PRIVATE PLACEMENT BUSINESS - BEWARE OF SCAMS! - (A little research by Nik Zafri)
UPDATE : AUGUST 2011 (BETWEEN SCAM AND THE REAL THING)
I can almost recall the early 90s; those good old days; genuine entrepreneurs now reaping lots of benefits and profits due to the great progress in private placement business. Their businesses grow from small timer to big timer. Many of these companies become large corporations today even turned themselves into bluechips listed in the Main Board of Bursa Malaysia. Despite some appear not to be so successful, but they are always bullish to make a comeback - even indulge themselves fully into corporate debt restructuring programs.
Today; when talking about private placement business in Malaysia, many people approached me (to do business plans) and say they have some good projects needed to be funded. Some of them even go to the extend of telling me that some VVIPs are indirectly involved in such projects. (What a joke...take a hike!!)
Based on their papers; on first impression; I was almost fooled as it appears that they do have what it takes. Great looking business plans with all the mission, vision, objective and goals, marketing, viability, gearing/financial ration, projected P & L etc., But as I delve further, I saw layers of brokers hiding behind the business plan. There are many places considered hotspots for brokers.
The normal ones, I did see a few of them in the only 'kampung' in Kuala Lumpur - mostly their brokerage 'network' are associated together with politics (so they claimed) - "Yes, I know this guy like the back of my head, I can bring you to him but I need a million ringgit upfront".
While, the 'higher class' are relaxing comfortably either at the lounge or coffee house; with laptops and gadget phones; in 4 stars hotels but the funniest part is that, I notice that they are taking only plain water (not even Evian) - and never offer you if you like to have something to eat or drink, being snobbish, displaying some dilapidated construction drawings, agreements, letters etc. Sometimes they talked boastfully about Fractal & Fractional Reserve Banking with many times leverage of deposits, cost of fund etc. Don't make they feel comfortable, don't pay for their drinks and food. Trust me - you'll be doing yourself a great favour.
The smart 'scam' brokers will seek ways to capitalize on entrepreneurs demand - mostly at the cost of entrepreneurs. Be careful businessmen and entrepreneurs, learn to smell elements of scam. New 'funding schemes' in private placement are one of them.
The most popular one today that is attacking the Malaysian PP market is the good old trick known as "leasing using Standby LC. Sounds good huh? The broker are smart enough to say that they know people in the banking and financial sector that you only need to pay an upfront of 10% out of the total value issued by the bank. This is a SCAM!
Standby Letter of Credit is an instrument alright but it's NOT discountable. Just walk into any bank and ask! If you need a 20 million SBLC, you need to pay 20 million! So, the scam brokers will convince you that upon issuance of SBLC by the bank, it can be used as a warranty or some sort of collateral to get more money from other projects (usually they will whisper to you that it's 'money laundering') There is no way you can use a leased SBLC to do business.
Another alternative, a smaller amount for big money (small PP), another scam. Behind small money, there is big money awaiting to be robbed from your pocket. Who would give big money for small money? Then; they say to you; you have assets to be liquidated? Yeah..that's where big money comes in. Although there is some logic in it, but wait till you see the levels of overriding commissions the broker will ask from time to time.
So, what else - leasing of bank instrument - is much the same as the SBLC. You have a leased property and trying to make money out of it when the property is not even yours. I don't think the bank will be convinced to take leased property as collateral. The brokers tell you that you can make money is because they want an upfront - that's all.
Another back-end scam is through JV funding which has little to no recourse to you. The scam brokers will ask an upfront (with some more profits from PP) once the so-called 'partner' lease an instrument. They use 'technical words' such as high yields and you're duped into spending so much money by not even bothered to look into the leased instrument.
So, it's all about upfronts. Many people has been tricked and I told them to make proper reports to the authorities - at least to stop others from being duped.
My advise, if you have so much money, go to the bank and ask for true professional advise. Private Placement Business do exist and can be of great assistance to you but try to avoid 'unlicensed and unqualified' brokers.
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Here's a good article
Swift MT 760 and MT 799, the Real Story
Submitted by InsideTrade Staff on Friday, 4 December 2009
If you have been in the private placement business for a while, you probably know that there are plenty of acronyms associated with trade programs. As someone new to the business, you may hear phrases like: “MTN”, “BG”, “SBLC”, “PPP”, “DTC”, “CIS”, “POF”, and say, “what the heck are they talking about”? Well, though it is good to know private placement lingo, cool sounding terms do NOT close deals. If you want to protect yourself and succeed in private placement, you MUST understand the 2 most important acronyms of all, the “MT 760” and “MT 799”.
Whether you are a client, broker, consultant, or even just a beginner, the MT 760 and MT 799 are two terms that are critical to learn inside and out!. Many times, if you speak to brokers who claim to have trade programs, you can tell if their investment is real by asking just one question, “Explain the MT 760 and MT 799, what are the risks and fees?” If you get an answer that sounds similar to the explanation we give below, then you may want to dig a little deeper! If you don’t, recognize that these people are less educated than they claim, and may not be the best option. First things first, let’s explain the definition and application of these terms in the modern day private placement business.
The MT 799 is a swift message used between banks to communicate in written form, and is usually referred to as “pre-advice”. For example, Bank “A” may send a MT 799 to Bank “B” stating: “We confirm “XXX” amount on deposit and are ready to block this amount via MT 760 in favor of account “XXX” at your bank. Please confirm readiness and receipt.” Typically, the MT 799 will be needed directly before the MT 760 is issued, and there may be small fees. Despite what most brokers may claim, the MT 799 is NOT used as collateral,and can NOT be used to enter a private placement program. Now that we know about the MT 799, let’s take a look at it’s cousin, the Swift MT 760.
The MT 760 is a swift message used to block funds in favor of someone other than the owner, collateralizing the asset via this message, while allowing for loans and liens against it. For example, most private placements require the investor to send a MT 760 to the trader’s account, allowing the trader to use this swift as a collateral guarantee for their bank. Again, despite what many brokers may claim, this is NOT everything you need to know about the MT 760. Now that you do know the definitions and applications, let’s cover the key points no one ever brings up about the MT 760: the FEES, and the RISKS…
First and foremost, the fees for blocking a large amount of funds via MT 760 can be more than you would expect. In most cases, your bank will charge 1-2% of the value being blocked for this service. For example, on a 100M bank instrument this can be 1-2M that the owner must come out of their pocket with, unless they have a special relationship with their bank. You may say to yourself, “Wow, that is a lot to spend on fees for something I’m not sure will work”! Well, even more importantly, let’s take a look at the risks if you did move forward.
If you complete the MT 760 and pay the fees, you should observe everything very closely from that point on. Once the MT 760 has hit the account of the trader, the line of credit should become available within 72 hours. At that time, the trader should be able to make their first bank instrument purchase, and give you a DEFINITE TIMELINE for your first profit disbursement. You may say, “Why do I need to watch this process so closely?” Well, here is the part that most brokers don’t tell their clients…
When blocked in someone’s favor, the MT 760 collateralizes assets in the form of a swift guarantee, and by doing so, allows the beneficiary to draw credit against it. This means, if the loan to the “trader” was defaulted on, the bank would seize the collateral and you would be out of your money! Though this scenario is possible, I would consider it rare for two reasons… In today’s world, no bank will loan Millions of dollars to someone they haven’t vetted, no matter what collateral is on hand. Second, the MT 760 is quite rare, and this usually draws attention to the beneficiary of the swift.
In summary, the MT 760 can be safe, or it can blow up in your face. As always, the key is having a real trader and most importantly, getting your payments as scheduled. If the trader makes a statement about yields and a time line, they must ALWAYS keep in line with their promises. Over the THOUSANDS of transactions we have been involved in, the only ones that have closed have been smooth from the start, with NO hiccups.
Remember, both RISK and FEES are a part of blocking funds via MT 760!!!! In addition, by understanding the MT 760 and MT 799, you can clear out the TIME WASTING brokers from your network, and work MORE EFFICIENTLY towards your goals.
Let’s face it, very few people know as much as you do after reading this article. Use it to your advantage to qualify the private placement investments you come across, and it will make life a lot easier. Ask yourself, if someone can’t explain the MT 760 and MT 799 in thorough detail, do you think they have ever closed a deal? Then ask yourself, do I want to risk Millions with someone that has NEVER been successful? It’s not hard to see, education is the key!
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SAMPLE- S.W.I.F.T. MT760 – WIRE FORMAT EXAMPLE
NOTIFICATION :
DELIVERY STATUS :
PRIORITY / DELIVERY :
MESSAGE INPUT REFERENCE :
-----------MESSAGE HEADER----------------------------
SWIFT INPUT : MT760 CONFIRMATION OF BLOCKED FUNDS
SENDER :
BANK NAME :
BANK ADDRESS :
SWIFT CODE :
BANK OFFICER :
AMOUNT :
ACCOUNT NAME :
ACCOUNT NUMBER :
RECEIVER :
BANK NAME :
BANK ADDRESS :
SWIFT CODE :
BANK OFFICER :
ACCOUNT NAME :
ACCOUNT NUMBER :
IN FAVOR OF :
-----------SWIFT MESSAGE TEXT----------------------
TRANSACTION CODE :
TRANSACTION NUMBER :
WE, [INSERT NAME & LOCATION OF SENDING BANK] ON BEHALF OF OUR CLIENT [INSERT NAME OF ACCOUNT HOLDER/SIGNATORY], HEREBY PRESENT OUR CONFIRMATION OF FUNDS IN THE AMOUNT OF [INSERT WRITTEN AMOUNT]UNITED STATES DOLLARS (USD $XXX,XXX,000.00) IN ACCOUNT NUMBER [XXXXXXXX] AS OF THE DATE OF THIS TRANSMISSION.
BY VIRTUE OF THIS INSTRUMENT WE [INSERT NAME & LOCATION OF SENDING BANK] CONFIRM WE HAVE PLACED SAID FUNDS ON ADMINISTRATIVE HOLD FOR A PERIOD OF [INSERT WRITTEN NUMBER] (XX) [INSERT TIME PERIOD] IN FAVOR OF THE BENEFICIARY LISTED ABOVE
THIS INSTRUMENT IS IRREVOCABLE AND VALID FOR A PERIOD OF SIXTY (60) DAYS, AND THE FUNDS SHALL REMAIN UNENCUMBERED FROM ANY OTHER BENEFICIARIES.
WE, ---INSERT NAME & LOCATION OF SENDING BANK--- CONFIRM THE FUNDS IN OUR CUSTODY WILL NOT BE CHANGED, ALTERED, AMENDED OR PLEDGED FOR A PERIOD OF [INSERT WRITTEN NUMBER] (XX) [INSERT TIME PERIOD] FROM THE DATE OF THIS TRANSMISSION.
BANK OFFICER, TITLE: BANK OFFICER, TITLE:
PIN: PIN
------------------MESSAGE TRAILER-----------------------
NOTIFICATION :
DELIVERY STATUS :
PRIORITY / DELIVERY :
MESSAGE INPUT REFERENCE :
-----------------MESSAGE HEADER--------------------------
SWIFT INPUT : MT760 CONFIRMATION OF BLOCKED FUNDS
SENDER :
BANK NAME :
BANK ADDRESS :
SWIFT CODE :
BANK OFFICER :
AMOUNT :
ACCOUNT NAME :
ACCOUNT NUMBER :
RECEIVER :
BANK NAME :
BANK ADDRESS :
SWIFT CODE :
BANK OFFICER :
ACCOUNT NAME :
ACCOUNT NUMBER :
IN FAVOR OF :
--------------SWIFT MESSAGE TEXT------------------------
TRANSACTION CODE :
TRANSACTION NUMBER :
WE, [INSERT NAME & LOCATION OF SENDING BANK] ON BEHALF OF OUR CLIENT [INSERT NAME OF ACCOUNT HOLDER/SIGNATORY], HEREBY PRESENT OUR CONFIRMATION OF FUNDS IN THE AMOUNT OF [INSERT WRITTEN AMOUNT]UNITED STATES DOLLARS (USD $XXX,XXX,000.00) IN ACCOUNT NUMBER [XXXXXXXX] AS OF THE DATE OF THIS TRANSMISSION.
BY VIRTUE OF THIS INSTRUMENT WE [INSERT NAME & LOCATION OF SENDING BANK] CONFIRM WE HAVE PLACED SAID FUNDS ON ADMINISTRATIVE HOLD FOR A PERIOD OF [INSERT WRITTEN NUMBER] (XX) [INSERT TIME PERIOD] IN FAVOR OF THE BENEFICIARY LISTED ABOVE
THIS INSTRUMENT IS IRREVOCABLE AND VALID FOR A PERIOD OF SIXTY (60) DAYS, AND THE FUNDS SHALL REMAIN UNENCUMBERED FROM ANY OTHER BENEFICIARIES.
WE, ---INSERT NAME & LOCATION OF SENDING BANK--- CONFIRM THE FUNDS IN OUR CUSTODY WILL NOT BE CHANGED, ALTERED, AMENDED OR PLEDGED FOR A PERIOD OF [INSERT WRITTEN NUMBER] (XX) [INSERT TIME PERIOD] FROM THE DATE OF THIS TRANSMISSION.
BANK OFFICER, TITLE: BANK OFFICER, TITLE:
PIN: PIN
---------------MESSAGE TRAILER--------------------
S.W.I.F.T. MT760 – WIRE FORMAT EXAMPLE
NOTIFICATION :
DELIVERY STATUS :
PRIORITY / DELIVERY :
MESSAGE INPUT REFERENCE :
---------------MESSAGE HEADER----------------------
SWIFT INPUT : MT760 CONFIRMATION OF BLOCKED FUNDS
SENDER :
BANK NAME :
BANK ADDRESS :
SWIFT CODE :
BANK OFFICER :
AMOUNT :
ACCOUNT NAME :
ACCOUNT NUMBER :
RECEIVER :
BANK NAME :
BANK ADDRESS :
SWIFT CODE :
BANK OFFICER :
ACCOUNT NAME :
ACCOUNT NUMBER :
IN FAVOR OF :
-------------SWIFT MESSAGE TEXT--------------------
TRANSACTION CODE :
TRANSACTION NUMBER :
WE, [INSERT NAME & LOCATION OF SENDING BANK] ON BEHALF OF OUR CLIENT [INSERT NAME OF ACCOUNT HOLDER/SIGNATORY], HEREBY PRESENT OUR CONFIRMATION OF FUNDS IN THE AMOUNT OF [INSERT WRITTEN AMOUNT]UNITED STATES DOLLARS (USD $XXX,XXX,000.00) IN ACCOUNT NUMBER [XXXXXXXX] AS OF THE DATE OF THIS TRANSMISSION.
BY VIRTUE OF THIS INSTRUMENT WE [INSERT NAME & LOCATION OF SENDING BANK] CONFIRM WE HAVE PLACED SAID FUNDS ON ADMINISTRATIVE HOLD FOR A PERIOD OF [INSERT WRITTEN NUMBER] (XX) [INSERT TIME PERIOD] IN FAVOR OF THE BENEFICIARY LISTED ABOVE
THIS INSTRUMENT IS IRREVOCABLE AND VALID FOR A PERIOD OF SIXTY (60) DAYS, AND THE FUNDS SHALL REMAIN UNENCUMBERED FROM ANY OTHER BENEFICIARIES.
WE, ---INSERT NAME & LOCATION OF SENDING BANK--- CONFIRM THE FUNDS IN OUR CUSTODY WILL NOT BE CHANGED, ALTERED, AMENDED OR PLEDGED FOR A PERIOD OF [INSERT WRITTEN NUMBER] (XX) [INSERT TIME PERIOD] FROM THE DATE OF THIS TRANSMISSION.
BANK OFFICER, TITLE: BANK OFFICER, TITLE:
PIN: PIN
----------------MESSAGE TRAILER----------------------
Sample
BANK GUARANTEE
[Illustration only]
TO: The Principal {"Principal"}
In consideration of the Principal at the request of Contractor ("Customer") and [name of bank] ("bank") agreeing to accept this undertaking in connection with a contract between Principal and Customer for Customer to provide Services to Principal, (Contract") the bank unconditionally undertakes to pay the Principal on demand in writing any sum or sums which may from time to time be demanded in writing by the Principal to an amount not exceeding ………. THOUSAND DOLLARS ($…,000.00) )("agreed sum") in total.
Payment of the agreed sum or any parts of it will be made by the bank to the Principal without reference by the bank to the Customer and notwithstanding any notice to the bank by the Customer not to pay to the Principal any monies payable under this undertaking and irrespective of the performance by the Customer or the Principal of the terms of the Contract.
The bank’s liability will not be affected or discharged in any way by any alterations which may be made to the terms of the Contract or by any extension of time or other forbearance on the part of the Principal or the Customer to the other.
This undertaking will continue in force until either notification in writing has been received by the bank from the Principal that this undertaking is no longer required by the Principal or until payment to the Principal by the bank of the whole of the agreed sum or the balance of it remaining after any part payment or payments which ever first occurs.
The bank will be entitled to terminate this under at any time on payment to the Principal of the agreed sum or the balance of it remaining after any part payments or any lesser amount which the Principal requires.
[Execution by Bank]
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SAMPLE LETTER OF CREDIT
(note that Malaysia is not yet a member of ICC)
TO: { BUYER} PROFORMA INVOICE:
YOUR REF.:
YOUR REF. DATE:
We have indicated below those terms and conditions that we would find acceptable in a letter of credit issued by your bank. Your efforts to gain compliance with these terms and conditions in the issuance of this letter of credit will ensure prompt dispatch of your order. If your bank is unable to issue the credit within the following guidelines, please contact us providing information on those areas that must be altered. This will eliminate needless delay and costs involved with amendments after the credit has been opened. Only those items marked with an "X" will apply.
1. [ ] The letter of credit is to be irrevocable and subject to the Uniform Customs and practice for Documentary Credits, as published and updated from time to time by the International Chamber of Commerce.
2. [ ] The letter of credit is to be [ ] Advised [ ] Confirmed by our bank:
X bank
Telex No.:
SWIFT No.:
ABA.:
3. [ ] The beneficiary is to be shown as:
4. [ ] The letter of credit is to be payable upon presentation of drafts drawn at:
A. [ ] At sight
B. [ ] ___ days after the date of the transport document (i.e., 90 days after date of B/L)
C. [ ] ___ days after sight (i.e., 90 days after sight)
D. [ ] Other: ____________________________
5. [ ] The letter of credit is to be available by negotiation with any bank.
6. [ ] The letter of credit is to be payable in:
[ ] U.S. dollars
[ ] Other: _______________________________
7. [ ] The amount of the letter of credit is to be specific as:
[ ] "Not to exceed “_____________ [ ] "About “_______________
8. [ ] The following documents are normally provided if required in the letter of credit. Please avoid the requirement for any other documents without prior agreement on our part.
A. [ ] Signed Commercial Invoice, one original and ______ copies.
B. [ ] Packing List in ______ copies.
C. [ ] Negotiable Marine/Air Insurance policy or certificate in duplicate for 110% of invoice value covering all risks and war risks and ____________________________
D. [ ] Full set of clean on board ocean bills of lading
issued to order of : __________________________
E. [ ] Clean air waybill consigned to:
__________________________________________
F. [ ] Other documents:
9. [ ] The letter of credit is to specify shipment of:
____________________________________________
____________________________________________
____________________________________________
10. [ ] Shipment is to be:
[ ] FOB ___________ From: __________________
[ ] CFR ___________ To: ____________________
[ ] CIF___________
[ ] EXW__________
[ ] Other __________ (i.e.: FCA, FAS, CIP, etc.)
11. [ ] The Bill of Lading is to be marked:
[ ] Freight Prepaid
[ ] Freight Collect
12. [ ] Transshipments:
[ ] Are permitted
[ ] Are not permitted
13. [ ] Partial shipments:
[ ] Are permitted
[ ] Are not permitted
14. [ ] Latest Shipment Date __________________
15. [ ] Latest Presentation Date of Documents to the Negotiating bank to be ____ days after each shipment date.
16. [ ] Expiration Date of letter of credit to be __________________
17. [ ] The letter of credit should specify that all banking charges outside the country of the applicant are for the account of the [ ] applicant [ ] beneficiary.
18. [ ] letter of credit to be transferable.
19. [ ] Other special instructions.
2. Complying with Documentary Requirements
Exporters and freight forwarders who frequently assist the exporter is preparing documents for shipment are aware that terms and conditions in letters of credit are to be fulfilled exactly as stated. The opening bank has set forth terms as requested by the applicant, or buyer, and neither the opening bank, negotiating bank or designated paying bank will honor documents other than those specified. Furthermore, some documents required under a letter of credit are specifically described as to the information which must be contained in the specified document.
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SAMPLE - BUYER'S MANDATE
To be issued on Buyer’s Letterhead
Letter of Intent / Irrevocable Corporate Purchase Order
Date of Issue : ... . 2008 Buyer's Reference: ................
Valid Till: ... ..... 2008
To:
Seller Mandate :
Company
Address
Country
We the undersigned Name of Signatory of End Buyer's Company Name hereby state and confirm that we are ready, willing and able to purchase HMS (Grade.....) in the quantity and for the price as specified in the terms and conditions as stated below. This representation is made with full corporate authority and also responsibility of the above stated buyer.
Commodity HMS 1 & 2 (80:20)
Specifications ISRI 200 to 206
Loading Port XXXXX (Seller's Choice)
Packing Bulk / Container
Destination Port Destination Port Name
Shipment Terms CIF /CNF, (Buyers destination Port)
Total Contract Qty ...............MT (in xxx months /days)
Quantity per Shipment .............. MT (+- 5%)
No.of Shipments per Month ----Shipment per Month
Length of Contract ___Months / One time Spot deal
Delivery Period Within 60 Days after Opening of DLC/LD.SBLC
Yard Visit Seller’s Choice
Inspection SGS or CCIC or Equivalent at Seller's Cost Procedure Seller’s Choice
Price CNF / CIF / FOB............USD .... / MT
Mode of Payment Irrevocable, Confirmed, Non-Transferable,
100% payable at sight DLC. Activated by Sellers’s 2% PBG
Performance bond: 2% Operative PB from the seller.
End Buyer's Information
Company Name
Address
Country
Zip
Telephone No.
Fax No.
E-Mail
End Buyer's Bank Details (From Which LC Will be Issued)
Bank Name
Address
Zip and Country
Telephone No. and Fax No.
Account Name
Account No.
Bank Swift Code
Bank Officer's Name
Designation, Direct Phone and Fax No.
LC Confirming Bank's Details (can be same as above)
Bank Name
Address
Zip and Country
This exclusive LOI with the specific LOI reference number is the only current LOI. It takes precedence over any other LOI with the above-mentioned specific LOI reference number currently in circulation for this quantity and product. The Buyer is of the understanding that any and all offers are subject to final agreement on the details of sales contracts.
Signature .................
Printed Name .................
(Corporate Seal)
Title .................
INTERNATIONAL CHAMBER OF COMMERCE ( I.C.C 400 / 500 / 600 )
NON-CIRCUMVENTION, NON DISCLOSURE & WORKING AGREEMENT
WHEREAS the undersigned wish to enter into this Agreement to define certain parameters of the future legal obligations, are bound by a duty of Confidentiality with respect to their sources and contacts. This duty is in accordance with the International Chamber of Commerce.
WHEREAS the undersigned desire to enter a working business relationship to the mutual and common benefit of the parties hereto, including their affiliates, subsidiaries, stockholders, partners, co-ventures, trading partners, and other associated organizations (hereinafter referred to as “Affiliates”).
NOW THEREFORE in consideration of the mutual promises, assertions and covenants herein and other good and valuable considerations, the receipts of which is acknowledged hereby, the parties hereby agree as follows:
1. TERMS AND CONDITIONS
A. The parties will not in any manner solicit, nor accept any business in any manner from sources or their affiliates, which sources were made available through this agreement, without the express permission of the party who made available the source and,
B. The parties will maintain complete confidentiality regarding each other business sources and/or their Affiliates and will disclose such business sources only to the named parties pursuant to the express written permission of this party who made available the source, and,
C. That they will not in any of the transactions the parties are desirous of entering into and do, to the best of their abilities assure the other that the transaction codes established will not be affected.
D. That they will not disclose names, addresses, e-mail address, telephone and tele-fax or telex numbers to any contacts by either party to third parties and that they each recognize such contracts as the exclusive property of the respective parties and they will not enter into any direct negotiations or transactions with such contracts revealed by the other party and
E. That they further undertake not to enter into business transaction with banks, investors, sources of funds or other bodies, the names of which have been provided by one of the
F. Parties to this agreement, unless written permission has been obtained from the other party (ies) to do so. For the sale of this agreement, it does not matter whether information obtained from a natural or a legal person. The parties also undertake not to make use of a third party to circumvent this clause.
G. That in the event of circumvention of this Agreement by either party, directly or indirectly, the circumvented party shall be entitled to a legal monetary penalty equal to the maximum service it should realize from such a transaction plus any and all expenses, including but not limited to all legal costs and expenses incurred to recover the lost revenue.
H. All considerations, benefits, bonuses, participation fees and/or commissions received as a result of the contributions of the parties in the Agreement, relating to any and all transactions will be allocated as mutually agreed.
I. This Agreement is valid for any and all transaction between the parties herein and shall be governed by the enforceable law in All Commonwealth Country’s, European Union Country’s, USA Courts, or under Swiss Law in Zurich, in the event of dispute, the arbitration laws of states will apply.
J. The signing parties hereby accept such selected jurisdiction as the exclusive venue. The duration of the Agreement shall perpetuate for (__) years from last date of signing.
2. AGREEMENT TO TERMS
A. Signatures on this Agreement received by the way of Facsimile, Mail and/or E-mail shall be an executed contract. Agreement enforceable and admissible for all purposes as may be necessary under the terms of the Agreement.
B. All signatories hereto acknowledge that they have read the foregoing Agreement and by their initials and signature that they have full and complete authority to execute the document for and in the name of the party for which they have given their signature.
3. ACCEPTED AND AGREED WITHOUT CHANGE
Party # 1 (Seller/Seller Mandate) Party # 2 (Buyer/Buyer Mandate)
Name : Name :
Passport No : Passport No :
Nationality : Nationality :
Company : Company :
Business Registered No. Business Registered No.
Address : Address :
Tel : Tel :
Fax : Fax :
Mobile : Mobile :
E-Mail : E-Mail :
Designation : Designation :
Date and Time : Date and Time :
Sign & Seal : Sign & Seal :
EDT ( Electronic document transmissions )
EDT (Electronic document transmissions) shall be deemed valid and enforceable in respect of any provisions of this Contract. As applicable, this agreement shall be:-
1- Incorporate U.S. Public Law 106-229, ‘‘Electronic Signatures in Global and National Commerce Act’’ or such other applicable law conforming to the UNCITRAL Model Law on Electronic Signatures (2001) and
2- ELECTRONIC COMMERCE AGREEMENT (ECE/TRADE/257, Geneva, May 2000) adopted by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT).
3- EDT documents shall be subject to European Community Directive No. 95/46/EEC, as applicable. Either Party may request hard copy of any document that has been previously transmitted by electronic means provided however, that any such request shall in no manner delay the parties from performing their respective obligations and duties under EDT nstruments.
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SAMPLE MANDATE - FULL CORPORATE OFFER (FCO)
Date:
XXXXXXXX
XXXXXXXX
XXXXXXXX
Dear SELLER’S REPRESENTATIVE NAME
In an effort to reach a successful resolution, we, MANDATE representing BUYER, have the pleasure of submitting, for SELLER, our Full Corporate Offer for supply of PRODUCT AMOUNT per month of PRODUCT for a period of XX months based on the following terms and conditions:
Product:
Origin:
Quantity:
Specification:
Delivery Terms:
DESCRIPTION
COUNTRY
QUANTITY/PER (MONTH,YR ETC)
As per Specification Sheet annexed herewith
CIF(OR FOB) ASWP
PRICE:
Price in US Dollar per barrel to be invoiced against three-day average, the day before, the day on, the day after (pricing days) of the COUNTRY .... published by .... Crude Oil Market.
PROCEDURE (Non-Negotiable):
1. Seller/Seller's mandate forward Full Corporate Offer (F.C.O) along with formats of bank capability and format of payment Guarantee for the payment of commission to the royality and to the Buyer Mandate.
2. Buyer returns the FCO and formats duly signed and accepted along with an ICPO having full bank details (TOP 20) and major AAA Bank, which acceptable from the Seller. ICPO to be addressed to XYZ, C.C.S.Z. ANYONE (aka AW), W.SMITH, XXX and must confirm financial capability as well as include details of the refinery, refinery codes processing and storage capacity.
3. Seller Mandate response with draft of Sale/Purchase Copy of Contract for the Buyer to sign.
4. Seller Mandate arranges for exchange document as below:
a. Buyer's bank capability as per specified format, duly issued by TOP20 major AAA Bank, which is acceptable from the Seller.
b. Buyer's bank letter informing Seller Mandate that it will issue the bank guarantee as per specified format on a specified date in their bank after checking and verifying the codes with SELLER.
Against the above, same day and same time:
i) Seller Mandate will provide "Authority to Sell" document duly endorsed by the Chamber of Commerce, Saudi Arabia in original.
ii) Seller Mandate will provide "Mandatory Letter" in original issued by the Allocation Holder authorizing to sign the copy of contract on their behalf.
5. After successful completion of (4) above, Seller Mandate and Buyer sign the copy of Contract, agreeing in principal of all the articles.
6. After the Soft Copy of Contract has been signed and completed, Seller Mandate shall send the Soft Copy of Contract to the Allocation Holder, who in turn, shall have the contract registered in the name of Buyer with SELLER, within the maximum period of 15 banking days.
7. After the Hard Copy is registered in the name of the Buyer, the Seller/Seller's Mandate shall provide to the Buyer's/End User's Bank with genuine codes for verification from SELLER , the Buyer's bank shall be permitted a maximum of 24 hours from receipt to confirm and verify from SELLER.
8. Allocation Holder after registration of the Contract in the name of the Buyer with SELLER shall have the original contract having Seller Code, Contract Number, Allocation Number, Seller Bank Details, send to the Seller mandate through courier.
9. Immediately after receipt of the Contract in Original, Seller Mandate coordinate with Buyer/End User for Verification with SELLER and to be followed by signing of the hard copy by the Buyer.
10. After signing the hard copies in Buyer's Bank, simultaneously the Buyer's/End User's bank officer shall hand over to the Seller Mandate the Pay Order Guarantee as attached for the payment of commission to the royalty and to the Seller Mandate.
Splitting of discount is as follows:
Gross: US $XXX.00 per (barrel OR gallon OR metric ton)
Net: UD $YYY.00 per (same as above) (Maximum Market Rate)
Buyer Mandate & Intermediaries: US $ZZZ.00 per (same as above)
Royality: US $MMM.00 per (same as above) (Closed)
Seller Mandate: US $NNN.00 (same as above) (Closed)
The above discount could change on every Monday (London Time) based on the global crude market price fluctuation.
ONCE the Contract is signed then the Gross/Net Discount figures REMAIN CONSTANT during Contracts Term for XX DURATION PERIODS
11. Sellers bank sends to Buyer's bank a 2% non-operative performance bond that guarantees revolving six shipments in favor of Buyer L/C opener.
12. Immediately upon receipt of Non-Operative Performance Bond, the Buyer shall open a IRREVOCABLE, CONFIRMED, REVOLVING AND ONCE TRANSFERABLE (to SELLER) OPERATIVE DOCUMENTARY LETTER OF CREDIT TO BE OPENED TO SHOW AMOUNT FOR THE XX MONTHS QUANTITIES OF THE CONTRACT. THIS LETTER OF CREDIT WILL HAVE VALUE EQUIVALENT TO ONE MONTH'S QUANTITIES BUT REVOLVING FOR THE ENTRY XX MONTHS PERIOD OF THE CONTRACT, FROM A TOP 20 PRIME BANK, PAYABLE BENEFICIARY'S BANK AS SPECIFIED UNDER APPENDIX.
13. The 2% non-operative performance bond submitted by the Seller will be operative immediately after the letter of credit as mentioned in clause 12 above has reached and attached and accepted at Seller's Bank
14. The bellow mentioned document will be sent by the Seller immediately after receipt of Letter of Credit from the Buyer:
a. Certificate of Authority to Sell
b. Certificate of Availability of products
c. Delivery Schedule.
15. At the time of each lifting of delivery, the Buyer / End User (Letter of Credit Opener) must provide the port authority at port of loading, the following documents:
a. A copy of nominated vessels charter party under the name of LC opener (the Buyer must be end user).
b. Proof of Refinery or processing Agreement under the name of Opener (the Buyer must be end user).
16. The Parties to the contract enter into this cycle and shall proceed with the execution of mutually agreed schedule to its full implementation.
17. The validity of this document is only for FIVE (5) days from today (XXX Time).
Note: Only the Original copy with original signatures and seal shall be considered as acceptable document.
Sincerely,
XXXXXXXX
TITLE
XXXXXXXX
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SAMPLE BCL
(Note that some of the details have been altered, the following serves only as an example)
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http://www.gulfoiltrading.com/Fake%20companies.htm
Other Links:
http://sites.google.com/site/blacklistscammersoilandother/file-manager
http://www.docstoc.com/docs/6545072/The-list-of-some-FAKEs-companies-in-Russia-The/
http://www.alees.com/Black_list.aspx
