Atradius Recommends 10-Point-plan for Exports to Russia

By Atradius N.v., PRNE
Wednesday, May 18, 2011

Credit insurer presents checklist for successful trade with Russian customers

AMSTERDAM, May 19, 2011 - For many countries exports to Russia significantly increased in 2010 and
made the world's biggest country after China one of the most important growth
markets. However, trading with Russian customers also involves risks and
peculiarities that exporters need to get acquainted with. And to help
companies looking to trade with Russia, leading trade credit insurer Atradius
has created a 10-point-plan that summarises the most important aspects for
successful trade with this complex nation. "We see time and time again how
tough many companies find it to navigate Russian trade," says Michael
, Atradius Risk Services Director for Germany, Central and Eastern
. "But trade with Russia is not fundamentally different from supply
relationships with other export markets. You just need to be aware of a few
important differences."

Not going to court is one of the ten recommendations. This is because
Russia has yet to sign treaties agreeing to the mutual enforcement of court
judgments that extend to Western countries. So judicial proceedings mostly
remain ineffective on both sides and can be a waste of time. As a result, it
is a "must" for exporters to include an arbitration clause in their
agreement. These are generally recognised by Russian courts.

Avoid complex import schemes

The 10-point-plan also emphasises the need for simplicity and clarity
when trading with Russia. In recent decades complex trade structures have
become increasingly common, particularly in the food and electronics
industries as companies have sought to reduce the impact of Russian customs
payments and import taxes. This often involved the use of one or more
offshore entities, typically located in Cyprus, deliveries to non-Russian
warehouses, imports via Russian special purpose vehicles and settlement of
invoices by other offshore entities.

These import schemes have recently been under increasing scrutiny by the
Russian authorities, often involving the confiscation of the imported
products, which then typically remain unpaid for the supplier. There have
also been cases where investigations were initiated not only against the
importing entity, but also against the foreign seller for aiding and abetting
tax evasion by the importer. "Those suppliers who cannot give a valid
economic rationale for involving offshore entities should stipulate direct
deliveries and payments," says Torsten Syrbe of Clifford Chance CIS in
Moscow, who contributed to the 10-point-plan.

Understand who you are dealing with before delivery

The complex structures of Russian companies highlight just how difficult
credit assessments can be. "It is not unusual for us to get three different
balance sheets from a single entity," says Karrenberg from Atradius. "There
is only one way to get a true overview of a company's ability to pay and
that's by visiting it." The credit insurer has 20 years of risk management
experience in Russia at its fingertips and is in direct contact with almost
all of its customers' Russian buyers.

For the individual exporter it is almost impossible to singlehandedly get
a real picture of its Russian business partner, not least because of the size
of this market. "Because of this, we advise companies to agree securities
with Russian customers," says Andreas Tesch, Director of Global at Atradius.
"Then additional protection can be obtained through trade credit insurance,
enabling the exporter to completely focus on the opportunities that the
rapidly growing Russian market has to offer."

The complete checklist can be downloaded at

About Atradius

The Atradius Group provides trade credit insurance, surety and
collections services worldwide, and has a presence through 160 offices in 42
countries. Atradius has access to credit information on 60 million companies
worldwide and makes more than 20,000 trade credit limit decisions daily. Its
products help protect companies throughout the world from payment risks
associated with selling products and services on credit.

For further information: Atradius Corporate Communications, Christine Gerryn, Tel.: +31-20-553-2047, E-mail: christine.gerryn at,

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