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Senior Executives of Russian and multinational companies shared their best practices of detecting fraud

The recent roundtable in IBLF’s “Reducing the Risk of Corruption in Russian Business” Initiative (RRCRB) took place on Wednesday 3rd March. Our speaker was Charles Hecker, Director, Russia & CIS, of Control Risks who spoke on “The Machinery of Fraud and Corruption: Grey Practices in Russian Business.”

As international and domestic anti-corruption regulation becomes more stringent, companies are placed at increasing risk fr om Russia’s most corrosive business practices. These schemes, known as “grey practices”, thrive in Russia’s opaque business environment. In a country wh ere the pressure to do business off the books is high, any business process – from clearing goods through the Russian Customs Service to working with far-flung distributors – is fraught with risk for companies that are subject to extraterritorial legislation such as the Foreign Corrupt Practices Act.

Basing himself on newly published research by Control Risks, Charles Hecker and members of the Moscow team of Control Risks described the many imaginative sleights of hand which are employed by companies in Russia to evade legal and financial rules. Among the topics for discussion were offshore legal entities, banking loopholes, cash transactions and the use of other procedures. During the discussion, participants from multinational and Russian companies shared their best practices of detecting fraud and managing these risks.

Reducing Risk of Corruption in Russia Initiative (RRCR)