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Appendix 4

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Why Russians Don’t Smile: A Guide to Doing Business in Russia and the CIS Countries

4th Edition

Luc Jones

Why Russians Don’t Smile

4th Edition

Acknowledgements:

We would like to express our thanks to everybody who contributed comments, articles and general advice for our publication. Additionally we are extremely grateful to our sponsors for their support which helped to make this book possible.

Limitation of use:

Please note that commercial use, distribution, reprint or publication of all or any parts of the book is prohibited without prior written authorisation from the author. Reference to the author is obligatory when quoting any content from this publication.

Author: Luc Jones

Project manager: Evgeniya Gonzales

Designers: Ekaterina Gnidina, Nataliya Demkina

Published by: Intermark Relocation

7/1 Kropotkinsky Pereulok

119034, Moscow, Russia

+7 495 502 95 53

www.intermarkrelocation.ru

Moscow, 2020

Luc Jones Why Russians Don’t Smile 4th edition

Chapters

I. Scope of this book

II. Introduction to Russia and the CIS region

III. Expatriates in Russia

IV. Travelling to and around Russia and the CIS countries

V. Foreign assignments and hiring locally

VI. Behavioral differences faced by Expats

VII. Cultural differences

VIII. Language barriers and deciphering names

IX. Doing business part 1

X. Doing business part 2

XI. Entertainment in Russia

XII. Life in Russia - how Russians live

XIII. How Russians view foreigners

XIV. Charity, Corporate Social Responsibility

XV. Life outside of Moscow and St Petersburg

XVI. CIS focus - the ‘other’ Republics

XVII. Public Holidays in Russia

XVIII. Useful contacts

XIX. Glossary of Terms and Acronyms

About the author

Luc Jones

Luc Jones was born in Huntingdon, UK in 1973 to a British father and a French-Canadian mother and grew up in West Devon. His first trip to Russia was while still at high school in Tavistock: a week in Moscow and Leningrad in February 1991, followed by a year studying in Moscow and Yaroslavl in 1993/4 during his degree – Russian and Soviet Studies at The University of Portsmouth, UK. After a brief spell teaching English in Moscow in 1995/6, Luc joined ITE Group Plc (one of the world’s largest exhibition and conference organizers), working on the Moscow Motor Show.

Luc’s life in recruitment began with Antal in Warsaw in 1998 where he worked for 2 years, covering Poland and the Baltic States. He then joined CRM giant Siebel Systems (now part of Oracle) based in Prague, responsible for the CEE region, Turkey and South Africa. Moving back in Moscow in early 2002 with Antal, Luc worked his way up to Partner and Commercial Director before he joined Fircroft at the start of 2019 as Regional Sales Director for the CIS countries.

An extensive traveler, Luc has visited 145 countries including all 15 former Soviet Republics and continues to discover new places of interest throughout the world. Luc lives in Moscow and plans to do so for the foreseeable future, yet travels extensively throughout the CIS. Luc speaks Russian fluently in addition to his native English and has a very good knowledge of (Quebecois) French, Polish and Spanish.

I. Scope of this book

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What does it cover, whom is it written for and why

THIS BOOK HAS BEEN WRITTEN AS A GUIDE FOR THREE MAIN GROUPS:

Expatriates who have recently relocated to Russia/CIS (or are considering doing so in the nearest future) or live in their home country but visit on a regular basis. These are usually senior management of multinational corporations who are typically spend 3-4 years on a particular assignment before moving on or back home, or perhaps having been assigned this part of the world as a part of their overall territory.

People who perhaps don’t visit Russia/CIS often (or ever at all) but cover the region as part of their remit – this group includes human resources and recruitment managers, finance directors and even some CEOs. Since many multinational organizations use their European office to spearhead development and growth in the CIS region, this book has been written from the perspective of a Western/Central European manager.

Russians and citizens of other CIS countries who are interested in how they and their countries are perceived by foreigners. This is especially the case for those working for a multinational company, or perhaps for a local organization which is expanding into new markets abroad. If they report to a foreigner (based locally or abroad) or work with them on a regular basis, they can be more aware of potential pitfalls that they wouldn’t normally consider.

This book makes no apologies for being very much from a UK/European perspective as this has traditionally been the main target audience. Even US or Asian multinationals are likely to make business decisions for the CIS region from an office in Europe, for geographical and cultural reasons. However, this is not to say that North Americans, Africans, Asians, those from the Middle East or in fact anyone even remotely connected to the CIS might not benefit from reading this book.

The focus is primarily on Moscow although several chapters are devoted to other parts of Russia, such as St Petersburg and the Far East, plus all the CIS countries. Additionally this book does not claim to comprehensively cover every aspect of doing business in Russia/CIS, be it cultural, economic, business or social. An entire encyclopedia could be (and in many cases has already been) written on every single topic. Rather this book is meant as a guide for those new to this part of the world who wish to have an easy to read guide that they can quickly refer to, rather than having to read through a ‘War and Peace’ length novel.

THERE IS A SAYING THAT FOREIGNERS CRY TWICE – FIRSTLY WHEN THEY ARRIVE IN RUSSIA, AND SECONDLY WHEN THEY LEAVE IT.

Probably the biggest and most common mistake which foreigners make is that they assume that since Russians look like we do, they automatically think like we do. They don’t. Read on to find out more…

GETTING IT WRONG

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The cost of failure can be high so you need to do your homework before setting out. Russia is not a country where you can just show up and make a fast buck – you need to be in it for the long term. Some have tried and failed, but many more have done extremely well in Russia. See also chapter 5 for whom to hire, how and why. One of the most frequent reactions to the first three editions of this book from Russians themselves has been that foreigners will read it, but ignore much (or all) of the advice given because they still think that they are smarter. Do yourself a favour and don’t fall into this category.

II. Background to Russia/CIS Geography, history, religion, nationalities and initial stereotypes

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GEOGRAPHY

You don’t need a University degree in Geography to know that Russia is not only the world’s largest country (even after the demise of the USSR), but covers one eighth of the earth’s land mass. It’s a vast territory although the majority of visitors and Russians alike see precious little of it. It spans nine time zones (until recently it was eleven, but was scaled back) yet cities thousands of miles apart look remarkably similar thanks to the Soviet uniformity of buildings. One of the key reasons for this concrete ubiquity is that until the 1917 October revolution, many of today’s towns and cities were little more than remote villages that were changed forever during Stalin’s industrialization policies of the 1930s. For ease of understanding, the country is generally broken down into three geographical zones:

Since European Russian is by far the most populous area, this region itself is divided up into five parts:

Moscow and the surrounding area (often referred to as the Golden Ring)

St Petersburg & North-Western Russia

The Volga Region

The South, which includes the Caucasus

The Urals, which form the border between Europe and Asia

Few people agree (apart from the geographical border between Europe and Asia) as to exactly where one area stops and the next one starts, so these are given more as a general guide.

European Russia

Siberia

The Far East

HISTORY

There are entire libraries devoted to Russia’s rich history, and one would do well to acquaint themselves with at least the basics of twentieth century Russian history for a broader understanding of where the country is today, and why.

From a business perspective, it is crucial to understand that Russia has come a long way in a very short space of time – it can be hard to imagine that little more than a generation ago, the whole essence of doing business as we know it was not only an alien concept, it was in fact highly illegal. There are complaints both from inside and outside of Russia that far too many people are still employed by the State – estimates vary but it’s rumored to be around 50% even if the official figure is considerably lower. Putting things into context however, until the fall of Communism, the figure (officially at least) was 100%.

Westerners are raised in a society where everyone is constantly trying to sell you something, advertising is everywhere, choice is the norm and the whole ethos of life is geared around making money. Russia and the former Soviet States are very much emerging markets without a history of commercial business. During Soviet times you typically bought what they had on sale regardless of whether or not you actually needed it as it probably wouldn’t be there tomorrow, and you could then quietly sell it on, or trade it off sometime down the line. The inefficiency of the planned economy led to chronic shortages of even the most basic consumer goods as efforts were ploughed into heavy industry and military production. As a result, a massive grey economy emerged as Soviet citizens showed their resourcefulness in obtaining supplies that weren’t available through normal channels (ie, shops). Previously your standard of living depended not only on your salary, but on your connections and clout (known in Russian as ‘blat’ or ’svyazi’) either personal, or via the workplace. Your physical location – Moscow was always considered the showpiece of the USSR (see the ‘Moscow vs the Rest of Russia’ piece below) meant better access to goods and services, and also your line of work; those in the military, even serving in remote locations were always well fed.

A joke from the Communist era sums up both the influence and the necessity of the Soviet grey economy rather aptly: A senior American and Soviet diplomat meet and are discussing salary levels and standards of living in their respective countries. The American proudly boasts that “in the United States of America, the average salary is $25,000 per year, and $15,000 is needed to survive, but we don’t care what he spends the remaining $10,000 on.” The Soviet diplomat replies, that “in the Soviet Union, the average salary is 2,000 RUB per year and the amount needed to survive is 5,000 RUB, but we don’t care where he finds the remaining 3,000 RUB!” The result today is that Russians maintain a high sense of loyalty to those that they deem close to them, such as their friends (especially those made during student days), former colleagues and family members – you will notice how Russians often refer to a cousin as a brother or sister. This is manifested in how Russians make hiring decisions in the workplace; ‘po rekomendatsii’, based on a trusted recommendation. This might strike Westerners as a classic case of cronyism, or even corrupt practices. Russians view it somewhat differently, as working with a reliable and trusted partner who can be called upon to be sure to get a job done. See chapters 9 and 10 for more information on doing business in Russia.

I ONCE ASKED A RUSSIAN ‘WHY IS THE AIM OF SOCIALISM TO MAKE EVERYBODY POOR?’ – HE DRYLY RESPONDED ‘THAT’S NOT THE AIM, BUT THAT’S CERTAINLY THE RESULT!’

RELIGION

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The majority of Russians will claim adherence to the Eastern Orthodox Church, even if few actually attend services. The communist period was officially atheist and religious buildings were at best left to decay or reused for other purposes, such as storage, or in extreme cases, destroyed. Fortunately, slowly but surely some are being restored to at least part of their former glory, evident by the increasing beauty of onion domes on the horizons of many Russian cities, towns and even villages. It is interesting to observe that many drivers in Russia have mini Orthodox icons on their dashboards, especially in Russian-made cars – possibly a testament to the atrocious standard of driving in Russia and the high death rate on the roads. Few are aware that Russia has more Muslims than the rest of Europe combined – anywhere between 10-20 million, depending on which statistics you believe. However, the Sovietization policies resulted in heavy integration with surrounding Slavs, so most are moderate (Chechnya and Dagestan being the notable exceptions), and there is also a significant Buddhist minority in Kalmykia (southern Russia), the Altai region close to Mongolia and Buryatia (in Eastern Siberia, by Lake Baikal). The blatantly anti-Jewish policies of the Soviet Union resulted in a significant number of Jews emigrating (mainly to Israel and the USA) but many remain, and often occupy senior positions in large, local businesses. Nevertheless, it should be emphasized that whilst some take their faith seriously, Russia is a secular State and not an openly religious country. Whilst Russians are well aware of other faiths, it is rarely brought up as a topic of conversation. New Year’s Eve is celebrated with considerably more vigour than either Christmas or Easter.

NATIONALITY

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It is worth spending a moment or two on this as to Russians, one’s nationality and ethnicity means much more than it does to westerners. For starters, Russia is the ninth most populous nation on the planet, yet is far from being a homogenous country. You would be forgiven for assuming that this is a Slav-only place, and whilst Slavs certainly dominate, there are well over a hundred separate nationalities, ranging from Tatars who boast over five million, to the Evenki people in the far north-east of Russia whose numbers are in the tens of thousands. Despite Soviet attempts (in some areas considerably more ‘successfully’ than others) at wiping out individualism, effort was made to glorify the benefits of being a Soviet citizen, people will proudly tell you that they are ethnically Armenian/ Bashkir/Chuvash/Dagestani, albeit one that was born in Russia. Russians use two words to describe the people who live in Russia (not including Expatriates, tourists or migrant workers). This may strike Westerners as rather bizarre, and possibly even derogatory since someone of Indian parentage who was born and brought up in the UK would almost certainly consider him/herself as British, and anyone who has received their Green Card to the USA can quite proudly call themselves an American.

===RUSSKIY – REFERS TO PEOPLE WHO ARE CONSIDERED TO BE ETHNICALLY RUSSIAN ROSSIYANIN – REFERS TO PEOPLE WHO LIVE IN RUSSIA (OFTEN FOR GENERATIONS) BUT ARE NOT NECESSARILY ETHNIC RUSSIAN===

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Not so in Russia, and you will even hear people say ‘I’m not Russian, I’m Jewish’. Consequently some Russians can find it hard to comprehend how a black guy could be British or an Arab could be French. Obviously this is less likely to be the case with Russians who have lived, or travelled extensively abroad, but if you are of non-Caucasian origin, it’s worth bearing this in mind when visiting Russia as unfortunately some prejudice does exist. Whilst this is almost exclusively aimed at migrants from some former Soviet Republics (particularly Central Asia and the Caucasus) some Russians – especially in more remote regions, are unused to seeing anyone who doesn’t look like them, so although you are unlikely to encounter any outright hostility, do expect to be stared at.

Few are aware that Russia has more immigrants than any other country in the world after the United States. However, the overwhelming majority of these come from the former Soviet Republics, and there is some resentment of their presence – especially in Moscow where many head for. The fact that unemployment in Russia’s capital is low, and they are employed to do menial jobs that Russian don’t seem to want to do at salaries that Russians wouldn’t even consider getting out of bed for appears lost on many ethnic Russians. Do be aware that the word ‘Caucasian’ to Russians (pronounced ‘Kavkaz’ in Russian) refers to dark-haired people from the south of Russia (notably Chechnya, Dagestan and Ossetia), plus also the former Soviet Republics of Armenian, Azerbaijan and Georgia. It DOES NOT mean ‘white’ in the European sense.

MOSCOW VS THE REST OF RUSSIA

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In Western culture, we usually begin introductions with asking someone’s name, and then where they are from. Non-Muscovites living in Moscow can be uncomfortable when faced with this question, and may either not reply, answer simply “I’m from Russia” or say that they are from Moscow, even if they arrived only recently. The exception is St Petersburgers, who view themselves as culturally more advanced, and are the only Russians who look down upon Muscovites, as brash. See chapter 15 for more information on life outside of Moscow and St Petersburg. Average living standards were higher in Moscow and Leningrad (as St Petersburg used to be called) than elsewhere in the USSR, and it is also where the best higher educational establishments were, so this is where Soviet citizens strove to move to. The USSR had a residency permit system, known as a ‘propiska’ which allowed you live and work in a certain part of the country, and the authorities dictated who lived where, and who was allowed to move where, and when. In practice it was a clever and useful tool for the state to control the population as it heavily restricted even basic freedoms, Russia has suffered from a severe housing shortage since Stalin’s industrialization policies that began in the late 1920s and which forced the masses from the countryside into urban areas. Nowadays the system still exists, although it is much less enforced than before, yet you may observe a slight superiority complex amongst Muscovites when in the company of out-of-towners, colloquially known as ‘limitchiki’. There is more than a grain of truth in the joke that when Russian girls from provincial towns arrive in the capital, their preference is for a husband who has a propiska. This is beginning to change, as wealthier Russians choose to move out from a polluted downtown Moscow to greener areas outside the city limits. Russia is a very centralized, top-down society and despite Vladimir Putin hailing from St Petersburg, Moscow is where the bulk of business decisions are made, and naturally where the wealth is concentrated.

FAQs FOR PEOPLE PLANNING TO VISIT RUSSIA FOR THE FIRST TIME: What’s Russia like?

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Whatever you’ve ever read in the international media or seen on TV, either ignore it or believe the opposite. Most people’s first comment upon arrival is “oh wow, it’s normal. I had no idea it would be like this”. Bottom line, come with an open mind and you’ll be pleasantly surprised. Is it always cold?

It does get cold (if you’re concerned about global warming, come to Russia in the winter) but summers can be scorchingly hot, with spring and autumn seeming to last only a few weeks. However, buildings are well heated, often excessively so and it’s a drier cold than in Europe, so if you wrap up in appropriate clothing, you’ll be fine. Do you have to drink heavily to do business?

A lot of vodka does get drunk, although beer has in fact overtaken the clear stuff as Russians’ choice of tipple and wine and cocktails are increasing in popularity amongst the middle classes. Granted, there may not be many abstainers and Russians still refer to vodka as ‘water of life’ but there’s more sobriety than you may think. Lunchtime drinking in the corporate world is almost unheard of – see chapter 11 for more on entertainment after working hours.

Is Russia dangerous?

In a nutshell, no. Stories about the fabled Russian mafia might make great headlines for lazy journalists but the days of shootouts in broad daylight and kiosks being blown up are long gone, and were in fact highly exaggerated in the first place. Sure, Moscow has its fair share of petty crime like any other big city, but the majority of incidents against foreigners occurs due to drunken misunderstandings with the Police or taxi drivers (and/or with recently-met local women when under the influence).

Speaking some Russian or having a Russian friend/colleague generally prevents such issues as does local knowledge and not acting as though you’ve just arrived in town. Russians will tell you to avoid the outskirts of Moscow at night but there’s no reason for you to be there anyway, and the centre of Moscow or St Petersburg is probably safer than your hometown after dark.

====How will I get around if I can’t understand the funny writing?====

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Russian uses the Cyrillic alphabet, as do nearby Belarus, Bulgaria, Ukraine, Kazakhstan, Kyrgyzstan, Tajikistan, Mongolia and parts of the former Yugoslavia. It’s much less daunting than it first appears (some of the letters are the same, or similar to their Latin equivalents) and English language signage is on the increase, particularly in Moscow, St Petersburg and other places where foreigners may venture, such as airports. The World Cup in 2018 and the Sochi Winter Olympics in 2014 were just two examples of high profile events which improved matters considerably. You will even see Chinese characters in some places, in response to Russia’s drive to increase both business and tourism from the People’s Republic. See Chapter 8 for more information on learning the local language. Isn’t the country far too corrupt to be able to do business transparently?

Many of the world’s largest & best known multinational organizations are present in Russia, and run successful, profitable operations. Most have been here since the 1990s; they are audited and scrutinized both locally and internally, and simply wouldn’t tolerate an environment where they couldn’t run a clean business. Nobody is pretending that it’s plain sailing but it’s much less of an issue than the international media would have you believe. Chapter 10 goes into more detail on this subject.

====Surely international sanctions prevent our company from doing business with Russia?====

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Following Russia’s annexation of the Crimean peninsula in March 2014, economic sanctions were imposed against Russia by several nations, namely the USA, Canada, Australia, Japan, the European Union, and (hardly surprisingly), Ukraine. Many of these sanctions are aimed directly at businesses connected to Vladimir Putin’s inner circle and/or business connected with the Crimea itself, such as ports where cruise ships cannot dock. Mostly, the sanctions prohibit the sale, supply, transfer or export of goods and technology in certain sectors, although the number of companies whose businesses have actually been affected remains small. Sadly, some companies have chosen to ‘self sanction’, incorrectly assuming that they cannot do business in Russia and arguably it has been this assumption which has hurt the Russian economy more than the sanctions themselves. Obviously if you or your business are from one of the countries involved then it’s important to check what impact this might have (and your country’s Embassy will be able to advise here). Russia retaliated in August 2014 by banning certain foodstuffs from countries which had imposed sanctions and has managed to turn this into an opportunity to promote ‘import substitution’ which has enjoyed considerable successes. In some cases Russia lacks the equipment to produce locally, a gap in market which is being filled by foreign manufacturers.

Why does nobody ever smile?

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If you travel on the metro in the mornings, you’ll certainly see many glum faces and yes, it is rare for Russians to smile for no reason. Why? Some blame a combination of the poor weather, at least in the winter, a turbulent history, especially in the past century coupled with a general mistrust of outsiders (it didn’t pay to be inquisitive during communist times) and difficult living conditions for most, even today. In Western culture we smile to make people feel comfortable rather than us being genuinely happy to see them. If a Russian doesn’t smile at you, it doesn’t mean that they don’t like you (don’t take offense – it’s nothing personal), but if they do smile, then chances are that you’ve made a favourable impression on them. There is another explanation, that Russians view someone with a permanent smile as the village idiot, and smiling without a reason is viewed as being insincere.

III. Expatriates in Russia

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Who are they and how they differ from each other and also from their local staff

Like in any large city, the Expat community is very much a mixed bag but the majority of white collar workers fall into three distinct categories. CORPORATE EXPATS (CORP-PATS)

Typically Corp-pats have been posted to Russia/CIS with little or no previous experience of this part of the world, but their key selling point is their in-depth knowledge of their employer after years, if not decades with the firm, perhaps in multiple locations. They are seen as a safe pair of hands and are almost always employed in senior level positions. Trust is another influencing factor, especially in a finance role. The standard assignment is three years in length, sometimes more but the aim is often to eventually replace yourself with a local before moving on to pastures new within the firm, or it could mean returning home. Corppats almost always confine themselves to the ‘Expat bubble’, living in a compound or an area populated by other foreigners. This is especially the case if they have arrived with a family in tow, and hang out in expat circles, which in reality means downtown bars & restaurants where they are likely to bump into people similar to themselves. Few learn much, if any Russian as the corporate language at work will be English and they see little need to immerse themselves into the local culture as in all likelihood they’ll be moving on in a few years anyway.

RUSSIFIED EXPATS (RUSS-PATS)

Russ-pats may have studied Russian language and/or Russian literature, politics, history, economics at University and moved to Russia as they genuinely love the place. They are employed in a wide range of professions, and may now have family ties here, such as a spouse, children and perhaps have even purchased an apartment, or God forbid, a dacha! Some are in fact Corp-pats who have somehow stayed on and immersed themselves into the local community and have set up their own business, or work for somebody who has. More recently some Expats with specific skills have found themselves in demand by Russian companies who value their international background & input, especially if they come with previous CIS work experience and some knowledge of the Russian language.

RE-PATS

Re-pats emigrated from the CIS after the fall of the Soviet Union, but for a variety of reasons have decided to return to the motherland. Initially it was adults who were seeking their fortune abroad, although increasingly we are seeing their children who left when they were very young and so are bilingual, or close to. Some felt disillusioned with life ‘abroad’, others found the going tough and didn’t make it whilst many wanted to be closer to their relatives as they age. A few even realized that from a purely business perspective, they could make more money and have a faster and more successful career back in Russia/CIS, having picked up business acumen and strong language skills abroad. Russians themselves are rarely positive about Re-pats, viewing them as arrogant. Admittedly some do return with a ‘hey, I’m better than you as I’ve lived/ worked/studied abroad and I speak great English’ attitude (Russians can spot them a mile away as they frequently drop English idioms into their everyday Russian speech). When interviewing Re-pats for jobs in Russia, they should be taken on an individual basis, while naturally those who return with a shiny American passport and demand an expat package and a hardship allowance, can be quickly discarded.

It’s also worth you checking if Re-pats are eligible to work in Russia as some will have lost, or given up their Russian citizenship. Expats view Re-pats as Re-pats, whereas Russians simply view Re-pats as Russians who’ve spent some time living abroad. Moscow is a fairly transient place as far as the expat community is concerned, since Corp-pats almost always leave once their three year contract is up, either moving on to their next assignment in another farflung place, or simply returning home. Nevertheless, the Moscow expat circle is extremely welcoming and easy to break into. There are numerous social clubs, sporting activities, business associations and religious groups that welcome newcomers. They are by no means exclusively aimed at Expats, and can be a great way to get to meet English-speaking locals. See chapter 18 for a list of websites.

IV. Travelling to, around and visiting Russia and the CIS countries, plus moving to and settling in Russia