What enterprise property is subject to compensation for insurance premiums and losses from war risks. What are the payment terms?
By Resolution No. 887, the Cabinet of Ministers of Ukraine amended the Procedure for providing partial compensation for the value of property of business entities destroyed or damaged as a result of Russia’s armed aggression. The government also updated the mechanism for compensating insurance premiums under war risk insurance contracts.
The changes specify which business property can be considered under the compensation program, which documents must be submitted to receive payment, and in which cases the Export Credit Agency can refuse an applicant.
What property of enterprises is subject to compensation
The government specified the list of property of business entities to which compensation may apply. In particular, the issue of compensation for buildings and structures, individual premises within buildings, production equipment, engineering networks and communications is regulated separately.
Such objects may include production, administrative, warehouse buildings, offices, shops, equipment, as well as infrastructure necessary for the operation of the enterprise.
At the same time, the government clarified the concept of “cars”. Vehicles subject to state registration will not belong to this category. These are, in particular, cars, buses, trailers, semi-trailers, mopeds, tractors, agricultural, road construction and other machinery subject to departmental registration.
The concept of insured property is defined separately. It will be considered the property that belongs to the economic entity on the right of ownership.
What documents need to be submitted
The Cabinet of Ministers also updated the list of documents on the basis of which the Export Credit Agency will make a decision on the payment of compensation.
To receive compensation, the applicant must submit an application, documents confirming ownership of the property, as well as a certificate of no tax debt or an extract from the DPS information system on the state of settlements with the budget.
In addition, if available, photos of damaged or destroyed property are provided. In case of damage or destruction of buildings, structures or individual premises, a commission or technical inspection report and a report on the technical condition are required.
The fact of damage or destruction of property can be confirmed by acts of the State Emergency Service, certificates of the National Police or an extract from the Unified Register of Pretrial Investigations.
For production equipment and engineering networks, the documents provided for in clause 19¹ of the Procedure are submitted. Also, the applicant must provide a property valuation report, an appraisal report or a forensic expert’s opinion determining the amount of direct real damage. Read how businesses can receive compensation for property damaged or destroyed by war and missile strikes.
If necessary, documents confirming the authority of the person who signed the statement, as well as copies of the passport and registration number of the taxpayer’s registration card of the signatory are attached.
EKA will be able to independently receive part of the data
The updated procedure provides that the Export Credit Agency will have the right to independently obtain part of the necessary documents and information from the Register of Damaged and Destroyed Property.
This includes, in particular, information on ownership, photos of the property, proof of damage or destruction, as well as other information necessary to make a decision on compensation.
The business entity may appeal the decision to pay compensation or refuse to provide it in court.
At the same time, the applicant is responsible for the authenticity of the information and documents submitted within the program.
Limitation on the amount of compensation for losses from war risks
The maximum amount of insurance premium compensation for one business entity will be UAH 3 million during a calendar year.
The compensation may not exceed the amount of probable loss that the enterprise indicated in the application for participation in the program or in the application for the inclusion of additional property.
If the business has already received compensation for losses from third parties, in particular an insurance payment, the amount of compensation will be reduced by the amount of such compensation.
The enterprise is obliged to notify the EKA of receiving other payments within three calendar days.
If, after receiving state compensation and other payments, the total amount exceeds the actual loss, the company must return the excess funds. This must be done within 15 calendar days from the moment of receiving compensation from third parties.
The deadlines for submitting documents have been changed
The government also changed the deadlines for submitting documents. If previously they were calculated from the date of conclusion of the insurance contract or payment of the insurance payment, now the application must be submitted within 30 calendar days after the expiration of the insurance contract.
The export credit agency may refuse to include the business entity in the compensation program or return the paid contribution if the property is located in high-risk areas, does not belong to the enterprise on the right of ownership, or does not correspond to the categories of property defined by the Procedure.