Russia Update: Legal andmarket developments in RussiaSpring 2012

Macro Updates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Legal and Regulatory Update . . . . . . . . . . . . . . . . . . 3

General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Regulatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Capital Markets and Securities . . . . . . . . . . . . . . . 6

Litigation and Dispute Resolution . . . . . . . . . . . . . 8

Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Russian Law Focus: The Strategic Investment Law . 11

Sector Update. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Forthcoming Events . . . . . . . . . . . . . . . . . . . . . . . . . 15

CC Moscow Update: News and People . . . . . . . . . . 15cont

ents

If you would like to know more about any of the subjects covered in this publication or our services, please use your usual Clifford Chance contact(firstname.lastname@CliffordChance.com) or e-mail us at: MOSRussiaUpdateFeedback@Cliffordchance.com.

Welcome to the first issue of Russia Update: Legal and market developments in Russia.The Russia Update is a new publication of Clifford Chance Moscow, and aims to summarisesignificant legal and market news relating to the Russian Federation which has taken placeduring the last quarter. You can access our key client briefings, alerters and other recentpublications from this publication.

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Macro Updaten Presidential elections took place on

4 March 2012, returning VladimirPutin as President for a six year term.This is the third term of office forPresident Putin, who also served twoconsecutive terms as President in theperiod from 1999 to 2008. Mr Putinwas Prime Minister of the RussianFederation from 2008 to 2012.Mr Putin officially took office on 7 May2012. Turn out for the Presidentialelections was reported at around60% of the population.

n Former President Dmitri Medvedevhas been nominated as PrimeMinister by Mr Putin. The nominationfor Prime Minister must be confirmedby the State Duma.

n In State Duma elections held on4 December 2011, the largest party,United Russia, suffered electorallosses (and lost its two-thirds majority)but ultimately held an absolutemajority with 238 (approximately 53%)of the seats available. The CommunistParty (KPRF) now holds 92 seats inthe Duma, the Just Russia party(Spravedlivaya Rossiya) 64 seats andthe Liberal Democratic Party (LDPR)56 seats.

n A programme for privatisation of stateassets is expected to be a key focusfor the office of the new President. Inhis post-election victory speech,Vladmir Putin expressed his intentionto ensure state assets are sold atmarket prices.

n In December 2011, MICEX-RTS wascreated (from the merger of theMICEX and RTS stock exchanges) asthe largest stock exchange in theRussian Federation. The merger isintended to simplify trading for bothtraders and investors and forms partof wider plans to develop Moscow asa global financial trading centre.

MICEX-RTS provides a platform fortrading equities, bonds, derivativesand currencies.

n The Russian Federation acceded tothe World Trade Organisation (WTO)in mid-December 2011 and willbecome a member of the WTO30 days after the State Duma ratifiesthe accession package.

n At the end of 2011, Russia took upthe chairmanship of the APEC(Asia-Pacific Economic Cooperation)organisation for 2012. Theorganisation’s next summit will takeplace in September in Vladivostok.The Russian Federation has statedthat its priorities as chairman of APECwill be the liberalisation of trade andinvestment activity and a deepeningof economic integration in the region,cooperation for purposes ofinnovative growth, the improvement oftransport and logistical systems, andfood security.

n On 17 February 2012, Russiaacceded to the Anti-BriberyConvention of the Organisation forEconomic Co-operation andDevelopment (OECD). FormerPresident Dmitri Medvedev alsospoke in 2011 of his intention forRussia to progress full membershipof the OECD following accession tothe WTO.

Legal andRegulatory UpdateGeneralThe Civil CodeIn the first months of 2012 the hottesttopic in the Russian legal world is theproposed amendments to the Civil Code.If adopted, these changes are expected tochange significantly ‘the rules of the game’for all areas of business, from corporaterelationships and M&A to the real estate

market, banking activities and structuredfinance products (securitisation).

There is much in the proposed changesthat is potentially helpful, and some thatis potentially alarming. Among otherthings, this draft bill focuses on the dutyto act in good faith and provides specificconsequences of the parties’ failure to doso. It also introduces intercreditoragreements, pledge over bank accountrights, irrevocable powers of attorney,escrow accounts and other long-awaitedchanges. For the first time, the conceptsof indemnities, representations andwarranties are introduced in the Russianlaw. The draft bill also reconsiders theconcepts of security and its forms. Itcontemplates a wide range of changes inthe corporate law field and real estateregulation.

The relevant draft bill was submitted tothe State Duma by the Russian Presidenton 2 April 2012. The draft bill passed thefirst hearing in the State Duma on 27 Aprilwhile further readings are yet to bescheduled. If adopted in the currentversion, the majority of the amendmentswould enter into force as early as1 September this year.

Clifford Chance issued a Briefing Noteon the most salient of the proposedchanges to the Civil Code in April 2012.As the Draft Bill passes the hearings inthe State Duma, we will provide furtherupdates and briefings aimed atunpacking these provisions and theirpotential impact on market activitiesmore fully.

New Procurement Rules for State-Owned CompaniesFederal Law No 223-FZ “On theProcurement of Goods, Works andServices by Certain Types of LegalEntities” dated 18 July 2011 (the“Procurement Law”) has introduced anew regime for public procurementapplicable to state and state-controlledcompanies, natural monopolies andutility companies.

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The Procurement Law is more flexible thanthe pre-existing framework law on publicprocurement (Federal Law No. 94-FZ) asregards (i) the circumstances when tenderprocedures must be used, (ii) theprocedures to be adopted for selectingparticipants in the tender process (whichneed not be a tender or auction) (iii) therequirements for participants in theprocurement process and (iii) the timetableand documents needed for theprocurement project.

Each company subject to the ProcurementLaw is requried to adopt and publishdetails of the procurement procedure on itsofficial website by 1 April 2012 (or a laterdate for certain types of companies) orotherwise conduct its procurementactivities in accordance with the morerestrictive Federal Law No. 94-FZ.

Companies subject to the ProcurementLaw must also adhere to certainprinciples during a procurement process.Key among these are: transparency ofinformation; equal treatment ofcompetitors and a lack of arbitraryrequirements or restrictions; value formoney, taking into account wherenecessary the life cycle of the relevantproduct; steps to minimise the expensesof the procuring entity; and equality ofaccess to the process, includingproportionate requirementsfor participation.

The penalties applicable fornon-compliance are presently unclear. It isclear from the law that parties prejudicedby non-compliance can present acomplaint to the court, but it is not certainwhether the court has the power tore-open procurement processess.

Certain companies, including (a) thosenot having a significant proportion of theirincome from activities that representnatural monopolies, (b) subsidiaries (directand indirect) of state-owned companiesand (c) subsidiaries (direct and indirect) ofnatural monopolies, are not required to

comply with the Procurement Law until1 January 2013.

Law on Electronic SignaturesThe law on electronic signatures hasrecently been updated to clarify thecircumstances in which electronicsignatures can be used in cross-bordertransactions. Onerous requirementsconcerning encryption and regulatorypermits, which cast doubt on whethermessages sent via instant messagingsystems such as those operated bySWIFT, Bloomberg and Reuters wouldcomply with the law, have been relaxed.

The basic position is now that anyelectronic message with a simple electronicsignature will meet the requirements of thelaw on electronic signatures where theparties have previously agreed to use anelectronic signature when using therelevant messaging system and theparties have expressly agreed to keep themeans of generating the electronicsignature confidential.

Clifford Chance issued a Briefing Noteon changes to the law on electronicsignatures in April 2011.

CorporateNew Law on Business PartnershipsIn December 2011, a new law onbusiness partnerships was adopted bythe Russian parliament and will enter intoforce on 1 July 2012. The law wasoriginally intended to facilitate venturecapital projects but the potential scopefor its application may be even broader.

Business partnerships are introduced intoRussian law as a new form of legal entityfor the first time. According to the newlaw, they must have at least two and nomore than 50 participants and at leastone of them must be an individual whowill serve as the CEO of the businesspartnership. Other than the CEO, whoserole is prescribed by the law, thestructure of the management bodies maybe agreed between the participants.

Business partnerships may engage in anytype of business activities as long as theycomply with the following prohibitions: noissues of bonds or other mass securities,no advertising of their activities and theymay not own any shares of or participate inother companies (which means that theycannot serve as any holding companies).

The law allows the participants to agreein the partnership managementagreement on a broad range of mattersrelating to the activities of the partnershipincluding: management of its affairs,composition of its management bodies,rights of the participants etc.

Although the law creates rather flexiblerules for the constitution and operation ofa business partnership, a few provisionsin it (such as the requirement for the CEOto be a participant, restrictions on thepartnership’s activities and others) raiseconcerns as to the potential use of thisnew form of entity in practice.

Restriction on foreign ownership ofland close to the Russian border iseffective20 January 2012 was the deadline forforeign individuals and legal entities tocomply with restrictions on foreignownership of land in certain territoriesclose to the Russian border. The list ofparticular territories close to the borderwas approved in 2011 and included, forexample, some areas in the St.Petersburg region. The frameworkrestriction on foreign ownership of landclose to the state border was in place formany years before 2011; however, it wasnot effective until the list of specific areaswas approved.

RegulatoryCompetition UpdateThe so-called “Third AntimonopolyPackage” was adopted in late 2011 andentered into force on 6 January 2012.From the merger control perspective thisthird major set of amendments to federalcompetition laws introduced a new local

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presence criterion for foreign targets,brought the method of calculation of thetarget’s assets in line with otherjurisdictions, granted the FederalAntimonopoly Service (“FAS”) a right toimpose conditions precedent to closingof share purchase transactions and setother changes.

n �Local presence criterion: at present,foreign-to-foreign transactions fall withinthe Russian merger control regimewhere the target entity directly orindirectly controls any Russian entities,owns substantial assets located inRussia or has turnover exceeding RUB1 billion (approx. EUR 25 million) fromoperations in Russia in the yearpreceding the transaction (directly orthrough a foreign subsidiary). Theintroduction of the RUB 1 billionthreshold excluded transactions wherethe target’s turnover in Russia wasinsignificant from merger control.

n �Method of calculation of the target’sassets: generally, under theCompetition Law the target groupincludes the group of its controllingshareholder (often acting in thecapacity of the seller). However, forthe assessment of the asset-basedthreshold (combined value of assetsof the acquiring group and the target

group) for pre-transfer notificationsthe assets of the seller’s group are notaggregated with the target’s assets ifthe seller loses its controlling rightsover the target further to theimplementation of the transaction.

n �Right to impose conditions precedentto closing: for share purchasetransactions which may result in arestriction of competition (the mostfrequent example is the creation orstrengthening of a dominant position)in addition to the right to imposepost-closing conditions the regulatoralso obtained a right to imposeconditions precedent to closing andset a term for their fulfillment (up tonine months).

Strategic Investments Law Amendedas of 18 December 2011The “Law on Foreign Investment inStrategic Sectors” (the “StrategicInvestments Law”) was amended witheffect from 18 December 2011.

The principal aim of the amendmentswas to ensure that “real” Russian dealsare exempt from the StrategicInvestments Law. As such, the acquisitionof Russian assets by a foreign companywill no longer require prior approval,provided that the ultimate beneficiaries ofthe seller and the buyer are the RussianFederation, Russian nationals andRussian tax payers.

In addition, the scope of the StrategicInvestment Law was limited such that:

n Where the target of an acquisition is abank operating with encryptionlicenses, the Strategic InvestmentsLaw will not apply as long as theRussian state is not a shareholder inthe target bank.

n On the acquisition of a strategicsubsoil target, a request for prior

approval will only be required if theacquirer will control 25% of the targetpost-closing, raising the previousthreshold from 10% control.

Some of the key points to note about theStrategic Investment Law are set out inour Russian Law Focus column below.

FinanceChanges to the Enforcement Regimefor Russian Securityn New legislation was recently enacted

which affects the enforcement ofvarious types of Russian security.Federal Law No 405-FZ “Onamendments to certain Russian lawsin relation to the improvement ofprocedures for the enforcement ofsecurity” dated 6 December 2011(the “Security Enforcement Law”)came into force in March 2012 andintroduced wide-ranging changes tothe enforcement of various types ofsecurity interests, in particular, theenforcement rules relating to Russianpledges and mortgages.

n The new regime, while clearer andmore detailed, is arguably morecumbersome than before and it seemslikely that out-of-court enforcementover most Russian pledges andmortgages will only be possible with anotarial executory endorsement on thesecurity documents or with thecooperation of the security provider.This means that, from March 2012,security documents must be executedbefore a notary if they are to providefor out-of-court enforcement.

n In our Briefing Note published inDecember 2011, we expressedconcern that the new law createsuncertainty for security holders,particularly in relation to the applicationof the new law to pre-existing security

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interests. Any pre-existing securitydocuments affected by the new rulesmay need to be re-executed before anotary in order to be eligible for out-of-court enforcement through a notarialprocedure. Re-execution of thedocuments may give rise to newhardening periods which may prejudicethe security holder’s interest in theevent of the security provider’sinsolvency, unless this issue is clarifiedby the Supreme Arbitrazh Court.Enforcement of existing securitythrough the courts will still be available,without the need to re-execute therelevant security documents.

n The amendments introduced by theSecurity Enforcement Law also clarifythe circumstances in which pledgesover shares can be enforced out ofcourt. Certain other importantamendments have been maderegarding the creation of mortgagesover real estate, as well as clarifyingthe methods of out-of-courtenforcement available to mortgagees.

n The rules for out-of-court enforcementof Russian pledges and mortgages willbe amended further upon the

adoption of the amendments to theCivil Code, which is expected to occurlater this year.

Capital Markets andSecuritiesInsider Trading Lawn During the final six months of 2011

the Federal Service for FinancialMarkets of the Russian Federation(the “FSFM”) adopted the orders andother secondary legislation necessaryto bring into force Federal Law No.224-FZ “On the prevention ofillegitimate use of insider informationand market manipulation and oncertain amendments to the laws ofthe Russian Federation” (the “InsiderTrading Law”). Although in force inpart since July 2011, certaincompliance deadlines for issuers werepostponed and the Insider TradingLaw was, finally, substantially in forceby 31 December 2011.

n The introduction of an insider tradinglaw in the Russian Federation is alandmark event and represents thedevelopment of Russia as a maturingjurisdiction for the trading of shares

and other securities. Like similarlegislation in other jurisdictions, theInsider Trading Law regulatesaccurate and precise informationrelating to, among others, an issuer offinancial instruments or financialinstruments per se that has not beenmade public and if made public couldmaterially affect the price of financialinstruments trading (or subject to anapplication to trade) on an exchange.The Insider Trading Law is different,however, as (unlike other jurisdictionswhere inside information isdetermined by the issuer) the types ofinformation constituting “insideinformation” are listed exhaustively forspecific groups of issuers (these being“primary insiders”) in the “List ofInside Information”. As such, insidershave little or no discretion indetermining what information is insideinformation. It is likely that thisapproach has been taken in order toassist domestic issuers in adapting toa regime for disclosure of insideinformation, to develop understandingof the disclosure obligations and alsoto promote the obligation to disclose.

n The general rule imposed by theInsider Trading Law is that insideinformation must be disclosed by aprimary insider to the market by 10amon the day immediately following (i) theevent constituting inside information or(ii) the inside information becomingknown to the issuer. Disclosure ismade pursuant to new disclosurerules applicable to public companies,adopted in April 2011 (the“Disclosure Rules”) and includes anobligation to disclose material factsrelating to the event or matterconstituting the inside information.Significantly for issuers, althoughboard decisions are generally treatedas inside information, certain

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non-routine board decisions that areclassified by the issuer as confidentialinformation do not have to bedisclosed under the Disclosure Rules.As such, some board decisions canremain inside information for anindefinite period of time.

n The Insider Trading Law alsoregulates the transfer of informationbetween primary insiders and their“secondary insiders”, such as legaland financial advisers. The generalrule is that a person possessing insideinformation is prohibited fromtransferring that information otherthan to other persons on the list ofinsiders. The information may only betransferred pursuant to obligations orrights created by Federal Law orcontract or by virtue of anemployment relationship. The FSFMhas recently made steps to clarifysome ambiguities in the law regardingthe transfer of inside information,however, clear and detailed rules areyet to be published and until they areit is important for market participantsand advisers to think carefully aboutthe processes adopted for theexchange of information.

n Once further regulation is adopted,professional participants in thesecurities market and banks will haveobligations to notify the FSFM about“suspicious” transactions of theirclients that may be caught by theInsider Trading Law.

Our Briefing Note published in July2011 looks in more detail at some keyfeatures of the Insider Trading Law.

Deposits of Up to 100% of Sharesinto Depositary Receipt FacilitiesThe FSFM adopted several amendmentsto the Regulation on the placement andcirculation of securities of Russian issuers

abroad (the “Securities Regulation”) inAugust 2011. When implemented, theseamendments will potentially allow Russianissuers greater freedom to trade theirshares on foreign markets.

More specifically, when the adoptedamendments enter into force:

n Russian issuers that are not subjectto the Strategic Investments Law andhave shares included in quotation listA or B of MICEX-RTS will be able,with FSFM consent, to circulate up to100% of their securities on foreignmarkets as shares or foreignsecurities such as depositary receipts.Previously, the circulation of securitieson foreign markets was limited to25% of share capital.

n Russian companies subject to theStrategic Investments Law andoperating in strategic sectors other thansubsoil will be able to circulate theirsecurities on foreign markets either(i) up to an amount of 25% of sharecapital with FSFM consent or (ii) up toanother amount specifically authorisedin any pre-approval decision madeunder the Strategic Investments Law onthe application of that company.

n Russian subsoil companies will beable to circulate their securities onforeign markets either (i) up to anamount of 5% of share capital withFSFM consent or (ii) up to anotheramount specifically authorised in anypre-approval decision made under theStrategic Investments Law on theapplication of that company.

n The “50-50 rule”, under whichRussian issuers had to first offershares for sale in Russia before beingable to offer up to half of such sharesfor sale overseas, will be abolished.

The amendments to the SecuritiesRegulation are expected to enter in forcewhen all the provisions of the law on thecentral depository enter into force and thecentral securities depository is created.

Clifford Chance issued an alert on theRegulation in August 2011.

New Law on Central DepositoryIn December 2011, the RussianParliament adopted Federal Law No.414-FZ “On Central Depository” (the“Central Depository Law”) and FederalLaw No. 415-FZ “On Incorporation ofAmendments to Russian Legislative Actsin Connection with the Adoption of theFederal Central Depository Law” (the“Amendment Law”).

For the first time ever, the CentralDepository Law introduced the conceptof a central securities registrationinstitution in the Russian securitiesmarket. Although the FSFM is yet toadopt quite a few regulationsimplementing the new rules, theamendments will be relevant foroperations of a broad range of parties,including Russian issuers, holders ofdepository receipts and many more.

Some of the key features are as follows:

n The new legislation establishesregulatory framework for theoperations of the central depository.It also provides material changes tothe existing regulation of depositoryand registrar activities, stricterdisclosure and related obligations forthe market participants.

n The Central Depository Lawintroduces new types of securitiesaccounts that custodians andregistrars can open. Also, foreignnominee holders and internationalcustodians are allowed to openaccounts with the Russian custodians.However, the regulation for opening

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and maintaining of such accounts isyet to be established by the FSFM.

n If a Russian issuer is subject tomandatory ongoing disclosure rulesunder the Russian Securities MarketLaw, only the central depository willbe allowed to open a nomineeaccount in the register of such issuer.

n Russian issuers will have to preparelists of holders of depository receiptsrepresenting the shares of such issueron a quarterly basis. Interim nomineeholders (i.e. depository banks) arerequired to provide the Russian issuerwith the necessary information. Theexact procedure and scope of suchdisclosure is to be established byFSFM. The new laws providesanctions for failing to comply withthe disclosure rules such asprohibition on payment of dividends incertain cases.

n The Central Depository Law alsoprovides new rules and limitations forvoting with shares deposited under aDR program. Complying with the newrules may require extra effort for themarket participants.

n The Amendment Law also providesthat for the purpose of anyenforcement procedures only securitiesrecorded in owner (proprietary)accounts are subject to seizure.

Most of the new rules will becomeeffective from 1 July 2012 and the rest willfollow with effect from 1 January 2013.

Litigation and DisputeResolutionArbitration of Corporate Disputes –Recent Cases in the Russian CourtsTwo recent Russian court decisions haveconsidered the issue of whether

corporate disputes relating to Russiancompanies can be resolved by arbitraltribunals. These rulings may haveimplications for the enforcement ofRussian and international arbitralawards in Russia.

The term “corporate disputes” is adefined term in Russian legislation andcovers a range of different types ofdisputes relating to Russian companies,including (by way of example) disputesbetween shareholders, disputes over theexercise of rights attached to shares, anddisputes connected with theestablishment, re-organisation orliquidation of a legal entity.

Until recently, arbitrazh courts have nottaken a uniform approach to thearbitrability of corporate disputes. Oneview is that the Arbitrazh Procedure Codeof the Russian Federation (the “APC”)gives special jurisdiction to the arbitrazhcourts and that disputes betweenparticipants of companies and thoserelating to company operations cannot beconsidered by arbitral tribunals. The otherapproach is that the special jurisdiction ofarbitrazh courts over corporate disputesprovided for in the APC does not excludethe possibility of corporate disputes beingheard by an arbitral tribunal.

The two recent decisions both appear tobe predicated on the position thatcorporate disputes are not arbitrable.However, we are of the view that thesedecisions do not definitely settle the point.

We consider the two cases more fullyin our Briefing Note issued inFebruary 2012.

EmploymentShare schemes for RussianemployeesUsually under international shareschemes, employees of local subsidiariesare awarded shares in foreign groupcompanies. However, this was notgenerally possible in Russia as foreign

shares not listed in Russia could only beoffered to employees who are “qualifiedinvestors by recognition”. Furthermore,“qualified investors by recognition” mayacquire foreign securities only via abroker who has recognised them asqualified investors.

However, FSFM has made it possible, viaan order which came into force on 19June 2011, for foreign shares notadmitted to public placement and/orpublic circulation in Russia to be directlyacquired by certain other categories ofRussian citizens. These categoriesinclude, inter alia, individuals acquiringforeign shares (i) under their employmentcontracts; or (ii) in connection with theiremployment; or (iii) in their capacity as adirector of the company. This exemptionshould make it easier to implementinternational share schemes in Russia.

TaxRe-thinking Thin CapTwo recent court cases appear to mark asignificant shift in the approach of theRussian tax authorities and courts to thincapitalisation. These changes may requiretaxpayers and lenders to restructureexisting financings, as well as reviewplans for future financings.

Russia’s thin capitalisation rules imposelimitations on the deductibility of interestby Russian companies with significantoverseas shareholdings and have been inforce since 2002.

Due to drafting deficiencies it was notclear if the rules covered intra-group debtfinancing provided by a foreign groupcompany to a Russian group company,and market practice has been to treatthis type of loan as outside the scope ofthe rules. Russian courts have also ruledon a number of occasions that the thincapitalisation rules are incompatible withthe non-discrimination clauses containedin most Russian double tax treaties.

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However, the Naryanmarneftgaz case hascast doubt on financing via a foreign groupcompany, finding that an intra-group loanmade to Naryanmarneftgaz (a Russiancompany) by a foreign group companywas, despite appearances, instead aloan from the company’s foreignshareholder, ConocoPhilips.

In addition, in the case of SevernyKuzbass heard by the Russian SupremeArbitrazh Court the tax authorities arguedthat interest on controlled indebtedness isnot deductible for tax purposes. Ruling intheir favour, the court found, contrary toprevious practice, that “non-discrimination” clauses in double taxtreaties do not overrule Russian thincapitalisation rules.

We consider the two cases more fully inour Briefing Note published inNovember 2011.

Taxation of EurobondsThe Finance Ministry announced at theend of 2011 that off-shore SPVs used toissue Eurobonds would not qualify asbeneficial owners of the interest paidunder the bonds. Russian borrowerswould be obliged to pay a 20%withholding tax on any interest paid to theSPV unless they could demonstrate thatthe ultimate bondholders were residents ofa jurisdiction with a double tax treaty withRussia under which they were exemptRussian withholding tax (please see ourclient briefing “Beneficial Ownership inthe Context of Eurobond Transaction:New Reality?”). It was proposed that thechanges should have retrospective effectfrom 2008.

The announcement marked a significantchange in approach and causedsignificant uncertainty in the market inrelation to the taxation of futureissuances, and calls for a re-assessmentof the policy from issuers as well asunderwriters led to consultations betweenthe Finance Ministry and market

participants. These consultationsculminated in an announcement on20 February that the proposals would beamended to allow withholding tax inEurobonds to be avoided subject tocertain technical conditions being met.

We elaborate on this matter in ourBriefing Note.

Taxation of Interest on RussianListed BondsAmendments to the securities market lawand the introduction of a commondepositary concept into Russian law haveled to certain changes in the tax regimefor income from Russian domestic bonds.Thus, in respect of bonds kept with acommon depositary, the depositary willnow act as a tax agent and withholdRussian corporate income tax fromamounts payable to foreign bondholdersand personal income tax.

Capital Gains Tax ExemptionRussia has recently introduced a numberof exemptions in respect of capital gainstax on a transfer of shares in Russiancompanies.

The first exemption is available both toindividuals and legal entities and appliesto transfers of shares (or participatoryinterests in LLCs) acquired after 1January 2011 and held for at least 5years provided that such shares:

n were not traded on a stock exchangeupon acquisition or during the 5-yearperiod; or

n were traded on a stock exchangeduring the 5-year period and arerecognised as shares in companiesoperating in the advanced technology(innovation) field; or

n become traded on a stock exchangeand recognised as shares in

companies operating in the advancedtechnology (innovation) field upon theirfurther sale after the 5-year period.

Under the second exemption, capitalgains upon a disposal by a foreigncompany of shares in so-called Russianreal estate-rich companies (i.e.companies more than 50% of whoseassets comprise real estate located inRussia) will not be subject to Russianwithholding tax, provided such sharesare traded on a stock exchange.Together with the obvious benefits fordevelopers, this exemption also givescomfort to foreign investors tradingRussian blue chips.

New Transfer Pricing Regulations andFiscal Unity RulesOn 1 January 2012, a new section of theRussian Tax Code dealing with transferpricing in transactions between relatedparties came into force, replacingexisting regulations.

Going further than the previous regulation,the new rules broaden the list ofcontrolled transactions and circumstancesin which parties are treated as related.

Comprehensive rules are set out in therevised Tax Code for determining whetherprices used in controlled transactionscomply with market prices, and the newrules limit and prohibit the use of transferprices as means for reducing tax payable.

Under the new rules, a taxpayer isobliged to notify the tax authorities of anycontrolled transactions as well as tosubmit to the tax authorities, on demand,documents and information relating to thecalculation of the price for a controlledtransaction. Penalties may be imposed bythe tax authorities for failure to pay thecorrect amount of tax arising from acontrolled transaction, failure to notify thetax authorities of a controlled transactionand making notifications containingfalse information.

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Rules introducing a concept of “fiscal unity”to the Tax Code also came into force on1 January 2012. The rules allow membersof a “consolidated group” of taxpayers toaccount for corporate income tax on anaggregate basis and to avoid the transferpricing rules in relation to intra-grouptransactions, subject to certain exceptions.

A “consolidated group” of taxpayers is agroup meeting the following criteria:

n one member of the group directly orindirectly participates in the capital ofanother member for at least 90%;

n the aggregate amount of assets as of31 December in the year prior to thecreation of the group is not less thanRUB 300 billion (USD 10,26 billion)under the Russian AccountingStandards;

n the aggregate amount of VAT,excises, corporate income tax andmineral extraction tax (save for taxespayable upon export/import of goods)paid by the members in the year priorto creation of the consolidated groupis not less than RUB 10 billion(USD 342 million); and

n the aggregate amount of salesrevenues for the year prior to creationof the consolidated group is not lessthan RUB 100 billion (USD 3,4 billion)under the Russian AccountingStandards.

Employment taxes: Social insurancecontributionsAs of 2012, the general rate of socialinsurance contributions (which are paid inrespect of the capped annual payroll ofRUB 512 000) was reduced from 34% to30%. At the same time, the overall levelof contributions was increased due to theintroduction of a new 10% contributionpayable on the payroll in the excess ofthe capped amount.

Social insurance contributions arepayable in respect of Russian citizens aswell as foreign citizens who reside inRussia permanently or temporarily (i.e.,those who have residence permit orpermission to temporarily reside)excluding foreign citizens recognised as“highly qualified personnel”. Payments toforeign citizens that are temporarilystaying in Russia and work on the basisof visa and work permits are exempt fromsocial insurance contributions.

Double Tax Treaties: Update

LuxembourgOn 21 November 2011, Luxembourgand Russia signed an amendment tothe 28 June 1993 double tax treaty(the “Luxembourg Tax Treaty”). Theamendments came into force on1 January 2012 and include the followingkey changes:

n Dividends: Withholding tax ondividends is reduced from 10% to5%, and now applies to ownershipinterests meeting the minimumthreshold of 10% participation andEUR 80,000 (lowering the earlierthreshold of 30% participation andEUR 75,000).

n New regime for taxation ofUndertakings for CollectiveInvestment (UCIs):

• Income derived from units inRussian UCIs that invest inRussian real estate becomessubject to real estate income taxtreatment in Russia.

• Income from UCI units (other thanRussian real estate UCI units) istreated as a dividend.

• Capital Gains: Gains realised uponthe disposal of shares deriving,directly or indirectly, more than 50%of their income from real estate willbe taxed in the country (Russia orLuxembourg) where the real estateis located. The rule on capital gainsdoes not apply to listed shares,company reorganisations or togains realised by pension fundsor governments.

• Other Income: Any income nototherwise specifically dealt with inthe Treaty that is sourced orderived from one country will betaxable in that country. In addition,Luxembourg residents will nowreceive a tax credit for Russiantax paid.

Our Briefing Note published inDecember 2011 provides more detailedinformation about the amendments to theLuxembourg Tax Treaty.

SwitzerlandOn 24 September 2011, Switzerland andRussia signed a Protocol which amendsthe 15 November 1995 double tax treaty.The Protocol is subject to ratification byboth countries and provides for thefollowing key changes:

n Interest: the current withholding taxon interest is abolished (the currentlevels are 10% for corporate and 5%for banking loans). Once the Protocolis effective, interest will not be taxed

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11Russia update: Legal and market developments in RussiaSpring 2012

provided that the recipient is abeneficial owner of such income.

n Capital gains: capital gains on adisposal of shares in companieswhose assets mostly consist, directlyor indirectly, of immovable propertyare now taxable in the country wheresuch immovable property is located.Capital gains are however exemptfrom tax if:

• The shares are listed on a stockexchange; or

• Where a real-estate richcompany uses real estate tocarry on business.

n The Protocol now explicitly providesthat payments on units in real estateinvestment funds or mutual investmentfunds deriving more than 50% of theirincome from shares are considered asdividends. Payments on units inmutual investment funds deriving lessthan 50% of their income from sharesare considered as interest.

n Exchange of information andanti-conduit provisions are introducedto the Treaty

In light of the recent court practice inrelation to the Russian thin capitalisationrules (please refer to section Re-thinkingThin Cap above) it is worth mentioningthat in relation to Articles 10 (Dividends)

and 11 (Interest) of the Treaty theProtocol allows for the application ofdomestic thin capitalisation rules.

CyprusThe Protocol to the Russia-Cyprus DoubleTax Treaty, which was signed on 7October 2010, has been finally ratified bythe Russian Parliament on 15 February2012 (Cyprus had previously ratified theProtocol). Most of its provisions are due tocome into force in 2013, while thoseprovisions relating to the taxation of capitalgains will not come into force until 2017.

Like the Swiss Protocol, the Protocol tothe Russia-Cyprus Double Tax Treatyallows for the application of domestic thincapitalisation rules.

© Clifford Chance CIS Limited, May 2012

Russian Law Focus: The Strategic Investment Lawn The Russian Law Focus column in each new issue of our Russia Update will focus on a selected area of Russian law or

regulation. The choice of themes will not necessarily be linked to the news of the relevant quarter but rather provide a generaloverview on a particular legal matter that we are frequently asked to advise on.

n The Foreign Investments Control Regime (the “Regime”) was introduced in May 2008 setting out a procedure for prior control offoreign investments in sectors of strategic importance for national security and state defence.

n The Regime extends to Russian companies involved in any of 42 categories of “strategic activities”, e.g. the exploitation ofmajor subsoil plots, TV and radio broadcasting, encryption, printing and publishing, and natural monopolies (airports, ports).A company holding licences or permits for these activities but which does not actually perform them may also be consideredstrategic for the purposes of the Regime.

n The acquisition of a certain level of control (usually over 50%) over strategic companies by a foreign investor requires priorclearance by a Government Committee chaired by the Prime Minister. The clearance process is complex and usually takes fromthree to six months. The review process is coordinated by FAS which consults the Federal Security Service, the Ministry ofDefence and, in some cases, the relevant sector regulators.

n Special rules apply to acquisitions in the subsoil sector (e.g. the level of control at which the clearance requirement is triggeredis 25%) and those made by a foreign public investor (e.g., generally, a foreign public investor cannot exercise sole control over astrategic company).

n Sanctions for failure to comply with the Regime are very serious. Transactions entered into without clearance are null and voidand attract the usual consequences of invalidity under the general law including an obligation on each party to return to the otherproperty or money transferred under the transaction.

In the event that such civil sanctions cannot be applied for any reason, the Russian courts may strip the relevant shares of all votingand quorum rights. The courts can also declare any decisions made by shareholders and management bodies of the relevantstrategic company following the transaction null and void. Furthermore, the infringing company and its officers can be heldadministratively liable as well as liable to fines.

See also our update on the recent amendments to the Strategic Investment Law described on page 5 above.

12 Russia update: Legal and market developments in RussiaSpring 2012

Our Briefing Note published in April2009 provides detailed information aboutthe amendments made by the Protocol tothe Cyprus Tax Treaty.

ChileThe Russia-Chile Double Tax Treaty,which was signed on 19 November2004, has been finally ratified by theRussian Parliament.

The Treaty is similar to the OECD ModelTax Convention, and provides for reducedtax rates for dividends (5% and 10%) androyalties (5% and 10%), and a 15% taxrate on interest. Capital gains fromfinancial instruments as well as otherincome not mentioned in the Treaty issubject to taxation in the country of origin.

United Arab EmiratesRussia and the United Arab Emiratessigned a tax treaty on 7 December 2011.

The Treaty is not based on the OECDModel Tax Convention. It excludesdividends, interest and capital gains(except those derived from disposals ofreal estate and shares in real estate-richcompanies) from taxation at source.Other income is subject to taxation in thecountry of origin. The Treaty will applyonly to investments made on behalf ofthe state and fully state-ownedinvestment vehicles.

Sector UpdateThe Sector Update looks at certainkey deals and other developments inthe sectors most relevant to theRussian market.

Energy, Metals and MiningAnnounced Dealsn Russian oil giant Rosneft and

independent natural gas producerItera signed a strategic agreement tojointly develop gas fields in Russia.The two companies will set up a jointventure to manage the gas assets of

Itera and Rosneft in the gas-richYamalo-Nenets autonomous region inRussia’s Arctic. (March 2012)

n VTB Bank OAO bought a 20% stakein Metalloinvest, the iron ore minerpart owned by Alisher Usmanov. Thedeal was valued at about $2.5 billion.The stake was bought from VasilyAnisimov’s Coalco Metals, which willuse the proceeds to repay aUS$1.5 billion loan to VTB made in2008. (December 2011)

n UC RUSAL completed itsUS$4.75 billion syndicated pre-exportrefinancing of the international financialindebtedness. The deal has beennamed a Trade Finance Deal of theYear. (November 2011)

n SUEK, the Russian coal company,acquired 24.91% ordinary shares(18.68% stake) in MurmanskCommercial Seaport (MMTP). Thevalue of the deal was aboutUS$100 million. (February 2012)

n Following the acquisition of the rollingbusiness of Steel Invest and Finance(formerly a joint venture betweenNLMK and Duferco Group) in July2011 – one of the largest deals in thesector – NLMK announced thecreation of its new business divisions– NLMK Europe and NLMK USA.(August 2011)

n Russia’s state-owned oil companyRosneft teamed up with the U.S.corporation ExxonMobil in amultibillion-dollar deal to developoffshore oil fields in the Russian Arctic— one of the last regions with largeand untapped hydrocarbon deposits— in return for access to resources inthe Gulf of Mexico. The partnershipagreement relating to development ofthe Arctic’s untapped reserves wassigned in April 2012. (August 2011,April 2012)

Sector Newsn The Russian government has

announced its intention to sell its stakein OJSC Apatit, one of the world’slargest producers of apatite andnephelynic concentrates, in aprivatisation auction at the starting priceof RUB10.5 billion. The governmentcurrently owns 26.6% of Apatit’sordinary shares, or around 20% of itstotal charter capital. Some parties,including Russia’s leading mineralfertilizer producer PhosAgro, havealready filed their bids. (April-May 2012)

n The supervisory board at OJSCAlrosa approved the privatisation of14% of the diamond miner’s shares.(March 2012)

n A potential merger between Russiangold miners Polyus and Polymetal hasbeen quashed, following resistancefrom shareholders. The deal, whichwould have created an entitycontrolling more than a quarter ofRussia’s gold production, was rejectedby shareholders of both companies inFebruary 2012. (February 2012)

n World number one nickel andpalladium producer Norilsk Nickel isinvesting heavily in new and existingmines. The Russian miningconglomerate announced in December2011 it plans to spend US$10.9 billionto expand its mineral resource baseincluding development of existingmining assets and construction andcommissioning of new mines. It willalso spend US$632 million to explorethe Norilsk and Murmansk regions until2025. (December 2011)

n In November 2011, operations beganto lay the first of two pipelines,comprising the important Nord Streamproject which will transport natural gasfrom Russia to Europe under theBlack Sea. The project is consideredvital to future energy security forEurope. (November 2011)

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13Russia update: Legal and market developments in RussiaSpring 2012

Transport and InfrastructureAnnounced Dealsn Globaltrans completed the acquisition

of 100% of LLC Metalloinvesttrans,the captive freight rail transportationoperator of Metalloinvest, a leadingglobal iron ore and HBI producerbased in Russia. The acquisition, forUSD 540 million on a cash and debtfree basis, includes a three-yearcontract to provide freight railtransportation and logistics servicesto Metalloinvest.

n FESCO transportation group hasselected Neftetransservice as thewinning bidder for the sale of railwayoperator LLC Transgarant. FESCO willonly sell the non-container transportdivision of Transgarant. The deal isscheduled to be completed in thesecond quarter of 2012.

Sector Newsn Russian Railways (RZhD) expects to

privatise various subsidiaries in 2012,including Vagonremmash,Zheldorremmash, BetElTrans,RZDstroy, Pervaya NerudnayaCompany, as well as 25% of its 50%stake in Central Suburban RailwayCompany. (March 2012)

n The Russian government will channelat least RUR400 billion (US$13 billion)from federal resources into thedevelopment of shipping in the next10 years. In November 2011, formerRussian President Dmitry Medvedevsigned a federal law that offers taxbreaks and other incentives todomestic shipbuilding and shippingcompanies to stimulate theirdevelopment. Russian shipyards willbe exempt from land and property taxfor 10 years while ship owners willalso be tax-exempt from profitsreceived from the operation or sale of

Russian-built vessels. The new lawwill also exempt domesticshipbuilding and shipping companiesfrom insurance payments to Russia’sPension, Social Insurance andCompulsory Medical InsuranceFunds. (November 2011)

Financial ServicesAnnounced Dealsn VTB, Russia’s second largest bank,

completed a buy-back of its publiclylisted shares for a total of ca. 11 blnRoubles. VTB acquired about83.3 billion shares (ca. 0.008% of itsshare capital) from minorityshareholders. (April 2012)

n Sberbank acquired 100% ofVolksbank International (VBI), anEastern European subsidiary ofAustria’s OesterreichischeVolksbanken AG banking group, for€505 million in order to further expandinto Europe. (February 2012)

n Sberbank and Troika Dialog completedtheir merger, creating the largestuniversal banking institution in theRussian Federation. The businesses ofTroika Dialog will be integrated into newbusiness divisions of Sberbank focusedon Corporate Investment Banking andWealth Management (including assetmanagement and private banking). TheTroika Dialog brand will cease to beused once the merger is fullyimplemented. (January 2012)

n In December 2011 MICEX and RTSfinalised their merger creating the newMICEX-RTS. The deal, estimated atUS$1 billion, is aimed at establishingan integrated exchange anddeveloping Moscow as aninternational financial centre.(December 2011)

n EBRD and Russian Direct InvestmentFund (RDIF), a US$10 billion investmentfund, acquired stakes of 6.29% and1.25%, respectively, in MICEX-RTS, therecently merged Russian stock-exchange. (February-March 2012)

n VTB increased its stake in Bank ofMoscow to 80.57% (from 46.48%)paying about US$3.4 billion. Theadditional share issue is part of abroader state bailout plan to shore upBank of Moscow, where almost half ofits loan book was found to be doubtfulafter VTB took over control of thebank earlier in 2011. (October 2011)

Sector Newsn The Central Bank, Sberbank’s

controlling shareholder, is planning thesale of a 7.6% stake in Sberbank.However on 16 March Sberbank ChiefExecutive German Gref announcedthe bank is not currently planning toconduct an SPO (secondary publicoffering), as market conditions at

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14 Russia update: Legal and market developments in RussiaSpring 2012

present are unfavourable. Accordingto Gref, the SPO could happen in thefirst half or in the second half of thisyear. (March 2012)

n Barclays Bank disposed of its highstreet assets despite having investedheavily into the Russian business.Barclays sold its banking operationsin Russia to banker Igor Kim (whointends to restore the lender’s formername of Expobank), while retaining itspresence in the investment market.(October 2011)

Real EstateAnnounced Dealsn One of the landmark transactions in

the Russian real estate market wasthe sale of Lesnaya Plaza, a Class Aoffice building, by VTB Capital to O1Properties. The acquisition wasfinanced by a mezzanine facility madeavailable to the buyer by VTB Capital.(January 2012)

n The largest real estate deal in 2011was the purchase by MorganStanley of the 191,000 squaremeters Galleria shopping centre inSt. Petersburg in December, for anestimated US$1.1 billion. Thebank’s Morgan Stanley Real EstateFund VII purchased the Galleria Mallfrom Meridian Capital CIS Fund, aprivate investment fund backed by agroup of Kazakh investors.(December 2011)

Sector Newsn Last year saw record investment

volumes into Russian commercial realestate with growth of over 200%above the level reached in 2010(according to the latest research byCBRE). There were 43 investmentdeals last year compared to 27investment deals in 2010 and 50 dealsclosed in the record 2008. Investmentrose to €4.55 billion and the averagedeal size was approximately€105.6 million.

Technology, Media andCommunicationsAnnounced Dealsn VimpelCom, one of Russia’s top

three cell phone operators, closed a$6.5 billion merger deal with WindTelecom, owned by Egyptianbillionaire Naguib Sawiris. Thecombination of Vimpelcom andWind Telecom creates one theworld’s largest mobile telecomsprovider in terms of subscribers,with operations in 20 countries. Thedeal will cut the share of Norway’sTelenor, a VimpelCom shareholder,which opposed the merger, to 25% ofthe voting stock from the current36.03%, and the share of Altimo, thetelecoms arm of Russian billionaire

Mikhail Fridman’s Alfa Group, to 31%from 44.65%. (April 2012)

Sector Newsn Russian billionaire Alexander Mamut

may sell his 50.01% stake in Euroset,the country’s largest mobile phoneretailer, to mobile phone operatorMegaFon and the country’s long-distance operator Rostelecom. Thedeal is likely to be completed withintwo or three months. (March 2012)

n After years of intense corporatedisputes, shareholders of MegaFon,one of the three largest Russianmobile phone network operators,seem to have reached a solution.Together with an agreement onpayment of dividends, it has beendecided that AF Telecom (controlledby Mr Alisher Usmanov) will getmajority control in MegaFon, Altimo(Alfa Group's telecoms arm) will exitand Sweden's TeliaSonera will reduceits ownership whilst keeping a longterm strategic ownership. Also,MegaFon may be going public in2012, seeking to raise ca. $4bln(April 2012)

Consumer Goods and RetailAnnounced Dealsn On 20 June 2011 DIXY Group, one

of Russia’s leading retailers of foodsand everyday products, announcedthe completion of a deal to acquire100% of the shares of its marketcompetitor – Victoria Group. Thedeal was valued at RUR25.6 billion,including Victoria Group’s financialdebt, cash and cash equivalents. Asa result of this transaction, the DIXYGroup increased turnover by morethan 50%. (June 2011)

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15Russia update: Legal and market developments in RussiaSpring 2012

n Russia’s largest sparkling wineproducer Abrau Durso has gonepublic placing a 10% stake on theRussian MICEX-RTS (April 2012)

Forthcoming EventsThis summer there will be a number ofinvestor conferences and othersector-specific events in Russia, including:

n Russia & CIS Airfinance Conference -the biggest event dedicated to aircraftfinance in Russia and CIS (28 - 29June 2012, Moscow)

n Russian Ports (26 - 27 June 2012, St.Petersburg)

n St. Petersburg International EconomicForum (21 – 23 June 2012, St.Petersburg)

n Antitrust Regulation and CompetitionLaw in Russia (20 - 21 June 2012,Moscow)

n Preventing Fraud: Latest Strategies(18 - 19 June 2012, Moscow)

n Project Finance 2012 in Russia andCIS (14 - 15 June 2012, Moscow)

n Annual Russian Securities Forum (6 –7 June 2012, Moscow)

n All Russia Tax Congress (31 May - 1June 2012, Moscow)

n Russian Real Estate Summit (30 May- 1 June 2012, Moscow)

n Business Forum "1520 StrategicPartnership"– the biggest eventdedicated to railway transport inRussia (30 May - 1 June 2012, Sochi)

n Aircraft Finance in Russia (31 May2012, Moscow) – annual event heldby Clifford Chance

n World Leasing Convention (29 - 30May 2012, St. Petersburg)

n Tax Strategy in Russia (29 May 2012,Moscow)

n Russian Power (24 - 25 May 2012,Moscow)

n Syndicated Loans Russia & CISConference (24 - 25 May 2012,Moscow)

n CIS Coal Summit (22 - 24 May2012, Moscow)

n Russian Pharmaceutical Forum (22 -24 May 2012, Moscow)

CC MoscowUpdate: News andPeopleClifford Chance celebrates20 years in the RussianFederationIn the Autumn 2011, Clifford Chancecelebrated the 20th anniversary of itsoperations in Russia. Reflecting on thefirm’s 20 years in Russia, Jan ter Haar(Managing Partner, Moscow Office)comments: “Our anniversary is a veryspecial celebration for our entire team andit allows us to thank our clients for the partthey have played in our success. When weopened our office in Moscow in 1991 wedid so with a small group of lawyers andthe ambition to become a major player inthe Russian legal market. Today, we havea team of almost 100 lawyers and one ofthe most well-known law practices in

Russia. Our evolution has gone hand inhand with the changes happening inRussia. We have witnessed how theRussian economy opened its doors to therest of the world. Being able to participatein this process has been, and continues tobe, an exceptional opportunity for all of usat Clifford Chance and we thank ourclients for making that possible.”

Clifford Chance triumphs atIFLR Europe Awards 2012 We are proud to announce that thefollowing awards have recently beenreceived by Clifford Chance Moscowsuch as:

n ‘Russian Law Firm of the Year’ byIFLR Europe Awards in 2012

n ‘International Law Firm of the Year’ byIFLR Europe Awards in 2012

n CRE Award 2012 for The BestInvestment Transaction of the Year:acquisition of the Galeria ShoppingCentre in St Petersburg

n ‘Structured Finance and SecuritisationTeam of the Year’ by IFLR EuropeAwards in 2012

n ‘Restructuring Team of the Year’ byIFLR Europe Awards in 2012

n IFLR Europe Award 2012 for theProject Finance Deal of the Year: NordStream pipeline: Phase II

n Trade Finance Magazine Deals of theYear 2011: UC RUSAL, Uralkali,TANECO

People and PromotionsEffective 1 May 2012, Alexander Anichkinis promoted to Partner at Clifford ChanceMoscow. Alexander joined the firm in

© Clifford Chance CIS Limited, May 2012

Abu Dhabi Amsterdam Bangkok Barcelona Beijing Brussels Bucharest Casablanca Doha Dubai Düsseldorf Frankfurt Hong Kong Istanbul Kyiv London LuxembourgMadrid Milan Moscow Munich New York Paris Perth Prague Riyadh (co-operation agreement) Rome São Paulo Shanghai Singapore Sydney Tokyo Warsaw Washington, D.C.Clifford Chance has a co-operation agreement with Al-Jadaan & Partners Law Firm in Riyadh J201205050041034

© Clifford Chance CIS Limited 2012

Clifford Chance, Ul. Gasheka 6, 125047 Moscow, Russia

Clifford Chance CIS Limited

This publication does not necessarily deal with every important topic or cover everyaspect of the topics with which it deals. It is not designed to provide legal or otheradvice. Information about industry events and news in this material has been sourcedfrom publicly available sources and we have not verified it to any extent.

1999 and has since gained extensiveexperience focusing on Tax andRegulatory matters but also activelyparticipating in our Banking, Corporateand Capital Markets deals.

We are also very proud to announce thateffective 1 May 2012, Adam Fadian(Banking & Finance), Alexei Konovalov(Corporate), Julia Popelysheva (Litigation &Dispute Resolution) and Evgeny Soloviev(Capital Markets) are promoted to Counselat Clifford Chance Moscow.

Julian Traill joined Clifford Chance Moscowas Counsel in March 2012. Julian is anexperienced M&A lawyer, having practisedcorporate law with Freshfields, Bruckhaus& Deringer in London (2004-7) andMoscow (2007-12). He began his careerwith Minter Ellison in Australia. We aredelighted to welcome Julian to ourcorporate group.