UN-REFINED PRECIOUS METALS
- Seller provides complete draft contract/SPA as well as evidences that he/she has the banking and shipping relationships to deliver the product predictably and receive payment.
- A custom and professionally-formatted SPA, that includes an embedded FPA, is assembled. Includes Seller window of product delivery date vs. any proof of fund (POF) messaging and/or bank instrument text being requested from Buyer. Win-win and predictability is the mission.
- Buyer, Seller, and both parties’ bankers endorse SPA using a combination of modern corporate email and www.EchoSign.com.
- Buyer issues POF and/or bank instrument from his bank to Seller's Bank with exact text as per SPA agreement.
- Seller delivers product to Buyer's designated refinery within contract/SPA time window.
- Buyer’s refinery assays product at buyer expense upon delivery.
- Buyer pays by wire transfer into Seller's account no longer than a maximum of 72 hours after mutually favorable assay as per agreement.
- First deal completes and future deals commence as per additional agreement(s).
SELLERS THAT WANT A BUYER TO COME TO SELLER'S COUNTRY TO PURCHASE AND/OR EXPECTS BUYER TO PAY FOR ANY EXPENSES
Most of Magister Operis' precious metal buyers are corporate. That have planes, fast yachts, and serious websites. Please be fully prepared to clearly provide/answer the following immediately to gain full respect of buyers as soon as possible:
- Why you are actually a real seller rather than a broker somehow?
- How long have you been a seller?
- What transactions have you done in the past?
- What banks do you personally do business/transact with? Can you provide banking references and email addresses of banking officers?
Please outline the buyer’s exact comprehensive itinerary/timeline/location of exactly what/where the buyer will be doing while visiting your country to purchase the product.
If the buyer is expected to pay for things such as taxes, shipping, insurance, etc….be fully prepared to provide full contact info of the items the buyer is supposed to be paying. Buyer will not pay seller directly for expenses.
Due diligence will be performed on the parties. Need actual policy invoices for insurance policies rather than simply who to send a wire to.
SALES AND PURCHASE AGREEMENT (SPA)
For gold that a seller’s bank will recognize...the language of a sales and purchase agreement could be as simple as having the buyer post a conditional SWIFT MT103 against a seller’s MT600.
Un-refined gold transactions are more complicated. Buyers do not want to trust the purity of the product until after it has been assayed by a credible metals refinery.
It is not uncommon for a seller to require proof of funds (POF) or issue a bank instrument in favor of the seller…which is fair…since the seller is bringing the product at his own expense to the buyer’s refinery location.
But all too often sellers expect that after buyers provide POF and/or a bank instrument…for the buyer sit around and expect the seller to actually have their act together enough to be real. Magister Operis co-engineers SPAs that are designed to define predictable facts about the transaction and allow the buyer and seller as well as both parties banks to agree to the transaction before any exposure to the liabilities of SWIFT.
The buyers banks will only issue an Irrevocable NON-Transferrable Documentary Letter of Credit (IRDLC) or Standby Letter of Credit (SBLC) for the first monthly delivery to the seller’s bank in favor of the seller via SWIFT and a copy sent to the seller by email.
Magister Operis fully understands a buyer's hesitancy to issue an instrument for a year and a day. Magister Operis is regularly approached by parties wanting to "monetize and trade" instruments rather than actually focusing on delivering the product that the instrument was issued towards the delivery of.
PRECIOUS METALS, MONEY LAUNDERING, AND THE PATRIOT ACT
Metal refineries in the United States have a general obligation to conform to Patriot Act and/or anti-money laundering compliance. As a seller…the burden is on YOU…as the seller…to show that your product is not involved in any illegal, terroristic, slavery, inhuman, and/or money laundering activities.
Be prepared to show supporting documentation for your products!
The earlier…the better!
UNLESS YOU HAVE MAGISTER OPERIS ON RETAINER, PLEASE DO NOT ASK MASISTER OPERIS
...TO EVEN TALK TO THE BUYERS ABOUT OFFERS UNTIL SELLERS HAS PROVEN THEMSELVES PROFESSIONALLY COMPETENT!
Magister Operis Workflow: CLICK HERE
Sample gold transactions: CLICK HERE
Broker notes: CLICK HERE
Disclaimer: CLICK HERE