Monitoring & Inspection Services
Under this contract, the Bank hires a collateral manager, such as ACE Global Depository, to oversee and assess the Goods’ physical and, if necessary, documentation handling. This service is provided on behalf of the Bank, with ACE Global Depository’s role strictly limited to logistical oversight.
The client or third-party warehouse grants ACE Global Depository, as required by the Bank, free access to storage facilities for performing supervisory services. The Monitoring and Inspection Agreement with ACE Global Depository specifies that they are not accountable for the Goods’ condition, quality, or management unless stipulated otherwise.
In such a case, a different agreement, the Collateral Control Agreement, would be adopted. ACE Global Depository’s Stock Monitoring and Inspection Service includes detailed checks like sampling, quality and quantity analysis/testing, verification of packaging and labeling, along with managing loading and unloading operations. Their experts annually inspect significant quantities of commodities shipped globally.
Lender Benefits
- Ensures interest in goods by accurate tracking and accounting of all transactions.
- Offers ongoing on-site presence for constant monitoring (if agreed with borrower).
Borrower Benefits
- Inspection and reporting enable cost-effective credit access for continued business operations.
Financier Pre-Loan Considerations
- Determine the maximum credit against the borrower's stock.
- Decide on the advance percentage against stock value.
- Establish a stock valuation pricing system.
- Set periodic reporting requirements and documentation nature from ACE Global Depository.
- Define the goods release mechanism from ACE Global Depository to borrower or off-taker.
Pre and Post Shipment Inspection Services:
- Sampling as per contractual or international standards.
- Comprehensive quality analysis/testing, utilizing both internal and external labs.
- Validation of quantity, weight, packaging, and labeling.
- Supervision of loading/unloading processes.
- Various material analyses including physical, chemical, heavy metals, pesticides, microbiological, and mycotoxins.
- Conduct random weight checks and tally operations.
- Ensure compliance with labeling and packing for shipment acceptance.
- Verify cargo spaces are suitable for loading goods.
- Provide constant monitoring at ports and warehouses.
- Maintain detailed time logs and factual statements.
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