required for cover to be granted.

Regarding Wholeturnover Polies/revolving cover, the following shall apply: Deliveries may only be made with the consent of the Federal Government. 

 Contrary to what is stipulated in the Wholeturnover Policy Light, accounts receivable resulting from deliveries to Ukrainian buyers may also be covered if a letter of credit is opened prior to dispatch.The rules set out in the country letters dated 8.7.2022 for the Wholeturnover Policy and for the Wholeturnover Policy Light shall apply.