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{{infobox
{{infobox  
  | nameofpractice = Tamozhenniye l'goti
| nameofpractice =Tamozhenniye l'goty
  | location = Russia
| flagemoji = 🇷🇺
  | imagemap = Russia map.png
| definition =Excise privileges for the importation of alcohol and tobacco excise-free, extracted from the state by charitable foundations in the 1990s
  | imageflag = Russia flag.png
| location =Russia
  | authorofpiece = Anna Bailey
| imagemap =Russia map.png
  | authorinstitution = School of Slavonic and East European Studies, University College London, UK
| clusters =
}}
[[:Category:Domination|Domination]] – [[:Category: Motivational ambivalence| Motivational ambivalence]] – [[:Category: Co-optation| Co-optation]] – [[:Category: Patron-client networks| Patron-client networks]]
 
| categories =
'''''Original text: Anna Bailey, PhD alumna, School of Slavonic and East European Studies, University College London, UK'''''
[[:Category:Russia|Russia]] – [[:Category: FSU| FSU]] – [[:Category: Alcohol| Alcohol]] – [[:Category: Trade| Trade]] – [[:Category: Borders| Borders]] – [[:Category: Import| Import]] – [[:Category: Tobacco| Tobacco]] – [[:Category: Taxation| Taxation]] – [[:Category: Tax-avoidance| Tax-avoidance]]
 
| authorofpiece =Anna Bailey
<div class="toccolours mw-collapsible mw-collapsed">
| authorinstitution =Alumna, School of Slavonic and East European Studies, University College London, UK
''Tamozhenniye l’goti'' refers to a practice in 1990s post-Soviet Russia, whereby certain
| authorwebsite =[https://uk.linkedin.com/in/anna-bailey-6b5a9236 Profile page at LinkedIn]}}
‘privileged’ charitable organisations were awarded the right by the federal government to
<big>'''By Anna Bailey, Alumna, School of Slavonic and East European Studies, University College London, UK'''</big>
import products – typically alcohol and tobacco – without paying excise duty. The practice
[[Category:Domination]]
can be seen as an instance of the ‘state capture’ that plagued Russian state institutions in the
[[Category: Motivational ambivalence]]
1990s: the ability of private individuals and firms to extract preferential treatment from the
[[Category: Co-optation]]
state for little or nothing in return<ref name="frye">Frye, T. 2002. ‘Capture or Exchange? Business Lobbying in Russia’, Europe-Asia Studies,
[[Category: Patron-client networks]]
[[Category:Russia]]
[[Category: FSU]]
[[Category: Alcohol]]
[[Category: Trade]]
[[Category: Borders]]
[[Category: Import]]
[[Category: Tobacco]]
[[Category: Taxation]]
[[Category: Tax-avoidance]]
[[Category:Entry]]
[[Category: Volume 2]]
[[Category: Alumni]]
[[Category: SSEES]]
{| class="wikitable"
|-  
|style="font-size:1.1em;"| ''[[Tamozhenniye]] l’goti'' refers to a practice in 1990s post-Soviet Russia, whereby certain ‘privileged’ charitable organisations were awarded the right by the federal government to
import products – typically alcohol and tobacco – without paying excise duty. The practice can be seen as an instance of the ‘state capture’ that plagued Russian state institutions in the 1990s: the ability of private individuals and firms to extract preferential treatment from the state for little or nothing in return<ref name="frye">Frye, T. 2002. ‘Capture or Exchange? Business Lobbying in Russia’, Europe-Asia Studies,
54(7): 1017-1036</ref>.
54(7): 1017-1036</ref>.
|}


<div class="mw-collapsible-content">
The word ''l’goti'' (singular form: ''l’gota''; Cyrillic: ''льгота'') literally means ‘benefits’ or
The word ''l’goti'' (singular form: ''l’gota''; Cyrillic: ''льгота'') literally means ‘benefits’ or
‘privileges’, while ''tamozhenniye'' is the plural adjectival form of the noun ''tamozhnya''
‘privileges’, while ''tamozhenniye'' is the plural adjectival form of the noun ''tamozhnya''
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foundations meant that the mafiya was quick to infiltrate the practice. Some ''mafiya'' groups
foundations meant that the mafiya was quick to infiltrate the practice. Some ''mafiya'' groups
posed as qualified charities and foundations, and they ultimately took control of the customs
posed as qualified charities and foundations, and they ultimately took control of the customs
privileges owned by the genuine foundations too. ''Mafiya'' groups have been described as
privileges owned by the genuine foundations too.  
 
''Mafiya'' groups have been described as
‘functionally integrated’ into the Russian market at this time<ref>Volkov, V. 2000. ‘Organised Violence, Market Building, and State Formation in Post-
‘functionally integrated’ into the Russian market at this time<ref>Volkov, V. 2000. ‘Organised Violence, Market Building, and State Formation in Post-
Communist Russia’, in Ledeneva, Alena &amp; Kurkchiyan, Marina (eds.), Economic Crime in
Communist Russia’, in Ledeneva, Alena &amp; Kurkchiyan, Marina (eds.), Economic Crime in
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Foundation’s vast fortune accumulated from ''tamozhenniye l’goti'', valued at $200 million
Foundation’s vast fortune accumulated from ''tamozhenniye l’goti'', valued at $200 million
USD<ref>Harper, T. 1999. Moscow Madness. Crime, Corruption, and One Man’s Pursuit of Profit in
USD<ref>Harper, T. 1999. Moscow Madness. Crime, Corruption, and One Man’s Pursuit of Profit in
the New Russia (London: McGraw-Hill), pg. 232</ref>. Altogether the RFIVA suffered 34 killings and 62 woundings in
the New Russia (London: McGraw-Hill), pg. 232</ref>.  
 
Altogether the RFIVA suffered 34 killings and 62 woundings in
such violent incidents. The president of the Russian Ice Hockey Federation, Sych, was shot
such violent incidents. The president of the Russian Ice Hockey Federation, Sych, was shot
dead, while the first deputy president of the NSF, Fedorov, narrowly escaped an assassination
dead, while the first deputy president of the NSF, Fedorov, narrowly escaped an assassination
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Bychkov in a series of articles published in the Moskovsky Komsomolets newspaper. The
Bychkov in a series of articles published in the Moskovsky Komsomolets newspaper. The
Church’s import business was conducted through its Department of External Relations,
Church’s import business was conducted through its Department of External Relations,
dealing mainly in the import of duty-free cigarettes, but also vodka. The Department of
dealing mainly in the import of duty-free cigarettes, but also vodka.  
 
The Department of
External Relations was headed at this time by Metropolitan Kirill of Smolensk and
External Relations was headed at this time by Metropolitan Kirill of Smolensk and
Kaliningrad. Bychkov dubbed him the ‘tobacco metropolitan’ (a headline from one of his
Kaliningrad. Bychkov dubbed him the ‘tobacco metropolitan’ (a headline from one of his
Line 94: Line 117:


Charitable foundations and ''mafiya'' groupings were not the only actors who benefitted
Charitable foundations and ''mafiya'' groupings were not the only actors who benefitted
from ''tamozhenniye l’goti''. The practice provided a means for broker companies involved in
from ''tamozhenniye l’goti''. The practice provided a means for [[broker]] companies involved in
importing alcohol to avoid excise duty: they could simply pay a foundation or charity a fee to
importing alcohol to avoid excise duty: they could simply pay a foundation or charity a fee to
import the alcohol on their behalf, the fee being a fraction of the duty avoided. The scope for
import the alcohol on their behalf, the fee being a fraction of the duty avoided. The scope for
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domestic beer production in Russia had not yet taken off, and the novelty of imported foreign
domestic beer production in Russia had not yet taken off, and the novelty of imported foreign
beer provided a lucrative niche market, especially in Moscow<ref>Harper, T. 1999. Moscow Madness. Crime, Corruption, and One Man’s Pursuit of Profit in
beer provided a lucrative niche market, especially in Moscow<ref>Harper, T. 1999. Moscow Madness. Crime, Corruption, and One Man’s Pursuit of Profit in
the New Russia (London: McGraw-Hill), pg. 162-3.</ref>. Thus,
the New Russia (London: McGraw-Hill), pg. 162-3.</ref>.  
 
Thus,
the impact of state capture in the form of customs privileges reached far beyond the official
the impact of state capture in the form of customs privileges reached far beyond the official
beneficiaries (the funds and charities). It transformed the entire structure of the alcohol
beneficiaries (the funds and charities). It transformed the entire structure of the alcohol
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formal legal basis? On the one hand, the practice was instituted by government decrees and
formal legal basis? On the one hand, the practice was instituted by government decrees and
associated with formal organisations. On the other hand, this legislation was brought about
associated with formal organisations. On the other hand, this legislation was brought about
through non-transparent processes at a time of widespread state capture. At best, the practice
through non-transparent processes at a time of widespread state capture.  
 
At best, the practice
was camouflaged by the rhetoric of support for organisations such as war veterans; at worst,
was camouflaged by the rhetoric of support for organisations such as war veterans; at worst,
it was secretive and corrupt, in the sense that the formal state mechanisms of government and
it was secretive and corrupt, in the sense that the formal state mechanisms of government and
law were hijacked by individual private interests for personal gain. The practice had the aura
law were hijacked by individual private interests for personal gain. The practice had the aura
of a ‘open secret’ that was officially decreed, yet needed to be concealed, as evidenced by the
of a ‘open secret’ that was officially decreed, yet needed to be concealed, as evidenced by the
fact that the exposure of the ROC’s l’goti led to the ‘Tobacco scandal’. Moreover, the
fact that the exposure of the ROC’s l’goti led to the ‘Tobacco scandal’.  
 
Moreover, the
practice effectively became a cover-up for ''mafiya'' enrichment – an informal means of
practice effectively became a cover-up for ''mafiya'' enrichment – an informal means of
diverting revenues that were due to the state treasury into the hands of criminal structures.
diverting revenues that were due to the state treasury into the hands of criminal structures.
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yet serving private, if not criminal, elite interests, thus fitting the concept of legal corruption<ref>Kaufmann, D. and Vicente, P. C. 2011. ‘Legal corruption’, Economics and Politics, 23(2):
yet serving private, if not criminal, elite interests, thus fitting the concept of legal corruption<ref>Kaufmann, D. and Vicente, P. C. 2011. ‘Legal corruption’, Economics and Politics, 23(2):
195-219</ref>.
195-219</ref>.
</div>
 
</div>
==References==
==Notes==
<references />
<references />
'''Further reading:'''<br>
'''Further reading:'''<br>
Takala, I. R. 2002. Veseliye Rusi. Istoriya alkogol’noy problemy v Rossii (St Petersburg:
Takala, I. R. 2002. Veseliye Rusi. Istoriya alkogol’noy problemy v Rossii (St Petersburg:
Zhurnal Neva)
Zhurnal Neva)
[[Category:Entry]]
[[Category:Russia]]
Editor2018
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