Counterparty

Counterparty: a party to an agreement with whom a company has mutual obligations. In a foreign trade deal, this is above all the foreign supplier or buyer. But the carrier, the forwarder, the insurer and the payment agent are counterparties too.

Why checks matter more in foreign trade

Disputes with a foreign partner are harder: different law, different courts, and each country keeps its own registers. Once money has gone abroad, getting it back takes a long time. Besides, it is not only the buyer who checks the payment beneficiary. Your bank, the agent and the banks in the chain check it too. If the counterparty, its owners or its bank are subject to restrictions, the transfer will be stopped.

What to check before the first payment

• the company’s registration in its country’s register: name, number, address, director;
• that the name and details match in the contract, the invoice and on the company’s website;
• that the beneficiary’s bank is in the seller’s country, or that there is a clear explanation why not;
• sanctions lists for the company, its owners and its bank;
• the history of the relationship: correspondence, past shipments, feedback from partners.

A change of bank details by a message “from the supplier” without confirmation through another channel is a common fraud technique.

How to reduce risk through the contract

The contract sets out the exact details of the parties, the payment terms, delivery dates, liability, the governing law and the venue for resolving disputes. The more precise the contract, the fewer questions the bank has and the easier it is to defend your interests.

Who is who in a deal through a broker

When you pay through an agent, you have two counterparties: your supplier under the contract and the network company that pays it under an agency agreement with you. VEDmost is not a party to these agreements: we select the company and the route, prepare the documents and follow the payment through to execution. Before the roubles are transferred, we check the contract, the beneficiary and the country. If something does not pass the check, we tell you so before the transfer and charge nothing for declining. More details: Payment protection.