Payment agent liability

A payment agent’s liability has two parts: to the client, who is called the principal in the agreement, and to the state.

To the client

Under Chapter 52 of the Russian Civil Code, the agent must execute the principal’s payment order on the terms of the agreement and report on its execution. If the agent misses the deadline, transfers the wrong amount or pays the wrong beneficiary, it is liable under the agreement: through a contractual penalty, compensation for losses, or the return of unspent money. The specific consequences depend on what is written in the agency agreement. If the deadline and the consequences are not written down, it is hard to challenge the agent.

If the agent engages a sub-agent, the agent itself is liable to the principal for the sub-agent, unless the agreement says otherwise (Article 1009 of the Russian Civil Code).

To the state

The agent is responsible for complying with currency law, anti-money laundering rules and tax obligations in its own country. A Russian agent faces fines under the Code of Administrative Offenses for violations, and any agent may have its accounts blocked by its bank. For the client, this is a risk: with an agent in trouble, the payment may get stuck.

What to check in the agreement

• the execution period and when it starts to run;
• what happens if the deadline is missed;
• where your money is until execution;
• when and in what form the agent reports: payment confirmation, completion certificate, report;
• on what terms the agent may bring in a sub-agent.

How it works with us

We write the execution period into the agency agreement before the roubles are debited. If you need a guarantee, on request the roubles wait for execution in a special escrow account at a Russian bank, for an additional fee. The agent brings in a sub-agent only if the beneficiary’s bank accepts payment solely from a specific payer, with the client’s consent. More details: Payment protection.