Documentaion

MODULE CODE:

International , clearing
&
Customs

October 23, 2023 Dr. AKUMUNTU JOSEPH 1

Documentation

PROCEDURES
&
DOCUMENTATION
IN
INTERNATIONAL
SOURCING
October 23, 2023 Dr. AKUMUNTU JOSEPH 2
Introduction: Role of Export
Documentation
Proper Documentation in International Procurement
is vital so as to ensure smooth sailing with the
requirements of the various agencies and the
resulting transactions are successful.
Inaccurate or incomplete documentation results in
serious financial and goodwill losses.
Such losses can be completely avoided by
understanding clearly the documentation
requirements of all concerned parties and then
meticulously planning to get the right documents in
the right numbers, at the right places and at the
right time.
October 23, 2023 Dr. AKUMUNTU JOSEPH 3
Documentation used in
International Procurement
Generally an Import/Export requires the following documents:
An Entry Manifest or Application and Special Permit for
Immediate Delivery or other form of merchandise release
produced to the port director;
An evidence of the right to make entry (e.g., a properly endorsed
bill of lading)
An evidence of a bond (single entry or continuous)
The commercial invoice, or pro forma invoice when the
commercial invoice cannot be produced
A packing list (for CBP examination purposes); and
Any other documents and other government agency (OGA) or
Customs documents necessary to determine merchandise
admissibility.

October 23, 2023 Dr. AKUMUNTU JOSEPH 4

Import Documents
Import documents generally include the following:
 Letters of credit,
 multiple bills of lading (Air way bill; Bill of lading,
 Dock receipts, Import licenses, Certificates of
origin,
 Certificates of insurance,
 Packing lists/Goods Manifest,
 Pro-forma Invoice,
 Commercial invoices,
 Warranties,
 Manufacturers Authorizations,
 Clearance certificates.

October 23, 2023 Dr. AKUMUNTU JOSEPH 5

Export Documents
2.1.2.1 Role of Export Documentation
Export documentation plays a vital role in international marketing
as it facilitates the smooth flow of goods and payments thereof
across national frontiers.
Exporters are required to follow certain formalities and
procedures, using a number of documents. Each of these
documents serves a specific purpose and hence carries its own
significance.
A clear understanding of all documents and their purpose, how to
prepare these, number of copies required, when and where to file,
is a must for all export professionals.
Export documentation is complex in nature as the number of
documents to be filled-in is very large, so also is the number of
the concerned authorities to whom the relevant documents to be
submitted.

October 23, 2023 Dr. AKUMUNTU JOSEPH 6

2.1.2.1 Role of Export Documentation

It is, therefore, advisable to take the help of shipping and

forwarding agents who will obtain and fill out the documents
correctly as well as arrange for transportation.

Proper Documentation will ensure smooth sailing with the

requirements of the above agencies and the resulting transaction
will be a successful one.

Inaccurate or incomplete documentation will result in serious

financial and goodwill losses.

Such losses can be completely avoided by understanding clearly the

documentation requirements of all concerned parties and then
meticulously planning to get the right documents in the right
numbers, at the right places and at the right time.
October 23, 2023 Dr. AKUMUNTU JOSEPH 7
 4.1.2.2 Parties Interested In
Export Documentation
The various parties interested in the documentation of exports are:
 Buyers and exporters,
 Buying agents,
 Revenue Authorities,
 Authorized dealers (where the exporter has his bank
Account),
 Buyer’s bank (foreign bank),
 Customs and Port Authorities,
 VAT and Excise Authorities,
 EPZ’s,
 Insurance Companies,
 Inspection Agencies,
 Clearing and Forwarding Agents,
 Shipping Companies/Airlines and Inland Carriers etc

October 23, 2023 Dr. AKUMUNTU JOSEPH 8

 Classification of Export
Documents
Export Documents can be classified into following
four categories:
(1) Commercial Documents
(2) Regulatory Documents
(3) Export Assistance Documents
(4) Documents Required by Importing Countries
(1) Commercial Documents: These documents are
used by exporters/importers to discharge their
respective legal and other incidental responsibilities
under sales contract.

October 23, 2023 Dr. AKUMUNTU JOSEPH 9

Classification of Export
Documents
Commercial documents can be further sub-divided
into:
(i) Principal Commercial Documents
(ii) Auxiliary Commercial Documents
(i) Principal Commercial Documents: These
documents serve the following purposes:
(a) To effect physical transfer of goods and title of the
goods from exporter to the buyer.
(b) To realize export sales proceeds.

October 23, 2023 Dr. AKUMUNTU JOSEPH 10

Classification of Export
Documents
i.) Principal Documents include:
 Commercial Invoice (and the invoice prescribed by the
importer)
 Packing list
 Certificate of Inspection
 Certificate of Insurance/Insurance Policy
 Bill of Lading/Airway bill/Combined Transport
Documents
 Certificate of Origin
 Bill of Exchange
 Shipment Advice

October 23, 2023 Dr. AKUMUNTU JOSEPH 11

 Classification of Export
Documents
(ii) Auxiliary Commercial Documents: These
Documents are required to prepare /procure the
principal commercial documents and include:
 Pro-forma Invoice
 Shipping Instructions
 Insurance Declaration
 Intimation for Inspection
 Shipping Order
 Mates Receipt
 Application for Certificate of Origin
 Letter to Bank for Negotiation /Collection of Documents

October 23, 2023 Dr. AKUMUNTU JOSEPH 12

 Classification of Export Documents
(2) Regulatory Documents: These are prescribed
by various Government Departments/Bodies for
compliance of formalities under relevant laws
governing export transactions. These include:
(i) Exchange Control Declaration Form-GR Form
(ii) Freight Payment Certificate
(iii) Insurance Premium Payment Certificate
(iv) Shipping Bill/Bill of Export
(v) Port Trust Copy of Shipping Bill/Export Application
(vi) Receipt of Payment of Port Charges
(vii) Vehicle Ticket

October 23, 2023 Dr. AKUMUNTU JOSEPH 13

 Classification of Export Documents
(3) Export Assistance Documents: These are the
documents which are required for claiming assistance
under the various export assistance measures as may
be in operation from to time. Currently, these refer
to:
 Drawbacks Of Central Excise And Customs Duties,
 Packing Credit Facilities Etc
(4) Documentation required by Importing
Countries: These are the documents which are
required by the importer in order to satisfy the
requirements of his Government:
 Certificates Of Origin,
 Consular Invoice,
 Quality Control Certificate Etc.
October 23, 2023 Dr. AKUMUNTU JOSEPH 14
 Commercial Documents
(1) Commercial Invoice:
It is the basic and most important document in an
export transaction and extreme care has to be
taken by the exporter to prepare this document.
This document requires the exporter to submit
details such as his own details:
 Invoice number with date,
 Details of the consignee and buyer (if the buyer is other
than consignee),
 Buyer’s order number with date,
 Country of origin of the goods,
 Country of final destination,
 Terms of payment and delivery,
 Pre-carriage details (road/rail),
October 23, 2023 Dr. AKUMUNTU JOSEPH 15
Commercial Documents

 Vessel/flight number,
 Port of loading,
 Port of discharge,
 Final destination,
 Container number,
 Number and kind of packaging,
 Detailed description of goods,
 Quantity,
 Rate and
 Total amount chargeable etc
October 23, 2023 Dr. AKUMUNTU JOSEPH 16
Commercial Documents
Therefore, a Commercial Invoice contains the
complete details of the export order.
Normally, the trade practice is to raise and send a
Pro-forma Invoice to the buyer for his approval,
once the order has been finalized.
On receipt of the approved Pro-forma Invoice, the
exporter can use it as a part of the export
contract.
The Commercial Invoice then becomes easier to
prepare on the basis of the approved Pro-forma
Invoice.
October 23, 2023 Dr. AKUMUNTU JOSEPH 17
 Commercial Documents
(2) Packing List:
This document provides the details of number of
packages; quantity packed in each of them; the
weight and measurement of each of the package
and the net and gross weight of the total
consignment.
Net weight refers to the actual weight of the items
and the gross weight means the weight of the items
plus the weight of the packing material.
The packing list serves a useful purpose of the
exporter while dispatching the consignment as a
cross check of goods sent.
October 23, 2023 Dr. AKUMUNTU JOSEPH 18
 Commercial Documents
For the port personnel, it comes handy while planning
the loading and offloading of cargo.
It is also an essential document for the customs
authorities as they as they can carry out the physical
examination of the cargo and conduct checks on the
weight and measurements of the goods smoothly against
the declarations made by the exporter in the packing list.
(3) Certificate of Inspection:
This is the Certificate issued by the Export Inspection
Agency after it has conducted the pre-shipment
inspection of goods for export provided the goods fall
under the notified category of goods requiring
compulsory shipment of inspection.
October 23, 2023 Dr. AKUMUNTU JOSEPH 19
 Commercial Documents
(4) Certificate of Insurance/Insurance Policy:
Insurance is an important area in the export business
as the stakes are usually very high.
Protection needs to be taken in the form of insurance
cover for the duration of transit of goods from the
exporter to the importer.
(5) Bill of Lading:
This is issued when the goods are shipped using ocean
(marine) transport.
When the exporter finally hand over the goods to the
shipping company for loading on board the ship for
transport to their final destination, the shipping
company issues a set of Bills of Lading to the exporter.
October 23, 2023 Dr. AKUMUNTU JOSEPH 20
 Commercial Documents
(6) Airway Bill:
Airway Bill is a bill of lading when the goods are
shipped using air transport.
It is also known as air consignment note or airway
bill of lading.
(7) Combined Transport Document:
This is also known as Multi-modal Transport
Document.
Ever since containers have become popular, the
concept of Combined Transport Document has
gained solid ground.
October 23, 2023 Dr. AKUMUNTU JOSEPH 21
 Commercial Documents
(8) Certificate Of Origin:
This document serves as a proof of the country of
origin of goods for the importer in his country.
Imported countries usually require this to be
produced at the time customs clearance of import
cargo.
It also plays an important part in computing the
liability and the rate of import duty in the country
of import.
This certificate declares the details of goods to be
shipped and the country where these goods are
grown, manufactured or produced.
Such goods needs to have substantial value
addition so as to become eligible to certification of
this nature.
October 23, 2023 Dr. AKUMUNTU JOSEPH 22
 Commercial Documents
(9) Bill of Exchange:
Also known as Draft, this is an instruments for
payment realization.
It is a written unconditional order for payment from
a drawer to a drawee, directing the drawee to pay
a specified amount of money in a given currency to
the drawer or a named payee at a fixed or
determinable future date.
The exporter is the drawer and he draws (prepares
and signs) this unconditional order in writing upon
the importer (drawee) asking him to pay a certain
sum of money either to himself or his nominee
(endorsee).
October 23, 2023 Dr. AKUMUNTU JOSEPH 23
 Commercial Documents
This order could be made for payment on demand, called a
bill of exchange at sight or payment at a future date, called
a Usance Bill Of Exchange.
(10) Shipping Advice:
The exporter sends this document , called shipping advice,
to the buyer soon after the shipment is made to provide
him all the shipment details.
This serves as an advance intimation of the shipment and
allows the importer to arrange for delivery of the same.
(11) Letters of Credit
Assure the seller that it will be paid for the shipment. It
is paid when accurate and appropriate documents are
presented to buyer’s bank. Mostly available in Revocable
and Irrevocable types
October 23, 2023 Dr. AKUMUNTU JOSEPH 24
Clearing and Forwarding
Procedures
Def:
“Freight Forwarder: is an entity /company responsible
for undertaking export/import cargo arrangements
on clients/shippers behalf at a seaport, airport and so
on.
At seaport it would include collection of freight;
collection and issuing bills of lading; notification of
arrival and loading of goods; customs, import & export
documentation; certificates of shipment; arranging
sorting of cargo, cold storage, warehousing, transport
to destination including near continent; cargo or
damage surveys e.g. Lloyd's/Marine Agents etc. Also
termed as forwarding agent.”
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 Freight Forwarder’s Role In
International Trade

Provides strategic solutions of long distance

product sourcing and movement
Provides capabilities interfaced across a range
of different transport modes
Offers supply chain management solutions
Delivery and customs clearance
Cargo handling and distribution management
Intermodal transport services
Consultancy/advisory services on international
trade
October 23, 2023 26
Dr. AKUMUNTU JOSEPH
 On behalf of the Consignor (Exporter)

In accordance with exporter shipping

instructions the forwarder would:
 Book space with carrier
 Choose route
 Take delivery
 Arrange warehousing
 Note damages/loss Weigh and measure cargo
 Advise on insurance
 Monitor cargo movement
 Study L/C provisions
 Transport the good
October 23, 2023 Dr. AKUMUNTU JOSEPH 27
…cont
Pay fees and other charges
Attend to foreign exchange transactions
Arrange for trans-shipment

On behalf of the Consignee

Receive and verify relevant documents
Monitor cargo movement
Take delivery
Arrange customs clearance
Assist in pursuing claims
Warehousing and Dr.
October 23, 2023
distribution
AKUMUNTU JOSEPH 28
 Thank You

Always Learn to

Pay

Attention

October 23, 2023 29