How to read an FCO in 10 minutes
To read an FCO (Full Corporate Offer) in 10 minutes, run ten checks in order. Together they show who is really offering, what exactly is offered, whether the price, Incoterm and ports fit together, how and when money moves, and who has to prove what first. If any of these is missing, vague or contradicts another part of the offer, do not sign or send anything yet — ask questions first.
This guide is written by Vanguard Verify (by Vanguard Trade Capital, Dubai), an independent checking service for commodity buyers, brokers and suppliers. We are not the buyer, the seller or their broker.
What an FCO is
An FCO is a seller's written offer to sell a specific commodity on stated terms: product and specification, quantity, price, delivery basis, payment terms and procedure. It usually follows a buyer's LOI or ICPO, and it is often the document a buyer signs back to start contract drafting. Whether a signed FCO is legally binding depends on its wording and the governing law, so treat signing it as a real commitment and get advice if unsure.
The basic rule in any commodity deal: the buyer gives proof of funds (POF); the seller gives proof of product (POP). A good FCO says clearly how and when both happen.
The 10-minute FCO read: 10 checks, about one minute each
1. Who is the seller? (minute 1)
Find the full legal company name, registration number, registered address and country. A logo and an email address are not enough. Note them — you will check them in the official company register afterwards.
2. Who signs, and with what authority? (minute 2)
The FCO should name the signatory and their position, with a signature and date. "Seller's mandate", "authorised representative" or an unsigned PDF means you are not yet dealing with the seller itself. Ask for the seller's own signed offer or a written mandate you can confirm with the seller.
3. Who is it addressed to, and when does it expire? (minute 3)
A real FCO is addressed to a named buyer, with a reference number, issue date and a validity period (often a few days). An offer addressed to nobody, or "valid until further notice", is usually a circulating document, not an offer made to you.
4. Is the product specification complete? (minute 4)
Check the spec against the product's normal standard. For example: ICUMSA 45 sugar should state colour (45 IU max), polarisation, moisture and ash; urea 46% should state nitrogen and biuret limits; EN590 diesel should state the 10 ppm sulphur limit and the standard version. Missing specs, or specs that mix grades, are a warning sign.
5. Do the quantity and schedule make sense? (minute 5)
Look at trial shipment size, monthly quantity, contract length and tolerance (e.g. +/-5%). Very large "monthly x 12" volumes from a company you cannot find any export record for need explaining.
6. Do price, Incoterm and ports fit together? (minute 6)
FOB needs a named loading port; CIF or CFR needs a named discharge port; the price must say which. Check the Incoterms version (e.g. Incoterms 2020). An FOB price with a "destination of buyer's choice" note, or a CIF price with no discharge port, shows the offer has not been costed.
7. How does money move? (minute 7)
Normal terms are bank to bank: a documentary letter of credit (MT700), or a standby LC or guarantee (MT760), with payment against shipping documents. Be very careful if the FCO asks for any payment before the product is shown — for "documents", "licences", "inspection booking", "registration" or "legal fees".
8. Who proves what, and in what order? (minute 8)
Read the procedure step by step. A balanced procedure has both sides proving something: the buyer's POF and the seller's POP, each confirmed through banks or independent inspectors. If only the buyer is asked to prove funds, issue bank messages or pay before any POP, ask why.
9. Who inspects, where, and who pays? (minute 9)
A proper FCO names the inspection company (for example SGS, Intertek or Bureau Veritas) and where inspection happens — usually at the loading port. Note that inspection reports must later be confirmed directly with the inspection company, not from a PDF.
10. Is the text copied? (minute 10)
Pick two or three unusual sentences from the FCO and search them online. Copy-paste FCOs often match offers from many other "sellers", contain another company's name left in, or mix up ports and products. A copied text does not prove an offer is fake, but it means you must check everything independently.
After the 10 minutes
If the FCO passes, check the seller in the official company register, call the company on a number you found yourself, and ask for the POP route. If it fails, reply with specific questions — a genuine seller will answer them.
Red flags
- No registration number, address or named signatory.
- Unsigned, undated, or not addressed to a named buyer.
- Specification incomplete or mixing grades.
- Price, Incoterm and ports that do not fit together.
- Any fee or payment before proof of product.
- Procedure where only the buyer proves anything.
- Huge monthly volumes with no visible export history.
- Free email address, look-alike domain or WhatsApp-only contact.
- Text that matches other offers word for word.
- Pressure to sign "today" because the allocation closes.
Example (illustrative only — names and details invented)
A broker in the Gulf receives an FCO for 25,000 MT of urea 46% per month, CIF "any safe port", signed by a "seller's mandate". There is no registration number, the price is well below recent market levels, and the procedure asks the buyer to issue an ICPO, a bank comfort letter and a "document fee" before any POP. A web search finds the same paragraphs in offers from three other companies. In ten minutes the broker has five clear questions. She sends them, asks for the seller's own signed FCO and a POP route, and does not forward the offer to her buyer until they are answered.
FAQ
What does FCO stand for?
FCO means Full Corporate Offer: the seller's written offer setting out product, specification, quantity, price, Incoterm, payment terms and procedure. It often follows a buyer's LOI or ICPO.
Is a signed FCO legally binding?
It can be. Whether a signed FCO creates a binding obligation depends on its wording and the governing law. Read it as a real commitment and take legal advice before signing if you are unsure.
What is the difference between an FCO and an ICPO?
An ICPO (Irrevocable Corporate Purchase Order) comes from the buyer and states what it wants to buy. An FCO comes from the seller and states what it offers and on what terms. The buyer gives POF; the seller gives POP.
Should I pay a fee to receive or accept an FCO?
Fees before you have seen any proof of product are one of the most common warning signs in commodity offers. In a normal deal, money moves bank to bank against shipping documents. Speak to your bank before paying anything.
Vanguard Verify is run by Vanguard Trade Capital Goods Wholesalers DWC-LLC, Dubai South, Licence 14282. This guide is general information, not legal or financial advice.