Why SGS Rotterdam Rejects 7 Out of 10 Fuel Transactions
The hidden red flags in EN590, Jet A-1 & ULSD deals that buyers and brokers underestimate — and inspectors never ignore.
Introduction — SGS Is Not Your Enemy, It Is Your Filter
SGS Rotterdam is one of the most respected inspection authorities in global energy trading. Its role is not to facilitate deals, close transactions, or help buyers succeed.
Its role is simple and brutal: verify reality.
In practice, this means that an estimated 7 out of 10 fuel transactions submitted for inspection in Rotterdam never reach approval stage. Not because fuel does not exist — but because the transaction structure is fundamentally flawed.
This article exposes the real reasons SGS rejects EN590, Jet A-1, and ULSD deals, and the red flags that trigger immediate escalation or termination.
1. No Verifiable Product in Tank
The most common rejection reason is also the simplest:
There is no fuel physically present in a recognized terminal.
SGS does not inspect promises, allocation letters, screenshots, or verbal assurances. They inspect fuel in steel tanks under terminal control.
Automatic rejection triggers:
- No terminal confirmation
- Product “on the way”
- Product linked to future liftings
- Seller cannot grant tank access
If SGS cannot confirm tank location, volume, and custody — the transaction ends immediately.
2. Seller Has No Inspection Authority
A critical but misunderstood rule:
Only the tank holder or title holder can authorize SGS inspection.
Many deals fail because:
- The seller is not the tank holder
- The seller only has a resale right
- The seller cannot issue a valid inspection order
SGS does not accept broker-issued instructions or buyer-driven inspection demands. Authorization must come from the legally recognized custodian of the product.
3. Invalid or Non-Executable Delivery Structures
SGS reviews the delivery model before any physical action.
High-risk structures include:
- Invented delivery terms (hybrid TTT/CIF models)
- Back-to-back chains without tank continuity
- Simultaneous inspection and payment conditions
If the delivery model violates terminal operations or international trading logic, SGS escalates the file or disengages.
4. Inspection Requested Before Title or Control Exists
SGS does not perform inspections based on intention.
Inspection requires:
- Clear title ownership
- Documented control over the product
- Operational access authorization
Buyers frequently request inspection before title transfer, before payment instruments are live, or before seller control is established.
This is an immediate procedural rejection.
5. Documentation Mismatches
SGS cross-checks all submitted documents for consistency.
Common fatal inconsistencies:
- SPA party names not matching terminal records
- Different product specifications across documents
- Volume discrepancies
- Conflicting delivery dates
Even minor mismatches signal a lack of transaction integrity and trigger deeper scrutiny or rejection.
6. Non-Standard or Restricted Inspection Scope
Some buyers attempt to control inspection outcomes by limiting scope.
SGS red flags include:
- Quality-only inspection without quantity verification
- Inspection after payment
- Buyer-selected inspectors outside approved lists
SGS operates under internationally recognized procedures. Any attempt to restrict or manipulate scope results in refusal.
7. Unrealistic Timelines
Inspection is a physical process — not a PDF exchange.
SGS rejects transactions that demand:
- Same-day inspection authorization
- Immediate sampling in busy terminals
- Inspection without terminal slot confirmation
Operational reality always overrides deal urgency.
8. Payment Structures That Conflict With Inspection Logic
One of the fastest ways to lose SGS engagement is misaligned payment logic.
Examples:
- Payment required before inspection
- Inspection conditional on full payment
- Ambiguous escrow arrangements
SGS does not support structures that expose one party to unjustified risk.
9. Chain of Sellers Without Transparency
Long broker chains are not illegal — but they are high risk.
SGS requires clarity on:
- Who owns the fuel now
- Who controls the tank
- Who authorizes inspection
If the chain cannot be clearly mapped, inspection is declined.
10. Red Flag Behavior Patterns
SGS inspectors are trained to recognize behavioral red flags:
- Pressure to bypass procedure
- Resistance to transparency
- Frequent document revisions
- Claims of “special access” or “fast track”
Inspection companies protect their credibility above all else. Suspicious behavior leads to disengagement.
FAQ — SGS Reality Check
- Does SGS reject deals arbitrarily?
No. Rejections are procedural and evidence-based. - Can buyers choose SGS to force credibility?
No. SGS validates facts, not intentions. - Is rejection permanent?
Sometimes. Especially if credibility is compromised. - Do real sellers fear SGS?
No. Real sellers rely on SGS. - What is the fastest path to approval?
Product in tank, clear title, clean documents, realistic structure.
Conclusion — Inspection Is Where Fantasy Ends
SGS Rotterdam does not kill deals.
It exposes deals that were never real to begin with.
In EN590, Jet A-1, and ULSD trading, inspection is the moment where stories meet steel, and claims meet custody.
If your transaction cannot survive SGS scrutiny, the market has already decided its fate.
