Extortion of small businesses rising - report

Running a small business is rife with challenges in any environment, but when entrepreneurs are confronted with the added burden of having to pay off extortionists for "protection", as a recent police report suggests many must do, the economic repercussions go far beyond the shop till.

The blackmail of restaurant, herna bar and shop owners is on the rise, according to a report released by the state police Organized Crime Unit (ÚOOZ). Vietnamese grocery-store owners seem to be especially vulnerable to extortion payments demanded by criminal gangs from within their own community, although the police were careful to point out that extortion is by no means exclusive to the Vietnamese or any other immigrant community.

There were 32,155 Vietnamese citizens with trade licenses at the end of March, according to the Czech Statistical Office, many of whom are shopkeepers who are a "vital part" of the Czech economy, said Masha Volynsky, coordinator of the Migration Awareness Program for the NGO People in Need (?lov?k v tísni).

Representatives of the small-business community say it is unfortunate their fellow entrepreneurs from immigrant backgrounds should be targets for extortion (some may be paying up to 40 percent of profits as protection money, according to the report), but suspect from their business dealings with them that the highly-structured and, some say, isolated nature of the Vietnamese business community lends itself to these types of activities.

"That protection money is being paid in the Vietnamese business community is a known fact," said Radomíra Kotlárová, chairwoman of the SME Union Czech Republic, an association of small and midsize businesses.

Kotlárová said Czech business owners have plenty of experience with extortion themselves, as the practice was common throughout the '90s, but she feels the business community has "matured" over the past decade, making these crimes less frequent.

Kotlárová said her members can see an obvious hierarchical structure to the business practices within the Vietnamese business community that make shop owners vulnerable to coercion.

"They used to distribute clothes and electronics, but in the past few years, they've switched to fruits and vegetables. I don't know why, but you could tell that there was some higher power directing those shops to change all at once," Kotlárová said. "They have the same goods and the same prices even though they have different owners."

She admits, however, that reliable information about these illegal practices within this community is limited, both because of the apathy of the police and the insular nature of the community itself.

Kotlárová and other Czech business owners fear the issue will be wrongly portrayed in the media, giving Vietnamese businesses, with whom she says her members report only positive experiences, a bad name. Volynsky points out that the police report specifies the largest groups of organized criminals in the Czech Republic are "Russian-speaking, Asian and home-grown," which indicates that criminality is not limited to a single group of immigrants, and that the focus should be on the victims of the crimes within those communities.

"Since the 'protected' owners pay the money from their net profit, they are the ones damaged by this criminal activity," said Pavel Hanták, a spokesman for ÚOOZ.

Relieving the pressure allegedly put on these business owners is essential, not only for the sake of their economic prosperity, but also to ensure their integration, said Volynsky, who views the well-educated, multi-lingual Vietnamese youth as an "incredible potential resource for the Czech economy."

Emily Thompson can be reached at
ethompson@praguepost.com