ON BEHALF OF THE SELLER, WHOM WE REPRESENT, OUR COMPANY RAW POLYMERS LTD. HEREBY STATES THAT SUBJECT TO A PURCHASE AND SALE AGREEMENT BEING FULLY EXECUTED, WE ARE PREPARED TO SELL REFINED CANE SUGAR AS PER THE SPECIFICATIONS AND UNDER THE TERMS AND CONDITIONS STATED HEREIN.
SPECIFICATION:
COMMODITY: REFINED CANE SUGAR ICUMSA 45 RBU
POLARIZATION: 99.8% MIN
ASH CONTENT: 0.04 % MAX
MOISTURE: 0.04% MAX
ICUMSA RATING: ICUMSA 45 RBU
SOLUBILITY: 100% DRY & FREE FLOWING
RADIATION: NORMAL CERTIFIED without presence of cesium or iodine.
COLOR: SPARKLING WHITE
GRANULATION: MEDIUM TO FINE CRYSTAL
CROP: LATEST CROP (2007, 2008)
COUNTRY OF ORIGIN: BRAZIL
PACKING & MARKING:
ALL SUGAR TO BE PACKED IN FIFTY (50) KILOGRAM NET WEIGHT IN NEW POLYLINED ETHYLENE AND POLYPROPYLENE BAGS, OR INTERNATIONALLY ACCEPTABLE EQUIVLENT.
QUANTITY:
AT SELLER’S OPTION TOTAL OF FIFTY MILLION (50,000,000) METRIC TONS. THREE MILLION SIX HUNDRED THOUSAND (3,600,000) METRIC TONS CAN BE SHIPPED PER YEAR WITH A POSITIVE OR NEGATIVE WEIGHT TOLERANCE TO A MAXIMUM OF FIVE PERCENT PER SHIPMENT.
PRICE:
USD $165.00 (HUNDRED AND SIXTY FIVE U.S. DOLLARS) PER METRIC TON CIF ANY “US NON-SANCTIONED” SAFE WORLD PORT.
CONTRACT PERIOD & DELIVERY SCHEDULE:
DELIVERY TO COMMENCE WITHIN TWENTY EIGHT TO FORTY FIVE (28 – 45) DAYS OF ACTIVATION OF BUYER’S FINANCIAL INSTRUMENT(S) AND FURTHER SUBJECT TO SHIPPING AVAILABILITY AND INFRASTRUCTURAL CONDITIONS AT THE BUYER’S DESIGNATED PORT(S) OF DISCHARGE. AVERAGE MONTHLY SHIPMENTS OF THREE HUNDRED THOUSAND (300,000) METRIC TONS MONTHLY IN MINIMUM TWENTY FIVE THOUSAND (25,000) METRIC TON VESSELS WILL CONTINUE THROUGH HUNDRED AND SIXTY SEVEN (167) CONSECUTIVE MONTHS OR UNTIL THE FULL QUANTITY IS SHIPPED.
INSPECTION:
SGS SHALL, AT LOADING PORT AND AT SELLERS COST, INSPECT THE RESPECTIVE SHIPPING VESSEL(S) AND SHALL ISSUE ITS CERTIFICATE OF:
- HOLD AND HATCH CLEANLINESS AND CERTIFICATE OF RADIOACTIVITY.
- QUANTITY AND QUALITY CERTIFICATE INDICATE THE RESULTS FOR THE INDUSTRY STANDARD TEST AND TALLY’S.
- WEIGHT PER SHIPMENT
- SOFT OFFER FOR BRAZILIAN SUGAR ICUMSA 45
- SPECIFICATION OF GOODS AS STATED IN THIS CONTRACT.
PAYMENT TERMS AND CONDITIONS:
THROUGH A FINANCIAL INSTRUMENT SATISFACTORY TO THE SELLER’S BANK AND BE IN THE FORM OF:
1.) AN IRREVOCABLE, NON-TRANSFERABLE, DIVISIBLE, CUMULATIVE DOCUMENTARY LETTER OF CREDIT (DLC), ISSUED / CONFIRMED BY A TOP 25 WORLD BANK OR A BANK ACCEPTABLE TO THE SELLER, FOR AN AMOUNT CORRESPONDING TO THE VALUE OF ONE (1) MONTHS SHIPMENTS, BEING US$ 57,000,000 (FIFTY SEVEN MILLION U.S. DOLLARS), REVOLVING MONTHLY ‘BY AMENDMENT’ UNTIL THE TOTAL QUANTITY OF SUGAR CONTRACTED FOR IS SHIPPED. AFTER EACH DRAWING THE AMOUNT UTILIZED WILL BE REINSTATED BY AMENDMENT AND THE EXPIRATION DATE SHALL BE EXTENDED BY AMENDMENT A MINIMUM OF FIFTEEN (15) CALENDAR DAYS PRIOR TO THE EXISTING EXPIRATION DATE.
THIS FINANCIAL INSTRUMENT IS TO BE LODGED WITH THE SELLER’S BANK WITHIN FIVE (5) INTERNATIONAL BANKING DAYS OF SIGNING THE HARDCOPIES OF THE CONTRACT AND WILL REMAIN WITH SELLER’S BANK, PAYABLE 100% AT SIGHT, BY FIRST PRESENTATION AT THE COUNTER OF SELLER’S BANK OF ALL REQUIRED SHIPPING DOCUMENTS FOR EACH VESSEL.
THE FOLLOWING FINANCIAL INSTRUMENT WILL ACCOMPANY THE DLC TO SECURE THE QUANTITY FOR THE QUOTED PRICE AND AS A GUARANTEE TO THE BUYER’S FULFILLMENT OF THE WHOLE CONTRACT:
2.) AN UNCONDITIONAL, UNENCUMBERED CASHED BACKED STANDBY LETTER OF CREDIT (SBLC) ISSUED OR CONFIRMED BY A TOP 25 WORLD BANK OR A BANK ACCEPTABLE TO THE SELLER, WRITTEN IN THE AMOUNT CORRESPONDING TO THE VALUE OF TWO (2) MONTHS SHIPMENTS WHICH, UNLESS DRAWN AGAINST INCASE OF THE BUYER BEING IN “BREACH OF CONTRACT” IS TO BE RETURNED AFTER THE LAST VESSEL UNDER THE CONTRACT IS SHIPPED AND PAID FOR.
ALL FINANCIAL INSTRUMENTS MUST BE ADVISED THRU SELLER’S BANK AND PAYABLE AT THE COUNTERS OF THE SELLER’S BANK.
THE FINANCIAL INSTRUMENTS ARE SUBJECT TO THE 2007 REVISION OF UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, UCP 600, (ICC PUBLICATION NO. 600).
SELLER’S PERFORMANCE BOND:
AFTER RECEIVING BUYER’S NON-OPERATIVE FINANCIAL INSTRUMENTS AS REQUIRED WITHIN THE CONTRACT THE SELLER WILL PROVIDE THE BUYER WITH A PERFORMANCE BOND WRITTEN IN AN AMOUNT EQUAL TO TWO PERCENT (2%) OF THE REPLACEMENT VALUE OF THE AVERAGE MONTHLY SHIPMENT. THE PERFORMANCE BOND SHALL BE ISSUED IN THE FORM OF A STAND BY LETTER OF CREDIT IN FAVOR OF BUYER AND WILL BE IRREVOCABLE AND VALID TROUGHOUT THE DURATION OF THIS AGREEMENT PLUS 30 (THIRTY) DAYS.
CONTRACT PROCEDURES:
1.) BUYER WILL COMPLETE THE BUYER’S BANKING INFORMATION, SIGN AND SEAL AND RETURN THE FULL CORPORATE OFFER TO THE SELLER.
2.) WITHIN THREE (3) BANKING DAYS THE SELLER WILL PROVIDE THE DRAFT CONTRACT TO THE BUYER FOR THEIR CONSIDERATIONS. THE BUYER MAY MAKE ANY CHANGES FOR THE CONSIDERATION OF THE SELLER AND EXCHANGE DRAFTS UNTIL A FINAL DRAFT CONTRACT IS FOUND ACCEPTABLE BY BOTH THE BUYER AND THE SELLER. UPON COMPLETION OF NEGOTIATIONS BETWEEN THE BUYER AND THE SELLER THE BUYER WILL SIGN AND SEAL THE DRAFT CONTRACT AND RETURN IT TO THE SELLER.
3.) WITHIN THREE (3) BANKING DAYS OF THE RECEIPT OF THE SIGNED DRAFT CONTRACT THE SELLER WILL SIGN AND SEAL AND RETURN THE DRAFT CONTRACT TO THE BUYER. THIS DRAFT CONTRACT WILL BE EXCHANGED BY WAY OF E-MAIL, FAX, AND OR ELECTRONIC FACSIMILE AND WILL REMAIN ENFORCEABLE UNTIL HARDCOPIES ARE EXCHANGED.
4.) WITHIN FIVE (5) BANKING DAYS OF THE SELLER RETURNING THE SIGNED AND SEALED DRAFT CONTRACT TO THE BUYER, THE BUYER’S BANK WILL SWIFT BY MT-799 THAT THE BANK ON BEHALF OF THEIR CLIENT IS RWA TO ISSUE THE BUYER’S FINANCIAL INSTRUMENT AS PER THE DRAFT TEXT OF THE FINANCIAL INSTRUMENT ATTACHED AND ASK FOR APPROVAL OF THE SELLER’S BANK.
5.) WITHIN FIVE (5) BANKING DAYS OF THE SELLER RETURNING THE SIGNED AND SEALED DRAFT CONTRACT TO THE BUYER, THE BUYER WILL PROVIDE THE SELLER WITH HIS PROPOSED SHIPPING SCHEDULE FOR THE REFINERY’S/SUPPLIER’S APPROVAL.
6.) THE SELLER’S BANK WILL RESPOND BY SWIFT MT-799 THAT THE BANK IS RWA TO ISSUE THE SELLER’S POP AND PB AND ACCEPTS / AMENDS THE TEXT OF THE FINANCIAL INSTRUMENT.
7.) THE SELLER WILL, UPON RECEIVING THE BANK’S APPROVAL OF THE DRAFT TEXT OF THE BUYER’S FINANCIAL INSTRUMENT AND UPON RECEIPT OF AND APPROVAL OF THE BUYER’S SHIPPING SCHEDULE BY THE REFINERY/SUPPLIER, PRODUCE SIX (6) SIGNED HARDCOPIES OF THE CONTRACT WITH THE ATTACHED ANNEX “A”, “B” AND “C” THEN SIGN AND SEAL EACH HARDCOPY AND EXPRESS COURIER THEM TO THE BUYER.
8.) THE BUYER, WITHIN TWO (2) DAYS OF RECEIVING THE HARDCOPIES OF THE CONTRACT WILL INITIAL EACH PAGE, SIGN AND SEAL EACH HARDCOPY AND EXPRESS COURIER FOUR (4) HARDCOPIES BACK TO THE SELLER.
9.) WITHIN TWO (2) BANKING DAYS OF THE BUYER’S RECEIVING THEIR SIGNED HARDCOPIES OF THE CONTRACT, THE BUYER’S BANK WILL SWIFT THE NON-OPERATIVE FINANCIAL INSTRUMENT IN THE APPROVED TEXT TO SELLER’S BANK.
10.) WITHIN FIVE (5) BANKING DAYS OF THE RECEIPT OF THE BUYER’S NON-OPERATIVE FINANCIAL INSTRUMENT THE SELLER’S BANK WILL SWIFT THE PROOF OF PRODUCT IN RESPONSE. THE FORM OF THE PROOF OF PRODUCT WILL INCLUDE THE FOLLOWING DOCUMENTS, IF APPLICABLE:
- LICENSE TO EXPORT ISSUED BY THE BRAZILIAN GOVERNMENT
- APPROVAL TO EXPORT ISSUED BY THE BRAZILIAN GOVERNMENT
- STATEMENT OF AVAILABILITY OF THE PRODUCT
- WAREHOUSE RECEIPT AND/OR
- REFINERY COMMITMENT TO PRODUCE THE PRODUCT;
- CHARTER PARTY AGREEMENT(S) TO TRANSPORT THE PRODUCT TO DISCHARGE PORTS.
11.) WITHIN FIVE (5) INTERNATIONAL BANKING DAYS AFTER RECEIPT THE ACCEPTABLE NON-OPERATIVE FINANCIAL INSTRUMENTS THE SELLER’S BANK ISSUES THE PERFORMANCE BOND TO THE BUYER’S BANK TO ACTIVATE THE FINANCIAL INSTRUMENTS.
12.) AT THE BUYER’S OPTION, THE BUYER AND SELLER TOGETHER WILL VISIT THE REFINERY AND/OR THE STORAGE FACILITIES. SHOULD THE BUYER CHOOSE NOT TO CARRY OUT THIS INSPECTION, THE BUYER WILL IMMEDIATELY NOTIFY THE SELLER IN WRITING OF HIS DECISION?
13.) SHIPMENTS WILL COMMENCE WITHIN TWENTY EIGHT TO FORTY FIVE (28 – 45) DAYS OF THE FULFILLMENT OF THE ABOVE PROCEDURES AND CONTINUE AS PER SHIPPING SCHEDULE. BUYER TO SUPPLY SHIPPING SCHEDULE FOR THE FIRST NINETY (90) DAYS SHIPMENTS AT THE SIGNING THE CONTRACT WITH SHIPMENT SCHEDULE TO BE ISSUED FORTY FIVE (45) DAYS AHEAD OF THE ACTUAL SHIPMENT.
PRODUCT DOCUMENTATION:
- SIGNED COMMERCIAL INVOICE
- CLEAN ON BOARD BILL OF LADING
- PACKING LIST
- SGS CERTIFICATE OF WEIGHT GRADE, QUALITY, AND CONDITION
- CERTIFICATE OF ORIGIN,
- PHYTOSANITARY CERTIFICATE
- LOADING / STOWAGE SUPERVISION CERTIFICATE
- CERTIFICATE OF RADIATION
- CROP CERTIFICATE
- SHIPPING COMPANY STATEMENT
ACCEPTANCE:
THIS SOFT OFFER IS OPEN FOR ACCEPTANCE UNTILL THE END OF MAY 2008. AFTER THAT TIME IT WILL BE CONSIDERED NULL AND VOID. YOUR ACCEPTANCE IS BY ISSUANCE OF AN ICPO (IRREVOCABLE CORPORATE PURCHASE ORDER) AND BCL (BANK COMFORT LETTER) AND ITS TIMELY RETURN TO OUR OFFICE BY EMAIL.
quarta-feira, 27 de julho de 2011
International Trading Terms (Definitions)
When trading internationally, there are many acronyms which feature in contracts, reports, orders, and descriptions. This document outlines commonly used terms and acronyms in international training.
AMEX – Amex is one of the three largest stock exchanges in the United States. Founded in 1842, it trades mostly mid size and small companies.
ASWP – An acronym which stands for ‘Any Safe World Port’ Generally sugar sellers offer delivery to any safe world port of the buyer’s choice, so this term comes up quite often in sugar trading.
BG – Stands for “Bank Guarantee“, which acts as insurance for the seller on a purchase. When a Bank Guarantee is in place, the bank is legally required to pay the seller in the event of the buyer defaulting on the sale.
BCL – “Bank Comfort Letter” also known as “Bank Capability Letter“. Similarly to the Bank Guarantee, a Bank Comfort Letter is a letter written to the seller from the buyers bank. It states that the buyer has sufficient liquid funds to cover the cost of the sale. A bank comfort letter is not however, an agreement to cover the seller if the buyer defaults on the purchase.
CAD- “Cash Against Documents“. This is a type of selling procedure where title documents are transferred upon receipt of payment.
CIA – “Cash In Advance“. As the name suggests, this is a type of sale where the full amount of the purchase price must be paid upfront.
CIF – A popular term in sugar trading, CIF stands for Cost, Insurance, and Freight. It means that the cost of shipping and insuring the sugar is covered by the seller.
Commodities Exchange – A body or association which sets out rules and guidelines to govern trading in a particular jurisdiction.
Commodity Futures Contract – This is a contract stipulating to an agreement to trade a set amount of sugar (or other commodity) for a certain price on a certain date. These types of contracts are useful for buyers who wish to secure sugar supply into the future but do not wish to risk price fluctuations affecting their bottom line, and sellers who wish to set and maintain a price for their sugar.
CPR – Cédula de Produto Rural, is a Portuguese phrase, which in translation means ‘Agricultural Product Certificate.’ The government of Brazil issues such certificates which offer discounts on large amounts of sugar (and other commodities) into the future. For the buyer, this means securing a government guaranteed sugar source at a low rate for a specified period of time. For the Brazilian Government it is a quick way to raise funds.
CPR – F – These are Agricultural Product Certificates (Cédulas de Produto Rural) which deal in sugar that has yet to be produced.
CPR – X – These are Agricultural Product Certificates (Cédulas de Produto Rural) which deal with sugar that is already in existence.
CWO – “Cash With Order” This term refers to a type of trading arrangement where the buyer makes payment at the time of placing the order, and both parties are then obliged to complete the transaction.
DC – Draft Contract.
FCO – “Full Corporate Offer“. This is a piece of documentation which specifies the nature of the product, and outlines all conditions associated with purchasing said product.
FOB – “Free On Board“. This is a term which declares that the seller must deliver the sugar to the buyer at a location of the buyer’s choosing on board a ship of the buyer’s choosing. In such instances, the seller’s obligations and responsibilities are said to have been fulfilled when the goods pass over the rail of the ship.
ICPO – “Irrevocable Corporate Purchase Order” Used by corporate entities, this document is an order to purchase a certain amount of sugar (or other commodity) of a certain type. This document outlines the terms and conditions which have been agreed upon by the seller and the buyer, and is sent to the seller by the buyer when the buyer wishes to place its order.
ICPO With Banking Coordinates – An ICPO where the buyer also authorizes the seller to do what is called a “soft probe” on the buyer’s accounts which is used to determine that the buyer has sufficient funds to make payment on the sale.
Soft Probe - is a confirmation method used by banks to verify funding for a seller from a buyer, conducted by the seller’s bank to the buyer’s. The Sellers Bank asks the Buyers Bank if the Buyer has enough funds to pay for the purchase.
ICUMSA – “International Commission for Uniform Methods of Sugar Analysis”. This is the international organization which standardizes testing of sugar across the globe.
ILOC – “Irrevocable Letter Of Credit” This is a letter provided from the buyer’s bank to the seller which guarantees that payment for goods will be made on time and in full. This letter cannot be canceled, and upon shipping of the goods, the seller with be paid.
LC / LOC – “Letter of Credit” A very popular device for guaranteeing payment to sellers, a letter of credit is issued by the buyer’s bank and provided to the seller. It guarantees payment to the seller when the seller’s obligations are met according to the terms of trade. Because sugar trading is done on a global scale and parties are not always able to reliably verify the reputation and trustworthiness of their potential trading partners, letters of credit are often requested by sellers.
LOI “Letter of Intent” – A preliminary document sent from the buyer to the seller indicating that the buyer would seriously like to enter into negotiations with the seller. This is not a legally binding contract, but it is often the first step in opening negotiations between a buyer and a seller.
MFPA – “Master Fee Protection Agreement“. This is a document outlining the terms for payment of third party brokers. In many cases sugar is not traded directly from the seller to the buyer, but through middle men who receive a cut of the proceeds from the sale as a commission. The master fee protection agreement protects these agents and ensures that they are paid.
MOG – “Minimum Order Quantity” Fairly self explanatory, the minimum order quantity is simply the smallest amount that a buyer can purchase from a seller.
PB “Performance Bond“ – This is a bond which guarantees the buyer that the seller will meet its obligations and supply the agreed commodities in accordance with the terms and conditions agreed upon. Issued by an insurance company, it acts as protection for the buyer.
POF – “Proof of Funds“. There are many ways in which a buyer can prove that it has the funds to cover the transaction, the most common of these being soft probes and bank comfort letters.
POP - “Proof of Product” means different things to different people. Basically it is some kind of proof that the seller really is in possession of the goods which are being sold. An example of POP can be an allocation letter, ownership certificate, SGS report of the stock, past Bill of Landing. You have to specify which is needed by the buyer and which could be provided by the seller.
SBLC – “Stand By Letter of Credit” This is a document which is issued from one bank to another bank and which confirms that the company has sufficient collateral to cover potential fiscal responsibilities incurred in a sale.
LC at Sight – A letter of credit that is payable once it and certain documents are sighted.
Soft Commodities – This term generally refers to commodities which are grown. Sugar is therefore considered a soft commodity.
SWIFT – “Society for Worldwide Interbank Financial Telecommunication” A global service which facilitates inter bank communication and transactions all over the world.
RWA – “Ready Willing Ability“. Means Ready to sign Willing to pay and your bank confirms that you are Able to meet the payment conditions. The RWA is ssued by the buyer’s bank.
AMEX – Amex is one of the three largest stock exchanges in the United States. Founded in 1842, it trades mostly mid size and small companies.
ASWP – An acronym which stands for ‘Any Safe World Port’ Generally sugar sellers offer delivery to any safe world port of the buyer’s choice, so this term comes up quite often in sugar trading.
BG – Stands for “Bank Guarantee“, which acts as insurance for the seller on a purchase. When a Bank Guarantee is in place, the bank is legally required to pay the seller in the event of the buyer defaulting on the sale.
BCL – “Bank Comfort Letter” also known as “Bank Capability Letter“. Similarly to the Bank Guarantee, a Bank Comfort Letter is a letter written to the seller from the buyers bank. It states that the buyer has sufficient liquid funds to cover the cost of the sale. A bank comfort letter is not however, an agreement to cover the seller if the buyer defaults on the purchase.
CAD- “Cash Against Documents“. This is a type of selling procedure where title documents are transferred upon receipt of payment.
CIA – “Cash In Advance“. As the name suggests, this is a type of sale where the full amount of the purchase price must be paid upfront.
CIF – A popular term in sugar trading, CIF stands for Cost, Insurance, and Freight. It means that the cost of shipping and insuring the sugar is covered by the seller.
Commodities Exchange – A body or association which sets out rules and guidelines to govern trading in a particular jurisdiction.
Commodity Futures Contract – This is a contract stipulating to an agreement to trade a set amount of sugar (or other commodity) for a certain price on a certain date. These types of contracts are useful for buyers who wish to secure sugar supply into the future but do not wish to risk price fluctuations affecting their bottom line, and sellers who wish to set and maintain a price for their sugar.
CPR – Cédula de Produto Rural, is a Portuguese phrase, which in translation means ‘Agricultural Product Certificate.’ The government of Brazil issues such certificates which offer discounts on large amounts of sugar (and other commodities) into the future. For the buyer, this means securing a government guaranteed sugar source at a low rate for a specified period of time. For the Brazilian Government it is a quick way to raise funds.
CPR – F – These are Agricultural Product Certificates (Cédulas de Produto Rural) which deal in sugar that has yet to be produced.
CPR – X – These are Agricultural Product Certificates (Cédulas de Produto Rural) which deal with sugar that is already in existence.
CWO – “Cash With Order” This term refers to a type of trading arrangement where the buyer makes payment at the time of placing the order, and both parties are then obliged to complete the transaction.
DC – Draft Contract.
FCO – “Full Corporate Offer“. This is a piece of documentation which specifies the nature of the product, and outlines all conditions associated with purchasing said product.
FOB – “Free On Board“. This is a term which declares that the seller must deliver the sugar to the buyer at a location of the buyer’s choosing on board a ship of the buyer’s choosing. In such instances, the seller’s obligations and responsibilities are said to have been fulfilled when the goods pass over the rail of the ship.
ICPO – “Irrevocable Corporate Purchase Order” Used by corporate entities, this document is an order to purchase a certain amount of sugar (or other commodity) of a certain type. This document outlines the terms and conditions which have been agreed upon by the seller and the buyer, and is sent to the seller by the buyer when the buyer wishes to place its order.
ICPO With Banking Coordinates – An ICPO where the buyer also authorizes the seller to do what is called a “soft probe” on the buyer’s accounts which is used to determine that the buyer has sufficient funds to make payment on the sale.
Soft Probe - is a confirmation method used by banks to verify funding for a seller from a buyer, conducted by the seller’s bank to the buyer’s. The Sellers Bank asks the Buyers Bank if the Buyer has enough funds to pay for the purchase.
ICUMSA – “International Commission for Uniform Methods of Sugar Analysis”. This is the international organization which standardizes testing of sugar across the globe.
ILOC – “Irrevocable Letter Of Credit” This is a letter provided from the buyer’s bank to the seller which guarantees that payment for goods will be made on time and in full. This letter cannot be canceled, and upon shipping of the goods, the seller with be paid.
LC / LOC – “Letter of Credit” A very popular device for guaranteeing payment to sellers, a letter of credit is issued by the buyer’s bank and provided to the seller. It guarantees payment to the seller when the seller’s obligations are met according to the terms of trade. Because sugar trading is done on a global scale and parties are not always able to reliably verify the reputation and trustworthiness of their potential trading partners, letters of credit are often requested by sellers.
LOI “Letter of Intent” – A preliminary document sent from the buyer to the seller indicating that the buyer would seriously like to enter into negotiations with the seller. This is not a legally binding contract, but it is often the first step in opening negotiations between a buyer and a seller.
MFPA – “Master Fee Protection Agreement“. This is a document outlining the terms for payment of third party brokers. In many cases sugar is not traded directly from the seller to the buyer, but through middle men who receive a cut of the proceeds from the sale as a commission. The master fee protection agreement protects these agents and ensures that they are paid.
MOG – “Minimum Order Quantity” Fairly self explanatory, the minimum order quantity is simply the smallest amount that a buyer can purchase from a seller.
PB “Performance Bond“ – This is a bond which guarantees the buyer that the seller will meet its obligations and supply the agreed commodities in accordance with the terms and conditions agreed upon. Issued by an insurance company, it acts as protection for the buyer.
POF – “Proof of Funds“. There are many ways in which a buyer can prove that it has the funds to cover the transaction, the most common of these being soft probes and bank comfort letters.
POP - “Proof of Product” means different things to different people. Basically it is some kind of proof that the seller really is in possession of the goods which are being sold. An example of POP can be an allocation letter, ownership certificate, SGS report of the stock, past Bill of Landing. You have to specify which is needed by the buyer and which could be provided by the seller.
SBLC – “Stand By Letter of Credit” This is a document which is issued from one bank to another bank and which confirms that the company has sufficient collateral to cover potential fiscal responsibilities incurred in a sale.
LC at Sight – A letter of credit that is payable once it and certain documents are sighted.
Soft Commodities – This term generally refers to commodities which are grown. Sugar is therefore considered a soft commodity.
SWIFT – “Society for Worldwide Interbank Financial Telecommunication” A global service which facilitates inter bank communication and transactions all over the world.
RWA – “Ready Willing Ability“. Means Ready to sign Willing to pay and your bank confirms that you are Able to meet the payment conditions. The RWA is ssued by the buyer’s bank.
Payment Options
Below are detailed payment options which you may choose from when submitting your LOI (Letter Of Intent).
BG 100% Payable Instrument – A Bank Guarantee which is irrevocable, transferable, and confirmed, covers the cost of the entire order, is payable in its entirety on sight with the presentation of shipping documents, and is issued by or guaranteed by a major world bank.
FFSBLC – Fully Funded Standy By Letter of Credit which is irrevocable, transferable, and confirmed, covers the cost of the entire order, is payable in its entirety on sight with the presentation of shipping documents, and is issued by or guaranteed by a major world bank.
FFRDLC – Fully Funded Revolving Documentary Letter of Credit. As with the other forms of payment, this should be irevocable, transferable, and confirmed. It should also be payable on sight at the presentation of shipping documents, and issued or guaranteed by a major world bank. FFRDLCs should cover the cost of the shipment, and should revolve for the length of the contract, however long that may be. You may elect to have monthly shipments, quarterly shipments, or shipments at some other time interval of your choosing. A BG (Bank Guarantee) may also be requested to ensure that the entire contract is fufiled.
TT/SWIFT – Telegraphic Transfer. You may also make payment for the entire amount via telegraphic transfer.
SWIFT MT103.23 – An irrevocable SWIFT payment instruction.
BG 100% Payable Instrument – A Bank Guarantee which is irrevocable, transferable, and confirmed, covers the cost of the entire order, is payable in its entirety on sight with the presentation of shipping documents, and is issued by or guaranteed by a major world bank.
FFSBLC – Fully Funded Standy By Letter of Credit which is irrevocable, transferable, and confirmed, covers the cost of the entire order, is payable in its entirety on sight with the presentation of shipping documents, and is issued by or guaranteed by a major world bank.
FFRDLC – Fully Funded Revolving Documentary Letter of Credit. As with the other forms of payment, this should be irevocable, transferable, and confirmed. It should also be payable on sight at the presentation of shipping documents, and issued or guaranteed by a major world bank. FFRDLCs should cover the cost of the shipment, and should revolve for the length of the contract, however long that may be. You may elect to have monthly shipments, quarterly shipments, or shipments at some other time interval of your choosing. A BG (Bank Guarantee) may also be requested to ensure that the entire contract is fufiled.
TT/SWIFT – Telegraphic Transfer. You may also make payment for the entire amount via telegraphic transfer.
SWIFT MT103.23 – An irrevocable SWIFT payment instruction.
Fraudes em Operações com Commodities de vários tipos
É fundamental dizer que operações com commodities (trading e futuros) acontecem todos os dias entre os operadores e traders profissionais e nas bolsas.
Existe porém toda uma série de operações envolvendo commodities e que não tem sustentação ou simplesmente, mesmo que parecendo plausíveis, não acontecem quando não são uma verdadeira fraude. Estas operações frequentemente envolvem soja ou açúcar, mas também café e outros tipo de commodities (madeira, carnes, couro, minérios, combustíveis e suco de laranja...).
O esquema clássico é você receber uma oferta de venda ou compra por uma quantidade muito grande de alguma commodity. Às vezes a oferta vem por escrito e até acompanhada por referências bancárias (quase sempre falsas).
A partir daí existem numerosas variantes. Nalguns casos a negociação vai até o fim, com assinatura de contractos etc ... e depois não aparece a mercadoria no momento da entrega ou de eventuais vistorias. Noutros casos o suposto comprador exige o pagamento de um "performance bond" (quantia depositada pelo vendedor para garantir a entrega) antes de emitir a carta de crédito ... o vendedor deposita o “performance bond”, a carta de credito não chega e o “performance bond” depositado é utilizado de forma indevida ou como garantia para outras vigarices do suposto comprador. Existem, em fim, as verdadeiras fraudes descaradas, com cartas de crédito falsas (mas aparentemente perfeitas) entregues ao vendedor para que este liberte a mercadoria, que logo de seguida desaparece.
Neste ultimo caso o vendedor chora no acto do saque da carta de crédito.
O conselho, se realmente quiserem entrar neste tipo de negócios, é de verificar pessoalmente e de forma independente cada palavra, informação, referência e documento apresentado pelas partes. Se houver discrepâncias sem uma valida justificação, abortem o negócio imediatamente.
Existe porém toda uma série de operações envolvendo commodities e que não tem sustentação ou simplesmente, mesmo que parecendo plausíveis, não acontecem quando não são uma verdadeira fraude. Estas operações frequentemente envolvem soja ou açúcar, mas também café e outros tipo de commodities (madeira, carnes, couro, minérios, combustíveis e suco de laranja...).
O esquema clássico é você receber uma oferta de venda ou compra por uma quantidade muito grande de alguma commodity. Às vezes a oferta vem por escrito e até acompanhada por referências bancárias (quase sempre falsas).
A partir daí existem numerosas variantes. Nalguns casos a negociação vai até o fim, com assinatura de contractos etc ... e depois não aparece a mercadoria no momento da entrega ou de eventuais vistorias. Noutros casos o suposto comprador exige o pagamento de um "performance bond" (quantia depositada pelo vendedor para garantir a entrega) antes de emitir a carta de crédito ... o vendedor deposita o “performance bond”, a carta de credito não chega e o “performance bond” depositado é utilizado de forma indevida ou como garantia para outras vigarices do suposto comprador. Existem, em fim, as verdadeiras fraudes descaradas, com cartas de crédito falsas (mas aparentemente perfeitas) entregues ao vendedor para que este liberte a mercadoria, que logo de seguida desaparece.
Neste ultimo caso o vendedor chora no acto do saque da carta de crédito.
O conselho, se realmente quiserem entrar neste tipo de negócios, é de verificar pessoalmente e de forma independente cada palavra, informação, referência e documento apresentado pelas partes. Se houver discrepâncias sem uma valida justificação, abortem o negócio imediatamente.
sexta-feira, 22 de julho de 2011
EXEMPLO DE UM Irrevocable Master Fee Protection Agreement
Irrevocable Master Fee Protection Agreement
CONTRACT NO
COMMODITY
ORIGIN
CONTRACT QTY
CONTRACT PERIOD
TERM
SELLER’S NAME
REPRESENTED BY
BUYER’S NAME
REPRESENTED BY
We the undersigned herewith referred as the Seller, under penalty of perjury do hereby irrevocably confirm and irrevocably accept to pay all intermediaries and fee holders at the same time and in a manner as the seller is being paid for each and every transaction of this contract up to the completion of the contract plus rollovers and extensions and in accordance with the bank details to be specified in the hard copies of this contract.
We, the Seller, irrevocably confirm that we will order and direct our bank to endorse automatic payment orders to the beneficiaries named below; furthermore, we, the Seller, confirm that all pay orders shall automatically transfer funds as directed into each beneficiaries designated bank account within 1 (one) day after the date of closing and completion of each and every shipment of the product during the contract term plus any/or extensions and rollover of the specified contract. For the purpose of clarity, we confirm that the closing and completion of each and every shipment shall be deemed to take place when the letter of credit issued by the buyer has been drawn down at the counters of the issuing bank.
We, the Seller, agrees to provide all beneficiaries with written evidence of the pay orders lodged with our bank together with acknowledgements of their acceptance. Furthermore, our bank shall be instructed to provide duly signed and stamped acknowledgement of this instruction as set out in the agreement. Forming part of this agreement, it is understood that for the purposes of this Master Fee Protection Agreement, our bank shall be the same bank and this MFPA acts as an integral part of it.
We, the Seller, agree that the terms of Purchase and Sale of the Commodity shall be as per Contra between (As Seller) and , (As Buyer). Beneficiary named below under Seller side beneficiary and Buyer side beneficiary are acting strictly as our Agents and or Mandates shall have no liability whatsoever towards the Seller and/or Buyer (and their respective Agents or intermediaries) on account of default under the contract by Seller and/or Buyer. Agents / Mandates and or Intermediaries shall have no
liability whatsoever towards the Seller and/or Buyer (and their respective Agents or intermediaries) on account of default under the contract by Seller and/or Buyer. M/s. Agents / Mandates and or Intermediaries or their officers, partners, directors and employees shall not be liable under any theory of contract, strict liability, negligence, misrepresentation or other legal equitable theory for any loss of damage of any nature incurred by Buyer and/or Seller and their respective Mandate/Agents or intermediaries in the performance of the contract(s) between Buyer and Seller. Agents / Mandates and or Intermediaries shall not be liable to Buyer and/or Seller and their respective Mandate/Agents or intermediaries for any special, incidental or consequential (indirect) or contingent damages such as but not limited to loss of profit, loss of opportunity, loss of business, etc.
We the undersigned being Seller or the Sellers named legally authorized representative as stated within the signed and legally binding main transaction, contract unconditionally agree and undertake to approve and originate all payments in USD currency to all beneficiaries named below as their rightful and payable commissions. This agreement also acts as a record confirming the commission amounts for each named beneficiary as set out below:-
TOTAL COMMISSION SHALL BE PAID BY THE END-SELLER AS FOLLOWS:-
The amount of USD $ per Metric Ton/Shipment of Per month delivered should be settled as herein stated to be transferred into the account as follows:
Buyer side GROUP : USD per MT/Shipment/Month as a contract condition.(CLOSED)
TERM & CONDITIONS
This master fee protection agreement covers the initial contract and shall include any renewals, extensions, rollovers, additions or any new or transfer contract any how originated from this transaction because of the above intermediaries or changing codes of the initial contract entered into between the buyer and seller.
This master fee protection agreement and any subsequently issued pay orders shall be assignable, transferable and divisible and shall not be amended without the express written and notarized consent of the receiving beneficiary. All parties agree neither to circumvent nor to attempt circumvent either for the transaction of this current contract or in the future for a period of five (5) years from the date of the execution of this fee protection agreement. This document binds all parties, their employees, associates, transferees and assignees or designees.
All faxed and/or e-mailed signatures shall be considered as original signatures for the purpose of binding all parties to this agreement. This document may be signed and in any number of counterparts, all of which shall be taken together and shall constitute as being one and the same instrument. Any party may enter into this document and the agreement constituted thereby by signing any counterpart any time, date or period mentioned in any provision of this document shall only be amended by agreement in writing and signed off by all parties concerned.
Furthermore, we agree that any and all commissions due shall be paid to the beneficiary as a result of any extension or rolls of the contract and that we shall effect all necessary documentation with our bank without any undue delays to ensure such commissions and paid within the terms of the agreement.
PARTIAL INVALIDITY:
The illegality, invalidity and non-enforceable provision of this document under the laws of any jurisdiction shall not affect its illegality, validity or enforceability under the law of any other jurisdiction or provision.
GOVERNING LAW AND JURISDICTION:
This document shall be governed and construed in accordance with current English or I.C.C 400/500/600 signed between partners NCND laws.
ARBITRATION:
All parties agree to refer any disputes between the parties arising out of or in connection with this agreement including any questions regarding its existence, validity or termination to arbitration rules of the international arbitration centre (I.A.C). The appointed arbitrator shall hold the proceedings in any country chosen by the parties and the rules of the IAC shall apply.
This document is signed and accepted by parties named below as to be included in the main contract.
Accepted & Agreed by Seller and Beneficiary’s named below:-
PARTICULAR’S Seller
Company Name / Address
Represented by
Title
Passport No
Nationality
Signature
Date / Seal
Bank Name
Bank Address
Account No.
Account Name
SWIFT
IBAN #
Bank Officer
Bank Telephone /Fax
# BUYER’S SIDE BENEFICIARY #
TOTAL COMMISSION FOR BUYER SIDE GROUP: MT/Shipment/Month CLOSED
TOTAL COMMISSION FOR SELLER SIDE EVERY MONTH
TOTAL COMMISSION USD $
PARTICULAR’S BUYER’S BENEFICIARY
Company Name / Address
Represented by
Title
Passport No
Nationality
Signature
Date / Seal
Bank Name
Bank Address
Account No.
Account Name
SWIFT
IBAN #
Bank Officer
Bank Telephone /Fax
: ALL BANK CHARGES SHOULD BE BORNE BY ACCOUNT BENEFICIARY
NOTARY PUBLIC
ON THIS XXth 21 OF JULLY 2008 .
BEFORE ME, THE UNDERSIGNED NOTARY PUBLIC, PERSONALLY APPEARED ____________________ HOLDING PASSPORT NUMBE PRESIDENT DIRECTOR OF ______________________________________________________________, TO ME KNOWN TO BE THE INDIVIDUAL DESCRIBED IN AND WHO EXECUTED THE FOREGOING INSTRUMENT, AND ACKNOWLEDGED THAT HE EXECUTED THE SAME AS HIS FREE ACT AND DEED
MY COMMISSION EXPIRES:
_______________________
NOTARY PUBLIC
[SEAL]
Bank Endorsement
This irrevocable payment order has been lodged with us and will be executed as per instructions above.
______________________________
Bank Officer Name:
Title:
Pin Number:
Bank Name:
Seal:
Date:
CONTRACT NO
COMMODITY
ORIGIN
CONTRACT QTY
CONTRACT PERIOD
TERM
SELLER’S NAME
REPRESENTED BY
BUYER’S NAME
REPRESENTED BY
We the undersigned herewith referred as the Seller, under penalty of perjury do hereby irrevocably confirm and irrevocably accept to pay all intermediaries and fee holders at the same time and in a manner as the seller is being paid for each and every transaction of this contract up to the completion of the contract plus rollovers and extensions and in accordance with the bank details to be specified in the hard copies of this contract.
We, the Seller, irrevocably confirm that we will order and direct our bank to endorse automatic payment orders to the beneficiaries named below; furthermore, we, the Seller, confirm that all pay orders shall automatically transfer funds as directed into each beneficiaries designated bank account within 1 (one) day after the date of closing and completion of each and every shipment of the product during the contract term plus any/or extensions and rollover of the specified contract. For the purpose of clarity, we confirm that the closing and completion of each and every shipment shall be deemed to take place when the letter of credit issued by the buyer has been drawn down at the counters of the issuing bank.
We, the Seller, agrees to provide all beneficiaries with written evidence of the pay orders lodged with our bank together with acknowledgements of their acceptance. Furthermore, our bank shall be instructed to provide duly signed and stamped acknowledgement of this instruction as set out in the agreement. Forming part of this agreement, it is understood that for the purposes of this Master Fee Protection Agreement, our bank shall be the same bank and this MFPA acts as an integral part of it.
We, the Seller, agree that the terms of Purchase and Sale of the Commodity shall be as per Contra between (As Seller) and , (As Buyer). Beneficiary named below under Seller side beneficiary and Buyer side beneficiary are acting strictly as our Agents and or Mandates shall have no liability whatsoever towards the Seller and/or Buyer (and their respective Agents or intermediaries) on account of default under the contract by Seller and/or Buyer. Agents / Mandates and or Intermediaries shall have no
liability whatsoever towards the Seller and/or Buyer (and their respective Agents or intermediaries) on account of default under the contract by Seller and/or Buyer. M/s. Agents / Mandates and or Intermediaries or their officers, partners, directors and employees shall not be liable under any theory of contract, strict liability, negligence, misrepresentation or other legal equitable theory for any loss of damage of any nature incurred by Buyer and/or Seller and their respective Mandate/Agents or intermediaries in the performance of the contract(s) between Buyer and Seller. Agents / Mandates and or Intermediaries shall not be liable to Buyer and/or Seller and their respective Mandate/Agents or intermediaries for any special, incidental or consequential (indirect) or contingent damages such as but not limited to loss of profit, loss of opportunity, loss of business, etc.
We the undersigned being Seller or the Sellers named legally authorized representative as stated within the signed and legally binding main transaction, contract unconditionally agree and undertake to approve and originate all payments in USD currency to all beneficiaries named below as their rightful and payable commissions. This agreement also acts as a record confirming the commission amounts for each named beneficiary as set out below:-
TOTAL COMMISSION SHALL BE PAID BY THE END-SELLER AS FOLLOWS:-
The amount of USD $ per Metric Ton/Shipment of Per month delivered should be settled as herein stated to be transferred into the account as follows:
Buyer side GROUP : USD per MT/Shipment/Month as a contract condition.(CLOSED)
TERM & CONDITIONS
This master fee protection agreement covers the initial contract and shall include any renewals, extensions, rollovers, additions or any new or transfer contract any how originated from this transaction because of the above intermediaries or changing codes of the initial contract entered into between the buyer and seller.
This master fee protection agreement and any subsequently issued pay orders shall be assignable, transferable and divisible and shall not be amended without the express written and notarized consent of the receiving beneficiary. All parties agree neither to circumvent nor to attempt circumvent either for the transaction of this current contract or in the future for a period of five (5) years from the date of the execution of this fee protection agreement. This document binds all parties, their employees, associates, transferees and assignees or designees.
All faxed and/or e-mailed signatures shall be considered as original signatures for the purpose of binding all parties to this agreement. This document may be signed and in any number of counterparts, all of which shall be taken together and shall constitute as being one and the same instrument. Any party may enter into this document and the agreement constituted thereby by signing any counterpart any time, date or period mentioned in any provision of this document shall only be amended by agreement in writing and signed off by all parties concerned.
Furthermore, we agree that any and all commissions due shall be paid to the beneficiary as a result of any extension or rolls of the contract and that we shall effect all necessary documentation with our bank without any undue delays to ensure such commissions and paid within the terms of the agreement.
PARTIAL INVALIDITY:
The illegality, invalidity and non-enforceable provision of this document under the laws of any jurisdiction shall not affect its illegality, validity or enforceability under the law of any other jurisdiction or provision.
GOVERNING LAW AND JURISDICTION:
This document shall be governed and construed in accordance with current English or I.C.C 400/500/600 signed between partners NCND laws.
ARBITRATION:
All parties agree to refer any disputes between the parties arising out of or in connection with this agreement including any questions regarding its existence, validity or termination to arbitration rules of the international arbitration centre (I.A.C). The appointed arbitrator shall hold the proceedings in any country chosen by the parties and the rules of the IAC shall apply.
This document is signed and accepted by parties named below as to be included in the main contract.
Accepted & Agreed by Seller and Beneficiary’s named below:-
PARTICULAR’S Seller
Company Name / Address
Represented by
Title
Passport No
Nationality
Signature
Date / Seal
Bank Name
Bank Address
Account No.
Account Name
SWIFT
IBAN #
Bank Officer
Bank Telephone /Fax
# BUYER’S SIDE BENEFICIARY #
TOTAL COMMISSION FOR BUYER SIDE GROUP: MT/Shipment/Month CLOSED
TOTAL COMMISSION FOR SELLER SIDE EVERY MONTH
TOTAL COMMISSION USD $
PARTICULAR’S BUYER’S BENEFICIARY
Company Name / Address
Represented by
Title
Passport No
Nationality
Signature
Date / Seal
Bank Name
Bank Address
Account No.
Account Name
SWIFT
IBAN #
Bank Officer
Bank Telephone /Fax
: ALL BANK CHARGES SHOULD BE BORNE BY ACCOUNT BENEFICIARY
NOTARY PUBLIC
ON THIS XXth 21 OF JULLY 2008 .
BEFORE ME, THE UNDERSIGNED NOTARY PUBLIC, PERSONALLY APPEARED ____________________ HOLDING PASSPORT NUMBE PRESIDENT DIRECTOR OF ______________________________________________________________, TO ME KNOWN TO BE THE INDIVIDUAL DESCRIBED IN AND WHO EXECUTED THE FOREGOING INSTRUMENT, AND ACKNOWLEDGED THAT HE EXECUTED THE SAME AS HIS FREE ACT AND DEED
MY COMMISSION EXPIRES:
_______________________
NOTARY PUBLIC
[SEAL]
Bank Endorsement
This irrevocable payment order has been lodged with us and will be executed as per instructions above.
______________________________
Bank Officer Name:
Title:
Pin Number:
Bank Name:
Seal:
Date:
PAYMENT OPTIONS FOR SPOT
1. Buyer's Bank will send confirm Swift MT-760 MT-103 /23, with 100% cash transfer against receipt of shipping documents by the Buyer’s Bank for each shipment.
2. ARDLC (Auto-Revolving Documentary Letter of Credit) cash 100%
3. SBLC (Stand By Letter of Credit) cash 100%.
4. LC (Letter of Credit) common.
2. ARDLC (Auto-Revolving Documentary Letter of Credit) cash 100%
3. SBLC (Stand By Letter of Credit) cash 100%.
4. LC (Letter of Credit) common.
EXEMPLO DE UM Bank Comfort Letter (BCL)
Sample Bank Comfort Letter (BCL)
(On Buyer's Bank Letter Head)
(Including all details such as Address, Telephone, Facsimile, E-Mail, etc.)
Bank Comfort Letter (BCL)
Date: (Day, Month, Year)
To:
To the Seller,
This is to confirm that our mutual clients (namely) maintain a banking account with us and is in good standing with our bank.
At their instructions we, (full name of the bank), with full authority and mandate hereby confirm that the said client is ready, willing and financially able to initiate the process of purchasing of (requested product quantity) metric tons of Ordinary Brazilian Sugar or Commodities for the price of USD (price per metric ton) during the next (duration of contract) month(s) / year(s) and for the total value of USD (total contract value) subject to the seller, completing the Sales and Purchase Contract.
We, (buyer's bank), confirm our ability to issue in due course and after the signing of the Purchase Contract, required ((SBLC MT 760, DLC, FFDLC, FFRLC, SLC, BG MT 760, Unconditional SLC/BG)) Letter of Credit on behalf of our client and for the benefit of the seller, with full assurance for the full amount of the contract.
This Letter is to Confirm That (name of the company) registered in (address bank – tel.) has Business checking account with our branch in good standing and we are ready to issue a (SBLC MT 760, DLC, FFDLC, FFRLC, SLC, BG MT 760, Unconditional SLC/BG), on behalf (name of the company) for a maximum amount of $ XXX (XXX U$ Dollars).
We certify that our client named above has sufficient funds and / or have credit facilities with our bank to complete the proposed transaction within the time period outlined in the above referenced contract.
Our client hereby gives authority to the seller to procure usual banker's references from our bank officer (full name of bank officer), whose direct phone number is ....................................................
Yours truly
Signed by a senior level bank officer: .............................................................................................
Full name of the signatory: ..............................................................................................................
Designation of the signatory: ...........................................................................................................
Clients' Name as written in account: ................................................................................................
Account No / IBAN: ...........................................................................................................................
Bank Telephone No: ........................................................................................................................
Bank's Fax No: .................................................................................................................................
Bank SWIFT / Sort Code: .................................................................................................................
Bank stamp / seal: .........................................................................................................................
(On Buyer's Bank Letter Head)
(Including all details such as Address, Telephone, Facsimile, E-Mail, etc.)
Bank Comfort Letter (BCL)
Date: (Day, Month, Year)
To:
To the Seller,
This is to confirm that our mutual clients (namely) maintain a banking account with us and is in good standing with our bank.
At their instructions we, (full name of the bank), with full authority and mandate hereby confirm that the said client is ready, willing and financially able to initiate the process of purchasing of (requested product quantity) metric tons of Ordinary Brazilian Sugar or Commodities for the price of USD (price per metric ton) during the next (duration of contract) month(s) / year(s) and for the total value of USD (total contract value) subject to the seller, completing the Sales and Purchase Contract.
We, (buyer's bank), confirm our ability to issue in due course and after the signing of the Purchase Contract, required ((SBLC MT 760, DLC, FFDLC, FFRLC, SLC, BG MT 760, Unconditional SLC/BG)) Letter of Credit on behalf of our client and for the benefit of the seller, with full assurance for the full amount of the contract.
This Letter is to Confirm That (name of the company) registered in (address bank – tel.) has Business checking account with our branch in good standing and we are ready to issue a (SBLC MT 760, DLC, FFDLC, FFRLC, SLC, BG MT 760, Unconditional SLC/BG), on behalf (name of the company) for a maximum amount of $ XXX (XXX U$ Dollars).
We certify that our client named above has sufficient funds and / or have credit facilities with our bank to complete the proposed transaction within the time period outlined in the above referenced contract.
Our client hereby gives authority to the seller to procure usual banker's references from our bank officer (full name of bank officer), whose direct phone number is ....................................................
Yours truly
Signed by a senior level bank officer: .............................................................................................
Full name of the signatory: ..............................................................................................................
Designation of the signatory: ...........................................................................................................
Clients' Name as written in account: ................................................................................................
Account No / IBAN: ...........................................................................................................................
Bank Telephone No: ........................................................................................................................
Bank's Fax No: .................................................................................................................................
Bank SWIFT / Sort Code: .................................................................................................................
Bank stamp / seal: .........................................................................................................................
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