CIF Procedures / Payment instructions / Pricing Formula instructions

1. The Buyer sends LOI to the Seller along with KYC / CIS, Terminal name of Discharge Port.

2. LOI to confirm that the Buyer is willing, able and capable to receive product at the tank storage facility at destination port.

Note: if buyer has an exit buyer / end user/ Government supply order lined up, Buyer must have everything in order with their exit buyer / end user before issuing LOI.

3. The Seller issues FCO to Buyer after Due Diligence on the Buyer.

4. The Buyer signs the FCO for acceptance and returns it back the Seller. Buyer also issues an ICPO as per the procedures in the FCO.

5. ICPO must be signed by the legal representative with their Passport

6. ICPO must have the CIS and company incorporation certificate or trade license.

7. Buyer must provide preferred loading schedule, shipping agent detail at discharge terminal.

8. Seller issues draft Sales and Purchase Agreement (SPA) to the Buyer. Buyer returns SPA signed and stamped. Note: if Buyer has a funding partner, funding partner must also be a signatory to the SPA.

9. Seller will share Vessel Booking detail, Loading port name, laycan period, ETA along with following papers:
– a. Q88
– b. Product Passport or Quality Analysis report by SGS / Intertek / Saybolt Corelab test report not older than 48 hours
– c. Last injection report when Oil was injected in the Storage tank from where TTV will be done for final shipment to buyer.

10. Above POP documents verified and confirmed by the Buyer within 48 hours. Upon receiving confirmation from buyer about POP papers seller issue the Proforma Invoice mentioning the Base Price. Within 5 days of receiving the Proforma invoice, Buyer issues draft of DLC verbiage of irrevocable, transferable, divisible, 60 days valid letter of credit via swift MT799 to seller/ refinery nominated bank. Upon receiving the MT799 seller/ Refinery nominated bank will confirm draft of DLC by swift to buyer’s bank. After confirmation of the final draft, Buyer will issue DLC by swift MT700.

11. After receiving of payment instrument by the seller’s bank,

12. Seller will provide document showing Refineries commitment letter of export.

13. Seller and Buyer agree to the loading schedule to dispatch the vessel within 14 days of receiving the DLC. Once vessel is dispatched, seller will share scanned copy of following documents:

+Marine bills of lading in 3 originals and 3 copies consigned to applicant, marked freight prepaid  and notify applicant and 1^st beneficiary of the LC. Each original to be hand signed by master or vessel’s agent at the port of loading.
+Signed commercial invoices in 3 originals
+Packing list in 1 original and 1 copy
+Certificate of origin (coo) in 1 original and 1 copy stating country of origin
+ CPA copy ( charter party agreement copy)
+ Registration copy of the shipping line who has booked the vessel.
+ Cargo manifest
+ Product quality passport (analysis test report)
+ Quality & Quantity certificate with full report issued by SGS / Intertek/ Saybolt – Corelab or equivalent at loading port in accordance with methods and procedures commonly used in the oil industry practice and accepted at the port of loading, and, however, at all times, shall strictly comply with the revised ASTM/IP international standards and procedures. The latest revised edition of ASTM tables shall be used for the conversion of observed volumes of the goods to the volumes at the standard temperature and for conversion of volumes to weight.
+ copy master’s receipt of sample & documents. At the time of the vessel loading inspected samples shall be taken from the auto sampler or flow-meter. Sampling shall be performed according to the standard procedure accepted at the given port. Samples taken in such manner shall be thoroughly mixed, put into bottles and sealed. One part of each of these samples filled into not less than two bottles and sealed by the seller or their appointed representative, shall be placed on board of the tanker under the care of the vessel master for delivery to the buyer or his nominated representative at the port of discharge. The other part of the same samples filled with not less than two bottles shall be sealed by the vessel master and delivered to the seller.  Both samples taken in such manner shall be considered as the inspected samples after the loading. A certificate from the vessel’s master will be collected by the shipper in original and will be accompanied by the set of documents for negotiation.
+ Act of flowmeter passing report attested by the vessel’s master
+ Vessel q88.
+ Ullage report
+ Copy of notice nor and eta
+ Copy of time log sheet.
+ Ship’s tank dry/cleanliness certificate.
+ Copy of product release note.
+ Seller’s product export license copy
+ Seller’s company registration certificate copy
+ Custom clearance documents from loading port for shipping agent to verify
+ Letter of commitment in shipper’s letterhead to supply.
+ Letter of authorization to sell and collect in favor of ametheus commodities pvt ltd or the consignee.
+ Dip test result at discharge port should be in conformity with the q&q result/report of the surveyor nominated by the lc beneficiary.
+ Certificate of ownership transfer to consignee/ as per spa number xxxx
+ Certificate of insurance, issued by internationally recognized insurance company, for a minimum of 110% of the CIF value of goods on board each vessel.

14. Buyer is obliged to provide valid TSR (Tank Storage receipt) in the destination port and send instructions for receiving the vessel in the destination port minimum 5 days prior to vessel arrival. Buyer also obtains port access permit code (PAPC) based on Q88 from port authorities in the port of destination.

15. After arrival of the vessel, buyer will confirm the receipt of the cargo in full as per Q&Q report carried at final destination.

16. Based on the final and agreed Quality & Quantity (Q&Q) report, the Buyer shall instruct its bank to release payment under the Documentary Letter of Credit (DLC), and the Seller shall instruct its bank to draw the payment as per the final invoice under the DLC. Additionally, the Buyer shall make the difference payment (if any, based on the final Q&Q) via MT103, covering 100% of the cargo value as per the Seller’s Commercial Invoice, once the final Q&Q report confirms the agreed quantity. Upon the Seller’s receipt of the MT103 payment and successful drawdown of the DLC as per the final invoice, the Seller shall release the vessel at the destination port.

17. Seller after bank confirmation will issue Certificate of Ownership in buyer’s name and change the Title of goods to the buyer.

18. . Pricing formula instructions:

A Base price per metric ton on CIF terms will be agreed for the term of the SPA for the issuance of the DLC.

However, each shipment will/may have a different value from the DLC based upon market fluctuation and the agreed upon discount between Buyer and Seller.

7 days prior to loading of vessel at Origin a Price per metric ton will be fixed based upon the agreed discount using Mediterranean /Fujairah/MOPS Platts.

The true value of the cargo will be based upon the 7 days before loading fixed price and the Q&Q report.

Flow Chart: Buyer LOI → Seller FCO → ICPO → SPA → POP→DLC (MT799→MT700) → Shipment + Q&Q → Discharge → Payment against Q&Q report → Title Transfer

Flow Chart:

Buyer LOI → Seller FCO → ICPO → SPA → DLC (MT199+POP=MT700) → Shipment + Q&Q → Discharge → Q&Q at Destination → Payment → Title Transfer