Guide · Trade
How to verify a commodity supplierbefore you pay.
To verify a commodity supplier, confirm the company in its official registry, screen it and its owners against sanctions lists, check that the bank account is in the company's own name, and have the goods inspected independently at loading before any money is released. Then pay through a method that ties payment to documents, inspection or delivery, never on trust alone.
Why it matters
Check the company,then the goods.
Verification has two halves. The company: is it real, licensed, not sanctioned, and paid through its own bank account? The goods: do they exist, can every document be confirmed with whoever issued it, and will an independent inspector confirm quality and quantity at loading? A genuine supplier expects both checks and helps you complete them before any money moves.
The sequence
Seven checks,in order.
- Company registryFind the company yourself in the official registry of its country. Confirm the legal name, registration number, address, status, directors and shareholders.
- LicenceConfirm the trade licence is valid and covers the goods. Where the product needs an export licence or permit, confirm it with the issuing authority.
- Sanctions screeningScreen the company, its directors and the people who own and control it against the UN, EU, UK and US OFAC lists, and any list that applies in your country.
- Bank detailsThe account name must match the contracting company exactly. Confirm the details by calling a number you found yourself.
- Proof of productAsk for documents the issuer can confirm, such as a warehouse receipt or a certificate of analysis, and contact that issuer directly.
- Independent inspectionAppoint an independent inspection company to sample, test and weigh or count the goods at loading, and make its certificates a condition of payment.
- References and site visitCall trade references, and visit the site or send a local inspector when the size of the deal justifies it.
What to ask for
Each check,and how to confirm it.
| Check | What to request | How to confirm it at source |
|---|---|---|
| Registration | Certificate of incorporation or a current registry extract | Search the official company registry yourself |
| Licence | Trade licence, plus export licence or permit where required | Check with the licensing authority or its public register |
| Ownership | Directors, shareholders and the people who own and control the company | Compare with the registry and screen every name |
| Bank account | Account confirmation on bank letterhead | Call-back to a known number; account name must match the company |
| Product | Warehouse receipt, stock report, certificate of analysis | Confirm directly with the warehouse, laboratory or other issuer |
| Track record | Trade references, earlier bills of lading | Call the references; check documents with the carrier where possible |
| Facilities | Address of the mine, plant, mill or warehouse | Site visit, live video from the site, or a local inspector |
Sanctions screening
The four listsbuyers commonly check.
| List | Issued by | What it covers |
|---|---|---|
| UN Security Council Consolidated List | United Nations Security Council | Persons and entities under UN sanctions, which all UN member states must apply |
| EU consolidated financial sanctions list | European Union | Persons and entities subject to EU asset freezes and related restrictions |
| UK Sanctions List | UK government (FCDO; financial sanctions are implemented by OFSI) | Persons, entities and ships designated under UK sanctions |
| OFAC SDN List and other OFAC lists | US Treasury, Office of Foreign Assets Control | Specially Designated Nationals and other US sanctions programmes |
Screening in practice
Screen the owners,not only the company.
Sanctions can reach a company that is not listed itself. OFAC applies its 50 percent rule to entities owned by listed persons, and the EU and UK apply ownership and control tests. Screen the owners and directors as well as the company, and check whether the goods themselves are restricted. A result is a snapshot: repeat it before signing and again before paying.
Red flags
When to stopand check again.
- Pressure to pay before inspection. A genuine supplier accepts inspection at loading. Deadlines that leave no time to check are a warning sign.
- Documents you cannot verify. If the issuer cannot be found or will not confirm the document, treat it as unconfirmed.
- Prices far below the market. A price well under the going rate for the grade usually means the goods, the seller or the documents are not what they seem.
- Refusal to sign an NDA or to put terms in writing. Serious counterparties protect their information and agree every term on paper.
- Changing bank details. A new account announced by email, especially in another name or country, is a well-known fraud pattern. Confirm by phone before paying.
- Free email addresses. A trading company that writes only from a free webmail account, with no company domain, needs extra checks.
- Upfront payments for documents. Requests to pay for "registration" or the release of documents before any contract exists.
- Names that do not match. The seller, the account holder and the exporter on the documents should be the same company, or the link should be explained in writing.
Paying safely
Payment methodsthat protect the buyer.
| Method | How it works | How it protects the buyer |
|---|---|---|
| Documentary letter of credit (LC) | The buyer's bank undertakes to pay the seller against stated documents, usually under the ICC rules UCP 600 | Payment only against compliant documents, which can include an independent inspection certificate |
| Documentary collection | Banks release the shipping documents against payment (D/P) or acceptance of a bill of exchange (D/A), under the ICC rules URC 522 | The buyer pays only once shipping documents are presented; quality still needs inspection |
| Escrow | A neutral third party holds the funds and releases them when agreed conditions are met | Release can be tied to inspection results, documents or delivery |
| Payment after inspection or delivery | The buyer pays once the goods are inspected or received | The buyer keeps the money until the goods are confirmed |
Our role
Checks on both sides,before any introduction.
When BGI introduces a supplier and a buyer, both are screened against international sanctions lists and identity-checked first, nothing is shared before an NDA is signed, and every term is agreed in writing. Quality and quantity are confirmed by an independent inspection company where the goods require it. Our checks support each party's own due diligence and do not replace it. See how we work, or our guide on how to inspect used trucks before shipment for an example of a pre-shipment checklist.
Your checklist
Before you paya new supplier.
- 01Company found in the official registry; legal name and number match the contract
- 02Licence valid and covering the goods; export licence or permit where required
- 03Company, directors, owners and controllers screened against UN, EU, UK and OFAC lists
- 04Bank account in the company's exact name, confirmed by a call-back
- 05Proof of product confirmed directly with the issuer
- 06Independent inspection at loading, with its certificates a condition of payment
- 07Trade references called; site visited or checked locally
- 08Price, Incoterms, inspection, payment and delivery set out in a signed contract
Questions
Common questionsabout supplier verification.
How do I check if a commodity supplier is legitimate?
Confirm the company in its official registry, check its licence, screen it and its owners against sanctions lists, and make sure the bank account is in its own name. Then confirm the goods through an independent inspection at loading before payment is released.
Which sanctions lists should I screen a supplier against?
International buyers commonly check at least the UN Security Council Consolidated List, the EU consolidated financial sanctions list, the UK Sanctions List and the US OFAC SDN list. Add any list that applies in your own country or that your bank requires.
What is proof of product in commodity trade?
Proof of product is evidence that the seller holds or controls the goods, such as a warehouse receipt, a stock report or a certificate of analysis. It only counts if you can confirm it directly with the warehouse, laboratory or other issuer.
Is it safe to pay a supplier in advance by bank transfer?
It is the option with the least protection for the buyer, because the money leaves before the goods are inspected or shipped. A letter of credit, a documentary collection or escrow ties payment to documents, inspection or delivery.
What does independent inspection at loading check?
An independent inspection company samples and tests the goods against the contract specification and confirms the quantity by weighing, draft survey or tally. It then issues certificates of quality and quantity, which many contracts make a condition of payment.
What should I do if a supplier changes its bank details?
Stop and confirm the change by phone with a contact you already know, on a number you found yourself. Changed bank details sent by email are a well-known form of payment fraud.
Please note
General guidance only.
This guide describes common due diligence practice in international trade, for orientation. It is not legal, financial or compliance advice, an offer or a statement of available goods. Every deal sets its own terms in the written contract.
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