Zakharchenko & Co come up with how to get rich. Part 2

“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.

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

The so-called “State enterprise of standard control” is a monopolist on the occupied territory. There is a fixed price for every economic entity which they are to pay for the analysis of each sample and branding of precious metals. The highest tariff is for those economic entities and physical persons who bring for analysis products produced abroad, for example, in Ukraine of Russia. At the same time, nobody produces jewelry on the occupied territory now, so any piece of jewelry brought to Ukraine will be considered a foreign one.

The price of a gram of such jewelry varies. For example, it is 8.5 roubles for a gram of a piece of jewelry made of gold and 2.75 for a gram made of silver; it is  6.5 roubles for palladium, 8 roubles for the staff made of platinum, and 1.2 – for a gram of cutlery made of silver. Besides, the prices take into consideration the number of pieces of jewelry. For instance, a pair of earrings or cufflinks is counted as two units. If to count the number of products which goldsmiths have in their shops and their weight, the sums will come up to thousands of roubles.

There is also extra pay for extra time spent by experts from the laboratory. So, the pay for branding precious metals will be 30-50% higher if the product consists of different alloys, if it does not correspond to the declared brand, or the staff is packed in individual packing with fixed labels.

The new “DPR” rules establish separate payment for different ways of branding jewelry. The budget, the cheapest one is mechanic or laser branding. It is from 3.5 to 4.5 roubles (it is equivalent to 1.4-1.8 Hryvnyas) for gold, platinum, or palladium staff. The most expensive way is the electronic one: 7.5 roubles or 3 Hryvnyas for gold, 6.9 roubles for silver which is 2.76 Hryvnyas. The price is much higher for erasing fake brands on products – 29 roubles (which is 12 Hryvnyas).  Suspended stamps fixed to products will be 5.5 roubles (equivalent to 2.2 Hryvnyas) for gold, platinum, and palladium, and 3.9 roubles (1.56 Hryvnyas) – for products made of silver.

There are also fixed prices for extra services – for keeping and storing the products in the laboratory – 1 rouble per 1 gram a day.

It seems that the prices are not very high, but when everything is summed up (analysis, branding, rebranding, storing, etc.) and then the sum is multiplied by grams, the total sum of money will be quite considerable. 

Besides, jewelries from physical entities are accepted only if the owners present a customs declaration which confirms that the staff was brought to the occupied territory. If the jewelries were bought for commerce, there should be papers confirming the act of buying. Pawn houses are to have lists of valuables which have not been bought out. There are to be contract numbers, names of the people who laid them, the weight and brand of those valuables.

The new rules make businesspeople go through the procedure in a speedy way. And for that they have to give bribes. An owner of a jewelry shop in Makeevka explained, “Besides the payment for all the procedures, we have to pay a tax on each piece of jewelry which is sold by us. In order to be sold, the goods should be in the shop, not in the laboratory. That is why I took my staff to the laboratory in parts (some people do not take their staff to the laboratory at all as they are afraid that it will not be given back ). A week passed. The jewelries were still there. I went to the laboratory, gave them 12 thousand roubles (equivalent to 4,800 Hryvnyas) and the next day they were ready. This is the way how we work”.

According to the new rules of the “DPR ministry of finance”, the procedure of the  analysis and branding is to take 15 days. Some other kinds of expertise may take up to 30 days.

Observing all the “DPR new rules” will prolong the process of the so-called “legalization” of jewelries and will lead to checks, revisions, confiscations and fines. For those who will have gone through all the stages of the “control” process, the “new rules” mean raising the prices of gold and silver. Taking into account the fact that the prices for jewelry are quite high for buyers, the new rules will not raise the demand for jewelry and make people buy. They will not stimulate the development of jewelry business on the occupied territory. However, the rules mean that “DPR” will cash in on the money of businesspeople who have their business on the occupied territory.

Maksim Kateryninsky

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