Step № 9 – “Do everything only according to the law”

“Your first 50 right steps to enter the Russian food market”.

Step № 9 – “Do everything only according to the law”

Before I got involved into food business I graduated from two law schools in Russia. In this way I am a very rare specialist in Russian legislation with two legal degrees: one in criminal and the other one – in civil law. I hope you will take this step very seriously because everything I share with you here is written by a lawyer.

Legal environment.

Law in Russia is being strictly executed. In Russia, there are 32 types of law, all of which are taught at a law school. The main law of Russia is the Constitution of the Russian Federation. In Russia, there is also a very simple and clear hierarchy of laws, to be more precise, there is a simple rule that says what laws are more important than the others.

As I said, the most important regulatory act in Russia is the Constitution of the Russian Federation. Then, there are federal constitutional laws, followed by federal laws, then there are decrees and orders of the President of Russia, then the acts of the Government, followed by acts issued by ministries and so on below.

The constitution is one for all of Russia and all regions of Russia are subject to it. But in each region of Russia (there are only 85), there are additional laws that apply to the territory of this region.

According to Part 3 of Art. 62 of the Constitution of the Russian Federation “foreign citizens and stateless persons in the Russian Federation bear responsibilities on a par with Russian citizens”. This means that foreigners are brought to administrative, criminal, material, and civil liabilities on the basis of the same rules as citizens of Russia.

That means that, unlike in other states, foreign citizens are equal before the law. The fact that you are a foreigner does not guarantee you any privileges before the law. Exception is only given to persons with diplomatic immunity.

I want to note that in the hierarchy of laws, you will not see international legal acts. According to Russian laws, the main law in force in Russia is the Constitution of Russia, which is not subject to any international law.

A foreigner rights and responsibilities.

According to the Russian Constitution, foreigners are equal with Russians, but in fact, of course, the attitude towards a foreigner will be stricter (but within the law!). If some minor violation of the legislation can be forgiven to a Russian citizen, a foreigner or a foreign company can never account for that.

Therefore, when planning to enter the Russian food market, do everything only according to the law. Believe me, there will be a lot of people willing to offer you “to do something cheaper”. For example, to clear your goods, at special “reduced tariffs”. Or if you plan to supply food to Russian food retail chains, you may be offered “to get a deal, but for cash.”

Contracts vs. cash.

Remember that in order to supply to almost any Russian food chains, you have to pay. This payment is official, it is registered in the contract with this chain and it can only be paid via a bank transfer. Remember that all relationships between companies in Russia occur only via bank transfers. Cash is never used. There are exceptions, of course, but you are very unlikely to come across them.

A prerequisite for any payment between companies is always a contract (or agreement), a contract is signed at the beginning, then only a payment is made in the form of a bank transfer.

In many countries when a foreigner opens a company, he must have an inhouse lawyer. In Russia, this is not necessary. In many Russian companies there are no lawyers.

Study in advance all the information on the Internet that deals with the legal issues of your business in Russia. You may also want to ask for advice of some  Russian law firm or to hire a representative in Russia or an adviser to consult you on such legal issues. Such a firm/person will help you draft your contracts correctly to ensure smooth work with your Russian partners.

I definitely recommend you the following. If you plan to work with any Russian company, then always sign contracts in two languages ​​- your native one and Russian. This will allow you not only to make sure that everything written in the contract is correct, but in case of dispute, ask for help in a Russian court. According to the law of Russia, only the court says who is right in each given situation. All issues related to business are decided by a special Arbitration Court of Russia.

In other words, to protect a foreign company in Russia you can use only Russian legislation.

Yours faithfully,

Alexander Sinyanskiy

Business Adviser in the Russian Food Industry

www.alexandersinyanskiy.ru  

Please read the same my other steps:

Step № 2 – “Look at you products and website by the eyes of a Russian”

Step № 3 – “Do not offer commission!”

Step № 4 – “Learn and research about your future competitors”

Step № 5 – “Assess potential obstacles”

Step № 6 – “The most critical MUST-DO: localize and translate your food business into the Russian language”

Step № 10 – “Corruption and crime”

Step № 12 – “We are looking for a food distributor in Russia! Just one exclusive distributor!”

Step № 19 – “Always collect all the information about your Russian partners”

Step№ 21 – “GMO food, organic food and food additives”

Step № 24 – “Who are your potential clients in Russia?

Step № 26 – “Russian social networks”

Step № 32 – “Opening a Russian legal entity (LLC and JSC)”

Step № 33 – “Open a joint venture or buy a stake in a Russian business”

Step № 34 – “Opening a branch or a representative office of your company in Russia”

Step № 41 – “Are you thinking of selling your food franchise to Russia? Good idea!”

Step № 46 – “How to find a distributor or buyer for FREE in the food market of Russia”

Step № 47 – “Holidays and days off in Russia. What for? Of course for business”

Step № 48 – “E-commerce in Russia”

Step № 49 – “Start your food business in Russia remotely and manage all processes without problems”

Lack of customization for the Russian food market, on the example of a bread machine of a very famous global company.

You often ask me why I do not use Whatsapp? I answer!

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