ICC Digital Library Forum

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

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