Currency agent, payment agent and broker: who is responsible for what

A single import deal can involve three “agents” with similar names. One checks transactions on behalf of the state. The second transfers the money to the supplier. The third selects the second and monitors execution. If you mix them up, it is easy to ask the wrong party and lose time.

Where the confusion comes from

The phrase “currency agent” is used in two senses. In the law, it refers to a currency control agent, which makes sure currency transactions follow the rules. In everyday speech, the same phrase is sometimes used for a company that pays in foreign currency on your behalf, that is, a payment agent. Legally, these are different roles with different obligations.

Currency control agent

The framework is set by Federal Law No. 173-FZ “On Currency Regulation and Currency Control”. The currency control authorities are the Bank of Russia and the tax service. Currency control agents are listed in the law. For an importer, the main one is its own bank: the one where its account is held and where the contract is registered.

What the bank does in this role:

• registers the contract if the amount is above the threshold in Bank of Russia Instruction No. 181-I, and assigns it a unique contract number (UCN);
• keeps the bank control statement, where payments and deliveries are matched;
• accepts supporting documents and checks currency transaction codes;
• requests documents and may refuse a transaction if they are missing.

Fines under KoAP are not imposed by the bank. The bank reports violations to the currency control authorities, and they make the decision.

For an exporter, the bank’s role is the same, only in the opposite direction. The bank makes sure that proceeds under the export contract arrive within the contract deadlines. More: currency repatriation.

A currency control agent does not pay your supplier and does not select a route. Nor does it disappear when you pay through an agent: the contract remains registered with your bank. More: currency control.

Payment agent

This is a commercial company that pays the supplier on your behalf under an agency agreement. The legal basis is Chapter 52 of the Russian Civil Code, “Agency”. The agent receives a payment order, sends the foreign currency and reports back. It charges a fee for this.

The payment agent also checks you and the deal, but for a different reason: Federal Law No. 115-FZ on anti-money laundering requires it. It looks at the contract, the invoice and information about the goods. It has no currency control agent functions.

Two more homonyms. Payment agents under Federal Law No. 103-FZ accept payments from individuals, for example for telecom services. Bank payment agents under the law on the national payment system work for a bank. Neither has anything to do with paying for imports. More: payment agent.

International settlements broker

The broker does not move money and does not supervise transactions on behalf of the state. Its job is to maintain a pool of agents and, for each payment, select one whose route to the required country works now, and compare the terms. It prepares the agency agreement and the payment order, which the client signs with the agent: the execution term is set in the agreement, the rate and fee in the payment order before the roubles are debited. Then the broker follows the payment through to execution. More: international settlements broker.

Do not confuse it with other brokers. A customs representative, often called a customs broker, declares the goods. A broker on the exchange buys currency on the client’s order. An international settlements broker selects the agent and follows the payment through to execution.

How they meet in a single deal

Take an importer with a contract above the 181-I threshold.

1. The importer registers the contract with its bank. This is the currency control agent.
2. The broker reviews the contract and the invoice, selects an agent from its pool, and prepares the agency agreement and the payment order with the rate and fee.
3. The importer signs the agency agreement and the payment order with the payment agent and transfers the roubles.
4. The payment agent sends the foreign currency to the supplier and provides confirmation.
5. The broker hands the importer the agent’s report and completion certificate and the document package.
6. The importer submits to its bank the documents showing that the obligation to the supplier has been fulfilled. The bank records this in the statement.

Each has its own area. The bank is responsible for registration and control, the agent for transferring the money, and the broker for selection, terms and documents.

If one link drops out, the others stay in place. If an agent’s route closes, the broker looks for another agent in the network, while the contract at the bank and the document procedure do not change. The bank still sees the same contract and the same set of supporting documents.

Who to ask what

The tax service and customs usually come with questions later, after the deal. It is easier to answer them if the document package was assembled right after the payment, not reconstructed a year later.

The bank: whether the contract needs to be registered, which documents to submit and by when, which transaction code to use. The agent: execution of the payment order and the report. The broker: which route is available, how much the payment will cost, which agent will execute it, which documents you will receive.

This is a general overview. We will give you an answer on your deal after reviewing the documents and before the roubles are transferred.

VEDmost works as a broker. Our fee is paid by the executing agent: you do not pay the broker separately. We put together the package for the bank after the payment; more on the Currency control page. How the route through a broker differs from a bank and a single agent is covered on the Broker, agent or bank page.