thank you for sending the Letter of Interest showing the willingness to purchase 000,000 MT of sugar per month.
We would like to confirm that we are able to deliver these quantities of sugar. We are aware of the amount of issues that may arise during preparation and implementation of this contract. We are ready to discuss and jointly solve them at any stage of our cooperation.
However, both parties, the Buyer and the Seller, need to make some preparations for the contract of 000,000 MT of sugar per month. From our side we should work on logistics, transportation and other matters. You should also be prepared to receive deliveries.
While preparing schedule of arrivals of sugar please determine the quantity of tonnage units in a given month which will be needed in each place of delivery.
Since our business relationship would be considered unaffiliated unknown we propose the procedures described below which provide full security to the Buyer and the Seller including Proof of Product (POP) from our side while awaiting confirmation of funding (MT 760) from your side. These procedures cannot be changed since they were already confirmed with the producers and the banks.
We can authenticate each other exclusively through the contract which is agreed, signed and registered in our banks.
This can be done in two ways.
– Buyer’s bank issues INACTIVE SBLC to the Seller’s bank
– Seller’s bank issues POP and PB 2% which activates SBLC
– Loading and delivery according to the contract
– Buyer’s bank asks Seller’s bank to confirm the existence of POP – SWIFT MT 799
– Seller’s bank issues the RWA – readiness for accepting MT 760 thereby confirming that the Seller is ready to accept a financial instrument and a willingness to send POP and PB 2%.
– Buyer’s bank issues an active SBLC – MT 760
– Seller’s bank issues POP and PB 2% and begin implementation of the contract
– If Buyer does not receive the RWA he does not send MT760! Therefore, there is no risk and cost of funds blocked.
– MT103 from SBLC is sent on the basis of SGS and BL (a set of loading documents).
I believe that these options are the only way to give credibility that the Buyer has the financial resources and the Seller has the goods.
I hope that the above explanation dispel doubts and allow our cooperation.