CIF PROCEDURES INCOTERMS 2020:
1. The Buyer submits an LOI with corporate information, product request,
destination, and target price to the Seller.
2. The Seller issues the Full Corporate Offer (FCO) to the Buyer. The Buyer
electronically signs the FCO and sends it back to the Seller.
3. The Buyer electronically signs the FCO and sends it back to the Seller.
4. The Buyer issues an ICPO to the Seller in accordance with the terms and
conditions in the signed FCO and using this procedure, and includes the
Buyer’s incorporation certificate, a copy of the signatory’s passport, and the
company’s banking information.
5. Upon verification and approval, the Seller issues the draft Sales and
Purchase Agreement (SPA). The Buyer and Seller both electronically sign the
SPA.
6. The Seller issues a Proforma Invoice (PI) and PPOP for the trial sale
and delivery.
7. Within –three banking days of receiving the PI and the PPOP the Buyer’s
bank issues a SWIFT MT799 to the Seller’s bank with the verbiage for their
SBLC. Upon receipt, the Seller’s bank will respond with a SWIFT MT 199
stating the Seller's Ready, Willing, and Able (RWA) to perform and the
bank's confirmation they can issue the 2% Performance Bond upon receipt
of the Buyer’s SBLC via SWIFT MT760.
8. PPOP consists of a letter from the refinery stating that:
1)They are the owner of the Product and the supplier to the Seller,
2)That the refinery guarantees the supply of the Product,
3)That the Product's origin is Azerbaijan, and it will be shipped from Batumi
Port, Georgia,
4)That the refinery confirms they are RWA to supply and deliver the stated
Product in the amount shown in the Agreement above, to the Buyer's
discharge port.
Included in the Seller’s PPOP with the letter referenced above will
be a recent SGS report on the quality of the Product the Buyer is
purchasing from the Seller.
9. The Seller’s Banker will communicate directly with the Buyer’s Banker to
facilitate the Buyer’s bank issuing an Irrevocable, Transferrable, Confirmed
and Operative Standby Letter of Credit (SBLC) from a Top 50 World Bank or
confirmed by a top US or European bank.
10. Upon confirmation of receipt of the SBLC, the Seller will provide the
Buyer with the performing vessel’s latest version of their Q88 and the
loading laycan dates, as well as a Performance Bond (PB) for 2% of the
SBLC’s value.
11. Within 10 days of the SBLC confirmation, the Seller commences loading
of the vessel during the approved laycan window. Upon completion of
loading, the vessel sails to the discharge port.
12. The Seller will provide the Buyer’s bank the following:
1)SGS Quality and Quantity reports produced at loading
2)The Certificate of Origin,
3)The Certificate of Insurance,
4)A Non-Negotiable Bill of Lading.
The Seller will also supply the Buyer with daily position and updates 7/5/3/2
days and 24 hours prior to arrival.
13. The Buyer confirms their tankage at the destination port for receipt of
the Product.
14. Three days prior to arrival, the Seller arranges SGS Inspection for the
determination of the Product’s quantity and quality at the discharge port.
15. The Buyer is required to pay for the Product at discharge prior to
offloading of the Product from the carrying vessel. The Seller will present the
following documents by electronic transmission to the Buyer’s Bank to
initiate the payment cycle:
1)Certificate of Quality produced at the Discharge Port,
2)Certificate of Quantity showing the volume that is discharged,
3)Certificate of Origin,
4)N/N Bill of Lading,
5)Certificate of Title transferred against the payment to the Buyer, and
6)Final Commercial Invoice.
16. With the transfer of Product and Shipping documents defined above, the
Buyer’s bank makes the payment via wire transfer/ MT103 for the full value
of the Final Commercial Invoice to the Seller’s bank account. Upon receiving
the Buyer's payment, the Seller transfers the Product and the Product’s Title
of Ownership to the Buyer.
17. The Buyer is responsible for any demurrage incurred by the Seller’s
performing vessel at the discharge port at charter party rates per day pro-
rated.
18. Following successful completion of the Trial Shipment, and if Buyer and
Seller are mutually agreeable to continue the sales and purchase of the
Product, the Buyer can receive and pay for subsequent shipments by
following steps 11 through 17 above.
