My new business: Done so far

As I am planning to work with kydex, here are my first steps:

1) Calculations

2) Website for E-store

3) Ordered the E-store

4) Now doing SMM. A group on the Russian Facebook alternative.

5) A giveaway. Proposed a competition of manuals "Make something interesting of Kydex".

The essence of my current business

 A thermoplastic material from the US to be sold in Russia. Good for home-masters who love gadgets, such as this one =)

Russian business before 1917 - part 1

I have recently discovered, that my blog has no central idea whatsoever. So, I decided to write down another random topic, which nobody cares about. 

Russia is a country with the most dramatic history of private enterprises ever. Technically, the industrial revolution could not take off before 1862 when serfdom was officially abolished. Yes, Russia freed about 80% of its population from slavery after the US freed african-american slaves. From a social point of view, the situation was super-complex in Russia. In 1862, slavery wasabolished. The Tzar's government, howether did not dare to hit on the interests of the nobility too hard. All the freshly freed peasants found themselves in debt which they had to pay over a period of 10-20 years to their ex-masters for their land and freedom. Only the reforms of the early 1900's allowed this stagnation to end, resulting in massive immigation to the Russian cities and extensive industrial growth. By 1913, St. Petersburg was a modern European capital with lots of industrial enterprises and technological marvels, available to the rich in the forms of cars, private boats, electric lights and as sewing machines, electric trams and cinema to the public. It is fascinating to know, that many of the future giants of European business were already in Russua these years: Siemens, Citroen, Zinger. 

All the plants were nationalized in 1917. So now only the old buildings remember the start of free enterprise in Russia.

Russia has entered WTO: now what?

It's been a long story with our country. The USSR was a stubborn country, which did not like global associations. Communist associations suited it better and thanks to Joe Stalin and the KGB, there were plenty! But the world has changed and now we live in a global associated environment.

So, where has Russia arrived by finally signing all the WTO agreements? Well, actually, there is no big deal. For years, interest groups have been inflating the public debate. Anti-WTO rhetorics are the best presented in the media field. Here are some rumors, which have been circulationg the media since the 1990's.

- WTO is going to kill Russia's agriculture. How? Well, by introducing cheaper meats, vegetables and grains to the market. "Evil global forces will force Good Mother Russia to stop donating to her agricultural businesses, some still semi-government owned". What is really important? Well, government support to business in Russia is usually the essence of inefficiency. So, why don't we welcome the idea that less of our money will be being dumped into this financial black hole? The issue is complex, but mostly, the problem is with people who got used to the soviet idea of "self-sufficiency", which has almost never been nothing but a myth.

- WTO is going to kill Russia's manufacturers. Well, this one is a real problem. In today's world it is important to keep the industrial backbone afloat. Russian manufacturers of cars, ships, heavy machinery etc openly acknowlege that they still exist mainly due to import regulation. Even with the current customs tariffs, the Chinese car manufacturers still have a chance of biting a lump off the Russian car market in the next few years.

- WTO will kill Russia's banks. Give me that pistol, WTO, THAT'S how you make the control shot! Yes, this one is just dumb. There are many foreign banks in Russia anyway, there shuld be with credit rates of 15-17% for businesses and 19-30% for private persons. The financial system is stable, and there is always room for a few players.

Now, isthis all going to happen? Well, I don't think so. The reasons are simple.

- Russia is not rushing to reform the customs service. Like not at all. All the agreements on reducing tariffs are extremely vague with terms stretching from 6 to 15 years with conditions like "possible temporary increases of the tariffs to compensate for the changes". Customs will be working by the Customs Codex of the Customs Union, so, most likely, the rules are going to remain as they are today. And today the process is not transparent, complicated and full of difficulties.

- The system of requirements for goods is going to be strictly internal. I do not believe that anytime soon I will be able to import cosmetics having the ISO and GMP certificates of the manufacturer.These papers are now rubbish in Russia. Well, not that. One needs to present them while applying for the certificates of the Customs Union. Just to give you an example:

In order to import cosmetics for in-country sales, a company must present:
- State Registration papers, issued by Rospotrebnadzor of Russia. Every product must be have such a paper, or be included in a list with similar products in one. Cost: 100 USD per certificate + around 150 USD per product for testing. At least 100 ml of each product has to be submitted for testing. These take about 2 months to be issued.

- The new declarations of conformity. Now you have to declare the conformity to the Technical Requirements of the Customs Union, which is fresh and raw. Product groups are allowed again, but just for similar products. 130 USD per paper + up to 200 USD per product for testing. Again, at leasr 2 packages of at least 30 ml each fot each and every product. Can only be issued after the first papers are presented. Will take approximately 2 weeks.

Professional cosmetics become a nightmare with hundreeds of products and comparatively low volumes.

Stay tuned =)

Russia's profit margins - good pr bad?

Russia is a wild market from the point of view of Western companies. Normally, Russian companies prefer to engage in processes with at least 160% profitablity..

Pussy Riot: Qua Bene

Now with the sentence for Pussy Riot having been announced, the world is eager to defend the ladies from...err..who knows what?

My point is, all the Pussy Riot memners WANTED to be jailed more than anything else. They evaded all the formalities, which would make suspended sentence or minimal sentence possible. The question is: "why?'. Well, there are all these senses of pride, self-respect and rebellion against Putin, who does not give a shit. Should we believe this? I don't think so!

Two of the girls are young mothers. Tolokonnikova and Alekhina both have children under 5. Now, there are formal steps in any trial, which would have allowed them to come home to their kids with a suspended sentence.

Step 1. Cooperation during the trial. The ladies did not cooperate during the investigation. They openly disrespected the agents who tried them, drew the conversation from answering questions to dictating lectures. Yes, it seems heroic. No, I don't think we should applaud to young mothers who prefer going to jail and becoming famous to sacrificing their fame for their kids.

Step 2. Admitting the crime incriminated to them. Neither of the girls ever admitter being guilty. On the contrary, they kept on saying, they were doind what is right. There are issues here: a) Their actions are at least 95% a violation of the administrative\ criminal code of the country. b) A punk show in the country's main cathedral is at least a sign of disrespect. Now again, they behaved like heroes, but their behaviour drew the prosecution closer to their goal of building a criminal case.

Step 3. Pleading guilty, claimimg the understanding of the crime commited, promise to "never repeat". All these formalities usually soften the sentene in a criminal case. The ladies did neither. This made the picture pretty clear: release them and the next day they will do that again.

It is important to note, that their actions inside the cathedral actually did contribute to more disrespect and hatered between the chirch-goers and creative young atheist groups. So, yes, harm has been done.

So, in my opinion, all the Pussy Riot trial is a show:

1. The defendants are making sure that they will get their sentence. This is enourmous publicity and they did everything not to lose it.

2. The lawyers understood the fate of the defendants from the beginning. They also replaced detailed defence with PR-speeches.

3. The Russian judicial system showed off its illogical backwardness. Had the ladies been fined and kicked out of the police station the next morning, nobody would give a crap about them. They are actually a marginal art-group with no taste and no talent. Their previous actions included sticking a chicken up a woman's vagina in a supermarket, turning over police cars in St. Petersburg and having sex in a public museum with Tolokonnikova taking active part while 9 months pregnant. So, the prosecutor may be right by saying; "They are not punks, they are professional provocators".

Pussy Riot and the Magnitsky act: what's different?

Well, recently I saw a visit via a search request "Pussy riot magnitsky act". I wondered, what could be the relation of these two famous Russian cases? Anyway, I decided to provide some short explanation of these issues.

Magnitsky died in pretrial detention. He was placed there, because in the Russian justice, the prosecution office, the investigative comitee and the judge all prefer the defendant to be kept in custody before the trial. As I explained earlier, for the officials, this means less paperwork, more comfort at work and lower risk of getting into trouble if the defendant does not show up. Magnitsky's case was a criminal case. He was suspected of tax-evasion schemeing on a large scale. We will not discuss the scandal here in all detail, if you exuse me.

After Magnitsky died in pre-trial detention, there was a global scandal. So, the government passed several law corrections and introduced some legal guidances to make sure that people, suspected of economic crimes are not jailed before trial. It is still possible fo the investigative comitee to ask the judge to allow them to keep the defendant in custody, but now there are prescriptions in the law to disallow that.

Pussy Riot girls on the other hand were not suspected of economic crimes at all. Their case was viewed as a criminal one with the procecution pressing on the issue of "huliganism performed in an act of public demonstration of hatered to the Christian flock". Thus, they were not protected by the Post-Magnitsky case law corrections at all.

The Magnitsky case had a strong effect on the Russian legal system. No, nobody gives a damn about the "Magnitsky Act" in the US and the EU. The very idea of white-collar people dying in the awful prison conditions, while being cooperative to the investigators and not presenting a threat to the society hit too hard on the Russian public.

Back to the Pussy Riot case. I see lots of blaming towards the Russian court, saying that it must have paid attention to the Western media and Western rock stars. Well, this is Russia. The establishment is made up of people in their 50's. Their idea of the proper behaviour for Russia is "Be strong despite all odds, never bend to outside pressure". Thus, the more pressure - the more stubborn the system is. Naturally, with all the shouting, the judge could not have followed the Western pressure. Most people in their late 40's and 50's are happy, and they are the ones who make up most of economic and electoral majority.

Basically, Russia's main political problem is not with Pussy Riot. It is just that there is a too low percentage of young, ambitious population to add speed and passion to our life.

Comments appreciated. 

Pussy Riot - what's really happening?

Tomorrew we will see a verdict in the Pussy Riot trial. So, what has happened and what is going to happen? I will try to look at this situation without moralizing or switching to emotions.

The girls performed a 40 seconds long show inside Russia's main cathedral. Their act was quite shocking for the general public. Indeed, there were people, who wanted them punished. As there must have been people with influence, there was enough effort applied to the case to make it possible for the prosecution office to start working on filing a criminal case and for the investigation comitee to start "solving" this case. These actions can be launched against a person or a group in Russia as in any other civilized country by court order.

Why are they in jail? The Russian system prefers the defendant in a criminal case to stay in jail during the trial. This is a lot simplier for the prosecutors, the investigators and the judges. In terms of paperwork, workload and bureocratic formalities. Normally, the investigative agency requests that the defendants be kept in custody during the trial. The Magnitsky case has created a public outcry, which resulted in recommendations and law corrections, making people who are tried for economic crimes more likely to stay out of jail during the trial.

Why are they being tried and not set free? In any case, just or not, there is a criminal case against the three ladies. The Judge has to close the case down for them to be released.  Procedures are slow, so before the court hearings they were in detention so that the investigators could do their work. Now they are behind bars so that the judge can calmly write her decision down.

Will they be set free tomorrow? Very unlikely. Russian courts have around 0,7 percent case dismission rate. That does not mean few people go fee from court. Basically, their best chance would be to get a sentence equal to the time, served in pre-trial detention. A suspended sentence is likely, as well a real term howether. Why does not the judge say "We're sorry, now go!"? There are many formalities in the legal system. The judge is responsible for the paperwork logic of her job. Then, it is not the judicial system's interest to be detaining people for six months for nothing. This is why, already-served-in-detention terms are often used. This makes sure that the person has no right to request satisfaction from the government. Appeals are possible, but rare. Judges also have to submit a lot of paperwork after the case is closed. In case they drop all charges, they risk being subject to a corruption investigation right away.

What do Russians think of that? Well, there are many people, who want the girls to suffer. There are many of those who would rather see them free. What the Russians are dissatisfied with is the reaction from the outside world. Many now believe, it's just the pop stars getting a bit more press attention. Sure, does not help, but does irritate a bit.

What I think? Russia is a powerful enough player for the global establishment to respect its privacy. Forget it, gas prices, military stability and international trade are far more important then abstract illusions like "human rights", "gay rights" of just "freedom". The latter goes well with a claymore and a painted face, if you know what I mean....

Made in Russia - Exported to the USA

What if not Izhmash - the plant that makes kalashnikovs? Their rifles are sold to the US, where they are quite popular, due to some tricky facts:

- They are cheap
- They are reliable
- They ae primitive - easy to fix, hard to get lost in details

Well, here is a true Russian Brand!

Well

Madonna in Russia - a reason to spit

Madonna has left, but there is still some lees in the air, as they say in Odessa.

I don't believe in the concept "Madonna fights fo human rights". Events with Pussy Riot seem to match a formulae: "A scandal + a 15 000 $ fine = 5 million bucks worth of PR.

Bye, Madonna!

How to import spare parts for vessels into Russia

I have heard, it may be a problem for a company, which owns a vessels to conduct the necesaary technical services because it is sometimes impossible to have spare parts delivered into Russia. The Customs service would not simply allow spae parts through, as we are a country with very strict customs rules. That means, every bit of cargo, recieved by a legal entity is subject to customs declaration by Russian rules. Complications are numerous. There are issues like the decision on the customs value of goods, which influences the ammount of fees to be paid. There also can be issues with the goods code, as customs officials may well decide to change it in order to increase the customs duty output. Corruption is seldom the case. Mostly, it is about the ship owners being unable to grasp all the aspects of the regulation.

I would advise caution:
1) If you plan on having the vessel repaired, either import the spare parts with the ship's cargo, or have them shipped to Russia in advance & find a Russian customs brokerage firm to help you through.

2) If the repairs are unexpected, have a customs brokerage firm import your spare parts fo you.

I will share contacts and recommendations upon request =)

Importing goods to Russia. Shallow waters and hidden reefs.

Working in Russia means dealing with uncertainty on a daily basis. Working with the Russian customs means swimming in  a shark tank in a suit made of bacon. Today I will write about some practicse which make importing into Russia harder. The Russian customs serves one major goal that is to deliver as much money to the budget as possible. So here are some risky points which you should keep in mind.


First of all, you should know, whether your goods require certain certificates. An attempt to import something, which requires a Russian certificate without having one is one wide road into trouble. Possible outcomes are a fine, followed by an order to proceed with a customs clearance procedure within 2 months, which if failed will automatically lead to a second administrative case, another fine and finally the liability to pay for the customs warehouse, which normally costs around 1 0cents per kilo a day.

It is wise to know the Customs control sums for your type of goods. These figures are the product of the Customs officials internal investigation, which makes them poorly related to the actual market situation. STill, if your price per kilo is lower then the required minimum, it may be adviszble to increase it by ordering more expensive transport etc. If your goods are too cheap, you are looking at a process, named the correction oof customs prices, which means the customs officials will decide  how much you owe on their own.

Zero customs duties. Goods with a zero customs duty are subject to extensive study. The whole idea of importing at zero duties is essentially against the main goal of the Customs. It is therefore a good idea to prepare as many papers as possible to support the claim for zero level customs duties and prepare for supply delays. It is likely that the Customs officials will attempt to rule for the change of the customs code in favor of the one with higher duty figures.

All these issues are easier to evade than to deal with. Generally if you are right and the customs official is wrong, the court will rule in your favor, but this won't take less than six months. Corruption is rarely the case, as Customs are strictly monitored and the officers follow instructions to the letter.

What is Russia's best brand? Poll

What is Russia's best brand?
	Kalashnikov
	Smirnoff
	Sukhoi jets
	MIG jets
	Sinebruhoff beverages (yeah, I know)
	LADA cars
pollcode.com free polls

Some new stuff - online Master's

I am currently working on an entirely new thing for myself, that is I have joined a Master's programe in Global Marketing online.

There is a long and sad story with my higher education, which has stretched far too long. Well, anyway, here is my story.

I finished my BA in Sociology in my home city of St. Petersburg in 2009 and wanted a Master's ever since. I rejected sociology right away, took a look at the language studies, but finally decided to take up business. So in september 2010 I won a scolarship for the Master's in International Business at the St. Petersburg State Univercity's Graduate School of Management (GSOM). It is a great school for Russia, member of CEMS and PIM. Shortly, I got dropped after the first semester. Reasons, well...

First of all they told us not to work at all during study. Easier said then done. My mom, who runs the business I still work for said "no + 2 hours of brain washing about responsibility". So I decided to live in a mode of "full time study + work", which proved just great. My week looked somewhat like this:

Monday: Study 9-00-18:45
Tuesday: Study 9-00-13-30, work 14-30-21-00
Wednesday: Work 10-00 - 13-00, Study 13-40-18-45
Thirsday: Study 9-00-10-30, Work 11-30-20-00
Friday: Study 10-45 - 17-30
Saturday: Study 9-00 - 13-00, Work 14-00-18-00

The timetable varied from time to time, but generally looked close to this. The strangest thing was that I did actually manage my studies till November quite well, staying in the middle and catching top grades in the more humanitarian disciplines. The Russian system is built around a symester, ending in exam sessions. From mid-november to December 29th we had 12 exam sessions, which effectively sum up each of the courses, studied during the semester. The rule is simple. 3 failed exams mean automatic expulsion. To the honor of the institution, I found no back door. Hell, I did search! I failed:
- French (Spent the night before the exam at work till 23-30, the exam was at 9-00).
- Statistics (as I went to the exam test, the road was blocked for half an hour to pass an official's cortege). I came 30 minutes late, they just gave me the paper and tooked it not a second later than the deadline.  The corect course of action for this case would have been: hit my head against a wall, go to the clinic, get the paperwork certifying the injury's time and date, go th the univercity the next day and file for late submission. The rules are the rules.
- Corporate finance. I am just dumb at international corporate finance.

I am very anxious about my Master's degree, which I have taken online at the univercity of Liverpool. I hope it goes be