The former CEO of Orlen Trading Switzerland (OTS), referred to as 'Samer A' due to privacy laws, is under investigation for authorising advance payments totalling approximately US$400 million for oil deliveries that were never fulfilled.

These payments were intended for the procurement of Venezuelan oil through intermediaries, and in similar cases letters of credit (L/Cs) would have backed the transaction, but the oil was not delivered, leading to significant financial losses for OTS.

Safeguards absent

The absence in this case of safeguards such as L/Cs, meant that advance payments were made without securing the actual delivery of goods, exposing OTS to substantial financial risk.

If such safeguards had been used to mitigate risks, it would have ensured that payment would only have been made only upon the presentation of specified documents confirming shipment and compliance with contract terms.

Significant exposure

The case underscores the importance of utilising instruments like L/Cs in international trade to protect against non-performance and financial losses.

By not employing such mechanisms, OTS faced significant exposure, leading to the current investigations and financial repercussions.

Terrorist financing

The transactions are under scrutiny for potential links to terrorist organisations, specifically Hezbollah, although Samer A has denied any such connections.

Aspects of the case have led investigators to suspect that the undelivered oil payments may have been diverted to entities linked with Hezbollah, highlighting serious concerns about compliance, oversight, and potential involvement in illicit activities within international oil trading operations.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.