Having recently traveled abroad, I can confirm that a lot of hotels in areas with bad septic won't even let you flush toilet paper.

It does say "paper", not "toilet paper" in Russian, but most certainly they do mean toilet paper.

Bins for toilet paper used to be quite common in old buildings with bad plumbing. Also, historically, toilet paper used to be in great deficit in USSR, so torn newspapers were used for that purpose instead, causing all kind of clogs.

In russian it simple "paper", not "toilet paper" [1]

[1] http://translate.google.com/#ru/en/%D0%A3%D0%B1%D0%B5%D0%B4%....

There are plenty of places around the world that have septic systems not designed to handle toilet paper. The sign is probably accurate.

Just went back to read it again. I must say it is quiet confusing, it says literally 'please don't throw paper in the toilet'. It doesn't specify what paper so it could be interpreted differently indeed.

It says "Please don't flush paper". Not toilet paper, not paper towels - just paper.

That is actually quite common in Russia and not necessarily Sochi-specific. The sewage system is in consistent state of mild disrepair, and it's common for bathrooms in hotels, conference centers and restaurants to have foul-smelling bins for used toilet paper.

it is toilet paper for certain. source: russian speaker.

No, it isn't. Sign says only "paper". It isn't clear what they mean, can be interpreted differently.

Part of traveling is groking the local terminology for things. In Atlanta, soda is "coke". Ohio, "pop". New York "soda".

They mean any paper, including toilet paper. This warning is common in Russia, don't ask why.