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TO END BUYERS

Hakim Trading and Services Group’s Non-Negotiable CIF Procedure

PAYMENT INSTRUMENT: SBLC MT760 / CONDITIONAL DLC MT700

 CHOICE 1 CIF SBLC

1. 1. PAYMENT TERMSS CIF SBLC MT760:

• For the First Spot Trial or First Contract Shipment of (……. MT) quantity of the commodity, the Buyer is required to issue a (Irrevocable, Recourse, Unconditional, Transferable, Divisible, Confirmable and Assignable Cashback Standby Letter of Credit (SBLC) MT760) issued from one of the top 25 prime world banks, and the SBLC confirmation must be written in the Verbiage. (The SBLC will be valid for One Year-One Day, covering the value of the entire first shipment and will remain in effect for the other 11 shipments during its validity period.) This SBLC will serve as a collateral security guarantee towards successful completion of providing all shipments as per the SPA. The payment of all shipments will be made via SWIFT MT103 after each shipment quantity is being discharged into the buyer’s tanks at the discharge port.
• The SBLC will act as a collateral guarantee, payable upon the arrival of the shipment at the port of discharge and upon completion of the SGS inspection by the buyer. The seller is only entitled to debit the due CI value of the arrived shipments from the SBLC in case of non-performance and default by the buyer to perform the SGS inspection within three (3) days of the shipment arrival at the port of discharge or if the buyer fails to pay the due CI value for the delivered shipment via SWIFT MT103.
• Face value of the SBLC; shall be sufficient to cover the amount in USD for the whole monthly/consecutive shipments of the commodity plus any rollovers or extensions.
• The SBLC must be sent to the Seller’s Bank account and will be subjects to the Seller’s Bank acceptance.
• As soon as the Sales & Purchase Agreement (SPA) is executed, the mentioned price is fixed for the trial and the next 11 consecutive shipments of the commodity. In case the commodity (………….) global plats price increases or decreases by a factor of 10% in comparison to the price agreed upon when the SPA was signed, either party (buyer/seller) has the option of terminating the agreement or temporarily suspending it, or negotiating a new price for continued agreement in between.
• For any reason; should the Buyer or the Seller wish to terminate the signed contract by the two parties at any time before executing the Contract or prior to its end, the Buyer or the Seller should pay 5% (Five Percent) of the full amount of the Contract value to the other party.

2. CIF PROCEDURES SBLC MT760 (INCOTERMS 2020)

• Buyer sends an Official LOI (Letter of Intent) to seller.
• Seller issues an FCO (Full Corporate Offer) to the buyer.
• Buyer signs and stamps the FCO and sends it to the seller. (Signing the FCO confirms your acceptance of the seller’s price and procedures).
• Buyer issues an official ICPO to the seller, along with buyer incorporation certificate, and a copy of the passport of the signatory.
• Once buyer credibility is established, seller will send SPA. Buyer executes this SPA and returns the stamped and sealed SPA to the seller`s address.
• Seller issues Proforma Invoice (PI) for the First trial Lift/First Delivery.
• Buyer bank will issue SWIFT MT199 to seller bank as a proof of capability to conduct the deal.
• Seller bank will confirm received and acceptance of the SWIFT MT199.
• For the first Spot Trial or First Contract Shipment of (………. MT) Buyer is required to issue a (Irrevocable, Recourse, Unconditional, Transferable, Divisible, Confirmable and Assignable Cashback Standby Letter of Credit (SBLC) MT760) issued from one of the top 25 prime world banks, and the SBLC confirmation must be written in the Verbiage.
• Seller obtains confirmation from his bank that the SBLC has been received.
• Seller Bank will issue a 2% PB (Performance Bond) to the buyer bank within 7 to 10 Days from the SBLC confirmation.
• Seller bank will also provide the buyer’s bank with the full POP documents within 10 to 15 days of the SBLC confirmation.
• Buyer confirms shipping documents, with vessels captain while delivery commence to Buyer discharge port according to the contract.
• Buyer provides evidence of Tank Storage at destination port. Seller loads First Lift/Trial Shipment at the Port of Loading.
• After loading, Seller Bank will send to Buyer Bank a Commercial Invoice (CI) and a full set of Shipping Documents/Bill of Lading via (Bank to Bank and Mail for information).
• Upon arrival of the shipment at the port of discharge and it is being discharged, the Buyer must arrange for conducting a Q&Q inspection by an SGS company and receive their report within a maximum of Three (03) days, and once a positive report is received, the Seller Bank will issue a full Commercial Invoice to the Buyer Bank. Then the Buyer must pay it via Swift Transfer (MT103) within a maximum of five (05) working days from the date the shipment is discharged.

NOTE: (IF THE BUYER FAILS TO CONDUCT THE SGS INSPECTION WITHIN THE TWO (02) DAYS PERIOD, THE SELLER IS AUTOMATICALLY ENTITLED TO CONSIDER HIS (PORT OF LOADING SGS REPORT) AS PROOF OF THE INTEGRITY OF THE FINAL DELIVERY INSPECTION. A DELIVERY NOTE REPORT WILL THEN BE OBTAINED FROM THE SHIPPING COMPANY AND SUBMITTED TO SELLER BANK TO DEDUCT THE DUE COMMERCIAL INVOICE (CI) VALUE OF THE DELIVERED SHIPMENT.)

• MONTHLY DELIVERY: Following the successful completion of the trial shipment, the buyer can continue to pay for the subsequent shipments by SWIFT MT103 after each shipment has been discharged into the buyer tanks at the discharge port.
• NOTES TO BE CONSIDERED:
  • The SBLC must be issued from top 25 prime World Banks.
  • The Buyer can issue any alternative to MT199 SWIFT Message, such as SWIFT MT799 or SWIFT MT999.
  • Under all circumstances, due to the Seller’s restricted policy; Seller will never share the Buyer any Confidential POP documents before SBLC received and confirmed by Seller’s Receiver Bank.
  • The Seller only work with CIF Procedure.
  • Once the Seller Get the POP; The Seller is not allowed to share online any confidential documents on behalf of a third party as proof of product (POP).
  • The Buyer must prepare and issue the ICPO in accordance with the above terms and procedures, and should send the signed sealed ICPO documents to the Seller company email addresses along with his Corporate License, and Passport Copy.

1. CHOICE 2 CIF CONDITIONAL DLC
   1. PAYMENT TERMS CIF DLC MT700:

• For the whole Spot Trial Shipment of (………. MT) quantity of the Commodity. Payment will be by 100% by MT103 Guaranteed by Irrevocable, Conditional, Confirmed Operative Documented Letter of Credit (DLC) MT700 of validity of Ninety days from only any World’s Prime 100 Banks or Confirmed by one of Prime World’s Banks, and covering the Trial Spot Shipment value, with the ability; that Al Hakim Trading Establishment has the right to withdraw thirty percent (30%) of the credit value against the Contract and Invoice and the remaining Seventy percent (70%) upon the arrival of the goods to the port of unloading against all Documents, and the confirmation must be written in the Clause 49 the Verbiage. And Value that will act as a collateral security guarantee towards successful completion and lifting of the Trial quantity with a maturity date of three (03) months. This DLC will serve as payment for the Trial shipment of the Commodity, and payment of the shipment will be made by SWIFT MT 103, this payment is 100% guaranteed payable directly into the Seller’s Bank, payable immediately 100% at Destination, for the whole Trial shipment loaded with the delivery of documents and SGS Inspection documents.
• For the whole Contract Shipment of (………. MT) quantity of the commodity. payment will be by 100% by MT103 Guaranteed by Irrevocable, Conditional, Confirmed Operative Documented Letter of Credit (DLC) MT700, only from prime 100 banks, validity of One Year One Month Revolving until the end of the contract until final delivery; covering one (1) monthly shipments’ quantity of the Commodity, with the ability; that Al Hakim Trading Establishment has the right to withdraw thirty percent (30%) of the credit value against the Contract and Invoice, and the confirmation must be written in the Clause 49 in the Verbiage. This DLC face Value will act as a collateral security guarantee towards successful completion and lifting of the contracted quantity with a maturity date of Twelve (12) months. This DLC will serve as payment for the last month shipment of the Commodity, and payment of the shipments will be made by SWIFT MT 103, this payment is 100% guaranteed payable directly into the Seller’s Bank, payable immediately 100% at Destination, for the whole 100% value of each monthly shipments, loaded with the delivery of documents and SGS Inspection documents. Except the last month month’s delivery payments; the withdrawal thirty percent (30%) is to be deducted and pay only the Remainder seventy percent 70% of the last month shipment’s value.
• (The DLCs MT700 for the Commodity subjects to Seller’s Bank acceptance). And The Contract DLC shall be for the whole period of the contract plus any Rollovers or extensions.
• Face value of MT103 Guaranteed by previous mentioned Documented Letter of Credits (DLCs) MT700; shall be sufficient to cover the amount in USD for the value of Trial Shipment or for the value of each monthly consecutive shipment for the Commodity. The seller is entitled only to take the shipment value in case of default and non-obligation of the buyer to pay the shipment value.
• The DLCs MT700 must be sent to Seller’s Bank after Signing the Contract, and before Loading.
• As soon as the Sales & Purchase Agreement (SPA) is executed, the mentioned price is fixed for the trial and the next 11 consecutive shipments of the commodity. In case the commodity (………….) global plats price increases or decreases by a factor of 10% in comparison to the price agreed upon when the SPA was signed, either party (buyer/seller) has the option of terminating the agreement or temporarily suspending it, or negotiating a new price for continued agreement in between.
• For any reason; should the Buyer or the Seller wish to terminate the signed contract by the two parties at any time before executing the Contract or prior to its end, the Buyer or the Seller should pay 5% (Five Percent) of the full amount of the Contract value to the other party.

 TRANSACTION PROCEDURES FOR CIF DLC MT700 (INCOTERMS 2020)

• End Buyer sends Official LOI
• Authorized mandates of the End Buyer if present to be mentioned in LOI, ICPO and SPA.
• Negotiations are conducted between the Authorized Representative of the End Buyer with the Commercial Manager of Hakim Trading Est. for initial agreement on the Procedures, Conditions and Prices.
• Seller sends to the Buyer; “Buyer’s Approval Document for Hakim CIF Non-negotiable Procedure”. Of the Pre-Agreed Procedure, Conditions and prices.
• Buyers Signs and Seals the Approval document and Returns it back within 48/72 hours; with a new updated LOI according to the Seller’s Approved Procedures Document; Signing and stamping the Document; means your Approval for all Terms and conditions. Then the FCO will be send to your address.
• Seller Issues FCO according to the Seller’s Approved Procedures document and send to Buyer.
• Buyer fills up Buyer’s details, sign/stamp the FCO & sends it with the Passport Copy to Seller along with ICPO with the approved seller’s procedure.
• Seller Issues Draft Contract or SPA, then Buyers Signs and Seals and Returns it back within 48/72 hours.
• Seller issues and sign and seals the final Contract or SPA, and send it to the Buyer. Then Buyer Signs and Seals and Returns it back within 24/48 hours.
• Seller issues the PROFORMA INVOICE (PI), while the Buyer signs, and seals the (PI) Invoice, and returns within 24/48 hours.
• Buyer issues SWIFT MT199 or MT 705 or MT999 bank to bank, and sends draft DLC copy.
• After Accepting the SWIFT MT199 by the Seller’s bank.
• FOR THE TRIAL SPOT SHIPMENT Buyer issues, Irrevocable, Conditional, Confirmed Operative Documented Letter of Credit (DLC) MT700 of validity of Ninety days from any World’s Prime Bank or from a Bank having RMA with our Bank; covering the Trial Shipment’s value and the confirmation must be written in the Clause 49 in the Verbiage.
• FOR THE CONTRACT MONTHLY SHIPMENTS Buyer Issues Swift Irrevocable, Conditional, Confirmed Operative Documented Letter of Credit (DLC) MT700 to be Revolving until the end of the contract until final delivery (from prime 100 banks), and the confirmation must be written in the Clause 49 in the Verbiage.
• Seller makes Confirmation of the DLC from the Seller’s bank.
• Seller within 7 days, issues 2% (PB) performance Bond.
• Seller after confirmation of the DLC, within 10 to 15 days; sends Full POP to Buyer.
• Buyer confirms shipping documents, with vessels captain while delivery commence to Buyer discharge port According to contract.
• In case the Vessel arrives to the destination port within three days and Buyer no carry out SGS inspection, automatically the Seller entitled to consider (SGS of loading port as final inspection and confirmation of delivery of shipment in the discharge port).
• Buyer’s bank will release the payment for the total supposed value of each Shipment to Seller’s bank (MT103) within two (2) working days. The payment will be 100% guaranteed payable directly to Seller’s bank, payable immediately 100% at Destination, with the delivery of documents and SGS Inspection documents from Discharge Port.
• NOTES TO BE CONSIDERED:
  • The DLC must be from prime 100 banks, and the confirmation must be written in the Clause 49 in the Verbiage.
  • We work only with CIF Procedure.
  • Under all circumstances, due to the Seller’s restricted policy; Seller will never share the Buyer any Confidential POP documents before SBLC received and confirmed by Seller’s Receiver Bank.
  • We don’t give any confidential documents from a third party.

The Buyer must prepare and issue the ICPO in accordance with the above terms and procedures, and should send the signed sealed ICPO documents to the Seller company email addresses along with his Corporate License, and Passport Copy.