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. Last Updated: 07/27/2016

Ustinov Tells SMEs He's on Their Side

MTProsecutor General Vladimir Ustinov
Small and medium-sized businesses found an unlikely supporter Thursday in the form of the country's top prosecutor, who said doing business in Russia was hard but that his office was there to help.

Prosecutor General Vladimir Ustinov, who started a second five-year term in office earlier this year, urged businessmen to make a formal complaint to his office in instances of extortion and other legal violations by state officials and criminal groups.

"As things stand, it's hard for small businesses to work in Russia," Ustinov told a meeting of Opora, a small-business lobby group. "As soon as an entrepreneur gets on his feet, they begin to put pressure on him."

He condemned the growing practice of bribes being taken by state officials under the guise of charitable donations. He also said small businesses faced endless checks by officials. On average, small businesses in Russia have to go through seven safety and other checks per year, Ustinov said. "Sometimes the costs [of such checks] are so high that the economic activity begins to not make any sense," he said.

His comments come after Ustinov issued an order in August telling prosecutors to intensify their scrutiny of unprincipled state officials as well as criminals -- a move aimed at helping smaller businesses. The order has already helped curb corruption in the Tula region, he said.

Sergei Borisov, the head of Opora, praised the order. Going to court was "very expensive" and "very ineffective" for 70 percent of small businesses in the country, Borisov said.

Ustinov, who has previously preached publicly on the importance of morality and religion, said many of Russia's woes stemmed from a lack of spirituality. Citing the Old Testament and Russian philosophers, he said businesses should do their utmost to obey the law.

An outspoken backer of the Kremlin's moves to rein in oligarchs, Ustinov said he was sorry prosecutors could not interfere in civil disputes between enterprises, something they could do just a few years ago.

"As a result, we now have a barbarian seizure of the market, internal corporate wars, takeovers of the enterprises through illegal bankruptcy [and] clear manipulations of documents," he said.

Such disputes are now handled in the country's arbitration courts.

Businessmen complained about various issues, including the barriers regional administrations are putting up to prevent competition from Moscow.

Aras Agalarov, a real estate developer and president of Crocus International, said it took "not months but years" to obtain all the necessary licenses to start construction.

Ustinov said he did not have ready answers for everybody, but urged businessmen to "simply write to and come to a prosecutor's office." But he stressed that entrepreneurs should also cooperate with police. "Otherwise, you are going to flood me now," he said.