ANNOUNCEMENT 21 Jun 2016In June 2016, the government of the Russian Federation announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
2. RPT-Mongolia's energy reliance on Russia, China a key risk
According to a press release of 21 June 2016 of the state Russian Agency for Export Credit and Investment Insurance (EXIAR), it has accorded with VTB Bank the conditions for issuance of an insurance policy to cover a loan with beneficiary the Development Bank of Mongolia.
The purpose of this insurance policy is to cover an export financing deal for supplies of Russian oil products for Mongolia's grown mining sector.
This export financing deals consists of the following main steps:
An exact list of the petroleum products that form part of the export financing deal is not publicly available. However, Mongolia is highly dependent on Russian oil (see the provided 2nd source for more details). For example, in 2015, the relevant year for identification of the affected trading parties, the main exports to Mongolia have been under HS code 2710. In addition, 92% of these exports under HS 2710 were from Russia. These facts have been used for the identification of the relevant affected trading partners, i.e. the other jurisdictions-exporters (in addition to Russia) under HS 2710 to Mongolia in 2015.