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Transaction Procedure

The document outlines several CIF and FOB transaction procedures for the purchase of oil products. 1. For CIF transactions, the buyer issues a purchase order and signs a contract provided by the seller. The seller provides proof of product and the buyer's bank sends payment. The seller then provides shipping documents and the product is delivered. 2. For FOB transactions, procedures include the buyer inspecting product in the seller's tanks and paying for it directly, or depositing funds in an escrow account before releasing payments and taking ownership of the product. 3. Key steps common to many procedures include the seller providing a commercial invoice, quality documents, and title transfer documents, and the buyer making inspections and

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795 views5 pages

Transaction Procedure

The document outlines several CIF and FOB transaction procedures for the purchase of oil products. 1. For CIF transactions, the buyer issues a purchase order and signs a contract provided by the seller. The seller provides proof of product and the buyer's bank sends payment. The seller then provides shipping documents and the product is delivered. 2. For FOB transactions, procedures include the buyer inspecting product in the seller's tanks and paying for it directly, or depositing funds in an escrow account before releasing payments and taking ownership of the product. 3. Key steps common to many procedures include the seller providing a commercial invoice, quality documents, and title transfer documents, and the buyer making inspections and

Uploaded by

greg
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CIF TRANSACTION PROCEDURE

1. Buyer issues ICPO must be with buyer company letterhead.

2. Seller issues Draft Contract (open for any amendments) to Buyer. Buyer signs, seals and
returns the Draft Contract to Seller for final endorsement. Seller gives Partial proof of
products.

(A) Seller Irrevocable Commitment to Supply

(B) Statement of availability of product

(C) Certificate of origin

(D) Commercial invoice for the first value shipment

3. Within 7 banking days, Buyer’s bank sends Irrevocable Operative SBLC via MT760 or DLC
via MT700 according to seller’s fiduciary bank verbiage to seller nominated fiduciary
offshore bank account for first month shipment. Should buyer fail to issue payment
instrument within 5 banking days, buyer will make cash deposit of $320,000 USD by TT wire
transfer for security guarantee to enable seller charter vessel and commence shipment, and
this payment will be deducted from the total cost of product after inspection at discharge
port, or legal action will be taken against buyer for default.

4. Seller’s Bank issues Full POP Documents to the Buyer’s Bank alongside with 2%
Performance Bond (PB2%).

a) Copy of license to export, issued by the department of the Ministry of Energy, Russian
Federation.

b) Copy of Approval to Export, issued by the Ministry of Justice, Russian Federation. c)


Copy of statement of availability of the product.

d) Copy of the refinery commitment to produce the product.

e) Copy of Transnet contract to transport the product to the loading port.

f) Copy of the port storage agreement.

g) Copy of the charter party agreement to transport the product to discharge port. h) Copy
of Vessel Questionnaire 88.

i) Copy of Bill of Lading.

j) SGS Report at loading port.

k) Dip test Authorization (DTA) & ATB

l) NOR /ETA

m) Certificate of Ownership Transfer

n) Allocation Transaction Passport Code Certificate (ATPCC) by Ministry of Energy

5. Shipment commences as per signed contract delivery schedule and the shipment should
arrive at Buyer’s discharge port within 5-24 days. The SGS inspection will be borne by the
Seller at the loading seaport and Buyer at the unloading seaport.

6. Buyer releases payment to Seller by TT/MT103 upon receipt of the shipping documents and
confirmation of the Q&Q by SGS/CIQ at destination.
FOB Rotterdam or Houston procedures, so that you can choose which one you feel with more
confidence with, we are always ready to send the SCO or FCO according to the chosen
procedure.

FOB (DIP/PAY) TRANSACTION PROCEDURE A:

1. Buyer issues ICPO, and company registration certificate and data page of buyer’s Passport or

any I.D.

2. Seller issue Commercial Invoice (CI) &Warning Letter, buyer's signs and returns to seller with his TSA.
Seller will complete verification on the TANK FARM of the buyer before making their three (3) days tank
lease payment.

3. Seller leases and pays the buyer’s tank for 3 days for the Injection Process. Buyer pays his Tank Farm
Company for his two (2) days’ tank storage costs, (totaling a five (5) day TSR) after his Tank Farm Company
has received the payment from Seller Company three (3) days cost.

4. Seller issues Unconditional DTA and SGS report.

5. Buyer conducts Dip test on the product and makes the payment for the total value of product injected
into the tanks through the means of MT103- TT.

6. Seller pays all intermediaries involved in the transaction and subsequently monthly shipment continues as
per terms and conditions of the sales and purchase agreement contract between buyer and seller.
FOB PROCEDURE- SCROW ACCOUNT PROCEDURE B:

1. Seller issue soft offer (SCO).

2. ICPO with procedure, bank account, and data.

3. Seller issue CI for the total value for that the buyer must signature, the buyer signs and sends.

4. Seller sends receipt for deposit for the 5% of the value of the Commercial Invoice, for that the buyer
deposit in Escrow account to the seller.

5. Buyer and seller agree to allow the buyer to make the deposit in the seller's name in the Escrow account
conditioned to the Commercial Invoice procedure.

6. Seller delivers:

a) Title of the product in the name of the buyer.

b) Fresh SGS with ATV.

c) Unconditional DTA with access code to the terminal and immediate authorization of execution.

d) ATSC.

7. Buyer verifies all documents received with the seller's authorization and executes the DTA.

8. Buyer authorizes the bank to deliver the sum deposited in the Escrow account and issues the remaining
payment of the Commercial Invoice with MT103TT

9. Buyer delivers TSR and TTIA for injection

10- Seller pays commissions to intermediaries

11- They make a contract and deliveries continue.


TRANSACTION PROCEDURES C: FOB HOUSTON/ROTTERDAM TANK TO TANK

1 Buyer issues Corporate Profile and ICPO.

2 Sellers issues Commercial Invoice.

3 Buyer signs Commercial Invoice and payment invoice for allocation procurement 14,500 USD.

4 Buyer signs and return the commercial invoice along with the payment swift copy of the executed
allocation procurement fee.

5 Seller issues the following POP Documents to the Buyer:

A. Fresh Q&Q Report by SGS/Intertek/Saybolt not older than 48 hours. B. Authority to Sell and Collect
(ATSC).

C. Authority to Verify (ATV).

D. Active Tank Storage Receipt (TSR)

6 Buyer verifies the full POP documents and pays for dip test and SGS (or similar) report in seller’s tanks.
Upon successful dip test, buyer issues payment to seller by MT103 within 24 hours and issues their logistics:
TSR or CPA & G88.”

7 Seller issues Title Transfer Documents to the Buyer.

8 After successful trial lift Buyer and Seller enter into 12-month SPA contract.

9 Seller pays seller side commissions and Buyer pays buyer side commissions as stated on NCNDA/IMFPA
signed document
TRANSACTION PROCEDURES FOB ROTTERDAM (DIP/PAY)

1 The Buyer sends ICPO on receipt and acceptance of the Seller's SCO Offer

2 The Seller Issues Commercial Invoice (Cl) for the Buyer's endorsement, alongside with passport product
(Quality Certificate).

3 The Buyer signs and returns the Cl to Seller

4 The Seller issues the readiness to inject and UDTA with ATV, ATSC to Buyer.

5 The Buyer contacts the Seller Tank Administrator to execute the Quality & Quantity, and to register in the
Tank Farm Terminal prior to the Inspection.

6 Upon the Successful Dip Test Inspection in the Sellers Tank, the Buyer Submits NOR from his Shipping
Company and Seller Injects the product into the Buyer Vessel.

7 The Seller releases the Complete POP Documents to the Buyer, including the following documents:

• Resource Confirmation Letter (issued by the End-Refinery).

8 The Buyer issues 100% payment for the total product by MT103/TT Wire Transfer to the Seller.

9 The Seller transfers the product title with the complete POP Documents to the Buyer and pays the
commission to his Seller Side Intermediaries as per Master Fee Agreement and Buyer pays also directly his
Buyer’s Side intermediaries

10 The Seller issues annual (12 months) delivery contract for review and acceptance.

NOTE: The Buyer can negotiate with the Administrator of the Terminal of the Tank Park where the seller has
stored the product, according to Point No. 5, but to register at the Terminal of the Tank Park to have access
and be able to carry out the inspection of the product, the normal thing is a payment of US $ 32,000.00 to
the Terminal of the Tank Park, not to the seller.

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