Nearly all procedures in a Sales Purchase Agreement (SPA) between a seller and a buyer call for the seller’s bank to issue a financing instrument such as DLC-MT700 or SBLC-MT760 first. These LCs trade drafts, not time drafts, and are non-operative, meaning they are not yet active and confer no obligation to the buyer’s bank […]

This article serves to shed light on one of the most basic, yet misunderstood, aspects of payment for a crude oil transaction, in particular for Nigerian Bonny Light crude oil. In every Sales Purchase Agreement (SPA), the stipulation is for a buyer’s bank to issue and send to the seller’s bank either an SBLC-MT760 or […]