FOB Rotterdam Transactions
FOB Rotterdam Transactions
Comprehensive Guide to Petroleum Product Purchases
Documentation and Transaction Procedures for FOB Rotterdam Port
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Procedure 1: Buyer Submits ICPO and Notice of Readiness (NOR)
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The buyer is required to submit an ICPO accompanied by a Notice of Readiness (NOR) from their tank farm or ship, along with all relevant documents. Once these terms are accepted by the buyer, pricing discounts may be offered. Note that the absence of an NOR will result in the termination of the deal, as this is a strict policy enforced by refineries.
1. Buyer submits ICPO (including passport and Company Profile) and Proof of Funds (POF) & NOR to the seller.
2. Seller responds with a Confirmation Letter of fuel availability.
3. Seller issues a Joint Participation Agreement (JPA).
4. Upon receipt of the signed JPA, seller issues a Commercial Invoice (CI).
5. Upon receipt of the signed CI, seller issues a Dip Test Authorization (DTA).
6. Following a successful SGS report, the seller arranges fuel transfer to the buyer’s tanks.
7. Upon confirming fuel transfer, the buyer pays for the fuel, and the seller issues Proof of Product (POP) and other relevant documentation.
Note: Procedures may vary slightly based on the seller. Transactions are conducted via the Merrill Lynch Commodities Trade Desk in New York. Buyers must have banking in the US or a corresponding bank in the US. Is your buyer incorporated in the US or EU, and where is their banking transacted?
Procedure 2: Buyer Shows Proof of Storage Agreement (TSA)
1. Buyer issues an Irrevocable Corporate Purchase Order (ICPO) with seller procedures, including a company profile and valid passport copy.
2. Seller issues a Draft Contract along with a Commercial Invoice. The buyer signs and returns these along with verifiable tank coordinates and a Tank Storage Agreement (TSA) not older than 10 days. The seller verifies and approves the TSA.
3. Seller provides Preliminary Proof of Product (PPOP) documents via Email or Fax to the buyer, including:
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Authorization to Sell (ATS)
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Product Quality Passport (Dip Test Result)
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Letter of Commitment to Supply
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Statement of Product Availability
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Reservoir Storage Receipt
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Allocation Transaction Passport Code Certificate
4. Within 3 days of receiving and verifying PPOP documents, the buyer provides a suitable storage tank for product injection, subject to seller approval.
5. Buyer provides a verifiable Tank Storage Receipt (TSR) and Authorization to Inject (ATI) Document to the seller with an injection permit.
6. All parties sign a Non-Circumvention, Non-Disclosure Agreement/International Master Fee Protection Agreement (NCNDA/IMFPA).
7. Seller issues a Dip Test Authorization (DTA) and a Complete Fuel Injection Report.
8. Upon satisfactory Dip Test Inspection, the seller issues the Title Transfer of Product Ownership and all necessary Export Documents. The buyer releases the full cost of the product via MT103 TT wire transfer within 72 hours, and lifting commences.
Procedure 3: Supplier-Specific Option (FOB Rotterdam & Houston)
1. Buyer issues ICPO, Company Profile, and passport copy (or company license) for data file purposes.
2. Seller issues a Commercial Invoice (CI) along with Proof of Product (POP) documents, including the Tank Storage Receipt (TSR), Injection Report, Unconditional Dip-Test Authorization, Letter of Acknowledgement, Dip-Test Inspection Schedule, and Authorization to Verify (ATV). Buyer returns the signed and sealed CI to the seller.
3. Buyer conducts a Dip Test in the seller's tank with SGS (or equivalent) officials and obtains a fresh SGS report within 24 hours, along with an Authorization to Sell and Collect (ATSC).
4. Within 72 hours, the buyer provides TSR or vessel storage for product injection and returns the signed NCNDA/IMFPA to the seller.
5. Upon successful injection, the buyer pays the total cost of the product via MT103.
6. Seller confirms receipt of payment, and both parties release payments to intermediaries involved in the transaction.
7. The contract begins with rolls and extensions as agreed.
Each procedure ensures a clear and structured approach to purchasing petroleum products under FOB Rotterdam terms, ensuring compliance and efficiency.