Why Is It Important to Verify Our CIF Buyers?
1. CIF Buyers in Africa: Why Verification Is Critical
Most “buyers” in Africa are not buyers. They are:
- Intermediaries
- Brokers
- Politically connected middlemen
- Entities without storage
- Entities without import permits
- Entities without bank capability
- Entities who want supplier credit because they cannot finance cargo
A real CIF buyer must have:
- Import rights
- Storage access
- Banking capability
- Regulatory compliance
- Downstream distribution
If any of these are missing, they are not a buyer — they are a risk.
2. The Core Principle: A Buyer Is Only a Buyer If They Can Take Delivery
A CIF buyer must prove:
- They can receive the cargo
- They can pay for the cargo
- They can clear the cargo
- They can store the cargo
- They can distribute the cargo
If they cannot do these five things, they are not a buyer.
3. The Four Non‑Negotiable Verification Checks
A. Bankability Check (The Most Important)
You must verify:
1. Their ability to issue a financial instrument
- SBLC MT760
- DLC MT700
- Bank Guarantee
- CAD (Cash Against Documents)
- Escrow capability
If they cannot issue an instrument from a Tier 1 or Tier 2 bank, they are not a buyer.
2. Their financial statements
- Audited accounts
- Bank reference letter
- Proof of funds (only when appropriate)
3. Their creditworthiness
- Are they on any sanctions lists?
- Are they politically exposed?
- Are they in financial distress?
Bankability is the foundation.
B. Storage Verification (Critical for CIF)
A CIF buyer must have:
- A storage agreement with a terminal
- A tank allocation letter
- A terminal access permit
- A throughput agreement
- A discharge window
You must verify:
- The terminal’s name
- The tank number
- The capacity
- The contract validity
- The terminal’s confirmation (email or letter)
If they cannot prove storage, they cannot receive CIF cargo.
C. Import Permits & Regulatory Compliance
African countries require:
- Import licenses
- Energy regulatory approvals
- Customs clearance capability
- Tax compliance
- Environmental compliance
You must request:
- Import license
- Trading license
- Tax clearance
- Regulatory approval letters
If they cannot import fuel legally, they are not a buyer.
D. Downstream Distribution Capability
A real buyer must show:
- Off‑take agreements
- Distribution network
- Retail stations
- Industrial clients
- Government contracts
This proves they can move volume.
4. The 3‑Stage Verification Model
Stage 1: Corporate Verification
- Company registration
- Directors
- KYC
- Compliance
- Sanctions screening
If they fail here, stop.
Stage 2: Operational Verification
- Storage
- Import permits
- Terminal access
- Logistics capability
If they fail here, they cannot receive CIF cargo.
Stage 3: Financial Verification
- Bank instrument capability
- Financial statements
- Bank reference
- Creditworthiness
If they fail here, they cannot pay.
5. The Harsh Reality: 80% of “CIF Buyers” in Africa Are Not Buyers
They are:
- Brokers
- Mandates
- Agents
- Middlemen
- Politically connected individuals
- Entities seeking supplier credit
Verification is your shield.
6. Gazolo Energio Process of CIF Buyer Verification
Step 1: The Buyer Onboarding Form
Request:
- Company documents
- Import license
- Storage agreement
- Bank capability letter
- Director KYC
Step 2: Conduct a Compliance Review
- Sanctions screening
- PEP screening
- Corporate structure review
Step 3: Verify Storage
Gazolo Energio contacts the terminal directly to confirm:
“[Buyer] has an active storage agreement for tank [X] with capacity [Y].”
If the terminal refuses to confirm, the buyer is not real.
Step 4: Verify Bankability
Request:
- Bank letter confirming ability to issue SBLC/DLC
- Sample instrument format
- Bank officer contact
If they cannot provide this, stop.
Step 5: Verify Import Rights
Request:
- Import license
- Regulatory approval
- Customs clearance capability
Step 6: Approve or Reject
Gazolo Energio approves buyers who pass all three:
- Corporate
- Operational
- Financial
Step 7: Apply for CIF Buyer Verification
Send a request to Gazolo Energio via email: admin@gazolo.co.za :
- Request must be on a Company Letter with:
- CEO / Director/s Details
- Company Corporate Address