1. Eurasian Economic Union – challenges and opportunities from customs perspective March 2015

2. 2 © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.  Development of the Eurasian Economic Union  Customs legal base of the Eurasian Economic Union  Eurasian Economic Union specifics  Armenia`s obligations upon Eurasian Economic Union entry  Threats and Benefits for the Business Agenda

3. 3 © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Development of the Eurasian Economic Union ■ 1 January 2010 beginning of the functioning of the Customs Union between the Russian Federation, Republic of Belarus, Republic of Kazakhstan ■ 1 July 2010 entry into force of the Customs Code of the Customs Union ■ 1 July 2011 liquidation of customs control between member states of Custom Union ■ 1 January 2015 entry into force the Eurasian Economic Union between the Republic of Belarus, Republic of Kazakhstan and Russian Federation ■ 2 January 2015 Armenia became a member of the Eurasian Economic Union

4. 4 © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Customs legal base of the Eurasian Economic Union ■ International legal framework − Multinational agreements within the Eurasian Economic Union − Customs Code of the Customs Union − Unified Customs Tariff of Eurasian Economic Union − Decisions of Eurasian Economic Commission ■ National legal framework – Federal laws regarding customs regulation – Orders of Federal Customs Service – Other regulatory documents (local letters and recommendations) Note  The Customs Code is under development at the moment  Entry of Customs Code of the Eurasian Economic Union into force is excepted at 1 January 2016 New complex provisions will be presented (automatic release into free circulation, more detailed descriptions of the customs procedures, etc.)

5. 5 © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Eurasian Economic Union specifics ■ Unified customs territory which provides free movement of goods within the Eurasian Economic Union: − no customs duties upon movement of Eurasian Economic Union goods between the member states − no customs clearance formalities for Eurasian Economic Union goods (transit customs procedure and statistic declarations should be applied with regard to shipments between Armenia and other member states) − no economic restrictions − residency principle of customs clearance of goods at the country where the importer is registered ■ Unified customs tariff and non-tariff regulation measures (with the established exceptions) ■ Unified approach to regulation of indirect taxes (agreements on the procedure for levying indirect taxes)

6. 6 © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Armenia`s obligations upon Eurasian Economic Union entry Agreement on Armenia's accession to the Eurasian Economic Union Treaty establishes the following general obligations: ■ Harmonization of import duty rates within 2-8 years ■ Implementation of technical regulation rules within 1 – 5 years ■ Implementation of regulations on intellectual property rights protection within 3 years ■ Implementation of Market Access for Services

7. 7 © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Threats and Benefits for the Business Recommendation - review the existing business model to mitigate potential threats and enjoy opportunities ■Uncontrolled import of counterfeit products ■Free movement of goods within the CU ■Unification of customs databases Threats ■Unification of legislation ■Free movement of goods, services and labor ■Implementation of distant customs clearance in the future Benefits ■ Decrease in revenues: −due to expansion traders −due to counterfeit imports ■ Alignment of the import prices and increase in customs payments ■Simplification of customs formalities ■Access to the logistics infrastructure of all Customs Union member- countries ■Optimization of logistics, customs costs

8. Mikhail Komarov, KPMG Russia, The Head of Customs group Telephone: +7 (495) 937 4477 Fax : +7 (495) 937 4477 E-mail: Mkomarov@kpmg.ru The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2015 KPMG Limited, a company incorporated under the Companies (Guernsey) Law, as amended in 2008, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International Cooperative (“KPMG International”).