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.

RM

In some aspects of the language we Germans are obviously inspired by the Inuit, who have some 250 words for snow.

RM

Personally, I don’t really see much of a distinction in practice between a government official who takes a back-hander, in return for a ‘favour’ and a private employee who does the same.

Well, thank you. I somehow gained the impression that e.g. the guy working in the purchasing department of some private company, taking / requesting money for giving an order to a particular side and not someone else, would be considered “bribing” as well.

What I initially had in mind was “blackmailing”, like someone telling me “Let me do this or that or I will do something to you. I got mixed up there, sorry.

Everything else is either just lousy business practice or plain-old crime. If it doesn’t involve government employees or institutions at least at some level, it can’t be corruption.

RM

I’m currently doing a lot of reading on the scientific research into this, including the problems of conceptualizing corruption. It’s a real bag of worms.

RM

Obviously, there are some cases where it is crystal clear that a bribe is being demanded or paid, but there are other times when the situation is far less clear.

There often comes a point when gifts are ‘expected’, either explicitly or tacitly, and that’s where I’d argue we move into bribery territory. But, to make things even more difficult, that point will vary from culture to culture – the same action in Russia could be viewed in a completely different way in England, for example. And, it gets even more difficult, when you consider that what, on the face of it, seems like the same action carried out in two different contexts, even within the same culture, can have different implications depending on the many other factors behind the decision.

How do you judge what is and what isn’t bribery in circumstances so close to the line? Difficult to say. Context, experience, gut feeling?

Was the box of chocolates I gave to the nice ladies in the registration office AFTER they let me bypass the line a bribe or simply a gesture of appreciation?

I think it was the latter. I am sure that if I had not given it to them, they would be just as nice next time, because all I did to get this done was be my most charming self [takes a lot of work, but I can be charming if I absolutely have to].

I have sweet-talked my way out of fines in Germany and North America. All I do is make clear that I understand the situation of the person I am dealing with, I don’t demand, I ask very nicely and make them feel very good about themselves. Goes very far with almost all officials who are not completely brain-dead and automated. I charmed my way out of a fine here in Russia at least once — I pretended to be utterly incapable of the language and played dumb and nice at the same time. Saved me a thousand ruble fine.
Is being nice to get your way a bribe? Is a smile and a joke that lightens up the day of the official a bribe if it speeds up the process/saves you a fine a bribe?
Where does bribe start, where does plain civilized conduct end?

Is a small bottle of cognac a bribe? Is a bunch of flowers a bribe? Is a box of nice chocolates a bribe?

RM

Examples:

a) I travel in my car. A cop stops me and wants to “fine” me for a broken tail light. The tail light works perfectly well. He charges 100 (whatsoever), threatens me to break the tail light if I do not pay and to charge me more, or even to arrest me.

Bribe or “Trinkgeld” ?

b) I travel second class on a train. It’s crowded. The conductor suggests that I may use the empty first class in exchange for a “Trinkgeld”. He’s the one who “checks” the tickets, nobody else. The fist class ticket would be three times more than I payed for second class ticket + “Trinkgeld”.

Bribe or “Trinkgeld” ?

People are angry about the “Trinkgeld” in a) as they do not profit from it. They rarely complain about the “Trinkgeld” in b).

Note: a) and b), both happend to me. Both didn’t happen in Russia.

Had the question been phrased differently to take into account a different cultural approach, the results may well have proved different.

(By the way – I’m not saying that bribery is everywhere in Russia, just that it is a major problem. And, whatever way you look at it, compared to more developed economies, Russia does lag behind in this area).

RM

Exactly ! How far will you get in Germany without paying a “Trinkgeld” to e.g. the plumber ? Or a “pour boire” to his colleague in France ?

Or how far will you get in Germany when your business receives a visit by the “Betriebsprüfer” (Tax Auditors) and the “snacks” you offer are not to their liking ? Is this bribing ? Hell “NO!!!”