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  • Writer's pictureThe Paladins

How to deal with Russian negotiation tactics

Russian business meeting

The first thing to understand about Russians if you want to negotiate something with them (or even execute an agreed deal with them) is that they are paranoid to depths you cannot imagine unless you have spent many years amongst them. Hence the two working assumptions of any Russian negotiation are:

  1. Somebody is going to try to create a documentary trail to discredit or damage you or them or both and therefore nothing should be documented except anodyne irrelevancies or in terms so obscure nobody will ever be able to work out later what was really intended. Or, even better, in the style of Kremlin press releases about meetings the President of Russia had, everything is totally fictitious and the meeting never took place at all.

  2. Irrespective of what you agree in a written document, nobody will have the slightest intention of complying with it anyway. In Russia legal documents do not exist to be read; they exist to be fought over, to make everything even more complex and obscure (see below).

These two qualities of Russian negotiating philosophy naturally present problems in negotiating and agreeing anything with Russian people in any of the political, diplomatic or commercial spheres. In fact, due to their paranoia about what might arise out of the negotiation process, Russians prefer not to negotiate anything at all. Instead the parties are expected to reach as simple as possible a quid pro quo understanding. It must be simple, because it will not be documented anywhere (the documents will all be bullshit) and hence you and your counterpart must remember the terms and act upon them as points of honour. This is obviously very different from western-style legal or diplomatic negotiations that proceed by exchanges of draft documents or of diplomatic notes. In Russia all these sorts of 'pre-contractual' documents are manufactured after the event for the purposes of obfuscation only (and to create something else to argue about).

Indeed Russians, by default, don't like to agree things. In this universal state of anarchic paranoia in which courts do not enforce contracts, the people writing the contracts hide what they are writing from their principals, and so on and so forth, the preferred Russian organisational model is a single strongman at the top of the structure who just dictates things to people and doesn't have any agreements with anybody. Perhaps because of the country's history of institutional impoverishment, Russians do not mind any enterprise (public or private - if there is a difference and we will come to that) - being run in this autocratic and totalitarian way. Indeed they understand there is no other way to run anything in a society without institutions.

The first thing that follows from all this is that if you seek to initiate negotiations with Russians, their first instinct will be highly paranoid suspicion of your intentions, and hence an urge to bullshit you so that no agreement can be reached. So for example you know a corporate negotiation is going badly when the Russian counterpart wheels out its board of directors. Anyone who sits on the board of directors of a Russian company is irrelevant. Indeed they may not even exist, just being fictitious names and biographies associated with random photographs on a website. (Often the photos are of dead people, a particularly sinister Russian habit to show publicly that someone crossed the line and was assassinated). No Russian company would have an actively cooperating board of directors in the Western sense. They would never be able to agree anything and the result would be anarchy. Unless of course the Head of the Board is Vladimir Putin (as Russian oligarch Oleg Deripaska notoriously found that Mr Putin had appointed himself to summarily, whereupon Mr Deripaska was so surprised that he accidentally walked off with Mr Putin's Montblanc pen).

Instead the person with the sole and exclusive decision making power will have an obscurantist title like 'the shareholder', 'the relevant official' (without that person being identified), or something like this. The first key to negotiating with the Russians is therefore to get rid of all the bullshit people. There is one person you need to speak to. You need to work out who this is and discard all the other irrelevant people milling around. Having a business card with information on it is seen as a sign of irrelevance in Russia, so try to find the person whose business card is just a mobile phone number (no name) or just a first name (no contact information) etcetera. They are the ones in charge. For Russians, preparing documents such as business cards with accurate information on them is potentially very dangerous, because that information can later be used to threaten you by someone.

Once you get to your decision maker (and never rely on proxies without the most intimate personal connections such as family, as fake proxies are another form of Russian bullshit), explain very simply what you want and he (it is usually a 'he') will say yes or no. And that will be it. So judge your negotiating mid-point accurately before you have that meeting. You are really negotiating for both yourself and your counterpart at the same time in not negotiating anything at all but making an up-or-down proposal that he will either consider fair or will not. And that will be it. To repeat: for God's sake keep it simple. Because the words you use will be the deal as your counterpart understands it, without anything being written down.

The way Russians negotiate is often euphemistically described as 'Russian roulette': the standard method for departure from a joint venture is not a negotiated exit but one party naming a price and the other party getting to decide whether to buy or to sell at that price. Think carefully about how hair-raisingly absurd this is in comparison with a discursive negotiation. Then you will understand a lot about the Russian mentality.

If you reach an agreement, then you both task lots of lawyers to write huge quantities of meaningless bullshit. This is not a negotiation; it is a cooperative process to disguise what you are really doing or to make it impossible for third parties to understand anything whatsoever. So don't waste time with things like contractual counterparties, security, etcetera. Russians do not really understand the concept of the company save as an intentionally fraudulent piece of paper to hide from the rest of the world what they are doing when everything is really owned by the President of the Russian Federation. The contractual counterparties are you and your Russian counterpart, personally, in an oral unrecorded deal. This is how Churchill and Stalin split Europe at Yalta, and it is how all Russian business is done.

Do not try to charm your Russian counterparts with dinners or social events. Social events are for friends and prostitutes. Business is business. If you try to introduce social warmth and familiarity to the deal, you will make yourself look weak in the eyes of your counterpart and you will be quickly back to bullshit.

Never dream of asking questions about a Russian person's family. To them it sounds like you work in the FSB and you are making some implied threat about their family. Business is totally separate from family or social arrangements.

Never smile in front of a Russian you are doing business with. Never - unless you want to convey to your counterpart that this is all bullshit and everyone might as well go home after a fake dinner with fake (FSB) prostitutes. There is nothing funny or light-hearted about business in Russia; it is a very serious business enforced by assassinations, corrupting the security forces, bribing judges and lots of other very serious things. No matter how absurd things seem to get, never crack even a small smile or a laugh. They simply won't understand why you think something is funny. These absurdities are the harsh realities of life for day to day Russians, and you must get along with those same norms with grim determination.

All the same rules apply to political and diplomatic negotiations. It is a personal agreement between the two men in the room, not an agreement between government substructures. Russians don't really believe in government substructures, except as a form of bullshit, because lots of Russian institutions exist without being written down anywhere and lots of institutions written down somewhere don't exist at all. And it can all change in an instant, upon the dictate of a senior politician or the President of the Russian Federation.

Likewise different parts of the government are typically at war with one another, so don't assume any hierarchical subordination. The deal you are doing is with the person sitting opposite you, irrespective of what may happen to him or to you. Just because he appears to lose his job does not necessarily mean he is no longer the relevant counterpart. Actually in Russia, being fired or resigning or being reassigned to somewhere else may mean you are getting more powerful, because you are not dead which is what failing politicians and businesspeople can expect to have happen to them. Be extremely suspicious of promotions. They can be lethal. Remember that the head of Russia's most effective military force, the Wagner Group, is/was Putin's waiter (in theory if not in practice). All sorts of apparently strange people can turn out to be very powerful in Russia. Quite possibly (even probably) the head of Wagner was never a waiter. It was all made up to confuse.

Get ready for the interminable litigation. This is inevitable. Russians like litigation, because it makes everything look even more complex and confusing than it really is; and because they don't trust each other they feel happier in an environment of persistent litigation where you can always apply pressure on someone if you feel you need to. Do not get personally involved in litigation; it is mostly a series of complex kickback schemes. Just ignore it and get on with the oral deal you made with your personal counterpart. If there are any real problems, go to meet him personally to resolve them one to one. Otherwise just ignore all the litigation.

Don't take anything personally - Russians won't - except betrayal. If you betray them - and you can only really understand what betrayal is in Russian if you have huge amounts of experience in the country - will result in a plan to murder you. This is a cast iron rule. Never forget it. If you do, never go back to Russia again as someone will be waiting to murder you. The Russian code of honour is sealed with blood.

This author will recount just one memory of working with a Russian structure (he has many more stories like this). The 'Chief Executive Officer' betrayed 'the shareholder' by cooperating with an FSB corruptly procured dawn raid of office premises. The CEO then disappeared (almost certainly assassinated for betrayal along with several other FSB agents who took money to defy a person with the highest connections in the Kremlin); while his facsimile signature and stamp appeared on all corporate documents for several years afterwards even though he was dead. Or maybe it is just that his body was never found and he is now happily registered as living in a small village surrounded by fields somewhere outside Moscow. These are Russian things; and when they do happen, don't get involved. They are nothing to do with you. Don't even ask.

Mediation and shuttle diplomacy are mostly useless forms of dispute resolution in Russia. The way you resolve disputes in Russia is the same as the way you form deals - two people, face to face, one of them offering a reasonable mid-point and the other accepting it without discussion. If you see anything else going on - e.g. Russian diplomats doing things - then you are most certainly back on the road to bullshit.

If your counterpart just disappears one day, don't be concerned - he may well be dead. Nobody will take offence if you just destroy all the documents and never mention that person again. Indeed they would be horrified were you to do otherwise. On the other hand, if you are told that your counterpart has had a skiing accident or some other such euphemistic absurdity, it means he is out of action for a bit: perhaps beatem up by creditors' agents, perhaps in prison. He will be back.

Don't use telephone landlines. No Russian in their right mind would ever use such a device associated with FSB phone tapping. You can use your real email address but your Russian counterpart will almost invariably use a gobbledygook or fake email address. This is not something to be concerned about - quite the opposite.

All business communications should be as short as humanly possible, and if you have a problem you should say 'I am very unhappy'. Otherwise Russians won't know why you are contacting them. Nobody calls each other in Russia just for chats. This could be very dangerous.

If you've got this far, then you are quite insane and you just might therefore be able to do business (or politics or diplomacy) in Russia. If anything in this article does not seem logical and obvious to you, then you are probably not cut out for Russia work.

Finally, peculiar as it may seem to say it, we hope the reader understands from the foregoing narrative that Russians are, in their own unusual way, very honest. Having established what they will give to you, they will do it. They expect absolutely the same degree of 'Russian' honesty in return. If you deal with Russians honestly, all sorts of problems can be overcome because Russians are very used to things going wrong in highly bizarre ways and they will understand. But if you do not cultivate this relationship of total honesty with them, your relations will not be successful or lead to satisfactory results (for anyone).

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