Is Rosoboronexport aware of any US investigation, and has it been contacted by the Special Inspector General for Afghanistan Reconstruction or other US agencies?

Anatoly Isaykin: We have learned from the Russian and American press reports that an investigation of the U.S. Department of Defense’s procurement of Russian Mi-17-V5 helicopters for Afghanistan is underway in the United States. The representatives of the U.S. law enforcement agencies, including the Special Inspector General for Afghanistan Reconstruction or other U.S. agencies, have not contacted Rosoboronexport on this issue.

Furthermore, we have received an address from the North-Eastern Region, a European branch of the U.S. Department of Defense Contract Audit Agency on matters related to the fulfillment of a contract for Mi-17V-5s. Rosoboronexport prepared, within its competence, an answer to Mr. Ernest S. Wang, head of the European branch of the U.S. Department of Defense Contract Audit Agency. In the answer, we noted that this contract was completely transparent in terms of the price component and was a direct Government-to-Government contract. In our opinion this contract is most acceptable to the U.S. Department of Defense in terms of quality/price ratio.

And do you have any reaction to the Pentagon announcement that it will not buy any further Mi-17s from Rosoboronexport beyond the 63 already under contract?

Anatoly Isaykin: It is very difficult to comment on such a U.S. Department of Defense’s statement, when it is obvious that today both Russia and the U.S. have joined efforts in bringing peace to Afghanistan. In the context of the withdrawal of coalition forces from Afghanistan scheduled for 2014, the Russian military transport helicopters have become the most in-demand means of transportation and fire support and would later make up the backbone of the Afghan National Army. And the 63 helicopters are being purchased for a good reason: these are by far the best rotorcraft ensuring the safety of crews that operate them in difficult geographical conditions of Afghanistan.

For Rosoboronexport, as Russia’s major arms exporter, each contract and every customer is certainly important. But today, Rosoboronexport’s order book is sufficient to ensure the steady utilization of Russian defense industrial complex’s production capacities, especially in the helicopter sector, for the next 3-4 years. Therefore, the U.S. refusal to purchase additional batches of Russian helicopters will not affect the Company's order book.