An escrow account is an instrument for providing sellers and buyers financial safety upon carrying out any asset sale-purchase deal. The purpose of an escrow account is to ensure fulfilment of sellers and buyers mutual agreements, and the Bank is the guarantor for the fulfilment of such agreements.
The account is convenient for most situations concerned with real estate as well as trade deals, sale-purchase of enterprises and transfer of shares.
An escrow account is the account of conditional deposition, i.e. the account where pledged funds are kept blocked until the execution of pre-agreed conditions. The deals execution is governed by Civil Statute of Republic of Latvia.
The Bank provides Escrow accounts for natural and legal persons.
The Bank’s escrow account opening and service is based on tripartite agreements concluded between the seller, the buyer and the Bank. The agreement specifies conditions for fulfilment of agreements and due dates. During the agreement validity period, funds meant for payments according to the deal are blocked in the Bank’s account and the seller may not receive them without the buyer’s explicit agreement. The buyer, for his/her part, has the assurance that funds will be remitted to the seller only after the fulfilment of engagements confirmation, i.e. after all documents are dully processed and submitted to the Bank.
Having a current account with the Bank is a mandatory condition for both the buyer and the seller, in order to open an escrow account. The Bank opens an escrow account in the customer name. If the seller or buyer is already a customer of the Bank, the escrow account opening is executed using documents which are already held by the Bank. In case neither seller nor buyer is an existing customer of the Bank, they should open a current account with the Bank in the usual manner.