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13 Aug, 2007 09:37

Russian policemen detained for alleged blackmail

Two police officers have been detained in Moscow while allegedly trying to extort a $US 1.5 MLN bribe. The suspects have been named as officers Kuznetsov and Kasyan.

A head of a “large business structure” has also been detained in connection with alleged blackmail.

The Prosecutor General's office has brought a criminal case against all three. If found guilty, they could face seven to twelve year sentences.

Russia's IT and electronics market is one of the most developed in the country. The annual growth reaches 20%, with a turnover of billions of dollars. But there is a number of corruption scandals and bribery cases around it, and this one would be quite ordinary corruption case but for $US 1.5 – that's how much the two policemen reportedly wanted for the release of goods they had impounded.

The Ultra Electronics warehouse was closed down last June after police suspected the firm of being involved in illegal trading.

Tonnes of computer equipment, which are falling in price day by day, were seized. A month later, the company revealed it had suffered financial losses of about $US 10 MLN.

“The law enforcement bodies seal the warehouses with the excuse that they may contain evidence. In most cases they do it illegally. And they demand bribes and threaten to confiscate the goods without any investigation,” commented Aleksey Galushchenko, Senior Executive, Ultra Electronics.

Russia's trade companies association unites a number of the world's leading brands such as Microsoft, Sony, and Intel. It claims the Ultra Electronics' case is just the tip of the iceberg.

“Today any product can be impounded as evidence. Then those products get sold at a very low price. This mechanism allows corrupt officials to benefit. They break the law, or so to say, use the gaps in the law to take away goods belonging to the companies,” said Anton Guskov, Trade companies association.

For a company whose goods are seized, Mr Guskov says, there are only two choices – to buy them back for double the price, or pay a bribe which often works out as the cheaper and easier alternative.

“Business in Russia suffers from so-called ”trade raids“ every week, it leads to billions of dollars of financial damage. But in most cases, the senior executives prefer not to make it public. Besides being a menace to business, it can also mean a personal threat,” added Anton Guskov.

So far, Russia Today has not been able to gain a comment from the officials.