Checking buyers in Russia

Unscrupulous companies and entrepreneurs are very good at portraying integrity. Luxurious offices, beautiful websites, polite managers and large-scale advertising campaigns make you think that we are facing an honest and unselfish professional. And who, if not him, fulfill all his obligations at the highest level and on time.

Here the question may arise, what have I to do with it? I'm not a buyer of goods and services, but a supplier, what are the risks?

As the famous Russian proverb says "Trust but verify"

It is very important to check your counterparties, regardless of whether you supply or purchase goods and services. Situations are not uncommon when customers do not pay their obligations under the contract for a long period (sometimes months turn into years of waiting), and when it comes to litigation, companies go bankrupt. In addition, there is always a risk of running into one-day firms, bankrupts and fraudsters.

In the current, crisis time when many companies are experiencing financial difficulties and ask for deferred payment, post-payment or a prepayment reduction. It is possible that the situation can be really difficult and the company needs relaxation of conditions, but you, as a supplier, also need a safety net.

The check will help decide whether it is worth cooperating with the counterparty, or there is a risk that he will not fulfill his obligations.

You can check the buyer in Russia yourself, but the procedure is rather painstaking and lengthy. You will need to request information from the Russian tax authorities, registers and check online databases. Even a Russian person is not always easy to get the full information, what can we say about foreign entrepreneurs. However, if you do decide to collect data yourself, here's a list of basic steps:

1. Request from the potential counterparty copies of the main documents (charter, Taxpayer Identification Number, Primary State Registration Number, as well as a decision or protocol on the appointment of the general director).
2. Get an up-to-date extract from the register of  the Unified Register of Legal Entities
3. Check the address of the counterparty for mass
4. Check if the director is disqualified
5. Check if the counterparty is bankrupt
6. See if the counterparty has been excluded from the Unified State Register of Legal Entities
7. Look for a counterparty in the database of bailiffs
8. Check the counterparty in the file of arbitration cases
9. Find out if the counterparty has a profitable business
10. Check the passport of the general director for validity
11. Clarify whether the term of the power of attorney has expired
12. Check the validity of the license (if any)
13. See if the director is a nominee
14. Check changes in the Unified State Register of Legal Entities
15. Check the registers of unscrupulous suppliers

As we have already said, the electronic verification procedure is quite laborious. In addition, it requires certain knowledge - it is not enough just to obtain these documents, it is important to analyze them correctly.

We also should notice that remote verification is not always effecient.  Often it is impossible to check your pertner without a personal visit to the enterprise. So you definitely cannot do without professional help. Only specialists know how to behave during an on-site check, what questions to ask, what to look for, etc.

For more than 10 years the RAUIE has been helping Asian companies and entrepreneurs to do business with Russia in the most open and safe format. We will help you check buyers, draw up contracts correctly, taking into account your interests, accompany the transaction from initial negotiations to final payment.

You can contact:

Maxim Kuznetsov - vice-president of the RAUIE

investment@raspp.ru

WeChat: maximkuznetsov

Allen Gao - deputy Head of trade and economic development Department 

businesscn@raspp.ru

WeChat ID: Sauron_1863