intermediary exporting advice study 2018 FTNX STUDY FAQ (1) FTNX STUDY FAQ (2) CONTACT FTNX



Intermediary, Broker
and International Trade Entrepreneur (iBITE 2017)
Doctrine of Trade for Intermediaries World wide
Front Page: Final site Updated : 19 Dec 2017 AEST 
By: David Giovanni.A.Papa
NOTE: FTN Exporting has moved to www.ftnx.net  site on the 16 November 2017.

This long serving site is now defunct and serves only general advice in where the new website www.ftnx.net now prevails. Please read pages herein first before considering purchasing our doctrine which is now offered on the new www.FTNX.net  site. This site will remain static from 2018. This site will carry raw unedited previous FAQ's  as a matter of added Educational Service. Some trading aspects herein have evolved  to more advanced aspects in 2018 



Back to the Future !





July 2014:DLC Transfer Fees and Bank Guarantees




Yes, such deals get closed by intermediaries. We also personally know of ill informed crude oil traders who are in prison today. These type of question adds nothing to your ability to learn trading as an informed intermediary and such information cannot be disclosed because they are sensitive by nature of the deal itself. We have been advised of deals being closed by informed intermediaries but none (understandably) will provide the required bank accounts to verify such formally, as such is non of our business. In early 2000 FTN did disclose the deals closed, online, but it soon became apparent that all because we could close a deal , everyone else thought they could do the same. Hence when the doctrine was released officially in 2005, from day one , such was always offered as an educational guide and nothing more. Some intermediaries are in prison for not using the doctrine has also become evident in my position in serving expert legal opinions in VIP legal cases (2010-14), which has allowed me to actually sight confidential bank deposits and full summary of charges laid on crude oil deals being closed by an ill informed intermediary who is now serving time in a U.K prison.So Yes, third parties do close crude oil deals is a matter of fact even in the early years 2001 BD( year 2001 Before the doctrine) when we reported on a case of jilted USA ill informed intermediaries being fleeced allegeldly by PDVSA on a large crude oil deal.


So the moral of the advice is now apparent a well. So the doctrine and other intermediaries using such correctly can close deals. How does that help your position in knowing other have closed such NBC deals None at all.


Trading without being informed in where you could end up in prison. That’s the important issue, and that the doctrine can close deals including crude oil deals safely are the most relevant issues , and not issues pertaining to how many deals other intermediaries have close which in any case are not many at all compared to how many ill informed people around the world are trying their hand in this business of which many still exist.The only bright light in this business that amongst this back drop. a small highly informed group of traders have been steadily growing year upon year.




It defeats the true nature of what it means to be a intermediary if one has to risk money on deals that are very hard to close., hence mitigating the risk means no money will be lost from the pocket of the intermediary and rightfully so. there rare people who are best suited to apply physical work and make money (the majority),then there are those who use their brains to do the same (the minority) Both virtues will make money, but only the latter, has potential to make big money or noting at all.The latter has no middle ground, hence efforts to close such complex deals should not apply that the intermediary is going to lose big money in doing so when the intermediary is trying to do the opposite to start with.

On a 100 million dollar NBC shipments , you are looking at around USD$200,000 dollars plus which once paid upfront to the advising bank to initiate the transfer portion for the credit, and in where the deal fails , the transfer fee is lost. The bank want his trader fee before proceeding with any deal up front and rightfully so. Advising banks are intermediaries just like us .They are prepare dot enact on the transfer of a credit , if they are paid first.Sounds familiar? We too must be paid first before we can enact on any export deal.

If you are truly frustrated with a deal and are financially stable and also feel that the issue of transfer fee is causing deals not to close , then source a small single FOB NBC shipment deal of lest say Coal, D2 , or Ore worth under 5 million dollars per the one only shipment .If the deal fails you’ll lose around -/+ $10,000 dollars, and won’t try such again, if it passes , Horray.!

I would not even attempt paying a transfer fee even on a small NBC deal until I have supreme confidence and good experience at the nature of business being applied in where the supplier is amicable and 100% secure. So again, learning the business over the longer term dictates such matters. For a revolving DLC for 12 month for Diesel at 100,000 MT, such Transfer fee’s cannot and should not be paid by most intermediaries, no matter how wealthy they are, hence the logic is simply here.

If a person can afford to pay nearly a billion dollars for such fuel offered at a great price , such will also be prepared to pay the transfer fee, accordingly UCP Article 38 infers as much.Unless agreed upon otherwise, the transfer fee is paid by the intermediary (beneficiary to the credit) Therefore the intermediary MUST make this fact clear to the end buyer, firstly on the offer and indeed contract and hence the obligation to pay such a transfer fee has been ‘agreed upon’ accordingly before the credit is issued, in where on the credit under its terms of reference or in a separate advice, it will state ‘transfer fee’ is for the account of the end buyer.’




A payment offer defined as a “Bank guarantee’ can’t be effectively used by a professional trader and could be used as issued from the end buyer bank to the suppliers bank in some circumstances.


A Bank issued Guarantee to one person as advised by a bank to another in the same country or state could be an effective instrument because the deal is supported by the laws of the state or country in where the bank issuing the BG is in the same state as the entity accepting such.

To accept a BG as payment in an international deal , a very different situation now becomes apparent.

The Bank Guarantee carries within it issuance protocol; the idea that the person accepting the Bank Guarantee is the person who will benefit if the guarantee is called upon. Hence a Bank Guarantee is indeed a personal obligation given by one person or bank for the benefit of another - there is no scope that such a BG once advised to one person, that such has inherited qualities which allows such an instrument to transferred.

A Bank is only required to honour its obligation under the Guarantee in where if anything different is apparent on the transaction not supported by the Guarantee, payment will not be made. To receive a BG as payment for goods in where a lame attempt is made to transfer such, is a different situation , not apparent when the Guarantee was ‘personally ‘ advised.This means the bank does not need to honour its obligations therein not does it support a contract because banks must not take part in matters to do with the sell contract. The sell contract is an independent aspect to methods of payment.

A seller and in particular informed intermediaries cannot use the virtues of a Bank issued Guarantee to pay for goods it is proposing to buy then sell to end buyers, and could only use such a guarantee in support of a single shipment payments DLC in where the deal is a revolving deal. The buyer supports the single shipment DLC with a bank guarantee for the whole contract value (Note ‘Whole contract value ‘ not just “contract”) in that the bank is guaranteeing the issuance of another DLC as each delivery is initiated and that if the DL:C is not forthcoming , a call on the supporting DLC is made, but even here such an application is fraught with issues for the informed intermediary, this is why intermediaries MUST accept a non cumulative revolving UCP endorsed DLC in support of the whole contract value and never a BG unless the buyer and seller are in the same country as are the corresponding bank applying laws of such a country or state.Even state to state differing laws may cause issues with transacting upon the virtues of a BG.



What’s the matter with you.

Nobody of sound mind is going to pay for goods ordered from a supplier or intermediary by SLC or SWIFT direct cash deposit, and yet we still see such offers being touted by ill informed traders.While we can’t dictate payment request sought from suppliers, we can reject such request to favour using a DLC. Intermediaries can only use a DLC as secured from an end buyer to pay for goods ordered from a supplier. We can’t uses BG ’s , SLC’s , Assigned DLC’s ,Revocable credits, Red Packing Credits, Variants confirmed credits or Bills of Exchange. We could use the virtues of not a bank issued credit to buy goods from a supplier , but an in-house credit in some circumstances.

We also as intermediaries can only accept “at sight “ type of credits.

The uniformity of the credit in application at issuance is dictated by rules as per UCP 600 , but the laws which govern such instruments are said to be closest to the laws of the country, hence bank, issuing such and instrument. Not all rules are laws in where all laws are rules. Country closest to the position of the intermediary is also applicable in such cases if such is acting in the position of buyer/seller.

Once a contract is signed and the end buyer fails to open a letter of credit , the end buyer is already liable for damages for failing to open a credit. This is another reason why ; while an intermediary may eventually get to quote and later offer stage in a deal quickly after intently studying the doctrine , signing a contract with the end buyer is not a common event; and is considered the least difficult process of the whole application. More importantly PIA will not sign a contract with a supplier on the same basis because if PIA has no credit secured after signing, PIA could also be sued for damages. From 12 buyers tested in the second half of 2013, no deal has lead to contract by FTN. To get to contract stage is therefore a big deal . To get the deal closed with a signed contract is a huge event .Many buyers are tested before one contract is signed is the nature of business pertaining to the professional intermediary.


There are 2 schools of thought on the matter; both work as tested by FTN over many years.


(a) Test as many buyers as often as possible, sparring no time for such to perform, to try and secure one or maybe two contracts per year or few years, in where one actually closes .

(b) Study the market with product secured intently,in hand, test a few selected end buyers in any given year , in where one contract may end up being signed.


(B) above, requires lots of due diligence and ongoing studies to apply before making a targeted offer to a personally targeted corporate end buyer, whereas (A) requires securing many suppliers and testing many end buyers at will as they come with anyone who is willing to “step back.” FTN is reverting back to (B) as the favoured application ,after testing (A) intently for over the last 5 years.


The problems with applying premise (B) is that the intermediary needs to be highly informed, and sure, only a few long term suppliers need to be secured in any given year , alas it is hard to secure a single supplier who will entertain assurance of goods for more than a few months, let alone longer.To get one long term supplier means the intermediary could test many buyers at will and do so at their own pace in where negotiations on a deal could be extended in getting the deal over the fence. To secure many suppliers will not allow the same virtues to apply as the ‘ dump the deal and move on’ application prevails.

Once the intermediary becomes informed and understands delivery and banking rules , they need to obtain actual trading experience, in where they pull back and start to apply the (B) premise is the best way to trade over the longer term as a truly professional highly informed trader.This slow targeted application allows an intermediary to retain their normal employment status as they trade after hours and weekends. Remember to go from making an offer to closing a deal to physical delivery could take 3/5 months. It would not take many deals being attempted to close, in any given year to remain busy.If the one deal is a large NBC revolving deal then PIA will be busy handling the one deal and the problems that may arise during delivery. FTN with 4 well trained agents could secure 6/8 suppliers in any given year .A well informed intermediary after studying and gaining experience in the first year could expect to secure 1 or 2 suppliers in any year(s) thereafter now describes the true overall nature of this complex business in a nut shell, as it applies to a informed intermediary applying safe, risk mitigated procedures. This position changes if an informed intermediary is tenured as an informed broker by a disclosed principal,offering in house procedural training, who is already busy, in where the commissions that the intermediary could expect is much lower in return.




We can’t take phone calls from intermediaries needing advice or help, we would be stuck in doing so perpetually 24 hours per day. This is why we do not provide phone numbers,we are not on trade sites, we do not answer emails. We do not accept overseas visitors as well.This is also why we published the best selling ITSI and why we provide extended training and study manual in-house so that others can become fully informed on how to trade as a professional intermediary, of which only a few will ever make the grade in any given year.


We created the first ever uniform doctrine elf trade that intermediaries world wide can study and apply this makes our position a very difficult one to ply. Only registered members and invited applicants who have purchased our in-house publications are able to talk to FTN Exporting directly if they wish. ITSI buyer in their thousands at any given time are not able to contact smice on the same basis, as ITSI although formally applied is the least expensive publication to buy in where , in house publication incorporates an added value for the time wasted in serving such applicant directly and that often such in-house publications are double of even triple the size of ITSI adds to its value. Supplier and end buyers also are able to talk to smice or FTN Exporting but only after we are prepared to accept a contract. We hold a unique position world wide, accordingly we are one of those few people on the planet, because of the doctrine we have created, who simply cannot man telephones all day. In any case even our own staff cannot answer such question sought leaving the principal (Davide Papa) hanging on the phone all day. We know many who contact us daily do so with good intent, while we do read all e-mails , unfortunately a select few ever receive a reply. Our valuable time is very limited.




Jack lives in USA he is an export import intermediary . He is dealing with European intermediaries .He is working in flawed terms of trade and references and is asked to sign a NCND agreement and given a piece of paper defined as a MPA or the likes defining his commission payment. Jack steps back and allows his secured supplier to work with the Euro intermediary group directly. 2 weeks later Jack is told that the deal has ‘ fallen through.’

In short Jack did not control the deal as a buyer/seller and had chosen to act as a sourcing intermediary or ‘spotter.” This happened because Jack and the other intermediaries in Europe are not professional trader, but clowns more akin to securing work in a circus, and have no idea at what they are doing. It may look like a good sea, a real deal which in fact it’s not even close in being able to close, and since it will not close using a flawed basis , Jack will never see a cent of commission. But lets say the Euro traders did by some divine intervention using an unworkable premise close such a deal. How is Jack going to claim commission based on a NCNDA and bit of paper defined as a commission payment authority or confirmation slip ; the simple answer is , he can’t.

The professional intermediary MUST hold position as Buyer/Seller as defined in the doctrine or be attached to an informed intermediary, or Jack has no scope to ever collect commission on a deal he helped too initiate. Sure URPIB (NOW IN 2018 TRIBE RULES APPLY INSTEAD )  has been studied and read, but URPIB is only explaining rules not procedures that Jack MUST apply to at least ensure that if he is initiating a deal using proper terms of reference, then he will be 100% safe in knowing that he will get his hard earned gains.There is no other way for Jack to ensure a 100% guarantee that if the deal is closed by him, he will make money. The only other secondary option is for Jack to be attached to a informed trader who will do the closing and then collect and payout the assured commission for the benefit of Jack as agreed upon (in line with URPIB rules)

The primary position for any intermediary is to become informed, to slowly practice and enter trading as a fully defined lawfully applied Seller and Buyer of commodities- There is nothing in between.




Mr ES Asks :


Q: What does the term informed intermediary mean.

A: One who know what they are doing.

Since the FTN doctrine is the first doctrine of its kind made specifically for intermediaries, then those who study and later apply the doctrine are defined as being informed traders.Informed traders do not conduct business with those who are ill informed , as discovered during the course of business, this includes end buyers and suppliers. ITSI did not really elaborate on this on any great lengths as ITSI is a formal study, and is mostly specified in our more casually applied beta in-house publications.

The direct reference here is aimed at those traders who have studied nothing at all and continue to ply LOI, ICPO, NCNDA, ASWP, POP, etc unworkable and flawed procedures.These are ” ill informed traders.”You will come across many such traders at the start. Later as ‘ experience’ is obtained, you will refine processes to identify such traders quickly- and are dismissed accordingly.

The nature of business is far too complex to enter into without being fully informed.

In other words; the doctrine and procedure of trade can only be effectively applied by those who have studied such works intently, as it’s a complex study and thus, only those who are informed will know intently how to act with an inquiry made by a informed intermediary. This included other private traders , suppliers and end buyers. Those who not informed are often the type of traders who also, will argue with the informed traders about International rules , laws and procedures.

If you are dealing with ill informed traders, drop the deal and move on.

If you are going to spend time in explaining your offers and quotes etc.. then ensure to do so with the supplier or end buyer who will most of the time understand many parts of what was written on such documents you have produced ; at the very least they should be informed about matter of Incoterms 2010 , which supports all dealings of the professional informed intermediary as well. The inference here is clear, don’t waste your time with idiotic traders who don’t even know in basic form universal delivery rules is a good start.





So called NCND Agreements to do with commission payment to SI’s often used in the past long gone and has not been seen by us for many years has raised its head again. Such a document MUST not be used in support of releasing confidential information about a supplier or end buyers.IF PIA is the Buyer/seller then PIA attaches those who are worthy of the attachment which means PIA advised such trader about commission payment ands directs such to URPIB rules. Traders who are not informed asking for a NCNDA as a condition of stepping back are dumped. The NCNDA cannot be enforced even if a deal closes is assured and the SI who can’t close their own deal alone can’t ask for anything. A confidential agreement could be plied as part of the sales contract, but that is to do with matters of confidentiality applied to matters of contract. If an informed trader depends upon the virtues of NCNDA then except no deal to close and that circumvention is assured.

We can’t stop idiotic or ill informed Si’s asking for a NCNDA,but PIA can. We suggest that the SI has reappeared after years of not trading and is unaware of the mainstream doctrine as there are many traders who wake up one morning, to recommence trading and who have not studied our works.in short do no waste time with such request or traders.

We do not just need supply information, the net is full of such, we also need an offer from such, something that most SI’s don’t have.




The doctrine is for the intermediaries who want to make the attempt at trading buying and selling commodities for profit in a proper and safe way. But the doctrine is formidable ; and that it should be used by any intermediary or business minded person, entering big business in the international realm because many aspects of the doctrine also delivers a study in matters of contracts, finance, and banking. Hence the study covers other practices by default of the main lesson and study as well; pertaining to agency and finance. SWIM takes months to intently read alone , but once completed the intermediary would have received information in a manner that would take 2 or more years to learn at a college, at huge costs , offering 45 minutes class session, if such a subject matter were offered. The intermediary is buying the doctrine to become highly informed at buying and selling commodes and other related big business carrying huge financial values. To chase a deal worth a half a billion dollar or more is never going to be easy, but if the attempts at such deals is being tried, then the intermediary needs to be highly informed.



What does the term “Lien” mean in our business.

A right to keep possession of property belonging to another person until a debt owed by that person is discharged. But we do not need to concern ourselves directly with such matters as intermediaries. Shipowners have this right or “privilege” and also ; in where an offended party issues a writ in rem to place the ship under arrest. The arrest is against the ship and not its operators. Often, local laws apply over maritime laws and that the debt must often be a maritime type of debt. This is a very complex issue and goes beyond in the realm of normal business plied by informed intermediaries and is a different study application.



About evidence of goods

There is no acceptable evidence from another intermediate seller, because goods can never be acquired form such a trader is the basis.The intermediary must secure goods only from an export ready supplier in possession of goods.This application protects the intermediary from criminal charges being laid for offering goods not correctly ascertained. The actual evidence, is when the delivery document are produced at loading as these are the goods being sold . As it applies to any end buyer doing business with a supplier so such applies to the Intermediary. The PPIC is surrendered after DLC has been secured as a part of the contract, what is being assured at this time is that the supply and supplier is possession of such is genuinely ascertained.



Do all Crude oil ships load and unload at a port.

No, especially when ULCC carriers are involved and often when VLCC carriers apply. Double hulled ULCC carriers are the new breed of shipping and difficult delivery modes for intermediaries to secure. Intermediaries deal in VLCC carriers or smaller. An anchorage point offshore allows a large vessel to park on the sea , and coupled with submerged loading and unloading points. FOB Port of loading therefore is specified by anchorage point location, like wise unloading.Further more to the question asked. A large carrier loading from KSA going to Houston USA of lets say 350,000 MT plus cannot take the Suez canal as it would be too heavy and scrape the sea bed. The ship will need to go around South Africa, and after crude is unloaded on the way back, the lightened carrier would often take the Suez canal thus completing a circular unloading and loading route. Here the crossing fee costing hundred of thousands of dollars, is for the account of the end buyer in USA.



Crude oil deals.Can I offer my own price formulation

No, if you are offering such goods on behalf of a disclosed principal and “Yes” other wise. What is crucial in a secondary market deal is that all parties have access to a respectable price board to read fixed prices from, in where the basis now takes this prices in conduction with the formulation offered.PIA must have a basis to work with.The only exception to this rule and the easier application to apply is when a great fixed price offer is given in where the sale price is also a fixed selling price.” Day before , Day on and Day after on average price” applications is often applied for spot cargo deals which we do not trade in as we have to be financially able(RWA) long before loading.We deal in future date deliveries.



LNG Deal deals at FOB

FOB is not applicable to LNG sales, is best assumed from the start that CIF is the only buy/sell application in where contracts exceeding 7 years is also the norm in that the supplier has to provide and secure the ship and supervise loading is also assumed. An agreement (an MOU) is first signed. The MOU is leveraged to raise funds to buy the LNG out right in one hand year per year or used to support the purchase as a guarantee.The LNG is sold to another accordingly. Earnings to investors are paid from expected gains made. These type of deals are simply too complicated for most traders to master but is an allowed business application under URPIB rules and those who have studied our past limited investment edition of TWIY which is not longer available.



Copper Cathodes

14 June 2014


Copper Cathodes ordered as per LME specs must carry a particular composition. Those who do not offer LME grade Copper Cathodes are selling their own product and that such products must be considered only for purpose of use ; and even if such conform to LME standards it cant be sold as LME Grade 1 unless brand made in particular country has been endorsed by LME.(Holding LME Warrants)


The LME accepts the following grades for Copper cathodes being LME approved grades under LME designation CU CATH-1 ( Copper Cathodes Grade 1)



BS EN 1978: Cu CATH-1


GB/T 467-2010 High purity cathodes : Cu CATH -1

There are around 8 Chinese manufacturers of approved LME grade.



ASTM B115-10: Cu- CATH -1

There are around 7 USA manufacturers of approved LME grade Copper Cathodes


All these standards can be sourced online.


When Copper composition is added up and composition are not all listed , then a minimum equal to or greater content becomes apparent which will not seem to total the offered AVERAGE 99.99% grade on offer. This is because a minimum assurance is being implied or as some say “a rejection rate becomes apparent” and hence a tolerance factor is always inherited in all product sold in bulk, including Copper cathodes, even though such a tolerance factor is not always specified . The AVERAGE grade therefore now suggests that some plates in a FCL may be less than 99.99% and some plates from a particular batch may be higher than 99.99% as prescribed under LME maximum grading of 99.9935% , hence settling upon the average grade as being 99.99%

Only the main 10 or so compositions making up the bulk of the Copper being offered are applied, when selling Copper hence not all the above grades will have all the same total composition in total (usually around 19)

The big producers are not the only ones making the most LME approved Copper Cathodes : I.e: Chile has around 20 manufacturers.

Around 30 countries make CU CATH-1 the rest do not and hence the huge variation in prices becomes apparent against LME prices for products which seem similar , in where composition reveal they are not.

There is no discernible difference in producing a Hot Water tank carrying a 10 year guarantee made with 99.99% grade copper as far as “part per million” composition is concerned , not so when making I.e: specialised electronic equipment like that used in a aircraft where to much on one composition may cause matters of longevity to be curtailed. Such “impurities” play a big role in certain products being made. Therefore the end buyer NEEDS to know what they are going to use the Copper for and ascertain by the specifications if such grade suits them.We know a lot about the products we sell, but we are not experts as the products we handle because unlike a Copper Cathode buyers we deal in a huge range of goods and are experts at applying safe acceptable buying and selling procedures.

To make Copper Cathodes to “suit a customers specifications” (custom made ) is overall not an acceptable trading application, because we cannot get into “not buying” what is out there , and only chase products as per customers specifications. Custom made specialised products also carry a much higher price. Such is a special order and requires special considerations, and that once a custom made order is secured , the customer MUST buy it and therefore signs an offer as legally binding.

I hope above delivers to quash all the nonsense from ill informed traders, Suppliers and end buyer we have seen over the past few months


7/4/2014:TRADE SITES:

SMICE does not enact on offers from "trade sites" and the likes for 2 reasons, the main reason is as follows. FTN exporting over many years has tested such sites and although in recent years some sites now apply more vigilance, such said sites do not serve the needs of the professional intermediary. Why such sites keep on growing, we have no idea! In the second instance, if everyone one can go to trade sites, then everyone could easily enact on deals-or so it seems; even suppliers and end buyer. This means such principals don't need to deal with us, nor entertain our offers - this is in effect produces false illusion. Every product on Earth "seems" to be available on such site.

There are many "export ready" suppliers and end buyers online sites in 2014 , and such are very easily found within minutes. A professional trader must secure a genuine workable offer from a principal, which is the most difficult aspect to apply in this business. Even getting one formal workable offer for wanted goods, may take months to secure.

As per the FTN Doctrine of trade for buyers,sellers, and intermediaries, "A supplier must be secured first" means a lot of work has to apply to secure such. It takes great skill and effort to secure and then enact on one single offer provided by a genuine supplier who can enact on acceptable safe procedures in support of incoterms and UCP Banking rules.

SMICE only offer goods it has secured directly from suppliers under contract , and only offers goods to end buyers on a personal and confidential basis-on contract

FTN Exporting has collated thousands upon thousands of supplier and principals over the years which have no bearing on our abilities to close a single NBC deal. "A suppliers in possession of export ready goods, who has goods "today" to offer may not have such goods to offer tomorrow." To close a deal one needs experience, skill and knowledge as to rules laws and safe processes, as learned over many month and applied over many years. Once this part of process is perfected by our Agents , sourcing one single supplier at time is the enacted upon diligently.if you see FTN on a trade site from earlier days of testing the doctrine , it's long outdated, now adds further to what we have stated. SMICE is not found on any trade site.

5 April 2014: Consumer Laws gone mad


5 APRIL 2014.



All offers from SMICE “for ready made products” or raw products made “fit for purpose” of immediate retail sales, from now on shall also state;more so for FCL less so for NBC products;

Consumer Laws: The buyer is hereby informed by the seller making this offer, that all matters of imported goods must comply or be made to comply with local Consumer Laws as it pertains to the country or state of importation. The end buyer bear responsibility to assess and ascertain if imported goods meet consumer laws, before accepting any offers.

In recent legal proceedings taken by the Director of Consumer Affairs Australia the Federal Court of Australia has declared that a large landmark store (Dimmeys) has sold imported goods which did not comply with relevant safety standards. The Federal Court also imposed penalties on the distributor and importer; to bear bart of the blame.

The goods involved were Novelty items defined as (specifically) Basket ball hoops, Baby squeeze toys, Shower gift sets, Girls swimwear.

Penalties Imposed

Store :AUD$3,000,000.00

Distributor :AUD$600,000.00

Third Party:AUD$120,000.00

The store owner was fined, but blame also trickled down the line all the way to the distributor means that anyone importing goods into any country, including professional intermediaries acting on behalf of undisclosed principals, who are trading from a country who have similar consumer based laws could now also face similar rulings.


Personal Note and Personal Opinion of the Author.

Here is a major store and large employer and those involved with the Federal Court decision, being fined for selling novelty items , because they did not meet some kind of safety standard, the type of standards which are also lacking in so many products found In Australia as sold from some many other sources (everywhere). It seems our Government based Consumer Advocate agency has been very busy penalising store owners and importers for selling “rubber duckies” and people are wondering why so many jobs are being lost in 2014, and why global industries are taking their business offshore. Many excuses have been given for the mass migration of these industries, especially by naive politicians except the obvious. Bureaucratic red tape in doing business in Australia bordering on lunacy; has now become very apparent.


24th Jan 2014




Our ‘Bank requires to see a copy of the sales contract before we can consider to handle a DLC’ is not the same as the bank saying ‘We need a signed sales contract or no DLC will be opened.’

In direct relation to the above the below points in reference apply.


(a) ICC Article (4) UCP 600 is about matters pertaining to a DLC ONCE it’s issued .

(b) Phoning up a bank to seek advice before any DLC is in hand happens a lot and banks are not free advisory services.

(c) To add to the pot , a credit once advises needs to be accepted and;

(d) A bank at its discretion has right to honour the business transaction related to the nature of business to the DLC.

(e) Banks world wide, are in the sights of law enforcement Agencies. Issues of Money laundering is an era long past existed but not like today. A bank accepting “proceeds of crime” to enact on matters of money laundering , once caught, attracts huge consequences and fines often measuring in the 100’s of million of dollars.

(f) Those who disobey the FTN doctrine , shall fall by the doctrine.

With the above premise setting the scene, the following is apparent.

FTNX Mediation Notes in part, on one case study Nov 2013;

FTN in the last 6 months has had a few intermediaries having reported trading success who have also reported that some banks are disobeying Article (4) of UCP. In the last few days FTN has investigated a few of theses claims in and in whereat has found that UCP adhering bank(s) in question did not (do not) break Article (4) as claimed.

An end buyer often states the same ill-advised excuse in that; their bank will not issue a DLC without a contract.

Article (4) and UCP rules applies to a credit when such it’s issued.

Before a DLC is issued UCP can’t apply, nor proper sound advice follow in where local, State or Federal banking laws prevail. Due diligence also often comes into play at this time.

Seeking advice from a bank if they will accept to “honour” a credit on information about a deal that has not even started is simply not going to happen and in any case banks do not know nor care about our business. They only know how to give reply to matter of its own business– finance and banking.

A person such as an informed intermediary (or ill informed end buyer) lacking knowledge and experience phones a bank and starts yapping about rules and laws and whatever and advises the bank that they are going to receive or need to advise a DLC. The bank responds in a Stoic or even somewhat disinterested or rude manner to an intermediary but not so to the end buyer who has accounts in such a bank. In the case of the intermediary; the advising Bank asks the intermediary, if they could reveal“ Who the supplier and end buyer are ” and other questions and may even suggest that they need to see a copy of the contract.

The intermediary wrongly engages with the bank in pointing to Article (4) UCP 600 I.e: “Banks may not get involved in matter of the sales contract.”

The intermediary remembers that they must not disclose sensitive information about a supplier or end buyer to “anyone.” But they seemingly forgot about issue such as “Don’t phone bank for advice as they are not a fee advisory service and that once you have secured a DLC advice, guidance from a bank will eventuate there after.”

Traders have often also forgotten about “ Once a DLC is secured and accepted who cares about who knows what; as it applies to the parties involved in a deal.”

From the above scenario we often see the following information sent to us stating that; Dear FTN, we phoned our bank about a deal we are closing on to advise that a DLC is going to be lodged into our account and the bank reply was “The bank requires that we produce a contract before they will consider handling a DLC.”

This is not what the bank is saying nor implying at all, as it pertains in calling that a breach of UCP article(4) is in play.

In any case even if they did want to study the terms of the contract intently; what they are referring to and intend to do is to study the contract about matters to do with due diligence and not matters of the contract itself, and that UCP Article (4) would be in breach if AFTER the DLC was lodged and AFTER the bank has agreed to handle the DlC and AFTER the DLC was accepted by the intermediary, the bank asked the trader that they need a copy of the contract to seek advise upon the body of its terms and conditions. Not so if the bank wants the contract from an I.e: end buyer to ensure the terms of the contract pertaining to the payment condition are accurately specified on the DLC it’s about to issue.

One ought to know when to call a breach of Article (4) UCP and not just waffle on without first ascertaining the true facts. It a serious breach of association for a bank to act outside the scope UCP rules.

Asking to see the contract is an event that may happen when I.e; end buyer is seeking finance or supplier is seeking pre shipment finance (factoring) and for matters to do with enacting upon the virtues of due diligence, an aspect also effecting intermediaries.

The bank is required to conduct such due diligence to ensure that “the bank has done it’s due diligence and believes that the transaction is a legitimate one, worthy of the banks participation.”

In other words a good strong deal is very apparent conducted by people who seem to be conducting legitimate business.

This is what the bank want’s to see and why they would ask ‘to see the details of the contract’ and in where an appropriate reply could be given over the phone.

“Sure,I’m wanting for the hardcopies to be returned but I’ll send you a draft copy of own PPI certificate in the mean time and bring a copy of contract for your file once the DLC is lodged”

How easy was that!

UCP is not in play, and that the bank is only doing what it has to do; conduct due diligence.

You do not say; Sorry you are in breach of Article (4) UCP” because the bank is not in breach of anything.

This is also why I really don’t like intermediaries getting on the phone with suppliers and end buyers and in particular banks until a deal is locked in.

The term “honour” is an important banking term related to the Issuance and collection of a Credit, as is the term “acceptance.”

The credit is advised and once accepted, the seller shall advise a PPIC to the end buyer. There is no deal here if the credit is not accepted. i.e: The buyer advised the credit differently to what was sought and other reasons.The advising bank does not have to ‘honour’ the attributes of the credit because such a bank is only the advising bank not participating on matter of DLC issuance or collection, (assuming non confirmed credit is plied) and that amongst other things ; all such matters become apparent AFTER the DLC is lodged not before. Prior to it issuance , matter of due diligence MUST prevail, the onus is on the bank to do so because if matter of fraud are discovered, the bank has to show that it did consider and conduct due diligence earlier which did not indicate in any form that a fraudulent deal was in play.

D/D has to prevail.Such has nothing to do with Article (4) UCP

Think about this for one moment? The intermediary turns up with a DLC in an account situated in USA from a country under embargo by USA banks like Iran; or from a bank known for supporting terrorists, or bank supporting known drug cartel. The bank will not touch such a credit once its merit has been examined and detrimental aspect determined.

The intermediary turns up with a poorly applied contract and/or a story which make no sense, the bank becoming suspicious of the deal, will say ‘No thanks were are not interested.’

The intermediary turns up with a non transferable DLC and obviously does not know what to do next. The bank will say “Sorry not interested.”


The intermediary has a transferable credit in its account advised from a smaller but mainstream bank in USA. It also confirmed by another bigger USA bank. The buyer of the coal is disclosed as being a USA energy giant. The supplier is a well know Coal mine easily found online situated Indonesia and in the advising bank own internal records due to past sales going through such a bank. The advising bank is also a large respected bank of the world, can see that the intermediary has ensured the transfer fee is payable at call.


The bank is convinced that a worthy deal is apparent .

This is the of kind of deal banks are interested in.

Unfortunately these are the kind or deals intermediaries do not enact upon often and attempt to deal in a transaction way beyond the skill level of the trader. Banks see through this situation often and quickly.

They are not interested in “hair brained” deals and righty so .The risks are too great. Here is where the “at sight” DLC application may seem a “risky” proposition to suppliers in that the intermediary is working outside the bounds of it own capabilities that the advising bank says they are not interested in the enacting on the DLC.in an attempt to save the deal the intermediary now has to get the DLC amended and lodged at the bank of the supplier, but if the intermediary is performing badly, even the accepting bank of the supplier might reject the DLC.

Advanced trading application are for those who have been supported by FTN or who have had closure on one ‘Sound’ NBC FOB deal.They are not for use by unskilled traders lacking experience.

In the 1st year ore after reading and studying the doctrine novice traders must stick to the CTDLC application and stick to the FOB premise now has purpose and reason appliedCFR comes net, then perhaps for some CIF transactions, after which again for some advanced transaction may be tested. One could stay trading at FOB for ever .There is certainly a lot of FOB offers out there. Many if not most buyers will consider FOB transactions. SMICE has proven as much.

Closing Note: Lawyer will often take cases on a I.e; “40/50 no fee, no win basis.” But what they don’t tell you is that such cases are the type that are simply “winnable” from the very start. I.e: Suit: Car accident and subsequent damage done to the car and harm done to the people inside due to the negligence of another, if the vehicle and driver causing such mayhem is insured.” if upon due diligence it it found that a person with no assets and no insurance had crated the accident, then said lawyers will not even consider the no fee and no win application.


Lawyers have an opportunity to test a case before they take it , Intermediaries do not, and must reply upon the virtues of a DLC. They can only test the UCP rules by ensuring that the business they apply when going to the bank is solidly applied and are adhering to those rules. Banks will mostly only consider good worthy sound deals. When it comes to an intermediary over stretching on the parameter of a deal and abilities of the trader to conduct such a deal are obviously lacking; will be met with negative response from a bank.


The Buyer/Seller closes on the deal, the end buyer then lodges a non confirmed DLC to their bank, in where the advising bank will advise a letter or initiate a phone call informing the intermediary that“I.e: with no participation from our bank we are pleased to advise that a DLC for the value of XXXXXXX has been lodged into your account. Could you please ring the bank and make an appointment to come in and discuss the matter further.”


This is how a good respectable and professional bank will deliver the message to the Buyer/Seller like PIA. The bank manager will now conduct due diligence based on what’s in front of him or her. The intermediary is not in breach of contract if it does not accept the credit due to the buyer advising a credit not in line of what was sought and ; the contract is not voidable and the end buyer is still obligated to perform. One does not ring the bank before writing a cheque, like wise the autonomous nature of a well advised worthy DLC being transacted upon by a skilled trader. If the bank will not touch the credit then you can’t accept the credit and it will bring to bear often that the intermediary has made a small but critical mistake in the way they are trying to conduct such business.

FTN exporting never did like aspect of the DLC ‘honour’ system being tied to “discretion” as here is no effective way to test the merits of the credit handling aspect, before issuance, but I can understand why such a system is in place. Sure a London bank manager from I.e; Israel might no like the attitude of a Muslim intermediary and decides to give him or her a hard time by using such “discretionary powers.” Such an event would be a prejudicial act but such matters and other similar improper or even unlawful acts happens in many aspect of business or employment every day, not just this one. There are some things that we just cannot control.

In the defence of the bank, sure the DLC application in itself fails to address the needs of the professional informed intermediary but if the type of poor documents and trading applications we’ve seen is any guide, bankers would be stuck all day trying to give inappropriate advice on deals as it applies to matter of finance that may also need to meander into matters of contract, matters which are not the realm of normal banking business nor practices.

Offer, Contract, DLC, then if the buyer states, prior to these sequence of event that we must have contract for the bank” Your answer is “Sure , but first we need to test if we have deal.”

Using the same bank on a second deal such issues will not be of concern. It’s always about ‘ the first deal.’ Nobody in their right mind will offer a contract copy for a deal that has not even started, only a person not of right mind would expect as much.


I hope the above matter has been cleared up once and for all.








Q: Can we trade without UCP banking rules being applied.

A:The proper answer is Yes! But you need understand what you are implying. A Doctrine would still need to be studied and prevail much in line on what’s already stated in ours works.You sound as if you are looking for short cuts.There are no short cuts.

We (AS INTERMEDFIARIES) must follow ICC rules as it related to latest INCOTERMS and UCP protocol. Changes impacting on said ICC rules impacts on all informed FTN intermediaries as well. For example if country states that all intermediaries must carry a business registration name, then that’s the requirement of local statutory laws, not International trade laws and rules .If local banking laws are; for example changed impacting on the nature of business the informed intermediary applies , then up to the point goods are loaded , statutory local banking laws apply etc..

But don’t get confused.

We do not own take possession of goods we buy or sell .We are wedged between two other principals and offer a unique different business aspect. We buy and sell title to goods secured. If for example Corporation laws requires the Supplier to act in a certain way or when borrowing funds to pay I.e: pre shipment expenses or; finance for end buyers to import of goods, such matters do not apply to intermediaries. We deal with principals who have already done their part, not applicable to the business of buying and selling. I.e; Banks may not get involved in matter of the sales contract does not mean that the end buyer does not have to explain the Bank why it wants to borrow i.e: 10 million dollars to open a DLC.

At the end of it all, whether the deal goes through or not, the borrower is obligated to repay any loan it has as it pertains to contract of finance which has nothing to do with the contract the end buyer has with any supplier and indeed seller.

So we have reason to apply UCP Rules. We don’t have reason not to.

In the last 2 years, UCP type of DLC usage has become very safe application with low rates of defaults world wide. Matters of risk mitigation have come a long way in this period of time as well, especially those applied by professional intermediaries thanks to publications like ITSI,FYBR and TWIY and the amount of advice we have served ‘our industry’ for 26 years. “Everyone is looking at our procedures.’ Many policy makers don’t really like the idea that we have revealed so much about this business either.

New rules and laws are examined often by FTN, and if ICC rules need to change, so will or own changes will be found and applied accordingly being that most standing rules apply directly to the supplier , end buyer and not to the intermediate “Seller /Buyer” then our position is taken after the principal has met its own obligation elsewhere.

Banking/finance disparity all around the world is under the spot light. Fair distribution of wealth is not being equally applied. Social unrest is growing at the way so many rules and laws seems to favour those few in position to take advantage of such new directives against many who can’t. A few crooks doing the wrong thing will force ‘local’ banking rules to change the future, so long as it does not change ICC Internationally applied / related matters, then we do not need to change our way of doing business either . 

In fact the study in not using UCP would take a longer time to learn and be a lot more complex then sticking to such.FTN could apply a different trading regime, 99.99% of intermediaries could not.

Export import Intermediaries have to be informed on what they can and cannot do. One thing they cannot do is to disclose a principal until payment assurance are in place. This why a “sourcing intermediary” has no scope to close a deal because not matter what eventuates in a deal, the legal obligation of contract is the aspect which binds anyone to the contract regardless of the rules or laws in place at any given time. Hence the intermediate buyer/seller position is an extremely important one for so many reasons.

Sure the bank may ask the Supplier who has 50,000 MT of Iron ore in stockpile to sell, to first obtain a sales contract before seeking pre shipment finance in where the supplier thinks or “pretends to think” that this means to imply “FTN Please sign the contract for our bank” is often a suggestion made by the supplier and not his bank. The bank will take the stockpile as collateral knowing that a sales contract could still fail performance.

The supplier gets a loan, it fails on contract, the loan is still outstanding. Nothing to do with intermediaries.We use the same rules as end buyers/suppliers use, once the goods are ready to be sold and purchased. Our participation starts with an offer. All business prior to an offer is for the principal to apply. The supplier offers exportable ready goods means he/she is ready to export such with the first buyer who buys such goods lawfully and legally.If the supplier makes an offer in where he/she is not export ready, means the supplier should have not made the offer to begin with. The supplier could find it self in legal hot water even if facing off against a well informed intermediary acting as buyer as it could facing off with an end buyer.


Rules are there to be followed. Our lead is taken on how any such new rules and laws impact on ICC delivery and banking procedures.If the nature of business means we need to dump ICC Rules in supporting our practice( i.e: dump UCP) such could easily be done, with little change to the doctrine as it apples to matter of contract and delivery, after all a contract is legally binding once signed by others party to such, no matter the country involved is also a hidden aspect of the FTN Buyer/Sellers process not apparent in the first instance. We are bound lastly by matters of legal and lawful aspects of a contract we’ve entered into , and not just rules and laws.

There are others way to initiate payments to a Supplier, but while we adhere to the strict nature of ICC Incoterms and UCP banking rules, such other less stricter processes cannot be applied effectively, as we need the aspect of safe dealing and agency to apply and support our premise at the utmost highest level.

For instance as already tried a few times in the past by FTN.

A Buyer (FTN) to a Supplier in the same country signs a contract with the supplier which has a “30 day cooling off period” as well as a strong circumvention terms of reference , which allows the buyer to back away from the contract when the cooling off period arrives. FTN now offer to sell such goods to an end buyer as Seller in fully disclosed form.The end Buyer signs contract or offer with the Seller then goes to the Supplies direct. The Seller / Buyer proving that the new end buyer going to the supplier is a sourced client of the seller, is obligated to serve FTN only if the contract is worded very carefully to protect FTN’s own interests.

Enforcement of supplier in another country will in effect make it very difficult to apply such a contract, not so if the supplier is local. Only the best minds could produce such a contract that could stand up in court, hence such would not be the most efficient way intermediaries could ply their business , nevertheless its a workable business application.


There are many such aspects that an intermediary could apply, but unless such aspects are fully defined intermediaries could not ply such effectively. Making contract beyond the standard template as offered in the doctrine would be too difficult to master for most.

The doctrine is about “uniformity” about the best intermediary doctrine that could be safely applied by like minded traders.ICC changes delivery and UCP matters so will the FTN doctrine become adaptable such a time, until then John, you need to study the FTN doctrine intently.




2014 Application



FTN Exporting Sale of Goods Contract Model 2014

Since publishing the best selling ITSI, now in its 5th year of release,it has become apparent that people from all walks of ‘business’ life world wide; and not just intermediaries, are using such contract models defined in ITSI for commodity sales. Many have studied the seemingly “simple” contract format and application.

FTN Exporting International Trade contract model is being redefined 2014 to now include the creation of standard “iContract” application, the ‘i’ standing for ‘interpolate.’ Four (4) years in the making, the iContract or “Instantaneous Flexi Contract Format” (©IFCF) will soon become another product created for specific purpose by FTN Exporting .


Suppliers and end buyers already have reliable safe resources available to them on matters of contract models via the ICC (www.iccwbo.org) and although our IFCF contract is able to be used as well mainstream, Its design is specifically made for use by FTN exporting informed intermediaries and broker.

A contract is a written(expressed) or spoken ( Verbal, Parole) agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law. The term ‘enforceable by law’ is a huge problematic term when it comes to international trade business and contracts. An agreement on the other hand is typically a legally or not legally binding arrangement between parties as to a course of union and subsequent action being considered.

It becomes clear that all contracts are agreements and that not all agreement could be construed as being a contract in where rules and laws are applied to such so as to express a very clear understanding and willingness of what parties to the contract are trying to achieve rather than trying to ‘perform’ upon. Humans have to “achieve” benchmarks in life to enact performance, animals and other life forms need to “perform” to survive. In this business ‘performance’ is tested after contract are signed. 

This rare insight of doing business under the auspices of a formal contract application is alas, sadly misunderstood in the world of commerce in where contacts have become so grandiose by design that litigation is enacted upon simply because a phrase or a certain word was found to be wrongly specified, even though “performance” did prevail.

In Australia we have seen simple lease contracts for rental properties exceed 400 pages as produced by some lawyers who think being word perfect and nothing else is the basis of producing such contract in where billion dollar deal on the other hand , rarely exceeds 50 pages, as plied by FTN Exporting.

The release of the new FTNX “IFCF” contract is about giving option and control to the trader in where a very basic template exists in one hand and in where the trader can draw from many conjoining terms and conditions to add to the contract depending the type of deal being enacted upon ‘without much thought.” FTN exporting has developed this new contract application to support new operations planned in the future in support of a new traders “Cartel” being developed , due for completion and inception mid 2014, as FTN leaves the realm of eduction to progress forward on its own to initiate a new energy trading business with a select few.

The new IFCF contract could be purchased by intermediaries applying the ISPI/TWIY doctrine to trade although its development is aimed at Corporations and indeed laws firms world wide.The world of international trade is about to change once more with this formidable contract application.

As for enforcement of a contract in breach?

This new IFCF contract has aspects within its design that ensure parties to the contract apply the first understanding that must be reached; in that once a contract is called for, parties to the “mercantile” contract acts with “good and honourable intent.”

Dishonourable intent, that is, the signing of a contract where intentional breach of such is apparent will cause great discomfort to the party causing the breach without the need to initially fork out huge expenses associated with taking legal action in an international forum in forcing remedy or compensation to apply. This is another feature of using as FTN Exporting Registered “IFCF” contract model.


In one folder we have 4 base templates , in the other we have a many contract terms than could be extracted and added to the template depending on the nature of business being applied.

Finally–the basis of the contract will be supported by formidable English formation laws, as English laws and the “Westminster” Democratic process is directly related to a laws of Ancient Rome. In other words a long linear line of precedence exist on how such business should be conducted safely and lawfully , going back thousands of year including matter of transparency, due diligence and remedies as well as matters of laws.English law alone today goes back some 1000 years. There are no misunderstanding with the IFCF contract especially when one considers that countries amongst others; trading giants like USA, India and indirectly China have connection to England an its laws in part of fully (via Colonialism) This new IFCF contract will only support (must ) ICC Paris, France directives in matters of delivery ( Incoterms ) and UCP banking Rules.

Extraterritorial laws and rules have no part with new contract applications.

More advice on the release date of the IFCF contract will be advised via the SMICE exchange, circa mid year 2014.



8 DEC 2013: NEW 2014 CONTRACT "Cooling off period'

TWIY 2014 AND FTNX REGISTERED APPLICANTS USE ONLY: BUYERS PLEASE ALSO TAKE NOTE INTENTLY AS SUCH "COOLING OFF PERIOD" ARE RARELY EVER SEEN IN THIS BUSINESS. Added clause to be refined over time to imply as follows and is currently in use on live contracts from December 2013 to alleviate any apprehensions the buyer may have in issuing a credit. New added clause not fully specified.


The Seller shall assure the Buyer that if a worthy credit, free of pending amendments is advised, that the Seller will not accepted the credit for the first 3 banking days after its issuance date. Should the Buyer change his mind and decided not take the goods offered before the Seller accepts the credit, the Buyer may pay a set fee as specified further allowing the Buyer to be released from the binding aspect of this contract. Such a discharge fee once paid is made to offset personal expenses and obligations of the Seller who will not accept the credit, to which the irrevocable aspect of the credit shall not be activated. The Credit shall be allowed revert to it issuance status by default releasing the irrevocable funds back into the control of the Buyer and in where the Seller shall agrees that no further action shall be pending for breach of contract. Should amendment(s) need to be advised to the credit, this said “special consideration and cooling off period” as offered under its heading, shall not apply. Should the said clean credit not be advised within 3 banking days after this contract is accepted, said special consideration shall not apply.


Using Trade Sites 2014

Trade Sites 2014
10 December 2013

A growing number of trade sites online offering products left right and centre has become apparent. Ostensibly most are offering an admixture of real and not so real ‘export ready’ suppliers, can be best assumed.From the trading perspective of PIA, a very specific application is in play.

“PIA must secure supply before making an offer to any end buyer.’

If you have a few thousand people on many trade site pages at any given time offering the same product at varying prices, then you have no supply but rather a confusing meandering ‘supplier reference site’ . PIA would be wasting its time to enact on such sites, because the supplier dictates what they are offering and what is needed to buy listed goods. Further more a reference site hardly fits the meaning of ‘secured suppliers.’

Many worthy Suppliers can be found online without needing to use trade sites; but PIA must secure an offer as well from the supplier directly and not just the details of supplier. This is where skill and knowledge of the informed trader comes to the fore. Such reference site seem to always have another trader between the production floor and the buyer making an inquiry in essence PIA would/could be trading with ill informed traders when using such sites , who simply asks the supplier all matters being asked by the buyer before giving reply to an inquiry.

The risks here are great for the informed as well as ill informed traders. If the connection to buy goods is with a trader ‘who seems to represent a supplier ‘ in where a deal has gone all the way to DLC issuance stage, then once PPI is released the DLC could legally and instantly be canceled by the buyer once supplier details have been disclosed. It could be cancelled because when the PPI is tested, the Supplier denies having an ‘authorised agent ‘ making such offers. Armed with such ‘supply’ information the buyer cancels the credit due to fraud and hooks up with the supplier to close the deal amongst themselves directly.

It's and old trick of the past, emerging in more enlightened times.

Disclosing the name of a supplier is simply not enough to PIA. The importance of seeking an offer from a supplier in possession of good being offered cannot be overstated. We get inquiries about ill informed traders being circumvented all the time. Stoic and often obtuse traders from China for instance , often seem to disclose supplier details. It seems they represent the supplier when in fact many represent other suppliers as well. Many are simply hunting for buyers with the idea that since the factory owners do not speak English, going direct to such by PIA would be a waste of time. But there is “always someone” in a huge Corporate production environment who can be found to speak English.

The informed trader could take the website details from such trade sites, and other information disclosed about suppliers and go “straight to the source” when making a buy inquiry is the proper approach as failure to protect sources is not an act of circumvention if approaches are made directly to suppliers. A supplier in possession of goods will sell to anyone so long as purchase criteria has been met.That's what an export ready supplier does, they sell goods. A trader is at fault if they did not protect their source. If the supplier/principal contacts PIA back stating that PIA must make the inquiry to their “ disclosed agent “ then PIA could continue with the trade using the 'disclosed agent’ as if they were dealing with the supplier directly.This is the only safe method to test any claims of agency or ‘mandate ship.’

We doubt that anyone has a “trade directory” like FTN Exporting has collated over a 26 year period but even with such information, new and current offers must be sought and such offers are personally applied to each and every transaction as it applies at such a time. With the thousands of offer FTN has advised in the last few years alone , it’s are rare event to find 2 identical offers formatted in exactly the same manner. Each and every deal is independently assessed based on merit. An informed trader coming across disclosed information about a supplier may indeed approach the supplier directly after online due diligence has applied . This is how PIA would /should use such trade sites. If PIA conducts a deal with a trader on a trade site who has disclosed a supplier, sure PIA would be protected against criminal charges should a legally binding deal fail,if expressed documents are held, but that’s not the primary concern once a deal starts.The primary concern is about being circumvented.The first step amongst others that must apply is to ensure circumvention will not happen, is to secure the “financially able and export ready “ supplier and offer from such directly.

Keep away from trade site. If good verifiable information is found, use information found on such a site and go directly to the supplier is your first test.




The PPIC application has been tested for 4 year straight. SMICE is no longer offering PPIC format as a matter of contract , as such, the PPIC is offered as a gesture of good will in where the contract shall only specify the implication of the gesture made should the PPI advice offered turns out to be false.This application makes it a simpler FOB, CFR or CIF contract application as the matter of the PPIC Form “A” format is no longer applied on the contract. Traders now have option of applying 2 acceptable PPIC applications.The original long form application as offered in ITSI is still very valid in where SMICE will be trading upon a basis in where this new short form streamlined application will only apply in 2014 via SMICE deals, made privy in full to only FTNX agents in due course. 8 paragraphs replace the whole PPIC application in the new contract format allowing for contract issuance format to apply, less 4 pages.

As an insight the following contract entries in part will apply in the new contract format (yet to be further refined in this first draft advice) The actual blank Form “A’ will no longer apply in this new process.


Policy Proof of Interest Certificate (PPIC)

11.3 If the information applied on the “PPIC” document later proves to be false or untrue no protests will be entertained with regard to the suitability of the document once issued. Should it be proven that the information supplied by the Seller is false, then the Buyer shall be allowed to make claims of fraudulent and dishonourable intent against the Seller, declaring that the Seller has not honoured the required obligations to deliver genuine verifiable information; in such an event, the Buyer shall grant the Seller a period of 72 hours within which to remedy the situation before the Buyer formally declares that the information on the PPIC is false. In defining that the information is false, such expressly means that the claim by the Seller to be able to buy such goods from the said Supplier is not true. The term “Supplier” in this instance shall mean; the Supplier in possession of goods, their authorised agent or exporter of such. The term “ Remedy” in this case shall mean the Seller may uses its own resources to offer another Supplier and goods of similar standing and price, at cost to the Seller in where the issuance of a new “PPIC” shall apply.

11.6 The Buyer may take the information on the “PPIC” and verify such information directly with the disclosed Supplier by phone or by other means, once only. The “PPIC” shall only carry information which identifies the Supplier, available contacts and address of such as well as quantities the Seller has or is able to personally purchase and nothing more. Added information such as website address and other details may also be offered, at discretion of the Seller. Once the DLC has been accepted by the Seller , issuance of the “PPIC” will be served. The Buyer has 3 banking days ( 72 hours or less) to verify the contents of the “PPIC.” Whether the Buyer chooses to verify the contents of the “PPIC” or not, has no bearing on the transaction applicable as specified on this contract, except if matters of Section (11) Paragraph 11.6 has become apparent.

11.7 If Section (11) Paragraph 11.6 and issues therein has become apparent related to ‘false’ presentation of information, within the time frame offered, in where even after attempts have been made to rectify any issues pertaining to such by the Seller , the information is still being treated as being ‘falsely given’ the buyer must apply in writing and declare such in the form of a Police report stating that the Seller has fraudulently given information which has proven to be false and present such to their bank for further consideration and cancellation of the irrevocable status of the advised financial instrument.

11.8 The Seller has right in defending a claim that the information on the “PPIC” is accurate and not false, if such is apparent, in where the Seller may instigate a criminal charge of Perjury against the Buyer for providing a Police report or personal statement which has been proven to be untrue, for specific purpose of avoiding the transaction, attempting to circumvent the Seller, attempting to unlawfully avoid the terms and conditions of this contract, and avoid payment application applied herein and in where the Seller may formally further declare that the Buyer is in breach of this contract.

The “PPIC” is therefore allowed to be advised in any format, only to appease the buyer as a goodwill gesture once a DLC is accepted so long at the format has the heading “PPI Certificate” apparent in its heading.informed trader should be able to get the gist of what’s being specified in this new format with the advice given above.




Legal Argument:FTNX Advanced Study

Ship accept delivery of wrong fuel.


A ship owner via its representative, the master of the vessel, accepted on face value the details apparent on the bunker fuel delivery note (BDN) which subsequently resulted in the shipowner receiving a penalty for violating specific sulphur limits, in where the BDN clearly showed that the fuel delivered on board was declared on the note to be below said maximum limits. The operator of the vessel, the master acting on behalf of a disclosed principal, the shipowner, bears no consequence for acceptance of the note which is for the shipowner to bear, unless the representative is found to be knowingly complicit in the ensuing fiasco.

It is assumed that the ship did accept and burn fuel in contrary to acceptable sulphur limits, for if it did accept the fuel without burning such, no violation would have taken place as delivery of the fuel no matter the sulphur content is not an unlawful nor illegal act in itself. It is also assumed, which needs to be tested further, that the authority issuing the penalty had the authority to issue a fine under statutory conventions as it applies to ships operating outside territorial waters and indeed inside territorial waters as endorsed by state law as it pertains to country laying claim to such territorial waters.

Assumptions aside, the first act is the acceptance of the fuel.The act is always examined first intently, to which the law comes second once a breach of the law is detected. All laws are rules but not all rules are law, from which the superior rule of all is the “rule” of law. The evidence that the note did carry upon its body clear advice on matter of quality is first class evidence that the fuel “as ordered” was accepted on such a basis. It’s not physical evidence that the goods loaded were not as claimed, but documentary evidence that the fuel being loaded was ‘assured’ to be the quality as claimed as asserted by the seller. Once the fuel has been tested to reveal a different quality to what was actually delivered, in contrary to expectations; is what eventually attracted the penalty.

The evidence that the ship did ‘take on board ’ a particular fuel to which the ‘note’ did specify as much does not put aside the penalty because the penalty is about a ‘ship violating sulphur limits.’ To challenge the penalty in an appropriate legal forum would produce the same verdict.Therefore, is the ship guilty of ‘burning’ fuel in violation of maximum sulphur limits once such an act is formally proven? The answer could only be yes.

A “note” is not a “Bill of Lading” but an instrument akin to the effect of a deed I.e: A pro forma invoice and / or documentary title to property and / or legal right to such. The note unlike a “Bill of Lading” is a transferable instrument unless stated otherwise. The holder of the “note” is entitled to the property therein.The note also relates to matter of transferability and of ownership. A BOL can only be endorsed and not technically ‘transferred’ over to another party in where such ability to endorse such further stops once the BOL is “endorsed in blank” to a named buyer. Not so with a “note” unless the note itself bears a ‘non transferable’ clause.

It is encumbered upon the vessel being re-fuelled to accept the note on face value, but to also insist upon separate analysis and certification of such fuel before it was loaded onto the ship as conducted by “independent experts.” Added cost of obtaining such certification is not a defence on why such a certification was not secured. The bunker party delivering such fuels, are not fuel analysis experts, they are fuel delivery experts.Ship owners are not fuel analysis experts they are owners of a fleet of ships and are involved in the nature of business accordingly. The shipowner in this case ought to have been satisfied that the fuel purchased not only meets “merchantability” but was also been delivered in accordance with policy of usage as per appropriate conventions in place. It speaks for itself, for just as easily the wrong type of product could have been delivered like water, petrol or even some other devious product could have been used to fill the fuel tank of the ship with horrific results not only for the ship but to all able bodies onboard.

The actual delivery of fuel is based on the assumption that the “seller” the bunker party, is selling such fuel in ‘good condition’ for nobody in their right mind would order fuel not in “good condition.” But the term “good condition” would not fit into the argument that the fuel sold was not of “merchantable quality” of which is was.

The added term of ‘as ordered’ would need to support the term ‘good condition.’ The term ‘as ordered’ unfortunately is missing from the custom and practice of international sales and delivery terms supporting the sale of all goods world wide as supported under “Incoterms” FOB delivery rules, which if apparent would have added precedence in support of ‘minimum’ expectations and to lend added weight to the argument in favour of the shipowner if it needs later, to bring the seller or supplier before a court. The seller could declare the quantity delivered, but it could not also be the entity assuring the quality of the fuel, as it has no expertise to do so.

If the seller being the bunker supply party, is defined to be an independent seller not acting for a disclosed principal, the supplier— then the seller will have to remedy the situation with the shipowner at the satisfaction of such.Here the seller would have received a BOL at loading from the supplier. If the seller was acting for a ‘disclosed supplier’ who operates a vessel for the fuel supplier ( hence ‘ note’ and not BOL would have been apparent ) the shipowner will need to issue civil suit against the supplier if no remedy if forthcoming. But there is a further issue pertaining to matters of cost and time in launching such legal proceedings which also must be considered, which could easily far exceed the value of any penalty served.

If the seller did obtain a Bill of Lading(BOL) from the supplier and in transshipment, whether such is acting for the supplier in disclosed or undisclosed form, in where in transshipment the BOL bearing a different sulphur content produced a ‘note’ defining another specification not apparent on the BOL, then the seller is intentionally and wilfully selling goods different to what was originally loaded onto the bunker vessel, as described on the BOL, in where the matter of criminal fraud now enters into the argument, turning an event best described at first to be a misdemeanour into a felony (non indictable offence to an indictable offence.) If fraud is evident, it’s here that the shipowner may have the appropriate leverage to seek both remedy and compensation from the seller or supplier, under the treat of being charged accordingly etc.etc.

Many matters have to be formally tested before a clear picture can be drawn of events. Such matters as said, cannot be simply settled once a dispute escalates. Each part of the sale and contract therein must be examined. Unless expressed type of evidence is produced , the shipowner will need to pay the penalty and issue suit to recover such from the seller or supplier will most likely be the initial outcome.

It critical to break down each step of a live transaction to identify independent mechanisms in play no matter the type of goods being purchased.In the above scenario it became apparent ‘beyond reasonable doubt’ that the ship was burning fuel in violation to signatories of a convention pertaining to sulphur levels contained in such fuel. It is also ‘doubtful’ that the shipowner did do all it could as per ‘normal custom’ to ensure the right kind of fuel ‘as ordered’ was delivered. In where European law is apparent, the shipowner is guilty unless otherwise proven differently, of having used the wrong kind of fuel.





Richard Said !

Q: We have a person who is able to get us Russian petroleum based products.

Rotterdam harbours (amongst others) the centralised fuel hub for that part of the world. It allows I.e: Russian fuel suppliers to sell fuel in the international market place where Russian local law is set aside to favour international selling procedures. Rotterdam also serves as a pricing benchmark hub based on the amount of fuel held at any given time by suppliers. The more petroleum based products becoming stored, the lower the price also becomes.The lesser the quantity the higher the prices become. Holding stock and matter of future supply is how an exchange application also operates. Immediate stock as applied for immediate purchase as per a SPOT deal, or stock which can be produced sometime in the future based upon prices applied in movement of stock under SPOT sales. Holding large amounts of stock in tanks is not the same as holding such on board a ship, but could be compared to a ship, in where once a FOB price is apparent on a benchmark like Platt’s , such is predicated upon the idea that the goods are “loaded on board” a ship because a FOB price under Incoterms stipulates as much in where FOB reference prices often prevail for deliveries initiated I.e: ex Rotterdam. In essence many product although offered at FOB are not true FOB and should have been offered at FAS. For instance ; an offer of Russian Gas oil at FOB Port of Augusta, Italy will not include the cost of freight for carriage of fuel from a Black Sea port to Italy which is also paid by the buyer.

Even delivery by Russian pipeline to a Black Sea storage facilities or other facilities may produced added cost to the FOB offer, in that although the fuel is owned by a Russian company, Transneft owns the pipeline in where added pipeline transient fees apply.

Furthermore, if FOB fuel sales were offered as secured from a Black Sea facility is made apparent, unless the master of the vessels holds an “all oceans mariner license” Russian mariners/shipping must be used to pick goods within the Black Sea region.

In essence all those offers for Russian fuels we often seen plied on the net are indeed fake offers is best assumed, based upon other unseen applications not often understood by many , even by those many private traders situated in Russia. Many such traders are not intentionally offering fake products are are mostly acting out on an assumed premises due to a lack of knowledge and not because of bad intent.

In the case of Rotterdam storage facilities which can hold in access of 20 Million MT of fuel based products at any one time, its purpose is to also records the amount of fuel based products, produced by the Russian Federation, as Russian law stipulates that not more the 30% of its own economy is supported in any given year by fuel sales. In other words, Russian economy applies a quota system in determining how much refined ‘petroleum’ based products it sells. Such a quota stands as 30%. Should an embargo by Western powers be applied against the Russian economy, Russia’s economy could collapse if it were to sell any amount of fuel based products at will, hence the 30% quota is a protective application by nature.This quota system indirectly also helps to regulated and control fuel prices. Russia requires to have enough fuel based products that should such an embargo be called , Russian industry has enough fuel reserves to meed local needs for 1 year, as drawn from the stockpile in hand which may or may not include stock held in places like Rotterdam. If one were to seek Russian shipbuilders to build ships , one would be met with open arms , not so when attempting to buy petroleum based products, because of this quota application.

Russian intermediate traders do not understand the politics in surrounding Russian fuel sales and limitation of production. We have a large number of Russian traders offering fuel that they don’t have but think they could secure, based on the rule or ideals pertaining to matters of “solicitation” rather than trade.

Most countries have severe laws in place to deal with blatant aspects of bribery, but they also allow legal “solicitation” to apply so long as it transparent. When an entity gets caught accepting a bribe as defined under specific local or U.N laws, a perpetrator may often try to make a hidden payment transparent, and claim that an open legal “solicitation” process was initiated. An entity gets some kind of deal going with potential buyer then ask many suppliers at rote (cold calling) for goods being sought. If a deal is closed between the end buyer and the entity used to “secure” supply, then the entity who solicited the deal gets an agreed upon ‘fee’ from the ‘buyer’. If such a ‘trader’ has a ‘fee’ agreed upon from a supplier beforehand, this indicates that the trader has already entered to an agreement with a supplier , which without a buyer in hand is also nearly impossible to secure. Fees to the value of millions of dollars are possible in solicitation dealings. Getting such fees paid is again another issue, in where circumvention again is rife in where the solicitation process often remains exclusively reserved for big companies with huge resources who are dealing directly with each other is the usual application of ‘solicitation’ process in where a third ‘often related or trusted entity’ is conducting solicitation type of deal in where matters of bribery claim also first appear once such hidden payments are made. Some countries also do have “solicitation” laws in place.

So in essences we have US traders often seen using flawed internal LOI,ICPO, BCL type of applications as an international trade application, being used by Russian traders and others as well. We also have Russian intermediate traders trying to do business in a manner often reserved for use by two Principals conducting local business with each other within Russia , as an international trade process. Chinese “ Sellers” often apply this solicitation application in where the buyer is thinking they are dealing with a supplier when all along they are dealing with an iill informed trader following instructions of a principal still stuck in the trading era of another time.


With all the above said , one can truly assess what’s ‘going on’ with all these Russian fuel offers and promises being touted. A true professional intermediary must secure goods from only the supplier , and resell such as a buyer sourced end buyers is an application that can only guarantee that when a deal is closed the intermediary earns his worth. Deals closed by sheer chance are not worth the risk of application without support of laws and rules. The consequences of such dealings could have huge ramifications.

The solicitation process is a useless process for informed intermediaries to use beyond local use, and local business, because local jurisdiction cannot be applied for matter of “international’ business. (rules and laws) One can only laugh when seeing an offer from within Russia using USA internal business procedures when an intermediary type of deal is in play.

It is true that two Principals could use any contracting application that such have agreed upon to use. A contract is just that. But! It is also true that many court litigations conducted every year could have been avoided if proper acceptable safe international procedures were used instead. Informed intermediaries must use acceptable safe trading procedures and simply cannot pander to the whim of a supplier or buyer who insist upon using flawed procedures or “extraterritorial” procedures as their own procedures all because “ that’s the way they have been doing business for many years.” Getting away in using a flawed process often only means that one day, later rather than sooner,using such flawed processes will come back to financially hurt the trader intently.


As for FTN Doctrine payment applications; Pre 2012 FTN used to get reports from ill informed intermediaries Russia for years, that Russia does not use nor accept UCP credits. Being fed up with all the nonsense FTN obtained confirmation from a leading Russian bank via its manager, situated in Moscow that they do indeed accept UCP endorsed credits, meaning that the credit can be traded upon and used in accordance with UCP Rules within Russia.


The quota system at work; Many have forgotten Hurricane Katrina, in where the President of the USA had to seek permission from the Russian President directly to secure 8 million BBL of fuel as the Russian President had the power to circumvent the quota system in place at that time in accordance with Russian law.





Personal opinion and insight given without prejudice.

TWIY /ISPI (a) added update in part.




Harvesting information on the internet is no different to a fisherman throwing out a huge deep sea net to catch huge amount of fish quickly. Amongst the valuable catch rubbish and unwanted fish will always be found.

In this business and others, such harvesting techniques allows an entity to make lots of money from gathering information as sourced or solicited via the net from mostly naive; and not so naive people alike who should known better. “There are no free lunches in this type of business application”. Some also seemingly think that such confidential information once provided , serves ‘something’ valuable in return as per the legal maxim of “Quid pro quo”. Often such harvested information does not even have to be sensitive information, to have worth, but general information such as birthdays , age, gender, e-mail address and names. Scam artists love the net. Powerful internet cross referencing applications are also valuable tools apparent once information has been harvested and assessed. Even the name of your dog can reveal if personal information you have given today is the same as the information given elsewhere on the net 6 months earlier.

Today companies in many forms seek to extract every dollar they can from a persons earnings before such earnings are even made. Many companies have become masters of this ‘business’ practice all predicated on one simple premise – by using information harvested in advance. It’s big business.In years to come wages may be converted to apply payment of all bills, loans and living expense in advance of such earnings in where the ‘client’ now has to borrow the next month wage yet to be earned just to live.Some people already do as much. “To work tomorrow to repay money borrowed yesterday” is fast becoming the norm.

Even employers looking for any excuse to legally sack workers now check the net often to see if an employees have made any comment how ever slight which could be seen as being detrimental to the business name of the employer.

A reporting agency reporter rings FTN to get advice to make report about our business , they then offer such information we gave them in the first place, to people seeking such for a fee as sourced their “own on files”. Like wise Consulates and Government trade agencies. Often the information served to ‘their’ clients is misinterpreted to what FTN had stated. We have seen our fair share of fake reports and documents “prepared ” by leading Banks / reporting agencies of the world as surrendered by others. The kind of documents which can't be verified because soon as you try to phone the bank or others the first thing they will say is " Sorry such information is private." One would need to go to their own bank pay money and ask your bank to verify the document bank to bank. Those intermediaries and traders who tout or ask for such documents and “who hand them out like chocolates” are doing so much damage to integrity of such institutions. It seems as far back as 1994 and as per the last call FTN accidentally accepted in late 2013, the request for sensitive information (RSI) made by such “Authorities” continue to be sought.

Intermediaries (99.98%) do not have millions of dollars to depend upon is best assumed, nor do they have business reports. Personal credit information hardly suits purpose of issuance related to business. Said traders are not producers either. To secure an end buyer to test a deal by going through the motions of being legally bound by contract is also not easy feat to accomplish . While may ask for an offer and all other kind of useless information, most back away once a contract is advised whether such is supported by sensitive information or not. As for the supply side,one does not need to be a deep thinker to understand that advising a good offer might lead to the closing of a I.e; 100 million deal. It might also not lead to such a deal closing for a whole host of other reasons, no matter the type of sensitive information given before hand. A deal has to close to the end before matters of sensitive information is surrendered, is the minimum expectation for very good reasons.

Suppliers who are NOT export ready offering goods are often looking to factor pre shipment finance by seeking such upfront information to present to their factor so they can borrow money from the factoring agent or bank.This is why a Supplier may seek such information for. Like wise an end buyer who needs to top up monetary reserves in the form of a bank loan to back the issuance of a DLC. Many end buyers who are users of products being sought often do not use such products and often seek to buy and flip the contract elsewhere. This what has happened in China and is why many Chinese suppliers in dismay are now dumping metals held in stockpile, and why world metal prices are disarray.

Unless the intermediary is very experienced, the acceptable base trading protocol calls for an informed intermediary to secure an offer which is not legally binding until contracts are signed, hence there is no reason to force a Supplier to create expense of getting a shipment of goods ready for export, until a signed contract is in hand, unlike the issuance of an ICPO which means that the intermediary becomes legally and irrevocably bound to perform at the time of signing, regardless if the actual contract is signed. The RWA status of the buyer is important in such an instance. Spot deals will attract the same protocol as well. Not so when “future” deals are in play, when first delivery is not expected for 60 or 90 days after contracts are signed. This is why intermediaries must not use an ICPO and must not deal in SPOT transactions. This is also why a bone fide Supplier must be clear on what is being sought and why an end buyer must also be clear on what is being offered.

This is also why the term “Supplier in possession of exportable ready goods” is now appropriately used by SMICE .Export “ready” as in “RWA” ready.

If one could lets say buy 20 million dollars worth of I.e: of Copper, for cash , at huge discount , to play the market. The buyer buys the Copper keeps in storage and offers it at a higher price until an end buyer is found. This is not the nature of business of the intermediate Buyer/Seller. “You don’t need much brains and skill to ply such deals you only need money.” An intermediary is trading offering hard to source goods using skill and knowledge and should not be paying for anything beyond token payments for documents, amendments, and bank service charges. This is the nature of this business which takes years to learn and apply, by only the best trading minds who have at the very least spend time to study such matters long before they start to trade.Professional Intermediaries do not take risks but apply skill to mitigate such risks.

If an end Buyer or Supplier does not understand the nature of business and feels they need some kind of report from “reputable” agency then it’s the principal seeking such report who pays for such. They get what they pay for. I personally think that any person giving out such confidential financial type of information online for a fee, should declare from whom such information was obtained or sourced from as well. One thing is for sure, the information will not come from a source who has breached privacy laws is the expectation and hence, such information is always questionable and should not be deemed as being reliable much more so when provided or sourced by an intermediary.

We do not accept pictures of goods being sourced as being genuinely ascertained as well for this very same reason. We do not accept SGS reports, BOL’s etc.. dated i.e: 2 year earlier, as giving indication nor proof of goods being purchased.We don’t give RWA status unless such has possibility of being given, and never until a contract is in force binding bother parties to act upon and achieve the desired goals sought.

When buying and selling commodities, information sought must be applied to reflect only the goods being traded upon at any given time in where the final meeting of minds lead to a contract. This is the time to enact on matters of finance. If a contact states that the Buyer (PIA) must produce a BCL or some kind of other report i.e.; “Seven banking days after contracts are sealed’ then once such RWA is produced, if the supplier fails to perform thereafter, such is breach of contract. This would be the only formal way an informed intermediary could disclose such sensitive information on contract as a legally binding contract condition, but only if such disclosures were available at that tim and allowable as in a PPI issuance. The matter of the goods and the deal in hand has been sealed hence it’s the contract which dictates the direction of the deal there after.

In Australia and many other leading economies have regulations in place pertaining to privacy laws. Banking details and credit reports are not given out by any statutory authority because its illegal to do so without expressed permission, and because most intermediaries are private registered business entities we do not have to offer any such information anyway, unlike a public company, in where company details must openly disclosed such information, much more so when public shares and investment application are also in play. We do not ask for finance nor to borrow money when we trade and hence confidential and private information is never given, nor should others in effect be allowed to use such information for their own nefarious benefit. If sensitive information is available and is to be given such is given as a contract condition.

Most intermediaries do not have such information and again, the doctrine is about professional highly skilled intermediaries doing business the perspective of such. Remember ! We are not producers nor Spot traders.We are all skilled high informed buyer/sellers.



Those who remember earlier version of FYBR remember the picture on the cover of a group of people holding hand dancing around a picture of the world.Such a picture signifies unity of process of like minded peer group regardless of race, creed or colour. We need to protect our own trading world against harm from outsiders is the message big conferred. Internally issued sensitive in-house type of trading information secured by union of like minded group must also never be given to outsiders, and yet we know of such members who have done just that again causing damage to the union. Everyone in union of the FTN URPIB trading process must practice the advice of the doctrine intently, and in time all others outside this union will respect such group for what they are - formidable.


THE DRIFTER:20/1/2014


The “Drifter.”


“Every company in the world should look at how Apple takes care of its customers.”

FTN can certainly can vouch for Apple services in Melbourne, Australia. Australian retailers should take notice intently, especially our own innate Telco’s on the way Apples conducts business.

Apple applies its business by far, as being the best informed sales people in Australia (In the world). And! It’s not always about the money. We have had products replaced at no charge, even after warranty has expired on more than one occasion.


One of our web hosting companies from the few we have tried over 15 years being online, meccahsting.com out of USA are also in the same category as Apple in the service they provide. Size of the company does not count.

It’s good to deal with people who know their business intently.

It’s not so good when they don’t.

It takes time and skill to learn about your business and to become a “Professional” even more so when your aim is to become the best at what you do.

FTN Exporting also enacts to train it’s agents on the whole trading “big picture.” One does not need to argue with people who don’t know what they are doing or are applying suspect procedures.

And Yet! Even in 2014 after being on the net for so long , and being a best selling Author 4 years straight without even mentioning in house publications , it irks me so much to know that some suppliers or end buyers in the nature of our business who still think that we commenced trading “yesterday.”

Some Supplier and end buyers still think we came off “the banana boat” yesterday.

“Our Bank in India needs a bank credibility report after contracts are sighed and before a DLC is signed.”

“Our Country does not accept UCP DLC’s”


“The Ports are too small to handle such loads”

“We need full spec before we buy” ( even though the stipulated the ASTM grade that must apply is apparent as made apparent on a basic quote)

“We need to present the contract to our bank”

“We need a a 2.0% PG SLC first” (This use of a risky term was rife once , and no not so rife after the release ITSI)

“Our lawyer need this and that” (even though the lawyer is wrong in making such demands)

“One could run away with the DLC” (A major Russian Corporation of the world stated as much about the intermediary business)

‘FTN does not have goods offered because an entry on specs was incorrectly

made’ (simple mistake)

 “Buyer is real, he is related to my uncles brother, the son of such”

“The supplier or buyer wants to met you in Somalia.”

etc..etc..Excuses and bad intent occupy the minds of many people in this business.

So many excuses have been sighted by FTN over the 2013 trading period, as provided by supplier or end buyers who should have known better. I could write a book on such matter alone, as encountered over a 26 year period.

Either a person know what they are doing intently or they don’t.

FTN tries not to lose its cool and often refrains fro given replies to suspect e-mails- but sometimes , our “coolness” goes straight out the window when truly idiotic wrongful or insulting inquires are in hand.

The business of the professional informed intermediary is predicated on one single basis . We have secured goods at a price that others want to buy, and provide a valuable service when selling such goods. The reason we ply such business is to make money.

To do as much requires skill and requires that a professionally minded entity is enacting on such a basis .To go beyond such bounds in this business means that the trader is enacting on another premise other that of intermediary. Informed intermediaries do not have credit reports , 50 million dollar in the bank, nor can they produce a BCL or disclose who the principals are.To do so means one is not acting as an intermediary.

If an intermediary acting as seller/buyer is willing to bear some risk of circumvention , then the intermediary should at least consider to trading “on behalf of a disclosed principal.”

When you get a supplier or end buyer acting in contrary to the Doctrine or indeed to international banking or delivery rules , then there is no point is discussing the issues further .There is no point discussing such issues that come up from time to time with people who should have recognised that the goods offered are genuinely offered based on the vast about of information given about the product as expressed on an offer and later subsequent contract. FTN trained agents can dismiss an inquiry quickly once they recognised what to look for hence; so can any other principal. If such suppliers or end buyers are unable to recognise that they are dealing with professional informed entities then there is no point in entertaining their inquiries.

When a supplier or end buyers introduce trading terms that suits their own hidden agenda then one must be prepared,in knowing that you may be dealing with a dishonourable person. ‘Our bank needs a report of the seller’ may seem a simple request albeit an inappropriate one.What the supplier is really saying in those few simple lines may often infer something else. A supplier may need to bring a verifiable financial report of a buyer to their bank when such is applying to borrow money from their bank; to show that a sale is possible if they could finance the cost of exporting goods they are seeking to buy. In essence they are “factoring” the deal for their own purpose and hence make the demand of the buyer that; our bank needs some kind of sellers report before issuing a DLC or signing a contract.


In the world of finance this act is not illegal and is indeed defined by the term ‘leveraged’ deal. It a valuable concept on it own which carries worth. If a trader has 100,000 MT of sugar than needs transportation to a port to enact FOB delivery terms then the cost of such transportation and subsequent enactment of FOB terms could mean the difference between an EXW and FOB price of 60 dollar per MT or more. Where is the supplier going to get 6 Million dollars from to enact FOB delivery?

There are a good number of suppliers who claim to be offering goods at FOB when they are not, which begs a further question. All those commodity indices which claim are offering goods at FOB as supposed to be offering a speculative driven price which reflect goods “loaded on board a ship.” We have never been able to secure physical goods at prices seen on most bench mark indexes.

This is why FTN insists that “goods are always offered by a supplier in possession of such goods who is export ready.” To ensure as much means one does to have to waste time with an inquiry that is not going to work at all as soon as any information comes to hand giving indication that “the supplier is not export ready”

Often if an intermediary could service such demands, then eventually other

Inappropriate demands are made quickly ; to disclose the supplier or end buyer and other matters soon follows without even having a contract in place. These type of demands are know in house by the term “drifting”.The entity trying to create the “drift” in trying to shift focus on the deal itself and bypass the procedures sought, to try to lock the other side deep into a deal, that it would make it nearly impossible to back away without penalty. We have met a lot of “drifters.”

“Banks need some kind of financial report” type of excuse also bears another sinister application within as initiated by the Drifter. Some companies simply want to know that the person they are trading with has assets in where they intentionally set traps in place along the deal to snare the trader into a legal position. If the trader backs away from the deal, corresponding lawyers are called in from the country of the intermediate seller or buyer to issue suit for “breach of contract” the bigger the assets, the bigger the suit. In the mid 90’s FTN had given at least 4 ‘reports’ to supplier and end buyers in trying to appease such in where no deal closed again for other reason which seemingly comes up soon as a previous demand is met. So we don’t state such matters lightly, It’s based on actual first hand experience.One can’t use the “report” offered by a principal supplier or end buyer either because to do so means disclosing details of such entities upfront.

It irks me greatly to find that there are some such nefarious traders are out there.

A professional intermediary who is able to provided service and has skill to do so must dump any inquiry as soon as a suspect request, term or counter term is apparent. There is no testing of intentions and of a deal with people who have already stated terms in contrary to what the professional intermediary is able to ply.

The Professional intermediary can only ply to trade in this business within the bounds of the law, rules and within the bounds of a guiding set of safe procedures and principles. It cannot go beyond such bounds unconditionally. Informed procedures, informed advice and good safe services is the realm of application for the informed intermediary. Going beyond this vey real boundary means a risk laden and precarious trading situation may soon become apparent.

One must not argue with people who do not know their Job equally once must always act professional with those who do. In this business one who is informed can easily determine when an inquiry is genuine or when its not .It all happens the start of the deal.It all start with the ‘meeting on of minds.’


ICC Introduces New Service:21/1/2014

ICC New Product

Internet application are starting to take precedence.

2 Jan 2014

Great news for End buyers. ICC World Chambers Federation (WCF) has launched the Certificate of Origin (CO) verification website to reinforce the authenticity of the CO verification process conducted by customs authorities and chambers

The Supplier obtains the Certificate of origin, and pays for it. Document is lodged with port customs. End buyer becoming a members new service , has access to verify that the origin goods has been formally “identified.” Seller invoice applies a debit against the buyer account for the cost of securing COO. The COO supports all debit and credit applied on the very important seller invoice which is a primary document of importance as import customs take the sellers invoice as per its entry in calculating import charges/taxes.The cost of COO is applied as an entry on the sellers invoice as a debit against the buyer as this is an import document. In ocean going spot transaction a COO may be secured by the buyer as(usually) non preferential COO as secured in country of import.We cannot give passwords to access site to each buyer who ask for such either, is problem for SRA wanting to take up membership of this new service ; for this main reason SRA’s are not able to benefit from such a service and the many other services out there.


A (preferential) COO is one advised usually from country of origin (goods ) when import or export tariffs/charges (discount) to a preferred country is apparent . Even though it is customary is ask if the buyer requires a COO its now virtually standard practice to secure one applicable to all exporters world wide. Legal stationary department is some countries also have blank COO declaration forms that an exporter may fill in and submit directly to customs.


For some end buyer in some counties, such a service would indeed be appreciated and end buyers or others may buy ICC brochure defining such matters intently via www.iccwbo.org


29/1/2014:How does SMICE define an intermediary


© FTN Exporting

TWIY 2014(N) Novice Addition.


Introduction: The Intermediary

The internet has changed the definition of the ‘intermediary.’ The first uniform doctrine of trade for intermediaries offered by FTN exporting has also contributed to such matters of change as well. It’s no longer acceptable to simply define an intermediary a middle person enacting upon a transaction amongst two other entities.

We know what the Dictionary and other organisations state in defining such a term, but we also know that certain positions specified under the generic, but now considered politically incorrect term of ‘middle-men’ mean. We also know that there are inherited “differences” on how the position of an intermediary could change and must be applied in business, and most often do apply ‘as it seems’ to others.

The term agent or broker and all terms in-between don’t all serve the term “intermediary” as being one specific meaning. The law takes notice in what “capacity” an intermediary has enacted upon, when a dispute is apparent.


An “Intermediary” is an entity who applies physical efforts to create an effect or reaction though skills applied or by chance and opportunity, matters to do with sourcing, negotiation and mediation resulting in the meeting of minds between two principals to conclude upon a formal event or initiate sales, is said to be in the general term an Intermediary.The type of intermediary is defined specifically based on the scope and nature of the type of business being applied.In where; when type is not defined or apparent, the nature of business of the intermediary is the nature of business applied to an entrepreneur.

Aeroplane flies in the sky and may carry goods, passengers or both and many also be used in as a tool in military conflicts.The type of plane designs dictates their use under the auspices of “specific purpose.”

A “Professional Intermediary” is an entity who applies physical efforts to create an effect or reaction though skills applied in matters to do with sourcing, negotiation and mediation resulting in the meeting of minds between two principals to conclude upon a formal event or initiate sales in where the intermediary is specifically attempting to enact upon merit and opportunity, to make a full time living from the nature of business being applied. One who is able to do so using a legally defined safe set of guiding rules and procedures in where chance plays no role and in where the entrepreneurial aspect of such business application may be curtailed or even diminished fully.

All intermediaries are initially specified be the “third party” to a 2 party deal. It’s only when an actual transaction is applied, will the actual position of the intermediary and type of position such holds become readily identifiable.

Transparency of position held.

(a) An intermediary acting on behalf of a disclosed principal or principals

In this position “direct authority” to represent a principal must be held and must also be made apparent immediately when enacting with other principals.


(b) An intermediary acting on behalf of an undisclosed principal or principals

In this position only ‘ostensible’ but verifiable authority is apparent, as it seems to others, and must not be disclosed when enacting with other principals.



(1) Professional (Primary) Intermediary:


(a) In the first primary position. Any informed entity acting as a 2nd party in a three party transaction on behalf of an undisclosed principals . A middle person in-between two other entities who are Principals. One holding position at any given transaction as Seller to End buyer or Buyer to a Supplier bearing all consequences and liabilities of their actions. One who generates income as gross profit due to the nature of business plied by selling of goods at a higher price than purchased, who earns such gross profits due to efforts made without relying upon such payment from another principal.One who is not tenured and acts upon a transaction based on the merit of such at any given time.

I.e: An entity acting on their own as principal , who attempts to secure goods from an export ready supplier (principal) in possession of such goods for purpose of buying such goods to sell to an end buyer (principal) taking possession of such goods, while acting as seller, and without disclosing other principals in the transaction. 

I.e: A Buyer /Seller of commodities their own name.

I.e: A type of intermediary acting as a principal in I.e: iInternational trade business of application


(2) In the second instance:In rare occasions, when 2 Principals first agree to use the services of professional intermediary such is defined as being the third party to the contract acting on behalf of disclosed principals in where consequence and liabilities become mitigated.Where one is specifically tenured to act upon a transaction based on the merit of such at any given time in where the professional intermediary agrees to act as “agent” for any one transaction for one or both principals, in disclosed form.

In this position the Professional intermediary is being used to formally oversee the transaction for both principals in where only one principal agrees upon the type of a payment to be made for such a service, being the principal who called upon the service of the intermediary.

(2) Sourcing Intermediary:(SI)

One who acts for a disclosed professional intermediary in a limited capacity pertaining to securing end buyers , suppliers or both by solicitation, where no other duties are apparent or allowed.One who earns commission based on success due to the efforts applied by the SI. Commission rate as offered by the PI.

The duties of the SI is complete once a disclosed end buyer or Supplier has been secured for a Principal. The offered commission is said to be “earned” at this time, but not payable at this time in where actual payment of commission is subject to another event . The Principal pays commission unconditionally to the SI as agreed upon if due to the efforts of the SI disclosed information surrendered leads to the closing of a deal by the PI. One who sources the attention of other Principals using skill, rather than one who conducts the business of selling of buying actual goods or services being touted.

An SI acts beyond the scope of simply producing referral as a principal carrying integrity amongst others will not use the services of an ill informed entity nor allow such to ply its name on such a basis.There is no position if an SI does not disclose information sourced to a PI they are attached or interacting with, as there is no business opportunity if one is unable to close upon its basis.

(3) Agent.

A highly informed specialist : One who able to influence or effect the outcome of a deal being enacted upon. Any Informed entity acting on behalf of a named disclosed principal(s) acting within a wide or narrow scope of its authority and tenure to represent such a principal(s).


One who could earn a wage or salary and/or who is also able earn a bonus from sales generated due to direct efforts made from the principal they are tenured to represent by name . One who has wide knowledge of both the business application and the goods they are selling and the nature of business enacted upon with end buyers.


I.e: Real-estate agent, FBI agent, Shipping agent, Agent of a Principal.

One typically who is able to work with 2 other principals more specific to its tenure and may include authority to sign a contract on behalf of a disclosed principal, visits by the agent representing a principal and even collection or paying of money on behalf of its principal. A person under an agency and employment contract able to represent a company fully or in part as directed.One who earns a wage and / or bonuses.

I.e: A Procurement Agent : One who is employed by and works for a disclosed company or entity for purpose of importing raw material or goods that such a company may need in where wages are paid and in where no added commission or bonuses are often not payable nor offered. I.e: Ones who buy for Walmart, Aldi, Cosco, BP, etc..

(4) Broker.

Any informed entity acting for a disclosed principal at any given time, specific to the position held with the principal in where the broker must only act within the bounds specific to the position held. A sales representative who is paid a wage and is able to generate a bonus on such sales or may earn a referral fee as well.

I.e: An Insurance Company, tenuring a broker with authority as specifically tenured to sell insurance for such a disclosed company the type of insurance the broker specialises in. A person who sells insurance in where once sold another person advises the contract or policy. One who brings the attention of a product or service a named principal being touted which later results in a sale. A money lender acting for a principal (I.e: bank) A person licensed to act for a principal I.e: One who gives appraisals.



26 March 2014



Personal opinion of the Author.Given without prejudice.


The way a deal starts, indicates on how will finish.

An offer is made by a supplier for lets say Iron ore at $180.00 per FOB in the air where world prices are around is lets $100.00 dollars per MT give or take 10% is the usual price from various producers around the world . The end buyer simply rejects or ought to reject such an offer in where no counter offer would be expected. No counter offer would be expected as there is no scope to cater for such counter offer to begin with.

Circumstances in where a counter offer could prevail is where a reasonable offer is on the table which has been rejected and where a counter offer becomes apparent, occurs when one party expects to pay “not more than certain price” and the other is prepared to take “no less than a certain price.” The two parties then apply themselves to negotiated in where both parties are satisfied at the final ultimate price. There is no scope even to consider, let alone commence negotiation on a price which exceeds acceptable expectations, of the person doing the buying.The matter of affordability is different to the matter of appeasing a buyers needs. One is about how much money one is prepared to pay, the other is about what one is expected to pay. One who employs a 1000 people in steel mill cannot expect to pay $180.00 dollars pr MT for such said iron ore; for to do so may mean the potential to sell the finished products, at a reasonable price, against those produced by competitors, are no longer apparent.

There is no integrity nor good intent of any supplier to ask for I.e: $180.00 dollars per MT for such goods it produces, when such a supplier would have accepted $95.00 dollar per MT or more for the same ore. The supplier in such a circumstance was not offering to supply goods to the end buyer, but rather, made the offer to obtain financial gains from the end buyer , such gains which was far beyond normal expectations, applying the virtues of opportunity.

In other words, a already busy supplier may have not been interested to sell goods to begin with and thus made the offer lacking good intent, but rather, made the offer to test the buyers desperation to see what much higher price it could obtain , much more so when an end buyer is in dire need of supply.

A rejection of the offer and subsequent counter offer must start upon a reasonable premise , without such , no counter offer could be expected to apply nor entered into is the only proper course in ensuring a deal does not start, to begin with, which may place the end buyer into a legally binding situation it ultimately should have not entered into.

Lawyers will not agree with the above because lawyers when seeking compensation for its own clients , have a different mind set when representing a client especially a client who is being served on a contingency basis. A lawyer often starts at a very high number and look towards what final number eventuates. Lawyers in such circumstances are indeed opportunists and look only to make as much gain as possible, in the first instance, as it applies to the situation in hand, even when a client has accepted a much lower than excepted instant settlement in where expectation are high, in that, a larger amount of compensation could be secured, sometimes on reasonable ground and other times unreasonably.

A counter offer is only made where a reasonable premise first exists to do so.