Standard Operating Procedure for FCA Customs Bonded Warehouse:
This Standard Operating Procedure (SOP) outlines the step-by-step process for conducting FCA transactions involving goods (Copper cathodes, Copper concentrates, etc) at the customs bonded warehouses, ensuring a structured and transparent approach to the transaction.
1. Buyer Initiates the Process:
- The Buyer initiates the process by sending an Irrevocable Corporate Purchase Order (ICPO) along with a Pre-Advice of SBLC MT799.
2. Signing the Sales and Purchase Agreement (SPA):
- Both the "BUYER" and "SELLER" enter into a formal Sales and Purchase Agreement (SPA) and mutually agree to its terms and conditions.
- Buyer studies, amends, or signs SPA. If no amendment, then returns to Seller for countersigning.
- Seller returns the amended contract duly signed and sealed as the final contract to Buyer together with the Pro-forma Invoice.
3. Draft Letter of Credit:
- The “SELLER” provides the Buyer with a draft letter of credit, which may include a Financial Bank Guarantee (BG) or Standby Letter of Credit (SBLC).
4. Operative Letter of Credit (BG/SBLC) :
- The Buyer opens an operative Stand by Letter of Credit (BG/SBLC) in favor of the Seller.
5. Performance Bank Guarantee:
- Within 10 banking days of the operative Stand by Letter of Credit, the Buyer receives a 2% Performance Bank Guarantee for contract shipments
6. Delivery to Customs Bonded Warehouse:
- Approximately 45 to 50 days after confirming the Buyer's bank instrument, the “SELLER” arranges the delivery of goods to the FCA Bonded Warehouse.
7. Inspection of goods:
- The “SELLER” instructs an international inspection agency, such as ALEX STEWART, to conduct an inspection and testing of the goods. Upon receiving results confirming the quality as specified in SPA, the inspection report is shared.
8. Shipping Documents:
- Digital shipping documentation is shipped to buyer /buyer’s bank. Upon final receipt of full payment for the cargo at Bonded Warehouse after completion of Q&Q inspection, the complete package of original shipping documents will be rendered directly to the buyer/buyer’s bank. These documents include: Seller's Final Invoice, Stock Keeping Receipt, Certificate of Origin issued by the Competent Authority of the country of origin, Packing list indicating Gross Net weight and markings on each bundle, Pre-Inspection certificate of Quality and Quantity issued by a Third-party inspection company (Alex Stewart) indicating weight and Quality of goods.
9. Seller Issues the Final Commercial Invoice:
- The buyer is responsible for making the final payment within 72 hours via a swift MT103 to the seller's designated bank account. Upon receiving the payment, the seller will transfer the ownership of the goods to the buyer's name and hand over the goods along with the shipping documents.
- Upon receipt of the final payment, the Seller transfers the ownership of the goods to the Buyer.
- The final invoice shall be based on the LME price in force at the time that the SKR is issued.
10. Next Shipment:
- The next shipment will start according to the shipping schedule in the SPA.
Standard Operating Procedure for FoB / CIF:
- This Standard Operating Procedure (SOP) outlines the step-by-step process for conducting FoB/CIF transactions involving goods (Copper cathodes, Copper concentrates, etc) at the loading port ensuring a structured and transparent approach to the transaction.
1. Buyer Initiates the Process:
The Buyer initiates the process by sending an Irrevocable Corporate Purchase Order (ICPO) along with a Pre-Advice of SBLC MT799.
2. Signing the Sales and Purchase Agreement (SPA):
- Both the "BUYER" and "SELLER" enter into a formal Sales and Purchase Agreement (SPA) and mutually agree to its terms and conditions.
- Buyer studies, amends, or signs SPA. If no amendment, then returns to Seller for countersigning.
- Seller returns the amended contract duly signed and sealed as the final contract to Buyer together with the Pro-forma Invoice.
3. Draft Letter of Credit:
- The "SELLER" provides the Buyer with a draft letter of credit, which may include a Financial Bank Guarantee (BG) or Standby Letter of Credit (SBLC).
4. Operative Letter of Credit (BG/SBLC):
- The Buyer opens an operative Letter of Credit (BG/SBLC) in favor of the Seller's partner company.
5. Performance Bank Guarantee:
- Within 10 banking days of the operational Letter of Credit, the Buyer receives a 2% Performance Bank Guarantee for contract shipments.
6. Delivery to the Loading Port:
- Approximately 45 days after confirming the Buyer's bank instrument, the "SELLER" arranges the delivery of goods to the Loading port for the first shipment, subsequent shipments will be loading within 30 days from the Loading port.
7. Pre-Shipment Inspection:
- The "SELLER" instructs an international Third-party inspection company, such as CCIC to conduct an inspection and testing of the goods. Upon receiving results confirming the quality as specified in SPA, the inspection report is will be emailed to the Buyer.
8. Shipping Documents:
- Digital shipping documentation is shipped to buyer /buyer’s bank. Upon final receipt of full payment for the cargo at loading port after completion of CCIC inspection, the complete package of original shipping documents will be rendered directly to the buyer/buyer’s bank.
9. Seller Issues the Final Commercial Invoice:
- The buyer is responsible for making the final payment within 72 hours via a swift MT103 to the seller's designated bank account. Upon receiving the payment, the seller will transfer the ownership of the goods to the buyer's name and hand over the goods along with the shipping documents.
10. Next Shipment:
- The next shipment will start according to the shipping schedule in the SPA.