CIF ASWP stands for Cost Insurance and Freight to Any Safe World Port. This is a flawed term which does NOT exist in the real market. When you get asked for (or offered) the CIF ASWP price, you know right then and there that you are either dealing with a scammer or more often a person who does not know much about import/export business – a beginner who picked up the term from other beginners and is throwing it around in hopes to land his first deal and get his big commission. People who use this term are known as “time wasters” or “joker brokers” and usually do not get a reply from anyone other than fellow time wasters. There have been “intermediaries” who have been caught in time wasting circles for years, not realizing that what they are doing cannot possibly lead to closure of a real deal.
The CIF part of the term is valid, the ASWP however is wrong. There is a simple logic behind this – the shipment cost cannot be the same to ANY World’s Port! For example the CIF price to ship sugar from Brazil to China would be double compared to if it was shipped to South Africa. In only one small ship load (12.500 MT) that makes over half a million dollars price difference. No buyer would be willing to pay extra just to get a an “easily” quoted CIF ASWP price. The “CIF ASWP” was probably developed by scammers because they did not have access to the ever changing real prices so they needed something more “general” they could quote on the fly.
ICPO (also LOI)
ICPO stands for Irrevocable Corporate Purchase Order while LOI is supposed to mean Letter of Intent while in fact the proper meaning would be Letter of Indemnity (international trade and carriage business). These documents are frequently used in some countries and some industries to establish corporate intent for certain undertaking – such as to purchase real estate, or to enter into some sort of deal, but there is no standard usage of these documents in International Trade! This is used by “joker brokers” because the phrase “Irrevocable Corporate Purchase Order” sounds barbarous, “strong” or “professional” if you will. In reality there is no need for anything other than Quote, Offer, Contract, Payments and Exchange of goods.
NCND or NCNDA
NCND stands for Non Circumvention, Non Disclosure Agreement. In the first instance it is not worth the paper on which it’s written as the document is notoriously hard to enforce and adjudicate against. The reference NCND is a sure sign that one is dealing with a missinformed intermediary/broker of some sorts.
FPA, IFPA or IMFPA
IMFPA stands for Irrevocable Master Fee Protection Agreement. The FPA and NCND usually go hand in hand. As an intermediary beware of anyone claiming to be the Mandate, Seller or Buyer while at the same time requesting FPA and NCND. A real mandate fears no circumvention because his interests are protected by the one extending a mandate to him. An intermediary may be circumvented, with ease if he is incompetent. FPA / NCND is not the proper way to protect broker’s interests.
How to avoid all this and trade properly?
Anyone considering a real career in international trade should learn how to recognize and weed out the joker brokers, otherwize they will literally eat all your time and energy. It is surprising how much nonsense documentation is in circulation out there in the world of commodity trading. The documents are mostly created as a result of desperate traders trying to “seal the deal”. Also sometimes useless documentation arises from traders with experience in one commodity trying to trade a new commodity without learning the protocols used with that particular commodity.
Every industry has their own standards, and different countries have different rules which govern trading in their jurisdiction. Traders, Agents, Intermediares, Brokers, Buyers, Sellers, and whate ever other term they identify themselves under – all need to educate themselves on the proper and legal procedures for their industry and location. Start with the FYBR commodity trading manual.