A rare work of art is for sale. The owner wishes to protect their identity; the prospective buyer wants to prevent their name from influencing the price negotiations. Both seek discretion, and both demand security. How can such a purchase be completed without getting to know the counterparty personally and without giving up enforceable rights? Double-Blind Escrow offers a possible contractual framework: a third party coordinates the exchange of performance and holds funds or assets until the agreed conditions are met. [1]
In the model discussed here, the identities of the buyer and seller initially remain confidential vis-à-vis the other side. The escrow agent knows both parties and conducts the stipulated checks. Their scope must be established in advance. In Switzerland, the legal assessment depends on the specific contractual arrangements and the applicable rules. The term alone creates neither special rights nor an exemption from statutory obligations. It is therefore essential to structure confidentiality, execution and legal protection together from the outset. [1, 2]
1. How does Double-Blind Escrow work, and when is it worthwhile?
A sound structure begins before the first payment. The buyer and seller have their identities, powers of representation and the subject matter of the transaction checked. At the same time, they establish which information must be accessible to the other side. The purchase agreement, confidentiality provisions and escrow agreement are then coordinated. A protected record identifying the parties can support discretion during the process; nevertheless, the participants must be clearly identifiable in law and validly bound. [3]
The buyer then deposits the agreed amount. The seller makes the purchased item or the necessary transfer documents available. The agent confirms the deposit and checks the evidence required by the contract for release. In an art purchase, this could include an independent expert’s report, a handover record and documentation of the chain of ownership. Payment is made only once the agreed conditions have been met. Transfer of ownership, transport and insurance must be separately coordinated with this process. For example, the parties may agree that the buyer receives an authenticity report, while personal details of the previous owner are accessible only to the examining expert and the agent.
This structure is attractive where discretion has a specific economic or personal value. Examples include the acquisition of a collector’s item or a confidential one-off transaction. At the same time, escrow can reduce the risk of unsecured advance performance. Whether the additional effort is justified, however, depends on the transaction value, the need for confidentiality and the checks required. In a business acquisition, necessary access to ownership and business information may substantially limit confidentiality between the parties.
2. What risks lie behind the discretion?
The main reliance shifts to the escrow agent. Errors in safekeeping, premature payment or unauthorised access to information can affect both sides. Qualifications, regulatory status, insurance cover and the specific account structure should therefore be checked before appointment. Equally important is how the assets will be treated if the agent fails. An account labelled «escrow» does not, by itself, provide comprehensive protection. The organisational segregation of assets should correspond to their legal attribution and the actual rights of access. [15]
There is also a risk that a discreet counterparty turns out to be an unsuitable contracting party or one without the right to dispose of the asset. Identity, ownership and authenticity checks address different questions. The fact that the agent has identified a seller proves neither the seller’s ownership of the work nor its authenticity. Nor does the agent, merely by virtue of that role, assume the seller’s warranty obligations or guarantee all contractual obligations. The scope of the agent’s responsibility must be expressly defined.
Matters become particularly sensitive in a dispute: the buyer alleges a forgery, while the seller demands payment. The agent then needs clear instructions. Defined deadlines for objections, appropriate evidence and a procedure for continued safekeeping of the disputed amount are advisable. If there is no clear basis for release, the agreement should provide for a joint instruction or a court or arbitral decision. The agent should not have to decide a substantive dispute at their own discretion. [14]
3. What duties does the escrow agent have?
The agent’s duties arise from the contract and the applicable law. To the extent that the law of mandate applies, the agent owes, in particular, duties of diligent performance and accountability. An agent who is a lawyer is also subject to professional rules. Representation of one party and the escrow obligations assumed towards both sides must be clearly distinguished. A law firm may not simultaneously represent conflicting interests as counsel for the parties; potential conflicts of interest must therefore be specifically examined before accepting the engagement. [2, 11, 12]
For anti-money laundering purposes, the activity actually performed is decisive. Anyone who deals with assets belonging to others on a professional basis may be subject to the Anti-Money Laundering Act as a financial intermediary. The relevant duties include identifying the contracting party, establishing and verifying the identity of the beneficial owner, conducting risk-based enquiries and maintaining documentation. The aim is to make it possible to trace who is behind the transaction and what purpose it serves. Where the statutory conditions are met, a report must be made to the Money Laundering Reporting Office Switzerland, MROS. [6, 7]
Lawyers’ professional secrecy does not automatically protect every escrow activity. The Federal Supreme Court distinguishes legal advice specific to the profession from commercial activities (BGE 132 II 103, consid. 2.1–2.2). The Federal Criminal Court elaborates on this distinction for escrow engagements (TPF 2015 121, consid. 6.4.2); FINMA focuses on the direct connection to a specific legal engagement and the legal expertise required. [4, 5, 1]
Since 1 October 2026, the revised AMLA has also covered certain advisory activities, particularly in connection with real estate and certain corporate structures. A legal engagement therefore does not entail a blanket exemption from all AMLA obligations. In the EU context, too, the CJEU distinguishes certain transactional services from assistance relating to legal proceedings (C-305/05 of 26 June 2007, paras. 33–35). The judgments cited do not constitute blanket judicial approval of the double-blind model. [6, 8, 9, 10]
4. How can claims remain enforceable despite confidentiality?
From the buyer’s perspective, the key question is: against whom can I take action if the artwork is not authentic or belongs to a third party? The seller, in turn, must know how to pursue claims for the purchase price and damages. The actual contracting parties, their representation and their obligations must therefore be clearly defined. Representation by an agent can facilitate confidential execution, but requires careful examination of its prerequisites. Art. 32 CO and the case law of the Federal Supreme Court illustrate why legal attribution must not be left to chance. [2, 3]
A sound solution should therefore include a staged disclosure mechanism. As long as the transaction proceeds properly, identity data remain within the agreed circle. For a specifically defined breach of contract, legally permissible access should be provided to the information required to pursue legal remedies. The trigger, recipients, scope and procedure for disclosure must be specified. Where lawyers’ professional secrets are involved, the necessary consents and statutory requirements must be taken into account. A mere general promise to «help» in a dispute is not a sufficient basis for structuring the arrangement. [5, 12]
Equally important are the applicable law, jurisdiction or arbitration agreement, and reliable arrangements for service of documents. Warranties regarding authenticity and ownership, appropriate time limits for notifying defects and, where appropriate, a purchase price retention can supplement legal protection. Confidentiality must not prevent necessary information from reaching banks and the competent authorities. The bank maintaining the account retains its own statutory due diligence obligations. Which information is to reach whom should therefore be clarified before the account is opened. [14, 6, 7]
5. What makes the structure legally and practically robust?
Quality depends on how the documents work together. The confidentiality agreement, often called an NDA, governs the handling of identities and transaction information. The purchase agreement describes performance, price, representations and the legal consequences of breaches of duty; in a share acquisition, it is often called a Share Purchase Agreement, or SPA. The escrow agreement, by contrast, determines deposit, safekeeping and release. These contracts should complement one another and not contain conflicting requirements for the same circumstances. [14]
The release conditions deserve particular attention. «After successful delivery» is too vague for a valuable work of art. A verifiable process is preferable: which expert confirms what? Which documents must be available? Who declares acceptance? By when may an objection be raised? Partial payments, unwinding the transaction, fees and the treatment of blocked amounts should also be settled in advance. The more precise the criteria, the less room there is for differing expectations at the crucial moment. [14]
Structuring should also include a practical stress test. What happens if an expert report is negative, a payment is delayed or the agent can no longer continue the engagement? Who continues to hold the item, and how do documents remain accessible? For international transactions, any additional mandatory rules must also be examined. The next sensible step is therefore a joint review of the transaction’s objective, confidentiality needs and completion conditions before funds are transferred or binding declarations are made. A written process plan setting out responsibilities, deadlines and arrangements for a substitute agent makes the contractual rules workable in day-to-day practice.
Conclusion: Discretion needs a clear legal basis
Double-Blind Escrow can combine discretion with a secured exchange of performance. Its value lies in a structure that protects confidential information while providing clear responsibilities, traceable checks and enforceable claims. Establishing these points early creates a better basis for the transaction.
LINDEMANNLAW is pleased to advise on legal structuring, assessment of regulatory requirements and the preparation of coordinated contractual documents. Our advice combines transaction law with confidentiality and compliance issues. It is based on our experience in providing legal support for transactions and our knowledge of contract and regulatory law. In individual cases, LLAW may also act as escrow agent, particularly where the holding of funds is directly connected to a specific legal engagement for a contracting party and requires legal expertise. This is subject to a review of the specific engagement and compliance with regulatory and professional requirements. Discuss your plans with us at an early stage: we will work with you to determine which structure protects your interests and makes your transaction legally sound. [4, 11, 13]
Disclaimer
This article is for general information only and does not constitute legal advice for any specific case. The legal assessment depends, in particular, on the contractual arrangements, the participants, the subject matter of the transaction and the jurisdictions involved. Reading this article does not establish a lawyer-client relationship. Legal position as at 6 October 2026.
Sources and references
The references substantiate the legal foundations and general escrow mechanisms. The specific contractual proposals and examples are our own structuring recommendations. The court decisions cited address individual legal questions; they do not provide blanket confirmation that the double-blind model is permissible. The information about LINDEMANNLAW is based on the firm’s own service profile and statements.
[1] Federal Criminal Court – TPF 2015 121, RR.2015.39 / RR.2015.40 / RR.2015.41
21 October 2015. Consid. 6.4.2 (escrow, legal classification of the contract and lawyers’ professional secrecy). Open source
[2] Swiss Confederation / Fedlex – Code of Obligations (CO), SR 220
Code of Obligations of 30 March 1911; status as at 1 October 2026. Arts. 1, 18–20, 32, 398 and 400. Open source
[3] Federal Supreme Court – Judgment 4A_393/2018
20 February 2019. Consid. 3.4.2–3.4.3 (attribution of parties and Art. 32 CO; not an escrow decision). Open source
[4] FINMA – Circular 2011/1 «Financial intermediation under the AMLA»
20 October 2010; last amended on 4 November 2020. Paras. 114–123, in particular paras. 119–121; scope of financial intermediation, supplementing the 2026 AMLA revision. Open source
[5] Federal Supreme Court – BGE 132 II 103 (2A.375/2005)
9 November 2005. Consid. 2.1–2.2 (activities specific to the profession, commercial activities and protection of professional secrecy). Open source
[6] Swiss Confederation / Fedlex – Anti-Money Laundering Act (AMLA), SR 955.0
AMLA of 10 October 1997; as at 1 October 2026. Art. 2 paras. 2–4; Arts. 3–8, 8b–8d, 9, 10a and 14. Open source
[7] FINMA – Fact sheet «Combating money laundering: financial intermediaries must comply with due diligence obligations»
1 January 2020. Basic duties of identification, establishing beneficial ownership, enquiries, documentation and reporting; cross-checked against the current AMLA. Open source
[8] Federal Council – Federal Council brings new anti-money laundering rules into force
12 June 2026. The AMLA revision and certain duties for advisers take effect on 1 October 2026. Open source
[9] FINMA – Guidance on the revision of the AMLA and AMLO as of 1 October 2026
Concerning the revision as of 1 October 2026; accessed on 6 October 2026. Inclusion of certain advisory services, particularly real estate and non-operating legal entities. Open source
[10] Court of Justice of the European Union / EUR-Lex – C-305/05, Ordre des barreaux francophones et germanophone and Others, ECLI:EU:C:2007:383
26 June 2007. Paras. 33–35 (certain transactional services, assistance relating to legal proceedings and the right to a fair trial; no examination of Double-Blind Escrow). Open source
[11] Federal Supreme Court – BGE 135 II 145 (2C_504/2008 / 2C_505/2008)
28 January 2009. Consid. 9.1 (conflicts of interest and dual representation). Open source
[12] Courts of the Canton of Lucerne – Lawyers’ professional law and ethics
October 2025. Sections on Art. 12 letters a–c BGFA and Art. 13 BGFA. Open source
[13] LINDEMANNLAW – Escrow Services
No publication date stated; accessed on 6 October 2026. The firm’s own service profile and restriction to situations specific to legal practice; no independent confirmation of a particular number of completed double-blind transactions. Open source
[14] Markus Vischer / Lucas Hänni, AJP/PJA – M&A standards for real estate purchases too: a model contract
April 2015. P. 630, section 3.3 and footnotes 17–19 (escrow, securing warranty claims, purchase price retention and interaction between the contracts). Open source
[15] FINMA – Information for providers of services in the fintech sector
No publication date stated; accessed on 6 October 2026. Assessment of AMLA applicability and licensing requirements before commencing activities. Open source
