Procedural Information

1. PURCHASE INTENT (LOI – LETTER OF INTENT)

A fully completed Letter of Intent (LOI) from the buyer or agent (mandate holder) contains all product information with the corresponding specifications and quantities, under which conditions (price, payment terms, delivery conditions, etc.) the buyer is willing to buy the goods. Please note: Letters of Intent (LOI) without a target price will not be accepted. This Letter of Intent (LOI) is checked by the seller or his agent and they decide whether the buyer’s conditions can be met or with what deviations. The buyer or his agent will be informed accordingly. The parties involved now have the opportunity to negotiate mutual interests in order to reach an agreement. If no agreement is reached in this early phase of the negotiation, the LOI expires and the process is to be regarded as a failure. In some cases, the producer or supplier also requires the buyer’s bank information, as normally only Letters of Credit from globally operating top 50 banks (top 50 world banks) are accepted for export transactions.

2. OFFER (SCO – SOFT CORPORATE OFFER / FCO – FULL CORPORATE OFFER)

If agreement between the parties has been reached regarding the specification and conditions according to the Letter of Intent (LOI) and these have been understood, the buyer will receive an offer (SCO / FCO) from the seller or his agent. It usually also describes other processes and time periods relating to the conclusion of a purchase contract, delivery and payment. The buyer side is usually given 3 to 5 days to check the offer (SCO / FCO) and send it back signed and stamped and to initiate all preparations for the next step (point 3). If the period expires, the seller is no longer bound by the offer.

3. ORDER (ICPO – IRREVOCABLE CORPORATE PURCHASE ORDER / IPOS – IRREVOCABLE PURCHASE ORDER SAMPLE)

After the signed and stamped offer (SCO or FCO) has been sent back by the buyer, the end buyer (final buyer) must issue an order (ICPO – IRREVOCABLE CORPORATE PURCHASE ORDER or IPOS – IRREVOCABLE PURCHASE ORDER SAMPLE) in which all agreed specifications, conditions and procedures are described as stated in the offer to express the firm intention to buy. Along with the order (ICPO – IRREVOCABLE CORPORATE PURCHASE ORDER or IPOS – IRREVOCABLE PURCHASE ORDER SAMPLE), the buyer has to send a Proof of Funds (POF – Proof of Funds) in the form of a BCL (Bank Comfort Letter) or RWA (Ready, Willing & Able), as well a copy of the company register and a copy of the buyer’s passport (or the company’s legal representative) to the seller.

4. CONTRACT (SPA – SALES & PURCHASE AGREEMENT)

After receipt of the order (ICPO – Irrevocable Corporate Purchase Order) and the other documents from the buyer described in point 3, these will be checked by the producer / seller and the buyer will timely receive a corresponding contract (SPA – Sales & Purchase Agreement). The prerequisite for this is a positive review of the submitted documents and evidence of sufficient funds (POF – Proof of Funds) corresponding to the scope of the contract. The buyer generally has 48 to 72 hours to review the Sales & Purchase Agreement (SPA). Ambiguities must be resolved at this point by mutual agreement as soon as possible. Once the contracting parties have finally agreed on the details of the contract (SPA – Sales & Purchase Agreement), the buyer must sign and stamp the contract (SPA – Sales & Purchase Agreement) and send it back to the producer / seller in PDF format by email. After a further check by the producer / seller, the buyer receives the contract (SPA – Sales & Purchase Agreement) countersigned. The further procedures can be found in the legally valid contract (SPA – Sales & Purchase Agreement) signed by both contracting parties. A delay in the processes agreed in the contract (SPA – Sales & Purchase Agreement) can lead to the termination of the contract if the contracting parties cannot find an amicable solution.

5. INVOICE (PI – PROFORMA INVOICE)

After receipt of the contract (SPA – Sales and Purchase Agreement), the SELLER issues a Proforma Invoice ( PI ), the BUYER signs and returns the proforma invoice to the SELLER.

6. PAYMENT REMINDER (LC – LETTER OF CREDIT)

The buyer’s bank issues SBLC (StandBy Letter of Credit), IRDLC (Irrevocable Revolving Documentary Letter of Credit) or DLC (Documentary Letter of Credit) – (MT 700/760) – as a guarantee for one month and sends it to the seller’s bank within 5 days. The seller returns the above bank instrument with possible changes. The bank instrument must be revolving, transferable, irrevocable, divisible, operational, renewable and confirmed by Top Prime 50 bank. Cash payment by MT 103 according to presentation of shipping documents BL (Bill of Lading) and Product Certifications. This Financial Instrument becomes immediately operational.

7. SHIPMENT (BY SEA AT LOADING PORT)

Shipment is to start in 45-60 days after the buyer’s bank releases the financial instrument to the seller. Ship leaves Origin Port according to the Agreement signed by both parts.

PAYMENT TERMS

We accept T / T (telegraphic bank transfers), cash in advance and we accepted LC (Letter of Credit).
The forms of payment will be agreed and confirmed according to each operation, depending on the requirements of PT RATTAN ART INDONESIA or the final selling company.