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Zakharchenko & Co come up with how to get rich. Part 1

Zakharchenko & Co come up with how to get rich. Part 1

“Take away and possess” – “DPR” principle

During the time of occupation of a part of the Donetsk region, the “DPR” grouping managed to take away all profitable business. It does not produce or create anything, but took away enterprises, renamed them, changed owners several times. “ATB” commercial chain is an example. Then “DPR” quickly enacted “DPR laws” and organized new departments and organizations to control businesspeople.

Illegal “DPR” with Zakharchenko at the head has been imposing new, more sophisticated taxes and fines, inspections and arrests of goods. In other words, a kind of “business mincer” is created in the occupied areas to squeeze as much as possible from what is now under the control of the illegal grouping.

What to do with those who do not agree?

Not a long time ago entrepreneurs expressed disagreement with inspections and fines. The so-called Donetsk “mayor” Igor Martynov and  Aleksandr Timofeyev, “DPR minister of income and fees”, met with the rally participants. It is Timofeyev who is the curator of business inspections on the occupied territory.

The rally in Donetsk ended with an agreement which was called “a victory” by some businesspeople. The goods which had been delivered to the territory before 2014 will not be “taxed” by the grouping, but it is required for businesspeople to compile lists of such goods and to submit them to the taxation office. All the goods which have been delivered to the occupied territory since the beginning of 2014 and have not been sold yet should be “legalized”. The inspection will be resumed on August 1, 2916. It means the price of the goods will increase beginning from August 2016.
 
“Gold Reserves”

The inspections of business have been sustained, but in jewelry business it is gaining momentum. Starting from July 1, 2016, precious metals and gems will be sold on the “DPR territory” if there is a respective “DPR” license and compulsory rebranding of the product.
At the end of 2015, new old jewelry stores and pawn houses opened in the Donetsk region. Imposing new “laws”, “DPR” grouping runs the risk of cutting the number of newly opened jewelry stores to some minimum. If in the past a lot of businesspeople managed to avoid registering jewelries selling in social networks, in future such activities will be limited. 

Any good brought to the territory should be paid for at the so-called “DPR customs”. After that it is to be analyzed and labeled. These expenses are on bemused businesspeople.
A lot of self-employed businesspeople on the occupied territory continue trading the “gold reserve” left from 2014. However, the prices are several times higher which allows businesspeople to survive somehow if they manage to sell something. Besides, there are also products which were made before the war at Donetsk jewelry plant “Baget”. 

For example, the price of a gram of gold of 585 brand varies from 3 to 4 thousand roubles (1200-1600 Hryvnyas).  For example, a man’s ring with a double eagle made in Russia will cost 13.5 thousand roubles (5.4 thousand Hryvnyas) for 4.5 grams of gold.

“DPR” rules of work

The so-called “DPR ministry of finance” controls jewelry business. In order to have business on the occupied territory, jewelry shop and kiosk owners, first, should be registered with the “DPR ministry of finance”. Second, under the new rules, by June 1, 2016, all goods made of precious metals (for example, silver cutlery) will have had to undergo the so-called “state quality control” – the gold content (brand) is to be confirmed. Then they are to be branded and have a “DPR” jewelry label.



“DPR” jewelry shops have been getting ready for the revision for a long time. In November 2015, a special body called “State enterprise of content / quality control” was formed. However, the information about one more control of the products (made in Ukraine of Russia) which have already been controlled was presented by “DPR” three months before the inspection. Two months before the revision, the so-called laboratories started taking goods for control. It is evident that the period was too short for shop owners to go through the control procedure. Starting from June 1, 2016, on the occupied territory, it will be impossible to trade the staff without the “DPR” brand. If such goods are detected, they will be confiscated, and the owner of the staff will be fine – the sum of the fine will equal the cost of the confiscated staff. So, “DPR” grouping gets money at the expense of businesspeople. In the first case, businesspeople will pay for useless quality control and expertise; in the second case, the staff will be confiscated and they will have to pay fines.

Maksim Kateryninsky

New service "Explain Ukraine". This is a daily mailout of two articles which were written about the situation in the Donbas by Donbas journalists and translated into English. Honest vision of people who work in the field is unbiased and fresh which is crucial in the world which is full of desinformation and propaganda. We try to share this vision in out daily mailout.  You can subscribe here.

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