Defense Services Marketing Council Event - Sponsor Latham & Watkins Presentation Offsets Panel Discussion 27 June 2011 Abu Dhabi

1. Effective Strategies to Support the Offset
Opportunities in Oman and Kuwait
27 June 2011
Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and
an affiliated partnership conducting the practice in Hong Kong and Japan. Latham & Watkins practices in Saudi Arabia in association with the Law Office of Mohammed A. Al-Sheikh. © Copyright 2011 Latham & Watkins. All Rights Reserved.

2. Delivering Counsel in the Middle East and Worldwide
Firm Overview
Latham & Watkins is a full-service international law firm with approximately 2,000 lawyers in 31 offices around the world. Latham consistently ranks among
the best transactional and finance practices in leading business and legal publications such as mergermarket, Chambers, The American Lawyer, the
International Finance Review and Project Finance International and earns praise worldwide for its work on high-profile and groundbreaking deals.
Latham & Watkins lawyers have been advising some of the most active strategic and financial dealmakers in the Middle East for more than 20 years. The
firm’s Abu Dhabi, Doha, Dubai and Riyadh offices are staffed with internationally qualified lawyers with Arabic, English and other language capabilities. At
present we have a team of more than 50 lawyers in the Middle East practicing US, English and local law.
Dubai
More than 20 corporate, finance and
investment funds attorneys
Strong relationships with government,
banks, funds, corporates and family
conglomerates
Doha
10 corporate and finance attorneys
The leading international law firm in
Qatar
15 years of experience with Qatari
government entities and clients
Riyadh
8 corporate and finance attorneys
Long history of practicing in the country Abu Dhabi
12 corporate and finance attorneys
Strong relationships with banks,
corporates, families, and regulatory bodies Strong relationships with key Abu Dhabi
companies and government entities
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3. Middle East Capabilities
• Regulatory Reform • Restructurings
Government Advisory/Regulatory • Privatization • Concessions
• Transactional Support • Offsets
• Private Equity Investments
M&A / • Joint Ventures
• Consortium Agreements
Joint Ventures / • Outbound & Regional M&A/ Private Equity
Private Equity • Privatizations
• Cross-Border M&A/Private Equity
• Islamic Finance M&A
• Construction Contracts • Export Credit Loans
Project Finance & Development • Operation & Maintenance Agreements • Shareholders Arrangements
• Long Term Offtake Agreements • Concession Agreements
• Multi-Source Financings • Development Agreements
• Project Bonds • Shared Facilities Agreements
• Securities Regulation
Corporate & Finance • Banking Regulation • Bonds
• Derivatives • Rule 144A & Regulation S Private Placements
• Leveraged Finance • Global Offerings & Dual Listings
• Senior & Mezzanine Debt • Restructuring/Insolvency
• IPOs & Other Equity Offerings
• Joint Ventures • Finance
Real Estate • Development • Acquisitions
• Construction • Restructurings
• Private Equity Funds • Hedge Funds
Investment Funds
• Venture Capital Funds • Shari’ah Compliant Vehicles
• Real Estate Funds • Registration & Licensing
Arbitration – Litigation • Pre-litigation and litigation counseling on all complex • Proceedings before numerous international bodies and
matters under all major international arbitration rules
Islamic Finance • Investment Funds
• M&A
• Project Finance
• Interbank Liquidity Documentation for IFIs
• Shari’ah Compliant Asset Finance
• Islamic Mezzanine and Structured Finance
• Sukuk Offerings
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4. Aerospace, Defense and Government Services Practice
Aerospace, Defense & Government Service Industries
Latham & Watkins has been advising major clients in the aerospace, defense and government services
industry for decades. We had a long-standing relationship with the American aerospace and defense
contractor Hughes Aircraft Company, and over the years our attorneys have acquired deep expertise that Aerospace & Defense Ranking
makes them uniquely positioned to advise global clients operating in the sector today. We act for both
private companies and government entities, and are experienced with counseling on regulatory,
transactional and contentious matters such as the following: Ranked #1 in the US Defense
• Numerous acquisitions, sales or investments involving industry Industry for number of deals
participants from 2005-2009
• Regulatory compliance, including trade control and anti- Thomson Reuters
corruption laws and rules governing Foreign Military Sales and
Foreign Military Financing
• Capital markets and bank finance transactions
Aerospace & Defense Ranking
• Global antitrust
• Lender and borrow financing transactions involving industry
participants Ranked #3 as advisor to the issuer
for deals in the Aerospace &
• Intellectual property matters involving homeland security
software products Defense Industry from 2007-2010
• Investigations and litigation involving industry participants Dealogic
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5. US Trade Controls and Regulatory Matters
Our Middle East offsets practice leverages our regulatory capabilities in our 250+ attorney Washington D.C.
office, such as the following:
Export Controls and US Anti-Boycott Laws FCPA & Bribery Act
Economic Sanctions
• Our specialists provide advice • Our Middle East offices work
• Our Washington DC specialists and assistance on compliance closely with our global FCPA team,
advise on US export controls and with the US anti-boycott laws which is led by a former Assistant
sanctions laws and regulations that restrict the Attorney General of the Criminal
• Export Administration Regulations ability to participate in or Division who had oversight of the
(controlling exports and re-exports cooperate with certain aspects entire US Department of Justice
of dual-use goods and technology), of the Arab League’s economic (DOJ) FCPA enforcement program
boycott of Israel from 2005 through 2008.
• Country specified economic and
trade sanctions administered by • Other members of our FCPA
OFAC, practice include former SEC
enforcement officers and DOJ
• International Traffic in Arms
Foreign Military Sales prosecutors
Regulations.
and Foreign Military • FCPA investigations throughout
• Significant Middle East experience,
Financing Europe, Africa, South America and
including UN and US sanctions
Asia across a broad spectrum of
relating to Libya.
• Our Washington DC industries including
specialists have expertise pharmaceutical, health care, oil
dealing with sales of defence services, and contractors, among
Government Contracts products to non-US others
• Strong government contracts government entities, including • Team of UK Bribery Act specialists
department, consisting principally providing advice under rules
of attorneys in our Washington governing Foreign Military
D.C. and other US offices. Sales and Foreign Military
Financing.
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6. Offsets in the Middle East
The following is a chart setting forth some of the key offset criteria in the three GCC countries listed below. Oman’s offset program operates similarly
and has commensurate parameters.
Criteria Saudi Arabia UAE Kuwait
Supply contracts relating to (i) the
defence and security sectors equal
Supply contracts exceeding US $10m
Purchases subject to offset Supply contracts exceeding US $107m to or exceeding KD 3m; and (ii) the
in any 5 year period
civil sector equal to or exceeding KD
10m
35% of the value of the technical
Level of offset obligations 60% of the contract value 35% of the contract value
component of the contract (at a minimum)
There is no specified term of the
offset obligation, but the submitted
7 year term, with offset milestones of business plan should cover
5%, 10%, 10%, 15%, 15%, 20% & 25% implementation and operation of the
Term of obligations &
10 year term during the term. offset project over a period of at
milestones
A grace period of up to 3 years at the least 5 years and fulfilment is
start of the term is available assessed on a quarterly basis at
inception stage and annually at the
implementation stage
Direct offset projects, indirect offset
30% input credit generating activities;
Credit earning activities Negotiable projects or investment in offset
70% output credit generating activities
funds
6% on unfulfilled portion of
Liquidated Damages Policy under consideration 8.5% on unfulfilled portion of obligation obligation deducted from the bank
guarantee
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7. Attorney Contact Details
Villiers Terblanche Nicholas S. O’Keefe
Partner Partner
Abu Dhabi Dubai/ Doha
villiers.terblanche@lw.com nicholas.okeefe@lw.com
+971.2.495.1717 +971.4.704.6324 (Dubai)
+974.4406.7725 (Doha)
Jade Laktineh Sally Elshihabi Soubra
Associate Associate
Abu Dhabi Abu Dhabi
jade.laktineh@lw.com sally.soubra@lw.com
+971.2.495.1743 +971.2.495.1770
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