Buying petroleum products: beware fraud
Be aware of fraudulent schemes that might affect potential petroleum products' buyers from the USA and other countries. Nowadays many American (and not only) companies are seeking for long-term supply contracts with the Russian refineries or intermediaries (brokers) involved. The most popular petroleum products are mazut M-100, diesel D-2, jet fuel and liquid natural gas.
There are a lot of companies on the Internet which claim to be ready to sell petroleum products of the Russian origin in high volumes on a long-term basis. But some of them are fake (fraudulent) companies using bogus documents and/or corporate names of major Russian oil corporations (like Rosneft, LukOil etc.).
Usually the fraudulent seller claims to be able to supply petroleum products in high volumes ASAP subject to advance payment of significant amount and/or some “mandatory” fees (inter alia export license fee, title transfer fee etc.). After receiving money they disappear without a trace.
Russia is one of the world's major petroleum products exporter and the overwhelming majority of the legal entities involved in transactions with petroleum products of the Russian origin are prudent companies.
But dealing with potential sellers of petroleum products of the Russian origin (especially when it’s your first contract with them), please, bear in mind the following tips:
There are no export license requirements in Russia for petroleum products (the only exception is natural gas in a gas form). So if your potential counterparty requests you to pay for an export license, it’s a scam.
The Russian laws do not provide for any title transfer fee for petroleum products. You might be interested to know that the only case in which you need to officially transfer your title for a property is selling/buying real estate. Petroleum products are not considered as real estate under the Russian laws (and, we guess, under no countries’ laws);
If you don’t know your counterparty really well it might be appropriate to use a letter of credit as the method of payment. You may also opt for performance bond;
No Russian authority could receive any sums of money directly to their accounts (especially in a foreign currency). If you’re asked to pay for something allegedly to one of the Russian authority and they’re the direct payees with accounts in some privately owned banks, it’s 100 % a scam
Hire Russian lawyer. There’re a lot of large, medium and even small legal firms in Russia that could help you protect your interest and money at relatively low price.
We hope that these tips could be of interest and help to all American companies involved in transactions with petroleum products of the Russian origin.
Here’s a list of major Russian refineries with links to their websites (some of them have information about the above-described scams):
Kirishnefteorgsintez (LLC "KINEF")
RN Tyapsinky Refinery
RN Komsomoljsky Refinery