THE SEARCH FOR AN OVERSEAS BUYER

An export organization is on the constant look-out for new overseas markets, where there is a demand for their products and the profit margins are attractive. There are various ways in which overseas customers can be located. Some of the effective ways of searching for these customers are discussed in the following sections.

Conducting Market Research

nvolves desk research to gather secondary data from various !ournals, magazines, publications, and the internet. "ould be followed by a personal visit to the target market for gathering primary data. #elps assessing the market demand, profitability, and risks involved.

Participate in an International Exhibition

Several specialized trade exhibitions are held regularly the world over. Trade $romotion %rganization &TPO' can help the exporter determine the most appropriate exhibition to participate at home and abroad. t also helps the participants by way of space booking, stand construction, shipment of exhibits, exhibition ground facilities, etc.

Internet
A powerful tool to get in touch with potential overseas buyers. (xporters can launch their own websites to advertise their products )se internet search engines to locate buyers.

Export Promotion Bureau (EPB)

(xport $romotion *ureau &($*', *angladesh under the +inistry of "ommerce is a government agency of the country, entrusted with the responsibilities of promoting export of the country. t is mainly responsible for, -. "oordinating export development efforts at different sectors and production levels. /. 0ormulating and adopting of policy and program for active promotion of exports. 1. "oordinating, monitoring and evaluating national export performance and analysing export trends.

2. "arrying out promotional activities in product development 3 expansion of supply side capacity. 4. (xploring markets of exportable abroad. 5. "ollecting and disseminating trade information to the stakeholders. 6. %rganizing participation in international trade fairs abroad. 7. mparting training for #89 .

:. "onducting studies, surveys, research etc. for expansion and diversification of export and Administering and monitoring of 8+; <uota. -=. ($* also assists the +inistry of "ommerce in formulating policies related to export of the country. "ontribution of ($* on searching an overseas buyer is giver below The 0air and 9isplay 9ivision organizes participation of *angladesh in various international trade fairs and also organizes *angladesh single country trade fairs abroad in close cooperation with the *angladesh (mbassies overseas. This is intended to provide direct marketing support to the exporters of the country. n trade fairs abroad, organized by ($*, the exporters get the opportunity to show-case their products to foreign buyers and to develop business relationship with them. n each fiscal year, the 0air and 9isplay 9ivision organizes about twenty such fairs. n most cases trade fairs lead to receiving spot and potentials orders by the exhibitors from the country. Apart from organizing trade fairs, the 0air and 9isplay 9ivision assists the *angladesh (mbassies abroad in maintaining display centres in chancery buildings with a view to pro!ecting the exportable of the country to the business and other visitors. This is done by way of providing finance and exhibits for such display centers. The "ommodities 9evelopment 9ivision arranges marketing missions abroad to find new markets and buyers of the specific products. The "ommodities 9evelopment 9ivision works in "o-operation with the *angladesh missions of the concerned country to find new markets of *angladeshi products and consolidate the existing ones. t also helps in the amicable settlement of the trade disputes between *angladeshi (xporter and 0oreign mporters.

PROCESSING AN EXPORT ORDER

The processing of an export order can be divided in two different categories, $re-despatch procedure $ost-despatch procedure

Pre-Despatch Procedure

After the $urchase %rder &$%'> ?." is received, the exporter must ensure that it complies with the 8* norms related to the permitted currencies and the methods of payment. The 8* allows exporters to receive directly from buyers payments in the form of bank drafts, che<ues, pay orders, foreign currency notes, or foreign currency traveler@s che<ues, sub!ect to certain conditions. The payment must be received through the medium of an authorized dealer

%nce satisfied with all the terms and conditions of the transaction, the exporter will initiate the following actions, -. f a manufacturer-exporter, the exporter will issue a Work Order and circulate it to various intra-organizational departments. The Aork %rder will contain all the details similar to $roforma nvoice so that the concerned department becomes fully aware of commitments made by marketing>exports department to the customer. /. f a merchant exporter, the exporter will place the order with a vendor>s. The exporter will issue a $urchase %rder in favor of the vendor&s' and communicate all re<uirements in order to execute the order as committed to the overseas customer. The exporter will ensure that the vendor delivers the goods well in advance of the shipment deadline. The merchant exporter may establish a back-to-back ?>" in favor of the vendor for effecting the payment. Alternatively the exporter and the vendor can decide the mode of payment with mutual consent. After the work order is received by the various departments within the organization, they initiate the manufacturing process. The exporter will simultaneously approach the bank to avail of the packing credit, which is the pre-shipment credit given by banks on lower interest rates. %nce the finances are available, the exporter can procure the raw materials and consumables for the export cargo. The exporter has to ensure that goods are manufactured as per international standards, such as the *S &*ritish Standards', 9 B &;erman Standards', C S &Capanese Standards' etc. The exporter must keep enough time margins, so that in case of re!ection on <uality parameters at any stage, he>she can remanufacture and still meet the despatch deadline. %nce the goods are accepted, the inspection authorities will issue a pre-shipment inspection certificate.

Excise clearance o! export goods

Excise clearance of export goods can be carried out in three ways: The exporter can pay the excise duty and claim the refund after the goods have been exported. Alternatively, duty drawback can be claimed on inputs used in manufacturing the products exported. The second method involves exporting the goods under bond without payment of excise duty. After the goods are exported and proof of export is submitted, the bond is released. (xporters who are members of ($"s &Export Promotion Councils' are exempted from submitting a bond to the excise authorities.

Some procedures are common to export under bond or duty pre paid! The documents re<uired for this are, invoice and A8(-- &Application for removal of excisable goods' forms. The invoice has to be prominently marked as D0%8 (E$%8T A T#%)T $AF+(BT %0 9)TF@. A8(-- has to be filled in five copies.

Three alternatives exist for the disposal of A"E # forms: (xport under supervision of excise officer (xport under self-sealing and self-certification (xport after payment of duty under claim of rebate

Export under super"ision o! excise o!!icer

The excise officer supervises the sealing of export cargo and endorses all the five copies of A8(-- form. #e gives original, duplicate, and <uintuplicate copies to the exporter, sends the triplicate copy to the bond authority and retains the <uadruplicate. The exporter sends the original, duplicate, and <uintuplicate copies to the customs officer at the port. The customs officer returns the original and <uintuplicate copies to the exporter after the goods are exported and sends the duplicate copy to the bond authority. Bow the bond authority will have two copies of A8(-- form, including the triplicate from the excise officer. This confirms to the bond authority that the goods for which exemption was claimed have been exported.

Export under sel!-sealing and sel!-certi!ication

This facility is only accorded to regular exporters with a good track record. n this case, the exporter seals the goods and certifies A8(-- forms and sends the original, duplicate, and <uintuplicate copies along with goods to the customs officer at the port. The exporter also sends the triplicate and <uadruplicate to the superintendent of excise. The excise superintendent sends the third copy to the office where the exporter has executed the bond. The customs officer sends the duplicate to the bond authority after the goods are exported. This enables the bond authority to ascertain the export of goods for which duty exemption was claimed.

Export a!ter pa#ment o! dut# under claim o! rebate

n this case, the exporter pays the excise duty first and then claims the rebate on the duty paid. The procedure remains the same, except that the duplicate copy of A8(-- is sent by the customs officer and the triplicate copy is sent by the excise superintendent to the officer to whom the rebate claim is filed. n case the rebate is claimed electronically, these copies will be sent to excise rebate audit section at the place of export.

$ales %ax Clearance !or Exports

the imposition of sales tax by state government is prohibited on exports and imports. *esides, there is no "entral Sales Tax &CST' on sale during export>import, as it is leviable only on interstate transactions.

CST Act to determine when sale is in the course of export$import: A sale or purchase of goods is deemed to be in course of export of the goods if (ither the sale or purchase occasions such export, or the sale or purchase is effected by a transfer of documents of title to goods after the goods have crossed the "ustoms 9epartment. Provision for the exemption of sales: There is a provision for the exemption of sales tax on the goods, which are purchased for eventual exports by a merchant exporter or an export house.

Such a sale is called Dpenultimate sale@ &i!e! last but one sale' The exporter can also claim exemption on the sales tax on the purchase of packing material. e!g! if the exporter purchases plastic containers, which are used for export production, it is deemed as Dexport sale@.

Conditions for availing exemptions on penultimate sale: The exemption will be available if the penultimate sale is for the purpose of complying with an agreement or order in relation to export. that such a sale is made after the agreement or order in relation to export. the same goods which are sold in the penultimate sale are exported. Procedures for getting sales tax exemption: 0or getting the sales tax exemption, the buyer has to issue the D#@ form, to the seller. This form is issued by the Sales Tax 9epartment. #owever, since the introduction of Galue Added Tax &GAT' regime, the buyer can pay GAT and claim the reimbursement from Sales Tax 9epartment.

Post -Despatch Procedure

Preparing and sending documents by the exporter: %nce the export consignment is ready for despatch and once all the clearances are obtained, the exporter will prepare and send the following documents to his freight forwarding agent well in advance of the shipment. nvoice $acking list ;uaranteed 8emittance &;8' form in duplicate to conform to exchange control regulations A8(-- form for excise clearance in five copies Sales Tax exemption form $re-shipment inspection certificate issued by (xport nspection "ouncil and>or any other third party inspection agency nominated by the overseas buyer 0orm B- for %ctroi "learance &as re<uired by certain states'

 "opy of ?etter of "redit &?.".' and>or $urchase %rder. Port formalities and further responsibilities of the freight forwarder: o %n receipt of the documents from the exporter, the freight forwarder will o complete the octroi formalities so that export cargo can reach the port of despatch duly exempted from payment of octroi duty. o obtain the port permit so that the truck>vehicle carrying export consignment can enter port premises. o complete the customs formalities, such as preparing the shipping bill so that the customs examination of the cargo can be conducted. o book the space on the ship>flight depending on the ?>" conditions and the directions from the exporters. o get the customs clearance and ensure that the cargo is placed on board the ship>aircraft. o obtain the following documents thereafter and send them to the exporter for negotiations with the bank. "ustoms attested invoice duly signed by the customs authority to certify that the goods have been checked and found in order. "opies of packing list. 9uplicate copy of ;8-- form. 9uplicate copy of A8(-- form &for claiming excise rebate'. "ertificate of origin &if re<uired' for commercial or political reasons. 0ull set of negotiable and non-negotiable copies of *ill of ?ading obtained from the shipping line &Airway bill in case of air cargo'. "opies of shipping bill. "opy of letter of credit and>or purchase order. Allowed time gap to complete the port formalities and further responsibilities: f the transaction is under a ?>", a time gap of about -4 to /- days is normally allowed between the last date of shipment and last date of negotiation of the documents. This is done in order to help the freight forwarder complete all the port formalities, and get all the relevant documents so that they can be sent back to the exporter for submission to the bank for further negotiations.

"esponsibilities of the exporter on receipt of the freight documents: %n receipt of the documents from the freight forwarder The exporter must check each and every document to ensure that all the terms and conditions of the ?>" are complied with. #e must also check the common discrepancies in the freight documents such as Spelling mistakes naccurate description of cargo on *>? &*ill of ?ading'

Shipment after expiry of ?>" #owever, the exporter sends shipment details to the buyer abroad such as *>? &*ill of ?ading' Airway *ill number and date Bame of the ship Goyage number> 0light Bumber (xpected date of arrival of the ship at the port of destination The exporter also sends the shipment details to the importers insurance company through e-mail> fax, so that suitable insurance cover is provided to the cargo.

Documentation
9ocumentation re<uired for commercial shipments to *angladesh include a commercial invoice, bill of lading or air waybill, an insurance certificate that must be underwritten by the Sadaran *ima "orporation or any *angladesh insurance company, and pro forma invoice. A certificate of origin may be re<uested. (xporters should seriously consider having the freight forwarder handle the formidable amount of documentation that exporting re<uires. freight forwarders are specialists in this process. The following documents are commonly used in exporting. which of them are actually used in each case depends on the re<uirements of both our government and the government of the importing country.

&egotiation o! documents
The exporter makes note with the following documents for negotiation, "ommercial invoice $acking ?ist

 %riginal "opy of ;8-- 0orm Set of negotiable copies of *>? duly endorsed by the exporter Set of non-negotiable copies of *>? "ertificate of origin "ertificate of pre-shipment inspection "opy of insurance policy "opy of ?>" or $>%

$crutin# o! Documents
The negotiating ban% will scrutini&e the documents and pay the exporter if they comply with the conditions of '$C! The ban% would also ensure the following: Serial number mentioned on the duplicate copy of (" form. f the transaction is on the C)* or C+* basis and the buyer proposes to pay the freight at the destination, then the freight amount deducted is the actual amount of freight. f the contract is on *O, basis and the seller proposes to pay the freight, the actual freight amount is added in the invoice. f the marine insurance premium is proposed to be paid by the seller on the behalf of the buyer, the invoice includes the actual amount paid and the same is received from the overseas buyer. Bo discrepancies are found in the document with regard to description of goods exported, value of export, or the country of destination.

Reali'ation o! Export Proceeds in special circumstances

-ormally.An exporter must realize export proceeds on the due date for payment as mentioned in the purchase order> ?>", or within six months from the date of shipment of the goods whichever is earlier.

$ome Exceptions
#owever, there are some exceptions to this rule Exports on 'onger Credit Period The exporter gives longer credit period in case the importer@s country faces *alance of $ayment problem and does not allow the remittance within six months. (xporters must then submit the application for 8* approval on form ECT. Short Supplies and Shut out Shipments /hen an exporter is unable to ship the entire

lot of cargo, short shipment notice must be sent to the "ustoms. "ertified by "ustoms, it is submitted to the authorized dealer for onward submission to 8* . Export by Air The exporter obtains the airway bill from the airline or its authorized agent in exchange of cargo. The airway bill is not a negotiable shipping document specially in case of transaction conducted without ?>". Ahere air cargo is shipped under consolidation, the airline company@s master airway bill will be issued to the consolidating cargo agent who in turn will issue 0A/, &#ouse Airway *ills' to individual shippers. Exports by "ail$"oad Transport (xporters sending their goods to neighboring countries by road>rail transport must submit (" form at the customs station at the border from where the vehicle would cross into another country.

Role (! Bank In )n Export-Import %ransaction

,an% as a *inancer: *ank provides pre-shipment credit known as packing credit to exporter on interest lower than market rate. t may be li<uidated against export proceeds received from abroad. *ank also provides post-shipment finance to make funds available during the credit period. ,an% as a *acilitator: *ank provides ?>" facilities to the importer to despatch the goods and get payment from the negotiating bank from own country. Transaction on 9A>9$ terms, exporter@s bank facilitates by sending the documents to the importer@s bank on collection basis. mporter@s bank facilitates the transaction by releasing the shipment documents only after the importer has paid the invoice value in case of 9$ transaction.

,an% as a "egulator: *ank can ensure that the payment of export invoices are received only through appropriate banking channels. *ank can handle the documents where exporter receives the export proceeds in the form of bank draft, pay order, banker@s che<ues, personal che<ues, foreign currency traveller@s che<ues etc. A lot of flexibility is provided for receipt of export proceeds from abroad if the bank is convinced about the integrity of the exporter and the genuineness of the transaction.