PETROLODEX
Transferable Letter Of Credit Process
Official procedure governing the direct supply of refined petroleum products through Petrolodex as a direct supplier, utilizing a Transferable Letter of Credit (Transferable LC) as the payment instrument. All parties must adhere strictly to this sequence
TRANSACTION PROCESS
Every direct supply transaction through Petrolodex follows this formal ten-step sequence, from Purchase Order through final discharge authorization and title transfer.
Buyer issues a Purchase Order (PO) to the Seller specifying the product, quantity, origin, delivery terms, nominated discharge port, and applicable pricing formula. Buyer reviews and acknowledges receipt.
uyer provides verifiable Proof of Funds (POF) via bank-to-bank communication. Preferred instruments are MT199 or MT799. POF must confirm sufficient funds to cover the full transaction value, including freight and insurance. POF must be issued in the name of the purchasing entity only. Seller verifies POF prior to proceeding.
Upon successful verification of POF, Seller provides the Buyer with the precise wording required for the Transferable Letter of Credit (Transferable LC). The Transferable LC must be structured in strict accordance with the Seller's provided wording to ensure acceptance by the issuing bank.
Seller issues a Commercial Invoice (CI) to the Buyer specifying: the loading port in Rotterdam, the Buyer's nominated discharge port, product quantity and fuel specification, applicable pricing formula, freight and insurance terms, and all procedural requirements governing the shipment.
Buyer signs the Commercial Invoice and returns a fully executed copy to the Seller. Simultaneously, Buyer submits the Transferable LC to the Seller's designated bank, structured in full compliance with the wording provided in Step 3. The Seller's bank will review and approve the Transferable LC prior to any further action
Upon confirmation of Transferable LC approval by the Seller's bank, Seller places the order utilizing their own banking instrument and receives confirmation of receipt. Upon injection the Seller provides the Buyer with the vessel nomination notice, including vessel name, flag, IMO number, estimated load date, and ETA to the nominated discharge port.
After ship has been loaded, Seller issues the full Proof of Product (POP) package to the Buyer. The POP package will include: Bill of Lading (B/L), commercial invoice, certificate of origin, certificate of quality, certificate of quantity, marine insurance certificate, and vessel details with confirmed ETA to the nominated discharge port.
When the ship arrives at the nominated discharge port, Seller issues an Authorization to Verify (ATV) to the Buyer, granting formal authorization for the Buyer's independent inspector to be present at the nominated discharge port upon vessel arrival to conduct product inspection.
Upon vessel arrival at the Buyer's nominated discharge port, Buyer's appointed independent inspection company conducts a physical dip and test of the cargo to verify quantity and specification compliance with EN 590 10PPM standards. The inspection comp
Following successful inspection and Buyer's written confirmation of product acceptance, payment is executed via release of the Transferable LC in accordance with its terms and conditions, or Buyer can leave the Transferable LC in place for the next order and pay via wire transfer. Upon confirmation of funds clearing, Seller authorizes discharge of the cargo at the nominated port and formally transfers title to the Buyer.
Any delays in verifying the fuel, including dip tests, financial delays, etc. will result in demurrage charges to be paid by the Buyer. Buyers are advised to ensure all inspection parties and financial instruments are in place prior to vessel arrival at the nominated discharge port.
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