Why are you rejecting LOI and ICPO?

Be advised that the following inclusions in LOIs and/or ICPOs are not accepted by the seller and the request for a FCO will be automatically denied:

1. Payment of first shipment at the port of arrival

2. Long term contracts (12 months minimum) conditioned to performance of first shipment.

3. LOIs and/or ICPOs issued on blank papers without the letterhead, buyer's name and/or buyer's coordinates.

4. LOIs and/or ICPOs not substantiated by a BCL or the authority to soft probe the funds.

5. Bank coordinates not signed by the bank account officer.

6. Requests to visit the storage facility before the hard copies of the contract are signed and sealed by both parties.

7. Copy of Bill of Ladings or other documents relative to previous deliveries, sanitized or otherwise.

8. Request to produce a picture of the goods.

To fully understand the reluctance of the supplier to consider paying attention to any of the above, one must accept the notion that respectable end users, suppliers and brokers alike are committed to operate with the highest degree of ethic and professionalism if they wish to enjoy a perpetual flow of business.

Requests like the one listed above serve no practical purpose because they do not guarantee availability of product, quality, delivery nor excellence of service. A visit to the storage site is a useless waste of time and money because, like in our case, the supplier has storage in all 5 Continents and has the option in the contract to ship the used metal from anyone of his storage facilities in accordance to commitments made to other buyers, the distance from the port of loading and the ports of discharge and atmospheric conditions.

The only guarantee available to a buyer to make sure that he receives what he is buying is in fact his right to be at the port of loading to oversee with his own eyes the loading operation, to work closely with the inspectors of SGS and assure himself that all documents needed to redeem the LC are drawn properly. Everything else, other than what has been said, is an outright excuse frequently used by intermediaries. Experienced businessmen and professionals do not dare to include in their LOIs and/or ICPOs any of the questions listed above in fear of tarnishing their competence and their common sense.

The above will help you understand that there is a difference between paranoia and concern and the only way to satisfy both cases is to be at the port of loading to oversee loading operations.

Payment Terms:

Option 1:  Operative, Irrevocable, Confirmed, Transferable, Divisible and Guaranteed SLC auto-revolving,  Top 25 World Bank. Valid for 14 month and 15 days. Payable upon receipts Documents by TT WIRE from LOADING PORT, Receipt of Documents: Commercial Invoice, Clean On Board of Lading Document.

Option 2:  By a Irrevocable, Transferable, Divisible SBLC to cover of 4 months shipments, payable at sight with TT within 5 days after arrival of the goods at the destination port and presentation of all shipping documents.

Remark:

a) Wording of financial instrument noted above BG/SBLC to be agreed in advance with Seller's Bank.

b) BG/SBLC (Conditional or Unconditional) must be issued or confirmed by a prime International Bank, informed and accepted buy the Seller PGB: 1% PB of the monthly shipments as this is payment at destination.

Option 3:  Require a ONE MONTH BG valid for 14 months (based on a 12 months contract) and a FFRLC Operative, Irrevocable, Confirmed,  Transferable, Divisible and Guaranteed, for the monthly volumes valid 14 months (based on a 14 months contract) by a Top 25 World Bank. Payable upon receipts Documents  from LOADING PORT.  

Payment by TT require a 3 months BG to be in place for the contract period, valid for 14 months and 15 days (based on 12 months contract).

An SBLC can be accepted in place of a BG but will require prior checking with the seller.

*** If the buyer needs to pay with a LC non-transferable, please add 3% fee to the final Price for banking expenses.

What are inspection types and who pays for it?

SGS or similar at loading port is at seller's expense.  CIQ and CCIC are at seller's expense if required, at the loading port and not to be part of the payment documents.  All other Inspections, at unloading port are to Buyer Account.

President
E & T Scrap Metal.