Publication date: 20.05.2024
Approval of the list of military and political risks: new opportunities for insurance from the Export Credit Agency
On April 9, 2024, an important decision was made at a meeting of the Cabinet of Ministers of Ukraine, which opens up new opportunities for ensuring the financial stability of Ukrainian exporters and investors. The Cabinet of Ministers approved the list of military and political risks, as well as the conditions and procedure for insurance (reinsurance) of such risks within the framework of the Export Credit Agency (ECA). This decision became an important step in the direction of improving legal regulation and protecting the interests of Ukrainian entrepreneurs in the conditions of a complex geopolitical situation.
The context and meaning of the decision
As the Deputy Minister of Economy of Ukraine, Volodymyr Kuzyo, explained, the adopted decision will contribute to the improvement of legal regulation regarding the list of military and political risks, the terms and procedure of their insurance or reinsurance. EKA got the opportunity to insure and reinsure against military and political risks investment loans of Ukrainian banks for Ukrainian exporters, as well as direct investments. This creates additional guarantees for investors and exporters, which will help increase confidence in the Ukrainian market and attract foreign investments.
Military risks
The list of war risks that are subject to insurance includes the following risks common in international practice that may arise on the territory of Ukraine:
Military conflict: war, armed conflict, armed aggression, hostilities, mass riots.
Violent change or overthrow of the constitutional order or seizure of state power.Terrorist acts and/or sabotage.
Occupation, annexation.
These risks are extremely relevant in the context of the current situation in the east of Ukraine, where the armed conflict continues, as well as in the context of general instability in the region.
Political risks
The following insurance risks are included in the list of political risks:
Compulsory alienation of property: confiscation of the property of a business entity by the state authorities of Ukraine.
Groundless revocation of a license or forced termination of a business entity by state authorities.
Non-fulfilment or refusal of the state to fulfill its obligations: defined by legislation or an investment agreement.
The introduction of bans by the state: payment embargoes, a moratorium on payments.
Impossibility of currency conversion or currency transfer abroad by a business entity.
These political risks take into account the possibility of government intervention in business activities, which can lead to significant financial losses for enterprises.
Insurance terms and conditions
The adopted decision provides for clear conditions and procedures for insurance and reinsurance of military and political risks, which allows to ensure transparency and efficiency of the process of providing insurance services. EKA has developed an action algorithm, which includes:
Risk assessment: analysis of the situation and identification of possible threats to a specific enterprise or project.
Development of insurance policies: inclusion in the policies of specific conditions that take into account the specifics of the business entity's activity.You may be interested in the following articles: Analysis, consultation, evaluation. legal analysis of the situation, lawyer's consultation, lawyer's consultation, analysis of documents, legal analysis of the situation, written consultation, verification of documents by a lawyer, lawyers' documents, lawyer's help online, lawyer online, legal opinion, legal opinion of a lawyer, lawyer online.
Monitoring and control: constant supervision of compliance with insurance and reinsurance conditions, as well as analysis of new threats and risks.
Conclusion
The introduction of the list of military and political risks, as well as the conditions and procedures for their insurance by the Export Credit Agency is an important step in the direction of increasing the financial security of Ukrainian enterprises in the conditions of an unstable geopolitical situation. This decision provides additional guarantees for exporters and investors, contributing to the stabilization of the economy and attracting investments to Ukraine. The Cabinet of Ministers of Ukraine continues to work on improving legal regulation, ensuring transparency and efficiency of insurance processes for military and political risks.
