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PROPOSAL FOR AU PROCEDURE
We are living in a period with great expectations concerning gold.
The price for 1 ounce is actually about 660 USD (June 10, 2007) .
Listening to the experts, a price of around 800 USD might be realistic within the next months.
Maybe thats one reason why we have actually a tremendous demand for gold.
Currently some of our buyers are ready to sign contracts for a longer period, with monthly quantities of min. 5 MT.
Other (institutional) buyers are ready to sign even larger contracts.
Our problem: Weve not enough gold to offer.
Anyhow, even if the demand is extraordinary, the buyers insist to follow the standard procedures for AU and refuse to accept any kind of ventures. When we are talking about quantities of >5MT, we can suppose to deal exclusively with financial institutions like Banks, Trust Companies, Foundations etc. If they are not in the front line, they will be definitely in the background as Exit Buyers.
As long as the seller is ready to follow specific standards, we neednt fear too much interference and are able to close a deal within a very short time. If one buyer dies before he signs the payment check, the next buyer on our waiting list will be happy to make the deal.
Therefore, we are open for any serious seller with an acceptable (standard) procedure and can guarantee a smooth, quick and professional transaction to the benefit of all parties.
In order to do that, we should avoid superfluous questions, due diligences and other time consuming paperwork and try to realize a quick test tranche to a place, which is comfortable for all parties. Such a place could be the Free Zones at some European airports, like Zurich or Frankfurt. The AU would be picked up by a Security Service like BRINKS or MATS and forwarded directly to the refinery. Payment is guaranteed via Buyers refinery account. Gold versus Cash, when refinery report or at least a lab report is available.
Superflous questions, due diligences and other time consuming paper work are guaranteed, as soon as the seller is requesting specific payment guarantees or any kind of up-front charges (to cover refinery costs, to organize shipping, paying export taxes etc. ) .
The bank is obliged to secure the Buyers interests (=capital) . Therefore, the bank will not rely only on documents, like SKR, Assay Reports and Exports Permits, which might be real or faked. Export Certificates might be real but, nevertheless nobody can be sure, that a specific tranche will be definitely released for export.
Instead of presenting documents, wasting time in endless discussions with bank officers and spending money for due diligences etc. , we should try to make facts.
1. Its a fact, when a tranche is available at a Free Zone in Europe. You neednt convince the bank manager, whether the tranche will be released or not. The tranche has already left the export country.
2. Its a fact, when the Assay Report was re-confirmed by a European refinery. Maybe its necessary to smelt the AU again. Maybe its sufficient to make a physical/chemical lab analysis only. In both cases you neednt talk to the bank officer anymore, whether the seller will really send 24ct or maybe faked AU bars.
3. Its a fact that, the owner will remain owner of the AU, unless it was paid by the Buyer, under supervision of the refinery, in case both parties like to use the refinery as a kind of trustee. Therefore, its superfluous to request any additional payment guarantees like a Bank Guarantee, SBLC or MT760. If the Buyer himself isnt able to pay the tranche, the refinery or preferably one of our other Buyers will do it.
4. A new buyer will be definitely organized within 24 hours.
As soon, as weve realized our 1st test tranche successfully, all discussions with the own bank and with other banks too, will be much easier and shorter than before. Instead of convincing with words, we are able to convince with facts now. Further tranches can be arranged without headaches on both sides.
To speed the process and to face our first success as soon as possible, we recommend a buyer to accept the following (simple) procedure:
1. Internally, we (seller & we) agree the principal procedure, payment terms (price, discount) etc. and sign a Memorandum of Understanding.
2. The 1st shipment has to be announced by facsimile/email at least 1 week before, to organize the refinery capacities on time, if necessary at all.
3. A contract with 1 of my buyers will be arranged within 3 banking days. This contract is exclusively for the 1st tranche, with the possibility of Rolls & Extentions.
4. As soon as the first test tranche of 100kg 5.000 kg is ready for shipment to Zurich or Frankfurt, all necessary and available documents (freight, insurance, packing list, certificate of ownership, history, etc. ) , will be sent by SWIFT from Sellers to Buyers Bank.
5. Buyers Bank will respond by SWIFT to Sellers Bank with a declaration, confirming the Buyers capability to realize a commercial deal in a volume of XXXXXXXX USD. We will avoid to mention GOLD in this confirmation, because this could maybe result in a delay by Buyers Bank.
6. As soon as Buyers bank confirmation is available to Sellers bank, the 1st tranche can be released for shipment.
7. The tranche will be picked up in Z|rich/Frankfurt by a major Security Service (BRINKS, MATS) on behalf of the refinery.
8. Within 72 hours, the tranche will be smelted or analyzed by the refinery and a report is being made.
9. Payment within 48 hours according to the report.
10. Further tranches can start immediately (point 4. ff) .
If you see a problem with our above procedure, please inform.
Everything should be as simple in order to avoid interferences, especially from the banking side.
Unfortunately, we need the Banks but, they should be involved in a Gold transaction as late as possible.
IN ORDER TO AVOID MISS-COMMUNICATION THAT CAUSED BREAK THE DEAL, WE SHALL ARRANGE YOU DIRECT CONTACT TO THE MANDATORY UPON RECEIVED YOU SIGNED AND SEALED NCND FILE.
Business Development Manager of Oredmas
Voice: +62 856 4819 0307