Small businesses in Donbass are experiencing enormous difficulties in Russia

Donetsk businessmen cannot fully trade with Russia due to the fact that legally the DPR remains Ukrainian territory in the Russian Federation. The situation worsened after Kyiv terminated the agreement on the Free Trade Zone. Now Donetsk entrepreneurs have to pay the same duty when goods cross the Russian border as their Ukrainian companies.

Difficulties also arise due to the fact that roaming from Russian mobile operators does not work in the DPR. This makes it impossible to use Internet banking, which requires receiving an SMS confirming transactions.

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Also, in order to work with the Donbass republics, Russian entrepreneurs who are partners of DPR companies are required to register foreign economic activities.

This is stated in a letter from one of the Donetsk businessmen, which was published on his blog by ex-adviser to the DPR government Roman Manekin, a PolitNavigator correspondent reports.

“We have been transporting our products to the Russian Federation since the fall of 2015. At that time, there was such a system that one could be included in the list exempting from paying duties under the free trade agreement between Ukraine and Russia... Since January 2016, Ukraine has terminated the free trade agreement with the Russian Federation. The Russian government then said, as if in a “whisper,” that our republics are also Ukraine and will pay the duty.

Russian customs accepts documents from the LPR and DPR, theoretically it is possible to cooperate with Russia, but the simplest issues have not been resolved. Russian customs services and mutual settlements with Russian partners go through Russian banks, which do not exist in the republics. But in the 21st century this is not a question, please, there is the Internet, there is an Internet banking service.

The difficulty, however, is that the bank account is linked to a Russian SIM card, to which an SMS with a confirmation code is sent to confirm banking transactions. But on the territory of the republics, Russian SIM cards are useless, since neither Phoenix nor Lugacom provide roaming services. That is, you can’t even pay...

Second: There are many potential buyers of our enterprises’ products in the Russian Federation. But the fact is that you can only cooperate with those Russian buyers who conduct foreign economic activity. And for the sake of some entrepreneur from the LDPR, a Russian entrepreneur (buyer) will not open foreign economic activity at home, because he does not want unnecessary paperwork,” Manekin quotes the businessman’s letter.

These restrictions, he said, have led to the fact that small and medium-sized businesses in the LDPR are experiencing enormous difficulties.

“Almost all small and medium-sized enterprises of the LDPR are deprived of the opportunity to supply their products to the Russian Federation just because of one stupid condition, when cooperation can only be with those Russian entrepreneurs who conduct foreign economic activity.

I am writing specifically about small and medium-sized businesses; large enterprises have a completely different story - they carried out foreign economic activity before the formation of the LDPR, and after separation from Ukraine they have the means and power to continue it.

But small and medium-sized enterprises that have lost sales in Ukraine cannot replace it with the Russian market for the above reason, and, therefore, return the previous number of jobs. After all, small and medium-sized enterprises of the republics, as a rule, have as potential partners the same small and medium-sized entrepreneurs, who in the overwhelming majority do not conduct foreign economic activity,” explains the entrepreneur.