Forensic services allow our clients to obtain the facts and information of a different level. Pari Passu Advisory team that consists of lawyers, financiers and certified fraud examiners is ready to assist our clients to predict, manage fraud risks and investigate difficult situations.
Fraud by company managers and officers is, unfortunately, widely spread in Kazakhstan. Falsification of accounts, embezzlement of company’s assets, defalcation, taking disadvantageous decisions do not constitute full list of problems that are being faced by local companies.
Third party risk and counterparty intelligence
How to know the reputation of a new partner? How to test trustworthiness of a counterparty? Are the employees related to suppliers? Such questions appear from time to time at any type of business. Answers to such question may contribute to time saving and taking right decision.
Fraud risk management
As in many other cases it is easier to prevent fraud than to investigate and try to recover funds or assets. Taking into consideration worldwide and Kazakhstan practice it should be noted that full recovery of losses is possible in very limited cases. Effective system of fraud prevention is a must be element of a company management.
Dispute advisory service
Evidence is the essential element of any commercial dispute. Difficulties emerge in convoluted disputes when one is working with financial data, corporate documents and decisions, endless chain of facts that should be connected into single chain. Numbers of litigation cases are being lost because of lack of evidences and inability to prove the disputed facts.
Anti bribery and corruption
Different companies and organisations are familiar with corporate corruption, from small Kazakh company to multinational enterprises. Implementation of anti bribery and corruption policies will not protect the company form breach of legislation if the effective system is not operating at the sound level. Unfortunately, Kazakhstan is teeming with such cases. One of the necessary elements of foreign companies is a system of corruption prevention in developing countries. For any cases of corruption in developing countries the head company’s managers are usually liable.
Procurement fraud is one of the widespread types of corporate misconduct in Kazakhstan. It is not only being committed in government authorities and national companies. Procurement fraud cases appear more often in private entities and as a result reputation, financial condition and trustworthiness suffer. Some specialists claim that procurement system that makes it transparent, clean and effective decreases company costs from 10 to 50 percent.
Legal due diligence, alongside with financial due diligence, is an important part of pre-M&A transaction review of a target. Forensic due diligence can be defined as a special and focused review, the aim of which is to uncover risks and threats.
We provide the following compliance consultancy services to public companies, including financial institutions and banks. Our services include consultation and analysis of compliance issues.
Compliance, internal audit and corporate governance that meets Basel requirements;
International standards on combating money laundering and the financing of terrorism and proliferation (FATF Recommendations February 2012);
Implementation of a risk management and internal control systems for second-tier banks (NB RoK Rules No. 29).
On 23rd of December 2013 the Republic of Kazakhstan has joined The Multilateral Convention on Mutual Administrative Assistance in Tax Matters and it is expected that Kazakhstan will sign The Multilateral Competent Authority Agreement of Automatic Exchange of Financial Account Information (CRS).
In 2010 the U.S. adopted Foreign Account Tax Compliance Act (FATCA) in order to reduce tax abuse by U.S. taxpayers with bank accounts outside the United States. The law has extraterritorial effect and applies to financial institutions in Kazakhstan.
Bribery Act 2010
Bribery Act was passed by the Parliament of the U.K. in 2010 and aims to combat bribery. The Act applies to British companies and companies engaged in business in the UK. The law is aimed at preventing corrupt practices of companies outside the UK.
Patriot Act 2001
The Act applies, in particular, to Kazakh banks that have correspondent accounts with the U.S. banks. One of the requirements is the nomination process agent in the United States.
Foreign Corrupt Practices Act was passed by Congress in 1977. The Act prohibits the giving, offering bribes and the promise of U.S. issuers (companies, U.S. and foreign companies, the securities of which are available on the U.S. stock exchanges) to any foreign government official.
Compliance to covenants
In many documents related to financing (loan agreement, trust agreement, agreements and memoranda of the bond issue) contains certain requirements for the debtor – covenants, the failure of which leads to various penalties, including early repayment of debt or redemption.
Despite successful implementation of compliance systems many Kazakh companies face the problem of maintenance and continuous improvement. Implemented documents and instruments initially have declarative ground beyond them and, as proves the practice, rarely reconsidered or tested on effectiveness. Compliance systems, as any other systems within a company, have to be continuously revised and improved in order to tackle always changing legislation and other objective challenges that impact the compliance management.
During implementation of several projects our experts have noticed that quite often minor contractual obligations are not being complied with because of negligence or because of absence of proper management. Breach of any contractual obligations at least raises vigilance by counterparties.