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Buyer/seller

The law of the sea.

Buyer/seller

Postby Eric » Thu Nov 03, 2016 5:52 am

Good day papa,

As I told you trading in Petroleum products in my country is through Transshipment. Even the big traders like Vitoil and trafigura deal in the same way which is usually outside bar Lagos. I have a supplier(I know he is only an intermediary now because of their wanting me to produce a transferable ,divisible and irrevocable BG and will not link me to their supplier) that I want to sign a SPA with. These are their procedures.

Supplier’s procedures:

•   Full cooperate offer from seller to buyer

•   Letter of acceptance from buyer to seller

•   Buyer and Seller sign and seal the SALES AND PURCHASE AGREEMENT with full Banking information and address.

•   Sellers bank Pre-Advices Buyers Bank on 1.5% Performance bond

•   Buyers bank activates sellers PB with irrevocable, transferable and divisible BG

•   Product loaded, vessel ETA fax to buyer, vessel arrives Outside bar

•   Bank guarantee crystallizes five days after Q&Q, receipt of product and shipping documents.

Based on their foregoing, I will send my END BUYER the mirrored request(with an increment in the Proforma invoice) the mirrored procedure. I feel their procedure can fly if I can ensure that I am giving from the SUPPLIER(intermediary) a transferable performance bond which I can transfer to my END BUYER to activate their transferable unrestricted L/C or BG.

I don’t think I would need a PG from them as the delivery of the document wont be necessary as they have stated that the BG will crystallize 5 days after the receipt of product and Q&Q check by buyers agent.

Do you see a loop hole? What would be the disadvantage of having a BG instead of an LC? Is the 1.5% PB able to cover the BG charges?

How do I handle bank transfer charges based on this arrangement?

Would it be possible for me to transfer a transferable performance bond from the seller to my end buyer as a SLC?

Learning fast from you!

Thanks.  
Eric
 
Posts: 45
Joined: Sat Jan 18, 2014 6:41 pm

Buyer/seller

Postby Victorino » Thu Nov 03, 2016 9:43 pm

Good day papa,

As I told you trading in Petroleum products in my country is through Transshipment. Even the big traders like Vitoil and trafigura deal in the same way which is usually outside bar Lagos. I have a supplier(I know he is only an intermediary now because of their wanting me to produce a transferable ,divisible and irrevocable BG and will not link me to their supplier) that I want to sign a SPA with. These are their procedures.

Supplier’s procedures:

•   Full cooperate offer from seller to buyer

•   Letter of acceptance from buyer to seller

•   Buyer and Seller sign and seal the SALES AND PURCHASE AGREEMENT with full Banking information and address.

•   Sellers bank Pre-Advices Buyers Bank on 1.5% Performance bond

•   Buyers bank activates sellers PB with irrevocable, transferable and divisible BG

•   Product loaded, vessel ETA fax to buyer, vessel arrives Outside bar

•   Bank guarantee crystallizes five days after Q&Q, receipt of product and shipping documents.

Based on their foregoing, I will send my END BUYER the mirrored request(with an increment in the Proforma invoice) the mirrored procedure. I feel their procedure can fly if I can ensure that I am giving from the SUPPLIER(intermediary) a transferable performance bond which I can transfer to my END BUYER to activate their transferable unrestricted L/C or BG.

I don’t think I would need a PG from them as the delivery of the document wont be necessary as they have stated that the BG will crystallize 5 days after the receipt of product and Q&Q check by buyers agent.

Do you see a loop hole? What would be the disadvantage of having a BG instead of an LC? Is the 1.5% PB able to cover the BG charges?

How do I handle bank transfer charges based on this arrangement?

Would it be possible for me to transfer a transferable performance bond from the seller to my end buyer as a SLC?

Learning fast from you!

Thanks.  
Victorino
 
Posts: 32
Joined: Wed Apr 09, 2014 2:52 am

Buyer/seller

Postby Rodman » Fri Nov 04, 2016 10:48 pm

   

DEAR KINGSLY-

I'LL USE CAPITALS TO CUT INBETWEEN YOUR ADVICE- THE PROBLEM HERE IS THAT I AM NOW ADVISING ON AN ACTUAL DEAL- AND EVEN ONE SINGLE AMBIGUOUS LINE ON THE OFFICIAL DOCUMENTS COULD MEAN A GREAT DEAL OF THINGS TO ME, WHICH IS NOT OBVIOUS TO YOU-

HAVIING SAID THAT  THE COMPANY YOU MENTIONED HAVE CROSSED MY PATHS ON PREVIOUS OCCASIONS, YEARS BACK TO WHICH THEY WERE NOT GIVEN ANY CONSIDERATIONS BY US, FOR OR OWN REASONS NOT APPRORIATE TO THIS FORUM-

THUS I WILL GIVE YOU SOME INSIGHT ANSWERS TO THE QUESTIONS, SO AS TO LEGALLY INDEMNIFY MYSELF, I AM NOT ADVISING ON THE ACTUAL DEAL- JUST GIVING RECOUSE AND INSIGHT TO YOUR QUESTIONS-THIS IS A Q AND A FORUM, TOALLY INAPPRORIATE FOR CONFIDENTIAL TRANSACTIONS- WHICH THIS HAS NOW BECOME-          Supplier’s procedures:

• Full cooperate offer from seller to buyer

THUS YOU NEED AN OFFER TO CONSIDER FULLY DEFINED- ITS EITHER ACCPTED OR NEGOTIATED UPON- IT ITS ACCEPTED ITS CONTRACT TIME, IF ITS NOT ACCEPTED , NEGOTIATION PREVIAL , AND NEW OFFER IS ISSUED WITH A NEW TRANSACTION CODE AND HEGOTIATED TERMS AND CONDITIONS APPLIED- WHICH THEN ARE ACCPTED-

UNLESS STIPULATED OTHERWISE - THE OFFER IS LEGALLY BINDING- THUS IF DRAFT CONTRACT  FDIIFERS IN APRT WHATS BEEN IMPLIED ON THE OFFER , THE OFFENDING PARTY IS IN BREACH OF CONDITIONS- SO MAKE SURE THE OFFER SUITS YOUR NEEDS AS AN INTERMEDIARY- THUS-

THE DEAL YOU HAVE IMPLIES THAT ITS A DEAL MADE FOR AN END BUYER TO SUPPLIER- AND THATS THE PROBLEM- YOU ARE AN INTERMEDIARY, THUS THE TERMS AND CONDITION MUST BE MADE TO APPLY TO YOU AS AN INTERMEDIARY- THATS WHAT YOU ARE TRYING TO DO - IF IT DOES NOT SUIT YOU AS AN INTERMEDIARY, THEN NO DEAL..VERY SIMPLE-THIS IS WHAT SO MANY TRADERS DO NOT GET-YOU CANNOT "PLY A DEAL S" AS THE "BIG BOYS DO"- YOU ARE AN INTERMEDIARY , DIFFERENT APPLICATION APPLY-

• Letter of acceptance from buyer to seller

OFFER ONCE ACCPTED IS "ACCEPTANCE" THUS ENSURE "ENGLISH LAW APPLIES" -APPROPRIATE FOR INTERNATIONAL TRADE- USA LAWS HAVE DIFFERENT ACCEPTANCE RULES- AND IS NOT APPRORIATE OFR INTERNATIONAL TRADE LAW APPLICATIONS- AS FAR AS AN INTERMEDAIRY IS CONCERNED- THIS IS VERY IMPORTANT , AS NIGERIA'S 5 OIL PRODUCERS , 4 ARE USA OWNEDOR ASSOCIATED-

• Buyer and Seller sign and seal the SALES AND PURCHASE AGREEMENT with full Banking information and address.

AGREEMENT OR CONTRACT?- ITS A CONTRACT- DEFINED AS A SIMPLE CONTRACT RATHER THAN A FORMAL CONTRACT-

• Sellers bank Pre-Advices Buyers Bank on 1.5% Performance bond

NEVER - THE BUYER GOES FIRST WITH A UCP500 ISSUED PRE ADVISED DOCUMENTARY CREDIT MADE RESTRICTED-

THIS MEANS YOU TRANSFER THE CREDIT WHEN IT LANDS TO THE SELLERS IS DOES SO RESTRICTED- IT YOU WHO GETS THE TRANSFERABLE CREDIT , BUT ITS YOU THAT TRANSFERS IT AS RECTRICTED- MEANING IT HAS USED UP ITS TRANFERABILITY-

NOW IF THEY SELLERS DONT LIKE THAT ..BAD LUCK - THEY THEY MUST STEP BACK TO YOU- YOU ARE THE KING HERE-YOU NOW HAVE THE POWER- YOU KNOW DICTATE TERMS , AND YOU ARE THE CONTROLLING MIDDLE BUYER/SELLER- NOT THEM- NOBODY GETS COMMISSION IF YOU DO NOT TRANSFER THE CREDIT TO THE SUPPLIER DIRECT- VERY SIMPLE- THUS YOU ARE SIMPLY NOT PREPARED TO TRANSFER THE CREDIT TO THE SELLERS, BECIAUSE YOU WILL LOSE THE MECHANISM IN BEING ABLE TO PROTECT THE DEAL-

• Buyers bank activates sellers PB with irrevocable, transferable and divisible BG

its not a bg or PB- its a PG- after you have advised the preadvised Credit- the seller seeks his protection from his supplier-the seller arranges some official documents that proves the goods exist- Eg; Allcoation advise from the supplier, Certificat of origin..etc..etc.

The PA DLC has a conditon on it- as per your contract advice- ' UPON THE FOLLWONIG DOCUMENTS VERIFYING THE EXISTANCE OF THE GOODS , THIS PRE ADVISED L/C SHALL BE MADE ACTIVE-

THUS THEY NOW MUST GIVE YOU SOILD DOCUMENTS AS TO PROVE THE PRODUCTS IS REAL- WHICH IN TURA CTIVATES THE PA DLC- THAT HAS NOTHING TO DO WITH THE PG- THAT COMES ONLY AFTER THE ABOVE HAS BEEN INITIATED SUCCESSFULLY- SO THE L/C PORTION YOU HAVE TRANSFERED HAS BEEN ACTIVATIED-

THE SUPPLIER NOW ARRANGES FOR A FULL ACTIVE PG TO BE ADVISED- NOW UNDERSTAND THIS A PG IS ABOUT "PERFORMANCE"- IF THEY SAY THAT THEY WILL "DELVER" IN 5 DAYS , BUT IT HAS TAKEN 7 DAYS , THEN YOU ARE ENTILED TO THE PG - BECAUSE THEY HAVE FAILED TO DELIVER IN TIME, IF YOU ARE ENTITLED TO THE PG , THEN ITS YOU BUYER WHO GETS IT , BECAUSE YOU WOULD HAVE PROMISED HIM ON CONTRACT "DELIVERY" WILL BE MADE IN 5 DAYS ALSO-

SO DELIVERY IS ;LATE BY 2 DAYS - YOU COLLECT ON THE PG - THIS IS DOME AUTOMATICALLY BY THE BANKS-ITS ISSUANCE IS SIMPY APPLIED -EG;" IF FAILURTE TO DELIVER THE DOCUMENTS WITH IN 5 DAYS OF  PREADVICSE CRDIT BEING BBEING MADE ACTIVE, THEIS PG SHALL BE MADE COLLECTABLE UNCONDITIONALLY"

SO THE BUYER GETS THE PG MONEY , BUT THE DEAL CONTIUES ALONG ITS MERRY WAY WHEN THE DOCUMENTS "DELIVERY " PROCESS FINALLY COMES TO A CONCLUSION-

SO HE PG FORCES THE SUPPLIER TO BE DILIGENT AND ENSURE THAT WHEN THEY GIVE A DELIVERY TIME FRAME , THEY WILL ABIDE BY IT OR FACE CONSEQUENCES OF LOSING THE PG-BUT THE DEAL STILL CONTINUES- AND IF THEY EVENTUALLY FAIL TO DELIVER OUTRIGHT, THE DLC CANNOT BE COLLECTED UPON, AND THE SUPPLIERS WOULD NOW FACE BREACH OF CONTRACT STIPULATION, WHICH IS USUALLY WORTH MORE THAN THE VALUE OF TH WHOLE DEAL ANYWAY-

• Product loaded, vessel ETA fax to buyer, vessel arrives Outside bar

• Bank guarantee crystallizes five days after Q&Q, receipt of product and shipping documents.

Based on their foregoing, I will send my END BUYER the mirrored request(with an increment in the Proforma invoice) the mirrored procedure. I feel their procedure can fly if I can ensure that I am giving from the SUPPLIER(intermediary) a transferable performance bond which I can transfer to my END BUYER to activate their transferable unrestricted L/C or BG.

NO ITS A TRAP- YOU CANT GIVE AN INACTIVE PG FIRST- THAT IS MADE ACTIVE UPON THE DLC BEING ISSUED- THE END BUYER IS PLAYING GAMES- IF HE ISSUES THE DLC IN ANY WAY WHATS SO EVER, LETS SAY FO THE VALKUE OF 50,000 DOLLARS INSTEAD OF 500,000 DOLLARS - NATURALLY YOU WILL PROTEST AS WILL YOUR SUPPLIER TO YOU- BUT THE ACTION OF ISSUING THE DLC MAKES THE PG ACTIVE UNCONDITINALLY-

THERE IS NO ROOM ON THE PG TO STIPLATE EXOTICE TERMS- ITS A VERY SIMPLE TWO LINE APPLICATION- EG:THIS PG BECOMES ACTIVE ON THE ISSUANCE OF A DLC NUMBER XXXXXXXXXXXXXFOR THE VALUE OF 1.5%-

SO THE DLC HAS BEEN ISSUED YOU PROTEST- THE BUYER SAYS SORRY I WANT  ABETTER PRICE - YOU STATE "WE HAVE A CONTRACT" AND AS SUCH I CANNOT DO ANYTHING NOW"

THE BUYER STATES I WILL ISSUE THE REST OF THE DLC WHEN YOU GIVE ME A BETTER PRICE-

YOU SAY" NO WAY" IT CANT BE DONE-

DELIVERY HAS FAILED- THE BUYER COLLECTS ON THE PG UNCONDITIONALLY FOR 2 MILLION DOLLARS AND RUNS AWAY TO HIDE- THE 50,000 DOLLAR L/C EXPIRES-

AND WALLA THE END BUYERS HAS MADE A COOL 2 MILLION DOLLARS FOR SIMPLY APPLY THE LAW AS ITS APPLIED TO AN SLC- HE HAS DOE NOTHING WRONG- AND IF YOU CANNOT FIND HIM, HOW ARE YOU GOING TO TAKE HIM TO COURT FOR "BREACH OF CONTRACT"- HAVE YOU GOT A MILLION DOLLARS SPEARE TO INSITIGATE SUCH PROCEDURES- THE SUPPLIER WILL TAKE ACTION AGAINST YOU FOR" BREACH OF CONTRACT" THEY ARE GOING TO BE MADE THAT THEY FOLLOWED YOUR ADVISE WHICH HAS CAUSE THEM TO LOSE THE  PG, AND THE SUPPLIER WILL HAVE THE RESOURSES TO TAKE YOU TO COURT-

INACTIVE OR ACTIVE  PG NEVER COMES FIRST - ITS ALWAYS OFFERED AFTER THE FINANCIAL INSTRUMENT IS SECURED AS ACTIVE-

I don’t think I would need a PG from them as the delivery of the document wont be necessary as they have stated that the BG will crystallize 5 days after the receipt of product and Q&Q check by buyers agent.

Do you see a loop hole? What would be the disadvantage of having a BG instead of an LC? Is the 1.5% PB able to cover the BG charges?

How do I handle bank transfer charges based on this arrangement?

Would it be possible for me to transfer a transferable performance bond from the seller to my end buyer as a SLC?

ITS A TRANSFERABLE SLC- SO YES- IT CAN BE TRANSFERED-

KIND REGARDS

DAVIDE PAPA

FTN EXPORTING
Rodman
 
Posts: 39
Joined: Tue Feb 04, 2014 6:02 am


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