STANDARD OPERATING PROCEDURE (SOP) – GOLD TRANSACTION

This Standard Operating Procedure (SOP) provides a clear, comprehensive, and professional framework for executing gold transactions. It is designed to outline every stage of the process in detail, ensuring that all parties understand their roles, responsibilities, and obligations from the outset.

Each phase specifies the exact actions required from both the Buyer and the Seller, the supporting documentation that must be exchanged, and the compliance standards that must be observed. By establishing these steps in advance, the SOP minimizes risk, enhances transparency, and builds trust between counterparties.

The structure also provides flexibility, allowing it to be adapted depending on whether you are operating as the Seller, the Buyer, or as a mandate representing either side. Ultimately, this SOP serves as both a procedural guide and a risk management tool, ensuring that gold transactions are conducted efficiently, securely, and in full alignment with international best practices.

Buyer Issues LOI (Letter of Intent)
- Specifies:
  - Quantity (e.g., 300 kg monthly for 12 months).
  - Purity (e.g., 96%+ Au).
  - Price formula (e.g., X% discount to LBMA).
  - Delivery terms (FOB, CIF, or Local Refinery).
  - Payment terms (TT Wire, Escrow, SBLC, Bank Instrument, etc.).
- LOI should be on the buyer's official letterhead, signed and stamped.
Seller Acknowledgment
- Confirms receipt of LOI.
- States willingness and capacity to deliver as requested.
- Provides indicative terms (if slightly different from LOI).

Stage 1 – Buyer’s Initial Interest

Stage 2 – Mutual Protection & Compliance

Buyer Issues LOI (Letter of Intent)

- Specifies:
  - Quantity (e.g., 300 kg monthly for 12 months).
  - Purity (e.g., 96%+ Au).
  - Price formula (e.g., X% discount to LBMA).
  - Delivery terms (FOB, CIF, or Local Refinery).
  - Payment terms (TT Wire, Escrow, SBLC, Bank Instrument, etc.).
- LOI should be on the buyer's official letterhead, signed and stamped.
Seller Acknowledgment
- Confirms receipt of LOI.
- States willingness and capacity to deliver as requested.

Provides indicative terms (if slightly different from LOI).

Stage 3 – Drafting & Signing SPA

Seller Issues Draft SPA
Includes: product specs, quantity, delivery schedule, assay procedure, payment terms, and governing law/arbitration.
Buyer Reviews & Negotiates
Amendments handled via “mark-up” or counter-draft.
Both Parties Execute SPA
The SPA becomes legally binding.
Each party keeps an original signed copy.

Stage 4 – Proof of Funds (POF)

& Proof of Product (POP)

Buyer Provides POF (one or more of the following):
Bank statement (redacted balance acceptable).
RWA (Ready, Willing, Able) Letter from buyer’s bank.
MT799 or Bank Comfort Letter.
Escrow account confirmation.
Seller Provides POP (after POF is verified):
Certificate of origin.
Past export documents (airway bill, customs papers).
Video/photographs of product with today’s date & buyer’s code.
Mining/extraction license.

Stage 5 – Transaction Execution Options

Depending on the agreed delivery method:

Option A – FOB (Free on Board – Seller’s Airport)

Seller transports gold to international airport.
Customs clearance initiated by Seller.
Buyer (or representative) inspects documents before shipment.
Buyer pays for export taxes, handling charges, and shipping.
Shipment loaded onto buyer’s chartered or commercial aircraft.
At buyer’s refinery: gold is assayed, and payment is released within 24–72 hours of assay confirmation.

Option B – CIF (Cost, Insurance, Freight – Delivered to Buyer’s Destination)

Seller arranges secure shipment & full insurance to Buyer’s nominated refinery.
All costs (freight, insurance, handling) borne by Seller.
Buyer receives goods at destination, refinery assays, and issues final assay certificate.

Buyer releases payment within 24–72 hours of final assay.

Option C – Local Refinery / Inspection

Seller delivers gold to recognized local refinery or vault in seller’s country.
The buyer's representative is present for the assay.
Assay certificate is issued.
Buyer wires payment immediately (same day) or within 24 hours.
Export process initiated after full payment is received.

Stage 6 – Payment & Settlement

Payment methods usually include:
- Telegraphic Transfer (TT/Wire) – most common and direct.
- Escrow Service – neutral third-party account releases funds after assay.
- Bank Instrument (SBLC/MT103/760) – for large contracts or long-term deals.
- USDT (ERC20) – for large contracts or long-term deals.
Payment can be a combination of suggested payment methods

Timeframe: 24–72 hours after assay confirmation, unless otherwise stated in SPA.

Stage 7 – Rolling Contract / Long-Term Supply

After successful first tranche:
Parties confirm continuation of supply.
Monthly (or agreed) delivery schedule activated.
Adjustments made to logistics, pricing, or refinery if needed.

Let’s Work Together

Risk Management & Best Practices

Never release full POP before verified POF
(to avoid scams).
Always include clear arbitration/jurisdiction clauses (ICC, LCIA, or UNCITRAL).
Use a secure, recognized refinery or escrow for first transaction to build trust.
Ensure all payments flow bank-to-bank
(no cash handling).

Keep all communication in writing/email for traceability.