Physical commodities trading
The truth today is that commodity traders are many, real sitting product is the issue. The broker market is flooded with fake offers entertaining the world. The key is to find real product traders who know how to transact.
Brokers claiming, they have “allocation contracts” that never get a product in inventory because they are brokers who bury from title holders for resale. Allocation holders are not title holders.
If the buyer is serious about dealing in this market and transacting business with us, our process.
We do not get involved with broker chains. If working in a group, the group must have access to the exit buyer, end customer. We do not work any offer in which I do not have access to seller and buyer or mandate. No transparency no deal, then it’s a waste of time.
A mandate to a supplier is an “agent” who acts on behalf of a principal buyer or seller. The buyer/seller intermediaries must know procedures well and act in the best interest of all parities on both sides of the deal.
Traders use of a “Letter of Intent” which is incorrect. LOI mean “Letter of Indemnity. A letter of Intent is not a binding contract. As to ICPO… This term means Irrevocable Corporate Purchase Offer. This procedure is with The exception to an unknown buyer to us where we’ll have to verify an RWA to prove financial capability and KYC.
The flawed document MFPA does not protect a commission payment. There are documents under International Law that can protect your commission, but the MFPA is not one of them. Enter deals with binding international chamber of commerce NON-CIRCUMVENTION, NON-DISCLOSURE & WORKING AGREEMENT (NCNDA) IRREVOCABLE MASTER FEE PROTECTION AGREEMENT (IMFPA).
– Performance Bond is for a deal that works for the supplier in possession of goods and an end buyer taking possession of goods. As to Performance Guarantee, it is a guarantee given by the seller’s bank to the buyer’s bank in the form of an unconditional Stand-By letter of Credit. If the delivery fails and the delivery documents are not presented to the bank on the date specified in the contract, the bank just automatically pays buyer bank the Performance Guarantee unconditionally, no questions asked.
Conclusion: Always work with people you trust and always verify everything.
– SOP
Standard Operating Procedures. A best practice process not a suggestion, but a mandate to keep all team members always involved in the transaction on the same page and move forward in a singular manner.
– NCNDA & IMFPA signed by all parties
A mutual confidentiality agreement (also known as a non-disclosure agreement or NDA) for use where both parties buyers sellers and intermediaries will be disclosing confidential information to each other for a general commercial purpose in a cross-border context.
Buyer submits the following documents addressed to the Seller:
– KYC
What is KYC?
Know Your Customer (KYC) PPE trading procedures are a critical function to assess customer risk and a legal requirement to comply with Anti-Money Laundering (AML) laws. Effective KYC involves knowing a customer’s identity, their financial activities, and the risk they pose.
– DD
What is DD
Due Diligence (DD) is a process of risk mitigation protecting yourself against criminals, terrorists, and Politically Exposed Persons (PEPs) who might present a risk.
– ICPO
Irrevocable Corporate Purchase Offer in PPE trading issued from the buyer and not drafted and issued from the intermediary.
– ATV (on your letterhead)
Authority to Verify FUNDS
– LOA
Attorney Letter of Attestation. (Funds verified & attested to, by independent US attorney)
– AML
Authorization Letter (on your letterhead in template provided by seller regulatory responsibility of compliance to Anti-Money Laundering. Current Bank Statement in the buyer’s name that matches the AML and KYC
By second day of document submission, the seller attorney instructs a top Escrow company who verifies the lot/SGS