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. Last Updated: 07/27/2016

Police Want To Help Investors Avoid Fraud

Police want to help foreign investors stay away from cheats by offering credit-risk assessment on prospective local partners.

"This system will cover new types of fraud, various crimes against foreign investments," said the head of the police department for economic crime, Alexei Orlov, at a news conference Tuesday.

The department called on other agencies to help put together an "early-warning" system for companies that run the risk of launching a business with a local company with a bad record.

The Tax Ministry, the tax police, the State Customs Committee and the Property Ministry also will cooperate, said Interior Ministry spokesman Alexander Vorobyov.

However, law enforcement officials say that to be more effective, they need the cooperation of investors themselves. Police want investors to provide information on potential business partners to determine whether they are trustworthy and save investors money, police say.

"Feedback, information about their partners, who they are, is very important," Vorobyov said.

Investment companies said the new system could be a real asset for managing risk.

"The creation of a civilized database that investors could use to receive information on potential partners, for example, on its untrustworthiness is absolutely justified," said Mikhail Shidyayev, spokesman for Baring Vostok Capital Management.

Investors were more reticent, however, about providing information on their partners.

"We respect our partners' need to maintain confidentiality," said a Western asset manager who asked not to be named. "Many of the agreements that we enter prevent us from sharing financial information with third parties."

An appointment with the local law enforcement officials already figures high on the list of priorities for foreigners looking to invest here.

"All major investment companies already cooperate with law enforcement agencies," said the asset manager. "Without local police help, they could not go far investing in any particular business."