"Macroeconomic Developments Report", October 2013Latvijas Banka
The document provides a macroeconomic developments report for October 2013. It summarizes developments in Latvia's external sector and exports in the second quarter of 2013. Key points include:
- Latvia's exports continued to grow but at a slower annual rate due to weakening demand from major trade partners. Exports of base metals declined due to a factory closure.
- Imports declined in both volume and value as production and investment activity decreased. Imports of base metals and vehicles fell the most.
- Despite challenges, Latvia increased its share of world imports according to WTO data. The report examines economic conditions in Latvia's key trade partners.
Macroeconomic Developments Report. December 2014Latvijas Banka
The document summarizes macroeconomic developments in December 2014. It reports that growth was weak in many of Latvia's major trade partners in late 2014. The IMF lowered GDP growth projections for the Eurozone, Germany, Sweden, Estonia and Lithuania for 2014 and 2015. Latvia's exports to Russia declined in the first nine months of 2014, though exports to other countries increased. The ECB lowered interest rates and implemented new bond purchase programs to stimulate lending and the Eurozone economy. Latvian lending continued a slow downward trend in late 2014 despite ECB actions. Inflation in Latvia remained low at 0.5% in October 2014.
Inflation in Latvia grew slightly to 0.8% in August. Exports and imports increased in July despite geopolitical tensions, growing 7.4% and falling 3.5% respectively. Manufacturing output fell 2.6% annually but some sectors such as food and wood products saw growth. Borrowing costs in Latvia have decreased since adopting the euro in January 2014, with interest rates on loans falling over 1 percentage point for some enterprises. However, credit spreads may only gradually shrink over the coming years.
A risk report I produced on Russia for my International Banking and Finance unit, highlighting key sovereign and foreign exchange risks facing the country. Obtained the highest grade of all students for the assignment.
The Russian economy experienced a sharp decline due to the global financial crisis. GDP growth fell to 5.6% in 2008, lower than the previous decade. Investments and internal demand decreased substantially. The crisis impacted Russia's monetary sector as the Central Bank sold foreign reserves to support the rouble amid capital flight. Stock and debt markets also declined sharply. While oil revenues had built a large budget surplus, revenues declined in 2008, shrinking the surplus. The crisis threatened political stability as the ruling party saw declining support in regional elections. However, state control over large firms and property rights increased. Overall the crisis posed major challenges to Russia's economic and political systems.
The Russian financial crisis of 1998 resulted from declining productivity, a fixed exchange rate between the ruble and foreign currencies, and declining oil prices. On August 17, 1998, Russia devalued the ruble, defaulted on domestic debt, and imposed a moratorium on foreign debt repayment. This led to high inflation of 84%, bank closures, reduced agricultural subsidies, and a political crisis for President Yeltsin. Russia recovered through rising oil prices in 1999-2000, devaluation boosting domestic industries, non-monetary exchange, and cash infusions paying back wages and taxes.
"Macroeconomic Developments Report", January 2014Latvijas Banka
The document provides an overview of macroeconomic developments in Latvia and its major trade partners. Some key points:
- The IMF revised downwards GDP growth forecasts for many countries, particularly Russia, Estonia, and Finland. However, forecasts for the Eurozone were unchanged.
- In Q3 2013, exports and imports of Latvian goods contracted year-over-year due to weakening external demand and a strong base effect from previous years. Nevertheless, Latvia continued to expand its export market shares.
- In response to low inflation, the ECB and Latvijas Banka both unexpectedly lowered interest rates in November. Credit growth remained subdued as banks retained excess liquidity.
"Macroeconomic Developments Report", October 2013Latvijas Banka
The document provides a macroeconomic developments report for October 2013. It summarizes developments in Latvia's external sector and exports in the second quarter of 2013. Key points include:
- Latvia's exports continued to grow but at a slower annual rate due to weakening demand from major trade partners. Exports of base metals declined due to a factory closure.
- Imports declined in both volume and value as production and investment activity decreased. Imports of base metals and vehicles fell the most.
- Despite challenges, Latvia increased its share of world imports according to WTO data. The report examines economic conditions in Latvia's key trade partners.
Macroeconomic Developments Report. December 2014Latvijas Banka
The document summarizes macroeconomic developments in December 2014. It reports that growth was weak in many of Latvia's major trade partners in late 2014. The IMF lowered GDP growth projections for the Eurozone, Germany, Sweden, Estonia and Lithuania for 2014 and 2015. Latvia's exports to Russia declined in the first nine months of 2014, though exports to other countries increased. The ECB lowered interest rates and implemented new bond purchase programs to stimulate lending and the Eurozone economy. Latvian lending continued a slow downward trend in late 2014 despite ECB actions. Inflation in Latvia remained low at 0.5% in October 2014.
Inflation in Latvia grew slightly to 0.8% in August. Exports and imports increased in July despite geopolitical tensions, growing 7.4% and falling 3.5% respectively. Manufacturing output fell 2.6% annually but some sectors such as food and wood products saw growth. Borrowing costs in Latvia have decreased since adopting the euro in January 2014, with interest rates on loans falling over 1 percentage point for some enterprises. However, credit spreads may only gradually shrink over the coming years.
A risk report I produced on Russia for my International Banking and Finance unit, highlighting key sovereign and foreign exchange risks facing the country. Obtained the highest grade of all students for the assignment.
The Russian economy experienced a sharp decline due to the global financial crisis. GDP growth fell to 5.6% in 2008, lower than the previous decade. Investments and internal demand decreased substantially. The crisis impacted Russia's monetary sector as the Central Bank sold foreign reserves to support the rouble amid capital flight. Stock and debt markets also declined sharply. While oil revenues had built a large budget surplus, revenues declined in 2008, shrinking the surplus. The crisis threatened political stability as the ruling party saw declining support in regional elections. However, state control over large firms and property rights increased. Overall the crisis posed major challenges to Russia's economic and political systems.
The Russian financial crisis of 1998 resulted from declining productivity, a fixed exchange rate between the ruble and foreign currencies, and declining oil prices. On August 17, 1998, Russia devalued the ruble, defaulted on domestic debt, and imposed a moratorium on foreign debt repayment. This led to high inflation of 84%, bank closures, reduced agricultural subsidies, and a political crisis for President Yeltsin. Russia recovered through rising oil prices in 1999-2000, devaluation boosting domestic industries, non-monetary exchange, and cash infusions paying back wages and taxes.
"Macroeconomic Developments Report", January 2014Latvijas Banka
The document provides an overview of macroeconomic developments in Latvia and its major trade partners. Some key points:
- The IMF revised downwards GDP growth forecasts for many countries, particularly Russia, Estonia, and Finland. However, forecasts for the Eurozone were unchanged.
- In Q3 2013, exports and imports of Latvian goods contracted year-over-year due to weakening external demand and a strong base effect from previous years. Nevertheless, Latvia continued to expand its export market shares.
- In response to low inflation, the ECB and Latvijas Banka both unexpectedly lowered interest rates in November. Credit growth remained subdued as banks retained excess liquidity.
On May 31, 2011 the Government and National Bank of Belarus (NBB) announced that they would ask for a new stand-by loan from the IMF. The requests for external assistance followed several unsuccessful government attempts to overcome the serious macroeconomic crisis that has been developing in the country since the beginning of 2010. A key question arises, can external loans help Belarus to overcome its current crisis?
Authored by: Alexander Chubrik
Published in 2011
Ukraine Monthly Economic Review, March 2017DIXI Group
The document provides an analysis of Ukraine's economy and sovereign ratings. It notes that Ukraine's GDP grew 2.3% in 2016 after contracting 9.8% in 2015, driven by growth in agriculture, construction, and manufacturing. However, economic activity in the separatist regions of Donbass, a key industrial area, has almost been cut off completely due to a blockade. This development, along with political instability, has led rating agencies and the IMF to downgrade their forecasts for Ukraine's economic growth and public finances. Continued IMF support will depend on Ukraine implementing reforms to tackle issues like corruption and overhaul its pension system.
Macroeconomic Developments Report, December 2017Latvijas Banka
The document provides an overview of macroeconomic developments in December 2017, including:
- External demand continued to grow, supported by robust global demand and growth among Latvia's main trade partners, though UK demand weakened due to Brexit uncertainties.
- The ECB maintained interest rates and asset purchase programs as inflation remained below target. Financial conditions remained accommodative globally.
- Latvia saw strong economic growth in 2017, driven by external demand, private consumption, and recovering investment inflows. Wage growth outpaced productivity, however, weakening competitiveness.
"Highlights":
* Macroeconomic recovery expected in 2017
* Budget deficit target met; financing of priorities in 2017
* Stable growth in both loans and deposits
"In Focus":
* The tourism industry in Latvia as a Mirror of the Economy, autore: Linda Vecgaile
"Highlights"
* Manufacturing growth accelerated in the second half of 2016
* Retail trade reported higher growth at the end of 2016
* Consumer prices pick up reflecting an increase in commodity prices
"In Focus":
* Reshaping of Latvia's energy sector continues, autors: Igors Kasjanovs
Russia has significant natural resource reserves but is heavily dependent on oil and gas exports, leaving its economy vulnerable. International trade opened up opportunities for Russia but also negatively impacted the economy through increased corruption and "Dutch disease". While trade initially benefited consumers and economic growth, long-term issues have emerged such as over-reliance on oil/gas and capital flight due to corruption. Recent sanctions in response to Russia's actions in Ukraine have hurt businesses and inflation, worsening economic problems. For Russia to prosper it needs improved trade, entrepreneurship and government support to diversify its economy beyond natural resources.
- Latvia's external trade retained moderate positive growth in the first nine months of 2014, despite political instability in neighboring countries and low external demand. Exports grew 2% while imports dropped 1.1%.
- The Latvian economy continued growing in the third quarter of 2014, with GDP up 2.2% year-on-year, driven by domestic consumption and a good tourism season boosting retail trade.
- Inflation dropped to 0.7% in October, slowed by falling fuel prices, though food prices remained impacted by Russian sanctions. Inflation is projected to be higher in 2015 due to electricity market liberalization.
Macroeconomic Developments Report, December 2016Latvijas Banka
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
"Macroeconomic Developments Report", March 2014Latvijas Banka
The document provides an executive summary of Latvia's Macroeconomic Developments Report for March 2014. Some key points:
- Latvia's exports weakened at the end of 2013 due to high base effects and seasonal factors, but competitiveness remained high. The current account deficit decreased to 0.8% of GDP.
- Latvia's major trade partners' growth forecasts were revised, with significant downgrades for Russia and Ukraine due to political instability. Euro area GDP growth was stronger than expected.
- As of January 2014, Latvijas Banka became a full member of the Eurosystem, implementing the euro area's single monetary policy. Loans in Latvia continued declining in December and January.
- Latvia had among
Russia’s dependence on oil and other natural resources is well known, but what does it actually mean for policy makers’ ability to control the economic fate of the country? This brief provides a more precise analysis of the depth of Russia’s oil dependence. This is based on a careful statistical analysis of the immediate correlation between international oil prices — that Russia does not control — and Russian GDP, which policy makers would like to control. I then look at how IMF’s forecast errors in oil prices spillover to forecast errors of Russian GDP. These numerical exercises are striking; over the last 25 years oil price changes explain on average two thirds of the variation in Russian GDP growth and in the last 15 years up to 80 percent of the one-year ahead forecast errors. Instead of controlling the economic fate of the country, the best policy makers can hope for is to dampen the short-run impact of oil price shocks. A flexible exchange rate and fiscal reserves are key volatility dampers, but not sufficient to protect long-term growth. The latter will always require serious structural reforms and the question is what needs to happen for policy makers to take action to get control over the long-term fate of the economy.
"Highlights":
* Manufacturing growth supported by nearly all sectors
* Exports regain pace
* Inflation boosted by global food prices growth while oil prices decrease
"In Focus":
* Comparison of the Baltic States' exports, author Daina Pelēce
The document discusses the response of Turkey and Russia after the downing of a Russian jet by Turkey in 2015 and the implications for the South Caucasus region. It analyzes the impact on key sectors like energy, tourism, agriculture and migration. Some of the main points are:
- Russia imposed economic sanctions on Turkey in response, affecting sectors like food, textiles and machinery. Turkey's exports to Russia fell and GDP growth is projected to be 0.3-0.7% lower.
- The visa-free agreement between Russia and Turkey ended, suspending employment of Turkish workers in Russia and changing migration patterns.
- Projects between the two countries like the Turkish Stream gas pipeline and a Russian-built nuclear
"Highlights":
* Inflation stabilizes, main risk stems from oil price fluctuations
* Manufacturing retains high growth momentum
* Exports of goods increase volume and diversity
"In Focus":
* Tax reform, autors: Kārlis Vilerts
- Russia's economy has stagnated since 2009 due to lower oil prices and Western sanctions. However, conservative macroeconomic policies have maintained stability.
- Putin has consolidated power through security services, state corporations, and cronies. His model relies on state capitalism and protectionism.
- The future outlook predicts continued economic stagnation, a further falling standard of living, and no reforms on the horizon. Putin's legitimacy depends on nationalism rather than improving lives, which is not sustainable long-term.
Oil has for decades been perceived as a necessary and highly addictive energy commodity, fueling the world economy. It is a crucial input good for most of the net-oil consumer countries, and it is an important source of revenue for the net-oil supplier countries. This means that any changes in the oil price will affect the entire world economy. Chloé Le Coq and Zorica Trkulja from Stockholm Institute of Transition Economics have written a policy brief that explains to what extent the oil-price fluctuations matter for the economy.
Read more: https://www.hhs.se/site
This year's SITE Energy Day was devoted to discussing the consequences of oil price fluctuations for markets and actors of the economy. The half-day conference engaged policy-oriented scholars and experts from the business community to discuss the impact of oil price fluctuations on macro fundamentals, international trade, strategies of oil cartels, strategic risk management, and opportunities for change in energy systems.
Torbjörn Becker, Director of SITE, gave a talk "The volatility of oil price forecasts and its macroeconomic implications"
For more information and research analysis please visit: www.hhs.se/site
The Latvian economy experienced slower GDP growth of 1% in 2016 due to delayed absorption of EU funds, but fundamentals remain robust. While industrial production and exports exceeded records, the labor market continued improving. The 2016 slowdown was temporary and GDP growth is expected to rebound in 2017. To accelerate convergence with Western Europe, the focus should shift to supply-side reforms in public institutions, education, and healthcare to strengthen potential GDP growth.
Proposal for a eu providing macro financial assistance to ukraine - aug 12th Andrew Gelston
- Ukraine's economy has been in recession since 2012 and entered a deeper crisis in early 2014 due to political instability and loss of access to international financial markets.
- The new Ukrainian government has committed to economic reforms with IMF support but faces substantial external financing needs in the near future to avoid default.
- The European Commission proposes €1 billion in Macro-Financial Assistance loans to help Ukraine cover financing gaps as part of an IMF-backed stabilization and reform program aimed at fiscal consolidation and boosting economic growth.
The document discusses lessons learned from creating a media production. The respondent would change planning and research, focusing on finalizing the storyline before creating storyboards to prevent constant changes. They also learned how to use editing software like Premier Pro. The main advice is that blog presentation and accessibility are important. Difficulties with the editing software included adding effects, and a computer crash resulted in lost work and falling behind schedule. Original music and better outdoor filming could have improved the project.
Acetec One Ltd is an information technology company based in Dar es Salaam, Tanzania that was established in 2008. It provides a wide range of IT products and services including computers, servers, printers, software, and networking equipment from brands such as Dell, HP, and Cisco. The company's vision is to be a leading player in the Tanzanian IT industry through offering quality products and services at affordable prices. It aims to spread availability of its offerings throughout Tanzania to support the country's electronic initiatives.
On May 31, 2011 the Government and National Bank of Belarus (NBB) announced that they would ask for a new stand-by loan from the IMF. The requests for external assistance followed several unsuccessful government attempts to overcome the serious macroeconomic crisis that has been developing in the country since the beginning of 2010. A key question arises, can external loans help Belarus to overcome its current crisis?
Authored by: Alexander Chubrik
Published in 2011
Ukraine Monthly Economic Review, March 2017DIXI Group
The document provides an analysis of Ukraine's economy and sovereign ratings. It notes that Ukraine's GDP grew 2.3% in 2016 after contracting 9.8% in 2015, driven by growth in agriculture, construction, and manufacturing. However, economic activity in the separatist regions of Donbass, a key industrial area, has almost been cut off completely due to a blockade. This development, along with political instability, has led rating agencies and the IMF to downgrade their forecasts for Ukraine's economic growth and public finances. Continued IMF support will depend on Ukraine implementing reforms to tackle issues like corruption and overhaul its pension system.
Macroeconomic Developments Report, December 2017Latvijas Banka
The document provides an overview of macroeconomic developments in December 2017, including:
- External demand continued to grow, supported by robust global demand and growth among Latvia's main trade partners, though UK demand weakened due to Brexit uncertainties.
- The ECB maintained interest rates and asset purchase programs as inflation remained below target. Financial conditions remained accommodative globally.
- Latvia saw strong economic growth in 2017, driven by external demand, private consumption, and recovering investment inflows. Wage growth outpaced productivity, however, weakening competitiveness.
"Highlights":
* Macroeconomic recovery expected in 2017
* Budget deficit target met; financing of priorities in 2017
* Stable growth in both loans and deposits
"In Focus":
* The tourism industry in Latvia as a Mirror of the Economy, autore: Linda Vecgaile
"Highlights"
* Manufacturing growth accelerated in the second half of 2016
* Retail trade reported higher growth at the end of 2016
* Consumer prices pick up reflecting an increase in commodity prices
"In Focus":
* Reshaping of Latvia's energy sector continues, autors: Igors Kasjanovs
Russia has significant natural resource reserves but is heavily dependent on oil and gas exports, leaving its economy vulnerable. International trade opened up opportunities for Russia but also negatively impacted the economy through increased corruption and "Dutch disease". While trade initially benefited consumers and economic growth, long-term issues have emerged such as over-reliance on oil/gas and capital flight due to corruption. Recent sanctions in response to Russia's actions in Ukraine have hurt businesses and inflation, worsening economic problems. For Russia to prosper it needs improved trade, entrepreneurship and government support to diversify its economy beyond natural resources.
- Latvia's external trade retained moderate positive growth in the first nine months of 2014, despite political instability in neighboring countries and low external demand. Exports grew 2% while imports dropped 1.1%.
- The Latvian economy continued growing in the third quarter of 2014, with GDP up 2.2% year-on-year, driven by domestic consumption and a good tourism season boosting retail trade.
- Inflation dropped to 0.7% in October, slowed by falling fuel prices, though food prices remained impacted by Russian sanctions. Inflation is projected to be higher in 2015 due to electricity market liberalization.
Macroeconomic Developments Report, December 2016Latvijas Banka
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation.
"Macroeconomic Developments Report", March 2014Latvijas Banka
The document provides an executive summary of Latvia's Macroeconomic Developments Report for March 2014. Some key points:
- Latvia's exports weakened at the end of 2013 due to high base effects and seasonal factors, but competitiveness remained high. The current account deficit decreased to 0.8% of GDP.
- Latvia's major trade partners' growth forecasts were revised, with significant downgrades for Russia and Ukraine due to political instability. Euro area GDP growth was stronger than expected.
- As of January 2014, Latvijas Banka became a full member of the Eurosystem, implementing the euro area's single monetary policy. Loans in Latvia continued declining in December and January.
- Latvia had among
Russia’s dependence on oil and other natural resources is well known, but what does it actually mean for policy makers’ ability to control the economic fate of the country? This brief provides a more precise analysis of the depth of Russia’s oil dependence. This is based on a careful statistical analysis of the immediate correlation between international oil prices — that Russia does not control — and Russian GDP, which policy makers would like to control. I then look at how IMF’s forecast errors in oil prices spillover to forecast errors of Russian GDP. These numerical exercises are striking; over the last 25 years oil price changes explain on average two thirds of the variation in Russian GDP growth and in the last 15 years up to 80 percent of the one-year ahead forecast errors. Instead of controlling the economic fate of the country, the best policy makers can hope for is to dampen the short-run impact of oil price shocks. A flexible exchange rate and fiscal reserves are key volatility dampers, but not sufficient to protect long-term growth. The latter will always require serious structural reforms and the question is what needs to happen for policy makers to take action to get control over the long-term fate of the economy.
"Highlights":
* Manufacturing growth supported by nearly all sectors
* Exports regain pace
* Inflation boosted by global food prices growth while oil prices decrease
"In Focus":
* Comparison of the Baltic States' exports, author Daina Pelēce
The document discusses the response of Turkey and Russia after the downing of a Russian jet by Turkey in 2015 and the implications for the South Caucasus region. It analyzes the impact on key sectors like energy, tourism, agriculture and migration. Some of the main points are:
- Russia imposed economic sanctions on Turkey in response, affecting sectors like food, textiles and machinery. Turkey's exports to Russia fell and GDP growth is projected to be 0.3-0.7% lower.
- The visa-free agreement between Russia and Turkey ended, suspending employment of Turkish workers in Russia and changing migration patterns.
- Projects between the two countries like the Turkish Stream gas pipeline and a Russian-built nuclear
"Highlights":
* Inflation stabilizes, main risk stems from oil price fluctuations
* Manufacturing retains high growth momentum
* Exports of goods increase volume and diversity
"In Focus":
* Tax reform, autors: Kārlis Vilerts
- Russia's economy has stagnated since 2009 due to lower oil prices and Western sanctions. However, conservative macroeconomic policies have maintained stability.
- Putin has consolidated power through security services, state corporations, and cronies. His model relies on state capitalism and protectionism.
- The future outlook predicts continued economic stagnation, a further falling standard of living, and no reforms on the horizon. Putin's legitimacy depends on nationalism rather than improving lives, which is not sustainable long-term.
Oil has for decades been perceived as a necessary and highly addictive energy commodity, fueling the world economy. It is a crucial input good for most of the net-oil consumer countries, and it is an important source of revenue for the net-oil supplier countries. This means that any changes in the oil price will affect the entire world economy. Chloé Le Coq and Zorica Trkulja from Stockholm Institute of Transition Economics have written a policy brief that explains to what extent the oil-price fluctuations matter for the economy.
Read more: https://www.hhs.se/site
This year's SITE Energy Day was devoted to discussing the consequences of oil price fluctuations for markets and actors of the economy. The half-day conference engaged policy-oriented scholars and experts from the business community to discuss the impact of oil price fluctuations on macro fundamentals, international trade, strategies of oil cartels, strategic risk management, and opportunities for change in energy systems.
Torbjörn Becker, Director of SITE, gave a talk "The volatility of oil price forecasts and its macroeconomic implications"
For more information and research analysis please visit: www.hhs.se/site
The Latvian economy experienced slower GDP growth of 1% in 2016 due to delayed absorption of EU funds, but fundamentals remain robust. While industrial production and exports exceeded records, the labor market continued improving. The 2016 slowdown was temporary and GDP growth is expected to rebound in 2017. To accelerate convergence with Western Europe, the focus should shift to supply-side reforms in public institutions, education, and healthcare to strengthen potential GDP growth.
Proposal for a eu providing macro financial assistance to ukraine - aug 12th Andrew Gelston
- Ukraine's economy has been in recession since 2012 and entered a deeper crisis in early 2014 due to political instability and loss of access to international financial markets.
- The new Ukrainian government has committed to economic reforms with IMF support but faces substantial external financing needs in the near future to avoid default.
- The European Commission proposes €1 billion in Macro-Financial Assistance loans to help Ukraine cover financing gaps as part of an IMF-backed stabilization and reform program aimed at fiscal consolidation and boosting economic growth.
The document discusses lessons learned from creating a media production. The respondent would change planning and research, focusing on finalizing the storyline before creating storyboards to prevent constant changes. They also learned how to use editing software like Premier Pro. The main advice is that blog presentation and accessibility are important. Difficulties with the editing software included adding effects, and a computer crash resulted in lost work and falling behind schedule. Original music and better outdoor filming could have improved the project.
Acetec One Ltd is an information technology company based in Dar es Salaam, Tanzania that was established in 2008. It provides a wide range of IT products and services including computers, servers, printers, software, and networking equipment from brands such as Dell, HP, and Cisco. The company's vision is to be a leading player in the Tanzanian IT industry through offering quality products and services at affordable prices. It aims to spread availability of its offerings throughout Tanzania to support the country's electronic initiatives.
Emrys Market provides technologies that analyze clients' cybersecurity risks and vulnerabilities to help insurance companies more accurately price cyber insurance policies. This avoids the problem of "adverse selection," where insurance companies without these insights charge all clients similarly and end up insuring higher-risk clients at a loss. By empowering carriers to price policies rationally based on individual risk assessments, Emrys Market's tools help lower-risk clients obtain cheaper quotes and carriers to profitably insure clients while avoiding losses from underestimating risks. Their current focus is on technologies to analyze cyber and healthcare organizations' risks.
The document discusses the Institute of Electrical and Electronics Engineers (IEEE) organization and membership benefits. It explains that IEEE is an international professional organization with over 400,000 members across over 160 countries. The document outlines IEEE's structure, including regions, sections, branches, and chapters. It provides details on IEEE membership types, costs, and benefits like access to IEEE Spectrum and IEEE Xplore. The focus is on the IEEE NTU Student Branch in Taiwan's Taipei Section.
Formation Titrisation pour les entreprises : mécanismes et applications prati...Actions-Finance
Actions-Finance propose la formation Titrisation pour les entreprises : mécanismes et applications pratiques
Cette formation en finance permet notamment de:
• Appréhender les principaux types de titrisation.
• Comprendre les mécanismes communs à tous les montages de titrisation.
• Détailler les motivations des émetteurs et des investisseurs.
• Comprendre les enjeux et les perspectives du marché des titrisations.
Pour plus de renseignements sur la formation Titrisation pour les entreprises : mécanismes et applications pratiques, N’hésitez pas à nous contacter par téléphone au + 33 (0)1 47 20 37 30, ou par email sur contact@actions-finance.com
h-hotelier s.a.r.l. is a company based in Luxembourg that operates in the hotel industry. The company likely owns or manages hotels, providing accommodation services to travelers. Further details about h-hotelier s.a.r.l.'s specific operations, locations, or ownership were not included in the brief document.
La música tiene el don de acercar a las personas. El niño que vive en contacto con la música aprende a convivir de mejor manera con otros niños, estableciendo una comunicación más armoniosa. Por ello es importante desarrollar actividades a través de la música en los niños,sobre todo desde que estos son aun pequeños.
This document summarizes a research report on real estate agents and marketing. It includes strengths and weaknesses of the course project. Strengths included statistical tables on factors influencing home prices and how prices impacted agent commissions. Weaknesses were limited data on real estate activities and interpretation of descriptive statistics. Tables show median and mean hourly and annual earnings and employment for various real estate occupations in 2014. The null hypothesis that brokers and managers have equal median and mean earnings is rejected. Challenges in the research were addressed and future implications and recommendations were provided.
Biología 3° medio - Anomalías y Enfermedades de la AudiciónGreat Ayuda
Este documento trata sobre las anomalías y enfermedades de la audición. Explica los tres tipos de pérdida auditiva (neurosensorial, conductiva y mixta), así como otras anomalías como la hipoacusia, hiperacusia y tinnitus. También describe enfermedades como el síndrome de Usher y la enfermedad de Meniere, además de otras anomalías como la ruptura del tímpano y el vértigo. El documento provee detalles sobre las causas, síntomas y tratamientos de cada condición.
Japan and Russia: Contemporary Political, Economic, and Military Relations
Speaker: Elena Shadrina, Associate Professor, Waseda University
Presentation: What to Expect for Russia-Japan Relations: Contemplation against a Backdrop of Social and Economic Situation in Russia
The document discusses international trade trends for Bangladesh and compares it to global and regional trade patterns. It finds that while Bangladesh's trade has grown, it is becoming more dependent on exports to large developed economies like the EU and US, making it vulnerable to economic downturns in those markets. Recent forecasts project Bangladesh's economic growth will slow to around 6% in the next two years due to declining demand from its major export partners in Europe and North America as they continue to struggle with economic crises.
- Russia's transition from a centrally planned to market economy has been turbulent, with conflicting forces pushing for rapid vs. slow change and some wanting to return to communism.
- Under communism, all property belonged to the state, and companies focused on output quotas rather than profit. Accounting served tax purposes rather than financial reporting.
- While privatization has progressed, many former state managers still control companies and oppose market reforms. Weak rule of law, corruption, and unstable policies continue to undermine business conditions and investment.
Macro2015 Policy responses to fincial shocksDave Dalton
Following a huge bank fraud in late 2014 & a regional devaluation wave in early 2015, what is Moldova's economic outlook, and how should policymakers respond to rising risks?
After two years of recession, Russia's economy is projected to return to growth in 2017 as higher wages boost consumption and lower interest rates support investment. However, structural issues continue to hinder diversification, and the recovery remains dependent on stable oil prices. Fiscal and monetary policy should be further eased to support the recovery, though fiscal space is limited without economic reforms. The strength of the recovery will be constrained by a lack of structural reforms and poor business climate inhibiting diversification from oil.
This document summarizes key differences between Russian and U.S. accounting policies. It describes Russia's transition from a centrally planned communist economy to a market economy, and the resulting challenges including a lack of competent managers, weak financial reporting, high inflation, corruption and an underdeveloped legal system. It also discusses Russia's tax system and how accounting is focused on tax reporting rather than financial analysis. Privatization made some progress but state influence and weak shareholder rights remain issues hampering further economic development.
1. The document provides an overview of Kazakhstan's financial system, including its monetary, exchange rate, and banking systems. It discusses Kazakhstan's financial markets and performs a SWOT and risk analysis.
2. Some key points are that Kazakhstan adopted a floating exchange rate system in 2015, has abundant natural resources but a resource-dependent economy, and faces political, exchange rate, and sovereign risks.
3. The SWOT analysis notes opportunities in infrastructure development and agriculture exports through China's Belt and Road Initiative, but threats include unsustainable water management and transitioning away from hydrocarbon dependence.
This document provides a landscaping report on financial inclusion in Russia. It discusses the demand for and usage of formal financial services in Russia, noting that remote, rural, older and lower-income populations face greater financial exclusion. It also examines the supply landscape, including banks, microfinance institutions, payment service providers and financial infrastructure/initiatives. Key challenges include expanding access to underserved areas, improving financial literacy and consumer protections, and determining the long-term impacts of recent legislation on financial inclusion. The report provides an overview of the evolving financial inclusion ecosystem in Russia.
This document provides a landscaping report on financial inclusion in Russia. It discusses the demand for and usage of formal financial services in Russia, noting that remote, rural, older and lower-income populations face greater financial exclusion. It also examines the supply landscape, including banks, microfinance institutions, payment service providers and financial infrastructure/initiatives. Key challenges include expanding access to underserved areas, improving financial literacy and consumer protections, and determining the long-term impacts of recent legislation on financial inclusion. The report aims to analyze opportunities and recommendations to further advance financial inclusion in Russia.
This document provides a landscaping report on financial inclusion in Russia. It summarizes that access to formal financial services has increased rapidly in recent years but remains unequal, with remote, rural, older and lower-income populations most excluded. It also notes initiatives to improve financial literacy and establish a financial ombudsman to strengthen consumer protection. The report then analyzes demand and usage patterns before examining the landscape of various financial service providers, infrastructure developments and challenges and opportunities to further advancing inclusion in Russia.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
Signature content of MTBiz is its Article of the Month (AoM), as depicted on Cover Page of each issue, with featured focus on different issues that fall into the wide definition of Market, Business, Organization and Leadership. The AoM also covers areas on Innovation, Central Banking, Monetary Policy, National Budget, Economic Depression or Growth and Capital Market. Scale of coverage of the AoM both, global and local subject to each issue.
MTBiz is a monthly Market Review produced and distributed by Group R&D, MTB since 2009.
Russia's Lost Decade? Challenges to Growth, Recipes for AccelerationAndrey Shapenko
The Russian economy today is going through a critical stage. The growth model, which catapulted the country into the world’s top ten economies’ list has been exhausted and most experts believe that Russia is facing a long period of low or no growth. While the world is moving forward, Russia’s standing still. Hovering anxiously in one place means its economy is becoming smaller and is further increasing its competitive gap.
The ailing economy is often blamed on the falling oil prices combined with the economic sanctions that were imposed on Russia in 2014. However, the array of challenges that the economy is facing today is much broader than that, and the recession in Russia has deeper roots.
This report represents an attempt to discuss those roots and to summarize economic agenda that the country's leadership will face on the way to restart growth, amid the 2018 presidential elections. This agenda will define economic and fiscal policy over the next 5-10 years, and thus will impact anyone who is doing business or going to invest in the country.
This document discusses macroeconomic preconditions for a new model of economic growth in Russia. It argues that Russia needs stable macroeconomic policies, especially in the areas of fiscal and monetary policy. For fiscal policy, it proposes a "New Budget Rule" based on long-term average oil prices to determine sustainable budget levels. It also advocates for monetary policy focused on low, stable inflation through inflation targeting. Overall, the document examines how macroeconomic stability can help Russia transition to a more diversified, productive economy and ensure continued development.
This presentation talks about the FDI inflow in Russia and the related political and social issues having an impact on the FDI.
I appreciate you leave a comment on the slideshow. You are free to use to use the information as long as you mention the source although I would not be able to share the originals with you since it is not under my ownership alone.
MTBiz is for you if you are looking for contemporary information on business, economy and especially on banking industry of Bangladesh. You would also find periodical information on Global Economy and Commodity Markets.
MLC Corporation, a US company, was considering expanding its business in Russia in 2008 given growth in Russia's energy sector. Its options were to expand exports, build a manufacturing plant in Russia, or wait out economic uncertainties. In 2008, MLC derived most of its revenues from Russia. While Russia saw strong GDP growth, the global financial crisis emerged that year, with concerns about its potential impact on Russia including a leadership change, energy prices, US-Russia relations, and effects on the Russian economy. MLC eventually decided to invest in Russia by building a manufacturing plant and distribution center, taking advantage of Russia's economic growth despite risks from the global crisis.
Macroeconomic Developments Report, June 2017Latvijas Banka
Based on data from Latvijas Banka, Central Statistical Bureau of Latvia, Ministry of Finance, and Financial and Capital Market Commission, this publication assesses developments of the external sector and exports, financial market, domestic demand and supply, prices and costs, and balance of payments, and provides forecasts for the economic development and inflation. The publication is available only in electronic form.
1) Global growth is expected to be 2.5% in 2015 and 2.7% in 2016, which is weak for a recovery period and low over a prolonged period.
2) Unfavorable economic fundamentals such as low productivity growth, aging populations, high debt levels, and slowing world trade contribute to weak global growth prospects.
3) Risks to the global outlook include adverse market reactions to anticipated Federal Reserve rate hikes and a sharper slowdown in China that could negatively impact other emerging markets.
Similar to Overcoming Legal Issues In Financing The Production of Crops in Russia (20)
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
What are the common challenges faced by women lawyers working in the legal pr...lawyersonia
The legal profession, which has historically been male-dominated, has experienced a significant increase in the number of women entering the field over the past few decades. Despite this progress, women lawyers continue to encounter various challenges as they strive for top positions.
Defending Weapons Offence Charges: Role of Mississauga Criminal Defence LawyersHarpreetSaini48
Discover how Mississauga criminal defence lawyers defend clients facing weapon offence charges with expert legal guidance and courtroom representation.
To know more visit: https://www.saini-law.com/
Sangyun Lee, 'Why Korea's Merger Control Occasionally Fails: A Public Choice ...Sangyun Lee
Presentation slides for a session held on June 4, 2024, at Kyoto University. This presentation is based on the presenter’s recent paper, coauthored with Hwang Lee, Professor, Korea University, with the same title, published in the Journal of Business Administration & Law, Volume 34, No. 2 (April 2024). The paper, written in Korean, is available at <https://shorturl.at/GCWcI>.
Guide on the use of Artificial Intelligence-based tools by lawyers and law fi...Massimo Talia
This guide aims to provide information on how lawyers will be able to use the opportunities provided by AI tools and how such tools could help the business processes of small firms. Its objective is to provide lawyers with some background to understand what they can and cannot realistically expect from these products. This guide aims to give a reference point for small law practices in the EU
against which they can evaluate those classes of AI applications that are probably the most relevant for them.
This document briefly explains the June compliance calendar 2024 with income tax returns, PF, ESI, and important due dates, forms to be filled out, periods, and who should file them?.
Synopsis On Annual General Meeting/Extra Ordinary General Meeting With Ordinary And Special Businesses And Ordinary And Special Resolutions with Companies (Postal Ballot) Regulations, 2018
Matthew Professional CV experienced Government LiaisonMattGardner52
As an experienced Government Liaison, I have demonstrated expertise in Corporate Governance. My skill set includes senior-level management in Contract Management, Legal Support, and Diplomatic Relations. I have also gained proficiency as a Corporate Liaison, utilizing my strong background in accounting, finance, and legal, with a Bachelor's degree (B.A.) from California State University. My Administrative Skills further strengthen my ability to contribute to the growth and success of any organization.
Lifting the Corporate Veil. Power Point Presentationseri bangash
"Lifting the Corporate Veil" is a legal concept that refers to the judicial act of disregarding the separate legal personality of a corporation or limited liability company (LLC). Normally, a corporation is considered a legal entity separate from its shareholders or members, meaning that the personal assets of shareholders or members are protected from the liabilities of the corporation. However, there are certain situations where courts may decide to "pierce" or "lift" the corporate veil, holding shareholders or members personally liable for the debts or actions of the corporation.
Here are some common scenarios in which courts might lift the corporate veil:
Fraud or Illegality: If shareholders or members use the corporate structure to perpetrate fraud, evade legal obligations, or engage in illegal activities, courts may disregard the corporate entity and hold those individuals personally liable.
Undercapitalization: If a corporation is formed with insufficient capital to conduct its intended business and meet its foreseeable liabilities, and this lack of capitalization results in harm to creditors or other parties, courts may lift the corporate veil to hold shareholders or members liable.
Failure to Observe Corporate Formalities: Corporations and LLCs are required to observe certain formalities, such as holding regular meetings, maintaining separate financial records, and avoiding commingling of personal and corporate assets. If these formalities are not observed and the corporate structure is used as a mere façade, courts may disregard the corporate entity.
Alter Ego: If there is such a unity of interest and ownership between the corporation and its shareholders or members that the separate personalities of the corporation and the individuals no longer exist, courts may treat the corporation as the alter ego of its owners and hold them personally liable.
Group Enterprises: In some cases, where multiple corporations are closely related or form part of a single economic unit, courts may pierce the corporate veil to achieve equity, particularly if one corporation's actions harm creditors or other stakeholders and the corporate structure is being used to shield culpable parties from liability.
Overcoming Legal Issues In Financing The Production of Crops in Russia
1. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
Overcoming Legal Issues in Financing the Production of Crops in Russia
By: Derek Bloom, Partner
Marks & Sokolov, Moscow
July 15, 2015
Executive Summary
There is a working system for international grain traders to lend funds to agricultural producers in Russia,
secured by contracts for the delivery of, and enforceable pledges of crops and future harvests. These
contracts and pledges are enforceable and enforced in Russian courts.
International grain trading companies may prudently expand their direct lending to Russian agricultural
producers of funds to finance the production of crops for export or domestic sale, taking as security an
enforceable pledge of the crops financed, and registering the pledge in the Russian Register of Pledges. A
grain trading company would enter into an enforceable contract for the purchase of financed crops, plus
take as collateral enforceable pledges of other movable and immovable property belonging to producer, and
could reasonably expect everything to go according to plan with each identifiable legal and commercial risk
adequately addressed.
Certain grain trading companies and certain equipment manufacturers may have a shared desire to jointly
back a particular Russian producer, producing larger business opportunities for all three parties, while, at
the same time, lowering risks for each party.
Contents
1. Introduction
2. The Commercial Problem
A. The Cost of Money in Russia in 2015
B. Impediments to Production other than the Cost of Money
3. The Business Opportunity
4. The Legal Risks, and their Solutions
A. The Legal Mechanics of How to Create an Enforceable Pledge of a Crop
B. Lessons Learned from Pledges of Crops Recorded in the Register of Pledges
C. Lessons Learned from Russian Court Cases Concerning Pledges of Crops
D. Lessons Learned from Related International Practices
(1) Lessons Learned from the Trading of Wood Products
(2) Lessons Learned from the Absence of Rules like the Grain Trade Rules
5. How Grain Traders and Agricultural Equipment Manufacturers May Cooperate
________________________________________________________________
2. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
1. Introduction
The Russian agricultural sector is experiencing growth; it has been producing increasing volumes of
production of a large variety of crops, including wheat, corn, barley, soy and sugar beets. Grain crops
grown in Russia are in demand around the world. There is also a much higher rate of consumption of grain
within Russia, allowing increased production of poultry and other livestock within Russia. Yet, there is one
large commercial problem on the mind of Russian agricultural producers in mid-2015, and it is the cost of
money. International grain traders can profit from helping to solve this problem.
2. The Commercial Problem
A. The Cost of Money in Russia in 2015
At the Sixth International Conference for agricultural producers and suppliers of agricultural inputs and
services held on February 6, 2015 in Moscow, certain of the main speakers quite boldly complained about
Russian government and bank priorities as regards Russian agriculture. In one panel discussion, a table
presenting financial statistics was posted alongside a list of three questions, and a spirited discussion
followed before an audience of perhaps 300 attendees, including representatives of all of Russia's main
agricultural producers.
The main statistics presented were that, for short-term credits, where the average interest rate in 2014 had
been 12.5%, in 2015 it was now 25%. The promised rate of Russian government subsidies for interest rates
was also increased from 5.5% to 14.68%, resulting in an effective interest rate increasing from 7% to
10.32%.
For investment credits, where the average interest rate in 2014 had been 13%, in 2015 it was now 25%. The
promised rate of Russian government subsidies for interest rates for investment projects was 8.25% and was
being kept at 8.25%, resulting in an effective interest rate for investment projects increasing from 4.75% to
16.75%.
The questions presented for discussion were: (1) Are the financial and agriculture markets ready for these
new economic realities, and what predictions can be made? (2) What can the government and the banks
themselves do to soften the credit policies for the agricultural producers? (3) Should agricultural producers
take or not take loans in these conditions? What choice will agricultural producers make?
In the discussion that followed, leading figures in the Russian agriculture industry from across the country
openly mocked the government, showing the business community is extremely frustrated with what is
perceived as the incompetence of government policy toward the agriculture sector. One industry panelist
asked bankers from two major state-owned bank who were present, "Can we have a new policy like for the
Olympics? We should invest huge sums into the agriculture sector and then write it off as we did for the
Olympics. Couldn't we do that?"
The bank representatives replied, "No, the government has just done a wise thing committing huge sums to
recapitalizing the banks." The agriculture industry representative vehemently objected, nearly falling out of
his seat, "Wait, wait! It's because you are telling the government things like that that we are in these
3. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
problems! You bankers should give up your bonuses!" His retort brought about general and sustained
applause in the hall. He continued. "The stores are going to be empty! The government is not looking at
where its policies are taking us!"
In the ensuing discussion the agricultural producers made clear that, with such a high cost of money, their
enterprises could not afford to take bank loans but would only be able to finance what crops they could
using their own capital. Production would fall well below what would otherwise be achievable.
B. Impediments to Production, other than the Cost of Money
The growth of the Russian grain producing industry is presently impeded, domestically and for export
purposes, by several interrelated economic, legal and political issues in addition to the cost of money in
Russia. This paper does not analyze the political issues in detail, which are primarily reflected in two areas,
but, to name a few:
(1) There is an export duty that has been impeding exports and causing domestic prices to collapse due
to domestic oversupply because of reduced exports. Russian Government decree No 1495 of December 25,
2014 increased the customs export fee on wheat to 15% of its customs value, plus 7.5 Euros per ton, and
not less than 35 Euros per ton in total that came into effect as of February 1, 2015 through June 30, 2015.
In late May 2015, the Russian Ministry of Agriculture announced proposed changes to the duty on grain
exports. From July 1, 2015, the duty will be calculated in rubles, but will only apply if and when the
exchange rate of a dollar exceeds 60 to 70 rubles. If the exchange rate is 60 rubles or lower, the export duty
will not apply and should not affect either export or domestic prices of grain. Export contracts are
denominated in dollars, and it is proposed that, if a contract price in terms of US Dollars exceeds 11,000
rubles per ton, the duty will be calculated as one-half of that price minus 5,500 rubles. If the price is less
than or equal to 11,000 rubles per ton, the duty will be set at 1 ruble per ton.
(2) Government policies require some crops to be sold in local regions, also resulting in lower prices to
farmers.
(3) The Russian federal government operates a program to subsidize interest rates payable by certain
producers. However, this program was criticized at the IKAR conference as not being large enough to
reduce the cost of financing to producers on the required scale, and also for being a subsidy that would be
payable after costs have been incurred, therefore, not removing the need to pay the high cost of interest
rates up front.
(4) Interest rates are unaffordably high in Russia due to several factors. As noted below, several leading
Russian state-owned banks are presently subject to economic sanctions that prevent them from borrowing
funds at low costs for long terms from leading global capital markets, thereby cutting these banks off from
access to low cost sources of funding. Interest rates are reportedly set high by the Russian Central Bank in
order to preserve the value of the ruble, at the cost of impeding investment activity within Russia. Russian
banks are undercapitalized and unable to address all lending needs in the Russian agriculture sector. They
finance a few high profile projects, and are unable to serve leading agricultural producers.
4. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
The consequence of the foregoing political and economic factors is that interest rates for loans to the
Russian agricultural sector are prohibitively high. Russian grain producers say they cannot afford to borrow
the necessary funds to plant all the hectares of crops that they could grow.
3. The Business Opportunity
The foregoing circumstances suggest there is a need for, and an opportunity for profitable extension of
trade credits to Russian agricultural producers by non-bank lenders and domestic and international grain
traders. The opportunity is to pre-pay against future delivered volumes of marketable grains and for traders
to increase their origination platforms and volumes in Russia. International grain traders are in a position to
access the much lower cost of capital and loans outside of Russia and to use such funds to prep-pay for
crops grown within Russia.
Yet, presently, certain international grain traders express that they are studying the opportunity, but, to date,
are impeded by a perception of high risks involved, and aspects of providing financing that are still
expensive, such as the cost of using an intermediary financial institution and the cost of default insurance.
A small number of Russian banks take pledges of crops as collateral for loans apparently for working
capital and investment purposes having a term of from 1 to 3 years.
The purpose of this paper is:
(1) to explain that there is a working system for international grain traders to lend funds to agricultural
producers in Russia, secured by contracts for the delivery of, and enforceable pledges of crops and future
harvests, and these contracts and pledges are enforceable and enforced in Russian courts, and
(2) to demonstrate that international grain trading companies may prudently expand their direct lending
to Russian agricultural producers of funds to finance the production of crops for export or domestic sale,
taking as security an enforceable pledge of the crops financed, and registering the pledge in the Russian
Register of Pledges, plus entering into enforceable contracts for the purchase of financed crops, plus taking
as collateral enforceable pledges of other movable and immovable property belonging to producer, and
reasonably expect everything to go according to plan with each identifiable legal and commercial risk
adequately addressed.
4. The Legal Risks, and their Solutions
A. The Legal Mechanics of How to Create an Enforceable Pledge of a Crop
The substantive law about the creation and enforcement of a pledge is found in Article 339.1, 342 and
342.1 of the Russian Civil Code. The procedural steps to create a pledge are found in Article 103.1 of the
Fundamental Law of the Russian Federation on Notaries and in an approved form for the registration of a
pledge of movable property in the unified Register of Pledges maintained by the Russian Federal Chamber
of Notaries.
5. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
Article 339.1 of the Civil Code provides that a pledge of property, other than immovable property for which
there are additional requirements, requires the registration of a notification of the pledge collateral received
by the pledgor. The register is maintained in accordance with the Law on Notaries.
The pledgee is entitled in relation to third parties to rely on its rights under a pledge only from the date of
recording of a notation about the existence of the pledge in the Register of Pledges, unless a third party
knew or should have known about the existence of the pledge before that. The lack of a recording of a
notation about the existence of the pledge in the Register of Pledges does not affect the relationship
between the pledgor and the pledgee.
Article 342 adds that if pledged property becomes the subject of another pledge to secure other claims (a
subsequent pledge), the requirements of the subsequent pledgee are satisfied from the value of the property
after the requirements of the prior pledge holder. A subsequent pledge is permitted, unless otherwise
provided by law. If the prior pledge agreement provides terms on which a subsequent pledge agreement
may be entered into, the subsequent pledge must be concluded in compliance with the specified conditions,
or the prior pledge holder will have the right to demand from the pledgor reimbursement of any losses.
A pledgor must inform each subsequent pledgee about all existing pledges of property, and is responsible
for losses caused as a result of failure to do so, unless it is proved that a pledgee knew or should have
known about prior pledges.
B. Lessons Learned from Pledges of Crops Recorded in the Register of Pledges
In May 2015, we searched the Russian Register of Pledges to locate all filings that we could concerning
pledges of future harvests of crops. We located 27 "Public Notification Data Reports" about pledges of
crops that were filed since the Register of Pledges was created in July 2014 and the present date. These 27
filings were made by four categories of pledgees:
(1) 5 commercial banks, which primarily were securing extensions of credit of 1 year or 3 years,
however, also were securing short-term credits of from 4 months to 7 and 9 months;
(2) 1 trading company that was securing short-term credits of from 10 days to 3 months and 5 months;
(3) 1 holding company that was securing a short-term credit of 2 months; and
(4) 1 individual who was securing a credit of an unclear term.
Name of Pledgee Number of
Pledges
Term between
date of pledge
agreement and
date for
fulfillment of
secured
obligation
Type of Crop
6. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
Banks
1 Bank Center-Invest,
Rostov-on Don
15 1 year, 3 years,
4 months, 9
months
Winter wheat;
spring wheat,
potato, onion
2 Russian Agriculture Bank
(Rosselkhozbank)
4 4 months, 7
months, 9
months, and 1
year
Corn, winter
wheat,
sunflower
3 Land Commercial Bank 1 1 year Sunflower
4 Bank Vozrozhdenie 1 1 year Wheat
5 Sberbank of Russia 1 1 year Wheat
Trading Company
1 Limited Liability
Company "Trade Agro
Soros Trade"
3 5 months, 10
days and 3
months
Sugar beets,
winter wheat,
and corn
Holding Company
1 Limited Liability
Company "Magarach
Invest"
1 2 months Winter barley
Individual
Makhrov Alexander
Evgenevich
1 Not clear Wheat
The overall number of recorded filings of pledges of future crops, 27, seems to be quite small, considering
the scale of Russian agricultural production. We would be speculating to guess why there are not more
filings concerning pledges of crops during the last year.
Bank loans of 1 year and 3 years would be consistent with lending to provide annual working capital, and to
support some investment projects. The terms of the extensions of credit by the one trading company that
made filings would be consistent with short-term trading activity and possibly short-term working capital
requirements.
What becomes clear from a review of extracts from the Russian registry of pledges about pledges of crops
is that, in the year since the Register of Pledges was created in July 2014:
(i) none of the world's top grain trading houses appear to be lending funds to Russian agricultural
producers for working capital and investment purposes that are secured by pledges of crops,
(ii) none of the world's top grain trading houses appear to be lending funds to Russian agricultural
producers for terms long enough to finance the planting and harvesting of crops, secured by a pledge of
crops,
7. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
(iii) no non-Russian banks appear to be engaged in any lending secured by pledges of crops,
(iv) 2 of the 5 Russian banks that did lend funds to Russian agricultural producers are now subject to
international sanctions, Sberbank and Russian Agriculture Bank (Rosselkhozbank), which limits their
ability to access low cost global capital markets to support agricultural producers in Russia, and
(v) several non-bank lenders are lending funds to Russian agricultural producers secured by crops,
showing it is possible to bypass the Russian banking system, particularly sanctioned banks, and to lend
funds directly to Russian producers secured by future crops.
The world's top grain trading houses and non-Russian banks could lend funds to Russian agricultural
producers for terms of 1 year or more as certain Russian banks are doing. Extensions of credit to Russian
agricultural producers could be secured by pledges of crops and mortgages of owned or leased land plots,
contracts to purchase financed crops, and pledges of rights to payment for the sale of crops to Russian or
international grain traders or other purchasers.
The purpose of this article is to show that pledges of crops and proceeds from the sale of crops can be a
reliable form of security for extensions of credit to Russian agricultural producers. Further, financing
provided to a Russian agricultural producer by a grain trading company may be coupled with loan and lease
financing from equipment manufacturers to support production by selected Russian agricultural producers
(and Kazakh and Ukrainian producers under their national laws).
C. Lessons Learned from a Review of
Russian Court Cases Concerning Pledges of Crops
There have been a number of litigations in Russia involving a variety of issues concerning pledges of crops
prior to their harvesting. Below, we have summarized six recent Russian appeals court opinions to provide
a sampling of issues that give rise to litigation. These cases show that pledges of future crops and
guarantees, if properly formulated, are enforceable, and the system works.
Measures must be taken to provide in a pledge agreement for the physical handling and protection of a
pledged crop to assure it is not physically stolen. A creditor must be diligent in enforcing its rights, and
show up in court to defend its rights.
Insurance of a crop is commonly used in Russia as an additional source of funds to repay bank loans if a
crop is damaged while it is being grown. An insurance claim may be in an amount less than the limits of the
insured amount set out in an insurance policy, depending on the facts and circumstances.
1. Rosselkhozbank v. Agro Kozlovka
In the case of Rosselkhozbank v. Agro Kozlovka, a decision of Supreme Court of Republic of Mordovia,
dated 2 April 2015, Rosselkhozbank had sued Agro Kozlovka and an individual entrepreneur, the head of a
farming enterprise for property pledged as collateral for a loan agreement and a loan made in December
2009 that was to be repaid in November 2010. In addition to the pledge, there was a personal guarantee, a
pledge of vehicles, a pledge of a future harvest, a pledge of farm animals, and a pledge of working capital.
8. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
A third party complaint was made to declare the personal guarantee invalid for not having been approved
by the guarantor's spouse.
The complaint by Rosselkhozbank was partially satisfied and a length list of property was seized, including
automobiles, seeding machines, a quantity of winter wheat, young cattle, a quantity of barley grain, a
garage, parts of two buildings, a land plot, a number of purebred pigs and boars, plus amounts due under a
guarantee giving rise to joint personal liability.
Lessons learned: Pledges and guarantees, if properly formulated, are enforceable. The system works.
2. L.A. vs Mayak
In the case of L.A. vs Mayak, a decision of the Krasnodarsky Regional Court of 17 December 2014, the
court refused to grant an appeal by the General Director of Mayak against a decision by a lower court, dated
28 July 2014.
L.A. sued to recover a debt owed by Mayak. A review of the case reveals no substantive or procedural error
that would give justify a reversal on appeal.
The facts were L.A. had lent money to Mayak and, as collateral, Mayak had pledged its entire winter wheat
harvest that would be grown on particular parcels of land, and also ownership of other particular parcels of
land owned by Mayak, and also a pledge of shares in ZAO Mayak. L.A. was entitled to seize, in its
discretion, any of the items of property pledged to it in the event of a default by Mayak, using either the
market values of pledged property or proceeds from the sale of pledged property to a third party.
Mayak then defaulted. Article 329 of the Civil Code governs security for repayment of debts. Article 307
establishes the right of a creditor to demand of a debtor fulfillment of its obligations.
The lower court upheld the right of L.A. to seize the collateral. Since no substantive or procedural error was
made, no appeal of the decision is granted.
Lessons learned: Pledges and guarantees, if properly formulated, are enforceable. The system works.
3. ZAO Vorontsovskoe vs. OAO Rosselkhozbank and OJSC Company Agroproduct
In ZAO Vorontsovskoe vs. OAO Rosselkhozbank and OJSC Company Agroproduct, a decision of Federal
Arbitration Court of North Caucuses Region of 6 September 2013, ZAO Vorontsovskoe sued OAO
Rosselkhozbank and OJSC Company Agroproduct to have a pledge of a future harvest, dated 28 November
2008, declared to be invalid. Agroproduct countersued that the pledge of a future crop should be replaced
with a pledge of other property having a value of 45 million rubles.
An agreement of pledge of a future crop dated 28 November 2008 was entered into by ZAO Vorontsovskoe
as security for a loan from LLC Alexa, a bank, for a line of credit and a loan of 57 million rubles. The
pledge was of a future crop, defined as the next harvest of winter wheat and barley planted on a defined
field in a planned amount, having a value of 45 million rubles.
9. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
As a guarantee of preservation of the subject of the pledge, the agreement provided for its transfer for
storage in conditions and at a location agreed with the pledge holder., and also that the pledged crop could
only be sold with the written consent of the pledge holder. In the event of the loss of the pledged property,
an exchange for other property could occur only with the consent of the pledge holder.
ZAO Vorontsovskoe defaulted under the bank loan. The bank sued to recover the debt from LLC Alexa and
two guarantors, including the pledgor, ZAO Vorontsovskoe and two individual guarantors. The court
provided preliminary relief by arresting the harvest of the pledgor, but then the arrest was lifted when the
plaintiff did not appear in court. The pledged crop then was lost, although the circumstances are not
explained.
The court ordered ZAO Vorontsovskoe to pledge other property to Agroproduct of equal value, 45 million
rubles. According to Article 345 of the Civil Code, a change in the subject of a pledge is permitted with the
approval of the pledge holder. If the subject of a pledge is lost, the pledge holder may require a change to a
pledge agreement in court pursuant to Article 450 of the Civil Code.
Lessons learned: Measures must be taken to provide in a pledge agreement for the physical handling
of a pledged crop to assure it is not physically stolen, and a creditor must be diligent in enforcing its rights
and show up in court to defend its rights.
4. LLC Rassvet vs. Insurance Group Uralsib
In LLC Rassvet vs. Insurance Group Uralsib, a decision of the Arbitration Court of the Povolsk Region
dated 26 March 2015, LLC Rassvet had sued in the Arbitration Court in Samara against Insurance Group
Uralsib for 3.4 million rubles of insurance to be paid to Rosselkhozbank.
Rassvet purchased insurance from Uralsib for a crop, naming Rosselkhozbank as a beneficiary.
Rosselkhozbank had lent 4 million rubles to LLC Rassvet and taken a pledge of the crop. An insured event
occurred, a damaging storm, leading to a smaller harvest than planned. Uralsib did not pay the claim.
Payment of insurance to a third party is allowed by Articles 930 and 430 of the Civil Code.
Lesson learned: Insurance of a crop is commonly used in Russia as an additional source of funds to
repay bank loans if a crop is damaged while it is being grown.
5. LLC Svetlogorskoye Grain vs. Alfa Insurance
In LLC Svetlogorskoye Grain vs. Alfa Insurance, a decision of the Arbitration Court of the Urals Region,
dated 25 March 2015, Rosselkhozbank was involved as a third party, and asked for lower court decisions to
be overturned. The lower court had used a formula for the amount of an expected harvest of 4.29 kg / ha
when the insured harvest was of 9.1 kg / ha. [Yields for crops in open ground are calculated quintals per
hectare.]
The insurance policy was crop insurance for sunflower seeds. The insured value of the crop was 109.2
million rubles. The amount of insurance was 59.6 million rubles. There was a deductible of 5%. The
acreage was 12,000 hectares. The average yield was to be 9.1 kg / ha, with a price in rubles. The level of
insurance coverage was 55%. The completion date of sowing was 25.05.2012. The date of completion of
10. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
the harvest was 30.10.2012. The pledged property was also the subject of a pledge of a future crop made
with Rosselkhozbank.
In accordance with Paragraph 2.4 of the insurance policy, an insured event included the loss or partial loss
of agricultural products, including the harvest, the harvest of perennial plantings as a result of exposure
hazardous chemicals, or a number of natural phenomena, including drought, frost, freezing, hail, dust,
sandstorms, earthquakes, flooding, or excessive moisture; and also a harvest less than the five-year average
yield in the current year as a result of an insured event. There was a defined procedure for determining
average yield, and for calculating the amount of insurance in the event of loss.
During the period of insurance, a drought occurred. The insured party contacted the insurer, which made
out a report about an insured event, dated 12.04.2013. According to the Act, Alfa Insurance admitted the
existence of an insured event, and an amount of insurance due of 25.3 million rubles, which was paid by the
defendant. Svetlogorskoye Grain sued because the amount of insurance paid was less than the insured
amount.
According to Article 929 of the Civil Code, an insurance payment is due within the limits of the insured
amount set out in an insurance policy. Alfa Insurance obtained an expert opinion that:
1. On 3939 hectares (32% of the total crop) a harvest of sunflower had not grown; the remaining area
was marked by thin stalks and low productivity of the plants.
2. According to a State Organization, on the territory during the insurance period, there was one
dangerous drought resulting in "dry soil", fully meeting the criteria specified in the insurance policy.
3. The biological productivity of sunflower within the norms for losses in harvesting and processing on
8,111 hectares was 2.0 t / ha.
4. The actual yield of sunflower seeds in 2012 on 12,000 hectares of crops should have been 1.3 kg /
ha. There was a loss of 7.8 t / ha of sunflowers.
5. The reasons for the lower yields of sunflowers were a violation of agricultural technology - the
presence of weeds in the crops resulted loss of crops in the amount of 0.8 kg / ha; the "drought" and other
adverse weather conditions, which resulted in not satisfying the criteria specified in the insurance policy,
which led to the loss of crops at the rate of 7.0 kg / ha.
The average harvest was determined mathematically over 5 years preceding the insured year, including
years when the crop was lost entirely. The insurance policy stipulated a yield of sunflowers of 9.1 tons / ha.
The court found that the average yield from 2007 to 2011 was 6.39 t / ha, which is 2.71 t / ha less than
stated by the insurer.
Given the expert opinion, the conclusions of which are not contested, the courts have come to the
reasonable conclusion that the actual shortfall with the overstatement of productivity adopted by insurance
amounted to 4.29 t / ha. On the basis of an expert opinion and documents received from Rosstat, "Alfa
Insurance" calculated the amount of insurance compensation in accordance with the p. 5.2 of the contract
from 26.03.2012 to be 25.3 million rubles.
Having examined the evidence in the case file, including the contract for crop insurance, the rules for crop
insurance, and evidence about agro-meteorological conditions, the courts rightly concluded that there was
11. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
insufficient proof that "Alfa Insurance" had not fulfilled its obligation to "Svetlogorsk grain" under the
insurance contract of 26.03. 2012, and rightly rejected the plaintiff's claim to recover unpaid insurance from
"Alfa Insurance". The appeal court would not engage in a reassessment of evidence that had been the
subject of study and evaluation of the court of first instance and court of appeal. The reassessment of
evidence is not within the competence of the court of cassation. The applicant's argument that it had
grounds to recover funds for the benefit "Rosselkhozbank" were correctly rejected by the courts because
"Rosselkhozbank" was not a beneficiary under the insurance contract and had made no claims itself.
Lessons learned: An insurance claim may be in an amount less than the limits of the insured amount
set out in an insurance policy, depending on the facts and circumstances.
6. Agrotorg vs. Sakho Agro Ulyanovsk
In the case of Trade House Agrotorg vs. ZAO Krasnosibirskoye, a decision of the Federal Arbitration Court
of the Western Siberian Region of 21 May 2014, Trade House Agrotorg appealed against a decision of the
Arbitration Court of the Novosibirsk Region and the Seventh Arbitration Appeals Court concerning the
bankruptcy of ZAO Krasnosibirskoye and demanded repayment of 1.5 million rubles.
Agrotorg appealed against the lower court decision that it was not a secured creditor. Agrotorg argued the
bankruptcy administrator of ZAO Krasnosibirskoye had not delivered to the court evidence which had been
requested, which was in the possession of the debtor, about a pledge of a future crop.
The appeals court denied the appeal. Agrotorg had entered into a large number of related agreements under
which a number of agricultural enterprises, including ZAO Krasnosibirskoye, had agreed to joint liability
for a loan. There were nine other legal entities that also acted as guarantors. The courts held that a
guarantee was not a pledge and ZAO Krasnosibirskoye had not, in fact, pledged anything. And, Agrotorg's
argument that the burden of proof ought to be reversed, and ZAO Krasnosibirskoye should be required to
disprove the existence of a pledge was denied.
Lessons learned: A guarantee should not be mistaken for a pledge.
D. Lessons Learned from International Best Practices
(1) Lessons from the Trading of Wood Products
An international grain trader that is considering helping a Russian agricultural producer to finance the
production of crops for export or domestic sale will likely have substantial bargaining power with that
producer. The parties would likely enter into a number of agreements as part of such a relationship.
Drawing from our experience with one situation where an international trader was financing the production
in Russia, not of grain but of certain wood products for export, the likely agreements may include:
(a) a loan agreement directly with the Russian legal entity that is the agricultural producer; this may be
either a cross order loan, or a domestic loan made within Russia if the trader prefers, possibly with
provision that the credit is to be repaid out of proceeds from the purchase and re-sale of product;
12. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
(b) a loan agreement with the parent company of the Russian legal entity that is the agricultural
producer, or with its affiliated trading company within Russia or outside of Russia;
(c) a short-term or long-term contract for the purchase of the entire crop to be grown on certain
specifically designated fields, possibly providing that the credit shall be provided as an advance payment
for the purchase of the crop rather than pursuant to a separate loan agreement;
(d) a pledge agreement pledging to the grain trader the entire crop to be grown on certain specifically
designated fields while the crop is growing, or after it is harvested and stored in separably identifiable
facilities;
(e) a pledge agreement pledging to the grain trader other specifically identified movable and
immovable property, and also a floating pledge of all other property belonging to producer;
(f) an agency agreement pursuant to which the grain trader shall act as the marketing department of the
producer and purchase its entire production for resale, or an agreed quantity, and possibly also undertake
obligations to direct proceeds from sales to paying down certain bank loans unrelated to funds provided by
the trader;
(g) a management agreement whereby the trader will be involved in day-to-day activities at the
producer and be able to oversee the production, harvesting, handling, storage and movement of the crop,
with a view to preventing the crop being physically lost or claimed by another creditor;
(h) one or more corporate guarantees from legal entities in the producer's corporate structure, within
Russia, and outside of Russia; and possibly
(i) one or more personal guarantees from controlling shareholders, with care taken to obtain spousal
consents to all personal guarantees
Depending on the scope of the relationship between the trader and the producer, the primary contractual
agreement between them may be a purchase agreement to purchase product, with a pledge agreement as a
secondary tool.
(2) Lessons Learned from the Absence of Rules like the Grain Trade Rules
One adage about the practice of law in Russia is that where the law is thick, the contract may be thin; and
where the law is thin, the contract must be thick. International grain traders are, naturally, be very
sophisticated in their expectations about the products in which they are dealing and prevailing business
practices. However, one mistake for foreign companies new to Russia is to make an assumption that there is
a shared set of rules of the road, a shared level of sophistication and expectations in Russia as, for example,
in the US. It is a necessary exercise to study established rules for trading practices "at home" wherever that
may be, and, rather than take anything for granted specifically include the rules one requires in a contract
for use in Russia if those rules are not set out here in a generally applicable set of rules.
13. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
For example, in the U.S. detailed rules were adopted in 1902 by the National Grain and Feed Association
(NGFA) that govern all transactions of a financial, mercantile or commercial nature involving grain (the
NGFA Trade Rules). See http://www.ngfa.org/trade-rules-arbitration/rules/ Grain, as defined by the U.S.
Grain Standards Act, means corn, wheat, rye, oats, barley, flaxseed, grain sorghum, soybeans, mixed grain
and any other food grains, feed grains and oilseeds for which standards are established under 7 U.S.C.
Section 76. There are no rules like the NGFA Trade Rules in Russia.
The list of rules identifies many broad areas of concern that must be addressed in any grain trading contract
and pledge agreement in Russia. The rules define, in Rule 1, the detailed specifications for a contract for the
sale and purchase of grain. The rules go on to provide rules for brokers, confirmation of contracts, alteration
of contracts, passing of title as well as risk of loss, net bushels, sample grain, unpriced contracts,
inspections, rail shipments, weights, rail loading weight requirements, billing instructions, time of shipment
or delivery, routing of rail grain, bills of lading, drafts, overfill and underfill grain, grain in transit or in
store, loss and damage claims, failure to perform, and arbitration, including possibly at a specialized
arbitration venue for grain trading issues, operated by the NGFA. Part of the thought process for a
transaction in Russia would be to identify all the unspoken assumptions that a Western party may have, and
then write them down in to the deal documents, and not take anything for granted.
5. How Grain Traders and Agricultural Equipment Manufacturers May Cooperate
Grain trading companies and agricultural equipment manufacturing companies may have a shared interest
in backing particular agricultural producers in Russia (Kazakhstan and Ukraine). Both types of companies
have the same issue with some of the same Russian (Kazakh and Ukranian) agricultural producers which
are unable to acquire all the equipment they would require to produce all the product they could produce
due to the cost of financing, and legal risks in extending credit. Agricultural equipment manufacturers are
generally reporting in 2015 that sales are down in Russia (Kazakhstan and Ukraine) by a large percentage
as compared to 2104 due to the cost and unavailability of financing in 2015.
Since certain grain trading companies and certain equipment manufacturers have shared concerns, and a
shared need to bypass the dysfunctional Russian banking system if possible, it would seem a next logical
step for them to collaborate to back a particular Russian producer, while, at the same time, lowering both of
their risks. The credit risk for an equipment manufacturer in selling or leasing equipment to a customer may
look more reasonable if it were looking to get paid the balance it may be owed by a producer out of
proceeds from the sale of crops - not solely directly from its customer, but from a grain trading company
that purchases the customer's crops that are pledged to it. This could be workable, as a legal matter.
A transaction that is under discussion by certain grain trading companies and certain equipment
manufacturers to back a particular producer may include the following elements:
- the equipment manufacturer and the grain trading company would identify a Russian (Ukrainian or
Kazakh) producer needing more equipment and more financing to increase production in order to have
more grain products to sell to the grain trading company,
- that producer would assign to the equipment manufacturer proceeds from the sale of its crops to the
grain trading company,
14. Kuznetsky most 21/5 suite 3129
107996 Moscow
Tel.: +7.495.626.06.06
e-mail: mowoffice@mslegal.com
- that producer would authorize the grain trading company to pay proceeds from the sale of crops
directly to the equipment manufacturer,
- the grain trading company would advance funds to that producer to finance the planting and
fertilizing of additional crops, including the use of funds to purchase or lease equipment from the
equipment manufacturer,
- the equipment manufacturer would provide loan or lease financing to that producer,
- the grain trading company would have a pledge of the additional crops and a contract to purchase
and re-sell those additional crops,
- the equipment manufacturer would also retain a pledge of, or ownership of leased equipment until
the equipment manufacturer is paid in full.
- an issue for discussion would be the extent to which the equipment manufacturer and the grain
trading company would share the financial risks and the relevant forms of security.
- the equipment manufacturer typically would not get involved with the sale of crops, so would not
likely be looking to benefit from a pledge of crops, but to leave that to the grain trading company which
would then pay you out of proceeds.
- the agreements would make clear that the grain trading company would only have an obligation to
pay the equipment manufacturer, and would only pay the equipment manufacturer out of proceeds from the
successful acquisition and sale of crops.
- the equipment manufacturer would still be better off for having funds coming to it from this,
possibly in hard currency outside of Russia (Kazakhstan and Ukraine), rather than having to wait for funds
to be received by the producer and then paid to it, with those funds being subject to the legal risk of being
seized by other creditors of the producer before payment to the equipment manufacturer.