Concerned About Fraud In Crude Oil Selling? Why, for Patrons, getting the 2 P.c Performance Bond by the vendor is the best & Surest Proof of a real Vendor
Credible analysis has proven that, while just about each supposed crude oil seller who goes to a possible crude purchaser to solicit enterprise, would virtually At all times profusely forswear heaven and earth that he, or the crude oil he professes to be promoting, is “absolutely reliable, dependable, genuine, authentic, and sincere,” nearly each Objective, CREDIBLE Evidence obtainable, on the other hand, offers a totally reverse and contrary Actuality – particularly, that the overwhelming majority of those supposed sellers and their provides (in deed, up to the extent of ninety nine.999999%, in accordance to 1 report) are totally faux, bogus, fraudulent or not official.
MASTERFULLY Forged & FALSE Documents ARE AT The heart OF THE CRUDE/Buying Selling Rip-off OPERATIONS
The first instrumentality by which these fraudulent con artists and crude “sellers” operate or perpetrate their con sport, is using skillfully forged or false documents. Such fraudulent and pretend “sellers” – or, not less than, the last word masterminds who originate and stand behind the scheme – are infamous for being grasp forgers and excellent copiers of each conceivable authentic refinery and authorities company paperwork related to crude gross sales or purchases. In deed, in line with specialists, so masterful at this sport are these fraudsters, that the documents they supply to prospective patrons are often so strikingly convincing and actual-wanting that they’re regularly plain tough, if not inconceivable, for nearly all but the most skilled of doc authentication specialists to immediately distinguish from the real and authentic ones.
As one report by the Fraud Watch International summed it up, “Victims [of such fraud] are sometimes satisfied of the authenticity of Advance Price Fraud schemes by the forged or false paperwork bearing apparently official Nigerian government letterhead, seals, as well as false letters of credit score, fee schedules and financial institution drafts.”
The U.S. State Department’s Bureau of Worldwide Narcotics and Regulation Enforcement Affairs, in a report titled “Nigeria Advanced Charge Fraud,” describes the documents employed by the Nigerian Advanced Charge Fraud (AFF) or 419 perpetrators, as “official-wanting stationery with applicable government seals, stamps, and signatures,” whose quality, it says, has “developed over the years, from poorly handwritten letters to extra skilled merchandise ready on word processors. Word processors additionally enable AFF criminals to generate extra letters.” It provides that the “AFF criminals include college-educated professionals who’re the perfect on the planet for nonviolent spectacular crimes.”
The primary Problem: INABILITY BY Consumers TO Confirm SELLERS’ CLAIMS & Paperwork
The point is that, largely in consequence of the above actuality, for critical worldwide patrons of Nigerian crude oil, the single most critical and most tough and risky drawback they confront within the open market, is now typically the verification and confirmation of the seller’s claims about having an genuine crude allocation and/or its present availability, and the affirmation of the proofs and paperwork submitted by them in support of these claims. For most buyers, endeavor that process is commonly dreaded and considered as one thing fraught with massive risks and uncertainties that ought to solely be threaded with the utmost warning, and the best care and deliberation.
Consumers’ “Most well-liked” PROOF & Proof OF CREDIBLE Vendor Immediately – a 2% PB
Because verification and affirmation of such documents from sellers are usually so troublesome and dicey, most such international crude oil consumers seek, due to this fact, to buy Solely from sellers who can present them what they consider the safest, most tangible, and most simply reliable sort of proof and proof of credibility by a seller. And what is this “most well-liked” proof and proof that the majority consumers would reasonably have? It is just this – the supply by a seller of a 2% Efficiency Bond (PB) to the purchaser.
The same old VERIFICATION & Confirmation APPROACHES
In a word, the standard proofs and proof of crude allocation and availability offered by sellers to prospective patrons, is often the availability to the Buyer of the cargo’s PROOF OF PRODUCT or POP. In a C.I.F. or F.O.B deal, for example, the everyday manner by which a supposed crude oil seller shows “proof” or proof to a possible buyer that the vendor has a genuine crude allocation or crude available to sell, is for the vendor to provide the buyer the PROOF OF PRODUCT, and the purchaser is asked to “confirm and affirm” the authenticity of this on his own, and, upon that, for the patrons to challenge their Bank Guarantee or Letter of Credit (or other cost instrument) to cowl the acquisition cost of the product at delivery.
But the issue with this traditional technique, is that for many worldwide crude patrons, the average Nigerian seller’s POP (an array of paperwork that would embrace the present loaded vessel paperwork, present Authority to Board (ATB) that was particularly issued to the initial buyer (consignee) of the crude in whose name the vessel was issued, Certificate of high quality, Certificate of origin, Cargo manifest, Vessel ullage report, Certificate of amount, Bill of lading, the majority Allocation Particulars, the vendor’s Authority to Promote (ATS) from the NNPC, etc), shouldn’t be reliable or readily verifiable for genuineness. For example, the POP, which is, in a phrase, the vendor’s most important document that is meant to prove to the buyer that the vendor truly has the product being bought, is likely to be exhibiting that an proprietor 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 isn’t any assure that the product may not have been offered to another purchaser just hours, or even minutes, proper after that transaction, and that the commodity is actually nonetheless out there on the market or supply to the buyer.
“Most buyers do not settle for Nigerian sellers’ proof of product (POP),” says Sam Nelson, an expert in crude buying and selling strategies and the writer of a primer on the subject. “Because of this, they (the Consumers) need a tangible (Physical) proof of product. The buyer would request that the seller inspect the cargo and present a verifiable inspection report from accredited businesses like SGS, Q & Q or Robinson International earlier than they (the Consumers) will charter a vessel for the transaction. This is because some so-known as Nigerian sellers have false claim over merchandise that never existed and they’d forge documents to current as POP. Nigerian market needs to be adopted very rigorously and all documentations completely verified.”
Nelson provides: “Please don’t give any inspection cash to the vendor. Always pay the money on to the inspection firm after they’ve collected samples of the crude oil from the mom vessel for chemical evaluation to confirm 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. Don’t accept any documents as genuine if you did not confirm it from the captain of the feeder vessel. Any documentation from a Nigeria seller should be verified for authenticity.”
MOST Paperwork OR PROOFS BY NIGERIAN SELLERS ARE Seen WITH SUSPICION
In deed, nowadays, the identical problem of common inability to definitively authenticate genuine crude allocation or availability, now pervades even situations the place “tangible, physical” POP inspection has supposedly been made. And a few buyers discover that even this cautionary recommendation 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 usually not quite work any extra in many situations at the moment.
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 usually no more a assure that the transaction is necessarily real or reputable. Nigerian con males and 419ers who operate within the crude oil business, have been identified to work with fraudulent vessel managers and captains or con males disguised as employees of the Shell/JV terminal operators. And Vessels confirmed as “pregnant” (i.e., loaded) even by the purchaser’s representatives and his appointed SGS inspectors invited to come back aboard the ship on a presumed ship “captain’s” ATB doc, have been known to be really arranged by fake ship operators and ship managers and “captains”; and in such cases the purchaser will only be taking over a ship and cargo with Fake Charter Celebration Agreement executed between the buyer and faux ship supervisor, with no Genuine ship proprietor’s approval and no genuine transport paperwork. And once the purchaser’s representatives aboard the vessel confirms that the vessel is “pregnant,” the buyer pays for the cargo, takes over the vessel, and the con males rapidly cut up the money and vanish. The buyer losses every thing since the respectable vessel proprietor never authorized the captain to difficulty the CPA, and the important cargo shipping paperwork used within the transaction are all merely pretend.
Nigeria’s bureaucratic quagmire
And there’s one more downside involved in attempting to authenticate Nigerian crude oil paperwork. The issue of the bureaucratic quagmire related to doing enterprise in Nigeria. One expert vastly experienced in doing crude oil shopping for business in Nigeria, put it this approach to this author: “NNPC Crude Oil Advertising and marketing Division, Abuja, is the authoritative source to confirm the Authority to Promote doc. However you will spend an endless amount of time trying to confirm it. As with most Nigerian institutions, folks use personal connections to get such documents, however that doesn’t mean that they will ship.”
WHAT Consumers NOW VIEW AS The best AND MOST “Most popular” PROOF OF AN Genuine CRUDE Vendor – A Seller WHO CAN Provide Purchaser A 2% Performance BOND
In short, the purpose is that virtually all traditional manners of verification and confirmation of crude oil possession and availability have develop into severely contaminated and adulterated by con artists and fake operators to the purpose that many worldwide crude oil patrons regard these strategies as largely unreliable, too difficult to confirm, and fraught with insupportable risks. And consequently, there has advanced among them what could immediately be called a “most well-liked” methodology for determining an genuine and credible vendor of crude oil in today’s market. Such a vendor is solely one who can meet one fundamental requirement – specifically, is willing and able to offer the purchaser a 2% Efficiency Bond upfront in a transaction.
What’s a Efficiency Bond or PB?
That is, in a word, an insurance coverage doc issued for the seller by seller’s bank or insurance firm guaranteeing that the issuer can pay a stipulated amount (a sum amounting, in this case, to 2% of the total worth of the cargo being purchased) to the purchaser in the occasion that the seller breaches (fails to carry out) the phrases and specifics of the contract signed by the vendor with the purchaser. (The Efficiency Bond could also be posted within the form of a Money Bond). The bank or insurance coverage company which points the PB acts because the responsible “surety” of the bond
If a vendor contracts with a purchaser to place up a 2% PB – and is able to really post that bond together with his financial institution or insurance firm – the vendor is, in a word, guaranteeing the buyer that if he had been to fail to perform his obligations underneath that contract, his bank or insurance coverage firm, of their roles as the “surety” of the bond, will pay the buyer a sum amounting to 2% of the value of the crude being bought, regardless.
WHY Patrons LOVE THE Performance BOND Assure
Buyers love finding sellers who can provide them UPFRONT 2% Performance Bond, overwhelmingly viewing that as the “most popular” choice as they consider that the safest, most dependable, most tangible, and most assured and least fraud-prone type of proof and proof of credibility by a vendor. Most experts contend that if a seller can offer a 2% PB deal – and, what’s much more essential, is actually in a position to post the PB because he has the financial wherewithal to take action – it is almost assured that the vendor is not going to fail the buyer in the actual execution of the deal, however will almost surely carry out those obligations as contracted with the buyer.
Sam Nelson, professional in crude shopping for and selling methods and the writer of a primer on the subject, put it this manner: “A contract with any of these bonds in place will likely be efficiently completed. 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 a good motive for them to carry out.”
And the Authorized Dictionary explains it this manner: “The purpose of a bond is to offer an incentive for the success of an obligation. It additionally provides reassurance that the obligation might be fulfilled and that compensation is offered if it’s not fulfilled. Performance Bonds guarantee for the passable completion of a undertaking.”
There are a few specific bases why consumers and specialists really feel that means:
1. Having the ability to put up a PB is an indication of monetary credibility and potential.
To have the ability to finance an precise posting of a 2% PB (which can mean, for example, 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 financial skill and sources.
2. Financial Price and Penalty Involved In Posting a PB, is a powerful Disincentive Not to Carry out.
Sam Nelson: “The players have their cash at stake and that is a good reason for them to carry out.” In deed, most consumers, upon getting the 2% PB issuance from a vendor, would promptly accept that as equal to POP and forgo having to evaluation the POP.
Three. The conventional Con Man or 419er Will not Have the Disposition, the Popularity & Monetary Wherewithal to Submit a PB.
Robert Strickland of Strickland Associates, an experienced New York dealer in crude oil offers, says as follows: “If you’re concerned with FRAUD! Only true Sellers that offer a 2%+ Efficiency Bond are genuine Sellers of Nigeria [crude oil].”
Sam Nelson, the crude oil deals knowledgeable and creator: “These bonds are crucial to guard the interest of the parties involved for pointless losses as a result of fraud or full negligence.”
Four. Having the ability to publish a PB is a solid indication to a buyer that the seller has already been vetted.
Acquiring a PB is generally not an easy or computerized factor. Before a financial institution or insurance coverage firm would give a seller a bond, the seller shall have gone by way of a rigorous application process, and must have met a set of stringent monetary and character necessities and situations. Hence, when a buyer gets a vendor who can, and does truly, submit a 2% PB, the buyer is almost assured that he’s received a credible vendor, and one most unlikely to be a fraudster or a 419er.
For simply an example, one Syracuse, New York, insurance coverage firm requires applicants for a Public Construction job PB to provide them the next objects, among others:
Surety Questionnaire Stuffed Out Utterly
Copy of Contract/Award Letter or Solicitation Letter
Enterprise Financial Statements (2 years audited fiscal yr financials) OR
Final 3 years Firm Revenue Tax Returns
Personal Monetary Statements and Resumes on all house owners of 10% or more
Work in Progress Schedule (if applicable)
Insurance Affirmation
A. Workman’s Compensation
B. Legal responsibility Certificate
C. Key Man Coverage
Supplier and Contractor Reference Letters
Schedule of Completed Jobs
Bank Reference Letter
Company and personal Indemnification (GAI we provide)
Articles of Incorporation
Corporate Resolution
Job Value Breakdown and/or bid specs
To most buyers of crude oil within the international open market, getting an UPFRONT 2% Performance Bond issuance from a vendor, is the overwhelmingly “most well-liked” methodology for doing a gross sales/purchase deal. It’s the option they consider to be the safest, most dependable, most tangible, and most assured and least fraud-prone sort of proof and evidence of credibility by a seller.
For varied reasons and factors, many of which are outlined above, most buyers and specialists believe that if a vendor can offer a 2% PB deal – and, what’s even more important, is actually in a position to put up the PB as a result of he has the monetary wherewithal to do so – it is almost assured that the seller won’t fail the buyer in the actual execution of the deal, however will almost surely carry out his own obligations as contracted with the purchaser. Therefore, in a deal of that type the buyer has little or nothing to worry about regarding a potential threat of fraud or rip-off. In consequence, patrons love discovering sellers who can present them – who can really submit – a 2% PB, and consider that to be the perfect proof and assurance of having a credible vendor, and one most unlikely to not carry out the contract, or to be a fraudster or a 419er
Be aware: As with many things regarding many a Nigerian crude vendor, it’s one thing for a vendor to claim to a purchaser that he’ll publish the PB, however quite another thing altogether for the vendor to be in a position to actually do it, or to actually do it!),.
YOU Want to Comply with UP ON How you can Assure GETTING A NIGERIAN CRUDE OIL Seller WITH A true, UPFRONT 2% Performance BOND? OR Vendor WITH Other Sorts of Sales Offers That are Genuine, “Secure” AND Rip-off-FREE?
INSTRUCTION: You can accomplish that. You may readily get hold of the particular primary requirements you’d need to fulfill in order for you to grow to be robotically thought of “proven” as a actually Reputable vendor who actually genuinely has some crude to promote. USE THE Creator’S 5 Fundamental Choices PROGRAM.
