Risk Disclosure Statement

1. General Commodity Trading Risks

Trading in petroleum products and commodities carries inherent risks that all participants must understand and accept:

• Price Volatility: Commodity prices can fluctuate dramatically due to market conditions, geopolitical events, supply chain disruptions, and other factors beyond anyone's control.
• Leverage Risk: The use of letters of credit and other financial instruments can amplify both gains and losses.
• Counterparty Risk: Despite our KYC/AML procedures, there is always a risk that another party may default on their obligations.
• Market Liquidity: Large commodity orders may face challenges in execution due to market conditions or availability.

2. Specific Risks in Petroleum Trading

2.1 Price Risk

EN590 diesel and other petroleum products are subject to:

• Global crude oil price fluctuations
• Refinery capacity and operating margins
• Seasonal demand variations
• Currency exchange rate movements
• Speculation and market sentiment

2.2 Geopolitical Risk

International commodity trading is affected by:

• Sanctions and trade restrictions
• Political instability in producing regions
• Changes in export/import regulations
• Conflicts affecting supply routes

3. Transaction-Specific Risks

3.1 Documentation Risk

Errors or discrepancies in transaction documents (ICPO, FCO, SPA, etc.) can lead to delays, disputes, or failed transactions.

3.2 Quality and Specification Risk

Despite SGS certification and quality control measures:

• Product specifications may vary within acceptable ranges
• Testing methodologies may yield different results
• Storage and transportation can affect product quality

3.3 Delivery and Logistics Risk

Physical commodity delivery faces risks including:

• Shipping delays due to weather, port congestion, or vessel issues
• Insurance claims and cargo damage
• Customs clearance complications
• Force majeure events

4. Financial Risks

4.1 Payment Instrument Risk

Letters of credit (SBLC/DLC) and other payment instruments:

• Require bank fees and collateral
• May be subject to bank rejection or amendment
• Can be affected by bank insolvency (though rare with Top 25/50 banks)
• May face compliance or regulatory holds

4.2 Capital at Risk

Buyers must commit substantial capital for:

• Payment instrument establishment fees
• Performance bonds and deposits
• Insurance and inspection costs
• Storage and demurrage charges

5. Regulatory and Compliance Risks

International commodity trading is subject to:

• Changes in sanctions regimes
• New environmental regulations affecting product specifications
• Tax law changes in various jurisdictions
• Enhanced due diligence requirements
• Anti-corruption and anti-bribery law compliance (FCPA, UK Bribery Act)

6. No Guarantee of Performance

While Valen Commodities conducts thorough verification and due diligence, we cannot guarantee:

• Successful completion of any transaction
• Specific pricing or terms being available
• Protection against all fraud or misrepresentation
• Elimination of counterparty default risk

7. Professional Advice Recommended

Before engaging in commodity trading, you should:

• Consult with legal counsel regarding contractual obligations
• Seek financial advice on capital requirements and risk management
• Engage trade finance specialists for payment instrument structuring
• Work with experienced logistics providers for delivery planning

8. Acknowledgment

9. Contact Information

For questions about risks or to discuss specific concerns: