THE ESCROW ACCOUNT by kig45481

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									 THE ESCROW ACCOUNT                                                                    FEATURES & BENEFITS                           •   Risk to the applicant will be limited to
                                                                                                                                         the goods not being delivered. Payment
                                                                                       •   An Escrow account can be opened in            however will only be effected once the
                                                                                           any major currency and can therefore          conditions have been met (which will
                                                                                           also cater as a currency management           include prove of delivery).
                                Shipment
                                  Shipment
                                                                                           tool in certain instances.                •   Risk to the nominated party will be
                              Agreement
                                 Agreement
                                                                                       •   The Escrow agreement will include             limited to non compliance to the terms
                                                                                           conditions under which funds will be          of the agreement. Payment however
    Buyer
     Buyer
              Escrow Agreement:
              (Release funds against copies of
                  Escrow Agreement:
                                                                 Exporter
                                                                   Exporter
                                                                                           released to a nominated third party.          will be effected once the conditions are
              shipping documents)
                  (Release funds against copies of
                  shipping documents)
                                                         Payment                           Both the account holder and the               complied with.
                                                           Payment
  Deposit       Escrow
                 Acc
                                                                                           nominated party will therefore receive
    Deposit       Escrow
                    Acc
                                                                  Copy of shipping
                                                                  documents shipping
                                                                    Copy of                some protection.
                                                                    documents
                                                     SA Bank
                                                       SA Bank
                                                                                       •   The Escrow agent’s communication to       WHO WILL BENEFIT FROM IT
                                                                                           the nominated party will be irrevocable
                                                                                           and the nominated party will therefore    Exporters of goods and/or services and
                                                                                           be ensured of payment once the            where advance payment is required to
                                                                                           conditions have been met.                 manage the payment risk. The Escrow
                                                                                       •   The account holder will have the          account can be offered to the importer to
                                                                                           assurance that his funds will only be     encourage him to make an advance
DEFINITION                                                                                                                           payment.
                                                                                           released to the nominated party once
                                                                                           the conditions set by him are met.
An Escrow is a legal arrangement whereby
funds are delivered to a third party (i.e. a                                                                                         EXCHANGE CONTROL
Bank), called an Escrow Agent, to be held
                                                                                       RISKS
in trust for the delivery thereof to another                                                                                         Exchange Control Rulings applicable to
party pending the fulfilment of a condition                                                                                          the export and/or import of services and
or conditions by that other party in terms                                             •   Minimum risk to the Escrow agent as
                                                                                           compliance to the conditions of the       goods will apply.
of an underlying contract.
                                                                                           agreement will be proved by the
                                                                                           submission of documentary evidence.




                                                                                                                                     This document was created by Lukas Crafford
                                                                                                                                     http://www.bolits.co.za

								
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