Buy used rail at Russia

[stteevve]

I am going to buy used rail from Russia. The trading company at Russia show me the procedures as follow:

1. Buyer issue ICPO with Sellers procedure stipulated on it.
2. Seller issues Full Corporate Offer to Buyer.
3. Buyer countersign the Full Corporate Offer to Seller
4. Seller issues contract to Buyer
5. Buyer notarizes the contract at Russia with the required ministries at Buyer's cost of USD 19,500.
6. Seller issues following document as partial POP: Certificate of origin, Product passport, Registration Certificate, Charter party agreement
7. Buyer's bank issues RWA message via MT999 to the seller's bank, stating and confirming the Buyer's capability and commitment towards the complete execution of the Transaction.
8. Seller issues Transfer Certificate to Buyer and courier hard copy of notarized contract to Buyer.
9. Seller lodge Transaction Passpot at its bank to initial Bank to Bank communication with the Buyer's bank.
10. Seller issues 2% Performance Bond to Buyer's bank, and Buyer issues LC to activate the Performance Bond.

My questions are:
1. Is it normal procedure to nortarize contract at Buyer's cost at Russia? (Contract value around USD 15,000,000)
2. How can I know that it is not a fraud?

[Sphinx]

Why would you buy used rails from Russia? How are you going to ship them?

[stteevve]

I am buying scrap metal everywhere in the world. Generally we ship it in bulk.

These scrap metal and used rail will be sending to China for recycling.

[Sphinx]

Then you should already know to construct a sales contract, correct?

[stteevve]

Of course I know how to construct a sales contract.

This is the first time I am dealing with Russian. Also the first time requested to pay for notarization. If I paid for it, but finally the business turned down by Seller, I will lose USD 19,500. Even though I can put some rules at the contract to protect myself, it will be too difficult to claim for compensation.

So, I hope to know that is it a general procedure of notarization if we are exporting from Russia?

The trader at Russia said: Only when contract notarized, they can apply for "Export Transaction Passport" and then initiate Bank to Bank communication at foreign country.

[Miyuki]

What does your legal representative say?

[De Master Yoda]

Due to the amount involved it could be smart to check out the validity of the Russian company as part of your due diligence checks.

Here is the email where you should be able to get help with this from the consulate.

embassy@russia.org.cn

[stteevve]

Before I pay any, I will be invited to Russia for site-visit and verify the availibility of goods.

I am also sent an e-mail to Russia Embassy at China to ask for their advice, but not yet receive any answer.

Right here at China the lawyer don't have much experience on Russia trade. Any one can introduce lawyers at Russia for me ?

[De Master Yoda]

A Google search should provide you with details of "Russian " lawyers in China who may be able to help. or the Chinese law society - http://www.chinalaw.org.cn/ Should be able to point you in the right direction.

This is beginning to become what we call due a diligence matter.

While we are happy to assist with a case of fraud, we do not do due diligence for commercial organizations. there are businesses that specialize in this area.

A search of such people in your area should provide details of some of them. Thank you

[stteevve]

Thanks for your help.