Closing Process

1. Supplier Issues Buyer with Full Corporate Offer (FCO)

2. Buyer reviews, signs & returns signed FCO copy to Supplier either by facsimile or by attachment email.

3. Buyer issues Supplier with Irrevocable Corporate Purchase Order (ICPO) with full corporate details and the full bank details of the bank that will issue the Standby Letter of Credit (SBLC).

4. Supplier issues a draft Sale Purchase Agreement (SPA) contract for review, negotiation, and eventual agreement. The SPA to include SBLC (MT760) Verbiage.

5. Buyer signs and seals the contract and returns it to the Seller either by facsimile or Email attachment within 3 working days of the completion of step 5. The facsimile or digital copy will be deemed legally enforceable until hard copies are exchanged.

6. Within 3 working days of step 6, Buyer’s Bank and Supplier’s Bank agree MT760 Verbiage. Buyer’s Bank issues a Draft Letter of Credit, preferably Swift MT-799 Pre-Advice confirming an MT760 has been created (awaiting activation). The MT799 constitutes Proof of Funds.

7. On receipt of MT799, Supplier has shipment commodity inspected for compliance with quantity, quality & documentation using a reputable inspection company. Inspection company issued a compliance report to the Buyer, Buyer’s Bank, Supplier and Supplier’s Bank. Compliance constitutes Proof of Product.

8. Buyer’s Bank issues SBLC using SWIFT MT760 operative issue for full amount of the contract value within 3 working days of the completion of step 8.

9. Supplier’s Bank confirms receipt of SBLC and issues Performance Bond (by SWIFT). Shipment
commences.

10. Buyer arranges inspection at Port of Loading at buyers cost.

11. Buyer releases payment (MT103) in accordance with the SPA.

Contract Documents supplied (minimum)

• Commercial invoice
• Bill of lading
• Packing list
• Certificate of origin
• Insurance certificate

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