PAYMENT TERMS: Irrevocable Transferable or Non Transferable (Buyer’s choice) Monthly
Auto-Revolving Documentary Letter of Credit, 100% payable at sight on Bill of Lading Documents,
valid until fulfillment of Total contract amount.


  1. Buyer sends the necessary LOI incorporating FORMAL ACCEPTANCE OF these Procedures. (or ICPO with full Company details and banking coordinates).fuel2
  2. Seller Company sends FCO (Full Corporate Offer.)
  3. Buyer sends the necessary ICPO and/or FORMAL ACCEPTANCE OF FCO
  4. Seller Company sends draft contract by email and the parties sign the contract and exchange electronically.
  5. Buyer’s bank issues the necessary MT799 RWA (See the enclosed file for draft wording)
  6. Seller Company provides full Proof of Product plus 2% Performance Bond Guarantee (see appendix). The POP shall include the following:

    A). Copy of license to export issued by the Russian Ministry Of Energy.
    B). Copy of approval to export issued by the Russian Ministry Of Justice.
    C). Copy of approval to export issued by the Russian Ministry Of Home Affairs.
    D). Copy of statement of availability of the product/commodity as per the specification in Appendix
    of this S & P.
    E). Copy of the refinery commitment to produce the commodity/product.
    F). Copy of the pipeline commitment, and deal passport.
    G). Copy of the storage receipt for the first delivery.
    H). Resources certificate.
    I). Copy Of The Charter Party Agreements (CPA) to transport the commodity to the discharge
    terminal/port of unloading.
    J). Copy of tank receipts and SGS reports

  7. Buyer’s bank issues AN OPERATIVE Irrevocable Transferable or Non Transferable Monthly Auto-
    Revolving Documentary Letter of Credit, payable 100% at sight on Bill of Lading Documents, valid until
    fulfillment of Total contract amount.


1. “PORT OF LOADING” – VLADIVOSTOK, RUSSIA. Largest Port of Russia and pipe lines

fuel32. “DISCHARGE TERMINAL/PORT ” – Rotterdam Port, Netherlands. (CIF only).
FOB Rotterdam Platts code : NWE/ARA FOB PLATTS AAWZD00 and CIF Rotterdam Platts
code : NWE/ARA CIF PLATTS AAWZC00. CIF price means delivery in vessel (including loading
costs and taxes at loading port paid by Seller Company).

3. POSITION OF SELLER COMPANY : the Seller is an Authorized, Mandated. Exclusive-Rights-
Holder legally empowered to coordinate, conclude, manage, negotiate, organize and sell the
commodity for and on behalf of the Producer/Supplier from Russia. The Producer/Supplier has
blocked and stored an agreed volume of its petroleum products produced, specifically and in
particular the said commodity, for the Seller to conduct and conclude the sales – and as such the
Seller is currently the Lawful Owner of the commodity stored at the storage facility in Russia, which
is available and ready to be sold and shipped out at the request of any potential and capable buyer
and/or purchaser.
NOTICE: The Seller has 30 Million Bbl*12 months Government Quota for JP54 and 3 Million
MT*12 months for D2. He is the Exclusive Seller Company of this Quota. First month
Immediate Delivery to be loaded (at least a large part of first month’s delivery.) No/little product
“in tank”, product is in pipeline now. It is not “SPOT” a deal – Spot can be only in tank – an
annual contract cannot be considered as Spot.

4. We mention full POP upon receipt of POF, instead of partial POP what does it mean? : It
means that the product is already produced (at least the first monthly delivery is available in
pipeline/refinery’s tanks and can be delivered immediately). That is what many companies
incorrectly offer as “SPOT” – it is not same – “SPOT” really means that product is in tank and to be
delivered within maximum 48 hours in tank. Immediate Delivery means the product is in pipeline
(ex-tank) with possible a small quantity in tank at terminal of loading port.
That is reason that we provide full POP including SGS documents. For the “comfort” of the Buyer he
has the necessary permission to make extra dip test for the part of available product in tank.
So, immediate delivery means that product is available to be loaded upon receipt of bank instrument.
Estimating 10 days as Charter Party Agreement / Storage Facility will be required in the name of end

Upon signing of contract the Seller Company can send an Attestation Letter from their Lawyer’s
office in USA confirming that POP’s are already at Standard Chartered Bank. They will also add a
clause of immediate delivery and upon receipt of the RWA the exactly quantity available for
immediate delivery will be given with a separate letter from the Seller Company.
Before receipt of RWA we cannot make any prediction regarding the exact quantity of immediate
delivery. Upon receipt of MT799 RWA the Buyer will receive this, not before.
Some Buyers ask for the POP and POF/RWA to be exchanged bank-to-bank at the same time –
strictly speaking this is technically impossible for the following reasons:
a) The POP is a commercial document, not a financial document. Usually banks do not accept
any responsibility for commercial documents especially if either the Seller or Buyer bank
with a branch of the bank that is not the not headquarters or a “major branch” (head office
and/or international trade department of the bank). The Banks cannot check the authenticity
of commercial documents and cannot provide Attestation for it. A branch manager can be
responsible only for financial documents, not for commercial documents.
b) The concept that the two banks can exchange “simultaneously” (same bank time-windows) is
a myth – due time-zone differences and each the fact that each “transaction” has it’s own
transmission & confirmation process via international trade departments and correspondence
c) If banks were to proceed with “financial readiness” direct from the POP , then Contract with
it’s step-by-step procedures wouldn’t have any practical value. Contracts are legally binding
between two involved parties (Seller and Buyer) – the role of the banks is not to control &
proceed with their client’s responsibility on behalf of contract, hey are only executors of the
financial processes as instructed by their clients.
However, if certain commercial papers are lodged with the bank, banking officers can (under the
instruction of their client) confirm to another bank that papers of that nature are indeed lodged with
them on their client’s behalf (but not authenticate the contents). Similarly in a secure senior-bankingofficer
to senior-banking-officer communiqué each client’s bank may inform the other that their
client is known to them and is known to engage in the said business and has a credit/transaction
history to support such – note: this will be “advisory only” and the banks will not take any
responsibility/liability for this. This is sometimes referred to as a “Soft exchange of POP & POF”
as it has no true legal standing.

A “Major’s Procedure” may be considered as a “short form” of procedures (usually reduced to only
4-5 steps in which the Buyer formally indicates their interest and the Seller issues a Full Commercial
Invoice after which payment/POF instruments are exchanged and the deal is closed).
“Yes” – In principal the Seller Company is prepared to engage in such, but only with bona-fide
“Major” Buyers – and only provided that Seller is in direct communication with the Buyer (who
MUST be a recognised “Major”) and proceeds/negotiates directly with the Major Buyer. So-called
“trade desks” and/or “broker centres” which ask for POP upfront are usually trying to assign it to
several majors in hope of trying to sell it. A typical approach from such groups is to ask for pay order
from the Seller before they “process” the offer.- We don’t walk into the trap of this trick anymore.
We consider these groups to be abusers.

The answer is that they ABSOLUTELY SHOULD NOT.
When a Bank wants/is instructed to block funds of it’s client or for another client the verbiage of the
banking instrument/instruction will clearly state that the Bank confirms that the funds of the stated
amount of (e.g. US$1,000,000) are “placed under administrative hold” (i.e. “blocked”) for an agreed
days/date (i.e. “for xx banking days from today” or “from the date of …../…./2010 to …../…./2010
inclusive”) and for what purpose (e.g. “in order to participate in a purchase agreement number
………….. for …… in the favor of for the period and duration as
stated herein”) and accordingly the funds will be blocked for that period.
Also please understand that both SWIFT MT799 and/or MT999 transmissions/messages are freeformat
messages, the only difference is the MT799 can be considered as proof of funds being
available (in theory) but not that the funds are actually “Blocked”. It is the MT103 – MT103/23
and/or MT760/RDLC that will mean that the Buyer’s funds are committed to the purchase.
If you read our RWA it state very clear that the Buyer’s bank only confirming the following:
1) (First paragraph) The Buyer is financially able to initiate, complete and honor payment of
contract number ……..
2) (Second paragraph) The Buyer’s bank understands that their client has to issue the DLC for
the value of US$xxxxxxxx and it will be “revolved” for each month of the contract.
Some brokers come with excuse that their bank will block their funds for such as swift Text. This is
simply not true – our verbiage is well-considered by our Bank so that Buyer’s bank need not and
indeed should not block the Buyer’s funds at the RWA stage.