RenAn Consulting can summarize the steps of a commodity purchasing procedure as follow:

Step 1. Soft Corporate Offer - SCO

Seller or Seller Mandate issues a SCO (Soft Corporate Offer).

Step 2. Letter of Intent - LOI

Buyer issues a LOI (Letter of Intent) including bank details.

Step 3. Full Corporate Offer - FCO

Seller issues a FCO (Full Corporate Offer) and a brief Company description.

Step 4. Irrevocable Corporate Purchase Order - ICPO

Buyer issues an ICPO (Irrevocable Corporate Purchase Order) and a BCL (Bank Comfort Letter).

Step 5. Draft Contract

Seller sends draft Contract for negotiations. Seller and Buyer sign and seal the Contract, exchange the electronic copies.

Step 6. Proof of Funds - POF

The Bank of the Buyer within … working days provides the POF (Proof of Funds).

Step 7. Proof of Product - POP

The Bank of the Seller within … working days provides via SWIFT MT 799 to the Bank of the Buyer the confirmation of the possessing of POP (Proof of Product) issued to the name of Seller and the readiness to issue PB (Performance Bond) guarantee (2 %).

Step 8. Letter of Credit - L/C

The Bank of the Buyer within … working days from receipt of SWIFT MT 799 establishes a no operative L/C (Letter of Credit) in favour of the Seller.

The Bank of the Buyer within … working days from receipt of SWIFT MT 799 establishes a no operative L/C (Letter of Credit) in favour of the Seller.

Step 9. Activating Letter of Credit

Seller and Buyer lodge the contracts in their banks.

The Bank of Seller in … banking days after the receipt of the hard copies of contract provides the full POP and the PB which activate the L/C.

Step 10. Shipment

Seller informs the Buyer about the readiness for shipments.

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