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Suspension of Cover for Russia and Belarus

Focus Ukraine

Additional information

Here you will find a collection of news items from the Federal Ministry for Economic Affairs and Climate Action (BMWK) and the Federal Office for Economic Affairs and Export Control (BAFA):

Cover policy Export Credit Guarantees

For Russia, Belarus and Ukraine

Russia

Country Risk Category 7 of 7

On Thursday, 24.02.2022, the Federal Government suspended the granting of export credit guarantees for Russia until further notice. Besides, an EU-wide ban on export credit guarantees for Russia entered into force on Saturday, 26.02.2022. 

 

Short-term business

No cover available.

 

Country-related provisions (Wholeturnover Policies (APG))

No cover available. Deliveries under existing APG-limits must no longer be made. 

 

Medium/long-term business

No cover available.

Belarus

Country Risk Category 7 of 7

On Thursday, 24.02.2022, the Federal Government suspended the granting of export credit guarantees for Belarus until further notice.

 

Short-term business

No cover available.

 

Country-related provisions (Wholeturnover Policies (APG))

No cover available. Deliveries under existing APG-limits must no longer be made. 

 

Medium/long-term business

No cover available.

Ukraine

With regard to applications for Export Credit Guarantees for export transactions in Ukraine, the Federal Government is continuously monitoring the current dynamic situation. The Federal Government's goal is and remains to provide Ukraine with the best possible economic support. 

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Questions and answers

Here, you will find answers to the most frequently asked questions. If you need any further information, please do not hesitate to contact us.
Does the Federal Government currently still provide cover for Russia? 

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. 

What will happen with my cover for Russia – will it remain in force?

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.

RUS/BLR: What are the effects on existing cover?

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.

I have a valid offer of cover for my transaction and want to conclude the export contract soon. Will the Federal Government still provide cover when I report the conclusion of my export contract? 

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.

RUS/BLR/UKR: : If I do not effect the delivery, I will be faced with contractual penalties. What can I do?

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. 

RUS: What effects does the Russian presidential decree 95 regarding the C account have? What has to be taken into account?

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 C account is opened by your Russian customer on your behalf. You are not involved in the opening of the account; the account will be opened even if you do not want that. 


 
If, in individual cases, payments made in roubles result in the discharge of the covered account receivable on the basis of the applicable law, then the following shall apply: As far as it is not possible to use the monies in RUS, you should try to have them transferred from Russia. If the monies are used in RUS (e.g. by a subsidiary in Russia) or a transfer from Russia is possible, the amounts have to be included in the calculation of the indemnification. 

 
If the payment made in roubles into the C account does not result in the discharge of the covered account receivable due to the regulations in the loan agreement and the applicable law (normally when the contract is governed by other than Russian law), then 
 the amounts in the C account shall remain untouched for the time being 
 the rouble amounts in the C account will not be taken into account in the indemnification process. 

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.

RUS/BLR/UKR: Is it still possible to dispatch goods to Russia, Belarus or Ukraine  against advance payment?

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.

UKR: Are deliveries to Ukraine still possible? Does the Federal Government still provide cover? 

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.

Overview of the handling of existing sanctions

Both the EU and the Federal Office for Economic Affairs and Export Control (BAFA) have published practical information on how to deal with the sanctions, which contain the relevant information as well as useful explanations:

 

 

 

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