Ask Davide

Here you will find frequently asked trading related questions and answers by Davide Papa.

Frequently Asked Questions

Which seller procedures are correct?
What is the difference between non operative DLC and pre advised DLC?
How much commission should I get?
Cannot find real buyers
Argentinean commodity export
How can I get real buyers or mandate holders of crude oil?
How to become a mandate holder?
Protecting My Contract From Person With D2 Import License
What is an intermediary to do in case of fraud
Getting a fair commission
Agent – Importer relationship
What is official selling price where crude oil marketing is concerned? Can this be considered as discount as is primarily the situation when trading in crude oil – also, what are the premiums that accompany the price?
International trading of Crude Oil
How can we confirm that the merchandise is legitimate?
When a member of the Russian Oil Federation quotes a price of $40 to $50 per barrel [negotiable] – how is it possible to price at this level when Crude oil is approximately $80 per barrel on average at this time?
I work with a person who has family connections with an actual Sheik. They wish to buy smaller refineries and purchase discounted crude oil
You are known to favor FOB deals, however, if CIF is necessary will it alter your method in regards to the terms of collecting your money from the L/C that you hold upon delivery?
When you are the intermediary, how would you handle it when the supplier requests a soft probe?
How would you answer someone who asks if you are the “End Buyer”?
FYBR written as a replacement for TYIY?
How do I become an agent?

Answers

Which seller procedures are correct?

Full question:

What follows is a trading protocol that is utilized by my provider. I am wondering what you think of it and if you feel it is a viable method. If it is a solid procedural method could you assist me in locating a buyer who would feel the same way about my providers trading policies?

They are as follows:

1) Shows the protocols and qualifier paper work and defines it for the purchaser. [Future documentation will be sent to the purchaser straightaway as necessary]

2) Confirm and authenticate for the purchaser that the agreements to work on behalf of the purchaser are properly prepared and set up – [Provider is unable to get reimbursed or pay out and fees from deals; you need to rely upon your principal to take care of this].

3) The purchaser must point out the crude oil or refinery goods they need and bring together the purchaser and provider. [The parties need to be working with a signing authority or a party to the trade that is able to endorse any purchase].

4) Discussion with the purchaser will provide the necessary information to prepare a proposal agreement for the purchasers endorsement [an agreement number will be issued that categorizes this transaction from that point onward].

5) To this point, the purchaser needs to recognize that the provider is being utilized to arrange all logistics and set up for transport ships.

6) Purchaser and provider both endorse the agreement

7) Purchaser gives communication or SWIFT message provided by their funding center to HSBC Canada declaring their capacity to finance the transaction. [Detailed wording will be forwarded straight to the purchaser].

8 ) Agreement and funding center notice proceed to HSBC Moscow for ultimate approval. [“Approval” in this scenario is when HSBC approves the purchaser’s funding center and the notice].

9) Provider buys replacement crude oil via Transneft to provide for agreement terms.

10) All paper work is given back as per the agreement stipulations for the provision of product. Proposed Laycan schedule is incorporated as well.
Purchaser selects Laycan dates and transport is carried out as dictated in the agreement. [To this point, Charter Company contracts need to be paid to CIBC Canada or the purchaser’s ships must be endorsed. Transporting times will be impacted by how long it takes to put the charter company’s contracts in place].

11) When the cargo consignments are put aboard and surveilled, compensation is conducted via transfer from the purchaser’s funding center to the account of the provider at HSBC Canada.

12) Reiteration as per Laycan dates being schedules and approved

Answer:

If you are the intermediary introducing the purchaser to the provider in the first spot – say goodbye to your deal – the trade is unmanageable for an intermediary who is involved.

At the point of which you lose the ability to manage the transaction yourself you lose the transaction and are out. The trade will be completed by the purchaser and the provider and you will not know what hit you.
YOU NEED TO BECOME THE PURCHASER TO THE PROVIDER AND THEN THE PROVIDER TO YOUR FINAL PURCHASER – this will secure the trade in your favor and you’ll be safeguarded.

As far as the remaining part of this trading protocol is concerned…it is entirely ridiculous.
What is the difference between non operative DLC and pre advised DLC?

Full question:

Once again I am here looking for your assistance. The first question I have is:

1) I need to know the distinction between the Non Operative DLC and a Pre advised DLC?

2) I have a provider for agricultural products to trade and he is utilizing this protocol – I need you to tell me if this is a viable and accurate course of action:
• Official demand is forwarded to the provider from the purchaser as LOI & BCL set up;
• Provider releases an official corporate proposal for the purchaser;
• With written approval of this proposal, the provider releases the trading agreement to the purchaser for endorsement and returned;
• Upon receipt by the provider, the purchaser is directed to arrange a non operative DLC in support of the provider;
• Upon receipt of the non operative DLC, the provider’s funding center releases the POP to the purchaser’s funding center in order to activate the funding method making it functional;
• The cargo consignment is readied based upon selected Incoterms 2000;

3) The provider utilizes this type of guarantee:
Guarantee of deliverance: In the event of non compliance regarding the delivery of products by the provider or a postponement of the agreement from the purchaser will be sanctioned via a penalty clause within the agreement at a sum the purchaser favors. We will not convey “PB”. This phrase makes certain the lawful and complete fulfillment by the two parties to the agreement – the purchaser and the provider. We propose a one hundred percent [100%] guarantee of transport and deliverance in the agreement.

Is this considered a correct method of providing a guarantee?

As per usual, your answer is very much appreciated and I am optimistic that others reading your replies will benefit from your answer as well.

Answer:

Carefully track these answers to your question in the following – The majority of these are answered in URPIB rules and my book.

1) Non operative DLC has no meaning. As far as PA-ITDLC

Concerning its use with an intermediary – A pre advised irrevocable transferrable DLC when released as a UCP600 signed method of funds, means the purchaser releases a PA ITDLC, the provider presents to perform one term of the credit – upon getting this the funding center exchanges the PA ITDLC to a full functional DLC that is then capable of being transferred. If the stipulation is left unfulfilled the credit can’t be transferred. [For Instance - Stipulation: Proof of products certificate as described in the agreement]

According to UCP600 as long as the stipulation has been achieved – the releasing funding center NEEDS to make the financing good to go and because of this it can’t be withdrawn – when the provider is identified – therefore it is less expensive for the purchaser to arrange as is perfect for utilization by the intermediary. A pre advised credit even as released by a UCP600 loyal funding center is not utilized by every funding center therefore the purchaser must request from his funding center whether they are able to arrange a PA ITDLC prior to the agreement being endorsed.

2) The final purchaser operating with the provider can utilize whatever procedure they like – they could use oranges to complete a transaction if this is what they agreed to – heading to court as so many have, when the product deliverance falls through. When the intermediary is part of the equation LOI/ BCL and this sort of thing can’t be utilized – as mentioned so often in previous responses – provider, final purchaser and intermediaries NEED to use the most superior and secure protocols – these are the quotes, offers, payments, [P.G] delivery, collection are the best and most secure means of functioning.

3) Guarantee: Already this too has been replied to often in prior answers – performance guarantee isn’t a typical trading function in the industry but whenever this comes up then the purchasers DLC is released and approved initially, the provider then releases a performance guarantee formatted as such as a UPC600 SLC or ISPB 98 SLC equating to and no more than two percent of the total worth of the cargo consignment – 1.5% is fine. DO NOT EVER ATTEMPT TO RELEASE AN SLC P.G FIRST – NEVER!

An SLC can’t AND MUST NEVER BE utilized for product payment though it is fine for paying out commission and certain other things like performance guarantee – [NOT A ‘PERFORMANCE BOND’ AS IT IS SO OFTEN CALLED – EVEN BY FUNDING CENTERS!]

When the provider does not deliver the product on schedule for whatever reason then the purchaser can make a call upon the provider P.G 9SLC – that is paid out by default without any questions asked due to the one condition of release – In the event that delivery is delayed, the purchaser makes the call and receives the P.G totaled sum.

Therefore, the SLC is an ‘unconditional method’ when just one stipulation is not achieved [non performance of deliverance] the SLC can be collected…and there can be no argument. Whereby, a DLC is a ‘conditional’ method reliant upon numerous deliverance policies/ paperwork in order to become viable prior to collection processes being started.

Hence, ‘the non fulfillment regarding the transport of products by the provider or the postponement of the agreement’ is ridiculous – that is a violation of the agreement – The purchaser supplies the DLC when this is approved [within five days] in return; the provider presents the binding SLC PG – quite easy. No delivery – purchaser receives SLC – Cargo consignment arrives, or next consignment is transported.
I hope I have been able to assist you – you should take for granted that there is much more that could be discussed for each of these questions – you at least get the basics described here.
How much commission should I get?

Full question:

For the last couple of months we have been dealing with a provider’s mandate. The question is could you define the typical rate of commission paid on transactions within the energy segment – and what would this fee be based upon?

Answer:

You must read the URPIB rules in my book.

A true mandated “provider” works for his identified primary and the intermediaries such as us act for the unidentified primaries.

In the event that the mandated provider has not yet given you the mandate ship paper work that identifies the primary provider then this should indicate that he in fact has no mandate – no provider and is simply one more misguided intermediary out there.

An actual mandate holder will be reimbursed by his primary – therefore his primary must also permit or approve commission fees paid to each intermediary taking part in the transaction – normally this won’t occur since the primary is just obliged to pay his mandate holder – therefore the opportunity to bypass others fees is ample.

When the mandate holder is verified he is then dealt with in the same manner as the “provider” which means the individual who manages the entire group “purchases” the products from the “provider” in order to resell all the a “final purchaser” at an elevated cost – utilizing the same funding from the final purchaser according to the estimate provided.

The median managing intermediary – the stated “purchaser/ provider” – then receives the commission fees subsequent to the transaction being completed and reimburses the approved commission fees to every intermediary who took part in the transaction from all parties. Essentially, an actual mandate holder IS NOT PERMITTED TO REQUEST ANY PORTION OF THE INTERMEDIARY FEE, SINCE IT IS INAPPROPRIATE AND UNPRINCIPLED AND MAYBE EVEN UNLAWFUL TWO RECEIVE A COMMISSION FEE “TWO TIMES”.

Therefore, follow the thread below for a representative kind of agreement:

1) Provider/ and or registered mandate holder
2) Locating intermediary
2) Locating intermediary
2) Locating intermediary
2) Locating Intermediary
3) INTERMEDIARY PURCHASER/ PROVIDER
4) Locating intermediary
4) Locating intermediary
5) FINAL PURCHASER/ AND OR REGISTERED MANDATE HOLDER

NUMBER ONE IS A SINGLE PARTY – 2-3-4: ARE RELATED INTERMEDIARY PARTY – NUMBER FIVE IS A SINGLE PARTY – NO ONE MOVES BEYOND NUMBER THREE (3) INTERMEDIARY THE PURCHASER/ PROVIDER – NUMBER (3) INTERMEDIARY TRADES THE PRODUCTS TO THE FINAL PURCHASER FOR AN ELEVATED COST – NUMBER (3) RECEIVES COMMISSION FEE PROTECTED WHEN THE DLC IS REASSIGNED – NUMBER (3) RECEIVES COMMISSION UPON DELIVERANCE OCCURRING – NUMBER (3) REIMBURSES EVERY INTERMEDIARY FROM NUMBER FOUR (4) AS WELL AS NUMBER TWO (2) PARTIES – NO POSSIBILITY TO BYPASS COMMISSION FEES EXCEPT IF NUMBER THREE (3) TURNS OUT TO BE A SCAM ARTIST.

THEREFORE YOU SHOULD JUST TRANSACT WITH NUMBER (3) WHO OSTENSIBLY UNDERSTANDS WHAT IS REQUIRED TO COMPLETE THE TRANSACTION AND YOU FEEL COMFORTABLE AND HAVE FAITH IN THIS PERSON – UNFORTUNATELY ALMOST EACH AND EVERY PURCHASER/ PROVIDER FOUND ON THE INTERNET TODAY IS MISINFORMED AND HAVE NO UNDERSTANDING ABOUT WHAT THE INDUSTRY IS ALL ABOUT OR HOW TO COMPLETE A TRADE.

THEREFORE IF YOU WISH TO BE ONE HUNDRED PERCENT CERTAIN YOUR COMMISSION FEE WILL BE SECURE THAN YOU MUST MAKE SURE YOU ARE IN POSITION NUMBER THREE (3) AND IN ENTIRE CONTROL OF THINGS. BEING IN THE NUMBER THREE POSITION MEANS YOU MUST HAVE A SOLID BASIS OF UNDERSTANDING REGARDING THE INTERMEDIARY TRADING PROTOCOLS OR YOU CAN KISS ANY FEES FAREWELL.

In the event you are not in the third spot (3) then you need to connect yourself with a trusted and competent trader that can secure that third spot (3) if you are able to source one out capable of managing the transaction properly.

This is simply the only method of being certain you are going to be paid on an effectual transaction.
I do not know how to make the above wording any clearer. The trade procedures online (LOI, ICPO, MPA, NCNDA…etc…and so on) are inadequate and ineffective intermediary protocols.

As far as the standard rates are concerned – this can be found at the ITSI website under URPIB rules – Fuel trades are usually coming in a $1.00 U.S. for a barrel for each person in the trade from (2) to (4) and splitting with number (3) who receives the biggest split – if the reduction provided is larger – the final purchaser would receive this as an incentive to purchase – not the intermediaries. When you trade anything such as crude oil purchaser end $4.00 for a barrel – providers end at $4.00 for a barrel – you should toss out the transaction because you are spinning your wheels and wasting your effort.

Commission fees cannot be hidden – they are written into the providers bill of lading as a “consultancy fee” and the final purchaser won’t permit his funds to be utilized for reimbursing the intermediaries at $8.00 per barrel for their commission fees – this just is not going to occur – however, he will not protest if he was given a reduction of $7.00 per barrel and the intermediaries all split $1.00 per barrel between them.
Cannot find real buyers

Full question:

I have spent the past year working to secure a crude oil provider based in Qatar. The issue I have is that I continuously keep bumping into these lousy purchasers. For whatever reason, they just don’t work out in the end. This is beginning to make me lose my credibility in the eyes of my provider since I continue to supply them with less than adequate purchasers.

There is no string happening here – only me and my provider the oil company. Where can I turn to so I can get a transaction completed finally? When I request a PC DLC they propose that I get a MT 799 as an alternative. I understand that with that in hand they will simply shop my provider about until they secure a final purchaser. I need your help since I am becoming discouraged by all this nonsense.

Answer:

Refrain from any of these BCL, MT, ASWP, LOI, NCNDA, MPA, ICPO…etc and the like. What you must do is begin utilizing precise and effective protocols to be effectual at trading – I am talking about a number of months of learning and studying on a full time basis.

The intermediary becomes the purchaser/ provider – if you do not understand how this works then you must become connected with someone you can trust and can also manage the entire transaction for you. Unfortunately, only a minute number of intermediaries who reside on the Internet know anything about the proper protocols of completing a transaction.

You must protect your provider and do not see him again until you have sourced out and secured a final purchaser – providers are quite difficult to source and you will burn their connection if you continuously return with another question each few minutes

Therefore, you need to deal with all the nonsense at least until you connect with that final purchaser – and not until that time should you go back to the provider and complete a transaction with them.
The most difficult portion of any transaction is to protect superior and desirable products.
Argentinean commodity export

Full question:

First and foremost I would like to offer a huge thank you for providing such useful information on this website and in your books. I have absorbed much thanks to these regarding the trading business.

A year ago I was in Argentina meeting with a new Hispanic/ Latin American exporter who dealt in agricultural products such as vegetable oils, powdered milk, cereal and grains and the like. I had a previous working relationship with them and enjoyed a solid friendship with the company president who requested that I serve as their mandate to trade their commodities. Over time now I have started my own company and website but having commenced studying your materials I realize I was kidding myself.
I know I am enjoying a position of advantage compared to many in this field but I also know I have so much more to learn from URPIB, URITI, FYBR, UCP600 and URC522 financial methods etc.

This is why I have come to you concerning this situation because though I have this major agricultural business with faith in me I don’t think I am capable of completing any deals for them.

Could you please help me?

Answer:

This is a process you are beginning – the process cannot be taught from this web based forum. I also cannot cooperate with you regarding this situation since you have not begun studying the business or learning from any of my books and will be unable to discuss anything on the same tier from the beginning. – I just do not have the time to give direction and training to everyone who makes a request of me.

My book is packed with more than one hundred fifty thousand words and yet it is still lacking in all of the necessary information.

It requires many months of studying and maybe even years to reach a full understanding of this industry and the numerous circumstances that arise when trading as a mandate holder – working for someone that is a disclosed chief principal

You are working with a source of supply rather than as a provider working for an undisclosed primary which is a much better scenario for numerous reasons.

There is not much sense in having a mandate ship if you have no idea how to work the protocols – Since there are principal’s instructions you are REQUIRED to keep – therefore your privileges and rights are now ‘conditional’.

I myself have turned down a number of proposals for mandate ship just because they were unworthy of the amount of work that was necessary from me.

I have no idea why a confidential autonomous intermediate believes that working for a disclosed primary is such a great position to be in. It just isn’t.

I believe there are several websites that have virtually ripped off my statutes as their own work – but the small number I have discovered in only the last week have no practical knowledge as it applies to trades. So many have perused my articles and have not understood that there are actually much more to many of the topics being discussed.

When you are a mandate holder it is to put it fundamentally – not a good position to be in – when you are the purchaser/ provider you are in the best spot to be in for an intermediary – you now manage the entire transaction – you are the head man in charge – just as long as you receive a proposal from a genuine provider then the authority belongs to you to be able to resell the products as the “provider” working for an undisclosed primary.

You make this happen by utilizing the funding from your final purchaser to pay for the products –
You trade in deliverance paperwork – your final purchaser trades in deliverance paperwork and control of the products – YOU never retain control of the products so essentially you just need to trade title of the products and the trade is completed.

As the mandate holder all of the just discussed procedure cannot be implemented – You arrange for the final purchaser to meet the principal – your trade prices are approved – the provider completes the trade with your final purchaser and forwards the stated commission fee to you.

However, the commission fee is paid from his own pocket – therefore what he proposes to pay you will be peanuts – in comparison to if you were the purchaser/ provider – and when all is said and done you will have to have faith in your primary at the same time. – If he says your trade from a month ago was squashed – will you be able to confirm this? No Way!

This might cost you thousands of dollars to go through the courts – the majority of intermediaries don’t ave that type of money anyways – any agreement they had with their primary would have to be iron clad – just to be able to attempt such a court action.

I apologize, Martin – these are the stated facts. If you have a source of supply, make offers to other intermediaries who could protect a purchaser and hence secure the commissions and this is the best and safest counsel I can give to you when you finally have some basic knowledge of efficient intermediary practices.

Study past answers to these subjects that are on this website when you eventually read this response.
I hope what I have added is helpful.
How can I get real buyers or mandate holders of crude oil?

Full question:

How do I go about arranging for introductions with actual legitimate purchasers or the purchaser’s mandate for crude oil? I am having nothing but trouble finding purchasers however; I am not having problems sourcing providers. Please help.

Answer:

The chances are quite likely that the whole lot of them is phony mandate holders – in previous responses I have answered quite extensively regarding mandate ship – You need to study my book.
How to become a mandate holder?

Full question:

I have an authentic purchaser for Diesel D2 – along with all the documentation. The buyer has stipulated that he will work on for mandate and does not want to bother with brokers or intermediaries. I have been trying to reach refineries to no avail but this business is no easy task. I need your help to find a product provider and I need to know how I can become a mandate?

Answer:

You need to read my prior answers and learn – You cannot simply just “become” a mandate holder – many of these arrangements are phony at any rate.

As an intermediary you are the product provider for the final purchaser and the purchaser to your product provider who will be holding the products. If your current final purchaser only wishes to deal with provider or an authorized mandated negotiator, then you need to tell this one to take a hike! They must make the deal with you or there is simply no transaction.

AS THE PURCHASER/ PROVIDER YOU ARE LEGALLY LIABLE – THEREFORE YOU NEED TO BE ABSOLUTELY CERTAIN THAT YOU HAVE THE BUYING SITUATION TOTALLY UNDER CONTROL – YOU CANNOT BE JUST 99 PERCENT SURE – BUT ONE HUNDRED PERCENT CERTAIN! YOU ARE NOT ALLOWED TO PURCHASE FROM SOME OTHER BAFFLED THIRD PARTY INTERMEDIARY – YOU CAN ONLY DEAL WITH THE ACTUAL PROVIDER OF THE PRODUCT.

YOU MAKE THE PURCHASE OF THE PRODUCTS FROM THE PRODUCT PROVIDER AT A DECLARED PRICE AND YOU DO THIS WITH THE END PURCHASERS FUNDS.

NOW YOU SELL THE PRODUCT AT AN ELEVATED PRICE – WITH YOUR FEE ADDED – TO YOUR END PURCHASER.
Now this previous scenario I just discussed takes many years to learn – you will master it with practical experience – so it is a waste of time to ask me “how do I make this happen?” or “how do I do that?”

This can only be studied by way of FTN exporting, the developers of the intermediary – and there is so much to learn. You should be reading and learning the URPIB rules of trade which are explained in detail in my book. And you must not forget that you are both the Purchaser AND the Provider.
Protecting My Contract From Person With D2 Import License

Full question:

I am dealing with a D2 agreement in China and my purchaser lacks a D2 import license. I have sourced another company with the proper credentials but they are an unknown and I fear I may get scooped for my fee. How and what is best method to save myself from this problem?

Answer:

[Currently I am dealing with a D2 transaction out of China and the purchaser I have is lacking a D2 import license] –

What does this have to do with you carrying out your transaction?

The Incoterms200 rules of delivery are quite upfront on these situations – the product provider is accountable – and so is the purchaser – the purchaser has to make sure they have import certification and this has zero to do with the product provider.

The provider must be certain they are in possession of any export certification…etc. If the purchaser pays for product, endorses the agreement and issues DLC but falls short of acquiring the import certification then this is his headache, the DLC still goes forward at site depository. If he indeed endorsed the agreement and reneges on his promise to perform due to an inability to acquire proper certification, this places him squarely in violation of the terms of the agreement and he is now in some very deep and hot water.

If he has failed to endorse the agreement and he cannot acquire the import certification than there simply is no agreement.

It is just that simple not at FOB/ CFR or CIF sales – if the goods were processed via DEQ Incoterms, then this might potentially be your problem and potential liability, based upon the way the agreement is written up – since intermediaries are not permitted to transact a delivery DEQ agreement. [it is my assumption that this is not a DEQ delivery term].
What is an intermediary to do in case of fraud

Full Question:

After importing some USB devices from China for a client I found the items were not working and not the memory capacity they claimed they were. In other words, my client is upset and wants their money back and I would like to know if there is some organization or establishment in Canada or China that can assist me in retrieving my money?

Answer:

Your problem rests in the cost of taking this matter to a local jurisdictional court and then collecting on any judgment you could earn and it would cost an arm and a leg to enforce this. I will not provide any legal advice but will try and give you some insight – Say so long to your money – which you should simply assume.

You should Immediately contact the commercial section at the Chinese consulate located nearest you and bombard them endlessly with letters and emails every couple of weeks. Stay on top of them and make sure they realize you have lost profit, your costs and integrity.

Now come up with an amount. [you are permitted to file a claim for profit loss and as well as potential profits].
You should ask for this number.

State in no uncertain terms that you are going to be black listing this exporter globally inside of twenty one days. [black listed by FTN exporting and bigger corporations functioning internationally – we are quite visible in China also]

Your assistance can be found though the consulate and the consumer affairs office in the nation where it originated that should take charge of occurrences such as this.

When you place this kind of pressure on a manufacturer in China, occasionally you will be rewarded since they can’t take the risk of potentially losing their export standing and authorization.

There really are no other organizations you can move against – your intimidation and grievance need to be targeted directly at the manufacturer.

Refrain from threatening legal consequences since they will see the impotence in that threat. This kind of court hearing might cost over a hundred thousand to pursue. Take aim at their export standing and their license – this will definitely grab their attention.
Getting a fair commission

Full question:

Since reading your book I have begun searching out providers of scrap metal and located a guy who has over 170 suppliers globally. My concern is that he might be trying to secure a commission for himself beyond the measly one percent he offered me after he handles product details and delivery – on an IRDLC.

Does this sound like he might be trying to leverage the buyer and supplier for further fees for himself? Due diligence shows him to be cleared alright. I would appreciate your opinion based on the meager information I was able to provide you.

Answer:

“Ostensible Authority” – Currently are you in possession of an offer from a product provider that actually has product? This is the basis of any transaction.

FIRST YOU LOCATE THE PRODUCT – WHEN YOU ARE SURE OF THE PRODUCT MAKE AN OFFER WITH CERTAINTY.

You present as the purchaser. You are on the hunt for product. If you cannot find a source of product straight to you, then there is no product or source for one. At this stage you could only mull over any offer presented through an intermediary – IF THAT AGENT IS WILLING TO REVEAL HIS PRODUCT PROVIDER AND IF THIS IS NOT THE CASE – MOVE ON, DROP THE TRANSACTION AND LOOK ELSEWHERE.

You have to be sure of your product provider and that they truly do have product in their “pocket”
It could be the President of the United States telling you he has secured product but business is business and friends are secondary to the transaction.

If he requested a TDLC from you – then he is not a product provider.

Hence, you could just request that he present an offer and state your primary concerns – YOU HAVE TO MAINTAIN MANAGEMENT OF THE TRANSACTION AS THE PURCHASER AND THE PROVIDER –
UPON MAKING THIS APPEAL FOR A BID YOU MUST DEMAND:

• We are requesting an offer for – [what mt per month? at FOB from a product provider who has secured product]
• YOU ARE GOING TO BE RESPONSIBLE FOR COVERING A NON TRANSFERRABLE IRDLC
• YOU WANT THE INITIAL DELIVERY TRANSPORTED WITHIN NINETY DAYS
• RULES OF DELIVERY USING INCOTERMS 2000. RULES OF IMBURSMENT UCP600

Now you include your commission fee to the price and present the offer to your final purchaser.
If everything just described actually occurs and the offer is from an intermediary who in turn has revealed the provider to you then offer to pay him a commission fee that is in accord with URPIB rules of trade or even higher.

Then, Paul – whether you have secured a product provider or you have not is the single question that you need answered. It appears to me that this is not the case. I think he is seeking a commission while asking you to make the imbursement; therefore, he is the one who maintains power over the transaction – not you – he is working to develop into the purchaser and the seller both.

IF IT WAS YOU WHO HAD THE POWER IN THIS TRANSACTION, THEN THE PROCEDURE WOULD BE UP TO YOU AND THERE WOULD BE NO NEED TO EVEN ASK THIS QUESTION.

Try out what was just discussed and see what you can do with it.
Agent – Importer relationship

Full question:

I work on behalf of Italian products in America as an agent for foodstuffs and I have two importers for a couple products. I need to know if I can develop new clients for the importer. If yes, what kind of agreement would I need to have for the importer? Also, should I deal with conventional importer or unconventional?

Answer:

You should have an agency contract – this is an agreement for you and your importer – I am thinking you are referring to bringing your customer to purchase products directly from the importer into the United States?
Your part in this, your obligation and disclosures are written distinctly into the contract and in return you are compensated at about ten percent for your fee. This goes for each deal your customer completes working with your importer.

However, it is critical that you understand what it is you are working on since the single reason you are going to understand when the transaction is completed, is to make certain you take the order and completing the agreement for your now disclosed client – the importer.

You are supposed to be the agent working for your primary client.

Remember that unless you learn and understand things such as proper processes – which could take many weeks or months/ years even. Taking into account the learning curve involved – why do you believe you are able to simply stroll in through the door and begin making introductions between your customers and the importer – and that you will be reimbursed for every deal that occurs because of it not to mention any transactions made between them down the road?

What you really must be doing is studying the correct procedures or just do not even chance trading in these situations. It does not take a genius to know that you might well be getting zero if you try introducing possible customers to the importer, without certain written understandings and procedures in place.
What is official selling price where crude oil marketing is concerned? Can this be considered as discount as is primarily the situation when trading in crude oil – also, what are the premiums that accompany the price?

Your question is a big one and very complex. It is also discussed in the FTN exporting periodical COFI and bound to the FYBR V journal.

I will try and cast some light in a fundamentally stated way regarding this internationally challenging situation.
In the most factual sense a discount does not exist.

You purchase based upon a settled amount and you sell at an approved price and anything left is your commission.

Stated in a different manner – you make a purchase at Joe’s Futures to be transported and unloaded on the 1st of February, 2011 at a cost of USD $56.00 for a mt discount FOB Incoterms 3000 – and move it at CMEGROUP at futures 1st February less USD $42.00 for a mt discount FOB Incoterms 3000.

There is a disparity of about $2.00 per BBL.

Learning and comprehending what I’ve just mentioned means I am able to modify the scenario in a dozen unique ways. I am able to do a dozen unique procedures or possibly more so I can purchase crude oil and sell the crude – TO MY OWN STANDARD PRICING AS BACKED UP BY AUHORIZED INTERNATIONAL COSTS.

If you have a purchaser YOU SELL and with an end buyer you can make the sale. YOU ARE THE ONLY ENTITY WITH ANYTHING TO DO WITH EITHER A BUYER OR SELLER.

The product provider might claim he requires BOL day on day prior to the day subsequent at Platt’s cost – your job is to persuade him differently to techniques that you are in favor of and feel secure about or IT’S NO DEAL.

SHOULD YOU BE UNABLE TO LOCATE PLATT’S PRICES ONLINE AT NO CHARGE – HOW THEN ARE YOU ABLE TO AGREE TO “PLATT’S PRICING GUIDE? HOW ARE YOU ABLE TO RECEIVE “DAY PRIOR TO OF DAY SUBSEQUENT BOL COSTS” – YOUR END BUYER WANTS THE CRUDE TODAY AND YOUR JOB IS TO GET IT TO HIM. FINANCING MUST BE FOUND TODAY TO PURCHASE WHAT YOU NEED FROM THE PRODUCT PROVIDER. HOW WILL THIS BE ACCOMPLISHED IF YOU DON’T HAVE A COST?

WITHOUT A COST THERE IS NO AGREEMENT.

I pull my hair out when I hear about intermediaries that believe they can just crawl out of bed and begin to trade crude oil when they finish their breakfast!

These crude oil/fuel transactions are some of the most multifaceted and tough business deals in the business – if it all falls apart. They are also the simplest of transactions when they come together properly.

There have been Swiss traders in a past period who have dealt in crude oil – however, that time period is now long gone.

Intermediaries who work in the crude oil field earn no income when they sell a single barrel of crude oil. One would have to sell a million barrels all at once. The intermediary would have to comprehend logistics, matters pertaining to shipping as well as rules of payment, delivery rules and ways to increase profitability. Not to mention knowing about application and cost of this as well as rules for delivery and agreements.

Upon understanding this, an intermediary could find themselves at a point in their life where they are confronted with the possibility of finishing up just one shipment of crude oil with a value of USD $70,000,000.00 or perhaps a yearly contract for provision for terms worth almost 1,000,000,000.

If you had one transaction with an annual agreement – one million dollars in commissioned earnings could be realized during a three month time frame – or if the commission percentile has been dropped one could make six million dollars all in with a sealed one year agreement for supply.

ALLOW ME TO STATE THIS FROM AN UNUSUAL PERSPECTIVE. A PERSON WOULD BE REQUIRED TO LABOR FOR FORTY YEARS AND SECURE AWAY SOMEPLACE SAFE, FIVE HUNDRED DOLLARS A WEEK IN ORDER TO FINALLY SAVE UP A MILLION DOLLARS. IN THIS CASE YOU ARE WORKING AS AN INTERMEDIARY FOR THREE MONTHS AND EARNING A MILLION BUCKS!

I BELIEVE IT EVADES THE MAJORITY OF INTERMEDIARIES THAT IF THEY ARE GOING TO MAKE THESE HUGE DOLLARS THEY WILL HAVE TO MAKE A HUGE EFFORT TO DO IT. TO DO SO THEY WOULD BE WORKING FOR NOTHING IF THEY BEGAN BEFORE THEY UNDERSTOOD THE TECHNIQUES INVOLVED AND LEARNED HOW TO UTILIZE THE FTN TECHNIQUES – [FTN EXPORTING POLICIES]

Do you believe that you could close a large deal like this? Think you have dealt with enough garbage and worked amongst the sharks for enough time to master the necessary knowledge to pull off a crude deal like this one?

If you believe that is the case – then what is holding you back? Just “Go For The Throat”

FTN exporting has a set of rules of its own, however, these rule are for trade and are meant to make certain of secure dealings so FTN will not be outwitted or get caught up in some form of deceptive transaction.

WHEN FTN SECURES A REAL SUPPLY, FTN IS THEN A ONE HUNDRED PERCENT GENUINE VENDOR AND PURCHASER OF CRUDE OIL FUEL. HOW I PERSONALLY PURCHASE AND SELL THIS CRUDE OIL IS CONNECTED TO HOW GOOD MY KNOWLEDGE IS ABOUT CLOSING TECHNIQUES AS WELL AS HOW GOOD AT IT I AM. ALL INTERMEDIARIES NEED TO CONDUCT THEMSELVES WELL FOR THIS PURPOSE –

THESE MATTERS WOULD INCLUDE A CAPABILITY TO LOCATE GENUINE PRODUCT ALONG WITH A CAPACITY TO FIND A LEGIT PURCHASER. THERE IS NO CONNECTION TO WHAT PLATTS OR NUMEX IS DOING NOR WHAT THEY CLAIM SHOULD BE DONE. THERE IS NO LAWS OF NATIONS AND TRADING PROVISOS OR STIPULATIONS UTILIZED WITHIN. THIS HAS ZERO TO DO WITH AUTHENTIC GLOBAL PRICING OF THESE COMMODITIES. THIS HAS ZIP TO DO WITH PREVIOUS FTN FINISHED DEALS, MONETARY CAPACITY OR AN ABILITY TO TALK A GOOD GAME LIKE AN EXPERT TRADER UTILIZING IMPOSING EXPRESSIONS SUCH AS LOI, BCL, ICPO,NCNDA,OR POP AROUND THE PEOPLE WHO HARDLY UNDERSTAND THE TRADING BUSINESS IN THE FIRST PLACE.

This is all about one’s talent and aptitude when it comes to properly finishing up a transaction in an effective and secure manner and by doing so you have gained additional experience and a hefty commission check as well.

Lesson: The spread sheet at the end of this scenario is distinct. Now for an average procedural example pertaining to what an intermediary should understand and then make it happen in a contract. It does not matter to me that SHELL, EXXON or even the RUSSIANS cannot utilize it – I ALSO DO NOT WORRY WHEN THE PURCHASER STATES THAT THE PROCEDURES AND FORMAT NEEDS TO APPEAL TO ME OR WE WON’T BE DOING BUSINESS.

EXPENDING MONTHS OF HARD WORK ONLY TO LOSE A COMMISSION DUE TO A LESS THAN HONEST PURCHASER JUST WON’T OCCUR. I WOULD SOONER LABOR FOR ONE HUNDRED YEARS AND NEVER COMPLETE A TRANSACTION, MAKE EVERY EFFORT TO DO IT BY PRACTICING TECHNIQUES THAT WILL BE SUCCESSFUL – THAN LET SOMEBODY ELSE MAKE MONEY INSTEAD OF ME DUE TO MY HARD WORK AND AT THE END OF THE DAY FROM MY BLUNDERS.

Imagine this:

1.In the initial space in the procedure under here – it says USD $2.42 per gallon earmarked for an August transport time. I must firstly come up with a purchase price starting at the product provider. It will not suffice to just use the provider’s straight up price proposal that he can regulate. It is necessary for me to maintain my own pricing and when I make a deal with my end purchaser too. This is a vital portion of the transaction that an intermediary must understand and you must hold fast to.

FTN did the groundwork by going to www.cmegroup.com locating Med Platts cost for previous transport in place for August – September – October and used a median of three costs to come up with one standard price. FTN then utilized that one median cost as a format standard. Is this fair play? To keep a purchaser happy, a three price median amount is used to make sure that pricing is stable for delivered pricing opportunities.

This means FTN is providing extremely realistic purchasing conditions.

Now it is the beginning of July and the initial freight delivery is scheduled for October so agreements need to be endorsed and sealed by late in July in order to take advantage of October pricing.

Therefore, freight delivery number two scheduled for November will have a format settled based on prices derived from September – October and November costs and so on, etc…

NOW I BEGIN TO SET UP MY PRICE CLAIM IN JULY – I JUST AM REQUIRED TO MODIFY THE MEDIAN AS IT DERIVED FROM A PRICING BOARD AND THE REST OF THE RESTRICTIONS ARE MODIFIED AND I MUST CONVINCE MY END PURCHASER OF MY FORMAT BUT ONLY AFTER I AM SATISFIED THAT THE PRODUCT PROVIDER IS ONE HUNDRED PERCENT AUTHENTIC.

IF THE END PURCHASER CONSENTS THEN FTN HAS CLOSED THE SALE.

[1] Now in the initial space we see USD$2.05 for a gallon set for an August transport of gasoline = www.cmegroup.com

[2] An identical CME guide provided me with September and October prospective price points.

[3] we arrive at a median FTN cost – I now understand what is required from my product provider – I must have my provider gasoline at this cost as well as a discount – this is my requirement from a provider – I am not doing this with blinders on – now I am able to purchase what I need based on my needs and not the providers – I have total control of the situation. If a problem ensues than tough luck, I modify the format and make things as close as I can in the providers favor and I look elsewhere for a different product provider.

[4] I make a proposal of .09 cents or more per gallon discount to a possible end purchaser – though I already received a .15 cent per gallon discount – I have got an offer price now that I can pass to my end purchaser – I am committed to handing a large piece of this discount to my purchaser – as an inducement to him for making the purchase – I CANNOT JUST HAVE THE ENTIRE DISCOUNT FOR ME AND STUPID INTERMEDIARIES TO SPLIT – a .06 cent disparity is what my commission is and also the commission for any and all intermediaries who have lent a hand in landing the secure purchaser – and if in fact the number fall below 1 cent per gallon to induce the purchaser to follow through with the deal, that’s the cost of doing business because a sale is better than no sale.

FTN has now got an all in purchase price from a product provider and all deal restrictions to continue selling -

FTN has proposed a payment to the provider of 2 cents per gallon – and regardless of what the price does on the market – FTN is promising a predetermined 2 cent fixed rate that will be tacked on to the cost – stated another way, FTN is guaranteeing a portion of the discount will be go back to the provider.
So in point of fact, the actual commission to this point is .04 cents for a gallon or less.

[5] Now a solid net FOB FTN purchase price has been determined

I now produce an identical format to present my proposal to the end purchaser

He is unaware of the rate of my commission fee – he only knows that he managed to get a healthy discount.

GAS – OIL OCTOBER FREIGHT DELIVERY – PRIOR SETTLE

***

ALLOTMENT: 3 MMT
GASOLINE: 0CT. 2011 DELIVERY DATE PRIOR SETTLE SMICE SELLS INC/OPX
RBOB GASOLINE FUTURE AUG 2.05
RBOB GASOLINE FUTURE SEPT 2.04
RBOB GASOLINE FUTURE OCT 1.93
SMICE MEDIAN GAS-OIL 2.0066666667
SMICE DISCOUNT 0.095
SMICE GROSS PURCHASE COST -1.8160333333
ADD SMICE PAYMENT 0.02
NET FOB PURCHASE COST -1.852354 0.0085
GALL TO MT EXCHANGE$ 265
BILL OF LADING MT PURCHASE COST ULSD FOB -490.87381 -495.04623738

NEXT SMICE MODIFICATION
AVERAGE PURCHASE PASSES 2.0366666667
AVERAGE PURCHASE FALLS BELOW 1.9766666667
ALLOTMENT: 3 MMT

As I mentioned earlier, it is a process laden with complexities – there is so much to learn and remember.
International trading of Crude Oil

Full Question:

I understand that when crude oil is being shipped on tankers, while it is in transit the crude oil on board may be purchased and sold again a few times – sold on the spot market. How do deals like that work between a purchaser and seller? Who actually owns the crude oil and when does ownership of the crude get reassigned?

Answer:

I won’t be able to clarify the entire bigger picture since this would mean quite a bit of learning curve for you – however, I can make additional information available to you in capitalization and this should prove pretty helpful and expand upon your thoughts. Even my simplest reply will take me some time.

I have been investigating the process of the purchase and sale of crude oil while on freight tankers.

IS YOUR INVESTIGATION AS AN INTERMEDIATE PURCHASER OR SELLER? ARE YOU TAKING A CLASS AT SCHOOL ON THE SUBJECT? THIS HAS NO BEARING SINCE THE SUBJECT TOPIC IS FAR TO COMPLICATED ANYWAY.

THEREFORE MY FOLLOWING ADVICE IS ONLY APPLICABLE TO INTERMEDIARIES

As I understand it, during the transit of the crude oil by tanker the crude might be sold on the spot market

THIS WOULD APPLY TO SECONDARY CONTRACT MARKET SINCE INTERMEDIARIES CANNOT MAKE TRANSACTIONS FOR ONBOARD OR SPOT MARKET PRODUCTS WHILE AT SEA.

That this can happen several times during the trip at sea

HYPOTHETICALLY FOR THE MOST PART – IN POINT OF FACT AND IN THE MAJORITY OF SITUATIONS DUE TO FUNDING METHOD RESTRICTIONS – THE PROCESS OF RESALE CAN TRULY ONLY WORK SECURELY ONLY ONCE IT WOULD BE BEST TO ASSUME.

Please explain how these transactions happen with a purchaser and seller?
THIS IS VERY TOUGH TO ANSWER IN FULL – EXCEPT TO STATE THAT AS AN INTERMEDIARY YOU ARE SELLER AND PURCHASER

“PRODUCT PROVIDER” OWNS THE PRODUCT AND MAKES THE SALE TO YOU – THE PURCHASER – WHO THEN TURNS AROUND AND MAKES A RESALE TO THE END PURCHASER [THE ONE PURCHASING THE PRODUCT/USER OF THE PRODUCT/GETTING POSSESSION OF THE PRODUCT] AS SELLER – ALSO YOU.

YOU –THE PURCHASER – BUYS THIS CRUDE OIL FROM THE PRODUCT PROVIDER WITH THE MONEY [FUNDING METHOD] FROM THE END PURCHASER – MAKING THE RESALE TO SUCH AND RECORDING SOME EARNED REVENUE AT SAME TIME.

THE ABOVE SCENARIO WOULD MEAN A THOUSAND PAGES AND MONTHS TO TEACH THIS FOR YOU TO FULLY COMPREHEND THE ENTIRE TRANSACTION PROCESS AND ITS INTRICACIES – AN INDIVIDUALMUST TAKE THE TIME TO LEARN FROM FTN EXPORTING POLICIES – FYBR.

ALL THINGS PURCHASED AND SOLD ARE DONE PROPERLY WITH DOCUMENTATION OF TITLE/ PRESENTATION/DELIVERY

Who is the owner of the crude oil and at what stage is the ownership of the crude exchanged? My thoughts are that when the crude oil is loaded on board the tanker ship it is the property of the oil manufacturer.

THESE ARE THE RULES OF INCOTERMS THAT SAY IN PART THAT FOB/CFROR CIF DELIVERY PURCHASER HAS OWNERSHIP OF PRODUCT WHEN THE SHIPS OIL OUTCROPPING PASSES OVER THE SHIP RAILS AT THE HARBOUR WHERE THE PRODUCT WAS LOADED ABOARD.

SO WHAT YOU JUST HEARD WAS THE OBVIOUS ANSWER – PURCHASER HAS OWNERSHIP WHEN PRODUCT IS LOADED AT THE HARBOUR. PRODUCT PROVIDER IS AT LIBERTY TO TAKE PAYMENT PRIOR TO THE SHIP SLIPPING ITS MOORS AND LEAVING FOR THE NATION IT IS SUPPOSED TO TRAVEL TO.

This producer of the oil arranges to ship the crude via tanker. They load the crude oil onboard and the ship gets underway to a destination.

DURING A CIF TRANSACTION THE “PRODUCT PROVIDER” SCHEDULES THE TANKER SHIP – IN FOB TRANSACTION THE PURCHASER NEEDS TO GET A CHARTER AGREEMENT FOR HIS OWN SHIP [FOB/CIF INCOTERMS DELIVERY RULES]

The oil manufacturer then locates a purchaser for the crude oil.

A PURCHASER NEEDS TO BE GENUINE PRIOR TO ANY CRUDE OIL BEING TRANFERRED AS AN OFFER, AGREEMENT AND IMBURSEMENT ARE AN INITIAL REQUIREMENT – BEFORE THE LOADING PROCESS EVEN BEGINS AND THIS COULD TAKE QUITE A BIT OF TIME TO SETTLE AND ASCERTAIN THE DETAILS.

The purchaser then accepts all the costs of shipping and they are the new owner of the crude oil. If the new purchaser happens upon a different purchaser agrees to pay a heftier fee.

THIS CONSTITUTES A BREACH OF THE AGREEMENT AND IS NOT PERMITTED

They could be interested in making another deal for the crude immediately and close another new deal. This is how I envision the process but I await your explanation.

THIS IS NOT EVEN CLOSE – YOU MUST HAVE MANY MONTHS OF COURSE TRAINING BEFORE YOU UNDERSTAND THE FUNCTIONALITY AND TECHNIQUES INVOLVED. EXAMINE OUR URPIB RULES AND SOURCE OUT INCOTERMS DELIVERY RULES ON THE INTERNET AS WELL AS UCP 600 FINANCIAL INSTRUMENTS BANKING RULES – THESE CAN HELP OU OUT SOME.

I HOPE THIS HAS HELPED
How can we confirm that the merchandise is legitimate?

Full Question:

We operate a family business and need your help with information regarding the buying/selling of processed white sugar. We wish to import out of Thailand but there are many scams in this industry and we are concerned. Also please explain London sugar market and tell us if there is a less complicated and cheaper market available to us. Additionally, if the buyer wants transferrable LC, how can we protect ourselves?

Answer:

I am going to be somewhat rough on you here and I am going to do so without prejudice. I do this because I need to make sure my point gets embedded into your brain.

This is not an easy business to work in so unless you are prepared to acquire solid trading techniques – keep out of this industry since the level of difficulty and intricacies will be too much for you. This business will consume you and spit you out! Understand that the techniques are easy to learn since I have turned complex situations into the most fundamental foundation to understand. The true difficulty is that there is just so much to become acquainted with and to study.

Alright then, let me tackle your questions.

[1] – what books pertain to my situation?

ALL OF THEM!!! Do you get it now Pischapa? My information is spread out widely on the Internet and has been for some time now. If you took the time to search for me online you would have found both ME and MY BOOKS!
I state this because your failure here means you also botched a very easy test of due diligence. How can you question me about the authenticity of sugar when you fail to even spend a modest bit of time looking for me online? Wherever you spend time searching you would locate my information with just a few clicks. It would have taken you to www.ftnexporting.com very fast.

[2] – You need to do your groundwork by learning solid techniques and these answers to all your questions would quickly come into focus, but only after a number of months of doing your homework.

[3] – In this online forum I can’t spend an entire year explaining to you an encyclopedia worth of information in order to answer the questions you asked me. Every answer I give to you turns into another question and still another answer and so on. You say you want to learn how to travel to the moon but you still need to understand how to build a rocket.

[4] – You need to begin by understanding what I have just told you and I will attempt to provide you with some of the most rudimentary yet essential insight that I can.

You could stand on the pier in a Brazilian port and watch as the sugar is transferred into the boat but that still will not provide you any assurance that it will make it to the port of delivery. Making sure genuine sugar is loaded and delivered while you watch it is no guarantee. The transfer of freight and quality and quantity of merchandise are a part of the process – it works due to the fact that funds have been expended to have a third party examine the merchandise being shipped.

For instance, what would happen if the sugar you receive is not what you paid for, or it has been spoiled in some way or never even makes it to the destination?

There are numerous techniques that can be applied prior to any of the answers can be effectually explained, and based on any number of things that can happen throughout the process means a potentially different response.

What I just mentioned is in regards to delivery and “contract bond” – a DLC is in regards to compensation, expenditure and eventually collection. These are the identical DLC regulations – clearly discussed – the substance of the agreement in play for the deal on the merchandise has zero to do with the type of trade practiced during the issuing and payout of the DLC.

This means that the LC comes complete with an individual set of rules that ought to apply in the case of potential fraud and if this is the case can be rescinded at once.

THIS IS NOT SOMETHING THAT MOST SCAM ARTISTS UNDERSTAND AND ALSO WHY THERE ARE NOT TOO MANY SWINDLERS WHO ARE THRIVING – SINCE THEY DON’T GET THE RULES – THAT SAID – A GOOD MANY SWINDLERS RECEIVE ACTUAL CASH OR AN SLC FROM GULLIBLE AND DENSE TRADERS.

If the FTN policies and procedures say you should never pay cash or SLC, and you go ahead and provide a SLC anyway than getting swindled is your own mistake.

Having said that – everyday we are observing transactions that say “Payment by SLC”

WHEN FTN EXPORTING AND IMPORTING POLICIES ARE UTILIZED AS THEY ARE LAID OUT IN OUR PUBLISHED MATERIALS – YOU WOULD UNDERSTAND THAT – DCL FOR MERCHANDISE, USE SLC FOR PERFORMANCE, ASSURANCE AND COMMISSION IMBURSEMENT AND THAT’S IT.

In addition, knowing what follows will make answering your query an effort in futility.

The DLC has no value in and of itself until subsequent to the delivery of merchandise has been completed. The DLC requires quite a few things to be produced such as title delivery paperwork, also government and insurance certificates, ship master documents, banking information and paperwork from the chamber of commerce – that is to say unless you are thinking that these people all work as one even though they have not got a clue who the other is though they are still an amalgam of thieves.

IF THERE ARE NO PRISTINE CERTIFICATES THERE IS NO COMPLIANCE WHEN PRESENTING TO THE BANK AND COLLECTING ON THE DLC WILL BE TO NO AVAIL.

SO, IS THAT CLEAR ENOUGH FOR YOU?

IF FTN PURCHASES SUGAR, WE INQUIRE ABOUT THE PAPERWORK THAT IS NEEDED FROM A MINIMUM OF NINE UNIQUE PRINCIPALS TO THE TRANSACTION – EVERY ONE OF THEM IS VERIFIABLE IMMEDIATELY.

Banking away a DLC is not even close to collecting on it, this could be months down the road yet. When a DLC is put in the bank and you do not purchase straight from the provider, then a competent intermediary is able to give confirmation of intricacies about the provider so you can make your own confirmation right away, far before the ship is even loaded.

ALL OF THIS WOULD BE UNDERSTOOD BY NOW HAD YOU BEEN STUDYING AND LEARNING FTN POLICIES AND SO MANY MORE THINGS OF VALUE.

It is true that 99.9 percent of independent and solo intermediaries do not have a clue what they are trying to do and it’s also true that there are many swindlers in the industry on both sides of the transaction – people who say any number of things with the goal of dishonestly getting supply from a different intermediary.

Rip-offs occur when gullible individuals have no idea about the procedures in place. IT IS FACTTHAT VERY DUMB MISTAKES OCCUR THAT HELP SCAM ARTISTS MAINTAIN A PRESENCE. A CHEAT MIGHT ATTEMPT TO SCAM A HUNDRED TIMES EACH YEAR AND OF THESE ONE HUNDRED SWINDLERS THE AUTHORITIES MIGHT NAB A FEW REALLY DUMB ONES.

[5] – I HAVE WITNESSED CIRCUMSTANCES WHERE AN ATTORNEY, A PHYSICIAN AND OTHER PROFESSIONAL PEOPLE ANTE UP FUNDS THAT THEY END UP LOSING DUE TO VERY DUMB PROCEDURAL ERRORS – THEY RECEIVE LOUSY GUIDANCE – THIS SCENARIO ARISES MORE OFTEN BECAUSE OF GREED BLINDING THE COMMON SENSE OF THE TRADER – THEY IGNORE PROPER POLICY TECHNIQUES AND DO NOT A CLUE WHAT THEY ARE GETTING INTO.

[6] – This is essential: SINCE NOT MANY OF THESE RIP OFFS ARE FLOURISHING, THEY DO NOT EVEN COME CLOSE TO THE NUMBER OF LEGITIMATE TRANSACTIONS THAT FIND THEIR WAY INTO COURT EVERY YEAR. GENUINE BUYERS AND LEGITIMATE SELLERS WHO FALL SHORT OF DOING PRECISELY WHAT THE AGREEMENT SAYS THEY SHOULD DO REGARDING PAYMENT, QUALITY ASSURANCE, REGULATIONS, COSTS, AND MANY MORE THINGS. Even the pro’s OCCASIONALLY play hard and fast with the rules and regulations.

TAKING THE EASY WAY CAN BE DISASTROUS – THAT is why stringent attention to the policies needs to happen whether you are a seller, a buyer, an agent, intermediary or a broker. If not, you risk the fate of your own making and who could blame a scam artist if you are too lazy or stupid to do things correctly.

It is imperative that you steer clear of expensive court hearings – YOU NEED to follow safe policies and clean measures – that’s it in a nutshell.

STATED QUITE SIMPLY, PISCHAPA, KNOW THE POLICIES AND TECHNIQUES THAT ARE REQUIRED OF YOU AND VOILA’ – THERE WILL BE NO SWINDLING OR RIP OFFS AND YOU WILL BE ABLE TO RECOGNIZE A PHONY DEAL IN A MATTER OF SECONDS.

IT WAS ME WHO CREATED THE INITIAL POLICY FOR INTERMEDIATE BUYER/SELLER SINCE PRIOR TO THAT, THERE WAS NO POLICY. MY PROCEDURE IS SUSTAINED BY RULES OF AGENCY, UCP 600 BANKING REGULATIONS AND Incoterms 3000 [1st January, 2011] DELIVERY RULES.

Even when you are an expert in this business such as me, the industry can be quite difficult. A buyer should only purchase straight from the merchandise provider or utilize one of the increasing number of FTN agents who have been trained in our policies – doing anything less than this could be a perilous situation.
When a member of the Russian Oil Federation quotes a price of $40 to $50 per barrel [negotiable] – how is it possible to price at this level when Crude oil is approximately $80 per barrel on average at this time?

Full Question:

I have been in touch with the Russian Oil Federation regarding prices for Crude oil and one contact gave me a price of $40.00 to $50.00 per barrel [negotiable] and with transport daily for low amounts.

My question to you is why are they able to quote this kind of price when Crude Oil is currently averaging out at approximately $80.00 per barrel?

Answer:

This is a difficult question and it really does not pertain to export. I will try and assist with some straightforward insight.

Associates of the Russian oil federation? Russians are a very intelligent and an extremely well schooled culture [the elderly age group at least]. They have had many accomplishments, most of which we are still finding out about online due to the top level security when these events took place.

Understanding The Animal:

It is a little known fact that as the U.S. went to the moon in July ’69 – seven months later the Russians were remotely driving around the moon with a solar powered vehicle [called Lunarkhod] that was roughly the size of a compact automobile – it stayed in operation for eleven months.

This kind of thing was way ahead of its time back then and ironically, this same country cannot seem to produce a car that runs dependably and doesn’t belch out pollution like a turn of the last century factory.
The communist party doctrine is explained in part as from the people, with the people, for the people to expand its economy. If they say they sell crude oil at a particular price point – you can be sure it is physical crude they are trying to market.

The Russians have a quota structure in place that limits their income earnings due to crude oil selling at not higher than thirty percent. It behooves the Russian people to utilize their smarts and brain power to produce products they can later sell and make a profit on in order to maintain the jobs in these industries for their intelligentsia.

It’s important that Russia does not generate so much crude oil that their economy has more than it needs for one year. In the event that an oil embargo is instigated by the western democracies – Russia MIGHT BE HELD HOSTAGE BY THIS CRISIS BECAUSE OF ITS RELIANCE ON CRUDE OIL SALES.

If Russian crude is accessible just now, it must mean that sales are quite slow at this time. The thirty percent quota is usually bought out well in advance leaving no crude oil that could be utilized for export purposes.

IF YOU HAVE LANDED A QUOTE LIKE THIS IT IS LIKELY DUE TO SOME OR MORE THAN ONE INDIVIDUAL NOT PAYING FOR WHAT THEY ORIGINALLY PURCHASED – SO IT MEANS THERE IS SOME EXCESS PRODUCT.

Russians can’t be held hostage at the risk of economic disintegration if the sale of crude oil was halted.

They also cannot utilize a small number of people to produce huge quantities of crude oil dollars when in actuality what they require is the most number of people working while generating a range of items to be used locally and also for export. AN EXAMPLE OF THAT WOULD BE CHEAP SOLAR PANELS – AT WHICH THEY HAVE PROVEN TO BE EXPERTS AND MORE CAPABLE THAN ANY OTHER COUNTRY [REMEMBER THE LUNARKHOD], STILL, THERE IS NO OVERWHELMING RACE FOR THIS TYPE OF ITEM.

Now let’s take a look at America – one has to love the U.S. of A.

I for one do like America – for reasons equal to my love for the Russians and their cleverness.

If one could come up with a government that was fifty percent capitalist and fifty percent communist – how wonderful would that country be? China is the closest nation that we have to that scenario.

Crude oil is dealt on the market standard i.e. Nymex, Brents, and TAPIS

In point of fact, at FOB it is meant to be sold “spot” and by now stored in the container ships – [Intermediaries can’t efficiently deal in Spot/ primary/ sell to processing plant transactions – we only make secondary market transactions]

The Russians though, market crude oil supported by future transaction conciliation and ultimate transport of product.

The Americans, conversely sell crude oil supported by direct accessibility and supported by pricing generated via investors that are actively purchasing and selling crude oil shares.

Different regions use their own standards. McGraw Hill [Platts] business policies – a quantity of which are good and a number that are not that great are quite evident in crude oil marketing.

In the U.S. they purchase stocks. They purchase stock supported by the theory that that stock could rise or descend in worth one day after the other. If there is a rush on unloaded crude stock, prices will drop – with a rush to buy, the cost will skyrocket – all while that same crude oil languishes in the hold of the ship.

When you hold a commodity share it means that person in fact owns a portion of the crude oil in the ship’s hold.
Imagine if you will that there are one hundred ships loaded to the decks with crude oil, and each day as actual portions are sold – another ship moves in to take its place. Every ship contains 250,000 mt.

When it reaches the point that one hundred ships turns into one hundred twenty ships, crude oil sales are stalled and investors start to get concerned – the shares are dumped like a cheating spouse and then the price of the crude itself also starts to drop.

Conversely, should those same one hundred ships fall to eighty ships, and down to seventy and then fifty – rising again to sixty, up again to eighty and then down to fifty again, there is obvious strain to revert back to the beginning when there were one hundred ships – now share prices will elevate since many further investors purchase stock in crude oil.

So a purchaser in America is picking up product that is distinctly a DERIVITIVE of crude oil and this adds up and non-natural prices are created.

The derivative worth is the inherent worth not only crude oil on its own but also the movement of same in sales.

The U.S. had developed an ASSESSED COST on the strength of an ASSET that already had some worth. EVEN THEN A SECONDARY ASSESSED COST, A THIRD ASSET AND THEREFORE A DERIVITIVE ASSESSED VALUE CAN BE DEVELOPED…and so it goes on and on.

An example of this would be if you let me have a billion dollars to purchase DLC crude oil – that we promise not to use – that is until the purchasers DLC is sustaining it – and I then promise you a twenty percent return in 90 days. Should the agreement fall apart, you have been promised that all your money will be returned and should the agreement proceed as planned you will have generated a twenty percent return in 90 days. WOW! A Great Proposal AND A Great Transaction!

This amounts to yet another derivative – An assessed rate derived from the assessed worth of another.
The prices for crude oil are generated pricing endorsed by a capitalist financial system – a system whereby employment for the mainstream civilians does nothing for the idealism that there is not a thing awry with grossing lots of money for an individual personally.

There was a time when deals of the type just mentioned above that were made based upon speculation might have paid off handsomely – though today things are not so tidy. With the Internet and electronic banking systems in place and not being written in to the scenario while the rich get filthy rich not by being smarter but by being sly and crafty manipulators while taking a toll on the national citizenry within that capitalist nation. It is a fact that ninety nine percent of the hard working population create the wealth for the remaining one percent to benefit from.

A capitalistic economy has some grim problems.

Also by being sly – ponder this thought – should FTN sign an agreement for one billion dollars of crude oil or sugar or some other commodity, a DCL needs to be directed FROM A MAJOR BANK and this is PRIOR TO any speculating traders realize that bankers are alerted to before speculators, when to purchase sugar or crude oil stocks since they would have been aware of the FTN agreement much sooner than somebody else.

Consider now that the state of California on its own normally deals one trillion dollars worth of monetary transactions yearly on average.

So I think you understand, I could continue for some time describing similar circumstances.

Also understand regarding Russia and the United States – there will be a cost of a few dollars to drill crude from below ground these days when in past years the cost of a BBL was as much as $150.

Learn from the books and begin to trade with your Russian contacts but make certain that you are one hundred percent sure that you are dealing with genuine product [since 99.9 percent are phony]. Set aside a few dollars per BBL as a commission charge – manage the transaction and provide the remaining discount to a genuine purchaser as a method of enticing them to follow through with a purchase. Try avoiding the common blunder of attempting to keep the degree of difference all to yourself – chances are good your deal will crumble and you will net zero – Greed is almost always fatal for a transaction.

PS: Follow up on the information below and previous answers from yesterday

CRUDE OIL: FROM RUSSIA

Let it be known that the United States of America and the Russian Federation have each signed on to honour the Hague Convention of October 5th, 1961. With respect to this convention, if documents from the United States are to be considered legitimate in Russia, they need to have an Apostille – a certification that verifies the authority of the official from government who has signed the document, the legitimacy of said signature and perhaps if warranted, the stamp or seal upon the documentation. Any credentials that bear the Apostille are not required to undergo any additional legislation

The same thing that applies to the American Government also is the same for numerous other nations. That said, should you receive merchandise from a Russian Intermediary, the agreement concerning the export is required to be endorsed by the powers that be within the government that permits the export of merchandise – that is unless the party is an entity of the government itself.

That does it for many of the Crude Oil proposals that are in play.

When the validation of the agreement through the Ministry of Energy, Russian Federation, duplicates of the validated contract are then traded between all parties of the agreement in about a week of the signatory endorsement by electronic means.

Whether or not there have been alterations to the rules – these modifications would be small – FTN insists upon comparable records to be in place also.

Some of those usual delivery records would be:

• Duplicate of license to Export: The Russian Federation, Ministry of Energy department;
• A duplicate of Approval to Export: The Russian Federation, Ministry of Justice department;
• Duplicate of Statement: Availability of the Product;
• A duplicate of the Russian Refinery Commitment To Produce the Product;
• A duplicate of the Transneft pipeline Agreement – to Port of loading;
• A duplicate of Russian Port Storage Contract;
• A duplicate of Tank Receipts and the SGS Report;

Basically, you receive an offer for Russian Fuel or Crude – whereupon you then investigate the offer – you request that the “Seller“ specify delivery credentials and if you are receiving what was just set out above you can carry forward with the deal – if not, RF it.
I work with a person who has family connections with an actual Sheik. They wish to buy smaller refineries and purchase discounted crude oil

Full Question:

I work with a person who has family connections with an actual Sheik. They wish to buy smaller refineries and purchase discounted crude oil for $3.00 per Barrel from the current cost of a barrel of crude. I believe I have a motivated seller. My connection is looking for a purchaser who will give us a commission fee of $1.00 per barrel. I’m interested in how you move forward?

Answer:

If you read my publications you will see that I write about this very thing in detail. I also receive approximately fifty emails a week asking me about similar offers and I throw them in the garbage.

The answer to your question –“how would I move forward from here?”

The answer is that YOU cannot move forward from where you are, you just can’t. You must study and learn about the business of being an intermediary before you even consider reaching the stage of the transaction where you acquire a contract. Another option is to give up and pass along your information to someone else who understands the processes involved and is ready to assist you so this transaction can be completed.

We now have produced the initial standardized Intermediary set of guidelines, therefore locating an individual to aid you with your project will be almost unworkable from the get go and you will arrive back at square one.

I recommend that you focus your learning toward intermediary techniques and complete this transaction on your own by working with the buyer/ seller.
You are known to favor FOB deals, however, if CIF is necessary will it alter your method in regards to the terms of collecting your money from the L/C that you hold upon delivery?

This is covered entirely in the FYBR and I do not have the space here to give the best answer that is provided in my publications.

The CIF contract is only an addition to the FOB delivery submission – implying a more sophisticated method of analyzing the properly figured statement is the primary issue – all else is as the FOB transaction more or less.
There are Incoterms and contract rules, then there are the policy and Incoterms rules and contract laws can always be amended but not so with the policy. The policy currently makes room for these adjustments, part of or perhaps most of them never being modified, specifically the notion that one is merely asking for a purchase agreement or price quote and that’s all – first and foremost.

As a provider of merchandise, if they ever – and I mean EVER – purchase merchandise without a quote or offer in the first place – any demands or requests subsequently is then based on the first part being fully commenced.

If you ask a person to enter onto a train but it is already moving, this is a bad idea. Whether the train is tardy or does not show up on time at all, the entire boarding process of that train begins with the person buying a ticket.

You should advise one and all of your status as a personal independent intercontinental trade group that adheres to URPIB regulations of trade. This will simply add to your endeavor, particularly when considering the number of poor transactions in existence within the industry.
When you are the intermediary, how would you handle it when the supplier requests a soft probe?

There is no soft probe, there is nothing. If a goods provider wishes to find themselves an END BUYER – Let them do it WITHOUT YOUR ASSISTANCE!

The policy is quite transparent when it comes to matters like these. There will be no transaction agreement unless an offer is provided first.

If it is necessary to placate an individual who is this mentally unable to understand, then if they expect to have a BCL or a Soft Probe, whatever they are looking for, they must first have an offer for your deliberation [during this period you deliver the buyer as well as the DLC into your account].

Should we accept the agreement I would advise a full BCL.

This is how to safely and correctly function in business throughout the entire international community. This cannot be disputed by any of the numerous lawyers or attorneys that I am connected with at any rate. If your goods provider continues to persist you operate in a different manner than you should move on to another supplier. Make a new deal elsewhere since timing is everything and YOUR time is valuable.
How would you answer someone who asks if you are the “End Buyer”?

As intermediaries we handle paperwork and not the goods themselves therefore, we are not able to be the purchaser taking control of the goods in question. Our role as intermediary or agent means we are only allowed to act for the unnamed individual.

Banks are another entity that has the same policy. They are also earning straight commission, no matter how the transaction is put together.

Explain to each person that you are a URPIB intermediary. There is nothing to be gained by keeping this point a secret. Also, since FTN developed the initial consistent set of rules, using our name will bring you a positive outcome eventually.

A seller who is not the owner of the merchandise says “we are only able to negotiate with the End Buyer/user is a thoughtless practice to take when that individual presenting the merchandise has no understanding of the intricacies of the situation.

Also, if you confront a provider looking to buy merchandise – saying something like “we need a purchase agreement to obtain merchandise for our customer in South East Asia – while at the same time it obviously says that you are located in the United States – There is no confusion on the part of the goods provider as to your connection. He might make the offer or he could continue to hold out for the end user/ buyer.

Some may state this – maybe more will particularly after that goods provider has dealt with numerous lousy traders over the years.

Conversely, you are going to have real providers with a real supply and the agreement will still be difficult to make. I would sooner have just that one safe provider that might take up to a year to sell, rather than have to deal with the question “What happens if they want to know if I’m the end user/ buyer?”

Just say simply – No, I’m not.
FYBR written as a replacement for TYIY?

If you are referring to TWIY – The World Is Yours – than yes. Quite a while ago my first self published book was TWIY and I sold it for next to nothing! At the time I had no idea the book would become so popular. The original TWIY then turned into FYBR 1, then 2, 3, 4 since many others were becoming fascinated with TWIY and the volume of questions increased dramatically – TWIY to this day features large portions of the current ITSI and FYBR journals with TWIY being the originator of the many other journals that came along. If these are controlled in the right manner they will continue to convey the necessary trading principles.
How do I become an agent?

Full Question:

Currently I am training to be a self employed person. I would truly love to be an import/export agent and distributor working in global trade markets. Please guide me for what I need to learn this industry regarding legal documentation. I am nervous about being an agent due to international shenanigans so I need to learn how to find distributors since I currently reside in America.

Answer:

Successful techniques are pretty easy to acquire. The biggest hurdle is there are quite a few small things to understand with this industry in order for an intermediary to earn their percentage as well as making certain the parties to a transaction are all satisfied that money has been paid and merchandise received.

T/T transactions are used by those who are working with one another for a long term period. If your intention is to transact a fifty million dollar deal and your reputation is new, then you really have no choice but to utilize the merits of DLC – even if the transaction is a tiny one.

I have recently imported a boat for one customer out of Indonesia. In the beginning the customer wanted to be paid first up front. My client was initially going to do this initially – transfer money with little more than an advertisement located on the Internet. We decided to open a DLC, paperwork was offered and the deal was completed just like that – simple and safely done.

The thing I’m trying to state here is that individuals are the ones who make the difference between a dumb deal and a solid transaction. When someone transfers funds without knowing who they are dealing with or what they are doing, they really do deserve being clipped by a dishonest party [not really my true opinion but certainly how I feel sometimes].

I personally am acquainted to four individuals who collectively lost two million dollars due to a PBG swindle when money was paid up front – two of them were attorneys and one a person who ended up losing their home.

It is vital you learn the intricacies of being a buyer and a seller of merchandise that you have located. Initially work for a goods provider who would be willing to compensate you for your time and effort – keep this one a local supplier. Bring that provider a number of customers due to your leg work and you should get paid – [with any luck].

This is commonly referred to as Intermediary – or “acting on behalf of a disclosed principal.”

At a later date you can gain your experience by modifying your arrangement and represent as an “Intermediate Buyer/Seller Acting On Behalf Of an Undisclosed Principal.” You can locate the goods provider and make the sale to your end buyer as a buyer/seller on your own.

Even with all the help you could wish for it is not a simple as it sounds to complete one transaction, therefore, a person should not squander their time doing FCL but bigger, revolving volume transactions. Let the larger companies who have dedicated staff take care of the smaller transactions.

Acquire 100,000 mt on a single delivery of volume merchandise supplied at ONLY FOB initially. Locate the true buyer and add five dollars to the price and earn 500,000 dollars – you need to think this way in the beginning. At the age of forty seven and you do this for a four or five year period and finally make the deal, you will not lose it since now you have gained the experience and understand much better what it is you are doing.

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