CIF PROCEDURE
Incoterms: CIF 2020
Loading port: Fujairah, Jurong, Rotterdam, Batumi, Kulevi, etc
Discharge port: Buyer-nominated safe port worldwide
Platts: Negotiable on PLATTS of NWE, Mediterranean, Arab Gulf (AG), Fujairah Platts, Singapore MOPS
Price basis: CIF discharge port = FOB TTV load port (Fujairah Platts / AG whichever higher, Jurong Singapore MOPS, Rotterdam NWE Platts) minus agreed discount + freight + insurance
Inspection: SGS / Intertek / Saybolt-Corelab or equivalent at load port and Discharge port
Payment terms: Irrevocable, Transferable, Divisible, Auto-Revolving DLC via MT700 (operative upon POP verification) – 100% against shipping documents & final Q&Q at discharge
Offer: Subject to tank & vessel availability. Buyer must confirm availability and fix price with Seller before proceeding
TRANSACTION PROCEDURE
- Buyer Inquiry:
Buyer sends email to seller stating intent to purchase, required volume, discharge port, preferred load port, and target laycan. - Seller Response
Seller issues FCO including:- Company profile
- CIS (KYC) of Seller
- Available quantity, specification, load port, indicative CIF price (FOB + freight + insurance breakdown)
- Buyer Commitment
Buyer issues:- ICPO (Irrevocable Corporate Purchase Order)
- CIS / KYC of Buyer
- Company business profile
- Valid Tank Storage Receipt (TSR) at discharge port (≥90 days validity)
- Port Access Permit Code (PAPC) or terminal confirmation letter
- Contract Issuance
Seller issues:- RECAP
- Pro-Forma Invoice
- Draft SPA (Sale & Purchase Agreement)
- Contract Finalization
Buyer reviews, signs, and returns:- Pro-Forma Invoice
- SPA → Buyer shares discharge port TSA details & exit-buyer mandate (if resale)
- Commercial Invoice
Seller issues Commercial Invoice (CI) → Buyer reviews, signs, and returns within 24 hours - Partial Proof of Product (PPOP) – Issued by Seller Within 48 hours of signed SPA: a. Commitment to Supply b. Authorization to Sell and Collect (ATSC) c. Certificate of Origin (COO) d. Product Passport / Certificate of Analysis (COA) e. Last Injection Report OR previous Q&Q report by SGS/Intertek/Saybolt (composite sampling, sealed tank details, tank number, seal numbers) f. Vessel Booking Confirmation (if allocated)
- PPOP Verification:
Buyer verifies all PPOP documents within 48 hours → If satisfactory, proceed to Step 8 - Buyer Provides POF & DLC Draft
Buyer submits:- POF via one of the following: • Bank Comfort Letter (BCL) • Bank Statement • SWIFT MT199 / MT799 POF confirmation
- Draft DLC verbiage (MT799) – Irrevocable, Transferable, Divisible, Auto-Revolving, 60-day validity
- Full Access Documents & DLC Confirmation – Issued by Seller Within 24 hours of POF & DLC draft receipt: a. Valid Tank Storage Receipt (TSR) at load port b. Terminal Access Code (TAC) c. Hub No. d. Authorization to Verify (ATV) e. Booking No. f. Vessel Q88 (pre-nomination) → Seller’s bank confirms DLC draft via SWIFT → Buyer’s bank issues operative MT700
- Vessel Nomination & Loading Within 14 days of operative DLC:
- Seller nominates vessel (Q88 approved by Buyer’s bank via SWIFT)
- Joint SGS/Intertek/Saybolt appointed (50/50 cost)
- Loading completed within laycan ±3 days
- Full shipping documents couriered to Buyer’s bank under DLC negotiation
- Shipping Documents Package (Upon Sailing) Seller’s bank transmits via courier:
- Marine Bill of Lading (3 originals, freight prepaid, consigned to applicant)
- Signed Commercial Invoice (3 originals)
- Certificate of Origin (1 orig + 1 copy)
- Certificate of Insurance (110% cargo value)
- SGS Q&Q Report (load port)
- Cargo Manifest, CPA, Vessel Q88, Ullage Report, etc.
- Discharge Port Preparation Buyer confirms 5 days before ETA:
- Valid TSR + PAPC at discharge port
- Port receiving instructions
- Discharge & Final Q&Q
- Joint SGS/Intertek/Saybolt at discharge (50/50 cost)
- Final Q&Q report binding for payment
- Payment Upon presentation of shipping docs + final Q&Q: → Buyer’s bank releases 100% via DLC within 24 hours → Difference (if any) via MT103
- Title & Cargo Transfer Upon confirmation of clean funds in Seller’s account:
- Seller issues Certificate of Ownership Transfer (COT) in Buyer’s name via SWIFT MT799
- Original Bill of Lading endorsed to Buyer
- Cargo released at discharge port
IMPORTANT NOTES
- Full Proof of Product (FPOP) & Fresh SGS → Issued in Exit Buyer’s name only after payment and title transfer
- ATSC → Must clearly authorize Buyer to sell and collect payment
- No Extra Fees → No terminal fees, port charges, or “facilitation payments” outside agreed SPA
- Q&Q Variance → >0.5% triggers deduction + $100K penalty (either party)
- Force Majeure & Disputes → Governed by ICC rules, arbitration in Singapore / London (as per SPA)
- Pricing Lock → 7 days before loading: Final CIF/MT = MOPS Platts (7-day avg) – Discount + Freight + Insurance
Buyer Credential Verification Policy
To ensure a secure and reliable transaction process, the financial capability of buyers intending to purchase fuels will be thoroughly verified.
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Individual Buyers: Credentials of the buyer must be provided for financial assessment.
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Joint Ventures (JV): If the buyer is importing fuels in partnership with another financially robust entity, both parties must submit their credentials for verification.
All provided information will be reviewed to confirm the buyer’s ability to fulfill the financial obligations of the purchase.
Indemnity Clause: In the oil procurement process, we strictly adhere to our established procedures, which are designed to be neutral, transparent, and structured to prevent scams and fraud in the oil trade. These processes ensure compliance, security, and fairness for all parties involved. Our procedures apply solely subject to the availability of the product.
Disclaimer : We hereby declare that we do not accept or source any fuel or petroleum products from Russia, Iran, or any other sanctioned country.
