Using BUCE accounts
BUCE accounts are an effective means of ensuring fulfilment of obligations under exchange contracts. It protects both – the buyer and the seller: the former is insured against non-delivery and the latter – from non-payment. Conceptually, using BUCE accounts for settlement under exchange contracts is similar to using a letter of credit or an escrow account. In this case, BUCE acts as a “disinterested” third party. First, it holds the funds transferred by the buyer to its account as payment under an exchange contract and then releases them to the seller when the buyer confirms the delivery of purchased goods. The only major difference between BUCE accounts and the letter of credit is that unlike banks BUCE provides this service free of charge.
In order to use BUCE accounts one must include this clause in the exchange contract or draw up a supplement to an exchange contract where the use of BUCE accounts is clearly specified.
One should bear in mind, however, that BUCE accounts cannot be considered a method of securing the fulfillment of obligations under exchange contracts.
The use of BUCE accounts for settlements is mandatory in the following cases:
- when the seller provides a security deposit and the exchange contract requires prepayment,
- when the buyer provides a security deposit and the exchange contract requires the goods to be delivered prior to payment.