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Extracting as much trapped as possible - the Maersk way

Julia Persson, from the corporate treasury department at A.P. Moller-Maersk, in her presentation at the Eurofinance Conference in Rome in October 2011 described how they extract as much trapped cash as possible from restricted countries. They have a dossier on each of the top 10 countries as what can and cannot be done to extract trapped cash in each country, and continuous dialogue with to the local businesses on how to minimise trapped cash.

Maersk uses a range of techniques to extract trapped cash. In one country where domestic multi-entity cash concentration is not feasible for foreign currency due to FX loans being subject to 3% tax over principal, they accumulate locally generated income and transfer it to the parent once a year as a dividend. This is combined with a combination of cross-border ZBA and notional cross-currency cash pool. Thus, the cash is available for treasury without leaving the subsidiary's bank accounts.


Neat solution. Doesn't work everywhere. Maersk uses a country by country approach.

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Cash & Liquidity Management
Releasing Trapped Cash