Aug 6, 2022
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Catch spies and currency traders: Russia will plant Moscow and St. Petersburg with new “Birches”

Catch spies and currency traders: Russia will plant Moscow and St. Petersburg with new

Photo: Denis Vyshinsky/TASS

Duty-free shops for diplomats, consuls, employees of international companies and their families will appear in Moscow and St. Petersburg, in other words, analogues of the Soviet Beryozka stores. The first outlets should open at the end of August. Where exactly they will be located is still unknown, but the addresses and drawings of the premises of outlets must be coordinated with the customs authorities and the diplomatic services department at the Ministry of Foreign Affairs. In addition, round-the-clock video surveillance will be organized there, data from the cameras will be stored for at least thirty days, and customs officers will control trade.

As follows from the government decree published on the Internet portal of legal information, retail sales will include products that are subject to the duty-free procedure (Duty Free) – alcohol, tobacco, perfumes and cosmetics, jewelry, smartphones and watches. Prices will be indicated in rubles, dollars and euros. At the same time, as in the Soviet “Beryozka”, a mere mortal will not get into such a store – at the entrance, visitors will be checked for documents confirming that they are in the diplomatic service or work for a foreign company.

In “Beryozka” it was possible to buy scarce products and goods by checks of Vneshposyltorg and Vneshtorgbank. Whether there will be a similar system now, albeit adjusted for modernity, like QR codes, is still unknown. But it is known that after the purchase, the customer will be given a cash receipt with the inscription “Duty Free”. In the check or a form equivalent to it, information about the buyer may be indicated. This information, as well as a list of what was purchased, will be sent to the Ministry of Foreign Affairs on a monthly basis.

Only a Russian company can become the owner of a retail outlet. Its co-founder will be the Main Production and Commercial Directorate for Servicing the Diplomatic Corps under the Ministry of Foreign Affairs of the Russian Federation – it will select a commercial partner based on the results of an open competition.

Naturally, the network immediately began to talk about why such stores were needed now. Whether so that foreign diplomats and other elites can buy goods in Russia that are otherwise unavailable due to sanctions and continue to drink their favorite Coca-Cola and Johnnie Walker, or, on the contrary, to control what they buy (for example, according to the decree, large quantities of alcohol for official events will be sold upon application from diplomatic missions and international organizations (the purpose of the purchase and the required amount of alcohol should be indicated in the application).

But, as experts explained to “SP”, behind the news about the appearance of new “Birches” in Russia, a much more serious process may be hiding – a complete rejection of dollars and other currencies of unfriendly countries in free circulation. Thus, foreign diplomats will simply have nowhere to exchange their currency, and here Duty Free shops will come to the rescue. This indirectly confirms the additional measures proposed by the Bank of Russia on August 4 to devalue the economy.

“Under the current conditions, the gradual rejection of the use of currencies of unfriendly states in the internal and external payment turnover seems to be an inevitable process. The Bank of Russia will help accelerate the natural process of devaluation of banking operations by introducing additional regulatory measures. It is advisable for non-financial organizations to transfer the accumulated foreign exchange funds in the currencies of unfriendly countries to other currencies, ”the Central Bank report says, which they plan to discuss with market participants and experts.

– “Birch” appears when the free circulation of currency in the country disappears, – says Director of the Institute of Regional Problems Dmitry Zhuravlev. – When you cannot buy everything you need for your dollars, and in the meantime the state says: “Hand over the currency”, like Bulgakov. Here, those who officially have the right to own the currency will spend it or the certificates that they will exchange for it in special stores and buy the necessary goods.

This is a very old story. Before “Birch” there were Torgsins (by the way, it was Torgsin who burned the cat Behemoth at the same Bulgakov), after “Birch” – “Albatross”. All this appears when imported goods are purposefully purchased by the state, and then sold to its citizens with certain conditions. This means that we most likely will not see our dollars, which are in foreign currency accounts. As a last resort, we will get Beryozka’s checks.

“SP”: – Will an ordinary person be able to get into such a store?

– It was impossible to buy or change Beryozka checks. They could, for example, be obtained for business trips abroad. Everyone who traveled abroad received daily allowances in the currency of the host country. But a person had no right to keep them for himself, they had to be exchanged for Beryozka checks, and, depending on the country, their purchasing power was different. The authorities need to limit the foreign exchange market, to abolish the free circulation of foreign currency. That’s what “Birches” are usually created for.

“SP”: – Can these stores become a way to bypass sanctions restrictions?

– It’s not out of the question. In Soviet times, everything that could not be bought in ordinary stores was imported to Beryozka, but at a price significantly higher than the price in the country of origin.

In addition, it is control over money. Do you know how spies are caught all over the world? Their salaries are higher than those of diplomats. If you spend more in such a store than your counterpart with the same status, then you are a spy.

In general, the appearance of such stores is an extremely negative sign. We say that our currencies are full, we sell everything and do not buy anything. But why then regulate the circulation of currency within the country, if we have a surplus of it?

Retail expert, CEO INFOLine Ivan Fedyakov doubts that, given the sanctions, new stores will be able to operate successfully.

– The free circulation of currency will indeed be curtailed. Today, the Central Bank published a document entitled “Financial Market: New Challenges in Modern Conditions”, which ordered to abandon the circulation and storage of funds in the currencies of unfriendly countries, as well as the issue of securities in them. This actually means the rejection of foreign exchange circulation within the country, because this is a key part of the foreign exchange market. It is still officially unknown whether these clarifications relate to previously issued securities, if so, this is also a direct blocking of currency circulation.

In order not to create panic among the population, the financial authorities allegedly talk about their readiness to work with foreign exchange, but their actions are entirely focused on excluding the circulation of foreign currency from the activities of legal entities and individuals.

“SP”: – That is, the appearance of “Birches” is also part of this process?

– In my opinion, the idea is crazy. If we talk about the horizon of six months or a year, it is unlikely that such stores can be opened. There are still quite a lot of foreign goods in Russia, and not all money in foreign currency has been seized from the population yet. It seems to me that the authorities will be afraid of legally prohibiting transactions with currency sooner than in a year and a half.

If we talk about the long-term horizon of 5-10 years, if we follow the Iranian scenario, there will simply be nothing to sell in these stores. In Iran, it is impossible to officially order the delivery of goods from Europe, the USA or a number of other countries. They are brought there only unofficially by private means or by smuggling. And not because the Iranian government prevents their import, but because vendors, manufacturers and distributors do not sell them themselves due to the sanctions regime.

At most, such shops like “Beryozki” will be needed by restricted officials who were closed in the country, and generals with good salaries. It is unlikely that this will be widespread. But in the same Iran there is such a profession – “buyer”, the buyer. This is when a person similar in build to the customer travels to Europe, buys clothes or other goods there, tries them on and brings them to the country for a fee. I think that our deputies, officials and generals will soon be shopping in this way, and the profession of “bayer” will become quite widespread in our country.

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