For some reason, most of these scammers and fraudsters only know of Rotterdam as the only port in the world.
So all you hear is FOB Rotterdam, FOB Rotterdam, FOB Rotterdam. Take it from my tank! Here are my storage receipts! But but first I need some 'upfront logistics and administrative fees'...
Yeah right.
So much so that the actual Port of Rotterdam via their intel division FERM has to establish a very handy blacklist of these so-called 'storage tank spoofers'. Till this day in 2019, they are still adding names to the list. Goes to show that the number of scams are still on the rise EVEN TO THIS DAY WHICH IS PRETTY AMAZING.
You can check out the list here.
Many of these are actually fake websites that use very similar names to actual and legitimate oil and trading companies. +1 for creativity.
Policing fraudulent physical petroleum transactions across the globe, they are all over the net.
The LOI Part #1
I've been hearing a lot about LOIs. The amateurs get a little confused because when they attempt to google about a LOI in trading, there is a legitimate result! Yet they also come across LOI in its phony jargon conjured by the dopey con-men.
So whats the real deal and what isn't?
The real LOI - Letter Of Indemnity
__________________________________________________________
LOI in the real world of physical trading stands for a Letter Of Indemnity.
There are 2 types of such LOIs.
One is used for the discharge (and in some instances release) of physical cargo because of the absence of shipping documents.
One is used in L/Cs to make payment against in the absence of shipping documents, normally addressed to the bank issuing the L/C.
Nobody in the real world of physical trading references a LOI as a Letter of Intent or Letter of Interest.
No such procedure or step is ever needed or required to initiate commercial interest.
Its easy to tell the real from the fakes.
Examples to follow.
So whats the real deal and what isn't?
The real LOI - Letter Of Indemnity
__________________________________________________________
LOI in the real world of physical trading stands for a Letter Of Indemnity.
There are 2 types of such LOIs.
One is used for the discharge (and in some instances release) of physical cargo because of the absence of shipping documents.
One is used in L/Cs to make payment against in the absence of shipping documents, normally addressed to the bank issuing the L/C.
Nobody in the real world of physical trading references a LOI as a Letter of Intent or Letter of Interest.
No such procedure or step is ever needed or required to initiate commercial interest.
Its easy to tell the real from the fakes.
Examples to follow.
The myth about Russian mandates
They don't exist. That's all there is to it.
Any 'Russian mandate to the supply of petroleum products' you hear of is pure fabricated bs, period.
If unsure, start with the email redflags.
Any 'Russian mandate to the supply of petroleum products' you hear of is pure fabricated bs, period.
If unsure, start with the email redflags.
Procedures? What procedures?
Whenever someone starts talking about ‘procedures’, it is a clear giveaway of the amount of experience and knowledge he or she has about physical trading.
What procedures? A load of rubbish!
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Proper physical traders never talk about procedures.
It is a well-known fact that upon closure of a deal, an email exchange constituting the terms of the trade follows, or what is otherwise known as a ‘deal recap’ or ‘trade recap’.
Thereafter, depending on the terms of the deal, multiple departments (for example chartering, operations, contracts, credit) start to get to work concurrently – it could be finding a vessel, clearing a vessel, negotiating the sales contract and L/C, registering the counterparty, appointing the surveyor etc.
In the wannabe world of trading, a step by step ‘transaction procedure’ is established by the fraudsters which is quite imaginative to be honest. It will usually look something like this:
The slightly smarter brokers have tried to eliminate the first step to make themselves look ‘professional’. Little do they realise that no such jargon is used in an actual physical deal.
What procedures? A load of rubbish!
__________________________________________________________
Proper physical traders never talk about procedures.
It is a well-known fact that upon closure of a deal, an email exchange constituting the terms of the trade follows, or what is otherwise known as a ‘deal recap’ or ‘trade recap’.
Thereafter, depending on the terms of the deal, multiple departments (for example chartering, operations, contracts, credit) start to get to work concurrently – it could be finding a vessel, clearing a vessel, negotiating the sales contract and L/C, registering the counterparty, appointing the surveyor etc.
In the wannabe world of trading, a step by step ‘transaction procedure’ is established by the fraudsters which is quite imaginative to be honest. It will usually look something like this:
- Exchanging something called a LOI/SCO/FCO/ICPO
- Signing of CI/SPA (Sales & Purchase Agreement as what they call it and it usually goes for 12 months)
- Signing of NCNDA (Non-Circumvention Non-Disclosure Agreement as what they call it)
- Exchanging some POP (Proof of Product as what they call it) like TSR (Tank Storage Receipt), DTA (Dip Test Authorisation) or SGS Report (seems like they only know of SGS)
- Sending of Swifts MT103/799/705 between banks
- Lift as per ‘schedule’ of the SPA
The slightly smarter brokers have tried to eliminate the first step to make themselves look ‘professional’. Little do they realise that no such jargon is used in an actual physical deal.
The CIF ASWP flawed terminology
This is a common term used by ignorant, self-acclaimed 'middlemen' who many a time do not actually know what it means.
Once again, it is yet another tell-tale sign that you are dealing with fictitious and bogus entities.
So what exactly is CIF ASWP and why is it incorrect?
__________________________________________________________
CIF ASWP stands for Cost Insurance and Freight to Any Safe World Port (ASWP). While CIF is a legitimate international shipping agreement acronym, ASWP is an erroneous term conjured by con-artists to deceive the naive. Why is this so?
If you break it down logically, what this term implies is that the shipping cost to any port in the world is the same.
That doesn't make any sense.
Put it simply, do you think the price to ship goods from the US to the UK is the same as from the US to Taiwan?
The difference in freight rates, insurance coverage and other related logistics costs could easily amount to a couple of hundred thousand dollars depending on the geography of the delivery.
So do yourself a favour and toss any CIF ASWP communication into the bin!
Once again, it is yet another tell-tale sign that you are dealing with fictitious and bogus entities.
So what exactly is CIF ASWP and why is it incorrect?
__________________________________________________________
CIF ASWP stands for Cost Insurance and Freight to Any Safe World Port (ASWP). While CIF is a legitimate international shipping agreement acronym, ASWP is an erroneous term conjured by con-artists to deceive the naive. Why is this so?
If you break it down logically, what this term implies is that the shipping cost to any port in the world is the same.
That doesn't make any sense.
Put it simply, do you think the price to ship goods from the US to the UK is the same as from the US to Taiwan?
The difference in freight rates, insurance coverage and other related logistics costs could easily amount to a couple of hundred thousand dollars depending on the geography of the delivery.
So do yourself a favour and toss any CIF ASWP communication into the bin!
Email addresses - a typical redflag!
Lets examine one of the most basic redflags which is common sense, really:
Why would anyone claiming to represent an oil major, NOC, IOC or global trading company communicate from a public mailbox such as Yandex, Yahoo, Mail.ru, AOL etc?
Seriously, someone genuinely from a Shell or BP or Trafigura or Vitol is going to 'close a delivery' for a buy/sell of an actual cargo worth millions of dollars via such channels?
Did it ever occur to you that such communication should always be via their official email domain, if it is indeed who they claim they are?
And if further in doubt, double-checking with the real @vitol.com or the real @shell.com should be an easy next step that comes to mind.
Simple DIY due diligence and homework that could identify a fraudster from the real deal and save you from time-wasting yet many do not practice it. God knows why.
Why would anyone claiming to represent an oil major, NOC, IOC or global trading company communicate from a public mailbox such as Yandex, Yahoo, Mail.ru, AOL etc?
Seriously, someone genuinely from a Shell or BP or Trafigura or Vitol is going to 'close a delivery' for a buy/sell of an actual cargo worth millions of dollars via such channels?
Did it ever occur to you that such communication should always be via their official email domain, if it is indeed who they claim they are?
And if further in doubt, double-checking with the real @vitol.com or the real @shell.com should be an easy next step that comes to mind.
Simple DIY due diligence and homework that could identify a fraudster from the real deal and save you from time-wasting yet many do not practice it. God knows why.
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