AboutDavide Andrew Papa Expertise All matters pertaining to assisting Private import export INTERMEDIARIES, AGENTS and BROKERS Regarding International trade Laws and procedures,Letters of credits, as per UCP 600,Presentation, Commissions,International Rules of agency, and Incoterms 2000. All matters pertaining to shipping documents relating to the Import and export of products from one country to another.All matter for buyers and sellers of commodity products relating to the import and export industry.FTN with the introduction of UCP 600 will release the publication "The world is yours"(2004) made specifically for Intermediaries.Current inhouse tra ining manual is "Follow the Yellow Brick Road"(2008) Our advice website is www.ftnexporting.com
Experience FTN exporting founder Davide Papa has been trading for over 20 years- and has dealt with a huge variety of corporate entities including Gold and crude oil suppliers. FTN appeared in a major controversial Newspaper editorial in 1994. FTN Exporting official publication "International Trade and the Successful Intermediary"(ITSI) is about to be released world wide (December 2009) by the prestigious U.K publishing firm Gower's (U.K) and is listed on Amazon.com (Keyword: International Trade Intermediary) ITSI is ostensibly the first uniform intermediary trading doctrine of its kind, and will become the standard intermediary practice world wide in years to come. FTN exporting has created the said doctrine and supporting rules of trade defined as "URPIB" (Uniform Rules and Practice for Intermediaries and Brokers), which will (has?) become the most successful set of private intermediary rules ever created.
Publications The World is Yours and "Follow the Yellow Brick Road" www.ftnexporting.com . Author of "International Trade and the Successful Intermediary " (ITSI) 2009 excepts on http://www.gowerpub.com/default.aspx?page=637&calcTitle=1&title_id=11177&edition_id=12138
Education/Credentials Let school early. Became a master chef . Took up business management and later studied "international Trade at Stott's college Melbourne, Australia.
Question Dear Davide Papa
We have agreed as buyers to a DLC to be issued to the seller and have asked the seller for a Performance Guarantee. The seller has offered to present the delivery documents to the bank for payment after the goods have been delivered to the destination port. He claims their is no risk for me so the Performance Guarantee from him is not necessary.
I feel this is not right and he should present the delivery documents to the bank from the port of loading.
My question: Can you tell me, is there any risk for me as a buyer and is there anything wrong agreeing to this arrangement with the seller. . ..Thanks Craig
Answer
Dear Graig
I am assuming Bulk carrier deal and not Container deals are in play-
In basic form-
(1) Intermediaries must not transact in DES deals ( Delivery EX SHIP)- The documents travel with the ship and payment is not collected upon until the end buyer has first taken possession of goods at port of unloading-
The risk here is great because the Buyer now has right to REJECT the goods- The buyer will make ANY excuse and the supplier will be forced to take back the goods or sell it at a reduced price to the very same buyer-is one scenario amongst many-
FYBR V state clearly that of all the delivery application DES must not be traded upon by intermediaries- and the Law books have described many problems of DES jilted suppliers-
(2) A performance Guarantee is not normal practice - but rather an allowable practice- in a DES deal it's not a Performance Guarantee but proper "Performance Bond" in that a P.G is not longer valid once goods are "delivered" clean over the ships rails at port of loading-as per FOB, CFR or CIF incoterms 2000- The buyer owns the goods and the seller Has performed on time.
A P.B in real form-( and greatly mis-understood ) is a guarantee that follows the goods in where the goods are rejected on good reason in where remedy is sought via applying on the collection of P.B supported by a B.G.
I.e: A"Bond" given to a prisoner to turn up on time at a court hearing is a bond attached to the Court- break the bond and you are contempt of the court-
the Bond in a DES deal only travels attached to the goods - break delivery protocol and the bond becomes collectible-
Both are of "Performance"based , yet both apply differing type of performance assurance
Hope it helps- Keep away from DES deals.
Davide Papa
www.ftnexporting.com
Author:"International Trade and the Successful intermediary"
