NIAGARA ATLANTIC
INDUSTRIES
UNIFORM RULES AND PRACTICE FOR INTERMEDIARIES AND BROKERS. (URPIB).
URPIB Article 9. URPIB Article 12. URPIB Article 16.
Acceptable Products Policy Proof of Interest (PPI) Bank Comfort Letter.
URPIB Article 10. URPIB Article 13. URPIB Article 17.
Honourable Intent Performance Guarantee Corporate Business
URPIB Article 11. URPIB Article 14. URPIB Article 18.
Intermediary and Goods Shipment Date Contract versus Financial instrument.
URPIB Article 15. URPIB Article 19.
Pre- Advised credit UCP: Uniform Customs and Practice for Documentary
Credits.
URPIB Article 9.
Acceptable Products
An intermediary shall not trade in or attempt to trade with, the following products or entities:
PBG otherwise known as financial instruments; ‘Prime Bank Guarantees’. This includes Cash and Bank Warrants, Pension Funds, Medium Term Notes (MTN) and the like.
Any form of gold bullion (or other precious metals) held in electronic depository form. Physical trading in gold in any form is allowed where no certificate is apparent on such gold – this is also defined as ‘deep storage gold’, alluvial gold or dust. DSG must be refined at Buyer’s cost to obtain formal certification. Very experienced traders should attempt these trades.
Any form of diamonds or precious stones held in electronic depository form is not permitted. Physical trading in any precious stones is allowed, with the exception of ‘conflict diamonds’; diamonds obtained by the exploitation of children or which provide appalling pay and condition for its workers. In general only very experienced traders should attempt such a trade.
Any weapons or material, whether raw or processed, used to make weapons or devices of mass destruction. Legally acquired military equipment and such associated material allowed.Very experienced traders should attempt such a trade.
Any biological material that could be misused to the detriment of humans. (Medical equipment and medicines allowed.)
Any government, race or country that has a definite ill will against the United States of America or allied countries considered to be allies or amicable with the USA. Intermediaries may trade with countries which have demonstrated past ill will towards the USA but which now are making efforts to unite or reunite diplomatically with the USA.
A felon or person who has been incarcerated in a prison for any serious reason involving more that 12 weeks imprisonment, or a person who has been charged with matters of arson, fraud or deception, but who has or has not yet been imprisoned or otherwise sentenced for such an offence.
The intermediary should not trade/ resell nor be in possession of any trade secrets, copyright material or matters considered secretive by nature and state.
Intermediaries shall not practice any business that suggests money laundering or any associated criminal activity such as the trafficking of people or prohibited substances.
Any transaction in which the parties are not transacting in the same language.
Any primary crude oil transaction (or fuels in general). Secondary crude oil transactions are allowed. A primary contract is defined to be one where a precondition of sale requires the disclosure of a refinery processing agreement or similar.
An undischarged bankrupt may only trade in the position of a sourcing intermediary while attached and may not trade in the position of a primary principal defined as a buyer/seller.
A person of diminished mental capacity, or a person who cannot comprehend the language of a deal they are entering into.A person under 18 years of age.
The following commodities and quantities are best avoided: Non-ferrous scrap metal, Beef products, Quarantine products, Fumigated food products, Lose clothing. Single or Multi FCL loads.
Any other commodity traders who ask for T/T , SWIFT type of payments or PBG payments or an active or inactive SLC up front are to be avoided. Likewise trading in such instruments are not allowed-
Any producer, supplier entity in any country in where such has been noted for human rights violations.Any country in where violent civil disputes has broken out.
An intermediary shall not be involved with any exporter or importer of live animals in where cruel handling or processing methods are apparent.
An intermediary must at all times ensure that the product they are dealing with is indeed merchantable, appropriate and readily sourced from reputable suppliers. Further the intermediary must have made reasonable effort to ascertain by whatever means that the product they are dealing with is safe, legal and genuine, and is generally acceptable as a tradable product world-wide.
Shall not trade on offers and contracts where UN sanction are in force unless permission is sought of the UN in writing.
URPIB Article 10.
Honourable Intent
An intermediary shall not transact in bad faith or in a dishonourable manner. Any intermediary who circumvents others or produces offers without ‘ostensible authority’ shall be deemed to be a ‘dishonourable trader’, and shall not be allowed to trade within a string contract. Once the infringing party or person has been clearly identified as having transacted in a manner that is defined at being in bad faith, this person shall be blacklisted on the URPIB registry for life.
‘Dishonourable acts’ are defined as, among other things, wilfully deceiving an end buyer, supplier or any other intermediary in the course of a transaction, with the intention of causing or furthering the successful closure such a transaction. No intermediary can falsely represent that they have a ‘principal’ in relation to a transaction (the specific purpose of obtaining information being to source a principal, after previously declaring that they had already secured that principal.)
URPIB Article 11.
Intermediary and Goods
An intermediary is officially trading under the doctrine includes support of proper application of UCP banking rules, incoterms delivery rules, and English common law of contract formation. Then URPIB intermediary shall at all times trade in ‘documents’ and not the physical goods pertaining to such documents. Only statutory or federal laws in the exporter’s country are capable of overriding these rules and laws. Ultra-terms where applicable shall also be used.
URPIB Article 16:
Bank Comfort Letter.
Where one of the preconditions to a transaction is the supply of a Bank Comfort Letter (BCL) or similar associated with the issue of an ICPO or LOI (Letter of Intent) etc, these preconditions shall not be entertained under any circumstances.
Under URPIB a quotation, offer and contract must prevail to establish grounds under contract law, which defines inter alia, acceptance, legal capacity and consideration.
Of all laws English Law is ostensibly the leading jurisdiction in international trade. Intermediaries using URPIB shall apply English law and foreign governance of such to reinforce and favour their own trading activities.
Local laws are for local uses and shall not be used in extraterritorial dealings.
URPIB Article 17:
Corporate Business.
As already described the BCL and LOI are tools of trade used internally by corporate entities. In international trade LOI means ‘Letter of indemnity’ and Bank Comfort Letters are used in circumstances where a corporate entity needs to give financial support to a related associated sub entity, usually to one established in the same country of the issuer.
Intermediaries using URPIB shall not accept nor apply procedures in a trading environment by using an LOI associated with a BCL, other flawed terms such as - ASWP, NCND, ICPO, RWA, FFIDLC, PB, and the likes is a premier application. The use of these acronyms automatically invalidates the protection offered under URPIB. Where the Buyer/Seller encounters others using these flawed methods, the Buyer/Seller must personally adhere to the provisions URPIB (URPIB shall also mean the doctrine of trade as taught in the text of International trade and the successful intermediary) even if others associated in a potential trade do not. The Buyer/Seller shall not continue in any trade in which URPIB rules or appropriate endorsed variations to such are not being universally applied. Under no circumstances shall URPIB rules be used to apply midway in a transaction after it has commenced using other flawed applications.
There is no protection offered to an intermediary using the virtues of a NCNDA (Non disclose and non circumvention agreement) and as such NCNDA agreements shall be deemed as un-workable and ineffective for intermediary trading purposes. If it is used (as may be the case when involved with a supplier or end Buyer who requests it, in which case the intermediary complies in order to appease him) the Intermediary shall do so with the clear undertaking that such a document does not imply in any form that commissions will be assured, guaranteed or forthcoming. Signing this document does not either create or enforce the confidentiality issues as specified in URPIB.
Variations as published or being enacted by the FTN exporting doctrine of trade with it own attached or associated members or as disclosed online on any FTN Exporting endorsed site. Variation(s) as such is able to be applied without conflict to URPIB rules.
URPIB Article 18:
Contract versus Financial instrument.
No party to a trade will be permitted to present the contract of sale to a financial institution.
Banks deal in finance and not contracts.Any loan needed to open a DLC is an obligation of the lender to the banker.Once open the bank effects its guarantee to the seller.
Under URPIB an intermediary shall treat the financial instrument, the sales contract, and the insurance contract as all being individual documents that are separate to each other.
No bank issued guarantee are allowed to be accepted by an intermediary.
URPIB Article 19:
UCP: Uniform Customs and Practice for Documentary Credits.
Unless advised by his bank in relation to an active credit or if permitted by any URPIB updates, an intermediary is not allowed to issue an offer or contract that refers to or relies upon any other provisions pertaining to the issuance of a financial instrument other than UCP rules. This includes all financial Instruments issued as a “In house” DLC
URPIB Article 12.
Policy Proof of Interest (PPI)
An intermediary at all times trade in ‘documents’ and not the physical goods relating to the documents. No ‘proof of product’ (POP) documentation or often implied ‘POP ’ will be supplied before the applicable financial instrument to the transaction has been lodged into the account of the intermediary representing the ‘middle person’ in a particular transaction.
An intermediary shall not trade on a transaction where POP is insisted upon before the lodgement of the active financial instrument. Where a pre advised credit is issued an intermediary shall offer to provide a ‘Policy Proof of Interest’ certificate. This is based on the assumption that PPI is issued from the intermediary making the offer, who is in turn offering goods from a supplier in possession of goods and/or verified identifiable authorized agent or exporter of such.
PPI information should already be in the possession of the intermediary when making an offer.
An offer secured from a bona fide supplier in possession of goods or his authorized exporter or agent defines that the buyer/seller has secured the PPI
An intermediary who has not secured PPI has no goods to sell is the assumption.
URPIB Article 13:
Performance Guarantee
Other than that which has been already advised regarding the performance guarantee: under no circumstances shall a SLC supported performance guarantee be opened as active or inactive in any form whatsoever to favor an end Buyer before the financial instrument pertaining to the product being purchased has been lodged and accepted into the account of the ‘Buyer/Seller’ associated and controlling the deal in hand.
Intermediaries shall not transact on any deals in which the transaction calls for the performance guarantee to be lodged prior to the lodgement of an active financial instrument.
The term ’Performance Bond” is an inappropriate term of reference for use by URPIB intermediaries. URPIB Intermediaries shall use the term ' Performance Guarantee.'
URPIB Article 14:
Shipment Date
As far as the intermediary is concerned, no transaction shall be allowed to proceed where a ‘shipment date’ is more than twenty days after the issue of the bill of lading as per its issuance date.
A bill of lading for all FOB transactions shall mean a ‘received’ bill, where the intermediary is asked to assist the end Buyer in obtaining the bill of lading. All transactions involving a CIF deal shall require a ‘shipped’ bill. In all such transactions, the shipment date shall mean the date when the bill of lading is issued.
URPIB Article 15:
Pre Advised credits
As far as the intermediary is concerned a current version of a UCP formatted Irrevocable Transferable confirmed pre advised or not documentary letter of credit (as opposed to normal active documentary credits) is an acceptable instrument to request but only when issued as a UCP financial instrument and only if issued as confirmed. This is the preferred instrument for use by the intermediary, until such time as the intermediary gains enough confidence and experience to accept other forms of financial instruments. Other forms of DLC type of financial instruments (credit) defined as revolving instrument, confirmed instrument or instrument not carrying pre advice status .
An intermediary shall not transact on any deal where SWIFT or other methods apply for payment of goods.
A ‘Supplier’ purporting to offer goods shall not be considered a genuine ‘Supplier’, if they request payment in the form of a transferable letter of credit.
The Buyer/Seller shall allow the transferable instrument to be transferred only to a supplier’s account, as a ‘non transferable instrument.’
‘Back to Back’ letter of credit procedures are not allowed to be used by intermediaries under URPIB rules of trade. A transferable credit may only be transferred once. The end Buyer issues the credit to the Buyer/Seller(which may be transferred once) as ‘non transferable’ directly to the owner in possession of the goods and not to another Seller.
In accordance with UCP Post Office box addresses can no longer be cited on a credit. Further, the term ‘transferable’ must now be applied to the credit accordingly as advised from an end Buyer or his bank, to the Buyer/Seller or his bank.
The credit must be issued from a Top 100 world class safe bank, otherwise the credit must be advised as confirmed to the Buyer/Seller. The exception to this is a pre advised credit, which must be issued as confirmed in the first instance.
A confirmed credit allows the Buyer/Seller to ‘localize’ the credit. This means that the advising bank is not dependent on the issuing bank’s instructions, and allows collection upon examining the documents required for delivery presentation. All expenses of adding confirmation to the credit shall be for the account of the end Buyer. In house credits or any other credit may not be used.
Until ‘great’ or ‘good” trading experience over years is gained by the URPIB trader signifies to mean that one non bulk break cargo deal has been closed.
Even where ‘great’ or ‘good’ trading experience is apparent , commission or gains made / earned shall not be used to physically buy products for selling and that such practices are not conducive to the intermediary trading ideal.
All transferable credit ' transfer fee' is paid by as agreed by the end buyer , when transfer is initiated, as per the request of the advising bank as made to the DLC issuing bank.