BBC: Why Russia locks up so many entrepreneurs

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ayzo

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Jun 8, 2007
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:xmas-smiley-010: хороший счастье братья

BBC News - Why Russia locks up so many entrepreneurs

In the last 10 years Russia has imprisoned nearly three million entrepreneurs, many unjustly. This statistic comes from a new ombudsman for business rights, Boris Titov, who says it is "hard to find another social group persecuted on such a large scale". How has this come about?

Businessmen have complained for years that people have been able to frame commercial rivals - by paying corrupt police officers to plant evidence and make arrests to order. But only now are they being taken seriously.

More and more well-heeled entrepreneurs have been joining, even leading street protests in recent months, with reform of the courts one of their main demands.

Perhaps those protests influenced President Putin's decision last month to create a post of "ombudsman for business rights" - but he might also have been persuaded by the $84bn in capital that left Russia last year, a record amount. Russians are investing overseas because they fear for the safety of their businesses at home.

"The economy will be completely destroyed," says entrepreneur Vladimir Perevezin. "Because businessmen are not safe in our country - anyone could be sent to jail."

Perevezin knows what it's like. He was imprisoned for more than seven years after being framed, he says, for money laundering.

His friend Valery Gaiduk was also imprisoned for three years, convicted of fraud. "I'm 100% sure that a rival paid to have me arrested," he says. He had been co-owner of a successful dental practice, but he claims police officers took a $500,000 bribe to frame him.

At the root of the problem is the criminal justice system itself. Statistically, once officially accused of a crime in Russia, there is little chance of proving your innocence. Less than 1% of all criminal cases that make it to court result in a not guilty verdict or acquittal - and that figure comes from Prime Minister Dmitry Medvedev.

Critics say that in practice, if not in theory, courts operate on an assumption of guilt. The prosecution takes the word of the police, and the judge takes the word of the prosecution - no matter how unconvincing the evidence may be.

"If a person ends up in a police cell as a suspect - he will find himself in court no matter what, and the court will find him guilty. That's guaranteed," says Marat Khisamutdinov, a former police officer.

It's not surprising then that, off the record, many Muscovites are prepared to admit paying bribes to police officers when arrested - even if they're innocent.

"It's best to solve the problem as soon as possible, at the police station," Khisamutdinov says.

"You only really need to pay the lowest arresting police officers. The rest of the machine works automatically."

It's much more expensive, by all accounts, to buy your release once the wheels of justice have begun to turn. Valery Gaiduk says he was offered freedom for $300,000, but did not pay as he was unsure the deal would be honoured.

One of the few judges prepared to talk openly about the failings of Russian courts is Sergei Zlobin, who resigned as head of the Volgograd regional criminal board four months ago. His portrait of life as a modern Russian judge is extraordinary.

"Often there are huge gaps in the evidence," Zlobin says.

"Investigators make serious mistakes, but the system is such that even these mistakes are used as evidence against the defendant, and the guilty verdict must be issued anyway - otherwise the judge will face problems."

Zlobin says that in the thousands of cases he heard in the 15 years he was a judge, he only ever issued seven not guilty verdicts - and five of them were later overturned. Issuing a not guilty verdict, he says, was not only a "waste of time" it was risky.

Judges come under all kinds of pressure from the Federal Security Service, prosecutors and the chairman of the court not to acquit defendants, he says, including blackmail. The result? Many innocent people are locked up.

Zlobin and his family have received threats and abusive messages since his resignation. He knows it's risky to speak openly, but says his conscience compels him to do so.

"Sometimes I just had to follow the instructions from above. Now, with hindsight, I understand that what I was doing was wrong, and moreover, it was illegal... and I deeply regret it."

Several judges and lawyers told me that the system acts to protect itself, rather than the letter of the law.

Asked if he had ever accepted a bribe to arrest someone on false charges, former police officer Marat Khisamutdinov refuses to answer.

Would an officer would feel guilty about framing an innocent person? "No" he answered. "You don't know him, you'll never see him again, and you get a financial reward - so why do you care?"

The business community will be watching Boris Titov's next move very closely.

He has hinted at a possible amnesty for prisoners serving time for "economic crimes", if it is their first offence.

This could affect more than 100,000 businessmen.

It would not, however, have any implications for the most famous jailed businessmen - Mikhail Khodorkovsky (once Russia's richest man) and his partner Platon Lebedev - as both have been convicted more than once.
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...THAT EXPLAINS WHY THERE ARE NO GAY WEBMASTERS N RUSSIA!

With a country that size, you'd think a large percentage of WF, maybe 30% even, would be russian... But the one or two Russians we have around here are already in other countries.

Wow, mind = Blown.

Clearly this was communism's fault.
 
500K USD to fuck up a dental practice? jesus - I've been gone too long. in my days - you could get a pack of tsiganis for nothing and they'd burn down the building+dance in front of it while it burned down.
 
So many countries have to suffer with corruption from the top to the bottom. The latest presidential elections in Mexico this month were won by fraud (again). Drug cartels ftw

We need a team of chuck norris's who go around sniping the top scum of these corrupt systems to remove corruption from the lower levels through sheer fear of death.
 
lukep said:
...THAT EXPLAINS WHY THERE ARE NO GAY WEBMASTERS N RUSSIA!

With a country that size, you'd think a large percentage of WF, maybe 30% even, would be russian... But the one or two Russians we have around here are already in other countries.

Wow, mind = Blown.

Clearly this was communism's fault.
Click to expand...

There are very many Russians here. They lurk and rarely come out. But they are here.
 
23071068.jpg
 
I am Russian.

Doing business in Russia is a bad idea. In America, if you want to put someone out of business you lower your prices or have your congressman pass some law that hurts them. In Russia, you resort to criminality. In the 1990s, it was common to hear about people trying to do business (like open a store or something) to get shot. While it's not as bad as it was then, every time I visit Russia (yearly) a lot of stores are either closed or moved or under new management. Coincidence?

But yeah, this article is fairly true. There are places that you can run legitimate businesses in like Skolkovo, aka Russian Silicone Valley.

As far as internet marketing? That's not a "business." Unless you floss hard in Russia (almost impossible, since the gangsters/oil men floss harder than anyone on the planet) no one will notice you're making money online. Maybe your family might ask you what you do for a living and people might find it strange you work from home, but no one's going to bribe the police and put you under (unless you're competing with another Russian affiliate, then all bets are off). It's kind of strange I don't hear about any Russian affiliates, considering the tax rate in Russia is like 13-20% maximum (flat tax ftw). Haven't met any OG Russian non-Jew affiliates, actually. All have been immigrants. Who knows? I think it mostly has to do with the fact that credit is almost non-existant in Russia, making it hard to fund PPC campaigns, which is why you see so much spam coming out of Russia instead. Also not knowing English is a huge hinderance for anyone trying to market online internationally.

PS: Actually considering moving back to Russia due to the huge tax savings I would get. If that would happen though I'd be sure to keep my head low, stay out of trouble, and not talk to anyone in specific about what I do unless I knew them very well. Such is the life.
 
[ame=http://www.youtube.com/watch?v=84MsRuC-1l8]Hermitage CEO Browder: Don't Invest in Russia Today - YouTube[/ame]
 
BluAffiliate said:
I am Russian.

Doing business in Russia is a bad idea. In America, if you want to put someone out of business you lower your prices or have your congressman pass some law that hurts them. In Russia, you resort to criminality. In the 1990s, it was common to hear about people trying to do business (like open a store or something) to get shot. While it's not as bad as it was then, every time I visit Russia (yearly) a lot of stores are either closed or moved or under new management. Coincidence?

But yeah, this article is fairly true. There are places that you can run legitimate businesses in like Skolkovo, aka Russian Silicone Valley.

As far as internet marketing? That's not a "business." Unless you floss hard in Russia (almost impossible, since the gangsters/oil men floss harder than anyone on the planet) no one will notice you're making money online. Maybe your family might ask you what you do for a living and people might find it strange you work from home, but no one's going to bribe the police and put you under (unless you're competing with another Russian affiliate, then all bets are off). It's kind of strange I don't hear about any Russian affiliates, considering the tax rate in Russia is like 13-20% maximum (flat tax ftw). Haven't met any OG Russian non-Jew affiliates, actually. All have been immigrants. Who knows? I think it mostly has to do with the fact that credit is almost non-existant in Russia, making it hard to fund PPC campaigns, which is why you see so much spam coming out of Russia instead. Also not knowing English is a huge hinderance for anyone trying to market online internationally.

PS: Actually considering moving back to Russia due to the huge tax savings I would get. If that would happen though I'd be sure to keep my head low, stay out of trouble, and not talk to anyone in specific about what I do unless I knew them very well. Such is the life.
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I read the whole fucking thing with a terrible Russian accent. Thanks!
 
Great post, BluAffiliate. The Flat tax situation there makes me drool.

I just have one tiny problem with what you said:
BluAffiliate said:
In America, if you want to put someone out of business you ... have your congressman pass some law that hurts them. In Russia, you resort to criminality.
Click to expand...
...I fail to see the difference between these two. :drinkup:
 
Ar Scion said:
Hermitage CEO Browder: Don't Invest in Russia Today - YouTube
Click to expand...

This is actually worth watching. I don't know to what extent crooked behavior existed prior to communism in Russia but communism certainly breeds it. When the only way to get ahead is through politics, bribing, stealing, etc, you transform the people. Honest people are at a competitive disadvantage. You create a natural selection for crooks, thieves, etc. Hans Hoppe has written about this.
 
I am Russian as well. I have to agree with everything said in this thread. Lots of opportunities with proven business models that exist in the US/Canada but the risk is too high. There are so many examples of people having all their assets illegally seized. Its scary just traveling there (never mind investing your hard earned $$$).
 
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