EDUCATION: SMICE
BY DAVIDE G.A.PAPA CEO FTN EXPORTING
WORLD WIDE AUTHOR: ITSI, FYBR,TWIY

Posted October 14 2010
TO SUPPLIERS AND END BUYERS AND FTNX AGENTS
INTERPRETATION OF INCOTERMS 2010(ex 3000): JAN 1ST 2011 Part (1) of (4)
FOB: FREE ON BOARD ( So called: “F” Group of Procedures)

Note:RED print defines authors personal opinions, remarks and in-depth study notes: Incoterms identifies Seller as being supplier or producer in possession for goods or and or Intermediary, and Buyer as being End buyer taking possession of goods and or intermediary buyer. Assume Buyer below is end “Buyer” and “Seller” below is Supplier .


Incoterms 2010 "DAP" (Delivery at Place) shall not be used by URPIB intermediaries.

"DEQ"( Delivery ex Quay) shall not be used by URPIB intermediares

URPIB Intermediares shall refrain from trading in CIF and CIP until long term experience in FOB, FCA and CFR delivery modes has applied.

FOB:Incoterms 2010: This term is to be used only for sea or inland waterway transport. “Free on Board” means that the seller delivers the goods, or procures the goods delivered, on board the vessel nominated by the buyer at the named port of shipment. The buyer has to bear all costs from that point. The risk of loss of or damage to the goods passes when the goods have passed the ship’s rail (in good order), the buyer bearing all risks from that point.

For ease of understanding once again assume the terms buyer refers to “End buyer”. The “Seller” means Supplier .FOB Incoterms 3000, similar to Incoterms 2000. ITSI advice still valid— Incoterms 3000 is ambiguous and following edict has been tested overruling Incoterms definition as implied. Interalia; Buyer expects even when goods pass the ships rails that such goods are received without damaged being apparent. Goods damaged after such pass the ships rails is not a defence in stating that the goods were in good order as they passed over the ships rails .URPIB overrules incoterms 3000 in this matter.

Implications: (a) The intermediary Seller shall accept fully and compensate the end buyer fully if it can clearly be displayed that the goods did pass over the ships rails in good order in where once landing on deck or cargo hold the goods became damaged - Good became damage after goods has passed ships rails while on deck on in cargo hold and before ship slips moors to depart loading port. URPIB Traders shall define all FOB deals as per standard Incoterms 3000 in accordance with the doctrine just like anyone else would do. If below ©DBSSM service also provide then it's a Incoterms FOB with added services that is being offered The URPIB intermediary may indeed also make the FOB offer more attractive to a prospective buyer with extra added services to favour the end buyer being offered.

SMICE Is able to offer :©DBSSM
Offer Verbiage Example : “FOB: Added services”

DELIVERY : FOB Incoterms 3000 “Named Port of Shipment” with added services
NAMED PORT OF SHIPMENT : VIZAG
COUNTRY: INDIA .
Added services DBSSM “Damage Before Ship Slips Moors”

DBSSM is another new FTN in house term. Buyer offers Seller added DBSSM protection. Should goods pass the ships rail in an apparent clean state, allowing a Bill of Lading to be marked as “Clean” on board in where upon arrival it is found that such goods were damage on board in where such damaged occurred before ship slipped it moors at port of departure and after goods crossed the ships rail, the seller shall compensate the buyer immediately on such verifiable proven damage on such goods actual cost plus 25%. The damage goods may also be kept and salvaged by the buyer. Compensatory Payment made by direct SWIFT wire to nominated account . Total claim cannot exceed damage to more than 20 Metric tonnes per increment of every 1000 Tonnes total contracted goods being loaded. Claim of damage must be evidenced or have been recorded before ship slip moors . As evidenced in writing by Ships master , Ships Mate , able Seaman or Forwarders. Compensation is Payable after payment for goods via Financial instrument collection applications have been successfully made; within 7 days thereof.

Notes:
1// DBSSM if applied is attractive proposal in convincing the buyer of your efforts.
2// ©DBSSM clause added to contract with end buyer similar to above.

The FOB term is not appropriate for use where goods are handed over to the carrier at a point other than the ship’s rail, for example goods in containers, which are typically delivered at a terminal, or for loading on a roll-on/roll-off or LASH ship. In such situations, the FCA term should be used. Seller is required either to deliver the goods on board the vessel or to procure goods delivered for the destination agreed in the sale contract. The reference to ‘procure’ here now caters for sales down a chain (‘string contract ’).

The intermediary buyer to the supplier is working a “mirror” application hence what ever the situation as provided by the supplier the Intermediate buyer reverts to the position of the intermediate seller offering the supplier services by default (Mirror) The term procure here as it applies to the intermediary simply means as procured directly from the suppliers. “Procure” may also mean as it applies to a supplier dealing with an end buyer or buyer-Procure: to obtain by care and effort. To acquire.

Particularly common in the commodity trades. The FOB term requires the seller to clear the goods for export, where applicable. However, the seller has no obligation to clear the goods for import or to pay any import duty or for any customs formalities.

THE SELLER’S OBLIGATIONS: FOB
Provision of goods and documents
The seller must provide the goods in conformity with the contract of sale and the
Commercial invoice and any other documents required by the contract.

(a) So matters of contract are private matters. If FOB “ Named port of Shipment ” is applied as the delivery terms and matters of contract apply contrary terms of reference to Incoterms 3000, then Incoterms 3000 directives is the ruling application if Incoterms 3000 is the agreed upon delivery application.

(b) “FOB “ without Named Port of Shipment may imply that the supplier is confused and is offering FOB as per UCC USA commercial code delivery application that must be avoided for use by intermediaries. Clarity of delivery mode and place of delivery on offer must be initiated if named port of shipment is not apparent on any offer-

So ensure that the following delivery terms is always clearly defined as follows;
Delivery : FOB Incoterms: “Named Port of Shipment”

Then ensure name of delivery port is clearly defined This is the correct proper way to use the FOB terms.

Licences, authorisations, security clearances and other formalities
Where applicable, the seller must obtain at its own risk and expense any export licence or other official authorisation and carry out all customs formalities
Necessary for the export of the goods.

(a) Certificate of origin is not a requirement of export . It’s a requirement of import and document presentation, accordingly Certificate of origin(COO) is obtained by the supplier if asked for , but the cost is them debited against the account of the end buyer. Even if supplier has paid for COO, the intermediate seller to the end buyer still debits the cost of such on their invoice.

So above is advanced information added to matters of FOB as found in ITSI. As from January 1st 2011 incoterms 3000 applies , which as defined is nearly the same as incoterms 2000 as far as intermediaries are concerned © Incoterms 3000 Trademark of ©ICC Paris France
Part (1) End





Posted October 13 2010
TO SUPPLIERS AND END BUYERS
SECONDARY CRUDE OIL AND FUEL AND NEW SMICE INDEX:
ABOUT SMICE PRICING AND PROCEDURES.

As the creator of the AGI ftn exporting intermediary doctrine, we have advised many Lawyers, suppliers, end Buyers, Bankers as and other professional and governmental bodies and entities since 2001. FTN exporting compliments are many. Our efforts to introduce the first uniform intermediary doctrine from 2005 has been greatly applauded and has many followers-

Suppliers and in particular End buyers seeking or offering goods from/to FTN exporting , should not make the approach to FTN exporting or trained agents with the pre conceived idea on matters of procedures. If such buyers do not want to do business with the worlds safest and best informed FTN-AGI trained intermediaries, then such should seek their own supplier . How easy is that to understand .

We know what the procedures that work for intermediate buyers and sellers are . MOST Supplier and end buyer do not. Most don’t hardly understand their own matter of procedures when dealing with each other let alone a superior intermediary group such as FTN exporting. We have nothing do do with the many idiotic intermediaries which have been prevalent in the market place for many decades. End buyers and Suppliers until 2 or 3 year ago would have never come across a professional FTN trained Intermediary. By late 2011 FTN intermediaries following the FTN doctrine and URPIB rules of trade will be the only effective intermediary group on the planet. SMICE is also the first intermediary Commodity trading board. Thousand are now studying the doctrine via the authors global publication of ITSI ( International Trade and the Successful intermediary ) now in its 9 month of release ( as from OCT 2010) From every 10,000 intermediaries studying such material perhaps less than 100 will last past the 3 year study period and make money in this business-that's how difficult such a business is - Only the very best and highly skilled entities are able to actually close such complex international trade deals as a fully fledged private intermediary. Those who learn procedures and last the distance will have an untapped market to transverse in by 2013, as the true professional intermediary starts closing more and more deals under the FTN doctrine.

It takes at least *14 months training and practice to become a good well informed AGI ( Academy of Global Intermediaries ) professional independent intermediary. 3 years is the standard. That’s how much knowledge an AGI Intermediary needs know before they become very proficient in this business.-(* the best of which attain ACA certification ; AGI Certified Agent )

As such; and in accordance with above statement.

SMICE Is not interested in such Benchmark prices created and under control by others in said regions. SMICE does not buy at spot either. SMICE buys today's for future first deliver usually to occur *60 up to *90 days after contracts are signed. All Future prices are based on a price created of current future pricing assumptions. As professional Buyers and Sellers associated with professionally educated AGI-FTN Exporting intermediaries, we are required to deal in many products and not just Petroleum, hence our expertise has to cover a much wider sphere of application, than just selling Crude oil and related products .

We buy and sell not based on supply or demand. We buy and sell based on discount and or over production and excess production capabilities of producer and refineries. We buy from a supplier in where no interaction with our buyer ensures the supplier is not in breach of any association they themselves are enacting with their own buyer or agents. Our procedure is simple, easy to apply and are supported by the best principles, rules and laws of international trade and contract formation.

FTN intermediaries do not trade in flawed LOI, ICPO, BCL, ASWP, NCNDA, MPA, POP and other foolishly implied application. We do not trade in DES delivery terms that the Chinese buyer often ask for when asking to buy goods,yet who often will never themselves offer to accept such DES delivery terms when FTN seeks to buy goods from Chinese exporters. FTN does not buy goods form another intermediary — only supplier . FTN exporting does not sell to another intermediary only end buyers. FTN exporting will allow other intermediaries to assist. FTN exporting acts as a Buyer and seller in their own right. We are international trade professional intermediary . FTNX intermediaries are buyers and seller in their own right as well. We know when supplier, end buyer , banks lawyer and other related entities make mistakes-We know when we are presented with a fake transaction. We know when a buyer is not who they say they are, we know because we are experts in a very unique field application.

Everyone knows who we are-What's important is that we know who the people making inquiries to us are?