I would also like to thank Tim for this great info. I really apprechiate it.

Thanks for your take on all this.

RM

Your lawyer friend might be refering to the practice of bribing contract holders into awarding contracts, which should be avoided at all costs unless it is the norm across the board in that country. This is a very different sort of bribery to paying officials to hurry the bureaucratic wheels along a bit faster.

RM

Yes, the corruption in Russia does discourage businesses from setting up shop in Russia, as the payment of bribes costs money. However, some companies may decide the benefits of doing business in Russia outweigh the drawbacks of the corruption, and go ahead anyway. Others won’t. The day I am asked to pay a bribe to a major client to win a contract on Sakhalin is the day I close the business with the blessing of my boss. But so far, things aren’t that bad.

The decision for a company going into business in a corrupt country is often decided by the level at which the corruption occurs. In the Middle East, generally you can pay one influential figure a handsome sum and from that point forward everything goes relatively smoothly. In Nigeria, you have to pay practically everybody at every level to get something done. The former case doesn’t present too much of a problem for businesses, they simply factor in the cost and charge the clients. In the latter case, the business struggles like hell and in most cases is unworkable.

Russia is somewhere between the two, probably close to the latter rather than the former, but it really does depend on what you are trying to do and what type of business you are in.

in your professional opinion then: do you believe that ‘corruption’ in Russia is discouraging businesses from doing business in Russia? Or do most businesses make a cost-benefit analysis and decide that after all, it’s still worthwhile to be in Russia?

No, I’m in Yuzhno-Sakhalinsk, in the Russian Far East. Not having any experience of running a business in Moscow, I am quite ready to accept that things are different there.

The second question is more difficult to answer. The bribery exists because the bureaucracy exists; the bribes become necessary to navigate the bureaucracy; and the ones taking the bribes are the ones managing the bureacracy. Therefore, the bribes are a consequence not a cause. So the answer to your question must surely be yes, as the bribes are often essential for certain requirements of the business, such as obtaining a sanitary certificate, for example. But the cause of the bribes, the bureaucracy, makes business infinitely more difficult.

are you in Moscow? Second question: do you think that bribery you experience makes business easier or more difficult?

RM

I can only assume that you don’t run a business, where to get any kind of license or certificate involves a mysterious “facilitation fee”, which doesn’t appear in any regulation or notice and for which you cannot get a receipt. I’m a general manager of a company here, I deal with this stuff on a daily basis. I don’t complain, it’s part of doing business, same as the sponsorship fees in the Middle East. But it’s bribery, pure and simple.

I’ve only been in Russia 6 months and I have seen a fair bit of bribery. I handed over a couple of hundred roubles to avoid a speeding fine, my wife bunged the passport office a couple of hundred dollars to get a passport in a week rather than 6 months, at least three Russians I know very well bribed somebody to stay out of military service. In most cases, I prefer to enter into a financial arrangement with an official in Russia rather than being faced with some jobsworth in the UK who whines “But the system says….” and invites you to write a letter of complaint.

Bribery is rife in Russia, but from what I’ve seen of the world there are only about 3 countries where bribery isn’t rife.