26.07.2016. European Banks’ Requirements to USD Payments

News

Correspondent banks established the following restrictions in respect of USD payments.

1) Outgoing payments are not allowed if made to:

•  counteragents from Azerbaijan, Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan
•  politically exposed persons (РЕР)
•  charitable organizations
•  money services businesses

Exception: recipient’s account is in the same correspondent bank.

2) Restrictions on jurisidictions
Both incoming and outgoing payments are not allowed if client’s jurisdiction is not included in the following list:

•  Europe
•  Former USSR countries
•  Australia
•  Canada
•  Hong Kong
•  Israel
•  Singapore
•  South Africa
•  UAE
•  USA

Exception: financial statements presented, supporting documents provided in respect of each transaction.

3) Restrictions on client’s business
Both incoming and outgoing payments are not allowed if client’s activities involve:

•  transit
•  payment splitting
•  large round sums

Exception: client’s commercial activities are completely clear, understandable and supported by documents, supporting documents provided in respect of each transaction.

Mandatory supporting documents (before payment is made)
Before either outgoing or incoming payment is made a client shall present supporting documents to its bank if:

•  the sum of a transaction with a new counteragent is equivalent of 100,000 Euro or more
•  the sum of a transaction is equivalent of 500,000 Euro or more.

Mandatory supporting documents (before or after payment is made)
For a payment to be made a client shall present supporting documents to its bank:

•  for the first transactions if it is a new client
•  if this is a payment for consulting or marketing services with the sum of 70,000 Euro or more
•  for any transactions involving cash
•  if the amount of transactions with that counteragent is 500,000 Euro or more
•  in any other cases at bank’s sole discretion.

Types of documents to be presented to bank
Commercial/personal activities or certain client account operations may be supported with the following documents:

•  contract
•  invoice
•  bill of lading
•  tax return
•  company’s balance sheet
•  company’ annual (half-yearly, quarterly) report
•  acceptance act
•  research report

Supporting documents shall be duly executed and signed by both parties, bear dates and numbers, correctly state full names of a company/individual.

Requirements to purpose of payment
The purpose of payment shall specify:

•  if payments for goods or services — accurate name of goods or description of services, number of a contract or date and number (if assigned) of an invoice
•  if payments for transport services — description of a transport service, number of a contract or date and number (if assigned) of an invoice, route and type of a transport vehicle, for sea freighters — also the name of a vessel and IMO number
•  if payments on loan agreements — purpose of a credit, number and date of an agreement, loan term
•  if payments on deposits — number and date of an agreement and nature of a deposit transaction
•  if payments on securities — name of securities, amount, price, ISIN number (if assigned)
•  Where the purpose of a payment to a legal entity provides for the list of invoices, list of supporting documents or full list of goods and summary of a payment nature completely consistent with the description of legal entity’s activities as stated on its official web-site home page any other requirements shall not apply.

The purpose of a USD payment shall be stated in English.

Taking into account the above requirements we highly recommend that payments be made in national currencies of those countries to which a payment is made by a client or from which a client receives a payment.

List of currencies: AED, AMD, AUD, BYR, CAD, CHF, CNY, CZK, DKK, EUR, GBP, GEL, HKD, ILS, JPY, KZT, NOK, NZD, PLN, RUB, SEK, SGD, THB, TRY, UAH, USD, ZAR.