Procedures and Conditions for Selling ICUMSA 45 Sugar
1. Preparation Phase
Market Research:
- Check current global market prices for sugar.
- Define your demand and ensure readiness to issue financial instruments such as SBLC or LC from top 50 banks.
Document Preparation:
- Prepare a Letter of Intent (LOI) and Identification (ID) of the signatory.
2. Initial Contact
Send ICPO:
- The buyer sends an Irrevocable Corporate Purchase Order (ICPO) with the buyer’s company’s letterhead, duly signed and stamped.
3. Offer and Negotiation
Receive FCO:
- The seller sends a Full Corporate Offer (FCO) to the buyer.
Draft Contract:
- Both parties negotiate and sign the draft Sales and Purchase Agreement (SPA).
- Buyer provides proof of funds (POF) and identification documents.
4. Contract Finalization
Sign SPA:
- The buyer and seller sign the SPA, including an RWA (Ready, Willing, and Able) letter issued by the buyer’s bank.
5. Financial Instrument
Issue Financial Instrument:
- Buyer issues the financial instrument draft (SBLC or LC) within 7 business days.
- Seller validates the draft with a fiduciary firm.
SWIFT Message:
- Buyer’s bank sends a SWIFT MT760 or MT700 message to the seller’s fiduciary bank.
6. Shipment and Payment
Delivery:
- Delivery starts within 35-40 days after the financial instrument is opened.
Release Payment:
- Payment is released by MT103/TT within 3 business days after receiving shipping documents, including BL and SGS report, at the loading port.
7. Additional Considerations
Inspection:
- Only SGS inspection at the loading port is accepted for payment release. CIQ inspection at the destination port is not accepted.
Intermediaries and Brokers:
- Commissions are accepted up to 9-10K above net prices, with complete identification required before the transaction.
Summary of Key Points
- Ensure all financial instruments are issued by top 50 global banks.
- Use escrow accounts in Swiss banks if necessary, without requiring LC/SBLC instruments.
- Adhere to the timelines for issuing drafts, SWIFT messages, and delivery schedules.