I know first-hand how to build and develop a private business in Ukraine...
More than 30 years ago, at the height of entrepreneurship, I quit my job at a state-owned enterprise and rushed into private business with great desire. I know, I can, I’m a specialist, there’s a great team to work with, the prospects are great!
The question of choosing a strategy immediately arose: give bribes or work honestly and bite in response to attacks, the team made a decision: we fight!
And so it began.
Now you can see articles about the judicial mafia, how judges destroy businesses.
Now, for the many thousandth time, the authorities are beginning to care about the “business climate” in the country, creating new “dummies” for analyzing the situation and chatter. At that time, “nostrils flared” from the prospects for business development, one’s own future well-being, and usefulness for the family and the country. Somehow Azarov’s restrictions on profitability and the weak first raids (both bandits and inspectors) are far away. The main thing is that the business developed, the transport “ran” 15 thousand km. per month (now 5-6 thousand for similar work), the team was satisfied with the work and salary, the first loans went out for business development. It rushed!
I emphasize that in the business itself there were no problems with the availability of work, that is, with clients, with competitors, minor misunderstandings with customs or the police were resolved without affecting the work process. However, as it turned out, at the same time as businesses then, officials and judges also developed. Their desires, needs, and impudence were inflated.
The first big problems appeared 5 years after starting the business. That is, when the team has already formed, submitted to the idea of working well, and become related. And the business developed rapidly. The first loan of 500 thousand dollars in the Odessa branch of the state bank (also the first for the bank, because before that we had never heard of foreign currency loans) and... the first tax audit. And immediately a huge fine of hundreds of millions of rubles
Then the tax office blocked the claims immediately on our current account and we stopped. The trials passed quickly, the blockade was lifted, minor losses from downtime and forward again. But... After 2 months the account was blocked again. I ask the tax office: why? The answer is – not us. This is a trial on its own initiative. Like this? What court, who is the judge? Odessa Regional Arbitration. I’m going to the chairman of the court: “I won’t give a bribe!” Judge B. Vikhrov: “I reviewed your case on my own initiative, I have the right. If you complain, the complaints will go to Kyiv through me, and I simply won’t send them.”
So, my business is “flying away”, I can’t work, I can’t give a foreign currency loan, my accounts are blocked, the team (about a hundred employees) has a question for me. I return to the judge: how much? We negotiated for 70 thousand dollars. Of course, I don’t have this money in cash. I asked for a “life-changing” installment plan for a year. The “judge” allowed it. I turned to the team: help, we’ll work it out.
As it turned out later, I was a very small episode for this judge. After several years of such judging, this judge “rested in God.” They shot him with a machine gun. And my business turned into earning and cashing out $70,000 in subsequent years.
I emphasize that neither I nor the experienced lawyers even had any doubt that if I had tried to “imprison “judge” B. Vikhrov with his bribe, I would have lost my business. Because after the start of the showdown with the bribe, simply removing the seizure from the accounts of my company would turn into many months of fuss (with the full prospect of many years). A showdown with any judge is purely a priori a losing option, in which everyone would lose: the business, the team, the state bank, my clients and me and my family.
In the end, as a result, these first losses and bribes turned into a 30-year mockery of my business, but it was then that the only correct option was chosen: to pay a bribe.
Then it rushed on. And we are working. “State” too. A few years later, my truck with transit cargo arrives at the Ukrainian border. The Chinese clients got something wrong on the bill. In terms of price, quantity, weight, name, everything is correct, but there is some discrepancy with the article numbers of these products. Industrial products, not vodka or clothing. Usually, the driver was “given passage,” but he decided to “save money” and did not pay the customs officer his inevitable share. That's why the car became.
Later it became clear that she stopped working for almost six months. The total damage from the idle time of the machine with the container amounted to more than $50 thousand. For my small private enterprise this is already a huge loss. But it seems that the government participants in this action already knew the result in advance. And I didn’t know this then.
After the first court hearing, the judge tells my lawyer: “My son is getting married, I need 6 thousand dollars...”. I called the Chinese: “You made a mistake in the documents, you have to pay.” We pay. There is a quick court decision: “Customs must release the car.” We don’t have time to pick it up in a few days, the prosecutor’s office immediately files an appeal. Court again. A month later. It only became clear later that we had fallen into a typical pattern.
The customs, court and prosecutor's office in this regional town are located on the same square, they all know each other, dine together and go to the same bathhouse. The scheme for “finishing money for suckers” is perfectly worked out. After the first appeal hearing, the judges “accepted” a new “sentence” to my lawyers: 9 thousand dollars. Explaining that there are already three of them.
I called the Chinese: “You made a mistake in the documents, you have to pay again.” We pay. There is a court decision: customs must release the car. The customs does not give it back, “they are waiting until they receive the original court decision by mail.” After 2 weeks, the prosecutor's office, which is located on the same square across the road, files a cassation appeal. The court instantly, within 24 hours, cancels the “freedom for the car” until the end of the new trial.
“Another sentence for the Chinese” – 12 thousand dollars. The total is already 27 thousand full US dollars in cash. The cargo costs almost half a million, the Chinese pay again. For me, too, the cost of a leasing tractor with a trailer is more than 100 thousand euros and there is no way to lose it, the delay of a container for six months is more than ten thousand dollars.
The scheme for “finding money” for suckers was perfectly worked out, all their whims were paid for. And this time, a showdown with these judges, prosecutors, customs officers would be purely a priori a losing option, in which we would all lose: the business, the team, the state bank, my clients and I and my family, and perhaps the judges would lose something, but this is a big question. As then, so now.
Once again: small private businesses in Ukraine are constantly faced with complex moral tasks from 2 conditions. The first condition: judicial showdowns, “ghostly catching dishonest judges” on bribes and, more than possible, loss of business (team, clients, pace of business development, etc.) or don’t give a damn about the cash, hand it over to the judges and continue the work of life, that is, business. A very difficult moral task, but you don’t really have to choose. There is no third.
After six months of delay, this car moved on with cargo to another country. The state received nothing, judges, prosecutors, customs got rich from a bribe from the Chinese, and I “earned” almost 50 thousand dollars in damages from this downtime.
But this is not the end. The court documents are drawn up in such a way that it is neither my fault nor the Chinese fault in this case at all, and I am deciding on a lawsuit with customs. To sue this culprit for his direct losses. I emphasize that I only want direct losses. And this is again a strategic mistake.
Court hearings on this process in countless quantities lasted 5 years, financial, economic, accounting examinations at my expense in dozens and in the end Judge Marin informed the participants in the action from the last meeting (customs, prosecutor, me and the lawyer): “Zakharov is completely right , but I, the judge, cannot consider the case in his favor. Because I can not!". A curtain. And again, my business turned into earning another 50 thousand dollars to cover the damage from my home state. But for the next few years.
And again, the moral task in “business a la Ukraine”: hope that you will sue the state for at least direct damage and go to continue business or silently suffer losses without any hope of compensation? It's better not to hope. It won't be so mentally difficult in the end.
It’s interesting that I once had a company in the states for about 10 years. Money came in for sea freight, sea freight came out, sometimes for 10-12 million dollars a year. After 5 years of this kind of work, the local state tax office sent a letter: “Are you going to pay taxes?” I answered them: “Why? I have no real estate, insurance, car, salary, and so on. Tell me how to pay, I will pay.” Their answer hung in my frame for a very long time: “We completely agree with you. As soon as you have something you need to pay taxes on, let me know!” And without any courts or Ukrainian bullying.
I don't give these examples to correct anything. That business no longer exists, and so do some of these judges. I give these examples because in Ukraine, small and medium-sized businesses a priori cannot compete with judges (with other officials too) in their field. “They don’t jump against a machine gun with a sabre...” Small and medium-sized businesses in our country a priori lose in battles called “to give or not to give bribes.”
This experience of “giving” is already in the subcortex of the brain, which is transmitted with all the experience of our first business generation for Ukraine. In particular, all my experience and my generation are now passing on this experience to those who will rebuild the country after the war: “Don’t fight with judges, give bribes (spit on the money and give). Especially if the judge himself demands it or you feel that a scheme is working against you (judge-prosecutor, judge-cop-prosecutor, judge-customs officer-prosecutor, etc.”).
A new movement “Manifesto 42” has recently been announced in the country and I have nothing against the leaders of “Obolon”, “Kievkhleb”, “Cherkasy Bus” and other respected directors who were included in this Manifesto. But the “kids” have completely different opportunities to “resolve cases in the courts.” Radically different. “Demonstrators-42” will print “business cards” for themselves and can continue to fight this “beyond law”, which, in the name of the state, has reduced business robbery to a system. “Demonstrators-42,” at best, will hire lawyers and deputies and write some laws “for themselves.” And the kids will again go to “work off” cash for judges, prosecutors, cops, office workers, Ubepovkas and others barely mentioned.
Only a complete change in the system of relations between business and the state will change the situation.
Only the strictest rule of law in favor of business, private property, only the inalienable right of business to protect their home, family, property, business, property, including by armed means, can guarantee this country that its small and medium-sized businesses will begin to develop normally.
We have already gone through the supremacy of judges, prosecutors, cops and clerks. We came to a complete dead end. From which the exit is only exclusively in the opposite direction. Turn 180 degrees. As a turn towards social and public justice towards those who create public welfare from those who only parasitize on what is created. If there were a verb from the word “worms,” then nothing better could have been used in this situation.
And separately about the timing of judging. How long did the American court recently consider the $50 billion Madoff case? On December 10, the FBI received information about the offense, on December 11 they were arrested, and on June 29 of the following year, Manhattan District Court Judge Danny Chin sentenced B. Madoff to 150 years in prison. Six months were enough for a case worth 50 billion dollars. And my case is only 50 thousand, the Ukrainian judges, to whom I paid the salary, milked it for 5 years. And in the end they said that they cannot offend the state that caused me harm.
The right to due process and a speedy and public trial is one of the components of the Bill of Rights that was added to the US Constitution back in 1791.
We don’t have a “Bill of Rights” and we don’t have a fair trial.
And again I have to end my confession with a phrase from my last articles: “We can only wait for the next legislators and stewards. The current ones couldn’t cope with the word AT ALL.”
