Tank to Tank (TTT) FOB (2nd Option) POF via SWIFT

Confirmation of customer’s solvency via SWIFT. FOB transaction procedure with oil products, from tank to tank inside the port.

There are suppliers who only care about confirmation of the customer’s solvency, but the seller wants this confirmation in the most reliable way that currently exists – in the form of a SWIFT message from the buyer’s bank via MT 199/799.

In order for a customer to give proof of solvency via SWIFT MT199 or MT799, the customer needs to have the full amount collected in their current accounts. Most banks not only require that the money is available before sending SWIFT, but also that this money “lay” on the accounts before this 3-5 days. The bank will also charge a % commission for issuing this SWIFT. Often on such large transactions buyers use credit facilities. If the buyer wants to issue proof of solvency at the expense of the existing credit line, the bank’s commission for issuing such SWIFT will be even higher.

Risk: The buyer collects in his accounts the full amount needed for the purchase. The buyer actually pulls money out of circulation and freezes it for a few days to confirm his solvency, but in return he has no guarantee that the seller actually has the resource available right now.

SAMPLE TEXT OF THE PROCEDURE:

  1. Buyer issues LOI and sends along with CIS/KYC documentation.
  2. Seller issues FCO and sends along with KYC documentation.
  3. Buyer returns signed FCO and issues ICPO and Charter Party Agreement (CPA)
  4. Seller issues Commercial Invoice.
  5. Buyer signs Commercial Invoice and returns it seller.
  6. Buyer provides acceptable POF (MT199 / MT799 Pre-Advice (Not Blocked Funds) / DLC / SBLC) as per Appendix 1.
  7. Seller provides the following PPOP within 3-4 working days of the verification of the MT799 Pre-Advice:
  • Commitment to supply.
  • Certificate of origin.
  • Product passport.
  • DIP Test Analysis. (Fresh Q&Q from an accredited testing company in Rotterdam 24-48 hours old)
  • Tank Storage Receipt (TSR) (Includes GPS Co-Ordinates & Tank Hub Numbers)
  • Injection Report.
  • ATV / Authorization to verify (physical verification of TSR).
  1. Buyer conducts Q & Q analysis on product in Sellers tanks.
  2. Buyer pays within 24 – 48 hours via MT103 as well as providing Seller with Vessel information and NOR from his Shipping Company and details of Port Clearance through the nominated vessel terminal.
  3. Seller on receipt of MT103 bank transfer and Buyers Port Clearance Payment:
  • Commences the injection/lifting into the Buyers vessel as per schedule.
  • Releases the complete POP documents to the Buyer including the Resource Confirmation Letter
  • Issues Authority to Sell and Collect (ATSC) and Transfers Title of Ownership into the Buyers name.
  1. Seller issues 12-month delivery contract for acceptance.
  2. Buyer issues a revolving IRDLC/MT700 OR SBLC/MT760 for the contract.
  3. Seller pays Seller Intermediaries and Buyer Intermediaries within 48 hours.
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