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. Last Updated: 07/27/2016

Red Tape Swells Despite Kremlin Vow

For being just a small strip of gray paper, a foreigner’s registration can become quite a bureaucratic nightmare — especially when you lose it.

This is what happened to Austrian businessman Alexander Schachner this summer. He left the country without handing in his registration. When he tried to re-register upon returning in August, his consultancy firm was fined 400,000 rubles ($13,700).

Apart from the hefty sum, Schachner said, the biggest hassle for him was the many hours he had to spend at police stations and with Federal Migration Service representatives.

“I was forced to fill out incredible amounts of paperwork. I sat with officers who seemed to have little understanding of what they were doing but said there was no way out for me. All for a tiny piece of missing paper. It was so bizarre,” he said in an interview last week.

Schachner challenged the fine with an official complaint, and the fine was waived after he received backing from the German Chamber of Commerce.

The registration hassle is just one facet of a bigger phenomenon felt by everyone in the country: Despite President Dmitry Medvedev’s latest pledges to fight for modernization, the country’s infamous bureaucracy continues to grow.

“This kind of modernization cannot take place in an economy overtaken by other processes, one that is infested with corruption and is ruled by an ineffective bureaucracy,” Medvedev told the St. Petersburg International Economic Forum on June 5.

“A research historian once wrote that even as far back as the 18th century, the Russian government bureaucracy grew at the same pace as society, swallowing the society as it expanded. This is a well-known but highly unwanted scenario that must be avoided,” he said.

Schachner got off lucky. The Austrian had clearly violated a regulation that mandates employers to inform authorities whenever their foreign staff members leave the country for more than three working days.

The law, whose logic is not clear even to experts, was introduced back in 2007 and is causing an increasing number of headaches, especially to foreign employers.

“The rules are very strict, and there is no room to determine whether someone acted willfully or just negligently. Fines can be exorbitant for even small violations,” said Frank Schauff, CEO of the Association of European Business, a lobby group.

The registration rule was actually introduced to make life easier for expatriates by moving the obligation from landlords to employers, said Alexei Filippenkov, head of the Visa Delight agency, which helps companies navigate Russian bureaucracy. But at the same time, he said, the de-registration requirement was changed from visa expiry to every departure.

In another layer of red tape, an amendment to the law on limited liability companies required all such firms to re-register this summer. While the amendment’s rationale was to ease corporate acquisitions, its implementation resulted in long lines and angry company owners, who by law are required to present the registration personally in front of a tax inspector.

“And there is only one tax inspector for all of Moscow,” complained Ruslan Rajapov, owner of the Correa’s chain of cafes who was preparing to submit documents.

“I am planning to queue up outside the tax inspectorate at 4 a.m. in order to get that done in one day,” Rajapov said, speaking from his cell phone while waiting at a notary to get his paperwork ready.

He said he would have to repeat the process because the inspectorate accepts only one legal entity at a time and his company consists of more than one legal entity.

“This also creates a great opportunity to take bribes,” Rajapov said.

In a sign that bureaucratization is spreading in other areas as well, St. Petersburg State University decided last month that scientists seeking foreign grants or wishing to present or publish their work abroad needed to obtain permission from administrators.

After the decision was leaked on the Cogita.ru web site, worried scientists asked whether a new “iron curtain” would cut off the country’s academic community, already hit hard by the 1990s exodus of many of its brightest talent.

But the university denied that the decision would have any negative effect on international academic relations. Because the submissions will be done by deans, scientists’ work will not be affected, Igor Gorlinsky, a first vice rector of the university, said in e-mailed comments last week. Gorlinsky also said the university had simply clarified a rule that had been in place since 1999 and that conformed with federal law.

Yet spokespeople for both Moscow State University and the Russian Academy of Sciences told The Moscow Times that no comparable rule existed at either institution to their knowledge. “This would clearly result in worsening conditions for international research,” Moscow State University spokeswoman Olesya Bezler said.

Amid a growing media flap, St. Petersburg State University issued a statement Friday saying that the new rules would not apply to researchers in humanities and social sciences and only to those working with “dual-use technology,” nonmilitary techniques that could have military applications.

Not only higher educational facilities are affected. At least one school in central Moscow is being forced to close the building that housed its first graders for more than 15 years after city authorities suddenly found that it violated sanitary norms.

The school’s directorate was notified in early October that the building should be vacated by Nov. 5 because it lacked facilities to prepare food on the premises, said Eduard Greshnikov, the father of one of 22 students affected. He said the principal told worried parents that she decided to comply for fear of losing the building altogether.

“She said that sanitary inspections have increased recently and that she did not want to provoke a dispute with her superiors,” Greshnikov said, requesting not to name the school because of the principal’s worries.

David Fawkes, a British economist who headed an EU-funded administrative reform project in Russia until last year, said the state of bureaucracy has seemingly worsened and prospects were bleak for improvement because there is no longer any constituency for change.

“The government is unable or unwilling to do anything substantive. The Duma has ceased to play any material role, and the public is thoroughly disenchanted,” Fawkes said in e-mailed comments. “Arguably, the only reason there isn’t more public anger is that people never expected much to begin with and so are inured to disappointment.”

His words were echoed by Yury Korgunyuk, a researcher with the anti-corruption Indem think tank, who said the problem could only be tackled from bottom to top. “If the intelligentsia is barely discernible and society fails to protest, the problem will persist,” he said.

He said the path toward reforming bureaucracy from its present self-serving attitude to an efficient part of the state would be controls “from society, from parliament, a free press and independent courts.”

However, he said, this is unlikely to happen any time soon. “Our society does not feel the need for this. It feels no connection between its well being and the ills of a bureaucracy that behaves as it likes,” he said.

Meanwhile, Schachner, the Austrian businessman, faces a new problem. On Friday, he was forced to leave a plane that he had just boarded at Domodedovo Airport after having been caught with an undeclared 11,000 euros ($16,000) in cash at customs. By law, a person can carry up to $3,000 undeclared and $10,000 declared.

“You get the impression of total helplessness — every law is used against you, regardless of how nonsensical it is,” he told The Moscow Times after emerging from the airport police station where the entire sum was confiscated.