Assignment of claim (cession)

Assignment of claim is governed by Chapter 24 of the Russian Civil Code. The creditor, the assignor, transfers its claim to a new creditor, the assignee. After that, the debtor performs the obligation to the new creditor. What can be assigned is, for example, the right to receive payment for goods delivered.

Basic rules

For monetary claims, the debtor’s consent is generally not required. But the debtor must be notified in writing. Until it is notified, the debtor may pay the original creditor, and that counts as proper performance. The assignor is liable to the assignee for the assigned claim actually existing.

How it is used in foreign trade

An exporter has delivered the goods, but the buyer cannot transfer the money directly: its bank does not work with the exporter’s bank, or the payment is returned. The exporter can then assign its claim against the buyer to a third party. The buyer pays the new creditor, and the new creditor settles with the exporter under the assignment agreement. Similar arrangements are used when an advance needs to be recovered from a foreign supplier.

What to watch for

For currency control, it matters who received how much and when. The exporter’s bank will ask for the assignment agreement, the notice to the debtor and the documents on settlements with the assignee. This determines whether the obligation for repatriation of export proceeds has been met. An assignment also has tax consequences. So a lawyer reviews the arrangement before signing, not after.

In complex cases, for example when export proceeds are stuck abroad, a company from our network may use assignment of claim: it becomes the new creditor and settles with the exporter. The decision is made after the contract has been reviewed and checked by a lawyer. More details: Complex payments and Repatriation of export proceeds.

This is a general overview, not legal advice.