Letter of Intent & ICPO Submission
The transaction process commences with the prospective buyer submitting a formal Irrevocable Corporate Purchase Order (ICPO) on company-headed notepaper, signed by an authorised director or signatory. The ICPO constitutes a binding expression of intent to purchase and must contain all material transaction parameters.
ICPO Must Contain:
- Commodity name, grade, and specification reference
- Quantity (metric tons), frequency, and contract duration
- Target price (USD per MT) or price reference formula
- Delivery port (name, country, UN/LOCODE)
- Preferred Incoterm (Incoterms 2020)
- Issuing bank name, SWIFT BIC, and country
- Authorised signatory name, title, and wet or e-signature
Submission Channel:
ICPO is submitted via email to trade@stratosdynamics.org with the subject line: ICPO – [COMMODITY] – [COMPANY NAME] – [DATE]
Stratos will acknowledge receipt within one (1) business day. Incomplete ICPO submissions will be returned with a specification checklist.
Soft Corporate Offer (SCO) Issuance
Upon receipt and preliminary review of a valid ICPO, Stratos issues a Soft Corporate Offer (SCO) on behalf of the seller. The SCO represents the seller's non-binding indicative offer and is subject to final confirmation pending completion of KYC due diligence on the buyer. The SCO is not a binding contract.
SCO Contains:
- • Commodity description and grade
- • Indicative price (USD/MT) + pricing basis (benchmark ± premium)
- • Available quantity and loading schedule
- • Proposed loading port and Incoterm
- • Payment instrument requirement (L/C details)
- • SCO validity period (typically 3–5 banking days)
Important Distinction
The SCO is followed by a Full Corporate Offer (FCO) once KYC is completed. Only the FCO, countersigned by the buyer, creates a pre-contractual obligation. Parties must not treat the SCO as a binding commitment.
Full Corporate Offer (FCO) & KYC / Due Diligence
The Full Corporate Offer (FCO) is issued once Stratos has completed a preliminary review of the buyer. The FCO constitutes a binding offer from the seller and must be formally accepted (countersigned and returned) by the buyer within the stated validity period. Simultaneously, Stratos initiates Know Your Customer (KYC) verification on both counterparties.
KYC — Buyer Requirements
- • Certificate of Incorporation
- • Memorandum & Articles of Association
- • Register of Directors
- • Passport copies — all directors
- • Proof of registered address
- • Bank reference letter (rated institution)
- • Last 2 years audited financials
- • Completed KYC questionnaire
KYC — Seller Requirements
- • Certificate of Incorporation
- • Proof of product ownership / mandate
- • Director passport copies
- • Bank account confirmation
- • Refinery / mill / processor certificate
- • Previous SGS inspection reports
- • Export licence (where applicable)
Sanctions Screening
- • OFAC SDN List check
- • EU Consolidated Sanctions
- • UN Security Council Sanctions
- • UK HM Treasury (OFSI) List
- • PEP (Politically Exposed Person) check
- • Adverse media screening
- • Vessel & flag sanctions (energy)
Sales & Purchase Agreement (SPA) Negotiation & Execution
The Sales and Purchase Agreement (SPA) is the binding commercial contract governing the transaction. Drafted on the basis of the agreed FCO terms and reviewed by legal counsel for both parties prior to execution. The SPA supersedes all prior correspondence including the ICPO, SCO, and FCO.
SPA Core Clauses:
- • Full commodity description and specification schedule
- • Quantity, tolerance (typically ±5% at seller's option)
- • Contract price and pricing mechanism
- • Incoterm (Incoterms 2020), loading port, delivery port
- • Laycan (vessel loading window)
- • Payment terms — L/C instrument details (MT700, UCP 600)
- • L/C required documents schedule (incorporated by reference)
- • Inspection clause (SGS/BV, scope, binding/non-binding)
- • Force majeure, governing law, dispute resolution
Governing Law & Disputes
All SPAs facilitated by Stratos default to English Law as governing law, with disputes resolved by ICC International Arbitration under the ICC Rules of Arbitration (2021). Parties may agree alternative governing law by mutual written consent at SPA stage.
ICC Court of International Arbitration, 33–43 avenue du Président Wilson, 75116 Paris, France.
Letter of Credit Issuance — MT700 via SWIFT (UCP 600)
Following SPA execution, the buyer instructs their bank to issue an Irrevocable Confirmed Documentary Letter of Credit via SWIFT MT700, subject to UCP 600 (ICC, 2007). The L/C must be operative and confirmed by the seller's nominated bank before product is allocated or loading commences. This is non-negotiable.
| SWIFT Field | Field Name | Required Content |
|---|---|---|
| 40A | Form of Documentary Credit | IRREVOCABLE |
| 40E | Applicable Rules | UCP LATEST VERSION |
| 42C | Drafts At | SIGHT (or as agreed in SPA) |
| 44E | Port of Loading / Airport | As per SPA — UN/LOCODE |
| 44F | Port of Discharge | As per SPA — UN/LOCODE |
| 45A | Description of Goods | Commodity, spec, quantity, Incoterm, unit price |
| 46A | Documents Required | Full document schedule (see Step 8) |
| 48 | Presentation Period | 21 days after B/L date (UCP 600 Art. 14c default) |
Financial Instrument Fraud Notice
Stratos does not accept: "proof of funds" letters, MT103 payment promises, SBLC "monetisation" proposals, "soft probe" arrangements, "blocked funds" instruments, or any payment instrument not issued directly by a SWIFT-member commercial bank. Parties presenting such instruments will be immediately disqualified and reported to relevant authorities.
Pre-Shipment Inspection at Origin
Once the L/C is operative, the seller allocates product and the Nominated Inspection Company (SGS or Bureau Veritas, as specified in the SPA) is engaged to conduct pre-shipment inspection at the loading facility. Inspection results are binding on both parties for the purpose of L/C document presentation unless the SPA specifies otherwise.
Sampling
Representative samples drawn per commodity-specific ASTM/ISO/ICUMSA sampling protocol. Sample sealed, labelled, and sent to accredited laboratory.
Analysis
Laboratory analysis performed against SPA specification parameters. Results documented in Certificate of Quality (COQ) with test method reference and pass/fail indication.
Weight
Net and gross weight determined by calibrated weighbridge or vessel draft survey. Documented in Certificate of Weight (COW). Quantity variance triggers SPA tolerance clause.
Vessel Nomination, Loading & Export Customs
Following satisfactory inspection, the seller nominates the loading vessel within the Laycan window specified in the SPA. Stratos coordinates between the seller, freight operator, port agent, and customs broker to ensure loading proceeds in accordance with the agreed Incoterm and within the L/C's latest shipment date (SWIFT field 44C).
- Vessel acceptance and NOR (Notice of Readiness) tendering
- Hold cleanliness certificate prior to loading (bulk cargo)
- Export customs declaration and EX-1 / AES filing
- Fumigation (if required for agricultural goods)
- Certificate of Origin — Chamber of Commerce or Embassy legalised
- Loading supervision by NIC inspector (SGS/BV)
- Mate's receipt issued by vessel master upon completion
- Vessel AIS position confirmed loaded and underway
- Marine cargo insurance policy arranged (CIF terms)
- ETA notification issued to buyer within 24 hours of departure
Document Presentation, L/C Negotiation & Bill of Lading Release
The seller presents the full set of L/C-stipulated documents to the nominated/presenting bank within the presentation period (SWIFT field 48, defaulting to 21 calendar days from B/L date per UCP 600 Article 14c). The presenting bank examines documents under UCP 600 Article 14 (standard of examination) within five banking days. Upon finding complying presentation, the issuing bank honours its undertaking and payment is released.
Standard L/C Document Set (Field 46A)
Full Set Clean On-Board B/L
3/3 originals · UCP 600 Art. 20 · Marked "Freight Prepaid" or "Freight Collect" per Incoterm · Consigned to buyer's bank or to order
Commercial Invoice
Issued by seller · Must mirror L/C description exactly (UCP 600 Art. 18) · Signed, dated, referencing L/C number
Packing List
Itemised by container number / hold number · Gross/net/tare weights per unit · Must be consistent with invoice and B/L
Certificate of Quality (COQ)
Issued by SGS or Bureau Veritas · Signed by accredited inspector · Must reference the SPA specification
Certificate of Weight (COW)
Issued by SGS or Bureau Veritas · Weighbridge or draft survey basis · Must match invoice quantity within SPA tolerance
Certificate of Origin
Chamber of Commerce or Embassy-legalised · Specifying country of origin as per SPA · Commodity HS code listed
Marine Insurance Certificate
CIF transactions only · ICC (A) terms minimum · Covering at least 110% CIF value · UCP 600 Art. 28
Phytosanitary Certificate
Agricultural only · Issued by national plant protection organisation · Certifies absence of quarantine pests
Radiation Clearance Certificate
Metallic scrap only · Issued by SGS/BV · Must reference vessel name, voyage, and container numbers
ISBP 745 Compliance Note
All documents presented under the L/C must comply with ICC International Standard Banking Practice (ISBP 745), which provides detailed guidance on the application of UCP 600 to specific document types. Discrepancies — including inconsistencies in commodity descriptions, vessel names, or quantity figures across documents — will result in a notice of refusal from the examining bank. Stratos coordinates pre-presentation document review to minimise discrepancy risk.
Ready to Begin Step 1?
Initiate the process by submitting your ICPO or Letter of Intent via our trade desk contact form. Our team will acknowledge within one business day.