
SMARTCORP INC.
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The only group that can issue paper that says they are the Titleholder is tank farms.
Refineries cannot normally issue paper as a Titleholder.
The reason is Refineries are always producing fuel and the fuel is pumped into tanks.
When the Refinery sells fuel, they pump the fuel from their tanks, and at the same time they are producing fuel that is pumped into the same tank, so the quantities are always changing.
Refineries can do SGS reports and Dip Tests so they know there are certain quantities and qualities of fuel in the tank on a certain day. They also know
the quantities that are pumped out and they know the quantities that are pumped into the tank.
Titleholder is a document issued by the government telling you who owns the fuel in the tank and the quantities. When a Titleholder document is issued there cannot be anymore fuel pumped into the tank and no fuel can be pumped out from the tank until the fuel is sold.
The Russian government is very strict about these programs as are other governments.
If they were not strict no one would trust these papers such as Dip Test, Titleholder or SGS Test Report.
The most cumbersome and costly document is a Commercial Invoice.
Commercial Invoices are seldom used and are only used when Major Procedures are used. If a refinery is to issue a Commercial Invoice this means the refinery is guaranteeing the product and the quantities to the government.
The product must be in separate storage. There cannot be any fuel pumped into the tank or tanks. There cannot be any fuel pumped from the tank or tanks. All movement of fuel must stop in the area of the tank or tanks and must be sealed by the government.
The fee to the government jumps from $85,000 for a regular shipment to $5,000,000 for Commercial Invoice.
If the buyer changes their minds and don't buy, as they sometimes do, the government fee is lost as the fee is not refundable to the refinery.
The biggest expense to the refinery is the interruption to the production in the refinery.
This cost is too much for most refineries to bear and therefore most refineries refuse to do Commercial Invoicing regardless of the price they are offered for their fuel.
The few refineries that do Commercial Invoicing do so in Major Procedure Transactions and sell their fuel for almost twice the price compared to fuel that is sold using the refinery's procedures.
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United States
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