What is a Paymaster?
A paymaster (from payment and master) is usually a entity responsible for making-receiving payments and guarantees for payments on behalf of clients.
This is especially true for transactions which involve large sums of money, such as various financial instruments and commodities like Bank Guarantees, oil, gold typically involve millions of dollars. Client use Paymaster’s services to facilitate the payments and disbursement of funds.
The primary purpose of a paymaster is to receive fees in escrow by buyers in a large transaction, and disburse to the sellers and brokers on the transaction.
Moreover, the Paymaster is not party to the transaction and does not know the exact time that it will close. Part of his job is to check periodically with the escrow account to ensure that the payment has been transferred in, then to disburse the funds as per his directions. Also, Paymaster will not disclose the identities of the parties to the transaction.
Scope of works
As an independent third party trustee and financial intermediary, we support our clients primarily in the following areas :
- structuring the deal
- ensuring that the transaction documents are prepared
- generating and revising transaction documents
- approval of the budget, regulation and management of payments
- acceptance and disbursement of funds and setting up escrow accounts
- manage cross-border payments
Opufund financial paymaster services
We focus on financial paymaster that involves transactions such as :
- Charity funds management
- Capital market transactions
- Financial instrument transactions
- Foundation, trust fund management
- Private Placement Programs
- Project funding disbursements
Due Diligence Compliance
Some clients asked what is a Paymaster duty in the Due Diligence and Compliance process.
A paymaster contract implicates ALL parties: Sender, Receiver and Brokers (if any). As SENDER and RECEIVER has closed the funding contract, so it is important to know the source and flow of funds.
In addition, International Money Laundering Laws requires us to present a due diligence for each transaction to the banks, money laundering authorities and the tax authorities of some countries. As a competent paymaster we know the procedures and guarantee a safe and legal transaction.
Only through professional, well prepared and documented due dilligence, funds transfers are possible! Otherwise money laundering or counter terrorism authorities will block the funds and will act against ALL parties.
In summary, all transactions are subject to banks’ approval and verification of the origin of funds. And all related parties are required to provide our office all supporting documentation and identification in advance to ensure full compliance with the “Know Your Client” and “Know Your Transaction” policies.
Each paymaster project MUST be legally structured. Especially concerning international money laundering laws are to respect numerous factors and rules. In some cases, it is necessary to develop and build a structure (holdings, trust, foundations etc…)
Financial, Political questions
- what is your exact role in the transaction: are you the sender, receiver or a broker?
- is any transacted parties political exposed persons (PEP)
- volume of transactions
- is it a one-time transaction or periodical transactions?
- is the funds for a project ?
- sender of funds (individuals or companies? Who? Where?)
- location of funds (country and bank)
- receiver of funds (individuals or companies? Who? Where?)
- location of receiver of funds (country, which bank?)
- final destinations of funds (who, country, bank?)
- are brokers involved? (who? where located? how is the commission?)
- do you need the set up for a structure? (company set up, off shore? on shore? where?)
We will require documentation from all parties who may be interested in employing our Paymaster services, including a copy of the underlying transactional documents, including but not necessarily limited to the fee agreement.
