In 2020, Poland ranked 11th among recipients of goods from Sweden and 6th among exporters to the Swedish market. Polish entrepreneurs intending to engage in cooperation with Swedish counterparts should first verify them. Especially now, considering the multimillion-dollar sanctions imposed since 2022 due to Russia’s violation of the territorial integrity of Ukraine. How to verify a company from Sweden?
Exercising due diligence in verifying the counterparty
In today’s world, establishing a company is very easy. In many countries, this can be done without even leaving the house, through the Internet. Therefore, one can never be sure who is really hiding behind the created name and entry in the register until it is checked. Verification is accomplished through actions commonly used in economic intelligence, consisting primarily of verifying the reliability and currency of the counterparty’s documentation, including the National Court Register (KRS), Tax Identification Number (NIP), National Business Registry Number (REGON), as well as permits and certificates necessary for conducting a specific type of activity.
Verification can be carried out by obtaining information from relevant individuals and institutions, such as: registration courts, Social Security Institution (ZUS), tax offices, or national and international chambers of commerce. It is worth delving into the history of the business and its owners, including opinions about the company, also by searching the Internet or asking other entrepreneurs, contractors of this entity, as well as the interested party directly. It should be remembered that failure to exercise due diligence in selecting a counterparty carries legal consequences, such as being accused of knowingly participating in irregularities, and resulting in further tax and legal sanctions.
Economic Cooperation with Sweden
In 1989, Poland and Sweden concluded an agreement on the promotion and mutual protection of investments, and in 2007, on the mutual protection of classified information. Primarily, both countries contribute to the EU’s internal market. In recent years, economic transactions involving Polish companies in the Swedish market have intensified. Since 1998, their number has doubled.
By the end of 2020, the value of Polish exports to Sweden exceeded PLN 31.15 billion, while imports from this country amounted to PLN 16.381 billion. Swedes most frequently purchased from us: a. machinery and mechanical, electrical equipment, and their parts, b. vehicles, aircraft, ships, and other means of transport, and c. industrial articles. We import the same products most willingly (a. and b.), but instead of industrial articles, we import non-ferrous metals and derivative articles more often. According to NBP data, the value of Swedish direct investments in Poland at the end of 2017 exceeded EUR 4.2 billion. The value of capital invested by Polish companies in Sweden exceeded EUR 2.7 billion at that time. Among the potential, future areas of cooperation are Polish exports to Sweden: chemicals, food, vehicles, IT and telecommunications equipment, and textiles, as well as bilateral innovative activity and in the field of new technologies.
Bilateral economic relations have been regulated by EU law since May 1, 2004, of which both countries are members. In addition, the most important agreements include: the convention on the avoidance of double taxation and the prevention of fiscal evasion with respect to income taxes of November 19, 2004, the declaration on political cooperation between Poland and Sweden in strategically important areas of May 4, 2011, and the declaration on cooperation in the field of innovation of June 11, 2015.
In 2019, there were 93.7 thousand people born in Poland registered in Sweden, which accounts for just under 1% of the population residing in the country of three crowns. Geographical proximity, partnership in the Union, and the aforementioned bilateral agreements make Polish entrepreneurs eagerly seek a market for their goods and services on the other side of the Baltic Sea. Not only common sense and awareness of economic risk but also national and international standards of due diligence in selecting a counterparty dictate the need to check every, including Swedish, company before entering into cooperation with it.
National and EU Sanctions
In connection with the violation of the territorial integrity of Ukraine, the European Union imposed 11 sets of sanctions on Russia by June 23, 2023. Poland also imposes additional sanctions. These include key individuals in Russia, as well as companies from this country and from Belarus. Trade in goods and services with Russian and Belarusian companies is prohibited. Polish entrepreneurs face a financial penalty of up to PLN 20 million and even up to 15 years of imprisonment for violating these sanctions. However, Russian and Belarusian entrepreneurs have learned to circumvent international bans, using, among other things, complex holding structures established in other countries, where it is difficult to detect the real ownership structure.
As reported by Money.pl, Sweden is the country with the greatest support for sanctions against Russia due to its armed aggression against Ukraine. Such a policy is supported by as much as 95% of the Swedish population. Poland and Denmark are tied for second place. In the face of widespread condemnation of Russian actions and approval for the establishment of trade restrictions and bans, Sweden takes a very rigorous approach to manifestations of sanction breaches in economic transactions. In January 2023, during a press conference in Stockholm, Prime Minister Ulf Kristersson confirmed that during Sweden’s six-month presidency of the European Union, his country’s priority would be the issue of Ukraine. He then announced the continuation of work on introducing further sanctions against Russia.
Detailed information on the type of transactions covered by the EU ban with Belarus and Russia can be found on the European Council’s websites: https://www.consilium.europa.eu/. In the Official Journal of the EU at the address: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0269-20220721, there is a list of individuals and entities subject to sanctions. The Polish Ministry of Internal Affairs and Administration also maintains an up-to-date register of entities subject to sanctions, where you can check the counterparty, their connections, reasons for inclusion in the register, and applied sanctions: https://www.gov.pl/web/mswia/lista-osob-i-podmiotow-objetych-sankcjami.
Therefore, in the first step of verifying a company from Sweden, one can check whether it appears in any of the above-mentioned registers. Useful information sources also include Council Regulation (EU) 2022/576 of April 8, 2022, amending Regulation (EU) No 833/2014 concerning restrictive measures in connection with Russia’s destabilizing actions in Ukraine.
On August 3, 2023, the European Union expanded the scope of sanctions imposed on Belarus to combat circumvention of regulations. The new measures amend Regulation (EC) No 765/2006 concerning restrictive measures in connection with the situation in Belarus. The changes ensure a closer alignment of EU sanctions targeting Russia and Belarus and help ensure that Russian sanctions cannot be circumvented by Belarus. These measures extend the export ban to Belarus on a range of highly sensitive goods and technologies that contribute to the military and technological strengthening of Belarus. The Council also imposes an additional ban on the export of firearms and ammunition, as well as goods and technologies suitable for use in aviation and space industry. The changes also adjust sanctions against Belarus to the Russian sanctions system. These restrictive measures were introduced in an accelerated procedure due to the urgent nature associated with combating the circumvention of regulations concerning certain highly sensitive goods and technologies.
Business Intelligence: How to Verify a Swedish Counterparty?
Verification of a counterparty can be entrusted to a professional business intelligence agency, which deals with such orders on a daily basis. A private detective in Warsaw, Poznań, Wrocław, or other cities will know how to obtain the necessary verifying information about the current or future counterparty.
The most important way to verify a counterparty and its potential connections with Belarus or Russia is to determine the entity that is its ultimate beneficiary, and then check if it is listed on the aforementioned sanctions list maintained by the Ministry of the Interior and Administration (MSWiA). These determinations can be made in the Central Register of Ultimate Beneficial Owners maintained by the Minister of Finance: https://crbr.podatki.gov.pl/adcrbr/#/search
Environmental Intelligence
A publicly available way to gather information about a counterparty is to search the Internet. Verify the company, check if it has a website, what opinions exist about it, and perhaps come across some publication about it. If for certainty we do not want to do this ourselves, we can entrust the research to a detective agency specializing in professional business intelligence. Because there are many more sources of information than just the World Wide Web. You can apply to the Embassy of the Republic of Poland in Stockholm with a request regarding a specific entity, whether any complaints have been received from other entrepreneurs, or whether according to the knowledge of the diplomatic mission, the company has a bad reputation? Similar information may be provided by Polish-Swedish chambers of commerce.
Direct Inquiry to the Counterparty
In case of difficulties in determining the ownership structure of a business partner using available registers, another method of verifying them within the framework of business intelligence is to directly approach them to confirm who their ultimate beneficiary is. Of course, to authenticate the response received, you can ask the Swedish entrepreneur to provide documents confirming their declarations.
Polish and EU Registries
In the Public Information Bulletin of the Ministry of Entrepreneurship and Technology, as the minister responsible for the economy, maintains a registry of representations of foreign entrepreneurs. If we find our counterparty’s representation in this registry, we can assume that they still exist and conduct business.
Another such registry where you can check a counterparty is the European Union’s registry of VAT taxpayers and the EORI registry. Companies and individuals wishing to carry out commercial activities within the Union must use an EORI number as an identification number in all customs procedures. The VAT Information Exchange System (VIES), a search engine run by the European Commission, allows you to check whether a given entity is registered as conducting intra-Community transactions. This is necessary, among other things, to apply a 0% VAT rate to a transaction. If VIES does not confirm the registration of the counterparty, you can request verification from the tax office of the country where they are based. It is also worth checking whether the company has the necessary permits and certificates if they are required in a particular country. The EU Business Register (http://www.eubusinessregister.org/) enables searching for companies worldwide.
The Registry of Insolvent Debtors allows you to check whether a particular counterparty is not listed. There are also economic information bureaus that have detailed information about the activities of companies. BIK, the Credit Information Bureau, established by the Polish Bank Association, collects data on the credit history of bank customers, credit unions, as well as non-bank lending companies.
Swedish Business Registries
In Sweden, the official state registry of business activities is maintained by the Swedish Companies Registration Office – Bolagsverket – at the address www.bolagsverket.se. Bolagsverket maintains several registries containing information about registered entities. Access to them can be obtained both by contacting Bolagsverket and using the online business search engine https://foretagsinfo.bolagsverket.se/sok-foretagsinformation-web/?lang=en. Through this platform, you can freely search for: the current status of the searched company and its assigned registry number; information about insurance intermediaries; information about brokerage houses; and whether the company is included in the anti-money laundering registry. At a fee, you can obtain documents such as: articles of association, registration certificates, current and previous company assignments, information on ultimate beneficiaries. Access to the registry is available in English and Swedish, although some documents available through the e-service can only be ordered in Swedish.
By registering on the website and obtaining the status of a client of the Swedish Business Registry, you can, among other things: check the company’s management; see what matters the company has filed with the Swedish Companies Registration Office; download annual reports, company agreements, statutes, financial plans, and registration certificates; obtain detailed information on bankruptcy and liquidation of the company; and download certificates from the ultimate beneficiary register.
The registration fee is 500 SEK – without VAT. Then, costs for performed searches will be added, according to the price list. Some information from Bolagsverket can also be obtained free of charge by phone. However, most requests for extracts from the registry are subject to a fee.
Lexbase – a commercial database that collects data on individuals and companies. Lexbase is an online service that provides legal information from all Swedish courts and many other authorities in one place. Access to the data is paid and only available in Swedish. https://www.lexbase.se/
PRV, or Patent and Registration Office, is a database for searching patents, trademarks, and registered designs. It has a library of various databases with advanced search engines. Access is available in English and Swedish. https://www.prv.se/en/
OpenCorporates, the Swedish company registration office, provides a partially free database. The service is available in English. https://opencorporates.com/advanced-search/
It is worth thoroughly checking the counterparty
Before making a transaction or establishing cooperation with a counterparty from Sweden, it is better to conduct business intelligence and thoroughly check them, especially to ensure they are not associated with Belarus or Russia. Violating the bans imposed on specific types of transactions with these countries and with certain individuals and companies can result in a financial penalty of up to 20 million PLN, and imprisonment ranging from 3 to 15 years. Furthermore, verifying the counterparty and exercising due diligence in their selection is a requirement that always applies when conducting business activities, incumbent upon entrepreneurs as professional market participants.
Do you already know how to check a company from Sweden? If not, or if you need to find more detailed information, we can help you. Feel free to contact us.
