GETAPPLE does not issue BCL or provide POF prior to acceptance of offer and contract signing. To do otherwise is foolhardy and makes no business sense. Business confidentiality is paramount, as a full service consultancy GETAPPLE can undertake no action to endanger its principals or clients, providing loose access to GETAPPLE banking is such an action. No serious buyer gives an untested vendor access to banking confidential access.
In general only brokers, not principal suppliers seem to request BCLs. This seems to be to gain a sense of comfort. However, at most a BCL will only indicate some degree of financial capacity. Buyer trying to provide premature proof of RWA via a BCL does not guarantee purchase, period. It says "I have money to buy something", it does not say "I will buy something from you."
BCLs never prove RWA for reasons detailed below, therefore requiring them is a waste of time and generally a deal killer.
A serious Seller is concerned about one thing only, closing a sale. Where the Buyer's funds come from, at what stage in a transaction Buyer might choose to fund a certain account, and other matters are simply not the Seller's concern as long as the Buyer is able to perform as required. A LC 100% guaranteed by the bank at the appropriate stage of transaction is the most appropriate method of demonstrating RWA, such an irrevocable payment is useless until the documents passing title to the Buyer are produced. No money - no product, no product documents - no money.
This is the most secure and safe protocol protecting Buyers and Sellers globally. Even if a Buyer decides foolishly to issue a full BCL this does not fully prove the Buyer is RWA, the only serious thing that proves a Buyer is RWA is to deposit a credit payment instrument.
In both domestic and international sales the BCL is never seriously used between principals and, in fact, proves nothing anyway. The BCL has some limited use between subsidiaries of the same corporation and certain other esoteric uses that need not concern us here.
Brokers who request a BCL need to consider that few serious Buyers will issue a financial statement of such confidentiality in today's international area rife with fraud, identity theft, piracy, and other financial threats to fortune, life, and limb. The intermediary who foolhardily insists on a BCL consistently condemns his deal to collapse. In a world of rampant fraud no serious buyer allows soft probes into their banking. No serious deals ensue when conducted using non-ICC approved pseudo protocols involving LOI, NCND Agreements, BCL letters, and the like.
List of nonsensical Brokers terms
Terms that do not exist in real banking world nor real international deal, only appear most frequently in the internet.
Bank Hard Copy
Bank/Corporate Pay Order
Blocked Funds Letters
Clean, Cleared Funds of Non-Criminal Origin Conditional Swift/Wire
For value received, we, the undersigned officers of ….. Fresh Cut
ICC 3034/3039 Format
Instruments free of liens and encumbrances International Banking Hours/Days
Irrevocable, Confirmable, Assignable, Divisible, Transferable KTT
London Short Form
One Year and One Day
Prime Bank Debentures, Guarantees or Notes Proof of Funds Letters
Rolls and Extensions
RWA Ready Willing and Able
Subject to the laws of U.S.A., Switzerland, England and etc. Tier 1 Banks
Under Penalty of Perjury
LOI (Letter of Intent - improper term)
Letters of Intent have no weight whatsoever in international trade rules. Anything backed by a LOI has no binding power because the LOI has no place in legally binding international trade protocols. One can seek clarification on this point from the ICC directly.
In general, the issuer of an LOI has no liability since under international law, such Intent can't be legally binding. This is the case even after contracts are issued. A LOI expresses an "Intent", nothing more. One can intend to purchase today and change one's mind tomorrow. Letters of Intent have certain binding or non binding legal applications in domestic trade under various laws of various countries.
In the international trading arena the Letter of Intent, however, means nothing. A Letter of Intent proves exactly that, Intent. It reflects an understanding of the intent of one or more parties to act. Intent can change in seconds. There is nothing binding about intent. A letter of intent is a simple enquiry, no more and no less. There is no standard application of the LOI with the BCL in International sales transactions.
International legally binding rules of contract stipulate the very first document in the transaction is the Quotation. This is followed by an actual offer. The offer may in some contexts be a legally binding contract, in other contexts the offer is followed up by a formal sales contract supported with "consideration", amongst the consideration due is monetary remuneration.
In the international trade arena NCND Agreements are not binding and impossible to enforce. It is impossible to prove circumvention took place between two parties without considerable legal resources and NCND agreements simply aren't recognized. They can be adjudicated in local courts but how will you sue someone for a breech halfway around the world while not even being able to rigorously provide proof that a transaction occurred as result of the breech?
There is no need for a Buyer and direct Supplier, or a Buyer and the intermediaries, agents and brokers alike, between the Buyer and Supplier, to sign a NCND. In fact requesting a NCND is a red flag illustrating possible unprofessionalism, and ignorance of international trading procedures and laws. Please read this information detailing on our Anti Fraud advisory.
A "Performance Bond"(PB) could be applied in a deal where delivery was based on "Ex Ship" as defined under Incoterms 2000.
Where the “assurances” given apply to "Bond" with the goods, until such goods arrive in the contracted condition into the possession of the End Buyer, in his port of discharge. In an "Ex ship" deal the goods and not the documents must arrive before delivery is said to have occurred.
Once the deal is "At sight" 100% against presentation of documents FCA/FOB/CIF, this must be a Performance Guarantee, since such seller cannot deal the possession of goods (physical), the Performance in this case being "Delivery” is only applied to the securing of the title or leading delivery documents to the goods being offered, and to do so in a certain time frame as per it’s guarantee.
S.W.I.F.T. Standards 2008
The Society for Worldwide Interbank Financial Telecommunication ("SWIFT") operates a worldwide financial messaging network. Messages are securely and reliably exchanged between banks and other financial institutions. SWIFT also markets software and services to financial institutions, much of it for use on the SWIFTNet Network, and ISO 9362 bank identifier codes are popularly known as "SWIFT codes".
The majority of international interbank messages use the SWIFT network. As of December 2007 SWIFT linked 8,332 financial institutions in 208 countries. SWIFT does not facilitate funds transfer. Financial institutions would need a corresponding banking relationship for financial transactions. Not all financial institutions have banking business relationships, but rather peripheral. Each financial institution, to exchange banking transactions, must have a banking relationship by either being a bank or affiliating itself with one (or more) so as to enjoy those particular business features.
SWIFT is a cooperative society under Belgian law and it is owned by its member financial institutions. SWIFT has offices around the world. SWIFT headquarters are located in La Hulpe, Belgium, near Brussels.
It was founded in Brussels in 1973, supported by 239 banks in 15 countries. It started to establish common standards (See SWIFT Standards) for financial transactions and a shared data processing system and worldwide communications network. Fundamental operating procedures, rules for liability etc., were established in 1975 and the first message was sent in 1977.
S.W.I.F.T. is a registered mark of Society for Worldwide Interbank Financial Telecommunication.