Practice business of kickbacks: How do we, in the West and in Russia

Практика бизнес-откатов: Как это делают у нас, на Западе и в России

The original on the website of the Andrey Golovachev in Facebook

I have a friend businessman, owning a large plant in Ukraine. It produces and supplies components to several well-known transnational corporations, which are represented by its production facilities in virtually every country of Europe: from Germany to Russia.

One or two times a year he has to participate in a grueling tenders for the right to be the exclusive supplier of these companies for the next 6-12 months. As a rule, every country where there are multinationals, conducts its tenders on their own. And we are talking about contracts for tens of millions of dollars.

I wonder how my friend describes the behavior of those managers who conduct procurement tenders in various countries. So, from East to West.

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1. Russia. Buyers are very aggressive, firmly and clearly articulate your interest. Despite the fact that salaries are suppliers of the highest in the CIS, however, the Russians demand the highest rate rollbacks. Afraid of nothing, act arrogantly and cynically willing to risk their position for the big rollback. Require cash only in the currency. Often insist on advance payment.

2. Ukraine. Buyers are more cautious than the Russians. More value the post. Weighed the risks. The norm of the required roll – around 50% of the Russian. Carrying out tenders, try to keep the visibility of the corporate standards for procurement. Ready to take the pullback as in the currency and in UAH. Require payment only after payment of the supplies from his company.

3. Central Europe (Poland, Hungary, The Czech Republic, Slovakia). Buyers themselves are kickbacks not require hints do. 30-40% of buyers agree to work for a pullback after such a proposal followed. Are subtly, professionally deduce the desired firm to win the tender. Please transfer the money to your offshore account. Contracts less than 5 million euros almost no interest.

4. Southern Europe (Spain, Italy, Portugal, Greece) – almost the same picture as in the countries of Central Europe, but kickbacks are taken from contracts less than 10 million euros. With the exception of the Greeks, which behave almost like the Russians.

5. Western Europe (Germany, Austria, France). Ethnic Germans and Austrians do not take bribes. But if the position was any representative of Central or southern Europe, it may break on a very large contract. But it is quite rare.

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A few examples from his rich practice.

1. 15 years ago I ran a pretty big printing factory and was quite pleased with his work. However, one recruitment Agency has decided to interest me in a position of Director of logistics and supply at PJSC “Azovstal” (Akhmetov). When I reasonably said that I would not like to move from the CEO position for a fall, the head of the Agency I calmly replied: “Andrey, I understand you Azovstal only one procurement of bread for their canteens will be able to purchase a Mercedes for my wife. And the metal will buy a Porsche every quarter. So think”.

2. When 8 years ago I was trying to get their products in one of the famous Western trade network (even calling is awkward!), it turned out that the whole system of kickbacks it was controlled… the head of security. Of course, we, Ukrainians, held a special training course in the headquarters of the Corporation. About our home-grown retail chains not even worth talking about. There is total darkness: all completely enmeshed in corruption, from top to bottom. There were even cases where the shareholders themselves were dragged from their own company.

The mentality, though!

When our business community is nobly outraged by the corruption among politicians and officials, I always laugh. All the good in equal measure! The society is always United in their basic culture.

Andrey Golovachev

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