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FTNX IN-HOUSE FORMS AND STATUTORY FORMS
Most big business operations apply localised laws as well as in-house
policies. In the international trade arena, the same aspects apply to inhouse policies. FTNX relies upon its trading basis by applying
strong formidable rules and laws as well as in-house policies, where forms are used to initiate such aspects. In other words, the business of international tradeand agency is enacted upon by using both formal and informal documents. Some of these forms as created by FTNX, may also be used by global suppliers and end buyers in their own
business applications. Below are
some of the more important aspect as to statutory documents that must be produced in the course of a commodity trade deal, and in-house documents that could be used where a legally binding aspect remains apparent.These forms and the FTNX doctrine are also uniform application, that could be used by all suppliers/sellers
and end buyers/buyers
worldwide.
Perspective
Under UCP DLC rules, one set of documents as a minimum aspect, are allowed to be presented as advised on the DLC terms and conditions. The documents that are marked as original by the PCT are the documents that will be used to present
at its bank. While most documents
are electronically
transmitted is marked as such, the one document
that must be personally handled by the PCT as advised in the FTNX
docotrne, is the commerical invoice. These documents are called ‘transport documents’ when applied to a NBC import /export transaction, which may take time to assemble. When applying
container based transactions the term ‘intermodal’
is used, where each container generates one complete set of documents which are able to be presented all at the same time, to arrive at the bank issuing the payment instrument where collection of payment may apply, at sight of such documents on condition these documents are presented without ambiguity or error ( presented
cleanly; at sight ) This is the first layer of security - where a bank is used to sight said documents appropriately, before any payment can be released to the supplier. The supplier is paid, in due course, as per the Incoterms used. In essence of a deal starting and being completed, it could take up to three months or longer to complete a deal leading to first delivery, in a revolving transaction. This is the time when the supplier gets to know the buyer (FTNX) and since it takes a long time to complete the deal, discovering adverse aspects about the deal being conducted, or the people involved in such,
will readily show up, during the course of
such a transaction.
In House Documents
These forms were created by FTNX as a matter of necessity
PPI
Policy Proof of Interest
This important in-house document was created and first applied by FTNX 22 years ago. End buyers
genuinely want to know that the goods being sold by FTNX or informed PCT have been secured prior to entering into formal negotiations. The efforts
needed to secure supply by FTNX is great–often taking months or even
years to obtain a long term assurance of supply (AOS) from a supplier at a lower than market price basis not available to most end buyers. Obviously a supplier needs to sell goods to remain in business. The supplier
providing goods to FTNX , will entertain an
end buyer who managed to by-pass FTNX and go directly to the same supplier to complete a deal as initiated prior by the seller (FTNX). Business is business; even if it means circumventing others with dishonourable and bad intent–is the attitude of most end buyers. FTNX does not apply business in such a manner. Also note: Certain suppliers don’t like to make offers to unknown entities for fear that their agent may be circumvented on a deal they should have been involved in; or for fear that goods are heading to a country bearing sanctions; which means the deal is prone to failure from the start.
To appease the concern of the end buyer
and even the supplier, the PPI was created, as borrowed from the business of insurance companies. The contract must bear ’witness’ to the
PPI aspect if offered or sought by the end buyer doing business with FTNX. Once the contract is sealed with the supplier, if sought for, the original PPI
can be advised to the supplier to show him who our client (supplier)
is. But the release of the PPI has to be timed perfectly to make the intent behind its issue workable. In the earlier years when such information was served, circumvention occurred on every single deal. Supplier also wanted forms filled in prior to serving an offer was another ruse still found being applied today. KYC (Know Your Customer) form was created by circumventors which means nothing
just like a NCNDA, LOI or ICPO means nothing in the international trading
arena as it pertains to the law. The form extracts a
whole lot of
sensitive information on a pretext of
deception
in making the principal believe that a deal is possible once such a form is returned with all the required information sought.A PCT must not entertain such requests.
The end buyer is asking for
details of the supplier before it will consider doing business with FTNX. In response, FTNX agreed to provide a PPI on a “Quid Pro Quo” legal basis. The end buyer must lodge a pre-advised UCP endorsed bank issued DLC to pay for ordered goods first. Which is a simpler and easier
kind of financial instrument to open by an entity who has a good credit history and good rapport with its bank. The PA DLC has a condition on its
body. This conditions state words to the effect, that upon a document headed as ‘PPI’ is advised, the bank converts the pre-advised status of the credit to a formal active credit. If the end buyer find that the details of the supplier is fraudulently advised (fake), this is the only reason where a irrevocable credit can be made revocable. To make such a claim however, which later turns
out not to be true could also be deemed as a fraudulent and criminal act, by the bank or the buyer, an act which will not happen lightly. The PPI is therefore a very important document and has a legal basis to rely
upon. The deal then moves forward as per its routine and schedule within 3 days of issuing the PPI. Whether the end buyer verifies the contents of the PPI or not, once it's served,
is irrelevant to the deal as the seller (FTNX) has guaranteed that the information served about the supplier on the PPI
is genuinely served. The PPI is only served to prove that the supplier is genuinely secured, before any deal with the end buyer was commenced. The end buyer
may directly verify the PPI with the
FTNX supplier, or a trade agency / consulate, once only. The supplier
may then
confirm to the end buyer, that the seller (FTNX) has said goods to offer in where the supplier is not allowed to reveal any other matter, including
FTNX buy price. The supplier is given the same PPI form is asked for, to disclose who the end buyer is only after the financial instrument has first been secured by FTNX. Hence if the supplier is demanding for disclosure of the end buyer, the offer and contract must also stipulate as much in where the Supplier is advised the PPI, after the financial instrument has first been secured from the end buyer- and never before. The issuance of the PA DLC fully
protects a PCT from being circumvented when dishonourable bad
actors
are involved in
buying goods from FTNX. The PPI allows an end buyer to feel confident that a genuine transaction is apparent and is only offered at the discretion of the PCT as it is not a requirement under current trade laws and procedures.The PPI has legal force as it applies to the intent of parties to the contract.
LDD
Late Delivery Discount
So the supplier does not
want to open a separate financial instrument to pay for failed deliveries via the issuance of Performance Guarantee (P.G) bearing a– i.e: 2.0% at call rate, assessed on the value of goods being purchased.
It’s not a bond, but a guarantee. The bank advising a P.G will allow unconditional
collection of the P.G in the event that
the supplier is late with delivery; because being late with delivery, may
cause the buyer to incur added expenses. Typically, once the financial instrument is advised to FTNX to pay for goods, FTNX
responds with a P.G SLC within 5 banking days thereafter. With the
LDD aspect no P.G is advised saving FTNX or the supplier, money, added expense and time. Note; No concerns are in effect that a dishonourable trader may try to unjustly claim the P.G supported by a SLC but the
LDD aspect
if offered, is applied in the offer ; the legal aspect is that an LDD is still offering all the aspects offered under a P.G in a different manner. Example: “ The seller offers the buyer a late delivery discounts of
€6.00
per MT should the
delivery date applied on the offer is late
as per its
first delivery date, in where the stated amount of the LDD shall be deposited into the bank account of the end buyer, as nominated at that time within 7 days of each late delivery. “
Or: the seller could offer to discount
the price of late goods by the LDD value
as recorded on its commercial invoice.
Either aspect
is applied to the offer. If the first delivery must be completed on the 10th of July
2026, and it is completed
one day to more later, the P.G rate is allowed to be collected by the end buyer.With a revovling deal in place, the traders to the contract are held to their promise on such matters, ensuring that the
contract and ongoing deliveries continue to be fluidily applied.
IPG
Irrevocable
Payment Guarantee
This in-house form created by FTNX, again was done so as a matter of necessity. An IPG is used to pay declared payments of commission, expenses and other forms of payment to do with services rendered as such services are
successfully completed.The IPG is an in-house form that does not get mentioned
on the offer for contract
as such, it comes into
effect “outside the bounds of the contract.” The IPG is advised to each payee involved in the deal where a principal is protecting the interests of agent, broker and others who assist on an import export deal.
Even a supplier who does nto have stock, recommends another known supplier within their circle of reach, to provide stock to FTNX, should a deal close, the suppleir would get a share of commission as well. FTNX honours it commitments on this matter intently. These kind of commission payments are expenses of doing business; which are
often defined under one heading by FTNX as “operational expenses” (OPX)
that must be covered when formulating the price of goods being sold by the PCT as taken in part, from the discount
served to FTNX by the supplier, in where the majority of such a discount
is served
direclty to favour the end buyer. Matters of commission payments are never mentioned on a trade deal. If such aspects need to be applied as a matter of formulating a price basis the inhouse term ‘Operational Expenses’ (OPX)
is applied where all expenses of the PCT heading a deal is incorporated
under the OPX heading.
AOS
Assurance of Supply
So much time was being wasted following through with offers submitted by suppliers to a PCT
where vital entries are missing. To obtain a fully completed
offer more information is often needed, that
may take a week or longer before the full effective offer becomes apparent as suppliers are often very busy. The PCT would accumulate a folder of information
while trying to complete a full offer allowing for mistakes and confusion to prevail on a document that is legally binding once signed. To eliminate
this aspect, FTNX developed the informal non legally binding aspects of the
‘AOS’
form that suppliers can fill-in and serve to
the PCT quickly. The ‘AOS’ form discloses to the supplier ‘what we need to know’ about the goods being offered for a PCT to consider buying. While the ‘AOS’ is not legally binding, the intent to act on such is, if or when the PCT makes the attempt to buy such goods within the stated validity period; the supplier is obligated to serve the assurance of supply made prior. Only the supplier can fill in and advise an AOS directly to a PCT acting as a buyer /seller .
OTS
An OTS is an in-house
form designated as an “Offer to Sell” to A PCT heading a deal with
associated members assisting the PCT in a strand deal. As often happens a string member is negotiating with a supplier for an offer. He or she obtains bits and pieces of information. The string member finally got all the elements of an offer, but he hasn’t got one full document that was advised by the supplier
which denotes a full offer is on hand. However the string member has an offer as indicated ostensibly via the emails held and information collected while negotiations were taking place. A PCT like FTNX will not accept fragmented bits and pieces of information as being an ‘offer.’ In this case , if the string member is very sure that he has a genuine supplier, then he or she must place their ‘bond’ on such , by filling an OTS
using the information collected. The OTS is then sent to
the PCT as a single document declaring with a signature that the string member is giving assurance to the PCT
that the
original information
served is supported by evidence held by the sting
member. The OTS
is now treated as a full
simulated offer. A supplier must not receive an OTS form a PCT
to fill in, to do so means an ill informed
trader is apparent.
RFQ
A PCT sources goods all the time, as large revolving contracts as per
the goods offered therein, often take a lot of effort and time to secure. At times an end buyer
may approach a PCT
in need of goods that may not be readily available. To make this sourcing aspect a formally applied aspect, a PCT being approached, secures all the information from the end buyer about the product being sought, via email. The string member now conducts due diligence online about the end buyer
( we conduct D/D all the time
whether buying or selling) If the information on hand validates what was found
online, the string member fills in a RFQ as one form, and sends it to his principal (i.e: FTNX) to consider further. If the D/D revealed disturbing aspects of the end buyer, the
enquiry
is trashed
and the PCT heading the deal is not even notified. If an end buyer is
asked to personally
fill in a RFQ, such
is dealing with an ill informed trader,
and should refrain from the nature of business being proposed as the RFQ form is only used inhouse. Once a principal heading a deal obtains a RFQ, an Offer to Procure is made and sent out to all string members being managed by the PCT, to source the goods being immediately sought, within a
7 days period.Once the sought after goods have been secured, an offer, valid of 7 days is provided
to the end buyer - without obligation. If the end buyer does not take the offer within 7 days, FTNX offers the secured
product worldwide on a FCFS (first come,
first served) basis.
PN
Promissory Note (PN)
A document signed by the issuer as supported by evidence where on the body of the PN a promise to pay an amount of money upon the completion of an act is made to a person or entity ‘outside the bounds of a transaction.’ I.e:
“Dear supplier, please make an added effort to ensure
the delivery is on time.For each on time delivery I will ensure a PG
poayment
of US$1.25 per
MT for your benefit.”
FTNX does not deal in matters where ‘kick backs’ and bribes are apaprent–there is no need for such, when transparent dealing are apaprent.FTNX is happy to pay a supplier
i.e: a “performance
guarantee”as well if his added efforts
are causing
deliveries to be made on time. Such a payment saves FTNX much more
compared to the havoc and delays late deliveries cause to a good routine.
Statutory Trade/Transport Documents.
Under UCP rules the bank will accept one single set of transport documents, to initiate collection proceedings.The word ‘original’ must be; and is allowed to be applied on each document without deeming that the document has been altered. If documents are to be electrically transmistted , it stated as much on the DLC used. Hardcopy collection
and prsentation could also apply, as served by courier mail, where the PCT when ready, takes the document to his advising bank personally.
Offer
No offer, no deal is legally in effect.
Contract: Instantanuous Contracts
All matters appearing on the offer must also appear on the contract. Where the added matters of liabilities, consequences and of scheduling is also applied to the contract. The PDF copy of the contract allows for the deal to continue via the internet, while awaiting signed hardcopy contract to arrive by courier post. A hardcopy of the contract must still be apparent even though email was being used to formulate the deal. Banks are not allowed to become involved with the goods being sold as part of their processes as banks deal in finance.
P.G
Performance Guarantee
is a payment for late delivery advised as a SLC or LDD as already described.
Payment
All payments for goods are paid by a UCP ruling documentary letter of credit (DLC). The DLC is a credit to favour the supplier, as established by a credit worthy buyer via his bank. Once a DLC is advised, all matters of payment are guaranteed by the bank issuing the credit on the condition that all matters and terms of the credit as stipulated on its form, have been completed. Where a smaller bank needs support of a larger bank, the DLC is advised as confirmed by the larger bank , where all the documents are sent to the larger bank , even though the smaller bank instigated the confirmation. The DLC is advised in the currency sought by the supplier. In 2025 , it would be prudent for a PCT to commence using other currencies other than the US dollar.
The type of DLC is dictated by the deal in hand - as explained in our DLC finance section.
Transport Documents
Bill of Lading
A PCT cannot enact on a Charter Party BOL as the DLC issuing bank under UCP rules must receives a Shipowners endorsed BOL to ensure maximum aspect of security is apparent when payment is made ‘collectible’ as per another set of rules (URC)
Pre-Shipment Inspection (PSI)
A globally recognised inspection agency (i.e: BOV, SGS.etc.) must verify ‘what’s on board ’ a loaded ship, or alongside a ship ready for loading.A certificate is issued. This certificate must be served with the transport documents, that must be presented to the bank in hardcopy or electronically, as allowed under the contract. PSI are expensive aspect of trade and therefore a valuable aspect that must apply as served by the supplier at his expense; added to the price of goods. If the buyer asks for another different PSI, such is a cost for the end buyer - as the supplier has already offered this service which was rejected by the end buyer for no good reason. PSI are expensive to conduct. The PSI will
advise upon
both quanity and quality on board while
allowed; it would be prudent to secure a seperate receipt for the quantity of goods recorded onboard by another entity ( Customs, Ship’s mate’s reciept, Waybill)
Certificate of Origin (COO)
Non preferential
COO is on e issued and endiored by a governemt where tie goods originated
form, or it may be secured from a consulate
operting a trade section, of the same originating
country, as laocted in another country.This a common custom endosed certificate. A Preferntial COO on the other hand has now become an important document, in light of the
current combative imposition of USA tariffs
system, and the embroglio created therein. When a PCOO is served, tarriffs imposed on genral imports may be reduced or even omitted fully. Unfortunately it seems a country like the USA, as it seems, is no
longer giving any tariff relief, even to long standing ‘preferred’
customers–however other countries are. If the exporter is looking to take advantage of a current
preferred status ; then the PCOO would be served.
SED
Seller export declaration as endorsed by Customs at port of loading and may be sought at time of loading or even after loading has been completed.
Insurance Policy
Insurance cover notes are not valid. An insurance policy as a certificate must be advised as part of the DLC condition.
On first demand, the supplier must take out a minimum all risks Class ‘A’ cover is the standing aspect under current Incoterms; this does not preclude the aspect that a lower class of insurance could be secured on merit.
Commercial Invoice
This invoice price created by the PCT has all relative aspects of the original sale of goods. This is the only document that a PCT is allowed to legally change after buying such goods which are on sale.The Commercial Invoice must clearly state a break down of all such charges and expense as well as the price of goods–separately.If one single cost is apparent, import customs will impose standing taxes/tariffs on the whole value.
Ship’s mate's receipt
The ship's mate's receipt is an important document as it confirms that someone has sighted the goods onboard as a matter of record in where the condition of the goods are also reported.
Waybill
Is simply a receipt of goods on board a ship, and cannot be used in place of the BOL as per the terms of a DLC.
Bill of Exchange
A PCT via its supplier, cannot draw up and use the virtues of a BOE, as the rules on this instrument are not uniformly applied.
For added Security
A ship sea
worthiness certificate and
registration
could also be sought
Adverse Aspects
Unworkable or illegal terms that must not be used to form a deal or apply as a delivery conditions. There are a few legitimate incoterms we cannot use such as DAT (Delivery at Terminal) or DAP as the title document travels with the carrier. In DAP (Delivery at Place) unless the PCT has trusted agents at the port of destination, attempting a DAP deal is fraught with the potential of huge losses as the PCT
must also pay tariffs to cleared goods at port of destination - amongst other ‘strange 'expenses; such as cleaning containers (FCL) exterior of “spider webs” at a custom endorsed facility, before goods can be cleared, are the kind of added expenses that the PCT will need to also pay when delivering goods directly to the i.e: end buyer’s factory, country of destination.
These terms of reference appear on trade transactions that are deemed unworkable or/and falsely served by FTNX, when plied in the International arena. Mostly served by ill informed intermediaires and
brokers
LOI:
Letter of intent means intent can be cancelled any time.
RWA
Ready willing and financial able refers to a financial aspect not a
loading capability. A supplier is able to supply goods, is already assumed , otherwise the supplier ought not to be offering such goods.
BCL
Bank Comfort Letters
have all proven to be fake documents
in the past dealing with FTNX. Trying to verify a BCL
from one country to another is impossible due to bank privacy laws. It is a useless document to consider as the DLC has full force in matters to do with payments.
ASWP
Freight rates versus distance travelled to state delivery. Any safe world port (ASWP) is acceptable to use in the right context; we can deliver Copper Cathodes ASWP. Stating that freight payable
at one rate to any safe world port–is not .
PB
The term is performance guarantee and not performance bond. A bond can be initiated as an undertaking that needs to be complied with,
even with a hand shake, serve s as a personal bond. A bond is also used to raise funds. A guarantee is a supported aspect in which a specific condition fails to be concluded, the buyer is able to collect on the guarantee unconditionally without conditions. Structure and purpose of use
change,
even though both aspects are serving an assurance.
SLC
A SLC must never be used to pay for goods. May be used to pay for P.G. The pyramid scheme supporting the issuance
of
Bitcoins,
can’t be used for payment of goods–neither can cheques.
ICPO
Irrevocable Corporate Purchase Order (ICPO)
when sought, indicates that the person seeking such has no idea what they are doing.
Most of these adverse aspects may be legal
within a state or country but not when applied to an international trade deal. A PCT cannot be held in an ‘irrevocable position’ all because an enquiry is taking place.
NCNDA
The contract has the non disclosure non circumvention agreement
applied within defined under a confidentiality and privacy clause. To issue a separate NCNDA
even before a deal commences highlights the auspices of stupidity often seen being applied by an ill informed and
pusillanimous person. The confidnetiality clause is apparent is found on
on the contract.A for ‘circumvention’ such matter are nealry impossible to defend against
or seek remedy is the even occurs.
MT 799
This is a SWIFT code and is often wrongly seen under payment modes when an ill informed
trader is apparent. Such aspects must not be seen on an offer or contract. Commodity
traders deal in goods. Bank deal in finance. This
is why banks cannot get involved in matters regarding the goods being traded. We must not pretend to define the internal workings of a bank either.
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