1. Why should I use escrow?
The most important reasons for using escrow is to minimize the risk of non-payment by the buyer and/or to make sure that the supplier delivers the ordered goods or services in time and according to the purchase contract. Escrow is also an efficient, convenient and fast instrument for protecting your interest. The buyer can minimize the risk by having Escrow & Settlement receive the money into an escrow account before the supplier starts delivering. The supplier receives confirmation from the escrow agent that the funds are available before the supplier ships the goods. Since the money is held in an escrow account with ABN AMRO, the bank and country risk is mitigated.
2. Is it safe to use escrow?
If the escrow is organized through and by a reputable bank it is very safe. All funds handled through Escrow & Settlement are received, processed and disbursed by ABN AMRO through a dedicated team of specialists with years of experience in providing escrow services. This is ABN AMRO's guarantee that your transaction is managed in accordance with the highest levels of safety, carefulness and promptitude.
We strongly advise you always to check with the Escrow & Settlement team or ABN AMRO that you are indeed dealing with our Escrow & Settlement department. Please read our safety tips on this website.
3. How long does the escrow process take?
Generally after the escrow agent has received all required information and is provided with a copy passport of the authorized persons from the buyer and seller, the client acceptance process will start, which might take a few days. In the mean time the buyer and seller are provided with the escrow proposal and if acceptable to buyer and seller, and the client acceptance being positive, the escrow agreement can be finalized and signed. This process might take a few days. Our experience is that it generally takes a week from start of the enquiry to the escrow agreement having been signed by buyer and seller. Afterwards it is up to buyer to pay into the escrow account which might take as little as 1 day.
4. Which information is required by Escrow & Settlement for arranging an escrow?
Escrow & Settlement needs to receive a completed enquiry form in order to understand what you require the escrow agent to do and properly advise you as to the best release conditions and the applicable escrow fees. If the escrow proposal of Escrow & Settlement is acceptable to the buyer and seller, Escrow & Settlement needs a copy of the passport(s) of the authorized person(s) from the buyer and seller and company registration documents for the client acceptance process.
In addition to transaction specific information, such as price and details of the goods sold, delivery terms, their names and contact details, Escrow & Settlement needs to receive the banking information of the buyer and supplier in order to carry out the settlements. This information includes the bank's name and address, account number and full name and address of the company holding the account (beneficiary).
5. How does Escrow & Settlement deal with confidential information?
Escrow & Settlement is part of ABN AMRO and has to comply with the high standards of confidentiality as imposed by the Dutch authorities on all banks. All information received by Escrow & Settlement is treated confidentially in accordance with Dutch law.
5. How does Escrow & Settlement deal with confidential information?
Escrow & Settlement is part of ABN AMRO and has to comply with the high standards of confidentiality as imposed by the Dutch authorities on all banks. All information received by Escrow & Settlement is treated confidentially in accordance with Dutch law.
6. Where is the escrow account held?
Escrow & Settlement holds nearly all escrow accounts with ABN AMRO. Each transaction has a dedicated escrow account number. The escrow account details will be made available after buyer and seller have ordered the escrow agent to set-up the escrow agreement. The account number is in the escrow agreement and is not available for any other transactions then the transactions between the buyer and seller mentioned in the escrow agreement.
7. In what currency can I make payment to Escrow & Settlement?
Escrow & Settlement supports payments in many currencies and off course the most popular ones: EUR, GBP & USD.
When transferring money to the dedicated escrow account you should always use the escrow reference which is displayed on the first page of the escrow agreement.
8. What methods of payment are available to transfer funds into the escrow account?
In principle Escrow & Settlement only accepts electronic payments and under certain conditions cheques may be accepted. If cheques are accepted by Escrow & Settlement the payment into escrow will only be confirmed to the supplier after the cheque has been cleared and confirmed.
9. What happens to the interest accruing on the escrow account?
If money is deposited in the escrow account for more than one calendar month, buyer and seller can agree with the escrow agent to be paid interest accruing on the amount in escrow. Escrow & Settlement pays the interest to buyer or seller, in accordance with what is agreed in the escrow agreement. We always aim to procure that funds held in the escrow account earn interest at the most favourable rate available at the Bank for similar accounts and for similar amounts.
10. I am the buyer in a transaction, how do I make a payment?
The buyer should make an electronic or direct transfer from their own bank account into the escrow account. Buyer is requested to quote the escrow reference, which is mentioned on the first page of the escrow agreement.
11. I am the supplier in a transaction, how do I receive payment?
As soon as delivery has been made and formally evidenced, confirmed and verified, Escrow & Settlement will make a direct electronic transfer of the agreed amount to your bank account, your bank account should also be mentioned in the escrow agreement.
12. What are the benefits of using escrow over payment in advance?
When the supplier is in financial difficulties, the buyer runs the risk of losing the money. If the buyer pays into the escrow account, the money is safe until the supplier has delivered. If the supplier has not delivered within the time agreed, buyer and seller can agree that the escrow agent will pay the money back to the buyer. Alternatively, buyer and seller can agree to make an extension and inform the escrow agent jointly.
13. What are the benefits of using escrow compared to letters of credit?
Escrow can be arranged faster, escrow is cheaper and escrow is more efficient. Buyer and seller agree on the conditions for the release of the money in escrow, it is the responsibility of the escrow agent to make sure that the release conditions can be executed. There is no involvement of other banks. The buyer orders his money to be transferred to the escrow account and upon the release condition met, the money in escrow is released and electronically transferred to the supplier. The buyer and seller can change the release conditions during the transaction by sending in a joint instruction to the escrow agent. If such joint instruction is accepted by the escrow agent, the changes are made. Such changes can be the delivery date, place of delivery, amounts to be prepaid etc.
14. What are the benefits of using escrow over credit insurance?
Credit insurance is generally provided for the entire turnover of the insured party (the supplier), also the insurance premium is calculated over the entire turnover of the supplier. The escrow fee is charged only over the transaction going through the escrow account and can provide 100% cover. Additionally the supplier using credit insurance has a credit limit for which he is covered by credit insurance. Escrow has no such limit.
15. What happens in case of a dispute about delivery?
If the supplier fails to deliver according to the terms of the contract, and buyer and seller have agreed in the escrow agreement that buyer needs to confirm having received the goods / services, the amount in escrow can not be released and will be paid back to buyer after the final date of the escrow agreement. Off course the first step in solving the claim or dispute is generally to try to negotiate an agreement between buyer and supplier without delay. If an agreement cannot be reached, the case can be escalated to a mediator. If after this a satisfactory settlement is still not reached, the next step could be to take the case to arbitration or court. The outcome of this process will be reported back to Escrow & Settlement with instructions on how the transaction is to be settled.
16. Can I decline the transaction or cancel payment to the supplier?
After payment into the escrow account, a transaction can only be cancelled when both parties give a joint written instruction to the escrow agent or if buyer and seller have specifically agreed a cancellation procedure in the escrow agreement. All transaction fees are non-refundable.
17. How can the buyer have the products inspected prior to releasing the money in escrow?
Depending on the scope of the inspection, you can either instruct your transport company to check the condition of the products to ascertain that it is consistent with what is specified in the agreement. Alternatively you can have a worldwide specialized inspection company perform this task for you. Buyer and seller can agree in the escrow agreement that the money in escrow is to be released after the escrow agent has received the conformity report of the verification / inspection partner.
18. Which rules and regulations are applicable?
Escrow & Settlement insists that all parties shall at all times comply with applicable rules and regulations in all countries where they are based and where activities are undertaken by them or on their behalf in relation to such activities. In the event (any part of) a party at any time during the term of the escrow agreement is or becomes in breach of any applicable rule or regulation in a country where they are active, such party shall immediately upon becoming aware of such breach notify Escrow & Settlement and shall, in consultation with Escrow & Settlement, take any steps necessary to terminate such breach. Similarly, Escrow & Settlement shall at all times comply with applicable rules and regulations in all countries where it carries out its obligations in connection with the escrow agreement.
19. Do the terms & conditions of the escrow service apply to both buyer and supplier when using the service?
Using Escrow & Settlement, you explicitly agree with the escrow process, the Escrow & Settlement terms and conditions and with the applicable laws and regulations as stated in the escrow agreement, which you need to sign before the escrow agreement comes into effect.