[of such fraud] are often satisfied of the authenticity of Advance Payment Fraud schemes by the solid or false documents bearing apparently official Nigerian authorities letterhead, seals, as well as false letters of credit, cost schedules and financial institution drafts.”
The U.S. State Division’s Bureau of Worldwide Narcotics and Legislation Enforcement Affairs, in a report titled “Nigeria Advanced Fee Fraud,” describes the documents employed by the Nigerian Superior Price Fraud (AFF) or 419 perpetrators, as “official-trying stationery with applicable government seals, stamps, and signatures,” whose quality, it says, has “evolved through the years, from poorly handwritten letters to more professional merchandise prepared on word processors. Phrase processors additionally permit AFF criminals to generate extra letters.” It adds that the “AFF criminals embody university-educated professionals who’re the perfect on the earth for nonviolent spectacular crimes.”
The main Drawback: INABILITY BY Buyers TO Verify SELLERS’ CLAIMS & Paperwork
The point is that, largely in consequence of the above reality, for critical international consumers of Nigerian crude oil, the one most important and most difficult and dangerous downside they confront in the open market, is now often the verification and confirmation of the seller’s claims about having an authentic crude allocation and/or its present availability, and the affirmation of the proofs and documents submitted by them in assist of these claims. For many patrons, enterprise that activity is often dreaded and considered as one thing fraught with massive dangers and uncertainties that should only be threaded with the utmost warning, and the best care and deliberation.
Consumers’ “Preferred” PROOF & Proof OF CREDIBLE Vendor At the moment – a 2% PB
Because verification and affirmation of such paperwork from sellers are usually so troublesome and dicey, most such worldwide crude oil patrons search, due to this fact, to buy Solely from sellers who can present them what they consider the safest, most tangible, and most easily dependable kind of proof and evidence of credibility by a vendor. And what is this “most well-liked” proof and evidence that almost all buyers would quite have? It is solely this – the provision by a seller of a 2% Efficiency Bond (PB) to the purchaser.
The usual VERIFICATION & Affirmation APPROACHES
In a phrase, the usual proofs and evidence of crude allocation and availability provided by sellers to prospective consumers, is commonly the provision to the Purchaser of the cargo’s PROOF OF PRODUCT or POP. In a C.I.F. or F.O.B deal, for instance, the standard method by which a supposed crude oil vendor reveals “proof” or evidence to a potential purchaser that the vendor has a real crude allocation or crude out there to sell, is for the vendor to offer the buyer the PROOF OF PRODUCT, and the buyer is requested to “confirm and verify” the authenticity of this on his own, and, upon that, for the buyers to subject their Financial institution Guarantee or Letter of Credit score (or different fee instrument) to cover the purchase price of the product at delivery.
But the issue with this traditional methodology, is that for most international crude buyers, the common Nigerian vendor’s POP (an array of paperwork that might include the present loaded vessel documents, present Authority to Board (ATB) that was particularly issued to the initial purchaser (consignee) of the crude in whose name the vessel was issued, Certificate of quality, Certificate of origin, Cargo manifest, Vessel ullage report, Certificate of quantity, Bill of lading, the majority Allocation Details, the seller’s Authority to Promote (ATS) from the NNPC, and so on), isn’t dependable or readily verifiable for genuineness. For instance, the POP, which is, in a word, the seller’s important document that is meant to prove to the purchaser that the vendor actually has the product being bought, might be showing that an owner of the oil allocation or commodity has possession of the product as of the precise time of the transaction, say, at a sure hour of the day at the moment. But yet, there is no such thing as a assure that the product won’t have been sold to a different buyer simply hours, and even minutes, right after that transaction, and that the commodity is actually nonetheless available for sale or delivery to the buyer.
“Most patrons do not accept Nigerian sellers’ proof of product (POP),” says Sam Nelson, an skilled in crude shopping for and promoting methods and the creator of a primer on the topic. “On account of this, they (the Buyers) want a tangible (Bodily) proof of product. The purchaser would request that the vendor inspect the cargo and present a verifiable inspection report from accredited businesses like SGS, Q & Q or Robinson International before they (the Consumers) will charter a vessel for the transaction. It’s because some so-called Nigerian sellers have false claim over products that never existed and they would forge documents to current as POP. Nigerian market needs to be followed very carefully and all documentations completely verified.”
Nelson provides: “Please do not give any inspection money to the seller. All the time pay the money on to the inspection company after they’ve collected samples of the crude oil from the mother vessel for chemical analysis to verify the standard and amount of the crude in the vessel. Also, insist that the ATB (Authority To Board) from the vessel for inspection originated from the captain of that vessel. Do not accept any paperwork as genuine when you did not confirm it from the captain of the feeder vessel. Any documentation from a Nigeria vendor should be verified for authenticity.”
MOST Paperwork OR PROOFS BY NIGERIAN SELLERS ARE Seen WITH SUSPICION
In deed, these days, the identical problem of basic inability to definitively authenticate genuine crude allocation or availability, now pervades even conditions where “tangible, physical” POP inspection has supposedly been made. And a few buyers find that even this cautionary advice by Nelson, that the buyers should “insist that the ATB (Authority To Board) from the vessel for inspection originated from the captain of that vessel,” would typically not fairly work any extra in lots of situations immediately.
In a TTO deal, for example, the fact of the buyers’ representatives boarding the vessel to make an “inspection” or “affirmation” of the “loaded” vessel, is often no more a guarantee that the transaction is necessarily real or reliable. Nigerian con males and 419ers who function in the crude oil trade, have been known to work with fraudulent vessel managers and captains or con men disguised as employees of the Shell/JV terminal operators. And Vessels confirmed as “pregnant” (i.e., loaded) even by the buyer’s representatives and his appointed SGS inspectors invited to come aboard the ship on a presumed ship “captain’s” ATB doc, have been known to be truly organized by faux ship operators and ship managers and “captains”; and in such instances the buyer will solely be taking over a ship and cargo with Pretend Charter Get together Agreement executed between the buyer and pretend ship supervisor, with no Authentic ship owner’s approval and no genuine delivery paperwork. And once the buyer’s representatives aboard the vessel confirms that the vessel is “pregnant,” the buyer pays for the cargo, takes over the vessel, and the con men quickly split the cash and vanish. The purchaser losses every little thing for the reason that legitimate vessel owner by no means authorized the captain to difficulty the CPA, and the important cargo transport paperwork used within the transaction are all merely faux.
Nigeria’s bureaucratic quagmire
And there’s yet another downside involved in trying to authenticate Nigerian crude oil paperwork. The problem of the bureaucratic quagmire related to doing enterprise in Nigeria. One skilled vastly experienced in doing crude oil buying enterprise in Nigeria, put it this way to this writer: “NNPC Crude Oil Marketing Division, Abuja, is the authoritative supply to confirm the Authority to Promote doc. But you’ll spend an infinite amount of time attempting to verify it. As with most Nigerian institutions, people use personal connections to get such paperwork, however that doesn’t imply that they can ship.”
WHAT Buyers NOW VIEW AS The best AND MOST “Most popular” PROOF OF AN Authentic CRUDE Vendor – A Seller WHO CAN Present Purchaser A 2% Efficiency BOND
In short, the point is that just about all conventional manners of verification and affirmation of crude oil possession and availability have turn out to be critically contaminated and adulterated by con artists and faux operators to the point that many international crude oil consumers regard those strategies as largely unreliable, too tough to confirm, and fraught with intolerable risks. And consequently, there has evolved among them what may right now be called a “most popular” technique for determining an authentic and credible seller of crude oil in right now’s market. Such a seller is simply one who can meet one basic requirement – specifically, is prepared and ready to supply the buyer a 2% Performance Bond upfront in a transaction.
What is a Performance Bond or PB?
That is, in a phrase, an insurance doc issued for the seller by vendor’s bank or insurance firm guaranteeing that the issuer can pay a stipulated quantity (a sum amounting, on this case, to 2% of the full value of the cargo being bought) to the buyer within the occasion that the vendor breaches (fails to perform) the phrases and specifics of the contract signed by the seller with the purchaser. (The Performance Bond is also posted within the type of a Cash Bond). The financial institution or insurance firm which issues the PB acts because the responsible “surety” of the bond
If a seller contracts with a buyer to put up a 2% PB – and is ready to really submit that bond with his bank or insurance coverage firm – the seller is, in a word, guaranteeing the purchaser that if he have been to fail to perform his obligations underneath that contract, his financial institution or insurance coverage company, in their roles as the “surety” of the bond, can pay the purchaser a sum amounting to 2% of the value of the crude being bought, regardless.
WHY Consumers LOVE THE Performance BOND Guarantee
Buyers love discovering sellers who can present them UPFRONT 2% Performance Bond, overwhelmingly viewing that because the “preferred” option as they consider that the safest, most reliable, most tangible, and most assured and least fraud-prone kind of proof and evidence of credibility by a seller. Most consultants contend that if a seller can offer a 2% PB deal – and, what is much more essential, is actually capable of submit the PB as a result of he has the monetary wherewithal to take action – it is almost assured that the seller won’t fail the buyer in the precise execution of the deal, however will virtually certainly perform those obligations as contracted with the buyer.
Sam Nelson, professional in crude shopping for and selling strategies and the writer of a primer on the topic, put it this manner: “A contract with any of those bonds in place will be efficiently accomplished. A bonded contract has a better degree of success than a non-bonded contract. A bonded contract is a bankable contract. The players have their cash at stake and that is an efficient motive for them to carry out.”
And the Legal Dictionary explains it this way: “The purpose of a bond is to offer an incentive for the achievement of an obligation. It also offers reassurance that the obligation will be fulfilled and that compensation is out there if it’s not fulfilled. Performance Bonds guarantee for the passable completion of a project.”
There are just a few particular bases why buyers and specialists really feel that way:
1. Being able to publish a PB is an indication of financial credibility and capability.
To be able to finance an actual posting of a 2% PB (which will imply, for instance, at the current crude prices, 2% of, say, $200 million for a 2 million barrels cargo, one thing amounting to $four million), a vendor must have some substantial monetary potential and assets.
2. Financial Value and Penalty Concerned In Posting a PB, is a strong Disincentive To not Perform.
Sam Nelson: “The players have their money at stake and that is an effective reason for them to perform.” In deed, most consumers, upon getting the 2% PB issuance from a seller, would promptly settle for that as equal to POP and forgo having to review the POP.
Three. The normal Con Man or 419er Is not going to Have the Disposition, the Fame & Financial Wherewithal to Put up a PB.
Robert Strickland of Strickland Associates, an experienced New York vendor in crude oil offers, says as follows: “In case you are concerned with FRAUD! Solely true Sellers that supply a 2%+ Efficiency Bond are genuine Sellers of Nigeria [crude oil].”
Sam Nelson, the crude oil offers skilled and writer: “These bonds are mandatory to guard the curiosity of the events concerned for unnecessary losses resulting from fraud or complete negligence.”
Four. With the ability to post a PB is a solid indication to a purchaser that the vendor has already been vetted.
Acquiring a PB is mostly not a straightforward or automated factor. Before a bank or insurance firm would give a seller a bond, the seller shall have gone via a rigorous software process, and should have met a set of stringent monetary and character necessities and circumstances. Therefore, when a buyer will get a seller who can, and does really, put up a 2% PB, the purchaser is almost assured that he is obtained a credible seller, and one most unlikely to be a fraudster or a 419er.
For simply an instance, one Syracuse, New York, insurance coverage company requires applicants for a Public Building job PB to provide them the next items, amongst others:
Surety Questionnaire Crammed Out Completely
Copy of Contract/Award Letter or Solicitation Letter
Business Financial Statements (2 years audited fiscal 12 months financials) OR
Final three years Firm Income Tax Returns
Personal Financial Statements and Resumes on all house owners of 10% or extra
Work in Progress Schedule (if relevant)
Insurance coverage Confirmation
A. Workman’s Compensation
B. Liability Certificate
C. Key Man Policy
Supplier and Contractor Reference Letters
Schedule of Accomplished Jobs
Bank Reference Letter
Company and personal Indemnification (GAI we provide)
Articles of Incorporation
Job Cost Breakdown and/or bid specs
To most patrons of crude oil within the international open market, getting an UPFRONT 2% Efficiency Bond issuance from a seller, is the overwhelmingly “most popular” methodology for doing a sales/purchase deal. It’s the option they consider to be the safest, most reliable, most tangible, and most assured and least fraud-prone form of proof and proof of credibility by a seller.
For varied causes and elements, many of that are outlined above, most patrons and specialists imagine that if a vendor can offer a 2% PB deal – and, what’s much more important, is actually in a position to submit the PB as a result of he has the financial wherewithal to take action – it is nearly assured that the seller won’t fail the buyer in the precise execution of the deal, but will virtually certainly carry out his personal obligations as contracted with the buyer. Therefore, in a deal of that type the buyer has little or nothing to worry about concerning a potential danger of fraud or rip-off. In consequence, buyers love finding sellers who can provide them – who can actually put up – a 2% PB, and consider that to be one of the best evidence and assurance of getting a credible vendor, and one most unlikely to not carry out the contract, or to be a fraudster or a 419er
Observe: As with many issues regarding many a Nigerian crude vendor, it is one factor for a seller to assert to a buyer that he’ll submit the PB, but fairly another thing altogether for the vendor to be able to really do it, or to actually do it!),.
YOU Need to Observe UP ON How one can Assure GETTING A NIGERIAN CRUDE OIL Vendor WITH A true, UPFRONT 2% Performance BOND? OR Seller WITH Different Sorts of Sales Deals Which might be Genuine, “Secure” AND Scam-FREE?
INSTRUCTION: You may do so. You may readily obtain the specific primary requirements you’d want to fulfill so as for you to turn into robotically considered “proven” as a actually Legit seller who actually genuinely has some crude to promote. USE THE Writer’S 5 Primary Choices PROGRAM.