Procedures
Dealing procedures of SMV IMPEX
For safe and efficient transactions
Our purchasing process is designed for safe and smooth dealing. We are using standardized financial instruments only, for covering all critical aspects of the transactions, such as payments, documents, on-time deliveries and setting the performance bonds. With world-class banks and widely used global inspection companies, we have developed our dealing procedure to cover all concerns of the client and the seller enabling us to offer a safe and widely recognized practice for dealing.
Ready to Start?
For getting our offer, contact us via email to info@smvimpexpvtltd.in and send us your Letter of Intent (LOI) having all the details of your query, including the product details, quantity needed and your wished plan for deliveries.
The Process.
Find our dealing procedure described step by step below. If you have any questions, feel free to contact our Sales for more information an advice.
Send your Letter of Intent
Determine your needs and draft a Letter of Intent (LOI) and send it to us for receiving our official offer for the products requested.
Issuing of Full Corporate Offer
Once received your Letter of Intent, we will immediately respond by sending you a Full Corporate Offer (FCO)
Send your Letter of Intent
After agreeing the terms of the trade by both of the parties, the Sales and Puchase agreement (SPA) will be drafted and agreed by both party.
Receiving the payment
Signing of Sales and Purchase Agreement
Issuance of the Pre-advice MT705
Sending the Documents
Issuing the Performance Bond
Issuance of the LC MT700
Confirmation of the Letter of Credit
Starting the Deliveries
Inspection of the Delivery
The products delivered will be inspected by a world-class inspection company at the time and place agreed in the SPA.
Payment of the Delivery
Receiving the Products
Completing the Whole Contract
The Documents.
The dealing procedure of us is following international standards commonly used in international trade. Find the documents explained below. For more deep understanding and drafting, contact our sales to info@smvimpexpvtltd.in
Letter of Intent
Your request for a quote
Letter of Intent, shortly LOI, is the document you should provide us when you’re ready to ask for our offer on the product you need. The Letter of Intent should indicate all the details we need for issuing our offer, including the product needed, the total quantity of the order, and your plan for monthly deliveries, the buyer’s details, and the destination port for the goods. Once we receive your Letter of Intent, we will respond with our offer within a few days.
Full Corporate Offer
Our Binding Offer for You
Full Corporate Offer, shortly FCO, is our binding offer for you about the product, quantity, and delivery schedule requested. Full Corporate Offer includes all the terms and conditions for the transaction, as well as product and transaction details. FCO outlines the procedures for you as a buyer, on how to move forward to the next step if you are accepting our offer and all its content.
Sales and Purchase Agreement
The Trade Contract Between the Buyer and the Seller
Sales and Purchase Agreement, shortly SPA, is the contract we sign between us at the stage when all the details of the transaction are agreed upon by both parties, and you are, from your side, ready to purchase the goods. SPA is a contract, including all the necessary and required details commonly used in large-scale international trade. SPA can be signed in our office in Jeddah, Saudi Arabia, or if needed, electronically and remotely.
Pro Forma Invoice
The invoice issued with and SPA
A Pro Forma Invoice is issued by us simultaneously when we are signing the Sales and Purchase Agreement (SPA) between us. Pro Forma Invoice indicates all the transaction details agreed in the SPA and it’s the document needed by you when you start the process for issuing the MT705, and later MT700, from your bank.
Pre Advice MT 705
The Bank Instrument for the Financial Proof
A Pre-Advice MT705 is a financial instrument we use for ensuring the financial capacity of the buyer. For us, as the seller, it is important to ensure the buyer is fully capable of entering the trade and fulfilling the financial responsibilities regarding it. MT705 is simultaneously a confirmation from your bank, sent via SWIFT, that the bank is willing and able to issue the Letter of Credit MT700 for covering the payments of the trade.
Letter of Credit MT 700
The Bank Instrument for the Payment
A Letter of Credit MT700, shortly LC, is commonly used for payments in international trade. It’s the instrument issued by your bank to our bank, and it should be confirmed by our bank or a third party bank as well. By using an LC, as a seller, we can be sure of receiving the payments at the right time, and you as a buyer, can ensure the quality and quantity of the goods delivered before sending the actual payments. When the goods are inspected by a widely trusted world-class inspection company, the payments and deliveries continue smoothly and safely from the start to the end, benefiting both of the parties involved.
Performance Bond
The Bank Instrument for the Guarantee of Quality
Performance Bond, shortly PB, is an instrument issued by our bank, which guarantees the delivery and the quality of the goods agreed in the SPA. The guarantee of PB covers the responsibilities borne by the seller and the lack of conformity of the goods or the delivery. Performance Bond is issued as a response to the MT705 issued by your bank.
Documents for the Payment
Documents Needed for Releasing the Payment from the LC
When we are using the Letter of Credit MT700 as a payment method, the payment of the delivery happens against the documents issued in the place of delivery. The documents that will be issued for the payment are:
- Bill of Lading.
- Certificate of Origin.
- Packing List.
- Inspection Certificate confirming the quantity and quality (SGS or equivalent).
- Commercial Invoice.
- Insurance Certificate.
Performance Bond
The Bank Instrument for the Guarantee of Quality
Performance Bond, shortly PB, is an instrument issued by our bank, which guarantees the delivery and the quality of the goods agreed in the SPA. The guarantee of PB covers the responsibilities borne by the seller and the lack of conformity of the goods or the delivery. Performance Bond is issued as a response to the MT705 issued by your bank.
Documents for the Payment
Documents Needed for Releasing the Payment from the LC
When we are using the Letter of Credit MT700 as a payment method, the payment of the delivery happens against the documents issued in the place of delivery. The documents that will be issued for the payment are:
- Bill of Lading.
- Certificate of Origin.
- Packing List.
- Inspection Certificate confirming the quantity and quality (SGS or equivalent).
- Commercial Invoice.
- Insurance Certificate.
CIF Cost, Insurance and Freight To
CIF (named port of destination) Incoterms 2020
Our offers are CIF to the port of destination (Incoterms 2020). CIF terms mean that the delivery will be to the named port of destination, which typically means the goods are delivered when loaded onto the vessel at the loading port. We, as a seller, handle and pay for the shipment and the insurance covering 110% value of the shipment, as well as the export procedures and fees. After delivery to the named place, the goods are under the buyer’s responsibility. When using CIF terms, all import procedures and fees are under the buyer’s responsibility.
Stand by Letter of Credit
The Bank Instrument for the Guaranteed Payments
We can achieve more flexibility in the Letter of Credit MT700 issuance by using the SBLC as a guarantee. Based on the customer’s demands, it’s possible to use Standby Letter of Credit MT760, shortly SBLC, to cover the contractual value when issuing the Letter of Credit MT700 for the total quantity of the contract is not possible for the buyer.