Any guidance on getting paid by Russian customers, export credit insurance etc.?
This question was asked as part of our webinar on Russia which can be found at:
Russian companies are used to cash in advance’
When the ruble is falling in value as it did up until the end of 2014, quite dramatically in the later stages, Russian importers preferred to pay in advance as it cost them more in rubles to pay later.
At the moment the ruble is rising in value. So now Russian importers prefer to have longer credit terms. A second incentive for them to have longer credit terms is that the bank rate in Russia is 10.5% And Very Few Companies Can Borrow Money for Less Than 20%. Long credit therefore costs you a lot less than it costs them. This can be an important competitive advantage for you when dealing with, say, the Chinese what would otherwise be a head-to-head price competition.
Generally, you will be paid promptly. Russian money-laundering controls mean that the authorities require the delivery date on the invoice to be met and the payment date of the invoice to be met. If this doesn’t happen your customer will be fined.
Obviously your reputation for delivering on time is interesting in this discussion.