The global economic trend has shifted from globalization to regionalization of international trade, which has significantly impacted businesses engaged in foreign economic activity. These include both importers and exporters operating in commodity markets, as well as service providers with international clientele. Beyond business development itself—such as entering new sales markets, finding counterparties, and solving logistics challenges—cross-border payment practices have become a separate and critical issue. The diagram above illustrates the participants involved in the process of a cross-border payment, from the buyer (payer) to the seller (recipient). As we can see, the process involves four banking institutions: the payer’s bank, the correspondent bank of the payer’s bank, the recipient’s bank, and the correspondent bank of the recipient’s bank. These four banks may, in general, be located in different countries and, accordingly, be subject to different regulatory requirements. Additionally, banks are guided by their own internal procedures and regulations regarding AML & Compliance processes. Finally, different jurisdictions may follow varying sanction practices. During the payment process, each bank is required to conduct a comprehensive analysis of the payment and the underlying trade transaction. This is a non-trivial task, as the following aspects must be reviewed:

• The companies involved in the transaction (whether they are on any sanctions lists of legal entities);
• The individuals representing these companies—such as directors and beneficiaries (whether they are on any sanctions lists of individuals);
• The goods being traded (whether they are subject to sanctions, and whether the transaction requires additional licensing);
• The banks involved in the transaction (whether they are on sanctions lists);
• The logistics intermediaries and the transportation itself (for example, sea vessels), in terms of their presence on sanctions lists. As we can see, this verification may be performed up to four times—once by each bank involved in the cross-border payment process. If any questions arise from any of the banks, the payer and recipient may receive a request for detailed transaction information and supporting documentation. Sometimes, preparing a competent and prompt response for a bank is not a simple task. It may require having a qualified foreign trade specialist, a lawyer, and an AML & Compliance expert on staff. As we understand, small and medium-sized enterprises cannot always afford the costs of employing such personnel. In such cases, communication with the bank often falls on the shoulders of the company’s CEO, chief accountant, or even the business owner. To simplify the process of doing business involving cross-border payments, a circle of companies has recently emerged whose professional activity centers on assisting businesses engaged in international operations. These companies have come to be known—perhaps not too aptly—as “foreign trade payment agents,” and banks in various countries have learned to cooperate with such organizations. Now, company leaders and owners are faced with the challenge: how to choose the most professional and reliable partner from the many options available? To make such a decision, the following information should be obtained from a potential partner:
• A basic diagram of how the payment will be processed;
• Which legal entities and banks will be involved in the money transfer;
• The timeframe for payment processing;
• The fee for executing the payment (it should be neither too low nor excessively high compared to other offers on the market);
• Whether the agent has its own liquidity to carry out the payment;
• Sample contracts;
• Market reputation. To solve the above-mentioned challenges, you can always contact us at the International Payment Alliance, a consortium of professional participants in the market of foreign trade payment agents. We will carefully analyze your request and select a partner that is optimally suited to meet your business needs.