PROJECT REPORT
ON
“EXPORT PROCEDURE & DOCUMENTATION”
AT
(
SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF
MASTER’S DEGREE IN BUSINESS ADMINISTRATION)
UNDER THE GUIDANCE OF:
SUBMITTED BY:
Mr. ANIL WATS (GM-EXPORTS) CHAYAN MEHTA
Mr. NANDA KUMAR (AGM- EXPORTS) BHAGWANT DEEP SINGH
Mr. MUKESH ARORA (DGM- LOGISTICS)
MANAV-RACHNA INTERNATIONAL UNIVERSITY
FACULTY OF MANAGEMENT STUDIES
ACKNOWLEDGEMENT
ACKNOWLEDGEMENT
I am very thankful to all those involved who have enabled me to successfully complete my project on ‘Export Procedure & Documentation’.
I would like to express my sincere gratitude to Mr. NANDA KUMAR and Mr.
MUKESH ARORA without whose support and encouragement I would not have achieved what
I have today.
I am heartily thankful to the whole unit of LUCKY EXPORT for the warm response they had given me to complete my summer training. I am also thankful to Mr. ANIL WATS
(GENERAL MANAGER – EXPORTS ) for giving me opportunity to undertake this project in
his reputed organization.
I would also like to express my humble thanks to my guides Mrs. ANINDITA
CHATERJEE and Mr. MANISH SHARMA ( PROJECT MENTOR) for the invaluable time
they devoted to me helping me to better understand the depth of the requirement of the project and elucidating my uncountable doubts.
S.No. Particulars Page No. 01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13. Acknowledgement Executive Summary Statement Of Obejective Focus Of The Study Company Profile Research Methodology
Procedure Of Exports and Its Documentation 1. Pre-Export Activities
2. Processing Of Export Order
i. Stage 1st -- Confirmation of Export Contract
ii. Stage 2nd – Sourcing of Export Order
iii. Stage 3rd – Dispatching
iv. Stage 4th – Pre Shipment Operations
v. Stage 5th – Custom Clearance
vi. Stage 6th – Post Shipment Operations
3. Work Flow Chart of Company Modes Of Payment
Government Incentives For Exports Summary
Conclusion
Limitations of the Study Bibliography 2 4 5 6 7 13 17 24 28 28 30 31 34 61 66 69 70 72 76 88 89 90
EXECUTIVE SUMMARY
The present study is a comprehensive study of EXPORT DOCUMENTATION AND PROCEDURE . The research work is done in collaboration with LUCKY EXPORT to assess the overall export procedure & documentation. On concentrating the objective of project, the maximum information is summed up sequentially. The executive summary of the study describes...
Objective
The main objective of the study is to formulate the overall procedure of export orders say ‘how to export’, documentation, modes of payment & incentives from Govt. of LUCKY EXPORT.
Research Methodology
Research comprises defining and redefining problems. Research purpose is to discover answer to question through the procedure of scientific procedure. Interviews and discussion with the supervisors and officials to get the root of the pre-determined objective and in order to outline the ‘a to z’ steps of processing export order.
Findings & Recommendations
On the execution of the objective of study, it might be conclude that processing of export order can be a tedious and costly activity. A careful planning and implementation of appropriate procedure can reduce time and cost drastically. A fair documentation not only reduces the threats of frauds, bottlenecks and risks but also enhances the business relationship between Exporters, Importers & Governments in the whole world.
The complexity of business operations greatly accentuate as businessmen cross the national boundaries. A lot of formalities and modalities of several organizations have to be compiled to and as error can create bottle necks in the free flow of goods, documents, information and payments.
Documentation is definitely one of the prime specialized functions of international business. The documents safeguard the interests of Exporter, Importer, Banks, Governments, Transport Agencies, Insurance Agencies and Inspection Agencies.
Main Objective of the Study
The main objective of the training was to study the systematic export procedure & documentation of a reputed export house say LUCKY EXPORT to overcome any kind of error, bottleneck, frauds and mistake for the awareness and implementation of standardized rule-regulations & documentation to contribute the integration of International Business up to any extent.
Sub Objectives of the Study
The sub objectives of the study were:
• To study the department wise functions & sequential documentation for various operations in export orders adopted by LUCKY EXPORTS.
• To study the standard modes of payment in export-import.
• To identify the incentives, discounts & duty drawbacks to exporters by the Government.
The focus of the study was the formulation the multifunction procedure of an export unit named LUCKY EXPORT. The focus of the study was on identifying the activities of different divisions and departments of LUCKY EXPORT having an impact on the export procedure of this unit. Focus was to outline the standard modes of payment for export houses. Researcher analyzed the pre-export formalities and necessities for exportation. The project is an attempt to formulate the ‘how to export’ concept finally to contribute to national and international economy & business relationship.
Lucky Group is Government Recognized Trading House with diverse interest in trading. Their group turn over from export is approximately USD. 50 Million. Their offices are in Moscow, Sharjah & Khartoum besides corporate office at Noida (India) and representative offices in various African countries like Ivory Coast, Senegal, Ethiopia.
Lucky Group of Companies, an India based Engineering, Procurement & Construction (EPC) company was established in the year 1990. It is affiliated with:
1. Delhi Chamber of Commerce
2. Federation of Indian Export Organization 3. Confederation on Indian Industry
4. Federation of Indian Chamber of Commerce and Industry
It is ISO 9001:2008 certified and Star Export House status holder from Government of India consecutively for the last 15 years.
The Lucky Group Companies are:
LUCKY EXPORTS
EXPOTEC INTERNATIONAL COPPICE TECHNOLOGIES LIMITED PVT. LIMITED
About the Company
Business Type: Manufacturer
Eng. Goods, Plants, Medical, Pharmaceutical.
Exporter
Eng. Goods, Plants, Medical, Pharmaceutical.
BOARD OF DIRECTORS
Lucky Group comprises of a Board of Directors perceptive to the dynamics of international business. This body controls and provides strategic direction to all Group companies.
Dilawar Shaban
Chairman of the Board
Iqbal Shaban President Rafique Shaban Executive Director Raza Shaban Executive Director Saleem Shaban Executive Director
VISION
AND
MISSION
To become respected global trading company that provides best of business solution delivered by best-in-class people.
MISSION:
Our mission is to cater to the specific scrap metal needs of our customers and, at the same time, to expand our sourcing points by creating strategic alliances with our key suppliers to best create value for our clients.
• Consultancy Service
• Supply of Plants and Machinery
• Project Management
• Erection and Commissioning
• Training
• After Sale Services
Small and Medium (SME) Industry • Food Processing Plants
o Tomato Processing Plants
o Potato Wafers Manufacturing Plants o Squash Manufacturing Plants o Pasta Making Plants
o Bread Making Plants o Biscuit Making Plants o Fruit Processing Plants o Corn Flakes Making Plants
o Milk Processing Plants (Yoghurt, Cheese) o Ice cream Plant
o Honey Processing Plant o Rice Mill
o Wheat Flour Mill
• Printing and Stationery Industries o Paper Carry Bag Making Plant o Plastic Carry Bag Making Plant o Envelopes Making Plant
o Exercise Book Making Plant o Chalk Manufacturing Plant o Gem Clip Manufacturing Plant o Staple Pin Manufacturing Plant
Large Scale Industries
• Refrigeration and Cold Storage Plants
• Packaging Plants
• Pharmaceuticals Plants
• Textile Mills
• Cement Plants
• Leather Processing Plants
• Steel Rolling Mills
• Effluent Treatment Plants
• Printing Presses
Research in a common parlance refers to a search for knowledge. Research can also be defined as scientific and systematic search for pertinent information on the specific topic. So research means careful investigation on inquiry especially through search for new fact in branch of knowledge. Research is an academic activity and as such as term should be used in a technical sense. “Research comprises defining and redefining problem, formulation hypothesis or suggested solution, collection, organizing and evaluating data, make deduction and research conclusion and careful testing the conclusion to determine whether they fit or not ”. Research purpose is to discover answer to question through the procedure of scientific procedure.
As in live studies on LUCKY EXPORT. The LUCKY EXPORT did the research work manually and intents to assess the overall potential and performance of this unit and desire. Research has helped to portray accurately the characteristic of a particular unit. Research helped to find out the problem faced by the unit, unit strength where they have competitive edge over the other competitors, unit weakness where the unit has to improve how they need to turn them into the opportunities.
The main objective of the research methodology of this in-house training project is to evaluate the Export Procedure and Documentation Operations of an Export Oriented Company. The assessment of potential, procedures, documentation and the analysis of LUCKY EXPORT demands a lot of time to be spent on observation of various activities and the process, the unit engage into, interviews and discussion with the supervisors and officials to get to the root of problem and in order to suggest corrective measure to LUCKY EXPORT . The research design utilized for this specific study has been explained as follows….
Descriptive Study:
Descriptive studies are utilized when the researcher attempts to describe the state of affairs without controlling the variables causing change. This study includes the survey and fact finding inquires of different kind. The major purpose of descriptive research was description of the state of affairs that exists in LUCKY EXPORT, the functional activities and procedure adopted and the working of LUCKY EXPORT. Interviews were taken of the executive and various kinds of facts were sought by this.
Empirical Studies:
An empirical research relies on experience or observation alone often without due regard for system and theory. It is the data research coming up with the conclusion which is capable being verified by observation and experiment. As in case of, the observation was done to find the export procedure & documentation problem and the weakness. In this, help of various departments was taken to observe the working and to deduce conclusion to suggest course of action to . In this the fact were taken into hand from LUCKY EXPORT at their source and is then utilized to infer desired information.
Collection of Data
The study has utilized both primary as well as secondary data for analyzing export performance, procedure & documentation of LUCKY EXPORT.
Primary Data:
The primary data was collected through the interview techniques & personnelmeeting where the Heads of different functional departments, various executive are interviewed and pretended information were collected pertaining to various aspects of export activities.
Secondary Data:
It was collected through scanning, searching and disseminating informationthrough company research profile and company maintained data also in search information for export procedure and export market related data was collected through the data compiled by Government Manual, Export Import policy of DGFT, customs and excise manuals, RBI exchange control Manual and other organization that compile data for various export oriented activities and documentation.
Analysis Pattern
The nature of the project is of the subjective nature so for the analysis of the available data, the use various statistical and mathematical and graphical techniques was not required. There were no additional statistical and technical tool were considered for suitability of the procedure & problem in order to achieve the desire objective. The study was of the qualitative aspect not the quantitative. All the data was collected through interviews a secondary data so not tool were used
Export Procedure
&
Its Documentation
Exports are key to the economic survival of a nation. Exports not only help a country earn
foreign exchange, they help create jobs, peace, prosperity, and the power to influence.
To be successful in exporting and importing, it helps to know why so many export and import businesses do not succeed. Success cannot be rushed by high hopes. Rather, it comes incrementally.
The success of an export business is often attributed to luck. Work harder and there will be more luck. The export success of Taiwan, China, Japan, South Korea, Germany and other countries (areas) is not a miracle, it is the result of hard work. The business miracle will not happen without working hard. However, success cannot be rushed by hard work.
The events in a large number of export offices worldwide are comparable to the events in a football game. It is not unusual to see colleagues kicking responsibilities back and forth, just like football players do the ball. It is important that employees' responsibilities are clearly spelled out and that systems of operation are flexible in order to accommodate the rapidly changing needs of world markets.
Dangers of Imbalance in International Trade
Trade surplus---favorable balance of trade---is an excess of exports over imports. Trade deficit---unfavorable balance of trade---is an excess of imports over exports. In layperson's
parlance, the trade surplus means earn more and spend less, while the trade deficit means spend more and less.
The trade surplus and deficit is analogous to one person's fortune is another person's misfortune. The danger is imminent in either situation. A country with a record trade surplus is often threatened with sanctions and trade barriers from a deficit-ridden importing country. A country with a record trade deficit is usually faced with the internal social upheaval.
The imposition of trade barriers, such as import quotas and higher duties, is not a solution to meeting the international challenge. The trade barrier will be confronted with a trade retaliation. A trade retaliation will be faced with a counter-retaliation. The conflict will not end if an agreement is not reached. The remedy to beat the trade imbalance is to understand foreign cultures and business practices, and to provide competitive products and services.
It is a good practice to diversify export markets. Concentrating exports to only a few markets poses imminent danger to an exporting country. Too much export concentration in a market usually invites protectionist trade laws from the importing country. In case the importing country imposes sanctions, the effect to the economy of the exporting country and the livelihood of its
Changing Global Marketplace and Meeting Challenges
The world markets have changed enormously in the past decade. New markets have been opened with the end of cold war. New economic blocks have been formed. New trading alliances are shaping. Inevitably, a new way of thinking and approach to doing business is necessary in order to survive in the fast changing economy.
Exports are key to the economic survival of a nation. A nation that exports more will grow stronger. The stronger a nation is, the more recognition and respect it will earn.
Increased Worldwide Competition
There can be no growth without competition. As the world population grows, which is estimated at a rate of 1.7% annually, more products and services are needed. Business people worldwide are keenly competing to fill these needs. World trade grew in volume at an average of 5% annually over the past 25 years. With the end of cold war, more resources worldwide are geared towards exporting. The export business has become more competitive. Exporting becomes more challenging with continued population growth and the addition of new exporters.
Effects of Social Upheaval and Recession
Any form of instability in a country can ruin its economy and may place its international trade in disarray. With the end of cold war, the earth has become a more peaceful place to live. However, an alarming occurrence is the growing number of permanent lower class in numerous countries, including in developed nations. The adverse effect of social upheaval is paramount. It can undermine the economic progress of a nation. There is an urgent need to stop the growing number of the lower class. The task requires a concerted effort from the government and people. The task is not easily done.
The effect of recession is immense, businesses sink, dreams of a lifetime shatter, and the lower class increases. Vigorous export promotions, increase in exports, and diversification of export markets can help reduce the number of the lower class.
Use of Terminology in Different Countries
The use of terminology differs from country to country. The term salesperson is easy to decipher as the salesman or saleswoman, but it is a term that is unheard of in some countries. The account manager is the sales representative, the buyer is the purchaser, the accounting assistant is the bookkeeper, the human resources department is the personnel department, the flat is the apartment, the chop is the stamp, the motor carrier is the trucking company, and the letter carrier is the postman.
The Role of Export-Traders and Buying Trend
Export-traders play a crucial role in international trade. Prior to the 1970's when export product quality was a common problem in many less developed countries, foreign buyers relied on export-traders for product sourcing and pre-shipment inspections. The nature of the order then normally was fewer items and more volume, that is, the number of items was few and the quantity of each item was large. At that time, many manufacturers did not know how to export, thus they relied upon export-traders for exporting, known as indirect exporting.
There were far fewer exporters worldwide before the 1970's. The foreign buyers then did not have many export sources from which to compare an offer. The export business was lucrative due to much less competition. As time progressed, competition built. The manufacturers competed on providing better quality products and lowering prices. The price war made the traditional practice of single source of supply difficult for export-traders to maintain. The export-export-traders changing the source of supply of similar products from one manufacturer to the other became inevitable. The manufacturers needed to survive and direct exporting was the solution. Many manufacturers started exporting directly in the mid-1970's.
Export product quality in general improved markedly in the late 1970's. However, the problem of quality remains a nightmare to some importers. During the oil crisis of the late 1970's, there was a significant increase in the number of manufacturers who export directly. Many foreign buyers deal directly with the manufacturers to save commission or fees and/or markups of export-traders.
Tools of Export-Import Communication
The telecommunication technology 'explosion' in the past decade has changed the way people interact around the world. With new technology on hand, some of our prime tools of export communication, for example telex (teletype exchange or teleprinter and exchange), have become obsolete.
The telex, like a fax (facsimile) or an e-mail (electronic mail), uses a telephone line in transmitting the messages. Telex was the 'e-mail of yesteryear'. But instead of a computer screen, you have a roll of paper, which may come in duplicate, triplicate or quadruplicate, either carbonless or the much older type having a carbon paper in between the sheets, where the outgoing and incoming messages appeared, that is, where the messages are typed. And instead of saving the typed message in a computer disk or hard drive, each alphanumeric character that was keyed (typed) in a telex, aside from appearing on the paper roll, is simultaneously translated and stored in a paper tape in coded form in a series of punched holes. Keying a wrong character may mean retyping the message from the beginning. The 'final' tape is rerun to send the message out or make additional copies of the message. The advantage of having a 'final' tape is to save the transmission time and
the receiver can 'talk' over the telex, that is, exchange messages over the telex while the line is 'on'.Although the e-mail is popular nowadays, the fax remains as an important tool of export communication in many countries.
In exporting, it is not a prerequisite for a business to sell to its domestic market before selling abroad. There are many successful export-traders and export-manufacturers, notably in Asia, who have been selling their products entirely to the foreign markets.
Exporting is not for large companies only. Contrary to a belief that only large companies can export, in fact there are more small and medium-sized companies than large companies in the world that are engaged in exporting. The size of a company is not static. Most large companies at one time were small companies. Not to mention, small and medium-sized companies are the leading source of job creation in many countries.
Export Phobia
Fear comes naturally to anyone new to exporting. Fear of the unknown, or lack of information, is one of the reasons that many businesses that are doing well nationally are reluctant to engage in exporting.
Export Mindset
The business ground is a battleground. Exporting, like any other business, involves risks. It is necessary to prepare for the challenges and the consequences. Engaging in exporting is akin to engaging in a war. It is a war of price, quality, delivery and service. It is a battle for the business orders. It is a fight for the company's survival---profits and growth. In practice, rough strategies are often used by some exporters in order to win contracts.
Export businesses are mainly classified into export-traders, export-manufacturers and service-exporters.
Merchant Exporters (Traders)
The export-traders include the export companies known as trading houses, trading companies, buying offices, buying agents, purchasing agents, resident buyers, sourcing agents, export representatives, export distributors, export agents, export management companies (EMCs), and manufacturers' representatives.
The export-trader operates on a buy-and-sell basis or a commission/fee basis, or a combination of these two. In the buy-and-sell basis, the trader buys from export-manufacturers and adds a markup to the export price. In the commission/fee basis, the export-trader collects a commission or fee from the export-manufacturer or the foreign importer, or from both of them without adding a markup to the price.
Export-Manufacturers
Export-manufacturers include the manufacturers, producers, assemblers and processors of export goods. Export-manufacturers either directly export the goods or indirectly export the goods through the export-traders.
Service-Exporters
Service-exporters include the banks, ocean shipping (steamship) companies, air cargo companies or airlines, trucking companies, rail carriers, insurance companies, freight forwarders or consolidators, consulting firms, and miscellaneous service companies. Service-exporters provide services to export-traders and export-manufacturers.
The planned group work for export order processing can greatly facilitate subsequent operations and avoid the hassles associated with the process. The pre-export activities can be divided into the following sets of activities:
A. Study Of Government Rules And Regulations B. Identifying Various Parties And Liasion C. Registration
D. Obtaining I/E Code Number.
A) Study Of Govt. Rules And Regulations
International trade is governed by a plethora of rules and regulations of various government bodies of exporter and importer. A careful study of these as a pre-requisite of exports while the rules governing exports will vary with commodity and importer country’s regulation, as a broad frame work the most important Acts/Publications which must be consulted by an exporter in connection with processing of an export order are :
a) Foreign trade(development and regulation) act, 1992 b) Customs act,1962
c) Carriage of goods by sea act, 1924
d) Foreign exchange regulations act, 1973 (now being replaced by FEMA and Money Laundering Bills)
e) Schedule of charges of goods in respect of the port of shipment
Exports involve coordinated effects of a large numbers of interdependent organizations. The main parties which are involved in export process are :
The Exporter The Foreign Buyer The Negotiation Bank The Reserve Bank of India
Director General of Foreign Trade The Collector of Customs
The Port Commissioner
Clearing & Forwarding Agents.
Besides these, other parties may also be associated depending on the nature of commodity and rules guiding the export of the same. Examples of these bodies can be Inspection Agencies, Export Promotion Council, Concor, Ministry of Agriculture etc.
For stepping in the field of an export business, it is compulsory for a company to get registered with Export Promotion Council related to the main product line with which they are dealing.
FUNCTION OF EXPORT PROMOTION COUNCIL:
The main function of EPC is to promote and develop the export of the related product line for enhancing the export. They organize Trade Fairs with in India and Abroad. They encourage the members registered with them to participate in Trade Fairs and advertise their products in whole world. The main role of the EPC is to Project India’s image abroad as a reliable supplier of high quality goods. The EPC keeps abreast of the trends and opportunities in the foreign markets and circulate important information among its members.
APPLICATION & DOCUMENTS REQUIRED FOR REGISTRATION:
Application form cum Membership form worth Rs.10 A copy of PAN No. issued by income tax authorities duly Import Export Code Number
Sales Tax Copy
D) Importer/Exporter Code Number
Every person / firm / company engaged in export business in India is required to obtain Import-Export Code(IEC) No. from the Regional Licensing Authority concerned (Director General of Foreign Trade). Custom authorities shall not allow clearance of goods to an importer or exporter who does not posses IEC No. It is compulsory quote this Code Number in the relevant Bill of Entry / Shipping Bill.
Applications and supporting Documents Required to Get IEC Number:
Application form
Commercial Bank Account Number(Current or Cash-Credit Account) Demand draft for payment of Rs.1000
Certificate from the banker of the applicant in the format given in the application form. Two copies of passport size photograph of applicant duly attested by the banker of
applicant.
PROCESSING OF EXPORT ORDER
Stage-1
stConfirmation of Export Contract
The exporter scrutinizes the export order with reference to the term & conditions of the contract. According to section 4(1) of the Sale of Goods Act, 1930,” A contract of sale of goods is a contract whereby the seller transfer or agree to transfer the property in goods to the buyer for a price,” therefore, this Act includes both a ‘Sale’ and an ‘Agreement to sell’.
This is the most crucial stage. All subsequent actions and reactions will depend on the terms and conditions of the export contract. It should be ensured that the contract has been entered into in accordance with the prevalent export promotion policies of the country and the foreign exchange regulations. The export order must specify the mode of the payment in unmistakable terms such as letter of Credit, Documents of Payment, Documents against Acceptance, etc. The specifications stipulated by the importer in the export order and the L/C such as delivery schedule, packing, inspection, marking, etc., must be strictly adhered to. The documents required by the foreign buyer must be prepared and submitted to the negotiating bank in the exact specified form and manner.
ELEMENTS OF EXPORT CONTRACT
An export contract, as described above, should be as clear as possible. The various elements of it should clearly define the duties and responsibilities of the parties; determine the exact point at which the title and/or risk change from seller to buyer. The various elements of an export contract are as follow:
1. Product, Standards and Specifications 2. Quantity
4. Total Value of the Contract
5. Terms of Delivery/Commercial Terms 6. Taxes, Duties and Charges
7. Period of Delivery Shipment/Part Shipment etc 8. Packing Labeling and Marking
9. Terms of Payment-Amount, Mode & Currency 10. Discounts and Commissions
11. Licenses and Permits 12. Insurance
13. Documentary Requirement 14. Guarantee
15. Force Majeure or Excuse for Non-Performance of Contract 16. Remedies.
17. Arbitration.
Besides these main elements, an export contract may contain other elements desired by the parties to the contract. Export order should be confirmed by the exporter only after the terms and conditions of the L/C have been found to be in order.
Stage-2
ndSourcing of Export Order
Upon confirmations of the export order preparations for the dispatch of goods are started. A ‘Delivery Note’ (in duplicate) or ‘Production Order’ is sent to the Work Manager or the Factory manager. This note should contain the description of the goods as has been given in the export order, along with a copy of the instructions given by the importer. The date by which the goods must be manufactured, the date by which the necessary formalities must be completed, the requisite time margins to be given and the shipment must be clearly intimated to Works manager. This is what the manufacturers. The specifications and instructions to be intimated to the supplier of export goods shall, however, remain the same. While sourcing the goods from suppliers, merchant exporter has to lay down clear cut specifications of quality norms because the ultimate accountability to the buyer is of the exporter only. In case of poor quality, the exporter may not be in position to get repeat order from the foreign customers who have wide choice of the exporters in the world market.
Sourcing of export order in LUCKY EXPORTS is based upon quality production system. Merchandiser finals the export contract with his correspondent buyer and receives an export order via fax, e-mail or courier. After receiving the export order, merchandiser orders a production order to Production Manager in written form. This production order contains the following entities:
P.O. Number Invoice Number Product Name
Quantity
Instructions(stitching, labeling etc) Dispatch Date
Required quantity is produced in fully by production unit after the recommendation of production samples in accordance with order sample. Produced quantity is delivered to Packing Department for dispatching operations.
Stage-3
rdDispatching
As the Production unit delivers the goods to Packing Department, the following procedures are to be followed in order to dispatch the
goods:-1) Packing
The Packing Incharge receives the importer’s instructions for packing from the Merchandiser and covers the following operations:
i) Final finishing of the goods(final passing, clipping etc) ii) Tagging & Folding(according to importer’s instructions) iii) Packing(Cartoon, bale or pair-packing)
2) Labeling
Specific marketing and labeling is used on report shipping cartons & containers to: i) Meet shipping regulations
iii) Conceal the identity of contents iv) Help receivers identify shipments
In overseas buyer usually specifies export marks that should appear on the cargo for easy identification by receivers. Many markings may be needed for shipment. Exporters need to put the following markings on cartons to be shipped:
Shipper’s mark Country of origin
Weight marking(in Lbs or Kgs) No. of packages & size of cases
Cautionary markings such as ‘this side up ’ or ‘use no hooks’ (In English and in language of country of destination)
Port of entry
3) Inspection
After packing and labeling, goods are inspected by the inspection agent or buying agent on behalf of importer. That means importer sends his own agency to inspect the goods. The inspector has right to open any of the carton or bale to verify the goods in accordance with invoice, packing list and desired quality scale.
If he finds any defect he can send these goods for processing again, otherwise, he issues Inspection Certificate. If buyer demands handloom certificate then exporter ask textile committee to inspect the consignment and provide them handloom inspection certificate. This certificate can be helpful to suit against importer in case of disputers or undue rejection
4) Containerization
A container is an article of transport equipment, strong enough for the repeated use, to facilitate handling and carriage of goods by one or other modes of transport.
Normally containers having following dimensions are used in handloom field:-i) 20 ft. 26 cbm
ii) 40 ft. 54 cbm
iii) 30 ft. 60 cbm (high cube)
LUCKY EXPORTS makes use of container of 20 & 40 ft. il.(according to the goods to be dispatched).
5) Locking of Containers
Before locking the container, excise authorities select 10% of rolls as samples and inspect them. The samples are sent for further sub-mission to customs. After examination of cargo, the excise seal along with the seal of shipping line on the container and endorse the excise invoice, AR-2 form, gate-pass etc. The main check point in the excise documents
are:- Name & Address of Consignee Destination
Description of goods & Specifications FOB value of goods
Quantity
Movements of goods(from -- to --) Container no. & Truck no.
Identification marks & Excise no.
For additional security of goods, in transit, the doors of container are locked with the iron rods with seals. In case of any shortage reported by the buyer and when a claim is required to be filled, excise endorsed documents play extremely crucial role.
Stage-4
thPre-Shipment Operations
Documents used for Pre-Shipment
The singed with the buyer defines the specification of the goods to the supplied. On the basis of this contract, invoice instructions are given the packing department packs the rolls depending on these instructions, the validation of above instructions are done by pre-shipment department. On linking the bales by packing department, the pre-shipment documents are generated, which primarily includes shipment advice from, invoice, packing includes shipment advice from, invoice, packing list etc.
1)
Shipment Advice Form
:
It is a sort of covering letter, showing the list of documents enclosed with it. It also contains some other details like Lorry Receipt No., RBI Code No. B/L particulars etc. The shipping advice is particularly important in short-sea trades, for example within the Asian countries where the goods may arrive at the port of destination before the shipping documents, and in the ports of destination where theft and pilferage of the imported goods is rampant.2)
Letter of credit:
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking. The letter of credit can also be source of payment for a transaction, meaning that redeeming the letter of credit will pay an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between asupplier in one country and a customer in another. They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising
bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e.,
cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank, if any.
Sample document LC:
THE MOON BANK
INTERNATIONAL OPERATIONS 5 MOONLIGHT BLVD.,
EXPORT-CITY AND POSTAL CODE EXPORT-COUNTRY
OUR ADVICE NO.
MB-5432
ISSUING BANK REF. NO. & DATE
SBRE-777 January 26, 2001 TO UVW Exports
88 Prosperity Street East, Suite 707 Export-City and Postal Code
Dear Sirs:
number SB-87654
for account of DEF Imports, 7 Sunshine Street, Sunlight City, Import-Country
in your favor for the amount of not exceeding Twenty Five Thousand U.S. Dollars (US$25,000.00)
available by your draft(s) drawn on us
at sight for full invoice value
accompanied by the following documents:
1. Signed commercial invoice in five (5) copies indicating the buyer's Purchase Order No. DEF-101 dated January 10, 2001.
2. Packing list in five (5) copies.
3. Full set 3/3 clean on board ocean bill of lading, plus two (2) non-negotiable copies, issued to order of The Sun Bank, Sunlight City, Import-Country, notify the above accountee, marked "freight Prepaid", dated latest March 19, 2001, and showing documentary credit number.
4. Insurance policy in duplicate for 110% CIF value covering Institute Cargo Clauses (A), Institute War and Strike Clauses, evidencing that claims are payable in Import-Country.
Covering: 100 Sets 'ABC' Brand Pneumatic Tools, 1/2" drive, complete with hose and quick couplings, CIF Sunny Port
Shipment from Moonbeam Port, Export-Country to Sunny Port,
Import-Country
Partial shipment Prohibited
Transshipment Permitted
1. All documents indicating the Import License No. IP/123456 dated January 18, 2001.
2. All charges outside the Import-Country are on beneficiary's account.
Documents must be presented for payment within 15 days after the date of shipment.
Draft(s) drawn under this credit must be marked
Drawn under documentary credit No. SB-87654 of The Sun Bank, Sunlight City, Import-Country, dated January 26, 2001
We confirm this credit and hereby undertake that all drafts drawn under and in conformity with the
terms of this credit will be duly honored upon delivery of documents as specified, if presented at
this office on or before March 26, 2001
Very truly yours,
Authorized Signature
Unless otherwise expressly stated, this Credit is subject to the Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of
Commerce Publication No. 500.
Letter of Credit Particulars: a) Latest Negotiation Date
The latest negotiation date is the last day of the period of time allowed by the letter of credit (L/C) for the presentation of documents and/or draft(s) to the bank. The latest negotiation date is not necessarily the L/C expiry date. In the sample letter of credit the latest negotiation date can be March 26, 2001 or 15 days after the date of shipment,
In case the L/C does not stipulate the latest negotiation, it is within 21 days after the date of issuance of the transport documents, but on or before the L/C expiry date.
b) Expiry Date and Place
The expiry date and place is the last day of validity of the credit and the place allowed by the letter of credit (L/C) for the presentation of documents and/or draft(s) for payment, acceptance or negotiation. In the sample letter of credit the expiry date is March 26,
2001 and the place for presentation of document is Export-City, which is the
beneficiary's city.
In case the validity of an L/C is stated in a period of time, for example "this credit is valid for three months" or "this credit is available for two months" or "this credit is good for one month", but does not specify the date from which the time is to run, its validity starts from the issuance date of L/C by the issuing bank. The bank normally discourages stating the L/C validity in a period of time.
In case the expiry date and/or the latest negotiation date falls on a day on which the bank is closed for reasons not including the acts of God, strikes, riots, civil commotions, lockouts, insurrections, wars or any other causes beyond the bank's control, the expiry date and/or the latest negotiation date is extended to the succeeding first day on which the bank is opened. Such extension, however, does not extend the latest date of shipment.
c) Draft(s) Drawn On
The draft(s) drawn on answers the question "Which bank or who is the drawee (the payer) of the draft?" The draft is most often drawn on the confirming bank or the issuing bank. In some cases, the draft is drawn on the applicant. In the sample letter of credit the draft is drawn on the confirming bank, which is The Moon Bank.
d) Draft(s) Drawn At
The draft(s) drawn at answers the question "The draft is drawn at what terms?" It can be a sight draft (i.e., payment on demand or on presentation) or a term draft (i.e., payment at a fixed or determinable future time). In the sample letter of credit the draft is drawn at
sight.
e) Draft(s) Drawn Under
The draft(s) drawn under answers the question "The draft is drawn under which credit and the credit is of which bank?" In the sample letter of credit, the L/C requires that the draft(s) be marked "Drawn under documentary credit No. SB-87654 of The Sun Bank, Sunlight City, Import-Country, dated January 26, 2001" (please see the completed sample
f) Latest Shipment
The latest shipment---latest date of shipment or last date for shipment---is the last day of the period of time allowed by the letter of credit (L/C) for shipment, dispatch or taking in charge. In the sample letter of credit the latest shipment date is March 19, 2001.
g) Port or Point of Origin and Port or Point of Destination
The port or point of origin is the port or place of loading, dispatch or taking in charge. The port or point of destination is the port or place of discharge or delivery. Some of the expressions that may appear in the letter of credit (L/C) indicating the origin and the destination are: "shipment from ... to ..." "dispatch from ... to ..." "carriage from ... to ..." "delivery from ... to ..." "forward from ... to ..."
"taken in charge at ... for transportation to ..."
In the sample letter of credit the origin is Moonbeam Port, Export-Country and the destination is Sunny Port, Import-Country.
3)
Commercial Invoice
:
The commercial invoice is a record or evidence of transaction between the exporter and the importer. Invoice is a bill for itemized goods or services. The pre-shipment invoice is a shipment detailing the transaction.It is one of the most important documents prepared and signed by exporter with whose help other documents are prepared. The description of merchandise as given in the commercial invoice must correspond to the description in the L/C and other documents must contain the similar description are:
Specific Language Requirements in the Commercial Invoice
Certain importing countries may require that the commercial invoice and the packing list be made out in, or translated to, the language of the importing country, for example, in French for shipment to France, in Italian to Italy, and in Spanish to Mexico and Venezuela.
Declaration on Commercial Invoice
The declaration on the commercial invoice for some countries must be in a specified wording. The exporter may check the wording with the customs broker, the government external trade department, or the foreign government trade office concerned in the exporting country.
The content of a typical declaration includes a sworn statement from the exporter indicating that the goods in question are manufactured in the exporting country, and that the amount shown in the invoice is the true and correct value.
Certification and/or Legalization of Commercial Invoice
The letter of credit (L/C) from certain importing countries, in particular from the Middle East, requires the certification and/or legalization of the commercial invoice.
The certification, which usually is performed by the local Chamber of Commerce of the exporting country, is to confirm that the invoice and declaration (in the invoice) are correct. The legalization, which is done by The Consulate or The Commercial Section of the Embassy of the importing country, is to verify that the invoice is correct.
The certification and legalization are most often satisfied with a stamp or a seal on the invoice and payment of a fee. The processing time may take one week
Signature and/or stamp
The commercial invoice and packing list need not be signed, unless otherwise stipulated in the letter of credit (L/C). In practice, the original and the copy of the commercial invoice and packing list are often signed.
Description of Goods
The description of the goods in the commercial invoice must correspond with the description in the letter of credit (L/C). In all other documents, the description can be in general terms provided it is not inconsistent with the description in the L/C.
Shipping Marks & Numbers
• Quantity
If the letter of credit (L/C) does not stipulate the quantity in a stated number of units (i.e., it does not state in units such as piece, set, box, dozen, or gross), or unless the L/C stipulates that the quantity of the goods specified must not be exceeded or reduced, a tolerance of 5% more or 5% less quantity is permitted, provided the total amount does not exceed the amount of the L/C.
In the sample L/C the stated quantity is 100 Sets, thus the quantity in the invoice must be 100 Sets. If such sample L/C does not state the quantity, the UVW Exports can ship between 95 sets and 100 sets of pneumatic tools, but not over 100 sets as the total amount will exceed the L/C amount of US$25,000. If such L/C does not state the quantity and the L/C amount is US$26,250 or more, the exporter may ship between 95 and 105 sets.
If the L/C quantity is indicated using the words "about", "approximately", "circa" or similar expressions, the quantity in the invoice cannot exceed 10% more or 10% less than the quantity indicated in the L/C. For example, if the L/C quantity is "about 100 sets", the quantity in the invoice can be any quantity between 90 sets and 110 sets, provided the total amount does not exceed the amount of the L/C.
• Unit Price
If the letter of credit (L/C) unit price is indicated using the words "about", "approximately", "circa" or similar expressions, the unit price in the invoice cannot exceed 10% more or 10% less than the unit price indicated in the L/C. For example, if the L/C unit price is "about US$250", the unit price in the invoice can be any unit price between US$225 and US$275, provided the total amount does not exceed the amount of the L/C.
• Amount
Unless otherwise stipulated in the letter of credit (L/C), the amount must not exceed the amount permitted by the L/C. If the L/C amount is indicated using the words "about", "approximately", "circa" or similar expressions, the amount of the invoice cannot exceed 10% more or 10% less than the amount indicated in the L/C. For example, if the L/C amount is "approximately US$10,000", the amount of invoice can be any amount between US$9,000 and US$11,000.
Explanations:
Fields in the Preamble of the Commercial Invoice
" For account and risk of Messrs. "
Enter the complete name and address of the importer (the consignee) in the field (For account and risk of Messrs.). The title Messrs. stands for Messieurs in French meaning gentlemen. It is used to address a business firm in a formal manner, the same way the title
Mr., Mrs. or Miss is used to address a person.
" Letter of Credit No. " , " Date " and " Issuing Bank "
Referring to the sample L/C, enter "SB-87654", "January 26, 2001" and "The Sun
Bank" in the respective fields in the documents. The sample L/C does not stipulate
indicating this information in the documents except the draft(s), thus UVW Exports may choose not to enter it in the documents, but there is no harm if it is entered in the documents.
" Import Permit/License No. " and " Date "
Referring to the sample L/C, enter "IP/123456" and "January 18, 2001" in the commercial invoice and all other documents, including bill of lading and insurance policy.
" Buyer's P.O. or Contract No. " and " Date "
The letter of credit may require the documents to show the purchase order (P.O.) or contract number. Referring to the sample L/C, enter "DEF-101" and "January 10, 2001" in the respective fields in the documents.
" Buyer's Department / Store No. "
The department or store number is often required when dealing with the chain stores. It is the identification number of the store or branch of a chain store. The store number is used in the routing of goods by the chain store. It identifies the store that places the order or to which branch (of the chain store) the goods will be delivered.
" Shipment on or about "
Shipment on or about is the ETD (estimated time of departure) or the ETS (estimated
time of sailing). In practice, the date of loading on board, dispatch or taking in charge is often regarded as the ETD.
" From (Port of Loading) " and " To (Port of Discharge) "
The port of loading is the port or point of origin and the port of discharge is the port or point of destination. Referring to the sample L/C, enter "Moonbeam Port,
Export-Country" as the origin and "Sunny Port, Import-Export-Country" as the destination in the
fields.
" Via (Tranship At) "
The via (tranship at) refers to the transhipping port or point in a transhipment. For example, if a consignment destined for landlocked Afghanistan has to tranship at Karachi, Pakistan, enter "Karachi, Pakistan" in the field.
" For Transhipment To "
For transhipment to is the final destination in the onward routing or carriage, which is
4)
Packing List
:
It is a document showing the details of goods contained in individual packages, which helps customs authorities and receives in identifying the contents of specific package.It contains almost all the information provided in invoice along with details of packing like:
No. of bales or cartons Gross weight
Net weight Dimensions etc.
For the purpose of explaining other fields in the packing list, it is assumed that the pneumatic
tools in the sample L/C contain the following data:
The catalogue or item number of the pneumatic tools is A380
Each set is in an inner box and there are two boxes in an export master carton, or a total of 50 cartons for the 100 sets
Each master carton:
Net Weight (N.W.) ... 20 kgs. (44.1 lbs.) Gross Weight (G.W.) ... 23 kgs. (50.7 lbs.) Measurement (Meas.) ... 0.113 CBM (4 cft.)
61 cms. x 61 cms. x 30.5 cms.(2' x 2' x 1')
" Package No. "
The entries preferably arranged in sequence from the lowest number to the highest, that is, from package No. 1 and up. From the sample L/C, enter "C/No. 1-50" or the like in the field (Package No.), provided it is not inconsistent with the marks and numbers on the master cartons.
" Item No. " and " Description of Goods "
The description of the goods in the packing list can be in general terms, provided it is not inconsistent with the description in the L/C. From the sample L/C and data of the pneumatic tools above, entering "A380" and "'ABC' Brand Pneumatic Tools" in the fields will satisfy the requirements.
" Quantity "
It shows the total quantity within a stated range of the package number and the breakdown in each package. The stated range is C/No. 1-50, enter:
100 Sets 2 Sets/Ctn.
or
100 Sets 2 Sets @ Ctn.
or the like in the field. The / and @ used here stands for per or each.
" Weight "
It shows the total weight within a stated range of the package number and the weight of each package. The stated range is C/No. 1-50, enter:
1,150 Kgs. 23 Kgs./Ctn.
or
1,150 Kgs. 23 Kgs. @ Ctn.
or the like in the field and put a notation "Gross Weight".
As far as the carrier is concerned, the gross weight or measurement of a consignment is needed to calculate the freight. In case the goods are assessed in the importing country or exported on the net weight basis, it is necessary to show the net weight and gross weight in the packing list. The entry may appear as:
N.W. 1,000 Kgs. G.W. 1,150 Kgs.
" Measurement "
Ocean shipments are most often charged by the cubic meter (CBM or cbm). Enter:
5.65 CBM 0.113 CBM/Ctn.
in the field (Measurement). Sometimes, it is necessary to include the size or dimensions (length-width-height) of the master package. The entry may appear as:
5.65 CBM 0.113 CBM/Ctn. @ 61 x 61 x 30.5 Cms.
The @ stands for at or each.
Some carriers may calculate the freight on a cubic feet (cft. or cu. ft.) basis. In the case of an irregular shaped cargo, take the three widest dimensions that describe the smallest cubic space enclosing the cargo to determine the measurement.
" Signature and/or Stamp "
The packing list and commercial invoice need not be signed, unless otherwise stipulated in the letter of credit (L/C). In practice, the original and the copy of the packing list and commercial invoice are often signed.
Summary of Totals in a Consignment
Total Number of Packages
For example a consignment where the range of the carton number is as follows: C/No. 1-8 C/No. 9-17 C/No. 18-23 C/No. 24-30 C/No. 31-42 C/No. 43-50 - Product A - Product B - Product C - Product D - Product E - Product F
Total Quantity
If a consignment consists of different units, preferably show all the units used in the summary of totals. For example, a shipment includes:
100 dozen 200 dozen 300 boxes 400 boxes - Product A - Product B - Product C - Product D
as such the total shows "300 Dozen and 700 Boxes".
Total Weight and Total Measurement
If the net weight and gross weight are used in the breakdown, the summary must show the total net weight and the total gross weight. If kgs., lbs., CBM and cft. are used in the breakdown, the summary must show the total of kgs., lbs., CBM and cft..
Under certain circumtances, such as in a consignment consisting of a few master cartons where each carton contains several small items of different sizes, it is necessary to show the breakdown of the quantity of each item. There is no need to show the breakdown of the weight and measurement of each carton. Simply entering the total weight and the total measurement of the consignment in the summary row would satisfy the export requirements.
5)
ARE-1 Form
:
This document is prepared by exporter & it acts as a excise document. This document contains details like: Description of package
Marks and number on packages Gross weight
Net weight
Description of finished goods Value
Invoice number and date
Amount of rebate claimed under rule 18.
6 copies of this document are prepared which are as follows:
(1) Original (White) - is sent with container
(2) Duplicate (Buff) - is sent with container
(3) Triplicate (Pink) - to excise authority after proof (4) Quadruplicate (Green) - shipment is obtained
(5) Quintuplicate (Blue) - kept for office record (6) Sixtuplicate (Yellow) - to control excise authority
6)
Bill of Exchange
:
A bill of exchange is also known as draft, which contains an order from the exporter LUCKY EXPORTS to the importer to pay a specified amount to a person. To whom it is directed to pay is called maker of a bill means exporter (LUCKY EXPORTS).When the goods are shipped by Sea, the bills are drawn in sets and two mailed to the foreign correspondent through an authorized dealer for presentation to the importer. A bill of exchange is to two
types:-a) Sight Bill: When the importer makes the payment immediately after the draft
presented to him. It is called a sight bill.
b) Usance Bill: When the exporter (LUCKY EXPORTS) has agreed to give credit to the
foreign buyer, he draws a bill, which is called usance bill. A usance bill is drawn for payment at a date later than the date of presentation. There is no aligned document for draft; the same can be prepared by the exporter in the usual format.
Drafts Drawn On the Bank
In the sample L/C the draft is drawn on the confirming bank, which is The Moon Bank. The UVW Exports may issue a draft drawn on The Moon Bank as follows:
The "No." (number) in the above sample draft may be used for the exporter's reference number. Blank drafts are available at the paying bank.
First of Exchange (Second Unpaid) and Second of Exchange (First Unpaid)
In practice, it is not uncommon that two drafts are drawn on the drawee bank in a letter of credit (L/C) to ensure that at least one draft reaches the drawee when they are dispatched separately. The issuance of more than one draft in a letter of credit follows the same logic as in the issuance of bill of lading in more than one original. At times even three drafts may be drawn on the drawee bank, this practice was not uncommon before in certain countries.
In contrast, normally one draft (sola bill) is issued in a documentary collection where the draft is drawn on the importer.
The sample draft shown above is the first draft, marked "First of Exchange (Second
Unpaid)" and the number "1". In the second draft, if any is issued, is marked "Second of Exchange (First Unpaid)" and the number "2". Some drafts may not be numbered "1" or
"2".
The Letters of Undertaking Instead of the Drafts
In certain exporting countries, the government levy a heavy tax on drafts. In such a circumstance, the exporter may request the importer to specify in his/her letter of credit (L/C) application that "No drafts be issued". When the documents are presented to the negotiating bank, the bank issues a letter of undertaking indicating when and where the money will be paid, instead of accepting a draft drawn by the exporter.
'Availed' Term Drafts
The word "aval" in French means endorsement. A term draft accepted by the importer does not guarantee payment on maturity, hence it is not readily accepted for discounting or as collateral in a loan. The exporter may arrange to have the accepted draft to be 'availed' by the importer's bank---the bank adds its endorsement as guarantee of payment. The 'availed' term draft can be readily discounted, thus providing the exporter with immediate funds.
• Drawer
The drawer is the party who issues the draft and to whom the payment is made. The drawer is the seller (the exporter) and the payee of the draft. The payee could be another party rather than the exporter, or could be the bona fide holder (the bearer) of the draft.
• Drawee
The drawee is the party who owes the money or agrees to make the payment and to whom the draft is addressed (made out). The drawee is the buyer (the importer), the acceptor and the payer of the draft in a documentary collection. In a letter of credit the drawee most often is the confirming bank or the issuing bank, which is the acceptor and the payer of the draft.
• Remitting Bank
The exporter's bank to whom the exporter sends the draft, shipping documents and documentary collection instructions, and who subsequently relays them to the collecting bank in a documentary collection is called the remitting bank.
The term remitting bank as used under a letter of credit may refer to a nominated bank from whom the issuing bank or the confirming bank, if any, receives the shipping documents.
Collecting Bank (Presenting Bank)
The bank in the importer's country (the importer's bank usually) involved in processing the collection---presents the draft to the importer for payment or acceptance, and thereafter releases the shipping documents to the importer in accordance with the instructions of the exporter---is called the collecting bank or the presenting bank.
manufactured, and in certain cases may include such information as the local material and labor contents of the product.
Some importing countries require a certificate of origin to establish whether or not a preferential duty rate is applicable. A popular example of the certificate of origin is the Form A, which is often called the GSP Form A.
The certificate of origin (C/O)is an alternative to the declaration or the certification and/or legalization of the commercial invoice. The C/O is based on the rules of the country of origin. The country of origin is the country where the goods are grown, produced or manufactured. The manufactured goods must have been substantially transformed in the exporting country as the country of origin, to their present form ready for export. Certain operations such as packaging, splitting and sorting may not be considered as sufficient operations to confer origin.
The certificate of origin includes the Form A, Chamber of Commerce Certificate of Origin, Exporter's Certificate of Origin, and Free Trade Market Certificate of Origin. The trade agreement, import practice, and letter of credit (L/C) stipulation determine the type of C/O needed.
Free Trade Market Certificates of Origin
NAFTA Certificate of Origin
The North American Free Tree Agreement (NAFTA) Certificate of Origin is used within the NAFTA countries (i.e., Canada, USA and Mexico). The form is available at the customs office. It is self-certified by the exporter.
EC Certificate of Origin
The European Community (EC) Certificate of Origin, as its name implies, is used in the European Community. It is issued by the Chamber of Commerce of the exporting country, usually with payment of a fee.
EC countries consist of Belgium, Denmark, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, and United Kingdom.
Movement Certificates
Different Movement Certificates are being used in the European Union (EU)---EC (European Community) and EFTA (European Free Trade Association) countries. The certificates require endorsement by the customs of the exporting country.
EFTA countries consist of Austria, Finland, Iceland, Norway, Sweden, Switzerland, and
DOCUMENT CONNECTED WITH TRANSPORTATION OF GOODS
• Air Way Bill (AWB) Air consignment Note.
The receipt issued by an airline or its agent for the carriage of goods is called airway bill or air consignment note. It is issued in terms and conditions of the contract of carriage of goods. It is not a document of title and it is not issued in a negotiable form.
Generally AWB is issued in three copies, viz; for the carrier, for the consignee and for the consignor.
• Postal Parcel Receipt (PPR).
Like the AWB, the PPR evidence merely the receipt of the goods to be exported to the buyer and is not a document of title.
• Bill of Lading (B/L).
A Bill of Lading is the most important document in Foreign Trade. It is generally issued by a shipping company. It services as a receipt from the shipping company who undertakes to deliver the goods at agreed destination on payment of freight in a prearranged manner and also a document of title to the goods. B/L is generally made out in the sets of two or three originals. All the originals are duly signed by the master of ship or the agent of the steamship company and all the originals are equally valid for taking the delivery of goods and once one original copy is utilized the other originals become full and void.
B/L is nor a negotiable instrument in terms of Negotiable instrument Act, However, it is a practice to call the original copies as negotiable copies.
