The Danish Business Club in Moscow

Selection_001How long has the Danish Business Club been operating for?

The club originated from a trade counsel, established by the Danish embassy back around 1983. However the club was only formally established via a statutory general assembly around 1997. This was the formal beginning of a democratic business club, with an elected chairman, board and bylaws. Every second year we change the board, which causes a lot of rotation and in some cases challenges in terms of consistency, but it does create a lot of new input to the club. This year we are putting considerable effort into making the club more focused on business rather than social events. Obviously this takes a lot of effort and time, especially from members of the board.

How long have you been chairman of the board?

I took over at the beginning of this year together with the newly elected board. All board members are Danes, and there are five of us, plus we have a secretary.

Selection_006How many members are there, are they mostly Danish?

We have both corporate members and private members, altogether we have between 100 and 200 active members, almost all of whom are based in or doing business in Moscow, which is really our stronghold in Russia. About 80% of our subscribing members are Danish, but that doesn’t mean that 80% of all participants at all events are Danish. Lego, Danfoss, Novo Nordisk, Arla or other major corporate members, might have an organisation of hundreds of Russians who could attend an event in which they are taking part so obviously there are a lot of Russian attendees as well.

What kind of events do you organise?

Firstly, we hold social events, such as the Stambord at the Restaurant Skandinavia once a month. Stambord is Danish for a table that always stays the same, and the event is always held at the same time of the month that we meet up, basically 7pm on the last Thursday of each month. People have the chance to come in and network, and meet others. It is particularly useful for newcomers, who can then write an email to a board member who will arrange an introduction to like-minded people who it might be useful for them to meet. At the same time, it’s a very good chance to catch up with what other members are doing.

Selection_005Do you organise educational seminars and lectures?

We are introducing theme-based events this year. The theme could be cultural; for example this year we had a famous Danish jazz singer visiting us. The cultural department of the Danish embassy initiated that event. We are trying to bring in more and more business-like content, and we have been quite successful with this. First of all, we do some company visits, which are joint-visits to member-companies here in Russia. For instance, we went to Lego, they explained the whole story of their development throughout the last decade, from the starting point, when they entered Russia, and how they have been growing their business and developing in the regions. We also organise meetings with market experts, for example we have an upcoming event with Chris Weafer, former Troika Dialogue, Sberbank. We host events, like the upcoming event on how companies that are already experiencing pretty good growth can get finance for their business.

Not being the largest business association in Russia, we are affiliated with other associations. For example, we have a representative from Denmark in the AEB, he briefs us and also the Danish Ambassador to Russia about the content of AEB meetings. Having representatives in other organisations makes it easier for members, in that they don’t have to be members of all the different associations and clubs. If we have some really important, breaking news, we share it with everybody by email. That is why we have a special website which is accessible to all subscribing members. We have a group on Linkedin and it is shared across all types of media.

Which language do you use?

Our operating language is English, because we all speak that, and because one of our aims is to attract Russian staff working for Danish companies, generating a good foundation for mutual business opportunities.


What is your relationship with your embassy?

They are a huge help to us. We use their facilities a lot, but there is a limit to how much the embassy can help all Danish companies coming to Russia and also those that are here already. Sometimes we are not able to hold the bigger events at the Danish embassy and have to find alternative locations suitable. We would like to see ourselves as being an independent business club, but very tightly linked with the embassy, trying to support our corporate and private members in the way the embassy can’t.

How do you stop the Club becoming a social organisation?

We are a business club, so the balance should lean more to the business than the social. Having said that, both Russians and Danes like to do business with people who are likeminded and with whom they have socialised with. So what we do is to be very clear when we send out our invitations as to exactly whether an event is business or social. We attach the agenda to the invitations, so there can be no doubt as to what the event is about. We are experiencing that because we have managed to create successful business events, our social events are getting more serious.


Can anyone join the Club?
Like any club, we have bylaws. The most important thing for anybody who wants to join, whether on an individual or corporate basis, is that the applicant has to have an association with Denmark. This doesn’t just mean that the person has seen the little mermaid back in Copenhagen. We are talking about Danish citizens living in Moscow or doing business in Moscow. We are not looking at passports, but you have to have a very close association with Denmark. Corporate applicants have to be Danish companies. If they are registered in an intermediary zone, that’s OK, but they have to be primarily Danish.

So you turn some people down?

Yes, on a regular basis, and this is to preserve the quality of the club. Obviously getting access to such a club could be quite useful for many companies who want to sell their services to members. We are very strict when it comes to certain companies or individuals wanting to invite or present something to our members.

Is your income from subscriptions or from sponsorship, do you have any money over for charity?

We have a tiny subscription fee, which keeps us going with our administrative costs. But then we have some very loyal sponsors, and the list is growing, because of the very strong initiatives shown by board members in this direction. We have two main events during the year. One of them is our mid-summer event, which is a big tradition in Denmark, which we have held since 1993. It’s a wonderful chance to get together, because it’s just before people are leaving on holiday. The second big event is a Christmas farewell for the year. This is more formal and usually it is held in the residence of the Danish Ambassador.

Unfortunately we don’t have enough money left over for charity. The money we have is the members’ money. We could bring forward a suggestion to donate to a certain charity, but it would have to be done at our general assembly, according to our bylaws and so on. What we do practice is that members who are part of charitable organisations, and able to pass on invitations to our members to participate in their events or make donations to causes that they support.

DBC Business Events – Autumn 2013

Our aim is to have one solid Business event a month in the season September-November and February-June.  This autumn we have thee very different events.

12th September – Company visit to the Danish company Haldor Topsoe. The Company is a global leader within catalysts and catalytic process technologies, and established a representative office in Moscow in 1992.

The General Director Jens Perregaard will be the host of the evening and will give a speech about the Russian part of the company.

24th October – Together with EKF (Denmark´s official export credit agency) DBC will make a whole theme day about financing in Russia.  Mainly focusing on Danish projects

14th November - Economist Chris Weafer will give a lecture about the latest economical, financial and political trends on the Russian market.

For more information and to see the list of cultural event which are continuously updated, have a look at our webpage



The Luxury Network

Selection_001What is the basic idea behind The Luxury Network, how was it created?

I will have to go back about seven years ago now when Andrew Lloyd and Kevin Rose got together and summarised their experience in the field of cross-marketing. They had both been dealing with high-end brands in various fields of luxury goods and services, and were active in helping clients develop loyalty programs and client relations. So basically they put together a cross-marketing agency which they called The Luxury Network. We are the franchisee for Russia. We deal with foreign companies who are represented here, or with Russian companies who are of sufficient quality, whether they be providers of goods or services.

The number of our members is not as important as their quality. We now have a dozen solid members. Our founding member was Rolls Royce Motors Cars Moscow, which set the tune because we aim to acquire as members the Rolls Royce of companies in different niches, such as Masterskaya Classicheskovo Kostiuma (bespoke tailors), Royal Wellness Club in fitness and wellness, Avrora Clinic in dentistry, Alexander Metlin in furs and Novoye Kachestvo (“New Quality”) in real estate. We bring representatives of these companies together to co-brand and cross-market, we seek out upper-crust marketing opportunities for them. We work with owners of companies, with GMs or even marketing managers, with people who are clearly interested in making their businesses grow.

What sort of events do you organise and why?

The one event that I should like to refer to first is our Annual Luxury Network Russia event. This is an occasion when all members come together to display their goods and services, it’s a gala evening where everyone can bring their clients. Obviously other members of the network are there so participants can make new client contacts. The gala coming up later this year will be our biggest yet, and we are looking at the possibility of bringing about 200 high net worth individuals together to be entertained, and to see members’ products and services in whatever way members will display them.

We are now putting together a string of smaller events which will be held in members’ premises. A representative of that company will deliver a speech or a lecture on a topic relevant to the company’s trade, and about 20 to 30 members will attend. This is a good number, because keeping it small means that the host will have enough time to meet and talk to the people he or she wants to, to create contacts.

Selection_002What is happening in the luxury sector in Russia?

The luxury sector is Russia is going through quite a transition. We have had three or maybe five consortiums which have become the key players on the luxury market here. They’ve accumulated quite impressive portfolios of luxury brands, which are at times put into the shade by the façade of the owning company. Many brands now seek independence in their marketing policy. Some of them are opening their own flagship stores, hiring managers that will run their marketing policy here. So the luxury network is something really instrumental for the likes of those companies.

The only sector of luxury goods that has shown consistent growth over the past two to three years is the automobile industry. Since the crisis of 2008-10, wealthy Russians have really cut their expenses on luxury goods and services. The travel industry has suffered quite badly, along with a few others. We see quite a slow down in luxury for example, that having to do with the cuts in new housing acquisition and new homes. It is wrong to think that Russia has been completely immune from the economic malaise that has hit other countries. But somehow the automobile industry has been doing well.

What services do you offer your Russian members?

We offer a whole marketing mix, with the joint events and the member events. The events are quite significant, because each of our current twelve members holds a minimum of two events a year, add that up with a couple of Luxury Network events and you are looking at 26 events a year. All of these events can be used for product placement and networking with potential new contacts and clients. We have a luxury network brochure, which brings all members together in a two page spread, and the distribution is a die-for for companies catering for high net worth individuals here; because it is distributed at points of sale, or points of client contact of each member. So take, for example, the Royal Wellness Club, they will have the brochures at their reception and by their bar. It is also distributed as a quarterly supplement to a monthly magazine called Top Flight, which is published by one of our members called Business Aviation Club, with a circulation of 25,000 copies. The magazine is distributed on board business jets, and a Luxury Network advertisement is featured in every issue of Top Flight. This is where brand alignment starts working for all our members.

What services can you offer international luxury brands looking to introduce and sell their products in Russia?

We can certainly give them quality exposure within the right circles. Having brought together a dozen member companies, we are now talking to about 10,000 clients. Our newsletter goes out to at least that number of people, and these are all high net worth individuals.

International brands can most certainly enjoy our events and take the opportunity of product placement. They can place their products and talk about their services at the small scale events that we shall start running from September, and that will be at least an event a member, so the schedule will be quite busy. We can have some of their products featured at members’ points of sales. An example here would be Kazumian cognac being seen and actually offered to other member clients. When people buy themselves a new Rolls Royce for example, among other presents, they receive a bottle of Premium Kazumian cognac.

We provide a direct marketing inroad for a minimum cost. We are the shortest way to your Russian high net worth client. You don’t have to spend hundreds of thousands of Euros in advertising to achieve what you can by becoming a member of the Luxury Network Russia. It’s quite a money saver.






















There is a place of magic in Novogoreevo. What looks like at first sight a normal riding school is in fact a place where children with severe motor skills disorders such as autism and down syndrome receive help which helps them do what they most need to do: connect with the world around them. Visiting there is a truly moving experience.

This charity, which has been helping children for 20 years, uses horses as part of its therapy. Artem Ivanov, who is in charge of physiotherapy at the centre, and semi-paralyzed himself from the waist down, explains:

“To control the movements of a horse as it moves means that the rider has to be able to control all the main muscle groups in his [the rider’s] legs, as well as his hands. This creates a training base for riders with any kind of movement problems. A horse’s temperature is two degrees warmer than ours, and because of this, the rider’s muscles warm up and relax. All this has a tremendously positive effect on the rider’s coordination and balance. I myself discovered this treatment and without it I wouldn’t have been able to enter university and integrate with the world. Not everything in our country is designed for people in wheelchairs!


“Children with autism need to establish contact with the outside world, and the horse becomes the link. You don’t need to speak to be able to make contact with a horse, which suits children with autism, but he or she must be able to correctly move his legs and arms. The horse doesn’t move unless the rider gives the corrects sequence of commands with his legs and hands, and learning these is really useful for any child with motor skills disorders.

“The horses have a kind of calming therapeutic effect, for example, children so want to communicate with the horse that they try to make words come out of their mouths even if previously they have never spoken. We have seen cases where the work ‘walk’ was the first thing that an autistic child ever uttered. Then slowly their speech, sensitivity, and intellect improves. The horses speed up the process of integration of the autistic child with other human beings.

Selection_008“Severely autistic children may have difficulty in determining where their right or left leg is, how tall they are, where their eyes are. But they can see that in comparison with a horse, he is she is small, and in comparison with Vanya, he or she is big. If the rider moves one of his legs, the horse makes one movement, if he moves another, the horse makes a different movement. The physiotherapy is joyful, and is full of positive emotions. The mother is happy to watch her child riding. None of the children are aware that they are being cured, that they are fighting with their illness, they are too busy! In other cases like with me, they are learning how to control a horse so that they can take part in competitions with other disabled children.”

Artem’s mother, Lidia Ivanova who manages the centre added: “All the horses are trained in a special way, and the instructors have to receive professional training. There is a lot involved in running this operation even though we only have six horses, which means that the centre is quite expensive to run. For example, we form groups of five or six children, no more, and there has to be two or three absolutely normal children in each group, because if one heavily autistic child starts to behave in a certain way, a different child, also with autistic problems will start to do the same thing. One will begin to shout, another will bite, a third will shake his or head around, and so on.

Selection_007Nevertheless, Preodolenie has been operating successfully for 20 years now, and I can say that the positive results on all the children that have come through here has been remarkable. We are tremendously grateful to the Irish Business Club and other organisations for the support they have given us. We cannot survive on government grants alone. Your help literally means that we know that we will be able to buy feed for the horses and pay essential staff. This year we have been able to buy a special carriage for those children who are so ill that they cannot sit on a horse, but nevertheless benefit from communicating with them. It also means that we can charge less for lessons, this is important because many families are not very well off. We may even be able to afford this year to hire somebody to help with the lifting work involved with putting children on horses and taking them off again.

To help Preodolenie, contact Hugh McEnaney, Secretary of the Irish Business Club via ,
or Preodelenie direct.

111396, г. Москва, Союзный проспект, д. 4, под. 8
Telephone: +7 (495) 301-61-50, +7 (495) 301-05-77
President: Lidia Ivanova
Leader of Physiotherapy department: Artem Ivanov
Email: [email protected]

Lavka Radostei


This summer the first and the only charity shop in Moscow ‘Lavka Radostei’ is celebrating its first birthday. To find out how successful the Russian project in Moscow is, Moscow expat Life visited Ekaterina Milova, the executive director of the non-profit charity foundation ‘Fse Vmestye’ and one of the founders of ‘Lavka Radostei,’ which is a charity shop.

Ekaterina, you only have to walk down a high street in towns in the USA, Australia, Canada, and Europe to see that charity shops are part of the cultural fabric of many countries around the world. How did it happen in Moscow?

Selection_002“It was Ekaterina Bermund, the director of the charitable foundation ‘Children’s Hearts’ who inspired everybody with the idea of opening the first charity shop in Moscow after her return from Britain. Having seen many such shops in London which raise money for charity, Katya thought: why not Moscow?

“We posted an urgent appeal for help on facebook and got a reply back from Svetlana Pchelnikova the director of a puppet-show workshop on Vetoshny Lane. She gave us a room of 20 meters to use. That is how we started. But that room quickly proved too small for us. After half a year we had to move on. The Moscow City Government allocated us a room on Prospect Mir, which we use as a warehouse. Right now we do not have premises of our own which we can use as a shop, but we do have a kind of warehouse where we keep things. But our team works at various charity fairs once every week or so. Premises for a shop have been promised by the Moscow Government but paper work has yet to be formalized.”

Do you pay taxes?

Selection_003“We do not pay taxes, because we don’t have prices. Everything is donated. This means that a customer can take out anything he likes and pay as much as he or she considers it should cost. Sometimes I wished we had prices. It is not fair when a person goes away with two big bags full of clothes and leaves 100 roubles for everything. We ask people to be righteous and donate 20-30% of the cost of the thing.

“All the money we get is given to the non-profit organization ‘Fse Vmeste.’ Then we decide where to direct funds. With the help of our charity shop we try to cover administration costs of the charitable foundation, because it is not easy to find enough money to pay our staff.”

What are the Ups and Downs of the charity shop?

“I think that main difficulty has been with finding the shop itself. I personally didn’t expect us to be so successful so quickly, even without permanent premises. It has become so well known. We have managed to create a good brand that has a good name. I have to thank all of our volunteers for their fantastic work. They don’t just help us out with arranging and receiving goods, they also take an active part in charity festivals and fairs.

“From time to time people who don’t believe in charity come to us. Our shop makes it possible for people donating goods to see the excitement and happiness in the eyes of somebody else who is buying the thing they bring. Sometimes people in genuine need of help come to our stall at various events. Everybody is different. Despite all the pitfalls the atmosphere at ‘Lavka Radostei’ has an incredibly concentrated charge of love, kindness and dedication.”

I can’t but agree that there is special atmosphere inside the charity shop. We met with Ekaterina at a big charity festival ‘Den Radosty’ at Vinzavod where ‘Lavka Radostei’ together with 20 charitable foundations and volunteer organizations belonging to ‘Fse Vmeste’. While we were talking, the last preparations were being made. Someone was arranging cosmetics goods. Somebody else was arranging clothes. I managed to get acquainted with the ‘Lavka Radostei’ team.

Selection_004I met Ksenya Anopko from the Charitable Foundation ‘Galchonok’ who was putting out some hand-made toys made by mentally disabled children. I also met Elena Smirnova from the Charitable Foundation ‘Sozdanie’ who donated some nice looking children’s clothes which had in turn being donated by a Russian clothes manufacturer. Just near the ‘Lavka Radostei’ stall, the Charitable Foundation ‘Galchonock’ had organized the ‘Hollywood Zone’ with a car from the famous Russian movie ‘Lightning’.

There was a real family holiday atmosphere, with a lot of activities. There were many workshops and showrooms. Food and drink was free. Clowns played with children. I was sorry to leave this place of kindness and smiles, and hope to come back next year.

You can always join ‘Lavka Radostei’ and work as a volunteer on such fairs or inside the shop.

If you want to be a volunteer of ‘Lavka Radostei’ you will need to speak some Russian.

Selection_006To become a volunteer or donate goods, please phone +7 495 5109728.

It would be appreciated if clothes are washed before being donated.
Furniture should be in fairly good condition.

A History Lesson

Selection_005Last year was the 200th anniversary of the events of the great patriotic war with Napoleon. And back in 1962, to celebrate the 150th anniversary, some films, including ‘War and Peace,’ directed by Sergei Bondarchuk, were shot, and it was decided to begin holding an annual theatrical event in the field of Borodino – the site of the most famous battle of the war (Borodinskaya Bitva, or, as the French named it, la Bataille de la Moskova). Soldiers of the Soviet Army were brought to the field under an officer’s command. They all were dressed in uniforms provided by Mosfilm and other studios and theatres, and armed with wooden rifles that the kids from the audience were happy to take home as souvenirs. The event won the hearts of the public, and was continued year after year in the same fashion, growing into historical re-enactments by 1982.

Napoleon started his doomed-to-fail Moscow campaign in the summer of 1812 by approaching Smolensk, ‘the key-city to Moscow,’ after being hesitant for a while, residing in Vitebsk and contemplating a peace treaty with Alexander I. Smolensk is my hometown, and I find its role in history fascinating. This is why I feel proud of the fact that for six years now the Battle of Lubino (taken from the name of a nearby village) that happened near Smolensk August 7, 1812, has been reenacted, uniting historical reconstruction clubs from all over Russia, former Soviet Union and abroad. Why is it important? Of that battle, back in 1812, it was said: ‘If it were not for Lubino, would there have been Borodino?’ Do I need to explain more?

Selection_007I arrive to the site early and walk around. Men and women dressed in 1812 clothes are teaching ballroom dancing to anyone who’s willing to learn. I snap some pictures and take the road that leads to the Russian and French camps. As I walk, I meet officers and soldiers, French ‘madams’ with children – everyone looking as if they had just stepped out of one of the Hermitage pictures painted back in the early 1800s. In the camps, everything – the tents, the furniture, the cutlery, even, I am told, food and beverage – is just like the way it was back then. Ladies are talking, horsemen are saddling their horses, some regiments are already lining up… It all looks like a movie site, only there’s no filming crew.

Selection_008As the battle begins, I join the ‘regiment’ of the press and photographers, and stand at the front line, doing my share of shooting which will not impact the outcome of the battle, but will capture the unique moments of glory. True, the scenario is the same every year, the outcome is always the same, but the battle is always different. After the battle is over, as tradition has it, the remains of unknown soldiers that fell at Lubino on August 19, 1812 found on the site during the year (search works are held by members of special patriotic clubs) are buried with honour. And then, there’s talk, laughter, music, fireworks and dancing in the camps. Historical reconstruction is much more than just a show. It’s a lifestyle.
Later, the soldiers, the officers, the generals of both armies and their guests are sitting at the wooden tables next to the camps. Selection_006Before I know it, I’m having some great conversations. “We hardly ever miss a battle,” my new friends tell me. Why, I ask them. A great hobby. Patriotism. Love of history. A young man from Germany says it’s the best way to meet interesting people. “Last year (the 200th anniversary), two punk rockers from Belgium followed the way of the Great Army, covering the distance between Moscow and Paris on foot, wearing 1812-styled jackets,” a finely dressed Russian officer smoking a pipe tells me. “We ran into them every battle we went to. Isn’t that fantastic?” Yes, it is. We exchange contacts and make sure we can find each other on social networks, and meet again in a matter of weeks at Borodino.

Farewell to Gerhard Mitrovits

Selection_022Chaîne des Rôtisseurs in Moscow saw a change in leadership as Gerhard Mitrovits said good-bye to the city after 3 years as the Bailli du Moscou and as the General Manager of the Batlschug Kempinski. His successor at Chaîne des Rôtisseurs is Lois Gilbert who, on the handover, promised to maintain the momentum gained under Mr. Mitrovit’s patronage with an increase in events for both members and guests.

The Chaîne des Rôtisseurs is the world’s oldest international gastronomic society, founded in Paris in 1248 by King Louis IX and re-introduced in 1950. It now has over 30,000 members in 80 countries and is an international society devoted to preserving the camaraderie and pleasures of the table and to promoting excellence in all areas of the hospitality arts.


Finding and Keeping Qualified Staff in Russia


Russia is on track for yet another year of above average GDP performance. But while economic growth promises great prosperity, it also brings a of new challenges such as a shortage of qualified labour.

The lesson we learned over the last decade is that qualified Russian staff are just as expensive as in the West. Today, the lesson we are learning is that there is simply not enough qualified labour available on the market which is especially felt by compaines in need of technicians, engineers, sales and finance staff.

So how can companies in Russia cope with the shortfall? Here are some tips for finding, assessing and keeping employees in the finance sector – our area of excellence.



In the fast changing Russian labour market, professional networks have gained more importance when it comes to finding the right employee. When searching for candidates with special qualifications, an innovative approach to advertising vacancies should be considered. At RUSSIA CONSULTING, we make use of networks such as LinkedIn to identify qualified candidates who may not see or respond to traditionally advertised vacancies. In contrast to labour markets in many Western countries, personal contact is more important in Russia. Career and professional fairs are another source recruiters should be looking into.


When asking for references, the recruiter should be aware that references may be friends or relatives of the candidate. This should not be seen as a sign that the candidate lacks integrity though, as this procedure is new to the business culture in Russia. Also, the understanding that a reference should be independent has not yet been fully incorporated into business conduct. Due to the fact that people tend to overestimate their own abilities and qualifications, it is important to check essential qualifications such as university degrees.


Russian employees are aware of the value they bring to the company and they know how buoyant the demand for qualified employees is. Most can immediately pick up a better paid job opportunity should they become frustrated or lose interest in their current position. The best way to address this risk is to have a focused training plan which takes into account the needs of each key employee. If they are the kind of employee you will want to retain, they will value this more than a little extra money in the short-term. Having left behind the disastrous lack of motivation often associated with the Soviet period, management staff on all levels are very keen to improve their skills and move on. Western companies have a unique advantage here and a lack of required language skills should not necessarily stand in the way of recruiting the right candidate.

In the Russian market, it is important to use a variety of techniques to find, assess and retain talented staff. While this may seem like a daunting process, RUSSIA CONSULTING has the knowledge and expertise to assist in the search for the right candidate.

Michael Spaeth

Director of Business Development

+7 / 495 / 956 55 57

[email protected]

Paying for your mobile telephone at a terminal


There are many different makes and models of pay machines which handle mobile phone payments in use in Moscow, however most of them work in the same way.


Step 1.

Identify the service you need:
The first ‘home’ screen will ask you what kind of services you want. The Russian words: ‘ОПЛАТА УСЛУГ’ (payment for services) are what you want.

Step 2.

Identify the service you want:
Selection_026You will be presented by an 
array of services which indicate the various services which the company operating the terminal has signed up for. Fortunately, to keep things simple, the logos for the most popular mobile telephone companies are displayed on the top row.

Step 3.

Having identified your mobile telephone ‘operator’ by its logo, you will then be asked to key in your telephone number. Having done this, you hit the button which says ‘ВПЕРЕД’ (NEXT). On most terminals this is coloured orange, but make sure you don’t inadvertently press any other buttons which may download various entertainment programmes onto your phone.



Selection_001This summer, the AWARA Group together with Hellevig Klein Usov Llc and Awara eduhouse brought together 300 lawyers and business people from around the world at the Baltschug Kempinski. The majority of participants were lawyers and investors, however there were a variety of other people present including Moscow-based CEOs and senior company personnel, many of whom stayed on for the AWARA Executive evening which was held on the first evening of the two day event.
Seminars were held throughout the two days, and covered a variety of themes from anti-corruption legislation in Russia, business and investment law in the Nordic and Baltic regions, to transfer pricing
 in a global context; to list only two of the eleven seminars. As with all events organised by the AWARA group, an open-minded stance was taken towards Russia, and revealing comparisons were made between the situation in Russia and that in other countries. Reporting in full the content of all the seminars would fill a book, however a short resume of those of interest to the author of this short article follows.

The seminar: ‘General Director (Executive) Powers and Liability in Russia’ was of particular interest to me as it reflected the way that Russia is moving forward to align itself to western European financial regulatory norms. Conducted by Vladimir Kramer, AIG Russia, Elena Somov AIG CISC Russia, Leonid Zubarev, CMS Legal and Anton Kabakov, Hellevig Klein & Usov, the seminar addressed new responsibilities which are now being placed directly on company directors’ shoulders as result of new legislation. Vladimir Kremer pointed out that directors are now liable for any claims made against their company, including those of any shareholder owning more than 1% of the shares. Even the company which the director is directing can issue a claim against its director. Directors and officers are now responsible for ‘irresponsible’ behaviour of their companies on stock markets, and can be held personally responsible in case of bankruptcy. All of this places
 any director in Russia in a difficult situation as he is forced to serve 
two masters: the shareholders and the company. This dichotomy of interests is familiar to the situations faced by the majority of their western counterparts. At the present time, fines of up to R. I mln can be imposed, and prison sentences can, and are being handed out. Since 2005, Vladimir Kremer mentioned that there have been 22 judgements against Russian directors of banks alone, holding them liable to pay R. 5.5 bln in damages. Over 1,000 directors and officers of Russian companies have been disqualified.

Selection_003The good news is that Directors and Officers’ Insurance Packages are now available in Russia, as Elena Somov pointed out. She mentioned that directors’ liabilities are not yet anything like as great as in other countries such as Australia, but nevertheless, the risks are there, and anybody becoming a director of a Russian company would “if they are in their right mind” take out
 an insurance package, as western directors do.

Leonard Zubarev pointed out that during IPOs, under the law on securities, and the law on shareholding, responsibility is placed primarily on those who sign the company prospectus, which
 is not as far as corresponding legislation goes in the UK, where anybody who is mentioned in the prospectus is liable. The liability for Russian directors in an IPO is now unlimited, and can include claims against loss of profit, which can be huge, and also difficult to prove. Directors can be disqualified for providing misleading information, as they can be in the UK. Claims have to be made within three years in Russia, against 6 years in the UK and 6 months in Germany.

Selection_004The seminar ‘How to Structure Russian Inbound and Outbound Business through the Asian Financial Hubs’ contained so much information that it would be possible to fill this whole magazine with transcripts. The session started off with a presentation on Indonesia by His Excellency the Ambassador of the Republic of Indonesia.

Mikhail Kuritsyn, Executive Director of the Russian-Indonesian Business Council, pointed out the importance of Indonesia’s mineral wealth. Indonesia contains 23%
 of the world’s known bauxite, and there are vast reserves of nickel and other non-ferrous metals. Mikhail emphasised that despite its rich mineral wealth, Indonesia is trying 
to diversify, and this was reflected in its decision to leave OPEC, which is perhaps a lesson for Russia. Mikhail also pointed out that Indonesia has been much more effective in curbing corruption than Russia. Whilst much criticism aimed at previous President Suharto can be justified, Indonesia has benefitted from 30 years of economic growth. Above all, Mikhail emphasised, when understanding Indonesia, it is important to understand local difficulties.

Hanley Chen, Commercial Secretary of the Embassy of Singapore

Hanley Chen, Commercial Secretary of the Embassy of Singapore

Perhaps the most interesting part of this seminar was that given by Hanly Chen, the Commercial Secretary of the Embassy of Singapore. She gave a factual
 yet fascinating description of the economic advantages of being based in Singapore which is “much more than just being a country of ‘lemons, bananas and tea’ as the Russian song goes.” Hanly listed 
the key advantages of basing 
one’s business in Singapore, which included Singapore’s present importance as a banking centre, with most international banks already there. “Libor rates are actually lower over the long term in Singapore than in many world capitals, and Singapore is the fourth most active foreign exchange market in the world, she said, and added that the Singapore stock exchange differs from London, New York and Hong Kong stock exchanges in that they depend to a large extent on local companies, meaning that there are little differences in terms of preferential treatment for foreign companies and Singapore companies.

Selection_005In reply to a question from the audience on the sometimes negative attitude of Singaporeans to investing in Russia, Hanly gave an honest reply: “I think language is one very valid problem, but not the only reason.
 For Singaporeans who come here, like me for example; I came on my first business trip in March 2008. I remember it well, it was one of the coldest days in my whole life. If you compare Japan to Russia, Japan 
tries to adopt a very foreigner- friendly approach, the signs are all translated into English for example. But even applying and getting a visa to come here can be very difficult
 for Singaporean business people.
 In a country where there is a lot of sunshine and smiling faces, to go into the Russian embassy where 
one sometimes feels not exactly comfortable, is rather scary. Then
 we come to Russia and find that we can’t even find the English word
 for toilet, and we are aware that there is some discrimination against Asians in Russia. We try not to recognise this, but we kind of suspect there is. I think it is very challenging for Singaporean businesses when they come here. Singapore is in the middle of an area of rapid growth, and there are a lot of very promising opportunities close
 at hand. So Singaporean business people think twice about going to a country where they are perhaps not very welcome, where the weather
 is scary, and the food is, well, not familiar. On the other hand, we have been successfully organising the Russian Singapore Business Forum for eight years now. Two hundred people attended in the first year, the second year we had double, this year we will have seven or eight hundred delegates, about half of who are from Russia and the rest from Singapore and other Asian countries. There are many challenges for us to overcome, such as seemingly simple things like translation of documents. But that does not mean we are not interested.

In the evening, AWARA group organised its successful regular Executive Business Evening to which 200 people came. Despite Jon Hellevig’s comment that
 there were too many lawyers there (joke), the food, drinks, musical accompaniment and great networking meant that delegates were there until late evening.

The August Coup Remembered

Selection_017by John Harrison

In August 1991 I was living and working as a photo correspondent in Moscow for an English daily newspaper. On the morning of the 19th, having returned from a friend’s dacha, I drove straight to a government office near Kievskii Vokzal to complete the long drawn out process of procuring a Soviet driving license. At about 9.30am I was waiting in a queue when I overheard people talking: “It’ll be the end of it, thank God. Teach those bloody rascals a lesson, get some order around here again”. “Do you know what your pension is worth now?”

I asked someone to please tell me what was happening. “Must be a foreigner, do you really think Soviet power can be stopped by your money and Jewish scheming?” was the answer. Seeing that only Swan Lake was being broadcast on the large Soviet TV at the end of the room, I thought it’d be a good idea to totally abandon the idea of getting my driving licence and head home to pick up my cameras. It took me an hour and a half to get across South Moscow (a long time then) because Leninsky Prospect was blocked with APCs and tanks trundling into central Moscow. At home, my Russian wife was in a panic, having been told by her parents that they were deserting Moscow for the countryside, but that she would be all right under the protection of a foreigner. Things seemed to move in slow motion, as they do in moments of great tragedy, or triumph. But there was no time to reason anything out. I knew only that Gorbachev had been deposed and hard-liners had taken over. There was no time to work out why, how or what to do next.

Selection_018My job got me into the press conference where the coup leaders declared to the world that they had imposed a state of emergency, and that President Gorbachev, on holiday by the Black Sea, was ill and unable to return to his duties. Despite Vice President’s Yanaev’s trembling hands, the coup seemed very real; Moscow was in shock.

The phone from London never stopped ringing, that long beep that immediately identified a call as being from abroad. The boys in the news room wanted to know where the tanks were, but I was inside the White House. My brave wife back in our flat had a map on the kitchen table with the radio on, tuned to short wave, and was informing London where the tanks were; and was surprised to be asked so many times whether people were being killed or not.

What was amazing to us was that the self-imposed commanders bothered to call a press conference at all, and that resistance was allowed to build up around the President of Russia, Boris Yeltsin, who had journeyed unhindered from his dacha to the White House that morning. It seemed that the “putchists” desire to somehow gain international approval, their very civility held them back from using force while they still had time to do so. They did not count on key army and KGB units disobeying orders.
The hard-liners also did not count on the power of raw emotion which Yeltsin and his colleagues successfully harnessed against them. Russians, particularly Muscovites and Leningradians were not yet disillusioned with democracy. Yeltsin did not have the Communist Party to contend with (unlike Gorbachev), and was the undoubted centre of reform. Thousands of Muscovites swarmed around the White House as speaker after speaker denounced the “fascists,” and new arrivals such as Shevardnadze were greeted with tumultuous applause.

Inside the White House, amazing calm prevailed despite the panic. I remember sitting in the office of a deputy from Yaroslavl discussing the situation. She wasn’t panicking; she was rational and together. There was a tangible sense of bravado and confidence, even co-operation, an unheard of quality in Russian politics after 1991. The phones were not cut off, a Gestetner machine was churning out samizdat copies of Vecherniaia Moskva, which were then distributed by the simple and effective method of being thrown out of the window to the crowd below. Alexander Listev (assasinated, 1995) and friends set up a miniature radio station which was broadcast by a weak short-wave radio transmitter. This was picked up by the Moscow based international news corps.

Selection_019I remember how a Russian cameraman colleague of mine found himself on the White House roof, just as Yeltsin appeared to make a speech, but without a camera. Suddenly he was thrown a VHS video camera from 50 feet below. Amazingly, he caught it. Next to come flying through the air was a cable, an umbilical cord with the world. Sasha didn’t realise it at the time, but he broadcasting live to the world. The CNN transmissions were fed back through monitors inside the buildings. We understood that the whole world was watching. This was a moment of history, fed by the media, and, some would say, kept going by the media.

There were, however some very serious moments. Late in the cold, drizzly evening of the 20th, a voice came over the White House tannoy system advising all women and children to leave, as apparently a squad of paratroopers had been dispatched to quell the uprising. It genuinely appeared to all—even an atheist like me—a miracle that they didn’t actually materialise on the roof, which they probably would have done if the weather hadn’t been so bad.

Not surprisingly, Moscow was split between the good and the bad guys. Between those who supported the “putchists” and those who had supported Yeltsin. No middle ground, and certainly no favourable media attention for the “baddies”. Looking back, there was an incredible of naiveté around. I met a couple of young people half way up a statue near Barrikadnaya Metro station, which I had scaled in order to get some good shots of the huge Russian tricolour being unfurled around one side of the White House on the 21st. I had expensive cameras, which I couldn’t possibly have afforded myself sprouting from every pocket. One of the two students asked me who I supported, like at a football match. I said, “Yeltsin.” He replied: “If we win, we’ll all have cameras like yours.” This just about summed it all up. The early democrats sincerely believed that everything would magically change now, that Russia’s ills would be cured by a panacea from the West. Unfortunately that isn’t quite the way it worked out.