Concerned About Fraud In Crude Oil Selling? Why, for Buyers, getting the two Percent Performance Bond by the vendor is the Simplest & Surest Proof of a Genuine Seller
Credible analysis has proven that, whereas nearly each supposed crude oil vendor who goes to a possible crude purchaser to solicit enterprise, would nearly ALWAYS profusely forswear heaven and earth that he, or the crude oil he professes to be promoting, is “absolutely trustworthy, reliable, genuine, authentic, and honest,” nearly each OBJECTIVE, CREDIBLE EVIDENCE obtainable, then again, provides a very reverse and opposite REALITY – specifically, that the overwhelming majority of those supposed sellers and their gives (in deed, as much as the extent of 99.999999%, in keeping with one report) are completely pretend, bogus, fraudulent or not authentic.
MASTERFULLY FORGED & FALSE DOCUMENTS ARE AT THE HEART OF THE CRUDE/BUYING SELLING SCAM OPERATIONS
The main instrumentality by which these fraudulent con artists and crude “sellers” function or perpetrate their con recreation, is the usage of skillfully solid or false paperwork. Such fraudulent and pretend “sellers” – or, no less than, the last word masterminds who originate and stand behind the scheme – are infamous for being grasp forgers and glorious copiers of each conceivable authentic refinery and authorities company paperwork associated to crude gross sales or purchases. In deed, in keeping with specialists, so masterful at this recreation are these fraudsters, that the paperwork they supply to potential patrons are sometimes so strikingly convincing and real-looking that they’re often plain troublesome, if not not possible, for nearly all however essentially the most expert of doc authentication specialists to right away distinguish from the actual and genuine ones.
As one report by the Fraud Watch International summed it up, “Victims [of such fraud] are often convinced of the authenticity of Advance Fee Fraud schemes by the forged or false documents bearing apparently official Nigerian government letterhead, seals, as well as false letters of credit, payment schedules and bank drafts.”
The U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs, in a report titled “Nigeria Advanced Fee Fraud,” describes the paperwork employed by the Nigerian Advanced Fee Fraud (AFF) or 419 perpetrators, as “official-looking stationery with appropriate government seals, stamps, and signatures,” whose high quality, it says, has “evolved over the years, from poorly handwritten letters to more professional products prepared on word processors. Word processors also allow AFF criminals to generate more letters.” It provides that the “AFF criminals include university-educated professionals who are the best in the world for nonviolent spectacular crimes.”
THE MAIN PROBLEM: INABILITY BY BUYERS TO VERIFY SELLERS’ CLAIMS & DOCUMENTS
The level is that, largely in consequence of the above actuality, for critical worldwide patrons of Nigerian crude oil, the one most crucial and most troublesome and dangerous drawback they confront within the open market, is now usually the verification and affirmation of the vendor’s claims about having an genuine crude allocation and/or its present availability, and the affirmation of the proofs and paperwork submitted by them in assist of these claims. For most patrons, endeavor that job is usually dreaded and seen as one thing fraught with large dangers and uncertainties that ought to solely be threaded with the utmost warning, and the best care and deliberation.
BUYERS’ “PREFERRED” PROOF & EVIDENCE OF CREDIBLE SELLER TODAY – a 2% PB
Because verification and affirmation of such paperwork from sellers are usually so troublesome and dicey, most such worldwide crude oil patrons search, subsequently, to purchase ONLY from sellers who can present them what they contemplate the most secure, most tangible, and most simply dependable form of proof and proof of credibility by a vendor. And what is that this “preferred” proof and proof that the majority patrons would moderately have? It is solely this – the availability by a vendor of a 2% Performance Bond (PB) to the client.
THE USUAL VERIFICATION & CONFIRMATION APPROACHES
In a phrase, the standard proofs and proof of crude allocation and availability provided by sellers to potential patrons, is usually the availability to the Buyer of the cargo’s PROOF OF PRODUCT or POP. In a C.I.F. or F.O.B deal, for instance, the standard method by which a supposed crude oil vendor exhibits “proof” or proof to a possible purchaser that the Seller has a real crude allocation or crude obtainable to promote, is for the vendor to supply the client the PROOF OF PRODUCT, and the client is requested to “verify and confirm” the authenticity of this on his personal, and, upon that, for the patrons to difficulty their Bank Guarantee or Letter of Credit (or different cost instrument) to cowl the acquisition price of the product at supply.
But the issue with this conventional methodology, is that for many worldwide crude patrons, the typical Nigerian vendor’s POP (an array of paperwork that would embrace the present loaded vessel paperwork, present Authority to Board (ATB) that was particularly issued to the preliminary purchaser (consignee) of the crude in whose title the vessel was issued, Certificate of high quality, Certificate of origin, Cargo manifest, Vessel ullage report, Certificate of amount, Bill of lading, the Bulk Allocation Details, the Seller’s Authority to Sell (ATS) from the NNPC, and so forth), is NOT dependable or readily verifiable for genuineness. For instance, the POP, which is, in a phrase, the vendor’s fundamental doc that is meant to show to the client that the vendor truly has the product being bought, is likely to be exhibiting that an proprietor of the oil allocation or commodity has possession of the product as of the particular time of the transaction, say, at a sure hour of the day at present. But but, there isn’t any assure that the product may not have been bought to a different purchaser simply hours, and even minutes, proper after that transaction, and that the commodity is definitely nonetheless obtainable on the market or supply to the client.
“Most buyers do not accept Nigerian sellers’ proof of product (POP),” says Sam Nelson, an knowledgeable in crude shopping for and promoting strategies and the writer of a primer on the topic. “As a result of this, they (the Buyers) want a tangible (Physical) proof of product. The buyer would request that the seller inspect the cargo and present a verifiable inspection report from accredited agencies like SGS, Q & Q or Robinson International before they (the Buyers) will charter a vessel for the transaction. This is because some so-called Nigerian sellers have false claim over products that never existed and they would forge documents to present as POP. Nigerian market has to be followed very carefully and all documentations thoroughly verified.”
Nelson provides: “Please do not give any inspection money to the seller. Always pay the money directly to the inspection company after they have collected samples of the crude oil from the mother vessel for chemical analysis to confirm the quality and quantity of the crude in the vessel. Also, insist that the ATB (Authority To Board) from the vessel for inspection originated from the captain of that vessel. Do not accept any documents as authentic if you did not verify it from the captain of the feeder vessel. Any documentation from a Nigeria seller must be verified for authenticity.”
MOST DOCUMENTS OR PROOFS BY NIGERIAN SELLERS ARE VIEWED WITH SUSPICION
In deed, these days, the identical drawback of basic lack of ability to definitively authenticate real crude allocation or availability, now pervades even conditions the place “tangible, physical” POP inspection has supposedly been made. And some patrons discover that even this cautionary recommendation by Nelson, that the patrons ought to “insist that the ATB (Authority To Board) from the vessel for inspection originated from the captain of that vessel,” would usually not fairly work any extra in lots of conditions at present.
In a TTO deal, for instance, the actual fact of the patrons’ representatives boarding the vessel to make an “inspection” or “confirmation” of the “loaded” vessel, is usually no extra a assure that the transaction is essentially real or authentic. Nigerian con males and 419ers who function within the crude oil trade, have been recognized to work with fraudulent vessel managers and captains or con males disguised as workers of the Shell/JV terminal operators. And Vessels confirmed as “pregnant” (i.e., loaded) even by the client’s representatives and his appointed SGS inspectors invited to come back aboard the ship on a presumed ship “captain’s” ATB doc, have been recognized to be truly organized by pretend ship operators and ship managers and “captains”; and in such instances the client will solely be taking up a ship and cargo with FAKE Charter Party Agreement executed between the client and pretend ship supervisor, with no AUTHENTIC ship proprietor’s approval and no genuine delivery paperwork. And as soon as the client’s representatives aboard the vessel confirms that the vessel is “pregnant,” the client pays for the cargo, takes over the vessel, and the con males shortly cut up the cash and vanish. The purchaser losses all the pieces for the reason that authentic vessel proprietor by no means licensed the captain to difficulty the CPA, and the important cargo delivery paperwork used within the transaction are all merely pretend.
Nigeria’s bureaucratic quagmire
And there’s one more drawback concerned in making an attempt to authenticate Nigerian crude oil paperwork. The drawback of the bureaucratic quagmire related to doing enterprise in Nigeria. One knowledgeable vastly skilled in doing crude oil shopping for enterprise in Nigeria, put it this method to this author: “NNPC Crude Oil Marketing Department, Abuja, is the authoritative source to verify the Authority to Sell document. But you will spend an endless amount of time trying to verify it. As with most Nigerian establishments, people use personal connections to get such documents, but that does not mean that they can deliver.”
WHAT BUYERS NOW VIEW AS THE BEST AND MOST “PREFERRED” PROOF OF AN AUTHENTIC CRUDE SELLER – A SELLER WHO CAN PROVIDE BUYER A 2% PERFORMANCE BOND
In quick, the purpose is that nearly all conventional manners of verification and affirmation of crude oil possession and availability have grow to be critically contaminated and adulterated by con artists and pretend operators to the purpose that many worldwide crude oil patrons regard these strategies as largely unreliable, too troublesome to confirm, and fraught with insupportable dangers. And consequently, there has advanced amongst them what may at present be known as a “preferred” methodology for figuring out an genuine and credible vendor of crude oil in at present’s market. Such a vendor is solely one who can meet one fundamental requirement – specifically, is keen and capable of present the client a 2% Performance Bond upfront in a transaction.
What is a Performance Bond or PB?
This is, in a phrase, an insurance coverage doc issued for the vendor by vendor’s financial institution or insurance coverage firm guaranteeing that the issuer pays a stipulated quantity (a sum amounting, on this case, to 2% of the whole worth of the cargo being bought) to the client within the occasion that the vendor breaches (fails to carry out) the phrases and specifics of the contract signed by the vendor with the client. (The Performance Bond is also posted within the type of a Cash Bond). The financial institution or insurance coverage firm which points the PB acts because the accountable “surety” of the bond
If a vendor contracts with a purchaser to place up a 2% PB – and is ready to truly put up that bond together with his financial institution or insurance coverage firm – the vendor is, in a phrase, guaranteeing the client that if he have been to fail to carry out his obligations underneath that contract, his financial institution or insurance coverage firm, of their roles because the “surety” of the bond, pays the client a sum amounting to 2% of the worth of the crude being bought, regardless.
WHY BUYERS LOVE THE PERFORMANCE BOND GUARANTEE
Buyers love discovering sellers who can present them UPFRONT 2% Performance Bond, overwhelmingly viewing that because the “preferred” possibility as they contemplate that the most secure, most dependable, most tangible, and most assured and least fraud-prone form of proof and proof of credibility by a vendor. Most specialists contend that if a vendor can supply a 2% PB deal – and, what’s much more necessary, is definitely capable of put up the PB as a result of he has the monetary wherewithal to take action – it’s nearly assured that the vendor won’t fail the client within the precise execution of the deal, however will nearly absolutely carry out these obligations as contracted with the client.
Sam Nelson, knowledgeable in crude shopping for and promoting strategies and the writer of a primer on the topic, put it this manner: “A contract with any of these bonds in place will be successfully completed. A bonded contract has a higher degree of success than a non-bonded contract. A bonded contract is a bankable contract. The players have their money at stake and that is a good reason for them to perform.”
And the Legal Dictionary explains it this manner: “The purpose of a bond is to provide an incentive for the fulfillment of an obligation. It also provides reassurance that the obligation will be fulfilled and that compensation is available if it is not fulfilled. Performance Bonds guarantee for the satisfactory completion of a project.”
There are just a few particular bases why patrons and specialists really feel that manner:
1. Being capable of put up a PB is an indication of monetary credibility and skill.
To be capable of finance an precise posting of a 2% PB (which can imply, for instance, on the present crude costs, 2% of, say, $200 million for a 2 million barrels cargo, one thing amounting to $Four million), a vendor must have some substantial monetary potential and assets.
2. Financial Cost and Penalty Involved In Posting a PB, is a Powerful Disincentive Not to Perform.
Sam Nelson: “The players have their money at stake and that is a good reason for them to perform.” In deed, most patrons, upon getting the two% PB issuance from a vendor, would promptly settle for that as equal to POP and forgo having to evaluation the POP.
3. The Normal Con Man or 419er Will Not Have the Disposition, the Reputation & Financial Wherewithal to Post a PB.
Robert Strickland of Strickland Associates, an skilled New York vendor in crude oil offers, says as follows: “If you are concerned with FRAUD! ONLY true Sellers that offer a 2%+ Performance Bond are genuine Sellers of Nigeria [crude oil].”
Sam Nelson, the crude oil offers knowledgeable and writer: “These bonds are necessary to protect the interest of the parties involved for unnecessary losses due to fraud or complete negligence.”
4. Being capable of put up a PB is a stable indication to a purchaser that the Seller has already been vetted.
Obtaining a PB is usually not a simple or computerized factor. Before a financial institution or insurance coverage firm would give a vendor a bond, the vendor shall have gone by a rigorous software course of, and will need to have met a set of stringent monetary and character necessities and situations. Hence, when a purchaser will get a vendor who can, and does truly, put up a 2% PB, the client is sort of assured that he is obtained a reputable vendor, and one impossible to be a fraudster or a 419er.
For simply an instance, one Syracuse, New York, insurance coverage firm requires candidates for a Public Construction job PB to supply them the next objects, amongst others:
Surety Questionnaire Filled Out Completely
Copy of Contract/Award Letter or Solicitation Letter
Business Financial Statements (2 years audited fiscal 12 months financials) OR
Last Three years Company Income Tax Returns
Personal Financial Statements and Resumes on all homeowners of 10% or extra
Work in Progress Schedule (if relevant)
A. Workman’s Compensation
B. Liability Certificate
C. Key Man Policy
Supplier and Contractor Reference Letters
Schedule of Completed Jobs
Bank Reference Letter
Company and Personal Indemnification (GAI we provide)
Articles of Incorporation
Job Cost Breakdown and/or bid specs
To most patrons of crude oil within the worldwide open market, getting an UPFRONT 2% Performance Bond issuance from a vendor, is the overwhelmingly “preferred” methodology for doing a gross sales/buy deal. It is the choice they contemplate to be the most secure, most dependable, most tangible, and most assured and least fraud-prone form of proof and proof of credibility by a vendor.
For numerous causes and elements, a lot of that are outlined above, most patrons and specialists imagine that if a vendor can supply a 2% PB deal – and, what’s much more necessary, is definitely capable of put up the PB as a result of he has the monetary wherewithal to take action – it’s nearly assured that the vendor won’t fail the client within the precise execution of the deal, however will nearly absolutely carry out his personal obligations as contracted with the client. Hence, in a deal of that sort the client has little or nothing to fret about regarding a possible threat of fraud or rip-off. In consequence, patrons love discovering sellers who can present them – who can truly put up – a 2% PB, and contemplate that to be the very best proof and assurance of getting a reputable vendor, and one impossible to not carry out the contract, or to be a fraudster or a 419er
NOTE: As with many issues regarding many a Nigerian crude vendor, it is one factor for a vendor to say to a purchaser that he’ll put up the PB, however fairly one other factor altogether for the vendor to have the ability to truly do it, or to really do it!),.
FOR A FOLLOW UP
YOU WANT TO FOLLOW UP ON HOW YOU CAN ASSURE GETTING A NIGERIAN CRUDE OIL SELLER WITH A TRUE, UPFRONT 2% PERFORMANCE BOND? OR SELLER WITH OTHER KINDS OF SALES DEALS THAT ARE GENUINE, “SAFE” AND SCAM-FREE?
INSTRUCTION: You can accomplish that. You can readily receive the particular fundamental necessities you’d want to satisfy so as so that you can grow to be routinely thought of “proven” as a really LEGITIMATE vendor who actually genuinely has some crude to promote. USE THE AUTHOR’S FIVE BASIC OPTIONS PROGRAM.
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