Commodity: Whole Milk Powder (WMP)
Origin: New Zealand
Shipment Terms: CIF Port
Shipment Quantity: 2,000 MT
Quality: Standard
Contract Period: Spot
Price FOB: USD 4,100
Price CIF: USD 4,100 FOB + logistics to the buyer’s destination
Delivery Time (FOB): 5 days after confirmation of the bank instrument
Delivery Time (CIF): 45 days after confirmation of the bank instrument
Payment Terms: RDLC (MT700) / SBLC (MT760)
Issuing Bank(s): World Top 50 First-Class Banks
Specifications: As specified below
Inspection: SGS / Saybolt / Intertek, or equivalent
Packing: 50 kg PP bags

CIF Transaction Procedure

  1. The Buyer sends an ICPO with the CIS.
  2. The Seller signs the ICPO and sends it back to the Buyer together with the Full Corporate Offer (FCO) and the Seller’s CIS. The Buyer signs the FCO and returns it along with Proof of Funds (POF).
  3. The Seller prepares a draft Sales and Purchase Agreement (SPA) with delivery details, price, and terms, and sends it to the Buyer for review.
  4. The Buyer signs and stamps the SPA and returns it to the Seller. The Seller then signs the SPA and sends Partial Proof of Product (PPOP) to the Buyer for checking and verification.
  5. The Seller issues the Commercial Invoice (CI) based on the SPA. Both the Buyer and Seller sign and stamp the invoice.
  6. The Buyer’s bank sends a pre-advice message (MT705 for RDLC or MT799 for SBLC) to the Seller’s bank to confirm the wording and details only.
  7. The Buyer’s bank sends the official bank instrument, either MT700 (RDLC) or MT760 (SBLC), to the Seller’s bank.
  8. After the Seller’s bank receives and confirms the official bank instrument, it issues a 2% Performance Bank Guarantee (PBG) in favor of the Buyer’s bank, as stated in the SPA.
  9. The Seller arranges production, loading, and shipment of the goods under CIF terms to the agreed destination port. After loading, the Seller provides proof of shipment.
  10. The Seller sends copies of all shipping documents to the Buyer’s bank. These include the Bill of Lading, Commercial Invoice, Packing List, Certificate of Origin, inspection report (such as SGS), and insurance certificate.
  11. When the vessel arrives at the destination port and the documents are confirmed as correct, the Buyer makes payment by bank transfer (MT103). At the same time, intermediary commissions are paid according to the IMFPA.
  12. After full payment is received, ownership of the goods is transferred to the Buyer.