Business Commentary for Rational Individuals

Motorola Takes on Russia

Dr. Bill Belew

Issue III - June 22, 2006

Introduction by Mr. Stolyarov: Russia's corrupt bureaucracy and rapidly expanding government are quickly becoming impediments to legitimate business there, writes Dr. Belew. A prime example of this trend is the Russian government's recent confiscation of $2 million dollars' worth of goods from Motorola. We at TRBJ hope that Motorola continues to staunchly resist the Russian regime's attempts to steal the rest of its property.

Russia is growing, and so are the shadows that are cast over the business proceedings there.

The bureaucracy is still extremely burdensome and growing. And laws are a matter of
convenience and seemingly circumvented at will -- or at least when you have the right connections.

Corruption and middlemen are a matter of course, and bribes are expected and given.

Confiscation of private goods -- i.e., Motorola's ongoing fiasco -- and resale for profit is
old news.

Legitimate dealings are called smuggling. And smuggling is called smuggling. 

Russian law allows confiscated material in criminal investigations to be sold or destroyed before the case is completed.

Motorola had $2 million worth of phones destroyed but still has 117,000 or $15 million
worth of additional phones that it is going to fight for.

Motorola ought not hold its breath.

The seizure and disposal of commercial goods without appeal is common, and RussGPS owner says that judges cost about 3 kopecks.

Russia will host the upcoming G8 meeting. At the meeting, Russian government officials hope to convince the world that Russia -- especially her oil -- is worth investing in.

Fat chance of that happening. No? But then again, somebody with money to burn will surely take the risk.

What do you think?


Dr. Bill Belew is a former Intelligence Officer for a Destroyer Squadron. He lived 20 years in Japan, where he started a language school for Japanese ECS. Dr. Belew teaches classes for a vocational school and online for a national university.

See Dr. Belew's blog, PanAsianBiz, for news and discussions about business and current events in Russia and Asia. See ZhongHuaRising for Dr. Belew's reports on business in China, RisingSunofNihon on business in Japan, and TheBizofKnowledge on business education.

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