With all the reports of fraud, counterfeiting, and scams, it’s essential to protect both sides of every transaction. After going through hundreds of transactions, we have determined the following procedures most often lead to a successfully closed deal.
- All transaction participants sign NCNDA (Non-Circumvention / Non-Disclosure Agreement). This includes the BUYER, SELLER, and all INTERMEDIARIES.
- Prior to submission of BUYER’s offer, Commission Term Sheet signed.
- LOI (Letter of Intent) or ICPO (Irrevocable Corporate Purchase Order) issued by BUYER, which includes caveats for SELLER performance and Proof of Product. LOI or ICPO is accepted and countersigned by SELLER.
- SELLER Attorney issues LOA (Letter of Attestation) for Proof of Stock (see Sample LOA below) or SELLER allows physical inspection.
- Attorney to Attorney, swap Authorization to Verify Funds for Manufacturing Contracts and/or SGS
- Both parties submit COMPLETE KYC/AML documents to Escrow Attorney
- Both parties sign agreed upon Purchase Order and Sales Contract to include all terms and delivery schedule
- Escrow Funded
- If Product is shipped, SGS and Bill of Lading or Tracking provided to the Buyer. Product arrives and clears customs. If Product is already OTG, go to Step 8.
- Inspection by Buyer.
- Upon acceptance, Escrow is released, Seller paid, Escrow Attorney as paymaster distributes commissions as per pay order.
Sample Verbage of Attestation from SELLER Attorney for Proof of Stock:
[For Direct Manufacturing Production Contracts]
This letter confirms that I, [ATTORNEY NAME], attest under the penalty of perjury that I have personally reviewed the fully executed and approved production contract with [MANUFACTURING COMPANY] and verified that [BROKER COMPANY NAME], and [BROKER], have fulfilled all the requirements in the contract with [MANUFACTURING COMPANY], and are in good standing. Additionally, I have personally verified with the [MANUFACTURING COMPANY] that the contract is allowed to be assigned (or sub-contracted) and the delivery schedule proposed in this contract is achievable.
[For On The Ground Transactions]
This letter confirms that I, [ATTORNEY NAME], attest under the penalty of perjury that I have personally reviewed the means in which SELLER acquired this lot and confirmed with [MANUFACTURING COMPANY], who produced the goods, through [their online verification portal] or [through the company’s fraud hotline] to ensure authenticity, as well as personally verified the titleholder to the goods is the SELLER. I attest that I have personally submitted the seller-provided Customs/Delivery Inspection SGS report to SGS directly and verified that [SELLER COMPANY NAME] was the contracting party to the delivery inspection in the USA, and that the goods, [DESCRIPTION OF THE GOODS], are verified by SGS in the amount and quality stated in the contract, and are on the ground in [CITY] and that the provided SGS report is authentic.
KYC/AML Information Needed:
All parties are obliged to respect professional secrecy and take all necessary precautions to protect confidentiality of the information each holds in respect to the other’s activities. The legal obligations shall remain in full force at all times. This form shall only be transmitted Attorney to Attorney for the purposes of KYC/AML and Escrow requirements.
|Country/Province/State where registered|
|Company Registration Number|
|Registered Company Address|
|Company Telephone Number (Including Country Calling Code)||+|
|Company Facsimile Number (Including Country Calling Code)||+|
|Company E-mail Address|
|Date Company Established|
|Type of Business Activity|
Attach Certificate of Good Standing and list of all parties owning more than 25% of the company.
Authorised Signatory Representative of Company:
Who is signing the contract?
|Residence Mailing Address|
|City (Province/State) + Zip Code, Country|
|Mobile/Cell Phone Number|
|Place of Birth|
|Country Issuing Passport|
|Date of Expiration|
Where is the money coming from or going?
|Name of Bank and Branch|
|Full Street Address of Bank|
|City, (Province/State) + Zip Code, Country|
|Name of Bank Officer|
|Account Number (Prefer IBAN Number)|
|SWIFT Code – BIC Bank Number|
|Switchboard Telephone Number (Including Country Calling Code)||+|
|Facsimile Number (Including Country Calling Code)||+|
|E-mail Address of Bank Officer|
|Name(s) of Account Signatory/Signatories|
Legal Advisor Information:
Always check the Bar for Disciplinary Action.
|Telephone Number (Including Country Calling Code)||+|
|Company E-mail Address|
While it may feel adversaarial, unless the deal is PO, Inspect, Cash and Carry, the risk of having your or your clients financial information released out into the wild is too great to let any of these risk mitigation strategies slide.