VEON (VEON) 20-F2021 FY Annual report (foreign)

The risks and uncertainties described below are not the only ones we face. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. In addition, you should consider the interrelationship and compounding effects of two or more risks occurring simultaneously.

The following summarizes the principal risks that could adversely affect our business, operations and financial results. Before purchasing our American Depositary Shares (“ADSs”), you should carefully consider all of the information set forth in this Annual Report on Form 20-F including, but not limited to, the risks set forth in this Item 3.D. In addition to those risk factors, there may be additional risks and uncertainties of which management is not aware or focused on or that management currently deems immaterial. Our business, financial condition or results of operations or prospects could be materially adversely affected by any of these risks, causing the trading price of our securities to decline and you to lose all or part of your investment.

The ongoing conflict between Russia and Ukraine, and related economic sanctions and export control actions against Russia have also led to a surge in certain commodity prices, including wheat, oil and gas, which may have an effect on our customers and their spending patterns. As of March 8, 2022, several countries, including the United States, announced sanctions on oil and gas exports from Russia, while the United Kingdom announced a phase out of Russian oil imports by the end of 2022, all of which is expected to further negatively impact the Russian economy and cause fossil fuel prices to increase. If additional countries were to impose further sanctions on fossil fuel exports from Russia, or the existing sanctions were accelerated or tightened, the price increases for related products would be exacerbated, which could cause further strain on our customers. Rising fuel prices also make it more expensive for us to power our networks and operations. Furthermore, the Russian economy is also expected to be significantly affected as result of many U.S. and other multi-national businesses across a variety of industries indefinitely suspending their operations and pausing all commercial activities in Russia. These corporate boycotts have resulted in supply chain disruptions and unavailability or scarcity of certain raw materials, goods and services in Russia, which may in turn have a spillover effect on the wider Russian economy, which could negatively impact our business. As a result of the above, unemployment rates in Russia have risen significantly, and could rise further if the conditions mentioned above are sustained. This could cause affected customers to downgrade or disconnect their services, and make it more difficult for us to maintain ARPUs and subscriber numbers at existing levels within Russia.

In the current climate, whether in connection with such sanctions or otherwise, the possibility of a sovereign debt default in Russia cannot be excluded. On April 6, 2022, the Russian Ministry of Finance announced that it had attempted to pay interest on certain U.S. dollar bonds in U.S. dollars, but was unable to do so when the U.S. Treasury Department did not grant approval for a dollar payment through the U.S. correspondent bank. As a result the interest payment was made in rubles, though the terms of the bonds do not contain provisions allowing payment in another currency. The Credit Derivatives Determinations Committee of ISDA ruled on April 20, 2022 that such failure to pay interest in U.S. dollars is a potential default (which would mature into a default 30 days after the required interest payment date if payment has not been paid in U.S. dollars prior to the end of such grace period). Standard & Poor’s Credit Market Services Europe Limited (“Standard & Poor’s”) downgraded its credit rating of the Russian Federation to “selective default” following the missed U.S. dollar payment. Even prior to the April 6, 2022 announcement, the credit rating of the Russian Federation had been downgraded by each of Fitch Ratings CIS Limited (“Fitch”), Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s, as a result of the negative impact on the Russian economy from the new international sanctions imposed on Russia and the economic isolation by parts of the international business community, as well as countermeasures introduced by the Russian government. Each of these agencies subsequently withdrew their Russia ratings following the EU prohibition on providing credit ratings to entities established in the Russian Federation. While we cannot predict the effects of a sovereign default, on the Russian economy, such effects could be pronounced and prolonged.

As of April 15, 2022, it is estimated by the United Nations High Commissioner of Refugees that approximately 4.85 million people have fled Ukraine and the country has sustained significant damage to infrastructure and assets. If the ongoing conflict persists, we could lose a percentage of our customer base in Ukraine if Ukrainian refugees choose to relocate permanently outside of Ukraine and switch to local providers. This could have a significant impact on their use and spending on our services. We have been and will also incur additional expenditures to maintain and repair our mobile and fixed-line telecommunications infrastructure in Ukraine as a result of any damage inflicted on our infrastructure due to the ongoing conflict, as well as for security, increased energy costs and related operational and capital expenditures.

In addition, our ability to provide services in Ukraine may be impaired if we are unable to maintain key personnel within Ukraine or our infrastructure within Ukraine is significantly damaged or destroyed. We have developed and, in some

If further sanctions issued by the United States, the United Kingdom or the European Union impact our suppliers or other counterparties, this could result in substantial legal and other compliance costs and risks to our business operations and could harm our business, financial condition, results of operations or prospects. Furthermore, while we have not been named as, and have concluded that we are otherwise not, the target of the European Union’s or the United Kingdom’s sanctions as a consequence of L1T VIP Holdings S.à r.l. (“LetterOne”) being a 47.85% shareholder in VEON (as of April 15, 2022), it cannot be ruled out that VEON or LetterOne could become the target of future sanctions legislation or executive orders, which would materially adversely affect our operations, access to capital and price of our securities. For example, we might be unable to conduct business with persons or entities subject to the jurisdiction of the relevant sanctions regimes, including international financial institutions and rating agencies, transact in U.S. dollars, raise funds from international capital markets, acquire equipment from international suppliers or access assets held abroad. Moreover, if we become subject to U.S., EU or UK sanctions, investors subject to the jurisdiction of an applicable sanctions regime may become restricted in their ability to sell, transfer or otherwise deal in or receive payments with respect to our securities. We are also aware of initiatives by U.S. governmental entities and U.S. institutional investors, such as pension funds, to adopt or consider adopting laws, regulations or policies prohibiting transactions with or investment in, or requiring divestment from, entities doing business with certain countries, which, if implemented, could limit the liquidity of our securities and thereby have an adverse impact on their value.

The legislative sanctions imposed are more complex and comprehensive than any such measures to date, and are evolving on a daily basis. We are not able to predict further developments on this issue, including those that could affect our operations in Russia, Ukraine or elsewhere, nor can we predict when sanctions targeting Russia imposed by the United States, the United Kingdom, the European Union and/or other countries as a result of Russia’s involvement in the ongoing conflict might be lifted. There may be additions to the restricted parties lists (which could include VEON or certain of our counterparties) or other expansions of sanctions by the United States, the United Kingdom, the European Union and/or other countries that target Russia and restrict dealings with businesses operating in Russia, as well as related to Russian-occupied areas of Ukraine in the future. The interpretation and enforcement of these new sanctions and counter-sanctions may result in unanticipated outcomes and could give rise to significant uncertainties, which could complicate our business decisions. For example, to protect U.S. foreign policy and national security interests, the U.S. government has broad discretion to at times impose a broad range of extraterritorial “secondary” sanctions under which non-U.S. persons carrying out certain activities may be penalized or designated as sanctioned parties, even if the activities have no ties, contact with, or nexus to the United States or the U.S. financial system at all. These secondary sanctions could be imposed on us or any of our subsidiaries if they were to engage in activity that the U.S. government determined was undertaken knowingly and rose to the level of material or significant support to, for, or on behalf of certain sanctioned parties.

In addition to economic sanctions, our business operations could be adversely affected by export controls imposed as a result of the ongoing conflict between Russia and Ukraine. For example, the United States imposed sweeping new export control restrictions on Russia’s ability to obtain goods, software and technology subject to U.S. export control jurisdiction, including a broad array of foreign-made items, that were previously not subject to U.S. export control jurisdiction. This could have an adverse impact on our ability to maintain and/or improve our infrastructure and adversely impact the availability and quality of our services and therefore have a material adverse effect on our operations and results of operation.

As a leading telecommunications provider in each of Russia and Ukraine, we have been adversely impacted by the ongoing conflict. While we are still assessing the extent of the impact on our operations and financial performance, as long as the conflict is ongoing, we expect a deterioration of our performance in Ukraine, which will be exacerbated as the conflict continues. In Russia, the ongoing conflict between Russia and Ukraine and related sanctions will have an impact on our operations, including as a result of the volatility of the Russian ruble and the CBR key interest rate. If there is an extended continuation or further increase in the ongoing conflict between Russia and Ukraine, it could result in further instability and/or worsening of the overall political and economic situation in Ukraine, Russia, Europe and/or in the global economy and capital markets generally. These are highly uncertain times and it is not possible to predict with precision how certain developments will impact our results and operations, nor is it possible to execute comprehensive contingency planning in Ukraine due to the ongoing conflict and inherent danger in the country. The discussion above attempts to surmise how prolongation or escalation of the conflict, expansion of current sanctions, the imposition of new and broader sanctions, an inability for us to transact with key suppliers and counterparties, difficulties for us to access and service financing, and the severe depreciation of, and restrictions on, the Russian ruble, could have a material impact on our results and operations. We cannot assure you that risks related to the conflict are limited to those described in this Annual Report on Form 20-F.

On February 28, 2022, the European Union imposed sanctions on Mikhail Fridman and Petr Aven, and on March 15, 2022, the United Kingdom imposed sanctions on then LetterOne shareholders, Mr. Fridman, Mr. Aven, Alexey Kuzmichev and German Khan, and the European Union additionally designated Mr. Khan and Mr. Kuzmichev (collectively, and with Mr. Aven and Mr. Fridman, the “Designated Persons”). Mr. Fridman resigned from VEON’s board of directors effective February 28, 2022. None of the other Designated Persons were members of the Board of Directors. We understand, based on a letter provided by LetterOne, a 47.85% shareholder in VEON, that Mr. Fridman and Mr. Aven are shareholders in LetterOne (approximately 37.86% and 12.13%, respectively) and that Mr. Khan and Mr. Kuzmichev are no longer shareholders in LetterOne.

We have not been named as, and have concluded that we are otherwise not, the target of the European Union’s or the United Kingdom’s sanctions, including as a consequence of LetterOne being a 47.85% shareholder in VEON. However, as a result of the association of Designated Persons with our largest shareholder, we have suffered reputational harm. In addition, as VEON is perceived by some as having undue exposure to Russia, we have experienced difficulties in transacting with certain key suppliers, business partners and other key counterparties at the Group level, and we cannot rule out the possibility that we may not be able to appoint an auditing firm for the audit of our financial statements for the year ended December 31, 2022. This could have an adverse effect on our ability to obtain financing to meet our capital needs or service our debt, or to access our existing cash held in third-party bank accounts or to access committed amounts under credit facilities, and could lead to a delisting of our securities. We have to date noted an unwillingness among certain of our business partners to continue to do business with us, which could be further exacerbated if current conditions continue and which could affect our prospects to engage in new business initiatives with existing or potential future business partners. Moreover, many multinational companies and firms, including certain of our service providers, partners and suppliers, have chosen of their own accord to cease transacting with all Russia-based or Russia affiliated companies (i.e., self-imposed sanctions), including our Russia-based operating subsidiary, as a result of the ongoing conflict between Russia and Ukraine. To the extent that the ongoing conflict between Russia and Ukraine continues or further escalates, the list of companies and firms refusing to transact with Russia-based companies may continue to grow.

Such actions have the equivalent effect, insofar as the ability to transact with such companies is concerned, as if the Russia-based companies were the target of government-imposed sanctions. Finally, the price of securities have suffered significant volatility in recent months as a result of exposure, and perceived exposure to the ongoing conflict between Russia and Ukraine. The inability to conduct business with key suppliers, business partners and other key counterparties could have a material adverse impact on our business, financial condition, results of operations, cash flows or prospects and price of our securities.

In addition to the Russian ruble, the values of the Pakistani rupee, Ukrainian hryvnia, Kazakh tenge, Algerian dinar, and Uzbekistani som have experienced significant volatility in recent years in response to certain political and economic issues, and such volatility may continue and result in depreciation of these currencies against the U.S. dollar. For example, as a result of the ongoing conflict between Russia and Ukraine, the National Bank of Ukraine has fixed the Ukrainian hryvnia against the U.S. dollar and there is a 10-20% gap between this set exchange rate and the unofficial exchange rate. Other countries in which we operate have recently experienced periods of high levels of inflation, such as Pakistan and Uzbekistan during 2020. Our profit margins in those countries could be harmed as well if we are unable to sufficiently increase our prices to offset any significant future increase in the inflation rate, manifested in inflationary increases in salary, wages, benefits and other administrative costs, which may be difficult with our mass market and price-sensitive customer base.

As a global telecommunications company operating in a number of emerging markets, our operations are subject to macroeconomic risks, geopolitical developments and unexpected global events that are outside of our control. Unfavorable economic conditions in the markets in which we operate may have a direct negative impact on the financial condition of our customers, which in turn will affect a significant number of our current and potential customers’ spending patterns, in terms of both the products they subscribe for and usage levels. During such downturns, it may be more difficult for us to grow our business, either by attracting new customers or by increasing usage levels among existing customers, and it may be more likely that customers will downgrade or disconnect their services, making it more difficult for us to maintain ARPUs and subscriber numbers at existing levels. In addition to the potential impact on revenue, ARPUs, cash flow and liquidity, such economic downturns may also impact our ability to decrease our costs, execute our strategies, take advantage of future opportunities, respond to competitive pressures, refinance existing indebtedness or meet unexpected financial requirements.

In addition, other adverse economic developments in the markets in which we operate have adversely affected us in recent years. For example, lockdown restrictions imposed by governments during the height of the COVID-19 pandemic adversely impacted our financial performance and results of operations. Our total revenue for the six months ended June 30, 2020 was 9.0% lower compared to the six months ended June 30, 2019, mainly due to the effect of the COVID-19 pandemic. Following the introduction of lockdown measures in response to COVID-19, we also experienced a reduction in roaming revenue, which largely disappeared in the second quarter of 2020. Travel restrictions that were imposed in certain of the countries in which we operate resulted in a reduction in migrant workforce, which has traditionally been a source of a large subscriber base in Russia. Network traffic patterns were also impacted as people worked from home, which required some adjustments to our network deployment plans. In addition, the COVID-19 pandemic caused delays and disruptions in our supply chain due to difficulty in obtaining components, temporary suspensions of operations, including in factories and disruption to logistic services. Correspondingly, the COVID-19 pandemic also adversely impacted demand, which was partly caused by a deterioration of confidence and expectations, negative income and wealth effects. Accordingly, there was a substantial deterioration in financial markets in 2020, unprecedented drops in commodity prices, a sudden slowdown in commercial activity and strong restrictions on transportation and travel. While lockdown restrictions have eased around the world since vaccines have become available, many governments respond to surges in case numbers or the emergence of new variants by re-imposing lockdown and travel restrictions. The uncertainty surrounding the ongoing COVID-19 pandemic, both in terms of new variants and surges and government responses thereto, continues to impact our ability to accurately predict our financial performance. Furthermore, the ongoing conflict between Russia and Ukraine could have a similar or more severe impact on our business, financial condition, results of operations, cash flows or prospects. Going forward, other adverse global developments, such as wars, terrorist attacks, natural disasters, and pandemics, may have a similar impact on us.

Our financial performance may also be affected by macroeconomic issues more broadly, including risks of inflation, deflation, stagflation, recessions, sovereign debt levels and the stability of currencies across our key markets and globally. Following stimulative monetary policies by central banks and increased government spending to combat the adverse economic effects of COVID-19 and associated lockdowns, many countries across the world are experiencing high levels of inflation and lower corporate profits, causing increased uncertainty about the near-term macroeconomic outlook as central bank interest rates are being raised to combat the high inflation. This, combined with increased energy prices, supply shortages resulting from logistical difficulties arising from the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine, may adversely impact our customers’ discretionary spending, which could, in turn, affect their usage levels of our products or their ability to pay for our services.

Our operations are located in the world’s emerging markets. Investors should fully appreciate the significance of the risks involved in investing in an emerging markets company and are urged to consult with their own legal, financial and tax advisors. Emerging market governments and judiciaries often exercise broad, unchecked discretion and are susceptible to abuse and corruption and the rapid reversal of political and economic policies. The political and economic relations of our countries of operation are often complex and have resulted, and may in the future result, in conflicts, which could materially harm our business, financial condition, results of operations, cash flows or prospects. The outbreak of the conflict between Russia and Ukraine is an illustration of this.

The economies of emerging markets are also vulnerable to market downturns and economic slowdowns in the global economy. As has happened in the past, a slowdown in the global economy or an increase in the perceived risks associated with investing in emerging economies could dampen foreign investment in these markets and materially adversely affect their economies. In addition, turnover of political leaders or parties in emerging markets as a result of a scheduled election upon the end of a term of service or in other circumstances may also affect the legal and regulatory regime in those markets to a greater extent than turnover in developed countries. Any of these developments could severely limit our access to capital and could materially harm the purchasing power of our customers and, consequently, our business. Such events could also create uncertain regulatory environments, which, in turn, could impact our compliance with license obligations and other regulatory approvals. The nature of much of the legislation in emerging markets, the lack of consensus about the scope, content and pace of economic and political reform and the rapid evolution of the legal and regulatory systems in emerging markets place the enforceability and, possibly, the constitutionality of laws and regulations in doubt and result in ambiguities, inconsistencies and anomalies. The legislation often contemplates implementing regulations that have not yet been promulgated, leaving substantial

Many of the emerging markets in which we operate are susceptible to significant social unrest or military conflicts. For example, over the past several years, Russia has been involved in conflicts, both economic and military, involving neighboring and distant states. On several occasions, this resulted in deterioration of relations between Russia and other countries, including the United States and various countries in Europe. Changes in government policy, other government actions and political risks could adversely affect our operations and the value of investments in Russia. Shifts in governmental policy and regulation in the Russian Federation are less predictable than in many Western countries, and could disrupt political, economic, social, regulatory and business processes and environments. Russian authorities have been reported to sometimes apply policies selectively and arbitrarily, including through withdrawal of licenses, sudden and unexpected tax audits, criminal prosecutions, asset freezes, seizures or confiscations, regulatory measures, and civil actions. Federal and local governmental entities have, in the past, used common defects in share issuances and registration as pretexts for court claims and other demands to invalidate such issuances and registrations and/or to void transactions, which may be seen as being influenced by political or business considerations. Some observers have noted that takeovers of major private sector companies by state controlled companies following tax, environmental and other challenges in recent years may reflect a shift in official policy in favor of state control at the expense of individual or private ownership, at least where large enterprises are concerned. This has, in turn, resulted in significant fluctuations in the market price of Russian securities and had a negative impact on foreign investments in the Russian economy, over and above any recent general market dislocations. Any similar actions by the Russian authorities which result in a further negative effect on investor confidence in Russia’s business and legal environment could have a further adverse impact on the Russian securities market and prices of Russian securities or securities issued or backed by Russian entities.

Furthermore, governments or other factions, including those asserting authority over specific territories in areas of conflict, could make inappropriate use of our networks, attempt to compel us to operate our network in conflict zones or disputed territories and/or force us to broadcast propaganda or illegal instructions to our customers or others (and threaten consequences for failure to do so). Forced shutdowns or broadcasts, inappropriate use of our network or being compelled to operate our network in conflict zones could materially harm our business, financial condition, results of operations, cash flows or prospects.

In addition, following the outbreak of COVID-19 in February 2020 and the resulting lockdown restrictions imposed by governments across all of our countries of operations, our revenue projections for the first quarter of 2020 did not reflect actual revenue, and we had to change our fiscal year 2020 guidance as a result. This was partly due to store closures, which had an impact on our gross connections and airtime sales and restrictions on travel, which caused a significant decline in roaming revenue and the loss of migrant worker customers from our subscriber base, particularly in Russia. The impact of this was only partially offset by increases in fixed line revenue, as lockdown restrictions encouraged home working and schooling.

Each of the items discussed immediately below regarding increased competition could materially harm our business, financial condition, results of operations, cash flows or prospects:

The telecommunications industry is characterized by rapidly evolving technology, industry standards and service demands, which may vary by country or geographic region. Accordingly, our future success will depend on our ability to effectively anticipate and adapt to the changing technological landscape and the resulting regulations. It is possible that the technologies or equipment we use today will become obsolete or subject to competition from new generation technologies for which we may be unable to deploy, or obtain the appropriate license, in a timely manner or at all.

The banking and other financial systems in our countries of operation are underdeveloped and/or underregulated, and laws relating to banks and bank accounts are subject to varying interpretations and inconsistent application. Uncertain banking laws may also limit our ability to attract future investment in these countries. Such banking risk cannot be completely eliminated by diversified borrowing and conducting credit analyses. In addition, underdeveloped banking and financial systems are more susceptible to a banking crisis, which would affect the capacity for financial institutions to lend or fulfill their existing obligations, or lead to the bankruptcy or insolvency of the banks from which we receive, or with which we hold, our funds, and could result in the loss of our deposits, the inability to borrow or refinance existing borrowings or otherwise negatively affect our ability to complete banking transactions in these countries.

In addition, the central banks and governments in the markets in our countries of operation may also restrict or prevent international transfers, or impose foreign exchange controls or other currency restrictions, which could prevent us from making payments, including the paying dividends and third party suppliers. For example, on February 28, 2022, Russian President

Furthermore, there is no assurance that we will be able to service our debt obligations when due. For example, as a result of current or future economic sanctions affecting Russian banks and decreased availability of the Russian ruble on international markets, we might be required to refinance part or all of our existing Russian ruble loans or bonds, which could have a material impact on our liquidity. Following the designation of VTB Bank as a sanctioned entity by the United States and the United Kingdom, we repaid our RUB 30 billion seven year term loan with VTB Bank on March 9, 2022. If we are unable to meet our debt obligations, including debt obligations that are accelerated as a results of sanctions, or if we fail to comply with the financial and other covenants contained in the agreements governing such debt obligations, we may as a consequence be required to refinance all or part of our debt, which may necessitate selling important strategic assets at unfavorable prices in order to meet such refinancing requirements, or entering into restructuring negotiations with our creditors. For example, these highly uncertain times and it is not possible to predict with precision how certain developments will impact our liquidity position, our financial covenants and non-financial provisions in our debt agreements, and our equity levels on a regular and continuous basis both at the group and operating company levels. A continued deterioration in the results or operations of our operating companies could trigger certain financial covenants or non-financial provisions in our debt agreements, requiring accelerated repayment, potentially triggering a cross-default across all debt facilities and the RCF and negatively impact our liquidity. We may also be impacted by conditions or local legal requirements in local or international markets that could make it more difficult to refinance existing debt or service our existing debt obligations. In addition, there can be no assurance that any assets which we could be required to dispose of can be sold or that, if sold, the timing of such sale and the amount of proceeds realized from such sale will be acceptable. If such contingencies develop and we are unsuccessful in these efforts, we may not have sufficient cash to meet our obligations.

If we are unable to raise additional capital in the market in which we want to raise it, or at all, or if the cost of raising additional capital significantly increases, as is the case when central banks raise benchmark interest rates, we may be unable to make necessary or desired capital expenditures, take advantage of investment opportunities, refinance existing indebtedness or

Our financing agreements across the VEON group generally have “change of control” provisions that may require us to make a prepayment if a person or group of persons (with limited exclusions) directly or indirectly acquire beneficial or legal ownership of or control over more than 50.0% of our share capital or the ability to appoint a majority of directors to our board. If such a change of control provision is triggered, and we fail to agree necessary amendments to any given loan documentation, then the prepayment provision will be triggered under such loan. Failure to make any such required prepayment could trigger cross-default or cross-acceleration provisions of our other financing agreements, which could lead to our obligations being declared immediately due and payable. A change of control could also impact other contracts and relationships with third parties and may require a renegotiation or reorganization of certain contracts or undertakings.

VEON Ltd. is a holding company and does not conduct any revenue-generating business operations of its own. Its principal assets are the direct and indirect equity interests it owns in its operating subsidiaries, and as a result, VEON Ltd. depends on cash dividends, distributions, loans or other transfers received from its subsidiaries to make dividend payments to its shareholders, including holders of ADSs and ordinary shares, and service interest and principal payments in respect of the indebtedness incurred at its intermediate holding companies, and to meet other obligations. The ability of its subsidiaries to pay dividends and make other transfers to VEON Ltd. is not guaranteed, as it depends on the success of their businesses and may be restricted by applicable corporate, tax and other laws and regulations. Such restrictions include restrictions on dividends, limitations on repatriation of cash and earnings and on the making of loans and repayment of debts, monetary transfer restrictions, covenants in our financing agreements, and foreign currency exchange controls and related restrictions in certain agreements or certain jurisdictions in which VEON Ltd.’s subsidiaries operate or both. Capital controls and other restrictions, asset freezes, including limitations on payment of dividends or international funds transfers may be imposed in Russia, along with punitive taxes and penalties targeted at certain foreign entities, which may impact our ability to receive loan repayments, dividends and distributions from Russia.

Similarly, at times our local operating subsidiaries depend on support received from us through cash generated in other jurisdictions or through debt incurred at the Group-level to make capital expenditures, service debt or to meet other obligations. The ability of an operating subsidiary to receive from, or make a transfer to, another Group entity can be limited by cash restrictions imposed by governments or restrictions in private contracts. The inability to make payments and/or transfer funds within the Group could limit or prohibit the payment of cash dividends, distributions, the repayment of indebtedness or payment of debt servicing obligations and thus could result in a default under any such instruments.

Furthermore, VEON Ltd.’s ability to withdraw funds and dividends from our subsidiaries and operating companies may depend on the consent of our strategic partners, where applicable, as well as the tax regimes and treaties between the Netherlands and the local jurisdictions in which we operate.

As each of our operating subsidiaries is responsible for managing their own cybersecurity risks and putting in place all operational preventive, detective and response capabilities, our operations and business continuity is dependent on how well these subsidiaries collectively protect and maintain our network equipment, information technology (“IT”) systems and other assets. Although we devote significant resources to the development and improvement of our IT and security systems, we are and will continue to remain vulnerable to cyber-attacks and other cybersecurity threats that could lead to compromised or inaccessible telecommunications, digital and financial services and/or leaks or unauthorized processing of confidential information, including customer information. Our systems are vulnerable to harmful viruses and the spread of malicious software that could compromise the confidentiality, integrity or availability of technology assets. In addition, unauthorized users or hackers may access and process the customer and business information we hold, or authorized users may improperly process such data. Such risks are inherent in our business operations and we will never be able to fully insulate ourselves from these risks. Our systems will remain vulnerable to attacks by third parties who are able to thwart the safeguards we have in place with tactics that are unforeseen or prove to be too sophisticated, and our systems in Russia and Ukraine may be particularly vulnerable to these attacks given the ongoing conflict.

Moreover, we may experience cyber-attacks and IT and network failures and outrages due to factors under our control, such as malfunction of technology assets or services caused by obsolescence, wear or defects in design or manufacturing, faults during standard or extraordinary maintenance procedures, unforeseen absence of key personnel, and the inability to protect our systems from phishing attacks. There is also a possibility that we are not currently aware of certain undisclosed vulnerabilities in our IT systems, processes and other assets. In such an event, hackers or other cybercrime groups (whether private or state-sponsored) may exploit such vulnerabilities, weaknesses or unidentified backdoors (including previously unidentified designed weaknesses embedded into network or IT equipment allowing access by private or government actors) or may be able to cause harm more quickly than we are able to mitigate (zero-day exploits). Although our subsidiaries have implemented cyber-security strategies for mitigating these risks, we cannot be sure that our network and information technology systems will not be subject to such issues, or, if they are, that we will be able to maintain the integrity of our customers’ and employees’ data or that malware, other technical or operational issues or human error will not disrupt our network or systems and cause significant harm to our operations. For example, in August 2021, certain personal data held by our Russian operations was inadvertently made public due to human error. We have been monitoring the darknet to ensure no information was published, which to date has not occurred, and have been working on mitigation measures to prevent such cases in the future. In addition, from time to time, we experience cyber-attacks of varying degrees to gain access to our computer systems and networks. As of April 15, 2022, we have suffered various cybersecurity incidents, which targeted our internal infrastructure but were contained by our response teams and generated limited or negligible impacts. In addition, we have identified unauthorized access to some of our network systems, possibly with the intention to capture information or manipulate the communications. Although we found no evidence that any such capture or manipulation was performed, we cannot guarantee that they did not take place, that all such attempts will be successfully thwarted in the future or that the impact of such attempts, if successful, would not be material to our business. We have also experienced infections by malware, advanced persistent threats, and network service interruptions during installations of new software. In some of countries of operation, our equipment for the provision of mobile services

Furthermore, due to the ongoing conflict between Russia and Ukraine, there is an increased risk of cyber-attacks or cybersecurity incidents that could either directly or indirectly impact our operations. Any attempts by cyber attackers to disrupt our services or systems, if successful, could harm our business, result in the misappropriation of funds, be expensive to remedy and damage our reputation or brands. Following the onset of the ongoing conflict between Russia and Ukraine, as of the date of this Annual Report on Form 20-F, there have been an increasing number of cyber-attacks on our Russian operations, which have caused service disruptions in certain instances. Our insurance coverage may not be sufficient to cover significant expenses and losses related to such cyber-attacks and cybersecurity incidents.

The occurrence of any of the foregoing events could result in reputational harm, lawsuits, violations of applicable laws, adverse regulatory actions, an inability to operate our digital services or our wireless or fixed-line networks, loss of revenue from business interruption or significant additional costs. As a result of this, our customers may curtail or stop using our products and services, which could harm our business, financial condition, results of operations, cash flows or prospects. In addition, the potential liabilities associated with the occurrence of any of these events could exceed the cyber insurance coverage we maintain and certain violations of applicable laws (including as a result of data leakage) could result in the suspension of operating licenses, imprisonment or fines for the entity and/or the individuals involved.

Our technological infrastructure and other property is vulnerable to damage or disruptions from numerous events. These include natural disasters, extreme weather and other environmental conditions, military conflicts, power outages, terrorist acts, riots, government shutdown orders, changes in government regulation, equipment or system failures or an inability to access or operate such equipment or systems, human error or intentional wrongdoings, such as breaches of our network, cyber-attacks or any other types of information technology security threats. For example, we may experience network or technology failures, or a leak or unauthorized processing of confidential customer data, if our technology assets are altered, damaged, destroyed or misused by employees, third parties or other users, either intentionally or due to human error. In addition, as we operate in countries which may have an increased threat of terrorism and military conflict, incidents on or near our premises, equipment or points of sale could result in causalities, property damage, business interruption, legal liability and damage to our brand or reputation. For example, while we have not sustained major damage to our assets in Ukraine thus far as a result of the ongoing conflict between Russia and Ukraine, there can be no assurance that our Ukrainian network will not sustain additional damage that cannot be repaired in a timely manner as the conflict continues.

Interruptions of services due to disruption or failure of our equipment and systems could harm our reputation and reduce the confidence of our customers to provide them with reliable services and hold their personal data. As a result, this could impair our ability to obtain and retain customers and could lead to a violation of the terms of our licenses, each of which could materially harm our business. In addition, the potential liabilities associated with these events could exceed the business interruption insurance we maintain.

We rely on third parties to provide services and products important for our operations. For example, we currently purchase the majority of our network-related equipment from a core number of suppliers, such as Ericsson, Huawei, Nokia, Cisco and ZTE. The successful build-out and operation of our networks depends heavily on obtaining adequate supplies of core and transmission telecommunications equipment, fiber, switching equipment, radio access network solutions, base stations and other services and products on a timely basis. From time to time, we have experienced delays in receiving equipment, installation of equipment, and maintenance services, due to factors such as new and existing telecommunications regulations, customs regulations and governmental investigations or enforcement actions. If this is the case, we may experience temporary service interruptions or service quality problems. As we seek to execute our “infrastructure” strategy and sell our tower assets, as we have done in Russia in December 2021, we will become more exposed to risks associated with our network service partners, including their ability to adequately maintain the tower infrastructure and provide use of it to us through network service agreements.

We do not have direct operational or financial control over our key suppliers and have limited influence with respect to the manner in which these key suppliers conduct their businesses. Our business, including key network and IT projects, could be materially impacted by disruptions to our key suppliers’ businesses or supply chains, due to factors, such as significant geopolitical events, changes in law or regulation, the introduction of restrictions to curb epidemics or pandemics, as seen in the current COVID-19 pandemic, trade tensions and export and re-export restrictions. Any of these factors could affect our suppliers’ ability to procure goods, software or technology necessary for the service, production and satisfactory delivery of the supplies, support services, and equipment that we source from them. For example, in May and August 2019, the U.S. Department of Commerce added Huawei and 114 of its affiliates to its “Entity List”, prohibiting companies globally from directly or indirectly exporting, re-exporting or transferring (in-country) all items subject to U.S. export control jurisdiction to Huawei without authorization and procuring items from Huawei when they know or have reason to know that the items were originally procured by Huawei in violation of U.S. export control regulations. This development continues to be a factor in the management of our supply chain. Further restrictions adopted by the United States, or any other applicable jurisdiction, on Huawei could potentially have a material adverse impact on our operations in certain markets where we are reliant on Huawei equipment or services. Specifically, any restriction on Huawei’s ability to deliver equipment or services, or on our ability to receive such equipment or services, could adversely impact our business, the operation of our networks and our ability to comply with the terms of our operating licenses and local laws and regulations. In addition, if the United States were to impose similar export control restrictions on Russian entities as a result of the ongoing conflict between Russia and Ukraine, that could impact the supply of items critical to the telecommunications sector in Russia and adversely impact our business, the operation of our networks and our ability to comply with the terms of our operating licenses and local laws and regulations.

We cannot assure you that our suppliers will continue to provide services and products to us at attractive prices or that we will be able to obtain such services and products in the future from these or other suppliers on the scale and within the time frames we require, if at all. If our suppliers are unable to provide us with adequate services and products or provide them in a timely manner, our ability to attract customers or offer attractive product offerings could be negatively affected, which in turn could materially harm our business, financial condition, results of operations, cash flows or prospects.

The success of our business depends, to a large extent, on our ability to effectively implement our corporate and operational strategies. We continue to transform our business with the aim of improving our operations across all our markets of operation. In September 2019, we announced a strategy framework comprising of three vectors: infrastructure, digital operator and ventures. As part of this strategy, we are focusing on growing customer engagement and retention and through expanding our growth opportunities beyond traditional voice and access data provision into new digitally-enabled services. We are also developing new IT capabilities, including local platforms that enable our customers to manage their accounts and services independently (“self-care”), digital applications (e.g. TV, music, financial services), billing systems and customer relationship management systems in order to improve customer engagement. We have also been focused on identifying, acquiring and developing “know-how” and technologies that open up adjacent growth opportunities, and updating our networks, developing enterprise resource management systems, human capital management systems and enterprise performance management systems, and reducing and simplifying our IT cost base. In addition, we recently implemented a distributed governance model that empowers its operating companies with the authority and accountability to manage their operations subject to certain limits and a framework to allow our operating companies to operate more efficiently and capitalize on local insight.

We cannot assure you that we will be able to implement this strategy or any future strategies fully, within our estimated budget and/or on time, or that it will generate the results we expect. We may experience implementation issues due to a lack of coordination or cooperation with our operating companies or third parties, significant change in key personnel, economic and logistical effects of the ongoing conflict between Russia and Ukraine, or otherwise encounter unforeseen issues, such as technological limitations, regulatory constraints or lack of customer engagement, which could frustrate our expectations regarding cost-optimization and process redesign or otherwise delay or hinder execution of these initiatives. Any inability on our part to implement our current and future strategies effectively could adversely affect our business, financial condition, results of operations, cash flows or prospects.

In addition, the onset of the ongoing conflict between Russia and Ukraine has disrupted our strategic plans in the short-term and diverted management’s attention from such initiatives while focusing on the impact the ongoing conflict has had on our business. In addition, management’s attention may be diverted from operations in other countries, if it continues to focus on our operations in Russia and Ukraine. We may also have to divert and/or hold funds at the Group-level to respond to maintenance capital expenditure requirements in Ukraine and Russia instead of being able to incur strategic and growth-related capital expenditures in the other countries where we have operations. The diversion of management’s attention or funds and resulting disruption to our strategic plans could adversely affect our business, financial condition, results of operations, cash flows or prospects.

In addition, we do not have direct control over the conduct of our strategic partners. If any of them become the subject of an investigation, sanctions or liability, or does not act in accordance with our standards of conduct, our reputation and business might be adversely affected. Furthermore, strategic partnerships in emerging markets are accompanied by risks inherent to those markets, such as an increased possibility of a partner defaulting on obligations or losing a partner with important insights in that region. In addition, some of the businesses for which we are not a controlling shareholder operate in highly-regulated markets, such as ShopUp, and as a result we cannot ensure that these business remain compliant with intellectual property, licensing and content restrictions. We could also determine that a partnership or joint venture no longer yields the benefits that we expected to achieve and may decide to exit such initiative, which may result in significant transaction

Our performance and ability to maintain our competitive position and to implement our business strategy is dependent on the continuity of our global senior management team and highly skilled personnel. Competition for qualified personnel in our markets of operation with relevant expertise is intense, and there can be a limited availability of individuals with the requisite knowledge and relevant experience of the telecommunications and digital services industries and, in the case of expatriates, the ability or willingness to accept work assignments in certain of the jurisdictions in which we operate. We have experienced in recent years, and may continue to experience, certain changes in key management and our board of directors. The ongoing conflict between Russia and Ukraine, including any adverse publicity relating to us, may make it more difficult for us to attract and retain key talent, including senior management, both at the Group-level and also within our key markets.

Furthermore, we may not succeed in instilling our corporate culture and values in our personnel, which could delay or hamper the implementation of our strategic priorities, or our compensation schemes may not always be successful in attracting, retaining and motivating our personnel. Our success is also dependent on our personnel’s ability to adapt to rapidly changing environments and to perform in line with continuous innovations and industry developments. We also may, from time to time, make adjustments or changes to our operating and governance model and there is a risk in such instances that our personnel may not adapt effectively. Although we devote significant attention to recruiting, training and instilling new personnel with our corporate values and culture, there can be no assurance that our existing personnel will successfully be able to adapt to and support our strategic priorities.

The loss of any members of our senior management or our key personnel or an inability to attract, train, retain and motivate qualified members of senior management or highly skilled personnel could have an adverse impact on our ability to compete and to implement our business strategy, which could have a significant impact on our business, financial condition, results of operations, cash flows or prospects.

Our business is highly capital intensive and requires significant amounts of cash to improve and maintain our networks. The physical infrastructure in our countries of operation, including transportation networks, power generation and transmission and communications systems is in poor condition. Supply chain issues arising from the geopolitical developments in Russia and Ukraine, from restrictions enacted as a result of the COVID-19 pandemic, or from other issues, including but not limited to export control regulation and other regulation, may result in significant increases to our costs, capital expenditures or inability to access equipment and technology required for business continuity or expansion. For example, in Russia, public switched telephone networks have reached capacity limits and are in need of modernization, which may create connectivity issues for our customers and as a result, will require us to make additional capital expenditures if there is continued traffic growth and development in the services provided. Our success also depends to a significant degree on our ability to keep pace with new developments in technology, to develop and market innovative products and to update our facilities and process technology, which will require additional capital expenditures in the future.

We cannot provide any assurance that our business will generate sufficient cash flows from operations to enable us to fund our capital expenditures or investments. The amount and timing of our capital requirements will depend on many factors over which we have little or no control, including acceptance of and demand for our products and services, the extent to which we invest in new technology and research and development projects, the status and timing of competitive developments, and certain regulatory requirements. For example, if network usage develops faster than we anticipate, we may require greater capital investments in shorter time frames than originally anticipated and we may not have the resources to make such investments.

As part of our business strategy, we seek from time to time to merge with or acquire other companies or businesses, divest our companies or businesses, form strategic partnerships through investments, the formation of joint ventures or otherwise, for various strategic reasons, including to: simplify our corporate structure; pursue optimal competitive positions in markets in which we have operations; divest certain operations, business lines or assets, including infrastructure and tower assets; acquire more frequency spectrum; acquire new technologies and service capabilities; share our networks or infrastructure; add new customers; increase market penetration; expand into new or enhance “non-telecommunications” services such as digital financial services, banking or digital content; and expand into new markets.

Our ability to implement successful mergers, acquisitions, strategic partnerships or investments depends upon our ability to identify, evaluate, negotiate the terms of, complete and integrate suitable businesses and to obtain any necessary financing and the prior approval of any relevant regulatory bodies. These efforts could divert the attention of our management and key personnel from our underlying business operations. Following any such merger, acquisition, strategic partnerships or investment or failure of any such transaction to materialize (including any such failure caused by regulatory or third-party challenges), we may experience:

From time to time, we may also seek to divest some of our businesses, including divestitures of operations in certain markets, infrastructure or business lines. Such divestitures may take longer than anticipated or may not happen at all. If these or other divestitures do not occur, close later than expected or do not deliver expected benefits, this may result in decreased cash proceeds and continued operations of non-core businesses that divert the attention of our management. Our success with any divestiture is dependent on effectively and efficiently separating the divested asset or business and reducing or eliminating associated overhead costs which may prove difficult or costly for us. There could also be transitional or business continuity risks or both associated with these divestitures that may impact our service levels and business targets. Furthermore, in some cases, we may agree to indemnify acquiring parties for certain liabilities arising from our former businesses. For example, following the sale of our mobile network towers in Russia in 2021, as part of our “infrastructure” strategy, we may incur increased operating costs in accessing tower and network infrastructure in Russia and are exposed to increased counterparty risks, as our network service provider may not fulfil their obligations under our service agreement or perform the necessary maintenance of the tower infrastructure. Failure to successfully implement or complete a divestiture could also materially harm our business, financial condition, results of operations, cash flows or prospects.

We are dependent on access to adequate frequency allocation within the right spectrum bands in each of our markets in order to launch mobile and fixed wireless telecommunications networks and maintain and expand our customer base. However, the availability of spectrum is limited, closely regulated and can be expensive, and we may not be able to obtain the frequency allocations we need from the relevant regulator or third party, without the imposition of burdensome service obligations or incurring commercially unreasonable costs given that the interest from various parties frequently exceeds available spectrum.  

In the past, we have experienced difficulties in obtaining adequate frequency allocation in some of the markets in which we operate. For example, we had previously been unable to obtain frequency allocations in an assigned frequency band for the development of our LTE network in Russia, and until March 2021, had held a disproportionately small amount of the available spectrum in Bangladesh given the size of our operations. In addition, we are also vulnerable to government action that impairs our frequency allocations. For example, the government of Uzbekistan ordered the equitable reallocation amongst all telecommunications providers in the market, which has affected approximately half of the 900 MHz and 1800 MHz radio frequencies of our Uzbek subsidiary, Unitel LLC, which came into effect in 2018. Frequency allocations may also be issued for periods that are shorter than the terms of our licenses to provide telecommunications services in our countries of operation, and such allocations may not be renewed in a timely manner, or at all. In the event that we are unable to acquire sufficient frequency allocations in each of our countries of operations to support the growth of our customer base and products, our business, financial condition, results of operations, cash flows or prospects could be materially adversely affected.

Legislation in many countries in which we operate, including Russia and Pakistan, requires that we make payments for frequency spectrum usage. The fees for all available frequency assignments, as well as allotted frequency bands for different mobile communications technologies, are significant. For example, in Pakistan, the PTA issued a license renewal decision on July 22, 2019 requiring payment of an aggregate price of approximately US$450 million, a decision which is currently under appeal in the Pakistan Supreme Court, even though the license renewal was signed under protest on October 18, 2021.

Any significant increase in the fees payable for the frequencies that we use or for additional frequencies that we need could have a negative effect on our financial results. We expect that the fees we pay for radio-frequency spectrum, including radio-frequency spectrum renewals, could substantially increase in some or all of the countries in which we operate, and any such increase could harm our business, financial condition, results of operations, cash flows or prospects.

If our frequency allocations are limited, we are unable to renew our frequency allocations or obtain new frequencies to allow us to provide mobile or fixed wireless services on a commercially feasible basis, our network capacity and our ability to provide these services would be constrained and our ability to expand would be limited, which could harm our business, financial condition, results of operations, cash flows or prospects.

Securing these interconnection and roaming agreements and access on cost-effective terms is critical to the economic viability of our operations. Our countries of operation have a limited number of international cable connections providing access to internet, data service and call interconnection and such international connections may be controlled by national governments that may seek to control or restrict access from time to time or impose conditions on pricing and availability which may impact our access and the competitiveness of our pricing. In certain of the markets in which we operate, the relevant regulator sets mobile termination rates (“MTRs”), which are fees for access and interconnection that mobile operators charge for calls terminating on their respective networks. If any such regulator sets MTRs that are lower for us than the MTRs of our competitors, our interconnection costs may be higher and our interconnection revenues may be lower, relative to our competitors. Moreover, even in cases of equal MTRs on the market for all players, the lowered MTR significantly impacts our revenue on a particular market. A significant increase in our interconnection costs, or decrease in our interconnection rates, as a result of new regulations, commercial decisions by other operators, increased inflation rates in the countries in which we operate or a lack of available line capacity for interconnection could harm our ability to provide services, which could in turn harm our business, financial condition, results of operations, cash flows or prospects.

We regard our copyrights, service marks, trademarks, trade names, trade secrets, know-how and similar intellectual property, including our rights to certain domain names, as important to our continued success. For example, our widely recognized logos, such as “VEON”, “Beeline” (Russia, Kazakhstan, Uzbekistan, Georgia and Kyrgyzstan),

In addition, as the number of convergent product offerings, such as JazzCash, Toffee TV, Tamasha and Beeline TV, and overlapping product functions increase as we execute our “ventures” and “digital operator” strategies, the possibility of intellectual property infringement claims against us may correspondingly increase. Producers and distributors of content face potential liability for negligence, copyright and trademark infringement and other claims based on the nature and content of materials, such as morality laws in Bangladesh and Pakistan. As we expand our offerings of these services, our ability to provide our customers with content depends on obtaining various rights from third parties on terms acceptable to us.

Current and new intellectual property laws may affect our ability to protect our innovations and defend against third-party claims of intellectual property rights infringement. The costs of compliance with these laws and regulations are high and are likely to increase in the future. Claims have been, or may be threatened and/or filed against us for intellectual property infringement based on the nature and content in our products and services, or content generated by our users. Any such claims or lawsuits, whether with or without merit, could result in substantial costs and diversion of resources, could cause us to cease offering or licensing services and products that incorporate the challenged intellectual property, or could require us to develop non-infringing products or services, if feasible, which could divert the attention and resources of our technical and management personnel. We cannot assure you that we would prevail in any litigation related to infringement claims against us. A successful claim of infringement against us could result in us being required to pay significant damages, cease the development or sale of certain products and services that incorporate the challenged intellectual property, obtain licenses from the holders of such intellectual property which may not be available on commercially reasonable terms, or otherwise redesign those products to avoid infringing upon others’ intellectual property rights, any of which could have a significant impact on our business and our ability to compete. 

Our operations are subject to different and occasionally conflicting laws and regulations in each of and between the jurisdictions in which we operate, which could result in market uncertainty and the lack of clear criteria. Regulatory compliance may be costly and involve a significant expenditure of resources, thus negatively affecting our financial condition. In addition, any significant changes in such laws or regulations or their interpretation, or the introduction of higher standards, additional obligations or more stringent laws or regulations, could result in significant additional costs, including fines and penalties, operational burdens and other difficulties associated with not complying in a timely manner, or at all, with new or existing legislation or the terms of any notices or warnings received from the telecommunications and other regulatory authorities. In addition, the application of the laws and regulations of any particular country is frequently unclear and may result in adverse rulings or audit findings by courts or government authorities resulting from a change in interpretation or inconsistent

Regulatory requirements and compliance with such regulations may be costly and involve a significant expenditure of resources, which could impact our business operations and may affect our financial performance. We face regulatory risks and costs in each of the markets in which we operate and may be subject to additional regulations in future. In particular, our ability to compete effectively in existing or new markets could be adversely affected if regulators decide to expand the restrictions and obligations to which we are subject, or extend such restrictions and obligations to new services and markets, or otherwise withdraw or adopt regulations, which may cause delays in implementing our strategies and business plans and create a more challenging operating environment. Furthermore, our ability to introduce new products and services may also be affected if we do not accurately predict how existing or future laws, regulations or policies would apply to such products and services, which could prevent us from realizing a return on our investment in their development. Any failure on our part to comply with existing or new laws and regulations can result in negative publicity, the risk of prosecution or the suspension or loss of our licenses, frequency allocations, authorizations or various permissions, diversion of management time and effort, increased competitive and pricing pressure on our operations, significant fines and liabilities, third party civil claims, and other penalties or otherwise harm our business, financial condition, results of operations, cash flows or prospects.

Our recent unsponsored listings on MOEX and the St. Petersburg Stock Exchange (“SPB Exchange”) also exposes us to increased risk that designated individuals and entities may buy, sell or otherwise transact with VEON Ltd.’s shares, as there are certain brokers in the Russian market that are currently designated entities and certain brokers do not have policies against providing services to designated individuals or entities. Further, in March 2022, the U.S. government imposed expansive new export control restrictions on Russia’s ability to obtain goods, software and technology subject to U.S. export control jurisdiction, including a broad array of foreign-made items that were previously not subject to U.S. export control jurisdiction. These restrictions apply to items critical to the telecommunications sector and could have an adverse impact on our ability to maintain and/or improve our infrastructure and adversely impact the availability and quality of our services in Russia and therefore have a significant impact on our operations and results of operation.

Tax declarations together with related documentation are subject to review and investigation by a number of authorities in many of the jurisdictions in which we operate, which are empowered to impose fines and penalties on taxpayers. Tax audits may result in additional costs to our group if the relevant tax authorities conclude that an entity of our group did not satisfy their relevant tax obligations in any given year. Such audits may also impose additional burdens on us by diverting the attention of management resources.

Tax audits in the countries in which we operate are conducted regularly, but their outcomes may not be fair or predictable. In the past, we have been subject to substantial claims by tax authorities in Russia, Algeria, Egypt, Pakistan, Bangladesh, Ukraine, Kazakhstan, Georgia, Uzbekistan, and Kyrgyzstan. These claims have resulted, and future claims may result, in additional payments, including interest, fines and other penalties, to the tax authorities.

There can be no assurance that we will prevail in litigation with tax authorities and that the tax authorities will not claim that additional taxes, interest, fines and other penalties are owed by us for prior or future tax years, or that the relevant governmental authorities will not decide to initiate a criminal investigation or prosecution, or expand existing criminal investigations or prosecutions, in connection with claims by tax inspectorates, including those relating to individual employees and for prior tax years. We have been the subject of repeat complex and thematic tax audits in Kyrgyzstan, Russia and Pakistan, which, in some instances, have resulted in payments made under protest pending legal challenges and/or to avoid the initiation or continuation of associated criminal proceedings. The outcome of these audits or the adverse or delayed resolution of other tax matters, including where the relevant tax authorities may conclude that we had significantly underpaid taxes relating to earlier periods, could harm our business, financial condition, results of operations, cash flows or prospects.

The introduction of new tax laws or the amendment of existing tax laws, such as those relating to transfer pricing rules or the deduction of interest expenses in the markets in which we operate, may also increase the risk of adjustments being made by the tax authorities and, as a result, could have a material adverse impact on our business, financial condition, results of operations, cash flows or prospects. For example, within the Organization for Economic Co-operation and Development (“OECD”) there is an initiative aimed at avoiding base erosion and profit shifting (“BEPS”) for tax purposes. This OECD BEPS project has resulted in further developments in other countries and in particular in the European Union.

Our business decisions take into account certain taxation scenarios, which could be proven to be untrue in the event of an adverse decisions by tax authorities or changes in tax treaties, laws, rules or interpretations. For example, we are vulnerable to changes in tax laws, regulations and interpretations in the Netherlands, our current resident state for tax purposes, and in our other countries of operation.

These considerations are compounded by the fact that the interpretation and enforcement of tax laws in the emerging markets in which we operate tend to be unpredictable and give rise to significant uncertainties, which could complicate our tax planning and business decisions. Any additional tax liability imposed on us by tax authorities in this manner, as well as any unforeseen changes in applicable tax laws or changes in the tax authorities’ interpretations of the respective double tax treaties in effect, could harm our future results of operations, cash flows or the amounts of dividends available for distribution to shareholders in a particular period. For example, as a result of the termination of the double tax treaty between Russia and the Netherlands that became effective on December 31, 2021, Russian interest withholding tax increased from 0% to 20% on our existing intercompany loans between our Dutch and Russian entities. We have incurred costs and diverted personnel resources to reduce the impact of this increase in withholding tax on our financing operations. Furthermore, we may be required to accrue substantial amounts for contingent tax liabilities and the amounts accrued for tax contingencies may not be sufficient to meet any liability we may ultimately face. From time to time, we may also identify tax contingencies for which we have not recorded an accrual. Such unaccrued tax contingencies could materialize and require us to pay additional amounts of tax.

The tax laws and regulations in our jurisdictions of operation are complex and subject to varying interpretations and degrees of enforcement, we cannot be sure that our interpretations are accurate or that the responsible tax authority agrees with our views. If our tax positions are challenged by the tax authorities or if there are any unforeseen changes in applicable tax laws, we could incur additional tax liabilities, which could increase our costs of operations and significantly harm our business, financial condition, results of operations, cash flows or prospects.

In recent years, an increasing number of jurisdictions have introduced rules restricting foreign investment or have strengthened existing rules, and our business could be materially harmed by such new or existing laws.

The existence of such laws that restrict foreign investment could hinder potential business combinations or transactions resulting in a change of control, or our ability to obtain financing from foreign investors should prior regulatory approval be refused, delayed or require foreign investors to comply with certain conditions, which could materially harm our business, financial condition, results of operations, cash flows or prospects.

As a telecommunications operator, with DFS, MFS, banking, digital content and other non-connectivity offerings, we are subject to a variety of national and local laws and regulations in the countries in which we do business. These laws and regulations apply to many aspects of our business. Violations of applicable laws or regulations could damage our reputation or result in regulatory or private actions with substantial penalties or damages, including the revocation of some of our licenses. In addition, any significant changes in such laws or regulations or their interpretation, or the introduction of higher standards, additional obligations or more stringent laws or regulations, including revision in regulations for license and frequency allocation and changes in foreign policy or trade restrictions and regulations (including in all respects in Russia or in Ukraine as a consequence of the ongoing conflict between Russia and Ukraine) could have a significant adverse impact on our business, financial condition, results of operations, cash flows or prospects.

We may be exposed to fraud or other misconduct committed by our employees, joint venture partners, representatives, agents, suppliers, customers or other third parties undertaking actions on our behalf that could subject us to litigation, financial losses and fines or penalties imposed by governmental authorities, and affect our reputation.

In addition to any potential legal and financial liability, our reputation may also be adversely impacted by association, action or inaction that is either real or perceived by stakeholders or customers to be inappropriate or unethical. Reputational risk may arise in many different ways, including, but not limited to any real or perceived:

We regularly review and update our policies and procedures and internal controls, which are designed to provide reasonable assurance that we and our personnel comply with applicable laws and our internal policies. We have also issued a Business Partner Code of Conduct that we expect our representatives, agents, suppliers and other third parties to follow and conduct risk-based training for our personnel. However, there can be no assurance that such policies, procedures, internal controls and training will, at all times, prevent or detect misconduct and protect us from liability arising from actions of our employees, representatives, agents, suppliers, customers or other third parties.

We maintain a Business Partner Code of Conduct and attempt to obtain assurances from distributors and other intermediaries, through contractual and other legal obligations, that they also will comply with anti-corruption laws applicable to them and to us. However, these efforts to secure legal commitments are not always successful. There are inherent limitations to the effectiveness of any policies, procedures and internal controls, including the possibility of human error and the circumvention or overriding of the policies, procedures and internal controls. There can be no assurance that such policies or procedures or internal controls will work effectively at all times or protect us against liability under anti-corruption or other laws for actions taken by our personnel, distributors and other intermediaries with respect to our business or any businesses that we may acquire. Our Business Partner Code of Conduct is available on our website at http://www.veon.com.

In addition, as previously disclosed, the Deferred Prosecution Agreement (“DPA”) that VEON entered into with the U.S. Department of Justice (“DOJ”) on February 18, 2016 has concluded and the criminal charges that had been deferred by the DPA have been dismissed. Since concluding the DPA, we have provided, and may in the future provide, updates on certain internal investigations related to potential misconduct to the U.S. authorities. In the event that any of these matters lead to governmental investigations or proceedings, it could lead to reputational harm and have a material adverse impact on our business, financial condition, results of operations, cash flows or prospects.

MFS and DFS offerings are complex and subject to regulatory requirements which are different from the traditional regulatory requirements of a telecommunications business. They may involve cash handling or other value transfers, exposing us to the risk that our customers or business partners engage in fraudulent activities, money laundering or terrorism financing. Violations of anti-money laundering and counter-terrorist financing laws, know-your-customer rules, and customer name screening and monitoring requirements or other regulations applicable to our MFS/DFS offerings could result in legal and financial liability or reputational damage and harm our business, financial condition, results of operations, cash flows or prospects. The regulations governing these services are evolving and, as they develop, regulations could become more onerous, impose additional controls, reporting or disclosure obligations, or limit our flexibility to rapidly deploy new products, which may limit our ability to provide our services efficiently or in the way originally envisioned. In addition, as we seek to execute our “ventures” strategy, we may seek to expand our MFS and DFS offerings, thereby compounding our exposure to such risks.

For example, Mobilink Bank in Pakistan carries on a microfinance banking business and provides certain MFS, DFS and traditional banking services in Pakistan under a license that was granted by the State Bank of Pakistan and is subject to regulation by the State Bank of Pakistan. Such regulations and banking laws are subject to change from time to time, including with respect to capitalization requirements and we may be required to increase the capitalization of Mobilink Bank from time to time and may be required to inject funds to cover any losses that the bank suffers. Mobilink Bank’s activities may expose us to a risk of liability under banking and financial services compliance laws, including, for example, anti-money laundering and counter-terrorist financing regulations.

We are subject to various, and at times conflicting, data privacy laws and regulations that apply to the collection, use, storage, disclosure and security of personal data that identifies or may be used to identify an individual, such as names and contact information, IP addresses, (e-mail) correspondence, call detail records and browsing history. Many countries have additional laws that regulate the processing, retention and use of communications data, including both content and metadata. These laws and regulations are subject to frequent revisions and differing interpretations and are becoming more stringent over time.

Any failure or perceived failure by us to comply with privacy or security laws, policies, legal obligations or industry standards may result in governmental enforcement actions and investigations, blockage or limitation of our services, fines and penalties. In general, mobile operators are directly liable for actions of third parties to whom they forward personal data for processing. If the third parties we work with violate applicable laws, contractual obligations or suffer a security breach, such violations may also put us in breach of our obligations under privacy laws and regulations and/or could in turn have a material adverse effect on our business. In addition, concerns regarding our practices with regard to the collection, use, disclosure or security of personal information or other privacy-related matters could result in negative publicity and have an adverse effect on our reputation. Violation of these data privacy laws and regulations may lead to a seizure of our database and equipment, imposition of administrative sanctions (including in the form of fines, suspension of activities or revocation of license) or result in a ban on the processing of personal data, which, in turn, could lead to the inability to provide services to our customers. The occurrence of any of the aforementioned events, individually or in the aggregate, could harm our brand, business, financial condition, results of operations, cash flows or prospects.

We also regularly receive notices from regulatory authorities in countries in which we operate warning us that we are not in compliance with aspects of our licenses and permits and requiring us to cure the violations within a certain time period. In the past, we have closed base stations on several occasions in order to comply with regulations and notices from regulatory authorities. Any failure by our company to cure such violations could result in the applicable license being suspended and subsequently revoked through court action. Although we look to take all necessary steps to comply with any license violations within the stated time periods, including by switching off base stations that do not have all necessary permits until such permits are obtained, we cannot assure you that our licenses or permits will not be suspended or revoked in the future.

If we are found to operate telecommunications equipment without an applicable license or permit, we could experience a significant disruption in our service or network operation, which could harm our business, financial condition, results of operations, cash flows or prospects.

Our subsidiary in Egypt, Global Telecom Holding S.A.E. (“GTH”), is an Egyptian private company and is subject to corresponding laws and regulations. Although GTH is no longer operating any business activities and GTH entered into a tax settlement agreement with the Egyptian tax authorities for certain historic periods, GTH may in the future be subject to further dubious or unfounded tax claims for other tax periods under existing or new Egyptian tax law or upon winding up or liquidation. The winding up of GTH and its subsidiaries may take some time and may expose the Company to costs and expenses or liabilities. In particular, GTH still has a large number of private investors holding less than 0.5% of GTH’s share capital and they may subject VEON Ltd. or GTH to claims in the future and may delay the winding up or liquidation of GTH.

Our business operations and financial condition are subject to regulatory developments and government action on climate change. Governments across the world are responding to climate change by adopting ambitious climate policies as public awareness of and concern about climate change continues to grow. Government climate policies include the enactment of circular economy regulations, regulating greenhouse gas (“GHG”) emissions, carbon pricing and increasing energy and fuel costs. Increased fuel and energy prices and taxes and pricing of GHG emissions could make it more expensive for us to power our networks and operations, and may also result in our being subject to carbon emission taxation directly for our limited carbon emissions as a telecommunications operator, which would drive medium-to-long term increases in our operational costs. In addition, there are initial capital costs that we will have to incur as we transition towards the use of renewable energy across our operations.

There could also be medium-to-long term increases in our operational costs due to changing levels of precipitation, increased severity and frequency of storms and other weather events, extreme temperatures and rising sea levels, which could cause potential damage to vital infrastructure and utilities. Increased risk of flooding to low-lying facilities and infrastructure due to longer-term increases in precipitation patterns could increase operating costs to maintain and/or repair facilities and network equipment. Decreased precipitation and rising and extreme temperatures could generate drought conditions that could create an increased burden to local power and water resources, which are required to operate our cooling infrastructure. In addition, these climate change impacts could also result in drops in productivity or increased operational costs for our suppliers, which in turn may be passed on to us, which could harm our business, financial condition, results of operations, cash flows or prospects.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Accounting standard-setting bodies, including the International Accounting Standards Board may change accounting regulations that govern the preparation and presentation of our financial statements, and those who interpret the accounting standards, including the U.S. Securities and Exchange Commission (the “SEC”), the Dutch Authority for the Financial Markets (the “AFM”), and our independent registered public accounting firm may amend or even reverse their previous interpretations or positions on how various accounting standards should be applied. Those changes may be difficult to predict and could have a significant impact on the way we account for certain operations and present our financial position and operating income. In some instances, a modified standard or interpretation thereof, an outcome from a unfavorable regulatory review relating to our financial reporting or new requirement may have to be implemented with retrospective effect, which requires us to restate or make other changes to our previously issued financial statements and such circumstances may involve the identification of one or more significant deficiencies or material weaknesses in our internal control over financial reporting, or may otherwise impact how we prepare and report our financial statements, and may impact future financial covenants in our financing documents. For example, we were engaged in a comment letter process with the AFM regarding our financial statements as of and for the six and three-month periods ended June 30, 2020 in which the AFM indicated that our goodwill impairment tests may have been applied incorrectly and that an additional goodwill impairment charge may be necessary, which concluded in December 2021. While the outcome of this particular process did not require us to restate previously issued financial statements or result in other changes to our goodwill impairment testing being imposed, there can be no assurance that the AFM will not raise new comments on our financial statements in the future that will be resolved without adverse consequences.

Work stoppages could also occur due to natural disasters, civil unrest (including potential dissatisfaction with regards to our response to the ongoing conflict between Russia and Ukraine) or security breaches/threats, such as due to the ongoing conflict between Russia and Ukraine, which would make access to work places and management of our systems difficult and may mean that we are not able to timely or cost effectively meet the demands of our customers. Furthermore, work stoppages or slow-downs experienced by our customers or suppliers could result in lower demand for our services and products. In the event that we, or one or more of our customers or suppliers, experience a labor dispute or disruption, it could result in increased costs, negative media attention and political controversy, which could harm our business, financial condition, results of operations, cash flows or prospects.

The depositary of our ADSs has agreed to pay holders of our ADSs the cash dividends or other distributions it or the custodian for our ADSs receives on our common shares or other deposited securities after deducting its fees and expenses. Holders of our ADSs will receive these distributions in proportion to the number of our common shares that their ADSs represent. However, the depositary is not responsible for making such payments or distributions if it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs, if such distribution consists of securities that require registration under the Securities Act but that are not properly registered or distributed pursuant to an applicable exemption from registration. The depositary is not responsible for making a distribution available to any holders of ADSs if any government approval or registration required for such distribution cannot be obtained after reasonable efforts made by the depositary. We have no obligation to take any other action to permit the distribution of our ADSs, common shares, rights or anything else to holders of our ADSs. This means that holders of our ADSs may not receive the distributions we make on our common shares or any value for them if it is illegal or impractical for the depositary to make them available, including in the case of sanctioned holders. These restrictions may materially reduce the value of the ADSs.

The liquidity in our securities may be limited. Listing of our ADSs and common shares on multiple trading venues and convertibility of our ADSs into common shares may further contribute to the split of liquidity split between NASDAQ, the SPB Exchange, Euronext Amsterdam, MOEX, and any other venues where our securities may be admitted to trading. This may impair your ability to sell your ADSs at the time you wish to sell them or at a price that you consider reasonable. Our securities are completely fungible between the markets or can be made fungible via deposit and cancellation procedures as set out in the deposit agreement. As a result, any decrease in the trading price of our ADSs or common shares on one of these markets could cause a decrease in the trading price of our securities on the other markets.

The rules governing the information that foreign private issuers are required to disclose differ from those governing U.S. corporations pursuant to the Exchange Act. Although we currently report periodic financial results and certain material events, we are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four business days of their occurrence. In addition, we are exempt from the SEC’s proxy rules and proxy statements that we distribute are not subject to review by the SEC and Section 16 of the Exchange Act regarding sales of our shares by insiders.

In the future, we could cease to be considered a foreign private issuer if a majority of our outstanding voting securities are directly or indirectly held of record by U.S. residents and a majority of our directors or management are U.S. citizens or residents. Based on a review of our register of members maintained in Bermuda, as of April 15, 2022, a total of 1,228,276,403 common shares representing approximately 69.92% of VEON Ltd.’s issued and outstanding shares were held of record by BNY (Nominees) Limited in the United Kingdom as custodian of The Bank of New York Mellon for the purposes of our ADS program and a total of 511,889,772 common shares representing approximately 29.14% of VEON Ltd.’s issued and outstanding shares were held of record by Nederlands Centraal Instituut Voor Giraal Effectenverkeer B.V. and where ING Bank N.V. is acting as custodian of The Bank of New York Mellon, for the purposes of our ADS program, and a total of 16,564,960 common

On April 7, 2022, we received notification from the Listing Qualifications Department of NASDAQ that, as a result of failing to meet the minimum bid price of $1.00 for 30 consecutive business days, our ADSs are not in compliance with the continued listing standards of the NASDAQ Global Select Market. Under the relevant listing rules, we have 180 calendar days from the date of notice, or until October 4, 2022, to achieve compliance. If we have failed to achieve compliance (generally measured as 10 consecutive business days of meeting the minimum bid price of $1.00), then we may be eligible for an additional 180 calendar days to achieve compliance. While we are monitoring and will continue to monitor the closing bid price of our ADSs, and may, if appropriate, consider available options to regain compliance with the minimum bid price requirement, such as a reverse stock split. However, we cannot assure you that we will regain compliance with the minimum bid price requirement or secure a second period of 180 calendar days to regain compliance or maintain compliance with other NASDAQ listing requirements.

Our predecessor PJSC VimpelCom (formerly OJSC “VimpelCom”) was founded in 1992. In 1996, VimpelCom listed on the New York Stock Exchange, where it remained listed until 2013 when VimpelCom moved its listing to the NASDAQ Global Select Market. In March 2017, VimpelCom rebranded to VEON and on April 4, 2017, VEON began trading its ordinary shares on Euronext Amsterdam.

In the early 2000s, we began an expansion into the Commonwealth of Independent States (CIS) by acquiring local operators or entering into joint ventures with local partners, including, but not limited to, in Kazakhstan (2004), Ukraine (2005), Uzbekistan (2006), Armenia (2006) and Georgia (2006). In 2009 and 2010, PJSC VimpelCom and Ukrainian mobile operator, Kyivstar, combined, and we subsequently established our headquarters in Amsterdam. Our expansion efforts have included transactions involving operations outside of CIS. In 2011, we completed the acquisition of Wind Telecom S.p.A., an international provider of mobile and fixed-line telecommunications and internet services with operations in Italy, through Wind Telecom, and in Algeria, Bangladesh and Pakistan, through Global Telecom Holding (GTH, previously known as Orascom Telecom Holding S.A.E.).

In November 2016, the group combined its Italian mobile telecommunications business with that of CK Hutchison Holdings Ltd. in a joint venture company named Wind Tre. In July 2018, the group announced the sale of its 50% stake in Wind Tre to CK Hutchison Holdings Ltd. which was completed in September 2018. In July 2019, VEON Holdings B.V. launched a mandatory tender offer (“MTO”) to purchase the shares of GTH, a subsidiary of VEON which consolidated the group’s operations in Algeria, Bangladesh and Pakistan. At the close of the MTO in August 2019, VEON held approximately 98.24% of GTH’s total outstanding shares. VEON subsequently embarked on a comprehensive restructuring of GTH, including a successful offer to acquire substantially all of GTH’s operating assets in Algeria, Pakistan and Bangladesh following the delisting of GTH from the Egyptian Exchange in September 2019. In late 2020, we sold our operating subsidiary in Armenia. In March 2021, the group successfully completed its acquisition of the 15% minority stake in PMCL, its Pakistan operating business, from the Dhabi Group for US$273 million. In July 2021, VEON exercised its put option to sell the entirety of its 45.57% stake in its Algerian subsidiary, Omnium Telecom Algérie SpA, which owns Algerian mobile network operator, Djezzy, to the Algerian National Investment Fund, Fonds National d’Investissement (FNI). Following the exercise of the put option for our stake in Algeria on July 1, 2021, the Algerian business has, in line with the IFRS 5 requirements, become a discontinued operation, and accounted for as “Asset held for sale.” The result is that the Algerian operations do not contribute to both the comparison base and the actual reported numbers of VEON, without any change in the net economic value of this business.

VEON Ltd. is the holding company for a number of operating subsidiaries and holding companies in various jurisdictions. We currently operate and manage VEON on a geographical basis. These segments are based on the different economic environments and varied stages of development across the geographical markets we serve, each of which requires different investment and marketing strategies.

The table below presents the primary mobile telecommunications services we offer to our customers and a breakdown of prepaid and postpaid subscriptions as of December 31, 2021.

The table below presents the primary mobile telecommunications services we offer in Pakistan.

The table below presents a description of business licenses relevant to our mobile business in Pakistan. Unless noted otherwise, we plan to apply for renewal of these licenses prior to their expiration.

According to the Ministry of National Economy of the Republic of Kazakhstan, Statistics Committee and other data sources noted above, as of December 31, 2021, there were approximately 24.5 million mobile customers in Kazakhstan, representing a mobile penetration rate of approximately 128.7% compared to approximately 24.3 million customers and a mobile penetration rate of approximately 129.0% in 2020.

The table below presents our competitors in the voice services, data services and fixed-line broadband markets in Russia.

In terms of end-user internet penetration, the consumer internet access business in Russia is saturated and end-user internet penetration is high. Competition for customers in Russia is intense, with internet providers utilizing new marketing efforts (for example, aggressive price promotions) in order to retain existing customers and attract new ones. We expect competition to increase in the future due to wider market penetration, consolidation of the industry, the growth of current operators and the appearance of new technologies, products and services.

The table below presents a description of the fixed-line telecommunications services we offer in Pakistan.

The table below presents a description of the fixed-line telecommunications services we offer in Ukraine.

Our joint carrier and operator services division in Ukraine provides local, international and intercity long-distance voice traffic transmission services to Ukrainian fixed-line and mobile operators on the basis of our proprietary domestic long-distance/ILD network, as well as IP transit and data transmission services through our own domestic and international fiber optic backbone and IP/MPLS data transmission network. We derive most of our carrier and operator services revenue in Ukraine from voice call termination services to our own mobile network and voice transit to other local and international destinations.

Following legislative changes, including the changes to the Law “On Telecommunications” made in 2019 by the Ukrainian Parliament, state licensing of fixed-line telecommunications services has now been abolished. Accordingly, our fixed-line business in Ukraine no longer requires licensing in order to operate. However, licensing of radio frequency resource (RFR) use remains unchanged.

The table below presents a description of the fixed-line telecommunications services we offer in Kazakhstan.

The table below presents a description of business licenses relevant to our fixed-line business in Uzbekistan. Unless noted otherwise, we plan to apply for renewal of these licenses prior to their expiration.

In 2021, these trends were less pronounced due to the COVID-19 pandemic, which resulted in associated restrictions imposed by governments across the world that impacted international travel and led to an increase in remote working arrangements, as well as disruption to supply chains. Roaming revenues were significantly lower as compared to normal years, while we saw a pick-up in usage of our fixed-line services due to work-from-home conditions and travel restrictions. However, going forward we expect the seasonal trends described above to continue.

As part of the execution of our digital operator strategy, in 2021, we devoted considerable resources to the maintenance, development and improvement of our IT systems. For example, in 2021, we completed the enhancement of the digital business support systems (“DBSS”) of our operating companies in Pakistan and Ukraine, and completed the DBSS modernization across Algeria, Bangladesh, Pakistan, Ukraine, Georgia and Kyrgyzstan. DBSS enhancements are currently ongoing in Russia, Uzbekistan and Kazakhstan.

Our support for the GSMA’s ambitions corresponds with a variety of existing initiatives to reduce the energy intensity of our business. We are committed to mitigating our carbon footprint and the rollout of network energy-efficiency measures, which will contribute to a low-carbon economy as well as offer us the potential to reduce our operating costs over time. We continue to upgrade existing diesel- and petrol-powered units with more energy-efficient, hybrid and renewable energy-powered network equipment and, where practical, increase the number of base transceiver stations situated outside to reduce the energy use involved in keeping them cool. In some markets we share tower capacity with other operators, which has had a direct positive impact on our energy consumption and our environmental footprint. We keep abreast of local environmental legislation and strive to reduce the environmental impact of our operations through responsible use of natural resources and by reducing waste and emissions.

Our operating companies continue to develop innovative solutions to reduce energy intensity, such as powering telephone exchange stations on solar energy, installing state-of the-art on-grid photovoltaic systems and carrying out training on renewable energy solutions to ensure stakeholders are aware of our carbon- and cost-saving benefits. Across our organization, we continued working on reducing the carbon footprint of our offices, with a variety of initiatives including switching to LED lighting. Additionally, our recent decision to encourage home-working as a permanent change to our HR policy at our Amsterdam headquarters will enable us to make an additional contribution to reducing the carbon footprint of our headquarters function.

As of 2021, we started applying the EU Taxonomy regulation (EU) 2020/852 of the European Parliament and of the Council on the establishment of a framework to facilitate sustainable investment.

After a thorough review, we concluded that our core economic activities are not covered by the Climate Delegated Act and consequently are Taxonomy-non-eligible. It is therefore concluded that VEON Group with its core business activities is not identified as a relevant source of GHG emissions under the EU Taxonomy regime.

The following information is disclosed pursuant to Section 13(r) of the Exchange Act.

On April 15, 2021, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) designated Pozitiv Teknolodzhiz, AO (“Positive Technologies”) on the Specially Designated Nationals and Blocked Persons List (the “SDN List”) pursuant to Executive Order 14024, “Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation,” and Executive Order 13382, “Blocking Property of Weapons of Mass Destruction Proliferators and Their Supporters.” Following the sanctions designation, VEON identified that its joint ventures/strategic partnerships in Pakistan (Pakistan Mobile Communications Limited or “PMCL”) and Kazakhstan (Kar-Tel LLP) and its subsidiary in Russia (PJSC VimpelCom) had relationships with either Positive Technologies or its affiliate PT Global Solutions Limited (“PT Global”). These relationships involved Positive Technologies/PT Global either providing cybersecurity assessment services to, or receiving telecommunications services from, these VEON entities. The telecommunications customer services transactions with Positive Technologies/PT Global since the designation have resulted in aggregate revenue of approximately $33,805, and aggregate profit of approximately $26,030. These activities with Positive Technologies/PT Global were in compliance with applicable laws, including sanctions regulations administered by OFAC, as well as PJSC VimpelCom’s legal obligations under Russian law to provide certain telecommunications services.

From January 1, 2021, holders of VEON American Depositary Shares ("ADSs") trading on NASDAQ are no longer subject to any cash dividend fee or depository service fee of any kind. ADS holders will continue to be subject to the normal issuance and cancellation fees.

In March 2021, VEON successfully concluded the acquisition of the 15% minority stake in Pakistan Mobile Communications Limited ("PMCL"), the operating company of Pakistan’s leading mobile operator, Jazz, from the Dhabi Group for USD 273 million.

This transaction follows the Dhabi Group’s exercise of its put option announced on September 28, 2020 and gives VEON 100% ownership of PMCL. This simplifies and streamlines the Group’s governance over its Pakistani assets and enables VEON to capture the full value of this growing business, including future dividends paid by PMCL. The transaction is presented within 'Acquisition of non-controlling interest' within the Consolidated Statement of Cash Flows.

In June 2021, VEON successfully acquired a majority stake in OTM, a technology platform for automating and planning online advertising purchases in Russia. VEON's investments in OTM will significantly strengthen Beeline's position in the advertising technology market and enable VEON to expand OTM's operations into other markets served by VEON’s mobile operators. The acquisition builds on VEON’s ongoing transformation into a digital operator.

On July 1, 2021, VEON exercised its put option to sell the entirety of its 45.57% stake in its Algerian subsidiary, Omnium Telecom Algérie SpA ("Omnium") to the Algerian National Investment Fund, Fonds National d’Investissement ("FNI"). Omnium owns Algerian mobile network operator, Djezzy. The exercise of the option initiates a process under which a third-party valuation will be undertaken to determine the fair market value at which the transfer shall take place. Under the

On September 5, 2021, the Company and VEON Holdings B.V., a subsidiary of the Company, signed an agreement for the sale of its mobile network towers in Russia to Service Telecom Group of Companies LLC ("Service Telecom"). The sale reflects VEON's continued focus on active portfolio management and the pursuit of opportunities to realize the value of its infrastructure portfolio. On December 1, 2021, VEON announced the successful conclusion of the sale of its Russian tower assets to Service-Telecom for RUB 70.65 billion (US$957 million equivalent), paving the way for the establishment of a long-term partnership pursuant to a master tower agreement that has been entered into between PJSC VimpelCom and Service Telecom.

In April 2021, VEON announced changes to its leadership structure. Co-CEO Sergi Herrero, who joined the company in September 2019, stepped down as co-CEO effective June 30, 2021. Kaan Terzioglu continues in his role as CEO of VEON Ltd. with overall responsibility for corporate matters and the Group’s general operations.

In addition, in April 2021, VEON announced the appointment of two new members of the Group’s leadership team. Alex Bolis joined VEON as Group Head of Corporate Strategy, Communications and Investor Relations while Dmitry Shvets joined as Group Head of Portfolio and Performance Management, a new role that includes oversight of VEON’s Performance Management and M&A teams. Mr. Bolis joined VEON on April 1, 2021 and Mr. Shvets on April 15, 2021.

On August 17, 2021, VEON announced the appointment of Michael Schulz as VEON’s Group Chief People Officer.

On October 21, 2021, VEON announced that its Group General Counsel, Scott Dresser, would be leaving VEON effective on December 31, 2021.

In June 2021, VEON Ltd. announced the results of the elections conducted at its Annual General Meeting of Shareholders. Shareholders elected three new members to the Company’s Board of Directors: Vasily Sidorov, Irene Shvakman and Sergi Herrero, who previously served as co-CEO of VEON. Shareholders also elected nine previously serving directors: Hans-Holger Albrecht, Leonid Boguslavsky, Mikhail Fridman, Gennady Gazin, Yaroslav Glazunov, Andrei Gusev, Gunnar Holt, Stephen Pusey and Robert Jan van de Kraats.

On July 15, 2021, VEON announced that Stephen Pusey decided to step down from its Board of Directors.

In March 2021, VEON Holdings B.V. successfully entered into a new multi-currency revolving credit facility agreement of US$1,250 million. The RCF replaced the revolving credit facility signed in February 2017, which was cancelled. The RCF has an initial tenor of three years, with VEON having the right to request two one-year extensions, subject to lender consent. International banks from Asia, Europe and the United States have committed to the RCF. The new RCF caters for USD LIBOR cessation with the secured overnight financing rate ("SOFR") administered by the Federal Reserve Bank of New York agreed as the replacement risk free rate with credit adjustment spreads agreed for interest periods with a one month, three

In March 2021, PMCL successfully entered into a new PKR 15 billion (US$98 million equivalent) syndicated facility with MCB Bank as agent and PKR 5 billion (US$33 million equivalent) bilateral term loan facility with United Bank Limited. Both these floating rate facilities have a tenor of seven years.

In March 2021, VEON Holdings B.V. successfully amended and restated its existing RUB 30 billion (US$396 million equivalent) bilateral term loan agreement with Alfa Bank and increased the total facility size to RUB 45 billion (US$594 million equivalent), by adding a new floating rate tranche of RUB 15 billion (US$198 million equivalent). The new tranche has a five year term. In April 2021, the proceeds from Alfa Bank new tranche of RUB15 billion (US$198 million equivalent) were used to early repay RUB 15 billion (US$198 million equivalent) of loans from Sberbank, originally maturing in June 2023.

In June 2021, PMCL secured a PKR 50 billion (US$320 million equivalent) syndicated credit facility from a banking consortium led by Habib Bank Limited. This ten year facility will be used to finance the company’s ongoing 4G network rollouts and technology upgrades, as well as to address upcoming maturities.

In September 2021, VEON Holdings B.V. issued senior unsecured notes of RUB 20 billion (US$273 million equivalent), maturing in September 2026. The notes were issued under its existing Global Medium Term Note Program with a Program limit of US$6.5 billion, or the equivalent thereof in other currencies. The proceeds were used for early repayment of RUB 20 billion (US$273 million equivalent) of outstanding loans to Sberbank that were originally maturing in June 2023.

In December 2021, VEON Holdings B.V. repaid RUB 45 billion (USD611 million equivalent) of outstanding loans to Alfa Bank, comprising of a RUB 30 billion loan (US$407 million equivalent) originally maturing in March 2025 and a RUB 15 billion (US$204 million equivalent) loan originally maturing in March 2026.

In December 2021, VEON Holdings B.V. repaid RUB 45 billion (US$612 million equivalent) of outstanding loans to Sberbank, comprising of a RUB 15 billion (US$204 million equivalent) loan originally maturing in June 2023 and a RUB 30 billion (US$408 million equivalent) loan originally maturing in June 2024.

On November 25, 2020, we received a letter from the AFM asserting that the goodwill impairment tests for the cash-generating units in Russia and Algeria had not been applied correctly in the first half of 2020 because our goodwill impairment tests did not take into account all aspects that market participants would take into account in determining the fair value less cost of disposal. The AFM comment process began in November 2020, when we received an initial comment letter from the AFM seeking additional information regarding our goodwill impairment testing performed in the first half of 2020 as disclosed in the 2020 Interim Financial Report. The AFM had asserted that they did not agree with our assumptions regarding the discount rate and projected cash flows used in our discounted cash flow model.

We responded to these requests from the AFM during 2020 and 2021 and met several times with the AFM to discuss our goodwill impairment testing. We maintained that our goodwill impairment tests were performed correctly and that no re-performance of the past impairment tests is necessary. These discussions with the AFM have now been resolved without a restatement of previously issued financial statements or other changes to our goodwill impairment testing being imposed.

On January 5, 2022, VEON announced the appointment of Karen Linehan to the Board of Directors as a non-executive director, following the resignation of Steve Pusey in 2021.

On February 3, 2022, VEON announced its intention to move its group parent company to the United Kingdom, with the introduction of a newly formed UK incorporated public limited company (the “new UK Parent Company”) as the top holding company of the VEON Group. It is expected that the new UK Parent Company will replace VEON Ltd. as the VEON Group’s ultimate parent company by way of a Bermuda court-approved scheme of arrangement. VEON has since suspended all activities related to the previously proposed re-domiciliation of VEON Ltd. to the United Kingdom and will continue to consider the optimal corporate structure for the Group.

In response to the ongoing conflict between Russia and Ukraine, the United States, European Union (including individual E.U. member states), the United Kingdom, as well as other countries (such as, Japan, Canada, Switzerland) have imposed wide-ranging economic sanctions and trade restrictions which have targeted individuals and entities, as well as large swaths of the Russian (and Belarussian) economy. The United States, the European Union and the United Kingdom have also imposed sanctions on a number of individuals and entities from both Russia and Belarus (including many Russian and Belarussian financial institutions), including measures that prohibit dealings with these individuals and entities and/or freezing their assets and measures that prohibit dealing with newly issued securities or extending credit to designated entities and, in the case of the United Kingdom, persons connected with Russia. In addition, certain Russian banks have been removed from the SWIFT payment messaging system, which facilitates transfers of funds between financial institutions and across borders. In addition to economic sanctions, the United States, the European Union and the United Kingdom have expanded export and import prohibitions on items destined for or from Russia or Belarus, including, among other things, restrictions on the export to or for use in Russia certain commodities, critical-industry software and technology, iron and steel products, and luxury goods. Ukraine has also enacted sanctions with respect to certain Russian entities and individuals, such as MOEX on which VEON Ltd.’s shares are listed and traded on an unsponsored basis. The sanctions and trade restrictions have been frequently updated as events have unfolded and are subject to ongoing change.

Furthermore, as a response to the new sanctions Russia recently introduced a number of counter-sanctions and measures aimed at stabilizing domestic financial markets. These, among others, include new restrictions related to capital and foreign exchange controls, restrictions on lending to foreign (non-Russian) persons, restrictions on foreign persons’ transactions with Russian securities and real estate, and limitations on export and import of certain goods into and outside Russia. The introduction of certain of these measures may significantly harm our business. For example, we are limited in our ability to pay and receive dividends, including interest payments on intercompany loans and dividends from our subsidiary PJSC VimpelCom, we may also be limited in issuing or repaying intra-group loans, completing corporate restructurings or planned M&A transactions. Moreover, new Russian counter-sanctions may affect our ability to service our indebtedness towards non-Russian creditors as Russian counter-sanctions introduce new rules related to debt repayment towards foreign creditors.

On March 1, 2022, VEON announced the resignation of Mikhail Fridman from the Board of Directors, effective from February 28, 2022.

On March 2, 2022, VEON announced that as of February 27, 2022, it had approximately US$2.1 billion of cash and deposits, including US$1.5 billion of U.S. dollars and euro-denominated cash and deposits held at the level of its HQ in Amsterdam. The HQ cash and deposits are held in bank accounts, money market funds and on-demand deposits at a diversified group of international banks from the European Union, the United States and Japan. In addition, VEON utilized US$430

On March 11, 2022, a subsidiary of VEON prepaid its RUB 30 billion interest-bearing loan with VTB Bank, which had been entered into on February 17, 2021, in accordance with its terms, and the facility was cancelled. The repayment and cancellation was in compliance with applicable sanctions. In February 2022, VEON requested a one-year extension to the RCF, which was approved by eight lenders, and in March 2022, commitments of two Russia-based banks under the RCF were cancelled as it is no longer possible for them to fund drawings under the RCF given the recently introduced Russian currency controls. As a result, the commitments under the RCF will be reduced from US$1,250 million to US$1,055 million.

On April 13, 2022, VEON announced that it had approximately US$1.3 billion of cash held at the level of its HQ in Amsterdam, which was deposited with international banks and fully accessible at HQ, with approximately US$700 million available under its RCF. In addition, VEON’s operating companies had a total cash position equivalent to over US$500 million. As of the date of this Annual Report on Form 20-F,VEON Holdings B.V. is in the process of drawing down the remaining committed amounts under the RCF, with a portion of the related utilization request having been received as of such date. Once the drawdown is complete, the RCF will be fully drawn. The proceeds of this drawing will be used for general corporate purposes.

In February 2022, PMCL fully utilized the remaining PKR 40 billion that it had available under its existing line of credit and in April 2022, PMCL entered into a PKR 40 billion syndicated loan with a ten year maturity and Banglalink entered into a BDT 12 billion syndicated loan with a five year maturity. In addition, in April, Kyivstar prepaid a UAH 1,350 million loan with JSC CitiBank, prepaid a portion of a UAH 1,677 million loan with Alfa Bank (UAH 1,003 million) and prepaid a portion of a UAD 1,275 million loan with JSC Credit Agricole (UAH 940 million prepaid).

On March 15, 2022 and April 13, 2022, we announced our conclusion that, on the basis of information available to us, VEON is not the subject of any sanctions imposed by the United States, the European Union or the United Kingdom. Bermuda adopts UK sanctions by operation of law.

VEON has no ultimate controlling shareholder. As disclosed in this Annual Report on Form 20-F, LetterOne holds 47.85% of our common and voting shares. Mr. Mikhail Fridman and Mr. Peter Aven, upon whom sanctions have been imposed on by the European Union and the United Kingdom, hold in the aggregate a less than 50% interest in the LetterOne group, the ultimate shareholding entity of LetterOne, and both have stepped down from the LetterOne group board. All of our shareholders have identical voting rights. None have ‘special’ voting rights (either through the bye-laws or as a matter of agreement between VEON and any shareholder). On the basis of public filings, there are no agreements in place between LetterOne and any other shareholders relating to the voting of VEON shares, and neither Mr. Fridman nor Mr. Aven directly or indirectly own any voting interests in VEON shares or ADSs outside of their interest in LetterOne. As we announced on 1 March 2022, Mr. Fridman stepped down as a director of VEON effective 28 February 2022. Mr. Aven is not a director of VEON or of any company within our Group.

On March 16, 2022, VEON announced the appointment of Michiel Soeting to the Board of Directors as a non-executive director and Chairman of the Audit and Risk Committee, following the resignation of Robert Jan van de Kraats on March 7, 2022.

On April 12, 2022, VEON confirmed that on 7 April 2022 VEON received notification from the Listing Qualifications Department of NASDAQ that VEON is not in compliance with the minimum bid price requirement set forth in NASDAQ’s Listing Rule 5550(a)(2). This does not impact current NASDAQ listing and trading, and VEON will evaluate options to return to compliance.

On March 31, 2022, Banglalink acquired new spectrum for a fee o US$205 million payable in installments over eleven years, which doubles its spectrum holding in Bangladesh. Banglalink acquired 40 MHz of spectrum from the 2300 MHz band. On April 12, 2022, Jazz signed a 4G license renewal with the PTA for a fee of US$486 million for 15 years, of which 50% has been settled, and the remaining amount will be paid in five equal annual installments.

On April 28, 2022, VEON announced a trading update for the first quarter period ended March 31, 2022 (unaudited), including selected financial and operational details.

For the year ended December 31, 2020, our consolidated finance costs were US$673 million as compared to US$876 million for the year ended December 31, 2019. This was a decrease of 23.2% primarily due to an updated fair valuation of the put option liability on completion of the independent valuation process triggered by the exercise of put option by the Dhabi Group and lower interest charges on loans driven by a combination of lower average cost of debt across most countries and by a depreciation of the Russian ruble.

For the year ended December 31, 2020, our consolidated finance income was US$23 million as compared to US$52 million. This was a decrease of 55.8% primarily due to lower cash and deposit balances and partially due to currency devaluation on cash and deposits in the local currencies of our operating companies.

For the year ended December 31, 2020, we recorded a loss net foreign exchange loss of US$54 million as compared to a net foreign exchange loss of US$18 million for the year ended December 31, 2019. The change was primarily due to depreciation of the currencies of countries in which VEON operates compared to the US dollar, which had a negative impact on profit or loss upon translation of U.S. dollar-denominated monetary liabilities, such as trade payables and debt.

For the year ended December 31, 2020, we recorded a loss attributable to the owners of the parent from continuing operations of US$384 million as compared to a profit attributable to the owners of the parent from continuing operations of US$576 million in 2019, that was mainly due to a decrease in operating profit in 2020 as compared to 2019 as discussed above.

For the year ended December 31, 2020, we recorded a profit attributable to non-controlling interest of US$33 million as compared to a profit of US$62 million for the year ended December 31, 2020, which was mainly driven by a decrease in operating profit for our discontinued operations in Algeria.

For the year ended December 31, 2020, our total Adjusted EBITDA was US$3,151 million as compared to US$3,861 million for the year ended December 31, 2019. This was a decrease of 18.4% mainly due to lower revenues as discussed above as well as the recognition of a one-off gain of US$350 million in 2019 relating to a revised agreement with Ericsson to upgrade the IT systems of VEON’s operating companies. The decrease was partially offset by lower general and administrative costs.

For more information on how we calculate Adjusted EBITDA and for the reconciliation of consolidated profit / (loss) before tax from continuing operations, the most directly comparable IFRS financial measure, to Adjusted EBITDA, for the years ended December 31, 2021, 2020 and 2019, please refer to table below.