What are the Regulations Pursuant to Currencies?

The Foreign Exchange Control Law (the “Currency Law”) regulates currency transactions in Russia. All currency transactions can be conducted without limitation except for:

1. Deposits
   A Company must create a reserve deposit with an authorized Russian Bank. The amount deposited is unavailable for a set period of time and then is returned to the Company. The amount of the deposit is defined as a set percentage of the transaction. Interest does accrue on a deposit.
2. Special Accounts
   Certain currency transactions can only be processed through special bank accounts.
3. Repatriation of Proceeds
   A resident that receives foreign currency proceeds from a non-resident must repatriate those proceeds to Russia.
4. Mandatory Sale of Foreign Currency Proceeds
   A resident must convert 10% of foreign currency proceeds into Rubles.

Russian Entities can perform transactions with Rubles in the Territory of Russia without any restriction. Generally, foreign currency transactions between residents are prohibited. The exceptions are transactions in duty free stores, certain transport operations, certain transactions performed under agency contracts and others. The foreign currency transactions between residents which can be performed without any restriction include:

• Receipt and Repayment of Loans and Interest
• Deposit and Withdrawal of Cash From Bank Accounts
• Certain Transactions with Bills of Exchange issued by Authorized Banks
• Payment of Commissions to Authorized Banks

Generally, foreign currency transactions between residents and non-residents can be performed without limitation, but there is an exhaustive list of exceptions, i.e.:

• Lending or Borrowing in Rubles
• Acquisition of Domestic Securities

Currency transactions between non-residents generally can be performed without restrictions. Exceptions include currency transactions involving domestic securities on the territory of the Russian Federation.