It is important that all our clients and stakeholders understand our standard procedures below which may change from time to time and in exceptional circumstances.
- We will only deal with legitimate end buyers who are ready to provide documentation
- We do reciprocate with Proof of Funds (POF) but only between Principals
- SBLC, LC payment mechanisms are acceptable.
- Only one month Revolving Documentary Letter of Credit (RDLC) are accepted.
- Transfer of title is made by seller’s bank to buyers bank only.
Proof of Product (POP): A Proof of Product is often requested by inexperienced clients who believe it will give them some guarantee of the existence of the product and ability of the supplier to deliver. Please note that many POPs can be FAKE. Product Passport and other documents are only transacted Bank-to-Bank. Letter of Intent with banking coordinates on End buyer’s letterhead along with Company Profile is the only way we initiate discussion with buyers. Short of that, no need to engage Our Guarantee If at the conclusion of the one-day Export Readiness Assessment you haven’t seen the value we can bring, then the day will be free (excluding charges for disbursements such as travel and accommodation). Please note that the walk-away decision is final and irreversible meaning we will not engage with you further at any point in the future.
Tank to Ship
- Buyer send and sign the FCO and the accepts officially sellers’ terms and procedures and issues ICPO (irrevocable corporate purchase offer) and CP (company profile ) and buyer valid scanned international passport copy and company registration certificate.
- Seller issues Draft Contract for buyer to countersign upon acceptance in word format.
- After Seller and Buyer sign the Sale/Purchase Contract,
- Contract is signed and sent via email; hard copies through post mail delivered.
- Buyer’s bank issues proof of funds and draft LC
- Seller responds with proof of product (set of documents that serve as a Seller’s proof that the product is real) and his bank approves LC draft.
- Buyer’s bank issues LC pre-advice to become operative when the 2% performance bond is received.
- Seller’s bank issues 2% PB to activate LC.
- Buyer will send vessel Q88 (Questionnaire 88) and give the ETA (Expected Time of Arrival) to the Seller port
- Seller and buyer will coordinate shipping at all levels including the ETA (expected time of arrival) of the Vessel.
- Seller pays intermediaries involved within 48 hours after receipt and confirmation of the product payment.
- Upon satisfaction by Buyer, both Buyer and Seller sign contract for month delivery with rolls and extension
- Buyer and Seller follow procedures as per the contract.
- PAYMENTS TERMS Irrevocable documentary letter of credit to be issued, confirmed by a first international class western bank prior to the expected delivery period which will be mutually agreed between both contractual parties a wording, format acceptable to seller bank payable against the full set of loading documents at sight.
Tank to Tank
1. Buyer issues ICPO
2. Seller issues Commercial Invoice (CI) for the available quantity in the Seller’s Storage Tank to the Buyer. Buyer signs and returns the CI to the Seller.
3. The Seller submits to Buyer the following Partial POP documents:
- a) Tank Storage Receipt (TSR) with valid barcode & Coordinates where the product is stored at Rotterdam Port
- b) Injection Report
- c) Authority to Verify (ATV)
- d) Commitment to supply
- e) Unconditional Dip Test Authorization (UDTA)
- f) Fresh SGS Report less than 48 hours old
- g) Authority to Sell and Collect (ATSC)
4. Buyer is given seventy-two (72) hours to verify the product either utilizing
- a) the ATV and the fresh SGS Report
- b) perform Dip Test at the Seller’s Tank at Buyer’s expense if needed. The port authority in Rotterdam requires a tank farm endorsed TSA, essentially a Notice of Readiness (NOR), to be provided to enter the facility to perform the Dip Test. This tank farm endorsed TSA at Buyer’s expense.
5. Within forty-eight (48) hours after successful product verification and/or Dip Test, Buyer issues 100% SWIFT GPI UETR MT-103 payment for the total cost of the product to the Seller. Within the same prescribed timeline and after receipt of the UETR, Buyer also submits their TSA, TSR and Buyer’s Tank Farm NOR (tank to tank injection).
6. Within twenty-four (24) hours after receipt of Buyer’s TSR, TSA and NOR, Seller injects the product into Buyer’s storage tanks in Rotterdam at Seller’s expense.
7. Seller transfers the title and issues the remaining documents.
CRUDE OIL AND OIL REFINERED PRODUCTS TRADING PROCEDURE FOB/CIF BASIS
- Buyer isues ICPO and FCPO to Seller.
- Buyer send signed and stamped FCO together with ICPO, passpory Copy, certificate of incorporation, TSA and POF
- Buyer signs Commercial Invoice and returns to seller and send tranferable, Irrevocable , Operative, issued or confirmed by a top 50 world bank payment 100% by MT760 issued for value of monthly quantity at loading port to the seller bank.
- Seller issues signed and properly completed unconditional DIPTEST authorization letter signed by Buyer and Seller.
- Seller issues PPOP documents, DTA attached and Seller’s Tank Storage receipt to Buyer. Buyer orders SGS to conduct DIP TEST of the product in Seller’s Tank at Buyer’s expense.
- Buyer, after receiving verifiable and acceptable dip test results, will provide a signed pre-advice from their bank.
- Upon successful DIP TEST and receipt of the pre-advice from the Buyer’s bank, Seller injects the fuel into Buyer’s tanks and Seller submits the full injection Report to the Buyer
- Upon receipt of all required documents, Buyer makes 100% payment by MT103 wire transfer for the total product and Seller pays Seller/Side and Buyer pays Buyer/Side commission to all intermediaries involved in the transaction within 48 hours after Buyer’s payment.
- Seller issues Draft SPA to Buyer to review for R&E monthly deliveries.
- Buyer reviews and approves SPA and issues Bank Guarantee irrevocable, non- transferable, auto-revolving for 12 monthly shipment values, and documentary or standby letter of credit valid for length of contract and for value of each lift per schedule. Buyer pays after DIPTEST by MT103 wire transfer on each monthly quantity.
- The subsequent delivery shall commence according to the terms and conditions of the contract .End Seller contacts the End Buyer’s tank farm or vessel (whichever is applicable) and verifies the reliability and POF.
Tank to Tank LNG Zeebrugge
1. Buyer submits an ICPO to Seller with Seller's procedures
2. Seller issues Commercial Invoice to Buyer. Buyer signs and returns Commercial Invoice with Tank Storage Agreement to Seller.
3. Seller issues the below listed PPOP:
- Product Passport (Product Analysis Report}
- Certificate of Origin of the Product directly from the Ministry of Energy of the respective jurisdictions (UAE, Oman, Uzbekistan
- Commitment Letter to Supply from the Seller and the respective refineries
- ATV - via email or phone
- Tank to Tank Injection Agreement (TTIA)
- Unconditional Dip Test Authorization (UOTA)
4. The buyer sends the TTIA to the Buyer's Tank Farm. The Buyer's Tank Farm signs and forwards the TTIA along with the Tank Storage Receipt (TSR) to the Seller's Tank Farm.
5. On Seller's account, Seller provides Buyer with Dip Test by SGS Report or equivalent laboratory, Injection Report.
6. NCNDA/IMFPA (Non-Circumvent. Non-Disclosure Agreement), Irrevocable Master Fee Protection Agreement. Also, banking details for this transaction for payment to Refinery and Intermediaries etc., are completed and signed.
7. Seller proceeds Tank to Tank injection and provides Buyer with completed injection report of DIP TEST by SGS, or equivalent petroleum laboratory of product injected into Buyer's tank.
8. Upon completion of the first lift, Buyer, within One (1) banking day, pays the Seller for the total cost of product injected into Buyer's tank by SWIFT MT103 GPI UETR, SWIFTNet Instant or SEPA Instant, as well as commissions to intermediaries involved, to Buyer's side involved in the transaction as per signed IMFPA, and proceeds with the signing of the contract with the Buyer. Upon receiving payment for the total product injected into the Buyer's tank and the commissions to intermediaries. The seller issues title ownership to the Buyer and all exportation documentation required of the Buyer for this transaction.
9. Deliveries commence as per contract
- Buyer will not be responsible to pay any fees to enter the tank farm or conduct the dip test other than to pay the testing company (ie: Intertek, SGS, etc.) additionally the Seller will instruct the tank farm to assist the Buyer with any reasonable request in conducting the dip test.
- Buyer will communicate directly with Seller once commercial invoice is issued.
- Seller must -if the payment is done in USD- use top non-sanctioned banks from non-sanctioned countries -according to the sanction list of USA-. If the payment is done in Euro, the European sanction list will apply.
STANDARD INTERNATIONAL COMMERCIAL TERMS
Incoterms 2010. International Commercial Terms (Incoterms) provides the international standard for international sales and purchase contracts (cross-border transactions) and sets the rules for interpreting the international trade terms. The term used (e.g., FOB or CIF) relates to the specific rights and obligations of the parties to a contract of sale with respect to the delivery of goods sold.
The use of Incoterms serves to protect the interest of the buyer and the seller by managing risks in case of loss, by allocating transport and insurance costs between the parties, defining responsibility for customs formalities, minimizing disputes in the absence of well-defined sales contracts, and supplementing international sales contracts. It defines the roles and responsibilities as to the following:
Delivery (where and when the seller fulfills obligation to deliver/point of delivery) Documents (who provides what documents, whether manual or electronic) Risks (who bears the risk of loss or damage at any point of transit / transfer of risk) Costs (who pays for what)
The trading term used will define which party will pay for the insurance, freight or transport costs and, in case of loss or damage to the goods, which party will claim against the insurance. Below are some pointers when using Incoterms:
Purchase a copy of Incoterms 2010 from International Chamber of Commerce. Specify the term applicable to prevent misunderstandings and possible conflicts. Study the rights and obligations outlined in each term; make sure each party agrees to the rights and obligations provided in the term.
Some of the terms refer exclusively to a specific mode of transport. FAS, FOB, CFR and CIF refer only to water transport while the rest apply to any mode of transport.
Do not change or add to the duties or obligations provided in the term. If there are changes to any duty or obligation provided in the term used, this must be agreed upon and put into writing. Better still, include the changes in the standard sales contract.
Confirm and verify the applicable term against the terms and conditions in the sales contract. In case of conflict, confirm with the trading partner that the contract prevails over the term used.
Inform the bank and insurance company of the term used to notify them of the rights and obligations of the parties.
The term used will determine the agreed price for the goods sold and the costs to be incurred or paid by the buyer.
The term used shall determine the taxable value to be declared to customs at the port of destination.
IMPORT AND EXPORT TERMS
When transacting across international borders. Importers need to plan how they import and need a minimum understanding of the following: process and risks in selecting suppliers abroad, payment terms and arrangements (e.g., letter of credit), role of forwarders and customs brokers, and basic import rules and regulations.
It would of course take some time to have a working knowledge of the whole import and export process and the alternative for traders is to hire an import/export specialist with proper experience and related training.
Ordering goods overseas will require the assistance of a freight forwarder. The role of the forwarder is to ensure that goods are properly packed, loaded and transported from the warehouse of the supplier, transferred to loading docks of shipping lines or airlines, unloaded at the port of destination, and finally delivered to the buyer. The forwarder will assist the importer in documenting the whole process. Most forwarders also provide customs clearance service. The importer may hire a service provider that will include forwarding, customs clearance and trucking into its services. Alternatively, the importer may hire a separate forwarder, customs broker and trucker.
It is imperative for importers to look at the track record and integrity of service providers. A good customs broker should ensure customs and trade compliance. Failing that, importers are at risk of incurring additional costs or failing to release their goods in time.
These developments now require that importers be responsible for ensuring the completeness and accuracy of declarations to customs and for compliance with trade regulations. In addition, importers are required to keep import and related business records for customs audit purposes.
Most traders look at the import process as a logistics process and as such, there is less focus on ensuring compliance with trade and customs regulations. When confronted with compliance issues, many importers hire “fixers” to resolve their issues. The main concern with short cuts is that the problem is only solved temporarily; the same issues may haunt the importer in the future especially when there is fraud involved and when a customs audit is conducted.
Importers therefore must always prioritize compliance with trade and customs rules even if doing so may result in delays in the initial stage of the import process. Importers must always prepare and plan properly. Non-compliance may result in goods being confiscated by customs, delayed releases and costly storage charges, or imposition of hefty fines and penalties.
An emerging need for corporate governance will involve the internal provision for a trade compliance and record-keeping system and a customs broker management system. A trade compliance and record-keeping system is basically a set of procedures and controls applicable to concerned units of the company (e.g., import, finance, transport, etc.) and to third-party suppliers (e.g. customs brokers and freight forwarders). This system will include periodic compliance and risk assessment of the company’s import operations and should provide procedures and controls for maintaining electronic and manual records. A customs broker management system will address the logistics requirements of the company and the need for compliance with customs and other trade regulating agencies.