Entrusted Payment Agreement Template for Hong Kong

The Entrusted Payment Agreement is commonly used in Hong Kong's business environment where structured payment arrangements are required for efficient transaction management. This document is particularly relevant when a company or individual needs to delegate payment responsibilities to a professional agent or financial institution while maintaining control over the payment process. The agreement becomes essential in scenarios such as large-scale project management, property transactions, or complex business operations where centralized payment handling is beneficial. Governed by Hong Kong law, it incorporates necessary compliance elements including anti-money laundering provisions, banking regulations, and trust-related requirements. The document typically includes detailed procedures for payment processing, authorization protocols, security measures, and risk allocation, making it a crucial tool for businesses seeking to streamline their payment operations while maintaining proper control and oversight.

1. Parties: Identification of all parties to the agreement including the principal, the payment agent, and any other relevant parties

2. Background: Context of the agreement, explaining the business relationship and purpose of the entrusted payment arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Authority: Formal appointment of the payment agent and scope of their authority to make payments

5. Payment Instructions: Process for issuing, modifying, and canceling payment instructions

6. Payment Processing: Procedures and timelines for processing payments, including validation requirements

7. Fees and Expenses: Details of fees payable to the payment agent and allocation of expenses

8. Representations and Warranties: Standard representations and warranties from all parties

9. Obligations and Responsibilities: Detailed obligations of each party, including reporting and record-keeping requirements

10. Anti-Money Laundering Compliance: Requirements for compliance with AML regulations and due diligence procedures

11. Liability and Indemnification: Scope of liability and indemnification obligations

12. Term and Termination: Duration of the agreement and circumstances for termination

13. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability