BUYING PROCEDURES FOR PETROLEUM PRODUCTS
The letter of credit is a legal binding agreement between an importer and a foreign seller. The shipper automatically gets paid once they have met all the terms of the L/C. The buyer’s bank (issuing bank) sends the funds to the seller (advising bank) within the terms of letter of credit.
Procedures
1. Seller provides: Personal proposal + Sample LOI.
2. Buyer provides: filled LOI. LOI - it letter of intent, which inform for purchase of goods. Provides Buyer on official letterhead with company details, stamp and signature, which not correspond this requirements, are considered as invalid.
3. Seller provides: Soft Corporate Offer (SCO) + Sample IСPO.
4. Buyer provides: filled IСPO and RWA or BCL.
IСPO - it irrevocable corporate purchase order commodity, with full legal responsibility.
RWA or BCL - this is a document which is issued by the Buyer’s bank.
The bank confirms that their client has the sufficient funds in their possession and is ready, willing and able to engage in the contract.
* RWA or BCL - gives grounds to think to the seller that buyer has serious and real intentions on purchase sugar, all other is an insignificant talk which takes away time of seller!
5. Seller provides: filled Contract on signature of buyer.
6. Buyer provides: signed Contract in during 48 hours. Sends Statement and Contract to release SWIFT (one month cost). Buyer Bank confirms Seller's Bank issuance SWIFT, time to 3 (three) working days.
7. Seller's Bank provides POP (documentation) and 2% Perfomance Bond (one month cost) time to 15 days and sends buyer.
8. Shipping and Forwarding will begin at once according to contract.
9. Seller + Intermediary: conclude contract NCNDA (nondisclosure) & IMFPA (commission), after provides SWIFT Buyer's Bank.
DOCUMENTS: -Bill of Lading -Packing List -Certificate of Weight and Quality by SGS, Bureau Veritas or other international Standard Certification Company. -Export Declaration -Commercial Invoice -Certificate of Origin -Phytosanitary Certificate -Cargo Insurance
10. Upon confirmation of buyer’s payment Instrument (BG) Seller shall re-assign the Allocation Ownership to the buyer and sign Charter Party Agreement with the Shipping Company responsible for the transportation of the product to buyer’s nominated destination port, And lodge bank to bank the executed SPA & CI along with:
-CHARTER PARTY AGREEMENT
-TANK RECEIPT
-BILL OF LADING
-SGS REPORT
-VESSEL Q88 AD OTHER SHIPPING DOCUMENTS
-COPY OF INSURANCE
CERTIFICATE OF OWNERSHIP
AUTHORIZATION TO SELL
11. Shipment and delivery commences as scheduled.
12. Within 2 working days of Vessel arrival, buyer release full payment via MT103 after CIQ or SGS at the destination port.
13. Seller releases payment to all intermediaries within 24 hrs of payment as mutually agreed in the IMFPA.