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Investment insurance against war risks should be launched in the second quarter of 2024

26/ 01/ 2024
  These are the approximate terms for the launch of the long-awaited investment insurance against military and political risks within the framework of the Export Credit Agency (ECA) were discussed during a meeting of the EBA Recovery Committee with Oksana Ocheretyana, Deputy Head of the ECA. This year, the Law of Ukraine No. 3497-IX dated 22.11.2023 came into force, which expanded the scope of the ECAs activities to include insurance of direct investments and investment loans aimed at the development of export-oriented enterprises. The list of military and political risks and the terms and procedures for insurance/reinsurance should be defined in a Resolution of the Cabinet of Ministers of Ukraine, which is currently being developed by the Ministry of Economy of Ukraine and the National Bank. This document should be published in the coming months. To implement the Law, ECA is preparing several products that are expected to be available to businesses this year: 1) Insurance of international and national direct investments in Ukraine and dividends; 2) Insurance of investment-related loans. Important criteria for access to this type of insurance will be the creation of export potential as a result of investments. Potential political risks may include expropriation, eminent domain, unjustified revocation of licenses, failure to fulfill government obligations, inability to convert currency, etc. Military events include military conflict, hostilities, violent change or overthrow of government, occupation, annexation, etc. Compensation will be available in the event of a complete business interruption (the difference between the value of investments before the event and the value after the event is compensated). More details will be known after the publication of the relevant draft resolution of the Cabinet of Ministers. In addition, Ms. Ocheretyana outlined the existing mechanisms to support Ukrainian exporters under the ECA. More details on the terms and programs of support can be found in the presentation New Opportunities for Ukrainian Exporters. The full recording of the meeting is available here. https://www.youtube.com/watch?v=wvdper3BdOY&feature=youtu.be

These are the approximate terms for the launch of the long-awaited investment insurance against military and political risks within the framework of the Export Credit Agency (ECA) were discussed during a meeting of the EBA Recovery Committee with Oksana Ocheretyana, Deputy Head of the ECA.

This year, the Law of Ukraine No. 3497-IX dated 22.11.2023 came into force, which expanded the scope of the ECA’s activities to include insurance of direct investments and investment loans aimed at the development of export-oriented enterprises. The list of military and political risks and the terms and procedures for insurance/reinsurance should be defined in a Resolution of the Cabinet of Ministers of Ukraine, which is currently being developed by the Ministry of Economy of Ukraine and the National Bank. This document should be published in the coming months.

To implement the Law, ECA is preparing several products that are expected to be available to businesses this year:

1) Insurance of international and national direct investments in Ukraine and dividends;

2) Insurance of investment-related loans.

Important criteria for access to this type of insurance will be the creation of export potential as a result of investments.

Potential political risks may include expropriation, eminent domain, unjustified revocation of licenses, failure to fulfill government obligations, inability to convert currency, etc. Military events include military conflict, hostilities, violent change or overthrow of government, occupation, annexation, etc.

Compensation will be available in the event of a complete business interruption (the difference between the value of investments before the event and the value after the event is compensated). More details will be known after the publication of the relevant draft resolution of the Cabinet of Ministers.

In addition, Ms. Ocheretyana outlined the existing mechanisms to support Ukrainian exporters under the ECA. More details on the terms and programs of support can be found in the presentation “New Opportunities for Ukrainian Exporters.” The full recording of the meeting is available here.

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