Check of counterparties

International business standards as well as Russian tax legislation require companies to check their counterparties. Moreover, simply checking a partner before starting cooperation or a debtor before starting a claim procedure is a good idea.

Dealing with unscrupulous partners entails tax risks (refusal to deduct VAT, refusal to recognize expenses for income tax), contract performance risks, risk of holding the company’s managers and employees liable, decrease in business reputation.

We will verify the existence of the counterparty and the accuracy of information about it in the state registers, find out whether it is under reorganization, liquidation or bankruptcy, check the accuracy of information about the CEO, address and shareholders, verify financial position and tax situation, reveal blocked bank accounts, amount, nature and extent of litigations, licenses, number of employees, information about recent government inspections, connections with other companies, and much more.

In addition, our specialists will develop a KYC-system for your company, create necessary documentation and instructions for employees, develop KYC-provisions for the contracts.

Our lawyers regularly check counterparties for a Japanese distributor of food products.

In addition, we have developed the KYC-Regulations, describing the legal basis for verification of counterparties and the risks associated with unscrupulous partners, listed red flags indicating dishonesty, described the verification procedure, provided a list of online resources useful to check a partner and developed a report form.

We have also prepared standard agreements containing assurances about good faith of counterparties and their obligations to compensate for losses.

As a result of the implemented procedures, the client significantly reduced cooperation with unscrupulous companies and mitigated associated risks.