The Baltic Exchange’s escrow service facilitates ship sale and purchase (S&P) transactions. Baltic Briefing meets ex-S&P broker Dmitry Pismenny who heads up the service to discuss how it works.
Trust and values underpin everything that the Baltic Exchange does. Dmitry notes that the 275-year old Baltic holds a unique position of independence and trust in the shipping industry. The Baltic’s escrow service looks to build on this reputation with an offering that provides a strong alternative to other service providers such as law firms and banks.
To provide Members with an opportunity to trial the service, the Baltic Exchange will be offering the first three transactions free of charge, with subsequent transactions at a discount of 20% on the standard fee until June 2020. Even after this period, Members will continue to benefit from favourable fees.
Going the extra mile
The Baltic Exchange is continually looking to add value for its Members. Dmitry shares that the service is underpinned by a high standard of compliance and controls. The Baltic Exchange follows a robust due diligence process in compliance with the Monetary Authority of Singapore (MAS) requirements. This is reinforced by the strict internal control of fund movements from the dedicated escrow account held with AA-rated Singapore bank OCBC. The Baltic Exchange is backed by its listed parent company, Singapore Exchange (SGX), which provides a further level of assurance to users.
“The Baltic is coming in as an independent, reputable and trustworthy institution that is known in the market. Due to its independence, there will be no conflict of interest, this, in addition to its competitive pricing, makes it a strong option for anyone in the industry looking to use an escrow service.”
Dmitry highlights that the Baltic Exchange’s independent and neutral position helps to differentiate it from other escrow providers in the market. Due to its independence, users of the Baltic’s escrow service can be sure that conflicts of interest will not arise and each transaction will be handled with the highest level of confidentiality, professionalism and security.
The Baltic Escrow process
The Baltic Exchange receives a request to act as the independent escrow agent for a ship sale and purchase transaction. The Baltic Escrow agreement and terms are sent to the buyer and seller for review while the necessary compliance checks are undertaken. Upon completion of compliance checks, the buyer and seller sign the escrow agreement. The deposit and related funds are transferred by the buyer to the Baltic Exchange escrow account and held securely while the deal formalities are completed. Once the deal is ready to be concluded and all contract terms are met, the buyer and seller instruct the Baltic Exchange to release the funds to the seller. At this point, the transaction is executed swiftly and professionally and with the highest attention to detail.
From Singapore to the world
Dmitry is keen to assure Members that while the servicing is handled out of Singapore, it is available to users globally. The choice to set-up the service in Singapore he says was a business one, with Singapore being both a major shipping hub and the centre for a large number of ship closings. This, in addition to its strong regulatory framework and international banking expertise, made the location a sensible choice.
Dmitry closes our conversation by discussing the future. While in the short term he expects the primary use of the Baltic escrow service to be for ship sale and purchase, Baltic is looking into expanding the service offering to other asset purchases, disputes and situations where an independent party is required to hold funds pending completion of a transaction. Baltic is also offering its escrow services to both existing Members and other users.
If you would like to take advantage of the Baltic Escrow Service’s introductory offer, or find out more about how the Baltic Escrow Service can support your business or learn more about becoming a Baltic Member, contact:
Dmitry Pismenny for the Baltic Exchange Escrow service on +65 9435 6650 / +65 3163 4913 firstname.lastname@example.org.
Crispin Eccleston for membership details on +44 (0)20 7369 1654 / email@example.com