Services & Contracts
Using the service
How a broker can use the Escrow account
1. Obtain the agreement of the operator
A broker wishing to use the service must be a BACA member, and must have been approved by the Royal Bank of Scotland (or be an existing RBS Group bank user, e.g. NatWest). You should apply for pre-clearance before attempting to use the scheme for the first time. RBS may levy a one-off charge for this.
The broker should talk to the proposed operator and get their agreement to use the Escrow service. Explain that this will only be set up with the mutual acceptance of all the parties involved, and on terms that the operator will agree to. However it will be in his interest to agree, because clients will naturally prefer the assurance that the services offers, and it will also protect the operator’s cancellation fees, should there be any.
Short-notice and low-value charters will usually not be suitable for Escrow payments, and the service is designed for bookings made well in advance of the flight date. It can be used for full charter prices, part of the charter price, deposits, or even other payments in many circumstances.
Discuss the principle with the carrier, and establish when payment would be made. It could be shortly before the flight date, on the flight date, or after it, but keep in mind that payments can only be made during normal working days and banking hours.
Then set up your air charter agreement in the normal way, noting in the Payment Terms section the payment date that you have agreed.
2. Draw up the Stakeholder Agreement
The Broker should download a copy of the Stakeholder Agreement from the menu on the left. Choose the one appropriate to the currency you will be using (Pounds, Dollars or Euros).
Fill in the relevant details about your company and the chosen operator. Add information about the charter price, payment terms and other requested details, and sign the agreement at the end.
SCHEDULE 1; Calculate the Stakeholder fee. It needs to be added to the charter price or deposit.
SCHEDULE 2; Fill in the flight or operation details.
SCHEDULE 3; This only needs to be completed when final payment is due.
SCHEDULE 4; Only needs to be completed if the operation is cancelled.
LAST PAGE, SIGNATURES; To be completed at the start, in every case.
Send the agreement to the operator. The operator must then also sign the agreement, and the entire document should then be sent by fax to 0207 369 1622, or by PDF to BACA Escrow Services Ltd (email@example.com).
BACA Escrow Services will then also sign the agreement, and the completed version (with three signatures) will be copied back to the Broker and the Operator.
3. Pay the Charter Price to the Escrow Account
When the Broker receives the copy of the Stakeholder Agreement signed by all three parties, they should transfer the charter price (or whatever proportion of the charter price has been agreed) plus the Stakeholder Fee (1% of the total charter price with a minimum of £100 (or US$ 200 or Euro 150) and a maximum of £350 (or US$ 600 or Euro 500), non-refundable) to the BACA Escrow Services Ltd account shown in the Stakeholder Agreement. Confirmation of receipt of funds will be sent to both parties.
An invoice will be sent by BACA Escrow Services to the Broker for the Stakeholder Fee. The Operator should raise an invoice to the Broker for the amount to be deposited in Escrow (in the normal way) stating that payment should be made via the BACA Escrow account. Please send BACA a copy of this invoice.
Please note that BACA Escrow Services will not be liable for bank charges. Please ensure that transfer instructions clearly advise the bank that the Broker will accept all fees.
4. Let us know when the Operator can be paid
When, according to the Agreement, the time has come for payment to be made, and all parties agree that the terms of the Agreement have been fulfilled (for example, that the flight has taken place) then approval for payment needs to be sent to BACA Escrow Services Ltd.
The Broker should copy the text of Schedule 3 (Letter of Confirmation) on their own letterhead, and sign it.
The document should then be sent by fax to 0207 369 1622, or by PDF to BACA Escrow Services Ltd (firstname.lastname@example.org). Payment to the Operator will then immediately be implemented, subject to banking hours. Confirmation will be sent to all parties when it has been done, and that completes the deal.
5. What happens if the flight is cancelled?
If the flight is cancelled, and both broker and operator agree that the contract needs to be terminated, then they should each copy the text of Schedule 4 (Letter of Cancellation of Charter Flight) onto their respective letterheads, sign them, and send them by fax to 0207 369 1622, or PDF to BACA Escrow Services Ltd (email@example.com).
The cancellation fee will then be sent to the operator, and the remainder of the funds (minus the Stakeholder Fee) returned to the broker.
6. What happens if the operator ceases trading?
If the operator ceases trading, or is unable to fulfil its obligations, then BACA Escrow Services Ltd will need written confirmation of this from both parties (or their representatives, receivers or liquidators). The funds can then be returned to the broker, minus the Stakeholder Fee.
7. Contact details
If you have a problem or require more information, contact Willem van der Pol on 020 7623 5501 who will either be able to answer your query, or direct you to someone who can provide a solution.
The Royal Bank Of Scotland Baca Escrow Facility
Bank Requirements for Brokers wishing to sign up to the service
1. Meeting – A face to face meeting at the business address will be required between David Walford ( Relationship Director from RBS ) and a director of the company.
2. Identification – Original documents must be seen. These can be copied in the meeting with David Walford. Alternatively these can be taken in to a local RBS Branch upon prior notification and arrangement with David Walford / Laura Holmes ( David’s assistant from RBS ) who will contact and arrange with the local branch manager. If individuals are based outside the UK a public notary in the country can send copies to David / Laura including written confirmation that these are certified copies of the original documents.
Identification is required for all directors of the company and any shareholder with 25% or more ownership within the company. If there is a complex structure in place these individuals may not have direct ownership / may have shareholding within a company and identification is required down to the individual level.
Two forms of identification are required – photographic identification ( Passport or Driving Licence ) and address verification ( If passport is used for above then driving licence, if not a utility bill (not mobile phone or credit card) or bank statement no older than 3 months old.
3. Beneficial Ownership Details – The bank will need to seek written confirmation of the full beneficial ownership structure of the company.
If there is a simple structure in place where individuals are the only shareholders then this can be included within the account opening forms. If however the structure is more complex, a letter on company headed paper will be required signed by a director of the company.
Simple structure – ABC Limited – ( 50% Mr Jones / 50% Mr Smith )
Complex structure – ABC Limited –
30% Mr Jones
35% DEF Limited ( 80% Mrs Jones / 20% Mr Dodd )
35% GHI Limited ( 80% Mr Smith / 20% JKL Limited / 100% Mrs Smith )
We need to know the full beneficiary ownership details of all companies within the structure down to the individual level. Within the letter of beneficial ownership the details of the company addresses and country where registered should be included. If individuals then their residential address and date of birth.
If there are any trusts involved then a further letter is required from a solicitor/accountant detailing such details as beneficial owners, settlors and controllers.
4. Bank Documentation – A new account opening form is required which is to be signed by the directors of the company in accordance with their internal signing authorities.
5. Credit Search Authority – A consent for credit checks form from each director or shareholder is required. This can be a blanket authority signed by one director stating that they can confirm that permission was given for all those parties involved.