10 years of Government Affairs in Russia From Jungle to FCPA/UKBA Compliance

1. 10 years of Government Affairs in RussiaFrom Jungle to FCPA/UKBA Compliance

2. Established in 2004 in Moscow One of the first Russian firm to provide professional services in the spheres ofGovernment Relations and Lobbying Kesarev Consulting has two offices – in Moscow (Russia) and Kyiv (Ukraine) There are 15 experts and 6 full partners working in a company, and who have long-term experience in government or GR and PA consulting. Strategic partnership with Alber & Geiger (Brussels) Priority areas of the services accomplishment: in the sphere of agricultural sector, on the issues of the customs tariff regulations, protective measures, in the area of the international trade and foreign affairs, infrastructure development and so on. Regions where the services are available: CIS including Ukraine, Central Asia, South Caucasus and Georgia; South-East Europe and Balkan States. About Kesarev Consulting

3. State of Government Affairs in Russia: 2010 • Owners and top-management continuingly leave once their owned government relations functionto professionals • International growth of Russian business with expansion of foreign investments into Russia • Growth and development of trade associations • ~ 5 in 2000; a couple of dozens in 2010 • Core of GA and PA professionals was made in western, multinationals and Russian top-200 corporations • about 1500-2500 GA professionals; most successful do not have government career experience • GA /PA in different capacities involved in corporate structure • specialization within GA • solid growth of professionalism and ethics within GA • Constant dynamics of carrier transfer between multinational and Russian corp. • GA moving into federal districts capitals • GA has dominantly Russian & CIS nationality, times of expats on GA function havepast • Networking

4. State of Government Administration: 2010 • Professional beurocracy formed • growth of professionalism of mid and upper level of public officials • Legislative environment rapidly fulfilled • Demand on strategic planning and decision-making quality • Major sophisticated legislation is now made in longer terms with obliged involvement of expertise • «Retail Regulation Law» - more than 1year. • «National Payment System Law» - more than 1,5year • Development of anticorruption and self-administrative regulations • ФЗ «О противодействии коррупции» 2008г. • ФЗ «Об антикоррупционной экспертизе нормативных правовых актов и проектов нормативных правовых актов» 2009г. • ФЗ «О государственной гражданской службе РФ» + административные регламенты • E-government

5. Challenges • High corruption • Turkey, Kosovo (2010) • but still not like Ukraine • High level of “corruption expectance” • Still quite low conciseness & ethics of top-management regarding government administration and corruption (including multinational companies) • Quite high number of so-called “corruption brokers” or “mighty-lobbying brokers” • High disproportion of people declaring to belong or wanting to transfer into GA industry (but not really belonging to it) • 1 to >10 (public officials, lawyers, PR, marketing and commercial, etc.) • overstated salary expectations (>10000$) • Underdeveloped GA/PA consulting • virtually no competition in defense, agribusiness, utilities and etc. • some in pharmacy, FMCG and tobbaco • Possibility of loosing Moscow as GA/PA center for CIS/SEE/EMEA region • we see not clear, bus some tendency in moving government affairs & public affairs leadsinto CIS or other regional centers (Prague, Budapest, Istanbul and etc.)

6. Moving forward • GA self regulation • Mandatory compliance (International Compliance Certification for enst. or etc.)

7. Kesarev Consulting9 Zemlyanoyval, 4th Floor, office 4010105064 Moscow Russiaphone/fax : +7 495 662-9859 Thank you! Kesarev Consulting – Ukraine72 Gorkogo str., office 15603150, Kyiv, Ukraine phone/fax : +38 044 200-5559 www.kesarev.com