Every SGN Member is required to participate in the SGN Diamond Fund at a cost of USD 500 per annum which covers all the Members’ registered offices in that country.
SGN demands high integrity when it comes to debt settlement between its members. Thus, SGN has created its own unique SGN Diamond Fund (SDF) procedures.
The USD500 contribution to the Diamond Fund is per 12 month paid membership and the fund remains under the control/ownership of SGN and is not the members funds.
If a member leaves SGN there is NO refund on membership fee or SDF contributions.
The other important rule is that any member reported for tardy payments up to 3 times may be terminated under the “3 TIMES ALERTING THEN YOU ARE OUT” rule.
There will be no membership fee refunds if this action is needed.
The main policies of the SGN Diamond Fund can be summarized as follows:
- SGN expects all members to pay their debts by no later than the end of the month following the invoice date. For example, a May 15th invoice should be settled by latest June 30th. Exceptions are when members have previously agreed, in writing, to a different payment schedule or when the debt involves ocean freight with long transit times. Payment should NOT be dependent on collection from consignees as this is at the sole option/discretion of the members themselves.
- Any debts in excess of the terms MUST be reported to SGN when they become 15 days past SGN terms (in the above example, July 15th). SGN will distribute a mid-month email reminder on the 15th of every month. If not reported by the 7th day (the 22nd), these debts will NOT be eligible for recovery from the SGN Diamond Fund. Whenever a delinquent debt is reported, SGN will intervene to assist in collection including broadcasting details to other SGN Members, placing that member on Hold Status and termination in the event of on-going or multiple delinquencies. If SGN is unable to collect this debt within a reasonable timeframe, it will be settled by the SGN Diamond Fund to the extent specified below.
- SGN will pay out a maximum of an aggregate of the higher of USD 25,000 per claim (to a maximum of 75% of the fund balance in the unlikely event that we have a multitude of claims), pro rata to the amounts owed (Example: If one SGN Member is owed $20,000 and another $15,000 for a total of USD 35,000, they will be paid $14,290 (20K/35K * 25K) and $10,714 (15K/35K * 25K) respectively). Payments from the fund that are USD 500 or below will be paid by way of a credit note that can be used only against future membership fees, this is to avoid incurring wire fees on small amounts i.e USD 300 might incur a 15% wire fee at both ends and does not make for a viable business decision as payment is eroded by fees.
- Should any member have access to any other means of full or partial recovery via receivable insurance coverage, sale of freight or even being a participant in another network offering receivable coverage, SGN will assume a secondary position. Any claim will be subject to endorsing the relevant debt over to SGN.
- All delinquent debts will be (i) announced to SGN Members, (ii) reported to Freight Deadbeats for their independent collection action and reporting (with associated collection fees being paid by the SDF). Only upon Freight Deadbeats reporting back about the status of recovering this debt, shall payment from the Signature Diamond Fund be approved by SGN. All significant and disputed issues shall also be referred to the Member Advisory Council for their input.
- It specifically excludes any debts resulting out of operational disputes/mistakes – for such events every member of SGN is requested to have forwarders liability insurance!
- The SGN Diamond Fund shall ONLY be used for delinquent and bad debts when SGN is unable to recover monies on behalf of a member. It specifically excludes operational disputes/mistakes. Those delinquent/bad debts pertains only to general freight/heavyweight freight, but excludes any transactions under PROJECT, HEAVYLIFT, PERISHABLE, HAZARDOUS, DANGEROUS, FIRE-ARMS, COLD CHAIN, LIVE ANIMALS, BULLION or BANK NOTES and other NICHE COMMODITIES due to the potential for very large amounts of monies to be exposed and/or potential for damages due to the need for focused “white glove” handling and detailed paperwork requirements that very few general freight forwarders can accommodate. Members should agree on credit terms on a shipment-by-shipment basis.
- In order to facilitate transactions between SGN Members, the SGN Diamond Fund shall also be used to guarantee initial transactions between members up to USD 5,000 in order to allow/establish Open Account Credit status to be granted between members. This ruling allows a seamless 1st transaction credit agreement on initial activity, BUT any default in payment must be reported to SGN under the rules of the Diamond Fund. SGN’s initial $5,000.00 guarantee is to facilitate initial 1st shipment process between new members.
- *Important* Members who claim against the fund for legitimate reasons, but also include bad debt from dates outside our mandatory Diamond Fund timelines, will not be considered for payment for either existing or old debt. Because you are in non-compliance with the older debt, SGN will not accept any of the debt rendered. Non-compliance with our timelines means no claim is possible by our members.
- Force Majeure: SGN adopts Force Majeure policy that frees us from liability or obligation when an extraordinary event or circumstance beyond our control, such as war, sanctions, strikes, riot, crime or an event described by the legal term “Act of God” (such as hurricanes, flooding, earthquakes, volcanic eruption). Force Majeure is NOT intended to excuse negligence – as where non-performance is caused by usual and natural consequences of external forces.
- Claims against the SGN Diamond Fund only includes physical transportation costs and does not include any debt/claim pertaining to Import duties or taxes at destination.
- SGN is not responsible for any errors involving transfer of funds for member-to-member payments. For your guidance, SGN takes the stance that the SENDER is 100% responsible for the funds being received at the receiving members’ bank. Please be aware of these bank scams and scammers illegally getting into your email system. If your staff member has any doubt, pick up the telephone and call the receiving member key person. DO NOT send emails, always use the telephone.
- Offices that were not registered in membership won’t be counted as qualified to the SGN Diamond Fund.