Appleby Trust (Isle of Man) Limited Form Type: Ref: Pages: Date: Client: Name: Address: Contact Details: Introducer: Name: Address: Contact Details: Name of Entity we are providing services to: Initial new Please circle business risk assessment (Formal CRA not required at this stage): New Business File Note Form 1 Page 1 of 5 Leonid Mikhelson Russia Via: Millennium Wealth Management AG East Union Russia Legal@eastunion.com / EY Moscow Low/medium/high Client is a high profile PEP in Russia and is currently the countries 2nd wealthiest man. Aircraft and trading will make this high risk in line with similar structures Client Background Set out in details background on the client, source of wealth, and include results of any internet research conducted. Leonid Mikhelson (LM) Born August 11, 1955 in the Kaspiysk. He graduated from the Kuibyshev Civil Engineering Institute majoring in civil engineer in 1977. After graduating from the Institute LM worked in gas pipe line construction Urengoy - Chelyabinsk in the Tyumen region where he held the posts starting from foreman to chief engineer. In 1985 he was appointed chief engineer of the trust "Ryazantruborovodstroy”. And two years later replaced his father as head of the "Kuybyshevtruboprovodstroy”. In 1991, "Kuybyshevtruboprovodstroy" was privatized, and then turned into a joint stock company "Samara national enterprise "Nova". LM headed it till October 1994 and then moved to the post of general director of the management company "Novafininvest", one of the assets of which was the "Nova". "Novafininvest" began to engage in gas production. LM began buying up shares of association Appleby Trust (Isle of Man) Limited Form Type: Ref: Pages: New Business File Note Form 1 Page 2 of 5 "Purneftegazgeologia, whichowned the license on several sites with large reserves of gas, organized the creation of several new oil and gas enterprises in the Yamalo-Nenets Autonomous District. Finally with the active assistance of Joseph Levinsohn (who moved from the post of administrator in "Purneftegazgeologia" to the post of vice-governor of the district) NovaTEK was created which in 1996 began producing oil and gas on the first of its three main fields - East Tarkosalinskoye. In 2002 the operation in theYurkharovskoye deposit began, in 2004 – in the Khancheyskoye. Immediately after the establishment of NovaTEK, Mikhelson began to attract investors in the company capital and to organize partnerships. In the spring of 2002 an agreement was reached with the Itera by Igor Makarov in order to merge oil and gas assets, but soon the company refused the deal without explanation. Then LM planned to sell a blocking stake in NovaTEK to the French Total. However, this transaction was not approved by FAS. As a result, LM preferred the IPO version, and in July 2005, 19% stake in NovaTEK was posted at the LSE. Investors bought shares worth about $ 1 billion, and LM, received 335 million dollars for his 6.6%. Then there was another deal - the sale of 19.99% stake in Gazprom. His current assets include Global Depositary Receipts worth USD 5 billion and a share interest of 20%, 14% of which is held via SWGI Fund. His total wealth is estimated at USD 15 billion. We have received an extract of the offering memo detailing the history of Novatek which was founded by LM Background Set out in detail any known background to the structure including details on all parties and include results of any research conducted. We are establishing a branch of a Panama Company in the Isle of Man, Golden Star Aviation Limited (GSAL). GSAL has entered into a purchase contract for a Gulfstream G650 (Circa 65,000,000) with Gulfstream. In order to import the aircraft a branch in the Isle of Man is required in order to establish a business and VAT register. GSAL is held through a ownership structure that includes SWGI Growth fund which holds a large proportion of his wealth. This is managed by Millennium Wealth Management Ltd who are regulated by the Swiss authorities for anti money laundering purposes under Verein zur Qualitätssicherung von Finanzdienstleistungen (VQF)/Financial Services Standards Association identification number 10519. I have been unable to find any significant negative press on the client in his own right. Appleby Trust (Isle of Man) Limited Form Type: Ref: Pages: New Business File Note Form 1 Page 3 of 5 Proposed Structure Set out in detail the proposed structure and its purpose, expected assets, turnover, areas of operation, the advice on which is based (ie tax advice), any funding arrangements, any business plans, etc. Please refer to the attached structure chart detailing the ownership structure. The aircraft will be purchased by GSAL. The Isle of Man foreign registered company will then be able to import the aircraft once the VAT registration has been completed. In order to trade, the Aircraft will be dry leased to SWGI Growth fund for the ultimate clients business purposes. The lease will be on commercial terms for this type of Aircraft. This will likely be in the region of USD 1,000,000 per quarter. Services to be provided Set out details of the services to be provided by ATIOML Place of business Corporate Director Administration of leasing structure Due Diligence Held Set out below and attach details of all CDD held or requested. Full CDD on UBO, GSAL and its direct shareholder. We have obtained a letter from the regulated service provider confirming that the other holding companies are all in place and valid as we were advised that due to the number of jurisdictions involved it would be very difficult to obtained correctly certified documents. The letter has been accepted that we have identified all the parties and received confirmation that they control and manage the entire structure, as they are regulated, I am happy to accept this. We have obtained a detailed background from the swiss provider as the manager of a large proportion of the clients wealth. Appleby Trust (Isle of Man) Limited Form Type: Ref: Pages: New Business File Note Form 1 Page 4 of 5 FATCA1 Due Diligence on any parties connected to the structure these questions must be answered 1. Are there any US residents/citizens connected to the client - no 2. Are we to use or have on file a US residence or mailing address - no 3. A US place of birth - no 4. Are we to use or have on file a US ‘ in care of ‘ address (PO Box addresses are not allowed to be used but check in case of a business address) - no 5. Are there powers of attorney or signatories appointed with an associated US address - no 6. Are we to have any standing instructions to transfer funds to a US account - no 7. Are there any US telephone numbers - no 8. Does the client hold any assets in the US - no Other Business & Risk factors The client is a high profile individual, while there is nothing unusal in the press we must still ensure sufficient monitoring in respect of the clients activities in the gas industry in Russia. The type of activity within the structure presents a money laundering possibility as large payments will need to be received into the structure and transferred out fairly quickly. Additional monitoring is required. Fees Set out details of the proposed fees. Are any fees required in advance? 1 The US foreign account tax compliance act (FATCA) was introduced Oct 2009. The FATCA regime falls on Foreign Financial Intitutions (FFIs). It requires FFIs to provide the Internal Revenue Service (IRS) with information on certain U.S. persons. The FFI needs to identify an account has having any of the U.S. indicia in the above section Appleby Trust (Isle of Man) Limited Form Type: Ref: Pages: New Business File Note Form 1 Page 5 of 5 Set up 5,750 Annual responsibility 3,000 Annual Admin: 4,500 (discounted from 6k) as the introducer asked me nicely! Issued by New Business Manager Date Administrator or Senior Recommendations and Comments of the New Business Committee Authorised proceed: Conditions: to Yes/No Follow up required Yes/No within 1 month: Timeframe for follow up if less than 1 month: Approved Sponsoring Partner or Executive Partner: Compliance: Date