RBW: Summer 2010

Russia Business Watch Vol. 18, No. 1

Summer 2010

Washington, DC

The Report of the U.S.-Russia Business Council

U.S. AND RUSSIA — New Opportunities in Sight

PRESIDENT’S MESSAGE p.1 OUTLOOK

Capitol Hill Reception with Duma and House Members

Reception with Deputy Minister Sergey Kudryashov and U.S. Ambassador Richard Morningstar

SECTOR UPDATE

Briefing with Marya Levintova

Briefing with Deputy Minister Igor Maidanov

pp.24-31

Revitalizing U.S.-Russia Trade

Breakfast Meeting with Governor Valery Shantsev

ACTIVITIES

Briefing with Under Secretary of State Judith McHale

pp.5-7

Upcoming Event: USRBC’s 18th Annual Meeting October 20-21, 2010

Round Table Discussion with Ambassador Philip Verveer Energy Efficiency Roundtable

pp.8-19

Russia Strategic Infrastructure Leadership Forum

LEGAL UPDATE

U.S. GOVERNMENT

USRBC Second Annual Legal Seminar

pp.21-23

NEW USRBC MEMBERS p.38

The Obama-Medvedev Presidential Summit: U.S.-Russia CEO Roundtable

pp.32-37

Contents

PRESIDENT’S MESSAGE 1 nn Time to Move Beyond The Reset / Пора выйти за рамки “перезагрузки”

OUTLOOK

5 nn Revitalizing U.S.-Russia Trade

Klaus Kleinfeld, Chairman of the Board Edward S. Verona, President and Chief Executive Officer

Russia Business Watch • Summer 2010

Chairmen Emeritus Robert S. Strauss E. Neville Isdell Theodore Austell, III, The Boeing Company Ozer Baysal, Pfizer Inc. Stephen E. Biegun, Ford Motor Company Carolyn L. Brehm, Procter & Gamble Peter A. Charow, BP America Inc. James F. Collins, U.S. Russia Foundation Jeffrey R. Costello, JPMorgan Chase Bank Andrew Cranston, KPMG Richard N. Dean, Baker & McKenzie Neil W. Duffin, Exxon Mobil Corporation Dorothy Dwoskin, Microsoft Corporation C. Cato Ealy, International Paper Terrence J. English, Baring Vostok Capital Partners Mark B. Fuller, Monitor Group Toby T. Gati, Akin, Gump, Strauss, Hauer & Feld, LLP Peter Gerendasi, PricewaterhouseCoopers LLP Herman O. Gref, Sberbank Drew J. Guff, Siguler Guff & Company, LLC Trevor Gunn, Medtronic, Inc. Jay M. Haft, Renova Group D. Jeffrey Hirschberg, Kalorama Partners, LLC Kamil S. Isaev, Intel Corporation Karl Johansson, Ernst & Young LLP Alexey Kim, Philip Morris Sales and Marketing Ltd. Klaus Kleinfeld, Alcoa Sergei A. Kuznetsov, OAO Severstal William C. Lane, Caterpillar Inc. Eugene K. Lawson, Lawson International, Inc. James J. Mulva, ConocoPhillips Peter B. Necarsulmer, The PBN Company Thomas R. Pickering, Eurasia Foundation Jay R. Pryor, Chevron Corporation Daniel W. Riordan, Zurich-American Insurance Company Paul Rodzianko, Hermitage Museum Foundation Charles E. Ryan, UFG Asset Management Claudi Santiago, General Electric Company Bernard Sucher, Bank of America Maurice Tempelsman, Lazare Kaplan International Inc. Peter L. Thoren, Access Industries, Inc. Clyde C. Tuggle, The Coca-Cola Company Daniel H. Yergin, Cambridge Energy Research Associates (CERA) Honorary Director Peter J. Pettibone, Hogan Lovells

ACTIVITIES

nn Upcoming Event: USRBC’s 18th Annual Meeting 8

9 nn USRBC Capitol Hill Reception with Duma and House Members

10 nn USRBC Briefing with Marya Levintova

11 nn USRBC Breakfast Meeting with Governor of the

Nizhny Novgorod Region, Valery Shantsev nn USRBC Briefing with Under Secretary of State Judith McHale 13 14 nn USRBC Round Table Discussion with Ambassador Philip Verveer 15 nn USRBC U.S.-Russia Energy Efficiency Roundtable 17 nn

USRBC Reception with RF Deputy Minister of Energy

Sergey Kudryashov and U.S. Ambassador Richard Morningstar

USRBC Briefing with Igor Maidanov, RF Deputy Minister

of Natural Resources and the Environment 19 nn USRBC Briefing with RF Senator Valentin E. Mezhevich

18 nn

U.S. GOVERNMENT

21 nn The Obama-Medvedev Presidential Summit: U.S.-Russia CEO Roundtable

SECTOR UPDATE:

RUSSIA STRATEGIC INFRASTRUCTURE LEADERSHIP FORUM nn Forum Overview 24

25 nn Keynote Address: Nick Chism, Partner, Head of Global Infrastructure

& Projects Group, KPMG nn Keynote Address: Laura Brank, Managing Partner, 26

Head of Russia Practice, Dechert LLP

27 nn Keynote Address: Denis Travin, Director,

Department for Investment Projects, RF Ministry of Regional Development nn Keynote Address: Vladimir Yakunin, President, Russian Railways 28

29 nn Keynote Address: Sergei Shishkarev, Chairman,

Transportation Committee, State Duma of the RF

30 nn Keynote Address: Claudi Santiago, President and CEO, GE Oil & Gas

30 nn Keynote Address: Valery Okulov, Deputy Minister, RF Ministry of Transport

LEGAL UPDATE: USRBC’S SECOND ANNUAL LEGAL SEMINAR

32 nn Seminar Overview

33 nn PANEL: Opportunities in Russia’s Oil And Gas Sector

34 nn PANEL: Managing Commercial, Technical and Execution Risk

36 nn PANEL: Establishing and Extending Your Business Throughout Russia

38 nn New USRBC Members

Russia Business Watch The report of the U.S.-Russia Business Council

1110 Vermont Avenue, NW, Suite 350, Washington, DC 20005 Tel: (202) 739-9180 • Fax: (202) 659-5920 • www.usrbc.org Novinskiy boulevard 8, Office 907, 121099 Moscow, Russia Tel: 7-495-228-5896 • Fax: 7-495-228-5897 ditor: Svetlana Minjack • Assistant Editor: Jeff Barnett E Design and Production: Maryia Dauhuliova Research Assistants: David Francois, Alla Malova, David Plotz, Hannah Thoburn For additional information or copies of Russia Business Watch, please contact USRBC at (202) 739-9180 or email RBW@usrbc.org.

PRESIDENT’S president’sMESSAGE message

Time to Move Beyond The Reset

Russia Business Watch Summer 2010

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Russia Business Watch Summer 2010

PRESIDENT’S MESSAGE

>

ПОСЛАНИЕ ПРЕЗИДЕНТА

Пора выйти за рамки “перезагрузки”

Russia Business Watch Summer 2010

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PRESIDENT’S MESSAGE ПОСЛАНИЕ ПРЕЗИДЕНТА

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outlook

outlook Revitalizing U.S.-Russia Trade

By Kellen Moriarty, The Coalition for U.S.-Russia Trade The Coalition for U.S.-Russia Trade is a broad-based group of U.S. companies and trade associations, for which the U.S.-Russia Business Council serves as Secretariat.

For more information, please visit www.usrussiatrade.org.

Russia Business Watch Summer 2010

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outlook

• Revitalizing U.S.-Russia Trade • continued

Chart: U.S.-Russia Trade (2000-2009) in U.S.$ billions Source: U.S. International Trade Commission Interactive Tariff and Trade DataWeb U.S.-Russia Trade Turnover

U.S. Exports to Russia

Russian Exports to U.S.

40 35 30 25 20 15 10 5 0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Q1 2009

Q1 2010

Russia Business Watch Summer 2010

It may be premature to label the Q1 2010 uptick as a return to the impressive growth rates previously seen, but conditions appear favorable for a strong recovery.

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Russia Business Watch Summer 2010

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outlook • Revitalizing U.S.-Russia Trade • continued

activities

activities Upcoming Event: USRBC’s 18th Annual Meeting Sponsors as of This Issue •Ernst & Young LLP

•Alcoa •

•Chevron Corporation • International Paper • Access Industries, Inc. • Siguler Guff & Company, LLC •Baker & McKenzie

Preliminary Agenda:

October 20-21, 2010 San Francisco, CA

Wednesday, October 20

Gala Dinner at The Ferry Building One Ferry Building, San Francisco, CA 94111 6:30pm Cocktails 7:30pm Dinner with Keynote Address

Thursday, October 21

Russia Business Watch Summer 2010

Annual Meeting at The Fairmont Hotel 950 Mason Street, San Francisco, CA 8:00 – 8:15am Welcome • Ed Verona, President and CEO, USRBC 8:15 – 8:45am Keynote Address • Klaus Kleinfeld, 12:00pm

Chairman and CEO, Alcoa; Chairman, USRBC 8:45 – 10:15am Panel • The Outlook for Russia

and its Place in the Global Economy 10:15 – 10:30am Coffee Break 10:30am – noon CONCURRENT BREAKOUT SESSIONS

Session • Infrastructure – Not Just Roads and Bridges Session • Supporting Entrepreneurship in Russia noon – 3:00pm Luncheon with Keynote Address 3:00 – 4:30pm Panel • The High-Tech Dimensions of Energy

4:30 – 4:45pm 4:45 – 6:00pm

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Coffee Break

CONCURRENT BREAKOUT SESSIONS Session • Preparing the Next Generation of Innovative Thinkers Session • Innovation in Healthcare Technology 6:00 – 6:30pm Closing Keynote Address 6:30 – 8:00pm Cocktail Reception

new members activities

USRBC Capitol Hill Reception with Duma and House Members February 24, 2010 • Washington, DC

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new members activities

USRBC Briefing with Marya Levintova, U.S. National Institutes of Health

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March 1, 2010 • Washington, DC

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new members activities

USRBC Breakfast Meeting with Governor of the Nizhny Novgorod Region Valery Shantsev March 2, 2010 • Washington, DC

Russia Business Watch Summer 2010

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Russia Business Watch Summer 2010

new members activities

• USRBC Breakfast Meeting with Governor of the Nizhny Novgorod Region, Valery Shantsev • continued

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new members activities

USRBC Briefing with Under Secretary of State Judith McHale March 17, 2010• Washington, DC

Russia Business Watch Summer 2010

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new members activities

USRBC Round Table Discussion with Ambassador Philip Verveer and FCC Commissioner Michael Copps

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April 26, 2010• Washington, DC

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new members activities

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USRBC U.S.-Russia Energy Efficiency Roundtable May 13, 2010• Washington, DC

Russia Business Watch Summer 2010

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new members activities Russia Business Watch Summer 2010

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• USRBC U.S.-Russia Energy Efficiency Roundtable • continued >

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new members activities

USRBC Reception with RF Deputy Minister of Energy Sergey Kudryashov and U.S. Ambassador Richard Morningstar Russia Business Watch Summer 2010

May 25, 2010 • Washington, DC

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new members activities

USRBC Briefing with Igor Maidanov, RF Deputy Minister of Natural Resources and the Environment

Russia Business Watch Summer 2010

June 11, 2010• Washington, DC

n 18

new members activities

USRBC Briefing with RF Senator Valentin E. Mezhevich June 14, 2010• Washington, DC

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Š 2010 Ernst & Young (CIS) B.V. All Rights Reserved.

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u.s. government

u.s. government The Obama-Medvedev Presidential Summit: U.S.-Russia CEO Roundtable June 24, 2010 • Washington, DC

Russia Business Watch Summer 2010

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u.s. government Russia Business Watch Summer 2010

The Obama-Medvedev CEO Roundtable participants included:

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u.s. government

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Russia Business Watch Summer 2010

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sector update

sector update Russia Strategic Infrastructure Leadership Forum

May 11-13, 2010 • Moscow

Russia Business Watch Summer 2010

and CG/LA Infrastructure LLC hosted the Russia Strategic Infrastructure Leadership Forum at the Marriott Grand Hotel in Moscow, Russia.

24

The Forum presented the Top Infrastructure Projects from the Russian Federation (see https://www.usrbc.org/activities/calendar/ event/2008). The projects were selected in close consultation with public and private sector leaders active in infrastructure project creation and execution and covered several key infrastructure categories, including water / waste water development; surface transportation (highways, bridges & tunnels); ports & logistics (ports, rail / freight); regional development (territorial development, digital infrastructure, special economic zones, & tourism); and energy (oil & gas, power sector).

The Forum agenda included targeted workshops and panel discussions with the participation of Russian and international industry leaders , including Basic Element, E4, Renova Group, Transstroy, VTB Group, GE Oil & Gas, KPMG, Bentley Systems, Caterpillar, Dechert, EBRD, IFC, and OPIC, as well as government representatives from several Russian regions and the federal Ministries of Transportation and Regional Development.

The Forum featured keynote addresses by:

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sector update update

Opening Remarks: Nick Chism, Partner, Head of Global Infrastructure & Projects Group, KPMG May 12, 2010 • Moscow

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sector update

Keynote Address: Laura Brank, Managing Partner, Head of Russia Practice, Dechert LLP

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May 12, 2010• Moscow

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n

sector update update

Denis Travin

Keynote Address: Denis Travin, Director Department for Investment Projects, RF Ministry of Regional Development May 12, 2010• Moscow

Russia Business Watch Summer 2010

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sector update

• Keynote Address by Denis Travin • continued >

Keynote Address: Vladimir Yakunin, President, Russian Railways

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May 12, 2010• Moscow

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sector update update

• Keynote Address by Vladimir Yakunin • continued >

Keynote Address: Sergei Shishkarev, Chairman, Transportation Committee, State Duma of the RF May 13, 2010• Moscow

Russia Business Watch Summer 2010

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n

sector update

Claudi Santiago

Keynote Address: Claudi Santiago, President and CEO, GE Oil & Gas May 13, 2010• Moscow

Keynote Address: Valery Okulov, Deputy Minister, RF Ministry of Transport

Russia Business Watch Summer 2010

May 13, 2010• Moscow

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n

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sector update update

• Keynote Address by Valery Okulov • continued

Valery Okulov

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Russia Business Watch Summer 2010

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legal update

legal update USRBC’s Second Annual Legal Seminar Sponsored by •Baker & McKenzie • Greenberg Traurig, LLP • Jones Day • TD International, LLC • DHL

May 27, 2010 • Houston, TX

Russia Business Watch Summer 2010

In collaboration with

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The Russian Chamber of Commerce of Texas

legal update

May 27, 2010 • Houston, TX

PANEL: Opportunities in Russia’s Oil And Gas Sector

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legal update

• Legal Seminar: Opportunities in Russia’s Oil And Gas Sector • continued >

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Russia Business Watch Summer 2010

PANEL: Managing Commercial, Technical and Execution Risk

May 27, 2010 • Houston, TX

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legal update

• Legal Seminar: Managing Commercial, Technical and Execution Risk • continued >

Russia Business Watch Summer 2010

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legal update

• Legal Seminar: Managing Commercial, Technical and Execution Risk • continued >

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Moderator:

Alan Page Global Energy, Utilities and Mining Leader PricewaterhouseCoopers

PANEL: Establishing and Extending Your Business Throughout Russia

Panelists:

Phillip Poland Director of Export Compliance DHL International Duaine Priestley Director U.S. Commercial Service Houston William Robinson Principle William T. Robinson, PLLC

Russia Business Watch Summer 2010

Stephen Schmida Managing Director SSG Advisors

May 27, 2010 • Houston, TX

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Russia Business Watch Summer 2010

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legal update

• Legal Seminar: Establishing and Extending Your Business Throughout Russia • continued

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Russia Business Watch Summer 2010

new members

new USRBC members

Loomis

new members

• New USRBC Members • continued

As s o c i a t e s

I N T E R N A T I O N A L

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new members Russia Business Watch Summer 2010

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• New USRBC Members • continued

www.strongholdrussia.com

SPRING 2009

WASHINGTON, DC

THE QUARTERLY REPORT OF THE U.S.-RUSSIA BUSINESS COUNCIL

U.S.-RUSSIA RELATIONS AND THE GLOBAL CRISIS: Choices and Challenges

Contact Svetlana Minjack Director of Communications and External Affairs Tel: 202-739-9182/sminjack@usrbc.org

PRESIDENT’S MESSAGE p.1

ACTIVITIES Council Calendar

OUTLOOK

USRBC Road Show Map

(Another) Year of Living Dangerously: Russia and the Global Crisis

USRBC Legal Conference

U.S.-Russia Relations: Reset, Overload or More of the Same

pp.3 - 11

Luncheon with Alexander E. Lebedev Briefing with Chief Justice Anton Ivanov

p.12- 22

U.S. GOVERNMENT

LEGAL UPDATE

USRBC Recommendations to the Obama Administration

The Strategic Sectors Law — the First Year of Enforcement

p.23

SECTOR UPDATE Are Foreign Independent Directors Needed in Russia?

p.24

U.S. Amendments to Buy America: Impact on Russia

pp.30-32

REGIONAL PROFILE Rostov Region

WTO WATCH

p.34

Russian Intellectual Property Laws Meet Essential WTO Standards

NEW USRBC MEMBERS p.37

p.27

Russia Business Watch Summer 2010

Interested in Advertising in RBW?

Russia Business Watch VOL. 17, NO. 1

new members

• New USRBC Members • continued

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The U.S.-Russia Business Council (USRBC) The U.S.-Russia Business Council (USRBC), a premier trade association based in Washington, DC with an office in Moscow, represents the trade and investment interests of its U.S. and Russian member companies.

The USRBC seeks to expand and enhance the U.S.-Russian commercial relationship by engaging in advocacy efforts with both the U.S. and Russian governments on behalf of its members; assisting member companies with troubleshooting and new business development; providing information and analyses to support business decisions; and facilitating access and networking opportunities, including briefings with government officials and private-sector leaders.

www.usrbc.org

Services Business Development/Access

Government Relations

Dispute Resolution

Market Intelligence

• The USRBC offers its members frequent opportunities to relay concerns directly to the highest levels of the U.S. and Russian governments.

• We facilitate member input on government policies that directly affect business.

• Our powerful relationships benefit members facing market access, tax policy and property rights challenges.

Members caught in commercial disputes with private or government entities benefit from the USRBC’s ability to educate the appropriate decision makers about the issue and effectively communicate its effect on the member, as well as on the overall investment climate.

Membership Questions?

Contact Randi Levinas Executive Vice President 202-739-9196/ levinas@usrbc.org

The USRBC engages regularly with the U.S. Executive Branch and Capitol Hill to promote a balanced discussion on U.S. policy toward Russia, advance the bilateral commercial agenda, and voice member concerns. We currently lead the broad business community effort associated with Russia’s WTO accession, the Coalition for U.S.-Russia Trade (www.usrussiatrade.org).

• Regular member briefings providing outside expert o pinion and experience on industry- specific topics and broader commercial relations.

• Regular e-mail alerts on significant political and eco nomic developments in Russia.

• Russia Business Watch — a leading quarterly publi cation on bilateral trade and investment.

18-е Ежегодное Заседание Американо-Российского Делового Совета

The U.S.-Russia Business Council’s

18th Annual Meeting October 20-21, 2010 The Fairmont Hotel Gala Dinner at the Ferry Building San Francisco, CA

20-21 октября 2010 года гостиницa “The Fairmont Hotel” торжественный ужин - “Ferry Building” Сан Франциско, Калифорния

Please visit www.usrbc.org for more information and to register.

Более подробная информация и регистрация на сайте АРДС www.usrbc.org.

Annual Meeting Sponsors as of this issue of RBW

Special Room Rates for USRBC Members at Marriott Hotels in Moscow Marriott is pleased to provide members of the U.S.-Russia Business Council with discounted room rates at Moscow Marriott Royal Aurora, Moscow Marriott Grand and Moscow Marriott Tverskaya hotels.

With questions regarding this special room rates offer for members of the U.S.-Russia Business Council, please contact Moscow Marriott Cluster Reservations Department at reservations@marriott-moscow.ru or via phone +7 495 937 00 55.