Dear all,
Would you accept to handle a collection including an invoice issued by a party other than the principal without an assignment of proceeds or an authorization from that party in favour of the principal to act on its behalf?
Regards
Antoine
URC
URC
Antoine,
I am not sure I have a simple answer to your question. Given the strict rules that there are these days about customer due diligence / knowing your customer (the customer being the party on whose behalf it is expected one will act) I would be most reluctant to be involved in a scenario where a third party (of which one had notice, as here), on which one had not performed CDD / KYC checks, was possibly deriving benefit from the banking relationship with one’s customer. I also share, what I infer is, your concern regarding disposal of any proceeds received and claims that may arise from the third party if the proceeds are not paid to them (constructive trusteeship). Overall, I think –other than in exceptional circumstances- I would simply refuse to handle under a collection an invoice issued by a party other than the principal/drawer.
Regards, Jeremy
I am not sure I have a simple answer to your question. Given the strict rules that there are these days about customer due diligence / knowing your customer (the customer being the party on whose behalf it is expected one will act) I would be most reluctant to be involved in a scenario where a third party (of which one had notice, as here), on which one had not performed CDD / KYC checks, was possibly deriving benefit from the banking relationship with one’s customer. I also share, what I infer is, your concern regarding disposal of any proceeds received and claims that may arise from the third party if the proceeds are not paid to them (constructive trusteeship). Overall, I think –other than in exceptional circumstances- I would simply refuse to handle under a collection an invoice issued by a party other than the principal/drawer.
Regards, Jeremy