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Russian prisons letting in email, Internet orders

Company sees huge market in nation’s 644,000 inmates by Ilya Khrennikov Bloomberg News | November 16, 2015 at 3:21 a.m.

Russian prisons have come a long way since Stalin forced inmates in the Gulag to dig canals and chop wood, but they don't exactly feel modern. For each of the country's 644,000 inmates, purchasing everyday items typically involves asking a relative to wait for hours in line at a Soviet-style prison store, and letters can take several weeks to send back and forth.

To make interaction with the outside world a little easier, the Federal Penitentiary Service -- the Gulag's successor -- has begun working with companies to offer online services to prisoners. While inmates aren't permitted to use the Internet, even under supervision, relatives or friends can send email and order goods on their behalf. Guards scan handwritten letters from prisoners and use email to send the replies.

Russian Internet pioneer Konstantin Antsiferov runs Zakaz, the largest of the prison system's emerging online stores. From January to August, the number of purchases from the 6-year-old company almost doubled from the same period last year, Antsiferov said, totaling 69,100. His company charges a $4.42 fee on each.

The most popular items include mineral water, Pepsi, Lipton tea, Mars and Twix bars, and roll-on deodorant, he said. The best-selling book on the site is the Russian Criminal Code, which outlines federal law and punishments.

Antsiferov also owns Pismo, a sister company that prints emails to prisoners and sends their scanned, handwritten letters back. As with paper letters, emails are screened and censored. Pismo charges senders 55 rubles -- about 82 cents -- per e-mail to or from inmates, and last year it facilitated the transmission of 320,000 messages, according to Antsiferov. In 2014 he started Prisonmail.eu, a joint venture with former Dutch Prison Services executive Rob Hollander, to set up comparable systems in the Netherlands, Georgia, and Lithuania.

Some European countries, including Norway and Belgium, already offer restricted email systems for inmates, said Steven van de Steene, an IT specialist at the International Corrections and Prisons Association, an industry group. The U.S. began a similar service a couple of years ago, and American private prisons have taken the lead in e-commerce, he said.

Inmates at some U.S. lockups can use the Internet under supervision, or scan forms or use ATM-like machines, to order goods from prison suppliers.

"The last decade has been almost revolutionary in terms of allowing and delivering digital services to inmates," van de Steene said.

Antsiferov has run a Web-hosting business in St. Petersburg since the late 1990s, with customers including branches of the Ministry of Justice. He began thinking about working with the Federal Penitentiary Service, which maintains the world's third-largest prison population, in the mid-2000s, while volunteering to manage budgets for the psychiatric department at the city's Kresty prison.

"The country has about 1,000 prisons across its vast territory, and they all have different suppliers," Antsiferov said. His businesses are now operating in about 400 of them. (They've stayed out of Moscow, where the prisons use rival website Skladsizo.ru. Skladsizo declined to comment.) He started Zakaz and Pismo--which have seven employees between them--with his own money but wouldn't say how much.

Inmates receiving Zakaz orders are still pretty much stuck with the inventory of their prison store. Buying products from outside retailers isn't really an option because guards looking for contraband chop up anything brought in by another party. Ekaterina Shutova, a civil-rights activist who spent eight months in prison for embezzlement four years ago, said cigarettes she received from friends usually arrived as a pile of dry tobacco, and fruit baskets turned into a messy fruit salad. She's using Zakaz to buy prison-store items for friends still inside.

Antsiferov said Russia's penitentiary system doesn't leave much room for him to jack up prices, because the prison stores already charge at least 20 percent more than a typical city supermarket.

"Prices are much higher than in common grocery stores," Shutova said. Still, she said, there's a clear advantage: "You can make an order from home, instead of waiting in these crazy queues."

SundayMonday Business on 11/16/2015

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