A Businessman's Guide to Moscow

Dr. Joseph Verdol, licensing manager of Atlantic Richfield Co., was a happy man. Competing against eleven firms from Japan, Europe and the U.S., he had just sealed one of the biggest deals with the Soviet Union since the two nations began doing more business with each other in May: a $16 million agreement for the design and initial operation of a plant near Leningrad that will make chemicals for Russian synthetic fibers. "The best advice that I can give Americans hoping to do business in the Soviet Union is to be patient," said Verdol. He should know. Before leaving Moscow two weeks ago, he had spent five of the previous seven months there. In the five weeks before signing, he said, "We saw only our hotel rooms and the negotiating tables."

Verdol is only one of the more recent--and more successful--of the many U.S. businessmen traveling to Moscow to sell. For many executives, a one-week business swing through Moscow has lately acquired the cachet that in the fifties attached to reconnaissance for branches in Western Europe. The list of firms and trade groups that have sent representatives in recent weeks includes ITT, Deere & Co., the Illinois Agricultural Association, and the Motor and Equipment Manufacturers Association. From a series of interviews with visiting U.S. executives, TIME Moscow Bureau Chief John Shaw has compiled a guide to doing business with the Soviets. His report:

The people to see, of course, are the top officials of one or more of the Trade Ministry's 40 separate import-export corporations. The Soviets' centralized economy makes the job of spotting the key decision makers relatively simple, but it also has disadvantages. For example, a U.S. businessman angling for a huge order for combine harvesters at first found officials of the Agriculture Ministry eager to buy. Then abruptly they stalled on discussions, and the executive later learned that the Agriculture people unhappily bowed to the veto of another ministry, which claimed that the machinery should be Soviet built. Unfortunately, in the Russians' closed-door society there is no way for Americans to argue against such hierarchical fiats.

When it comes to speaking about a U.S. firm's competition, Soviet traders are anything but shy. In fact, some U.S. businessmen complain that they have been invited to discuss a deal to help provide leverage against, say, a Japanese company from which the Soviets are trying to get more favorable terms. Generally, price is only one of several factors that the Soviets consider; they are also interested in the latest technology, the quality of equipment, start-up costs and the amount of personnel training provided. American companies that have Japanese subsidiaries or partners are especially favored; the Soviets have a high respect for U.S. technology but are much more used to doing business with Japanese firms, many of which have Moscow branch offices. (So far no U.S. manufacturer has a Moscow office, though the recent overall trade agreement provides for reciprocal office space in Moscow and Washington.) Atlantic Richfield took on Japan's Kawasaki Heavy Industries as a partner in the Leningrad deal.

The Soviets do not like hard-sell tactics but want full-scale technical presentations about anything they buy, the more elaborate the better. U.S. salesmen should bring their own audiovisual equipment; many have left Moscow with caseloads of unshown pictures because a projector could not be obtained. All specifications in catalogues and pamphlets should be in metric measurements, since even Russians who speak English fluently are baffled by feet and inches. Many Soviet officials like to begin their weekends early, making Friday a bad day to do business. And when contract time arrives, American lawyers had better be prepared to find substitutes for some standard phrasing: "acts of God" and "strike delays" are among expressions banned from the Soviet vocabulary.

The once-standard tokens of appreciation handed out by U.S. visitors --ballpoint pens and cigarette lighters --are now rightly viewed by most Soviets as small insults. However, more expensive freebies are not out of line: one electronics executive who passed out $300 minicalculators will be long and fondly remembered by the officials deciding his business proposition. And speaking of propositions, the dolled-up girls who hang around Moscow's hard-currency bars should be avoided. It is not necessarily that they are KGB agents under orders to set up Americans in compromising positions (too many U.S. businessmen overestimate their importance by assuming that they are being bugged or followed). But some of the women are industrial spies who are primed to wheedle technical information or filch documents from briefcases left beside beds.

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