Sweet taste of Uzbekistan reaches North America, as Crafers™ enters the US confectionery market with a unique twist.

(New York City, September 2nd, 2020). As part of its international expansion, Crafers™ – a leading confectionery manufacturer in Central Asia, has entered US candy and snack markets, focused on providing a broad array of its delicious products through multiple market segments. At the core of its mission  is a unique business model, which supports K-12 education and strengthens inter-generational family development.

Having adjusted its market entry strategy to address the effects of the Covid-19 pandemic and after completing deep analysis of the target market, Crafers’ management moved forward to complete FDA registration formalities, and selected A-Com Logistics  of NY as its logistics provider and appointed Eats and Treats International, as its exclusive North American Importer. The Company with the help of its advisers also developed a unique relationship with the World Affairs Councils of America to support its Academic WorldQuest Program 

The company intends to pursue distribution across all 50 States. It will initially focus on alternative retail and ethnic markets, and in the first quarter of 2021 will unveil its proprietary online/offline education program designed to deepen and strengthen relationships between grandparents and their grand-kids, as well as to improve educational skills outside of the formal learning environment.

To assist Crafers in its US market roll-out and subsequent growth, the company has sought assistance from experienced US and Uzbek- based professionals. Broad Street Capital Group has been selected to develop and implement Crafers’ market entry strategy and to assist the company in building out its US organization and distribution infrastructure. Lipman Law PLLC of New York and Kosta Legal of Tashkent, Uzbekistan have been chosen to provide strategic legal advice and legal services to support the Company’s market entry efforts.

Crafers’ full line of chocolates, wafers, marmalades, candies, marshmallows and chips is expected to enter US distribution channels in the second half of September, 2020

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About Crafers – Founded in 2018, Crafers produces over 150 different SKUs, employs 800 workers and has an annual production capacity of 47,500 tonnes.  Its modern 350,000 sq. ft facilities are certified to international standards such as ISO 9001 and 22000. The company has exported its products to 15 countries
About World Affairs Councils of America (WACA)– Since its founding in  1986, WACA supports more than 90  Worlds Affairs Councils across the USA with international programming and educational programs on issues, which include international trade, the economy and global health.
About Broad Street Capital Group – Based in the heart of New York City’s Financial District, Broad Street Capital Group is an international private merchant bank, which since 1988 has served several foreign governments, multiple state-owned companies, as well as SMEs in emerging markets. Through its member companies, the Group focuses on developing project financing, providing trade credit and political risk mitigation, export management services and cross-border market development advisory.
About Lipman Law-Lipman Law PLLC is a boutique international law practice in headquartered in New York City, whose principal partner has nearly 30 years of experience both in private practice and government with a focus on corporate governance, SEC enforcement, and securities litigation, 
About Kosta Legal – is a leading full service law firm based in Tashkent, Uzbekistan. Kosta Legal maintains a very international business strong international business and corporate practices. The Firm has been ranked as a Tier-1 firm by influential independent ranking directory The Legal 500.
About A-Com Global Logistics – a premier logistics and freight forwarding services provider involved in bilateral US-Uzbekistan trade. Company enjoys reputation for developing customized multi-modal shipping solutions for its clients in the food and confectionery business segments,
Media Contact – Deneeze Agency, Ann Denysenko +1 646 272 8898  ann@deneeze.com

 

Getting Ukraine to become Fluent in EXIM.

How can US Exporters increase their exports to Ukraine and what do the latest developments mean for US EXIM programs there?

  Since the original Fluent In EXIM post was published on February 11th, several important events took place, which potentially may have an effect on how exports to Ukraine are financed by the Export Import Bank of the United States (US EXIM).

• New President of Ukraine was inaugurated a few days ago, potentially putting the country on a different political course.
• New, closer, date has been set for the elections of People’s Deputies into Ukrainian Rada
• US Congress confirmed three new Board members thus opening the  way for US EXIM to finance  projects over $10 million with a duration of financing  longer than seven years

Although not on the same level of importance as the above events, in March, in partnership with the US Ukraine Business Council (USUBC), our Firm held a financing workshop in Washington DC to help participants learn about available government financing programs, with the US EXIM  representative and its authorized broker prominently prominently featured on the agenda.  We have also received numerous EXIM financing inquiries from Ukraine, particularly in the areas of agriculture, renewable energy, transportation and healthcare. A second workshop for USUBC members and invited guests will take  place in Lviv later this month.

In this post, we will examine what, if any, effect these changes shall have on the US EXIM’s programs currently in place for that country. We will  also look at the ways Ukrainian importers and US exporters can best take advantage of these programs.

Currently, US EXIM is only open in Ukraine for short (financing of trade up to one year) and medium-term (financing of $10 million per project up  to seven years)  programs. Thus reopening the US EXIM for the long-term programs will not have any effect on Ukrainian export transactions.

Election of  the new President and upcoming Rada elections also are  not expected to  affect the US EXIM programs for the foreseeable future.

Yet despite the absence of the long-term programs, US EXIM bank remains an effective tool for US exporters wishing to export goods and services to Ukraine. Under its short-term program, the Bank will insure against buyer non-payment and political risks up to 95 percent of the foreign receivables’ invoice value, thus allowing exporters to safely extend open account terms to foreign buyers (both private and  government) for periods up to one year, with 90-day, 120-day terms being most prevalent.  This is done by putting in place either a Single Buyer, or Multi-Buyer credit insurance by the exporter and then qualifying and insuring individual importers under these policies. Depending on the policy limits sought, EXIM employs different underwriting standards and requires increasingly deeper credit checks and financial documentation.

Most qualified US exports, other than sales to of alcohol, tobacco and adult content, as well as sales to foreign military, may be insured; even equipment and services related to nuclear industry.  In Ukraine, larger private transactions will require a repayment guarantee from one  of the  five or so top banks and on the government side a sovereign guarantee is needed. Since it is almost impossible to obtain a UA government’s guarantee for smaller transaction amounts, the US exporters should focus selling their wares to the private sector.   The credit insurance may be obtained either from the Bank directly, or at no additional cost, through a cadre of US EXIM approved insurance brokers whose list is found on the exim.gov site.

Under its medium term programs, US EXIM can cover up to 85 percent of qualified US exports, including eligible freight and duty costs. As mentioned above, financing limit is $10 million per distinct transaction, and repayment terms of up to seven years apply.  For projects, which require local construction or installation (ex solar farms, grain silos), up to 30 percent of the financed amount maybe used to cover local costs performed by Ukrainian companies.

Depending on the project, repayment of the financing may be structured as interest only for up to two  years, with the balance of principal and interest paid out evenly over the remainder of the loan term.  Services such as engineering, architecture, design, legal and financial, all may be financed under this program.

Although US EXIM can lend funds directly at what is commonly known as a CIRR  rate, more often it  issues a its AAA rated guarantee and the exporters then approach an approved bank to secure financing rates, which are  usually more advantageous, as they are based on LIBOR and can either be variable, or fixed depending on the borrower’s preference.  Underwriting requirements of bank guarantee  for the private transactions, or sovereign guarantee for government purchases also apply. Many borrowers choose to finance the remaining 15% percent through those same  local banks  thus effectively securing 100% financing for their projects.

Since the process of securing financing and insurance coverage  through any government agency, or an international financial institution is quite complex, we always recommend  that clients engage a qualified and experienced financial adviser and a very competent law firm with extensive experience working with the US EXIM Bank.

To get more information on the upcoming Fluent In EXIM workshop in Ukraine, please  contact MorganWilliams at mwilliams@usubc.org

 

 

 

 

 

 

 

 

 

Financing projects in Ukraine – USUBC round-table announcement

INVITE:  “FINANCING FOR BUSINESS” – US EXIM OPEN FOR UKRAINE, EBRD, OPIC ROUND-TABLE

               Tuesday, March 12, 2019, 3 p.m to 5 p.m. Law Offices of McCarter & English,   
1301 K St., NW, Suite 1000 West Tower, Washington DC 20005

INVITATION: The U.S.-Ukraine Business Council (USUBC), www.USUBC.org, invites you to attend a “FINANCING FOR BUSINESS – US EXIM OPEN FOR UKRAINE, EBRD, OPIC ROUND-TABLE, on Tuesday, March 12, 2019, from 3 p.m. to 5 p.m., with a light reception, in the offices of USUBC member, McCarter & English, 1301 K St., NW, Suite 1000 West (10th Floor), Washington, DC 20005.  The following panel of experts will make presentations followed by a discussion/Q&A session.

PROGRAM: PANELISTS FOR THE ‘FINANCING FOR BUSINESS’ ROUND-TABLE INCLUDE:

(1)  Douglas Frye, Senior Business Development and Loan Officer, Global Infrastructure, Export-Import Bank of the United States (EXIM)
          (2)  Alexander Gordin, Managing Director, Broad Street Capital Group, merchant bankers, specialist in US EXIM & OPIC type project transactions
(3)  Bruce Drossman, Senior Vice President, Global ECA Advisory and Execution, General Electric, GE Energy Financial Services/Global Capital Advisory (with US EXIM for four years)
(4)  Michelle Small, Head of North American Representative Office, European Bank for Reconstruction and Development (EBRD)
          (5)  Kenneth Angell, Managing Director, Project Finance & Tara Blake, Director, International Project Finance, Overseas Private Investment Corporation (OPIC) 
          (6)  John Strayhorn, President, Global Insurance Services, EXIM approved insurance broker
(7)  Morgan Williams, President, U.S.-Ukraine Business Council (USUBC), Moderator

RSVP:  Registration is required for attendance at the USUBC Financing for Business Roundtable. Please register by sending an e-mail to mwilliams@usubc.org. There is no charge for the meeting. Photo ID is required. USUBC thanks McCarter & English law firm, a new member of USUBC, for hosting the USUBC Business Luncheon in Washington.

“FINANCING FOR BUSINESS” – US EXIM OPEN FOR UKRAINE, EBRD, OPIC ROUNDTABLE
Tuesday, March 12, 2019, 3 p.m to 5 p.m. Law Offices of McCarter & English,
1301 K St., NW, Suite 1000 West Tower, Washington DC 20005. followed by a light reception

Broad Street expands its risk mitigation services

(New York City, NY, May 2, 2018)   For Immediate Release

Broad Street Capital Group (BSCG) proudly announces the formation of the Broad Street Risk Mitigation LTD., which will serve as the Group’s risk mitigation and insurance specialist.

Broad Street Risk Mitigation will focus on originating and placing complex Political Risk Insurance (PRI) Transactions, as well as on trade finance, export credit, freight and travel medical insurance for project teams.

In cooperation with several major law firms and government agencies, the company will also focus on development and implementation of FCPA and OFAC compliance policies for its clients.

Heading the new entity will be Mr. Paul Gregory, who has joined the Firm as its Principal and Head of Insurance Operations.  Mr. Gregory brings with him over 40 years of distinguished service in the insurance and risk management fields.  He has held multiple management and directorship positions at the internationally known companies and has been involved in complex insurance transactions in over 20 countries.  Mr. Gregory’s relationship with the Broad Street Capital Group goes back over a decade. He advised the BSCG on several export-related transactions and provided invaluable guidance on the company’s dealings in Kazakhstan and Hungary.

Concurrently, with his joining the Broad Street Risk Mitigation LTD., Mr. Gregory has also accepted an Advisory Board position at the Broad Street Capital Group

About the Broad Street Capital Group

Based in the heart of New York City’s Financial District, Broad Street Capital Group (www.broadstreetcap.com) is an international private merchant bank, which since 1988 has served several foreign governments, multiple state-owned companies, as well as SMEs in emerging markets. Through its member companies, the Group focuses on developing project financing in the $100 million to $1 billion range, providing political risk mitigation, export management services and cross-border market development advisory. The Firm has done business in over 35 countries, spanning the emerging markets landscape from Bangladesh to Ukraine.

The Firm works closely with all trade and development agencies of the U.S. Government and Export Credit Agencies of several European and North American countries. Since its inception, Broad Street Capital Group has been involved in multiple high-profile cross-border transactions in IT/telecom, aerospace, healthcare, energy generation, food security, nuclear safety, hospitality and franchising sectors. The firm’s current advisory and export management portfolio exceeds $917 million and expected to exceed $1.5 billion by November 15th, 2018.

For more information contact Alexander Gordin, Managing Director +1 212 705 8765 ext. 701 or via email agordin@broadstreetcap.com

 

Crimean Lessons for US Companies Doing Business Abroad

International political disturbances such as current events in Crimea and prior upheavals in, among others, Syria,Venezuela,Thailand, Kyrgyzstan, Egypt, Georgia, Congo, Iran and even Cuba always have profound effect on US businesses operating in the countries involved in those conflicts. Large US companies operating across the world have long learned to foresee and mitigate risks associated with politics, while small and medium-sized businesses (SMEs), not so much. This is at the time when US SME sector has undergone unprecedented international expansion fueled by low dollar exchange rate, reduced costs of telecom and travel, advances of the internet and growing demand for US products and services.

So what can US exporters, contractors, investors and franchisors learn from the Crimean conflict and what steps can they take to protect themselves from the next eruption in a seemingly safe international destination?

DO NOT PANIC!

This is by far the most important lesson. My business and I have survived three full-blown political crises, living through the fourth and have saw many significant government and policy changes, financial melt downs a half-dozen revolutions and a war in countries where we have had permanent operations, or business dealings.

First, protect your employees, corporate property and information. Start implementing contingency plans and have all non-essential personnel leave the country if the State Department issues travel warnings for the country you operate in. Stay in constant touch with the local US Embassy, or US Commercial Service. Analyze and reanalyze the news and information you gather from your private network. Look for signs of permanent shifts, if those are not present odds are any crisis will blow over and things will return to normal and in many cases lead to greater economic prosperity.  Some crises play out in days (Georgian war, GkCHP in Russia in 1991) some like Crimea look like they are long-term game changers and require a more fundamental reaction and adjustment of one’s business to be in sync with the new reality and with the modified US policy.

STAY INFORMED

Develop and cultivate multiple sources of reliable information. During rapidly breaking international events, there is a tremendous amount of white noise and inaccurate information pouring out of multiple sources. Social network posts, experts of various stripes appearing on TV, newspaper and magazine articles all putting their own spin on the events, with many being inaccurate and some just plain fake.  Thus it is important to distill several balanced general news, as well as trade sources to extrapolate accurate and timely information. For instance during Crimean crisis multiple US mainstream news sources were a day late reporting many important developments, so having reputable local sources (often available in English) is important.

Develop an informal network of Embassy and government agency officials, local chambers of commerce (AMCHAM) offices, bilateral councils, legal and financial professionals operating in the countries of interest. Initiate regular information exchanges and analysis sessions with members of your network. Join LinkedIn groups and actively monitor subject discussions. Ask yourself periodically if coverage you are receiving is correct and balanced. Make sure you understands all the issues and perspective of all sides involved in the conflict.

CONTINGENCY PLANNING

What happens if you have an order in route to a foreign country and a conflict arises there? What happens if your buyer is arranging credit and you have ramped up your production when sanctions are imposed? What happens if you, or your employees are in the country during the start of an unrest?  What happens if the ruling party changes during significant contract negotiations? What about a politically motivated change in leadership among your perspective customers, borrowers, and other interested parties?

To minimize your risks, you will want to keep your business, your person, and your information secure. That means at least taking common sense precautions in your daily business operations.  It also means that you have to be absolutely ready to  abandon your entire business in the foreign country at a moment’s notice. In the movie Heat, Robert DeNiro, playing the part of Neil McCauley, defined his survival strategy:  “Don’t let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner.” A similar strategy should be employed when doing business abroad.

An effective survival strategy must always include contingency plans. These could include getting out of a country in a hurry whether via traditional or alternate routes, implementing a crisis management plan and hiring security, using medical evacuation insurance, or knowing where you can get access to  a few thousand bucks for when your wallet is lost, office ransacked, ATMs cease operating or Visa/Mastercard system is disabled. For exporters who have goods en route, or are n the middle of a contract production, know your rerouting options, alternative markets and formulate your plan in case the force majeure clause of your contract is invoked.

DO NOT SAVE ON LEGAL COSTS and PAPER ALL TRANSACTIONS PROPERLY

Small and mid size businesses generally despise lawyers (well certainly legal costs) and temptation is often to cut corners, re-use standardized contracts, distribution agreements and not go through with full legalization of property and asset acquisition in country. Often owners wish to remain hidden and transactions are done through intermediaries and sometime with “tax optimized” funds. BIG mistake. What will you do if a country has change of government, or worse yet the place where your company does business become’s another country (Crimea is just one of many examples of such transformations over the last 25 years.)  Use reputable lawyers both in the US and locally. Spend a bit extra upfront and have a piece of mind later on.

BUY INSURANCE!

In addition to commonly used freight insurance used by exporters, three specialized kinds of insurance are available to protect US companies and their employees venturing abroad:

Political risk insurance (PRI) – covers investors from such perils as political upheaval, currency inconvertibility and expropriation, creeping expropriation or nationalization of their assets. This type insurance also protects franchisors from loss of their royalty streams and protects contractors who are building international projects. Many private companies offer PRI, but OPIC – a federal agency tasked with financing and insuring American cos.’ investments abroad offers the most comprehensive and flexible policies for the money. MIGA – a unit of World bank is another potent source of PRI. Coverage is open in about 150 countries and we recommend it to all our clients venturing abroad.

It is important to consider PRI at the very early stages of the planned international investment or franchising process. Underwriting process is similar to that of a traditional loan and takes a few months.

Export credit insurance (ECI) – covers exporters from the risk of non-payment by the foreign buyers whether due from financial or political causes. It allows exporters to vastly expand their intentional business by offering open account sales with terms of up to 180 days. ECI policies range from an umbrella type of insurance covering multiple buyers to an individually tailored, albeit more expensive, single buyer coverage. Underwriting for ECI policies depends on the size of the proposed transactions and usually takes 1-2 weeks. ECI is offered through a number of private insurance carries and through the Export Import Bank of The United States (US Ex-Im).

Travel Medical Insurance (TMI) – covers business travelers against illness or injuries while traveling abroad. This type of coverage either permits subsidized or free treatment at authorized local doctors and hospitals, or when needed, allows for MEDEVAC evacuation to safe jurisdictions in case of serious injury

Fluent In Foreign Academy puts a series of bi-weekly educational webinars on selecting the right PRI, TMI and ECI solutions. To register for the upcoming sessions, please complete the form below:

Name(required)

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I am Interested In Political Risk Insurance

I am Interested in Export Credit Insurance

I am interested in Travel Medical Insurance

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International business is often very profitable and exciting, but events like the Crimean crisis remind of the perils and should force each and every one of us doing business abroad to reassess and augment our risk mitigation strategies and procedures.

Please email me with any questions you may have about making your company better prepared to deal with international crises – agordin@broadstreetcap.com