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How a businessman in occupation does not turn into a collaborator

A few tips on how to minimize the risks of being included in the list of traitors

Russia continues to squeeze “fraternal” embraces in the occupied territories. Moreover, the agenda is not only a compulsory Russian passport. The occupiers are forcing entrepreneurs to “re-register” according to Russian legislation, even in the context of the gradual liberation of the Armed Forces of Ukraine of the fake “annexed” Ukrainian territories. They say that entrepreneurs will not pay taxes for this until the end of 2022.

What should business owners do? How can entrepreneurs protect themselves from representatives of the aggressor country and at the same time not become collaborators? What does the Ukrainian state think about this, and does it think at all?

Collaboration or survival?

Today, many businessmen who, for example, stayed in the Kherson region or returned there due to the lack of work in the controlled territories of Ukraine, want to protect their activities from the actions of the invaders. Now there are not so many options to implement this: mothball your own business, go into the shadows, or adapt to the requirements of the self-proclaimed government, which takes away property, steals agricultural products, equipment, in particular trucks, and also concrete slabs for the construction of defensive structures.

Despite the gradual process of de-occupation, there are entrepreneurs who go to the local tax office to reissue a certificate under Russian law and continue to work in the market. To re-register, the owner must provide passport data and a Ukrainian declaration of entrepreneurship.

“I have been building my business for over 20 years, so re-registration is the only way to keep my business,” says the owner of a clothing store from the city of Oleshki, who asked not to be named.

True, such preservation of business can cause serious problems.

Will re-registration be considered collaborationism?

De facto, any cooperation with the occupier is collaborationism. After all, after re-registration, the entrepreneur must give part of the income to the occupiers and thus replenish the treasury of the aggressor country.

A similar situation was in the Donbas in 2014-2015, when business owners paid taxes twice: to Ukraine and the so-called LDNR. Therefore, representatives of Ukrainian law enforcement agencies opened criminal cases against such entrepreneurs. True, none of them, due to the lack of proper evidence, ever reached the court but seriously spoiled the nerves of business owners.

To avoid mistakes and clearly define the boundaries between collaborationism and survival, at the beginning of March 2022, the Verkhovna Rada supplemented the Criminal Code with one more article – 111-1 “ Collaboration activities”. According to this article, any cooperation – the supply or sale of goods, the transfer of property, the payment of taxes to the enemy administration – will be punished by a fine of up to 170 thousand hryvnias or imprisonment for up to five years.

But most often, entrepreneurs agree to the conditions of the occupiers, fearing losing their property or even catching automatic fire. For example, the occupying power has been in charge in the Kherson region for seven months now. If earlier the occupiers simply intimidated Kherson residents with letters Z painted on their cars for refusing to re-register, now they are forcibly taking away their property, seizing Ukrainian settlement terminals to withdraw the hryvnia from circulation and establish control over the income of businessmen using their payment system. Entrepreneurs who resist coercion are trying to accept only cash, but there is less and less of it in the Kherson region.

“First, the orcs called the end date for reissuing the beginning of summer, then August, today they have already stopped accepting applications. I punish myself for having succumbed to the pressure of the Russians, but when I found out that my brother’s store in Kherson was taken away, I was very scared, ”says the owner of a clothing store in the city of Oleshki.

Many Ukrainians began to apply to the Ministry of Reintegration with the question of whether their particular case could be punished. And so the ministry team developed two bills that roughly make it clear which activities are not treason.

In particular, the drafts specify that only those who voluntarily cooperate with the aggressor will be punished. Also, the developers of the bills identified the types of activities that provide the most important areas of life. Such business activity, even if it interacts with the occupiers (of course, it does not help the aggressor state ), will not fall under Article 111-1 “ Collaboration activities”.

The critical list includes the following areas:

  • delivery of pensions;
  • medical service;
  • housing and communal services;
  • the work of banks;
  • Agriculture;
  • civil protection;
  • measures to ensure the rights and freedoms of Ukrainians in the occupied territories.

The Cabinet of Ministers has already supported the legislative initiative, now the floor is up to the deputies of the Verkhovna Rada. Which should probably answer the central question: who and how will determine voluntary cooperation or coercion? But while the Rada is swinging, business needs to live somehow and make decisions.

What to do for entrepreneurs who do not have the opportunity to evacuate a business

Since a complete blockade is being carried out by Russia today, it is impossible to relocate the business from especially dangerous territories. Entrepreneurs have to work on the verge of Ukrainian legislation and occupation rules. Some of them froze their activities, but most adjusted to the current realities.

Economist Igor Chalenko, director of the Center for Analysis and Strategies, advises occupied businesses to avoid official re-registration. Especially now, when we see steps to de-occupy the territories, and, if possible, go to work in the shadows, as some Donetsk entrepreneurs did in 2014-2015, or completely mothball work for several months, arguing this decision by the lack of the necessary material or inventory.

Business owners who do not have the financial ability to stop work should develop an action plan to minimize the risks of being listed as collaborators :

  • re-register the business to the territory controlled by Ukraine through “Diya” (prepare the necessary documents, certify them with your digital signature and send them to the email of the Ministry of Justice );
  • make payments, wages, and taxes only to recipients’ accounts in Ukrainian banks;
  • try at all costs not to supply goods to the occupiers;
  • document cases of forced cooperation: involve witnesses, make a video or audio recording, and have prepared acts on the seizure of goods. After all, there is a possibility that the case of a re-registered entrepreneur will be considered by the court, whose representatives will analyze the evidence, the position of the entrepreneur, and the words of eyewitnesses;
  • be careful with advertising your business on social networks, and promoting services under occupation, so that the text does not even hint at support for the aggressor country;
  • do not play with fire by participating in the pseudo-referendums of the occupying authorities.

It is bitter to realize the obvious – in the eighth year of the war when the territories occupied by the Russian Federation are transferred to the status of de-occupied, Ukraine has not yet defined a clear state position regarding people under occupation. It is the absence of an official position of the state about those who survive and those who are looking for a place in the ranks of collaborators that works into the hands of the occupiers.

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