FTN: About ICPO, BCL, LOI..etc..etc..

ICPO, LOI, BLC

FYBR / ITSI/ TWIY Applicable-
Posted: May 2nd 2009

POP and other Nonsense?

Even with the 100’s of pages of advice on the Allexperts site- and even with hundreds of generated web site pages including one very angry FTN CEO on You tube video, misguided and misinformed intermediaries are still asking FTN exporting every day via e-mail about procedures attached to ambiguous terms and unworkable applications-

Some really stupid outside traders even cut and paste the FTN registry list an send to every listed URPIB agent their ignorantly applied fake offers, not understanding that all roads lead back to FTN exporting- Every day FTN exporting is adding to its black listed files, people who wilfully cannot be trusted or who are offering anything but real goods.

From the 20th of May FTN exporting automatically spams the many e-mail advised daily without opening of such- FTN exporting does not mind intelligent questions but to answer the same type of questions over and over again pertaining to useless procedures is about to come to halt-

If you looking for very detailed answers to LOI, POP, ICPO, Mandates , ASWP, NCNDA, etc.. and the likes , please go to Google browser enter the term “Distribution of Products” -I should be near the top ranking on the very first page page under Allexperts- Do your research on past answers and find the what you are looking for- it’s all there- or try FAQ section in www.itsi.itgo.com-

If one is going to attempt such deals and if one is going to write rules and apply such rules and laws to such deals, then the best , most effective and most widely used source should give support to such a practice- FTN exporting has done just that- I am not preaching my “Rules and laws” such are already in place and widely used - I’ve simply worked out how an intermediary can use such rules and laws for their own benefit of use- and to do so in the most safest manner.

For the record the following page site will refresh such answers more forcefully all on the same page in basic form only , assume there is a lot more that could be said on every section defined-.


LOI
LETTER OF INTENT - I intend to buy today - Sorry! change my mind tomorrow- Not appropriate for use by intermediaries. LOI actually means “Letter of indemnity” and is specific to international trade dealing, especially in matters of construction contracts and the likes-

ICPO/ IPO
The term is used when someone who has an open account can place an order for stocks from a stock broker-Ie.: over the phone.( ICPO :INITIAL CORPORATE OR COMMERCIAL PURCHASE ORDER)

As for the flawed term “ICPO” as per IRREVOCABLE CORPORATE PURCHASE ORDER: An intermediary cannot make an Irrevocable commitment to purchase goods . A intermediary seller has no right to ask for such, for goods he does not own- An Intermediary can’t irrevocably buy goods that he will never see, use or obtain possession of such- An intermediary can only consider an OFFER to buy such goods and often subject to final contracts - thus allowing the intermediary to reject the goods or accept the goods. Because the Intermediary ‘ Buyer” is also the seller of such goods It cannot use the USA system of law pertaining to offer acceptance in and international arena - because the intermediary needs to also secure funds from an end buyer to purchase such goods- Under USA law an offer once accepted can be rejected- great! So an intermediary works for weeks to secure his end buyers funds and at a whim the offer is rejected- under English law the offer once accepted is a legally binding application- This forces the intermediary to really be sure that the goods being offered are real , because if he makes an offer which is accepted by and end buyer , then its legally binding- Any intermediary asking for an ICPO or attempting to issues a ICPO in where they fail to Perform- take note; the consequences of such failure could be huge-especially for USA intermediaries-

RWA
READY WILLING AND “ FINANCIALLY “ ABLE- the Letter “F” is missing from “RWA” but it has already been defined in both English and American legal systems. The Intermediary MUST be R.W.A ready by the time he signs the final formal contract of supply form a supplier in possession of goods- that means; time spend to negotiate upon the suppliers terms is being applied over a longer time frame , while in the shorter time frame the intermediary “buyer/seller” secures the funds from the end buyer - because the Intermediary has to go first with payment in where proof of goods follows second- according the intermediary has to very very sure not to offer actual proof of goods ,and that they are actually offering goods from a real supplier in possession of goods being offered- The Suppliers is secured and verified first to which once such is assured the end buyer sources funds .

When an end buyer does business with a supplier directly , the end buyer has to issue funds first, long before the ship even arrives at loading port. Accordingly the intermediary must also do the same.

ASWP
So 100,000 MT of heating oil from Texas to New York habour is going to cost the same freight as a 100,000 MT shipments going f rom Texas to India- Really? All ports are dangerous environments by the nature of their existence and business plied- Tell me, can any one define to me a port which is Safe?

MT749
MONEY TRANSFER NETWORK PROTOCOL and SWIFT are internal application used bank to bank- not dissimilar to “Key Tested Telex” system in where a secure landline is used so “bank to bank” protocol can test each other using special codes to identify each other- intermediaries MUST use a DLC application implying anything else is unacceptable. An intermediary must not use an inappropriate internal applications when doing business

SLC
STAND BY LETTER OF CREDIT may be used for payment of performance guarantee or commissions and MUST never be used to buy goods- an SLC is an unconditional instrument- an event is applied to where once such an event is recorded as having eventuated , the SLC is allowed to be collected upon-

MANDATE
A representative of a disclosed Principal in where an agreement is held with such (mandate ship) supplier in possession of goods or end buyer taking possession of goods. A Mandate holder must disclose his Principal and may gets his commission from his principal- see itsi.itgo.com FAQ and Mandate page site for more details- A Mandate holder, once such a position is claimed in not accepted unless the e-mail supports to disclose the supplier or end buyer. Once an intermediary has proof in writing that “ Someone has disclosed”, the supplier or an end buyer “when disclosing their mandate ship” , then should later the deal fall in legal dire straits due to failure of supply- then the intermediary can indeed mitigate its own stance by producing the claim of mandate ship- The person making the claim, which fails to pan out, is the one who will be is serious trouble from law enforcement.


QUOTE
Ideal the best document a intermediary can ask for from a Supplier of given to an End buyer to commence a deal- A quote is not ‘accepted’ but “confirmed” thus a quote is not a legally binding document so long as the heading implies that term “Quote”- A quote must carry information about Quantity, Grade, Delivery Status , and PRICE as a minimum standard-

OFFER
Ideal for intermediary use- Once an quote is confirmed , the Offer is issued or asked for- the offer once accepted is legally binding as is or is subject to acceptance on final contract signing both edicts means to define a legally binding irrevocable status- one is legally binding once acceptance is implied , the other implies the same so long as matters of the offer are not changed on the contract- but is subject to the contract as being signed as formally active. You sign an offer as accepted then you’d better have the goods or end buyer. English Foreign law governance now applies to over 65 percent of the planets exporters fully or in part- because English law is one of the the legal systems that can hear disputes of English contract application applied in foreign jurisdiction-

POP
Even an end buyer going to the port of loading to witness the goods being loaded and even touching the goods when such is being loaded is not guaranteed that the product that's being ordered is the very same product they are touching- If this is the case for an end buyer then such is more so the case with an intermediary- for this reason the so called P.O.P must come after the DLC is deposited - The supplier calls upon an independent third party Inspector at huge cost to certify that the goods being loaded is what the end buyer has ordered- the third party certification Guarantee’s that what the “experts” have certified is true and correct thus a legally enforceable guarantee becomes evident against the inspection service if the goods arrive different to what has been attested to- Like wise; “Samples” are offered by the inspection agency and must be paid in advance before such samples are drawn.


PPI
POLICY PROOF OF INTEREST-
Ideal for intermediary use-Incoterms stipulates that the “seller” must provide “ evidence” of goods- this now definitively implies that a contract has been sealed and that the supplier has provided the documents to the the buyer in where the intermediary buyer turn seller is required to provide or “present “ at sight the “clean” delivery documents as per the contract to enact ‘’collection” procedures- In where an intermediary simply cannot provide genuine P.O.P it can provide its own interest in the goods being sold- “interest in the goods being sold” is very specific-

I have a quote and offer and finally a signed contract- since the offer is a legally binding document once accepted the intermediary is legally bound to perform with the supplier - to do so means that great gains could eventuate to the intermediary- thus his interests is the goods are both very real and very apparent- he has goods secured, he is buying the goods from a supplier and he can prove that he has interests to protect in regards to the sale of such goods-

“Dear Mr Brazilian sugar supplier could you kindly confirm that you have sold sugar to FTN exporting” proves one thing above all else - that the end buyer has had the opportunity to conduct due diligence on whether or not FTN exporting has sugar-from a verifiable supplier- this is a lot different to offering POP to goods which in reality simply cannot be ascertained unless experts test such products outright- I hope the above POP application is finally put to rest- Giving POP before the DLC is ill advised protocol and a waste of time to apply-as such cannot be effectively give and to do so anyway would only reveal the all important suppliers details in where circumvention will prevail- To reveal the suppliers details will still require the end buyer to secure Real POP later anyway as part of the delivery application as issued not form the supplier but by the said appointed experts- So why give this said ineffective POP before hand ?- Thus the real reason most sly intermediaries ask for the so called POP is ostensibly not based on honourable intent but asked for on a very deceptive platform. Most Intermediaries think that if they have POP first they can close a deal with a end buyer- hence that’s why such ask for “POP”-


P.G
-PERFORMANCE GUARANTEE -Ideal for intermediary use- intermediary has to perform title delivery of documents as stipulated on the issued DLC - Failure to Perform means that the goods can still be delivered albeit; late- in where as a matter of compensation the end buyer gets to call upon the SLC supporting the P.G unconditionally once delivery time is recorded as being late and nothing more- Note the use of a P.G is not a normal part of doing business but is an an acceptable application to use. The offer from a intermediary to the end buyer has no matter of P.G usually applied - and is applied if asked for- at an increase in price of goods- In all cases even if the Buyer/Seller does not provide a P.G to his end buyer , such is always asked for or at least sought from the supplier for his own peace of mind and benefit.

B.G
BANK GUARANTEE- cannot be used by an intermediary - a B.G is one instrument of support- supporting a DLC issuance protocol especially in revolving credit applications when UCP600 DC applications are not in play- Payment by PBG or BG is a nonsense application.

P.B: PERFORMANCE BOND :
A felon is give bond to answer charges at a later date- the bond is with the court- Accordingly P.B is a “Bond “following the goods - Such a “bond” only becomes apparent for claiming not against and after delivery has applied over ships rails in port of loading , but much later when goods are examined when off loaded at port of destination- The intermediary deals in documents - “Delivery documents” that become apparent when goods go over a ships rail at port of loading- accordingly a P.G is about “Performance’ of delivery and not a “bond” on Goods-

CONTRACT:
A valid contract is an ‘agreement” made between two or more parties to such; in where legal rights and obligations are in play in where the Law will enforce.

The following “Essential Elements ‘ must be apparent as nearly a global application- Much more so where English Law governance of such applies-

(1) The Intention of the parties to create a legally binding situation-
(2) An offer must have been apparent -
(3) Valuable consideration must be apparent. I.e ; firm price or pricing application.
(4) legal capacity to enter into a contract must be apparent.
(5) A genuine consent must be apparent by the parties.
(6) legality of objects of the agreement must be apparent-

Any of the above elements which are not apparent may indeed identify that a invalid contract could be in play.

A contract is identifies where the parties intend to create a legally enforceable situation based upon the legal obligations of both.

An” agreement” generally lack one or often; more of the above elements . Ie.. An agreement to repay money on a debt is defined as an agreement in where one party is giving a direct order to another , in where failure to perform on such an order could proceed to legal action-

All contracts are agreements but not all agreements are contracts-Intermediaries deal in contracts. A contract is discharged by Performance, Breach or Frustration - Performance as far as an intermediary goes is about ‘Payment of money” in where legal tender applies -As far as an intermediary is concerned who does not deal using legal tender-payment infers a “conditional payment” in where DLC or bills of exchange are used- Should such fail to be made available for collection , the the intermediary is returned to the original place in the contract before such conditional instruments where issued-(breach of contract)


Thus when payment is made and cleared , the intermediary has “performed” and his part of the ongoing deal is closed- Since the intermediary must not deal in DES (Delivery Ex Ship) transactions, then matters to do with goods arriving at destination port and claims made thereafter as still addressed to the intermediary who closed the deal , but only for forwarding as such to their supplier .I.e.; If the end buyer’s claim is against the intermediary , then in effect the intermediary has a claim against the supplier-

The law of contract in general applies to the country in where such a contract is made-of where performance is enacted of such- but he terms within the contract may also need to place the needs of an intermediary in another country and the law of the exporting yet in another country- A Judge would rule on matters to hear disputes specifically based upon identifying “Place of jurisdiction” - The dispute is settled upon the law's in where jurisdiction has been determined-

Example of a Contract:

This agreement made on the 6th of May 2009 between John Smith of etc... define as the Vendor and Plain Jane of ..etc...(The purchaser)

(1)The vendor agrees to sell 200 wrecked cars suitable for metal recycling, as already inspected by he purchaser for $20,000 dollars .

(2) The said purchaser has agreed to pay $20,000 dollars without conditions on goods already inspected.

(3) Upon signing of this contract - the purchaser shall pay the vendor a deposit of $2000 dollars which is not refundable. the balance of the finds owing shall be paid within 30 days thereafter , whether or not all the said goods have been collected.

(4) Attestation:
Signed by John Smith in the presence of witness

Signed by PLAIN JANE in the presence of witness


AN EXAMPLE OF AN AGREEMENT-

I JOHN SMITH OF ETC...ETC. DO HEREBY OFFER TO MAKE PAYMENT EVERY MONTH FOR 12 CONSECUTIVE MONTHS the sum of $100 dollars per month until the amount of $1200 dollars has been paid to Plain Jane .

For every payment that is late - 10 dollars per month extra is payable on each default.

Signed by John Smith


DELIVERY
AS IT APPLIES TO INTERMEDIARIES: Under Incoterms delivery means “Document delivery “- and not goods delivery- giving further support to the intermediary edicts that they close the deal in hand when delivery performance of such has been successfully applied-

SPOT
NOT FOR INTERMEDIARY USE: Front line defined this week (April 2009) that up to 100,000,000 MT of crude oil is being stored in ships- storage cost per day could be as high as $35.000 dollars-

This implies that such ships loads are immediately available for purchase- this also implies that since the the buyer doe not have to spend the next 30, 40 days securing a carrier , such buyer could buy such crude immediately immediately means that within 15 days or less the deal is sealed and goods have been paid for - intermediaries work with a 90 day plus delivery time frame. SPOT deals often refer to goods already loaded on board ship-or are already ocean going-


ASWP
Must no apply for use by intermediaries; nonsense application. Very high prices can only prevail- for a ULCC carrier to travel only 500 N/m and imply that if it had to travel 5000 N/m the freight component is the same is a ludicrous situation.


NCNDA
Must no be relied upon for use by intermediary; Non disclosure non circumvention agreement will not guarantee commission payments. For such you need a “Personal Guarantee” from the person protecting the commission to another person and not party- A NCND could be applied as a matter of contract, but that’s only an applicable regime applied to the parties signing the contract.

MPA
Must no be used by intermediaries; Master Payment Order cannot be made to apply because one single edict applicable to mistake of fact or information could render the whole MPA as invalid thus making all names applied on such an invalid situation-
Each Payment order must be personally issued by the guarantor to it the beneficiary of such near the start of the deal- and must be supported by a financial instrument once the deals has closed-


TOLERANCE
To be used by all intermediaries-
+/- 10 % applies to goods -/+5 applies the financial instrument-
In goods- Should the contract state 100,000 MT but the BOL defines the load as 91,000 MT then the bank will allow collection to apply at the new MT rate / cost application- If the funds supporting payment usually exceeds 5% then the issuing bank has to ask the end buyer to accept the higher value and difference - otherwise an issuing bank can act on its own on matters such excess payments - If ? for instance 100,000 MT of goods is ordered But 103,000 MT has been identified on the BOL- the bank can allow payment for the excess 3 MT without needing to ask the end buyer-


PRE ADVICE DLC
Ideal for intermediary use- the inexpensive Pre advised bank issued UCP600 irrevocable DLC is opened - All terms and condition will be apparent on such before the pre advised credit can be made fully operational as a full active credit-

I.e: Buyer opens pr advised DLC-Seller issues suppliers details of goods to prove sellers interests in such- Buyer authenticates the suppliers details, pre advised credit reverts to being a fully active credit-

So until the condition is advised that will make the credit active , the credit cannot be transferred. Under UCP600 a pre advised credit is made effective as a matter of such rules - accordingly, surrendering the correct information leaves no choice but for the bank to actually make the credit fully active-thus concerns of circumvention do not apply. The information supplied whether authenticated by the bank or not is not an apparent protocol either- simply producing the required Policy proof of interests is enough to activate the full credit status- It’s up to the buyer to authenticate such information- Fake or false information on the other hand will cancel the irrevocable status credit outright- A proven act of fraud is about the only supporting rules in UCP600 in where the irrevocable status of a credit can be defeated- Only a foolish intermediary would ever accept to trade on the goods not ascertained from a supplier-this further give even more support to the FYBR/ITSI edict - Supply must be secured first and verified and being genuine. Here is you main reason why an intermediary MUST secure goods from a supplier and not another intermediary.

TRANSFERABLE DLC
May be used by an intermediary- if one intends to transfer the credit then the term must now be apparent on the body of the credit-unlike in UCP 500 if such was not implied as such , the intermediary could still apply to use such as a transferable instrument- All fee’s for transferring the credit is made for the account of the end buy as a cost of doing business- this in not a normal practice but is an allowable practice under Article 39 of UCP600 in where “Unless other wise agreed upon’ , the cost of transferring the DLC is for the cost of the intermediary (beneficiary)

Thus he intermediary ensure that on the offer and contract such transfer fee’s are implied as a cost of doing business.

If the buyer say “No” then apply to refund all such fee’s as a credit on the the sellers invoice favouring the end buyer- Naturally this will effect final commission gross amounts.

The issuing bank issues a credit to the middle intermediary controlling the deal - The middle intermediary can only transfer the credit ONCE- thus it must be transferred to the supplier and not another intermediary- FTN HAS SEEN NUMEROUS INTERMEDIARIES SECURE HUGE DLC FROM A END BUYER - IN WHERE SUCH was transferred to another intermediary who than attempted to again transfer the credit to the supplier or another confused intermediary-in where such deals simply collapsed; Fee rate for transferring a DLC is based on a percentage value of the DLC as pr each banks own rate card. Having a great deal fail because you have not got the $30,000 plus transfer fee is a tragedy.


GOODWILL
Trading as a professional intermediary is one thing- actually securing suppliers and end buyer is where a deal is closed means that your efforts has a Good will value applied- In effect if a an agency closes a deal(s) in where it has made lets say 1 million dollars in profit in ay given year , then the business of the professional intermediary also has value - this value is called ‘Good will”

The principal of agency could sell his ‘Files’ -thus business, to another for a high price. It could also franchise its own business name to others for a fee-

A professional intermediary who has learned FTN trading regime over a long period of time and who really does know about the business, more so in where no deal has yet eventuated by the agency can indeed provide “Consultancy Services” to others especially end buyers and supplier- Fee’s exceeding $100 dollar per hour are indeed appropriate for such “expert” advice.

As such intermediaries ability to source goods and end buyers is a very confidential aspect of applying such business, accordingly it’s imperative that such information remains secret , now further only adds to why an intermediary cannot provide any “Proof” that discloses the end buyer or supplier without first securing payment from the end buyer. Learned correctly defined effective Information has value to the right people as does providing service and advice.

(More added monthly....)

In General
PIZZA AND A SMALL Espresso.
The production of a Classical Pizza is now supported by Italian law.
I.e: Margherita : A Pizza must be 33 cm Diameter , and be no more than 3mm thick. The cheese used must be Buffalo Mozzarella..etc..etc..

If there are laws to protect classical long standing recipes ,then the international trade intermediary must reconcile to the idea that there are rules and laws that are also apparent specifically to the way an international trade professional intermediary must also observe. Being ignorant of such is no excuse.

So the intermediary has rules to follow.! Intermediaries who are also attempting to make huge gains while trading, must also understand that since there are rules as it pertains to the way they MUST trade as a minimum application, then there are commercial considerations not dissimilar to the structure applied in using rules, that says for instance , as per a recent study ie.: “ A person opening up a business such as a restaurant, will need 5 years of trading successfully before they can make money from there investment” and that - “A restaurant with less than 100 seats is not viable”

This means to imply the idea that if one can last 5 years trading then they could indeed have a successful business on their hands.(Good will value increases) so long as the business supports what other “Industry experts” have stated when such was being developed. Such experts are not defining legal edicts just good business practice-

In Australia Industry experts have said that 60 % is the failure rate for new restaurants , most don’t last one year. Many spend over well 100,000 plus dollars to set up their business. Many will never recoup such initial investment.

An apprentice Chef or Hairdresser has 4 years to learn their chosen trade . They become qualified and start earning a full wage, as experience is gained and their skill becomes a demand , so will their capacity to earn more money will prevail. Some will give up their profession to favour another- Some will never advance and remain working in the same manner as they have been trained to do so-

A professional intermediary is plying business in one of the world’s most complex commercial business applications. It must protect its position from circumvention and such is chasing gains which ostensibly could be worth millions at a moments notice. For all the best training, rules and advice, some, the majority will never close a deal. Some will get close to such deal closure , and very few, the minority, will close a deal.

Some will simply use their knowledge to gain employment in a related industry -Some may even sell their expertise, if such is apparent.

Most will give up trading within a year after studying and plying good proficient workable procedures- One year is not enough to really test the resolve of the intermediary to close a deal. 3 years would be appropriate if one is going to attempt to make more money tan they could earn working elsewhere in a lifetime.

Everything is relevant - Big money in any industry takes time to earn. Not everyone in industry will make such gains is also a fact of entering into any business application.

If one is going to try and trade as a professional intermediary , then at the very least he or she needs to know what to do, as it relates to procedures that an intermediary can effectively and safely apply- The rest is dependent on the personal skills and ability or the trader as it relates to experience and sourcing abilities. Without such knowledge and experience one is simply wasting their time trading in deals which can never close. Big gains is not made for doing nothing. Attempting to earn big gains means intense knowledge- Knowledge is power.

First you get supply - ” Then you get the money”, When you get the money, you get the power” :- Scarface