AEB Business Quarterly

Trade activities in the Russian Federation The labour market in the retail sector

An update on antimonopoly amendments Quality assurance Energy effi cience labeling ...and more

Russia’s Retail Trade

and Home Appliances sectors

Business Quarterly

Win

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Quality Information • Eff ective Lobbying • Valuable Networking

AEBA s s o c i a t i o n o f E u r o p e a n B u s i n e s s e s

with AEB updates on:

AEB BUSINESS QUARTERLY • Winter 2011/2012

1

Dear Readers,

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CEO Letter

I would like to welcome you all to the Winter 2011 edition of the AEB Business Quarterly dedi-cated to the Retail Trade and Home Appliances sectors.

In Russia, the retail trade industry is one of the fastest growing economic sectors. Th is of course does not come as a surprise given Russia’s size and population. Couple that with Russia’s high con-sumer spending and the result is a wide range of international players all headed to the country with one goal – a successful investment into the country’s retail trade sector. Auchan, Metro, IKEA, to mention but a few, are now expanding beyond Moscow and St. Petersburg, into the regions, for example, Rostov-on-Don, Krasnodar and Volgograd. Th at is not to say that this sector did not likewise feel the impact of the past crisis: decreased and at times even negative economic growth, sprinkled with increased pragmatism regarding money related issues, inevitably led to a considerable

contraction in client expenditure. Th is, however, was a short lived phenomenon, with the industry regaining momentum in 2010. Some experts are even of the opinion that retail sales may witness a healthy compound annual growth rate (CAGR) of around 18% up until 2013, surpassing 584 billion Euros by 2013. As it stands, according to the State Statistics Service, retail sales rose 9.2% from 2010, which is 0.7% higher than experts had initially forecast.

Since 2010, the home appliances market in Russia showed steady growth. AEB member companies estimated a further growth of Major and Small Domestic Appliances in 2011. Some of the experts involved in market analysis of the Home Appli-ances market, however, showed cautious optimism, predicting only a 10% growth in 2011. Nevertheless, factoring in the cur-rently impressive development of some of the segments of this market, such as online sales, which in part is due to the rapidly evolving social media marketing strategies, one may begin to anticipate a more positive outcome with regard to the end of year results. In the fi rst half of 2011, sales of MDA and SDA in Russia grew by 30%. Although market volumes decreased in May, they still remained 20% above those in 2010. For now, energy effi ciency remains one of the most important issues for both the home appliances and retail sectors, driven both by Government initiative and market leaders promoting their innovative products.

In this issue of the Business Quarterly we again benefi t from the expertise and insight of our members, leading experts in retail trade and home appliances, who will give you a detailed update on these two very important sectors of the Russian economy.

As always, you will fi nd details of AEB committees’ activities, business developments, and member news in our magazine.

Our next issue, focusing on Energy Effi ciency in Russia, comes out in April, just in time for the 2012 Annual General Meet-ing (AGM).

Also, I would like to take this opportunity to welcome the new members. Currently, the AEB is made up of over 630 mem-ber companies, which is proof that European business in Russia is growing and the AEB is growing apace.

On a fi nal note, with the 2011 business season fast drawing to a close and 2012 just around the corner, I would like to wish you all a happy holiday and the very best in the year ahead.

Yours sincerely,

Dr. Frank Schauff Chief Executive Offi cerTh e Association of European Businesses


2

AEB BUSINESS QUARTERLY, Winter 2011/2012

CEO LetterIntroductory words from Dr. Frank Schauff , Chief Executive Offi cer of the Association of European Businesses in the RF 1

Russia's Retail Trade and Home Appliances sectorsIntroduction and General Overview

A Brief Look At Russia's Retail MarketErwin Trinkl, METRO GROUP and Chairman AEB Retail Trade Committee 4

An Overview Of The Russian Home Appliances MarketHans-Kersten Hrubesch, General Director, 000 "BSH Bytowaja Technika" 5

Back To NormalNatalia Andrievskaya, Senior Marketing Consultant, GfK 8

From the RF government

The Deputy Minister of Industry and Trade Vladimir Salamatov Talks to the AEB About Trade Activities in the Russian Federation 6

HR Issues in the Retail trade and Home appliances sectors

Labour Market in the Retail SectorChulakhvarov Andrey, Head of Permanent Staffi ng Department, Coleman Services 10

Professional education in ‘HVAC & R’ industriesPhilippe Cohen, General Manager for Russia and Belarus at Ariston Thermo Rus 12

Five phases of training in the retail trade in Russia Nadège Olivier, Head of Talent Development and Training, Auchan 14

Industry speci c aspects

The Calm Before the Storm: Waiting for Antimonopoly AmendmentsEvgeniya Rakhmanina, Associate, CMS, Russia 16

Quality – an absolute priorityKovalenok Alexey Viktorovich, Quality Assurance Manager and Deputy Head of Country QA, METRO Cash & Carry LLC 19

Energy effi ciency label: more clarity, less expenseAlexej Soldatow, Technical Regulation Manager, OOO BSH Bytowaja technika 22

Contents

From the RF government, pg. 6

Supporting Charity, pgs. 36-39

Labour Market in the Retail Sector, pg. 10

Networking, pg. 29

Pro

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3

Association of European Businesses

in the Russian Federation

Board

Cohen Philippe (Deputy Chairman)

Fache Dominique

Hartmann Reiner (Chairman)

Helin Erik

Linares Antonio

Munnings Roger (Deputy Chairman)

Sakuler Gerald (Deputy Chairman)

Thomas David

Ziegler Christian

Council of National Representation

Austria – Wolfgang Leitner

Belgium – Johan Verbeeck

Czech Republic – Alexey Abramov

Denmark – Aage V. Nielsen

Finland – Timo Mikkonen

France – Philippe Delpal (Deputy Chairman)

Germany – Tiberius Braun

Greece - Stefanos Vafeidis

Iceland – Ingolfur Skulason

Ireland – David Gilmartin

Italy – Costante Marengo

Lithuania – Natalia Bucelnikova

Montenegro – Luka Nikčević

Netherlands – Lodewijk Schlingemann

Spain – Alina Simonyan

Sweden – Jonas Rybring

Switzerland – Michael Roedter

Turkey – Ali Tenc Can

UK – Don Scott (Chairman)

AEB CEODr. Frank Schauff

Publications ManagerNina Anigbogu

Advertising & Sales

Olga Pavlyuk

Ul. Krasnoproletarskaya 16, bld. 3

127473 Moscow, Russian Federation

Tel.: +7 (495) 234 27 64

Fax: +7 (495) 234 28 07

Website: www.aebrus.ru

The AEB Business Quarterly is registered

with Rosohrancultura, ПИ No. ФС77-24457

Circulation: 16, 000 copies. All copyrighted

images are taken from Katerina Grekova,

www.shutterstock.com and www.dreamstime.com.

The opinions and comments expressed here are

those of the authors and do not necessarily refl ect

those of the Association of European Businesses.

Contents

AEB Member News, pg. 45

The Regulation of Refrigerant Use: European Experience as an example for RussiaStefan Verstappen, Business Development Director, Russia & CIS, Daikin Europe NV Moscow Offi ce 24

Legal Updates

New procedure for transfer pricing control in Russia: main provisionsValentina Akimova, Partner, Pepeliaev group 30

Protection of Trademark Rights in the Retail Sector Stanislav Bartenev, Lawyer, Rödl & Partner 33

Supporting Charity

“It Felt Like Being a Character in a Movie” 36

The 2011 Downside Up Autumn In-Door Football Tournament 37

The Trafalgar Ball 2011 38

Charity event “Draw your own winter day!” 39

AEB Updates

Networking 26

AEB Committee updates 40

AEB Member News

Member News 45

Appointments 51

New Members

New Members 53


4 Introduction

Since the very fi rst day METRO GROUP entered the Russian mar-ket I have been working in Rus-sia. Th is was over 10 years ago.

I remember very well what Russian commerce was like in those years, and I have personally witnessed the rapid progress and the huge changes Russian retail sector has undergone to become what it is today.

It is nice to know that a lot of posi-tive trends have been implemented in Russia thanks to the entry of Euro-pean retail and wholesale companies. Leading retail companies possessing international expertise and experience facilitated the market development and upgrade. Th e companies used their proven technologies and best practice, supporting their local partners and cus-tomers to work at a professional level.

As retailers, we are highly interested in training and education of our sup-pliers and customers. Th is motivates us to create programs like “School of Trade” for our partners – e.g. small food retailers’. Th at is a very targeted and intense study combined with practical “tailor made solutions” for the business. Th is free of charge training programme allows small shops all around Russia to elaborate their business structure, remodel their shops and, as a result, to improve their profi tability.

As a result of the common eff orts of all market players, European trading standards are starting to be formed in Russia. Th e quality of goods and ser-vices is becoming paramount, while

the freshness and innovativeness of products are gaining incredible impor-tance. In order to comply with modern work principles, the whole supply chain from manufacturers to consumers had to undergo manifold improvement in the fi elds of production, packing, stor-age and transportation systems and lots of other things, but, most importantly, changing the whole attitude to retail trade and commerce.

Over the past years, many changes have been implemented in the fi eld of regulation of retail trade. We appreciate a lot that worldwide practice to involve business in consultation on elabora-tion of norms and standards at federal level is being more and more applied in Russia. As “links in a chain” it is our foremost interest that legal norms accordingly regulate current business procedures in favour of all market par-ticipants. In this respect we are ready to share our professional knowledge about trade legislation gained in other as well as our experience with effi cient models in trade functioning world-wide. I strongly believe that clear and transparent rules are the key factor for

the Russian trade sector’s further mod-ernization.

Th e committee on retail and trade in the Association of European Businesses has been set up just recently. Having started our activity about one year ago, we already succeeded to gather the big-gest foreign players in retail operating in Russia. Th at means we involve numer-ous professionals in commerce, modern thinking experts aiming to implement the most effi cient models at local level as well as working out unique solutions in Russia, that will be recognized at international level.

Today Russia’s retail market has achieved a fundamentally new level of quality and capacities. Th is has allowed companies to expand their geograph-ic presence and enabled customers throughout the country to buy high-qual-ity goods. Local experts have become highly sought for in the West, while expe-rience in successful operations gained in Russia is already used by companies as best practice for new markets.

A lot has been done in the last 10 years to upgrade the Russian retail sector.

Let us set a good example!

Erwin Trinkl, METRO GROUP and Chairman AEB Retail Trade Committee

A BRIEF LOOK AT RUSSIA'S RETAIL MARKET

Speakers at the Retail Trade Round Table organized within a framework of the Forum of Russian and European Businesses: Partners in Modernization ( September, 2011)

5


Introduction

The Russian Home Appliances Mar-ket has grown before the 2009 crisis to No. 4 in Europe. Now, after the crisis, the market recovered espe-

cially during this year fast and strong with monthly growth rates up to 50%. Th e forecast for the year 2011 is that we will have a new "all time" high in volume and value: that means 2008 +15%!

Nevertheless for those who had to import goods from Western Europe the year 2011 started with a crisis as the transportation quotas between Poland and Russia had not been fi xed. As a result thousand of trucks had to been kept on hold. Alternatives as bringing the goods via the Baltic sea also failed as container ships have been frozen for weeks:

Th at was not all: also transport by rail-way took much more time as any import-er has expected and as the railway/ con-tainer terminals have been overcrowed and could not handle what was demand-ed. Neverless, that problem occured to be long lasting. Th e capacities and the equipments are not at all able to handle the upcoming growth and alternative ways of transportation. Th e modernisa-tion in a short time will be essential to bring traffi c away fom the main roads of approaching Moscow's logistic regions. Truck traffi c is one part, ecological aspects an other. To give you an indica-tion: by changing our import transporta-tion mix in 2011 from 97% truck deliver-ies in 2010 to 30% short sea, 30% railway and 40% truck the CO2 emission could be reduced (on 2010 transport capaci-ties) by 28% or more than 2.000 t CO2.

But an other key question is: "Is after the crisis just before the next crisis? "

Consumption remains the main driver of Russians's growth: consump-tion accounts for half of the Russian GDP. And we expect that the general growth of the Russian household con-sumption and in particular in home appliances will continue in Q4 2011 and Q1 2012, but loosing speed compared to the very robust growth rates of 2011.

Th e growth will be driven by inno-vations mainly in the CE sector and and sustainable topics as high energy effi cient products. A consumer research which was carried out by BSH in 2010 over total Europe including Russia has shown, that even in Russia, where the cosst for energy are (still) very low, ener-gy effi ciency is ranked at No 2 in the consumers mind. And I can confi rm that as we have taken that topic not only in Europe as key topic for BSH-Group but also claimed it as key competence factor in Russia 3 to 4 years ago. At that time we have got only surprise as feedback from our clients in the retail and not recogni-tation. Th at has changed in the mean-time: Big retail chains are very successful-ly off ering replacement promotions for changing old products into new, energy saving models. Th e impact on Russian energy sector will be signifi cant as only more than 25 Mio refrigerators used today in Russia are older than 10 years. Replacing them by state of the art fridges of today up to 12 bil kWh and 3,8 mio t CO2 could be saved each year. To make it more understandable: that equals the demand of 10% of the total residential energy consumption in Russia or the total residential energy consumption of the people living in Moscow!

It took a long time, but the 2011 Rus-sian energy labeling law is a good step forward in the right direction, even if the execution should be much more closer to the EU regulations as it is for the time being. In this respect AEB committees

for trade and home appliances are con-tinuing to lobby also in the future togeth-er as not all has to be invented in Russia for a second time – we try to share also in that respect "best practices" between EU and Russia. Beside the execution also federal incentive programs repla-cing old home appliances should come into place. Also this is part of our daily work within the AEB home appliances committee and all affi liated companies.

Technical Regulation and Customs Union: You can compare it a little bit with the Russian energy effi ciency measures: despite all eff orts they are diff erent and still not hamonized.

Further development of the Cus-toms Union awakes hopes and causes uncertiainties. Coming into force of the Customs Union Low Voltage Regula-tion on 01.07.2012 does not prevent from the gap being created from similar Russian regulation, whose enforcement is sche duled for January 1st., 2012. All home appliance manufacturers are still not aware if they should get prepared to the national requirements and/or to the requirements of the customs union. Public discussion has been started for the regulation draft "On information about energy effi ciency for users of energy using products". Russian national requirements developed in accordance to the Russian federal Law 261-FZ on energy effi ciency are already stated as energy labelling procedure, but still not considered by all market players. Upcoming regulation of the Customs Union is going to follow the energy label-ling requirements which are harmonized with the relevant European directives of 90-s but is going to incorporate them into the conformity assessment scheme, simi-larly to the actual Belarus aproach. Rus-sian energy effi ciency regulation still suf-fer from lack of national standardization, disabling proper verifi cation procedures. Standards are published but it takes time before they become offi cial.

AN OVERVIEW OF THE RUSSIAN HOME APPLIANCES MARKET

Hans-Kersten Hrubesch, General Director, 000 "BSH Bytowaja Technika"


6 From the RF government

Over recent years, domestic trade has been one of the fastest-grow-ing sectors of Russian economy, surpassing many other industries

in its growth rates. Among the state’s major tasks in the

trade activities sphere is the creation of “game rules” aimed at facilitating the eff ective functioning and creating enabling environment for trade deve-lopment.

Th e federal executive authority responsible for public policy and legal regulation in the fi eld of domestic trade is the Ministry of Industry and Trade of the Russian Federation.

Federal Law No. 381-FZ “On the Foundations of State Regulation of Trade Activities in the Russian Federa-tion” was passed at the end of 2009. Th is law’s intention is to facilitate trade activities for the purpose of improving product accessibility for the population, creating a competitive environment, and supporting goods manufacturers in Rus-sia. It should be noted that the Law on trade relations established the features of the relations between trade organisa-tions and the suppliers of food products; among other things, deadlines were set for payment for foodstuff s depending on their expiration date, and an upper limit was placed on bonuses for the acquisi-tion of a certain quantity of foodstuff s.

In order to maintain and enhance competition a number of legal norms were established by the Law on trade relations. Retailer won’t be able to rent or acquire additional fl oor space in case his market share of food sales in particu-lar region or municipal district exceeds 25%. It is forbidden for regional govern-ments and municipal administrations to conduct activities which may lead to the establishment of trading rules dif-ferent from those established by federal laws and other legal acts of the Russian Federation. Since the enactment of the Law on trade relations, the Ministry has been monitoring its implementa-tion, on the basis of which proposals are being prepared for amendments to certain legislative acts of the Rus-sian Federation regarding the improve-ment of state regulation of trade activi-ties. Work is constantly being done to study various issues related to domestic trade. Th is year, research is being con-ducted on questions of the condition and development of wholesale trade, studies are being made of the staffi ng requirements for the trade industry, and defi nitions and interpretations of major trade terms are being determined.

Th is year, the Ministry approved the Strategy for Trade Development in the Russian Federation for 2011–2015 and for the period until 2020.

Th e main objective of the Strategy is to satisfy the needs of the population in the trade services through creation of an eff ective supply chain in accor-dance with innovative economic devel-opment of the Russian Federation.

To achieve this goal the Strategy provides a solution of the following tasks:

■ Improving the effi ciency of state reg-ulation of domestic trade;

■ Trade infrastructure development; ■ Development of trade in small and

distant populated areas; ■ Reduction of staff shortages; ■ Support development of small and

medium-sized business; ■ Facilitation of the necessary level of

competition; ■ Encouraging the development of dis-

tance selling; ■ Improvement of traditional trade

formats.Th is Strategy establishes priority

actions in several key areas. For exam-ple, in order to promote development of trade infrastructure, the Ministry prepared procedural recommenda-tions, on the basis of which regional executive authorities are working on the preparation and implementation of trade development programmes. To support and promote competition in the industry, monitoring of the fulfi l-ment of industrial and anti-monopoly legislation is being conducted; regional authorities are paying close attention to the development of alternative sales channels, including the development of retail markets and fairs as a way of supporting and stimulating sales of domestic agricultural producers.

THE DEPUTY MINISTER OF INDUSTRY AND TRADE VLADIMIR SALAMATOV TALKS TO THE AEB ABOUT TRADE ACTIVITIES IN THE RUSSIAN FEDERATION

Deputy Minister of Industry and Trade Vladimir Salamatov

7


From the RF government

Considering the main trends of Russia’s domestic trade this year, the following can be noted:

Th e level of trade development is one of the main indicators character-izing the level of living. Trade makes a signifi cant contribution to Russia’s GDP, which is about 19%. Moreover, the share of tax payments to the bud-get of the Russian Federation from the trade sector is about 10%.

Th e trade industry is the leader among all the industries of Russian economy in number of jobs created: the

total number of employees in whole-sale and retail trade is about 12 million people, or 18% of the total employed population.

Th e role of trade is also large in the development of small business, which accounts for 25% of retail turnover. Approximately 30% of the total amount of small enterprises are engaged in wholesale or retail trade. Moreover, wholesale or retail trade employ more than 50% of the total number of indi-vidual entrepreneurs.

A notable characteristic of the cur-rent year is more dynamic develop-ment of the trade in non-food items, whereas the increase in the turnover in the retail foodstuff s trade is progress-ing at a moderate pace. On consumer behaviour of the population the accu-mulated volume of delayed demand in the previous two years had a signifi cant impact, when the falling retail trade – especially of non-foodstuff goods in connection with the crisis in the econ-omy has been fairly substantial .

In the near- and medium-term, the following trends may be noted that

will determine the further direction of development for the trade industry:

Market consolidation will continue, and the eff ectiveness of trade compa-nies activities will improve; strength-ened competition in the retail chain market will stimulate the need for fur-ther streamlining business processes and a search for new management solu-tions directed at providing higher qual-ity services to consumers; there will be continued improvement of logistics, cooperative systems with goods suppli-ers, and development of alternative sales channels and Internet trade. Th e ten-dency for intense regional development of large and medium size trade compa-nies will continue, both organically and through mergers and acquisitions. Th ere will be further development of indus-trial and inter-industrial self-regulation on the consumer market, which will facilitate an increase in the availability of goods, the development of competition in the trade fi eld, and the formation of mutually benefi cial conditions for coop-eration throughout the entire commod-ity distribution chain.

This year, the Ministry approved the Strategy for Trade Development in the Russian Federation for 2011–2015 and for the period until 2020. The main objective of the Strategy is to satisfy the needs of the popula-tion in the trade services through creation of an eff ective supply chain in accordance with innovative eco-nomic development of the Russian Federation.


8 General Overview

We lived through 2009 and 2010 when the market went down on a roller coaster ride and everybody started to forecast

how many years it will take for it to get back to pre-crisis levels. But as usually happens in Russia – the fast collapse and stagnation for some 12 months were replaced by rather fast recovery and growth. Th e Russian consumer, who was patiently waiting for the econ-omy to stabilise a bit, went out in the middle of 2010 to satisfy the pent up demand that was there.

Th is postponed demand which started to drive the market in the mid-dle of 2010 continued in 2011 aided by new technology and new line ups.

Markets returned to their normal size and seasonality. Th e only excep-tion in the white goods market was Air Conditioners. Remembering the scorching summer of 2010 when all air cooling devices were swept out of stores and prices skyrocketed; in 2011 people started buying AirCons already in March-April. However next year this market will most likely come back to its normal seasonality with a high season in June and July.

TIME AND SPACE (SLIM and FIT)Th e main trends in 2011 seem to be similar to previous years: people go for saving time and space. Th e great majority of the Russian population lives in fl ats with limited kitchen and bathroom space, therefore the consum-

er looks for slim and/or tall devices, hence we see continuous growth of slim washing machines and dishwash-ers and tall (above 180 cm) refrigera-tors on the market.

Alongwith that, saving time is becoming equally essential as Russians are beginning to adopt Western pat-terns of household behaviour of doing laundry and shopping just once a week. Hence we see a consumer preference for more time effi cient devices. Slim washing machines occupy two thirds of the Russian washing machine mar-ket and since people are not willing to sacrifi ce more space for a bigger wash-ing machine, manufacturers are mak-ing it possible to fi t more in the same size. Two years ago 5 kilos of laundry was all you could fi t in the slim WM – this year some brands off er already 8 kilo load capacity in slim washing machines. Furthermore, refrigerators now are allowing storage of more food at once by growing in height rather than width. And as people are look-ing for taller refrigerators (the 180-200 cm segment is growing), they are also looking for a freezer at the bottom, for easy access to frozen vegetables, berries and pizza. Some manufacturers create models with slimmer walls – allowing a greater capacity without demanding more space.

And since we want to store food for the whole week in the refrigerator – we choose No Frost technology (see graphs attached) (as it claims to keep your food

fresh for longer). No Frost also saves us a few hours and headaches of turning off and defrosting your device.

SPREADING OUTAnother trend that is rather new this year and that will most likely continue in the coming years is the growth of ‘nice to have products’ in the biggest cities. Th e main market for products like dishwashers, hobs, bread ma kers, coff ee machines and other non essen-tials is of course Moscow and Saint Petersburg. But as the penetration rate for these products grows – demand increases in other cities with a pop-ulation above one million. Overall, throughout 2011 Moscow and Saint Petersburg showed much slower growth than the biggest cities in other regions (such as N. Novgorod, Ekate-rinburg, Novosibirsk, etc.).

One of the results of that is the growth of built-in market (+45% in Jan-Sep 2011 vs. Jan-Sep 2010). It hasn’t reached the share of the pre-crisis year inside the market, but a lot of it comes from initial purchases outside Moscow and St. Petersburg.

Coff ee machines would be another example – for the moment Moscow is the main market, but if we look at the shares of this market in western Europe – we see defi nite potential for further growth in Russia.

TAKE IT EASYTh e pace of contemporary life asks for anything that can simplify our every-day existence. New products that were

BACK TO NORMALNatalia Andrievskaya, Senior Marketing Consultant, GfK

JAN08-DEC08 – JAN11-SEP11Sales Ths. Units

Sale

s Th

s. U

nits

(x1.

000)

MDA TOTAL 8

JAN09-DEC09 JAN10-DEC10JAN08-DEC089

8

7

6

5

4

3

2

1

7.633

5.940

8.6727.698

JAN11-SEP11

JAN10-SEP10 : JAN11-SEP11JAN10-SEP10 JAN11-SEP11JAN11-SEP11Sales Units %

COOLING

17

29

29

16

9

19

27

33

13

9

9%

-8%

13%

2%

-21%

< 140 cm height

< 140 - 160 cm height

< 160 - 180 cm height

< 180 - 200 cm height

>= 200 cm height

9


General Overview

deemed not only completely unneces-sary but unlikely to appear in private kitchens at all only a few years ago, today make a statement and strongly push their sales across the mature mar-kets of Moscow and St. Petersburg.

Take, for example, bread makers. More than 40% of sales are done in the central region and have enjoyed over 130% growth this year! Who would

have thought 5 years ago about baking bread at home? But seeking a healthy life style is another trend that comes from Europe and drives the market of small kitchen appliances, such as bread makers and food steamers, even deep fryers which work with ‘low oil’ or ‘no oil’ fat cooking.

While Europe is already going for three vacuum cleaners in the house-hold, we are still waiting for the fi rst one somewhere Russia. However Mos-cow is ready for a second device. You have one powerful vacuum for your weekly cleaning, and now we are ready for a second machine – a light weight and compact electric sweeper that can be taken out in a minute to take care of a small mess around dinner table. Fur-

thermore there is potential for robot-cleaners, a fancy product that can be good reason for boasting about to your neighbours, just like your 3D TV.

Other devices that simplify our lives are growing in similar fashion include hand blenders (easy to store and to use), dishwashers, built in ovens with self-cleaning function, and ironing systems.

INTERNETAnother key topic is the internet. Depending on the product group, the internet sales occupies from 5% to 8% of the total Russian market. We have to understand that the majority of this is done by Moscow and St. Petersburg. In these two cities, the share of internet is much more signifi cant. While it is rather stable in the two capitals and we don’t expect any sudden fl uctuations here – the rest of Russia is still full of potential. One of the interview surveys showed that the prime reason for peo-ple outside Moscow not to buy through internet is lack of internet access. We are all looking forward to launch of LTE in 2012, which will open high speed internet for users in distant regions and will help in solving the problem of the low penetration rate of the internet.

As soon as this problem is resolved and people get more used to internet purchasing it might drive online sales further, solving the logistics problem for people in remote places, making their decision process easier, and further expanding market opportunities.

15

12

56

17

13

13

63

11

JAN10-SEP10 : JAN11-SEP11JAN10-SEP10 JAN11-SEP11

FRONTLOADING<= 35 cm deepFRONTLOADING> 35 <= 45 cm deepFRONTLOADING> 35 cm deepTOPLOADING

JAN11-SEP11Sales Units %

WASHINGMACHINES

-10%

11%

11%

-36%

3137

6963

-8%

16%

NO FROST

JAN10-SEP10 : JAN11-SEP11JAN10-SEP10 JAN11-SEP11

JAN11-SEP11Sales Units %

COOLING

STATIC 93 94 95 96 94 92 96

7 6 5 4 6 8 4

Online

COOLING WASHINGMACHINES MICROWAVE OVENS VACUUM CLEANERS AIR CONDITIONER HOT BEVER.MAKER FOODPREPARATION

January 2011 - September 2011Sales Units %

Traditional

Depending on the product group, the internet sales occupies from 5% to 8% of the total Russian market. We have to understand that the majority of this is done by Moscow and St. Petersburg.


10 HR Issues in the Retail Trade and Home Appliances Sectors

Market Trends Both food and non-food retail sectors have demonstrated and continue to enjoy rapid development in modern Russia. Th e pace may have somewhat slackened compared to 2005-2008, but increasing earnings and so increasing consumer spending invites retail com-panies to expand further. Depending on a type of retail activity, whether a product or service-based, or a region, competition may be intense, moderate, nascent or virtually non-existent. Th is indicates that retail market in Russia has taken defi nite shape, but is not by any means saturated. It is still forming, and retail companies are eager to iden-tify and exploit new market niches. New shopping centers are being built and put into operation. High street retailers are matching the pace. Hyper-markets, chain restaurants, retail bank-ing, consumer electronics & home appliances, clothing, beauty parlours and perfumeries, pharmacies and spe-cialized shops all seize the chances to get a footing in the growing market.

With the development of the retail market, labour availability becomes of critical importance. Retailers, espe-cially in foods, must control costs in order to retain a competitive edge. Th ese cost-saving strategies necessar-ily impact on the personnel-related costs and budgets. In most cases, staff engaged in operations do not need a qualifi cation or a university degree, as product- or service-specifi c knowl-edge can be acquired on the job. As a consequence, retail companies do not off er the most attractive salaries on the market, and so personnel turn-

over within retail is conspicuously high. Further, the high ratio of staff engaged in operations to management makes it diffi cult to chart career plans for every person who joins the organization, and long-term employee loyalty is rare in most retail companies. While grow-ing, retailers understandably put labour availability in front of labour productiv-ity. Hiring comes before performance improvement.

Current labor market trends within retail industry are indicative of the gen-eral market recovery and return to pre-crisis conditions. Our clients, large multinational organizations repre-senting both food and non-food retail segments, all concur on trends that became apparent during 2011:

■ Personnel turnover, which had decreased during crisis, has recently returned to pre-crisis levels:

■ Good candidates are scarce, and there is a marked competition between employers for them: it is the labour seller’s market;

■ Th e keys to getting the best talent are the speed of a hiring decision as well as the salary off ered.

Retail Labour Market Forecast Th e mid to long-term perspective does not look so bright for retailers. Rapid growth means quicker market saturation. As an upshot, competition for the customers’ attention will be much more pronounced. In order to ensure consistent growth, retailers will have to shift from market-conquering to customer-winning strategies. Obvi-ously that will imply a revised approach to management, with precise custom-er-focused market research, balanced pricing, improvement of service qual-ity HR issues will move up the list of priorities for retailers.

Several challenges are impending Th e number of students employed part-time will be decimated because of the demographic pitfall Russia expe-rienced with the economic instability of 1990s. Th e infl ux of personnel may

further be reduced by government reg-ulations forbidding unqualifi ed foreign labour. Th e conclusion is obvious: the competition for customers’ attention will be won by those who already won the competition for talent.

Attracting and Retaining: HR Brand Value

To a degree, any company in a rapid development stage can disregard the quality of the personnel. When the market is saturated, personnel quality becomes of paramount importance. By quality we understand not only qualifi -cations and skills, but key competencies necessary for good performance. It is not enough to recruit a shop consultant, it is more important to train and keep him/her motivated to perform well.

Recruiting good candidates can be a problem too. In Moscow, where the unemployment rate is forecast to be below 1% (source: www.rosstat.ru ) for 2011, a shortage of both qualifi ed and unqualifi ed personnel makes it diffi cult for an employer to negotiate bargain rates. When looking for a job, a candi-date is likely to have one already and feel more confi dent. If each candidate has a choice between several off ers, it is evident that the Moscow labor market has changed compared to 2009-2010, and retail is no exception. Technically, it would seem unavoidable that employ-ers must off er higher salaries in order to get the best candidate. For the employ-er, the problem is that the cost increase is not really connected to labour pro-ductivity. But luckily it’s not all about the money for the candidate himself.

Th e good candidate will want to consider things important to him/her. Flexible hours, proximity to home, opportunities for career growth, good team, competent management – some or all of these come to mind to any experienced job seeker. Many employ-ers pride themselves on having all these things. But in reality, too few retailers ask their employees for an opinion – it is easier to replace a dis-

Chulakhvarov Andrey, Head of Permanent Staffi ng Department, Coleman Services

LABOUR MARKET IN THE RETAIL SECTOR

11


HR Issues in the Retail Trade and Home Appliances Sectors

gruntled employee than analyze the problem. But what if the problem is indeed important and causes exces-sive staff turnover? What kind of PR will the company receive in our age of social networks? No doubt the com-pany’s reputation/ HR Brand is tar-nished. Fewer people will want to work there, therebycreating holes in staff lists widen, workloads for incumbents increase with no change in compensa-tion An increasing number quit, and costs rise. It is a downward spiral, as formidable as any in retail business.

Ways to trim personnel costs may be hard to see, but they are already being implemented by more circum-spect retailers. Personnel satisfaction surveys, non-monetary incentives, employee hotlines – burdensome, cost-ly, even obscure for management or an

investment that pays off ? It is a task for a fi nancial analyst to come up with a Profi t & Loss statement substantiating cost-effi ciency of such instruments for a specifi c company or business.

In this context, retailers would also do wise to introduce a career devel-opment system which will allow to identify the best talent from within the organization. Successful careers are a very eff ective instrument of motivat-ing personnel, and strengthen the HR brand. Between two employers, other things being equal, a candidate will choose the company where an internal promotion is more likely to occur. Such company will boast a lesser employee turnover and greater loyalty. Th e longer the person works, the more competent he gets at his job, and the faster his productivity grows. Th e customers will appreciate it. Th e management should do likewise. In economic terms, if the trained and skilled employee can do twice the workload of an untrained for only +50% of the salary, the cost-effi ciency is obvious. It has more stra-tegic advantages: competent and expe-

rienced employee serve as role model for new colleagues, and basic training costs can be cut.

Labor Availability ForecastOf course the change from market development to market saturation does not happen with a loud crack for every retailer to snap to attention. Changes in the labour market do not appear overnight. For a while, retailers may pursue their operational goals paying little heed to what may happen tomor-row. But it is the very subtlety of these changes that makes them the more dangerous. It is also too easy to let a quietly important goal slip down the priority list. Having it all here and now may seem the number one priority, but an insightful business mind will rec-ognize the impending risks and chal-lenges, and invent counter-measures. Retailers who dedicate time to analyze their current work force problems and implement necessary HR solutions now, will have created a springboard for further development and winning the next war for customers.

Current labor market trends within retail industry are indicative of the general market recovery and return to pre-crisis conditions.



Question about the shortage of job specialties have been raised repeatedly by the leadership of our country. Representatives of

the climate control and heating indus-try are concerned this problem not less than other builders. All directors of large companies and industry asso-ciations talk about a personnel fam-ine, about the impossibility of business development and production and the domination of the contract labourer.

Unfortunately, however, there are no any signifi cant legislative measures com-ing and the eff orts of business in order

to change this situation. For example, in Europe, in order to establish a climate control system, certifi cation is required both for the company and for the par-ticular work. Th e worker is obliged to undergo training and to prove that he has the right to operate a technique that through his actions he will not harm to the consumer or the environment. Th e barrier is high – in one example, the penalty for a lack of a certifi ed work permit can reach 10,000 Euros, and the company may revoke the license.

We build our hopes on the devel-opment of of self-regulating organisa-tions (SROs), which are fi nancially responsible for the quality of work of their companies. But in solving the defi cit with the workers of SRO may not help – in fact, their requirements to the obligatory certifi cation concern fi rst of all to the engineering-technical personnel, that is again not workers.

However, some exceptions do exist and these allow some optimism. State

Polytechnic College № 19 (www.prof2.ru), with the assistance of the largest climate control companies have cre-ated a unique platform for the training of workers. Adults and children are taught in new programmes, with new equipment, to attain professional levels of expertisel in the fi eld. Th e college also runs environmental awareness activities - for the fi rst time in Russia there has been an international day of ozone layer protection.

With the opening of a unique school of heating engineering, with the support of the Ariston company, this college is the fi rst and so far only educational institution in Russia where practically all technologies are on show - from the everyday ‘splits’ to the chill-ers and complex heating systems. To coincide with ‘world student day’, on 17 November there will be a breaking ground ceremony, a signal of the start of the revival of professional education in our country.

Philippe Cohen, General Manager for Russia and Belarus at Ariston Thermo Rus

PROFESSIONAL EDUCATION IN ‘HVAC & R’ INDUSTRIES



Unlike industrial professions, the retailing professions require both general commercial skills and a wide range of special purpose

professional skills. However, the Rus-sian system of education often trains specialists of a particular fi eld instead of generalists who are professionals in manufacturing, sales, promotion and management at the same time. Our experts have a greater number of areas of responsibility. For example, a baker knows hygiene rules regarding the products, as well as regarding the equip-ment and workrooms, can make several kinds of bread with diff erent recipes, uses various equipment, is well-aware of all of the production steps starting from dough kneading to baking, knows how to arrange work to fulfi ll turnover targets and also knows the implanting principles in ethos of the bread depart-ment in the Bread department. No Rus-sian educational institution currently trains such professionals. Partnership relations between educational institu-tions and retailing companies are yet in the making. In depth training within companies is in extremely low demand with students perhaps because of igno-rance of the existing professions or lack of partnerships between educational institutions and companies. We also need to mention that the culture of ser-vice in Russia is not as highly developed for a number of historical reasons as it is in Europe. And of course, it is recog-nized that the turnover of personnel in the retail trade remains too high.

In this context of the lack of multi-skilled professionals, the need to devel-op commercial standards and reduce the high level of employee turnover, education becomes an essential invest-ment in achievement of success in the retail trade in Russia.

In recent years there have been major developments in education in our sphere, in both teaching techniques and in the use of materials. Within company education cannot solely be the training of professional techni-cal skills in lecture rooms. Training should embrace lecture class-rooms and tutorship, skill sharing, coaching, expedition learning and e-learning.

To make professional training more effi cient, to make the learners change something in their professional prac-tice, the following components are essential: 1. Th e PURPOSE of any training is fully integrated into company strategy2. Th e ADOPTION of goals by the learner precedes the teaching of any professional technical skills3. Learner’s personal INTEREST in the application of the standards is the driver of putting change into practice4. Next, the MEANS, TOOLS and TECHNICAL SKILLS for further practical application of theories in the workplace are needed 5. And an ACTION PLAN after the training, supported by the manage-ment, allows observation of the results of the training being realized in actual practice for a long time

1. The Purpose of Training Too many trainers begin with direct education of a certain technical skill without speaking about the connection with the company’s strategy and prior-ities. Th e fi rst stage for any learner is to know how the training fi ts in with the company’s strategy. Th is makes every-one a participant in the company’s life.

For example, at the fi rst training lesson in the bakery school, trainers explain why a bake-house is a strategic alter-native and how the company wants to satisfy its clients’ needs. Th is phase make the learners to understand the sense of their daily work.

2. The Adoption of Goals Proof of the link between the train-ing and the company’s priorities is the information which can be easily forgot-ten unless trainees have gone through it directly. Teaching should focus on the adoption of the goal of the training by the participant. Th e aim is to make the participant reformulate in their own words and creatively depict the answer to the question of how this training serves the purposes of achieving the company’s goals. In our example of a bakery school, the learner should restate what position the company wants to occupy in the fresh bread market.

3. The Trainee’s InterestWhy should the learners suff er dis-comfort by changing their professional practice? What’s the use of it for the learner? Th e training must help each participant to answer these questions. Th e more active, role-playing the form of the training, the easier the process of education will be and the more the participant will want to improve their practice. Use of games for memorizing information, work in groups in order to let the participants help each other to learn, practical application of techni-cal skills on site with an expert, tasks which the trainees set for each other,

FIVE PHASES OF TRAINING IN THE RETAIL TRADE IN RUSSIA

Nadège Olivier, Head of Talent Development and Training, Auchan

Pedagogics and training execution are the responsibility of the train-ing department, while the exact content is the responsibility of the professional experts supported by the teaching department.

15


HR Issues in the Retail Trade and Home Appliances Sectors

and sharing of experience are examples of stimulating the learner to implement change. In our baker school we touch upon several types of motivation for training: change of jobs, confi rmation of professional skills with a certifi cate issued by the company whose study programme has been certifi ed by the state, pride in making top quality bread, and skill sharing with colleagues. We use a varied mix educational methods.

4. The Means, Tools, Technical SkillsPedagogical purposes determine what the participant must be able to do to meet the techniques or standards set by the company. It is easier to put this in practice if the coach can speak from personal experience. Our trainers have to be members of the profession they teach instead of professional teac hers. Pedagogics and training execution are the responsibility of the training department, while the exact content is the responsibility of the profession-al experts supported by the teaching department. As a result, we guarantee the outcome will meet the vocational developmental needs of the employees’. Th e whole content of all training given in the bakery school was composed by a group of managers who are experts in this product with the support of a manager of the training department. Th e same people deliver trainings.

5. The Action PlanIf there anyone who has never heard, after their training :“What you have studied at the training is all very well but practice is completely diff erent and this is not applicable”? Such statements should concern us twice over: either the training is not focused or adapted to reality, or the learner’s manager does not know how to (or does not want to) implement the company’s principles and techniques. It is no use if we begin to teach the baker of the importance of the time for baguette ‘proofi ng’ has to be precise, while their man-ager believes that it is not necessary to follow the proofi ng time or does not know how important it is . In such a case we will never achieve positive changes. Without the support of their manager, the baker will not achieve compliance of standards for a long time after the training. Managers have to be

guarantors for the company’s standards and processes. Th ey have to be the fi rst to have professional trainings. Th eir teams have to hear from the trainer the same as what they hear from their manager every day.

Implementation of skills obtained at training is a daily obligation for the leader. Th e leader must check that the learner understood what they want to realise, that the learner has all neces-sary means for that. Th e leader has to agree with the learner what benefi t for their colleagues they can derive from their new knowledge and how they can put their new kills into practice. Whether the education will be eff ec-tive or not depends on this.

Involvement of managers in deliv-ery of trainings or in post-training

supervision allows for enhancement of their managerial competence. In turn, they go through fi ve phases of manage-ment. Th ey:1 –give meaning to their team’s work; 2 –work with their teams to know and eff ect the purposes of their tasks; 3 –create motivation and stimulate implementation of changes; 4 –make sure that everyone has means to put this into practice; 5 –support this implementation.

In order to develop the retail trade in Russia, it is necessary simultaneously to develop leaders’ managerial skills and levels of profi ciency. Th ese cannot be separated from each other. Let us develop partnership programmes with higher education institutions, participa-tion in adaptation of study programmes and didactic methods in order to spread information about our professions and to prepare our future human resources better. Th e purpose for tomorrow is to train our teams and our future candi-dates for a job how to serve customers the best. We still strive to achieve great progress in this sphere.

The more active, role-playing the form of the training, the easier the process of education will be and the more the participant will want to improve their practice.


16 Industry Specific Aspects

Only a few years ago it seemed that the Russian antimonopoly authority (the Federal Antimo-nopoly Service or FAS) only

cleared transactions and chased natural monopolies or those violating advertis-ing regulations. But now the author-ity of the FAS covers a broad range of regulations in all sectors of business: relations between banks and insur-ance companies; similarity of prices charged by competing mobile service providers; market conditions created by oil companies; state tenders; foreign investment into strategic companies and even prosecuting for the unauthor-ized use of the Olympic symbol.

Th e FAS’ authority is starting to seem boundless and enforcement of Russian antimonopoly regulation (and related areas also controlled by the FAS) is becoming stricter by the hour: fi nes are increasing and criminal cases are being initiated.

Distribution AgreementsOne of the most common scenarios where non-Russian companies fi rst encounter strict Russian antimonopoly legislation is when a foreign manufac-turer decides to start distribution of its products in Russia.

Under a distribution agreement, a company supplies goods to a distribu-tor who resells the goods on its own behalf and at its own expense in a cer-tain territory.

Various types of distribution struc-tures can be implemented in Russia.

THE CALM BEFORE THE STORM: WAITING FOR ANTIMONOPOLY AMENDMENTS

Th ey may involve Russian as well as for-eign companies; they may be governed by Russian law, as well as any other foreign law; and they may cover Russia only or may cover the whole of the CIS.

However, it is important to remem-ber that as long as the distribution in any way concerns or aff ects the Russian market, then Russian antimonopoly regulation must be taken into account.

Common Mistakes If a distribution agreement includes restrictive clauses, such as, for example, resale price maintenance, territorial protection or various non- competi-tion obligations, these agreements may potentially infringe Russian competi-tion law. For this reason, Russian compe-tition rules should be carefully checked along with aspects such as customs and currency regulations, intellectual property rights and taxation which are almost never forgotten by businesses.

Many of the common (and often regarded as “standard”) provisions con-tained in such agreements, such as requirements to purchase minimum quantities, reporting obligations and non-competition obligations are pro-hibited and may be permitted only within certain limits. In certain circum-stances, distribution agreements may even be even carefully structured to provide for exclusivity. Such provisions can, however, be declared as contra-vening the Competition Law if one of the parties to the agreement holds at least a 20% market share.

Selective DistributionA selective distribution system is a dis-tribution system where the supplier undertakes to sell certain goods or services only to specifi c distributors selected on the basis of identifi ed cri-teria.

Generally, Russian law does not provide specifi c rules permitting (or prohibiting) selective distribution. As a consequence, selective distribution contracts are heavily regulated by the general provisions of competition law.

Th us, if the FAS considers that the selective distribution arrangement leads to or may lead to a restriction of competition on a market, the arrange-ment may also be seen as contravening the Competition Law.

Agency AgreementsUnder an agency agreement, the agent is granted authority to negotiate and/or conclude contracts on behalf of the principal, either under the agent's own name, or under the name of the prin-cipal, for the purchase or sale of goods or services.

If there is a “true agency” situa-tion, commercial agents are generally considered to fall outside the competi-tion legislation, since they are usually treated as a single economic unit with the principal. However, if the agent is not fully integrated into the principal's distribution system, but operates inde-pendently, accepts fi nancial risks on its own account (such as taking title in the goods bought or sold), or has person-al liability to perform contracts, then the agency agreement may contradict various restrictions of the Competition Law.

Franchise AgreementsUnder a franchise agreement, one company, the franchisor, grants anoth-er company, the franchisee, a package of rights relating to trademarks, signs

Evgeniya Rakhmanina, Associate, CMS, Russia

Russian law prohibits agreements which would allocate business among competitors on either a geo-graphical or consumer basis, or also according to the volume of sales/purchases or the range of market-able goods through distribution or licensing or other arrangements.

17


Industry Specific Aspects

and know-how for the sale and distri-bution of goods and services, usually in return for a fee or a royalty. Generally, franchising agreements contain a range of vertical restraints, such as selective distribution and/or non-competition and/or exclusive distribution that apply to both the franchisee and the franchi-sor. Franchise agreements are subject to state registration.

Generally, the provisions of the Competition Law have a restricted app lication to franchising contracts, as franchising contracts are likely to come within the scope of the exemption pro-vided by the law.

Single Branding ArrangementsAny obligation placed upon the pur-chaser to concentrate its purchases with one supplier (or the supplier to con-centrate its sales with one purchaser) are deemed to have the most negative and most prominent anti-competitive eff ects and the decision to conclude such an arrangement must always be carefully assessed. Formally, such a non-compete obligation may be exempted from being seen as a violation if it falls

under either the under 20% market share exception or when such an obli-gation is related to the protection of a set of intellectual property rights.

Although this rule seems simple enough, the actual application of this exemption is not as straightforward as it seems and will primarily depend on a thorough market analysis which the FAS would confi rm and accept.

Price Fixing ArrangementsUnder the Competition Law, agree-ments aimed at controlling or fi xing prices, discounts, bonus payments, or surcharges are prohibited.

In certain vertical agreements, the parties may formally be allowed to determine prices if neither of them holds at least a 20% market share. How-ever, a broad range of exceptions (regu-latory as well as practical) applies to this allowance.

Dominant CompaniesTh e FAS supervises the activity of compa-nies which hold a dominant position on a market, as well as monitors the prices established by such dominant companies.

Th e most important factor for evaluating dominance is a company’s market share. For companies with a market share of 50% or greater, there is a presumption of market dominance. Entities with a market share between 35% and 50% are deemed to be domi-nant, if their dominant position has been ascertained by the FAS.

Moreover, it is also possible for the authorities to assert a dominant posi-tion of companies with a market share of 35% or less, if they meet a number of cumulative conditions established by the Competition Law. When ana-lysing the market share, the FAS may even take into account a whole group of companies, i.e. all entities related through ownership and/or manage-ment control, or several competitors that are then recognised as being “col-lectively dominant”.

When structuring and implement-ing their pricing policies, dominant

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By class of products: a division of the market can take the form of product allocation agreements concluded between real or potential competitors.



companies have to comply with the following general principles:

■ prices should not be excessively high or inconsiderably low;

■ diff erentiation in the price of goods must have an objective justifi cation;

■ the withdrawal of goods from the market is not allowed if it could pro-voke a rise in prices;

■ dominant companies may not create discriminatory conditions on access-ing particular products, or barriers for market entrance for new market players; and

■ they may refuse, without a justifi ca-tion, to enter into a contract with a particular customer if the delivery or production of goods is possible.

However, some of the restrictions may be overlooked if the dominant party can prove that the positive eff ects of its behaviour outweigh the negative consequences.

Price Diff erentiationCharging diff erent prices for the same products to fi nal consumers may be con-sidered as pricing abuse, unless there are legitimate and objective reasons for such a diff erence (e.g. reduced prices for bulk buying). To avoid accusations of pricing abuse, a dominant supplier should treat its customers on an equal basis.

Excessive PricesAn excessive price is one defi ned as bearing no reasonable relation to the economic value of the products sup-plied or the service provided. Often, excessive prices are charged by domi-nant companies that are less bound by competitive market forces. One indicator of excessive prices would be economic harm suff ered by a buyer. It is diffi cult, however, to give a product economic value that would probably be indicated through a cost/price analysis, with some element of comparison to competitors' products and prices. In other words, there is no formula to state when a price becomes excessive.

Predatory PricesIn the same way that manufacturers may wish to set higher prices than their competitors, there are also legitimate commercial strategies involving the lowering of prices. However, strate-gies aimed at reducing prices as a way

of eliminating competition from the market are prohibited as an abuse of a dominant position. “Predatory” prices are assumed to be in place when a price is below average variable costs and is so low that no profi t can be made on production. If this is the case, the com-petition authorities will step in.

DiscountsTh ere are many possible forms of off er-ing discounts on products, but the basic competition principles concerning dis-counts are relatively simple: a discount scheme should result in a fair price charged, which does not exclude com-petitors or make it diffi cult for customers to access the products of other suppliers.

Market AllocationRussian law prohibits agreements which would allocate business among competitors on either a geographical or consumer basis, or also according to the volume of sales/purchases or the range of marketable goods through distribu-tion or licensing or other arrangements.

By geography: the law is infringed if two or more producers who sell the same or similar products agree to a territorial division of markets. Th is can result, in particular, from an agreement to keep out of each other’s territories or by establishing quotas.

By customers: market allocation agreements divide the market by class-es of consumers. Th ese agreements provide that market players will not compete for particular groups of con-sumers. Th ey may be formulated as a “positive” restriction (specifying with whom a business may deal), as well as a “negative” restriction (specifying with whom the business will not deal). Th e division can be made, for example, by professions, age or gender.

By class of products: a division of the market can take the form of prod-uct allocation agreements concluded

between real or potential competitors. As a result of agreements between real competitors, for example, a manufac-turer may agree not to sell its particular products in exchange for its competitor doing the same in respect of its prod-ucts. Agreements between potential competitors are often aimed at restrict-ing entry into the market, and usu-ally such agreements give the potential competitors other advantages. Such divisions need not be between inter-brand competitors, but may also result from vertical arrangements.

Cartel agreementUnder Russian law, it is forbidden to enter into cartel agreements or engage in concerted actions which exclude or may exclude competitors or make it diffi cult for customers to access the products of other suppliers, or impede fair pricing.

What is Expected in the Following Months

Th e long-awaited “Th ird Antimonop-oly Package” is expected to be adopted by the end of this year and to enter into force on January 1, 2012.

Th e legal society and businesses alike have been waiting for this set of amendments to the Competition Law and associated legislative acts to be adopted for almost a year. Th e former are looking for clarifi cations and refi ne-ment of the existing regulations, while the latter are looking for simplifi cation of current regulation and protection of their business interests.

Th ough it is expected that it will shed light on certain questions, which have been awaited for fi ve years (since the law was adopted), the general approach of the above regulations and restrictions is unlikely to undergo any substantial overhaul.

Th e program is in its early stages, and it is too early to comment on its success, but the key challenges will be whether developers can be given enough com-mercial freedom, and exploit it success-fully, whilst also enhancing the service received by passengers. If they can then a true synergy will have been realized. It will also, however, be a challenge for the management of RZD to negotiate and manage so many commercial projects in a short space of time.

In certain vertical agreements, the parties may formally be allowed to determine prices if neither of them holds at least a 20% market share However, a broad range of excep-tions (regulatory as well as practical) applies to this allowance.

19



Under the conditions of markets globalization, including food stock markets, foodstuff produc-tion and Retail business, prob-

lems associated with ensuring food safety are brought to the fore.

Th e most important principle for providing safe and high-quality food products to customers is observing proper conditions throughout the sup-ply chain: from primary agricultural production, manufacturing of cattle fodder and fertilizers, throughout the technological chain, observing the conditions of production and risk-pre-venting technologies, until subsequent distribution and sale from the shelves of retail chains to end consumers. Th at means, that not only producer or exporter countries are currently con-cerned with problems associated with food stock or foodstuff safety. Potential food safety threat can aff ect all the supply chain participants: producers, exporters, retail agents, and, ultimately, end users.

Th is is why adoption of food safety principles and requirements common for all participants across the supply chain becomes a vital task for all global market participants. Th e resolution of this goal is the aim of the Hazard analysis critical control point (HACCP) recommendations of the Food and Agriculture Organization (FAO), the World Health Organization (WHO), and in the Russian Federation – of the regulatory legal acts issued by execu-tive authorities, specialized standards, regulations containing requirements on assurance of safety of food stocks and fi nished food products, traceabil-ity of the supply chain from food stock

receipt to food product arrival on the shelves of retail chains, etc.

Looking at each of the food prod-ucts supply chain stages in greater detail, we can draw the conclusion that creation of high-quality and safe food products starts not with production (processing of food stocks) or with sup-plies of food stocks, but with planning of enterprise design activities, including retail enterprises, as well as with the creation of proper sanitary, hygienic, environmental, and other conditions for the sale of food products.

Nevertheless, requirements to the enterprise management system are at least as important, and often crucial for the ultimate result, since without a systematic approach to management it appears impossible to ensure produc-tion, as well as subsequent sale of high-quality and safe food products.

Success can be achieved via the introduction and maintenance of a management system, i.e. a quality management system developed to con-tinuously improve operations, taking into account the requirements of all stakeholders. Th e introduction of an enterprise management system based on international standards and rec-ommendations allows the sale of food products on a systemic, stable and pre-dictable quality level, while observing safety and traceability requirements

and principles of continuous improve-ment.

Leading international players in retail and small-scale wholesale compa-nies are becoming more customer-ori-ented. Retailers are active participants of international associations whose activities are aimed at ensuring food safety; these include

■ the Consumer Goods Forum (CGF) – an association of retail agents;

■ the Global Food Safety Initiative (GFSI) – an international concept of food safety assurance, developed by CGF and dedicated to benchmark-ing of existing food standards against food safety criteria, and developing mechanisms to exchange informa-tion in the supply chain, to raise consumer awareness and to review existing good retail practices

■ GFSI – recognized schemes of cer-tifi cation – standards for food safety intended for manufacturers to ensure food safety of products especially Pri-vate labels

Focusing on the most demanding customers and with an aim to off er the best quality food products, compa-nies are adopting the primary objective, which is making the quality of products and service off ered to customers an absolute priority.

Taking into account the chain’s global scale, wide range of goods sold,

Kovalenok Alexey Viktorovich, Quality Assurance Manager and Deputy Head of Country QA, METRO Cash & Carry LLC

QUALITY – AN ABSOLUTE PRIORITY



including those imported from other countries, the objectives and tasks established, and the associated risks mentioned below, the company’s qual-ity assurance departments are intro-ducing and applying a risk assessment and management matrix for all groups of goods sold.

Th e matrix is based on the follow-ing factors in descending order:

■ Risk of disease; ■ Risk of deterioration of the com-

pany’s image; ■ Risk to certain consumer groups

such as children, elderly persons, highly allergic persons;

■ Risk for products often subject to counterfeiting;

■ Customers’ inquiries; ■ Sales level of food products in our

chains and Supplier status (federal / local) for RF products;

■ Countries and regions of product origin.

Th e aggregate eff ect of the above factors determines the approach to analysis and subsequent operations with products. All food categories are divided into 4 groups of low, average, high, and extra-high risk.

In order to ensure proper quality and safety of foods sold in high and extra-high risk groups, along with docu-mentation analysis and labeling, regular quarterly product tests are used, as well as annual (or semiannual, if necessary) audit of manufacturing conditions in accordance with special requirements.

From 2012, European retail and small wholesale companies will begin intro-ducing a mandatory requirement for Private label products producers / sup-pliers – certifi cation of production con-

ditions in accordance with the require-ments of international standards under the Global Food Safety Initiative (GFSI) concept. All the standards include HACCP recommendations, elements of quality management systems, as well as requirements with regard to observing production conditions and infrastruc-ture, in particular, requirements of regu-latory legal acts of the RF with respect to sanitary and hygiene conditions.

We are looking at a classic win-win situation. Th e certifi cation gives pro-ducers an opportunity to market their products nationwide or even interna-tionally. Consumers get a guarantee of safe food products. Retailers through a local network of certifi ed suppliers can enhance the supply security.

To meet global and local food stan-dards retailers launched together with the United Nations Industrial Develop-ment Organization (UNIDO) a devel-opment program for the improvement of food safety and quality of suppliers. It is aimed at Russian brand and fresh products suppliers.

UNIDO is a specialized agency of the United Nations. Its mandate is to promote and accelerate sustain-able industrial development and work towards improving living conditions.

“Developing countries are benefi ting from increasingly participating in the global trading system. Th us, strength-ening their capacity to participate in global trade is critical for their future economic growth. Especially after their accession to the WTO, their technical ability to enter into global production and value chains is key for their success-ful participation in international trade. UNIDO is one of the largest providers

of trade-related development services, off ering customer-focused advice and integrated technical assistance in the areas of competitiveness, trade policies, industrial modernization and upgra-ding, compliance with trade standards, testing methods and metrology.” – states the offi cial web page www.unido.org.

Following the provided recommen-dations, the supplier pays considerable attention not only to proper quality and safety of food supplies from vendors, but also the conditions of delivery and sale at the shopping centers (SC ) of the retailer.

One of the most eff ective ways of addressing product safety is through the construction of own distribution centers (DC), which allow retail com-panies store large product volumes from vendors and generate orders depending on the needs of each store of the chain. Th is allows companies, to the maximum possible extent,

■ ensure incoming quality control at the DC;

■ provide a proper storage regime, observing the temperature and humidity conditions requirements;

■ ensure the delivery of products (especially those with short shelf life) to remote regional stores observing the requirements for transportation of such product types (the so-called “cold chain”).

All the above schemes of work with vendors and operations aimed at ensur-ing a regime of acceptance, delivery, and sale in stores, allows retail compa-nies off er customers high-quality prod-ucts in the required volume and range, at aff ordable prices.

Aside from products delivered through the company’s distribution center, attention should be paid to the conditions under which products are supplied to stores directly from ven-dors. Companies are introducing the requirements to suppliers of high and extra-high risk products with a short shelf life. Th ese requirements are to have the cargo accompanied to stores by devices registering the temperature regime of the delivery.

In order to guarantee the safety and quality of products sold, producers should determine and make known, the specifi c storage conditions that retail stores should adhere to.

21



Th ese conditions should include ■ ensuring that each product is kept

under its optimum storage tem-perature and carrying out periodic, recorded checks to ensure that this temperature range is maintained at all times;

■ regular equipment maintenance; ■ maintaining optimum sanitary con-

ditions required for product storage; ■ installing certain types of equip-

ment, which help ensure that opti-mum storage conditions are met, for example, low temperature equip-ment with automatic temperature control and notifi cation of need of maintenance, when necessary.

To ensure that optimum storage temperature is maintained during deliv-ery, stores off er specialized packaging for products, which helps maintain the required temperature conditions during transportation from the SC to the cus-tomer: cooling boxes, cold accumulation devices, portable electric refrigerators.

Th e following measures are imple-mented in retail and small wholesale companies in order to control sell-by date:

■ delivery to SCs of products (espe-cially those with a short shelf life), within a period equivalent to one third of its shelf life, from the date of its manufacture;

■ regular quality control of products on shelves;

■ inventory control, allowing continu-ous receipt of fresh products from vendors and companies’ DC.

In order to ensure the quality and safety of food products sold at the SCs, companies adopt and introduce internal (self developed) “Quality Standards”, developed by a company’s quality control department taking into account the company’s international

experience. Th ese Standards are a manual on the organization of a pro-duction control system and a corporate self-control system at wholesale trade centers.

The standard should include requirements for products’ acceptance, allocation and sale, as well as wash-ing and disinfection measures. Logical introduction of new higher standards for suppliers can start with require-ments for manufacturers of “Private labels”.

All eff orts made by retailers with regard to the quality of the products off ered are primarily most benefi cial to their customers. In buying products from retail stores that adhere to the standards of food safety, they are con-fi dent that these products have under-gone all mandatory checks: they have been approved by the quality assurance department, contain all the information required by the Law “On Protection of Consumer Rights and specialized stan-dards” and most importantly, this infor-mation is presented to the customer in layman’s terms.

One of the most eff ective ways of addressing product safety is through the construction of own distribution centers (DC), which allow retail com-panies store large product volumes from vendors and generate orders depending on the needs of each store of the chain.



On average, household applianc-es are responsible for half of a households' energy consump-tion. Th is is not only harmful for

the environment, but also costs a lot for the consumer due to constantly increasing electricity prices. Running new resource-saving devices can lead to considerable economies. Low water and energy consumption becomes an ever more important parameter in household equipment choices. Since 1995, the European energy effi -ciency label has informed customers about household devices’ water and energy consumption. Th anks to the technologies’ development within the last 15 years, household devices are consuming signifi cantly less resources; therefore initial energy effi ciency label has lost its importance as a decision-making instrument and the necessity of its modernization became obvious. Which was not an easy task, by the way. Only after protracted negotiations in Brussels was it possible to come to terms over the changes in the label.

Energy effi ciency calculation meth-odologies which are related to energy effi ciency label in Russia are equivalent to those used for old European energy effi ciency labels for washing-machines, dish-washers and refrigerators. For washer-driers and ovens they are still identical to initial ones. Although leg-islation of the Russian Federation as opposed to European directive doesn’t require unifi ed energy effi ciency label design for one type of products, many

manufacturers, fi rst of all, the members of the AEB Home Appliances com-mittee, made an agreement to use one and the same label model localized into Russian language. Unifi ed energy effi -ciency labels design under condition of their obligatory presence on the sold household devices – is an eff ective deci-sion-making instrument for customers interested in reducing regular operation costs and ecological properties of pur-chased goods. Th is, of course, presup-poses no negative eff ects on the device’s functionality.

Member of the AEB Home Appli-ances committee see their role in caring attitude to natural resources propagan-da, water and electricity at fi rst place and set high value on energy effi cien-cy labels as a carrier of objective and concentrated information on house-hold devices economic effi ciency. By simple substitute of the old devices to the modern ones it is possible to achieve signifi cant results. According to statistics, about 25 million refrigera-tors produced more than 10 years ago are used in Russia. If all those devices are substituted by the modern super energy-effi cient ones with a high class

of energy effi ciency, energy demand will decrease 10.2 TW*h a year. Th is is almost equal to the overall energy consumption of all the households in Moscow and requires production capacity of two medium size nuclear power plants.

Russian regulators do not conceal the fact that the regulatory framework aimed at informing the household appli-ances customers about it’s energy and water consumption characteristics are based on European approach – this is directly stated in the Government decree 1222 as of 31.12.2009. Th is allows to speak of considerable harmonization between the regulatory energy effi cien-cy characteristics and methods of their calculation in Russian Federation and European Union members, which very likely means that innovations embodied in new European energy effi ciency labels in future would be implemented in Rus-sian regulatory framework. So what has changed in EU energy effi ciency labels?

New European energy effi ciency label kept most of its components, such as, for instance, basic principle of subdivision on seven energy-effi ciency classes, marked with letters and col-orful lines from red (low energy effi -ciency class) to dark-green (high ener-gy-effi ciency class). Th ree new classes were added: A+, A++ and A+++. Also now it is regulatory to state the noise

Alexej Soldatow, Technical Regulation Manager, OOO BSH Bytowaja technika

ENERGY EFFICIENCY LABEL: MORE CLARITY, LESS EXPENSE

Russia: Substitution of the old refrigerators pre-supposes signifi cant energy-saving potential

An example of a Russian energy effi ciency label

The new European energy effi ciency label

43% are operated for more than 10 years already!

58 mln. devices 23.8 bln. kW per annum

25 mln. devices

Household refrigerators

11.2 bln. kW per annum

Consumption of electrical power by refrigerators

In case of replacement of all the devices that are operated for more than

10 years with similar modern class A++ devices

12.6 bln. kW per annum

Potential of reduction of emission: about 3.8 mln. tons of CO per year2

Data as of 2008 0.338 kg of CO correspond to 1 kW/h

2

23Industry Specific Aspects

level. New label contains universal pic-tograms instead of text fi elds descrip-tions specifi c for every EU language. It is used to indicate the annual energy and water consumption rates, mea-sured in accordance with European standards. Since the end of 2010 new energy effi ciency label may be used on the volunteer basis by manufactur-ers of original refrigeration equipment, wine chiller cabinets as well as wash-

ing machines and dish-washers. Since the end of 2011 new label for those categories of appliances will become mandatory. At the time being drafts of new directives and energy effi ciency labels for dryers and vacuum cleaners are being developed.

New was hing machine labels fea-ture three new energy-effi ciency class-es: A+, A++ and A+++. A+++ class devices consume 32% less energy than

the same purpose А class devices. While specifying annual energy and water consumption rates, diff erent modes of operation are taken into con-sideration: cotton cycle at 60°С with full and partial load, and also cycle at 40°С with partial load. In addition to this, new label shows the device’s energy consumption in the standby mode. On the new energy effi ciency labels performance quality is no longer stated, since with implementation of new Ecodesign requirements, all wash-ing machines must ensure the quality of washing not lower than A class.

New dis h-washers labels feature three new energy-effi ciency classes: A+, A++ and A+++. A+++ class devic-es consume 30% less energy than the same purpose А class devices. On the new energy effi ciency labels the quality of drying is no longer stated since with implementation of the new Ecodesign requirements all dish-washers must ensure the quality of dish drying not lower than A class. New dish washers label also shows the device’s energy consumption in the standby mode.

Production (raw materials, power and

water consumption)

Raw materials Non-ferrous metals,

steel, plastics, glass, etc.

Distribution (power consumption

and emission of hazardous

substances)

Removal of wastes (power consumption)

Operation (consumption of water, power and chemical substances)

* Rates depend on the type of product and consumer behavior

About 90% of impact of common household appliances on the

environment happens at the stage of their utilizaiton.

<0.5%

<0.5%

90-95%

4-9%

Impact on environment during the life cycle of the household appliances*

Main household appliance life-cycle stage from the point of view of it’s environmental impact – operation phase



Introduction Air conditioners consist of one or more indoor units connected through a closed piping system to an outdoor partner. In the cooling operation, the indoor unit has an evaporating fl uid, thus removing heat from the room. In the outdoor part, the fl uid is con-densed, releasing the excess heat to the surrounding environment.

Th is fl uid is called the refrigerant and it is selected mainly, but not exclu-sively, because of its thermodynamic properties.

Two main groups of refrigerants are currently used HCFCs (hydrochlo-rofl uorocarbons, of which R22 is the most common example) and HFCs (hydrofl uorocarbons, often referred to as F-gases).

HFCs follow HCFCs HCFCs have a harmful eff ect on the ozone layer, and that is why in many parts of the world their use has been banned. In Russia, their use is to be reduced by 90% by 2015. However, manufacturers and scientists haven’t yet agreed on what substances would replace HCFCs in refrigeration and air conditioning systems. Currently, mixed refrigerants as R410A and R407C con-taining hydrofl uorocarbons (HFCs) are off ered as alternatives. It has been agreed that these HFCs do not harm the ozone layer, but their global warming potential (GWP) is very high, and there-fore the emissions of these substances are included under the Kyoto Protocol.

In Europe the use of refrigerant has been regulated since the early 1990s.

Initially, the control system was estab-lished as part of the fulfi lment of com-mitments under the Montreal Protocol. At that time it regulated chlorine-con-taining refrigerants CFCs and HCFCs. Later, Kyoto added HFCs. Th e expiry of the Kyoto Protocol on 31 Decem-ber 2012 will not aff ect the European F-gas policy. Moreover, the interna-tional community is deliberating upon including F-gases into the scope of the current Montreal Protocol.

Th e Russian Federation started to phase out HCFCs soon after the major-ity of those European countries that are ahead of the Montreal Protocol sched-ule. While Russia just starts to cut back in HCFC production and consump-tion, Europe has already completed this stage and imposed HCFC con-trol measures, protecting its domestic market from technologies using these refrigerants.

Stefan Verstappen, Business Development Director, Russia & CIS, Daikin Europe NV Moscow Offi ce

THE REGULATION OF REFRIGERANT USE: EUROPEAN EXPERIENCE AS AN EXAMPLE FOR RUSSIA

Principles of F-gas Regulation Policy in the EU

EU Regulation 842/2006 of the Euro-pean Parliament and of the Council of 17 May 2006 on Certain Fluorinated Greenhouse Gases which sets the uni-fi ed F-gas regulation policy came into eff ect in In July 2007 in the EU. It stipulates several lines of policy: leak checking, training and certifi cation of installation personnel and companies, a product labelling system, refriger-ant recuperation and destruction, and reporting and control systems.

Leak CheckingMandatory rules for checking installed systems has been introduced in order to prevent emissions of F-gases. Th e check interval depends on the refriger-ant charge. Every piece of equipment containing more than 3 kg of refrigerant has to have its own logbook, including records of any actions performed on the equipment and the identifi cation of technicians who performed such servicing or maintenance.

Training and Certifi cation of Installers and CompaniesBoth companies and technicians have to undergo certifi cation. Only those activities which require interference with the refrigerant circuit require cer-tifi cation. Cleaning fi lters and repair of electric parts are excluded. To obtain it, European technicians need to pass a theoretical and practical examination and demonstrate a minimum level of relevant training. Before examination, installers may have authorised training courses at specialised facilities. Th ey have to show knowledge of legisla-tion, skills in working with refrigerants, detecting and eliminating leaks be able to perform soldering.

In order to be certifi ed, the com-pany is to submit necessary documents and pass an audit similar to educational institution licensing by a fi eld team in Russia. Th e certifi cation must be imple-

Trade associations—the key dis-semination channel—have played an important role in creation of awareness of the business circles and customers.

25



mented by an independent, accred-ited organisation. Th ere are companies off ering assistance in preparation for certifi cation.

Product Labelling System Labelling should be a part of name-plates, operation and installation manu-als as well as other technical docu-ments. Th ese are to communicate to the installer and consumer that the piece of equipment they are dealing with contains F-gases covered by the Kyoto Protocol. It also identifi es the specifi c refrigerant (factory or fi eld added) and invites thorough checking in manuals and technical documentation.

Refrigerant Reclamation and Destruction Equipment containing F-gases cannot be decommissioned without address-ing the refrigerant properly. Specialised companies are engaged in recuperation and destruction of refrigerants. Th is recovery activity has to be done by certifi ed technicians. After recovery, it can be reused, reclaimed, recycled or destroyed.

Reporting and Control Systems Th e reporting system is based on col-lection and analysis of data obtained from F-gas sellers and manufacturers, installation contractors and logbooks. In some countries the document man-agement system is paper-based (the Netherlands), in others, it is electronic (Hungary).

Th e data from refrigerant produ-cers, importers and exporters are

reported directly to the European Commission. Th e control system is multistage. In the Netherlands, for example, the a control is exercised by STEK (the organization that has devel-oped a certifi cation system and is cur-rently eff ecting routine monitoring), a subdivision of VROM (Ministerie van Volkshuisvesting, Ruimtelijke Orden-ing en Milieu – the Ministry of Hous-ing, Land Use Planning and Environ-ment of the Netherlands), and local executive bodies.

However, we should not forget about one more control level. Citi-zen responsibility plays an important role. It is the duty of the end user or operator to check that work on the refrigerant circuit is only performed by certifi ed persons. Th e conscious attitude of the Dutch people to envi-ronment has become a part of their modus vivendi after the 1972 publica-tion of ‘Th e Limits to Growth’ by the Club of Rome. Th at report foretold depletion of oil and gas resources. Th e Dutch are very conscious about energy consumption and maintenance of the balance between human activities and environment. In particular, work with-out certifi cation, failure to check leaks by customers or other violations are subject to a 10,000 Euro penalty and a company’s loss of license.

Specifi c Features of F-Gas Control Whereas in Russia tend to enact laws quickly and then clutch our heads (Suggest: While Russia tends to pass laws in a haste and worry about their

implementation later, the EU worryies about implementation developing new rules gradually and progressively. Th e experience in the Netherlands with certifi cation of refrigerant technicians since 1992 was successful and therefore copied across the EU in 2006.

Trade associations – the key dis-semination channel – have played an important role in creation of awareness of the business circles and customers. Frequent inspectors’ visits (the whole fi rst year they just educated and did not impose fi nes) consolidated success. In the Netherlands, the internet was not brought into play, since in early 1990s it was yet so widespread and eff ec-tive, but in new EU members such as Hungary, the certifi cation system was implemented directly via the internet.

Economic Advantages In Russia, environmental concern has absolutely no economic aspect. But in the EU, that component favours busi-ness development. Some examples:

Whereas Russian associations have no means to isolate a market from amateurs and moonlighters, the F-gas regulation helped to solve this prob-lem in Europe in several steps. Th anks to scheduled inspections, installation organizations increased their profi t by 25%, business became more stable: installation works in summer, check-up and servicing in other seasons. A new discipline in vocational training appeared, still absent but needed in Russia. Th e baseline knowledge and skills necessary for an installer may be secured as part of vocational secondary education. Th e introduction of paid technician certifi cation (note again, that it’s not free) led to a reduction in personnel turnover: an employee has to work for a company for three years or have to repay training and examina-tion costs in full or in part.

Of course, the principal benefi t of leakage prevention has been ecologi-cal. Th e leakage level decreased from 30 to 10% of total refrigerant charge. In new equipment, it does not exceed 3%. Regular inspection is also a preventive maintenance bonus for the end user, saving costs on repair and spare parts, and on the energy bill. Adopting this model would benefi t Russian people, business and the environment.


26 Networking

NETWORKINGThe Forum of Russian and European Businesses Partners in Modernisation: New Opportunities for Doing Business in RussiaOver 200 delegates attended this year’s forum of Russian and European Businesses, organised by the AEB. Th e event was held in St. Petersburg on 23 September 2011.

Senior government representatives and top level speakers from the leading European and Russian companies took part in discussions on the challenges of modernisation, innovation and new opportunities for investors in Russia.

Delegates to this year’s event were also given the opportunity to attend round table meetings on diff erent sec-tors, such as manufacturing, high tech, retail trade and pharmaceuticals. Th e challenges of HR, customs legislation, transport and logistics issues were dis-cussed in-depth. A round table on the stock market, hosted by MICEX, high-lighted new opportunities for investors and IPOs in Russia.

An offi cial meeting of the No r-thern Dimension Business Council was chaired by Alexey Mordashov, CEO of Severstal and Tapio Kuula, Presi-dent and CEO of Fortum Corporation. During the meeting, the participants decided to hold the 3rd Northern Dimension Forum in St. Petersburg on 29 March 2012.

Sponsored by:

Reiner Hartmann, Head of E. ON Ruhrgas Representative Offi ce Moscow & AEB Chairman of the Board

Thierry Geoff roy, IT & Logistics Director, Atak & Tatiana Fedorovich, Head of Regional Suppliers Department, Auchan

Calin Anton, Key Account Manager Russia & CIS, Lindab & Ronald Laucassen, Chief Supply Chain Offi cer, Heineken Russia

Dmitry Cheltsov, Chairman of the AEB Transport & Customs Committee & Vadim Bushuev, Deputy Head of North-Western Division, Head of Federal Customs Revenues Service, RF Federal Customs Service

Fernando Valenzuela, Head of Delegation of the EU to the RF & Tapio Kuula, President & CEO, Fortum

Eric Helen, CEO, Specta

Sergey Sinkevich, Vice-President, MICEX & Maria Ivanova, Head of Domestic Securities Services, Deutsche Bank Russia

Jaroen Ketting, Managing Director, Lighthouse Russia & Alexander Demidov, CEO, GfK Rus

Howard Gibson, HR Director, Caterpillar Eurasia & Olga Bantsekina, Head of Representative Offi ce in Russia, Coleman Services UK

Dominique Fache, Chairman of the Board, Enel OGK-5

Frank Schauff , CEO, AEB

Jean-Luc Duramy, VP Eastern Europe, DuPont Science & Technologies

Bruno Balvanera, Head of Regional Development Russia, EBRDAlexey Mordashov, CEO, Severstal

27


Networking

EU – RUSSIA DIALOGUE

The AEB Pharmaceutical Committee meets John Dalli, EU Commissioner for Health and Consumer Policy10 October 2011. John Dalli, EU Commissioner responsible for Health and Consumer Policy, visited Moscow to par-ticipate in the Millenium Development Goals – 6: Forum to combat HIV/AIDS, Tuberculosis, Malaria and other diseases. Th e AEB Health and Pharmaceutical Committee

had a breakfast with Mr. Dalli to brief him on the important issues for the pharmaceutical sector, including counterfeit-ing, localisation of production in Russia, clinical trials and the impact of the Customs Union on the industry develop-ment.

The SI-Federation of Icelandic Industries Delegation visits the AEB12 October 2011. Th e AEB welcomed a Delegation from the Icelandic Industries. Th e Delegation was eager to know more about the activities of our Association and the investment climate in Russia.

Alex Stoljarski, AEB Chairman of the Legal Committee briefed the delega-tion on the legal aspects to be considered before entering the Russian market. Luc Jones, Member of the AEB HR Committee, presented some insights on the Russian labour market. Liliana Stoianova, member of the AEB Real Estate Committee, gave a presenta-tion on the offi ce and warehouse market.

The Icelandic representatives emphasised Russia’s importance as a market for investment and exports.

Ruslan Kokarev invited the Fed-eration of Icelandic industries to participate in the Th ird Northern Dimension Forum co-organised by the AEB and the Northern Dimen-sion Business Council. Th e event will be held on 29 March 2012.

10th EU-Russia Intellectual Property Rights (IPR) Dialogue12 October 2011. Th e parallel import liberalisation, copyright and trade mark protection in Russia as well as other important issues were discussed during the 10th EU-Russia IPR Dia-logue. Ekaterina Tilling, Deputy Chair-man of the AEB IP Subcommittee and Artyom Kursakov, AEB Legal Advi-sor represented the Association at the meeting.

Th e round of the Dialogue was hosted by Rospatent. Th e event was attended by the representatives of gov-ernment bodies including the Minis-try for Economic Development of the Russian Federation. Th e AEB views participation in the EU Dialogues as an eff ective communication channel for conveying the concerns of the Euro-pean businesses community and AEB members.

The AEB meets the representatives of the Finnish Chamber of Commerce 24 October 2011. Risto Penttilä, CEO of the Central Cham-ber of Commerce of Finland welcomed Ruslan Kokarev, COO of the AEB and Marie Rondelez, Adviser on EU Aff airs of the AEB, and asked them to give a brief overview of the investment climate in Russia.

Th e Finnsih representatives were particularly interested in the Partnership for Modernisation initiative and the

Skolkovo project in which Finnish industries are willing to participate. Th ey also enquired about the current political climate in Russia and the latest developments in the Russian political scene.

Ruslan Kokarev invited the Finnish Chamber of Com-merce to take part in the preparation of the Th ird Northern Dimension Forum.

AEB Welcomes Russia’s WTO Accession Russia’s WTO accession will encourage open and fair competition, innovation, international cooperation and economic growth.

Th e AEB is a strong supporter of Russia’s WTO accession as an important step forward for interna-tional trade and investment. According to the World Bank, the economic eff ect of entry will be a 3.3 percent annual increase of Russia’s

GDP over the next several years.

Once the landmark agreement is implemented and Russia is formally invit-ed to become a member of the WTO at the Ministerial Conference in December Russian customers will enjoy a greater access to high qual-ity goods and services.

Th e overseas companies will benefi t from a unifi ca-tion of trade regulations,

measures stimulating invest-ments, and IP rights protec-tion. New WTO compatible customs and tariff policy will, most likely, increase competition for commodi-ties and industrial products on the Russian market as well as reduce prices.

“New investors are likely to enter the Russian market in the future. Th e European companies already success-ful in the country will ben-

efi t from new and expanded opportunities as well as a more predictable and legally viable business environment”, noted Frank Schauff .

Th e AEB hopes that Rus-sia’s active participation in the Customs Union will not aff ect WTO membership. Russia’s membership of WTO will certainly help further devel-opment of the EU-Russia Dialogues and the creation of the Single Economic Space.

Orri Hauksson, General Manager of SI – Federation of Icelandic Industries & Ruslan Kokarev, COO of the AEB


28 Networking

Forecasts. Analysis. Debates.

The World Bank: Russia’s Economic Report № 26Th ere are two risk scenarios for Russia, according to the World Bank.

Th e “moderate shock” scenario: the global growth outlook gradually deteriorates but remains positive, refl ected in lower oil price outlook to an average of US$80 (a drop of about US$15 compared with the baseline outlook).

Th e “severe shock” scenario: the global outlook is severe-ly aff ected by the recession in one of the major economic blocks, resulting in a sharp contraction in global demand and demand for oil. Under these conditions, oil demand

would fall sharply and prices could again average $60 in 2012 (as in 2009).

Th ese risks as well as current trends and policies were high-lighted by Pedro Alba, World Bank Country Director for Rus-sia at the briefi ng, organised by the AEB in September 2011.

“Notwithstanding the short-term federal budget surplus and the low public debt, the new budget plan for 2012–14 raises concerns about the long-term fi scal sustainability of Russia’s public fi nances” said Mr. Alba at the briefi ng, organ-ised by the AEB.

Pre-Electoral Period: What’s on the Agenda?Th e global positioning of Russia is not clear enough, accord-ing to Igor Yurgens, Chairman of the Board, Institute of the Contemporary Development.

If Russia is positioning itself as a strategic ally of the EU, supplies Europe with natural resources and makes a bridge to Asia, this is one avenue for development, said Mr. Yurgens at the briefi ng organised by the AEB in October. If Russia is

a strategic ally of China, then the bridge comes from another side but it’s still a bridge.

“Th e third way is a creation of the Russian Eurasian super-power and establishing a new economic zone. However, there are many questions here, such as: who are our allies? Are they true allies or they are just playing their game?”, Mr.Yurgens added.

The Election Campaign: What is the Future of Russian Politics? Over 59% of Russia’s citizens don’t want to change the existing pension system and 55% support a “one-size-fi ts all” model of economic and social policy, according to the Centre for Political Technologies (CPT).

“Th ere is a demand for political change in society: 88% of our respondents want to have a bigger infl uence on the govern-ment in contradiction to an idea of “stability as a priority” propagated by Russia’s leaders”, said Igor Bunin, General Director of the CPT at the briefi ng, organised by the AEB in October 2011.

Th e idea of fairness is supported by some political parties as well as people, such as Alexey Navalny: nearly 83% are looking for rapid changes.

“Th ere will be some insignifi cant technological modernisation, possibly in Moscow and St. Petersburg only, with no impact on Russia’s development overall. A large scale modernisation is impossible without a free press or strong political opposition”, Igor Bunin added.

Odd Per Brekk, Senior Resident Representative, IMF

Growth or Stagnation?Greater instability in Russia than in the European countries is caused by an economic structure vulnerable to external shocks, according to Odd Per Brekk, Senior Resident Representative, IMF. But Russia’s business cycle-amplifying macro policies have also contributed to the instability,

he said at the briefi ng organised by the AEB in September, 2011. On behalf of the IMF, Mr. Brekk recommended expanding Th e Bank of Russia’s powers, conduct-ing consolidated supervision and applying “supervisory judgment” to lift growth and reduce vulner-ability.

Mass Media and Elections: Briefi ng by Alexey Venediktov, Editor-in-chief, Echo of MoscowTh e coming elections in Russia are the last ones in which television will be playing a signifi cant role as the popularity of social media, including twitter, is increasing, said Alexey Venediktov, Editor-in-chief, Echo of Moscow at the briefi ng, organised by the AEB.

“People have no answers, only questions, and they can’t get the information they need from the mainstream media. Th ey have also started building communities online, and the mainstream media reports on this, attracting even more followers”, he noted.Alexey Venediktov, Editor-in-chief, Echo of Moscow

29


Networking

Business Mission to Voronezh“IT technologies and agriculture are the priority for our region” said Alexey Gordeev, Governor of the Voronezh region, at the meeting with the AEB members.

Over twenty European Russia-based companies participated in the mission, including BASF, which have recently set a local offi ce in the area.

Th e industrial park “Maslovsky” was the focus of a presentation by Alexander Gusev, Deputy Gover-nor of Voronezh region. He told the AEB members about the infrastructure and illuminated some ben-efi ts for the park residents.

Dmitry Markov, Head of Industrial, Transport and Innovation Department of Voronezh region presented an overview of the government’s clus-ter policy in the area. Th e programme for cluster development (with a special focus on joint cluster projects) will be completed by 2012.

Anatoly Spivakov, Head of Agrarian Policy, told the group about over 70 new investments in agrarian projects across the region. Th e government plans to raise the numbers of cattle to 300 thousand by 2020.

“Our visit is a step towards closer cooperation with our colleagues in Voronezh region responsible for attracting foreign and Russian investments”, said Frank Schauff , CEO of the Association of European Businesses. The AEB members participated in the business mission

Alexey Gordeev, Governor of the Voronezh region & Frank Schauff , CEO, AEB


30

On 1 January 2012, a new trans-fer pricing control regime for tax purposes will be introduced. How does it diff er from the control

regime in force now? Th ere has been no material change

to the defi nition of related parties for the purposes of the new law, but the list of formal criteria allowing parties to be classed as related has been signifi cantly expanded (article 105.1 of the Russian Tax Code). Parties are classed as related according to the following criteria:

■ holding more than 25% directly or indirectly, of the issued capital. To this end, the parties’ being related may be based on a vertical (as at present) as well as a horizontal relationship;

■ having the power to elect at least 50% of the management bodies;

■ the same individuals managing organisations or forming more than 50% of their management bodies;

■ having the authority of the sole exec-utive body;

■ for individuals, being relatives or one being a subordinate of the other in an employment relationship.

Th e court will retain its current right to hold that parties are related based on other grounds if the relation-ship between them allows infl uence to be exercised over the price. Moreover, the new law allows taxpayers voluntari-ly to admit that they are related based on any criterion not established by the law. A taxpayer is not obliged to dis-close the reason for such an admission.

Th e list of controlled transactions is established by article 105.14 of the Tax

Code. Exchange (barter) transactions are excluded, as are cases in which a tax-payer permits prices to fl uctuate by more than 20% from the prices applied by it.

Transactions between related par-ties are treated as controlled, as well as equivalent transactions (transactions between parties with a ‘superfl uous’ intermediary between them, cross-bor-der transactions with goods traded on global exchanges, and transactions with residents of tax havens). Restrictions have been brought it for the control of internal transactions between related parties which are Russian residents: large-scale transactions the income

under which is in excess of RUB 1 bil-lion, transactions with a party that pays mineral extraction tax, as well as trans-actions in which one of the parties has a special tax status allowing it to make an unjustifi ed tax saving. Bearing in mind the fact that control over large-scale transactions between Russian organisa-tions is conditional on additional obli-gations being imposed on a taxpayer to distribute tax proceeds between diff er-ent regional budgets, the law states that there is no control over transactions between Russian organisations which pay tax to one and the same regional budget (they do not have standalone subdivisions) and have no losses.

A court may not class transactions as controlled for reasons that are not stipulated in the law. Th e court may class a transaction as controlled only if the taxpayer has entered into it with the aim of avoiding transfer pricing control.

As with the current law, the new law establishes a comparison with the market price as the main principle of control over transfer prices, i.e. with the

transaction price for the same (or simi-lar) goods entered into by independent parties in comparable conditions. Th e new law signifi cantly extends the list of factors for conditions to be comparable, both in relation to the subject matter of the transaction as well as internal and external features of the activity of the parties to the transaction (articles 105.5 and 105.8 of the Tax Code).

Also extended is the list of sources of information which the tax authori-ties may use to check the prices applied by a taxpayer in controlled transactions (article 105.6 of the Tax Code). In par-ticular, now the information from the taxpayer itself in comparable transac-tions with independent parties may be used as such a source. Only general restrictions are established with regard to sources – they must be published and publicly available. Th e tax author-ity may not use information which it has obtained through carrying out tax control over other taxpayers and which remains confi dential tax information.

Th e new law signifi cantly changes the approach to the methodology for proving that prices under controlled transactions conform to the market level.

Th ere are now fi ve methods, which the tax authority may apply for control purposes: to those applied under article 40 of the Tax Code have been added the comparable profi tability method and the distribution of profi t method.

Th ere is also no strict order in which the methods must be supplied, whereas an order of priority is currently stipulated by article 40 of the Tax Code. Simply, the comparable price method takes precedence. Th e priority of this method in relation to the others is due to the fact that information sources have a fairly large amount of informa-tion and when there is a high level of comparability between transactions being measured against one another, this allows for greater accuracy in the assessment of whether the prices under

NEW PROCEDURE FOR TRANSFER PRICING CONTROL IN RUSSIA: MAIN PROVISIONS

Legal Updates

Valentina Akimova, Partner, Pepeliaev group

Tax control of transactions that are reviewed is carried out win the scope of a special tax audit, which only the FTS may conduct (article 105.17 of the Tax Code).

31


Legal Updates

controlled transactions correspond to market prices.

Th e legislature establishes the most general requirements for a company wishing to choose other methods. Th e company must use the method which, taking account of the actual circum-stances and the terms of the controlled transaction, allows for the most author-itative conclusion to be drawn as to whether or not the price applied in the transaction corresponds to mar-ket prices. A range of more specifi c grounds for applying one method or another are also stated.

The fundamental distinction between the re-sale price method (method 2) and the cost-plus method (method 3), and the comparable profi t-ability method (method 4) and the prof-it split method (method 5) is as follows. As a result of applying the second and third methods the tax authority must determine a market price with which can be compared with the price under the controlled transaction. Applying the fourth and fi fth method results in a certain tax base being determined and

this must correspond to the market level of taxable profi t.

Another substantial difference between the new rules and the regime currently in force is that there is no established permissible deviation in price (profi tability) from the market price in controlled transactions. Cur-rently, the fact that this is permissible reduces the negative implications of errors and mistakes committed during the control process.

Th e new control regime provides for the statutory gap in market prices (profi tability) to be replaced. Price fl uc-tuations that are natural for the market, including under transactions between

independent parties, form a market interval in prices. Th erefore the terms according to which price control meth-ods are used should ensure that the cal-culation data corresponds to the market level of prices that has developed in the sector in question. However the provi-sions of the new law, bearing in mind the lack of information, allow for the need to establish such an interval to be avoided, signifi cantly reducing the eff ectiveness of and justice in tax control in this area.

Th ere have been radical changes to the procedure for informing the tax authorities of controlled transactions that have been consummated as well as the procedure for justifying the prices applied in them. Under the legislation currently in force, a taxpayer has no obligations to notify the completion of such transactions or to provide spe-cifi c documentary evidence of the price le vels applied.

Now, a taxpayer that has entered into a controlled transaction must notify the tax authority of the fact that the transaction has been entered into (article 105.16 of the Tax Code). Such

As with the current law, the new law establishes a comparison with the market price as the main principle of control over transfer prices, i.e. with the transaction price for the same (or similar) goods entered into by independent parties in comparable conditions.


32 Legal Updates

a notifi cation must be sent to the tax authority at the place where the taxpay-er is registered no later than 20 May of the year following the year in which the transaction was completed. Th e noti-fi cation must state information about the transaction(s) such as the period in which it was entered into, the subject matter, information on the parties and the amount of income (expenditure) under the transaction. Th e local tax authority exercises control to ensure that the taxpayer notifi es its full activ-ity, and should it be revealed that con-trolled transactions were entered into which the taxpayer has failed to notify, the authority itself will notify the Rus-sian Federal Tax Service (the FTS) of any such transaction.

A taxpayer is obliged not only to notify the tax authorities of the fact that controlled transactions have been entered into but also to prepare docu-mentation justifying the transaction (article 105.15 of the Tax Code). Th e documentation that is supplied must include information on the parties to the transaction, the methods applied, the sources of information used with regard to prices and information on the economic eff ect obtained. Further, the detail and thoroughness of the information supplied must be com-mensurate with the complexity of the transaction and the formation of the price within it. Such documentation must be supplied further to a demand from the FTS, which may be made no earlier than 1 June in the year follow-ing that in which the transaction was entered into.

Th e change in the procedure for pro-viding information concerning transac-tions, and in the scope and nature of the documentation, has prompted many experts to talk of the legislature shifting to the taxpayer instead of the tax author-ity the burden of proof with regard to prices conforming to the market level in controlled transactions. We believe that such an opinion is fully justifi ed.

Tax control of transactions that are reviewed is carried out win the scope of a special tax audit, which only the FTS may conduct (article 105.17 of the Tax Code). Th e law prescribes the overall fundamentals of the procedure for such an audit in such a way that it could be described as a cross between a desk tax

audit and a fi eld tax audit. Th e audit is carried out at the premises of the tax authority, in which respect it is similar to a desk tax audit. At the same time, the completeness and depth to which the audit is conducted, the volume of documents investigated, the means used, and the procedure for document-ing the stages of the audit bring it closer to a fi eld tax audit. It is necessary to search for analogies, since the law is silent on many important points relat-ing to the conduct of such an audit.

Th e total time period within which an audit must be carried out has been established as six months, but diff er-ent grounds are stipulated according to which this may be extended to 21 months. Th e audit may encompass no more than three years preceding the year in which the decision is given, while the decision must be made within two years of the notifi cation being received that the transaction was entered into. An important aspect is that if, in the audit, one of the parties to the transaction has confi rmed that prices correspond to market level, then the other party to the transaction may not be subjected to an audit.

Th e new law also provides that symmetrical adjustments may be made, which is a positive development (article 105.18 of the Tax Code). In essence, such adjustments mean that, where the FTS has assessed additional tax to one party to a transaction based on a calculation of market prices, the other party to the same transaction may apply these same market prices when deter-mining its own tax obligations.

Th e aim of carrying out symmetri-cal adjustments is to ensure that situa-tions where there is double taxation are not permitted. In the majority of cases, the fact that one of the parties to a civil law transaction receives income in a defi ned amount means that the other party is treated as incurring an expense, for example when profi t tax is calcu-lated. A simple increase of the income of one party to the transaction when its taxes are calculated without the cor-responding increase in the expenses of the other party to the transaction leads to a situation in which there is double taxation, which is clearly unjust from the standpoint of the economic grounds for levying taxes.

At the same time, rules for sym-metrical adjustments have been framed so that they may be applied in prac-tice by a relatively small number of tax-payers. Only Russian organisations are entitled to make a symmetrical adjust-ment. Foreign organisations which are active in Russian through a permanent representative offi ce and which pay Rus-sian taxes, as well as individuals who are tax residents of Russia and who pay individual income tax, have no right to make a symmetrical adjustment. Nor is there any entitlement to a symmetrical adjustment on the part of counterpar-ties of taxpayers that have voluntarily increased their tax obligations, or have applied prices for tax purposes that dif-fer from the actual prices, since a sym-metrical adjustment is only made when additional tax is assessed according to a decision of the tax authority. Th ere is also doubt as to whether it is possible for a counterparty to apply symmetrical adjustment if additional tax has been assessed to a taxpayer without the price under a controlled transaction being calculated directly, in other words apply-ing the comparable profi t and distribu-tion of profi t method, having calculated an additional tax base. Th is proposal is explained by the fact that in the article on symmetrical adjustments, the legislature refers only to market prices applicable for tax purposes and not to a directly cal-culated additional tax base. We believe that this diff erence is explained solely by technical mistakes which will be cor-rected, rather than by a conscious diff er-ence in the rights. In the latter case, the majority of taxpayers will be deprived of the right to a symmetrical adjustment since in practice it will be the fourth and fi fth methods that are applied.

By way of a measure to stabilise tax relations, it is also provided for it to be possible to enter into pricing agree-ments with the state. Th e purpose of these is to reach agreements in advance between a taxpayer and the tax author-ity on the procedure for pricing under controlled transactions, the applicable methods and the sources to be used. Only large-scale taxpayers will have the right to conclude such agreements. A refusal to conclude a pricing agreement may be appealed in court, as may a unilateral termination of such an agree-ment by the tax authority.

33


Legal Updates

The person in whose name a trade-mark is registered (the rights hold-er) enjoys the exclusive right to use that trademark in respect of the

goods for which it has been registered for personalisation of such goods. In particular one is entitled to use the trademark via application to the goods (including labels and packaging) mar-keted, distributed, shown at exhibitions and fairs or otherwise released for civil circulation in Russia, or stored or trans-ported for that purpose, or imported to Russia. So says Article 1484 of the Russian Civil Code.

And respectively, counterfeit items are any goods, their accompanying doc-uments, labels and packaging to which either the trademark or a confusingly similar mark has been applied illegally.

According to Decision no. 11 of the Plenary Session of the Supreme Arbitration Court of Russia dated 17.02.2011, the term ‘illegal use of a trademark’ shall comprise illegal appli-cation of such trademark to the goods as well as their importation to Russia for their release for civil circulation, release of such goods for civil circula-tion and distribution of such goods already released for civil circulation.

Th e Plenary Session has empha-sized that the responsibility for illegal use of a trademark lies with the fi rst seller as well as with any subsequent seller of such goods. Th erefore it is the responsibility of any seller to fi nd out if the trademark is protected in Rus-sia. Consequently, a legal entity can be prosecuted if it has failed to check if it is using the trademark lawfully and/or

omitted to fi nd out if the trademark is protected in Russia.

Illegal actions of the above kind can be stopped via civil, administrative or criminal proceedings.

Th e following options are open to protect the infringed rights to a trade-mark:

1. Filing of complaints with the competent authorities on the basis of an administrative procedure. Th e activities may contain evidence of sev-eral administrative off ences: illegal use of a trademark for similar products, unfair competition or consumer fraud. In the event of fi ling a complaint, the rights holder should consider that any party distributing counterfeit goods, rather than the fi rst seller only, can be prosecuted for illegal use of the trademark (Article 14.10 of the Russian Code of Administrative Off ences, or ‘RCAO’).

Depending on the qualifi cation, the following administrative authorities can be addressed for the initiation of

PROTECTION OF TRADEMARK RIGHTS IN THE RETAIL SECTOR

Stanislav Bartenev, Lawyer, Rödl & Partner


34 Legal Updates

administrative procedures: the Police, Federal Surveillance Service for protec-tion of consumers´ rights and human welfare (‘Rospotrebnadzor’) and the Federal Anti-Trust Service.

An administrative procedure case is initiated by the duly authorized law enforcement authorities based on a notifi cation/application fi led by any party. Having examined the case, the respective authority can issue an enact-ment (decision) to collect a fi ne or refer the case to the court.

2. Filing of complaints with the Police as part of a criminal proce-dure. Th e illegal use of a trademark for similar products is punished with a fi ne of RUB 200,000 if the criminal act was committed repeatedly or caused seri-ous material damage. Unlike the admin-istrative procedure where individuals as well as legal entities can be prosecuted, a criminal procedure can be started solely in respect of individuals.

A real advantage of the recourse to the criminal procedure is the possibility of seizing counterfeit products at an early stage of the proceedings.

A problem lies with the necessity to prove that the act was committed repeatedly or did cause heavy mate-rial damage as a precondition to start-ing the criminal procedure. Th e law enforcement authorities may fi nd it hard to assess the actual damage in practical terms.

3. Filing of a statement of claim with the arbitration court. Arbitra-tion proceedings may lead to the compensation of losses as a result of the violation of trademark title.

In addition to the key require-ments to protect the exclusive rights

that may be cited in court in accor-dance with Article 1252 of the Rus-sian Civil Code, Article 1515 of the Civil Code provides for the possibil-ity of claiming either removal from the circulation and destruction of the counterfeit items at the expense of the infringing party or removal of the illegally applied trademark or the con-fusingly similar mark from the coun-terfeit items, their labels or packaging, where such release in civil circulation is necessary in view of the public interest. Th e rig hts holder is entitled to claim from the infringing party either reimbursement for the damage incurred or the amends in the amount determined by the court . Th e amount determined by the court at its discre-tion depends on the nature of the off ence and ranges from RUB 10,000 and RUB 5 mln, or double the total value of the goods to which the trade-

mark has been applied illegally, or as the twofold value of the right to use the trademark. Th e value of the right to use the trademark is calculated on the basis of a price normally paid in comparable circumstances for the lawful use of the trademark.

It suffi ces for the plaintiff to prove that his rights have been infringed to become entitled to claim compensa-tion. It is not necessary to prove the exact amount of the damage case.

A practical problem that can emerge in connection with the arbitration pro-cedure lies with obtaining of injunctive relief, which the courts are generally not particularly willing to grant.

4. Registration of the Trademark at the Customs Register of Intellec-tual Property

Such an application seeking to include the trademark in the Customs Register of Intellectual Property Items that can be fi led by the rights holder or by his representative.

Th e import of the products that seem to be counterfeit items will be temporary stopped by the customs authority and the rights holder will be so informed. A claim for imposition of administrative sanctions will be fi led with the court by the customs authority.

If the trade mark infringement is proven, the importer will be fi ned and the import of goods will be prohibited. If the trade mark infringement cannot be proven, the possessor of the rights is obliged to reimburse the importer’s losses in connection with the import delay.


36 Supporting Charity

“IT FELT LIKE BEING A CHARACTER IN A MOVIE”

Recently Marriott Moscow Royal Aurora welcomed a group of children from Nepetsinsk orphanage in the Moscow region. In collaboration with “To Children With Love” charity foun-dation which helps abandoned and orphaned Russian children, the hotel invited children from senior classes for a vocational guidance tour of the hotel with an aim to demonstrate diff erent hotel professions.

Training Manager Andrei Gorosh-nikov acquainted the teenage guests with the work of hotel departments such as housekeeping, engineering, front desk and kitchen among others. Th e educational part of the visit was complemented by a hotel tour when all were shown several rooms, recently renovated conference facilities, Polo Club and Aurora restaurants.

“It feels like being a character in a movie, everything is so beautiful. I wish I could stay here longer,” said 14-year old Katya, evidently impressed.

Th e tour was followed by a Q&A session where General Manager Bert Fol and heads of several departments fi elded various questions, from organi-zational structure of the hotel, employ-ment issues to how to become a general manager.

Finally, the children were invited to a staff canteen where they were treated to a typical lunch, served daily to every hotel employee, from bellman to Gen-eral Manager.

“We were happy to welcome chil-dren from Nepetsinsk orphanage, – said General Manager Bert Fol. “We are con-stantly looking to encourage people who have an interest in our industry and I was impressed with the insightful ques-tions asked and interest demonstrated by these young people. Who knows,

maybe in a couple of years I will inter-view one of them for a hotel position.”

“It was a great educational experi-ence for our children, – said Tatyana Evgenyevna, deputy director of the orphanage.

“Such excursions broaden their horizons and give them an incentive to study better and to learn more striv-ing for employment in companies with high standards, like the Marriott Aurora hotel.”

To Children With Love foundation has worked for more than 12 years with

diff erent orphanages from Moscow and Brynsk regions and it is supported by an Irish Charitable Foundation. 5* Marriott Moscow Royal Aurora hotel has cooperated with the foundation for about three years. Over this period the hotel has undertaken a range of activi-ties to support the charity and donated various items including carpets, towels and bed linen to diff erent orphanages. It raises funds directly via donation boxes placed in its lobby encouraging hotel guests to support the foundation.

Last year the hotel organized a tour of the Kremlin for orphaned children.

Marriott Moscow Royal Aurora hotel has a long history of charitable activities. Since its opening in January 1999 the hotel has supported various charitable programs and events, from fund-raising balls to toy and clothes drives.

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Supporting Charity

THE 2011 DOWNSIDE UP AUTUMN IN-DOOR FOOTBALL TOURNAMENTOn the 6th of November, 2011 Down-side Up Charitable Fund hosted its annual Autumn In-Door Football Tournament among corporate teams. Fourteen teams competed for the Cup, and each won! Beating prejudice and wrong beliefs against individuals with specials needs and about charitable giv-ing is as important as any major sports victory! During intermissions a tradi-tional ball juggling competition and an entertainment programme courtesy of the “Open Arts” choreographic studio.

CHARITY SPORTS is a sports project, where the emphasis is on par-ticipation. Th e DownsideUp sports events help to raise funds for early intervention programmes for individu-als with Down syndrome, and promote participation of people with disabili-ties in sports. Well-trained corporate league football players compete on a football fi eld, and awards are present-ed by children with Down syndrome. Everybody wins!

One million three hundred thou-sand rubles (1,300,000 rubles) was raised to benefi t the Downside Up early intervention programmes. Pro bono assistance was provided for Downside Up by the MGIMO Volunteers Centre, the arbiter Alexey Andreyev, and the Dynamo sport complex administra-tion, who provided the football arena free of charge.

Many thanks to all the partici-pants! We look forward to seeing you at the 2012 Spring Tournament.

RESULTS14th place – ExxonMobil13th place – Nika12th – Most Creative Club11th place – Hyundai10th place - Cliff ord Chance9th place – Kaspersky Lab8th place – CMS7th place - hotels Renaissance, Courtyard, Ritz-Carlton Russia6th place – parents’ team5th place – Baker & McKenzie4th place - Raiff eisenbank3th place – AGS2th place – Lay’s1th place – PepsiCo

Juggling virtuoso – Dmitry Sadovsky, Lay’s teamBest bombardier – Alexander Nikiforov, AGC teamBest player – Victor Boukievsky, PepsiCo teamBest full-back – Sergey Butenko, Lay’s teamBest goalkeeper – Igor Semenkov, Raiff eisenbank team

Our partners:AVM Sport (“АВМ СПОРТ”)- Tech Partner; PepsiСo – General Partner; Voerman, AEB, RBCC, hotels Renais-sance, Courtyard, Ritz-Carlton Russia.

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38 Supporting Charity

THE TRAFALGAR BALL 2011Among the key events in Moscow’s social calendar, there is one which every “Brit” living and working in the capital has to attend at least once – the annual charitable Trafalgar Ball – which this year took place on October 15th, 2011 at the splendid Renaissance Moscow Monarch Centre Hotel.

Th e Ball, named after one of the most memorable battles of the Brit-ish Fleet – Th e Battle of Trafalgar, October 21st 1805, is always held on the closest Saturday to the memorial of the Battle.

Th e Trafalgar Ball started as a party organised by a group of Brits in one of Moscow’s restaurants. Th e restaurant no longer exists, but the tradition of gathering together has remained and grown into one of the most anticipated events of the year, not only among the British community in Moscow: over the last 12 years, it has developed into a wide circle of friends and partners of the Ball.

Th e Trafalgar Ball 2011 was organ-ised by the Taganka children’s fund, in partnership with Th e British Business Club in Russia. But we would not have been be able to organise such a fabu-lous event without the support and help from our major sponsors – Th e Renaissance Moscow Monarch Centre Hotel, SUPRA, PARLIAMENT, BMI, PEPSCO and LINDT.

Th e Trafalgar Ball, as a traditional charitable event has since 1999 given Th e Taganka Children’s Fund oppor-tunities to realise numerous innova-tive projects such as the Taganka Shed Inclusive Th eatre - whose next perfor-mance will take place at the beginning of February 2012.

www.charity-tcf.ru

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CHARITY EVENT “DRAW YOUR OWN WINTER DAY!”On 27 September, 2011, a charity event entitled “Draw Your Own Winter Day!” was held in the Luchiki Kindergar-ten for children with impaired hea-ring in the city of Kolomna. Th e event was organized by the Russian-Ger-man Foreign Trade Chamber (AHK) and international law fi rm BEITEN BURHARDT.

Th e kindergarten for such children aged from three to six has existed in Kolomna for a long time. Wonderful teachers, speech pathologists and edu-cators work there. Th ey provide the children with an opportunity and abil-ity to learn about the outside world, to understand so much that is of interest in this world and to make astonishing discoveries.

Th e charity event represented one step in the goal of realising the creative talents of the pupils at the kindergar-ten. During the event it was decided to create a combined drawing on the topic “Draw your own winter day!” In the run-up to the impending cold spell many children recalled with plea-sure how they had spent the previous winter, what they had done during long walks and what games they had played. Th is was all refl ected in their joint work, resulting in a remarkable children's drawing.

Th e young artist Sofi a Solnyshkina (www.sunsony.ru) was an active par-ticipant at the event. She showed her

paintings to the children and helped them create the fi nalcomposition.

Th e wonderful teachers from the Kindergarten provided extensive sup-port to all participants during the event – Galina Valerievna Fedyunina (speech pathologist) and Elena Vladi-mirovna Karkh (educator). Th ey created a very positive and creative atmosphere for thechildren, who drew with pleasure, were extremely inventive and communi-cated together. At the end of the event, everyone was rewarded with presents.

We would like to thank in particu-lar the director of the Kindergarten for children with impaired hearing in the city of Kolomna – Elena Vasilievna Lenchevskaya for her support and assistance with the implementation and organization of the event.

Contact details for anyone who wants to support the kindergarten: Municipal pre-school educational insti-tution– remedial kindergarten Luchiki, 19b, ul. Malysheva, city of Kolomna, tel. 615 49 40, 615 52 87, director – Elena Vasilievna Lenchevskaya.

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40 AEB Committee Updates

AEB COMMITTEE UPDATESAgribusiness Committee

Presentation of Rosselkhozbank Programs by Mikhail Mikhailovich Shangaleev, Director of the Department of Targeted Programmes

Following recent authorisation by the Russian Government of credits for pur-chase of agricultural machinery from for-eign producers, Mr. Shangaleev informed the Committee about conditions of crediting purchases of harvesters, trac-tors, towed equipment and attachments,

equipment for cattle and breeding farms, pesticides, and others Answering ques-tions from the participants, he highlight-ed programmes of the forestry harvesting and construction equipment credits.

Th e Bank will consider agricultur-al machinery assembled in Russia as

“Made in Russia”, once localisation rules and targets are agreed and adopted by the Russian Government, which will make possible the extension of credit programmes currently focused only on national producers, to those foreign pro-ducers with production plants in Russia.

Construction Industry and Building Material Suppliers Committee

Meeting with Deputy Minister of Regional Development Mr. Ilya Ponomarev

On 15 September 2011, the AEB Construction Industry and Building Material Suppliers Committee held a meeting with Deputy Minister of Regional Development Mr. Ilya Pono-marev. During the meeting, the parties exchanged their opin-ions on the problems of the building materials industry and dis-cussed opportunities for mutual eff orts to solve concrete prob-lems of producers and help improve the regulatory framework. Among other things, the following issues were mentioned:

technical regulation and standardisation, infrastructure and resource availability, education and training of specialists for the construction industry, and energy effi ciency. Th e Committee was invited to prepare proposals on the implementation of the State Strategy of Development of Building Material Industry up to 2020. Th e Ministry will also consider a possibility of approv-ing the Committee’s delegates to the Ministry’s expert councils on implementation of strategy and on energy effi ciency.

Finance and Investments Committee

AEB Open Event: Public-private partnership in Russia - recent trends and scenarios for the future

On 12 October 2011, the Finance and Investments Committee held an open event on recent trends and perspectives of public-private partnership in Russia. Ernst and Young acted as the silver sponsor at this event. Th e non-commercial partner-ship “PPP Development Centre” provided information support for the event.

Th e event off ered an exclusive platform for exchange of opinions on general legislative, economic and political environ-ment for public-private partnership in post-crisis Russia. High-profi le speakers representing EBRD, Citibank, VTB Capital,

as well as industrial companies and consultancy and law fi rms invited by the AEB provided case study analysis of success factors of PPP projects, and implementation and specifi ed economic and social sectors with high potential in terms of PPP.

Special attention was given to discussion of PPP projects in transport and road infrastructure covered, among others, by guest speakers from GK Avtodor and Kapsch Traffi cCom.

Th e governmental bodies were represented by Mr. Sergey Belyakov, Director of Department for the Investment Policy and the Development of Public-Private Partnership of the Ministry of Economic Development and Ms. Svetlana Gorushkina, Deputy Minister of Culture of the Moscow Region Government.

Health and Pharmaceutical Committee

Committee updates

Th e committee organised a round table: ‘Pharmaceutical Business Harmonisa-tion with International Standards’ with-in the framework of the Forum of Rus-sian and European Businesses: Partners in Modernization, in St. Petersburg on 23 September 2011.

It was a very successful event. Th e moderators were: Mr. Yuri Litvishchen-ko, Deputy Chairman of the Health and Pharmaceuticals Committee of the AEB and Mr. Viktor Dmitriev, General Director of the Association of Russian Pharmaceutical Manufactures (ARPM).

Written recommendations were devel-oped during this round table. Th ere was also a joint event with the AEB Legal Committee on Recent Developments in the Legislation on Healthcare in the RF: new opportunities for Russian and foreign business on 27 September 2011.

Mathias Weber, Ernst & Young; Sergey Belyakov, Ministry of Economic development; Natasha Khanjenkova, EBRD

41


AEB Committee Updates

IP Sub-Committee

26 May 2011, IP sub-Committee and Taxation Committee Round Table on copyright dues.

According to the Russian Civil Code, all producers and importers of audiovisual equipment and information car-riers must pay fi xed dues to the authorised (accredited) organisation for import / production of such goods. A list of goods for which such payments are due and the procedure of making such payments were to be issued by the Russian Government, and that duly occurred on 24 October, 2010. (See attached). Th ese documents state that producers and importers of audiovisual equipment and information carri-ers must pay 1% of the customs value of the goods . Th e list contains such products as computers, notebooks, recorders, cell-phones, fl ash drives, etc. Since then, many AEB mem-ber companies have received model contracts from Russian Union of rights holders (an offi cially accredited organisation) for consideration and signature.

As this regulation has recently become eff ective, it cre-ated a lot of questions from the business community side. Th ese questions vary from technical to general, such as if such dues are legitimate at all and if its rates can be estab-lished by the Government’s resolution.

Th e AEB invited representatives from various Ministries (Culture, Finances, Rosokhrankultury) and Russian Union of rights holders, which is authorized to collect these payments from producers/importers. During the Round Table, Ekate-rina Tilling, IP Sub-committee Deputy Chairman, made a presentation on the nature of these payments, international

practice and diff erent approaches. Among others, Ekaterina noted that in many jurisdictions the payments are a fi xed %, however the fi xed maximum amount is also stipulated in order to prevent for those payments to become unreasonably high. In many countries nominated state agencies (affi liated organisations) are authorized to collect such payment and then subsequently make their further distributions.

Vadim Zaripov, Deputy Chairman of Taxation Com-mittee, shared with the participants an interesting approach stating that such payments are of a taxation nature and thus should be enforced not by Government resolution but only by the Federal Law. Th e Chairman of the Round Table Denis Voevodin, Deputy Head of the IP Subcommittee, welcomed offi cials and representatives of the Union to an open discus-sion and to express their positions. Th e Russian Union of rights holders confi rmed their readiness and willingness to modify and improve the current procedures.

Th e discussion made clear that stereo systems imported by the auto manufacturers as accessories for their cars should not fall under the requirements to make those payments. As a result,

the AEB has prepared an offi cial letter on behalf of AMC to the Ministry of culture, Rosokhrankultury and Russian Union of right-holders in order to con-fi rm that position offi cially. Such a letter has been already sent to the respective addressees and AEN should get an offi cial reply in the nearest future.

Additionally the AEB will prepare a respec-tive list of suggestions to the current procedure in order to improve it, taking into consider-ation international practice. In particular it was decided to scrutinize the approach of some state to set fi xed maximum sums which cannot be exceeded.

IP annual conference

Th e AEB Fifth annual Conference – “Intellectual Property Rights: recent trends, court practices, problems and solutions”, organized by the AEB IP sub-committee, was held on 16 June 2011 at the premises of the Delegation of the European Commission to Russia.Mr. Kalyatin, IP leading lawyer, Rosnano focused on draft amendments to the RF Civil Code related to the Intellectual Property Issues.

Special attention was paid to the proposed changes on know-how rights presented by Ekaterina Tilling,

Special Counsel at BakerBotts and a Deputy Sub-Committee Chairwo-man.

Expert advice on the changes to transactional IP was provided by Mar-garita Divina, Baker & McKenzie.

A Lawyer and advisor at Beiten Burkhardt, Prof. Andreas Steininger, in general positively evaluated Russian IP related legislation, stating it is one of the best developed in Europe.

An industrial community repre-sented by IPR expert of the Ford Motor Company, Igor Sergeev, warned about

potential risks of parallel import liber-alisation.

Real court practice on lawsuits against cybersquatters was addressed by Natalia Babenkova, NOERR.

Th e conference which was well attended and provided a discussion platform for hot IPissues was accom-plished by Mr. Starzhenetskiy, Deputy Head of International Law Depart-ment, RF Supreme Arbitration Court who gave an overview of judgments of the Supreme Commercial Court con-cerning protection of IP rights.

Vladislav Starzhenetsky, VAS, RFEkaterina Tilling, BakerBotts, AEB IP Sub-Committee Deputy Chairwoman

Evgeny Arievich, Baker & MCKenzie; Vitaly Kalyatin, Rosnano

Speakers' panel


42 AEB Committee Updates

Migration Committee

Meeting with representatives of the Federal Migration Service

On 6 September 2011, the AEB Migration Committee held a joint meeting with representatives of the Federal Migration Service. Th e meeting was organised following a tradition of regular briefi ngs of FMS offi cials hosted by the AEB in order to exchange opinions on implementation of migration legislation. Th is time, Ms. Ekaterina Egorova, Deputy Direc-tor of FMS, Mr. Oleg Artamonov, Head of Public Relations Department of the FMS, Mr. Alexander Aksenov, Head of Visa and Registration Department of FMS, and Mr. Ser-

gey Temryakovich, Deputy Head of the Labour Migration Department of FMS, briefed the AEB members on peculiari-ties of work and residence permit application procedures for highly qualifi ed specialists and their family members, migra-tion registration related issues and more. Th e participants also exchanged views on the peculiarities of the legal status of expatriates entering Russia under the Agreement between the Government of the Russian Federation and the Govern-ment of the French Republic on temporary labour migration.

Meeting on migration quota issues

On 11 October 2011, the AEB Migration Committee held a joint meeting with representatives of the Ministry of Economic Development of the RF, the Ministry of Health and Social Development and the Department of Labour and Employment of the Moscow City Government.

Th e meeting was devoted to discussions of practical issues related to foreign labour quotas in 2011 and 2012, including correction of quotas, quota-free professions, and quota application procedure, which were covered by Mr. Georgy Gadenko, Deputy Director of the Department of employment and labour migration of the Ministry of Health, and Mr. Oleg Neterebs-kiy, Head of the Department of Labour and Employment of the Moscow City Government.

Also Ms. Marina Maslova, Deputy Director of the Department of Social Development Economics and High Priority Programmes of the Ministry of Economic Development, provided an assessment of the eff ect of the new migration regime for highly qualifi ed specialists on the investment climate and economic development in Russia.

Insurance And Pensions Committee

Business meeting: Insurance and Mergers and Acquisitions

On October 27, 2011, the business meeting organised by the Insurance and Pensions Committee on insurance and M&A related issues took place in Moscow, at the Swissotel. Th e Zurich Insurance Company provided sponsorship support for this event.

Th e fi rst session of the meeting was dedicated to an over-view of recent M&A trends and perspectives on the insur-ance market and to analysing the practical aspects of M&A transactions specifi c for the insurance market in general and

in Russia in particular. In the second part, the audience was provided with an

exclusive opportunity to hear from international experts of the Zurich Insurance Company, on the most up-to-date information on the role of insurance and risk management in M&A deals. In particular, the Zurich Risk Room, a global risk assessment tool developed by Zurich and designed to illus-trate the impact of multivariate risks on individual countries, was demonstrated.

Annual Pension Conference

On 2 November 2011, the AEB Annual Pension Conference titled “Recent trends and the future of the pensions system in Russia” was held in Moscow at the Ararat Park Hyatt Hotel. Th e conference was sponsored by NPF Aviva and NPF Raiff eisen.

Guest speakers from VTB Capital Investment Management, EBRD and NPF Stalfond provided the audience a thorough update on the pensions market, including the analyses of the future of Russia’s pension system and the role of pension money as a resource for the development of the fi nancial sector in Russia. GfK Rus presented the results of the survey on pension strategies of Russian citizens. NPF Aviva and NPF Raiff eisen presented updates on the development of corporate pension programmes. Th e event has also provided a platform for discussing coming changes in the tax regulation of pension insurance and persisting shortcomings of the legal framework. Key players from Russian and international companies were present, making this event a unique networking opportunity.

Mikhail Kuprin, MetLife Alico; Timur Gilyazov, MetLife Alico; Leonid Zubarev, CMS, Russia Andrey Kulapov, NPF Aviva; Elena Gorshkova, NPF Raiff eisen

43


Safety, Health, Environment and Security Committee

Open Event “Practical steps in building an eff ective fraud resilience programme”

Th e AEB SHES Committee held an Open Event titled, “Prac-tical steps to build an eff ective fraud resilience programme”. Th e conference took place on 17 May 2011 at the Marriott Grand Hotel, ul. Tverskaya, 26/1, Moscow.

Th is meeting provided an opportunity to non-governmen-tal and business organisations to share their experience with all those present and talk about best practices. Among others the agenda topics covered the organisation of programmes to create resilience to fraud; preventing and combating fraud as part of the corporate culture in companies, in procurement and marketing. A special session was devoted to techniques of the third party due diligence investigations and to training issues and enhancing awareness of employees in fraud resilience. Participants included representatives of the American Society for Industrial Security (ASIS) and the Association of Certifi ed Fraud Examiners (ACFE). Th e event was sponsored by a security company based in St-Petersburg ANS – Alfa Nord Security.


Round Table: “Modernization in Retail Trade”in the Framework of the Forum of Russian and European Businesses: Partners in Modernization” (23 September 2011)

Th e AEB Retail Trade Committee orga-nized a round table discussion within a framework of the Forum of Russian and European Businesses: Partners for Modernization, held in St-Petersburg on 23 September 2011. Representatives of the leading foreign retailers such as METRO Group, Auchan, Atak, H&M Hennes and Mauritz, LLC focused on the issues of the highest importance for the companies, namely supply chain management; electronic documenta-tion interchange (EDI); quality assur-ance and education and training. As an outcome of the discussion, the follow-ing recommendations on every topic were developed:Supply Chain Management:

■ Unifi cation of regional security and quality related regulations. Th e same

rules and requirements should be applied in all the regions of Russia.

■ Introduction of support measures and tools in order to motivate and encourage regional suppliers to intro-duce a high quality standard of prac-tice.

■ Diversifi cation of the economy in the regions is highly dependent on the development of local suppliers. Th e more suppliers successfully develop in a region the more diversifi ed its economy will become .

EDI: ■ EDI is a strategic project which is

supported by business as well as gov-ernment

■ It is highly recommended to facilitate development and enforcement of the EDI related Technical regulations

■ To adjust accounting and taxation legislation in the EDI related part.

Quality Assurance ■ Some standards of the market (such as

ISO) can be applied for manufactured products. It is recommended to encour-age suppliers to implement internation-al quality assurance standards.

■ Service level agreements can also be applied with service suppliers. As a con-tract is mandatory in Russia, the specifi -cation can be added as an annex.

Education & Training ■ A strong demand for professional

education exists ■ Close collaboration with educational

institutions is a priority goal ■ Professional education of mid-level

specialists for retail trade is an abso-lute must.

Andrei Novikov, Ernst & Young; Frank Schauff , AEB; Oleg Babinov, Risak Advisory; Sergei Martynov, ACFE Russian Chapter

Igor Denisov, Plekhanov Academy; Thierry Leconte, Auchan, Milen Gentchev, METRO Cash & Carry

Speaker's panel

Retail Trade Committee

A Committee meeting on Factoring in Russia

Th e AEB Retail Trade Committee held a meeting with its focus on factoring in Russia. A representative of UniCredit Bank in particular stated that factoring is a rather new sphere in this country that explains the absence of related legislation and regulations and further suggested factoring schemes. In response, representatives of Auchan explained the details

of the factoring scheme implemented by the company. Exchange of opinions and experience confi rmed the impor-tance of the issue and demonstrated readiness of the actors to cooperate in developing working factoring procedures, although the recommendation of retail companies would neither ban nor support factoring.

44



Taxation

Business Breakfast with Sergey D. Shatalov, Deputy Minister of Finance

On October 18th AEB Taxation Committee organised a Business Breakfast with Sergey D. Shatalov, Deputy Minister of Finance. Th e topic for the discussion was the new Transfer Pricing Law, which comes into force in January 2012. Th e law will have a signifi cant impact on taxpayers and the development of the Russian tax system as such.

Mr. Shatalov updated the AEB members and partners on how the law will be implemented. AEB Taxation Committee Task Force on Transfer Pricing: Evgenia Veter, Ernst & Young, Vadim Zaripov, Pepeliaev Group and Ilarion Lemetyuynen, PwC presented the Committee’s Position Paper on the subject. Mr. Shatalov gave his comments on the proposed changes to the law.

Th e meeting was chaired by Dr. Alina Lavrentieva, Chairman of AEB Taxation Committee and was attended by over 100 representatives of AEB member companies and EU Embassy representatives. and journalists.

Joint Committee Events

Round table – “Recent developments in the legislation on Healthcare in the Russian Federation: new opportunities for Russian and foreign businesses”

A round table – “Recent developments in the legislation on Healthcare in the Russian Federation: new opportunities for Russian and foreign businesses” was held on the 27th of September, 2011 by the AEB Health and Pharmaceuticals and Legal committees.

Speakers representing leading law fi rms and pharmaceutical companies talked about the current developments with regard to the healthcare legislation on development, touching on the issue public-private partnership projects in the said sphere.

Issues discussed at the round table generated a lot of interest. Th e event

was well attended. Close attention was especially paid to the Federal targeted programme on the development of the pharmaceutical and medical industries in the Russian Federation, which will last until 2020, and hopefully, beyond. Its analysis and perspectives were presented by Julia Tormagova, Vegas Lex. An overview of localisation issues within the pharmaceutical industry in Russia was given by Bilgeis Mamedova, BEITEN BURKHARDT.

Dmitri Khalilov, Ernst & Young highlighted major tax and legal issues related to the absence of registration certifi cates of pharmaceutical products.

Alberto Volpato, EU Delegation briefed all present on the recent regula-tory developments on pharmaceuticals in the EU. Other topics addressed were:

Th e existence of PPP frameworks for healthcare projects in Russia, deliv-ered by Ilia Skripnikov, Salans;

Construction of pharmaceutical plants in Russia: project specifi cs, pre-sented by Dania Aknazarova, CMS, Russia. Th is was based on the Kaluga region case study;

Th e specifi cs of public procurement within Russia’s pharmaceutical sector, presented by Nina Belosertseva, Golts-blat BLP.

Deputy Minister of Finance Sergey D. Shatalov with AEB Taxation Committee Chairwoman Dr. Alina Lavrentieva

Open Events delegates. Over 100 people attended the event.

Ilarion Lemetyuynen, AEB Taxation Committee Task Force members on Transfer pricing together with Evgenia Veter, Co-leader of AEB Task Force on Transfer Pricing

Andrei Novikov, Ernst & Young Sergei Martynov, Association of Certifi ed Fraud Examiners (ACFE) Dmitry Budanov, American Society for Industrial Security (ASIS)


45AEB Member News

Baker & McKenzie

Baker & McKenzie advises Brown-Forman CorporationBaker & McKenzie CIS Limited announced that it advised Brown-Forman Corporation on a complex project for the distribution of Brown-Forman’s portfolio of beverage brands in the Russian market through Coca-Cola Hellenic Bottling Company Eurasia.

Advising Brown-Forman Corporation included the preparation of an agreement with Coca-Cola HBC Eur-asia to distribute in Russia such Brown-Forman brands as Jack Daniel’s, Finlandia, Southern Comfort, and el Jimador Tequila. Coca-Cola Hellenic already distributes Brown-Forman brands in Croatia, Hungary, Serbia and Ukraine. From mid October 2010 it became a new partner of Brown-Forman in Russia.

Baker & McKenzie advises Kaspersky Lab on year’s largest offi ce leaseTh e law fi rm Baker & McKenzie acted as a legal adviser for the Kaspersky Lab in drafting and executing a preliminary agreement for the lease of about 65% of the rentable space in Moscow’s Olympia Park, a Class A offi ce centre.

Th e preliminary agreement for the lease of nearly 30,000 square metres of offi ce space was the largest commercial real estate transaction recorded on the Russian market over the past year.

As part of its advice for the Kaspersky Lab, Baker & McKenzie drafted and coordinated preliminary, long-term and short-term leases, took part in negotiations on lease terms and assisted in completing and closing the transac-tion. Th e project team included Konstantine Kouzine, head of the Real Estate & Construction Practice Group for Baker & McKenzie Moscow, and Dmitry Ilyin, a Moscow-based senior associate.

Th e Kaspersky Lab is one of the world’s leading com-puter security companies off ering diverse anti-virus, anti-spyware, anti-spam and intrusion-control products.

Baker & McKenzie advises Siemens on EUR 2 Billion OrderBaker & McKenzie advised Siemens in connection with a EUR 2 billion contract for the delivery of Desiro RUS type regional trains to Russian Railways (RZD). Th e order, for which a preliminary contract was signed in June of this year, is for the delivery of 1,200 rail carriages.

Th e trains will be delivered by Siemens Train Tech-nologies, a joint venture between Siemens and the Russian rail technology manufacturer Sinara. Starting from 2013, the new cars ordered by RZD are to be built in the Ural Locomotives plant near Yekaterinburg, where Siemens and Sinara started manufacturing electric freight locomo-tives earlier this year under the Ural Locomotives joint venture. As part of its advice for Siemens, Baker & McK-enzie was involved in the preparation of the draft delivery contract and participated in extensive negotiations with RZD.

BENE

A new BENE Moscow showroomWelcome to the BENE Moscow New Showroom!the new showroom of Austrian offi ce furniture company Bene has been open since October 2011 on Strastnoy blvd., 16 in the very centre of Moscow

Th e best examples of new ways of setting up eff ective offi ces are shown. With this showroom, Bene wants to give its (its not it’s) customers the opportunity to compare theory and practice of the new innovations in a realistic setting . Customers can examine how Bene’s designs suit their own requirements, and see the most modern ideas in style and appearance for diff erent working environments and dif-ferent offi ce layouts using all the latest advances from the product portfolio. Th ese include the waiting and commu-nication area, which consists of new original PARCS series that create a multifunctional working environment thanks to its wide big variety of elements. Th e system’s acoustic properties enable meetings in the smallest of spaces, con-tributing to the effi cient use of space.

“Th e new showroom represents our international suc-cess”, says Mr. Gerald Sakuler, Export Sales Executive of Bene offi ces in Russia. “We are proud to showcase our latest technological developments and equipment standards.”

Visitors can see all developmentsand trends in the modern offi ce market. As energy saving is a key issue nowa-days, LED lights from Bene’s partner company Zumtobel are used on the whole offi ce fl oor, which is to our knowledge, the fi rst in Russia as an integrated unit ! Bene shows by this its attitude and respect for nature and for people and that Bene is operating on the leading edge of the offi ce interior and offi ce furniture development markets."

BDO Russia

BDO RUSSIA held a briefi ng on "Transfer pricing in Russia: revolutionary change tax laws"BDO Russia held a briefi ng on "Transfer pricing in Russia: revo-lutionary changes in tax legislation". Th e participants discussed main changes of the law on tax regulations pricing issues.

Jakov Bykov, director in BDO Russia, addressed the audi-ence with the opening remarks .

Nikolai Simoyanov, senior manager of the Tax Policy Group of BDO in Russia, outlined the main innovations of the law in respect of controlled and uncontrolled transac-tions, new approaches to defi nition of interdependent indi-viduals and comparability of transactions, changes in the list of sources of prices information, methods of determining market prices, the documenting of pricing principles and reporting as well as the introduction of symmetrical adjust-ments of pricing arrangements, the issues of tax control over transfer pricing and penalties for violation of the new provisions of the Tax Code. In addition, the old and new standards were compared, and there also was a discussion about some ambiguous provisions of the new law.

Evgeny Kivenko, senior manager of the Tax Policy Group of BDO Russia, gave the audience his report "Implementing innovations for taxpayers: where to start? ".

Th e briefi ng was attended by a record number of visitors with who gave positive comments on the event. Among

MEMBER NEWS


46 AEB Member News

others, there were representatives from top companies, Gigaset, Atomredmetzoloto, Bashkir Chemistry, PIK, DHL Logistics, Euroset, Mechel, MTT, Severstal, Sberbank AST, Sollers, STEKLONiT, Tver Wagon Works, TNK-BP Man-agement, Transmashholding and Jaguar Land Rover.

BDO Russia and BDO USA held a joint webinarBDO USA, BDO Russia and the Latham & Watkins law fi rm (USA) held a joint webinar “Foreign Corrupt Practice Act series: Doing business abroad - spotlight on Russia”. Th e event was arranged for American business environment representatives.

Specialists of the Legal Group and Financial Advisory Practice of BDO Russia prepared the material for the webi-nar. Speaking on behalf of BDO Russia, Irina Minskaya, director of the Legal Group, went into specifi cs of doing business in Russia, administrative barriers, legal require-ments and current practices that may cause an involve-ment of a foreign investor or partner to become a corrupt relationship. Special attention was paid to the role of con-sultants who are often able to help the client in addressing issues in the legal fi eld, and, in particular, to possibilities of BDO in Russia.

Th e objective of the seminar was to inform the audience about corruption risks that arise while doing business in Russia, to talk about legislation and anti-corruption mea-sures undertaken by the Russian government, and to make comparative analysis of American law and Russian legisla-tion, as well as to report to the audience about training pro-grammes for clients and about risk- identifying procedures which can be performed by outside consultants.

Th e webinar was attended by a total of 78 participants. All the attendees had the opportunity to get acquainted with the electronic version of the brochure “Starting Business in Russia and Doing Business in Russia”. Also, BDO Russia experts were invited to participate in preparing a number of publications.

CMS

Portuguese law fi rm Rui Pena, Arnaut & Associados to join CMSCMS has agreed that Portuguese law fi rm Rui Pena, Arnaut & Associados (RPA) will become a member of CMS. From 1 January 2012, the fi rm will be called CMS Rui Pena & Arnaut (CMS RPA). Th e CMS Executive Committee agreed the expansion last week.

“We are delighted to count CMS Rui Pena, Arnaut & Associados as a new member fi rm of CMS,” – comments Jean-Francois Marquaire, Managing partner at CMS, Rus-sia. “ Th is fi rm is among the best ranked in Portugal and in addition to local business in this country, provides a unique gateway to Brazil, Angola and Mozambique. Th is is great news for our Russian customers who invest in these coun-tries in particulars in sectors such as Oil and Gas, Mining, Tourism and more generally services and manudacturing industry sectors. A warm welcome to our Portugese friends!

“Th is adds an important jurisdiction to our European growth strategy,” said CMS Chairman Cornelius Brandi. “CMS RPA can continue to build on its longstanding, excel-

lent reputation in Portugal, while simultaneously working as part of CMS on being the best European provider of legal and tax services.”

Since signing a formal cooperation in October 2010, CMS and RPA have already been working together on client matters and on forging a wider Iberian growth strategy. Th e results provided a clear business case for RPA becoming a member of CMS.

Coleman Services

Coleman Services CRS: disabled people as an untapped resource For the fourth year, Coleman Services takes an active part in the Business Council on disabled people and NGO Regional society of disabled people “Perspektiva” projects. Th e prima-ry goal is to give real possibilities for employment to young disabled specialists. Such steps shows to businesses that in a labour market there are undiscovered resources – young disabled people, professionally trained in various areas.

One of the projects is the annual contest of students and recent graduates ”the Way to a Career”, which is actively supported by leading Russian and foreign companies includ-ing Coleman Services, Citi, Cliff ord Chance, Ernst&Young, Johnson&Johnson, KPMG, Microsoft, Nike and Transaero. Traditionally, Coleman Services’ representatives are in the contest jury.

“Th e Way to a Career” laureates get the opportunity to take an internship in major companies. Th is year Elena Mordasova undertook a two week internship in Coleman Services. Elena chose the HR department for her internship . Th rough her work she learned staff records, management and other aspects of the HR department’s activities.

Frost & Sullivan

Frost & Sullivan Company of the Year Award Crowns Rosvodokanal’s Extraordinary Performance in the Russian Water and Wastewater Services MarketTh e 2011 Frost & Sullivan Russia Company of the Year Award in Water and Wastewater Services is conferred on Rosvodokanal. Th e company’s high quality services, coupled with positive feedback from end users, their application of modern technologies and continued penetration of new regions in Russia has marked its success.

Gasunie

A new gate terminal on the Maasvlakte in RotterdamHer Majesty Queen Beatrix of the Netherlands opened Gate terminal, located on the Maasvlakte in Rotterdam, on 23 September 2011. Gate terminal (Gas Access To Europe) is the fi rst import terminal for liquefi ed natural gas in the Netherlands and has been developed by N.V.Nederlandse Gasunie and Royal Vopak. Th e reason for devel-oping Gate terminal as an independent distribution point for European energy companies is the rising demand for anddeclining production of natural gas in northwest Europe. Paul van Gelder, CEO of N.V. Nederlandse Gasunie: "Gate termi-nal is an important major new access route on the gas round-about of northwest Europe. With this terminal, the north-west European gas market has access to global LNG, further


47AEB Member News

strengthening security of supply and improving liquidity inthe market through diversifi cation." Gate terminal receives liquefi ed natural gas (LNG) by ship, which is subsequently regasifi ed and prepared for distribution to the Dutch gas transport network and transport to the north western European markets. Gate terminal has three storage tanks, two jetties and regasifi cation systems. Each tank will have a storage capacity of 180,000 m3. Th ethroughput capacity amounts to 180,000 m3 and can be expanded to up to 16 billion m3 per annum in the future.

Goltsblat BLP

BLP to open offi ces in germany Law fi rm Goltsblat BLP announces that the Berwin Leighton Paisner (BLP) Group, of which it is a part, plans to open two offi ces in Germany. The offi ces, which are expected to be open in Frankfurt and Berlin before the end of the year, will focus on high end real estate work and cooperate closely with Goltsblat BLP in Moscow. Th is move is prompted primarily by the recent substantial growth of the Goltsblat BLP/ Berwin Leighton Paisner Global Real Estate Practice and high demand for property-related services, in particular real estate transactions and investment, among the fi rm’s customer base, more than half of which consists of foreign clients. Th e BLP Global Real Estate Practice currently consists of more than 230 experienced lawyers, including 32 partners, working from Moscow, London and other BLP offi ces, and is one of the biggest in Russia, as well as in the UK. Th e major interna-tional legal directories, such as Legal 500 EMEA, Chambers Europe, PLC Which Lawyer and others, top-rank the Global Real Estate Practice of Goltsblat BLP and mention it as “the best choice for providing legal support for real estate trans-actions in Russia” (Legal 500 EMEA 2011).

Th e new offi ces will be staff ed by an experienced team of German real estate lawyers previously from the magic circle fi rm in Germany. Relying on its robust presence in Germany, the global real estate practice will be able to advise clients investing in and out of Germany.

Th is announcement is in line with the BLP new markets strategy and follows its investments in new offi ces in Mos-cow, Singapore, Abu Dhabi and Hong Kong.

Intercomp Global Services

A new offi ce in YekaterinburgIntercomp Global Services, international Finance & Accounting and HR outsourcing service provider, has opened its offi ce in Yekaterinburg. Entry to the Urals region

is an important stage of Intercomp’s strategy aimed at strengthening the company’s leading position in the Rus-sian BPO market through the extension of its geographical presence in the target regions.

Functions of the Intercomp branch in Yekaterinburg include development of new client relations, as well as provision of consulting support and expertise at the stage of choosing an outsourcing model. Intercomp started to deliver outsourcing services in Russia and CIS in 1994. So far, the company’s offi ces successfully operate in Moscow, St. Petersburg, Kyiv and Almaty; Intercomp also has an opera-tions centre in Ryazan.

Jones Lang LaSalle

Jones Lang LaSalle Russia and CIS launches Tetris Solutions RussiaJones Lang LaSalle is pleased to announce the opening of a new group company - Tetris Solutions Russia which off ers a range of interior fi t out related services delivering “turnkey” solutions. Th e Tetris Solutions model is based around pro-viding a dedicated single point of contact for the Client with Tetris Solutions driving the delivery of the project, simplify-ing the administrative process, optimizing the timeline and providing value for money.

Tetris Solutions team will provide the full realization of your project - from its inception to completion, deliver-ing quality, effi ciency and value. Th e company’s services include, space optimization, design implementation, high-quality refurbishment, including security systems, infor-mation technology support, furniture solutions and move management.

Tetris experience of operating in France, Th e United Kingdom, Italy, Spain, Portugal and Belgium will add further benefi t to our Moscow clients ,relating to current design trends throughout Europe. Recent Tetris clients include Bank of America, Bank of Montreal, Nokia, HIS Global Insight, Pool, Warner Bros., Lego, Brussels Airlines and Sony.

Marriott International

Marriott opens its fi rst residence inn extended stay hotel in EuropeMarriott International’s third largest lodging brand, Resi-dence Inn by Marriott, celebrated the opening of its fi rst property in Europe, the 125-room Residence Inn Munich


48 AEB Member News

City East. Th e Residence Inn Munich City East opens along-side the new 227-room Courtyard by Marriott Munich City East under a franchise agreement with SV Group. Residence Inn by Marriott, the pioneer in the extended-stay hotel segment, has more than 600 properties globally.

As part of an ambitious fi ve year growth plan in Europe, Residence Inn by Marriot is the fourth new brand to open under Marriott International’s global portfolio of brands this year. Earlier this year, Marriott introduced AC Hotels by Marriott, Autograph Collection and EDITION hotels to Europe for the fi rst time.

Marriott Moscow Royal Aurora hotel starts a new sea-son after renovation

Marriott Moscow Royal Aurora hotel has earned a reputation as one of the best fi ve star hotels in the city pro-viding world-class facilities and impeccable services since its opening in 1999. As part of its commitment to keep its reputation for providing excellent services, to follow the changing market trends and to enhance the guest experi-ence, the hotel has just completed an extensive upgrade in the public areas. Th e renovation included installation of a new revolving entrance door, upgrading the lobby area and the lobby bar on the fi rst fl oor and renovating the ballroom, all conference rooms and the Polo Club steak house on the second fl oor.

Michael Page

Michael Page presented "European CFO Barometer 2011"Th e presentation of the survey “European CFO Barometer 2011”, carried out by international recruitment company Michael Page took place in Ararat Park Hyatt on the 18th of October. Th e speakers were Alf Harris, Director of Michael Page, and Olga Emelyanova, Executive Manager (Finance & Accounting Division). Th ey presented the results of the study to СFO and Finance Directors of the largest Russian and International companies. Guest speakers were Daniele Marchi, Director of the Economic Department at LLC Pire-lli Tyre Russia, and Andrey Ignatov, Independent Member of the Board of Directors of “IC Kvartira.ru”. Th e fi ndings of the study and experts' opinions indicate the necessity in times of crisis for the CFO's transition from a support func-tion to full participation in the strategic decision making process in the company.

More than 2,400 CFOs and Finance Directors from over 14 countries including Russia responded to an international survey conducted this year. Th e main aim of ‘Barometer’ was to collect and analyse information about the CFO's job responsibilities, qualifi cations and career opportuni-ties. Olga Emelyanova, who presented the survey, summed up her speech "In this time of uncertainty CFOs have to improve their management skills and strategic thinking, to be oriented towards their team, to be fl exible and look for new market opportunities".

Praedium ONCOR International

Refi nancing the multifunctional complex “Prazdnik”Praedium ONCOR International arranged refi nancing of multifunctional complex Prazdnik located near Tushinskaya metro station in Moscow. Th e credit line was issued by Alfa Bank one of the leading fi nancial institutions in terms of real estate fi nancing in Russia. Praedium ONCOR International was responsible for loan term negotiations, structuring and support of the deal.

Th e total area of the complex is 34,000 m2. Th e major tenants are: Eldorado, Beliy Veter Tsifrovoy, Snezhnaya Koroleva, L’etoile among others. Th e asset value is esti-mated at around $85m and the volume of the credit line has reached $30m.

In terms of the current volatility in global fi nancial mar-kets the largest fi nancial institutions signifi cantly reduced the volume of commercial real estate fi nancing in Russia. Russian governmental banks are nowadays among the most active market players in this sphere.

Roca

Zaha Hadid, two times winner of the Stirling Prize, celebrates the launch of her third London project, the Roca London GalleryZaha Hadid Architects and Roca are delighted to announce the opening of a brand new fl agship space, the Roca London Gallery, at Imperial Wharf close to Chelsea Harbour. Zaha Hadid Architects were commissioned to create this unique concept which takes its inspiration from the power of water as a transforming element and which will bring the Roca London Gallery to life.

Zaha Hadid and her team have created a design that is not just purely visual, it also uses the art of precision and control to help the visitor understand the relationship between the architecture of the space and the design of Roca bathroom products.

Th e Roca London Gallery consists of a single fl oor mea-suring 1,100m2, where, as the Zaha Hadid studio intended, it appears that water has sculptured and defi ned each and every detail of the space. Roca’s commitment to design and innovation is clearly visible in the exterior of the building with its distinctive and unique façade which gives the Roca London Gallery its identity. Th ree almost organic portals which appear to have been shaped by water erosion open up this space to the city.

Th e movement of water is the overriding theme in the Roca London Gallery – fl owing between and merging exterior and interior spaces. Th e interior is sculptured white


49AEB Member News

concrete and its state of the art lighting connects each of the diff erent areas whilst serving as a central axis around which the Roca London Gallery revolves.

Th e interior is fabulous, functional and fl exible, featur-ing cutting-edge, modern, audiovisual, sound and lighting equipment. Th is technology provides interaction with the brand and the opportunity to discover the company’s histo-ry, its landmark achievements and the values on which all of Roca’s work is based: the commitment to sustainability and particularly to innovation, design, wellness and saving water.

Th e Roca London Gallery is intended to be much more than just a display space. Available to an extensive audience that will include everyone from design-savvy architects to design-hungry students, it will become a London hub host-ing a wide range of activities such as exhibitions produced in-house or externally, meetings, presentations, seminars and debates, the criteria being a celebration of design in keeping with the Roca brand and company values.

Santek is a winner of "Brand №1 in Russia" awardOn 17 October, 2011, the results of national trust award "Brand №1 in Russia 2011", were announced in Moscow. Th e Russian brand of sanitary ware Santek became a winner in the Bathroom Equipment category.

Th e competition's juries were consumers themselves - from 12 to 26 September any interested person could fi ll in a questionnaire in popular printed publications or on the offi cial website of the competition. 250,000 Russians from all regions of the country took part in the voting. A poll was set out for evaluation of the goods in 50 diff erent categories. It is necessary to note, that no answers were off ered, the consumers had to specify the brand name in the category by themselves. Th is way it was possible to reveal the brands with greatest popularity and national trust.

Santek took part in the competition for the fi rst time. 29% of total respondents voted for this brand in the Bath-room Equipment category. Th e victory of this brand with a landslide as compared to other participants testifi es to their wide brand recognition and awareness.

Salans

Salans assists RÜTGERS Group in establishing a joint venturewith SEVERSTALSalans has represented RÜTGERS Group, Europe’s leading manufacturer of chemical raw materials

made from coal tar and owned by private equity investment fi rm Triton,

in signing a joint venture with Severstal, one of the world’s leading vertically integrated steel and mining compa-nies. An agreement to this eff ect was signed in Moscow by Severstal Russian Steel Division general director Alexander Grubman, RÜTGERS Group President and CEO Mr. Henri Steinmetz and RÜTGERS Group CFO Dr. Max Padberg.

RÜTGERS holds 51% of the charter capital. Total invest-ments make up USD 26.6 million through borrowed funds over 5 years. Th e joint venture "RÜTGERS Severtal" will use the facilities of the tar pitch processing shop of the coke and by product process at Severstal's factory in Cherepovets to produce vacuum pitch, technical oils and naphthalene by deep conversion of coal tar. Th e joint venture is scheduled to become fully operational by the 1st quarter of 2013.

Severstal’s team included CEO legal adviser Yakov Kaza-kov, legal counsels Yuri Antsyferov, Elena Klimakova, Sergey Bibikov and Tatyana Veretekhina. Salans’ team was led by Moscow partners Florian Schneider and Mikhail Dikopolski and included Moscow associates Anton Kunashov, Artash-es Oganov, Aaron Raff el, Andrei Kiryanov, and Sergey Shishkin together with St. Petersburg associate Ksenia Bruk.

Sheremetyevo International Airport

Since the Beginning of the Year Sheremetyevo Has Accepted More Than 19 Million PassengersSheremetyevo International Airport has reviewed its busi-ness results of October and ten months of 2011. Th e num-ber of passengers since the beginning of the year grew 16% up to 19 million 078 thousand compared to the same period in the previous year.

Passenger traffi c on international air lines (IAL) in January-October grew 17.6% totaling 12 million 332 thou-sand, on domestic air lines (DAL), 13.1% totaling 6 million 746 thousand.

In October 2011 Sheremetyevo Airport accepted 1 mil-lion 993 thousand air travelers, which is 10.2% more com-pared to the same period in the previous year. Th e number of international passengers grew 11.3% up to 1 million 241 thousand, domestic passengers, 8.3% up to 692.1 thousand.

Th e most popular international destinations in ten months of the current year included Antalya, Paris, Istan-bul, Prague, Beijing, Rome and Amsterdam, domestic des-tinations, St. Petersburg, Sochi, Krasnodar, Ekaterinburg, Kaliningrad, Rostov-on-Don and Samara.

Most of the passenger traffi c growth in January-October 2011 was recorded by the air carriers Aerofl ot, Transaero, Nordavia, NordWind, Aerosvit, Air France, Donavia and Turkish Airlines.

From January to October 2011, Sheremetyevo Airport hosted 175.8 thousand aircraft movements, which is 14.1% more compared to the same period in 2010. Th e number of aircraft movements in October grew 10.7% up to 18.1 thousand. Sheremetyevo has introduced a service for registration to Air France and KLM fl ights via the mobile phoneSheremetyevo international airport introduced a new ser-vice of mobile-registration of passengers for Air France and


50 AEB Member News

KLM air companies. Now the passengers of these carriers can spare a lot of time during processing of pre-fl ight for-malities and can register for the fl ights with the help of a mobile phone.

In order to use the service of mobile registration the air traveler needs to execute on-line registration on the airport site (http://svo.aero/registr/) or on the sites of air compa-nies (www.airfrance.ru, www.klm.com), which takes only a couple of minutes. Th e passenger receives a boarding ticket in the form of a MMS-message to his mobile phone. Th e boarding ticket is scanned at the special terminal installed in the E Terminal departure zone. Th e terminal prints out a boarding ticket with which the client passes both passport and special control without having to attend check-in coun-ter. Let us note that this service is especially convenient for passengers traveling without luggage. Th e passengers with baggage after printing out of their boarding tickets need to come to the Drop Off counter (separate counter for drop-ping off of the luggage for the passengers that registered via the Internet) in order to drop off their luggage.

Registration of passengers and drop-off of the luggage on Air France and KLM fl ights in the airport itself starts at 03.30 and is available for all the fl ights of the current day (registration is closed 30 minutes before the fl ight).

Sheremetyevo airport also provides the passengers with a possibility to perform check-in in the on-line mode. At the time being on-line check-in is available for the passengers of such air companies as Aerofl ot, KLM, Air France, Air Astana, Transaero and AeroSvit, Air Baltic, Hainan Airlines and Turkish Airlines. On-line check-in is generally opened 30 hours before the fl ight which gives to the passengers a number of advantages for planning the time of their travels and stay in the airport.

Sheremetyevo airport provides special conditions for Air France and KLM air companies passengers. Th us, Sheremetyevo ensured record short time for delivering lug-gage for the passengers of these carriers. Th e fi rst piece of luggage is put on the transporter line in just 12 minutes after the airship is parked and the last one — in 20 minutes. Th is allows to ensure minimum time of after-fl ight procedures in the airport.Sheremetyevo implemented an automatic system of positioning of motor vehicles on the apronSheremetyevo international airport implemented a new information system that allows to trace special vehicles on the apron in real time mode and to analyze the effi ciency of its utilization.

Th e main task of implementation of motor vehicles management system is to minimize running of special vehi-cles. Visualization allows to make decisions based on facts and not with the help of oral communications. When the dispatcher knows the exact location of a motor vehicle he can fi le a task to the nearest vacant driver. Th is system allows to execute control over fuel consumption, optimize working time of dispatchers and drivers and spare operating and fi nancial resources of the enterprise.

Th e detailed map of the airdrome of the dispatcher shows movement and status of all the transport vehicles, no matter if they are serviced or repaired or are available

for operation. If the motor vehicle sing is shown in green — it is vacant, if it is shown in yellow — its engine is working, if it is shown in orange — eff ective utilization, red stands for defective motor vehicles (undergoing repairs). Th e dispatch-er can access the following statistical information at any time: mileage, speed, time of running/parking, fuel volume, location, engine status (turned on/turned off ), movement trajectory. Business analysis module allows to receive data on consumption of resources, analyze time of work of the motor vehicle for any period of time as well as to compare the loading of this motor vehicle for this or other period with the loading of other motor vehicles.

Motor vehicles movement trajectory is traced via the satellite signal, like on automobile navigators. Th e informa-tion is sent by GPRS to the server which transfers these data to the control rooms of the airport.

On the fi rst stage the monitoring system was fi tted on 127 motor vehicles in the Special Machinery Service, Main Mechanic Service and Airdrome Service. Full-scale operation of the system will be launched in the following year.

TEVA

TEVA to build plant in Yaroslavl, RussiaTeva Pharmaceutical Industries Ltd. announced today that it has signed an investment agreement for the construction of a manufacturing facility in Russia. A signing ceremony was held today at the Sochi Economic Forum in the pres-ence of Russian Prime Minister Vladimir Putin, Sergey Vahrukov the Governor of the Yaroslavl region, and Shlomo Yanai, President and CEO of Teva.

“Th is investment will boost Teva's ability to provide accessible quality healthcare to the Russian people and neighboring markets", said Shlomo Yanai at the signing ceremony, "It will further allow Teva to enhance its regional presence and sustain its fast growth in Russia for years ahead".

Teva’s plant, which will be located within the phar-maceutical cluster in Yaroslavl city, will be built in various phases. Th e fi rst phase, for the manufacture of oral dosage form products, is scheduled for completion by 2014. Teva’s investment will create 200 direct jobs for skilled personnel and lead to the creation of approximately 1000 jobs in the related supply chain and services fi elds.


51Appointments

CMS, Russia

A new Head of the Lifesciences group in MoscowCMS, Russia is pleased to announce the appointment of Vsevolod Tyupa as Head of the Lifesciences group in Moscow. Vsevolod has vast experience in advising clients in the pharmaceutical sector on legal regulation relating to the circulation of medicines, clin-ical trials, diff erent civil and corporate law

issues, antitrust matters and dispute resolutions. Vsevolod will lead one of the top Lifesciences groups in

Russia, which is part of CMS’ global Lifesciences group of more than 250 experts across Europe. For the last two years, CMS has been the number one law fi rm in Europe for the number of M&A deals in the sector. Prior to joining CMS, Vsevolod worked for Roche – one of the world’s leading pharmaceutical companies.

Jean-Francois Marquaire, Managing partner of CMS, Russia com ments, “We are delighted to welcome Vsevolod in his new position as Head of Lifesciences in Russia. He will continue developing this strategically important sector for us and providing clients with comprehensive legal advice on their industry-focused projects”.

GOLTSBLAT BLP

GOLTSBLAT BLP announces further expansion of the fi rm’s dispute resolution practice and appointment of new partner Oleg Arkhipov

Law fi rm Goltsblat BLP is pleased to announce that Oleg Arkhipov has joined the fi rm as a Partner in the Dispute Resolu-tion Practice.

Oleg was previously a member of the Goltsblat BLP team and, since then, over the last several years, has worked for the

Hannes Snellman international law fi rm. Together with Oleg, the fi rm will welcome Rimma Malinskaya, Senior Associate, who also comes from Hannes Snellman.

Oleg has over 20 years’ experience of representing cli-ents in complex disputes in state arbitration courts, courts of general jurisdiction and various state bodies. He is a dispute resolution lawyer recommended by the leading internation-al rankings and directories. Most recently, he has advised a major international manufacturing company on a number of bankruptcy cases worth a total of over EUR 100 mln, has successfully represented a Russian subsidiary of a leading international producer of mobile communications facilities in a commercial dispute against a chain mobile retailer to the amount of EUR 1.3 mln, and many others. Th e clients with which Oleg co-operates include such companies as Kimberly-Clark, Rosenergoatom, Kone, Nokia and many other well-known Russian and international companies.

Oleg will be the third LDR Partner in the practice and will work together with Partners Rustam Kurmaev and Elena Trusova.

APPOINTMENTSIn2Matrix

In2Matrix introduces its new Chief Operating Offi cerIn2Matrix is pleased to announce appointment of Margot Clarenbeek as the Group's Chief Operating Offi cer. Margot will be responsible for managing and overseeing the fi nan-cial and business planning functions, human resources and the Group's risk management and legal activities. Margot is a qualifi ed chartered accountant (NIVRA) and holds a Masters degree in Business Economics from the Erasmus University, Rotterdam in the Netherlands.

Margot joins In2Matrix from KPMG in Russia and the CIS, where for many years she had been an equity partner and member of the Executive Board. Margot has over 20 years' experience in professional services, mainly focused on auditing, accounting and employee benefi ts and other human resource matters in Russia, the UK, Ukraine, Brazil, Surinam and Th e Netherlands. We would like to take this opportunity to welcome her to our team and know that she will be a valuable asset to the organisation.

Marriott Grand

A new Executive Chef at Marriott Moscow GrandEmmanuel Garde has been appointed as Executive Chef at Marriott Moscow Grand.

Emmanuel started his apprenticeship in 1987 in culinary school near Saint Etienne in central France., For the eight years since 1990, he perfected his craft in French cui-sine working his way through some of the

best restaurants in the Paris region including 1 Star Michelin LE DAUPHIN and L’AUBERGE.

To acquire international experience and pursue his career, he travelled to London and took the position of Junior Sous Chef for Selfridge’s Hotel and then to the Hilton Park Lane. In 2000, Emmanuel moved back to France to work for Hyatt International at the Regency Charles de Gaulle and moved to the Park Hyatt Vendome as a member of the hotel opening team. In 2006, he moved east and to Russia where he worked for nearly four years in the Ararat Park Hyatt Moscow as Executive Chef. Th e following year and half was spent in Cambodia where Emmanuel developed his Asian cuisine skills in the Raffl es hotel, to move back to Moscow as Execu-tive Chef for the Marriott Moscow Grand. In his new role, Emmanuel will be in charge of the hotel restaurants Grand Alexander and Samobranka, the Banqueting kitchen and the Marriott Moscow Grand renowned Outside Catering team.

Radisson Blu Belorusskaya Hotel

Georges Chauve returns to Moscow to lead the operations and opening team of the Radisson Blu Belorusskaya Hotel

French born, Georges Chauve has thirty years experience in hotel management and is bilingual in English and French. In March of 2008, Georges joined the Rezidor Hotel Group as Vice President of Business Devel-opment Russia, CIS, Baltics. In November 2009 Georges moved to Operations, step-

ping in to manage and restructure the Radisson Slavyans-kaya Hotel & Business Centre Moscow. In October 2010,


52 Appointments

Chauve moved to the Radisson Blu Mahary Hotel Tripoli, Libya taking over the position of General Manager and shortly after assisting in the evacuation of staff members during a crisis period. In late May, 2011 Georges Chauve returned to Moscow to lead the operations and opening team of the Radisson Blu Belorusskaya Hotel.

With a background in both Rooms and in Food and Bev-erage operations, Georges has been the General Manager of major international hotels. He has successfully opened deluxe hotels in Hong Kong and in Japan as well as two IHG franchise Hotels in Moscow. He has been general manager of Renaissance Hotels in Hong Kong , Japan, Malaysia, and Sri Lanka. He repositioned the exclusive Grand Westin Hotel in Amsterdam, Netherlands as well as the Sunway Lagoon Hotel and Resort and its Convention Centre serving up to 8000 food and beverage covers per service in Malaysia.

With Meridien Hotels, Georges worked in various food & beverage positions as well as rooms operations in France and the USA. Additionally, Georges was an owning partner of two boutique hotels in Paris, Le Walt and the Le Marquis, properties which he constructed, developed and oversaw the operations.

With a proven track record, Chauve has successfully established and maintained a consistent, strong profi t and high quality product for each of the hotels he has managed through proper operations, sales, marketing and human resources.

RUSSIA CONSULTING

New Director of Tax and Legal Departments at the Moscow offi ceHelge Masannek joined RUSSIA CON-SULTING as Director of Tax and Legal Departments in the Moscow offi ce.

Helge is a German qualifi ed lawyer (Rechtsanwalt) with several years’ experi-ence in advising western companies in their activities in Russia and the CIS, with par-

ticular emphasis on tax law and market-entry issues. Before joining RUSSIA CONSULTING Helge worked for more than fi ve years for a German based law fi rm in Moscow, advising clients in all aspects of Russian commercial law.

At RUSSIA CONSULTING his focus will be on the development of the tax practice, whereas the legal depart-ment’s work that he supervises will remain in providing sup-port to the substantial accounting outsourcing department of RUSSIA CONSULTING. Helge regularly holds seminars in Germany on Russian and International tax and customs issues. He is fl uent in German, English and Russian.

A new Business Development ManagerAlberto De Paoli joined RUSSIA CON-SULTING as Business Development Man-ager. He is the primary contact person at RUSSIA CONSULTING for Italian and French clients.

Alberto has over 20 years of experience in advising on SME development. He has

assisted numerous French and Italian speaking companies in establishing and enlarging their businesses in Russia and

CIS, e.g. he was involved in advising on a major joint ven-ture project of a French cookware and domestic equipment manufacturer in St. Petersburg.

Alberto is fl uent in French, Italian, English and Russian, and he combines his multicultural experience with an in depth local and international industry-specifi c knowledge of the agro-alimentary, food & beverage, wood processing, mechanical engineering, mining, energy and telecom sectors.

Salans

Alexei Zakharko appointed Partnerat international law fi rm SalansAlexei Zakharko has been promoted to Partner at Salans’Moscow offi ce. Alexei is a member of Salans’ Russian Corporate/ M&A Practice Group and has completed a term in the fi rm’s London offi ce. Alexei specialises in acquisitions and disposals of companies and businesses, joint ventures, private equity, corporate fi nance and leveraged acquisitions. Alexei graduated from Cornell Law School (LLM) and the Moscow State Institute of International Relations (LLB). Alexei’s experience includes acting for:

■ the Coca-Cola Company in its acquisition of JSC Nidan Juices, one of Russia’s largest soft drink companies, from Lion Capital, a UK private equity fund;

■ Orient Express Bank, one of Russia's top 10 privately owned lenders, in connection with the acquisition of a 100% stake in CityMortgage Bank LLC from Morgan Stanley;

■ Orient Express Bank in connection with the acquisition of a 100% stake in CJSC Santander Consumer Bank from Santander Group;

■ Computershare PLC, a global leader in transfer agency, share registration and proxy solicitation services, in con-nection with its acquisition of a 60% stake in JSC Registrar Company Nikoil, a leading Russian share registry company;

■ Siemens AG in connection with the establishment of a joint venture with its Russian partner, Iskra-Avigas, a subsidiary of OJSC Gazprom, to produce compressors for gas turbine units.

Salans expands its International Trade/ WTO PracticeSalans has expanded its International Trade/ WTO Practice with the addition of new senior associate Dmitry Demen-tiev. Dmitry, a highly experienced international trade and customs expert, joined Salans from Magisters, and will be based in Moscow. He has extensive experience in represent-ing exporters in safeguard and anti-dumping investigations before the Russian Ministry of Industry and Trade as well as the Customs Union Commission. Dmitry is a graduate of Rutgers University School of Law (Camden, NJ), the Univer-sity of Pennsylvania (Philadelphia, PA), Eastern College (St. David’s, PA) and the Law Faculty of Moscow State Linguistic University (Moscow, Russia).

Edward Borovikov, Head of Salans’ International Trade/ WTO Practice, said: “We are delighted that our Internation-al Trade/ WTO Practice is growing. Our Practice has been consistently recognised as one of the leading in the world by Chambers Global and Legal 500. Considering the range of our clients and the level of cases we handle, it is defi nitely the number one practice in Russia.”


53AEB New Members

Led by Edward Borovikov, Salans’ International Trade/ WTO Practice group has been involved at all levels of trade and customs aff airs all over the world. It has assisted clients with complex trade issues, including trade defence mea-sures, before relevant authorities in the European Union, Russia, Ukraine, USA, China, Brazil, India, Pakistan, Egypt, Turkey, and elsewhere, and is involved in EU law- and policy-making as well as negotiating WTO and bilateral/regional trade agreements. Th e group also supports cli-ents with litigation before the EU’s Courts in Luxembourg and national courts and guides them in consultations and dispute settlement proceedings before the WTO Dispute Settlement Body.

1C:BIT1C:BIT is an authorized partner and a franchisee of 1C company. Our regional network includes

more than 50 offi ces in diff erent regions in Russia and CIS. It allows us to provide the full range of automation services anywhere in the above countries and work successfully with all our clients from small businesses to global corporations.

We operate in the following areas: ■ SMB automation on the 1C:Enterprise software base: supply,

installation, implementation, customization, and support. ■ Implementation of large-scale automation projects for

medium and large companies: preliminary examination, preparation of technical specifi cations, programming, launching a pilot operation, maintenance.

■ Automation of enterprises in various spheres of activity: wholesale, retail, industrial, construction, motor-car, tour-ism, HoReCa, and many other sectors.

■ Personnel training by showing of the implemented solu-tion from the 1C:Enterprise software family.

Capwill LLCCapwill LLC is a private fi nancial

advisory and investment company with principal focus on the Scandinavian region and Russia/CIS. Th e company operates primarily in the consumer goods and services, business services and real estate sectors.

Commerzbank (Eurasija) SAOCommerzbank (Eurasija) SAO

is a subsidiary bank of Germany’s leading bank Commer-zbank AG. Being present in Russia since 1976, we off er a broad range of products to corporate clients and fi nancial institutions. As a part of the Commerzbank Group, Com-merzbank (Eurasija) SAO provides reliable banking solu-tions to our customers from various branches all over the world. Globally, as well as locally, at our branches in Moscow and Saint Petersburg the Bank supports Russian and inter-national corporations with a clear connection to Europe and Germany - being core bank for many European companies.

www.commerzbank.ru/ru/

NEW MEMBERS

CRHCRH is a diversifi ed building materials group which employs approximately 75,000 people at 3,600 operating locations in 35 countries. Headquartered

in Ireland with stock exchange listings in Dublin, London and New York, CRH reported sales of over €17 billion in 2010. Th e group’s businesses range from the fundamentals of heavy materials to construct the building frame (e.g. cement, lime, aggregates, concrete, asphalt, precast concrete elements), through value-added exterior products that complete the building envelope (e.g. concrete pavers & rooftiles, clay bricks, fencing, glazing systems), to distribution channels which ser-vice construction fi t-out and renewal (e.g. builders’ merchants and DIY stores). With a strong balance sheet and operations focus, CRH continues to grow through acquisitions and investments while maintaining a strong credit rating. Th e group entered the Chinese and Turkish cement markets in 2007, and the Indian cement market in 2008. www.crh.com

HöganäsWebsite: www.hoganas.com, www.hoganasthermalspray.com

Höganäs' core competence is in metal powder technology. Powder metallurgy, surface coating and welding are major focus areas. Höganäs continuously broadens the application of metal powders to new areas. Discover new opportunities by collaborating with Höganäs PoP (Power of Powder) Centre where end-user demands are achieved by the interaction of material, design and process expertise.

Welcome to join us in the development of tomorrow’s powder applications.

Hotel Reservation ServiceHRS operates a global hotel portal for business and leisure travellers featuring

over 250,000 hotels in 180 countries and covering all catego-ries. Th e complimentary booking service allows travellers to book accommodation online at rock bottom prices – with a best price guarantee. In addition to millions of private cus-tomers, HRS serves more than 25,000 corporate customers organising business trips, conferences and group travel; the latter benefi t from special HRS business rates with up to 30% off hotel daily prices. Founded in 1972, the company is based in Cologne and operates branch offi ces in Shanghai, London, Paris, Warsaw, Rome, Istanbul and Moscow.

ImtechImtech” is a company with more

than 150 years of experience (founded in 1858) and more than 22000 employees all over the world. Th e main activi-ties of the company are design, installation and maintenance of the building engineering systems.

“Imtech” owns research-and-development centers in the fi eld of: power industry and energy effi ciency; ultra-clean rooms for pharmaceutical, microelectronic and biotechno-logical industries and nanotechnologies; fi re public safety.

“Imtech Russland AG” is founded in 2006 as a subsidiary of the European concern. “Imtech Russland AG” is fully licensed for performing design, building and installation


54 AEB New Members

works in the territory of the Russian Federation, including design and installation works of fi re extinguishing systems.

Th e key projects (current and realized on territory of RF): ■ Design of engineering nets for the new soccer stadium for

62.000 seats in Saint-Petersburg; ■ Installation of engineering nets and civil works for new

offi ce of Deutsche Bank in Moscow; ■ Elaboration of concept of all engineering nets, supply and

disposal systems for 250 hectares artifi cial island “Island of the Federation” located in Black See;

■ Design of engineering nets for the Polypropylene plant, Tobolsk.

Major Cargo ServiceMajor Cargo Service ranks among the leading providers of 3PL services in Rus-sian Federation. We off er customers

tailor-made logistics solutions for transportation, customs clearance, warehousing and distribution even for the most challenging projects. Having intensive domestic network and being an exclusive agent of Expeditors we provide services both in Russian and international markets. Our industry know-how, in-house expertise, customized IT systems and excellent customer service enable us to meet comprehensive needs of diff erent business areas.

National Container CompanyNational Container Company (NCC) is the leading container terminal operator

in Russia and CIS. Th e company was founded in 2002. NCC follows the strategy to develop a solid system of container terminals according to current market demands.

Th e company’s consistent terminal network includes First Container Terminal (FCT, St. Petersburg), Logistika-Terminal (Shushary, St.Petersburg) and Ust-Luga Container Terminal

(ULCT, Leningrad region). Th e main focus of our strategy for 2011 is ULCT’s fi rst phase completion. ULCT is due to become the largest container terminal in Russia and the Baltic region with the annual throughput capacity of 3 million TEU by 2019. Th e aggregated throughput of NCC’s terminals in 2010 amounted to about 1,3M TEU.

Orange Business ServicesOrange Business Services is the France Telecom Orange branch dedicated to

B2B services, is a leading global integrator of communica-tions solutions for multinational corporations.

Orange Business Services in Russia is the only interna-tional telecommunication and integration services provider with a state-of-the art network infrastructure that is fully licensed including a long distance voice license in Russia. More than 1000 employees work in 36 cities of Russia. there are representative offi ces in Almaty, Kiev and Minsk. Company operates its own uniform IP MPLS-network with access points in all largest cities of Russia and CIS countries.

www.orange-business.ru

Sterh CorporationSince its foundation in 1993, Sterh Cor-poration has become a leading logistic Russian company and an active partici-

pant of foreign trade activity in the Northwestern Federal District.

Presently, the Corporation comprises a group of compa-nies providing full scope of logistic services. Th e Corpora-tion’s structure includes:

■ Customs brokers. Customs brokers of the Sterh Corpora-tion are regular winners in nominations ‘Best Customs Broker’ and are leading brokers in St. Petersburg in vol-ume of cleared shipments.

■ Transportation and forwarding companies, which pro-vide, among others, multimodal transportation services.

■ Transportation and logistics terminals, with the terri-tory equipped with container yards, dry and cold-storage A-class warehouses, open warehouses, parking areas for storage of heavy-duty vehicles, A- and B-class business centers. Total area of warehouses is over 60,000 sq.m.

YE International"ZAO YE International Russia is

a part of the YE International concern that operates in Finland, Estonia, Latvia, Lithuania, Ukraine and Russia and supplies electronics and electromechanical components, measuring devices, instruments, power supplies, tools and accessories. YE International has been listed on the Hel-sinki Stock Exchange since 1988. Th e head offi ce in Russia is situated in Saint-Petersburg; the company has branches in Moscow, Yekaterinburg, Novosibirsk, Samara, and Nizhniy Novgorod.

ZAO YE International Russia is the sole offi cial distribu-tor in Russia for RS Components - one of the leading dis-tributors of electronic, electrical and industrial components in the world. Th e company carries over 500 000 products, 98% stock is available for despatch from the UK.

AEB Membership Benefi tsEff ective Lobbying

Advocating members' interests to public offi cials, legislators and business decision-makers in Russia and the EU. Cooperating with the Russian autho-

rities to solve business issues and eff ective interaction with lawmakers.

Quality Business InformationPublications: AEB Business Quarterly, Membership Directory, Position Paper,

Real Estate Monitor, How to Invest in Russia, monthly AEB News.Regional presentations and business development missions to the regions.

More than 20 sector and issue-based committees and working groups in Moscow, St. Petersburg, Krasnodar and Yekaterinburg.

Valuable NetworkingOrganising open meetings, conferences, political briefi ngs and other

high-profi le events with prominent government and business leaders. Regular social events, including embassy EuroReceptions Government

and business contact information in Moscow and the regions. Online access to Member Database.

Marketing Opportunities and VisibilityInternet links and banners. Advertising opportunities in AEB publications.

Sponsorship opportunities during AEB events.

1. COMPANY / Company Name in full, according to company charter. (Individual applicants: please indicate the company for which you work /

Название компании в соответствии с уставом. (Для индивидуальных членов – название компании, в которой работает заявитель):

Legal Address (and Postal Address,

if different from Legal Address) / Юридический и фактический адрес, если он отличается от юридического:

INN / KPP / ИНН/КПП:

Phone Number / Номер телефона: Fax Number / Номер факса:

Website Address / Страница в интернете:

2. CATEGORY / : THE CATEGORY IS DETERMINED ACCORDING TO THE COMPANY’S WORLD TURNOVER

Please indicate your AEB Category /

Отметьте категорию

Company’s world-wide turnover

(euro per annum) / Мировой оборот компании (евро в год)

AEB Membership Fee /

Членский взнос в АЕБ

SPONSORSHIP / Спонсорство – 8,500 euro/евро

CATEGORY A / Категория А >500 million/миллионов 5,750 euro/евро

CATEGORY B / Категория Б 50–499 million/миллионов 3,500 euro/евро

CATEGORY C / Категория С 1–49 million/миллионов 2,000 euro/евро

CATEGORY D / Категория Д <1 million/миллионов 750 euro/евро

INDIVIDUAL (EU/EFTA citizens only)/ Индивидуальное (только для граждан Евросоюза/ЕАСТ)

– 750 euro/евро

Any non-EU / non-EFTA Legal Entities applying to become Associate Members must be endorsed by two Ordinary Members

(AEB members that are Legal Entities registered in an EU / EFTA member state or Individual Members –

EU/EFTA citizens) in writing/

Заявление любого юридического лица из страны, не входящей в Евросоюз/ЕАСТ, и желающего стать членом АЕБ, должно быть письменно подтверждено двумя членами АЕБ (юридическими лицами, зарегистрированными

в Евросоюзе/ЕАСТ, или индивидуальными членами – гражданами Евросоюза/ЕАСТ)Individual AEB Membership is restricted to EU / EFTA member state citizens, who are not employed

by a company registered in an EU / EFTA member state /

К рассмотрению принимаются заявления на индивидуальное членство от граждан Евросоюза/ЕАСТ, работающих в компаниях, страна происхождения которых не входит в Евросоюз/ЕАСТ

Please bear in mind that all applications are subject to the AEB Executive Board approval /

Все заявления утверждаются Правлением АЕБ

3. CONTACT PERSON / INDIVIDUAL MEMBER / /

Title, First Name, Surname / Ф.И.О:

Position in Company / Должность:

E-mail Address / Адрес эл. почты:

AEB MEMBERSHIP APPLICATION FORM / HA Please fill out the Application Form in CAPITAL letters, sign it and fax it to 234 28 07/

Заполните заявление печатными буквами и пришлите по факсу 234 28 07

Calendar year / Календарный год: 2012 (Please check the appropriate box/boxes / Укажите соответствующий год/года)

Name of your AEB Contact / Ваше контактное лицо в АЕБ: ________________________________________

THE VOICE OF EUROPEAN BUSINESSES IN RUSSIA

ASSOCIATION OF EUROPEAN BUSINESSES

Russian Federation, Ul. Krasnoproletarskaya 16, bld. 3127473 Moscow, Russian Federation

Tel.: +7 (495) 234 27 64. Fax: +7 (495) 234 28 [email protected]. http://www.aebrus.ru

Российская Федерация, 127473, Москва, ул. Краснопролетарская, 16, строение 3

Тел.: +7 (495) 234 27 64. Факс: +7 (495) 234 28 [email protected]. http://www.aebrus.ru

4. COUNTRY OF ORIGIN /

А. For a company / Компаниям:Please specify COMPANY’S country of origin /

Указать страну происхождения компании1

or B. For an individual applicant / Индивидуальным заявителям: Please specify the country, of which you hold CITIZENSHIP /

Указать гражданство

Please note that only EU / EFTA members can serve on the Executive Board and the Council of National Representatives/

Внимание! В Совет национальных представителей и Правление могут быть избраны члены, представляющие страны Евросоюза или ЕАСТ.

Please fill in either A or B below/ Заполните только графу А или В

5. COMPANY DETAILS /

Company present in Russia since: ____________ / Компания присутствует на российском рынке с:____________ г.

Company activities/

Деятельность компанииPrimary / Основная:

Secondary /

Второстепенная:

Company turnover (euro)/

Оборот компании (в Евро) In Russia / в России:

Worldwide / в мире:

Please do not include this in the AEB Member Database/ Не включайте это в справочник АЕБ

Number of employees/

Количество сотрудниковIn Russia / в России:

Worldwide / в мире:

Please do not include this in the AEB Member Database/ Не включайте это в справочник АЕБ

Please briefly describe your company’s activities (for inclusion in the AEB Database and in the AEB Newsletter) /

Краткое описание деятельности Вашей компании (для включения в базу данных АЕБ и публикаций АЕБ)

6. HOW DID YOU LEARN ABOUT THE AEB / ?

Personal Contact / Личный контакт Internet / Интернет

Media / СМИ Event / Мероприятие

Advertising Source / Реклама: ____________________________ Other / Другой:___________________________________________

Signature of Authorised Representative of Applicant

Company / Подпись уполномоченного лица заявителя:

____________________________________________________________

____________________________________________________________

Signature of Authorised Representative of the AEB /

Подпись Руководителя АЕБ:

____________________________________________________________

____________________________________________________________

1 Location of a parent company or of the main shareholder/ Местонахождение головной конторы или основного учредителя.

Date/Дата: Date/Дата:

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Documents

AEB Business Quarterly