German experts criticize legal approval of list of works, services that could be supported by ECA
The German Advisory Group Ukraine has criticized the approval of a list of works and services that could be supported by the Export-Credit Agency (ECA), according to the analytical conclusions of the group about the bill on the on providing for large-scale export expansion of goods (works, services) originating in Ukraine through insurance, guarantees and cheapening of export credits passed in 2016, which foresees the creation of the ECA and contains a list of type of products (works and services of foreign economic activities that could expect to receive support from the ECA.
"Usually, ECA's don’t distinguish between different goods, works and services to be supported, as demand for cover can change rapidly and no branch of the industry should be formally excluded. All branches of the Ukrainian export industry must have the same access to ECA support," the experts said.
"The immediate question arises why other products or industry branches, representing 83.5% of Ukraine’s goods exports, are not eligible. The quotation of certain chapters of the Ukrainian Classification of Commodities for Foreign Economic Activity while other chapters are not mentioned gives the impression that lawmakers intended the preferred support for specific branches of the industry whereas other branches were deliberately discriminated," the experts said.
In addition, the law does not exclude investment insurance of commercial risks by the ECA, while investment insurance should cover only non-commercial risks.
The German experts said that the law shows a very high degree of itemization. It should be considered to focus in the ECA-Law on key objectives, main governance regulations and financial framework of the ECA. More operational matters should be regulated by legal documents below the level of a state law, most suitably by the Charter of the ECA.