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 How long does it take the bank to verify certificate of goods as defined in the contract so that the PA ITDLC can be converted to full active DLC. Thanks.
Helen
Answer
Dear Helen,
A Bank verifies nothing- A Bank under UCP600 Rules is not allowed to take part in matters related to the sales contract-
Thus the PPI ( Policy Proof of Interest) Certificate is issued as per a matter of contract between the intermediary and his end buyer-
Since the intermediary as per URPIB doctrine and rules of trade is required to ensure ONLY OFFERS OR QUOTES FROM A SUPPLIER IN POSSESSION OF GOODS is secured FIRST- Then in fact the PPI information is already in hand-
The contract applies a small section which give a BLANK copy of the PPI Certificate as created by the intermediary-
The heading of the document is defined as "PPI Certificate"-
The supporting terms in contract reference makes it clear that the said BLANK shall be returned to the "Bank" FILLED in - defining fully the genuine supplier in possession of goods AS SECURED BY THE INTERMEDIARY- Thus? If a supplier states " Yes we have sold goods to Helen" then by default goods have been verified in meeting with satisfactorily proving at the very least goods are ostensibly genuine-
And that's as goods as it gets-
Thus when the DLC is issued to the middle controlling intermediary, and ACCEPTED- the Intermediary FIRST signs the contract with the supplier which was already secured once an indication that the end buyer is going to BUY offered goods- in where the suppliers Offer to the intermediary has been first accepted-to which a contract is returned immediately-
This is the POINT of NO return-
The Middle INERMEDIARY the said "BUYER/SELLER" has the Accpeted DLC thus he/she he cannot be circumvented-
Thus Before RELEASING THE BLANK PPI certificate to the bank The contract to BUY from the supplier is intiated fully and secured.
Now as per the conditions of contract - the INTERMEDIARY issues the PPI certificate as a MATTER of CONDITION and requirements of the CREDIT-Not the actual sales contract-
The CREDIT states in effect: i.e: This pre advised confirmed credit shall become active with the production of a document carrying the heading of "PPI Certificate" disclosing genuine information pertaining to the sellers interests in the goods being sold"..etc..etc
REGARDLESS IF THE END BUYER VERIFIES THE DETAILS OF THE PPI OR NOT - THE DEAL STILL MOVE FORWARD BECAUSE THE CONDITIONS OF THE CREDIT HAVE BEEN MET- You are still 50/70 days away from having the deal being closed- hence plenty of time to cancel the credit can be made in where FRAUD has become evident.
The only way a bank will take action to the contrary is that if later it is found that the PPI information on the PPI Certificate is fake , then fraud is being implied and the bank has the right under such conditions to revoke the "IRREVOCABLE " status o the credit - This is a disaterous result and is just about the only edict that can reverse such an irrevocable status- The Intermediary could then face Fraud charges as well -IF CLAIMS OF THE PPI PROVES TO BE FALSE-
Whether the End buyer verifies the information on the PPI is irrelevant , because If he does not verify the information then he could in theory stall the deal forwever until he does-if such was made a part of the DLC conditions.
Yhus YOU are declaring thet the information given on the PPI is genuine-(False statement in this case = Fraud)
Thus the RIGHT to verify the infoirmation is end buyers right to apply - not the bank. Whether he does so or not, is his concern-
The end buyer can only Verify the detiails of the PPI and nothing more once only- as writtien into the body of the PPI and supported under the sales contract-
He is not allowed to transact on the deal with the end buyer because that's a breach of contract and that YOU hold full control of his payment instrument-
On going interference by the end buyer with the supplier could place your own supply intent in danger-
The end buyer uses the PPI information verifies the suppliers details and may even ask I.e.: "Has the named seller purchased said goods"
The end buyer could even send a copy of the PPI to get its claims verified-
NO MATTER THE PROCESS ONCE PPI IS SURRENEDRED THE BANK HAS NO CHOICE BUT TO ALLOW THE CREDIT ACTIVE STATUS TO APPLY-UNLESS IT GET STRONG WRITTEN VERIFIABLE EVIDENCE FROM THE end BUYER THAT THE PPI IS FAKE-
In where he bank would then intervene to verify such a claim before canceling the credit.
A shifty end buyer forcing a bank to cancel a credit wrongly would incur fraud charges and breach of contract conditions- This is a very serious breach indeed-worth a grat deal o the jilted intermediary by the way of compensation-
Since the supplier has a signed contract from the middle intermediary , he can only confirm that the intermediary HAS purchased such goods and NOTHING more as per the details of the contract with the end Buyer and in where permission is already given to the supplier to accept a call once only to the end Buyer, if such is made to verify the seller "Interests' in the goods-
Thus the supplier now knows who the end buyer is - But YOU have the credit and accordingly the SALE is to you- YOU are 100% safe.
Sure you may lose potential future deals - but you might not either if your services proved invaluable-but what is imperative is that you do not lose your capacity y to earn great commission to the deal in hand- That's your only immediate concern.
No Mention of the buy price is allowed- No other information is allowed to be given or sought as per the PPI and contract condition-
I instruct my agents to allow a turn around time of 3 days -
and the bank has up to 5 days to apply active status in where the end buyer gives no justifiable instruction to the contrary ( silence means acceptance as per UCP600 rules)
In effect the inermediary is simply using the UCP600 bank rules of DLC issuance to it's fullest supporting effect-
An Intermdiary in lets say CANADA cannot give so called POP for goods it has not even seen and will ever get possession in to a buyer half way around the other side of world- It can only give proof and evidence that IYT HAS PIRCHEDS claime goods and that sch purchased goods are now avialable for reselling- that's the claim the PPI-
Such can indeed be effectively verified-
All Nonsese about "POP" is just that-It cannot be given because the intermediary has no possession to goods - and! the intermediary cannot give PPI unless they are 100% safe anyway- the only way to be 100% safe is to ensure that the DLC is secured and accepted first - If the intermediary HAS not got real supply he will get cause get caught sooner if not later-
Thus - First Rule oF Trade- ALWAYS SECURE SUPPLIERS written QUOTE or offer FIRST ....NEVER THE OTHER WAY AROUND- BECAUSE WITH SUCH YOU HAVE PPI CAPABILITY IN YOUR HAND from the start -If yoU accept an offer from another misguided intermediate seller- Good-bye deal because this means that PPI/ supply is not genuine and goods are not in your control.If you do not have goods offered from a producer/supplier is possession of such when offering to resell such goods- YOU have no legal authority to offer such goods for reselling is also an legally defined agency position.
