The Process

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  • 1. Buyer issues Letter of Intent (LOI) and Bank Capability Letter (BCL).
  • 2. Seller’s Bank confirms the BCL and issues an Irrevocable Corporate Purchase Order (ICPO) and Draft Sales & Purchase Contract (SPC).
  • 3. Both parties sign SPC.
  • 4. Seller’s bank provides partial Proof of Product (POP) to buyer and confirms their readiness to issue 1% Performance Bond (PB).
  • 5. Buyer’s Bank issues a Non-Operative, Irrevocable and Non-Transferable Documentary Letter of Credit (DLC) or a Bank Guarantee (BG) to be drawn as per quantity delivered for each shipment.
  • 6. Seller’s Bank issues a 1% PB to activate the buyer’s DLC or BG and seller issues full POP.
  • 7. Seller confirms the date the product will be delivered to the Loading Port.
  • 8. Seller provides to the buyer the details of the vessel and the name of the Shipping Company that will receive the product at the loading port.
  • 9. Upon acceptance of the vessel, shipment commences as per contract.
  • 10. The SGS inspection is conducted and copies of the report will be sent to the Buyer, the Seller and to their respective Banks.
  • 11. Buyer releases payment to Seller’s Bank as per quantity and quality loaded as per the SGS Inspection Report and the Shipping Company.

For ongoing orders, the next shipment will be delivered as specified in the contract (repeat Steps 10 and 11).