Trade Due Diligence Protocol

LXXI Limited (“LXXI”) originates, structures, facilitates, and intermediates commercial transactions across commodities (energy, agriculture, minerals), capital goods, and other strategic trade opportunities.

Given the size, complexity, and cross-border nature of many of the transactions handled by LXXI, we operate a verification-before-commitment policy. This policy ensures that LXXI does not advance a transaction to an advanced contractual stage before the identity, authority, capacity, product, title, financial capability, regulatory standing, and execution capability of the relevant transaction parties have been sufficiently established.

The purpose is not merely to satisfy compliance requirements. It is to protect:

• The commercial interests of the buyer
• The commercial interests of the seller/supplier
• LXXI’s reputation
• LXXI’s institutional relationships
• The integrity of its counterparties
• The time and resources of all parties
• The bankability and executability of the transaction

LXXI operates on one fundamental principle. An attractive transaction does not become a good transaction merely because:

• The price is attractive
• The quantity is available
• The parties are enthusiastic
• A principal has issued an LOI
• A mandate has been provided
• A seller has issued an offer
• A buyer has issued an ICPO
• The parties have agreed commercial terms
• An SPA has been circulated

LXXI has identified a recurring transaction risk within the broader trade market: parties often become commercially committed to a transaction before the underlying due diligence has been completed. This creates a situation in which:

1. 1A buyer may become committed to a supplier that cannot satisfy the buyer’s compliance requirements
2. 2A supplier may become committed to a buyer that cannot establish financial capacity
3. 3LXXI may introduce parties before knowing whether both parties can pass institutional due diligence
4. 4An SPA may be negotiated before material documentation has been verified
5. 5A transaction may collapse after significant time and resources have already been expended
6. 6LXXI may suffer reputational damage despite not being the source of the underlying deficiency

This protocol applies to:

• Crude oil transactions
• Refined petroleum products
• LNG/LPG and gas-related products
• Agricultural commodities — cocoa, sesame, grains, coffee, palm products
• Minerals and metals, including precious or strategic minerals
• Forestry products
• Capital goods and equipment
• Bulk commodities
• Agro/industrial chemicals
• Structured commodity transactions
• Import/export transactions
• Offtake arrangements and supply agreements
• Other transactions in which LXXI acts as broker, facilitator, intermediary, arranger, or transaction adviser

Every trade shall move through defined transaction gates:

1. 1GATE 0 — OPPORTUNITY RECEIPT: Receipt of LOI, ICPO, seller offer, buyer mandate, or equivalent expression of interest.
2. 2GATE 1 — COMMERCIAL PRE-SCREENING: LXXI determines whether the transaction is commercially coherent and within its mandate.
3. 3GATE 2 — PARTY DUE DILIGENCE: Buyer, seller, supplier, principal, and/or other material parties undergo initial KYC/KYB and authority verification.
4. 4GATE 3 — TRANSACTION DUE DILIGENCE: Product, title, availability, licences, origin, quantity, specification, logistics, and other transaction fundamentals are verified.
5. 5GATE 4 — MUTUAL COUNTERPARTY QUALIFICATION: LXXI confirms that the proposed buyer and seller are each sufficiently qualified to be introduced to the other.
6. 6GATE 5 — COMMERCIAL MATCHING: Commercial terms are negotiated between qualified parties.
7. 7GATE 6 — TERM SHEET / HEADS OF TERMS: Material commercial terms are documented.
8. 8GATE 7 — SPA READINESS REVIEW: LXXI confirms that the parties have satisfied the documentary and commercial requirements necessary to proceed to definitive contractual documentation.
9. 9GATE 8 — SPA / DEFINITIVE AGREEMENT: The SPA or other definitive contract is negotiated and executed.
10. 10GATE 9 — CONDITIONS PRECEDENT / CLOSING: Inspection, delivery, banking, logistics, payment, and other closing requirements are satisfied.
11. 11GATE 10 — EXECUTION & COMPLETION: The transaction is completed and formally closed.

The most important requirement under this protocol is:

• Who they are
• Who owns or controls them
• Who has authority to transact
• What they are selling or buying
• Whether they possess or control the relevant product
• Whether the product can legally be sold
• Whether the transaction is commercially executable
• Whether the relevant parties can satisfy their obligations

LXXI shall not deliberately allow a transaction to reach a stage where its success depends upon a party that has not yet demonstrated its ability to satisfy reasonable due diligence requirements. Accordingly, LXXI shall seek material due diligence documentation before:

• Representing a party as verified
• Making substantive counterparty introductions
• Making a transaction-specific recommendation
• Circulating definitive contractual documentation
• Representing that the transaction is execution-ready
• Requesting the other party to commit significant resources
• Initiating banking or financing processes

LXXI shall not place the entire burden of diligence on one side of a transaction. Where LXXI is facilitating a buyer-to-seller transaction, LXXI shall seek to qualify both sides before representing either party as transaction-ready.

Depending on the commodity and jurisdiction, the following documents may be requested:

Depending on the transaction, the buyer may be required to provide:

• Certificate of Incorporation/Registration and corporate registry extract
• Company profile, directors/shareholders, and UBO information
• Authorised signatory identification
• Purchasing mandate
• Evidence of relevant business activity
• Import licence where applicable
• Destination/storage capability where applicable
• Proof of funds or financial capacity where applicable
• Bank reference where appropriate
• Financing confirmation where applicable
• Evidence of ability to execute the proposed payment mechanism

LXXI does not operate a “one-size-fits-all” documentation policy. The required documentation will depend on:

• Commodity and transaction value
• Country of origin and destination
• Incoterm
• Payment mechanism
• Transaction structure
• Regulatory and financing requirements
• Counterparty risk
• Product-specific risks

Upon preliminary acceptance of a transaction, LXXI may issue the applicable Transaction Due Diligence Request List to the relevant party. The party will be expected to acknowledge receipt and provide the documents within an estimated completion timeline.

Where practical, material corporate and authority documentation should be submitted promptly, ordinarily within 5 business days of formal request.

Where documents require additional time because they must be obtained from a principal, regulator, bank, refinery, producer, warehouse, or other third party, the party must communicate this clearly and provide a realistic timeline.

Before LXXI represents a counterparty as transaction-ready, it must be satisfied that the counterparty is document-ready. A document-ready party:

• Knows what documents it possesses
• Knows what documents it does not possess
• Can identify the actual principal
• Can demonstrate its authority
• Can explain the origin of the product
• Can provide reasonable evidence supporting its claims
• Can obtain additional documentation from its principal where necessary
• Responds professionally to verification requests
• Does not continuously move the goalpost

LXXI shall avoid blind introductions wherever practicable. A blind introduction occurs where one party is introduced to a trade without LXXI having first established sufficient information regarding the identity, authority, and basic transactional capability of the parties involved.

Before a material introduction, LXXI should ordinarily know:

• Who is the party?
• Who do they represent?
• What authority do they possess?
• What exactly are they offering/requesting?
• Can they substantiate the fundamental claim?
• Are they capable of participating in the proposed transaction?

For material transactions, LXXI may establish a controlled transaction data room containing the relevant documentation under appropriate access controls. Typical sections include:

• A. Corporate & KYC — corporate registration, ownership, directors, and signatory information
• B. Authority — mandates, resolutions, powers of attorney, and principal confirmations
• C. Product — specifications, title, origin, quantity, allocation, inventory, and inspection
• D. Regulatory — licences, permits, certificates, and applicable regulatory documentation
• E. Commercial — offers, pricing, Incoterms, quantity, payment terms, and delivery schedule
• F. Financial — proof of funds, financing documentation, and relevant banking information
• G. Logistics — loading, storage, shipping, transportation, and inspection arrangements
• H. Legal — NCNDA, term sheet, SPA draft, and other contractual documentation

Documents supplied by a party shall not automatically be treated as independently verified. Where appropriate, LXXI may verify information through:

• Corporate registries and issuing authorities
• Regulators and government agencies
• Banks
• Recognised inspection companies and laboratories
• Producers, refineries, warehouses, and terminals
• Official corporate contact channels
• Other reliable independent sources

Where an intermediary claims to represent a principal, LXXI may require direct confirmation from the principal. This is particularly important where the transaction involves:

• Major commodity allocations
• Refineries, producers, or mining companies
• Government entities
• Large institutional buyers or financial institutions
• Unusually large transaction volumes

Because LXXI frequently operates through supply-side relationships, every supply partner must understand that LXXI’s reputation depends on the supply partner’s ability to satisfy reasonable buyer due diligence. A supply partner shall be expected to provide the documentation reasonably necessary for a qualified buyer to evaluate the proposed transaction. LXXI shall not knowingly introduce a supply partner to an institutional buyer where LXXI has reason to believe the supply partner cannot satisfy normal transaction-level due diligence, and shall not represent a supply partner as “fully verified” where material verification remains outstanding.

The same standard applies to buyers. A buyer cannot demand extensive supplier due diligence while refusing to establish its own identity, authority, and financial capability. LXXI therefore operates a principle of mutual disclosure proportionality: each party should provide information reasonably necessary for the other party to assess the risks associated with its role in the transaction.

An SPA may be initiated only when the transaction has achieved sufficient SPA Readiness, which generally requires:

• Buyer identified and qualified; seller identified and qualified
• Principal authority established
• Corporate KYC/KYB substantially completed
• UBO information obtained where required
• Product identified, with availability and title/control reasonably established
• Quantity, specification, and origin confirmed
• Price/pricing mechanism agreed in principle
• Incoterm, delivery location, and delivery timeline agreed
• Inspection methodology and payment mechanism agreed
• Relevant financial capacity established
• Regulatory requirements identified
• Material logistics requirements established
• Material red flags resolved
• Required counterparties qualified

An SPA shall never be used as a mechanism to “move the transaction forward” in the hope that missing due diligence documents will subsequently appear. The following approach is prohibited as standard LXXI practice:

LOI → negotiations → SPA → request documents → discover supplier/buyer cannot provide documents → transaction collapses.

The preferred sequence is instead:

LOI → screening → due diligence → verification → mutual qualification → commercial agreement → SPA → execution.

Where documentation cannot reasonably be completed before contract execution, LXXI shall seek to ensure that the relevant outstanding matters are appropriately reflected in the definitive contract. Depending on the transaction, conditions precedent may include:

• Satisfactory KYC
• Proof of title
• Regulatory approval and export licence
• Inspection certificate
• Proof of funds and bank authentication
• Financing approval
• Logistics confirmation and insurance
• Corporate authority and principal confirmation

The following behaviours shall trigger escalation:

1. 1Refusal to provide basic corporate documents
2. 2Refusal to identify the actual principal
3. 3Repeated delays in providing documents
4. 4Documents promised only after SPA
5. 5Sudden changes to the supplier or buyer
6. 6Inconsistent corporate information
7. 7Inconsistent product information
8. 8Unusually attractive pricing without credible explanation
9. 9Excessive intermediary layers
10. 10Pressure to skip KYC
11. 11Pressure to introduce parties before qualification
12. 12Pressure to issue banking instruments before verification
13. 13Requests for unexplained fees
14. 14Requests to pay personal accounts
15. 15Unverifiable bank documents
16. 16Unverifiable inspection reports
17. 17Refusal to permit reasonable independent verification
18. 18Artificial urgency
19. 19Threats that the allocation will disappear if documentation is requested
20. 20Statements that “serious buyers do not ask for these documents”
21. 21Statements that “documents will only be released after payment” where such documentation is fundamental to establishing the transaction
22. 22Any indication of fraud, sanctions evasion, money laundering, bribery, or other unlawful activity

LXXI may suspend or, in more serious cases, reject a transaction depending on the nature of the deficiency identified:

The LXXI due-diligence process is communicated at the beginning of the relationship precisely so that no party can reasonably claim later that the documentation requirements were unexpected.

LXXI distinguishes between four levels of counterparty status, and these terms shall not be used interchangeably:

LXXI’s reputation is a transaction asset. Accordingly, LXXI will not knowingly represent a counterparty as legitimate, verified, authorised, financially capable, product-confirmed, or execution-ready unless LXXI has a reasonable evidentiary basis for making that representation.

By submitting an LOI or transaction proposal to LXXI, the prospective client acknowledges that:

1. 1LXXI operates a verification-first trade process
2. 2Submission of an LOI does not constitute acceptance of the transaction
3. 3Due diligence will commence before definitive contractual commitment
4. 4LXXI may request documentation from the client and/or its proposed counterparties
5. 5LXXI may independently verify information supplied
6. 6LXXI may require mutual qualification of buyer and seller
7. 7LXXI may suspend a transaction where required documentation is not provided
8. 8LXXI may reject a transaction where the identified risks cannot be satisfactorily resolved
9. 9No party may represent itself as LXXI’s verified counterparty without written confirmation
10. 10LXXI does not guarantee that a transaction will close
11. 11The client remains responsible for the authenticity and accuracy of documents supplied by it
12. 12Commercial urgency does not override LXXI’s verification requirements

A successful transaction is not one in which LXXI gets parties to sign an SPA. A successful transaction is one in which:

• The right parties were identified
• Their authority was established
• The product was verified
• The money was verified
• The commercial terms were viable
• The legal structure was sound
• The logistics were executable
• The relevant risks were understood
• And the transaction successfully closed