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. Last Updated: 07/27/2016

Kiosk money changers: Illegal, but who cares?

While the Russian government wrestles with problem of how to make the ruble convertible, a host of kiosks in Moscow are doing a brisk business exchanging rubles for hard currency. Although the practice is illegal, kiosk owners in several areas of the city are taping up dollar bills in their windows to alert passersby that they are in the money-changing business.

Kiosk managers interviewed recently said they recognized they were breaking the law, but did not consider themselves black marketeers.

They were simply responding to market demand and to the government's inertia in enforcing the law, they said.

"The government doesn't approve of such a business, and it is not legal", said a man who runs one of four kiosks that change money in front of the Irish House on Novy Arbat.

The man, who identified himself only as Sasha, said he viewed kiosk currency exchanges as "semi-official".

"The police don't care", he said - and he, like the other half-dozen kiosk managers interviewed by The Moscow Times, has never been approached by a policeman or city official about selling rubles illegally.

Most kiosks began black-market currency dealing during the last three months. Current exchange rates, usually based on bank rates, vary from 110 to 135 rubles to the dollar, and the customers are an even mix of foreigners and Russians, kiosk owners said.

A woman who manages another Novy Arbat kiosk said that changing money amounted to about 15 percent of her business. About 20 customers a day buy rubles from them for dollars, she said.

She uses the hard currency to buy Western goods for her "shop", she said. The practice appears to be common among the kiosk money traders.

Her kiosk has two exchange rates:

100 rubles to the dollar for up to $100

and 125 to the dollar for over $100. The kiosk also sells dollars - at 135 rubles to $10n Tverskaya Ulitsa not far from McDonalds, two men do a brisk business selling rubles to "about 50 to 100 people a day" from their tiny kiosk.

"Our customers are mostly Russians, very rich people who can buy dollars", one of the men said. Those customers exchange enough rubles to get $50 to $100, he said.

The Tverskaya kiosk buys dollars at 120 rubles to the dollar and sells them at 130 to one. The small, crude handwritten sign on the window indicates it also exchanges deutsche marks, Swiss francs and French francs.

Vladimir Rogov, deputy section chief in Moscow city government's Department of Economic Crimes, said that Article 88 of the criminal code, which outlaws currency exchanges except at licensed banks and exchange points in hotels, is still on the country's law books.

The penalty for violating Article 88 ranges from a minimal fine to three to eight years imprisonment, depending on the amount of money exchanged, Rogov said.

"Both buyers and sellers can be prosecuted", he added.

But Rogov admitted that enforcement of the law has a low priority, and said he personally believed that illegal money changing was "a crime that doesn't hurt anyone".

Consular officers of several Western embassies said they had received no reports of citizens of their countries being arrested for money changing this year.

The U. S. , French and Canadian embassies advise citizens to observe the law and exchange money only at banks and licensed exchange points. Others are more lenient.

"Kiosks appear to be acceptable", a spokesman at the Italian Embassy said. "People are finding rates there that are comparable to the banks, and they are convenient".