REC Head: we see export opportunities and expect our companies to mobilize

- Many countries are introducing quarantine measures and closing borders due to the coronavirus, and Russia is no exception. How can exporters deliver their goods in such conditions?

- It should be understood that restrictions on border crossing do not apply to trucks, as well as freight trains. This, of course, does not mean that the coronavirus has not affected the delivery channels in any way. There are significant features that exporters need to consider. For example, motor transport in the context of a pandemic can be called the most risky type of delivery. There may be problems with the passage of trucks across borders, and the drivers of vehicles returning to Russia themselves are subject to a 14-day quarantine.

The situation with air transport is not easy. Companies often shipped goods in the cargo hold of passenger planes, but their flights have been temporarily suspended since March 27. Cargo and postal air transportation remain, but fares and flight schedules are constantly changing. Prices are determined by the carriers at the time of booking and cannot be guaranteed for a long time.

Everything is easier with railway transport so far, there are no serious difficulties here. The delivery time is about two weeks, so there are no problems for the safety of the cargo. The main thing is that there is no shortage of containers. The same applies to shipping by sea. We do not expect port closures, and ships are sailing without interruptions. But the timing is more complicated here. According to our information, the transportation slots are booked a month in advance. In general, we advise exporters to review the delivery dates in their contracts to minimize risks, and to focus on sea and rail transport from a logistical point of view. If we are talking about small shipments, it is better to send them through the channels of the Russian Post or other express carriers.

- The budget of the REC as an operator of state support provides assistance to exporters both in terms of exhibitions and in other areas. Have you reviewed the measures and amounts of support for this year due to the coronavirus?

- no. We do not renounce our obligations to exporters and fulfill them smoothly. This applies to both non-financial and financial products, as well as subsidies. The REC is ready to actively attract new customers who want to use our help.

Some of our tools are gaining strength and popularity during the crisis. For example, EXIAR insurance products (the "daughter" of REC. - editor's note). They cover both commercial and political risks in the amount of up to 90% of the value of the export contract.

Or transaction financing tools. The exporter has signed a contract, but the buyer does not have the money to pay at the time of delivery. In this case, Roseximbank can finance these supplies by providing direct loans to foreign buyers or their banks. Alternatively, you can give a foreign buyer a deferred payment by insuring the risk of non-payment under the contract in EXIAR. In this case, the exporter can also use the factoring tool, thereby speeding up the receipt of money for the goods. Anyway, in either case, the exporter does not need to enter into a loan agreement with the bank. This means that the exporter will have no obligations to repay the loan.

It is important for REC to support all exporters, in particular SMEs (small and medium-sized entrepreneurs. - editor's note). They are the most vulnerable to crisis events. It is very useful that we are part of the perimeter of the VEB group, because it is also actively involved in the fight against the economic consequences of the crisis. It was decided to send 100 billion rubles to our largest systemically important banks and the SME Bank, which is part of the group, to guarantee loans to small and medium-sized enterprises. These loans will be issued for a period of six months at a zero rate to pay salaries to employees. VEB itself provides guarantees for these loans, the Ministry of Economic Development subsidizes the rate, and the Central Bank refinances. Such teamwork is possible.

In parallel, local measures to support exporters are in place in the regions. No one canceled or suspended them. We know that some regions are preparing plans for priority measures for the sustainable development of the economy, despite the spread of the coronavirus. They will also affect foreign trade.

A unified export promotion network operates throughout the country. The export support centers included in it, as well as the territorial administrations of the REC, are constantly monitoring the situation and are ready to manually support export business processes.

- Is monitoring necessary to consult exporters?

- Not only that. In the midst of the pandemic, we launched an operational headquarters. Its main purpose, of course, is online consultation and support for exporters. But, in addition, the headquarters also identifies the most pressing problems for our companies and prepares anti-crisis proposals for the government of the Russian Federation.

We have selected the most frequent questions and formulated anti-crisis recommendations based on them. The result is a document of more than 50 pages. There we give recommendations on passing customs procedures, obtaining permits, and tell you in detail about the legal aspects. It is impossible to retell everything here. We posted the document on the website ((https://www.exportcenter.ru/operativnyi-shtab-rec /) The REC operating center and intend to supplement it taking into account new requests. Exporters can also ask their questions by calling the hotline (+7-495-725-6150).

- Half of the world is in quarantine, services and companies are not working. Do exporters have any problems with processing transactions and documents?

- The pandemic has indeed created a number of additional legal problems for businesses. For example, due to travel restrictions, the preparation of export deals has become more complicated. Partners cannot gather in one place to sign a contract. And there are disruptions and delays in the work of postal and courier services, which slows down the workflow. Remote contracting mechanisms can be used to simplify and speed up the process. But this should be taken into account when drafting the text of the agreement.

In addition, the question arises: what should an exporter do if, due to disruptions caused by the coronavirus, he is unable to fulfill his contractual obligations? According to the law, he will not be responsible for this if he proves that execution is impossible due to force majeure. Under foreign trade contracts, the occurrence of force majeure circumstances is confirmed by a certificate from the Chamber of Commerce and Industry. The Russian courts consider such a certificate to be sufficient evidence. In turn, the CCI of the Russian Federation announced its intention to recognize restrictions related to COVID-19 as force majeure. However, we recommend that you first seek to negotiate with the counterparty to resolve any delays in delivery by mutual agreement. In export, as in any other commercial activity, maintaining a good reputation as a reliable and cooperative supplier should be a priority.

- Is the Russian economy in general and Russian exporters in particular suffering greatly due to restrictions imposed by a number of countries on the import and export of goods?

- The restrictive measures themselves do not have as much impact as it might seem. Exports are more affected by the global slowdown in the economy and trade, which does not depend on the bans imposed by the governments of different countries. If, for example, the Russian authorities impose some kind of targeted restrictions (on the export of cereals or medical masks) for businesses, this does not mean that production will stop. It's just that in conditions of increased domestic demand, these goods are sold domestically. And the bans on the import of products, which are practiced by certain countries, practically do not affect Russian exporters.

Many states, on the contrary, are opening their markets. To cope with the shortage of certain product groups, countries reduce or completely eliminate customs duties on them. I would say that the trade regulation measures that are being taken in the world are opening up new opportunities for our exporters.

We try to monitor prices and monitor the needs in a particular country, and we work in this area together with trade missions. Now we already understand the list of Russian goods to which the interest of foreign buyers in certain markets has increased significantly.

But assessing market conditions, updating the export strategy and preparing commercial proposals are the functions of the exporter rather than ours. Our goal is to provide solutions that will make an individual exporter's strategy work. In the current difficult conditions, we expect our exporters to mobilize: An active position, together with increasing external demand against the background of a favorable situation for Russian exporters in the foreign exchange market, creates all the opportunities to increase profits.

For our part, we will do everything to ensure that our companies that want to export increase their presence in global trade. To this end, we have already formulated our anti-crisis initiatives and sent them to the Government. We hope that our proposals will be implemented.

- Will it make life easier for companies to mitigate administrative liability for non-repatriation of foreign currency earnings? And when will criminal liability be abolished?

- As for making life easier for exporters, we really hope so. Now companies that commit minor violations have a chance to avoid a fine. It is also established that criminal liability will occur only for a repeated offense, that is, only if the businessman has previously been subjected to administrative punishment for a similar act.

The requirements of currency control are that the state wants the exporter to be absolutely punctual in receiving foreign exchange earnings. It wants the exporter to receive the full amount exactly within the time period specified in the contract. This requirement effectively makes the exporter dependent on the counterparty. And in modern conditions, this is extremely painful and unpredictable for exporters. The changes will take effect on April 10 and will apply to violations of the revenue repatriation procedure that have occurred since that date.