The provision of a trusted, independent and efficient escrow service is a vital component of corporate transactions including asset purchases and in disputes. It is essential that all parties have confidence that the necessary due diligence checks are performed, funds are held securely, and the escrow service is executed smoothly and professionally with close attention to detail. The Baltic Exchange is offering an independent one-stop escrow service to all clients to facilitate a wide range of transactions.

Key Features of the Escrow Service

Independent and trusted

The combination of two leading organisations, Singapore Exchange (SGX) and Baltic Exchange, ensures that clients have confidence that their escrow needs will be executed by a professional, trusted and independent service provider.

SGX is Asia’s leading and trusted multi asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards. The Baltic Exchange, a wholly owned subsidiary of SGX , is a trusted provider of independent maritime market information to an international community of members encompassing shipowners , shipbrokers, charterers, financial institutions and maritime professional services providers.

The escrow service builds on this position of independence and trust.

Secure

Ensuring that escrow funds are held securely at all times is paramount in the provision of the escrow service. Each escrow transaction is treated with the highest levels of security and confidentiality.  

  • Know-Your-Customer (KYC) / Anti-Money Laundering (AML) and Sanctions checks are performed in  compliance with Monetary Authority of Singapore (MAS) requirements.
  • Secure escrow accounts are maintained with two leading AA-rated banks in Singapore:  OCBC and UOB.
  • Strict internal control of funds movements in place to ensure that funds are only released based on agreed parameters and by authorised approvers.

Efficient and flexible

Clients can be assured that they will receive efficient service that is tailored to their needs.

  • Ability to cater to a wide range of industry segments.
  • Support any situation or transaction that requires an escrow service.
  • Hold funds for any duration of time.
  • Support multi-currency transactions.
  • Competitive pricing available based on membership status and volume of transactions.

Using escrow in security payments for chartering

The chartering of vessels carries a degree of risk of non-performance for both shipowners and charterers. The stakes are higher when dealing with new or unfamiliar counterparties. The Baltic Exchange helps shipowners and charterers mitigate these risks during the chartering process by facilitating and holding a security payment relating to the charter in a dedicated escrow account. 

The security payment typically represents a pre-agreed amount between the parties and is held as collateral to ensure that both parties fulfil their contractual obligations. Having the Baltic Exchange as the escrow agent gives all parties involved confidence that the service will be delivered with the highest level of professionalism, reliability and security. 

Examples of use cases

Time charters

Security sums paid by the charterer into an escrow account for the duration of the time charter, to be released after vessel redelivery.

Voyage charters

Prepayment of freight payment by the charterer into an escrow account as a security sum, to be released upon cargo discharge. 

Benefits of using escrow service for chartering transactions

  • Ensures that interests of all parties are protected.
  • Provides assurance that contractual obligations are fulfilled before funds are released.
  • Enables conditional release of the agreed security sum on pre-agreed, structured terms.
  • Helps shipowners as well as charterers mitigate risks related to counterparty non-performance.
  • Provides support for smaller, less well-known and/or new charterers to hire vessels.
  • Allows shipowners to transact with a wider pool of charterers.
  • Prompt onboarding and timely release of funds upon instructions from both parties.
  • KYC onboarding process by the Baltic Exchange provides an added level of assurance to counterparties.

Contact Us

To learn more about the escrow service and how we can support your escrow needs, please contact us at escrow@balticexchange.com