ANTITRUST REGULATION

Changes in legislation on protection of competition

A number of changes have been made to the Federal Law “On protection of competition”.

In particular, land and non-industrial buildings, structures, constructions, premises and parts of premises and facilities under construction have been excluded from the list of facilities the transactions with which are subject to prior approval of the antitrust authorities.

Furthermore, the validity term of lease agreements for state and municipally owned property executed with small and medium-size businesses prior to July 01, 2008 without a tender has been permitted to be extended. This provided, such agreements may be extended to July 01, 2010 only.

Federal Law No.195-FZ “On introducing amendments to Federal Law ‘On protection of competition’” dated November 08, 2008

Antitrust authorities not responsible for proving occurrence of losses

In the course of court proceedings the court pointed out that the antitrust authorities are not responsible for proving the occurrence of losses which may be inflicted on a competing entity as a result of actions committed by another entity having violated antitrust legislation.

Resolution of Arbitration Court of Appeal No.13 on case No.A26-924/2008 dated July 30, 2008

INVESTMENT ACTIVITY

Submission of information by foreign investors

The Government of the Russian Federation has approved the procedure for foreign investors submitting to the authorized agencies information on acquisition of 5 percent and more of shares or stock constituting share capital of strategic business entities.

Resolution No.795 of the Government of the Russian Federation “On approval of regulations on foreign entity or group of entities of which the foreign investor forms a part submitting information regarding performing transactions with shares (or stock) constituting share capital of business entities of strategic importance for state defense and security” dated October 27, 2008

BANKING

Refinance rate of the Bank of Russia increased

To reduce the outflow of capital from Russia and to restrain the inflation growth the Bank of Russia has once again raised its refinance rate from 12% to 13% annual taking effect as of December 01, 2008.

This is the second time this month and the sixth time this year that the Bank of Russia has raised its refinance rate.

Directive No.2135-U of the Central Bank of the Russian Federation “On the refinance rate of the Bank of Russia” dated November 28, 2008

LEGAL ENTITIES

Providing information on company businesses to company shareholder

In the course of court proceedings, the court pointed out that the Federal Law “On joint stock companies” does not impose any restrictions concerning the scope of information on company business which a company shareholder is entitled to access.

Furthermore, the time period for which the shareholder is entitled to request information does not depend on the moment in time when such shareholder purchased the company shares.

Resolution of Arbitration Court of Appeal No.13 on case No.A56-28184/2007 dated July 04, 2008

LABOR RELATIONS

Holidays and weekends for 2009 officially scheduled

The Government of the Russian Federation has approved the schedule of holidays and weekends for 2009.

In particular, weekend day of Sunday January 11, will be shifted to Friday, January 09, thus extending the New Year and Christmas holidays to the first ten days of 2009, whereafter a six day business week will follow starting from Sunday, January 11.

Resolution No.877 of the Government of the Russian Federation “On holidays and weekends in 2009” dated November 26, 2008

REAL ESTATE

Privatization of land with construction in progress

In accordance with the Russian Land Code, a construction in progress is not among items on the list of facilities the possession of which entails exclusive rights to privatizing land whereon such facility is located.

In consideration of the foregoing, the court upheld a decision of the Federal Registration Service (Rosregistratsiya) on denial of state registration of transfer of ownership title of a company to land with a building under construction owned by the company.

Resolution of the Federal Court of Arbitration of the North-West Region on case No.A05-5739/2008 dated October 23, 2008

CONSTRUCTION

Developer’s failure to submit quarterly reports

In accordance with the legislation on share construction, a developer is responsible for submitting quarterly reports on raising funds from participants of share construction for purposes of constructing apartment buildings. Any failure to fulfill such responsibility on the part of a developer entails administrative liability in the form of penalty from 100 to 200 thousand rubles.

In the course of court proceedings, the court pointed out that entering into preliminary agreements on share construction and preliminary sale and purchase agreements does not release the developer from its responsibility of submitting quarterly reports, provided that agreements between the developer and individuals in their legal essence constitute share construction agreements.

Resolution of Arbitration Court of Appeals No.13 on case No.A21-1049/2008 dated May 28, 2008

CONSTITUTION SYSTEM

Use of the Russian national symbols

The Russian legislation regulating the use of the Russian national symbols has been amended.

For example, individuals, non-government associations, companies, institutions, and organizations have been permitted to use the Russian national flag and depictions thereof.

Furthermore, the ban on using official designations of “Russian Federation”, “Russia” and their derivatives in the names of legal entities has likewise been repealed. Such designations may be included in a company name, provided receipt of a relevant permission.

Apart from that, a regulation on administrative liability for violating the procedure on official use of the Russian national symbols was added to the Russian Code of Administrative Offences.

Federal Constitutional Law No.4-FKZ “On amendments to the Federal Constitutional Law ‘On the national flag of the Russian Federation’” dated November 08, 2008

Federal Law No.201-FZ “On amendments to Article 1473 of Section Four of the Civil Code of the Russian Federation” dated November 08, 2008

Federal Law No.197-FZ “On amendments to Article 17.10 of the Code of Administrative Offences of the Russian Federation” dated November 08, 2008

PROTECTION OF CONSUMER RIGHTS

Violation of consumer rights by a credit institution

In the course of court proceedings, the court pointed out that the bank’s misinforming a client on the dates of the monthly payments and the amounts due when extending a credit constitutes grounds for bringing the bank to administrative liability.

Resolution of Arbitration Court of Appeals No.13 on case No.A56-2137/2008 dated June 18, 2008

Issuance of fuel cards to owners of compact cars in Moscow

From November 11, 2008 owners of compact cars in Moscow are issued fuel cards worth 24 thousand rubles. Fuel cards are issued provided the compact car is purchased and registered between October 01, 2008 and December 01, 2009.

Resolution No.2591-RP of the Government of Moscow “On procedure of issuing fuel cards to owners of compact cars” dated November 05, 2008

TAXES

Applying treaties on elimination of double taxation

The Russian Federal Tax Service has reported that treaties on elimination of double taxation and prevention of evasion of paying profit and capital taxes may be applicable only to the following taxes: corporate profit tax, personal income tax, corporate property tax and personal property tax.

Letter No.3-7-01/133 of the Federal Tax Service “On applying treaties between the Government of the Russian Federation and governments of foreign countries on elimination of double taxation and prevention of evasion of paying profit and capital taxes” dated July 03, 2008

Rent expenditures on for foreign employees

The Directorate of the Moscow Federal Tax Service clarified that costs associated with providing foreign employees with free accommodation (or compensation of apartment rent costs) under the labor contract cannot be recognized as costs for calculating profit tax.

Letter No.20-12/060105 of the Moscow Directorate of the Federal Tax Service “On recordkeeping of accommodation costs for foreign employees for calculating profit tax” dated June 26, 2008