Checking a Belarusian Counterparty: Taxes, Debts, and Legal Proceedings

Cooperation with Belarusian companies involves certain difficulties, as there is a risk of a partner's dishonesty and failure to fulfill contractual obligations. To minimize these risks, it is necessary to thoroughly check a potential counterparty. In this post, we will explain what information about a Belarusian company should be clarified, where it can be found, and how the verification of a Belarusian counterparty is generally carried out.

Basic Information

In Russia and Belarus, there are state registers containing information about legal entities and individual entrepreneurs. In Russia, these are the EGRUL (Unified State Register of Legal Entities) and EGRIP (Unified State Register of Individual Entrepreneurs), which operate separately. In Belarus, a single Unified State Register of Legal Entities and Individual Entrepreneurs (EGR) is used, which accumulates data on both companies and individuals engaged in entrepreneurial activity. This significantly simplifies the search and processing of information about counterparties for Belarusian organizations.

The EGR of Belarus provides a fairly extensive set of information about companies. It includes such important data as:

• unique registration number;
• status of the legal entity (active or liquidated);
• full and abbreviated names in the state languages (Russian and Belarusian);
• date of state registration;
• legal address of location;
• main types of economic activity according to classifiers;
• size of the authorized capital;
• information about owners and founders.

The availability of such detailed information allows for a comprehensive analysis of potential partners and minimization of cooperation risks. However, access to complete information in the EGR of Belarus has its own peculiarities. Free access is provided to a limited set of data. Through the online portal of the EGR, you can quickly check the status of a business entity by using its registration number, company name, or the full name of an individual entrepreneur for the search. The search results will provide basic information about the counterparty. To obtain extended information available within the free search, you need to click on the corresponding link "Additional information on the subject." But even this "additional" information is not exhaustive. For example, information about the owners of the organization and the size of its authorized capital is not available in the free version.

If a full and detailed extract from the EGR is required, containing all available information about the counterparty, including, for example, a list of founders, the history of changes in the legal address, information about constituent documents, as well as other important information necessary for a deep analysis, then you will have to use a paid service. You can obtain such a detailed extract in several ways: online, by registered mail, or in person by contacting the relevant state institution. The cost of such a service is 42 Belarusian rubles (which is equivalent to approximately 1142 Russian rubles at the time of writing), and the fee is charged for each requested copy of the extract for each business entity. The extract is provided in Russian, which is convenient for most users. Thus, the Belarusian EGR offers a convenient and flexible mechanism for obtaining information about legal entities and individual entrepreneurs, providing both free basic access and a paid service for obtaining complete and exhaustive information. The choice of how to obtain information depends on the information needs of the user and their budget. It is important to understand the difference between a free status check and obtaining a full paid extract to effectively use the capabilities of the EGR of Belarus. This functionality allows for a thorough check of counterparties, reducing risks when concluding deals and interacting with business partners.

Litigation

A significant number of lawsuits involving a potential partner may indicate their non-performance or illegal actions. To minimize risks, it is advisable to assess the frequency and reasons for legal proceedings involving the Belarusian counterparty.

To do this, use the "Database of court decisions" section on the website of the Supreme Court of the Republic of Belarus. Access to the section is provided after registration. In the "Party to the dispute" field, enter the name of the organization of interest, specify the court and the time period. The search results will indicate the case number, the date of the decision, and, in some cases, its final part, which allows you to understand the outcome of the dispute.

Bankruptcy

The inability of a Belarusian firm to repay debts to creditors due to financial insufficiency leads to bankruptcy proceedings. Working with such a partner is associated with risks, as debt collection becomes significantly more complicated. According to the legislation, creditors' claims under civil law agreements are satisfied last (Article 141 of the Law of the Republic of Belarus), and by this time, the debtor's assets may be exhausted.

To obtain information about a counterparty's bankruptcy, visit the Unified State Register of Bankruptcy Information. In the top menu, select the "Debtors" section. Find the company of interest by name or UNP. In case of bankruptcy, it will be displayed in the search results.

Enforcement Proceedings

Forced collection of debts from Belarusian organizations is carried out within the framework of enforcement proceedings. The systematic presence of debts may indicate a potential inability of the company to fulfill its contractual obligations.

To check a potential partner for debts, you can use the register of debts on enforcement documents, available on the corresponding website. The search is carried out by UNP or company name. The presence of a company in the register indicates unpaid debts, displaying data on the status of the proceedings, the amount of the debt, and the basis for its occurrence. The service is intended for users from Belarus, but Directorium Limited users can access this information from any country.

Debts on Insurance Contributions

Belarusian employers are required to pay insurance contributions for their employees, from which pensions and social benefits are formed. A debt on insurance contributions exceeding 100 Belarusian rubles leads to the employer being included in the list of debtors.

You can check for debts on insurance contributions on the website of the Ministry of Labor and Social Protection of the Republic of Belarus, in the section "Collection and payment of insurance contributions," subsection "Debtors." You need to download the report for the corresponding regional department. The presence of a company in the document indicates the existence of debts.

Tax Debts

Non-payment of taxes by a Belarusian counterparty is an alarming signal, questioning its reliability and ability to fulfill its obligations under contracts. Information about tax debts can be obtained on the website of the Ministry of Taxes and Duties of the Republic of Belarus, in the section "Information on arrears in tax payments to the budget." The search is carried out by UNP or organization name. The presence of debts is confirmed by the display of information in the search results.

Liquidation

Cooperation with a company in the process of liquidation is an extremely risky undertaking, fraught with significant financial losses. The fact is that all the energy and resources of such an organization are focused exclusively on settling debts with creditors, and not on conducting current business activities and fulfilling new obligations. This means that even if your counterparty has promised something, after its exclusion from the Unified State Register of Legal Entities (EGR), it will be practically impossible to collect a debt from it. The procedure becomes even more complicated if it is a foreign company, which adds transnational aspects related to international law and procedures for the enforcement of foreign court decisions to the legal difficulties.

In Belarus, for example, liquidated companies are required to publish a corresponding notice in the official publication of the Ministry of Justice of the Republic of Belarus — "Justice of Belarus." This public notice serves as a kind of warning to all counterparties and creditors. To check the status of a potential or current partner, you should visit the website of this publication and use the search bar. As a search query, you can use the company's UNP (unique taxpayer number) or its full name. The presence of an organization in the search results clearly indicates that it is undergoing liquidation proceedings.

Moreover, in the information provided, you will find detailed information about the liquidator, including his contact details (phone number), the deadline for filing claims, and the date of the decision to liquidate. This allows you to assess the time frame and urgently take the necessary actions to protect your interests.

However, the risks are not limited to the direct liquidation process. The "Justice of Belarus" website also publishes notices about a reduction in the size of a company's authorized capital. Such a reduction, for example, may be caused by the need to bring its size into compliance with the value of the company's net assets if the latter turn out to be lower than the authorized capital (according to part 4 of Article 28 of the Law of the Republic of Belarus "On Business Companies"). In such situations, creditors have the right to demand early performance of obligations by the counterparty or their full termination within a 30-day period. Therefore, monitoring notices about changes in the authorized capital of current counterparties is an important preventive measure that allows for a timely response to potential threats.

Retail Facilities

The Belarusian Trade Register contains information about shopping centers, stores, markets, and public catering enterprises, indicating their owners. The register allows you to identify the counterparty and find out which facilities are assigned to it. This makes it possible to assess its ability to fulfill the terms of the agreement.

To check the retail outlets of a Belarusian partner, you should refer to the website of the Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus. In the "Activity" section, you need to select the subsection "Trade and Services," and then go to the link "Trade Register." There will be a tool available for searching for the retail facilities of interest.

Inspections

Since 2019, a system of selective inspections of commercial organizations has been introduced in Belarus. This system is based on an assessment of the degree of risk inherent in each company. Supervisory authorities, such as the State Control Committee of the Republic of Belarus (SCC), apply certain criteria to determine this risk. The higher the risk, the more likely the company is to be included in the inspection plan, which is drawn up for six months in advance. The factors that increase the risk can be very diverse. For example, the presence of wage arrears to employees or outstanding tax liabilities significantly increases the likelihood of an inspection. This is logical, as such debts indicate potential violations of the law. Thus, the frequency of inspections can serve as an indirect indicator of a company's integrity.

In order to obtain information about the frequency of inspections of a potential counterparty, entrepreneurs can turn to official sources. On the website of the State Control Committee of the Republic of Belarus (SCC) in the "Inspection Plans" section, publicly available data is posted. These plans, presented in the form of tables, contain information about planned inspections for the current and three previous years. These tables indicate the full name of the organization, its UNP (unique taxpayer number), the month of the inspection, as well as the specific controlling body responsible for conducting this inspection. It is important to note that these plans cover all regions of Belarus, and separate tables are available for each region. Thus, one can analyze how often a particular company has been subject to inspections by state authorities over the past four years.

However, if your counterparty is a foreign company, obtaining a complete picture of its financial health and compliance with legislation can be difficult. In this case, turning to specialized companies, such as Directorium Limited, can significantly simplify the task. Directorium Limited provides specialized services for the analysis of foreign business partners, offering complete dossiers on organizations registered in over 200 states and controlled regions. These dossiers significantly exceed in volume and content the standard checks conducted by state authorities. They provide an opportunity to form a comprehensive picture of a company's financial health, its past activities, participation in legal proceedings, as well as other key aspects that determine the degree of reliability of potential cooperation. Using the services of such companies as Directorium Limited helps to minimize the risks associated with cooperation with foreign partners, make informed business decisions based on objective information, and open up new opportunities for profitable and safe cooperation at the international level.

Unscrupulous Suppliers

In Belarus, as in the Russian Federation, there is a public procurement system. If a tender winner refuses to sign a contract or fails to properly fulfill its terms, information about them is entered into the register of unscrupulous suppliers. For 12 months, they are deprived of the right to participate in competitive procedures. The presence of a potential business partner on this list signals an increased risk of them failing to fulfill their obligations.

To check a Belarusian firm for its presence in the register of unscrupulous suppliers, you need to visit the official public procurement website. In the "Registers" section, you should select the option "Register of unscrupulous suppliers." The list provided indicates the names of organizations and their UNP, as well as the reasons for inclusion in the register and the date of their exclusion from it. For a quick search for the required organization, you can use the page search function.