CIF PROCEDURE
Documentary Letter of Credit ( Irrevocable, Confirmed, Transferable & Revolving)
1 Buyer issues ICPO containing the seller’s procedure with banking details and scanned copy of buyer’s passport, along with Bank Comfort Letter from the Buyer’s Bank.
2 Seller issues A Draft Contract / Sales and Purchase Agreement for Buyer’s review and endorsement. (SPA Open for amendment if any).
3 Buyer within three (3) working days reviews and endorse the SPA and returns to seller for legalization at seller’s expense, along with the Draft of DLC from the buyer’s bank, bearing all the details, mentioned in the SPA
4 Seller issues the below PPOP Documents to Buyer.
a. Certificate of origin
b. Product Passport
c. Tax Registration Certificate
d. Refinery commitment to supply
e. Statement of availability of product
f. Proforma Invoice
5 Upon Buyer’s receipt of the PPOP Documents, Buyer issues their financial guarantee in the form of Documentary Letter of Credit ( Irrevocable, Confirmed, Transferable & Revolving) to cover the first shipment to seller’s bank within five (5) working days
6 Buyer in alternative shall make security guarantee deposit of 5% of product value via TT Wire from total value of the contract (First month’s delivery) to seller bank to secure the vessel if fails to issue the Bank Instrument within the stipulated time frame.
Note: Fee made by buyer will be deducted when making payment for the total cost of the product at the discharge port after a successful CIQ/SGS test at the discharge port.
7 On confirmation of the above clause, Seller Company releases copies of POP and Shipping documents to buyer Company.
a. Export license by the ministry of Petroleum and Energy.
b. Approval to export by the ministry of justice.
c. Statement of availability of the product.
d. Refinery commitment.
e. Transnet contract to transport the Product to the Port.
f. Port Storage agreement/ Insurance.
g. Charter party agreement.
h. Customs clearance certificate.
i. Tank receipt by the storage facilitator.
j. SGS Report.
8 Shipment commences as per contract and upon arrival of the vessel tanker at the discharge port, buyer conducts SGS or CIQ Inspection.
9 Buyer makes operative payment for the full shipment via T/T Wire or MT103.
10 Seller will release payments to the intermediaries involved within 24 hours of receiving the full Payment for the product from the Buyer’s bank after successful delivery of the first monthly shipment of the Product.