Our Terms & Conditions
Example Procedures for processing Orders:
We are pleased to follow a proven procedure which is required by the Seller, and is generally not negotiable - as a rule we will not diverge from it. We also believe the procedure is fair to both the Buyer and the Seller.
We act as a facilitator/mandate introducing Serious REAL
Buyers to REAL Suppliers.
Initially we negotiate the terms and procedures with the Buyer
to achieve an acceptable LOI or ICPO,
with every detail correct as required by the Supplier. We may
have to ask you to make minor amendments to your initial LOI or ICPO to
reach this position. It should be noted that all LOI
or ICPO should be on Buyer’s letterhead
and have complete details of the Buyer’s requirements
including full banking coordinates and details of his Confirming
Bank. This will include details of the product and specification
required, total quantity and period of delivery, destination
port, target price per metric ton and validity of the LOI or ICPO in
days after being issued. Once an acceptable LOI or ICPO and
BCL are received, we will pass the deal over
to a selected Supplier and/or Manufacturer who will then contract
directly with you, the end Buyer.
Procedures obviously will vary with the various commodities, but please note our base operating procedure:
1. In response to the Buyer’s initial enquiry, we provide a Soft Offer for the Buyer’s consideration.
2. Buyer will Issue an ICPO (Irrevocable Corporate Purchase Order) with Buyer’s Name, Full Address and Full Bank Coordinates issued on Letterhead with Stamp, Signed and Sealed by Buyer along with NCND/IMFPA completed and signed by Buyer, Buyer Mandate and all intermediaries and passed to Sell Side for completion.
In some cases the Buyer may be required to issue a BCL with wording that details the contract quantity, contract value and monthly revolving amount, which confirms the Buyer’s ability to finance the deal.
3. Seller after receiving Buyer’s ICPO with will issue a Draft Contract to the Buyer. Buyer makes changes by red lining the document (no removal of terms) and additions are to be placed in RED. Buyer verifies Signs, seals and returns to the seller.
4. Seller will check and verify that all are acceptable and will sign the final contract and return to the buyer;
5. Buyer verifies that the contract is final and approved, signed, and sealed by the seller;
6. Within 5 (five) banking days the final contract must be returned to Seller, signed and approved, by buyer.
7. Buyer issues non operative payment instrument approved by Seller’s Bank.
8. Seller issues 2% PB which makes the Buyer’s payment instrument operative.
9. The rest follows as specified in the contract.
SWIFT CODE – TT SERVICE:
SWIFT Code (also known as SWIFT-BIC, BIC code, SWIFT ID or SO 9362) is a standard format of Bank Identifier Codes approved by the International Organization for Standardization (ISO). It is the unique identification code of a particular bank. These codes are used when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks.
The most common acceptable method of providing POF is via SWIFT service Bank to Bank such as MT799, MT999. Most USA banks will not issue POF by this method because they can be held legally responsible.
PAYMENT
The Buyer’s payment method can greatly affect the price presented by the Seller; generally the more secure the payment the cheaper the price. Sellers are looking for more security in the payment method because of the high percentage of drop outs of Buyers paying by ordinary DLC, because this payment does not guarantee continuity.
The payment instrument acceptable to the Seller can vary considerably with each Seller and also with the particular commodity being traded – some Sellers are happy to accept IRDLC revolving for one month’s shipment value whilst other Sellers, such as Scrap merchants, may require a BG as security deposit held in trust for one or even two months shipment value as surety against the buyer dropping out of the contract.
Buyers drop out? To secure the best price, a buyer would contract a quantity up to 12 times more than the quantity they actually required; they pay for 1 or 2 shipments and then drop out after having obtained the benefit of a price offered for the much larger quantity. Also buyers would drop out of a contract because they had since found a seller with a cheaper price, leaving the initial Seller with ships on contract and product stationary at the loading port incurring demurrage costs.
For similar reasons, contracts for sugar may require mandatory payment by FFBG with some sugar Sellers. Nevertheless our Seller’s payment options will always be clearly outlined in our Soft Offers and are almost always non-negotiable.
Our Payment Options
ALL payment instruments must be
issued
by a “Top 50 Prime World Banks”; please
check our website for latest Top 50 list.
CONFIRMED, Irrevocable Letters of Credit - gives the seller the greatest protection, since sellers can rely on the commitment of two banks to make payment. The Confirming Bank will pay even if the Issuing Bank cannot or will not honor the draft for any reason whatever. However in accordance with the additional risk assumed by the banks, Confirmed Irrevocable Letters of Credit are more expensive than unconfirmed Letters of Credit.
The three (3) main payment options are:
- IRDLC + BG
Unconditional Bank Guarantee for one month’s
shipment value held as surety and then monthly payment by
Irrevocable, Transferable or Non-Transferable, Auto-Revolving
for one month’s shipment value, Documentary Letter of
Credit, Issued
by (or Confirmed by) a Top 50 Prime World Bank, 100% at
sight Port of Loading.
There are other acceptable payment methods and also variations of these payment methods above applicable to certain commodities that our Sellers may accept, however these will be advised in our Soft Offers.
Please clearly define your preferred payment when making your application for quotation.
PROCEDURE
Once we have given you a Soft Offer we require an LOI or ICPO
from the Buyer with wording that mirrors the Soft Offer and
which must include Buyer’s full banking coordinates.
To avoid any dispute regarding commission split at
a later date we also require the
Buyer Mandate and all intermediaries to complete and sign an
NCND/IMFPA and pass it to Sell Side for completion.
The Seller then issues an FCO or Draft Contract to the Buyer
for acceptance.
PROOF OF FUNDS:
Our Sellers always require POF (Proof of Funds) however this will vary as to when and how this is provided. POF can be offered in a variety of ways.
SOFT PROBE:
Whilst permission for a Soft Probe may be offered in the ICPO
or LOI is nice, it is generally not acceptable as it is not
a guarantee of any commitment to the contract in hand.
BANK COMFORT LETTER:
A BCL should list a description of the goods, the quantity,
the total contract value and the monthly revolving amount expressed
in US Dollars. A BCL (Bank Comfort Letter) is becoming
less acceptable to both the Seller and the Buyer.
Very few USA Banks will issue BCLs because of previous instances
where many Sellers have successfully sued the Buyer’s
bank for failure of the Buyer to provide the payment.
Also BCLs have been fraudulently designed by Buyers and this
has made such documents in doubt.
SPA CONTRACT №: SELLER’S COMPANY NAME: (BUYER’S COMPANY NAME):
SELLER’S TRANSACTION CODE: ______________ BUYER’S TRANSACTION CODE: ___________.
(PRODUCT AND PRICE BREAKDOWN)
PRODUCT / QUANTITY / PRICE: ___/____/ MT Delivered over 60 Months USD ___.__ per MT Gross/USD ___.__ per MT Net DATE / DISCHARGE PORT DATE: _______ CIF Port, Country.
FIXED PRICE WITH ANNUAL PRICE REVIEW
Seller Initials Buyer Initials Page 1 of 9 IRREVOCABLE MASTER FEE PROTECTIION AGREEMENT (IMFPA) & NCNDA
INTERNATIONAL CHAMBER OF COMMERCE (I.C.C 400/500/600)
NON-CIRCUMVENTION, NON-DISCLOSURE & WORKING AGREEMENT (NCNDA)
IRREVOCABLE MASTER FEE PROTECTION AGREEMENT (IMFPA) Contract Code : |
CONTRACT №: : |
Seller’s Transaction Code : |
Seller’s Code : |
Buyer’s Code : |
Commodity : |
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Terms: |
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Product Origin : |
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Contract Quantity : |
30,000,000 MT (500,000 MT x 60 months) rolling over after annual price review |
Contract Period : |
60 MONTHS |
Payment Term : |
Seller’s Name : |
Seller’s Side Representative : |
Buyer’s Name : |
Buyer’s Side Representative : |
Contract Released Date : |
DATE: |
