Frequently Asked Questions
What is the current price?
Price can depend on many things (For example: quantity, shipping term, quality, payment instrument and world market situation).
How can we get a price quotation?
According to int. standard we request all importers/buyers to issue LOI or ICPO with full banking details, target price along with destination port and BCL.
Can you provide product sample or past performance doc's ?
We do not provide samples or past performance document of our previous clients . All product specification complies with international export standard. At the time of loading the product is inspected by a third party inspection company (SGS/Intertek) to insure quality and quantity as per contract.
International Trade Terminologies
BCL: Bank Comfort Letter
BCL also known as a Bank Capability Letter, or Bank Confirmation Letter, this is a letter from the Buyer's bank confirming his ability to meet a certain level of payment requirements. This letter states that the Buyer has sufficient funds to cover the cost of the order. It should however be understood that this does not imply any guarantee of payment.
T/T : Telegraphic Transfer or telex transfer;
Definition: Often abbreviated to TT, is a term used to refer to an electronic means of transferring funds. A transfer charge is often charged by the sending bank and in some cases by the receiving bank. Historically telegraphic transfer meant a cable message from one bank to another in order to effect the transfer of money. Prior to the existence of electronic payment networks this was often directly between banks via a telex message.
LOC-(L/C): Letter of Credit;
A Letter of credit is a document issued from the Buyer's bank to the Seller which guarantees payment to the beneficiary of the letter of credit (the Seller), as long as the terms and conditions set out in the letter of credit are met. L/Cs are almost always irrevocable, can be transferable, For regular shipments a Revolving L/C is often utilized
TLC: Transferable letter of credit;
This is the favourite instrument of the traders and middlemen to offer secure terms of payments to third parties such as their suppliers (second beneficiary in the letter of credit). When the buyer pays the letter of credit, part of the proceeds is transferred to Letters of Credit variations.
CL/C: (Confirmed Letter of Credit);
A letter of credit, issued by a foreign bank, with validity confirmed by a First Class (usually US or European) bank. A seller with CL/C terms is assured of payment even if the foreign buyer or the foreign bank defaults.
Society for Worldwide Interbank Financial Telecommunication;
A global service that is responsible for facilitating communication between banks. Most payments are made via SWIFT.
RWA: Ready, Willing and Able;
This is a document which is issued by the Buyer's bank. The bank confirms that their client has the sufficient funds in their possession and is ready, willing and able to engage in the contract.
RLC-(ARDLC): Auto-Revolving Documentary Letter of Credit;
It is a financial guarantee or performance bond issued by a bank on behalf of a buyer i.e. a written obligation of the issuing bank to pay a sum to a beneficiary on behalf of their customer in the event that the customer himself does not pay the beneficiary. The SL/C is regulated by the ICC600 rules
DL/C: Documentary Letter of Credit;
A document issued by a bank which guarantees the payment of a buyer's drafts for a specified period and up to a specified amount. The Documentary Letter of Credit provides a more secure means of carrying out transactions in import-export trade than by documentary bills collection (see Bill of Exchange). A letter of credit when transmitted through a bank, usually in the seller's country, becomes the means by which the seller obtains payment. The necessary documents, correctly completed, are presented to a bank by an agreed date. If the terms of the credit are met, a seller can receive payment from a bank immediately.
L/C: (Irrevocable Letter of Credit);
An Irrevocable Letter of Credit cannot be amended or cancelled without the consent of the issuing bank, the confirming bank (if confirmed), bears the further payment undertaking of another bank, usually the advising bank, called the Confirming Bank here since it adds its confirmation to the letter of credit. This may also be used if the issuing bank is of unknown doubtful standing to the seller and the beneficiary. The payment is guaranteed by the bank if the credit terms and conditions are fully met by the beneficiary. The words Irrevocable Documentary Credit or Irrevocable Credit may be indicated in the L/C. It means that once the buyer's conditions in the letter have been agreed to by the seller, they constitute a definite undertaking by the buyer's bank and cannot be revoked without the seller's agreement. Revocable Letters of Credit are rarely used as the terms of the credit can be cancelled or amended by an overseas buyer at any time without notice to the seller.
SBL: Stand-by Letter of Credit;
It is financial guarantee or performance bond issued by a bank on behalf of a buyer i.e. a written obligation of the issuing bank to pay a sum to a beneficiary on behalf of their customer in the event that the customer himself does not pay the beneficiary. The SL/C is regulated by the ICC600 rules
PB (%): Performance Bond;
This is a type of bank guarantee which is issued from the Seller to the Buyer. It guarantees that the Seller will meet the terms of the contract. Normally issued in the amount of 2 % of the total amount of the contract, a performance bond can be drawn upon by the Buyer in the event that the Seller breaks the contract and fails to provide the product which was stipulated in the contract.
POP: Proof of Product;
A Proof of Product ('POP') is often requested by customers or agents who believe it will give them some guarantee of the existence of the product and ability of the supplier to deliver the product. In practice many POP's are false. POP offers no proof at all, because once a POP has been drafted it is automatically out of date -the product could have been sold to another buyer and therefore no longer exists. Nevertheless, a POP is still occasionally requested as apparent proof that a seller has the product, A POP is realistically provided only when the Buyer's bank issues a Bank Confirmation Letter (BCL) to the Seller and or seller's bank via SWIFT. Then the Seller's bank can check the availability of funds in the Buyer's bank and issue a POP to the Buyer's bank within an agreed time period (e.g. 5 days). A seller will not issue a POP to buyer without a non-operative letter of credit opened. See our procedures. The (PB) of 2 percent will render the DLC operative. The bank will then send the POP five days later. RWA: Ready
SHIPPING / INCOTERMS
BOL-(B/L): Bill of Lading;
Definition : This is the receipt given by the shipping company when goods are loaded on board the vessel. This is an important document and gives title to the goods. It is needed by the buyer to obtain the goods from the port.
FAS: Free Alongside Ship;
The seller delivers when the goods are placed alongside the buyer's vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the seller to clear the goods for export, which is a reversal from previous Inco terms versions that required the buyer to arrange for export clearance.
FOB: Free Onboard Vessel;
Definition : Free Onboard Vessel is sort of a hybrid, where the seller is obligated to bring the goods all the way to the port, clear the goods for export, AND see that they are loaded onto the ship nominated by the buyer. Once the goods clear the railing of the vessel the buyer assumes the risk. FOB is often followed by the named loading port thus: FOB Long Beach, meaning the seller delivers the goods, pays the port fees, and sees the goods loaded onto the ship docked (in this case) at the port of Long Beach.
CFR: Cost and Freight;
Definition : The price includes the cost of the goods, loading, and freight to the named Destination Port. This does not include unloading charges.
DDP: Delivered Duty Paid;
Definition : To the named Destination (which can be customer's works) e.g. DDP New York. All delivery charges and duties to the named destination are paid by the exporter.
EXW: Ex Works;
Definition : The seller makes the goods available at their premises, or at another named place. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included.
CIF: Cost, Insurance and Freight;
Definition : This is the same as CNF, but also includes insurance to the named Destination Port. e.g. CIF Aqaba Port-Jordan.
SELLER / EXPORTER
FCO: Full Corporate Offer;
Definition : Issued by the seller after the preliminary stages of negotiation are complete such as a letter of intent having been issued by the buyer, and a soft probe have been conducted on their accounts by the Seller. A full corporate offer is a document which outlines the conditions of the sale.
DC: Draft Contract;
Definition : A draft contract is an initial contract which is drawn up and sent from the Seller to the Buyer. The Buyer has the opportunity to make amendments and send it back to the Seller for consideration. This process continues until both parties are satisfied with the terms of the contract.
PI: Pro forma Invoice;
Definition : A pro-forma invoice is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods. Typically, it gives a description of the purchased items and notes the cost along with other important information, such as shipping weight and transport charges. Pro-forma invoices are often used for customs purposes on imports.
BUYER / IMPORTER
LOI: Letter of Intent;
Definition : Letter of Intent is a document issued from the Buyer to the Seller which indicates that the Buyer would like to enter into negotiations with the Seller in the hope of purchasing commodity. The letter of intent is not legally binding, but it does provide a starting point for negotiations.
ICPO: Irrevocable Corporate Purchase Order;
Definition : This is a document drawn up by commercial Buyers, and contains the quantities and type of commodity required, and other conditions that the buyer would like the sale to proceed under. Once submitted to the Seller, this is deemed to be binding and the corporation is obliged to complete the sale.
Definition : This is an authorization from the buyer to the seller to contact the buyer's bank to verify the buyer has the financial capability to purchase the amount of sugar and the method of payment agreed in the (LOI Or ICPO).
SGS INSPECTION (www.sgs.com)
Definition : SGS is the world's leading inspection, verification, testing and certification organization. SGS is recognized as the global benchmark for quality and integrity. The core services offered by SGS can be divided into three categories: 1- Certification Services: SGS certifies that products, systems or services meet the requirements of standards set by governments (e.g. GOST R), standardization bodies (e.g. SO 9000) or by SGS customers. SGS also develops and certifies its own standards. 2- Inspection Services:SGS inspects and verifies the quantity, weight and quality of traded goods. Inspection typically takes place at the manufacturer/supplier's premises or at time of loading or at destination during discharge/off-loading. 3- Testing Services: SGS tests product quality and performance against various health, safety and regulatory standards. SGS operates state of the art laboratories on or close to customer's premises.
ICC : INTERNATIONAL CHAMBER OF COMMERCE;
Definition : The International Chamber of Commerce (ICC; French: Chamber de commerce international (CCI)) is the largest, most representative business organization in the world. Its hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise. ICC has three main activities: rule setting, dispute resolution, and policy advocacy. Because its member companies and associations are themselves engaged in international business, ICC has unrivalled authority in making rules that govern the conduct of business across borders. Although these rules are voluntary, they are observed in countless thousands of transactions every day and have become part of international trade. A world network of national committees in over 90 countries advocates business priorities at national and regional level. More than 3,000 experts drawn from ICC’s member companies feed their knowledge and experience into crafting the ICC stance on specific business issues. ICC lobbies the United Nations, the World Trade Organization, and many other intergovernmental bodies, both international and regional, on behalf of international business. ICC was the first organization granted general consultative status with the United Nations Economic and Social Council.
NCNDA - NON CIRCUMVENTION NON DISCLOSURE AGREEMENT;
Definition : It is an agreement used in the preliminary stages of a business transaction where the seller and buyer do not know each other, but are brought into contact with each other by one or more intermediaries to fulfill the transaction. The purpose of such agreement is to ensure that (1) the intermediaries who brought the buyer and seller together are not by-passed and (2) the information disclosed during the negotiations is not revealed to any external or unauthorized party. These agreements are usually valid for a specified term.
IMFPA - IRREVOCABLE MASTER FEE PROTECTION AGREEMENT;
Definition : An Irrevocable Master Fee Protection Agreement (IMFPA) is generally applied to an over-the-counter commodity transaction. It is an irrevocable and binding legal agreement between a buyer, a seller and a business broker. In an IMFPA, the objective is to reach a private agreement for the placement or purchase of a commodity or other piece of merchandise that has been clearly identified and negotiated in bulk. The buyer or seller offers a private business broker a fee (either a fixed sum or a percentage) for arranging the transaction. The fee is only paid if and when the transaction is completed. The commission and when it will be paid is determined by the aforementioned fee agreement. Usually, the fees are automatically transferred from the bank account of the buyer to the business broker when the buyer pays for the product.