© Pepeliaev, Goltsblat & Partners. All rights reserved. Foreign banks in Russia: legal regulation Lidia Gorshkova Head of Banking Practice 28 September 2008

© Pepeliaev, Goltsblat & Partners. All rights reserved. Principal regulatory acts  Federal Law No. 86-FZ dated 10 July 2002 "On the Central Bank of the Russian Federation (the Bank of Russia)"  Federal Law No. 395-I dated 2 December 1990 “On Banks and Banking"  Regulation of the Bank of Russia No. 109-I dated 14 January 2004 "On decision-making by the Bank of Russia on state registration of credit institutions and issuing of banking licences"  Regulations of the Bank of Russia No. 437 dated 23 April 1997 "On the specific of registration of foreign-invested credit institutions"  Regulation of the Central Bank of Russia No. 130-I dated 21 February 2007 "On seeking preliminary consent from the Bank of Russia to acquisition and (or) obtaining of shares (stakes) in a credit institution in fiduciary management"  Regulations on establishment and activities of representative offices of foreign credit institutions in the Russian Federation (approved by Order of the Bank of Russia No dated 7 October 1997)

© Pepeliaev, Goltsblat & Partners. All rights reserved. Possible forms of establishment  Representative Office  Branches  Foreign-invested credit institutions

© Pepeliaev, Goltsblat & Partners. All rights reserved. Establishment of a representative office  Subject to approval by the Bank of Russia  Permit term is for 3 years (provided activities commenced within 6 months)  Restrictions on headcount and control over activities by the Bank of Russia  Possible termination of the representative office by the Bank of Russia without stating the reason  Possible extension of the Permit  Criteria for success: goodwill financial soundness bilateral relations

© Pepeliaev, Goltsblat & Partners. All rights reserved. Foreign-invested subsidiary banks Establishment  Preliminary approval by the Bank of Russia (LOI)  Permit term is 1 year  Minimum € 5 mln charter capital Acquisition  No special (discriminatory) requirements  Subject to approval by the Bank of Russia for acquisition of more than 20%, notice of acquisition of more than 1%  Subject to approval by the Russian Federal Antimonopoly Service for acquisition of more than 25% of the shares and more than a 1/3 stake in the charter capital provided company assets are more than RR3 bln ($120 mln)

© Pepeliaev, Goltsblat & Partners. All rights reserved. Admission for foreign bank branches  Envisaged by the legislation as a part of the Russian banking system  Source of long-term investment given lack of funding in the real economy  Possible regulation and control by the Bank of Russia, including special admission and business parameters  Mandatory regulation in the following spheres: licensing supervision (including parent banks) deposit insurance system corporate compliance taxation etc.

© Pepeliaev, Goltsblat & Partners. All rights reserved. About the firm Krasnopresnenskaya Nab., 12 World Trade Center-II, MOSCOW 54 Shpalernaya St., Golden Shpalernaya Business Center, ST. PETERSBURG  Russian legal firm  Full range of legal services  More than 200 lawyers  Offices in Moscow and St. Petersburg

© Pepeliaev, Goltsblat & Partners. All rights reserved Krasnopresnenskaya Nab., Entrance 7, World Trade Center-II, Moscow, tel: +7 (495) fax: +7 (495) Shpalernaya St., Golden Shpalernaya Business Center, St. Petersburg, , Russia tel: +7 (812) fax: +7 (812) © Pepeliaev, Goltsblat & Partners. All rights reserved. Contacts