Unless otherwise notified by SELLER, the payment for each shipment hereunder shall be made by BUYER in U.S. Dollars.
BUYER shall establish an irrevocable, confirmed and transferable Letter of Credit in favour of SELLER for each shipment deliverable hereunder, covering the anticipated value of oil comprising such shipment. The amount of Letter of Credit should cover the total nominated quantity plus the percentage of tolerance on the basis of provisional price agreed upon in the Contract. BUYER shall arrange that such Letter of Credit be duly confirmed to SELLER by one of the banks acceptable by SELLER. BUYER shall ensure that at least 10 days prior to the expected date of arrival at the loading port of the vessel, nominated by BUYER. the confirmation of the Letter of Credit concerned is duly received by SELLER in a manner acceptable to SELLER. SELLER shall not be responsible for any delay caused to vessel due to the Letter of Credit not having been received by SELLER as stipulated hereinabove.
Should SELLER agree to supply bunker to the vessel nominated by BUYER. BUYER shall establish a separate Letter of Credit covering the anticipated value of bunker in accordance with paragraph 3.2 above.
Such Letter of Credit shall specify the financial basis upon which BUYER has established the Letter of Credit.
Against BUYER's own credit line with the Letter of Credit Opening Bank.
Against Bank Guarantee(s) issued by a third bank acceptable to the Letter of Credit Opening Bank in which the name of such bank be declared.
Against Letter of Credit opened in favour of BUYER by a third party which constitutes the basis of Letter of Credit opened in favour of SELLER in which case the name of such party be declared.
Payments against Letters of Credit, referred to under paragraphs 3.2 and 3.3 above, shall be made on the due date concerned upon the presentation by SELLER << either to confirming bank directly or to Tehran representative office of L/C confirming bank >> concerned of the following documents:
Original Commercial Invoice plus two copies.
Full set of Bill of Lading in triplicate, made out to the order of shipper's (NIOC) account (BUYER's complete registered name) and duly blank endorsed. The said Bill of Lading should be signed by the master of vessel or owner's authorized agent. Such Bill of Lading should be marked "INSURANCE AND FREIGHT PAYABLE AS AGREED"
Original certificate(s) of quantity and quality plus two copies.
In case NIOC finds it impossible to submit the documents listed in the L/C documentation clause within the usance period (i.e. payment period mentioned in crude oil sale contract and its related letter of credit) then, payment shall be made against SELLER'S telex invoice to the L/C confirming bank on contractual due date.
SELLER may refuse delivery of the cargo and defer carrying out any of GTC's obligations if the Letter of Credit or the payment is not received by SELLER in a manner acceptable to SELLER, in accordance with the provisions of Section 3 hereof.
BUYER shall be liable to pay interest, at a rate mentioned in the Contract if the value of any shipment is not paid by BUYER at the contractual due date.
irrespective of whether the due date of payment falls on a Saturday, Sunday or any other banking or official holidays, the payment should nevertheless be value-dated on such due date. However, should the due date of payment falls on a non-banking day, as stated above, payment may be value-dated on the immediately succeeding banking day provided interest for the days overdue is also paid as stipulated in the Contract.
The text of NIOC standard L/C shall be considered as integral part of the crude oil sale contract.
BUYER shall instruct the bank concerned to accept the documents in question as and when presented by SELLER without regard to date of validity stated in the Letter of Credit.
BUYER undertakes not to withhold instructions to vessels agent in Iran to amend/reissue the Bill of Lading immediately upon receiving SELLER's request to this effect which may be necessitated for the purpose of payment of the value of cargo to SELLER.
