AU GOLD BULLION CIF

  • TERMS & CONDITIONS
1.Product:AU (Aurum) Gold Bullion Metal in Bar Form
2.Form:1Kg or 12.5Kg (One or Twelve-point Five Kilogram) Bars conforming to GLD Specification
3.Age:Certified Less than Five (5) years from production
4.Hallmark:Internationally Recognized Hallmark less than 5 years
5.Quantity:A minimum of Eight metric tones (8MTS) with possible Rolls & Extensions
6.Delivery Tranche:Monthly tranches of 8MTS
7.Delivery Frequency:Monthly
8.SPA Term:Twelve (12) months 
9.Purity:999.5/1000 Fineness or Better
10.Discount to daily 3pm LMBA price:Gross Discount Rate: 9% (Nine Percent)
Net Discount to the Buyer: 6% (Six Percent)
11.Commission:Total 3% (Three Percent);
1.5% (One Point Five Percent) to the Seller Group (CLOSED),
paid by the Seller
1.5% (One Point Five Percent) to the Buyer Group (OPEN),
paid by the Seller

12.Transaction Currency:United States Dollars (USD) or as agreed (EURO/HKD/CNY)
13.Delivery
Term:
D.D.P.  (Incoterms 2020 ) Free-Zone Dubai
14.Transaction:Transaction of PSKR (Private Safekeeping Receipt) issued by HSBC Hong Kong Bank
15.Payment
Method:
MT103 from Buyer’s bank account to Seller’s bank account or any payment method as agreed by the Parties.Blocked funds MT799 and MT600 for each tranche or shipment
  • DOCUMENTATION

The Seller shall provide, with each shipment or tranche, the following documents under this SPA and these documents are collectively the ‘Documents List’.

  1. Air Waybill.
  2. Pro-form Commercial Invoice.
  3. Certificate of Purity.
  4. Packing list.
  5. Certificate of Origin.
  6. Certificate of Incorporation.
  7. Export Certificate.
  8. Certificate of Ownership.
  9. Safe Keeping Receipt from storage/warehouse issued by HSBC Hong Kong Bank.
  10. Insurance Certificates.
  11. Export Tax Paid Receipt.
  12. Declaration that gold is free and clear, of non-criminal origin, free from any encumbrances and devoid of constraints, transferable and exportable.

3. PROCEDURES

  1. The Seller’s Power of Attorney (Seller’s POA) hereby issues this draft SPA for acceptance by the Buyer.  Upon this acceptance by the Buyer, the Seller’s POA shall issue the final version of the SPA for both Parties to execute.
  2. Both Parties shall sign and execute, and deliver to the other Party, a signed and executed SPA that shall include: the Seller’s POA and Buyer’s corporate details; colored copies of the Seller’s POA and the Buyer’s and Buyer’s Mandate’s passport; and an Irrevocable Master Fee Protection Agreement (IMFPA) signed by the Buyer or Buyer’s Mandate and the Seller’s POA, with all Documents being delivered also to the other Parties named in the IMFPA.
  3. Upon execution and exchange of the SPA under clause 3.2, both parties shall simultaneously do the following:
  4. The Buyer shall arrange with the Buyer Bank blocked funds under an MT799 facility which the Buyer shall do at its own expense and this MT799 block funds instrument: shall mention the Seller and Transaction Code: SPA_______________; be a minimum value of USD 400,000,000 and remain in place pending the payment at settlement of each monthly shipment of the Product via an MT103;
  5. The Seller shall simultaneously issue an MT600 to confirm proof of product; 
  6. Written confirmation of the financial arrangements in 3.3.1 and 3.3.2 shall be exchanged between each Party’s respective Bank Officers in the Banks mentioned in Appendix 1 of this SPA.
  • Both Parties acknowledge that the Buyer’s actions under clause 3.3.1 and the Seller’s actions under 3.3.2 are sufficient as respective Proof of Funds and Proof of Product.
  • Both Parties expressly acknowledge that the steps taken by both Parties under 3.1 – 3.4 are necessary conditions precedent to be fulfilled prior to the following terms and conditions being performed.
  • The Seller shall take all reasonably necessary steps to arrange for the shipment or transport, to the Buyer’s nominated Destination, of Product in the first and successive tranches. 
  • The Seller agrees to pay all expenses incurred in the CIF Delivery of Product to Buyer’s Destination Airport and these expenses include but are not limited to freight and transport, export taxes and insurance related costs. 
  • The Buyer agrees to pay all expenses incurred in transporting the Product from the destination Airport to its’ Final Destination where payment and transfer of title occur.
  • Both Parties expressly acknowledge that ownership of and title to the Product shall remain in the name of the Seller until:
  • The Buyer pays for the Product by MT103 transfer of funds, where the sum of funds is calculated according to clauses 1.6 – 1.12; at which point
    • The Seller, simultaneously with MT103 payment, transfers ownership of and title to the Product to the Buyer.
  1. Both Parties agree to repeat the process set out in clauses 3.1 – 3.10 for each shipment and both Parties expressly agree that the other Party owe contractual obligations to the other only for each separate shipment.
  2. All supporting documents are presented by both the Buyer’s and Seller’s Bank Officers and is performed under Full Bank Responsibility. The Buyer’s Assayer can enter the Private Safe Keeping Warehouse to inspect and test the AU if the Buyer request and the Documents List for the shipment of each tranche.
  3. Both Parties may vary the procedures outlined in clauses 3.1 – 3.12 in mutually agreed terms in writing.
  4. Once approved and accepted by the Buyer and Seller POA, transfer of funds will be made by the HSBC Buyer’s Bank Officer by MT 103, or ledger to ledger, to the Seller Account and once received, transfer of ownership will be made by the HSBC Seller’s Bank Officer to the Buyer.   Within 24 hours, after the exchange of funds and ownership, the Sellers and Buyers IMFPA’s will be paid to the respective Buyer Brokers, Sellers Brokers, Buyer Mandate, and Seller Mandate.  
  5. Any changes to either Party’s banking details in Appendix 1 does not change any obligation owed by the Parties in the SPA to the parties mentioned in the IMFPA.
  6. These Terms and Conditions are subject to the Sales and Purchase Agreement (SPA) acceptable by both parties, Buyer and Seller. If the Sales and Purchase Agreement (SPA) is not accepted by both parties, Buyer and Seller, this agreement is null, and void and no claims can be made by either party.
  • NON-CIRCUMVENT & NON-DISCLOSURE

Seller and Buyer accept and agree to the provisions of the International Chamber of Commerce, Hong Kong, China, for non-circumvent and non-disclosure, with regards to all and every one of the Third-Party assignments with full reciprocation for a period of 5 (five) years from the last performance of delivery.

5.              BANKING COORDINATES

Seller’s Banking Detail and Buyer’s Banking Detail, Appendix 1

Only the authorized coordinators of both parties shall be in connection with each other. If it appears that any unauthorized person or third party has tried to contact with any bank officer herein, this agreement shall be terminated automatically without prior written notice.

  • BANKING CORRESPONDENCE PROTOCOL AND PROCEDURES

The Banking communications shall be restricted between both Parties’ Bank Officers and shall follow these terms:

  1. All communications and correspondences between representatives of both parties including information or reports shall be all in writing.
    1. All requests for information in connection with steps taken under clauses 3.1 – 3.4 by the respective Party’s Bank Officers shall be responded to in a timely manner.
    1. The confirmation of the Buyer’s Funds/Seller’s Product Verification shall be all in writing and be acceptable to the Seller/Buyer Bank Officer and the acceptance shall also be responded in writing by both Officers.
    1. All correspondence shall only be between the respective Parties Bank Officers named in Appendix 1 unless both Parties agree to change the named Bank Officers with prior written notice.
    1. Any attempt to correspond with unauthorized parties with respect to any matter under this SPA involving the Bank Officers shall terminate this agreement automatically and the agreement shall be rendered null and void immediately without written notice.
  • ELECTRONIC SIGNING

EDT (Electronic document transmissions) shall be deemed valid and enforceable in respect of any provisions of this Contract. As applicable, this agreement shall be: – Incorporate U.S. Public Law 106-229, ‘‘Electronic Signatures in Global and National Commerce Act’’ or such other applicable law conforming to the UNCITRAL Model Law on Electronic Signatures (2001) and ELECTRONIC COMMERCE AGREEMENT (ECE/TRADE/257, Geneva, May 2000) adopted by the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT).

EDT documents shall be subject to European Community Directive No. 95/46/EEC, as applicable. Either Party may request hard copy of any document that has been previously transmitted by electronic means provided however, that any such request shall in no manner delay the parties from performing their respective obligations and duties under EDT instruments.

  • TIME LIMITATION

Unless otherwise agreed by the Parties, within 10 banking days following the signing this Agreement, the Buyer’s and Seller’s Banks are obliged to provide the Seller the Proof of Funds and the Buyer Proof of Product for verification and authentication. Should the Buyer/Seller or their Bank fail to provide the Authorization to Verify the Buyer’s Funds or Seller’s Product within the 10 banking days following this Agreement, this Agreement will be automatically rendered null and void, without any written notification.   

  • ARBITRATIONS AND APPLICABLE LAW

Should any dispute arising from this Agreement, or the Parties’ discharge or failed discharge of their obligations under this Agreement, be unable to be resolved between the Parties to this Agreement, then both Parties submit to binding arbitration in accordance with the rules of the ICC International Chamber of Commerce. Any decision and/or award made by the arbitrators shall be binding on the Parties and enforceable law in the country of choice of an award by the arbitrators. In the event of dispute, the Hong Kong law shall be applied. The Arbitration shall be conducted in Hong Kong and the Court Arbitration shall be in Hong Kong, Special Administrative Region of the People’s Republic of China.

  1. FORCE MAJEURE

No Party shall be liable for any failure to perform its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster),  war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war,  rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist  activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity [or telephone service] in such circumstances.  Any Party asserting Force Majeure as an excuse shall have the burden of proving that reasonable steps were taken (under the circumstances) to minimize delay or damages caused by foreseeable events, that all non-excused obligations were substantially fulfilled, and that the other Party was timely notified of the likelihood or actual occurrence which would justify such an assertion, so that other prudent precautions could be contemplated.

  1. ADDENDA AND ANNEXES

This Agreement Addendums shall form a part of this Agreement together with any future addendums and annexes which have been duly signed by the two main signatories of this agreement.

  1. ALTERATION OF AGREEMENT

Any changes alteration or substitutions shall not be permitted unless the same shall be notified and in writing and signed by both signatories. Such alteration may be sent to the other party via fax or email and shall be binding and concluded with legal liabilities between the two signatories (Seller and Buyer) of this Agreement.

  1. OTHER CONDITIONS

Both Parties agreed to vary any and all terms and conditions of the Agreement only by prior mutual written consent.