Wed Jun 14th, 2006 at 06:34:19 PM EST
I found a somewhat puzzling article in the NYT international pages this morning over coffee. It's a really quite confusing report about what could either be a trade dispute, a regulatory conflict between the Russian government and transnational capital, or plain old corruption. So, I thought, maybe somebody here could clarify what exactly is going on. More on the flip.
Full text of the article should be available here
MOSCOW, June 13 -- On March 29, agents of the Interior Ministry seized 167,500 mobile phones that Motorola had shipped into Sheremetyevo Airport in Moscow, dragging the company into the Kafkaesque world where Russian justice intersects with business.
The phones were first declared counterfeits, then contraband, then a health hazard, and now they are evidence in a criminal investigation focused, again, on suspected smuggling.
In April, the Interior Ministry made a show of destroying some of the phones -- 49,991, officials said -- after saying that one model violated safety standards, though suspicion abounds that not all the phones were destroyed. The same model remains on sale in shops around Moscow.
Then a patent dispute began.
With a shadowy economy, a growing bureaucracy and a capricious embrace of law, Russia has long been a maddening place for businesses to operate, a developing market that is at once lucrative and full of risks.
But the experience of Motorola has highlighted what executives, analysts and even some pro-government lawmakers in a largely pliant Parliament say is a worrisome trend: law enforcement agencies are not only taking sides in commercial disputes, but also precipitating them to enrich corrupt officials and their intermediaries.
So, the NYT seems to be going with the "The Russians are scary and unpredictable" meme, but from the facts presented in the article, I'm not entirely sure what is going on here.
If this is an import/export dispute between Russia and Motorola, what is the main issue over which they are fighting? Does Russia just want a payoff? Are IP issues to blame?
If this is a matter of internal regulatory compliance vs. transnational capital, what exactly is the regulation at hand, and why is Motorola challenging it?
If this is corruption at work, than is part of a common pattern, or is this a bizarre and isolated incident?