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In 2008 the Russian Customs office decided to close some customs posts and move them to new locations. This required companies to file reams of paperwork to shift their supply chain flow to a new route and customs entry point. Without the proper registration at a particular post, the goods would not pass through and could be caught indefinitely in a bureaucratic quagmire. It required a visit to the customs office to sign documents, shake hands, and agree on the new process.
One winter day I sat in a dingy Customs office facing a high ranking official across his desk. He took off his large-brimmed official hat, placed it on the table and looked at me. At the time I was the Managing Director of Chrysler Russia and I sat there with my Spare Parts Manager. The official cleared his throat and stated in Russian that it could be possible that our parts would be delayed during customs clearance under certain "circumstances". My Parts Manager translated.
The customs official cleared his throat again and informed me that with the right "method" the parts would not get stuck and flow through unimpeded. I listened to the translation wondering where this was leading.
"Can you wire funds to a Russian bank account to get your shipment released quickly?", came the question.
The hair on the back of my neck rose. "No", I replied, "that would not be possible based on corporate rules".
"Can you wire funds to an account in Cyprus?" came the follow up question.
Fully understanding the context, I replied "no, our company is unable to wire funds to either account for the purpose of facilitating speed of our shipments. It is against global corporate policy".
The official looked at me long and hard. "You understand that your spare parts may be stuck in Customs for days, weeks, or indefinitely, in that case", he softly threatened.
I nodded my understanding and underlined with a firm "I understand and we are willing to take the chance of delay. We will send a new shipment if the parts cannot clear."
The customs official grunted, stood up, donned his official hat, and left the room without a handshake or farewell. My Spare Parts Manager and I looked at each other, took a deep breath, stood up and made our way out to my car.
Why write about corruption? For two reasons, first with regards to working outside of one’s home country. Second, the current trying economic times can lead to taking desperate decisions. Nobody sets out to be “corrupt” on purpose. It can happen due to the circumstances around them and it may happen so subtly it is hard to distinguish.
Business is conducted differently in different countries. Depending on the country, varying degrees of corruption may tolerated or even accepted. This could be between business partners, between businesses and companies that support them (ex. utilities), or government officials.
You can get a feeling for the degree of corruption by scanning the Transparency International list of countries ranked from least to most corrupt. In the 2022 edition (found here) Russia is ranked at 137 out of 180, quite high in terms of corruption. I had to take numerous corporate classes, including on the Foreign Corrupt Practices Act (FCPA), several times and undergo a biannual corporate audit.
With corruption, once is too much.
Challenging economic conditions can also lead to higher levels of corruption as individuals from the paying or receiving end may be under pressure economically. As a business comes under intense pressure it might lead to considering actions under these singular circumstances that my not otherwise be considered.
Whether you decide to proceed down that path or not, there is one thing to remember: with corruption, once is too much. As soon as you have taken one step over the line, at least one other individual, perhaps more, will know it. That knowledge will be out there forever. And it could come back to haunt you either legally or publicly.
I am not trying to be a moral lecturer. I can not tell you which choice to take. But I can only advise deep consideration before crossing that line the first time. It is an action that cannot be taken back.
Did Chrysler parts shipments ever get stuck and delayed at Russian Customs? Absolutely. Did the company ever pay facilitation payments to clear them out? Never. Another shipment was packed and shipped via a different customs entry point in order to try clearance there.
With corruption, once is too much.
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