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  PROCEDURES AND PAYMENT TERMS

Payment

Irrevocable, transferable, confirmed and revolving letter of credit payable 100% at sight upon presentation of original
shipping documents. Letter of credit issued from a top 25 prime bank.

SPOT D2  PROCEDURE ROTTERDAM & HOUSTON

We can also supply CIF ASWP on request or FOB Russian port subject to Buyer providing us with documents which will
include all licences and permissions from relevant authorities.
Note: We can obtain CIF SPOT from Russia if Cargo is not available in Rotterdam

 
 

 

Payment Procedures

1. Seller provides Soft FCO with Seller’s Bank coordinates, Terms/Conditions, Price and Procedure.
2. Buyer issues ICPO/LOI with permission for soft probe of accounts together with Bank Commitment Letter (BCL) –
a copy to seller by email attachment and the original by Swift to seller’s Bank. (Buyer may elect to issue Ready, Willing and
Able (RWA Swift MT799). The RWA must be Bank Commitment and responsibility.
3. Seller approves ICPO/LOI and seller’s bank verifies the BCL. On approval of BCL/ ICPO, Seller issues a Draft Contract.
4. IMFPA will be completed by representatives of Buyer and Seller.
5 .Buyer signs, seals and returns Contract to Seller who countersigns, seals and return a copy of the document to the buyer.
Both parties lodge a copy of the contract with their respective Bank.
6 .Seller’s Bank issues confirmation of the POP to buyer’s Bank.
7. Within 2 International banking days, Buyer’s bank issues conditional payment order MT103/23.
8. Seller presents full set of POP documents and Ownership title at counters of Buyer’s Bank.
9. Upon receiving the ownership title and pertaining documents Buyer’s bank pays for 100 % of the value of the commodity
by SWIFT wire transfer (MT103) directly to the Seller’s designated bank account within 2 banking days.
10. Lifting of the D2 commences.

Seller A
1. Buyer issue Irrevocable Confirmed Purchase Order (ICPO) with full banking details and soft probe or current  BCL 
2. Seller issue Draft Contract on firm Terms and Conditions to the buyer.
3. Buyer’s bank shall issue and swift the Irrevocable and Unconditional Letter of Credit (TDLC) Revolving for the entire contract with one month cargo value OR Irrevocable and Unconditional Standby Letter of Credit (SBLC) Revolving for the entirecontract with one month cargo value with a validity period of one year and one day from the top 25 prime international banks within (03) international Banking days from the date contract was execute. TDLC or SBLC.  
4. Seller obtains Refinery Proof of Product (POP) and issue two percent (2%) Non-operative Performance Bond to the buyer via Swift transfer
to buyer’s bank after seller received, verified and accepted Buyer’s TDLC or SBLC. 
5. Buyer upon accepting and verified seller’s POP shall activate seller PB.
6. Delivery commences as per contract and mutual agreement.
Seller B
1. Buyer issues LOI
2. Seller issues FCO.
3. Buyer sends back signed/sealed FCO and issues ICPO.
4. Buyer's bank issue BCL to Seller's bank.
5. Seller's bank issues confirmation of POP to Buyer's bank.
6. Seller issues Draft Contract on firm Terms and Conditions.
7. Buyer's bank issue L/C to Seller's bank.
8. Seller’s bank issues Full POP to Buyer’s Bank
9. Seller's bank issue 2% PB to Buyer's bank.
10. Shipment per contract
Seller C
1 .Full Soft Corporate Offer issued by sellers mandate.
2. Buyer signs, seals and returns this soft offer with a LOI or ICPO
3. Draft contract issued by SELLER and any areas of interpretation needed are resolved by buyer and seller and final contract signed and lodged with respective banks.
4. Buyers bank sends via SWIFT RWA (MT799) to sellers bank or buyer issues/confirms the pre-advice from a top 25 World Bank
5. Original hard copies issued and exchanged via courier.
6. Seller issues POP documents and non-operative Performance Bond.
7. Upon receipt of POP and non-operative 2% Performance Bond, buyer establishes fully funded revolving DLC to activate the sellers Performance Bond
8. Seller issues Charter Party and delivery schedule .
9. Deliveries made in accordance with contract terms and conditions.
DRAFT OF "READY, WILLING AND ABLE"
RWA SWIFT MT-799

BANK REFERENCE
FROM BUYERS BANK:

DATE:
TO:

Bank Name                          
Bank Address                     
Account Name                     
Account  No. (€)                  
Sort Code                            
IBAN
Telephone                           
Fax                                     
Swift Code                        
Bank Officer                           

"WE, …………BANK, HEREBY CONFIRM, THAT OUR CLIENT, xxxxxxxxxxxxxx HAS THE FINANCIAL CAPACITY TO PAY FOR THE PURCHASE OF THE FULL ALLOCATION OF 5,000.000 METRIC TONS OF "RUSSIAN GASPOIL DIESEL (D2) L-0.02-62, GOST 305-82." FREIGHT ON BOARD BASED FOR A TOTAL AMOUNT OF THE CONTRACT (US$ XXX, XXX, XXX. 00) XXXX MILLIONS XXXXX HUNDRED AND XXXXX THOUSAND UNITED STATES DOLLARS

WE ……….… BANK WILL MAKE THE PAYMENT FOR THE FULL CONTRACTED QUANTITY OF 5,000.000 METRIC TONS OF "RUSSIAN GASPOIL DIESEL (D2) L-0.02-62, GOST 305-82." BY SWIFT WIRE TRANSFER (MT103) DIRECTLY TO THE SELLER’S DESIGNATED BANK ACCOUNT WITHIN 2 BANKING DAYS.

WE HEREBY CONFIRM OUR READINESS TO ISSUE CONDITIONAL PAYMENT ORDER MT103/23 UPON RECEIVING THE PROOF OF PRODUCT ON BANK TO BANK BASIS FROM THE SELLER.

SINCERELY, BANK SEAL


++++++++END DOCUMENT+++++++++++++
*** MUST BE ISSUED VIA SWIFT ***

BANK COMMITMENT LETTER (BCL)

Date:
To:
seller
(Name of Bank):
(Address of Bank):
Telex:
SWIFT:
Telephone number:
Fax number:

Name of account holder to be confirmed by seller

Bank Account No: To be confirmed by seller

Subject: Bank Commitment letter

Contract No:
Description:

We confirm that our client, ………………………………, is ready, willing and able to perform on the contract for the purchase of quantity xxx,000MT of D2 (product name) HSD-D2 Gasoil L-0.02-62 Gost 305-82 as per the Terms of the contract.

We undertake to issue Irrevocable, Conditional Payment Order MT103/23 as per the contract terms for the amount of US$ xxx on behalf of our client, ………………….. upon receipt of the confirmation of Proof of Product, on the above mentioned contract.

This is to inform you that we wait for confirmation of Proof of Products to open the payment instrument.

This letter can be verified and confirmed by bank to bank.

1) Bank officer name:

SWIFT NO.:
TEL NO.:
FAX NO.:
Signed and sealed

(Title) Authorized bank signatory

2) Bank officer name:

SWIFT NO.:
TEL NO.:
FAX NO.:
Signed and sealed

(Title) Authorized bank signatory

(ELECTRONIC SIGNATURES OF TWO BANK OFFICERS WITH NAMES, TITLES AND BANK SEAL)
SAMPLE TEXT of SWIFT MT-103

Date:
To:
BANK NAME :
BANK ADDRESS :
ACCOUNT NAME :
ACCOUNT NO. :
BANK OFFICER :
SWIFT CODE :
TEL NO Direct :
FAX NUMBER :

From :
Bank Name :
Bank Address :
Bank Account Holder :
SWIFT Code :
Bank Officer and Title :
TEL Number Direct :
FAX Number :
Agreement Number :

We, <name of the issuing bank>, on behalf of our client, <name>, hereby present our Conditional, Irrevocable, Assignable, Transferable and Callable cash-backed SWIFT wire transfer in your favor for the account of your client, _________________________, holding an account number: <number> for an Amount of USD430M (Four Hundred And Thirty Million United States Dollars).

This Conditional Irrevocable SWIFT is a binding payment commitment by us and we hereby undertake to wire transfer the said amount to you in favor of your client, upon receiving verifiable POP as per signed AGREEMENT No:

We hereby confirm that the funds are good, clean and cleared funds of non-criminal origin and are from a legal source.

This Conditional, Irrevocable, Divisible, Assignable, Transferable Callable cash-backed SWIFT wire transfer is valid for 15 banking days from the __ th day of ________, 2008 and until the __ th day of _______, 2008.

This is an operative bank instrument and is subject to the Uniform Commercial Code as it relates to bank credit instruments.

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