|
FCE BUYING OR SELLING PROCEDURES
This page: Last update: 20 December 2025
To educate others about complex proceedings is never an easy feat. We hope the following insight offers to clarify safe procedures used by the FTNX when dealing with end buyers and suppliers worldwide conducting business with a FCE licensed Agent. An end buyer purchasing goods from the FCE must follow a strict set of procedures when dealing with a FCE USCT Agent or no sale will eventuate. The required procedures are prescribed below. Note: The same trading process applies as a mirror image when the FCE buys goods from a supplier means that we expect no less of a commitment from end buyers. The first understanding is the simplest to grasp, and saves parties to a potential deal a lot of time and effort. If an end buyer cannot afford to open a documentary letter of credit, then they should not attempt to buy goods from the FCE.
End Buyer contacting a USCT FCE licensed Agent (FLA) or vice versa. If no changes are applied on an offer, then the below set of procedures will apply when an end buyer buys goods from the FCE via a FCE USCT Agent. We have applied the below procedures as it applies for a revolving or single NBC shipment transaction - applied as a uniform worldwide application. Let us assume a FOB delivery mode is being explained. The FCE uses ‘days’ and not ‘banking days’ on its contract and schedule. Hence “5 banking days is evident as 7 days.” To keep track of holidays around the world while acting on a contract, is not our business. Bank use ‘banking days ’ as prescribed under ICC UCP banking rules
FIRST CONTACT (Allow 24/48 hours)
An end buyer contacts a FLA and discusses matters of a purchase via email in an amicable manner. If a basic understanding has been arrived at, the FLA will issue a quotation and sets up a desktop folder to handle all correspondence to do with this transaction. The transaction code on the quote remains fixed through the whole process and links the whole process as being one single deal.
(1) THE QUOTE (Allow up to 7 Days)
A quote confirms the price and basis. A quote once issued (PDF) and is confirmed by the end buyer, is not a legally binding aspect. Once the quote is confirmed by email the Agent will relase an offer.
(2) THE OFFER (Allow up to 10 Days)
The offer is released outlining the whole trading and price basis in a very specific manner. The offer is a very important document as its basis is transferred to the contract. The offer is signed and returned as a PDF. The FLA checks the offer or mistakes and if all is in order, the signed offer is forwarded to FTNX. If an offer needs to be changed once it returned by the end buyer, the original offer is cancelled and a new offer is advised with a new transaction number. This aspect and rejection protocol will be tolerated only once. If the end buyer insists to have a third offer advised after the second rejection a deposit of EUR 50,000.00 is required. A lower value deposit as served to FTNX in the past, is not longer acceptable. Why? In the past FTNX had to bear consequences of expenses incurred in commencing loading operations where subsequently the end buyer failed to sign the contract. The offer once signed is legally binding.This is the standing international application supported by rules and laws. The signing of the offers indicates that “both parties to the deal agree to become contractually bound.” A well defined offer prescribes all the main attributes of a transactions. Once the offer is accepted the FCE prepares goods for loading. This is necessary if the “first delivery date” offered is going to succeed. If the offer is signed on the first issue , this is the best aspect and this is where the end buyer must serve serious considerations before signing the offer.
(3) THE CONTRACT (Allow up to 14 Days)
The contract is advised to the end buyer by the FLA as a PDF. The end buyer prints a copy of the contract and seeks legal advice before signing it. On the hardcopy of the contract, the endbuyer adds the words “original” at the top right side of the contract under the header. The hardcopy component is scanned and made into a PDF and sent to the FLA. If all is in order, it will be sent to FTNX, if not the FLA will advise the end buyer what the issue encountered is about.The PDF copy allows parties to continue with the closing process without any delays occurring on the condition that the hardcopy contract is also returned to FTNX via courier where proof that the hardcopy contract has been sent is evident as supported by a tracking receipt. The tracking receipt proves intent. This is the time when FTNX takes over the deal personally but to do so with the FLA remaining in place until the deal is closed and first delivery takes place.
(4) PAYMENT INSTRUMENT (Allow up to 7 Days)
Once the contract has been signed and returned by the due date, this is the date that is timed to the remaining set of procedures. The end buyer lodges to our bank, within 7 days of signing the contract, a bank issued financial instrument defined as an ICC UCP 600 supported DLC as stipulated on the offer and contract. FTNX has as per UCP 600 rules (5 banking days ) 7 days or less to accept the instrument. Once the DLC has been accepted it remains under administration with our bank. A 'conditional instrument’ is advised, that is- FTNX must follow a whole lot of procedures before the bank will allow collection on the DLC to apply. A SLC is never advised to pay for exportable goods as often seen online, as this is an unconditional instrument. A DLC is useless to FTNX, it only becomes valuable once its terms and conditions have been met. The DLC is irrevocable in where once the conditions of issue is met it becomes collectible. Only matters of proven fraud can remove the irrevocable status of a UCP 600 endorsed DLC and is just one of the reasons why such a secure instrument should be used.
Note: Depending on the type of product being purchased, FTNX may release a FTNX created PPI Document ( Policy Proof of Interest) when a confirmed credit is advised; if such a disclosure is acceptable to our supplier. The PPI is served to appease any apprehension the end buyer may have about the genuine aspects of the goods being sold. It allows the end buyer to confirm by any means even via an consulate, that FTNX has purchased the goods from the disclosed supplier indicated on the PPI, the same goods being sold to the end buyer.A PPI is an inhouse initative of FTNX and is not a requirement or trading process.
(5) P.G/LDD (Allow up to 7 Days)
Once the DLC is accepted by FTNX it will issue a Performance Guarantee (P.G) or the FTNX created LDD ( Late Delivery Fee) within 7 days of accepting the DLC . The P.G is served as an unconditional instrument. If the ship arrives as ordered by the end buyer under a FOB delivery mode and the goods are not ‘along side ship’ ready for loading, then goods are deemed to have “failed to be delivered on time.” For being late, the end buyer may automatically make a claim on the P.G held. If the delivery mode is applied as per FTNX created QUD ( Quantity Unconditonally Delivered) delivery mode, or FAS no P.G or LDD is served. A P.G is only served on a FOB, CFR, and CIF delivery mode.
(6) FIRST DELIVERY (Allow up to 21 Days from contract signing date)
Since FTNX has already commenced loading operations earlier, when the offer was accepted, this now means that when the payment instrument is accepted by FTNX , first delivery will be initiated within 21 days as per the rules applied to the DLC issuance aspect. This is why its important that the matters of procedures and schedule are upheld. Delays will often attract fees and added charges especially if the DLC needs to be amended: aspects of trade that nobody wants. Once the ship arrives loading of the end buyers tenured ship is applied immediately and when all the goods are on board, the ship draws its wharf lines and heads to the destination port ( POD). Under delivery rules served by Incoterms 2020 per ICC FOB, ‘delivery’ means “delivery of documents” not ‘physical delivery’ of goods. The supplier is entitled to full payment once goods are confirmed as loaded onboard a named ship, port of loading (POL). Even if the ship sinks once loaded, the ship rails is the point when the goods belong to the end buyer. The insurance cover taken by the end buyer takes care of the end buyers loss- the suppleir is still paid as per the irrevocable attributes, terms and conditions of the DLC.
(7) PRESENTATION OF DOCUMENTS (Allow 5 Days )
With the ship heading to the destination port, all the required transport documents that must be presented to the bank of the end buyer.Transport documents must be advised in a clean state before the bank will allow payment to be collected upon by FTNX. The bank has 7 days to release such payments.In a fob delivery mode, the following insight on the kind of documents that must be presented. Unlike what some think , bank are intermediaries who are specialists, at what they do-when is comes to matters of finance and not goods or contract.They earn a “commission” for acting to oversee the financial side of the transaction.Bank rightly earn their fee, because without their participation, matters of payment and exports would be adversely affected.Becaue ot the discount served on goods offered by FTNX, and end buyer should not ber concerned about such fee. The bank play a crucial role in matters of secuirty as well, as it takes a long time for a deal to close leaving a suspect transaction open to discovery early rather than later. A bank will revoke a credit if a suspect transaction becomes apparent.
Ships Mates Receipt (SMR)
This is the nest important delivery document after the BOL that must be secured and presented as part of the document presentation aspect as the SMR confirmed actual goods are on board a ship named POL.
A Commercial Invoice
The details on the invoice must be broken down and clearly specify each aspect of expenses incurred to get the goods exported including any payment of commission. A single entry as a ‘total sum’ is unacceptable. If a single total is made apparent on the invoice, customs at POD may impose a stranding tariff or GST and the likes; the assessed customs rate on the whole value of the invoice may occur.
Pre-Shipment Inspection (PSI)
All goods sold by FTN Exporting come with pre-shipment inspection as advised by leading independent inspection services as it applies to quality. As for quantity, a separate tally is provided on a Ships Mates Receipt (SMR) or Bill of lading is the appropriate aspect. Waybills cannot be used for such purposes.
Certificate or Origin
All goods bear a (a) preferential Certificate of Origin (COO) or (b) a standard COO in 2026. This is a very important document in these trying times when sanctions and politics have crept into the trading business.A preferential Certificate of Origin is issued and served when a reduction of tariffs is being sought by the end buyer. If a product from a sanctioned country is delivered to a country not bearing sanctions; if the said country is reprocessing the goods, to produce a different product in which the said country issues a standard COO, the goods can be legally traded. A standard COO can also be secured from consulate or as usual via Customs at Port of loading. A SED ( Sellers Export Declaration) as opposed to an export permit - is also needed and can be readily secured right up to the time a shipment is loaded on board.
SED: Sellers Export Declaration
This document can be secured late once goods are about to be loaded or are loaded. The SED specifies who is exporting the goods.
PPI: Policy Proof of Interest
If a PPI is served as explained previously, it is made a part of the document that is required to be presented to the end buyer's bank.
Note: About Bill of Lading
Bill of Lading is not a ‘transferable’ instrument as some believe, when conducting a purchase deal with FTNX– is another added and formidable security feature. FTNX must produce a shipowners endorsed BOL and not a charter party BOL. When FTN Exporting secures the BOL on a CIF or CFR delivery mode there is no scope to conduct a ‘back to back’ transaction as the process is not supported by leading banks. FTN Exporting endorses the BOL in its margin in where goods can only be collected by the end buyer at port of destination, once all statutory expenses and custom tariffs have been paid for as prescribed under the ICC CIF delivery rules.The proper CIF application as per per the ICC requires that the freight is prepaid for carriage when the goods are ordered on board; however its when the ship arrives at port of destination the quoted freight rate amount, is left in the account of the end buyer - to pay for the freight component, that was ‘pre-paid’ to FTNX when opaying for ordered goods, in a accordance with ICC CIF Incoterms delivery rules. The Bill of lading will have the words ‘pre-paid ‘ stamped on its body. When FTNX books the ship under a CIF or CFR transaction, FTNX assures the shipowner that the funds supporting the carriage rates have already been secured prior to arriving at the destination port. This is done because a ship cannot claim its freight rate, until it’s earned. The term ‘earned’ means until goods have been physically delivered to the Port of Destination. In a ICC FOB transaction, FTNX is not required to secure the BOL under FOB delivery mode which is left for the end buyer to do as much, unless the end buyer instructs FTN Exporting otherwise, in which case the letter of credit must not stipulate this aspect on the DLC
(8) COLLECTION ( Allow up to 27 days or less for payment to be instigated )
The required transport documents are presented without ambiguity for at sight examination by the end buyers bank as per ICC URC collection rules.Once documents are deemed as clear, the end buyers bank issues payment to the bank account of FTNX. Under UCP DLC rules one original copy of presentation documents is needed to be presented.The ‘at sight’ application must be concluded within ‘5 banking days.’
(9) DEFECTIVE GOODS ( Allow up to 90 days )
Once goods arrive at the destination port (POD), the end buyer takes possession of such. If goods arrive ‘not as ordered’ the end buyer has up to 90 days to lodge a rejection claim with FTNX. A USCT FCE agent will be sent to inspect and confirm the nature of the claimed defect, take photographs and report back to FTNX, if the claim is clearly legitimate,as per the evidence in hand. FTNX and the end buyer discusses adequate compensation in where FTNX settles the claim immediately as prescribed on contract or as agreed upon at the time. If the claim is suspect and it cannot be settled upon amicably, parties head to arbitration as an absolute last resort.To avoid such costly proceedings is always the better option.
In Summary of Above Procedures
To contact the FCE with some idea that a complex export import deal can be closed in ’24 hours’ as seen online delivers the idea that an ill informed person is advising such an aspect. In a good clean deal it will take from first contact to final deliivery between 60 and 70 days to formally and legally complete such a deal, whether its for a single or revolving NBC shipments. When goods are sought, as listed on the FCE, this process activates a live process; such goods appearing on, lets us say, January in a given year ; it means that in a good clean deal first delivery will ocur in March or April of the same year.
Other Aspects of Related Business
Deliverable Quantities
The FCE will list goods at the ICC FOB in accordance with delivery mode. FTNX can also serve a CFR or CIF price basis for all non-break cargo (NBC) delivered via VLCC or VLBC. No other delivery modes may apply as assumed, unless a very large contract supporting full container loads (FCL) is apparent, FTNX does not transact on smaller FCL types of transactions. If a large FCL based transaction is accepted the purchased or sold goods with not appear on the FCE and the delivery modes as per ICC incoterms is FCA or CIP is applied
Contract Value
FCE buys one NBC shipment or revolving NBC shipment. The FCE minimum on board quantities sought commenced at 12,500 MT. Shipment loads of up to 140,000 MT considered. ULCC quantities are not considered. As an example the FCE may list a product as e.g: 1 x 50,000 MT @ 3x3x3/12 means 50,000 MT of goods is offered to the FCE where one delivery every 3 months over one year is offered on contract in which within one year 3 deliveries to eventuate. In effect the price of goods displayed on the FCE is based on one NBC shipment of 12,500 MT or more. If a revolving aspect is taken, better prices are offered than single deliveries offered. If the product is sought intently a premium may be offered on single shipment purchase. Once a revolving transaction is apparent, the FCE will seek a discount on prices from the supplier looking to secure a large lucrative revolving contract.
Measurements
The FCE uses pre-set measurements, descriptions and specifications when listing goods on the FCE so as to formalise a uniform aspect, and create a price and basis for goods listed on the FCE as offered to end buyers. Naturally when business leads to an offer to end buyers, the measurements, descriptions and specifications applied on the offer is updated to reflect the suppliers actual advice on such matters at that time. This effect may slightly lower or lift the offer price listed on the FCE only as it applies to the first delivery.
Delivery Mode
The FCE buys and sells goods listed on the FCE at ICC FOB Incoterms. When goods pass the ‘ships rail’ in good condition, as ordered, at port of loading, the goods are paid for; the refinement made by FTNX to the standing ICC interpretation “as ordered” is very specific in meaning. All offers are advised as per ICC FOB Incoterms 2020 delivery rules, as further expressed by FTNX. The offer will have a section on its body for end buyers looking to buy goods at CIF Incoterms. If CIF is sought, the FOB aspect of the offer is signed as accepted subject to the CIF price basis. If the CIF price is accepted via email, the offer is legally binding and the contract will bear the CIF aspect , If it’s not accepted , the FOB offer initially made is cancelled unless the end buyer accepts it; after the CIF price basis was not accepted.
Note: This aspect saves parties to a potential delays at contract time and mitigates confusion. FTNX can only serve a shipowners endorsed Bill of lading under ICC in accordance with CIF delivery rules when a DLC is issued to sell goods. This means the end buyer would be able to secure better freight rates than FTN Exporting may be able to do–may be presumed. The aspect above allows the buyer to consider a CIF price after signing the offer at FOB, but has the opportunity to revert back to the FOB aspect if the CIF price basis is not accepted. When FTNX serves a CIF freight rate, the price given remains at the rate secured- we do not markup freight rates.
Currency
FTNX applies all Euro to all goods listed on the FCE in the first instance. FTNX will also accept BPS ( British Pound Sterling ) CHF (Swiss Francs) and USD$ in the second instance if these currencies appear and an option on the offer or contract. If a country wishes to use its own currency to buy or sell goods, due to a central bank currency control regulations, the FCE agent will consider as much after conferring with A FCE USCT licensed Agent. Changing a currency will attract a currency fluctuation clause, in which the price of goods offered on the FCE in Euro may rise.
Payment
Top 100 banks are used to oversee all matters of payments. All four major Australian banks are TOP 100 ranked banks of the world. An end buyer may use our bank to pay for goods or pay for goods at the counter of another bank or corresponding bank located in Melbourne, Australia in where all corresponding charges are for the end buyer's account. In all cases, unless stated otherwise, payment is made to FTN Exporting in which the instrument is lodged into our top 50 ranked bank of the world. All payments are made using a documentary letter of credit (DLC) where the rules supporting such instruments universally are applied as per ICC UCP 600 rules for the issuance of the credit and current URC rules for collecting on payments.
Type of Payment Instrument
When paying for goods a DLC should be advised from a top 100 ranked bank of the world. If this is not possible the DLC must be advised as confirmed. The DLC must also be advised as transferable so that the bank of the end buyer is able to track the instrument directly to the supplier's account.If a credit is not advised as transferrable then a confirmed credit must be advised. Once all the transport documents are received by the end buyers without ambiguity, in a good and ‘clean’ order, the end buyers bank after sighting and accepting conforming documents, allows payment to be collected upon–and not before. Here the crucial role of the bank supervising the financial side of the transaction is an important security feature as the banks must adhere to ICC presentation rules; under such rules once all the transport documents are presented as clean, the bank must initiate payment within 5 baking days or less ( often it's less). No other payment other than a DLC as endorsed under ICC UCP 600 financial instrument issuance rules is considered as this is the safest of all payments methods that trader can use with confidence, as a UCP 600 DLC even though its served as irrevocable can be revoked if the bank suspect a fraudulent transaction is being plied– that will often takes weeks or even months to arrive at the required delivery mode. This aspect does not allow for a fraudulent deal to transpire not bee sustained without being discovered over the course of a transaction. The use of a DLC attracts bank fees, charges and expense at each stage of a deal's progress. FTN Exporting ensures this aspect is mitigated by ensuring an excellent discount is served to the goods being sold. A DLC is not like ‘cash’ in which a whole lot of procedures and verifiable documents must be produced before payments are released upon delivery being completed. Therefore a DLC is a conditional instrument. A SLC must never be used to pay for goods as its payment aspect is unconditional. A SLC can be collected quickly without even producing documents. A SLC is totally different to the DLC aspect and is never used to pay for goods; the financial risk and potential loss to the end buyer is very real and great.
Pre advised Instrument
If an end buyer is unsure about issuing an active DLC, a simpler and easier instrument that can also be advised is defined as a “ICC Pre advised” UCP 600 ruling DLC. This instrument is lodged to our advising bank. This instrument does not become active until an important document is first served. FTNX has developed a document called a PPI ( Policy Proof on Instrument ) which can be released in making the pre advised credit operative. Pre-advised credit must be advised and confirmed and transferable. The end buyer must first ask its bank if they can issue such an instrument as not all ICC adhering banks can issue a pre advised credit.
In House Corporate Credit
Sometimes a supplier has a failed deal with goods already located at port of loading or where goods are offered to FTNX at a heavily discounted rate for immediate purchase. In this aspect a 21 day contracting period comes into effect, in which if FTNX buys such goods an in-house DLC bearing ICC rules of application is advised. An In house issued DLC is provided to prove RWA quickly. The supplier confirms the instrument via its bank to our bank .If RWA is established, FTNX arranges the ship and obtains possession of such goods once the required transport documents from the suppliers side are served cleanly, as per terms and conditions applied on the in-house DLC.
Back to Back Transactions
Applying a financial instrument to travel along a string deal is not supported by most banks and is not supported under ICC UCP International banking and trade rules. If an ‘end buyer’ is not the ‘user’ of ordered goods and is wanting to buy goods from the FCE at one price for on-selling at a higher price, they can seek a 90 days deferred payment aspect. Here a DLC is advised except FTNX cannot collect on the instrument until 90 days has passed form when goods were delivered. The Buyer accepts the goods and resells them making payments for the goods from the sale of such, before the 90 days deferred period has arrived, which in effect allows the buyer to buy such goods and make payments for such goods and profits using the money secured when the goods were resold. If the end buyer does not make payment within the 90 days deferred period, the DLC lodged previously is collected upon. Acceptance DLC (D/A) and a Negotiable DLC may also be used-in some cases. An interest rate will be applied to the price of goods sold this way.
In Summary
End Buyers worldwide; where goods do not bear western sanctions, looking to buy goods listed on the FCE–or where goods need to be sourced from a supplier, if approached, may act with a licensed highly informed USCT member acting as a FCE Agent with confidence; and privately. USCT Licensed agents understand all matters above and in this website FTN Exporting will mostly buy or sell wanted export ready products that are or will become listed on the FCE. FTN Exporting procedures are strict and highly secure when buying or selling goods. We are unable to bypass said aspects stated. An end buyer who cannot issue a DLC should not be considering buying goods from the FCE. Likewise a supplier who is unable to accept such a formidable and safe payment instrument and strict procedures, should not be offering goods for listing on the FCE. Safe dealings, good prices and straight forward, legally defined and safe trading applications is what FTN Exporting is about. We don’t take short cuts.
|
