Thank you for sending the Letter of Interest showing the willingness to purchase 150,000 MT/Spot 12.500MT of sugar per month. We would like to confirm that we are able to deliver these quantities of sugar. We are aware of the amount of issues that may arise during preparation and implementation of this contract. We are ready to discuss and jointly solve them at any stage of our cooperation.However, both parties, the Buyer and the Seller, need to make some preparations for the contract of 150,000 MT/Spot 12.500MT of sugar per month. From our side we should work on logistics, transportation and other matters. You should also be prepared to receive deliveries. While preparing schedule of arrivals of sugar please determine the quantity of tonnage units in a given month which will be needed in each place of delivery.Since our business relationship would be considered unaffiliated unknown we propose the procedures described below which provide full security to the Buyer and the Seller including Proof of Product (POP) from our side while awaiting confirmation of funding (MT 760) from your side. These procedures cannot be changed since they were already confirmed with the producers and the banks.We can authenticate each other exclusively through the contract which is agreed, signed and registered in our banks.
This can be done in two ways.
– Buyer’s bank issues INACTIVE SBLC to the Seller’s bank
– Seller’s bank issues POP and PB 2% which activates SBLC
– Loading and delivery according to the contract
– Buyer’s bank asks Seller’s bank to confirm the existence of POP – SWIFT MT 799
– Seller’s bank issues the RWA – readiness for accepting MT 760 thereby confirming that the Seller is ready to accept a financial instrument and a willingness to send POP and PB 2%.
– Buyer’s bank issues an active SBLC – MT 760
– Seller’s bank issues POP and PB 2% and begin implementation of the contract
– If Buyer does not receive the RWA he does not send MT760! Therefore, there is no risk and cost of funds blocked.
– MT103 from SBLC is sent on the basis of SGS and BL (a set of loading documents).
I believe that these options are the only way to give credibility that the Buyer has the financial resources and the Seller has the goods.I hope that the above explanation dispel doubts and allow our cooperation.
The problem that the sellers usually have is the trust with new clients in need to buy sugar IC45. The buyer is concern about the real POP and the seller is concern about payment by MT 760 that is required to be sent first.
There is a very simple and easy way to get this done without any concern.
1. MT799 sent by the buyer – it’s nothing else but the readiness to send MT760 and it costs a little. So no risk at this point from the buyer side.
2. RWA – readiness to accept MT760 is the best banking proof that the seller is ready to accept the instrument by his bank. Also it means that his bank is ready to send POP and PB2%. (Personal Bonds: The standard is 2% of the shipment, please don’t ask for 5% or even 8%, this is viewed a s a potential scam and will be reported to all insurance companies.)
that information also is sent by the seller bank officer along with RWA.
So IN THIS POINT the buyer receives the banking legal and official confirmation on POP and PB.
POP and PB is already lodged in the bank and ready to be sent.
IF THE BUYER DOES NOT RECEIVE RWA HE DOES NOT SEND MT760! So no risk!
3. MT760 sent by the buyer.
4. POP and PB is sent by the seller.
5.MT 103 with DLC is sent after SGS and BL.(full set of documents loading )
This acceptable form of payment will be as follows:
- Buyer’s bank issues Irrevocable Transferable BG at sight to the Seller’s bank
- Seller’s bank issues POP and PB 2% (ONLY FOR 12 MONTHS CONTACTS, NOT FOR SPOTS)
which activates Irrevocable Transferable BG at sight (Confirmed Top 50 Western Prime Bank)
The BG is not payment, it is guarantee and payment by MT 103 for each shipment against shipment document.
The seller’s bank shall send to the buyer’s bank a complete set of shipping documents for confirmation and verification then after reception of the orginals within 5(five) banking days, payment at sight (100% MT-103) is released
After issuing the loading documents for the buyer, the forwarding agent in the port of loading informs the forwarding agent of this fact at the unloading port. It is not possible to change this ship to another buyer. The seller’s Bank sends loading documents to the buyer’s Bank. This will not change. Any sale of HSS is a misunderstanding, it is against the law. I will never decide to change the unloading port and documents for another buyer. This is a crime. There is no seller in the world whose ship is on the ocean for a month waiting for the buyer to purchase on HSS conditions.
The issued documents and the port of unloading should be never changed.