On 24 November 2011 the Central Bank issued Letter No. 169-T approving the “Methodical Recommendations for the Preparation and Submission of Financial Reports by Lending Organizations.”

International Financial Reporting Standards

The Letter details the procedure lending organizations should follow when preparing and submitting 2011 financial reports in accordance with international financial reporting standards (IFRS). (Lending organizations have been required to prepare financial reports in line with IFRS since 1 January 2004.)

The Letter abolishes Central Bank Letter No. 183-T, dated 30 December 2010, and is to be published in the Central Bank Herald.

Provisions to cover potential losses in operations with offshore residents

On 21 November 2011 the Central Bank issued Letter No. 15-1-3-6/5075 regarding provisions to cover potential losses related to letters of credit opened in favor of residents of offshore zones.

The Letter was issued in response to the query of the Association of Russian Banks. It clarifies the need for double provisioning for letters of credit opened by Russian banks in favor of residents of offshore zones. The provisions are to be formed 1) in accordance with Directive No. 1584-U “On the Formation and Amount of Provisions to Cover Potential Losses in Operations of Lending Organizations with Residents of Offshore Zones” – to cover a country risk, and 2) in accordance with Regulation No. 254-P “On the Formation of Provisions by Lending Organizations to Cover Potential Losses in Loans, Loan Indebtedness and Other Similar Indebtedness” – to cover a credit risk.

The Letter was published at on 30 November 2011.

For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .