Analysing corruption risks in the ownership structure

An industrial enterprise can be recognised as “corrupt property” and the business can be seized and transferred to state ownership. This problem is especially relevant for persons who previously held public office (PEP persons), as the time limits for the state to “detect” violations of the law are virtually unlimited and a defence through a limitation period objection is impossible considering CC Ruling 49-P. Such in-depth verification is also relevant for companies offered for sale, since the above risks may today be a reason for the transaction to be refused.  

BGP Litigation conducts full due diligence of compliance with the Russian legislation during creation or acquisition of industrial enterprises. BGP Litigation lawyers study archival documents of the enterprise and its owner, the State Archive of the Russian Federation, and the archive of the relevant subject of the Russian Federation. The practice experts audit the income and expenses of the persons who participated in creating and acquiring the enterprise and may be related to it. Taking into account control legislation 79-FZ, 115-FZ, 230-FZ, the lawyers prepare a report on the chronology of creation/acquisition of the enterprise with a description of the current business owners’ identified risks.

In the process, the lawyers make up documentation on the business creation/acquisition procedure that is missing from the corporate departments of the business or the owners. This removes title risks.