❓ Before you trade

How escrow works in an import/export deal, step by step

Agreement, funding, production, inspection, shipping documents, release. Where the money is at each step, who can touch it, and what happens if something goes wrong.

Escrow in international trade is not complicated; it is just unfamiliar to people who have only used wires and letters of credit. The whole thing is one idea applied six times: at every step, the money is somewhere neither party can pull it back from, and it moves only when the step is done. Here is where the money is at each stage of a typical deal on iEscrow.

The six steps

  1. 1Agreement. Buyer and seller open a private Business Escrow room and write the terms: goods, quantity, spec, Incoterms, milestones (for example 30% on production start, 40% on passed inspection, 30% on bill of lading), who the arbiter is and when they step in. Money: nowhere yet.
  2. 2Funding. The buyer funds the full amount into escrow in the agreed crypto. Money: held by the escrow. The seller sees it locked and starts production. Neither side can cancel now.
  3. 3Production. The seller declares the first milestone (production started, with evidence). The buyer confirms; 30% is released to the seller. Money: 30% with the seller, 70% in escrow.
  4. 4Inspection. The buyer arranges a pre-shipment inspection. The report is the evidence for milestone 2. Passed: the buyer confirms, 40% released. Failed: the buyer does not confirm; the seller fixes and re-declares, or either side opens a dispute and the arbiter decides on the report.
  5. 5Shipping. The seller ships and uploads the bill of lading and the other documents agreed. The buyer confirms; the final 30% is released. Money: all with the seller. Goods: on their way to the buyer.
  6. 6If something goes wrong at any step. The milestone in question is frozen, the others are not. The arbiter reads the agreement, the documents and both sides’ evidence, and decides that milestone with the reason in writing. A milestone decided for the buyer refunds its share.

What the escrow is not responsible for

  • Customs, freight, insurance and the goods themselves. Escrow moves the money on the conditions you wrote; the trade logistics are yours.
  • Fiat. The deal is settled in crypto; both companies need to be willing to pay and receive it.
  • The quality of your agreement. The arbiter decides on what you wrote. The precision of the terms is the quality of the protection.
iEscrow is custodial: the platform holds the funds in escrow until each release, and the room keeps a timestamped record of every event. That record is what both companies keep as the file of the deal.
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