Checking counterparties and competitors

[Андрей Захаров]

Law "On Private Detective and Security Activities in the Russian Federation"
Article 1. Private detective and security activities

For the purposes of investigation, the following types of services are allowed:
2) market research, collecting information for business negotiations, identifying insolvent or unreliable business partners;
3) the establishment of circumstances ... unfair competition ...

As can be seen from the disposition of this article of the Law, a private investigator is allowed, on the basis of a civil law contract, to provide services to third parties in terms of market research, collecting information for business negotiations, identifying insolvent or unreliable business partners, establishing circumstances of unfair competition.

At the same time, it is necessary to distinguish by the amount of possible information that the customer of our services may need to collect information regarding possible contractors and potential competitors. So what are the differences in these areas of activity? And there are differences ....

In order to determine them, it is necessary to keep in mind the following circumstances.

First of all, we will determine the goals of these events ....

IMPLEMENTATION OF THE COLLECTION OF INFORMATION for business negotiations, identification of insolvent or unreliable business partners.

These events are held in relation to potential counterparties with whom the customer plans to conclude any contracts. The purpose of collecting information on potential counterparties can be defined as an assessment of the counterparty’s capabilities to fulfill its contractual obligations and, as a consequence of this, “calculate” the degree of possible risk of the customer of this service when concluding specific contracts.

This may apply to contracts, at the conclusion of which the customer of the service may be inflicted real harm if the counterparty fails to fulfill its contractual obligations:

-delivery of goods (services) to the counterparty with the condition of payment for goods (services) after delivery (provision).

- purchases by the customer of the goods (services) from the counterparty with the condition of prepayment of the goods (services) by the customer.

When conducting such checks of counterparties, the following is usually found out:

- the presence (absence) of the counterparty of outstanding contractual obligations

- availability (absence) of the counterparty’s conditions for the fulfillment of specific obligations to the customer of the service (availability of goods, storage facilities, concluded contracts for the supply of goods necessary for the customer, etc.)

-other information indicated as necessary by the customer upon conclusion of the contract

We will not describe in detail in this article all possible variations in the scope of inspections of the counterparty, because it will take a lot of time, taking into account the fact that there are developed methods for checking precisely the counterparties, which should be known to persons carrying out such checks. In this regard, we dwell on the main thing .... And the main thing in this case is that the scope of the audit may be limited to determining the degree of risk of the fulfillment of its contractual obligations by the auditee, about which the person conducting the audit gives the customer relevant recommendations based on its results. Moreover, the counterparty may be a subject of entrepreneurial activity of a different level with the customer (subject of micro, small, medium, large business).

IMPLEMENTATION OF THE COLLECTION OF INFORMATION on establishing the circumstances of unfair competition, market research.

These activities are carried out in order to determine the customer’s behavior strategy in the market of goods (services), taking into account the conditions of “work” in this market of its potential competitors that provide services similar to those of the customer or that sell products similar to those of the customer.

In this regard, the amount of information about the activities of competitors will significantly differ from the amount of information necessary to make a decision when working with contractors as part of their verification. It should also take into account the factor that a potential competitor is usually, as a business entity, at the same level as the customer (micro, mini, medium, large business).

In addition to the volumes of information indicated as necessary when checking counterparties, when studying the activities of potential competitors, attention should be paid to the collection of the following information.

- information about potential counterparties of a competitor

-information about the rival’s connections with criminal structures, corrupt officials

- information that may compromise a competitor for various reasons

- information regarding the characteristics of entrepreneurial activity in a particular market of goods (services) carried out by a competitor

-data on the payroll of employees of a competitor

-full information about the place of the competitor's entrepreneurial activity (the presence of office premises, warehouses, production, etc.)

-other information (financial statements, etc.)

A complete list of information that is necessary when collecting information regarding a competitor is agreed with the customer when concluding a service agreement.

Based on these circumstances, we can conclude that the amount of information when checking counterparties and competitors is significantly different. It should also be borne in mind that if, when conducting activities to check counterparties, in principle, the person conducting the audit may not have a sufficiently high level of knowledge regarding the scope of the counterparty’s activities, then when conducting activities to collect information on a potential competitor, the person collecting the information should have a sufficiently high level of knowledge in the field of activity of a potential competitor and practical work experience related to the collection of such information.

At the same time, one should also take into account the fact that the information itself, collected in the framework of market research (information about competitors), cannot guarantee the possible "advantage" of the customer who has received his information on the market of specific goods (services). This information will simply allow the customer to "navigate" the market of goods (services), make various management decisions on the possible "promotion" of his goods or services, taking into account the characteristics of the activities of potential competitors.

Of course, this article does not cover all aspects of conducting such checks since the purpose of writing it was simply to show the difference between the different types of data collection regarding business entities. However, it is thought that this publication, compiled on the basis of many years of experience in this area, will be useful both for practitioners conducting inspections and for potential customers of private detective services.

Sincerely, Private Detective Zakharov Andrey Valerevich

 

[Матушкин Андрей Николаевич]

As can be seen from the disposition of this article of the Law, a private investigator is allowed, on the basis of a civil law contract, to provide services to third parties in terms of market research, collecting information for business negotiations, identifying insolvent or unreliable business partners, establishing circumstances of unfair competition.

Andrey, good afternoon.
Thanks for the interesting stuff.
As always sensible.

 

[Детектив-Молдова]

Andrey, thanks!
Respect!