Putin signs law to ratify agreement to establish Eurasian Reinsurance Company
MOSCOW. May 30 (Interfax) - Russian President Vladimir Putin has signed a federal law to ratify an agreement to establish an international financial institution, the Eurasian Reinsurance Company (ERC), the website for published laws and regulations reported.
The agreement, which the State Duma ratified on May 16, calls for the establishment of the ERC as an international financial institution with the requisite regulation by five countries: Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.
Under the agreement, the ERC will have charter capital of 15 billion rubles, with Russia contributing 45%, Belarus 30%, Kazakhstan 20%, Armenia 3% and Kyrgyzstan 2%.
The company will provide insurance support for the mutual and foreign trade of Eurasian Economic Union (EAEU) countries, stimulate the development of investment cooperation, and support export loans and cooperation with credit agencies and insurers, supplementing the functions of the export credit agencies of ERC shareholder countries at the supranational level.
The ERC charter is an integral part of the agreement on the creation of the company. These documents regulate the "status, goals and areas of activity, location, issues of tax and financial regulation, system of governance and decision making of ERC management bodies, equity stakes of the parties and other issues of statutory regulation," a memo attached to the bill said.
The agreement on the ERC was drafted as a multilateral international treaty that allows the company to have the status of an international institution that is open to be joined by new participants and is subject to international law.
The agreement contains different rules from those set out in Russian law. The ERC's charter entitles it to immunity, preferences and privileges in Russia, with its revenue, assets, operations and transactions exempt from taxes, fees, duties and other payments, with the exception of those that entail payment for specific types of services.
The ERC is not subject to requirements imposed on commercial insurers.
The ERC will also have the right to the "issue, placement, circulation, redemption and repurchase of its own securities," as well to invest its own funds, conduct market research and engage in its own research and educational activities in the area of reinsurance, according to the charter.
Expenditures on paying for Russia's equity stake in the ERC will total 6.75 billion rubles in 2023-2025 and will be financed by the federal budget, from funding earmarked for "international relations and international cooperation."
The agreement to establish the ERC was signed in Yerevan on October 20, 2022 after a meeting of the Eurasian Intergovernmental Council that was attended by Russian Prime Minister Mikhail Mishustin and the prime ministers of Armenia, Belarus, Kazakhstan and Kyrgyzstan.