EFFECTIVE LOBBYING IN RUSSIA & CIS

A GUIDE THROUGH THE MAZE:GOVERNMENT RELATIONSFOR DOING BUSINESSIN RUSSIA & CIS

The post-Soviet space represents a significant market and a substantial proportion of the global economy. Not only Russia itself, but the Ukraine, Kazakhstan and other countries in the region offer new development opportunities for partners from around the world. These opportunities are in traditional industries such as energy, natural resources and heavy engineering, and also in more innovative sectors such as information technology and high tech manufacturing.

DISCOVER THE OPPORTUNITIES

The highest level of GDP per-capita among BRIC countries

Low level of national debt

The largest raw stuff producer in the world

Государственный долг

Trillions of USD

Russia’s share in export of resources Russia’s share in world stock

8th largest internal market in the world

Russia is the sixth largest economy in the world by GDP volume

Third place in the world by gold and foreign currency reserves

USD

Millions of USD

Уровень безработицы

For companies considering relocating their operations to Russia or the CIS, or expanding their existing operations in the region, opportunities need to be weighed against risks. All markets have their challenges, and any cost-benefit analysis has to take account of the complexities associated with operating in any particular market and balance them against the potential commercial opportunities.

PREDICTING THE UNPREDICTABLE:MANAGING RISKS IN RUSSIA AND CIS

CORRUPTIONAs with many parts of the world, it is difficult to do business in Russia and the CIS without encountering corruption. A shadow economy does exist, and staying within the constraints of the Foreign Corrupt Practices Act and the Bribery Act is a significant challenge for western companies operating in the region.

However, a combination of strict adherence to the principles of anti-corruption laws, and access to experienced local consultants will minimise risks.

THE CHALLENGESOF BUREAUCRACYRussia has more government officials than any other country. Complex, confusing regulations hurt business, and business-men and investors should be prepared to face very rigid and time-consuming pro-cesses and procedures. Government and government agencies still hold significant levels of arbitrary power. The local fire in-spector can be as influential – and as det-rimental to your business – as a regional administration head. Local knowledge can help to ensure that hurdles are leapt and unnecessary obstacles bypassed with the minimum fuss.

You will definitely need someone who can help you manage this kind of “lost in trans-lation” situation.

CUSTOMSThe complexities of customs regulations are one of the main reasons for the unenvi-able position of Russia in the World Bank’s ‘Doing Business’ rating. Some of the stories about problems faced with importing and exporting goods in and out of the country are worthy of a line in the Guinness Book of Records! A whole consulting community exists around solving these kinds of prob-lems, but one must be wary of fraudsters.

NEGOTIATINGAs in any other regions, there is a local way of doing things, and that extends to ways of negotiating and doing business. In Russia and the rest of the CIS region nego-tiations cans sometimes take place over a few glasses of vodka or in the steamy en-vironment of a sauna – as opposed to the preferred western environments of restau-rants or the golf club. By being prepared to conform to the local norms, especially with the help of a good local guide, negotiations can run more smoothly and good business can be done.

All games have to be played by the rules, and in the for-mer Soviet region the rules can be complicated and often weighted in favour of the home team. At State Solutions we know the rules and we have played the game many times before. This puts us in a position to help interna-tional businesses, from medium-sized companies up to global giants, to establish themselves and to prosper in Russia and CIS.

WE KNOW RULES OF THE GAME

GOVERNMENT RELATIONS � Consulting on starting up new busi-

nesses and improving existing business relations with national, regional and lo-cal authorities

� Practical assessments of policy, regula-tory and administrative risks and oppor-tunities

� Continuous monitoring of changes in regulations and bureaucratic procedures

� Expert support and analysis of business opportunities arising from Russian and CIS membership of the World Trade Organisation, the Eurasian Economic Community, and the Organisation for Economic Co-operation and Develop-ment

� Developing solutions to business issues and crisis situations

STATE SOLUTIONS LLPWe offer a wide range of services developed to help western European governments do business in Russia and the CIS. As well as providing a business advisory service, we are also experts in public affairs, govern-ment relations and lobbying. Our expert knowledge and thorough understanding of the legislative, regulatory and administra-tive systems in Russia and the CIS enable us to provide effective solutions to many of the problems which may be encountered. We are headquartered in London, but our regional office operates out of Moscow.

LOBBYING

• Influencing government institutions on behalf of clients in an ethical and effi-cient manner

• Obtaining vital administrative and legal documents in a timely fashion

• Ensuring that decisions taken by gov-ernments and government agencies do not adversely affect the business inter-ests of clients

PUBLIC AFFAIRS � Developing and executing communi-

cations strategies and campaigns for targeted audiences, as well as coalition building and reputation management

� Engaging with business associations and non-governmental organisations

� Consulting on decision-making prac-tices and delivering effective commu-nication with multiple stakeholders and interest groups

� Intelligence gathering and thought-lead-ership development

SUCCESS STORIES

MEDIA FRIENDLY

A large international player in the media in-dustry was faced with a lack of cooperation on the part of regulatory bodies. It needed expert advice and an action plan in order to maintain and develop its presence on the market.

The experts from STATE SOLUTIONS were quick to establish all the facts and offer the customer several possible options. By choosing one of them, the customer was able to restore a constructive dialogue with the regulator and continue its operations in the region.

HEALTHY TOUCH

A large international pharmaceutical com-pany needed a package of services to ac-company the launch of a new product in the CIS market.

The experts from STATE SOLUTIONS fa-cilitated the dialogue with regulatory bod-ies; among other things, they helped the company to obtain the official approvals it needed. The product is now in great de-mand on the market.

COMFORTABLE M&A

An international advertising agency net-work bought an outdoor advertising op-erator in one of the Russian regions. The customer needed assistance in its commu-nications with the municipal authorities in order to develop the business.

The experts from STATE SOLUTIONS promptly developed the action plan required by the customer and their input was impor-tant to the success of the negotiations. The regional segment of the advertising opera-tor has been growing consistently.

VALUABLE FORECAST

A large international telecommunications company required a case study and a de-velopment forecast in view of the appoint-ment of new senior officials in the regula-tory bodies.

STATE SOLUTIONS prepared a report to this effect, which left the customer com-pletely satisfied. The company is develop-ing successfully in the segment.

More success stories on www.state-solutions.com

The media often exaggerates the difficulties of doing business in Russia and the CIS. Equally, it would be unwise to deny the fact that this is a complex market, with formidable barriers to entry.

It is because there are challenges, complexities and barriers that I founded State Solutions LLP – with the specific intention of helping western companies to pick their way through the maze of regulations which can be daunting to those unfamiliar with the landscape. I believe that we have the experience and expertise to help you to do business in a unique market which is at once both challenging and potentially rewarding.

Doing business in the post Soviet space inevitably brings companies into frequent – and often frustrating – contact with governments and their various bodies. The state looms large in societies which only two decades ago were tightly controlled by centralising communist parties.

Things have improved dramatically in recent years, and with the right local guide it is possible to avoid both pitfalls and precipices. We would like to be your guide, and to have the opportunity to show you the path to profit in our part of the world.

--------------------------------------------------------------------------------PAVEL MOROZOVManaging Partner--------------------------------------------------------------------------------

p.morozov@state-solutions.com

HEADQUARTERS 1 Berkeley streetLondon, W1J 8DJUnited KingdomTel: +44 (0)20 3402 1707

REGIONAL OFFICE Office 39 Bolshoi Kislovskiy PereulokMoscow, 125009Russian FederationTel: +74992509703

www.state-solutions.com

STATE SOLUTIONSEFFECTIVE LOBBYING IN RUSSIA & CIS