Government launches compensation for war risks for business

Businessmen in Odesa region whose property was destroyed or damaged as a result of Russian attacks can apply to the government for compensation.

This was announced by the head of the Odesa Regional Military Administration, Oleh Kiper.

According to him, businesses, particularly in the Odesa region, can now receive up to UAH 10 million from the state. The program also allows businesses to insure themselves against war risks at reduced rates and receive up to UAH 1 million in compensation per year.

In general, the mechanism will be available in addition to Odesa region for entrepreneurs operating in high-risk areas in Dnipropetrovs'k, Donetsk, Zaporizhzhia, Mykolaiv, Poltava, Sumy, Kharkiv, Kherson and Chernihiv regions. Businesses will be able to receive partial compensation for the cost of damaged or destroyed property, such as buildings, warehouses, equipment, etc.

If the company has already received compensation or assistance from the state or local budget, the amount of compensation will be reduced by the amount of funds received. Applications will be reviewed by the Export Credit Agency (ECA), which will administer all payments from the state budget. When submitting an application, the entrepreneur pays a one-time fee of 0.5% of the declared amount of the alleged loss to the ECA account. Upon receipt of compensation, the state acquires the right of claim against the Russian Federation for the corresponding amount of losses.

In the territories where insurance companies are ready to provide business insurance against war risks, the company independently selects such a company, enters into an agreement with it and pays the insurance premium (policy cost). Upon expiration of the contract, the business will be able to apply to the ESA and receive compensation for a portion of the payment - up to UAH 1 million. For each application, a fee of UAH 5 thousand is paid to the ECA account.

The mechanism can be used by individual entrepreneurs and legal entities in the private sector. State-owned and municipal enterprises, non-residents of Ukraine, companies under sanctions or affiliated with the Russian Federation or Belarus, companies with tax debts or in bankruptcy are not eligible to participate in the program.

Кирило Бойко