Export Contract and Credit Insurance in Russia: Legal Aspects

 

July 8, 2024

BRACE Law Firm ©

 

In the current environment of sanctions restrictions, boosting exports—primarily non-resource goods — under the condition of appropriate state support can provide a new impulse to the development of the Russian economy with prospects for growth in the near future. It is no coincidence that the problems of state support for export-oriented enterprises and organizations are at the center of attention of government authorities.

Who Insures Export Activities?

To develop foreign trade activities, the Russian government and the executive authorities of the constituent entities of the Russian Federation implement measures aimed at:

• Promoting the development of foreign trade activities, including lending to foreign trade participants;
• Operating a system of guarantees and insurance for export credits;
• Organizing and participating in trade exhibitions and fairs, specialized symposiums, and conferences;
• Conducting campaigns (including advertising) to promote Russian goods, services, and intellectual property in global markets.

The Joint Stock Company Russian Export Center (the "Russian Export Center" or "REC"), the Joint Stock Company Russian Agency for Export Credit and Investment Insurance (the "EXAR"), the State Specialized Russian Export-Import Bank (Joint Stock Company) (the "ROSEXIMBANK"), and their subsidiary business entities implement functions related to financial, insurance, guarantee, and other support for exports and imports.[1]

In the manner established by the Government of the Russian Federation, the Russian Export Center:

• Participates in the implementation of state policy in the field of export development and support, including assisting in the implementation of state and other projects involving the export of goods (works, services), information, and rights to the results of intellectual activity and equivalent means of individualization;
• Provides informational and consulting support to exporters, Russian investors making investments outside the Russian Federation, their foreign counterparties in relevant transactions, Russian and foreign credit organizations, as well as other organizations providing financial support to these persons;
• Organizes access for Russian exporters and other interested parties to information on export support measures, as well as on the activities of authorized state authorities of the Russian Federation and state authorities of the constituent entities of the Russian Federation in the field of export support;
• Assists the activities of non-profit organizations representing the interests of economic entities engaged in foreign trade activities;
• Assists in the promotion of industrial products (goods, works, services) abroad, including assisting in exhibition, fair, marketing, and other activities, in cooperation with authorized federal executive authorities of the Russian Federation and executive authorities of the constituent entities of the Russian Federation;
• Assists the activities of organizations acting as intermediaries in export activities;
• Assists the production of products (goods, works, services) that are competitive in international markets;
• Acts as the operator of the "One Window" information system in the field of foreign trade activity;
• Engages in other activities to support exports.[2]

The Russian Export Center is essentially a unique state institution for supporting non-resource exports, providing Russian exporters with a wide range of financial and non-financial support measures without industry restrictions. Within the framework of the Development Strategy of JSC Russian Export Center, a comprehensive export support system has been developed, based on various types of export support measures; this support targets organizations, including those that are not currently exporters. The Russian Export Center also maintains close cooperation with state authorities and the business community, ensuring meaningful participation in the state policy of foreign economic activity and forming the foundations for a unified, effective institution for supporting Russian exports. Accordingly, the Russian Export Center today represents a synergy of existing approaches and measures for supporting and developing exports in Russia.[3]

The State Specialized Russian Export-Import Bank (Joint Stock Company):

• Finances exporters, Russian investors making investments outside the Russian Federation, their foreign counterparties in relevant transactions, Russian and foreign credit organizations, as well as other organizations providing financial support to these persons;
• Ensures the performance of obligations of Russian exporters, their foreign counterparties in relevant transactions, Russian and foreign credit organizations lending to relevant transactions, as well as other organizations providing financial support to these persons, including through the issuance of bank guarantees, the conclusion of surety agreements, and other methods;
• Engages in other activities to support exports.

EXAR’s main target group consists of export-oriented enterprises with a high share of innovation.

EXAR utilizes two main mechanisms to support exporters:

• Export Contract Insurance. A Russian exporter sells goods or services abroad on deferred payment terms. In this case, the resulting accounts receivable are insured. If the foreign buyer fails to pay the Russian seller for the delivered goods (rendered services), EXAR will make the payment and then initiate procedures to collect the debt from the foreign buyer. EXAR offers insurance for short-term accounts receivable, covering regular deliveries of homogeneous goods on deferred terms of up to one year to regular foreign buyers, and insurance for deferred payments for small and medium-sized enterprises (SMEs) exporting Russian goods (services, works) on deferred payment terms of up to 90 calendar days in small volumes;
• Credit Non-repayment Risk Insurance. A Russian or foreign bank issues a credit to a foreign buyer to pay for Russian products. In this case, EXAR insures the bank against the risks of non-repayment of the credit and interest. If the foreign debtor buying Russian products fails to pay interest on time or does not repay the credit, EXAR will return the credit amount and interest to the Russian bank and subsequently collect the debt from the foreign debtor.

Currently, EXAR operates in accordance with its Development Strategy, which outlines the main directions of its work. In May 2021, the Board of Directors of the Agency approved the EXAR Development Strategy until 2026 and for the period until 2030. EXAR's strategy is synchronized with the development strategies of the Russian Export Center and JSC ROSEXIMBANK and aims to effectively achieve the unified goals and objectives of the REC Group in supporting exports.

The Agency's Development Strategy was developed based on the updated national goals contained in Decree of the President of the Russian Federation No. 474 dated July 21, 2020, On the National Development Goals of the Russian Federation for the Period until 2030, the objectives and expected results of the national project "International Cooperation and Export" and federal projects within its scope, high-level strategic targets of the unified VEB.RF Group for 2024 and for the period until 2030, the main provisions of the previous EXAR development strategy until 2024, in-depth interviews with foreign trade participants, the results of an "online" survey of exporters, and an analysis of international practice.

In the new strategic cycle, EXAR will continue implementing tasks for export development, including growth in total export volume and the volume of insurance provided, and will also assist in deepening the integration of Russian companies into international value chains and cooperation.

The main strategic priorities for EXAR’s development include:

• Qualitative growth and business model development (growth in export support volumes at rates exceeding the growth of non-resource non-energy exports and planned growth rates for similar indicators of the national project "International Cooperation and Export");
• Support for the instruments of JSC ROSEXIMBANK to increase export competitiveness, as well as the development of partner products together with commercial banks and other development institutions;
• Development of the product line to meet the new needs of Russian exporters (investors) and their partners for insurance support instruments;
• Use of digital channels to increase the availability of provided insurance products, including by placing the relevant offer within the FGAIS "One Window" for exporters;
• Increasing support for large transactions (growth in insurance for credits for export-oriented and capital-intensive projects);
• Improving operational efficiency (improving data quality, automating business processes, developing centers of excellence, and "online" interaction channels with clients).

It should be noted that EXAR's obligations are backed by a state guarantee of the Russian Federation provided by the Ministry of Finance of the Russian Federation, acting on behalf of the Russian Federation.

In addition to EXAR, other insurance companies also provide insurance for export contracts and credits. For instance, LLC Credendo – Ingosstrakh Credit Insurance offers insurance coverage for non-payment by buyers both within Russia and during export to foreign markets. Insurance compensation covers up to 90% of the insured loss caused by the buyer's bankruptcy, long-term payment delays, or political events (for export operations). The insurance coverage applies to regular deliveries of homogeneous goods, works, or services to Russian and foreign counterparties if the delivery deferral does not exceed one year.

Commercial banks also offer solutions for Russian exporters:

• Payment guarantee to secure the payment obligations of the exporter (principal) to the manufacturer (beneficiary) under a supply contract for non-resource goods (works, services) at the stages of implementing an export contract (or at the stage of implementing a pre-export contract);
• Performance guarantee for an export contract, which secures the obligations of the exporter (principal) for the proper performance of the export contract for the supply of non-resource goods (works, services) to a foreign buyer (beneficiary);
• Advance payment refund guarantee, which secures the performance of the exporter's (principal) obligations to a foreign buyer (beneficiary) to refund an advance payment if the exporter (principal) fails to perform its obligations under the export contract for the supply of non-resource goods (works, services).

Export Contract Insurance

A long-term export contract involving a long production and delivery cycle with a flexible buyer payment schedule generally indicates not only significant transaction volumes but also an increased risk of non-payment. By the time payment obligations arise, the financial condition of the buyer or the political situation in their country may have deteriorated. The insurance coverage applies to individual deliveries (a single delivery or a delivery schedule) carried out on deferred payment terms.

The insurance coverage extends to commercial risks (the counterparty is unwilling to perform its obligations or lacks sufficient funds) and political risks (the counterparty is unable to perform its obligations due to imposed state prohibitions).

The insurance policy covers up to 95% of the amount of the foreign buyer's outstanding obligations, allowing the exporter to secure its foreign trade activities, expand the volume and geography of deliveries, and fulfill its obligation to repatriate foreign currency earnings.

If the exporter plans to take out a credit to finance the contract, the lending bank can become the beneficiary under the insurance contract, thereby increasing the credit quality and offering the client more favorable financing terms.

Since December 21, 2023, EXAR has launched its "Export Contract Insurance" product as a digital service on the "My Export" platform.

The necessary conditions for export contract insurance include:

• Exporting goods (services, works, results of intellectual activity) of Russian origin;
• Presence of a signed export contract or its draft;
• Supply of goods on deferred payment terms (an individual schedule is possible).

An exporter wishing to insure its export contract with EXAR must provide the following documents:

• Request for export contract insurance. This request is filled out by the potential insured at the initial stage of discussing the insurance issue so that EXAR can provide preliminary insurance terms. All information about the transaction known to the insured must be provided to EXAR. Preliminary insurance terms can only be confirmed by EXAR after receiving and reviewing the completed insurance application form and conducting a full risk assessment. EXAR may request additional information if necessary;
• The export contract or its draft (if available);
• Reporting of the foreign counterparty for the last two years;
• Financial model of the project (if available).

Insurance applies during the export period, with a payment deferral of no more than 90 days, as well as in the event of granting a maximum additional deferral (rescheduling the payment date) for the following buyer's debt to the supplier under the export contract:

• Debt arising in connection with the shipment of goods, performance of works, or provision of services specified in the insurance application;
• If the payment invoice is issued within 15 days from the date of the corresponding shipment of goods (performance of works, provision of services)—applied if the payment deferral period under the export contract begins from the date of the invoice;
• If the export destination country (i.e., the country where the goods are delivered, services are provided, or works are performed, or the country where the results will be used) matches the export destination country specified in the insurance application;
• If the law of the Russian Federation is the applicable law for the export contract regarding the relevant debt;
• If disputes under the export contract regarding the relevant debt are subject to resolution by an authorized state Arbitration Court of the Russian Federation or the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation;
• If there is no prohibition or other restrictions on the transfer of claims regarding the relevant debt under the export contract to EXAR.

Accordingly, the insurance does not apply to the following debt:

• If the debt consists of penalties (fines, late fees) or compensation for damage to goods;
• If there is a relationship of direct or indirect control between the insured and the buyer, including through direct or indirect participation in capital, or when the insured and the buyer are under the common direct or indirect control of the same person. Control is the ability of one person to directly or indirectly influence the decisions or transactions of another person, including, but not limited to, direct or indirect participation in the charter capital of such other person or under the terms of an agreement concluded between said persons;
• If the insured did not receive advance payments, i.e., the debt arose in connection with the shipment of goods, provision of services, or performance of works for which the insured did not receive advance payments provided for by the terms of the export contract;
• If the obligation to pay the debt does not lie with the buyer, including if a letter of credit is used as the form of settlement;
• If the debt arose in relation to the shipment of goods, provision of services, or performance of works for which payment upon receipt (cash on delivery or delivery against payment) or payment in non-monetary form is provided;
• If the insured granted the buyer more than one additional payment deferral, or a single additional deferral exceeded 45 days (maximum additional deferral), i.e., the payment date was rescheduled more than once or was increased once by more than 45 days for the relevant shipment;
• In terms of shipments of goods, provision of services, or performance of works carried out after the buyer's non-payment (default) or bankruptcy;
• Regarding which the insured violated the representations given in the insurance application;
• On exports carried out after the amount of insured debt reached the insurance value once.

In the event of a buyer's failure to perform payment obligations, the insured is obliged to:

• Send a demand to the buyer to settle the overdue debt and take other necessary actions to obtain payment from the buyer and/or to include the debt in the register of the buyer's creditors' claims;
• Submit an application for insurance compensation to EXAR no earlier than 30 days from the payment date (including extensions) on which the buyer failed to settle the debt. The insured has 40 days to submit the application and payment documents from the specified date;
• Obtain EXAR's prior consent to change the debt payment terms;
• Notify EXAR of the receipt of any amounts from the buyer or any amounts from other persons towards debt repayment within 5 days from the date of their receipt.

The decision to pay insurance compensation is made based on the application for payment submitted by the insured, the payment documents, and the results of EXAR's verification of the insured's performance of the duties provided for by the insurance contract. EXAR pays the insurance compensation or sends a reasoned refusal to the insured within 30 days from the date EXAR receives the last of the payment documents. Insurance compensation is payable in full or in part provided the insured complies with the requirements of the law applicable to the contract and the export contract.

Insurance compensation is not payable in full or in part if:

• The insured's loss was directly or indirectly caused by circumstances such as the insured's intent, errors and omissions in the export contract, the insured's failure to comply with the terms of the export contract, agreements preventing payment of the debt, or currency fluctuations;
• The insured waived its right of claim against the person responsible for the loss, or the exercise of such rights by EXAR became impossible (in full or in part) due to the insured's fault;
• The export contract is recognized as invalid, as not containing legal obligations, and/or the terms of the export contract are recognized as unenforceable (in full or in part).

Please note that EXAR has the right to demand the return of paid insurance compensation if it is found that the compensation was not payable under the terms of the insurance contract, or if the insured failed to ensure the transfer of rights of claim from the export contract to EXAR, or if the exercise of the rights of claim transferred to EXAR is impossible, as well as if the export contract is recognized as invalid, as not containing legal obligations, and/or the terms of the export contract are recognized as unenforceable (in full or in part) after the insurance compensation has been paid. In these cases, the insured is obliged, at EXAR's request, to return the paid insurance compensation within 15 days from the date EXAR sends the relevant request to the insured.

Export Credit Insurance

EXAR provides export credit insurance in accordance with the Rules for Insurance of Export Credits and Investments against Entrepreneurial and/or Political Risks of Exporters, Russian Investors making Investments outside the Russian Federation, their Foreign Counterparties in Relevant Transactions, Russian and Foreign Credit Organizations lending to Relevant Transactions, other Organizations providing Financial Support to these Persons, Ensuring the Performance of Obligations of Residents of the Russian Federation and their Foreign Counterparties during Export and Investment outside the Russian Federation, including through the issuance of Independent Guarantees, the Provision of Sureties, and the use of other methods of securing performance of obligations for projects of national, strategic, or priority importance for the economy of the Russian Federation, as well as the implementation of reinsurance (the "Rules").[4]

In accordance with these Rules and without obtaining a permit (license), EXAR:

• Provides insurance for export credits and investments against entrepreneurial and/or political risks for exporters of goods (works, services, results of intellectual activity), Russian investors investing outside the Russian Federation, their foreign counterparties in relevant transactions, credit organizations, international financial organizations, the state development corporation VEB.RF, and other organizations providing financial support to these persons;
• Engages in reinsurance activities involving Russian and foreign insurers, reinsurers, and export credit agencies;
• Ensures the performance of obligations of Russian residents and their foreign counterparties during export and investment outside the Russian Federation, including through the issuance of independent guarantees, the provision of sureties, and the use of other methods of securing performance for projects of national, strategic, or priority importance for the Russian economy.

The parties to the insurance contract are the agency, the insured, and the beneficiary, or the agency and the insured. Under the insurance contract, the entrepreneurial risk and/or political risk of the insured may be insured in favor of a beneficiary who has an insurable interest in concluding the insurance contract based on law, another legal act, or a contract.

The following persons having an insurable interest in the transaction subject to EXAR insurance may be insured under the insurance contract:

• A Russian legal entity, a foreign legal entity, or a physical person registered under the laws of the Russian Federation as an individual entrepreneur who has concluded or intends to conclude a transaction related to export;
• A Russian legal entity, a controlled foreign person, or a physical person registered under the laws of the Russian Federation as an individual entrepreneur engaged in investment activities, as well as a foreign legal entity having an insurable interest directly or indirectly related to the Russian investor's investment activities;
• A credit organization, VEB.RF, or an international financial organization that has provided or intends to provide financial support.

The objects of insurance are the insurable interests of the insured (beneficiaries) related to possible losses caused by entrepreneurial and/or political risks realized during the performance of transactions related to export and/or investments abroad.

The sum insured (limit of insurance liability) is established in the insurance contract. The procedure for calculating the sum insured is established by the insurance rules. For each transaction, EXAR can cover up to 95% of losses for political risks and up to 90% for commercial risks. In specific cases, by decision of the Board of Directors, up to 100% of the loss may be covered.

The insurance premium amount is determined by the agency in accordance with the insurance tariff. The insurance tariff is calculated based on the following factors:

• The debtor's financial condition;
• The risk level associated with the state(s) regarding which the insurance coverage is provided (coverage territory);
• The amount and term of the debt obligation or the debtor's obligation in a transaction related to export and/or investment abroad;
• The share of risk retention by the insured and/or reinsurer;
• The sum insured (limit of insurance liability);
• Other factors established by EXAR’s internal documents and/or transaction specifics.

The insurance premium, calculated based on tariff factors and the agency-approved regulation on insurance tariffs, must correspond to:

• The insured risk;
• The volume of the provided insurance coverage.

Calculation and payment of the insurance premium and insurance compensation are carried out in rubles, unless otherwise specified in the insurance contract.

An insurance case is an insured risk realized as a result of an insurance event related to entrepreneurial and political risks that results in losses for the insured (beneficiary).

Events related to entrepreneurial risks include:

• Insolvency or bankruptcy of the debtor and/or its guarantor, recognized under applicable law or determined in accordance with the terms of the reinsurer's insurance contract with which the agency concludes an incoming reinsurance contract;
• The debtor's failure to perform its obligations;
• Unjustified suspension (termination) of performance by the debtor or refusal of obligations to compensate expenses related to production, creation, preparation for export of Russian goods (works, services, results of intellectual activity), or supply of related goods (works, services).

Events related to political risks include:

• Unjustified refusal of a sovereign debtor to perform its obligations, including refusal to make payments;
• Unjustified suspension of performance by a sovereign debtor or refusal of obligations, including failure to perform obligations to compensate expenses in transactions related to export and/or investment abroad;
• Interference by a foreign state, including actions or decisions by a foreign state, state authority, or other authorized state entity, which: prevents performance of a transaction related to export and/or investment abroad; leads to nationalization, expropriation, requisition, confiscation, or similar actions by the foreign state without equivalent compensation; violates obligations assumed by the foreign state within the insured's investment activity; changes contractual obligations assumed by foreign states within structured financing; leads to changes in regulatory legal acts on the basis of which investments were planned;
• A debt payment moratorium established by a foreign state's law;
• The impossibility or delay of the debtor making payments to the insured in a transaction related to export and/or investment abroad due to political events, economic problems, or legislative or administrative measures outside the Russian Federation;
• The adoption in the debtor's state (foreign state) where investments were made of legislative acts recognizing debt repayment through payments (including in a different currency than the obligation currency) that, on the transfer date, do not cover the debt amount in the obligation currency;
• The adoption by the Russian Federation or an international organization of decisions on foreign trade issues, including decisions introducing an export ban, if the consequences of such decisions are not otherwise compensated by the Russian Federation;
• Force majeure circumstances arising outside the Russian Federation, including combat and military actions, military maneuvers or similar events, civil wars, strikes, popular unrest, and mass riots, if their consequences are not otherwise insured.

The insured (beneficiary) is responsible for the accuracy and completeness of the data provided to EXAR for the conclusion and performance of the insurance contract.

When concluding an insurance contract, EXAR independently or by involving an expert assesses the insurance object to determine the degree of insurance risk. The risk of invalidity and/or unenforceability of the terms of a transaction related to export and/or investment abroad (including the terms of investment activities) is borne by the insured (beneficiary). In the case of concluding a reinsurance contract, EXAR may rely on the assessment of the insurance object carried out by the reinsurer or the insured, respectively.

When concluding an insurance contract, the parties must reach agreement on the following conditions:

• Object of insurance;
• Events related to political and/or entrepreneurial risks;
• Insurance risks and insurance cases;
• Sum insured (limit of insurance liability);
• Insurance premium (insurance installments if paid in portions);
• Insurance value;
• Duration of insurance and/or the insurance contract;
• Other conditions that, by EXAR’s decision and/or according to the insurance rules, must be included in the insurance contract.

EXAR may unilaterally terminate the insurance contract if the insured (beneficiary) fails to immediately notify the agency of changes in circumstances reported to the agency upon concluding the contract and/or relating to the subject of the insurance contract or the risk accepted for insurance, if these changes significantly affect the increase in insurance risk.

EXAR is released from paying insurance compensation for a loss arising from:

• Actions or omissions of the insured (beneficiary) or its representative;
• Restriction of the insured's rights provided for by any contract concluded by it, unless otherwise agreed with EXAR;
• Any subsequent agreement concluded by the insured after concluding a transaction related to export and/or investment abroad that prevents or delays debt repayment, if such agreement was not coordinated with EXAR;
• Failure by third parties involved by the insured to perform obligations for transactions related to export and/or investment abroad, provided such failure was not caused by events related to political risks;
• Invalidity or unenforceability of the insured's (beneficiary's) right of claim against the debtor or another obligated person specified in the insurance contract within an export-related transaction, according to the law applicable to such claim.

Unless otherwise provided by the insurance contract, the right of claim that the insured (beneficiary) has against the person responsible for losses reimbursed as a result of insurance passes to EXAR upon payment of the insurance compensation, in the manner, volume, and on the terms defined by the insurance contract. The right of claim transferred to EXAR is exercised by it in compliance with the rules governing relations between the insured and the person responsible for losses, taking into account the specifics provided by the insurance rules and the insurance contract.

To implement the rights of claim transferred to EXAR, the insurance rules and/or insurance contracts provide for:

• The obligation of the insured (beneficiary) to transfer to the agency all documents and evidence necessary for the agency to exercise the right of claim transferred to it, as well as to report all information necessary for this;
• A condition that the agency is released from paying insurance compensation in full or in the relevant part and may demand the return of excessively paid compensation if the insured (beneficiary) waived its right of claim against the person responsible for losses reimbursed or to be reimbursed by the agency, or if the exercise of this right became impossible due to the actions (omissions) of the insured (beneficiary).

Court Disputes Related to Export Insurance

The existence of a debt for payment of goods declared as a risk does not entail an obligation for EXAR to pay insurance compensation.

In Case No. A40-189475/2022 regarding EXAR’s failure to pay insurance compensation, it was established that "after analyzing said information and indicators at the loss adjustment stage, the Agency applied to law enforcement authorities to conduct an investigation into the presence of signs of attempted insurance fraud in the plaintiff's actions. The decision of the competent law enforcement authorities confirms the validity of the Agency's position regarding the insured's realization of its unlawful interest in obtaining insurance compensation and enrichment at the Agency's expense". [5]

Pursuant to Article 928(1) of the Civil Code, insurance of unlawful interests is not permitted. According to Article 963(1) of the Civil Code, the insurer is released from paying insurance compensation or the sum insured if the insurance case occurred due to the intent of the insured, the beneficiary, or the insured person.

Thus, the court concluded that "the plaintiff's claims are based on sham supply transactions and an attempt to realize its unlawful interest by fabricating an insurance risk."[6]

In another case, Case No. A40-128493/19, EXAR refused to pay the plaintiff insurance compensation under the contract, citing that "the actual consignees specified in the bills of lading do not match the agreed consignee and the one specified in Appendix No. 1 to the contract, and the plaintiff did not properly perform its obligations to deliver the cargo to the proper consignee, which does not entail an insurance case."[7] Furthermore, the court concluded that "the terms of the Contract themselves refute the reality of the supply legal relationship." The plaintiff did not confirm the reality of the supply legal relationship, did not confirm compliance with the terms of the contract or its proper performance, and failed to prove the realization of the insurance risk.

As previously noted, losses of the insured directly or indirectly caused by, among other things, the insured's failure to comply with the terms of the export contract are not subject to reimbursement.

In Case No. A40-219619/18, the reason for the refusal to satisfy the claims for insurance compensation was the insured's failure to follow EXAR's instructions.

The court established that the insurer, "after receiving notification of the realization of the insurance risk, sent instructions to the insured aimed at the Insured taking measures to return the goods unpaid by the buyer to the exporter — in the letter, EXAR also expressed readiness to reimburse the costs associated with the measures to return the goods."[8] Meanwhile, the insured refused to follow EXAR's instructions on fabricated grounds and failed to consider the real legal possibility of returning the goods. Additionally, the plaintiff failed to provide evidence that the debt possessed the characteristics of an insured debt.

Thus, existing court practice shows that upon the occurrence of an insurance case (failure of the buyer to perform the obligation to pay for the delivered goods), the insured — to prove the occurrence of the insurance case in accordance with the insurance terms — is obliged to conduct preliminary claim work with the buyer, act according to the insurer's directions and instructions, and provide all available information and documents upon its request.

There is also practice in favor of insured parties where courts collect insurance compensation from insurance companies. In Case No. A40-61514/2018, an insured filed a lawsuit against the insurance company LLC Credendo-Ingosstrakh Credit Insurance to collect insurance compensation due to a foreign counterparty's failure to pay for goods supplied by the plaintiff. The court of first instance, in dismissing the claims, stated that the plaintiff "failed to prove the fact of delivery of the goods to the foreign counterparty and, as a result, did not provide the full set of documents provided for by the contract for the payment of insurance compensation."

The appellate and cassation courts, in turn, concluded that the defendant "pre-approved the insured's counterparty before the plaintiff concluded the supply contract. The facts of any fraudulent actions by the plaintiff's counterparty or the person posing as such do not affect the plaintiff's right to demand insurance compensation in connection with the occurrence of the insurance case. Regular reports from the insured to the insurer on shipments made also allow for the conclusion that the defendant was aware of and possessed information regarding the plaintiff's counterparty and the delivered batches of goods, which were consistently authorized by the defendant."[9]

Thus, the courts held that the fact of the insurance case's occurrence was confirmed, the plaintiff provided an exhaustive set of documents confirming the amount of damage and the fact of delivery to the foreign counterparty, and satisfied the claims.

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References

[1] Federal Law No. 164-FZ dated December 8, 2003, On the Fundamentals of State Regulation of Foreign Trade Activity.

[2] Government Decree No. 71 dated February 5, 2016, On Approval of the Rules for the Russian Export Center to Support Export and Import Activities, as well as Interaction with Federal Executive Authorities, Currency Control Authorities Authorized by the Government of the Russian Federation, and the State Atomic Energy Corporation Rosatom.

[3] Demchenko M.V., Efimova N.A., On the Issue of Subjects of Legal Relations in Export Activities. International Public and Private Law Journal, 2020, No. 4.

[4] Government Decree No. 964 dated November 22, 2011.

[5] Ruling of the Arbitration Court of the Moscow District dated July 12, 2023, in Case No. A40-189475/2022.

[6] Ibid.

[7] Ruling of the Arbitration Court of the Moscow District dated October 7, 2020, in Case No. A40-128493/19.

[8] Ruling of the Arbitration Court of the Moscow District dated January 23, 2020, in Case No. A40-219619/18.

[9] Ruling of the Arbitration Court of the Moscow District dated April 30, 2019, in Case No. A40-61514/2018.