smice news ftn exporting scam report
© SMICE NEWS POSTING MONTHLY :NOVEMBER 2010
©SMICE NEWS :19 NOVEMBER 2010:TWITTER
WAPI registration is gaining ground.Scam artists beware.
FTN Exporting Intermediary doctrine is now spreading world wide.
Applying fraudulent intent when conducting business in the import export field of practice is a lot different to a ill informed intermediary creating a fraudulent situation. The inter net is now overwhelmed with ill informed Intermediaries. The Inter net also is infested with scam artist .The scam artist and the ill informed intermediary have two very distinctive traits and should not be identified as being the same thing.
The main difference between the two entities is to do with their ‘Intent.’ The scam artist intentionally is targeting clients to defraud such. The ill informed intermediary is trying to earn a dollar, albeit in a misinformed manner. Acting upon such misinformed matters, fraud charges could eventuate- Being charged with fraud is one matter. Making charges stick is another . A scam artists is aware of what they doing, a misinformed intermediary does not - hence the very specific difference in the make up of both entities can be found. A judge would find as much as well.
Today, yet another report has filtered back to FTN Exporting of a group meeting once more in a major city in Asia.They are meeting to conduct business; Last time it was in matters related to the sale of a ‘MTN’ instrument - this time it’s a ‘PBG.’
Lawyers representing the ‘Buyer’ are apparent. The group will meet next week One party will pay the expenses of the other ‘as per contract.’ - Funds in the form of small deposits and other ‘charges’ will be paid and at the end of many weeks of ‘negotiations’, nobody gets anything except the person offering to sell such instruments - He gets an all expense paid holiday and perhaps a few hundred thousand dollars.Now that’s a scam.
The party of buyers will go back home then claim they were ripped of by scam artists posing as ‘Intermediaries.’ They won’t mention being ripped of because they are stupid people, trying to close a stupid deal with people who are just as stupid as them.
While in the above scenario the intent here is clear of the scam artist , it could be argued effectively that the said ‘Buyers’ have implicitly contributed to the whole situation being that lawyers are involved- it seems in their defence trying to argue they they were ‘Ignorant of law’ would not cut well in a courtroom. With all the literature about the subject matter available on line - How do such lawyers come to the conclusion in believing that they can attend a meeting instigated by some fool to buy fake financial instruments. If this deal is led by a person who I think is involved , then such a person is in effect an imbecile- An uneducated moron. To add insult to injury! How do such professionally minded people get caught dealing in such a sophisticated transactions with such an inept moron is beyond me !
The answer might be easier found than first thought. Greed is often the culprit. A deal that suggests that person can make huge sums of money because of their position or skill can often cloud the mind of otherwise normal intelligent people, so much so that even an inept moron can dangle the proverbial carrot to create the wanted reaction.
URPIB Intermediaries are informed intermediaries, they have rules and a clear set of strict procedures to follow. The term ‘Intermediary’ once disclosed is specific . Using terms likes Trader, Broker, Agent ,Mandate, means nothing when compared. In fact; as a intermediary you may conduct business as a Buyer and Seller of commodities. The term ‘Procure’ is synonymous with the terms ‘Intermediary’, if one knows what they are doing.
A URPIB intermediary directly adheres not just to the URPIB rules and doctrine for intermediaries as created by FTN Exporting, but also indirectly such an intermediary also takes advantage of International rules of trade, just like those used by a supplier or end buyer. Rules of trade such as Uniform Banking Rules (UCP600) Uniform Collection Rules (URC) and Incoterms Rules of Delivery .These private rules were created not by statutory force of law but an long standing entity defined as the ICC. (International Chamber of Commerce situated at 3 Albert Cours Ier 75008 Paris France.)
It would be inappropriate to use such terms before the FTN Exporting ITSI /FYBR uniform doctrine become apparent if used in the wrong context. But with the informed doctrine now firmly in place, just like an end buyer applying to open a documentary credit be informed, so must the professional URPIB intermediary be informed of the same DLC rules because the doctrine specifically stipulates as much to reinforce the position of the intermediary.
A doctrine using LOI, ICPO, MPA, BCL, ASWP and the likes, under the support of some ill conceived NCND agreement could not be made to work (other than by sheer luck) because such terms are not formally nor internationally recognised.(albeit if such terms float around the planet for decades, one could think such terms are appropriate and recognisable )
Yet some major entities who should know better do imply that these types of commodity deals can be enacted upon by ‘anyone’ in support of such NCND (Non circumvention, Non disclosure) agreements as a way of reasonably ensuring commission can be secured along with the payment of such - they can’t.
Even the term ‘beneficiary’ as used under UCP bank rules is ambiguously applied in that; an Intermediary is technically not the beneficiary of the credit, the supplier supplying goods to the intermediary is the beneficiary to the credit as advised. A URPIB intermediary holding position as a buyer is not actually earning commission but earning a ‘Gross profit or gains.’
A shop owner is not gaining benefit from payments made a by a customer- His business is the ‘beneficiary’,not him- from which his business pays dividends upon the shop owners efforts, due to sales, in the form of gross profits. If a shop owner collects money from it customers and spends it all on personal effects as earned- then his business will go broke. Where is the “benefit” in that. Simple shop owner or multi national corporation the same rationale applies.
A deal conducted in the same state rather than country, where a product is sourced could earn an intermediary ‘commissions’, not so when applying the same attributes in the International arena.
Not so; because of the hundreds of thousand of dollars if not millions of dollars needed, to seek remedy for a so called breach of NCNDA is money that most intermediaries have unless they closed a few deals, and only after irrefutable first class evidence is in hand proving as much.
Applying a non study regime stating that an Intermediary can conduct the nature of business defined, in any way, so long as it’s supported by a NCND is a myth. It’s also improper, inaccurate and indeed by any definition misleading to state as much.This very application alone in my opinion has created the very regime for scam artist to overtly operate in.
A scam artist could in part apply on documents matters of ICC rules, but without learning procedures such scam artists are easily caught out by a genuine URPIB practitioner, banker and genuine informed exporters because other important attributes nor covered by above rules are only covered by the FTN Exporting Doctrine .
The URIPB applicable Doctrine is a platform that an intermediary can use in where acceptable rules current in a period of time can be attached to such, in making the doctrine perhaps stronger rather than just ‘good.’
A scam artist may for instance produce an impressive document asking for lets say ‘A UCP600 Documentary Letter of Credit’ - but in doing so , and even managing to get such an instrument means nothing because such a scam artist would have worked out very quickly that such a DLC is worthless if bone fide documents are not apparent to collect upon such an instrument . In essence a scam artist most often asks for a SLC or cash mode of payment in the scams they ply.
A URPIB intermediary on the other hand MUST ask for a “UCP 600” formatted Letter of credit as issued by a bank of good standing.” MUST ask for such or imply such is required on forms, and contract, because if the term “Bank” is not mentioned then intermediary could face securing an unwanted In-house letter of credit that could still be ‘UCP600 applicable.’ If the URPIB intermediary does not ask specifically for a ‘UCP600’ DLC then they could also be advised by a non adhering UCP bank a ‘Bank issued’ DLC issuance carrying terms on it which the intermediary cannot enact.
Such situations where the wrong instrument were advised by a issuing bank of the credit applicant, when a contract was in force, will make the intermediary unable to perform. Therefore to a URPIB intermediary the terms “UCP600” and “Bank” are crucial elements related to the matter of payments instrument sought. Only a URPIB can expand upon the comments made above by studying and practising the FTN exporting Doctrine over a long period of time. ( As per Publication FYBR or ITSI) A scam artist for most would be unable to expend upon the above comments. Such may apply such terms on their ‘offer’ but without understanding the mechanisms to such rules the scam artist could easily caught. A URPIB intermediary while trading under such understanding of the rules in where they are yet not fully informed on such matters is not ‘trading fraudulently’ because no matter how such a trade is enacted the very basic platform will still be apparent.
The apprehensive nature of the conducting such business when starting changes over time in where confidence takes over. I.e: Not unlike a person starting in a new job, compared to 3 weeks later, then 3 years later.
No different to a professional racing car driver entering a Grand Prix race for the first time- they might crash, they may come last for many races but at the end of the day, the more they race the better such a driver becomes - More better the driver becomes- because of one crucial factor! He has the tools to make the attempt to win such races. Winning an event once and entering the race, are two very different distinctive protocols- many millions have been spent on the cars and payments to such drivers, who will never win such a race- ever.
The URPIB intermediary now has the tools (Doctrine and URPIB) to conduct effective trades and over time, practising to use such tools effectively will increase the chance of “Winning the race” or even obtain a place, is a regime enacted over a long period of time often measured in years. Entering a race in where every other driver is trying to do the same means that only the best will have a chance at winning- and winning more than once.
The tools are refined to such a point to obtain maximum performance and every race reveals if a few seconds on lap times can be further shaved. Some drivers refine the tools so much that eventually such tools “Explode”.( In the doctrine we call this event as ‘Burned out’) A new race car is acquired and the whole process restarts.
URPIB stipulates that the intermediary must strictly apply the doctrine, but above all else the term “Intermediary” is the overriding term that must be apparent somewhere or give perspective to somewhere, on all documentation plied, clearly identifying the position of the entity plying the nature of business being attempted, and for good reasons- Firstly, the intermediary is attempting to trade in commodities for financial gains, using very strict set of rules thus said rules can close the deal while at the same time protect the intermediary from scam artists. Secondly! The URPIB intermediary can be verified quickly with a simple e-mail to FTN exporting as well.
Results? As one group fades away another formable trading group takes it place in where everyone is able to trade safely but in where only the best, the minority of such traders would be able to close a legitimate export import deal. Scam artists have very little in common with majority of informed or ill informed international trade intermediaries.
Before one group fades away , the other eventuating group has to leave the realm of limbo, to become noticed in the real world of trading. FTN Intermediaries are now starting to be noticed by those who count (suppliers and end buyers and even banks and learning institutions ) world wide are becoming apparent every day. The doctrine has left Limbo. It’s all starting to get serious.
Scam artists are now attempting to add terms of reference as those applied by a URPIB Intermediary - Alas! No matter the nature of business applied scam artist and fraudulent intent can be found in every business application and is not exclusive to the nature of business plied by professional URPIB intermediary others, buying and selling commodities legitimately for gains. URPIB Intermediaries has nothing to worry about if they stick to the doctrine. On the other hand most unguided Lawyers, Bankers, Supplier, End buyers doing business in this realm - Watch out! Times are a changing.
©SMICE NEWS :10 NOVEMBER 2010
Fresh from Chinese buyers defaulting on Australian ore contracts another issue is starting to raise concern. In recent months more reports form SMICE agents confirming that some Chinese importer continue to insist that they are required to allow 90% to 95% Collection of a DLC when purchasing goods in where the remaining amount is paid after goods have been issued with a CIQ certificate in country of destination. AQSIQ controlling entity of CIQ do not make such assertions and Chinese importers are reminded that FOB or CIF/CIF deals “at sight” of documents does not allow for a “DES” or “Deferred “ payment nor associated type of delivery applications and that holding such payments is an inappropriate if not at times even an illegal act. Chinese importers are also remind that they are the entities who must clear goods with CIQ and that stating anything to the contrary could be construed as an act of Fraud, a serious crime in China.
©SMICE NEWS :10 NOVEMBER 2010
In a current transaction for a local client . A speed boat purchased from USA to Melbourne by FTN first quoted at CIP $3400 dollars had to apply RO/RO on deck application after it found that the boat was 2 foot longer than advertised and could not fit into a 20 FT container - Subsequently the delivery charge increased to USD$7300.00. SMICE and WAPI agent are reminded whether small or huge deals are apparent -do not become complacent on matters of due diligence as such mistakes could prove costly once contracts are signed.
©SMICE NEWS :9 NOVEMBER 2010
FYBR/ITSI/WAPI members are reminded that they must for the first year remain firm in dealing with FOB transactions as such delivery applications are far less complicated than CIF deals and that FOB is still by far the most used delivery mode especially for Chinese buyer. Please also remember the FTN doctrine and start using the correct inter modal container terms such as CIP and FCA instead of CIF and FOB when dealing in FCL.
©SMICE NEWS :9 NOVEMBER 2010
For early 2011: After many requests - FTN Exporting has commenced translating a Mini 200 page FYBR into Chinese and Russian titled “Supplier, Buyers and the Intermediary.” This effect will bring the FTN doctrine to the notice of Large wanted Suppliers and End buyers. Combined with the English version- those studying should ensure good practice prevails for the year 2011 as the year 2012 will eventuate the disclosure of many more close deals, using the uniform FTN Doctrine as such expands to become a fully fledged universal application. Flawed LOI/ICPO traders will then be literally eliminated.
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