Trading Procedure · CIF
A transparent, bank-secured process from first inquiry to final shipment. Every step has a defined deadline, a responsible party and a documented outcome.
Version April 2026 · Applicable to CIF contracts for sugar, grains and edible oils. The SPA prevails over this summary.
Offer
- 1
Buyer inquiry and KYC
Seller validates before any offerThe Buyer issues a Letter of Intent (LOI) or an Irrevocable Corporate Purchase Order (ICPO) with full corporate details and a copy of the signatory’s passport, together with:
- Completed Client Information Sheet (CIS)
- KYC documentation: certificate of incorporation, company registration, ultimate beneficial owners and bank details
The Seller validates the CIS and KYC, including compliance and sanctions screening. If validation is not satisfactory, no FCO is issued.
- 2
Full Corporate Offer (FCO)
Issued in 2 business days · Valid 3 business daysThe Seller issues the FCO within two (2) business days of the satisfactory validation of the Buyer’s LOI/ICPO and CIS/KYC. The FCO is valid for three (3) business days.
- 3
FCO acceptance
3 business daysThe Buyer signs and seals the FCO and returns it to the Seller within its validity period. Otherwise, the FCO expires automatically without further notice.
Contract
- 4
Draft Sale and Purchase Agreement (SPA)
3 business daysThe Seller issues a draft SPA incorporating the full terms and conditions and sends it to the Buyer within three (3) business days of receipt of the signed FCO.
- 5
SPA signature by the Buyer
5 business daysThe Buyer signs and seals each page of the SPA and returns it to the Seller within five (5) business days. If it is not signed and returned within this period, the SPA is considered null and void.
- 6
SPA execution and Proforma Invoice
Valid 15 banking daysThe Seller countersigns and seals the SPA and issues a Proforma Invoice to the Buyer. The Proforma Invoice is valid for fifteen (15) banking days. If the SBLC/DLC is not issued and operative within this period, the SPA is terminated and the non-performance penalty applies.
Guarantees
- 7
Payment guarantee: SBLC, DLC or MT799 blocked funds
Draft in 7 banking daysWithin seven (7) banking days of signing the SPA, the Buyer’s bank sends to the Seller’s bank, for approval, the draft payment guarantee in favour of the Seller:
- Irrevocable Standby Letter of Credit (SBLC), SWIFT MT760, subject to ISP98, or
- Irrevocable and transferable Documentary Letter of Credit (DLC), SWIFT MT700, subject to UCP 600, or
- Irrevocable blocked funds for a term of one (1) year in favour of the Seller, confirmed bank-to-bank by SWIFT MT799. Blocking periods shorter than one year are not accepted.
The Seller’s bank approves or comments on the draft within three (3) banking days, and the Buyer’s bank issues the operative instrument by SWIFT within five (5) banking days of approval.
- Issued by a bank acceptable to the Seller
- Covers the value of one shipment
- Valid for the contract term plus thirty (30) days
- Any instrument that cannot be authenticated bank-to-bank via SWIFT is rejected
The SBLC/DLC or blocked funds act only as a payment guarantee. Each shipment is paid by MT103 (TT), as set out in step 12.
- 8
Seller’s Performance Bond (2%)
Issued in 5 banking daysThe Seller issues a Performance Bond only after the Buyer’s SBLC/DLC has been received, authenticated and confirmed as operative by the Seller’s bank.
- Issued by the Seller’s bank via SWIFT MT760, subject to URDG 758, within five (5) banking days of that confirmation
- Amount: 2% of the value of one shipment
- Valid for the contract term plus one (1) month
- Callable only if the Seller fails to ship according to the agreed delivery schedule for reasons attributable to the Seller, excluding force majeure
- Expires automatically once the contract has been fully performed
Shipment & payment
- 9
Preparation, SGS inspection and loading
15 calendar daysOnce the Seller’s bank confirms correct receipt of the instrument, the Seller prepares the goods within fifteen (15) calendar days and delivers them to the port of loading, where SGS carries out the quality and quantity inspection before loading. The Bill of Lading and other shipping documents are then issued.
- CIF (Incoterms® 2020): the Seller pays the freight
- Marine cargo insurance under Institute Cargo Clauses (A) for 110% of the CIF invoice value, in favour of the Buyer
- Risk passes to the Buyer once the goods are on board the vessel at the port of loading
- 10
Subsequent shipments
Per SPA delivery scheduleSubsequent shipments follow the delivery schedule agreed in the SPA. Each new shipment is loaded only after the Seller has received the MT103 payment for the previous shipment.
- 11
Document flow
Originals released after payment- Within two (2) business days of loading, the Seller sends the Buyer scanned copies of the full set of shipping documents.
- The Buyer checks the copies and pays by MT103, as set out in step 12.
- Within two (2) business days of receipt of funds, the Seller sends the full set of original documents, including the 3/3 original Bills of Lading, by DHL or similar courier with tracking number.
Original documents are never released before payment has been received.
- 12
Payment per shipment by MT103
3 banking daysThe Buyer pays 100% of the value of each shipment by MT103 (TT) to the Seller’s bank account within three (3) banking days of receipt of the scanned shipping documents, once the SGS inspection at the port of loading has been completed.
- The SGS certificate issued at loading is final for invoicing purposes; any quantity adjustment is reflected in the commercial invoice
- Both Parties accept SGS as the independent inspection company
- If payment is not received on time, the Seller is entitled to draw on the SBLC/DLC without further notice
Key deadlines
| FCO issued after KYC validation | 2 business days |
| FCO validity | 3 business days |
| Draft SPA after signed FCO | 3 business days |
| Buyer signs and returns SPA | 5 business days |
| Proforma Invoice validity | 15 banking days |
| Draft SBLC/DLC after SPA | 7 banking days |
| Seller’s bank review of draft | 3 banking days |
| Operative SBLC/DLC after approval | 5 banking days |
| Performance Bond after confirmation | 5 banking days |
| Goods prepared and delivered to port | 15 calendar days |
| Scanned documents after loading | 2 business days |
| MT103 payment after scanned documents | 3 banking days |
| Original documents after payment | 2 business days |
Non-performance penalty
Once the SPA has been signed, any breach by either Party entitles the other Party to liquidated damages of 5% of the total contract value.
In particular, the Buyer shall pay this penalty if it:
- fails to issue an operative SBLC/DLC within the deadlines set out in steps 6 and 7;
- submits a false or unverifiable instrument, or one that cannot be authenticated bank-to-bank; or
- fails to pay any shipment on time.
In any of these cases, the Seller may terminate the SPA immediately, draw on the SBLC/DLC where available and report any suspected fraud to the banks and authorities concerned.
The Seller’s performance is secured by the Performance Bond (step 8). By signing the FCO and the SPA, the Buyer expressly accepts this penalty.
Shipping documents provided by the Seller
The Buyer is entitled to attend loading and/or appoint, at its own cost, an additional independent inspection company (e.g. Bureau Veritas, Intertek or CCIC) at the port of loading. The SGS certificate issued at loading remains final for payment purposes.
Intermediaries
The Seller pays all intermediaries within 48 to 72 hours.
All counterparties are subject to KYC verification and sanctions screening before an FCO is issued. See our Compliance policy.
Start an inquiry
Send your LOI or ICPO with the completed CIS and KYC documents. We reply with a clear decision.
