Export insurance or Comprehensive export contracts insurance against political and commercial risks is the relatively new insurance product of insurance field in Uzbekistan. For legal entities export insurance is mainly considered as cargo insurance. But export insurance is not only cargo insurance but also financial risks insurance. Uzbekinvest National export-import insurance company is multi-profile insurance company which simultaneously carries out functions of the state agency on insurance of export contracts and credits of commercial banks. Actually Uzbekinvest carries out functions of the export credit agency of the Republic of Uzbekistan.
Export insurance realizes under the Presidential Decree No. UP-1871 of October 10, 1997 “On Additional Measures to Encourage the Export of Goods” and Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 167 of April 21, 1998 “On measures designed to provide domestic exporters with insurance cover”.
Today Uzbekinvest national export-import insurance company offers its potential clients a wide spectrum of insurance products, that match international standards of carrying out export risks insurance, on protection of their interests in foreign markets from political and commercial risks. Those products are:
- Comprehensive export contracts insurance by the type «Supplier`s Credit»
The insurance protection against risk of non-performance of obligations by the foreign buyer on due payment as a result of commercial and political risks on export contract which provides trade credit (delay of payment) until 60 days.
Insurance policy is the basis for filling the calculation report provided by the Resolution of the Central Bank of the Republic of Uzbekistan and State Customs Committee No. 1137 of 14.05.2002 .
The given policy provides insurance protection against failure by foreign guarantor or bank issuing a guarantee /ILC to fulfil their financial obligations where a guarantor/bank has no right or basis in accordance with terms and conditions of the guarantee or ILC to refuse payment of the sum due to the exporter.
- Export credits Insurance of Uzbek commercial banks by the type «Buyer Credit»
The given policy provides insurance protection against risk of non-performing by the buyer (borrower) of his financial obligations under credit, provided by commercial banks of the Republic of Uzbekistan to foreign bank or foreign buyer (borrower) for the payment of export contract, due to commercial and political risks.
- Export contract repudiation insurance.
The given insurance policy provides insurance protection against non-performance of contractual obligations by the foreign buyer in preloading period, due to political risks (unilateral breach of contract by the state buyer, war, civil commotion, introduction of import embargo in buyer’s country, government actions of the buyer’s country that prevent parties from performing their contractual obligations).
- Insurance protection against confiscation, expropriation, nationalization.
The given insurance policy provides insurance protection from inability to return investments due to political risks in the country of investments.
- Advance payment insurance
The given insurance policy provides insurance protection against risk of non-performing by the suppliers of his obligations on delivery of importing goods or inability to return the advance payment due to commercial and political risks.
- Domestics credit insurance
The insurance protection against risk of non-performing by the national buyer of his financial obligations due to commercial risks.
FAQ
- What is the export credit insurance?
- Advantages of export insurance?
- The main reasons to export in risky conditions?
- What kind of risks do the national exporters meet in their international activity?
- What kind of insurance risks does Uzbekinvest cover?
- Are there special terms for insurance protection?
- In what currency may be concluded the export contracts?
- Acceptable cost of an insurance product?
- How to conclude the insurance contract?
- Procedure of indemnity payment?
Our coordinate:
Export risks and investments insurance department
Address: 2, A. Qodiriy, Tashkent, 100017, Uzbekistan
Tel. 235-92-30
e-mail: export@uzbekinvest.uz
DECREE OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN
10 October 1997 N UP-1871
On Additional Measures for Stimulation of Export of
Goods (Works, Services)
With the purposes of further liberalization of foreign economic
activity, perfection of regulation of export-import operations and
stimulation increase of export the products made by the enterprises
of the republic:
1. To cancel from November 1, 1997:
export customs duties for all kinds of goods (works, services);
licensing of export of goods (works, services) except specific
ones, according to Enclosure No. 1
Point 2 is stated in accordance with Point 4 of the Decree
by the President of the Republic of Uzbekistan No. UP-3022
dtd 31.01.2002
2.To lay down that from February 1, 2002, economic
establishments may export goods (work, services) for freely convertible
currency without advance payment and opening a letter of credit under
warranties of the buyers' banks or insurance policy of export contracts
This Point was excluded in accordance with Point 5 of Decree by
the president of RUz No. UP-2841 dtd 14.05.2001
4. Privileges and preferences, stipulated by items 2 and 3 of
this Decree, do not concern mediatory organizations, and also
industrial enterprises, exporting raw goods according to Enclosure No. 2
5. To allow industrial enterprises of all forms of property,
exporting goods of own production, to open abroad trading houses
and representative offices for marketing researches of foreign markets
and advertising of produced goods with delivery for them goods on a
consignment basis.
6. To accept the offers of the Ministry of foreign economic
relations, Ministry of macroeconomics and statistics, Ministry of
finance, State customs committee of the Republic of Uzbekistan for
approval from November 1, 1997:
rates of import customs duties, according to Enclosure No. 3
list of subjects and products, export of which is forbidden,
according to Enclosure No. 4
list of subjects, forbidden to import (importation) to the
Republic of Uzbekistan, according to Enclosure No. 5
The 5 Paragraph of Point 6 is considered null and void
in accordance with Decree by the President of the Republic
of Uzbekistan No. UP-3028 dtd 20.02.2002
Enclosure No. 6
To take into account, that in accordance with the Law of the
Republic of Uzbekistan "On customs tariff" from January 1, 1998 the
rates of customs duties are estimated from customs cost of goods
(works, services).
7. The Ministry of macroeconomics and statistics, the State
customs committee together with the Ministry of Foreign Economic
Relations of the Republic of Uzbekistan and Uzgosstandard for two
months to carry out the necessary measures on perfection of tax system
and data processing of the state foreign trade statistics.
8. To recognize as lost force:
item 15 of the Decree of the President of the Republic of
Uzbekistan dtd. January 21 1994 No. UP-745 "About measures on a
further deepening of economic reforms, maintenance of protection of a
private property and business development";
item 2 of the Decree of the President of the Republic of
Uzbekistan dtd. March 20, 1996 No. UP-1411 "About additional measures
for stimulation of companies - manufacturers of export production";
item 1, paragraphs 1,2,3,5-7 of item 5 of the Resolution of
the Cabinet of the Ministers of the Republic of Uzbekistan dtd.
July 25, 1995, N 287 "About measures on further liberalization and
perfection of external economic activity";
item 1 of the Resolution of the Cabinet of Ministers of the
Republic of Uzbekistan dtd. March 20, 1996, No. 114 "About measures
for perfection of the mechanism of foreign economic activity
regulation";
The Resolution of the Cabinet of Ministers of the Republic
of Uzbekistan June 18, 1996 No. 219 "About additional measures on
liberalization of regulation of goods export";
Appendix 4 to the Resolution of the Cabinet of Ministers
of the Republic of Uzbekistan dtd. September 3, 1996, N 304 "About
questions of production, sale and maintenance of automobiles of JV "UzDAEWOOauto";
item 1 of the Resolution of the Cabinet of Ministers of
the Republic of Uzbekistan dtd. October 1, 1996, No. 342 "About
measures on rationalization of the goods import in the Republic
of Uzbekistan ";
The Resolution of the Cabinet of Ministers of the Republic
of Uzbekistan dtd. December 10, 1996 No. 438 "About change of the
import customs duties on separate kinds of the goods".
9. The Ministry of Justice, the Ministry of Finance, the State
customs committee of the Republic of Uzbekistan together with concerned
ministries and departments should introduce the offers to the Cabinet
of Ministers of the Republic of Uzbekistan on change and addition
of the current legislation, following from the present Decree.
10. The Cabinet of Ministers of the Republic of Uzbekistan for
a week to accept the appropriate Resolution on fulfilment of the present
Decree.
The President
of the Republic of Uzbekistan I. Karimov
Enclosure No. 1
to the Decree by the President
of the Republic of Uzbekistan
of October 10, 1997 No. UP-1871
LIST
of specific goods, export and import of which is carried out under the licenses, issued by the Ministry for Foreign Economic Relations, Investments and Trade of the Republic of Uzbekistan on the basis of the orders of the Cabinet of Ministers of the Republic of Uzbekistan (In edition of Point 5 of the Decree by the President of the RUz No.UP-3194 dtd 15.01.2003,Point 4 of Enclosure to the Decree by the President of the RUz
No. UP-3661 dtd 20.09.2005)
No. |
Brief name of product |
Product code due to PN FEA |
1 |
Arms and military engineering(only military purpose)special inventory materials(except items for their production |
8710, 8802
8802 11 100,8802 12 100
8526
8802 20 100, 8802 30 100,
8802 40 100), (except 8803 100)
8803 10 100, 8803 20 100,
8803 30 100, 8803 90 910),
8805 (except 8805 20 100),
8906 00 100, 9013 10,
9013 20, 9013 80
9014, 9301, 9302,
9305 (only to the battle),
9306 (except 9306 10,
9306 29 100, 9306 29 200,
9306 29 400, 9306 30 910,
9306 30 930)
|
2 |
Precious metals, alloys, ores, concentrates, breakage and waste of metals, natural gems and their products, waste, powders and natural gem recuperates, pearl and its products, amber and its products |
2843, 3006 40 (only of
precious metals), 7106-7115,
7118 (only of precious metals),
9003 19 100,
9021 29 100, 9101,
9111 10 000, 9113 10 000,
9608 10 300, 9608 39 100, 9705 (only gem coins), 7116 (only of pearl and natural gems), 9602 (only processed amber and its products |
3 |
Uranium and other radio-active substances, their products waste of radio-active substances |
2612 (only concentrates of uranium), 2844, 2845 |
4 |
Devices and equipment with usage of radio-active substances |
8401 |
Appendix N 2
to Decree of the President of the Republic of Uzbekistan
as of 10 October 1997 N ÓÏ-1871
LIST
of export raw materials which are exempt from privileges
______________________________________________________________________
¦N ¦Name of the goods ¦Êîä ïî ÒÍ ÂÝÄ ¦
________________________________________________________________________
¦1. ¦Cotton ¦5201, 5203 ¦
________________________________________________________________________
¦2. ¦Cotton yarn ¦5205, 5206 ¦
________________________________________________________________________
¦3. ¦Cotton waste ¦1404 20 000 ¦
________________________________________________________________________
¦4. ¦Crude oil, condensed gas, ¦ ¦
¦ ¦oil products ¦270900, 270900100, ¦
¦ ¦ ¦2710 (êðîìå ¦
¦ ¦ ¦271000330, ¦
¦ ¦ ¦271000350, 271000590)¦
________________________________________________________________________
¦5. ¦Natural gas ¦271121000 ¦
________________________________________________________________________
¦6. ¦Electric energy ¦271600000 ¦
________________________________________________________________________
¦7. ¦Precious metals ¦7106, 7108, 7110, ¦
¦ ¦ ¦7112 ¦
________________________________________________________________________
¦8. ¦Non-ferrous metals, non-ferrous rolled ¦ ¦
¦ ¦metals, scrap and waste of non-ferrous ¦ 7401, 7402, ¦
¦ ¦metals ¦7404-7406, ¦
¦ ¦ ¦7501-7504, 7601-7603 ¦
¦ ¦ ¦(êðîìå 760120900), ¦
¦ ¦ ¦7801-7802 (êðîìå ¦
¦ ¦ ¦780110000), ¦
¦ ¦ ¦780420000, ¦
¦ ¦ ¦7902-7903, 8001-8002,¦
¦ ¦ ¦810191900, ¦
¦ ¦ ¦810291900, ¦
¦ ¦ ¦810310-810310900, ¦
¦ ¦ ¦810411000-810430000, ¦
¦ ¦ ¦810510-810510900, ¦
¦ ¦ ¦810600100, ¦
¦ ¦ ¦810710000, ¦
¦ ¦ ¦810810-810810900, ¦
¦ ¦ ¦810910-810910900, ¦
¦ ¦ ¦811000-811000190, ¦
¦ ¦ ¦811100-811100190, ¦
¦ ¦ ¦811211000, ¦
¦ ¦ ¦811220-811220390, ¦
¦ ¦ ¦811230-811230100, ¦
¦ ¦ ¦811240-811240190, ¦
¦ ¦ ¦811291 ¦
________________________________________________________________________
¦9. ¦Ferrous metals, ferrous rolled metals, ¦7201-7213 (êðîìå ¦
¦ ¦scrap and waste of ferrous metals ¦721310000, ¦
¦ ¦ ¦721331000), 7214 ¦
¦ ¦ ¦(êðîìå 721420000, ¦
¦ ¦ ¦721440), 7215, 7216 ¦
¦ ¦ ¦(êðîìå 721610000, ¦
¦ ¦ ¦721621000, ¦
¦ ¦ ¦721622000, ¦
¦ ¦ ¦721650100), 7217-7229¦
________________________________________________________________________
Appendix N 4
to Decree of the President of the Republic of Uzbekistan
as of 10 October 1997 N ÓÏ-1871
LIST
Of items and products which are not allowed to be exported
________________________________________________________________________
¦N ¦ Name ¦ Êîä ïî ÒÍ ÂÝÄ ¦
________________________________________________________________________
¦1.¦Grain: wheat, rye, barley, oats, rice, ¦ 10 ¦
¦ ¦maize, buckwheat ¦ ¦
________________________________________________________________________
¦2.¦Bakery products (except for wheat ¦ 1905 ¦ confectionary, cakes, pastries of own production¦ ¦
¦ ¦ ¦ ¦
________________________________________________________________________
¦3.¦Flour, grain ¦ 1101-1106 ¦
________________________________________________________________________
¦4.¦Cattle, poultry ¦ 0101-0106 (êðîìå ¦
¦ ¦ ¦ 0106 00 990) ¦
________________________________________________________________________
¦5.¦Meat and meat sub products ¦ 0201-0210 ¦
________________________________________________________________________
¦8.¦Sugar ¦ 1701-1702 ¦
________________________________________________________________________
¦10¦Antiques (pictures, sculptures and ¦ âõîäÿùèå â ãðóïïó 97 ¦
¦ ¦others), representing significant ¦ ¦
¦ ¦artistic, historical, scientific or ¦ ¦
¦ ¦other cultural value (according to ¦ ¦
¦ ¦Ministry of Culture statement) ¦ ¦
________________________________________________________________________
¦11¦Vegetable oil ¦1507,1512,1516 (êðîìå ¦
¦ ¦ ¦òåõíè÷åñêèõ 1512 11 ¦
¦ ¦ ¦100, 1512 21 100) ¦
________________________________________________________________________
¦12¦ Raw stock (including non standard), ¦4101-4103, ¦
¦ ¦ fur, including astrakhan fur ¦4301-4302 ¦
¦ ¦ (including non standard) ¦ ¦
_______________________________________________________________________
¦13 ¦ Scrap and waste of ¦ 7404 00, 7602 00, 7802 00 000, ¦ non-ferrous metals
¦ ¦ ¦ 7902 00 000, 8002 00 000, ¦
¦ ¦ ¦ 8101 91 900, 8102 91 900, ¦
¦ ¦ ¦ 8103 10 900, 8104 20 000, ¦
¦ ¦ ¦ 8105 10 900, 8106 00 100, ¦
¦ ¦ ¦ 8107 10 900, 8108 10 900, ¦
¦ ¦ ¦ 8109 10 900, 8110 00 190, ¦
¦ ¦ ¦ 8111 00 190, 8112 II 900, ¦
¦ ¦ ¦ 8112 20 390, 8112 30400, ¦
¦ ¦ ¦ 8112 40 190 ¦
________________________________________________________________________
¦14 ¦Silk cocoon ¦ ¦
¦ ¦ ¦ 5001 00 000 ¦
¦ ¦ ¦ ¦
¦ ¦Filoselle ¦ 5002 00 000 ¦
¦ ¦ ¦ ¦
¦ ¦Silk waste ¦ 5003 ¦
________________________________________________________________________
Note: Uzbek karakul incorporated company is allowed to export
karakul and karakul raw material through the republic's customer
frontier within volume of production subject to export approved by the
Cabinet of Ministers of the Republic of Uzbekistan. (In edition of
Point 2 of the Decree No. UP-2068 dtd 25.08.1998.)
Note: Tashkent plant for processing of scrap metal and
nonferrous waste open joint-stock company is allowed to export through
the customs territory of the Republic scrap metal and nonferrous metals
within the volumes of production liable to export approved by the
Cabinet of Ministers of the Republic of Uzbekistan. (Introduced by
Decree No. UP-2212 of 05.02.99, Point 1 of Enclosure to the Decree by
the President of the RUz No. UP-3800 dtd 14.09.06)
Enclosure No. 5 has been amended in accordance with
Decree No. UP-2160 of 25.12.98
Enclosure No. 5
to the Decree by the President
of the Republic of Uzbekistan
of October 10, 1997 No. UP-1871
LIST
of subjects forbidden for import
to the Republic of Uzbekistan
Works of art, manuscripts, cliche, paintings, photo pictures,
photo films, negatives, cinema-, video-, and audio products, gramophone
recordings, sound materials, dedicated to subversion of state and
public system, infringement of territorial solidness, political
independence, propagandizing war, terrorism, violence, national
exclusiveness and religion independence, racism and its different
kinds (anti-Semitism, fascism), and also materials of pornography
contents.
Enclosure No. 6 is considered null and void in accordance
with Decree by the President of the Republic of Uzbekistan
No. UP-3028 dtd 20.02.2002
RESOLUTION OF THE CABINET
OF MINISTERS OF THE REPUBLIC OF UZBEKISTAN
April 21, 1998 No. 167
On measures designed to provide domestic exporters
with insurance cover
With the purpose of providing domestic exporters operating on
the international capital, commodity and service markets with insurance
cover, in accordance with Law of the Republic of Uzbekistan, "On
insurance", the Cabinet of Ministers has resolved as follows:
1. To lay down that:
export contracts which stipulate deferment of payment and are
not provided with payment guarantees against political and commercial
risks from first-class banks, are insured according to the procedure
detailed in Enclosure below.
2. Insurance cover against political and commercial risks of
export contracts, which stipulate deferment of payment, is provided to
exporters and resident commercial banks of the Republic of Uzbekistan
by insurance establishments.
Insurance of export commodity transportation is accomplished by
legal entities of the Republic of Uzbekistan enjoying the right to
carry out a corresponding line of activity according to the current
legislation of the Republic of Uzbekistan and International Rules
Incoterms.
3. Deputy Prime Minister B. Khamidov shall supervise the
implementation of the present Resolution.
Chairman
of the Cabinet of Ministers of the Republic of Uzbekistan I. Karimov
Enclosure
to the Resolution of the Cabinet of
Ministers of the Republic of Uzbekistan
of the April 21, 1998 No. 167
PROCEDURE
for the provision of domestic exporters of
capital, commodities and services with insurance cover
The present document was amended in accordance with
the Section XV of Enclosure No. 3 to the Resolution
of the Cabinet of Ministers of the RUz No. 413 dtd
27.11.2002
I. General
With a view to protect the state interests as well as domestic
exporters against political and commercial risks, which may arise on the
international capital, commodity and service markets, the present
Procedure specifies a mechanism for (i) insuring export contracts and
(ii) providing insurance cover to credits extended by commercial banks
to fulfil export contracts.
1. Insurance cover is granted to resident exporters of the
Republic of Uzbekistan (hereinafter to be referred to as simply "the
exporter") and resident commercial banks of the Republic of Uzbekistan
only in respect of export operations (including leasing) which involve
ingeniously-produced commodities, i. e. whose country of origin is
Uzbekistan.
Point 2 is stated in accordance with the Section XV of
Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
2. Insurance establishments are considered to be commercial
organizations which enjoy both legal entity status and the right to
insure export contracts.
The Ministry of Finance specifies a list of insurers authorized
to issue policies of insurance of export contracts against political and
commercial risks; the latter are used by authorized banks when serving
export-import transactions.
3. Export contracts are provided with insurance cover against
the following types of risk:
Political risks are regarded as those associated with any
unfavourable changes in the political and macroeconomic situation in the
foreign partner's country, which, partially or in full, hinder the
latter from performing his contractual liabilities. Political risks
embody (i) risks associated with the fulfilment of export contracts and
(ii) those related to the implementation of investment projects.
Political risks associated with the fulfilment of export
contracts are as follows:
_ the introduction of embargo on the export and import;
- declared or undeclared wars, civil unrests, revolutions, acts
of terrorism and sabotage in the foreign partner's country;
- certain actions by the government of the foreign partner's
country, which impede the fulfilment partially or in full, of the
contract signed, including the introduction of new laws of
discriminative character in respect of the Republic of Uzbekistan;
- delay in transfer because of lack of convertible currency
funds in the foreign partner's country or the declaration of moratorium
on serving foreign debts of the foreign partner's country, all
restricting bilateral payments between Uzbekistan and its foreign
partner's country.
Political risks associated with the implementation of
investment projects are as follows:
- expropriation of property, as well as the introduction by the
importer's country of new laws or administrative actions whatsoever, all
leading to loss of control over property or profit derived from the
latter, with the exception of general rules of indiscriminative
character introduced by the government of the foreign partner's country
in an effort to regulate economic activity carried out on its
territory;
- declared or undeclared wars, civil unrests, acts of terrorism
and sabotage which occur in the foreign partner's country.
Commercial risks are judged to be those which are directly
connected with the foreign partner's financial and economic position
and reflected in the latter's proven insolvency or bankruptcy and, as a
result, his inability to perform certain financial liabilities
undertaken under the given contract.
II. Procedure for the provision of export contracts
with insurance cover
4. Insurance against political and commercial risks.
Insuring the export contract, whose partial or full fulfilment
stipulates deferment of payment, requires the following documents to be
submitted by the exporter:
- an applicant form;
- the export contract and one copy thereof;
Paragraph 5 of Point 4 is stated in accordance with
the Section XV of Enclosure No. 3 to the Resolution
of the Cabinet of Ministers of the RUz No. 413 dtd
27.11.2002
- based on a degree of risk accompanying fulfilment of export
contract, insurance establishment is entitled to demand either a counter
guarantee or a surety of a foreign buyer on fulfilment of contractual
obligations;
- a copy of an appropriate reference issued by the exporter's
authorized bank, which certifies the fact that the advance payment at
the rate of no less than 15 per cent of the export contract's total
value has been received, with the exception of the cases detailed in
the law.
Only contracts signed according to the current law are admitted
to consideration. (Enclosure A - The scheme of export contract insurance
against political and commercial risks)
Insurance cover of the export contracts takes the form of a
standard insurance policy approved by the insurance establishment.
The insurance policy's payment terms are specified in an
individual agreement signed between the insurant and insurance
establishment.
The insurance establishment's liabilities under the insurance
policy come into force from the date the first insurance instalment
premium is transferred to its current account.
A decision to pay out insurance compensation under the
insurance policy signed is taken after a claim raised is subject to
thorough consideration and a resulting statement, which confirms the
occurrence of the insurance accident, its reason and the amount of
damage caused, is drawn up according to the established procedure.
III. Procedure for the provision of credits extended by
commercial banks with insurance cover
5. Insurance cover is provided to credits extended by the
Republic's resident commercial banks and/or exporters under the
internationally accepted terms of export crediting, including:
- the foreign partner (purchaser) should transfer and advance
payment at the rate of no less than 15 per cent of the contract's total
value, if credit is extended for a period exceeding one year;
- the exporter should observe the maximum term fixed for the
use of credit extended by the commercial bank (excluding the initial
grace period) - 5 years, and 12 years - for several product categories;
- the export contract having been fulfilled, the main portion
of credit should be repaid by successive equal instalments paid every
six months simultaneously with payment of interest accrued on an
unrepaid portion of credit.
6. Export and credit liabilities may be ceded to the third
party according to the established procedure, only following a written
agreement with the insurance establishment involved.
if there is a compensatory or counter deal, the export and
import contracts should be completely separated from each other.
7. Credits extended to exporters by commercial banks under
contracts which are not associated with deferment of payment, are not
subject to insurance.
8. Credits extended by commercial banks under export contracts
may take two forms: credit extended by the supplier and credit extended
to the purchaser.
The first type denotes credit extended by the supplier to the
purchaser which takes the form of deferment of payment for
technologies, goods or services supplied under the contract.
In this case the exporter appears in the role of the insurant,
while the exporter and/or an authorized bank of the Republic of
Uzbekistan play the role of the beneficiary.
The provision of this type of credit with insurance cover is
accomplished in the following succession (Enclosure B - Scheme of
insurance of commercial banks' credits on export contracts on
"supplier's credit" type):
- coordination of the export contract's terms between the
exporter and foreign purchaser;
- submission of an application and a package of the required
documents to both the authorized commercial bank and insurance
establishment;
- consideration of the application and taking by the
above-mentioned establishments of a decision on whether or not is
expedient to finance the given contract, and on whether or not to
provide the latter with insurance cover;
- signing of the export contract for the supply of produce
between the exporter and foreign purchaser;
Paragraph 9 is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
- based on a degree of risk accompanying fulfilment of export
contract, insurance establishment is entitled to demand from the buyer
to produce either a guarantee or a surety on fulfilment of contractual
obligations to the exporter or insurance establishment;
- signing of a credit agreement between the authorized
commercial bank and exporter and opening of financing;
- assignment to the insurance establishment by the exporter of
the right to enforce the foreign partner to perform his liabilities
under the given contract, payment of insurance premium, and receipt of
the insurance policy from the insurance establishment;
-discharge by the foreign purchaser of an advance payment at
the rate of no less than 15 per cent of the contract's total value, if
credit's term exceeds 1 year;
- delivery to the foreign purchaser of produce by the exporter
as required under the contract signed. Record-keeping of promissory
notes with an Uzbek authorized commercial bank;
- payment effected by the foreign purchaser for products
delivered under the export contract:
- repayment by the exporter of credit extended by the authorized
commercial bank;
- accomplishment of the following when an insurance accident
occurs:
a) the exporter or authorized commercial bank notify the
insurance establishment of the insurance accident occurring;
b) the exporter or authorized commercial bank assign the
regressive compensation right to the insurance establishment;
c) the insurance establishment considers a claim raised and
takes a substantiated decision to compensate or not losses incurred;
d) the foreign purchaser or his guarantor pay off their arrears
under the contract in favour of the insurance establishment concerned.
Paragraph was supplemented in accordance with the Section
XV of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
Both insurance establishment and Uzbek exporter take measures to
reimburse insurance loss (recovery of losses equal to a sum of
insurance cover paid out by insurance establishment).
Credit extended to the purchaser denotes credit which is
extended, according to the current law, by the Republic's resident
commercial bank either to the foreign purchaser's bank - a borrower for
a subsequent re-financing of this credit to the foreign purchaser or
directly to the foreign purchaser a borrower for the latter to pay for
the export contract. (In edition of the Section XV of Enclosure No. 3 to
the Resolution of the Cabinet of Ministers of the RUz No. 413 dtd
27.11.2002)
The resident commercial bank of the Republic of Uzbekistan
appears in the role of the insurant.
The provision of insurance cover is accomplished in the
following succession (Enclosure C - The scheme of insurance of commercial
banks' credits on export contracts on "credit to the buyer" type):
- coordination of terms of the export contract for the delivery
of goods between the exporter and foreign purchaser;
- coordination of a draft credit agreement between the
authorized commercial bank and foreign purchaser or his bank;
- submission to the insurance establishment of an application,
on behalf of the authorized commercial bank, making a request for the
provision of the export contract with insurance cover;
- consideration by the insurance establishment of the
application and, on the basis of a resultant statement, taking of an
appropriate decision on whether to approve or reject the request for
the provision of insurance cover;
- signing of the export contract between the Uzbek domestic
exporter and foreign purchaser;
- signing of the credit agreement between the authorized
commercial bank and foreign purchaser of his bank;
- submission to the insurance establishment of guarantees from
the foreign purchaser's government or a foreign banking institution;
Paragraph 30 is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
- based on a degree of risk accompanying fulfilment of the
credit agreement, insurance establishment is entitled to demand to
produce by the borrower either a guarantee or a surety on fulfilment of
obligations on credits to the bank-creditor or insurance establishment;
- signing of the insurance policy between the authorized
commercial bank and insurance establishment;
- discharge by the authorized commercial bank of insurance
premium, provision of the export contract with insurance cover by the
insurance establishment;
Paragraph 33 is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
- payment by the borrower of no less than 15% of a sum of export
contract;
- opening of financing by the authorized commercial bank;
- delivery the exporter of products according to the
contract's terms;
- repayment of credit to the authorized commercial bank by the
foreign purchaser (or his bank);
- accomplishment of the following when an insurance accident
occurs:
a) the authorized commercial bank notifies the insurance
establishment of an insurance accident occurring;
b) the authorized commercial bank assigns the regressive
compensation right to the insurance establishment;
c) the insurance establishment considers a claim raised and
takes an appropriate decision on whether or not to pay insurance
compensation;
Paragraph 41 is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
d) Both insurance establishment and commercial bank serving the
exporter take measures to reimburse loss (recovery of losses equal to a
sum of insurance cover paid out by insurance establishment).
Credit extended to the purchaser denotes credit which is
extended, according to the current law, by the Republic's resident
commercial bank enter to the foreign purchaser's bank for a subsequent
re-financing of this credit to the foreign purchaser for the latter to
pay for the export contract.
The resident commercial bank of the Republic of Uzbekistan
appears in the role of the insurant.
The provision of insurance cover is accomplished in the
following succession:
- coordination of the terms of the export contract for the
delivery of goods between the exporter and foreign purchaser;
- coordination of a draft credit agreement between the
authorized commercial bank and foreign purchaser or his bank;
submission to the insurance establishment of an application, on
behalf of the authorized commercial bank, making a request for the
provision of the export contract with insurance cover;
- consideration by the insurance establishment of the
application, on the basis of a resultant statement, taking an
appropriate decision on whether to approve or reject the request for
the provision of insurance cover;
- signing of the export contract between the Uzbek domestic
exporter and foreign purchaser;
-signing of the credit agreement between the authorized
commercial bank and foreign purchaser or his bank;
- submission to the insurance establishment of guarantees from
the foreign banking institution;
- signing of the insurance policy between the authorized
commercial bank and insurance establishment;
- discharge by the authorized commercial bank of insurance
premium, provision of the export contract with insurance cover by the
insurance establishment;
- discharge to the exporter by the foreign purchaser of an
advance payment at the rate of no less than 15 per cent of the export
contract's total value, as stipulated under the contract;
- opening of financing by the authorized commercial bank;
- delivery by the exporter of products according to the export
contract's terms;
- repayment of credit to the authorized commercial bank by the
foreign purchaser (or his bank);
- accomplishment of the following when an insurance accident
occurs:
a) the authorized commercial bank notifies the insurance
establishment of an insurance accident occurring;
b) the authorized commercial bank assigns the regressive
compensation right to the insurance establishment;
c) the insurance establishment considers a claim raised and
takes an appropriate decision on whether or not to pay insurance
compensation;
d) the foreign purchaser or his guarantor pay off their arrears
in favour of the insurance establishment.
IV. Payment of insurance premium, the size and
payment of insurance compensation
9. Insurance cover against risks provided by the insurance
establishment is effected in any freely
convertible currency. (In edition of the Section XV of Enclosure No. 3
to the Resolution of the Cabinet of Ministers of the RUz No. 413 dtd
27.11.2002)
Point 10 is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet
of Ministers of the RUz No. 413 dtd 27.11.2002
10. Insurance payment (insurance premium) is effected as
specified in the contract of insurance signed.
11. Residents of the Republic of Uzbekistan may discharge
insurance premium in foreign currency payable to the current accounts
held by the insurance establishment with overseas banks.
12. Expenditure associated with payment of insurance premiums
is included in the export contract's total cost.
Point 13 was excluded in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
Point 14 is regarded as Point 13 in accordance with the
Section XV of Enclosure No. 3 to the Resolution of the
Cabinet of Ministers of the RUz No. 413 dtd 27.11.2002
13. Compensation under insurance cover provided by the
insurance establishment is paid out in the following cases:
a) in case of a war, revolution or civil unrests, provided the
direct damage they have caused to the insurant's main assets is
appropriately certified, - after the foreign partner's 10-month forced
inactivity;
b) in case of expropriation - after 10 months from the date the
event has occurred;
c) in case certain restrictions on remittance are introduced by
the authority, which makes it impossible to repatriate foreign currency
receipts within 6 months that follow;
d) in case the foreign partner's authority interferes in his
contractual relationships - after 6 months from the date the
interference is recognized legally; (In edition of the Section XV of
Enclosure No. 3 to the Resolution of the Cabinet of Ministers of the RUz
No. 413 dtd 27.11.2002)
e) in cases new statues of discriminative character in respect
of Uzbek investors are introduced - after 6 months from the date their
discriminative character is recognized internationally; (In edition of
the Section XV of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002)
f) in case the expected payment from the foreign purchaser
and/or his bank is not received - after the expiry of 6 months from the
date fixed for the discharge of the due payment (the date specified in
the contract or credit agreement); (In edition of the Section XV of
Enclosure No. 3 to the Resolution of the Cabinet of Ministers of the RUz
No. 413 dtd 27.11.2002)
g) in the case of bankruptcy of the foreign purchaser and/or
his bank - in the course of 30 days after their insolvency is
recognized.
Paragraph 9 was excluded in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
Enclosure A is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
Enclosure A
The scheme of export contract insurance against political
and commercial risks (effected on the terms of deferment
of payment without attraction of the bank credits)
_____________________
¦ ¦The foreign partner <__> Uzbek exporter <_____ Agency for FER, ¦
¦ ¦ (buyer) ¦ ¦ ¦ ¦ commercial bank, ¦
¦1 ____________________________________________ ¦ serving the ¦
¦ ¦ Conclusion of export contract ¦ ¦ exporter ¦
_______________________________________________ _____________________
¦ ¦ Contract ¦
¦ ¦ registration ¦
___________________v __________________________ _____________________
¦ ¦ Insurance organization ¦
¦ ____________________________________________
¦ ¦- Consideration of an application for ¦
¦ ¦ contract insurance ¦
¦2 ¦- Assessment of a degree of risk ¦ ¦
¦ ¦- Preparation of conclusion on possibility¦ ¦ _____________________
¦ ¦ (or refusal) of provision of insurance ¦ ¦Guarantee/surety of ¦
¦ ¦ cover ¦ ¦a foreign purchaser ¦
_______________________________________________ ¦ ¦
¦ ¦ ¦
___________________v___________________________ _____________________
¦ ¦ The foreign partner ___ > Uzbek exporter <____Based on degree of ¦
¦ ¦ (purchaser) ¦ ¦ ¦risk, insurance or- ¦
¦3 ____________________________________________ ¦ganization is en- ¦
¦ ¦Discharge of advance payment at the rate ¦ ¦titled to demand ¦
¦ ¦no less than 15% of the contract, with the¦ ¦to produce by a ¦
¦ ¦exception of cases stipulated by the ¦ ¦foreign purchaser ¦
¦ ¦legislation ¦ ¦of a guarantee or a ¦
_______________________________________________ ¦surety of fulfil- ¦
¦ ¦ment of obligations ¦
___________________v___________________________ ¦under the contract ¦
¦ ¦ Insurance <____> Uzbek ¦ _____________________
¦ ¦ organization ¦ ¦ exporter ¦
¦ ____________________________________________
¦ ¦- Coordination of terms of insurance ¦
¦4 ¦- Signing of an agreement on provision of ¦
¦ ¦ insurance cover ¦
¦ ¦- Discharge of insurance payment and ¦
¦ ¦ coming into force of obligations of ¦
¦ ¦ insurance organization ¦
_______________________________________________
___________________v___________________________ _____________________
¦ ¦ The foreign partner <___ Uzbek exporter <____ Commercial bank, ¦
¦ ¦ (purchaser) ¦ ¦ ¦ ¦ serving the ¦
¦ ____________________________________________ ¦ exporter ¦
¦5 ¦ Organization of delivery in accordance ¦ _____________________
¦ ¦ with terms of contract concluded ¦ ¦ Issue of settlement¦
_______________________________________________ ¦ reference for cus- ¦
¦ ¦ toms clearance of ¦
___________________v___________________________ ¦ cargo ¦
¦ ¦ The foreign partner ¦ ¦ Uzbek ¦ _____________________
¦ ¦(purchaser) _____> exporter, ¦
¦ ¦ ¦ ¦ commercial bank ¦
¦ ¦ ¦ ¦ serving the ¦
¦6 ¦ ¦ ¦ exporter ¦
¦ ____________________________________________
¦ ¦Foreign buyer's payment for production to ¦
¦ ¦the exporter in accordance with terms ¦
¦ ¦of contract concluded ¦
_______________________________________________
__________________________________________________
¦ In case of refusal or inability of the foreign¦
¦ buyer to pay within terms stipulated in the ¦
¦ contract for technologies, commodities and ¦
¦ services received (insured accident) ¦
__________________________________________________
¦
_______________________v________________________
¦ ¦ Uzbek exporter ¦
¦7 _____________________________________________
¦ ¦ Notification of insurance event coming ¦
________________________________________________
¦
_______________________v________________________
¦ ¦ Insurance organization ¦
¦ _____________________________________________
¦ 8¦ Study of claim and taking of well-founded ¦
¦ ¦ decision on payment of insurance ¦
¦ ¦ indemnity ¦
________________________________________________
¦
_______________________v________________________
¦ ¦ Insurance ______> Uzbek ¦
¦ ¦ organization <______ exporter ¦
¦ _____________________________________________
¦ ¦- Assignment of rights of recourse on ¦
¦ ¦ losses ¦
¦ ¦- Both insurance organization and Uzbek ¦
¦ ¦ exporter take measures to reimburse insu-¦
¦ ¦ ranse loss (recovery of losses equal to ¦
¦ ¦ the sum of losses sustained by the expor-¦
¦ ¦ ter within an insurance money) ¦
________________________________________________
Enclosure B is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
Enclosure B
Scheme of insurance of commercial bank's credits
on export contracts on "supplier's credit" type
_______________________________________________ _____________________
¦ ¦ The foreign partner <____> Uzbek ¦ ¦Guarantee/surety of¦
¦ ¦ (the purchaser) ¦ ¦ exporter <_____ a foreign buyer ¦
¦1 ____________________________________________ ¦ ¦
¦ ¦ Draft export contract for delivery of ¦ _____________________
¦ ¦ production ¦ ¦ Based on a degree ¦
_______________________________________________ ¦ of risk, insurance¦
¦ ¦ organization has ¦
___________v __________ ¦the right to demand¦
¦ Uzbek exporter ¦ ¦ from the foreign ¦
_______________________ ¦ buyer to provide ¦
¦ ¦ either a guarantee ¦
¦ ¦ of a surety of ful-¦
¦ ¦ filment of obliga- ¦
¦ ¦ tions under the ¦
¦ ¦ contract ¦
¦ _____________________
______________v______________________________________
________v______________________________________ _________v___________
¦ ¦ Insurance organization ¦ ¦Commercial bank ¦
¦ ____________________________________________ ¦serving an exporter¦
¦ ¦- An application to provide insurance ¦ ¦ ¦
¦2 ¦ cover of export credit ¦ ¦ ¦
¦ ¦- Preparation of a conclusion on possibi- ¦ _____________________
¦ ¦ lity (or refusal) to provide insurance ¦ ¦-Expert examinati- ¦
¦ ¦ cover ¦ ¦ on of the project,¦
_______________________________________________ ¦ assessment of the ¦
¦ ¦ borrower's credit ¦
¦ ¦ ability, ¦
¦ ¦-Remarks, prelimi- ¦
¦ ¦ nary approval of ¦
¦ ¦ expediency of the ¦
¦ ¦ project financing,¦
¦ ¦ presentation of ¦
¦ ¦ draft credit agree¦
¦ ¦ ment ¦
¦ ¦ ¦
¦ ¦ ¦
¦ _____________________
¦
______________________v________________________ _____________________
¦ ¦The foreign partner <____>Uzbek ¦ ¦ Agency for FER, ¦
¦ ¦ (the purchaser) ¦ ¦exporter <____>commercial bank ¦
¦3 ____________________________________________ ¦serving an exporter¦
¦ ¦-Conclusion of contract for delivery of ¦ ¦ ¦
¦ ¦ production with taking into account ¦ _____________________
¦ ¦remarks and suggestions of insurance orga-¦ ¦ Registration of ¦
¦ ¦ nization and an exporter's bank ¦ ¦ a contract ¦
¦ ¦ Provision of a guarantee or a surety ¦ _____________________
_______________________________________________
__________________v____________________________
¦ ¦ Uzbek exporter ¦ ¦ Commercial bank, ¦
¦ ¦ <___> serving an expor-¦
¦ ¦ ¦ ¦ ter ¦
¦4 ____________________________________________
¦ ¦- Signing of a credit agreement with ta- ¦
¦ ¦ king into account remarks and suggestions¦
¦ ¦- Opening of financing ¦
_______________________________________________
¦
__________________v____________________________
¦ ¦ Uzbek exporter <___> Insurance orga - ¦
¦ ¦ ¦ ¦ nization ¦
¦ ____________________________________________
¦ ¦- Transfer of either a guarantee or surety¦
¦ ¦ provided by a foreign partner (the buyer¦
¦5 ¦- Signing of an agreement for provision of¦
¦ ¦ insurance cover ¦
¦ ¦- Discharge of insurance payment and ¦
¦ ¦ coming into force of liabilities of ¦
¦ ¦ insurance organization ¦
¦ ¦ ¦
_______________________________________________
¦
__________________v____________________________
¦ ¦ Uzbek exporter <____The foreign part- ¦
¦ ¦ ¦ ¦ner(the purchaser)¦
¦ ____________________________________________
¦6 ¦ Discharge of advance payment in an amount¦
¦ ¦of 15% of the cost of contract value ¦
¦ ¦when crediting for a period more than one ¦
¦ ¦year ¦
_______________________________________________
¦
__________________v____________________________ ___________________
¦ ¦ The foreign partner <____ Uzbek exporter¦ ¦Commercial bank ¦
¦ ¦ the purchaser) ¦ ¦ <____>serving an ¦
¦7 ____________________________________________ ¦ exporter ¦
¦ ¦Deliver of production to the foreign part-¦ ¦ ¦
¦ ¦ner (the buyer) in accordance with ¦ ___________________
¦ ¦terms of the contract concluded ¦ ¦Record keeping of¦
_______________________________________________ ¦promissory notes ¦
¦ ___________________
__________________v____________________________
¦ ¦The foreign partner____> Uzbek ¦
¦ ¦ (the purchaser ¦ ¦ exporter ¦
¦ ____________________________________________
¦ ¦Payment for production effected by the ¦
¦ ¦foreign partner (the buyer) to Uzbek expor¦
¦ ¦ter in accordance with the terms of the ¦
¦ ¦contract concluded ¦
_______________________________________________
______________________________________________________
¦ Insured accident ¦
¦Non-fulfilment of obligations under the contract by ¦
¦the foreign buyer because of political and commer- ¦
¦cial risks ¦
______________________________________________________
¦
¦
______________________v___________________________________
¦ ¦ Uzbek exporter, ¦ ¦ Insurance organiza- ¦
¦ ¦ commercial bank ser-________> tion ¦
¦ ¦ ving an exporter ¦ ¦ ¦
¦9 ¦ ¦ ¦
¦ _______________________________________________________
¦ ¦- Notification of coming of insurance event ¦
¦ ¦- Study of a claim and taking of well-founded decisi-¦
¦ ¦ on on payment of insurance indemnity ¦
__________________________________________________________
¦
¦
______________________v___________________________________
¦ ¦ Uzbek exporter, ¦ ¦ Insurance organization¦
¦ ¦ commercial bank ser-________> ¦
¦ ¦ ving an exporter ¦ ¦ ¦
¦10¦ ¦ ¦
¦ _______________________________________________________
¦ ¦ Assignment of rights of recourses on losses ¦
__________________________________________________________
¦
______________________v___________________________________
¦ ¦ Uzbek exporter, ¦ ¦ Insurance organization¦
¦ ¦ commercial bank ser-________> ¦
¦ ¦ ving an exporter ¦ ¦ ¦
¦11¦ ¦ ¦
¦ _______________________________________________________
¦ ¦ Payment of insurance indemnity (within the limit of ¦
¦ ¦ insurance money) and in case of refusal a well-foun-¦
¦ ded response should be given ¦ ___¦____________________________________________________ ¦
¦
______________________v___________________________________
¦ ¦ Insurance organiza- ¦ ¦ Guarantor of a foreign¦
¦ ¦ tion, Uzbek exporter<________ partner(the purchaser)¦
¦ ¦ ¦ ¦ ¦
¦12_______________________________________________________
¦ ¦ Both insurance organization and Uzbek exporter take ¦
¦ ¦ measures aimed to reimburse insurance loss (reimbur-¦
¦ ¦ sement of losses equal to an amount of insurance ¦
¦ ¦ covers paid out by insurance organization) ¦
__________________________________________________________
Enclosure C is stated in accordance with the Section XV
of Enclosure No. 3 to the Resolution of the Cabinet of
Ministers of the RUz No. 413 dtd 27.11.2002
Enclosure C
The scheme of insurance of commercial bank's credits on
export contracts on "credit to the buyer" type
_________________________________________________
¦ ¦ Uzbek exporter <____>The foreign partner¦
¦ ¦ ¦ ¦ (the purchaser) ¦
¦1 ______________________________________________
¦ ¦A project of export contract for delivery ¦
¦ ¦of production ¦
_________________________________________________
¦
__________________v______________________________
¦ ¦ Uzbek exporter, ¦ ¦The foreign partner¦
¦ ¦commercial bank <____>(the buyer) or the ¦
¦2 ¦serving an exporter¦ ¦ foreign buyer's ¦
¦ ¦ ¦ ¦ bank ¦
¦ ¦ ¦ ¦ Borrower ¦
¦ ______________________________________________
¦ ¦ Draft credit agreement ¦
_________________________________________________
¦
__________________v______________________________
¦ ¦Commercial bank ¦ ¦ Insurance ¦
¦ ¦serving an exporter<____> organization ¦
¦ ¦ ¦ ¦ ¦
¦ ______________________________________________
¦3 ¦- Application to provide insurance cover ¦
¦ ¦ of export credit ¦
¦ ¦- Preparation of a conclusion on possibility¦
¦ ¦ of provision (or a refusal) of insurance ¦
¦ ¦ cover ¦
¦ ¦- Remarks and proposals to the credit agree-¦
¦ ¦ ment, a text of guarantee and export cont-¦
¦ ¦ ract ¦
_________________________________________________
¦
__________________v______________________________ ____________________
¦ ¦The foreign partner<____> Uzbek exporter <___> Agency for FER, ¦
¦ ¦ (the purhaser) ¦ ¦ ¦ ¦ commercial bank ¦
¦4 ______________________________________________ ¦ serving an expor-¦
¦ ¦ Conclusion of contract for the delivery ¦ ¦ ter ¦
¦ ¦ of production with taking into account pro-¦ ____________________
¦ ¦ posals of insurance organization and the ¦ ¦ Registration of ¦
___¦ exporter's bank ___________________________¦___¦the contract______¦ ¦ ____________________
__________________v______________________________
¦ ¦ Commercial bank ¦ ¦ Borrower ¦
¦ ¦serving an exporter<____> ¦
¦5 ¦ ¦ ¦ ¦
¦ ______________________________________________
¦ ¦Signing of credit agreement with taking into¦
¦ ¦ account remarks and proposals ¦
_________________________________________________
¦
__________________v______________________________ ____________________
¦ ¦ Insurance orga- ¦ ¦ Commercial bank <____ Guarantee/surety ¦
¦ ¦ nization <_____serving an exporter¦ ¦ of the Borrower ¦
¦6 ¦ ¦ ¦ ¦ ____________________
¦ ______________________________________________ ¦Based on a degree ¦
¦ ¦ Provision of a guarantee or a surety on ¦ ¦of risk, insurance¦
¦ ¦ request of insurance organization ¦ ¦organization has ¦
_________________________________________________ ¦the right to de- ¦
¦ ¦mand from the fo- ¦
¦ ¦reign buyer to ¦
¦ ¦provide a guaran- ¦
¦ ¦tee of a surety of¦
¦ ¦fulfilment of ob- ¦
¦ ¦ligation under the¦
¦ ¦contract ¦
__________________v______________________________
¦ ¦ Commercial bank ¦ ¦ Insurance ¦
¦ ¦serving an exporter<____> organization ¦
¦ ¦ ¦ ¦ ¦
¦7 ______________________________________________
¦ ¦- Signing of an agreement for provision of ¦
¦ ¦ insurance cover ¦
¦ ¦- Discharge of insurance payment and coming ¦
¦ ¦ into force of obligations of insurance ¦
¦ ¦ establishment ¦
_________________________________________________
¦
__________________v______________________________
¦ ¦ Uzbek <_____ Borrower ¦
¦ ¦ exporter ¦ ¦ ¦
¦8 ______________________________________________
¦ ¦ Payment by the Borrower not less than 15% ¦
¦ ¦ of a sum of export contract ¦
_________________________________________________
¦
__________________v______________________________
¦ ¦ Commercial bank ¦ ¦ Borrower ¦
¦ ¦serving an exporter<____> ¦
¦9 ¦ ¦ ¦ ¦
¦ ______________________________________________
¦ ¦ Opening of financing ¦
_________________________________________________
¦
__________________v______________________________
¦ ¦ Uzbek exporter _____>The foreign partner¦
¦ ¦ ¦ ¦ (the purchaser) ¦
¦10______________________________________________
¦ ¦ Organization of the delivery of production ¦
¦ ¦ manufactured in Uzbekistan to the foreign ¦
¦ ¦partner (the buyer) in accordance with terms¦
¦ ¦ of a contract concluded ¦
_________________________________________________
¦
__________________v______________________________
¦ ¦Commercial bank ¦ ¦ Borrower ¦
¦ ¦ serving an exporter <_____ ¦
¦ ¦ ¦ ¦ ¦
¦11______________________________________________
¦ ¦ Repayment of credit by the foreign buyer ¦
¦ ¦ (the bank) - Borrower in accordance with ¦
¦ ¦ terms of credit agreement concluded ¦
_________________________________________________
_____________________________________________
¦ Insured accident ¦
¦Non-fulfilment of obligation under the ¦
¦credit agreement by the foreign buyer, the ¦
¦foreign buyer's bank - Borrower because of ¦
¦political and commercial risks ¦ ¦
_____________________________________________
¦
________________________v_________________________________
¦ ¦ Commercial bank ¦ ¦ Insurance ¦
¦ ¦ serving an exporter_______> organization ¦
¦12 ¦ ¦ ¦ ¦
¦ ______________________________________________________
¦ ¦ Notification of insurance event coming ¦
__________________________________________________________
¦
______________________v___________________________________
¦ ¦ Commercial bank ¦ ¦ Insurance ¦
¦ ¦ serving an exporter_______> organization ¦
¦13 ¦ ¦ ¦ ¦
¦ ______________________________________________________
¦ ¦ Assignment of rights of recourse on losses ¦
__________________________________________________________
¦
_____________________v____________________________________
¦ ¦ Commercial bank ¦ ¦ Insurance ¦
¦ ¦ serving an exporter <_______ organization ¦
¦ ¦ ¦ ¦ ¦
¦14 ______________________________________________________
¦ ¦- Study of a claim and taking of well-founded deci- ¦
¦ ¦ sion on payment of insurance indemnity ¦
¦ ¦- Payment of insurance indemnity (within an amount ¦
¦ ¦ of insurance money) and in case of refusal - well-¦
¦ ¦ founded response should be given ¦
__________________________________________________________
¦
_____________________v____________________________________
¦ ¦Borrower or guarantor ¦ ¦ Insurance ¦
¦ ¦of the borrower (the ¦ ¦ organization ¦
¦ ¦foreign buyer or a _______> ¦
¦ ¦bank of the foreign ¦ ¦ ¦
¦ ¦buyer) ¦ ¦ ¦
¦15 ______________________________________________________
¦ ¦ Both insurance organization and commercial bank ¦
¦ ¦serving an exporter take measures to repay losses ¦
¦ ¦ (recovery of losses equal to a sum of insurance ¦
¦ ¦cover paid by insurance organization) ¦
_______________________________________________________
Export contracts repudiation insurance
The given insurance policy provides insurance protection against non-performance of contractual obligations by the foreign buyer in preloading period, due to political risks (unilateral breach of contract by the state buyer, war, civil commotion, introduction of import embargo in buyer’s country, government actions of the buyer’s country that prevent parties from performing their contractual obligations).
At the presence of insurance policy, the exporter can minimize losses incurred by the contract repudiation caused by political events in the buyer’s country before accepting goods and by that to keep liquidity of the balance (assets).
The insured under the contract of insurance is the exporter.
-
Conclusion of export contract (agreed with the insurance organization);
-
Export contract registration in authorized bodies;
-
Signing of an agreement for provision of insurance cover against export contract repudiation insurance agreement;
-
Inability to deliver the export production to foreign buyer due to export contract repudiation by the foreign buyer;
-
Payment of insurance indemnity in case of insured accident.
This policy provides insurance protection against risk of non-performance of financial obligations by the foreign buyer due to commercial risks, such as: protracted default and insolvency, and also political risks (war, civil commotion, import embargo in the foreign buyer’s country, government actions of the foreign buyer’s country, preventing parties from fulfilling their contractual obligations, a delay of transfer - inability to exchange and transfer the sum of debts under the contract, provided that the given sum of local currency of the foreign buyer has been deposited in a special account in the authorized body of the country of the Foreign buyer.). The given contract can cover both the separate export contract, and all contracts, which are included in an annual portfolio of the insured.
At presence of the Insurance Policy the exporter can minimize risks of possible losses arising from non-payment by the foreign buyer as a result of specified political and commercial risks.
The insured under the contract of insurance is the exporter.
The given policy provides insurance protection against failure by foreign guarantor issuing a guarantee to fulfil their financial obligations where a guarantor has no right or basis in accordance with the terms of the guarantee to refuse payment to the exporter.
The insured under the insurance policy is the exporter.
The given policy provides insurance protection against failure by foreign bank issuing an ILC to fulfil their financial obligations where a bank has no right or basis in accordance with the terms of the ILC to refuse payment to the exporter.
The given policy provides insurance protection against risk of non-performing by the buyer (borrower) of his financial obligations under the credit, provided by commercial banks of the Republic of Uzbekistan to the foreign bank or foreign buyer (borrower) for the payment of export contract, due to commercial and political risks.
Commercial risks are: protracted default and/or borrower’s insolvency.
Political risks are: war and civil commotion, government actions of the buyer’s country, a delay of a transfer.
With the insurance policy, the commercial bank - resident of the Republic of Uzbekistan - that provided foreign buyer with credit to finance the export contract or to foreign bank to further refinance the proceeds of credit, with a purpose of acquisition of goods, services and technologies from Uzbekistan - can minimize losses incurred by total or partial non-payment of the credit by the foreign borrower under the credit agreement due to occurrence of the above-stated political events in the Country of the buyer and commercial risks of the borrower.
In this type of insurance, the insured and the beneficiary is the commercial bank - resident of the Republic of Uzbekistan - that provides credit to foreign borrower. This kind of Policy serves as collateral for crediting bank under the credit agreement.
The given insurance policy provides insurance protection against risk of non
performing by the suppliers of his obligations on delivery of importing goods or inability to return the advance payment due to commercial risks (protracted default and/or borrower’s insolvency and political risks (war and civil commotion, government actions of the buyer’s country, a delay of a transfer).
The insurance protection against risk of non-performing by the national buyer of his financial obligations due to commercial risks.
- Export credit insurance – is the insurance protection of national exporters against non-performing by the foreign partner of his contractual obligations due to political and commercial risks. Every careful exporter is interested in receiving the contract payment in time and shall to address to the insurance company in order to get an insurance protection against non-performing by the foreign buyer of his contractual obligations.
- When an export contract concluded in terms of prepayment or letter of credit the risk of non-payment is minimum and an exporter is protected from delinquency or non-payment by the foreign partner. However, there are many cases in business sphere when an exporter supplies goods on trust. The buyer is ready to accept goods and pay for goods in terms of trade credit (delay of payment). Trade credit always connects with a risk of non-payment due to worsening of political situation in buyer’s country or worsening of buyer’s financial condition. The policy of comprehensive insurance of export contracts against political and commercial risks provides insurance protection against risk of non-performance of contractual obligations by the foreign buyer. With this policy exporters have an opportunity to use more preferential terms of payment during the export of their production, increase the competitiveness of export production, widen the geography of market and promote the development of export potential of the Republic of Uzbekistan. For issuing the policy the insurance company will consider the financial condition of the buyer (based on financial analysis), country risk. Also, analysis made by the insurance company may be useful for exporter in process of making a decision on export contract conclusion.
It is significant to mention that under the Resolution of Cabinet of Ministers No. 413 of November 27, 2002 facultative insurance expenses will be deducted from taxable income at the rate of 2% from annual gross sales of goods (works, services).
- When an export contract concluded in terms of prepayment the foreign buyer demands a discount from price of good and as the result of it the exporter doesn’t get an expected profit. Also, prepayment may be done only in that case if the buyer has a good experience with the exporter or at least recommendations from partners of the exporter. If contract is concluded for the first time the buyer can require a bank guarantee or trade credit (delay of payment). Getting a bank guarantee worth additional information and extra expenses, while trade credit is not worth to exporter an extra expenses. Thus, it is beneficial to sell on trade credit.
- Foreign markets, especially developing countries are characterized of unpredictable political situation and financial condition of foreign partners. The probability of foreign clients to be bankrupt or dishonest and try to avoid the contract payment is a real problem for exporters. For prevention such problems exporter can get an insurance protection against political and commercial risks. Political risks are changing of political situation in the buyer’s country as a result of non-performing by the foreign buyer of his contractual obligations. Commercial risks are directly connected with the economic and financial condition of the foreign buyer including protracted default and insolvency.
The mission of the Uzbekinvest National Export-import Insurance Company is growth of export potential through reliable insurance protection against political and commercial risks.
Political risks include such events in buyer’s country as:
- insolvency.
The Company guarantees an individual approach to inquiries and requirements of each
clients and quality of insurance protection.
The necessary conditions are: an exporter has to be the resident of the Republic of Uzbekistan
and a deal is connected with the export. Our clients can be:
- the exporters experienced in international trade, but faced with a specific problem at
realization of export or planning to export to new and unknown buyers;
- beginner exporters concluding export contracts for the first time and not having
experience in conducting international trade;
-commercial banks working in the field of trade financing (crediting of export
contracts).
At the same time there are restrictions for production that may be exported in terms of
trade credit (delay of payment). Enterprises exported raw materials according to Enclosure No.2 to the Decree by the President of the Republic of Uzbekistan of October 10, 1997 No. UP-1871, including cotton fibre, cotton yarn, ferrous and non-ferrous metals and other goods, to which privileges and preferences are not applied.
- Under contracts of export risks insurance, payment of loss is carried out in the currency in which the insurance premium is paid.
- The rate of the insurance premium is calculated based on the required period of insurance, the period of a delay of payment, the list of risks included in the coverage, country risk, a financial condition of the foreign buyer and/or a kind of available security (a guarantee, guarantees of the third parties, etc.), proceeding from a degree of risk. At the average the rate of the insurance premium is up to 5% from the insurance sum.
In order to get insurance protection it is necessary to submit an insurance enquiry to
corresponding territorial branch of the Company in the region or in head office in Tashkent city, with inclusion of the following standard data filled out and signed by your authorized representative:
- The application - questionnaire on insurance that contains questions concerning the
insured contract;
- Documents and the information, listed in the appendix to the application
questionnaire, concerning the export contract;
Right after presenting of the above-stated documents, the Company will consider your enquiry within the shortest period of time and the decision on granting insurance protection will be made. If positive decision is made, the Company will conclude with you the contract of insurance according to which you should pay the corresponding insurance premium. After the insurance premium reaches the bank account of the Company, which is specified in the contract of insurance, the insurance policy (certificate) will be issued to you.
- In case of the insurance event (non-payment or partial non-payment of proceeds under
the export contract within the specified term), the exporter (and in case of using credits of commercial bank - commercial bank - beneficiary) informs the Company and claims the insurance indemnity. After the waiting period, during which the exporter and the Company carry out teamwork on minimization of the loss, the Company pays to the exporter insurance indemnity.
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