Entrusted Payment Agreement Template for Indonesia

The Entrusted Payment Agreement serves as a crucial document in complex commercial transactions where centralized payment management is required. This agreement type is particularly relevant in Indonesia's business environment, where large-scale projects and multi-party transactions often necessitate structured payment arrangements. The document establishes the legal framework for delegating payment responsibilities, ensuring compliance with Indonesian banking regulations, including Law No. 3 of 2011 on Fund Transfers and relevant OJK regulations. It is commonly used in infrastructure projects, large commercial developments, and situations requiring efficient management of multiple payment obligations. The agreement details all aspects of the payment arrangement, from appointment of the entrusted party to termination provisions, while incorporating necessary safeguards and compliance measures required under Indonesian law.

1. Parties: Identification of the Entrusting Party (Principal), the Entrusted Party (Agent), and the Beneficiary/Recipients

2. Background: Context of the agreement, including the underlying transaction necessitating the entrusted payment arrangement

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

4. Appointment and Scope: Formal appointment of the Entrusted Party and scope of their payment authority

5. Payment Instructions: Procedures for submitting and executing payment instructions

6. Payment Processing: Details of how payments will be processed, including timelines and confirmation procedures

7. Fees and Charges: Fees payable to the Entrusted Party and related charges

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

9. Obligations of the Entrusting Party: Responsibilities of the Principal, including funding obligations

10. Obligations of the Entrusted Party: Responsibilities of the Agent, including payment execution and reporting

11. Anti-Money Laundering Compliance: Compliance requirements with Indonesian AML regulations

12. Records and Reporting: Requirements for maintaining payment records and providing reports

13. Liability and Indemnification: Allocation of liability and indemnification obligations

14. Term and Termination: Duration of the agreement and termination provisions

15. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms