Information Glossary :

ASWP:
“Any Safe World Port” is often a term used by misguided intermediaries when giving cost of goods with freight cost applied. The acronym means that cost of freight is the same regardless of distance. For example, a CIF ASWP deal means that the goods being purchased cost the same if delivered within 50 nautical miles or 8000 nautical miles. Intermediaries need to address this term immediately when presented in an offer or RFQ and ask for an explanation. Most often than not, when ASWP terms are reflected the offers are fake. Please beware of such an ill acronym.

UCP600:
Uniform custom and practice for documentary credits publication 600.
After July 2007 UCP500 ceased being the applicable bank application for matters pertaining to the rules of issuance involving the use of UCP600 financial instrument. Financial instruments are “Letters of Credit” that the Intermediary must secure from an End Buyer of goods being offered. The UCP600 rules are international applications that govern the way such letters of credits are secured and transacted upon. This means that once the Intermediary secures the financial instrument marked accordingly with the term “UCP600 applied” from an End Buyer then such rules take over in governing the trading application in matters of payments for such goods being purchased and sold.

L.O.I:
Letter Of Intent (wrong use of term).
Most misguided intermediaries get the LOI application confused and thus misused during the early stages of the trade deal process. LOI is another flawed and unworkable application in the intermediary trading process. Others such as “B.C.L” (Bank Comfort Letter); “P.O.P” (Proof of Product) “N.D.N.C”, (Non-Disclosure and Non Circumvention Agreement) and “M.P.A” (Master Pay Order for Commissions) are also not applied to intermediaries trading under proper applications. Most importantly – they are not even enforced by international courts. If you are reading this you have already been exposed to all the ill terms just mentioned and have probably dealt with them at a level. Many deals in the industry fail because of such misguided terms being or trying to be applied under trading process. The reality is that those terms are not applicable today and will cause the deal to delay and most likely to get dropped. The truth being told is that “LOI” stands for “LETTER OF INDEMNITY” and has no application for intermediary use.

M.O.U:
Memorandum Of Understanding is not so often used as the LOI application but is similar in practical meaning. It is often seen applied in an investment or construction contract applied abroad of which Intermediaries shall not trade in such deals. Such applications are not suitable for Intermediary use at WCS.

PRINCIPAL:
The Principal is the person leading the deal. The principal will control the situation at all times, will direct the situation, will inform others involved, will never count his money first and will always help and assist. In short, the Principal is the one who is protecting everyone’s interests and commissions at all times. Examples of Principal are: Buyer/Sellers, Suppliers and End-Buyers.

DELIVERY:
For intermediary use the term “delivery” pertains to document presentation and may also mean “title” or a “leading” document presentation for goods being transacted upon.

SOURCING INTERMEDIARY (SI):
A sourcing intermediary (SI) is one who only assists within the whole “String Contract” application, in finding a Supplier or an end-buyer. A sourcing intermediary finds suppliers and or end-buyers and passes the information to us for proper review and confirmation. Once we confirm that the sourcing intermediary has successfully sourced either a supplier and or an end-buyer they will receive further steps to follow so a deal can properly become in active. Sourcing intermediaries are skillful and informed agents who understand proper applications and are willing to step back so that we can assist them in closing a transaction.

BACK TO BACK:
For intermediary use – back-to-back procedures are advanced applications that only well informed and experienced traders should attempt. All our representatives should transact using bank used transferable financial instruments.

SLC:
Intermediaries should use the “Stand-by Letter of Credit” to pay commissions and Performance Guarantees (PG) and not for the purchase of goods. The SLC is allowed to be transferred many times among intermediaries and can be referred to as “ISP98 SLC”. However, a SLC defined as “UCP600 SLC” can only be transferred once from the buyer/seller to the end-buyer as issued from the supplier and must be marked as “Transferable”.

IDLC:
“Irrevocable Documentary Letter of Credit”. Irrevocable means that once accepted by the buyer/seller the DLC cannot be cancelled.

PA TIDLC:
“Pre Advised Irrevocable Transferable Documentary Letter of Credit”. Pre advised refers to the credit being operational but not yet active. The credit will become active once a precondition occurs under UCP600 and once the credit becomes active it should be transferred as irrevocable to the supplier as a non-transferable instrument.

CIDLC:
This terms refers to “Confirmed Irrevocable Documentary Letter of Credit” where a credit is issued as “confirmed” is the highest credit the intermediary can have to close on the deal.

TIDLC:
Transferable and Irrevocable Documentary Letter of Credit. For intermediaries there is no other way to trade correctly than to accept a TDLC from end-buyer. Under UCP600 the term “transferable” must be apparent on the credit being accepted. For example, the end-buyer issues the TDLC to the buyer/seller > the buy price is transferred to the supplier as a normal DLC > keeping the difference as commission payment.

L/C:
This terms refers to Letter of Credit. Intermediaries should only use L/C to make commission payments as it can be revoked.

REVOLVING CREDIT:
“Non cumulative TIDLC” is the payment instrument intermediaries need to issue, where the issuing bank needs to (and agrees) to honor revolving status on the credit for multi shipment deliveries.

P.P.I:
“Policy Proof of Interest”. The internet often misuses this term to mean “P.O.P” or “Proof of Product”. The term refers to your “interest” because the whole transaction is in your interest – meaning that the goods are being secured prior to the offer being issued and what’s actually being assured. “Proof of Product” can not be given before the contracts are signed and sealed by the end-buyer because circumvention can occur. For intermediary use, the “P.P.I” certificate is written in the body of the contract as a blank and the buyer/seller will fill it out once the irrevocable financial instrument has been secured and confirmed. Therefore, the buyer/seller will issue the contract stipulating that the P.P.I will be disclosed only after the financial instrument has been advised and accepted by the buyer/seller. Then, the blank document will be filled out by the buyer/seller and will be returned to the end-buyer with the information requested.

ADVISING BANKS:
The buyer/seller bank is the advising bank.

ISSUING BANKS:
The bank of the end-buyer issuing the irrevocable DLC is the issuing bank.

ACCEPTING BANKS:
The bank of the supplier is known as the accepting bank.