Trade reports in risk analysis and counterparty verification in Poland

Activities in the area of Risk Management and Compliance have recently assumed exceptional importance. This is due not only to internal company regulations, but also to the constantly tightening regulations on transactions with related parties, including those from tax havens or from outside the EU, control of final beneficiaries or the obligation to verify the credibility of the counterparty. Not only for the purposes of security of receipt of payment, but also to ensure that VAT is correctly accounted for.

Why is it important to know your counterparty?

Increasing competitive rivalry in the marketplace increases the propensity for fraud, unethical and even illegal activities. Basically, every entrepreneur is exposed to the risk of cooperation with unreliable entities. Meanwhile, failure to exercise due diligence in verifying business partners and counterparties may result in both financial losses and image consequences. What is more, each entity is at risk of the so-called infection of infringements in the form of unconscious participation in the carousel VAT procedure or money laundering.

Information sources

We can divide the sources of third party information into external and internal. The first group includes various registers maintained by state institutions, as well as commercial databases.

Official registers in Poland:

  1. National Court Register (KRS)
  2. Central Register and Information on Business Activity
  3. Central Register of Ultimate Beneficiaries
  4. REGON Internet Database search
  5. White list of VAT taxpayers
  6. Commercial databases, portals, etc.
  7. Business information agencies
  8. Internet debt exchanges

What does maximum credit mean?

The maximum credit is the maximum amount of credit that the bank will grant us with a repayment period chosen by us. The amount depends on many different factors and importantly can be quite different from one bank to another.

Rating methodologies

It is created by assigning specific numbers of points (weights) to economically, politically and socially relevant risk factors, which are then aggregated. The rating characterises the risk class into which the analysis classifies a country. This method makes it possible to compare risks between different countries, as national risks are classified according to uniform standards. The combined assessment of the entities allows for estimating the amount of country risk and deciding on future financial exposure. Independence from the governments of the countries analyzed allows for a relatively high degree of objectivity. A great advantage of the reports produced is also the continuous updating of data.

Where to look for information on foreign contractors?

Foreign entities

When it comes to verifying foreign entities, the following sources, among others, will enable the entrepreneur to do so:

  1. Verification of VAT number (VIES)
  2.  European e-Justice portal
  3.  Foreign Chambers of Commerce.