Cross-border fraud due to registration differences Viesturs Gurtlavs Latvian Lessors Association Prague, 3 February, 2012

Agenda. Market Fraud influence Solutions

Market

New sales in Latvia

Leasing portfolio in Latvia

Market situation State economy went to deep crisis. That resulted an overall decrease in all businesses. Decrease in demand for transport services. Formerly good customers went to or close to insolvency. Restructuring of lease contracts.

Attitudes of unsuccesful customers. Try to deal with Leasing company for restructuration of contract. To return assets. Try not to return assets. Criminal actions.

Fraud influence

Criminal actions. Insurance fraud. Hiding of asset. Moving of asset to another country.

Visible stages of possible illegal export. Possible payment delays (not obligate). Change of company management and/or owners. Sudden lose of any contacts, phone, e- mail, e.t.c. no information about vehicle. Vehicle has no valid insurance / no regular technical inspection. }?}?

Unvisible stages of possible illegal export. Movement of truck, trailer or car to another country. Several owners / resellers until “end” purchaser/user. Based on falsified sales documents, registration in other country. Application of first (legal) owner (leasing company) when the asset appears to be stolen.

Registration problems. Different countries- different rules for registration. Only purchase documents. Application by post. Informing of “previous” country within several times. Other. Register agencies not always check legal status of asset in “original” country.

Registration problems.

Only few countries exchange information in Eucaris. Belgium, Estonia, Germany, Hungary, Iceland, Ireland, Latvia, Lithuania, Luxembourg, Romania, Slovakia, Sweden, The Netherlands and the United Kingdom

Consequences? For legal owner- lost of assets and a big potential for insurance rejection. For “new” owner- potential risk of lost of money. If found, very long and expensive procedure of recovery, legal costs, translation e.t.c. Risk of using of asset in crimes and as result confiscating of asset.

Solutions

How to reduce potential risk from present customer? Continuous and permanent monitoring of all customers, if such is possible. Immediate reaction in cases when potential illegal action indicates. Personal guarantees from owners/management. GPS tracking (especially in rent cases).

How to escape from purchase of such used assets? Ask seller for: Previous registration and origin documentation. Ownership of himself. Customer related with seller... Trustful evaluation of asset. For example in Czech republic- CEBIA. In Latvia AR-Control. Members of IAATI. If seller rejects... As well as Search engines for VIN.

Before and after....

Suggestions Continuous control and checking. Use of evaluation services for any used asset. Cooperation with Vendors for history checking. To promote that your country completely joins to Eucaris.

Thank you!