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HOW BUSINESSES CAN BENEFIT FROM THE FORENSICS BUREAU
Koka Kalandadze
The FINANCIAL
http://finchannel.com/Main_News/Business/113839_How_Businesses_can_Benefit_from_the_Forensi cs_Bureau/
Aug 6 2012
Georgia
The FINANCIAL -- Income of the National Forensics Bureau of Georgia
reached GEL 8 million in the first six months of 2012, while in 2011
it was GEL 14.5 million.
These figures show the growing demand for services provided by
the Bureau. In 2009 the National Forensics Bureau gave out 60,000
examination reports whilst in 2010-11 the number reached over 80,000.
Giorgi Khizanishvili, Head of the National Forensics Bureau, says
that interest from Armenia and Azerbaijan is also intensifying.
"Interest from Armenia and Azerbaijan is increasing due to the fact
that the majority of specific/complicated examinations that we do are
not done there yet. For example we recently had Armenian businessman
wishing to check the quality of gold on a prospective gold mine that
he was going to invest in. From Armenia we also had a key construction
company and engineers visit who were interested in the construction
mechanics and structures' seismic stability of their buildings -
as we have a special laboratory for Seismic Stability in Dighomi.
We are also negotiating with Azerbaijani and Armenian sides to sign
a memorandum of cooperation with regards to DNA examination because
such a service is not provided there. In fact we are the only country
in the Caucasus region to have DNA examination equipment, which we
have had since 2007.
"Whereas in the past the majority of people came to us after court
rulings to check the evidence and we gradually became associated
with criminal institutions and the like, in the past two years these
stereotypes have sharply shifted and now, as the statistics show,
from total applications only 33% belong to court rulings/criminal
cases whilst the remaining 67% belong to companies, juridical
persons, individuals who come to us to check their house's seismic
stability, evaluate their wealth, cars' amortized value and so on,"
said Khizanishvili.
It's a recent trend that the government gifts land and gives some
other privileges to investors at a symbolic price. After that the
investor is obliged to build for example a factory, employ a certain
amount of labour etc. Usually after a year or so in cooperation with
the Ministry of Economy and Sustainable development, we check whether
those obligations have been met by the investors and send the report
to the investor who then sends it to the government."
"It is also often the case when an investor puts money into a private
company (buying shares) and then is interested in whether those
obligations the company took have been met or not - we also check that
and send the report to the investor. We had a case for example when
Israeli investors came to Georgia willing to renovate some building
and wanted to know, in the event they rehabilitated the building,
approximately how much profit would they get if they finally rented
the space out. Why did they need this info? Because this inference
would be finally reflected in their business plan: How viable their
investment is and therefore whether or not they should do it. Demand
for such services has drastically gone up in the last several years.
On average more than 100 financial inferences are made about
investments in Georgia," claims Khizanishvili.
Legal Entity under Public Law (LEPL) - Levan Samkharauli National
Forensics Bureau was established on November 4, 2004 under the
decree of Georgia's President. Whereas earlier forensics service was
divided among different ministries and institutions, now all forensic
examination is done at our Bureau. There are currently 13 departments
with offices in Tbilisi , Kakheti, Batumi, Kutaisi and Rustavi. The
Bureau performs complete and independent examination services of 450
kinds starting from the technical examination of documents (handwriting
and signature examination), ending with biological examination like
DNA etc.
"An absolute majority of forensic services that we do are not offered
in Georgia by other private bodies. And the reason is probably the
lack of profit margin that this kind of business entails - i.e.
sometimes the price of single forensic technological equipment reaches
several million USD and the latter is harder for private companies
to undertake, in addition the maintenance and training of employees
is often too costly as well as maintenance of all the assets our
Bureau has."
Q. Who are your competitors and in mainly what kinds of businesses?
A. Our competitors are mainly audit companies, private
laboratories/clinics, real estate brokers, food safety laboratories
etc, but most of those enterprises offer very limited services.
In addition when speaking for example about audit companies - they
are most often found to be loyal to clients and sometimes the auditors
even let clients fix some problems within the company surreptitiously.
But when there are two reports from two different audit companies then
the court gives a decree to our Bureau to check the evidence. Our
experts are warned in advance about any loyalties that the auditors
may have had to the client - that's why they are impartial.
Many local audit companies, as well as evaluation, use examinations
of ours such as biological/chemical, criminal, etc.
Q. What is your main source of income and how does the Bureau function,
is it like a commercial organization?
A. The National Forensics Bureau is a Legal Entity under Public
Law (LEPL) - and it functions under the umbrella of the Georgian
Government although it is managed like a private enterprise because
we get the majority of income from the orders that we get whilst the
rest is from the budget meaning we work with criminal entities for free
that's why we get reimbursed for that activity from the state budget.
Part of this income is paid like any legal entity - i.e. VAT, property
tax, profit tax and the rest of the profit is used to make reinvestment
- acquisition of new equipment and other commodities.
In 2010 when I became the head of the bureau - the income was GEL
11.3 million. In 2011 it hit GEL 14.5 million and in 2012 we have
already had GEL 8 million of income.
These figures show clearly that the demand for our service is
increasing. To clarify, in 2009 we gave out 60,000 examination reports
whilst in 2010-11 it reached over 80,000.
We employ a single window principle which means all kinds of services
are offered at one place - you just need to have an identity card
and the rest is done by our Bureau which has significantly cut the
level of bureaucracy.
Tariffs are approved by the government and as opposed to audit
companies which often charge successful companies higher prices; we
serve both rich and poor with the same tariff. All of those tariffs are
also given on our website www.expertiza.gov.ge so they are transparent.
"National Forensics Bureau employs about 400 people out of whom 250
are experts whilst the rest are sanitarians, laboratory workers and
administrative staff. Experts' salaries peak at GEL 1,350 whilst
the average salary in the Bureau reaches GEL 1,000. All experts
are internationally certified with ISO 17 024 which means that the
conclusion/final report they make can be used as testimony in any
country."
Q. How about financial examination specifically?
A. We do an accounting examination which means for example
how correctly tax is calculated; correct examination of asset
amortizations; liabilities to revenue service, etc. Our service is
very often used by investors and state bodies like the Ministry of
Economy and Sustainable Development.
We serve the majority of large companies like Georgian Railway,
Wissol, SOCAR , Gulf, etc.
Q. What are your ambitions and plans for the future?
A. Despite the fact we have ISO 17 024 certification, we now want
to make all of our laboratories and the whole Bureau internationally
accredited, which is ISO 17 025.
National Forensics Bureau has been operating in Georgia since 1952 and
throughout these years we have accumulated a huge amount of expertise
and knowledge. Currently we have the ambition to be leaders not only
in the Caucasus Region but also in Eastern Europe.
We have been named in the top ten list of laboratories among 34
countries of Europe by the quality of the service and the equipment
we have - the latter assessment was done by the European Network of
Forensic Science Institutes and we are members of this organization.
In addition we also took key positions in the United Nations' similar
kind of research.
Koka Kalandadze
The FINANCIAL
http://finchannel.com/Main_News/Business/113839_How_Businesses_can_Benefit_from_the_Forensi cs_Bureau/
Aug 6 2012
Georgia
The FINANCIAL -- Income of the National Forensics Bureau of Georgia
reached GEL 8 million in the first six months of 2012, while in 2011
it was GEL 14.5 million.
These figures show the growing demand for services provided by
the Bureau. In 2009 the National Forensics Bureau gave out 60,000
examination reports whilst in 2010-11 the number reached over 80,000.
Giorgi Khizanishvili, Head of the National Forensics Bureau, says
that interest from Armenia and Azerbaijan is also intensifying.
"Interest from Armenia and Azerbaijan is increasing due to the fact
that the majority of specific/complicated examinations that we do are
not done there yet. For example we recently had Armenian businessman
wishing to check the quality of gold on a prospective gold mine that
he was going to invest in. From Armenia we also had a key construction
company and engineers visit who were interested in the construction
mechanics and structures' seismic stability of their buildings -
as we have a special laboratory for Seismic Stability in Dighomi.
We are also negotiating with Azerbaijani and Armenian sides to sign
a memorandum of cooperation with regards to DNA examination because
such a service is not provided there. In fact we are the only country
in the Caucasus region to have DNA examination equipment, which we
have had since 2007.
"Whereas in the past the majority of people came to us after court
rulings to check the evidence and we gradually became associated
with criminal institutions and the like, in the past two years these
stereotypes have sharply shifted and now, as the statistics show,
from total applications only 33% belong to court rulings/criminal
cases whilst the remaining 67% belong to companies, juridical
persons, individuals who come to us to check their house's seismic
stability, evaluate their wealth, cars' amortized value and so on,"
said Khizanishvili.
It's a recent trend that the government gifts land and gives some
other privileges to investors at a symbolic price. After that the
investor is obliged to build for example a factory, employ a certain
amount of labour etc. Usually after a year or so in cooperation with
the Ministry of Economy and Sustainable development, we check whether
those obligations have been met by the investors and send the report
to the investor who then sends it to the government."
"It is also often the case when an investor puts money into a private
company (buying shares) and then is interested in whether those
obligations the company took have been met or not - we also check that
and send the report to the investor. We had a case for example when
Israeli investors came to Georgia willing to renovate some building
and wanted to know, in the event they rehabilitated the building,
approximately how much profit would they get if they finally rented
the space out. Why did they need this info? Because this inference
would be finally reflected in their business plan: How viable their
investment is and therefore whether or not they should do it. Demand
for such services has drastically gone up in the last several years.
On average more than 100 financial inferences are made about
investments in Georgia," claims Khizanishvili.
Legal Entity under Public Law (LEPL) - Levan Samkharauli National
Forensics Bureau was established on November 4, 2004 under the
decree of Georgia's President. Whereas earlier forensics service was
divided among different ministries and institutions, now all forensic
examination is done at our Bureau. There are currently 13 departments
with offices in Tbilisi , Kakheti, Batumi, Kutaisi and Rustavi. The
Bureau performs complete and independent examination services of 450
kinds starting from the technical examination of documents (handwriting
and signature examination), ending with biological examination like
DNA etc.
"An absolute majority of forensic services that we do are not offered
in Georgia by other private bodies. And the reason is probably the
lack of profit margin that this kind of business entails - i.e.
sometimes the price of single forensic technological equipment reaches
several million USD and the latter is harder for private companies
to undertake, in addition the maintenance and training of employees
is often too costly as well as maintenance of all the assets our
Bureau has."
Q. Who are your competitors and in mainly what kinds of businesses?
A. Our competitors are mainly audit companies, private
laboratories/clinics, real estate brokers, food safety laboratories
etc, but most of those enterprises offer very limited services.
In addition when speaking for example about audit companies - they
are most often found to be loyal to clients and sometimes the auditors
even let clients fix some problems within the company surreptitiously.
But when there are two reports from two different audit companies then
the court gives a decree to our Bureau to check the evidence. Our
experts are warned in advance about any loyalties that the auditors
may have had to the client - that's why they are impartial.
Many local audit companies, as well as evaluation, use examinations
of ours such as biological/chemical, criminal, etc.
Q. What is your main source of income and how does the Bureau function,
is it like a commercial organization?
A. The National Forensics Bureau is a Legal Entity under Public
Law (LEPL) - and it functions under the umbrella of the Georgian
Government although it is managed like a private enterprise because
we get the majority of income from the orders that we get whilst the
rest is from the budget meaning we work with criminal entities for free
that's why we get reimbursed for that activity from the state budget.
Part of this income is paid like any legal entity - i.e. VAT, property
tax, profit tax and the rest of the profit is used to make reinvestment
- acquisition of new equipment and other commodities.
In 2010 when I became the head of the bureau - the income was GEL
11.3 million. In 2011 it hit GEL 14.5 million and in 2012 we have
already had GEL 8 million of income.
These figures show clearly that the demand for our service is
increasing. To clarify, in 2009 we gave out 60,000 examination reports
whilst in 2010-11 it reached over 80,000.
We employ a single window principle which means all kinds of services
are offered at one place - you just need to have an identity card
and the rest is done by our Bureau which has significantly cut the
level of bureaucracy.
Tariffs are approved by the government and as opposed to audit
companies which often charge successful companies higher prices; we
serve both rich and poor with the same tariff. All of those tariffs are
also given on our website www.expertiza.gov.ge so they are transparent.
"National Forensics Bureau employs about 400 people out of whom 250
are experts whilst the rest are sanitarians, laboratory workers and
administrative staff. Experts' salaries peak at GEL 1,350 whilst
the average salary in the Bureau reaches GEL 1,000. All experts
are internationally certified with ISO 17 024 which means that the
conclusion/final report they make can be used as testimony in any
country."
Q. How about financial examination specifically?
A. We do an accounting examination which means for example
how correctly tax is calculated; correct examination of asset
amortizations; liabilities to revenue service, etc. Our service is
very often used by investors and state bodies like the Ministry of
Economy and Sustainable Development.
We serve the majority of large companies like Georgian Railway,
Wissol, SOCAR , Gulf, etc.
Q. What are your ambitions and plans for the future?
A. Despite the fact we have ISO 17 024 certification, we now want
to make all of our laboratories and the whole Bureau internationally
accredited, which is ISO 17 025.
National Forensics Bureau has been operating in Georgia since 1952 and
throughout these years we have accumulated a huge amount of expertise
and knowledge. Currently we have the ambition to be leaders not only
in the Caucasus Region but also in Eastern Europe.
We have been named in the top ten list of laboratories among 34
countries of Europe by the quality of the service and the equipment
we have - the latter assessment was done by the European Network of
Forensic Science Institutes and we are members of this organization.
In addition we also took key positions in the United Nations' similar
kind of research.