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Friday 24 December 2010
Thursday 2 December 2010
What is the INN code for Russian companies?
Several months ago I added Feedjit to this blog. It is very helpful if you are interested in understanding of core problems of your auditory.
Among recent search phrases I found simple but important question “What is the INN code for Russian companies?” I think it’ll be reasonable to give brief and simple answer in a short article.
INN (Russian “Individualiy Nomer Nalogoplatelshika”) is an Individual Tax Number of every Russian company or person.
INN code of a company has 10 digits:
1-4 – Identification number of Federal Tax Service department
5-9 – Unique number of tax payer in the Federal Tax Service department
10 – Control number for validation of the INN code
INN code of a private person has 12 digits:
1-4 – Identification number of Federal Tax Service department
5-10 – Unique number of tax payer in the Federal Tax Service department
11-12 – Control numbers for validation of the INN code
Thursday 18 November 2010
Registration of Russian citizens at their place of residence and work will be simplified
According to Russian media since 01st of January 2011 registration of Russian citizens at their temporary place of residence and work will be simplified. This initiative of the government is intended to limit illegal labor migration (according to public sources about 3 million Russian citizens) and is said to be the first step towards updating of Russian private persons’ registration system. We will definitely face some serious changes in background screening procedures and raw data mining when this law will be implemented. I’ll keep you informed about recent changes in private persons’ registration system but yet I don’t have enough data to say something for sure.
Thursday 11 November 2010
Security & Intelligence professionals’ Day.
The 12th of November in Russia we celebrate Security & Intelligence professionals’ day. I want to congratulate my colleagues both Russian and Foreign with this holiday. Let’s make the World a safer place for living and future prosperity of our descendants.
Tuesday 2 November 2010
Database of unreliable former employees of the biggest Russian bank
It took me a month to prepare new article for my blog. Initially I planned to send a long research about management of commercial and trade secrets in Russia, but actually I’ m a little overloaded by due diligence projects and it is hard to find spare time and revise the problem. That’s why I’d like to share new important link that will be helpful for you during background screening of bank and finance management professionals in Russia.
Since August 2010 Russian biggest governmental bank Sberbank started to publish the list of former employees dismissed because internal fraud or theft. Initially the list included also those employees who were caught by internal control department but several legal claims forced Sberbank to exclude fraudsters who weren’t brought to the Court.
The list is in Russian language only and is intended to be regularly updated.
Sunday 19 September 2010
CIS is moving towards integration of forensic databases.
It is reported by leading Russian informational agencies that 17th of September 2010 ministers of internal affairs of the CIS have signed documents on developing of a single forensic database.
Currently, law enforcement agencies of CIS countries exchanged information, but the processing of requests for its issuance takes a long time.
I expect that in 12-18 months the procedure of criminal background check of the Subject who was involved in criminal activity in several CIS countries will be simplified (nowadays this assignment requires independent investigation in every country of interest, takes much time and money).
Tuesday 14 September 2010
Direct links to statistical data of Russian Federation
Sometimes it is required to include simple benchmarking analysis to your background screening project. One knows that valid data requires fresh investigation (research) but if we need to have a general view of the market some statistic can be enough for decision maker.
Where can we get this data if we deal with the Subject from Russian Federation? Our first step is the Federal State Statistics Service.
Where can we get this data if we deal with the Subject from Russian Federation? Our first step is the Federal State Statistics Service.
On this site you will find general statistical data about population, economy, regional development of the country etc. English version of the Federal State Statistics Service site is less informative and knowledge of Russian language is essential.
If your Subject is involved in international trade some important statistical data and regulations can be found at Federal Customs Service. English version of the site is also poor.
Saturday 7 August 2010
Forecasting in background screening projects (private person activity forecasting)
At last the weather is comfortable and I'm ready to proceed with the series of previously announced articles.
I hope you remember that my last statement was "if only we could reconstruct business or personal strategy of the subject, then we would be able to predict subject's activity in the future".
We have several important data sources to analyze:
1. Subject's goals and targets
2. Subject's best practices
3. Subject's risks (excluding external environment)
4. Subject's timing
Let’s start from private person activity forecasting (in general it is simpler than company forecasting):
TIMING
When background screening project is over we have a lot of structured data about subject's future: when he will celebrate his birthdays, when his children will go to school, when he'll have to update his driver's license, when he will have to repay his debts, in what period of time he will resign etc.
Usually professional investigators and risk managers (at least in my area) pays this step of analysis little to none attention. In a scheme above I mentioned only main milestones, but it is reasonable to add Subject’s wife & parents birthdays, passport expiring dates etc.
SUBJECT’S RISKS
Dealing with background screening projects of Russian citizen in most cases I pay attention only to health risk, criminal risks (relations with criminal authorities), credit risks (unpaid or huge debts), family risks (divorce, fornication etc.) and corporate risks (if the Subject is a shareholder).
When these risks are identified, it is reasonable to proceed to
SUBJECT’S BEST PRACTICES
This section is the most difficult to analyze and even hard to explain for non-native English speaker. The aim of this section is to identify behavioral patterns of the Subject including (but not limited to): How long he used to stay at the same company (e.g. 2.5 years)? Does he study a lot after graduation (e.g. the Subject completed about 12 courses of business education, approximately 1 course a year)? Is he targeted on a long-termed partnership or makes money with unknown persons (e.g. for the last decade he was involved in 7 new partnerships but still makes business only with his close friends)? Was the subject ever claimed as a wife cheater?
In general I think that best practices can be divided into several sections:
1. Finance management practices (how the Subject deals with his personal or corporate finances)
2. Family & friends relations management practices (how he treats his relatives, friends, lovers etc.)
3. Corporate management practices (how the Subject manages his companies)
4. Personal development practices (how the Subject manages his personal skills, health, assets etc.)
It is reasonable to mention ones again that the aim is not to dig the data but to identify behavioral patterns of the Subject.
If we have enough raw data and preliminary analysis results are valid we can make the following type of the Subject’s best practices descriptions:
FINANCIES: When the Subject experience lack of personal finances he used to take a bank loan (he doesn’t ask his friends or business partners to help him and prefer to keep his problems to himself). He is said to be a bad debtor for personal loans but is strict in repaying corporate debts. If in 2011 he will have to get additional funds for his child application to the university he will have to ask foreign bank for a loan (Russian banks will refuse because he is listed as a bad debtor).
When all possible (taking into consideration project’s limits) best practices of the Subject are identified it is reasonable to proceed to the final part of the job – “Subject goals and targets”
SUBJECT'S GOALS AND TARGETS SECTION:
I think it is a good place to stop for today – I’ll be glad to see your comments and questions because the methodology I have started to present is a matter of discussion and I’m not sure that there are no better ways of the Subject’s behavior forecasting. That’s the way I do it.
The final statement I’d like to add is that even if it looks like the unified scheme for forecasting either Russian or the US private person behavior it is almost impossible to do this job unless the analyst understands the environment of the Subject.
Wish you a good day.
I hope you remember that my last statement was "if only we could reconstruct business or personal strategy of the subject, then we would be able to predict subject's activity in the future".
We have several important data sources to analyze:
1. Subject's goals and targets
2. Subject's best practices
3. Subject's risks (excluding external environment)
4. Subject's timing
Let’s start from private person activity forecasting (in general it is simpler than company forecasting):
TIMING
When background screening project is over we have a lot of structured data about subject's future: when he will celebrate his birthdays, when his children will go to school, when he'll have to update his driver's license, when he will have to repay his debts, in what period of time he will resign etc.
SUBJECT’S RISKS
Dealing with background screening projects of Russian citizen in most cases I pay attention only to health risk, criminal risks (relations with criminal authorities), credit risks (unpaid or huge debts), family risks (divorce, fornication etc.) and corporate risks (if the Subject is a shareholder).
SUBJECT’S BEST PRACTICES
This section is the most difficult to analyze and even hard to explain for non-native English speaker. The aim of this section is to identify behavioral patterns of the Subject including (but not limited to): How long he used to stay at the same company (e.g. 2.5 years)? Does he study a lot after graduation (e.g. the Subject completed about 12 courses of business education, approximately 1 course a year)? Is he targeted on a long-termed partnership or makes money with unknown persons (e.g. for the last decade he was involved in 7 new partnerships but still makes business only with his close friends)? Was the subject ever claimed as a wife cheater?
In general I think that best practices can be divided into several sections:
1. Finance management practices (how the Subject deals with his personal or corporate finances)
2. Family & friends relations management practices (how he treats his relatives, friends, lovers etc.)
3. Corporate management practices (how the Subject manages his companies)
4. Personal development practices (how the Subject manages his personal skills, health, assets etc.)
It is reasonable to mention ones again that the aim is not to dig the data but to identify behavioral patterns of the Subject.
If we have enough raw data and preliminary analysis results are valid we can make the following type of the Subject’s best practices descriptions:
FINANCIES: When the Subject experience lack of personal finances he used to take a bank loan (he doesn’t ask his friends or business partners to help him and prefer to keep his problems to himself). He is said to be a bad debtor for personal loans but is strict in repaying corporate debts. If in 2011 he will have to get additional funds for his child application to the university he will have to ask foreign bank for a loan (Russian banks will refuse because he is listed as a bad debtor).
When all possible (taking into consideration project’s limits) best practices of the Subject are identified it is reasonable to proceed to the final part of the job – “Subject goals and targets”
SUBJECT'S GOALS AND TARGETS SECTION:
I think it is a good place to stop for today – I’ll be glad to see your comments and questions because the methodology I have started to present is a matter of discussion and I’m not sure that there are no better ways of the Subject’s behavior forecasting. That’s the way I do it.
The final statement I’d like to add is that even if it looks like the unified scheme for forecasting either Russian or the US private person behavior it is almost impossible to do this job unless the analyst understands the environment of the Subject.
Wish you a good day.
Friday 16 July 2010
Couple of links to the brand new databases for background screening
It is still extremely hot in St. Petersburg and I have to convince that when the nature is playing against its’ rules it is pretty hard to write articles in non-native language. That’s why up until now I can’t finish my new article about forecasting.
Just to let you know that I’m still alive and try to keep my promises I’m glad to publish a couple of brand new links to officially opened for public databases applicable in several types of background screening projects in Russia.
FIRST – THE REGISTRY OF FEDERAL BAILIFFS SERVICE (IN BETA TEST MODE)
On its’ pages you’ll be able to check if the Subject-private person is wanted as defaulter; check if the legal body was claimed as a bankrupt.
Also there is a database of real estate arrested by the Federal Bailiffs Service and several registers useless in background screening projects
It is sad but the database is in Russian language only and it is not planned to translate its’ records into English.
I have to remind that the Registry is in test mode and some bugs are promised to be fixed in the nearest future.
SECOND - FEDERAL AGENCY FOR TOURISM, REGISTRY OF CERTIFIED TRAVEL TOURS OPERATORS
The search is simple and can give you the license number and expiry date of certified travel tours operators.
That’s all for today. I pray that the next few days the weather will change and I’ll be able to share some new ideas about complex tasks of background screening results analysis.
Thanks for your attention, hope these links will be also useful.
Just to let you know that I’m still alive and try to keep my promises I’m glad to publish a couple of brand new links to officially opened for public databases applicable in several types of background screening projects in Russia.
FIRST – THE REGISTRY OF FEDERAL BAILIFFS SERVICE (IN BETA TEST MODE)
On its’ pages you’ll be able to check if the Subject-private person is wanted as defaulter; check if the legal body was claimed as a bankrupt.
Also there is a database of real estate arrested by the Federal Bailiffs Service and several registers useless in background screening projects
It is sad but the database is in Russian language only and it is not planned to translate its’ records into English.
I have to remind that the Registry is in test mode and some bugs are promised to be fixed in the nearest future.
SECOND - FEDERAL AGENCY FOR TOURISM, REGISTRY OF CERTIFIED TRAVEL TOURS OPERATORS
The search is simple and can give you the license number and expiry date of certified travel tours operators.
Thanks for your attention, hope these links will be also useful.
Tuesday 6 July 2010
Background screening - forecasting (pilot article)
The weather is extremely hot these days in St. Petersburg. The sky reminds me of the Creedence Clearwater Revival with its’ famous “Have you ever seen the Rain?” I’m not sure I have seen it.
Nowadays every citizen of St. Petersburg pays additional attention to weather forecasting – Will the cold wind blow? Will it rains? Who’s responsible for these sunrays attacking us 24 hours a day? In this aggressive environment I’ve decided to write a short series of articles about some particular qualities of Russian business forecasting in the context of background screening and external investigations.
It is reasonable to say a few words about forecasting in general and how it is related with background screening.
In most cases the client (even if he asks for basic background check of private or legal body) needs some data to make a decision. In my practice about 70% of clients' decisions are to be made about future activity of the Subject, not the past. Will the Subject try to steal my money if I’ll hire him as a financial manager? Can I rely on my partner honesty? Will the Subject ever repay his debt????
If you’ll say that the client has to make the decision himself you’ll be absolutely right. Responsibility of the PI is limited to his/her reputation, contract value, license but the client has to accept all the risks including even personal safety risks (if we talk about joined ventures with organized crime).
On the other hand, particularly if we talk about international projects, I often see that the client tries to make the decision without deep understanding of local business practice of Russian companies; commonly used indicators of reliability fails to predict or even classify the Subject activity. It is absolutely clear when you deal with a global company whose unified risk-management standards make decision making procedures inflexible to local environment.
Several times I was forced to spend hours in negotiations with my clients and team members explaining why the Subject must be treated as reliable/unreliable company or private person. At last I made a decision to include sections “recommendations” & “subject forecasting” in applicable reports. This decision was made as “try before you implement” and many questions aroused at the very beginning:
1. How to forecast subjects’ behavior? If it is just your expertise why should the client trust you and treat your prediction as something valuable unless he has positive experience of cooperation?
2. How to develop simple and unified methodology of forecasting for subject behavior in unknown environment?
3. How to convince the client that he has to give you as much information as possible about his reasons of background screening (I often work with contractors and sometimes they prefer to give less data then needed for forecasting)?
4. How to stay profitable? Should we do forecasting as a complimentary research or ask for additional payment?
It is reasonable to mention that previously I was involved in a number of business strategy development projects and had experience of long-termed planning and prognostic analysis. This knowledge was extremely helpful when I started the process of formalizing forecast methodology for background screening of legal bodies.
I’ve decided that if I’d be able to reconstruct main strategic goals of the subject and collected data will match the way I assumed the company is trying to reach these goals my forecasting will be much more reliable than simple expertise. It was clear that usual methods like BSC strategy map won’t work in this exact case: too much work with insufficient data and unexpected results.
That’s all for today.
I will be glad to see your comments to this introduction of a series. Does this problem exist in your area? Do you think that forecasting is applicable in background screening projects?
I’ll try to post the next article of this series by the end of this week.
Nowadays every citizen of St. Petersburg pays additional attention to weather forecasting – Will the cold wind blow? Will it rains? Who’s responsible for these sunrays attacking us 24 hours a day? In this aggressive environment I’ve decided to write a short series of articles about some particular qualities of Russian business forecasting in the context of background screening and external investigations.
It is reasonable to say a few words about forecasting in general and how it is related with background screening.
In most cases the client (even if he asks for basic background check of private or legal body) needs some data to make a decision. In my practice about 70% of clients' decisions are to be made about future activity of the Subject, not the past. Will the Subject try to steal my money if I’ll hire him as a financial manager? Can I rely on my partner honesty? Will the Subject ever repay his debt????
If you’ll say that the client has to make the decision himself you’ll be absolutely right. Responsibility of the PI is limited to his/her reputation, contract value, license but the client has to accept all the risks including even personal safety risks (if we talk about joined ventures with organized crime).
On the other hand, particularly if we talk about international projects, I often see that the client tries to make the decision without deep understanding of local business practice of Russian companies; commonly used indicators of reliability fails to predict or even classify the Subject activity. It is absolutely clear when you deal with a global company whose unified risk-management standards make decision making procedures inflexible to local environment.
Several times I was forced to spend hours in negotiations with my clients and team members explaining why the Subject must be treated as reliable/unreliable company or private person. At last I made a decision to include sections “recommendations” & “subject forecasting” in applicable reports. This decision was made as “try before you implement” and many questions aroused at the very beginning:
1. How to forecast subjects’ behavior? If it is just your expertise why should the client trust you and treat your prediction as something valuable unless he has positive experience of cooperation?
2. How to develop simple and unified methodology of forecasting for subject behavior in unknown environment?
3. How to convince the client that he has to give you as much information as possible about his reasons of background screening (I often work with contractors and sometimes they prefer to give less data then needed for forecasting)?
4. How to stay profitable? Should we do forecasting as a complimentary research or ask for additional payment?
It is reasonable to mention that previously I was involved in a number of business strategy development projects and had experience of long-termed planning and prognostic analysis. This knowledge was extremely helpful when I started the process of formalizing forecast methodology for background screening of legal bodies.
I’ve decided that if I’d be able to reconstruct main strategic goals of the subject and collected data will match the way I assumed the company is trying to reach these goals my forecasting will be much more reliable than simple expertise. It was clear that usual methods like BSC strategy map won’t work in this exact case: too much work with insufficient data and unexpected results.
That’s all for today.
I will be glad to see your comments to this introduction of a series. Does this problem exist in your area? Do you think that forecasting is applicable in background screening projects?
I’ll try to post the next article of this series by the end of this week.
Sunday 6 June 2010
The link to the Superior Arbitrage Court of Russian Federation on-line broadcasting
Referring to my previous post, I’d like to post direct link to the on-line broadcasting section of the Superior Arbitrage Court of Russian Federation Internet site. http://arbitr.ru/po_test/
There you’ll also find the list of the nearest sessions of the Court.
There you’ll also find the list of the nearest sessions of the Court.
Monday 31 May 2010
Superior Arbitrage Court of Russian Federation will broadcast its sessions on-line
Since June 2010 the Superior Arbitrage Court of Russian Federation will broadcast its sessions on-line. It is a remarkable step towards transparent court practice. It is expected that sessions will be available online the next day after the meeting.
According to the official site of the Superior Arbitrage Court of Russian Federation the first on-line session will be the Case number A65-4758/2009-SG1-18 Arbitration Court of the Republic of Tatarstan. "Vodokanalservis" against "Tatenergosbyt". If there won’t be any technical problems, I’ll mandatory put the link to this historical session to this blog.
Prior to the on-line broadcasting most of Russian arbitrage courts had databases of courts decisions. Since June all courts (civil, arbitrage, criminal) of Russian Federation will host databases of their decisions on-line.
According to Russian media, in July Constitutional court of Russian Federation will also start on-line broadcasting of its sessions.
All documents and on-line video will be in Russian language only. The Superior Arbitrage Court of Russian Federation has "Microsoft translator" applet for non-Russian speaking visitors.
According to the official site of the Superior Arbitrage Court of Russian Federation the first on-line session will be the Case number A65-4758/2009-SG1-18 Arbitration Court of the Republic of Tatarstan. "Vodokanalservis" against "Tatenergosbyt". If there won’t be any technical problems, I’ll mandatory put the link to this historical session to this blog.
Prior to the on-line broadcasting most of Russian arbitrage courts had databases of courts decisions. Since June all courts (civil, arbitrage, criminal) of Russian Federation will host databases of their decisions on-line.
According to Russian media, in July Constitutional court of Russian Federation will also start on-line broadcasting of its sessions.
All documents and on-line video will be in Russian language only. The Superior Arbitrage Court of Russian Federation has "Microsoft translator" applet for non-Russian speaking visitors.
Thursday 27 May 2010
Basic background check of Russian companies (add on)
In my previous post I forget to mention that in the process of the subject identification it is also reasonable to use database from the Uniform State Register of Legal Entities of Russian Federation (ЕГРЮЛ database).
In this database you can verify if the subject was duly incorporated, get it INN and OKPO codes.
I'd like to thank Mr. Ludo Block for his kind remark about this database. I rare use ЕГРЮЛ database in my everyday work but it can be recommended as valid and up to date informational source.
In this database you can verify if the subject was duly incorporated, get it INN and OKPO codes.
I'd like to thank Mr. Ludo Block for his kind remark about this database. I rare use ЕГРЮЛ database in my everyday work but it can be recommended as valid and up to date informational source.
Thursday 20 May 2010
Basic background check of Russian companies
It was my decision to start this blog with articles about basic background screening of private persons. With no doubt it is a regular business task for every PI or Risk Management corporation. My mission was simply to inform you about legal procedures and types of data which can be collected by Russian local PIs without in-depth investigation or illegal activity. I can assure you that I will continue this theme in my future articles.
Today, following recent international projects, I plan to show you first steps of legal body background screening process in Russia. I believe this data will be helpful ether for professional investigators and competitive intelligence specialists interested in effective and legal cooperation with Russian colleagues.
As usual, my first words will be about the Law and its requirements.
Every Russian PI agency is regulated by the “Federal Law about private detective and security services” (21.03.2002 N 31-ФЗ, 10.01.2003 N 15-ФЗ, 06.06.2005 N 59-ФЗ, 18.07.2006 N 118-ФЗ, 24.07.2007 N 214-ФЗ, 22.12.2008 N 272-ФЗ). This Law is a subject of constant debates between PI professionals and police authorities of Russian Federation. In general, the problem is in comparatively poor effectiveness of investigations leaded by the Ministry of Internal Affairs and numerous offences of Russian private agencies. Thank god this law is regulating mostly means of investigations (follow-up services, eavesdrops etc.) and doesn’t limit the scope of investigations. Uncommon for the world practice is that this law also regulates “marketing researches, negotiations support and credit status checks”. There are several hundreds of marketing companies in Russia (including representative offices of well-known foreign companies) acting without PI license and in my opinion this section of the Law must be treated as “recommended but not required”.
“Trade secret protection Law” (29.07.2004 г. N 98-ФЗ). This Law is similar to EU regulations. The only difference is that the victim can apply to the Russian court only if it had “trade secret protection regime” and acted in compliance with its regulations when the trade secret was stolen.
“The law about State secret” (06.10.1997 N 131-ФЗ, от 30.06.2003 N 86-ФЗ, от 11.11.2003 N 153-ФЗ, от 29.06.2004 N 58-ФЗ, от 22.08.2004 N 122-ФЗ, от 01.12.2007 N 294-ФЗ, от 01.12.2007 N 318-ФЗ 27.03.1996 N 8-П, 10.11.2002 N 293-О, 10.11.2002 N 314-О) regulates protection and management of State secrets. It is important to know that private company can have the license to work with governmental secrets (most shipyards, ammo factories, some software developers etc.). In this case your request will be mandatory declined by every reliable professional.
STEP 1 – IDENTIFICATION OF THE SUBJECT
Background screening project usually starts from the subject identification. Today we will limit the scope of the article to the case where the company corresponds to the only legal body. In fact it is rare for Russian business. Most Russian companies have several legal bodies united by shareholders or even unaffiliated.
If you know legal name of the Subject – you can proceed to Step 2.
Our aim is to find indicators which can help us to identify the legal body. In Russia these indicators are Tax ID (INN, ИНН), legal name and type of ownership. If this data is unavailable, the only 2 methods we can use are OSI and database screening. Usually if the company is acting and duly registered, at least one legal body can be identified by the OSI. Most Russian companies place their Tax ID and legal name on their Internet sites.
I BEG YOU NEVER EVER MAKE THE FOLLOWING CONCLUSION: IF THE SUBJECT HAS A GOOD WEBSITE - IT IS A DULY INCORPORATED COMPANY. THERE ARE NUMEROUS RUSSIAN FAKE SITES DESIGNED WITH THE ONLY INTENTION – TO ASSURE YOU THAT THE COMPANY REALLY EXISTS. THESE SCAMERS ACT MOSTLY IN INTERNATIONAL OIL&GAS BUSINESS, BUT I SAW ALSO SCAM DISTRIBUTORS AND EVEN SCAM DETECTIVE AGENCIES SITES.
If OSI can’t help in the Subject identification, database screening is the final chance. In case the company has a unique name, it is possible that you will succeed, if it is not (for example the name of the company is “Omega”) you will have to consider in-depth investigation as the only chance to identify the Subject.
STEP 2 – DATABASE SCREENING
When the Subject is identified, the process of basic background screening is simple: check and cross analysis of legal database records.
There are several reliable and legal databases of Russian companies. Most popular are:
SPARK (System of Professional Analysis of Markets and Companies) This database includes records about Russian, Ukrainian and Kazakhstan companies
Database of National Credit Bureau Comparatively with SPARK it has stronger financial reporting system but Ukrainian and Kazakhstan companies are not listed in this database.
These databases are formed by data exported from Federal Statistics Service, Federal Financial Markets Service, Federal Tax Service data. These informational sources with no doubt are very reliable, but at the same time they limit the ability of investigator to get up to date information.
E.g. by this time SPARK gives accounting data issued by the end of 2009 (for several companies even 2008!). The problem is in traditionally poor reporting system of Russian companies and delays in information analysis. Even now many Russian companies have double reporting system: first (legal) for taxation, second (informal) for internal control and financial analysis. That’s why even if the structure of the subject financial balance in above mentioned databases is strong; in fact the company can be on the edge of bankruptcy.
Anyway these databases can give us reliable and comparatively up to date information about:
1. Short name of the subject
2. Full name of the subject (Russian and English)
3. Foundation date
4. Reg. Number (OGRN)
5. TAX number (INN)
6. OKPO Code
7. Type of Ownership (OKFS code)
8. Legal form (OKOPF code)
9. OKATO
10. Line of business
11. General Director
12. Legal address
13. Shareholders
14. Affiliated bodies
15. As it was mentioned before, accounting balance is also available.
STEP 3 – ARBITRAGE RECORDS SCREENING
Among reliable open for public databases the database of Arbitrage court is one of the best. During basic background screening it is reasonable to check if the subject was claimed as unreliable debtor or even in the process of bankruptcy.
Every regional court has its own database. Probably later I’ll publish its links in this blog.
SEVERAL HINTS FOR PERSONS WHO WISH TO MAKE BACKGROUND SCREENING FREE OF CHARGE
1. SPARK and National Credit Bureau has limited free access. You can check if the company was duly registered and the name of the general manager
2. There are simple methods of bank account and TAX-ID validation. Some of them is available for free at the Internet
3. Old data is available on several illegal on-line databases. If you’ll be lucky you will find one before it will be erased from the Internet.
4. If the subject is a Joint Stock Company (Russian OAO) it is obliged to disclose information about its shareholders and affiliated bodies. It is a good and legal source of important information.
I’m sorry that my post is much longer than usual, but I hope this data will be interesting and helpful.
As it was mentioned before it is rare when the company (business) has only one legal body and it is hard even for “Russian made” professional to identify the whole structure of legal bodies involved in the business of the company. That’s why I’m sure that when you’ll face the challenge of Russian company background screening you will make a good decision and won’t try to do this without professional support.
Today, following recent international projects, I plan to show you first steps of legal body background screening process in Russia. I believe this data will be helpful ether for professional investigators and competitive intelligence specialists interested in effective and legal cooperation with Russian colleagues.
As usual, my first words will be about the Law and its requirements.
Every Russian PI agency is regulated by the “Federal Law about private detective and security services” (21.03.2002 N 31-ФЗ, 10.01.2003 N 15-ФЗ, 06.06.2005 N 59-ФЗ, 18.07.2006 N 118-ФЗ, 24.07.2007 N 214-ФЗ, 22.12.2008 N 272-ФЗ). This Law is a subject of constant debates between PI professionals and police authorities of Russian Federation. In general, the problem is in comparatively poor effectiveness of investigations leaded by the Ministry of Internal Affairs and numerous offences of Russian private agencies. Thank god this law is regulating mostly means of investigations (follow-up services, eavesdrops etc.) and doesn’t limit the scope of investigations. Uncommon for the world practice is that this law also regulates “marketing researches, negotiations support and credit status checks”. There are several hundreds of marketing companies in Russia (including representative offices of well-known foreign companies) acting without PI license and in my opinion this section of the Law must be treated as “recommended but not required”.
“Trade secret protection Law” (29.07.2004 г. N 98-ФЗ). This Law is similar to EU regulations. The only difference is that the victim can apply to the Russian court only if it had “trade secret protection regime” and acted in compliance with its regulations when the trade secret was stolen.
“The law about State secret” (06.10.1997 N 131-ФЗ, от 30.06.2003 N 86-ФЗ, от 11.11.2003 N 153-ФЗ, от 29.06.2004 N 58-ФЗ, от 22.08.2004 N 122-ФЗ, от 01.12.2007 N 294-ФЗ, от 01.12.2007 N 318-ФЗ 27.03.1996 N 8-П, 10.11.2002 N 293-О, 10.11.2002 N 314-О) regulates protection and management of State secrets. It is important to know that private company can have the license to work with governmental secrets (most shipyards, ammo factories, some software developers etc.). In this case your request will be mandatory declined by every reliable professional.
STEP 1 – IDENTIFICATION OF THE SUBJECT
Background screening project usually starts from the subject identification. Today we will limit the scope of the article to the case where the company corresponds to the only legal body. In fact it is rare for Russian business. Most Russian companies have several legal bodies united by shareholders or even unaffiliated.
If you know legal name of the Subject – you can proceed to Step 2.
Our aim is to find indicators which can help us to identify the legal body. In Russia these indicators are Tax ID (INN, ИНН), legal name and type of ownership. If this data is unavailable, the only 2 methods we can use are OSI and database screening. Usually if the company is acting and duly registered, at least one legal body can be identified by the OSI. Most Russian companies place their Tax ID and legal name on their Internet sites.
I BEG YOU NEVER EVER MAKE THE FOLLOWING CONCLUSION: IF THE SUBJECT HAS A GOOD WEBSITE - IT IS A DULY INCORPORATED COMPANY. THERE ARE NUMEROUS RUSSIAN FAKE SITES DESIGNED WITH THE ONLY INTENTION – TO ASSURE YOU THAT THE COMPANY REALLY EXISTS. THESE SCAMERS ACT MOSTLY IN INTERNATIONAL OIL&GAS BUSINESS, BUT I SAW ALSO SCAM DISTRIBUTORS AND EVEN SCAM DETECTIVE AGENCIES SITES.
If OSI can’t help in the Subject identification, database screening is the final chance. In case the company has a unique name, it is possible that you will succeed, if it is not (for example the name of the company is “Omega”) you will have to consider in-depth investigation as the only chance to identify the Subject.
STEP 2 – DATABASE SCREENING
When the Subject is identified, the process of basic background screening is simple: check and cross analysis of legal database records.
There are several reliable and legal databases of Russian companies. Most popular are:
SPARK (System of Professional Analysis of Markets and Companies) This database includes records about Russian, Ukrainian and Kazakhstan companies
Database of National Credit Bureau Comparatively with SPARK it has stronger financial reporting system but Ukrainian and Kazakhstan companies are not listed in this database.
These databases are formed by data exported from Federal Statistics Service, Federal Financial Markets Service, Federal Tax Service data. These informational sources with no doubt are very reliable, but at the same time they limit the ability of investigator to get up to date information.
E.g. by this time SPARK gives accounting data issued by the end of 2009 (for several companies even 2008!). The problem is in traditionally poor reporting system of Russian companies and delays in information analysis. Even now many Russian companies have double reporting system: first (legal) for taxation, second (informal) for internal control and financial analysis. That’s why even if the structure of the subject financial balance in above mentioned databases is strong; in fact the company can be on the edge of bankruptcy.
Anyway these databases can give us reliable and comparatively up to date information about:
1. Short name of the subject
2. Full name of the subject (Russian and English)
3. Foundation date
4. Reg. Number (OGRN)
5. TAX number (INN)
6. OKPO Code
7. Type of Ownership (OKFS code)
8. Legal form (OKOPF code)
9. OKATO
10. Line of business
11. General Director
12. Legal address
13. Shareholders
14. Affiliated bodies
15. As it was mentioned before, accounting balance is also available.
STEP 3 – ARBITRAGE RECORDS SCREENING
Among reliable open for public databases the database of Arbitrage court is one of the best. During basic background screening it is reasonable to check if the subject was claimed as unreliable debtor or even in the process of bankruptcy.
Every regional court has its own database. Probably later I’ll publish its links in this blog.
SEVERAL HINTS FOR PERSONS WHO WISH TO MAKE BACKGROUND SCREENING FREE OF CHARGE
1. SPARK and National Credit Bureau has limited free access. You can check if the company was duly registered and the name of the general manager
2. There are simple methods of bank account and TAX-ID validation. Some of them is available for free at the Internet
3. Old data is available on several illegal on-line databases. If you’ll be lucky you will find one before it will be erased from the Internet.
4. If the subject is a Joint Stock Company (Russian OAO) it is obliged to disclose information about its shareholders and affiliated bodies. It is a good and legal source of important information.
I’m sorry that my post is much longer than usual, but I hope this data will be interesting and helpful.
As it was mentioned before it is rare when the company (business) has only one legal body and it is hard even for “Russian made” professional to identify the whole structure of legal bodies involved in the business of the company. That’s why I’m sure that when you’ll face the challenge of Russian company background screening you will make a good decision and won’t try to do this without professional support.
Sunday 9 May 2010
The question of the hour: Can we check educational background of the subject and how this can be done in accordance with Russian legislation?
For several years since mid-90th the problem of educational background check of Russian employees is a terrible headache for professional investigators and background screeners. “What’s up, man, what’s the problem with it?” – that’s what we often hear form our international partners and even local HRs and security managers.
The problem has several sides:
1. Fake Higher education Diplomas are available on the black market and even on the Internet. Average price of the fake Diploma is 500 USD; add another 1200 USD and you can even register it in the list of Diplomas of several private or even State Institutes or Universities.
2. There are a lot of small private Institutes in every region of Russia. Sometimes it is a problem to identify the Institute where the Subject got his Diploma.
3. There is no Federal or even local database of Higher education Diplomas.
How we can manage this situation and get reliable data about Subjects’ educational background?
Step 1 Check University or Institute Diplomas database.
Ask your potential employee to make a copy of his Diploma. This copy will be in need when you apply to the University for Validation. Please pay attention that it is not allowed by most State institutes to validate the number of the document without written permission of the Subject and at least a fax copy of his Diploma. It is strange but some institutes can’t trace back their students Diplomas issued in 70-90th years of XX century.
If the reply will be positive there is 80% probability that the Subject was in fact graduated from this institute.
Step 2 Check social networks accounts of the Subject to identify if there are classmates from the same institute in his friends list.
If results of steps 1 and 2 are positive, the probability that the Subject was in fact graduated from this institute is 90%
Step 3 Get in touch with potential classmates of the Subject (it is better to choose some not from his friends list) and ask them if they had studied with the Subject and did he really graduated from the institute.
If results of steps 1, 2 and 3 are positive, the probability that the Subject was in fact graduated from this institute is 99%.
I often see public offers from Russian PIs that they are ready to check educational background of the Subject in two or three days. I can assure you that results of these investigations can’t be accurate or reliable – there are no legal (and even partially legal) databases of Diplomas of governmental or private higher education institutes of Russian Federation.
The problem has several sides:
1. Fake Higher education Diplomas are available on the black market and even on the Internet. Average price of the fake Diploma is 500 USD; add another 1200 USD and you can even register it in the list of Diplomas of several private or even State Institutes or Universities.
2. There are a lot of small private Institutes in every region of Russia. Sometimes it is a problem to identify the Institute where the Subject got his Diploma.
3. There is no Federal or even local database of Higher education Diplomas.
How we can manage this situation and get reliable data about Subjects’ educational background?
Step 1 Check University or Institute Diplomas database.
Ask your potential employee to make a copy of his Diploma. This copy will be in need when you apply to the University for Validation. Please pay attention that it is not allowed by most State institutes to validate the number of the document without written permission of the Subject and at least a fax copy of his Diploma. It is strange but some institutes can’t trace back their students Diplomas issued in 70-90th years of XX century.
If the reply will be positive there is 80% probability that the Subject was in fact graduated from this institute.
Step 2 Check social networks accounts of the Subject to identify if there are classmates from the same institute in his friends list.
If results of steps 1 and 2 are positive, the probability that the Subject was in fact graduated from this institute is 90%
Step 3 Get in touch with potential classmates of the Subject (it is better to choose some not from his friends list) and ask them if they had studied with the Subject and did he really graduated from the institute.
If results of steps 1, 2 and 3 are positive, the probability that the Subject was in fact graduated from this institute is 99%.
I often see public offers from Russian PIs that they are ready to check educational background of the Subject in two or three days. I can assure you that results of these investigations can’t be accurate or reliable – there are no legal (and even partially legal) databases of Diplomas of governmental or private higher education institutes of Russian Federation.
Wednesday 28 April 2010
Since January 2011 the database of Russian medical professionals will be available for public by request.
The Ministry of Public Heals and Social Development announced short –termed plan for 2010-2012 where it is proclaimed that by the end of 2010 every Russian citizen by request will be able to check education of his doctor or medical adviser. Up until now it is not clear how the Ministry plans to implement this Federal project. Moreover, it is doubtful that the education screening process will be in compliance with the Federal Law on Personal data. Anyway, if this screening process will be legal, quick and reliable we can foresee decrees in corruption among medical professionals and general improvement of quality in the public health services market.
By the end of April it is proclaimed that the database of medical professional already includes 390 thousands records. It is planed that the whole database will have about 1 800 thousands records.
I will keep my eyes opened and will mandatory inform you if, how and where this data will be available.
By the end of April it is proclaimed that the database of medical professional already includes 390 thousands records. It is planed that the whole database will have about 1 800 thousands records.
I will keep my eyes opened and will mandatory inform you if, how and where this data will be available.
Thursday 25 March 2010
How to use SNA during background screening in Russia?
Method of data mining in social networks was widely discussed in LinkedIn Group “ProP.I.” in March 2010. Most questions were about pretexting in social networks and ability to use the data collected in the court. I paid attention, that there are many approaches to problem solving, depending on regional traditions and regulations where PI operates.
That’s why I think it is reasonable to say a few words about the way data collected in social networks can be used in background screening in Russia.
First of all lets’ divide the law and the ethics. According to the law one can use any data collected in public accounts unless he is trying to use this data against the owner of the account. Most PIs I know is working on the edge of the law and it is reasonable to take for granted that reliable expert will find the way to get information he needs in compliance with local regulations.
Taking into consideration the above statement, pretexting in social networks is the matter of ethic, not the law.
There are 2 different situations:
1. PI uses unknown for the subject name and personality asking him “add me as a friend”. Pretty girl in bikini or sales person with “unique opportunity” are good examples of these fake pages. If the subject accepts this offer I see no reason to speak about unethical behavior or offense against the law. The subject made his own decision and thinks that the data on his page can be given to the stranger.
2. PI uses fake page of the subject‘s classmate or relative. Even if this way gives PI the data he needs I think that it is unethical. This practice must be stopped and may be even prosecuted by professional community.
In my practice I met several “subject’s fake accounts” where competitors or detractors of the subject publish compromising materials.
How can we use social networks’ pages as a valid data if we are not even sure that this page actually belongs to the subject of the investigation? – There’s no other way except validating this data through other informational sources or during investigation.
Social networks can give us only preliminary information, nothing else.
That’s why I think it is reasonable to say a few words about the way data collected in social networks can be used in background screening in Russia.
First of all lets’ divide the law and the ethics. According to the law one can use any data collected in public accounts unless he is trying to use this data against the owner of the account. Most PIs I know is working on the edge of the law and it is reasonable to take for granted that reliable expert will find the way to get information he needs in compliance with local regulations.
Taking into consideration the above statement, pretexting in social networks is the matter of ethic, not the law.
There are 2 different situations:
1. PI uses unknown for the subject name and personality asking him “add me as a friend”. Pretty girl in bikini or sales person with “unique opportunity” are good examples of these fake pages. If the subject accepts this offer I see no reason to speak about unethical behavior or offense against the law. The subject made his own decision and thinks that the data on his page can be given to the stranger.
2. PI uses fake page of the subject‘s classmate or relative. Even if this way gives PI the data he needs I think that it is unethical. This practice must be stopped and may be even prosecuted by professional community.
In my practice I met several “subject’s fake accounts” where competitors or detractors of the subject publish compromising materials.
How can we use social networks’ pages as a valid data if we are not even sure that this page actually belongs to the subject of the investigation? – There’s no other way except validating this data through other informational sources or during investigation.
Social networks can give us only preliminary information, nothing else.
Saturday 13 March 2010
What kind of data can be collected during basic pre-employment screening?
First of all you have to take into consideration that in Russia you won’t ever get standard criminal background or credit history report of the employee.
Criminal records: There are no “open for public” databases of criminal records in Russia. Moreover, except for serious (or organized) crime, police has no federal database of crime participators. That’s why if we try to get criminal background records of the employee, the task should be split into 2 different steps:
1. Check if the employee was named in the Federal database as an offender or terrorist (pay attention that this source is also “for authorized use only”)
2. Check local database of criminal records to find if the employee was prosecuted or detained by the police (no chance to get this data unless you have a strong relations with local authorities).
There’s also another way of collecting criminal background information – check illegal databases of organized crime participants and offenders which is available on the black market. This database is not up to date (newest records dated 2002) and doesn’t pretend to be full. I can’t recommend you to rely on this source of information, but if you try to save your time & money, this is the only source you have. Elsewhere you will have to “investigate” and get information directly from police databases.
Credit history: It is a long story which started in 2004, when the Federal Law 213-F3 “About credit history” dated 12.30.2004 was published. According to this Law, several Credit bureaus are to be organized. Banks are welcomed but not obliged to sign agreement with Credit bureaus and disclose information about their debtors. As the result there are databases of Russian citizens credit history, but they are not reliable (if the Subject get financial credit from the bank which is not in the disclosure program, this data will be hardy available). With the permission of the Subject you can get information about his criminal background, but the only legal way to get credit history of the Subject is to take his Power of Attorney.
So, what will we find in the basic background screening report of Russian employee?
National registration data of the Subject (First name, Second name, Fathers name, date of birth, passport number, registered address). Registered address (so called “propiska”) is a kind of legal address. Very often registered address doesn’t mean place of residence.
Tax ID (Individual tax number, INN) – identification of the private person in tax police
Driving license (including expiry date)
Relatives of the Subject – only if they are registered at the same address.
Ownership of vehicles (VIN, registered number, date of registration)
Ownership of premises
Involvement in legal bodies
Criminal background – only Federal database data (see above)
I’ve seen different reports produced by local and international companies but the truth is that this data is the only valid information about the employee that can be collected without investigation.
Criminal records: There are no “open for public” databases of criminal records in Russia. Moreover, except for serious (or organized) crime, police has no federal database of crime participators. That’s why if we try to get criminal background records of the employee, the task should be split into 2 different steps:
1. Check if the employee was named in the Federal database as an offender or terrorist (pay attention that this source is also “for authorized use only”)
2. Check local database of criminal records to find if the employee was prosecuted or detained by the police (no chance to get this data unless you have a strong relations with local authorities).
There’s also another way of collecting criminal background information – check illegal databases of organized crime participants and offenders which is available on the black market. This database is not up to date (newest records dated 2002) and doesn’t pretend to be full. I can’t recommend you to rely on this source of information, but if you try to save your time & money, this is the only source you have. Elsewhere you will have to “investigate” and get information directly from police databases.
Credit history: It is a long story which started in 2004, when the Federal Law 213-F3 “About credit history” dated 12.30.2004 was published. According to this Law, several Credit bureaus are to be organized. Banks are welcomed but not obliged to sign agreement with Credit bureaus and disclose information about their debtors. As the result there are databases of Russian citizens credit history, but they are not reliable (if the Subject get financial credit from the bank which is not in the disclosure program, this data will be hardy available). With the permission of the Subject you can get information about his criminal background, but the only legal way to get credit history of the Subject is to take his Power of Attorney.
So, what will we find in the basic background screening report of Russian employee?
National registration data of the Subject (First name, Second name, Fathers name, date of birth, passport number, registered address). Registered address (so called “propiska”) is a kind of legal address. Very often registered address doesn’t mean place of residence.
Tax ID (Individual tax number, INN) – identification of the private person in tax police
Driving license (including expiry date)
Relatives of the Subject – only if they are registered at the same address.
Ownership of vehicles (VIN, registered number, date of registration)
Ownership of premises
Involvement in legal bodies
Criminal background – only Federal database data (see above)
I’ve seen different reports produced by local and international companies but the truth is that this data is the only valid information about the employee that can be collected without investigation.
Friday 12 March 2010
Pre-employment screening of Russian citizens (1)
I think it is a good idea to start from pre-employment screening of Russian citizens. This task is common and widely used by international companies during start-ups or development of their Russian brunches. I had several dozens projects of top-managers and regular workers background screening for EU companies in Russia and wish to share my experience of cooperation.
LAW: Personal data of Russian citizens is protected by the Federal Law “On the Personal data” #152-FZ dated 07.26.2007. Unless it was published on the Internet or printed media, personal data can’t be collected or analyzed without written permission of the Subject. Debates follow application of this Law since the date of its publication, but main rules are simple:
That’s all for today. Next post will be about the data and informational sources for pre-employmant screening in Russia.
LAW: Personal data of Russian citizens is protected by the Federal Law “On the Personal data” #152-FZ dated 07.26.2007. Unless it was published on the Internet or printed media, personal data can’t be collected or analyzed without written permission of the Subject. Debates follow application of this Law since the date of its publication, but main rules are simple:
- “If you wish to make pre-employment screening of your applicant – take a written permission to check his personal data”
- “If you wish to have your employees under control, add the disclaimer to the Labor agreement that personal data of employee can be regular screened by internal audit department or sub-contractor of the company”
That’s all for today. Next post will be about the data and informational sources for pre-employmant screening in Russia.
Thursday 11 March 2010
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