Entrusted Payment Agreement Template for Saudi Arabia

The Entrusted Payment Agreement is essential for businesses and financial institutions operating in Saudi Arabia who need to establish secure and compliant payment arrangements. This document is particularly relevant when one party needs to delegate payment responsibilities to a trusted financial institution while maintaining Sharia compliance. The agreement covers crucial aspects such as payment processing, regulatory compliance, risk management, and operational procedures. It is designed to meet SAMA regulations and Sharia requirements, making it suitable for various commercial transactions in Saudi Arabia. The document is commonly used in large-scale projects, international trade, and recurring payment arrangements where a trusted intermediary is required to manage payment flows.

1. Parties: Identification of all parties to the agreement including the payment entrustor, trustee, and beneficiary

2. Background: Context of the agreement and the business relationship between the parties

3. Definitions: Key terms used throughout the agreement including payment-related terminology

4. Appointment and Scope: Formal appointment of the trustee and scope of payment services

5. Payment Instructions: Process for issuing and executing payment instructions

6. Duties and Responsibilities: Detailed obligations of each party in the payment process

7. Payment Mechanism: Technical and operational details of how payments will be processed

8. Fees and Charges: Structure and calculation of fees for the payment services

9. Representations and Warranties: Legal assurances given by each party

10. Compliance Requirements: Obligations regarding AML, KYC, and Sharia compliance

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

12. Confidentiality: Protection of confidential information

13. Liability and Indemnification: Allocation of risks and responsibilities between parties

14. Force Majeure: Provisions for unforeseen circumstances

15. Governing Law and Jurisdiction: Application of Saudi law and dispute resolution mechanism

16. Notices: Method and addresses for formal communications

17. General Provisions: Standard boilerplate clauses including amendments, assignment, and severability