Despite the on-going war with Russia, Ukraine is moving forward with extraordinary measures to stimulate exports with an overhaul of the rules for its first Ukrainian export credit agency (“ECA”) since independence. While the rules and efficiency of the ECA are yet to be tested, several exporters are already exploring the opportunities that the new instruments present.
Under its new Regulation No. 1 “On licensing of the export credit agency and the conditions for it to carry out insurance, reinsurance, and guarantee activities” (the “Regulation”), the National Bank of Ukraine (the “NBU”) acknowledged and duly regulated the status of the ECA as an insurer with a special status. The Regulation came into effect on 10 January 2023.
The key objective of the ECA is to stimulate exports of goods and services of Ukrainian origin and effectively support local business that export Ukrainian products by way of insurance, reinsurance, and the provision of guarantees under contracts that ensure export development. The Regulation was required and designed specifically for that purpose.
Among other things, the Regulation sets out detailed rules for the following:
- registration and licensing procedures for the ECA and the conditions for carrying out its insurance, reinsurance, and guarantee activities;
- requirements for internal control, risk management, and reporting systems as well as qualification criteria for managers and key personnel in the ECA; and
- requirements for capital adequacy and solvency standards.
The ECA must comply with the Regulation and will need to submit an application to the NBU for a special licence to be able to act as an insurer with a special status and effectively promote Ukrainian exports.
