Difference between revisions of "Krysha (Russia, Ukraine, Belarus)"

The term ''krysha'' became widely used in post-Soviet republics after the disintegration of the Soviet Union when a series of sweeping political and socio-economic reforms, mainly concerned with the privatisation of state property, created a conducive environment for the empowerment of criminal organisations. Therefore, the earliest and most common usage of ''krysha'' relates to extortion by criminal organisations and gangs through the threat of violence or of actual violence. ‘In many cases, the business will have to pay from 10 to 60 percent of its pre-tax income for protection regardless of who provides it. … If the criminals find a business particularly attractive, they will demand an ownership share of it’ (CSIS 1997, p. 29<ref>CSIS 1997. Russian Organized Crime. Global Organized Crime Project, Center for International and Strategic Studies, Washington, DC.</ref>).  

The term ''krysha'' became widely used in post-Soviet republics after the disintegration of the Soviet Union when a series of sweeping political and socio-economic reforms, mainly concerned with the privatisation of state property, created a conducive environment for the empowerment of criminal organisations. Therefore, the earliest and most common usage of ''krysha'' relates to extortion by criminal organisations and gangs through the threat of violence or of actual violence. ‘In many cases, the business will have to pay from 10 to 60 percent of its pre-tax income for protection regardless of who provides it. … If the criminals find a business particularly attractive, they will demand an ownership share of it’ (CSIS 1997, p. 29<ref>CSIS 1997. Russian Organized Crime. Global Organized Crime Project, Center for International and Strategic Studies, Washington, DC.</ref>).  

Although Russian organised crime groups have been known to run ''krysha'', public officials have also sought to offer such protective services and extract the same kind of informal payments as criminal organisations. Law enforcement agencies have been reported to operate a ''de facto'' protection racket for criminal organisations (Volkov 2002a<ref>Vokov, V. 2002.a Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism. Ithaca: Cornell University Press.</ref>). Dishonest public servants would need neither violence nor threat of violence to establish ''krysha'' but will manipulate the law and bureaucratic procedures. Such abuses of public office undermine the competitive market system, especially in the case of small and medium-size businesses, making them dependent on informal arrangements between state officials and criminal organisations. McCarthy (2011, p. 64<ref>McCarthy, D.M.P. 2011. An Economic History of Organized Crime: A National and Transnational Approach. London and New York: Routledge.</ref>) argues that the involvement of public servants in protection rackets makes ''krysha'' in Russia strikingly different from analogous informal practices in other national contexts, such as ''pizzo'' (extortion money) levied by mafia organisations in Italy. Therefore, the effectiveness of a criminal ''krysha'' often depends on the power it has, relative to other protective ‘roofs’, including those provided by state institutions (Volkov 2002a<ref>Vokov, V. 2002.a Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism. Ithaca: Cornell University Press.</ref>). ‘Less powerful criminal groups would seek to align themselves with more powerful criminal groups, who in turn … obtain their own ''krysha'' from corrupt government officials’ (von Lampe 2015, p. 275<ref>von Lampe, K. 2015. Organized Crime: Analyzing Illegal Activities, Criminal Structures, and Extra-Legal Governance. Thousand Oaks, CA: Sage </ref>).

Although Russian organised crime groups have been known to run ''krysha'', public officials have also sought to offer such protective services and extract the same kind of informal payments as criminal organisations. Law enforcement agencies have been reported to operate a ''de facto'' protection racket for criminal organisations (Volkov 2002a<ref>Vokov, V. 2002.a Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism. Ithaca: Cornell University Press.</ref>). Dishonest public servants would need neither violence nor threat of violence to establish ''krysha'' but will manipulate the law and bureaucratic procedures. Such abuses of public office undermine the competitive market system, especially in the case of small and medium-size businesses, making them dependent on informal arrangements between state officials and criminal organisations. McCarthy (2011, p. 64<ref>McCarthy, D.M.P. 2011. An Economic History of Organized Crime: A National and Transnational Approach. London and New York: Routledge.</ref>) argues that the involvement of public servants in protection rackets makes ''krysha'' in Russia strikingly different from analogous informal practices in other national contexts, such as ''pizzo'' (extortion money) levied by mafia organisations in Italy. Therefore, the effectiveness of a criminal ''krysha'' often depends on the power it has, relative to other protective ‘roofs’, including those provided by state institutions (Volkov 2002a<ref>Vokov, V. 2002.a Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism. Ithaca: Cornell University Press.</ref>). ‘Less powerful criminal groups would seek to align themselves with more powerful criminal groups, who in turn … obtain their own ''krysha'' from corrupt government officials’ (von Lampe 2015, p. 275<ref>von Lampe, K. 2015. Organized Crime: Analyzing Illegal Activities, Criminal Structures, and Extra-Legal Governance. Thousand Oaks, CA: Sage </ref>).

Moreover, since the police and the military personnel were largely underfunded after the collapse of the Soviet Union, they actively sought a share of the legal market in private protection (Cox 2001<ref>Cox, D. 2001. Close Protection: The Politics of Guarding Russia’s Rulers. Westport, CT: Praeger.</ref>). While in some cases, criminal organisations would run private security firms, Taylor (2011<ref>Taylor, B. 2011. State Building in Putin’s Russia: Policing and Coercion after Communism. Cambridge: Cambridge University Press.</ref>) notes that the police may often control the legal market in private security: ‘for example, the head of the municipal militia in St. Petersburg in the early 2000s reportedly oversaw roofing operations in the city, partially by controlling licenses for private security companies’  (p.164).  

Moreover, since the police and the military personnel were largely underfunded after the collapse of the Soviet Union, they actively sought a share of the legal market in private protection (Cox 2001<ref>Cox, D. 2001. Close Protection: The Politics of Guarding Russia’s Rulers. Westport, CT: Praeger.</ref>). While in some cases, criminal organisations would run private security firms, Taylor (2011<ref>Taylor, B. 2011. State Building in Putin’s Russia: Policing and Coercion after Communism. Cambridge: Cambridge University Press.</ref>) notes that the police may often control the legal market in private security: ‘for example, the head of the municipal militia in St. Petersburg in the early 2000s reportedly oversaw roofing operations in the city, partially by controlling licenses for private security companies’  (p.164).  

Summing up, the types of ''krysha'' distinguished in post-Soviet societies are: criminal ''krysha'' provided by organised crime, semi-legal (or ‘combined’) ''krysha'' provided by criminal organisations and public officials working hand in hand, and government ''krysha'', involving public officials of various state institutions. Having emerged more than two decades ago, ''krysha'' practices remain a characteristic feature of the business culture in post-Soviet countries. Despite the efforts of post-Soviet governments to tackle these informal practices, foreign investors have continuously raised concerns about the troublesome reputation these states have when it comes to anti-competitive behaviour, extortion, and bribery.  

Summing up, the types of ''krysha'' distinguished in post-Soviet societies are: criminal ''krysha'' provided by organised crime, semi-legal (or ‘combined’) ''krysha'' provided by criminal organisations and public officials working hand in hand, and government ''krysha'', involving public officials of various state institutions. Having emerged more than two decades ago, ''krysha'' practices remain a characteristic feature of the business culture in post-Soviet countries. Despite the efforts of post-Soviet governments to tackle these informal practices, foreign investors have continuously raised concerns about the troublesome reputation these states have when it comes to anti-competitive behaviour, extortion, and bribery.