Independent Inspection and Q&Q in Fuel Trade Finance
Quality and quantity inspection turns a fuel contract into a clear set of facts a bank can read. Without an independent Q&Q, a Jet A-1, EN590 or mazut file is a story about product that may or may not be in the tank, and may or may not meet the specification the buyer.
Quality and quantity inspection turns a fuel contract into a clear set of facts a bank can read. Without an independent Q&Q, a Jet A-1, EN590 or mazut file is a story about product that may or may not be in the tank, and may or may not meet the specification the buyer thought it bought. Capital providers treat that uncertainty as credit risk, not as a detail to tidy up after funding.
This guide is about inspection as part of a financeable trade. It is not a rewrite of fake inspection certificates in commodity trades, which you should read first if the certificate arrived as a scan from a seller you have never met. It is also not a rewrite of bridge loans for TSR and SGS costs, which is about financing inspection and storage costs. Financely is an advisor and arranger. We do not inspect cargoes and we do not issue certificates.
What Q&Q has to prove
Quantity is the volume or mass that will be paid for, after the agreed method: shore tank, ship's figures, or another stated procedure, with a clear treatment of temperature, density and free water. Quality is whether the product meets the named standard. For Jet A-1 that is usually ASTM D1655, DEF STAN 91-091, or the AFQRJOS checklist, including freeze point and the other aviation limits. For EN590 it is EN 590, including sulfur, density, cetane, water, contamination and, where relevant, cold-filter plugging point. For Mazut M100 it is the named GOST 10585-2013 mark, including viscosity, sulfur band, water, impurities and flash point.
The appointment should name the inspector, the standard, the sample points, the method of composite sampling, the sealed-sample procedure, and who receives the certificate. Seller-only inspection is weaker than an independent appointment agreed by both parties, or an appointment the letter of credit itself requires. See LC and SBLC structures for refined petroleum products and documentary LC vs SBLC for Jet A-1 and EN590 trades.
Where inspection sits in the timeline
- At load, or into a shore tank, to evidence what was delivered into the trade.
- At discharge, or out of the receiving tank, where the contract or the credit requires a second check, or where a quality claim is possible.
- During storage, if product will sit under a collateral management agreement or enter a borrowing base, because residual fuel and even distillates can change with water, sediment or commingling.
- At title transfer for in-tank deals, together with tank receipts and ullage reports that the terminal can confirm. See title transfer and release procedures for fuel in tank.
Named firms such as SGS, Intertek, Bureau Veritas and other TIC companies are examples of independent inspectors, not a required shortlist and not an endorsement. The contract should appoint a company the parties and the capital provider can accept, and should say what happens if the first result is disputed, including the use of sealed samples and a referee test.
Certificates that should not be trusted
Forged or recycled certificates are common in fuel and metals scams. Warning signs include a certificate that the inspector's own office cannot confirm, a logo or letterhead that does not match the firm's current style, a tank or a vessel that the terminal or the port cannot place, a date that does not fit the voyage, or a quality result that is a perfect copy of a previous cargo. The fake inspection certificates article and the commodity trading scams hub cover the pattern. Call the inspector on a number you obtained yourself, not on the number printed in the seller's email.
Paying inspection or tank fees to a personal account, rather than to the inspector or the terminal, is another warning sign, already discussed in tank storage fraud. If the commercial problem is still the supplier, use commodity sourcing rather than paying for a certificate that cannot be verified.
| Inspection element | What a finance file needs | What usually fails |
|---|---|---|
| Appointment | An independent inspector, named in the SPA or the LC, with a defined scope | A seller-issued quality letter, or an inspector the beneficiary chose alone without disclosure |
| Standard | The exact product standard and the test methods | A certificate that says on-spec without naming EN 590, ASTM D1655, DEF STAN 91-091 or GOST 10585-2013 |
| Location | Load, discharge, or the named tank, consistent with title transfer | A tank number the terminal does not recognize |
| Confirmability | A certificate the inspector will confirm when a bank or a buyer calls | A PDF that cannot be traced in the inspector's system |
Cost, timing and the letter of credit
Inspection costs money and it takes time. Those costs are a commercial item in the SPA, not a reason to skip the appointment. If you need a short bridge to pay inspection or tank fees against a real cargo, that is the narrow case discussed on the existing TSR and SGS cost-bridge page. It is not a reason to pay an unknown account so that a certificate can be released. The inspector should be paid in the ordinary way, to the inspector.
When a documentary credit calls for a quality and quantity certificate, the wording has to be performable. A credit that requires a certificate issued at a place the inspector cannot attend, or that requires a standard the product was never tested against, will only produce a discrepancy. Agree the certificate wording with the inspector and the bank when the credit is drafted, not after the vessel has sailed.
How Financely uses inspection in a mandate
When we review a refined petroleum or mazut file, we look at whether the inspection plan matches the contract, the instrument and the custody plan. We will ask you to have certificates confirmed. We will not take an unverifiable certificate to a capital provider and hope nobody checks. If you have a live cargo, send the SPA, the appointment, the latest certificates and the tank or shipping documents through deal submission.
Frequently Asked Questions
Is a seller's quality certificate enough for a bank?
Usually not. Capital providers want an independent inspector, appointed in the contract or the credit, who will confirm the certificate when asked on a number you obtain yourself. A seller-only letter is a weak document. If a PDF cannot be confirmed, treat it as a warning sign and stop before you pay anyone.
Which standard should the certificate cite?
Cite the standard named in the contract: ASTM D1655 or DEF STAN 91-091 for Jet A-1, EN 590 for automotive diesel, or GOST 10585-2013 with the sulfur mark for Mazut M100, plus the agreed test methods. The certificate has to be performable against that standard, not a neighboring grade.
Does Financely inspect the cargo?
No. Financely is an advisor and arranger only. It does not inspect cargoes, issue certificates, or lend. Inspection is performed by an independent company appointed under the contract. Named firms such as SGS, Intertek, or Bureau Veritas are examples, not endorsements, and the contract should name the actual appointee.
What if I already received a PDF certificate from the seller?
Have it confirmed with the inspector on a contact number you obtain yourself, not a number supplied only by the seller. If it cannot be confirmed, treat it as a warning sign, and read the article on fake inspection certificates before you pay anyone or send the file to a capital provider.
Financely is an advisor and arranger, not a lender and not a supplier. If you have a real transaction and need a lender-ready file, submit the mandate through the intake form.
You can also read how structured trade finance advisory is scoped before you send the file.
Sources and references
- Product standards: ASTM D1655, DEF STAN 91-091 / AFQRJOS, EN 590, GOST 10585-2013.
- Companion scam article: https://blog.financely.io/fake-inspection-certificates-in-commodity-trades/
- Financely deal submission: https://www.financely.io/deal-submission