Counterparty Due Diligence: Which Belarusian Services Can Reduce Transaction Risks
- 1. USR: an extract as the starting point
- 2. Affiliation of an individual: what can actually be found out through the USR
- 3. Kartoteka.by: a data consolidator
- 4. E-Pasluga: state express audit
- Contact a lawyer for further information
The security of any transaction is built in even before the parties put their signatures to the document. Proper formalisation of relations should begin not with discussion of the contractual terms, but with an in-depth analysis of exactly who you are planning to work with.
Checking a counterparty makes it possible, at the outset, to assess the financial stability, reputation and legal standing of a potential partner. In today’s environment, with the existence of “technical” companies, shell companies and “dump” entities, such prudence is not merely a formality, but a necessary tool for protecting business interests.
Compared with neighbouring jurisdictions, many types of information are available only for a fee. At the same time, the Belarusian information environment offers a sufficiently wide range of tools for a full preliminary check.
Below we have prepared an overview of the key state and private databases that may be useful for checking counterparties and, consequently, ensuring transaction security.
1. USR: an extract as the starting point
The basic tool is the Unified State Register of Legal Entities and Individual Entrepreneurs.
Free of charge, it is possible to find out:
- full name and legal form;
- taxpayer identification number, registration date and registering authority;
- registered address and contact details, including email;
- types of activity under OKED;
- information on licences;
- status of the entity: active / in liquidation or bankruptcy / liquidated / undergoing reorganisation;
- information on amendments made to the constitutional document of the legal entity.
A paid electronic or paper extract, costing BYN 22.50–45.00, will additionally contain information on:
- history of registered addresses;
- charter capital and depositary;
- founders, including the history of participants;
- director or head of the entity, including full name, contact details and date of commencement of authority, as well as history of directors;
- history of reorganisation and changes in ownership structure;
- amendments made to the constitutional document;
- separate subdivisions, including branches and representative offices, except foreign ones.
The USR does not contain:
- data on bank accounts of business entities;
- personal data of individuals, except upon request by state authorities;
- data on shareholders of joint-stock companies, homeowners’ associations, consumer co-operatives, gardening associations, associations/unions, state associations and chambers of commerce and industry.
2. Affiliation of an individual: what can actually be found out through the USR
Through the USR, it is possible to request information on an individual, namely in which organisations that person is a founder or director.
This is useful where it is necessary to understand who exactly you are dealing with: the director or owner of one company may simultaneously manage or own several related structures.
Important limitations when checking the affiliation of individuals:
The extract will not show an individual’s participation in JSCs, CJSCs, homeowners’ associations and other organisations from the “closed” list referred to above. Information on membership of boards of directors or supervisory boards, work as a deputy director, and affiliation through close relatives is also unavailable. It is impossible to check affiliation in the full sense through open sources.
3. Kartoteka.by: a data consolidator
Kartoteka.by is a commercial service that includes data from more than 100 sources, including the Ministry of Taxes and Duties, the Federal Tax Service, the Ministry of Economy, the National Centre for Electronic Services and the Belarusian Currency and Stock Exchange.
A paid document costing BYN 55 contains an extract from the USR, as well as additional information on a legal entity, including:
- checks for signs of sham entrepreneurship;
- scheduled inspections;
- debts to the budget and the Social Protection Fund;
- bankruptcy;
- debts to Belarusian customs authorities;
- information from the Register of Dishonest Suppliers;
- information from the Register of Entities Being Liquidated by Decision of the Registering Authority;
- certificates, declarations and licences;
- participation in tenders and public procurement;
- debts under state leases;
- court cases involving the counterparty;
- financial indicators of open joint-stock companies and bond issuers;
- information from the Register of Dominant Market Position;
- changes in charter capital;
- membership of the Belarusian Chamber of Commerce and Industry;
- residency in a free economic zone;
- information from the Register of Foreign Economic Activity Participants;
- information from the trade register and household services register;
- history of the business entity;
- trade marks;
- tax arrears in real time;
- writ and enforcement proceedings for the last 10 years, including commencement dates, amounts and creditor names.
|
The API service can be integrated into a company’s CRM system, which is relevant for systematic counterparty checks. There are also other private services on the Belarusian market for preliminary counterparty checks. |
4. E-Pasluga: state express audit
The Portal of State Electronic Services of the Republic of Belarus, the Belarusian analogue of Russia’s Gosuslugi, offers service 3.36.01, “Information for checking the reliability of business reputation”. This is one of the most comprehensive tools for a complex check of a Belarusian legal entity: more than 20 data sources, approximately 15 minutes per check, and a low cost of BYN 1.98 per request.
| Authorisation is carried out by login and password, via Google/Apple, electronic digital signature or ID card. |
What the report by taxpayer identification number includes:
- registration and status: USR status, taxpayer status, registration date, liquidation information, bankruptcy;
- debts and obligations: debts to the budget, customs authorities and the Social Protection Fund;
- litigation risks: participation in economic court proceedings;
- permits and registers: licences, membership of the Hi-Tech Park, free economic zones or the Belarusian Chamber of Commerce and Industry, registration in the trade register, household services register and register of producers;
- reliability: inclusion in the Register of Dishonest Suppliers, participation in public procurement procedures, facts of unfair competition, information on dominant market position and natural monopoly status;
- property and economics: ownership of real estate, financial results based on accounting reports, participation in foreign economic activity.
Particular attention should be paid to the “Property and Economics” section: it allows data to be obtained on whether the counterparty owns assets, namely real estate, and makes it possible to assess the economic condition of the business based on the accounting statements for the previous year. This is fundamentally important before a major transaction: a company with a zero balance sheet and no property presents a high level of risk compared with a company with real assets.
5. Free Belarusian checking services
- Register of Dishonest Suppliers
The list of suppliers, contractors and service providers temporarily barred from participation in public procurement procedures is maintained by MART within the public procurement system. It is relevant when participating in tenders and when working with companies that have previously participated in public procurement.
- Register of Licences
Checking an entity against the Unified Register of Licences is mandatory if the contract involves the counterparty carrying out licensed activities, such as construction, medicine, education, security services and others.
- Bankruptcy information
The Unified Information System for Economic Insolvency Cases makes it possible to check whether bankruptcy proceedings have been opened against a counterparty, who has been appointed as administrator and at what stage the proceedings are.
- Database of court judgments and writ proceedings
Authorised users can obtain information on the website of the Supreme Court of the Republic of Belarus about judgments of economic courts, decisions and rulings in civil and other cases involving a particular company.
- Register of debts under enforcement documents
Information on the existence of debts under enforcement documents is searched by the taxpayer identification number of a legal entity or the full name of an individual. It contains information on enforcement documents that are being enforced, terminated or returned to the creditor.
- Information on tax arrears
On the portal of the Ministry of Taxes and Duties of the Republic of Belarus, it is possible to find out whether organisations or individual entrepreneurs have arrears of taxes, duties, fees or penalties as at the first day of the month following the reporting month, excluding business entities in the process of liquidation or cessation of activity.
- State Register of Taxpayers
This information resource of the Ministry of Taxes and Duties of the Republic of Belarus reflects information on a legal entity, the date of its tax registration, its status, whether active or not, the date of status change, and inactivity for more than 12 months, which makes it possible to understand whether the company is actually carrying on business.
- Register of Advertising Distributors
Information from this register makes it possible to understand whether the entity with which a contract for advertising placement or distribution services is planned has the legal right to provide such services.
- Registers of entities holding a dominant position on commodity markets and natural monopolies
Inclusion of a counterparty in one of these registers means that its prices or tariffs are subject to state regulation, which directly affects the contractual terms and the negotiating position of the parties.
How can REVERA lawyers help?
Counterparty checking is a manageable stage of a transaction that directly affects its outcome. At the outset, it is possible to identify risk indicators: the company’s recent incorporation, financial instability, litigation burden and restrictions on its activities.
If you do not have the resources to analyse data from different sources independently, it is advisable to delegate this work: we carry out a comprehensive counterparty check, analyse the contractual terms and provide a legal assessment of transaction risks before the contract is signed.
Author: Sergey Suschenya, Elina Hardziyenka.
Contact a lawyer for further information
Contact a lawyer
