FTN:FAQ

FAQ
Frequently asked Questions
BEST FAQ SELECTED FOR PUBLICATION :
Last Update: November 14th  2009

For ITSI use: All important ITSI Updates will appear on this Site.

PRE ADVISED DLC

11th November 2009.


Dear Craig,

You need to know a lot to get his application right-

UPDATE: ABOUT ICPO
MAY 6TH 2009

As well as what has been explained further in this FAQ section about ICPO-URPIB will apply the latest addition on two matters-

In basic terms - ICPO has a meaning in the USA- The term is used by a person who has established open account- placing an order for stocks or bonds from a stock broker- I.e: over the phone. 'INITIAL PURCHASE ORDER" defines the accronym 'IPO" from which the word "Corporate or Commerical" is added- URPIB Intermediaries are to now reject any such inquiry as "RF" outright in where the term ICPO is apparent -You are trading with a ill informed person when ICPO is supporting the procedures being given. In fact- An intermdiary really cannot trade using a "Irrevocable corporate purchase order-" such is a nonsense application, and is a very risky and dangerous application to use- Other URPIB changes-COMMISSION: Scenario: 80 year old retired bank executive is very impressed with the dealing of lets say FTN exporting- He spreads among his own peer group the details of lets say FTN exporting and the ability of such-

The said peer group are other retired or semi retired Past Captains of Industry . FTN closes a deal with not the banker but with someone who he recommended ftn to-Is the original intermediary group who introduced FTN to the said banker become entitled to a share of commissons earned with the person who found out about FTN via his connection with the past banker-The answer is "YES"

URPIB Update to be added on ITSI short form copy on 10th of May 2009


COMMISSION PAYMENT/MANDATE HOLDER

MAY 1 ST 2009

Dear Karl-
Did you read URPIB rules on my site? - www.itsi.itgo.com

A real mandated "seller" acts on behalf of his disclosed principal-
We intermediaries act on behalf of undisclosed principals-

If the mandated seller has not provided to you his mandate ship paper disclosing his Principal supplier - then he is no mandate holder of such-but just another confused intermediary.

A genuine mandate holder gets paid by his principal- Accordingly his principal has to also allow or authorize commission payment to all other intermediaries involved in the same deal- this usually will NOT happen as the principal is only obligated to his authorized mandate holder- hence Circumvention is easily applied.

The Mandate holder once confirmed is treated the same as a "supplier" this means a person taking control of the intermediary group ' BUYS" the goods from the "supplier" and resell to an "end buyer" at a higher price - using the funds of the end buyer as per the quote given-

The middle controlling intermediary the said "buyer/seller" then collects the commission after the deal closes and pays out agreed commissions to all intermediaries involved-ON BOTH SIDE- In effect a true mandate holder CANNOT CLAIM ANY PART OF THE INTERMEDIARY COMMISSION, AS IT'S IMPROPER, UNETHICAL IF NOT ILLEGAL TO COLLECT COMMISSION 'TWICE"

Thus as per below typical string contract Schematic-

(1) Supplier/ AND OR registered Mandate holder
(2) Sourcing intermediary
(2) Sourcing intermediary
(2) Sourcing intermediary
(2) Sourcing intermediary
(3) INTERMEDIARY BUYER/SELLER
(4) Sourcing intermediary
(4) Sourcing intermediary
(5) END BUYER/AND OR REGISTERED MANDATE HOLDER

NUMBER ONE -IS ONE GROUP
2/3/4: ARE ASSOCIATED INTERMEDIARY GROUP
NUMBER FIVE IS ONE GROUP

NOBODY GETS PAST NUMBER (3) INTERMEDIARY THE BUYER/SELLER-

NUMBER (3) INTERMEDIARY SELLS THE GOODS TO THE END BUYER AT A HIGHER PRICE

NUMBER (3) GETS COMMISSION SECURED WHEN THE DLC IS TRANSFERRED

NUMBER (3) COLLECTS COMMISSION WHEN DELIVERY EVENTUATES

NUMBER (3) PAYS ALL INTERMEDIARIES IN NUMBER (4) AND NUMBER (2) GROUP

NO CIRCUMVENTION POSSIBLE UNLESS NUMBER (3) HIMSELF IS A CROOK-
THUS YOU MUST ONLY WORK WITH NUMBER (3) WHO KNOWS WHAT TO DO AND HOW TO CLOSE A DEAL AND CAN BE TRUSTED FULLY-ALAS 99.9% OF BUYER/SELLER ON THE NET ARE CONFUSED, DO KNOW WHAT THEY ARE DOING OR KNOW HOW TO TRADE CORRECTLY.

THUS IT IS YOU WHO MUST HOLD POSITION NUMBER (3) IN A GOODD VIABLE DEAL IF YOU WANT TO BE 100% SURE OF CONTROLLING ALL COMMISSIONS-

TO BE AT NUMBER (3) YOU MUST LEARN BASIC INTERMEDIARY TRADING PROCEDURES OR YOU WLL NEVER SEE A CENT IN COMMISSION-

If you cannot hold position as number (3) then you must become attached to a good and honourable trader holding position number (3) (If you can find one as such who know how to close a deal correctly)

There is no other way to collect commisson on an effective deal-

I hope the aboe is clear-and guides your path- Trading application as seen on the net ( LOI,ICPO, MPA, NCNDA..etc..etc..) are useless unworkable Intermediary procedures-

As for the rates- It's IMPLIED on the ITSI site in URPIB rules- Fuels generally are set at USD$1.00 per BBL for everyone involved from 2 to 4 to share with Number 3 getting the largest share- If the discount available is higher- then the end buyer gets that as an inducement to BUY- not intermediaries.When you see something like i.e;Crude Oil Buyers side 4.00 per BBL sellers side 4.00 BBL- throw the deal away you are wasting your time-

You can't hide commission payments - It's recorded on the sellers invoice as "Consultancy fee's"- an End buyer will not allow HIS money to be used in paying intermediaries 8.00 per bbl in commission- that's not going to happen- But he will not protest if he got 7.00 per BBL discount and the intermediaries shared $1.00 bbl among themselves-


FRUIT FLY INFESTATION
Posted: 4th April 2009
Insight ideal for : Intermediaries, End buyer and Suppliers:

Dear Nisha,
This looks like a study question- This type of question is beyond most untrained intermediaries capabilities of answering- I’ve changed some keywords to ensure no breach of copyright-

SCENARIO-
MV Banana Boat Trader is a ship specializing in the carriage of fresh fruit and vegetables between Australia and Asia. A recent voyage from Sydney to China has raised some Problems .

The goods in question consisted of 100 tonnes of Premium Queensland Pineapples, valued at AUD$500,000, being shipped to China pursuant to a sales contract made with the Australian Fruit Board for delivery to Shanghai Imports, China . Two bills of lading were issued, one for 50 tonnes, which was carried in the forward hold, and one for 50 tonnes carried in the aft hold. The cargo was described on the bill of lading as being “loaded on board in apparent good order and condition”.

When the ship arrived at Shanghai Port, representatives of Shanghai Imports went to the wharf to negotiate the discharge of the cargo with Customs. However- when they arrived, they were advised by the ship’s captain that 50% of the fruit was severely damaged. During the voyage, rough seas were encountered. Damage was inflicted on the ship’s hull when an undiscovered submerged wreck was struck. Despite the crew’s best efforts, the forward cargo hold took on lots of water. The entry of warm sea water in the forward Cargo hold has caused the Pineapples to to rot, and very little of the fermenting mess which remained is usable.

While this discussion was proceeding, a quarantine officer delivered a notice stating the cargo in the aft hold was not to be discharged anywhere in Chinese waters as it was infested with fruit fly. The fruit fly destroys fruit crops and is widespread in parts of Asia. However, both China and Australia are Fruit fly free zones. Shanghai Imports determines that it cannot send this infested cargo for sale anywhere and orders the MV Banan Trader to dump it 12 miles out to sea. The captain immediately blames the infestation on “inherent vice” (although he has no evidence of this).

Shanghai Imports has instructed its lawyers in Australia to demand from the owner of the Carrier compensation for the loss of its 100 tonne cargo. Advise the owners of the Fresh Food Trader if such a claim will be successful and if so to what extent.


ANSWER:
The text book answer is that the Carrier is liable.

Had you studied your material and understood the scenario you would should found the answer-

Premise to the Answer

Hague Visby Rules and in Common law . Cargo should not be accepted by a ship that is unseaworthy- Failure to conduct due diligence from the start of any voyage, is the prevailing condition that leads to a claim of negligence.

In that :

(a) Fact: Simple due diligence by yourself using the net would lead to the discovery : Fruit such as Pineapple is not a “Fruit fly host” and that the ship was indeed loaded from declared area that is indeed “ Fruit fly free zone” - A fruit fly free zone means that in such an area a program is in place to ensure such insects are not apparent - its a loading port for all kinds of fruit including those not effected by fruit flies-

“Mealy bug” is a host pest related to Pineapples .

To which once above is authenticated as verifiable ;

(b) The said infestation of the said fruit may only seem to imply that the Pineapple’s were infested- But! - The “the Cargo in the Aft Hold” implies that all fruit in such a hold was infected- When in fact it could also mean that the “ Cargo hold” itself could also have been be infected as well- Whether it had fruit in it or not-

All “Cargo” could have not been infected is provable: If Pineapple do not attract fruit flies and are not capable to be infested by such , then the Pineapples cannot be the cause on why such insects are on board- The buyer is not interested on any other claims except his own.

(d) To which :

Facts to verify that Pineapple is not a host fruit of the the fruit fly and even more so, that custom port of loading eventuated “ from a free Fruit fly zone” now adds weight to favour only the buyer claims- of compensation, based on general averages but not loss of profit- The infestation was of the Cargo Hold or by another method and not the Pineapple itself -

Since Two BOL were issues , the goods pertaing to the other Cargo in another part of the ship is not claimable if it arrived as ordered-

(c) Regardless to which rules are in effect , at the very least the final possible application of Common law would still apply similar to the law applied to a Common Carrier- Specifically; “A ship arriving infested with insects at destination port where goods are refused off loading because of such , is an unseaworthy vessel”

In where a court will find that the master of the ship failed to conduct due diligence in making the ship seaworthy by leaving untreated, insects from a previous voyage- or at the very least the court would find no basis to the claim of “Inhered defect” could be made to apply specifically to the cargo of Pineapples-

Failure to Conduct due diligence proven.- or; Claim of inherited defect dismissed-

Claim of Negligence would be upheld.

Thus- The Carrier is liable-

Please don’t ask me any more such study questions Nisha- If you do not undetand the process to the anwser, then yiou should not be studying as it can become much more complex than already defined-

Kind Regards
Davide Papa

www.ftnexporting.com
www.ftnx.9f.com
www.itsi.itgo.com


GOLD DEALS

POSTED: 21ST FEB 2009

Dear Robert,

Thank you for your e-mail. These are the sort of questions which are answered on the open forum www.allexperts.com .To find me simply add into a Google browser "Distribution of Products", to which I should be ranked near the top.

I will give you the courtesy of reply, this time as I don't like seeing an intermediary getting into trouble- but without understanding the underlying process, such a reply may not make a whole lot of sense.

(1) As per our own FTN URPIB rules intermediaries must not trade in gold ( FTN’s URPIB Rules ARTICLE 9- is listed on www.itsi.itgo.com )

(2) The exception is given to DSG (Deep Storage Gold) mostly meaning "WW II Nazi gold" ( I had an editorial written about my adventures with Gold in 1995 in a major Australian news paper- I had chased DSG gold since 1988, but you are being advised by someone who has indeed “Followed the Yellow Brick Road” )

Your gold deal falls on the same trading application as per DSG.

(3) Beside problems of importation in where issues related to the person who is assaying the gold is holding a security brokers license, the experience trader dealing in gold MUST really understand the market they are plying in-


(4) LME Market prices must not be made to apply to gold which has yet to be certified , hallmarked and indeed tested for purity- SUCH mined gold therefore is purchased at around 33% less of LME prices as a guiding reference. Because as you will note , the end buyer has a lot of expense yet to apply-

(4) The Gold (Tranche) is lodged on board Aircraft- Until this happens , the gold is still legally owned by the Seller. Once the doors are sealed an AIRWAY BOL (AWB) is provided, the gold now belongs to the BUYER who obtains the TITLE to the “property “ in such gold but is yet to take "Possession" of such.

(5) You are Buying the title to the gold using the end buyers money to do so- The title document is then endorsed over to the end buyer from YOU the “seller”. The SUPPLIER gets his money, you get your commission , (the difference between the buy and sell price) , the end buyer get possession of gold at the arriving airport - ( Massive expenses now begin to apply to the end buyer- security , testing sheltering, storage.. Hence the 33% percent discount factor applies less 3% for your own commission)

Escrow of funds will not work as suggested by you. Applying local USA Federal or State UCC rules against international application is a flawed process. Incoterms 2000 is your delivery rules of application as far as an intermediary is concerned. Incoterms dictates who must bear he expense of what?

(5) In your WAY of dealing YOU are trying closing the deal at “DES” or "Ex ship”- this already defines the the above approved and proper method of trading in such gold cannot be made to apply- as the "TITLE" now travel with the goods. The intermediary has nothing to close the trade with - NO TITLE DOCUMENT. NO DEAL. And you’ll get circumvented on commission because you have lost control of the deal as well.

The Intermediary only deals in TITLE and not possession of goods , once no tangible assets such as a title is available to trade with the ability to close a deal does not exist- hence URPIB Rules " Intermediaries shall not deal is "Delivery Ex ship "
( meaning also "Aircraft")

You already have breached 2 of the most important matters in relation to the ability of a Professional intermediary in being able to close a deal- Further more you are attempting to deal in such goods for an pittance when compare to the huge responsibilities being placed on you-

Intermediaries must no take on such risky business and responsibilities. To do so is asking for trouble.


(6)In short ; The end buyer has to pay for the gold to be hallmarked and assayed. The SELLER pays for SGS certification before the goods are loaded. The seller quotes the CIF cost ( Cost ,Insurance and Freight ) but that's also applied as an expenses against the end buyer account. All these expenses appear on the sellers invoice which is also a 'Delivery' presentation document attached to the BOL (Bill of lading ) which is the leading title document. To apply escrow means that funds are released when such delivery documents are presented- regardless of what such documents state.

A letter of credit on the other hand must apply specifically all the title documents, and all delivery document must be presented in a specific time and that such document must conform to the terms and conditions of presentation. The DLC has conforming rules applied under UCP600 banking edicts- thus those rules apply internationally to such a DLC-( No so, to an escrow account)


(7)In you way of dealing; The seller is offering to deliver the goods to a specified airport, get the gold assayed and smelted then apply to sell the gold at 12 % from LME. That’s nonsense- Why would he do that? Certified Gold can be traded like cash- for it full value less a small handling fee’s- The gold is stored in a depository - in where Certificate are issued, in turn allowing certificates to be traded like bonds or shares. There is no true apparent value in gold which has yet to be certified- It’s virtually worthless until its been tested for purity. The less pure it is the less value will be applied to it, unless of course you are securing lets say huge unusual nugget of an unusual shape in where once purity is ascertained, one could get more for such a nugget that the actual gold value-

But you are dealing in mined Gold in where quartz and or other material is crushed to release such gold it bears.

So the test on purity is a very crucial aspect of buying gold as a starting process of a deal, because such sets the price . If a supplier don’t set a price you have no offer- If you have no offer the very basis of getting into contract stage cannot be made to apply. One has no valid contract without consideration being apparent first- “Consideration” in this case means “price”.


IN ANY CASE a Supplier will not load the plane unless he has a financial instrument in place first, even in an DES deal, in any case the SUPPLIER must also provide a Performance Guarantee after the buyer’s financial instrument is advised- If the supplier fails to delver the gold in TIME as per the contract, then the end buyer gets to collect upon and keep the P.G unconditionally-

Both parties go to the depository I.e; Germany , hands in their passports - Certificates are authenticated , SWIFT funds are wired Certificates' and gold now is owned by the end buyer, there and then... half an hour of business-


Gold is often purchased I.e: as a hedge against other currencies- It’s better than blue chip stocks and is equal to the status of cash- One buys i.e: 2.4 Million dollars of gold not because it may go up on down in prices but because in most countries gold purchases mitigates having to pay income tax that otherwise would have to prevail if cash was declared-

Drop the deal now Robert , is my strongest suggestion, and is the best advice I can give you.


Kind Regards
Davide Giovanni Papa
www.ftnexporting.com


BUYER/SELLERS EDICT
27 JAN 2009

REPLY TO "LYN"

(1) A professional intermediary is both a Buyer and Seller of goods- you cannot hold position of only a buyer or only a seller- You BUY from a SUPPLIER and resell to YOUR end buyer using the funds of the end Buyer- the difference in the buy/sell price is your commission which YOU collect for yourself and all other who assist you with the deal ( i.e assist you to find end buyer or suppliers- sourcing intermediary)

(2) You Buy using a UCP600 formatted Transferable Letter of credit - such a transferable letter of credit can only be transferred once only - directly to the supplier Thus YOU MUST VERIFY SOURCED SUPPLIER FIRST- Once you know supply is real then chase the end buyer- again- "End buyer and not just another 'buyer"

So..! Lets recap on ITSI/TWIY/FYBR

SUPPLIER= PERSON HOLDING TITLE AND POSSESSION OF GOODS as owner of such.

SELLER = PERSON TRADING ONLY ON THE TITLE TO THE GOODS (DOCUMENTS)

BUYER= ONLY EXISTS IN RELATION TO THE SELLERS POSITION
END BUYER- ONE WHO buys/ TAKES BOTH TITLE AND PHYSICAL POSSESSION GOOD

YOU are a sourcing intermediary when sourcing goods but take on to hold the role of 'Buyer/Seller' once you have secure the principals- You control the deal as buyer/seller , protect all others who have "Stepped back" and assisted you with information You close the deal by transferring the title of goods from the Supplier directly to the end buyer Who holds s title is the one who is able to gain possession of goods;the action applied to mean "Transfer" is called "Endorsement"

As you can see there is a lot to know-

Nevertheless; the first golden rule- Always secure or source real supply first from a supplier - then chase the End buyer

Any genuine e-mail or written document produced from a supplier that at the very least mentions price means you have "Ostensible authority" to BUY and by defualt, to also SELL such goods- "On behalf of an undisclosed principal"- If you accept to sell goods as offered by a misguided intermediary "seller' and the goods later is found not to exist - it's fraud.

if you get the seller to step back to reveal the supplier which turns out to be genuine- and you make an offer to sell the suppliers goods as a 'seller' to YOUR End Buyer, and the deal fails , then it's not FRAUD- hence the big difference.

You get real supply first , once secure you move to secure end buyers-

there is no other way-

As for mandate holders- anyone claiming to be a mandate holder of a Principal MUST disclose their principal UP front before a deal starts- no disclosure - No mandate ship. if the mandate ship is genuine and verifiable, then you treat the mandate holder the same as you would a supplier-


WARNING: OSTENSIBLE AUTHORITY
The financial crisis of 2008 has force many countries to implement sweeping changes to laws aimed at stock “brokers” doing business especially in matters of “Naked selling”. Selling shares in where no interests in such shares (PPI) were evident is now considered to be seriously flawed applications- FTN exporting has been vindicated, as the very base foundation and FTN doctrine has always been, for many years, that the first part of any deal is to secure the supplier and secure an Interest ‘ in the goods being offered firs, is a premier unconditional rule that intermediaries must learn to apply. By default of such new laws as it applies to Stock Brokers, intermediaries now could also face the same scrutiny . Simply making the offers to sell goods which turn out not to exist may now be enough to attract fraud charge. In the past one would make an offer , get the funds from the end buyer and if the goods did not exist , fraud charges could indeed be laid against the intermediary- Today, simply applying the act of making an unverified offer for the sale of goods that ultimately do not exit could produce the same consequences. A intermediary holding position as Buyer/seller MUST force everyone to step back and MUST be satisfied that the goods being offered is real before looking to secure the end buyer. It may take a long time to get such goods finally secured,perhaps years, but the gains that could be made often is well worth the effort and wait. Trading as an intermediary is about due diligence, researchstudy, practice and gaining experience so when that real deal finally lands on your lap, you’ll be ready-You cannot start a deal without knowing that the goods are real.

All deals start with the capability of supply and never from the perspective of the end buyer Looking to buy goods yet to be sourced. Promising a buyer with a fake offer goods that you think you can secure later is fraud to begin with, even if the matter of the said new laws don’t prevail.


I KNOW SELLER WELL
Dear Sunita,
It’s all about procedures- If you are dealing with “The Queen of England” -Intermediary trading procedures must still be made apply . You have no friends in this business once a deal starts. Will your “friend” accept consequences for offering you goods which later is found not to exist?
I don’t think so- Fraud charges is not something many people will readily accepted to bear consequences upon. Do yourself and your “friend” a favour by ensuring that the “Strict Doctrine of Compliance” prevails at all time.- Anything less is unacceptable.



COMMISSION PAYMENT

Dear Daniel,
You see Daniel, you may think its a small question you have asked but in fact is very complex- hence I will give you only the direct insight- assume there is a lot more to it-
There is no argument- You may think one way, but after 21 years of trading and mentoring I know differently- I am not saying that “If” one is in control- I am stating that and INTERMEDIARY must remain in control- No ‘if’s or Buts”- When you “Play “ the game it important to do so many moves ahead-

The supplier knows nothing else - You are the buyer to the supplier and the seller to the end buyer- one side never crosses over to the other- 2 deals are in play - Your contract with the supplier and your contract with the end buyer- In this position you are “ acting on behalf of an undisclosed principal” this means your buyers details is no business of the supplier-(and visa versa -It’s confidential information)

If on the other hand you “act on behalf of a disclosed supplier” then you have to secure the transferable DLC in the name of your supplier- it also means you MUST disclose UP FRONT when making the offer to the end buyer who your SUPPLIER is- YOU must also have an agency agreement with your supplier in place about such agency to him-

NOW WHAT ARE YOU GOING TO DO IF THE SUPPLIER DECIDES NOT TO PASS ON YOUR COMMISSION- TAKE as an example PETROBRAS BRAZIL FOR INSTANCE- ARE YOU GOING TO TAKE A TOP 20 OR 30 GLOBAL COMPANY TO THE INTERNATIONAL COURTS THAT COULD COST YOU UP TO ONE MILLION DOLLARS OF MORE? FOR COMMISSIONS IMPLIED TO BE A WHOLE LOT LESS?

Than means in essence if you are going to disclosed a supplier up front, than you should be ‘employed “ by them, and that you have great skill and knowledge before such company will employ you anyway-and that you are employed for a small salary and that you may earn a very small commission as well- The supplier is in control of the whole deal.

ABOVE IS USELESS PROSPECT FOR MOST INTERMEDIARIES SO WHAT LEFT- ?? THE INTERMEDIARY MUST OPT TO WORK ON BEHALF OF A UNDISCLOSED PRINCIPAL- THIS NOW MEANS THE INTERMEDIARY IS IN CONTROL OF HIS OWN DEAL.

Whether you offered a Non transferable credit (or if you have offered a transferable DLC as a disclosed entity) to a supplier and he accepts it, then indeed he has accepted you as being the buyer- If you are from lets say USA and you order goods from lets say t Brazil at FOB, then YOU have to get the ship to port, thus your instruction to the end buyer applies accordingly as per FOB Incoterms - The supplier does not care that the end buyer is no at the port of loading-his job is to sell the goods as delivered to , at the port of loading as per FOB or FAS delivery rules-regardless if he is dealing with his on end buyer or a intermediary buyer. A person or small trader who personally buys goods from lest on ebay does so for reselling on ebay or privately is working on the very same application- the Buyer does not own the goods he is selling- the only difference is that the Buyer Buys the goods , then resells it, because such dealings are indeed small and affordable- but there are many Large sellers on ebay who Sell goods of a undisclosed Supplier in another country- they take the order , collect the profits, then place the order at a lower prices from a supplier who ships the goods to the end buyer based on the Intermediate
“Buyer/sellers” advice-


BACK TO INTERNATIONAL TRADE-

If it’s a CFR or CIF deal again the supplier know your are not the end buyer because ether goods are ordered eg; CIF China from a buyer located in USA buying Brazilian goods-otherwise; to thing any differently later , the supplier should have not made you an offer-nor enter into contract as well. The issuance and acceptance of a transferable credit is from the end buyer is to YOU- from you to the supplier its NOT a transferable credit . It’s a non transferable credit that is being issued from you to the supplier- That has to apply because a UCP600 DLC can only be transferred ONCE- hence your idea of transferring a transferable credit is wrongly implied.-

When YOU have finished buying the goods then in fact all instructions after that is about “ who is going to get possession “ of such goods-

Very simple really!

No you are not an export company- you only facilitate the deal- you are not the owner in possession of goods being bought and sold- which brings me to the next question- “Delivery” as it applies over the hips rails in port of loading (FOB incoterms)- You have no possession of goods- you are trading on the “title” of such goods- regardless if the supplier finds out or not is irrelevant - You have the DLC and its issued as irrevocable, that means you remain in control and an cannot be circumvented once the supplier finds out who the end buyer is or visa versa- If you choose to act “On behalf of an undisclosed Principal” and later change status to “ acting on behalf of a disclose principal” is also irrelevant- the BOL or sellers invoice applies to mean main title document depending on terms of reference applied on contract- the BOL if it’s being secured is really not a transferable instrument- but there is a provision allowed in where instead on consignee, the intermediary become the “party notified”- the party Notified” has the right to endorse to BOL over to the end buyer- hence “ blank endorsement” means that only the end buyer can accept the BOL -

In effect You are not the end buyer or supplier but a Seller /Buyer in the true sense-

If the DLC issued by the end buyer is confirmed , then in effect , presentation and reimbursement happens at you bank and not the issuing bank- you present the document at your advising bank , who will take up the option where appropriate to accept the documents there and then- the Advising bank then reimburses the issuing bank accordingly- It its not confirmed and if a its a transferable DLC, then only the portion as applied by the buy price is transferred- but the document although still coming back to you , will need to be sent to end buyer issuing bank to allow collection to apply-

Thus since you are trading on only Title, then in effect you are indeed a real “Seller/buyer” because title document are tangible items- A end buyer uses YOU because of sourcing abilities and skill,. the end buyer will find out who the supplier is , bu so what! as long as you do a good Job, the end buyer may use you again and again... You could make a small fortune on such bulk deals - what is important is that you don’t get circumvented - YOU and those you are protecting , hence whether of not the end buyer comes back to you is a trivial matter in comparison to the deal in hand.

Thus You are the buyer /seller , you cannot disclose the supplier to the end buyer or via visa versa until you first ensure you have supply capability form a supply and not another intermediary seller, and that you have secured the DLC into your account- once that's is done then it won’t matter ho knows what- If you do anything differently to ruin the deal, then You could be liable for other commission you promised to protect other intermediaries-Hope it helps-


WE CAN ONLY SELL TO END USER

Dear Rick
Advanced "Variable" study application ;

You are my 'PI" and he is your 'SI" only as it seems to the deal being attempted - in fact FTN/Yourself and the seller are the united ‘Buyers" all being protected with commission payments /circumvention from FTN exporting in where the whole group is allowed to remain transparent with the deal until failure or success is implied-

In fact once the Supplier has been identified and the supply is real- then the group in effect BUYING the goods- Even if there are 100 intermediaries in the middle controlling group , such a group is defined as one party in a 3 party deal- headed by one person who closes such a deal-

Because FTN would have secured the funds from the end buyer and ALSO applied for specific mandate ship on a complex deal such as selling and buying a refinery , then on this one occasion , applying for mandate ship would be appropriate- but it’s not a mandate ship apparent- it an understanding that FTN exporting is applying to also work on “behalf of a disclosed principal” AFTER THE FUNDS OR DEPOSIT OF SUCH FUNDS HAVE FIRST BEEN SECURED-

Thus with the end buyer's authority added to the mix, anyone offering such a refinery or any goods would have to deal with "FTN" on behalf of a YET to be disclosed principal- to refuse is a breach of contract- If they have already issued a real offer to sell-

In effect Rick, there is not need to ask a supplier anything, ONCE SOME KIND OF QUOTE, IMPLIED, QUOTE, IMPLIED OFFER, of goods has been communicated preferably in writing- If there is a product on legitimate offer implied or expressed, then we as intermediaries have the right to buy it- Even if the product states that such must be sold to a “end user” only - Then in such a case if the product is indeed wanted authority from the “end user” would also be obtained by FTN exporting-”on behalf of an disclosed principal” in some matter such as selling real-estate and indeed matters of construction type of deals - in this case, your offer from a supplier to sell a Turn key Refinery-

So when a Supplier say - “Sorry , we only sell to an end buyer” means very little-

What is the most in important fact is that the supplier has provided a real quote- or an implied quote or even a business card stating some kind of quote- then indeed that may be enough to state that “Ostensible authority to Buy” has been obtained by the “Buyer/seller”- it’s irrelevant to whom such goods are resold to-

You see your said Supplier never even gave "us" an offer- because in doing so, they could make all the claims they like, that they can only sell to an end user- so long as the supplier condition are met- they can't simply back out by later saying " We can only sell to an end user"- because if authority to represent an end user is also obtained later by the intermediary- they are the ostensibly "End User" as far as a courts are concerned.

So when you made the enquiry to the refinery supplier, he already stated to you that the refinery is available for 30 million dollars , you don’t need to ask him if ‘intermediaries” can be involved- the quote has already been given-

If when you are making the enquiry , had the supplier said “ Sorry we can only do business with a end user” then it’s over- he has indicated his intent before any quote of offer has been advised- If he adds , “but if you as an intermediary bring to us an end user/buyer we will protect your commission”- then it’s simply best for the intermediary to avoid the deal all together- You can assume you will not see a cent in commission with be the final outcome-

When is such"disclosure" of a principal applied?- We'll that's a different matter- If a legitimate offer is out there , then we as an intermediary can buy it in some cases by simply ensuring that when the funds are coming, so is the authority to represent the end buyer is also presented to the supplier -In a deal in where an offer or quote has been advised in where the buyer has indicated at the same time that they will only deal with the end user- It’s too late; The intermediary needs only to guarantee early that the supplier will be dealing with an end user- after the intermediary is sure that the supplier is sure that supply is forthcoming and all matters of construction has been addressed-

Thus when the time comes for the end buyer to perform no excuses become apparent-

If an offer says "Only sold to end users'"- and I’d say " Sure- I will apply as such on final contracts” - that's not a counter offer - that' only affirmation in regards to something left out on an offer, thus if the initial offer is not changed -the offer made itself still stands-

In such a scenario, I must simply ensure funds as well as the authority of the end buyer is in my hand before such a final contract with the supplier is signed, because then I would be in breach of conditions in that ; If I promised to disclose my authority on contract thus disclosing the end user and fail to do so just to induce or extract a contract - then it to could be construed as fraud.

To get the end buyer’s authority is easy , in a product that is indeed much wanted- The normal TWIY/FYBR offer to sell is applied - but at the end of the offer at the Sellers declaration a simple statement is applied in stating-

‘ We the seller have the right to unconditionally represent the end buyer directly and exclusively without bias on the whole nature of business as defined on this offer, in the seller effort to ensure that all matters of the transaction are applied to it s maximum safe level of application. The end buyer agree to such an exclusive representation and shall not confer with the supplier or any suppliers without engaging their representative on the such matters until failure of success of the transaction has been recorded”

The Buyer/seller concludes contract with the end buyer , applying and even stronger statement of exclusivity, and the DLC or deposit of such is accepted in where the Buyer/seller no sign the contract with the Supplier disclosing the end user to them-

The Seller/buyer who is controlling the “Irrevocable” funds can’t be easily shafted without extraordinary great expense being applied - and if shafted, the paper work is very strong to indicate that t someone is going to pay dearly for their fraudulent intent-

Thus the importance of an legitimate real offer - is the only main consideration- So that ‘We” who are holding position of an intermediary , do not get charged with is fraud- as for the rest, there is no need to ask permission from a supplier if they would allow a intermediary to buy such goods- Other wise what is a real genuine offer doing being touted by intermediaries in the first place? that's the first question a judge would ask.

WHAT IS THE OFFER DOING OUT THEIR BEING HANDLED BY INTERMEDIARIES IF THE SUPPLIER ONLY WANTED END BUYERS TO APPLY?

Remember that! A genuine offer from supplier verified to be accurate and true is all that's needed TO START A TRADE - If at the last moment FTN got to contract stage IN A CONSTRUCTION TYPE OF DEAL - and the supplier backed away then FTN could be left holding the bag with a legitimate supplier, but having an offer from a real supplier would mitigate consequences from that side- But on the supplier side- It could even cost him more than even if the deal did go ahead so far in advance-because there should have not been an offer out there in the first place, if the intent of the supplier was not to form a legally binding situation- " Meeting of minds" is reached at the start of a transaction- the deal either fails early ( no offer) but it can't fail later when all parties have been negotiation upon the matter for months-because of issues related to '"We are only selling to an end user"

This “Variable” advanced trading application can only be applied effectively by those who have studied the underlying basic trading application of TWIY/FYBR- form such trading application the well informed intermediary over time as experience is gained can indeed learn many other ways to “Skin a cat” in where the underlying TWIY/FYBR edicts of trade is always apparent.

THE WORTH OF A NCNDA=2 CENTS OR LESS

Dear Lorean
No don't bother with NCNDA - it protects your from nothing- You have to become the buyer/seller- which is not hard if you know procedures-- If you do not know good procedures your are wasting your time- If you don't know trading procedures that a intermediary must apply then you must attach yourself as a sourcing intermediary to a trusted well informed Buyer/seller intermediary-alas most seller or buyer have no idea of correct procedures anyway- so finding such a trusted well informed buyer/seller is nearly impossible


There is a it to learn and study- many pages and months of learning- hence there is not way to formally instruct you specifically to your answer-

But take a look at the following state- Just to give you an idea on what you are dealing with-

Canada is the biggest seller of crude oil to the USA- Any expert will tell you that such a statement is correct-

Ask me.! and I will tell you that such a statement is wrong- The correct statement is as follows;

Canada is the biggest supplier of crude oil to the USA - Biggest supplier , not the biggest "Quantity"

Saudi arabia is the biggest seller of crude oil to the USA-thus it sellers the biggest "quantity"

Can you see the difference in such a statement?

How about this one- "Apple is the world's biggest computer company" -

Get the gist! Apple perhaps only supplies the world consumers with perhaps under 10% of the world's computers- The other 90 percent is supplied by over 30 other computer suppliers- hence in essence " Ostensibly Apple is the biggest single supplier/manufacturer of computer in the world"- it's not the biggest seller of computers-as the PC market is the biggest market not Apple-

Saudi Arabia when combined with other local suppliers is the biggest "seller" of crude oil to the USA- Canada on it own is the biggest independent supplier of crude oil to the USA now makes sense to a well informed Intermediary and nobody else-

You have to learn how to buy from a supplier as "Buyer" and resell to your end buyer as "seller" - this is the ONLY way you can guarantee non circumvention and assure you will get your commission - there is no other way-NONE.

99% of world intermediaries are wasting their time trading and will never close a deal because of this fact- and the fact that such intermediaries wants to trade in billions of dollars worth of goods without spending a little time even to learn some very basic procedures is beyond my understanding-

As you can see as per my web site - i have already mentioned that a NCND agreement issuance is waste of time as far as intermediaries are concerned- along with LOI, BCL. ICPO and the likes - I have stated that openly online for nearly 10 years- and I have many bankers and, lawyer and private intermediaries who have all studied my edicts because what they l thought was correct trading procedures were only flawed nonsense application-

A seller is an intermediary who is allowed to trade on title of goods only - A buyer is a intermediary who is allowed to trade on title - A supplier is an entity who has both title and possession of goods- and End buyer is the person who buys title and takes possession of goods- there is the big difference- intermediaries cannot deal in possession of goods they can only buy and sell the title to such goods- thus you must become a buyer/seller to secure commission-

As such; as it applies to an intermediary - The end buyer places the funds in the buyer/seller account- the Buyer/seller then transfers the buy price to the supplier - The difference in buy and sell price remains in the buyer/sellers account-If the supplier side of the deal is closed successfully , he get his money as you get the portion of the DLC left in your account- from this portion you pay other intermediaries who have assisted you with the deal-

No other way-


CRUDE OIL

QUESTION: What chance has inexperienced intermediaries got in closing such crude oil deals if it’s so hard for an entity such as FTN exporting to secure and close such deals-


ANSWERS: Good question,worthy of a reply. Very good perception. (LOL: So you're the one reading my answers)


(1) FTN Exporting trades in crude oil products, because it has experience to do so-It does not mean that it’s any easier to close such deals- It only means that if such a deal becomes apparent , FTN exporting is able to close it- Big difference compared to the so many intermediaries who ARE dealing in crude oil , and who have no idea what they are doing-IF? a deal becomes apparent in such circumstances, such deal would be lost due to ineffective or inappropriate use of procedures.

Yes, I also attempt Oil deals, but only if i can get a direct supplier- which I can't- Intermediaries are mostly plying false offers, and suppliers rarely answer me , because they often think that FTN Exporting in "Another " misguided trader, and rightly so. After many years all those stupid intermediaries approaching Crude oil supplier with dumb LOI/ICPO/POP type of procedures - No wonder Crude oil suppliers have literally closed the door on such inquiries-


The Last Crude Oil supply I got was some 14 years ago - and for all my best efforts I could not sell it because it was a primary deal, still being a bit green on procedures did not help either- If I had that oil today , I feel 80% sure of selling regardless if it were a primary or secondary market offer-

(2) Note :80% Sure and not 100% sure- End buyers now are also becoming wary of all offers being made by intermediaries-again because so many end buyer have been wasting time dealing with stupid LOI/ICPO/MPA/NCND type of deals-

(3) I have read about one Crude Oil deal in particular that was closed with 5 intermediaries involved , who were all circumvented- Commissions on the deal as reported by Florida Post??? was 4 Million dollars per Month- That was some time ago- The intermediaries sold the whole story to the newspaper- Citi bank was implicated in that deal-

(4) In TWIY i state that it's best to deal in crude oil as a secondary application , in where the intermediary concentrates in dealing mostly on anything else but crude oil- and that crude oil deals are "tested' and dismissed outright very quickly unless a positive response to suppliers capabilities are assured- I also stated that crude oil deal are bordering on being "Mythical" dealings


(5) So many are dealing in crude oil- So many are simply wasting their time- as such deals are bordering as being mythical is a truism like no other-No so much because of the type of deal itself , but because so many intermediaries simply know nothing about closing such deals-

"Have you got a gun"- Yes i have .

What type is it?

"It's an Air Rifle"

What do you use it for?

"To Shoot Alligators"

Paul, you can see what a useless wasted effort such an ideal is??

If you are going to hunt Alligators, then make sure you have the right gun- Having the right gun does not mean you will bring home an Alligator, but it does mean that if one crosses your path, the chances of landing one are good-

I suspect some internet intermediaries may have come across a real crude oil deal every now an then, and have lost such deals due to lack of procedural knowledge-

I have a good bunch of trained TWIY agents on board now, who now know on how to identify real deals and offerings- it takes us but a few minutes to dump a deals , once such is offered- that's how bad such offerings are-

(6) But! having said all of the above- Could such a deal be closed by an effective Intermediary- In theory the answer is Yes- Banks support the transferring of the DLC, and there are no laws in place stating otherwise- Hence TWIY now provides some specific information to those who also want to use TWIY underlying principles in Crude oil deals and related fuels, which are similar in protocol to the growing Bio Fuels markets , which indeed offers some real potential for intermediaries-as such markets are relatively new to supplier's and end buyers-

(7) Remember this Paul- One single crude oil deal make take many years to close- One deal will make an intermediary wealthy - hence the incentive- If one is going to attempt to close such deals then they must have a support base to work from -a support base made for intermediary use, based on rules and, laws and correct acceptable procedures- without such there is no point to trade in anything-

In summary- In theory such deals could be closed by an intermediary - in reality perhaps only a hand full of intermediaries on this planet has the experience skill and knowledge to do so, Non of whom i have met on the Internet , which i constantly test - All crude oil , fuels and many other products offered on the net have proven false for many years now- Hence i I will keep on looking fir that elusive crude oil deal, while trading in other products, if one does prove real, the chances of closing such a deal are is reasonably good-

Winning Lotto or closing a Crude oil deal..? Closing a Crude oil deal has the better chance if one knows what they are doing-otherwise playing Lotto is the better options- if one is chasing big bucks

I hope the above answer your question clearly-

LOI STUDY ADVICE

LOI Applications: Study-Specifically and Definitive-

So lets study the following Example on specifically why intermediaries cannot apply to use LOI, BCL, POP type of flawed procedures Assume EXXON MOBIL is going to buy Crude Oil from the Black Sea area- via Laverna, Italy.

The Seller "Rosneft" in this case being the "Supplier in possession of goods" and not an INTERMEDIARY SELLER;- asks for and obtains a LOI, BCL and other financial capability statements from EXXON -after FIRST confirming a QUOTE or OFFER, indicating not a price, but an applicable benchmark indice. The offer is issued and contracts are signed-

THE OFFER CARRIES WITH IT, MATTERS OF PROCEDURES IN THIS 'TWO " PARTY DEAL-

As per such an offer and subsequent contract, matters of payment capability are advised, as per our example, a "Bank issued Guarantee” (BG) supporting specifically the backing ot a financial instrument which are yet to be issued. This means Exxon has proved financial capability in advance- Even if only a "Bank comfort letter" (BLC) was issued, after a quote or offer was given and accepted first, the BCL holds nothing by way of actual "Capability" to pay - It only defined a "Readiness" to pay- The capability is provided only when some kind of financial instrument or surety is actually advised-


What foolish intermediaries plying LOI, BCL, POP deals don’t understand is as follows:

The cost of such Crude is calculated often; One day before, Day on, and Day after ship is loaded- as taken from the agreed benchmark on the actual said loading days- The price is averaged and the financial instrument is issued accordingly- for payment at sight of title documents- on the support of the issued Guarantee, that states; Payment will be issued.Te guarantee is simply enforcing the issue of the DLC which still needs to be advised even though a “Guarantee’ is in place- And what is issued is a DLC, per the said calculated price,on a ship ready to slip it's moors at Port of loading-

In Layman Terms: A person guaranteeing title to their own house , so that another can purchase a house as well, still means that the second purchasers needs to take out a loan- and that; if the second person defaults on such a loan repayments, the lender will chase the Guarantor for payments- No different with Crude oil deal in where only Two parties are involved in such a deal-


Above is fairly indicative and very clear on the type of business being conducted-in where two parties are involved in a deal-

When an intermediary is involved in such a deal, the transaction changes dramatically from a 2 party deal to a 3 party Transaction- Note the term “Deal” and “Transaction” , to which i like to define further as meaning- “The nature of business being Plied at any given time”. No matter how many intermediaries are involved, one party is the end buyer, one party is the supplier, the third party represent 1 or many intermediaries involved in the nature of business being plied , as headed by a controlling intermediary, the much said Buyer/seller- This said Buyer /Seller controls both sides of the deal, collects commission and pays everyone such commission on both sides of the fence- meaning; on the often said and often ambiguously implied "The buyers side " and on the "Sellers side"-

Intermediaries cannot trade the same way as 2 principal's Trade- Intermediaries need to apply a price in ADVANCE, they need to secure a DLC from the buyer in ADVANCE - Way in advance of loading-

In fact- A supplier dealing with a good well informed intermediary (rare to find) is not going to get a financial statement and LOI and the likes - because intermediaries in any case don’ t have such financial capabilities to back such documents with a “BG”-

Nor can an LOI/BCL be used by intermediaries because the "Readiness” to “Play ball” as already explained, has to be provided to the supplier early, which will result in the supplier obtaining disclosure of the end buyers details that will result in legal circumvention.

*Commission pay orders and NCND agreements mean nothing- How is an intermediary going to prove circumvention if they are shut out of the actual deal- Which intermediary in any group has a million dollars plus to take the matter to the applicable court of jurisdiction ? and even if they do have such funds? Can the group prove a loss.?Can anyone in the group even prove if the deal was closed- In any case, failure to protect your own interests means that you allowed such circumvention to legally prevail-Since you were working in the position of "Agent acting on behalf of an undisclosed Principal"- then you were not required to reveal such Principal- So why did you?

Intermediaries don't have such personal financial capabilities- but they do have the capability to be "financially ready" hence the saving grace of the whole nature of business being attempted now become apparent- he ability to become “financially ready” at a given time, means that a intermediary can indeed trade as a Buyer or Seller at any given time and at will.

Suppliers, when dealing with truly well informed professional intermediaries get a DLC instead of "RWA" (The ultimate "RWA" is defined s being a DLC as far as intermediaries are concerned, far superior to a "BG" or "BCL") - Suppliers get a DLC from such said intermediary defining to mean that a supplier dealing with an intermediary who knows what they are doing is doing to get paid faster and will close the deal at a quicker pace than if the Crude oil Supplier were dealing with refiner, EXXON via the LOI, BCL application-

A supplier will get paid a lot quicker and enter into transaction mode faster when dealing with well informed intermediaries is indeed the better option (Rare to find such intermediaries)

In fact ; exxon would need to establish a complete “RWA” (Ready, willing and financially able ) status with its supplier - because the supplier can only ensure the supply of crude- it cannot a give a price until much later, it can only imply a price basis in order to have a n active contract in hand. An intermediary on the other hand has to be “RWA” ready way before the contracts of supply are signed- for the very same reason- That reason being “Consideration” must be apparent when such contracts are signed or no contract is said to be in force- “Consideration” simply means “Price”
A contract without a price “or Price Basis “ being implied is said to be a useless contract-

Big difference indeed!

Exxon needs to pay for goods 3, 4,5 months later on first delivery. An end buyer dealing with the supplier, and will often buy goods at "Ex ship" as well, intermediaries cannot deal "in Ex ship" or “Arrival” contracts delivery modes- because this is one of those very few delivery applications under incoterms 2000 in where the documents cannot be used as a negotiable instrument- In an 'Ex ship " deal the goods and 'title" documents travel together- but lets assume that we are dealing with a FOB or even CIF deal- The intermediary has to be ready to pay for such goods within 30 days of first making contact with a supplier even though first deliver is 3,4,5 months away-The supplier will end up collecting on such a DLC as soon as the goods are loaded. Exxon would only need to back its payment within 30 days and allow collection to apply 3,4,5, months later, when physical goods are actually delivered- regardless if a 'BG" or DLC or both instruments are in force- even if 'Ex ship" delivery was not applied - If Exxon asked for 90 days deferred payment, then the same end result would apply-

It takes months to establish such financial documentation so as to appease a supplier to loaded a ship secured by the End buyer. Thus an end buyer applying such business with the supplier is a totally different application to what the well informed intermediary needs to apply is now becoming very apparent - Thus the intermediary is assured of supply first, then sells the physical goods by "flipping the contact" to the end buyer - the "flipping" here means flipping of "Title" and not possession of goods-

What else is apparent refers to the length on time needed to provide financial documentation ; Take a look at www.pdvsa .com- read their application for those wanting to do business with them, as advised on the left hand active margin-Just getting documentation ready will take months- and although Pdvsa has made demands for "this and that" on their site- in fact, nobody in their right mind would provide such information without at first obtaining an assurance of supply- in the form of a quote or offer-

So you ask a supplier for crude oil and he responds we need an LOI/BCL- then most likely you are dealing with a misinformed intermediary seller and not supplier - a seller who has no goods, but thinks by obtaining a "BCL/LOI”- they can go to some obscure web site and place an order- They can't.

*You must get an offer or quote first,must! Once secured and if a supplier then ask for LOI/BCL or the likes, in the manner you have seen on the PDVSA site then if fact you can supply as such, but later in the form of an active DLC- which will satisfy most suppliers. You have no contracting basis without an offer or quote in where no 'price' application is implied- failing to obtain a capability to "Buy" from a supplier means you have nothing to sell-An offer is indeed a "Contract "in most instances, once accepted.

Intermediaries cannot use or apply to use, the same trading procedures as an end buyer applying to buy goods from a supplier in a 2 party deal- and in any case , the law books are indeed full of litigation's, mainly dealing with the use o f LOI, BCL dealings, define to further mean that even when the “Big boys" close such deals using such methods , they are skating a very thin and precarious trading line anyway. So what hope has an intermediary got in using such flawed LOI/BLC/ICPO/POP procedures- none. Suppliers don’t readily understand the needs of a well informed intermediary because in fact, many supplier’s have never applied to trade with such intermediaries, regardless if many have implied differently-( many ill advised intermediaries have) In such matters the facts are these among other things-

(a) Those supplier who have encountered intermediaries in the past “clam up” when approaches made by such are made- and won’t give information to products readily because of past stupidity applied LOI/BCL requests- and;

(b)Others, as well as New supplier’s who know what genuine procedures are when dealing with an end buyer from their own perspective , look upon strangely at intermediaries LOI/BCL request and won’t reply, and in any case, know very little about a well informed intermediaries procedures to being with, as well-

(c) Those so few intermediaries who do use adopted correctly defined international trade procedures find it difficult to get their foot in the door with Suppliers, because, most supplier often work with end buyer and not intermediaries and don’t know what good intermediary applications are -and often fail to recognise that the potential to close a deal quickly may have been lost.

Hence the well informed intermediary has to work extra hard in securing first supply , then selling such goods to the end buyer directly or via other intermediaries- It takes year perhaps many years to close one large deal by an intermediary, for this reason the intermediary must practice only safe viable and acceptable trading applications-until one day that genuine deal finally falls on their lap- In the reality of the whole LOI/BCL trading application, Intermediaries cannot deal in LOI/BCL/POP is now a matter of fact. Many of the intermediaries trading in such flawed procedures will not read this advice. Those who do read this advice usually get the idea, and refrain from applying LOI /BCL applications.

THEY GET THE IDEA BECAUSE OF THE SO MANY TIMES THEY HAVE ENTERED INTO A DEAL, IN WHERE THEY ALWAYS SEEMS TO GET NOWHERE-

UNFORTUNATELY In the overall scheme of things- LOI, BCL trader will be around for a while yet, but their day are indeed number as FTN’s uniform application under “TWIY” and soon “ITSI” is starting to get noticed world wide- The good news is that our sound advice is slowly spreading.

A well informed intermediary can only approach suppliers with the intent to Buy- as ‘Buyers.

The intent here is clear- Dear Sir , We are considering buying your good. Please advice among other thing a QUOTE. That’s one side of the business , “Your business. Nobody else needs to know about “Your business”.

What is “Your business” .To get a quote, so that you may “Resell such goods” for profit. Your “Intent to buy” in the first place is strongly supported by your abilities to “Resell”. Such successful reselling means “Profits” by way of commission- LOI ,BCL Simply has no role in the attempt of an intermediary to secure such said gains. I hope the question of LOI, BCL, ASWP and other like terms has been answered- assume there’s a lot more to it than simply addressed her.


MATTERS OF LOI/BCL AND THE LIKES

CUT TO:

“WHO IS HE” Asked the the President”

INTERCUT: (Alec Baldwin)

HE’S A SUBMARINE COMMANDER , SIR-

CUT BACK: (The President)

“I LIKE SUBMARINE COMMANDERS, THEY HAVE NO TIME FOR BULLSHIT”-

Movie :Pearl Harbour


NONSENSE TRADERS EQUALS NONSENSE DEALS-

Some common reoccurring question that seem to never go away-
Insight given without Prejudice
Plenty of Sarcasm applied-


RE: AMBIGUOUS BCL REQUEST

(1) SUPPLIER: We need full financial reports before we can give an offer.

INTERMEDIARY: We can’t buy fresh air. We’ve asked for a simple offer or a quote and you're asking for highly confidential inappropriate material.


RE: LOI
INTERMEDIARY: We require an L.O.I

SELLER: What for ? Why do you need a “Letter of indemnity”- all I am asking is for correct international trade procedures to apply-

INTERMEDIARY: No..We need a “ letter of Intent’”

SELLER: What’s that-? Can you show me any edicts under International trade applications that requires for you to ask for such a document.

INTERMEDIARY: I need something-

SELLER :Oh you don’t know trading procedures. Let me guide you.How about first accepting or rejecting our offer to sell. I mean you asked us for an offer, then added a whole lot of nonsense applications as well-



RE: “DIVISIBLE L/C”
INTERMEDIARY: Payment by Fully funded Divisible transferable letter of credit-

SELLER: You mean an “ Irrevocable documentary letter of credit” which is allowed to be issued as unrestricted for Transferring. “Divisible” ? I don’t know what that means- It ‘s not procedural matters of UCP600 rules of issuance-


RE: ICPO
INTERMEDIARY: Here is our ICPO:

SELLER: And.! What are we meant to do with that! So are you saying that if we accept the ICPO you are “Irrevocably Bound”- WOW..! I could make a fortune-as 99% of all such offer will fail-


RE: RWA
Intermediary : We are RWA

SELLER: Really..! You have not even asked for an offer and your are already “Ready willing and FINANCIALLY able” to perform payment obligations- Yes..”RWA” IS A LEGAL EDICT- The word “Financially” may not be apparent in the acronym “ RWA”- but that is what such a term implies-


RE: PB
INTERMEDIARY: We require a Performance Bond of 2.5%

SELLER: Really..! Is not the deal being applied “At sight” 100% of presentation document CIF ? Surely you meant a ‘”Performance Guarantee”- A Guarantee of Performance up to delivery of presentation documents. We don’t have a EXSHIP deal in place do we? - It is CIF delivery application that was quoted on was it not? - because if you recall- We as intermediary SELLERS do not and must not sell goods at delivery EX SHIP or “Arrival”


RE: ASWP
INTERMEDIARY Seller : We can quote you 500 dollars MT CIF ASWP.

INTERMEDIARY Buyer: Wow..That’s great. So the first shipment delivery which is only 1000 Miles away from loading port carries with it the same freight rate as goods which need to be delivered elsewhere 8000 miles away.Tell me then what is the credit “COLLECT” amount applied on the sellers invoice?

INTERMEDIARY Seller: What do you mean- It’s “Pre paid” Why do you care-

INTERMEDIARY Buyer: Are we not dealing in “CIF” Incoterms rule, or is there another set of rules I don’t know about, Perhaps from Mars. You need to credit to me the full said freight rat. That means when you get our DLC, the payment of the goods LESS the marked freight rate is applied as a credit on your sellers invoice to us.

INTERMEDIARY Seller: What do you mean

INTERMEDIARY Buyer: What do I mean- I mean that you should not be trading in such complex matters as a CIF deal-


RE: MPA AND NCND
INTERMEDIARY in string contract: Please issue MPA and NCND agreement-

INTERMEDIARY Seller: Why! Are you going to take me to court half way across the other side of the planet if i breach NCND terms and conditions and what will you issue suit for? Have you lost any gains? Can you prove a deal has closed? If you could. Can you also prove your involvement in such?. If you can, could you then specify such loss in comparison to the effort you applied in getting such a deal closed?

INTERMEDIARY: Ok. I will use all e-mail correspondence to verify my claims if need be later. So how about MPA for me and others in the string contract-

INTERMEDIARY Seller; That’s your problem not mine- I am prepared to pay a lump some commission to you- It’s up to you to pay all others, unless I allow other options to prevail.
INTERMEDIARY: O.K! I will accept that please issue a lump sum Pay order to me-

INTERMEDIARY Seller: Not until I know that a deal will eventuate- We have a long way to go yet. How about getting the offer accepted first then letting me know that you have a copy of such in hand -



RE: HOW TO CLOSE AN IMPORT EXPORT DEAL
INTERMEDIARY: I am new to import exports could you please tell be how to close a deal; in numerical order ie;.1.2.3.4.5:

FTN EXPORTING: Yeah Right,it took me 7 years to learn the trade, and now you want to know “How to closes a deal” in 5 simple steps-

O. K- Let me Advise you accordingly, if TWIY has no been purchased;

(1) Enrol in a College, It should cost you under $2000 dollars- learn International trade applications and obtain Certificate 1 and 2:

(2) After a year get advice from a well informed intermediary and start trading only to obtain hands on experience-

(3) After another 3/4/5 years of gaining experience and only applying to use strict safe procedures

(4) you might get close to closing your first deal, regardless if you are selling a small FCL of rice , wine , or f frozen apple pies or large bulk shipment of crude oil. Without applying as such you have no hope in closing any deals.

(5)Oh Yes!.. Let me throw in Number 6 for free -In between of gaining experience, learn all you can about Incoterms and UCP600 DLC applications as well- and never stop studying the market you’re dealing in-

and that’s just for starters-


RE: WHAT ARE “PROCEDURES”
INTERMEDIARY: My uncle, her sisters ex husbands brother in law younger son- knows a real oil supplier. How do I get involved to earn commission is selling of such-


FTN Exporting: Open Gasoline station. At the very least you could still be defined as a “Seller” of Oil based products- As you’ll never make it as an import export intermediary-



RE: SUPPLIER WILL NOT REPLY
(10) INTERMEDIARY: I have asked supplier to provide a quote as per your procedures but many don’t reply-

FTN EXPORTING: Entertain those suppliers who do give a reply.

INTERMEDIARY; I gave the contract to the supplier,who did not understand my procedures as advised in FTN’s TWIY publication.

(1) Supplier is illiterate-

(2) Supplier cannot understand English

(3) In any case, the intermediary has to accept the supplier contract as a first option protocol- The supplier has only an option to look and consider the intermediaries' contract. Likewise;The intermediaries contract is mainly for use between himself as issued by such for his end Buyer-



RE: BUYER WANTS POP
INTERMEDIARY: Now my buyer what's POP, before even contracts are signed-

FTN EXPORTING: I’m sure he does- But you as the intermediary have only secured the goods “Supplier” and possible future title to such goods -You will never get possession of such goods. In any case you are 8000 miles away from the supplier - how can you give POP for goods you need yet to test in buying- Competition in this business if fierce and merciless with circumvention being rife- If you do not buy the goods from the supplier , he will sell to anyone else who makes an buy inquiry- Thus you have no protection other than the knowledge in knowing that you have “sourced” real goods that other want badly- In effect you cannot give POP until you are very safe from circumvention- but more importantly , you cannot give POP because your buyer will indeed seek to buy directly from your supplier goods you have sourced once such disclosures are given- thus could indeed get you in serious trouble even though you’ve acted with good and genuine intent- If you have made Multi offers for instance, to many buyers and one one actually buys the goods from your supplier after you've slipped up and disclosed the supplier to such, , then in effect when you finally get around the buy the same goods - the supplier could indeed turn around as say - Such goods as offered has already been sold” leaving you in a precarious situation in where you have secured the buyers funds but in where you did have the goods earlier which now do not exist-


Thus; your SOURCING” ability is what of value, to which such “sources” cannot be released until you have a irrevocable and accepted DLC from your end buyer in place, after which; you can disclose anything about the supplier to the end buyer to verify that YOU Have purchased goods , to which you are now reselling- (“Flipping” the contract application ) but after you have signed the purchase contract with the supplier, now defines that such “sourced” goods are sold to you, is what’s actually being verified-


The Intermediary has no choice- No POP ( actually “PPI” - “Policy Proof of Interest”- is the correct term) prior to Buyers DLC acceptance and supplier contract being signed-

Leaving the intermediary to face FRAUD charges if the goods being offered fail to eventuate-If such goods do no exist after buyers DLC was accepted-


The sourcing intermediary is just that - A person who has capabilities to “SOURCE “ real much wanted goods directly from supplier who is then able to revert to the position of actual BUYER/SELLER-


RE: PLEASE ISSUE NC/ND AGREEMENT
(1) INTERMEDIARY: Please issue NC/ND agreement

(a) Assuming its a flawed LOI/BC:/POP type of deal: Waste of time unless NC/ND agreement is between two people or more in the same country and STATE-

(b) NCND protects the intermediary from nothing.

(c) NCND cannot be claimed against because someone later is accused of Circumvention - a real loss has to be identified.

(d) Even after signing the NCND agreement most intermediaries have to “Step back” thus how do the intermediaries “Stepping back” in allowing the Principals to close a deal among themselves really know if a deal did eventuate?-They don’t. The principals needs only to simply claim “Oh that deal fell through” - and the intermediaries would not know any different-

(d) It’s not circumvention if the intermediaries in a string contract failed to protect their own interests-

(e) Intermediaries cannot lay claim to loss of commission if they can’t even prove that a deal closed- and that’s impossible to do once the intermediary ‘Steps back’ because such a group has lost control of the deal outright-



RE: WHAT IS “BACK TO BACK" DLC
In the old application as per (UCP 500 pre 2007)The value of the first bank issued credit is used as security to open another credit to another intermediary- but be warned , banks do no accept a DLC as being a secured Guaranteed Instrument- and imply such instruments as to be only quasi security- The intermediary still needs to offer collateral and have a good credit rating to get a bank to at least accept in part the value of a Confirmed DLC as security for the issuance of another credit-
But...! Those highly skilled and trained TWIY intermediaries do have another option- also defining a new “ legally applied “ back to to back : Applications so long as UCP600 issuance rules apply- It is possible for intermediaries to all protect their own interests in a String contract-
Eg: 3 intermediaries in a String contract can each have a DLC issued to them from the previous intermediary - each applies to add their own commission and forward its issuance to the next intermediary in a string contract-

In Theory: The first end Buyer must issue a bank endorsed DLC to the first “Seller” as non transferable -The first “SELLER” can from his office issue his own non bank endorsed “IN HOUSE” DLC to the next seller as “BUYER” from the next intermediary, who in turn adds his own commission and issues his own IN HOUSE DLC to the next intermediary as “Buyer” and so forth and so on-

Offer and Contract applications still apply- each intermediary in effect is fully responsible for their own dealings only to the next intermediary on the sell side or buy side. Ideal applications for small string contracts-only UCP600 rules can apply and only those who have read and understood TWIY can apply to use such procedures when total strangers are apparent in the formation of a deal-


CRUDE OIL ADVICE REGARDING GOST:
FTN has examined many strange Russian crude oil offers in the past week- with some common critically flawed factors being apparent

GOST is the Russian Quality Certification standard, which is offered as matter of Russian Law- The Certificate is issued in Russian language- to which any offer which only carries the GOST number to imply specification is simply not a good offer to accept- GOST defines the method applied to testing of quality for all sorts of products including Crude oil.

A far away buyer making purchase of Russian Crude/Fuels is not interested in the method, but rather in the actual quality of goods being loaded on board ship- To ensure that GOST specification are converted to the universally accepted ASTM Certification, a buyer will often insist for a "On Board" analysis of the goods being purchased- This defines the use of a "Pre shipment inspection" agency. The Certificate issued is defined as a "in Personam" Certification and is almost always issued by SAYBOLT Russia,for matters of Crude/fuels exports-

Where Russian crude/fuels are sold to its neighbours, then the GOST certification may be enough to appease the buyer- Not so when the goods are exported to far away countries. Thus by default if the buyer will not accept the GOST certification , the buyer has the option to employ the service of SAYBOLT to issue a more acceptable certification of the crude/fuel on board ship at time of loading-

This extra service is a COST APPLIED TO THE BUYERS ACCOUNT- as defined specifically under FOB INCOTERMS 2000. It's not a cost for the supplier all because the supplier states that a quality certification is offered as being a part of the goods price- The supplier is already required to issue the GOST certification, its not obligated to pay for any other quality certification, all because an end buyer is not aware of what's being offered through badly applied and ambiguous procedures-

Furthermore: Matters related to the issue of clean on board BOL are often implied incorrectly by intermediaries not understanding what they are doing- especially the intermediate "Buyer/seller" who should not be acting in such a position if they are simply trying to bluff their way through a deal-

Under Incoterms 2000 as applicable to a FOB delivery application- the SELLER is only required to "Assist " the buyer to obtain the Marine BOL- If the seller assist the buyer and the buyer is unable to secure the BOL because of some fault of his making, then the seller is entitled to present the "appropriate" documents for collection, a defined on the DLC.

But if the seller has implied that they will produce the clean on board BOL, then its defeats Incoterms 2000 outright- thus in such a case the seller MUST produce the BOL to be able to make presentation of the documents,in a situation where they were only required to assist the buyer in the securing of such-

The intermediary has not understood that the buyer is the one chartering the ship, as such the BOL goes directly to the buyer- The seller is only required to give "Evidence" that the goods are on board and nothing more- A shippers certificate, a first mates slip, a Wharf finger advice or the likes evidencing that the goods are on board ship is the only required document that the seller needs to produce to be able to present all documents for collection- for this reason Intermediaries should apply to transact on FOB deals only, and keep totally away from the much more complex CIF deals, unless they are very experienced and knowledgeable in ICC rules and procedures, as defined under Incoterms 2000

CIF as per Incoterms applies the use of a "Freight Collect" BOL, and not the freight prepaid application as so often seen in bulk deals- In any case that's a matters for another lesson- For now traders need to make sure that matters of FOB as it prevails to the issuance of a BOL and quality certifications are followed through when dealing in Russian crude oil and indeed all tradable bulk shipments of products-or that deal you've been working on, will simply never be able to be closed.


INTERMEDIARIES AND GOLD SALES-
New gold purchases made at current prices, generally attracts a LME Gross price as well as a Premium- Different Supplier apply different premiums, ranging from 3.5% up to 12% or more is not uncommon depending on what type of gold quantities and bar sizes are purchased.Often such buyers simply wait for Gold prices to rise, then occasionally offer such private Gold holdings with a small discount applying,(This is rare) usually in a falling market. FTN has seen only one such Gold offer carrying 2.0% discount 15 years ago for a very large quantity-

In the early years FTN has handled both false and genuine Bullion certificates- The biggest offer originated from a USA Wells Fargo depository.(It was genuine for sure, after all 3 New York lawyers were representing the seller) -Elaborate fake UBS Certificates carrying the name of former Indonesian President Suharto was circulating for years among the plethora of fax pushers in the day when the term and device defined as the "Inter net" did not exist- FTN was also featured in a Major Sunday Newspaper Editorial back in 1995, disclosing the efforts made by us,(Current FTN Agent Stephen Yong certainly remembers those early heady days well- defining that there is not many of us left from "The old school") in tracking down the Mythical World War 2 Nazi Gold treasure-(Holocaust Gold) with all roads often leading back to Vaults located somewhere in Switzerland or a dark mine somewhere in Austria-(or even Japan) which now brings us to the matter of "Deep Storage Gold" DEEP STORAGE BARS- These are old bars many in poor quality and which mostly lack proper Hallmarks, which have been circulating in the market for many years. A Vault manager will not accept such bars for mainstream storage and usually such BARS cannot be applied for reselling with the much needed bullion Certificate- Often in the past we've see such GOLD carrying large Discounts against LME prices. Such a discount are often applied so that the Buyer can have the GOLD re refined in where correct weights, purity and hallmarks stamps can be applied.

The discount is supposed to easily offset the buyers cost of refining by a LBME approved refiner as found all over the world. The newly refined gold bars are then issued with the required bullion certificates.

In the "Old days" The Amazing Russian Antanov heavy lift Aircraft, was the only "Cheap" charter plane capable of lifting 250 MT plus Tranche of such gold. Poorly trained or misinformed Intermediaries in general should not be dealing in DEEP storage GOLD unless they know what they are doing- Gold carrying large discounts are "Deep Storage Gold". Genuine Gold bulk tranche offers, properly carrying Certificates and Hallmarks do not attract such discounts as so many think, with primary market sellers such as the LME, only selling such gold mostly to central bank buyers.
In reality Intermediaries cannot deal in Certificate Bullion deposits,(accounts) but they could deal in physical gold if the right approach is made-
Such an approach often means having to form an attachment with an appropriately licensed Gold Dealer/Seller.

DSG is indeed ideal for selling in a secondary market application where only well informed intermediaries are involved. DSG usually apply a discount of anywhere between 7 to 15 percent on LME prices- 80 percent of more of such a discount must be returned to the buyer, otherwise re-refining cost many not be covered. FTN has examined a few DSG offers in the past, but has not seen any genuine offers of such in the last 5 or more years. Now you know!


SHIPPING: THE BOL- Blank Endorsement-
Shipping- The order of things in the simply implied.
The ship owner delivers the goods for consideration of freight.- thus the ship owner is commonly defined as “The Carrier”- The party contracting carriage of goods by sea is defined as “The shipper” generally and most often meaning “The Exporter”.

The terms and conditions applied to the Shipper with the Ship owner is embodied in a document defined as a “Charter party”- The foremost document evidencing that the goods are on board ship is defined to be a “Bill of lading”

Usually a “Shipper “ instructs his forwarder to procure freight space for its intended cargo- A ship owner often also employs an “Agent”- defined as the “Loading broker” to obtain cargos for him. ( Thus commission can be earned on this activity as well)

The forwarding agent duties include securing a sailing date and port of loading, and where required books space on board the ship, and prepares the said Marine Bill of lading where required. (Different shipping lines have their own formatted bill of lading , to which for most in any case still follow a basic uniform set of “Terms and Conditions” as its overall premise)

So in effect we have a “Shipper” represented by his forwarder connecting up with the “Ship owners” agent the already said Loading broker-

The forwarder applies the required particulars on the Bill of lading in regards to the goods being shipped, and sends a draft copy to the loading broker- The Loading broker brings the goods alongside the ship, arranges customs entry into the loading port, and pays all required dues. After shipment has been completed the loading brokers send the Bill of lading to the shipper. The shipper then sends the BOL and other presentation documents to the the Intermediary who then forwards them to his advising bank (or to the advising bank directly)- From which the documents are then usually advised by registered courier mail to the buyer or his agent as well as electronically bank to bank-After the appropriate Shippers own invoice is changed to favours the intermediaries own invoice.

All the particulars of the goods once loaded are tallied and checked by a “Ships officer” to which a “Mates receipt” is often issued- It’s the information on the Mate’s receipt which is later embodied on the Bill of lading, thus if the Bill of lading is indeed “Claused’ meaning that the goods on board are not “Clean”, then such a qualification was arrived at as per the information applied on the Mate’s receipt.

Charter parties are mainly governed by the rules of “Common Law” in particular the laws as applicable to where the ship is registered- In such circumstances Charter parties may have rules apply or modified accordingly with or even without adhering to any principle of uniformity other than that allowed under common laws- where as the “Contract of Carriage” as evidenced by a “Bill of lading” are for most regulated by statue in particular “The Carriage of Goods Act 1971” as appended by the “Hague Visby Rules of Carriage.

Intermediaries must learn and understand the above basically implied linear pathway in a deal when attempting to learn the procedures in matters fo shipping- In particular when the idea that intermediaries must use a letter of credit in order to have any chance in being able to close a commodity transaction. In bulk shipments the Charter party is of great importance to the buyer as it’s indeed the cheapest shipping rates apply accordingly , but to an intermediary using of such is problematic in a CFR or CIF deal, in that among other things-UCP500 disallows the presentation of a “Charter party BOL”, when transacting under a UCP500 (and UCP600) ignited letter of credit application. Intermediaries must keep away from offering or dealing in CIF of CFR deals, and must especially for the first few years or after they have closed their first FOB deal apply to trade in FOB or lesser delivery applications only

In such a circumstance, since FOB document presentation as such does not require the issuance of a “Bill of Lading” but rather only “Evidence” that the goods are on board ship, then under UCP500 a “Ship’s Mate’s Receipt ” is more than enough evidence to indicate that the goods are indeed onboard as to allow a intermediary to close such a deal accordingly.

It never ceases to amaze FTN Exporting at the number of ambiguous CIF deal found on the net being plied by Intermediaries- and unless ability and skills are very apparent an intermediary should not even attempt to deal in CIF of CFR until they have full practical knowledge on how to close a deal using the many other lesser Incoterms 2000 delivery applications.

UCP 600 ARTICLE 30 : Tolerance
As far as "The World is Yours II" (TWIY II) is concerned, and as it applies to Intermediaries acting as Buyers/Sellers- enhance yourself with the ideal that the "-/+ 10%"(Plus of Minus) application may seem to apply a tolerance in defining the actual Goods in a bulk carrier deal, and that "-/+5%" is applied under UCP600 (Applicable as from July 2007 ) to define the allowable tolerance in a documentary letter of credit - further meaning that the Issuing bank and or advising bank, if a letter of credit is advised as being issued as confirmed, may apply to pay the tolerated amount without the need of amendments to apply. The sellers Invoice in combination with the BOL will imply the figure as to quantity and price,and the two presented documents must match to what is defines except for price of the actual goods. If lets say the goods exceed 5 % on the final tally as loaded on board, then the credit will be adjusted accordingly, and where the goods define less the the contracted amount being on board, then a credit remains applicable to favour the account of the end buyer. The Net effect overall of the term "tolerance" looks harmless enough, but is indeed a very deceptive rule,to the unwary untrained intermediary Buyer/Seller who could, by default lose their commission if they strictly applied the meaning of UCP 600 on the sales contract, without applying due diligence in presenting their sellers invoice. Remembering that the issuing bank will obtain presentation of the shipped BOL, and that the Intermediary acting as seller is allowed to manipulate the sellers invoice as obtained from the supplier in regards to price only- Thus if goods are sold for $100 per MT and the DLC is opened for 105 dollars Per MT to the middle controlling intermediary Seller /Buyer (To allow for his 5 dollars in commission) but the goods are "Delivered' on board at 5 percent short of what it should have been- then we have a situation in where the BOL is 5 percent short as per its on board tally count- thus in effect the credit is allowed collection to proceed at lets say 95 dollar per MT. The sellers invoice will apply to show 105 dollars per MT to the issuing bank as part of document delivery presentation- to which because of the tolerance, the credit will only be allowed collection at the 95 dollars per MT rate as allowed to favour the Supplier - The middle controlling intermediary Seller by default would indeed lose his commission in such a scenario, as the 10 dollars "implied" overage per MT would be credited back into the account of the End buyer. The trick here is not to be over anxious- Wait until the title documents arrive and DO NOT prepare the sellers invoice in advance- Wait and read exactly what has been "Delivered" then apply to the said sum to the sellers invoice, then redo the maths as to arrive at the correct total. Thus the sellers invoice will correspond exactly with the price of the goods- to which if correctly applied ,as per our example the goods on board record a 95 dollar collection rate, 5 dollars is disclosed on the sellers invoice as is the all important "Consultancy fee"(Sellers Commission is defined as such unless you sell at i.e CIF&C) thus allowing the excess 5 dollars per MT to be credited to favour the end buyer- Remember no matter what seems to be implied under such articles, the INTERMEDIARY seller must disclose their Commission on the sellers invoice to at the very least mitigate any mistake made in regards of tolerance and that, at all times the Issued DLC value must add up to equal as such when the intermediate seller advises its own sellers invoice. BOTH TOLERANCE AND DISCLOSURE OF COMMISSION MUST BE APPLIED CAREFULLY, OR IN AN INSTANT, COMMISSION WILL BE IRRECOVERABLY LOST. What ever happens the funded amount issued by the End buyer to pay for the goods must add to be the same total when all the documents are presented,credits go back to the End buyers account- As for debits, the bank will pay up to 5% above the actual DLC without the need to consult with the End buyer.