OFFtCIAL DOCUMENTS LOAN NUMBER 8288-RU Loan Agreement (Public Finance Management Technical Assistance Project) between RUSSIAN FEDERATION and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 6zl- 6,2013 LOAN NUMBER 8288-RU LOAN AGREEMENT Agreement dated 1%LCeI 601 6 , 2013, between the RUSSIAN FEDERATION ("Borrower") and the INTERNATIONAL BANK FOR RECONSTRUCTION, AND DEVELOPMENT ("Bank"). The Borrower and the Bank hereby agree as follows: ARTICLE I - GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE H - LOAN 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of fifty million Dollars ($50,000,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.07 of this Agreement ("Loan"), to assist in financing the project described in Schedule I to this Agreement ("Project"). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount. The Borrower shall pay the Front-end Fee not later than sixty (60) days after the Effective Date. 2.04. The interest payable by the Borrower for each Interest Period shall be at a rate equal to LIBOR (or such other Referencd Rate in accordance with paragraph 82 of the Appendix of the General Conditions and Section 3.02(c) of the General Conditions) for the Loan Currency plus the Variable Spread; provided, that upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02 (e) of the General Conditions. 2.05. The Payment Dates are February 15 and August 15 in each year. 2.06. The principal amount of the Loan shall be repaid in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -2- 2.07. (a) The Borrower may at any time request any of the following Conversions of the terms of the Loan in order to facilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of the interest rate basis applicable to: (A) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate to a Fixed Rate, or vice versa; or (B) all or any portion of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Reference Rate and the Variable Spread to a Variable Rate based on a Fixed Reference Rate and the Variable Spread, or vice versa; or (C) all of the principal amount of the Loan withdrawn and outstanding from a Variable Rate based on a Variable Spread to a Variable Rate based on a Fixed Spread; and (iii) the setting of limits on the Variable Rate or the Reference Rate applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding by the establishment of an Interest Rate Cap or Interest Rate Collar on the Variable Rate or the Reference Rate. (b) Any conversion requested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a "Conversion", as defined in the General Conditions, and shall be effected in accordance with the provisions of Article IV of the General Conditions and of the Conversion Guidelines. ARTICLE III - PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall carry out the Project through the Ministry of Finance with the assistance of the Project Implementation Unit, in accordance with the provisions of Article V of the General Conditions. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV - REMIEDIES OF THE BANK 4.01. The Additional Events of Suspension consist of the following: (a) The Project Implementation Unit shall have failed to perform any of its obligations under the Agency Agreement. (b) The Agency Agreement, or any provision thereof, shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of the Borrower or the Project Implementation Unit to carry out the Project. 4.02. The Additional Events of Acceleration consist of the following, namely: any event specified in paragraphs (a) or (b) of Section 4.01 of this Agreement occurs and is continuing for a period of sixty (60) days after notice of the event has been given by the Bank to the Borrower. -3- ARTICLE V - EFFECTIVENESS; TERMINATION 5.01. The Additional Condition of Effectiveness consists of the following, namely, the Agency Agreement has been entered into between the Ministry of Finance and the Project ,Implementation Unit in accordance with the provisions of paragraph 3(a) of Section L.A of Schedule 2 to this Agreement. 5.02. The Additional Legal Matter consists of the following, namely that the Agency Agreement has been duly authorized by the Borrower and is legally binding upon the Borrower and the Project Implementation Unit in accordance with its terms. 5.03 The Effectiveness Deadline is the date one hundred twenty (120) days after the date of this Agreement or such later date as may be established by the Bank pursuant to Section 9.04 of the General Conditions. ARTICLE VI - REPRESENTATIVE; ADDRESSES 6.01. ,The Borrower's Representative is the Minister of Finance or authorized Deputy Minister of Finance. 6.02. The Borrower's Address is: Ministry of Finance of the Russian Federation Ilyinka Street 9 109097 Moscow Russian Federation Telex: Facsimile: 112008 (7-495) 925-0889 6.03. The Bank's Address is: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: Facsimile: INTBAFRAD 248423(MCI) or 1-202-477-6391 Washington, D.C. 64145(MCI) -4- AGREED7 act R ssAn rof e pion, AGREED at . C ( , ____ _, as of the day and year first above written. RUSSIAN FEDERATION By Aut rized Representative Name: er c Adt Title: /( /7 / er INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Authorized Representative Name: ,Z6242 7a a'( Title: 0,_)_6 4_ Ole / -5- SCHEDULE1 Project Description The objective of the Project is to assist the Borrower in improving transparency and results focus in public financial management and building institutional foundations for improved budget efficiency, effectiveness and accountability. The Project consists of the following parts: Part 1. Improving the Efficiency of Tax Policy and Tax Administration Support the implementation of the Borrower's Main Directions of Tax Policy of the Russian Federation, inter alia, through provision of technical assistance for the following: (a) Improving transparency, equity and efficiency of the fiscal regime for oil and gas activities by, inter alia: modeling current upstream and downstream activities to assess the economic and financial impact of alternative policy options; studying other countries' experience with fiscal regime changes; designing a target fiscal regime; and preparing applicable legal and regulatory instruments and testing their application. (b) Decreasing the use of transfer pricing for tax avoidance by, inter alia: developing guidelines and regulations on transfer pricing; formulating rules on controlled foreign companies; developing regulations and methodological approaches for advance pricing agreements; enhancing skills of staff of the Federal Tax Service of Russia ("FTS"); and securing for employees of the FTS and the FTS Interregional Inspectorate for Price Control for Taxation Purposes, access to information that will be used to compare conditions of transactions between related parties with conditions of transactions between unrelated parties. (c) Improving analysis of tax expenditures by, inter alia: designing a methodology for improving legal regulation, practical provision and administration of tax expenditures. (d) Tax policy development within the Russian Federation Customs Union with Kazakhstan and Belarus by, inter alia: reviewing VAT legislation and procedures for necessary changes; developing a VAT information exchange system within the customs union; and reviewing excise duties for necessary changes. (e) Modernization of tax procedures to align with present technology upgrades and improving tax laws to align with present business models and products by, inter alia, developing procedures within the tax code to facilitate risk management and anti- avoidance rules, sub-ordinate legislation, instructions and clarifications for implement; and developing recommendations (based on review of legislation) for improvement of financial sector taxation, taxation of non-hydrocarbon minerals, and double taxation avoidance treaties. (f) Improving the design and implementation of special tax regimes by, inter alia, reviewing the applicable taxation regime and developing a strategy to facilitate compliance and prevent abuse by taxpayers. -6- (g) Improving taxpayer public services by, inter alia, implementing a program to enhance tax literacy, including designing and implementing public information programs and developing infrastructure for provision of information services to taxpayers in local tax offices. (h) Improving the pre-court appeals system within FTS by, inter alia, developing rules and procedures aimed at improving the credibility of the system and designing and conducting training programs for tax employees. Part 2. Improving Efficiency of the System of Inter-Governmental Fiscal Relations and Sub-National Public Finance Manaaement ('TFM") Support increase in efficiency and effectiveness of the system of federal and regional fiscal transfers to regional and municipal governments, inter alia, through provision of technical assistance for the following: (a) Improving assignment of fiscal responsibilities across levels of government by, inter alia, analyzing assignments between different levels of governance; developing methodological recommendations on enhancement of the sub-national budget revenue base; and developing capacity for performing risk analysis and proposing risk mitigating measures for sub-national budgets. (b) Improving the intergovernmental fiscal transfer system by, inter alia, preparing a medium-term fiscal federalism strategy and implementation plan; streamlining existing federal and regional funding mechanisms; developing recommendations on the system of targeted intergovernmental fiscal transfers; creating a mechanism of incentive and sanctions to promote PFM reforms in regions highly dependent on fiscal transfers; and improving the equalization transfer system. (c) Improving PFM quality, transparency, and anticorruption measures at the sub-national level by, inter alia, developing regulation and methodologies for quality enhancement of public services delivery; and developing guidelines for sub-national governments on incorporation of anticorruption mechanisms into the budget process and increasing transparency of their budget cycle. (d) Facilitating implementation of program budgeting at the sub-national level by, inter alia, providing advice on the preparation, monitoring and evaluation of budget programs, and capacity building programs for staff, drafting relevant legislation and instructions, and developing a system of non-governmental monitoring of efficiency of public expenditures. (e) Improving capacity of staff at the MOF and in regional and municipal governments, including on issues related to the budget. -7- Part 3. Support for the Development of an Electronic Budget ("E-Budget") System Support implementation of selected activities within the Ministry of Finance's broader Electronic Budget Implementation Action Plan 2011-2016, inter alia, through provision of technical assistance for the following: (a) Improving legal and methodological foundation for automations of budget procedures and integration of budget process information flows. (b) Review of the latest international tendencies and best practice on automation of budget process and implementing E-Budget systems. (c) Expansion of analytical and information management tools under the E-Budget system and the development of the unified standards for data storage and exchange. (d) Building capacity of budget sector staff through training programs, knowledge-sharing workshops and conferences, and by developing a code of good practices on implementing the E-Budget and improving public access to information. (e) Enhancement of the E-Budget system implementation by developing implementation regulation and guidelines and establishing quality assurance processes. (f) Establishment of support for emerging needs during the implementation of said action plan. Part 4. Enhancine Budget Efficiency Support implementation of the Borrower's program for enhancing efficiency of budget expenditures, inter alia, through provision of technical assistance for the design and implementation of the following key aspects of the program: (a) Improving budget planning and preparation by, inter alia, revising medium and long term budget planning processes to better integrate capital planning and procurement planning, strengthening the links to strategic planning, and implementation of fiscal rules; and continuing support for program-based budgeting. (b) Supporting innovation in service delivery by, inter alia, developing guidance on governance, PFM and accountability aspects when using autonomous agencies and partnerships with the private sector and non-government organizations. (c) Improving internal controls and internal audit by, inter alia, rationalizing and modernizing the system of state financial control; and establishing modern systems of internal control and internal audit, across the public sector. (d) Improving accounting and financial reporting by, inter alia, developing a full set of federal standards for public sector accounting. (e) Improving revenue management by, inter alia, developing recommendations for budget administration system at all budget levels. -8- (f) Improving public procurement and contracting by, inter alia, supporting implementation, of the new federal contracting system, with particular attention to budget planning and enhanced transparency and accountability in procurement and contract implementation. (g) Improving the budget process in the area of cooperation with international financial institutions. (h) Supporting the preparation of related follow-up operations. Part 5. Project Management Provision of support to the Project Implementing Unit for implementation of the Project through the financing of Operating Costs. -9- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements 1. At all times during the implementation of the Project, the Borrower shall maintain the following: (a) The Working Group established by the MOF, responsible for the preparation and implementation of the Project. (b) The Sub-groups established by the Working Group, responsible for coordination and management of their respective activities under Parts 1, 2, 3 and 4 of the Project. (c) The Project Implementation Unit responsible for provision of day-to-day implementation support to the MOF. 2. The Borrower shall: (a) cause the MOF, with the assistance of the PIU, to carry out the Project in accordance with provisions of the Project Operations Manual, satisfactory to the Bank; and (b) not amend or waive, or permit to be amended or waived said manual or any provisions thereof, except with the prior written approval of the Bank. 3. The Borrower, through the MOF, shall: (a) enter into an Agency Agreement with the PIU, on terms and conditions satisfactory to the Bank, for provision of day-to-day support for the implementation of the Project, which terms and conditions shall include compliance with the Anti-Corruption Guidelines and the Project Operations Manual; (b) at all times throughout the duration of the Project, cause the PIU to perform its obligations under the Agency Agreement. - 10 - B. Counterpart Funding Requirements for the Project Without limitation upon any of its obligations under this Agreement, the Borrower shall ensure that sufficient annual allocations be made in the Borrower's budget for the Borrower's counterpart contribution to the costs of the Project. C. Anti-Corruption The Borrower, through the PIU, shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. Section II. Proiect Monitoring Reporting and Evaluation A. Project Reports 1. The Borrower, through the PIU, shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of indicators acceptable to the Bank. Each Project Report shall cover the period of one calendar quarter, and shall be furnished to the Bank not later than forty five (45) days after the end of the period covered by such report. B. Financial Management, Financial Reports and Audits 1. The Borrower, through the PIU, shall maintain or cause to be maintained, a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. 2. The Borrower, through the PIU, shall prepare and furnish to the Bank not later than forty five (45) days after the end of each calendar quarter, interim unaudited financial reports for the Project covering the quarter, in form and substance satisfactory to the Bank. 3. The Borrower, through the PIU, shall have its Financial Statements audited in accordance with the provisions of Section 5.09 (b) of the General Conditions. The audit of the Financial Statements shall cover the period of one (1) fiscal year of the Borrower, provided that the first and last audit periods may, with the agreement of the Bank, cover a period of up to eighteen (18) months. The audited Financial Statements for each such period shall be furnished to the Bank not later than six (6) months of the end of the fiscal year. Section III. Procurement A. General 1. Goods and Non-consulting Services. All goods and non-consulting services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. - 11 -- 2. Consultants' Services. All consultants' services required for the Project and to be - financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions. The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in Sections II and III of the Procurement Guidelines, or Sections II, III, IV and V of the Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods and Non-consulting Services 1 . International Competitive Bidding. Except as otherwise provided in paragraph 2 below, goods and non-consulting services shall be procured under contracts awarded on the basis of International Competitive Bidding. 2. Other Methods of Procurement of Goods and Non-consulting Services. The following table specifies the methods of procurement, other than Competitive Bidding, * which may be used for goods and non-consulting services (including Database Subscription Services) for those contracts specified in the Procurement Plan: Procurement Method (a) National Competitive Bidding, subject to the additional provisions set forth in the Annex to this Schedule 2 (b) Shopping (c) Direct Contracting C. Particular Methods of Procurement of Consultants' Services 1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph 2 below, consultants' services shall be procured under contracts awarded on the basis of Quality and Cost-based Selection. 2. Other Methods of Procurement of Consultants' Services. The following table specifies the methods of procurement, other than Quality and Cost-based Selection, which may be used for consultants' services for those contracts which are specified in the Procurement Plan. Procurement Method (a) Quality-based Selection (b) Least Cost Selection (c) Selection based on Consultant's Qualification (d) Single-source Selection (e) Individual Consultant -12- D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank's Prior Review. All other contracts shall be subject to Post Review by the Bank. E. Procurement of Training Training (as defined in the Appendix to this Loan Agreement) shall be procured in accordance with agreed procedures set out in the Project Operations Manual. Section IV. Withdrawal of Loan Proceeds A. General I. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Bank shall specify by notice to the Borrower (including the "World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time to time by the Bank and as made applicable to this Agreement pursuant to such instructions), to 'finance Eligible Expenditures as set forth in the table in paragraph 2 below. The Borrower may, for purposes of the Project, open and maintain one or more designated accounts in accordance with the provisions of Section 2.04(a) of the General Conditions. 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan ("Category"), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Amount of the Loan Percentage of Expenditures Allocated to be financed Category (expressed in USD) (inclusive of Taxes) (1) Goods, non-consulting services, consultants' services, 45,000,000 35% and Training (2) Operating Costs 5,000,000 100% TOTAL AMOUNT 50,000M000 - 13 - B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) from the Loan Account until the Bank has received payment in full of the Front- end Fee; or (b) for payments made prior to the date of this Agreement. 2. The Closing Date is December 31, 2017. -14- ANNEX to SCHEDULE 2 Mandatory Provisions for Procurement under Bank-Financed Contracts Subject to National Competitive Bidding Contracts for goods for which Part B of Section III of Schedule 2 to the Loan Agreement allows procurement under paragraphs 3.3 and 3.4 of the Procurement Guidelines may be procured in accordance with the provisions of national laws and regulations of the Borrower. In order to assure economy, efficiency, transparency and broad consistency with the provisions in Section I of the Procurement Guidelines, the national procurement provisions shall be modified as set forth in the following paragraphs. Eligibility 1. No restrictions in respect of eligibility to participate in bidding for contracts shall be placed on the basis of nationality of bidder and/or origin of goods other than those * imposed by primary boycotts. 2. Eligibility for foreign firms to participate in bidding shall not be based on requirements to joint-venture with national firms. 3. Bidders shall only be required to register for bidding provided that registration requirements and process are simple and non-discriminatory and otherwise qualified foreign bidders are not excluded from participating. 4. No preference shall be accorded to bidders on the basis of, inter alia, place of registration, ownership, and small size. No restrictions shall be imposed in terms of source of labor, material or equipment. 5. Government-owned entitles shall be eligible to participate in bidding for contracts if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency of the purchaser or the contractor. Standard Bidding Documents 6. Until a modified version of the Borrower's standard bidding document has been approved for use by the Bank, the Bank's own standard bidding document shall be used. Advertising bidding opportunities time for bid preparation 7. Bidding opportunities shall be advertised in national press of wide circulation. Prospective bidders shall be allowed at least thirty (30) days for bid preparation and submission of bids (excepting contracts for readily available off-the-shelves goods or standard specification commodities or small value works). 8. The opportunity to pre-qualify for procurements involving large or complex contracts shall be advertised. -15- 9. Minimum experience, technical and financial requirements (for pre- or post qualification) shall be explicitly stated in the bidding documents and only criteria so specified shall be used to determine whether a bidder is qualified to bid. Bids by bidders which are deemed not qualified to bid shall not be further considered and shall be rejected. Bid opening 10. Bids shall be opened immediately after the deadline for bid submission and in the presence of bidders who wish to attend. Bids received after the deadline shall not be considered and shall be returned unopened. Rebidding 11. Rebidding shall not necessarily be required if only one bid has been received provided that the bid received is responsive, bid price is acceptable and bidder is deemed capable of performing the contract in accordance with the criteria in the bidding documents. Bid evaluation 12. Evaluation criteria shall be clearly specified in the bidding documents and evaluation criteria other than price shall be expressed in monetary terms. Only criteria so specified shall be used in bid evaluation. Merit points shall not be used in evaluations of bids for goods and works contracts. 13. Bid evaluations shall be confidential and bidders shall not be allowed to be present during evaluation. No information relating to the evaluation shall be disclosed to any bidder until the successful bidder has been notified of contract award. 14. Bids containing material deviations from technical specifications and/or material reservations to the terms or conditions of the bidding documents shall be rejected as "substantially not responsive". Bidders shall not be requested or permitted to withdraw material deviations or reservations once bids have been opened. 15. Evaluations shall be made in strict adherence to the criteria specified in the bid documents and no other criteria than those specified in the bidding documents shall be applied. Contract shall be awarded the lowest evaluated qualified and responsive bidder. 16. There shall be no negotiations of price or substance with "winning" bidders prior to contract award. -16- SCHEDULE 3 Amortization Schedule The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ("Installment Share"). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Installment Share Principal Payment Date (Expressed as a Percentage) On each February 15 and August 15 Beginning February 15, 2019 through February 15, 2031 3.85% On August 15, 2031 3.75% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph I of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date ("Original Installment Share") and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. 3. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. - 17 - (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub- paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs I and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in;each * Loan Currency, so as to produce a separate amortization schedule for each such amount. - 8- APPENDIX Definitions 1. "Agency Agreement" means the agreement to be entered into between the Borrower, represented by the MOF, and the PIU pursuant to Section 5.01 of, and paragraph 3(a) of Section I.A of Schedule 2 to, this Agreement. 2. "Anti-Corruption Guidelines" means the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011. 3. "Category" means a category set forth in the table in Section IV of Schedule 2 to this Agreement. 4. "Consultant Guidelines" means the "Guidelines: Selection and Employment of Consultants under IBRD Loans & IDA Credits and Grants by World Bank Borrowers" dated January 2011. 5. "Database Subscription Services" means access to or subscription to databases that facilitate comparisons of conditions of transactions between related parties with conditions of transactions between unrelated parties. 6. "Electronic Budget Implementation Action Plan 2011-2016" means the "Action Plan on Implementing the Concept of Development and Implementation of the State Integrated Management Information System" approved by the Government Commission on Introducing Information Technologies in Government Bodies and Municipal Authorities Operations on September 20, 2011, pursuant to Minutes of the Commission N2 19, and amended on November 22, 2012, pursuant to the Minutes of the Commission 2 10, as such action plan may be updated from time to time. 7. "General Conditions" means the "International Bank for Reconstruction and Development General Conditions for Loans" dated March 12, 2012. 8. "Main Directions of Tax Policy of the Russian Federation" means the Main Directions of Tax Policy of the Russian Federation for the medium term, updated on an annual basis and published in the MOF's website. 9. "Ministry of Finance" and the acronym "MOF" meaa the Borrower's Ministry of Finance or any successor thereto. 10. "Operating Costs" means reasonable incremental costs incurred by the PIU on account of Project implementation, management and monitoring, including: staff salaries; social charges; consultants' services to support PIU activities, Project audit; training, conferences and seminars attended by PIU staff; dissemination of Project related information; office rent and utilities; office equipment and supplies; office and equipment insurance, maintenance and repair; vehicle rental, maintenance and repair; travel; communication; translation and interpretation; bank charges; and other miscellaneous costs directly associated with the Project, all based on periodic budgets acceptable to the Bank. -19- 11. "Project Implementation Unit" and the acronym "PIU" mean Non-Comnercial Foundation for Enterprise Restructuring and Financial Institutions Development (FER), a legal entity organized and established pursuant to the law of the Borrower on non- commercial organizations, and operating on the basis of its Charter dated July 5, 1996, as amended on June 2, 1997 and June 10, 2003, and was selected by the Borrower to assist the MOF in the implementation of the Project and which is a party to the Agency Agreement. 12. "Project Operations Manual" means the manual, satisfactory to the Bank, adopted by the Working Group, setting out the organizational arrangements and operational requirements (including financial management and procurement) and procedures related to Project implementation, as such manual may be amended from time to time with the approval of the Bank. 13. "Procurement Guidelines" means the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" dated January 2011. 14. "Procurement Plan" means the Borrower's procurement plan for the Project, dated June 5 2013, and referred to in paragraph 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. 15. "Training" means expenditures for Project-related training and knowledge sharing events, other than through service providers' contracts, including the cost of study tours, training courses, seminars, workshops, conferences, training materials, space and equipment rental, travel, per diem and visa support for trainees (including civil servants at the federal and regional levels and non-civil servants involved in Project implementation), trainers and related organizational, logistical and technical support. 16. "Working Group" means the Working Group established pursuant to Order of the Ministry of Finance of the Russian Federation N 367 dated October 15, 2012, and referred to in paragraph 1(a) of Section L.A of Schedule 2 to this Agreement.