Cablegate: U.S. Embassy Moscow's Tourist Visa Validation Study: A

DE RUEHMO #2697/01 3060440
R 020440Z NOV 09



E.O. 12958: N/A

MOSCOW 00002697 001.2 OF 002

1. SUMMARY: This is the first installment of a quarterly rolling
validation study of B1/B2 tourist visas issued by U.S. Embassy
Moscow covering the period of March 2008 to May 2008. It is our
intent to track adverse incident rates of travelers who were issued
visas over a fairly tumultuous economic and political period in
Russia (March 2008-present). This installment will serve as a
control group for our study as the full effects of the financial
crisis did not begin to resonate in Russia until September 2008.
As expected, the adverse incident rate during this timeframe is
astonishingly low as evidenced by our results below. END SUMMARY.

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PREMISE: RussiaQs Financial Crisis Will Affect Travel Patterns
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2. Consular officers began to wonder in September 2008 when the
financial crisis hit Russia how the economic downturn would affect
the way Russians nationals travel to the U.S. and whether they would
be more prone to remain in illegally. Since September 2008,
uncertainty about the banking sector, the value of the ruble, and
the price of oil have prompted investors to withdraw significant
amounts of capital from the Russian economy. As the higher cost of
credit that ensued, in conjunction with the global downturn in
demand for a broad range of products, many Russian firms cut
production, reduced the workweek, decreased salaries, and trimmed
staff. As a result, since November 2008 incomes have declined,
reversing nearly a decade of real double-digit income growth.
Unemployment and underemployment in Russia increased. Official
estimates for actual unemployment range from ten to twelve million
with significantly higher risk for workers in Russia's single
company towns and distressed sectors (e.g., automotives, steel). In
addition to currently unemployed workers, more than 1 million
workers are on idle time, reduced work schedules, or administrative
leave. Russian workers also suffer from falling real incomes and
delayed salaries, although the government has stepped up activities
to reduce the amount of wage arrears to workers. Despite these
efforts, wage arrears remain at around 8 billion rubles, primarily
due to the absence of sufficient funds on the part of employers.
The Ministry of Economic Development predicted real incomes would
fall 8.3 percent in 2009, although these estimates are being
revised, as inflation slows due to the overall decline in economic

3. At the close of the first half of 2009, the economy appeared to
have achieved some stability, thanks to a modest, but steady rise in
the price of oil. The ruble has stabilized, the federal budget was
in surplus (through February), and the stock market has been growing
again. However, the economic outlook for the year has never been
more uncertain, as production continues to contract and banks are
still grappling with large amounts of non-performing loans. The
Russian Government forecasts an economic contraction of 6-8 percent
for the year. Economists from academia and the think tank community
estimate a sharp economic contraction of 5-10 percent, whereas
investment bankers anticipate a recovery by the end of the year with
potential growth reaching three percent in 2010.

4. The purpose of our quarterly rolling validation study is to
chart adverse travel incidents according to the economic situation
in Russia. It is our contention that the rate of adverse travel
incidents (overstays, illegal immigration, working illegally in the
U.S.) will increase throughout the period of the financial crisis in
Russia. Although it is difficult to obtain hard evidence of this,
our contention is based on circumstantial evidence consisting of an
increased refusal rate for non-immigrant visa applications as well
as logical deductions (high unemployment in Russia could lead some
to seek illegal employment abroad). This rolling validation study
is meant to test our thesis with hard evidence.

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5. Part one of the validation study is based on B1/B2 issued during
the timeframe of March 2008 Q May 2008. The total population is
22,437 with a random sample of 1,019 issuances, which allows for a
+/-3 % margin for error with a 95% confidence interval. Adverse
incidents were confirmed through the DHS entry/exit system ADIS as
well as subsequent telephone interviews when the ADIS record showed
no departure from the United States. Upon completion of the study,
the sample was grouped as follows:
Q Good Travel (returned home and no suspicion of fraudulent
activity while in U.S.;
Q Did not travel on visa;
Q Change of Status (Pending or Approved); or,
Q Adverse incident.

Furthermore, the adverse incident group is divided into two
subgroups: a) confirmed overstay and b) inconclusive overstay.

6. A confirmed overstay is defined by having an ADIS record with no

MOSCOW 00002697 002.2 OF 002

return and not being able to make contact with the subject in Russia
or have information from a family member indicating that they are
still in the U.S. An inconclusive overstay is defined by an ADIS
record with no return and when we contacted the family/friend of the
applicant they claim the subject has returned but we were never able
to get in contact with the subject themselves. In other words, we
still have doubts after a thorough investigation.

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Results: Russians Were Excellent Travelers Pre-Crisis
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7. This first installment of the rolling validation study revealed
an adverse incidents rate of between 0 and 4 percent. This period
of time between March and May 2008 represents an extremely
prosperous and relatively stable time in Russian society. The
results of our study are as follows:

Q Good Travel: 90.1% +/- 3%. (918/1019)
Q Did not Travel: 8.5% +/-3% (87/1019)
Q Change of Status Pending: .4% +/- 3% (4/1019)
Q Adverse incidents: 1% +/-3%.

There were 10 possible ADIS overstays out of 1019 from the random
sample: Seven of these were confirmed overstays and 3 were
considered to be inconclusive. Of the adverse incidents, 70% are
female and 30% are male.

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Got a visa, now what?
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8. One surprising aspect of the study was the high rate of visa
holders that did not travel. One would assume that if an applicant
went to the trouble of applying for a 1 or 2 year visa that they
would actually travel. Certainly there will always be incidents of
travel plans falling through, but the surprising number did not
travel as planned and an overwhelming majority of these applicants
had prior travel to the United States. Such evidence only
reinforces the idea that this was a time of prosperity for Russians.
Despite travel plans listed on their applications, it appears that
applicants actually applied without a specific trip in mind.

9. These results tend to reflect the extremely low refusal rate for
the Moscow NIV section during the time period in question. The
refusal rate over this time for B1/B2 visas was 4.5%. By way of
comparison, the refusal rate has risen to 9.4% for the month of
September 2009.

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Gender Play a Role, but not Age
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10. Among the adverse incidents, there is a statistically
significant trend of female overstays outnumbering male overstays
(70% to 30%). One possible explanation is that on the Qvisa line
we tend to refuse more males (especially working age with
transferrable skills).
11. Age appears to be a statistically insignificant factor for
overstay. Generally the adverse incidents are either young (not
very established) or old (perhaps no longer working or have died in
the US). There were no overstays in the middle aged category.

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Next Steps
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12. The next tranche in our rolling validation study will cover the
timeframe of June 2008 to August 2008. It is our hypothesis is that
as the financial crisis takes hold starting in September 2008 to the
present the adverse incident rate of travelers will also increase.
This projected trend would also tend to track with the gradually
increasing refusal rate. We look forward to testing our hypothesis
in the months to come.


© Scoop Media

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