ibo-4 unit-3 export import documents overview

7/31/2019 Ibo-4 Unit-3 Export Import Documents Overview

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IBO-4UNIT-3 EXPORT IMPORT DOCUMENTS-

OVERVIEW

1. What are the perspectives of Export Documentation.ANS:Export documentation is commonly considered to be the most complexand difficult part of overseas marketing. You may have come across suchcomments as such comments tend to discourage people from enteringinto export business. It is therefore, necessary to emphasize thatdocumentation is as much of an important activity as the conclusion of anexport order and its fulfillment.Documentation formalities are necessary to enable the importer to getthe contracted goods and the exporter to get sale value as well as tosecure export incentives. In other words export documents are needed tocomply with commercial, legal and incentive requirements.Commercial PerspectiveTrade between two business firms located in different countries beginswith the conclusion of an export contract. Under the contract, the duty ofthe exporter is to ship the contracted goods in the agreed form (e.g.,packing) and by agreed mode of transport as well as according to agreedtime schedule. On the other hand, it is the duty of the importer to remitsale value to the exporter according to agreed terms of payment. In thisprocess of physical movement of goods from the exporter to the importerand remittance of sale value in the reverse order, neither the exporter northe importer is personally and physically involved.Instead goods are handed over to a shipping company or an airline which

issues a receipt for these goods. Further, since goods in transit may bedamaged or lost due to some accident, the exporter may be required toget an insurance policy. While these two documents will protect theinterests of the importer, the exporter will ensure that these documentsare not in the possession of the importer unless he has either paid for thegoods or he has made a promise to make payment at a later date. For thispurpose, physical possession of the good will be linked with theacceptance of a payment document by the importer. In actual practice, aset of documents given proof of shipment and cargo insurance coveragealong with a bill for payment is sent by the exporter to the importerthrough the banking channel.

This set of documents symbolizes ownership in goods. This will be handedover to the importer by the bank in his country, which he has received itfrom the bank in the exporting country only when he has honoured thebill. In other words, the importer will get delivery of the goods from thecarrier on the basis of the transport document, which is obtained throughthe bank, after he has complied with the agreed terms of payment.

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OVERVIEWLegal PerspectiveBesides commercial necessity, documents for exports have a legalperspective. All over the world, laws regulating export-import trade as

well as movement of foreign exchange has been enacted. In somecountries, the regulations are few, which arc enforced through simpleprocedural and documentation formalities. In other countries, theregulations are many and the enforcement procedures are complex.Why should there be regulations in foreign trade? There is perhaps nocountry in the world where movement of goods and money is absolutelyfree. 'The minimum regulations that one can think of are the one to recordthe movement of goods from and into a country. For this purpose, theexporter has to declare on a document the details of goods beingexported by him. Other than this basic minimum requirements, thegovernments all over the world regulate movement of goods to protect

political, economic, cultural and other interests and for implementingtrade agreements with other countries.Some countries do not have political relations with the others. As a result,goods originating from such a country are not allowed to be imported.Thus, a country, which does not permit flow of goods from certaincountries, has laid down the requirement of Certificate of Origin, whichstates that the goods are of the country, which is exporting them. Forexample, some of the countries in West Asia do not allow imports fromcountries or companies having any relation with Israel.Documents are needed for protecting the economic and social interests ofthe trading countries. For example, under the Indian Export policy, the

government has listed out products, which either cannot be exported orcan be exported after obtaining permission from the designated agencies.Some of the products are subject to restrictions because of their shortsupply in the country. Consequently, these products can be exported onlyafter obtaining a quota, for which a documentary proof is to be submittedto the customs, authority for shipment purposes. Similarly there are anumber of government regulations governing quality, standards, foreignexchange flows, valuation of goods for calculating customs duties, etc.Compliance with these regulations necessitates documentation.Documents are also needed for fulfilling requirements under bilateral andmultilateral trade agreements. For example, an Indian exporter will need

to obtain GSP, Certificate of Origin for exporting certain specified productsto those countries which operate the Generalised System of preferences.Under this System, the developed country accord preferential dutytreatment to specified goods originating from developing countries. TheGSP certificate will enable the importer to pay concessional duty.

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OVERVIEWIncentive PerspectiveExport assistance and incentive measures have become an integral partof policy in larger number of countries. Since these incentives are to be

given only td the export activity, documentary proof to this effect isrequired to be given by the claimant to the disbursing authorities. Such adocumentary proof should state that the claimant is eligible to receive theincentive, that the goods will be or have been exported according to theexport contract and that the claim has been filed in the manner specifiedin the policy. In other words, bonafides of the claim have to be establishedfor receiving incentives and assistance. You may also note that for makinga claim, the exporter has to file an application on the specified form thatsummarizes the shipment and other details. This application is to beaccompanied by a number of supporting documents to enable theincentive disbursing authority to check the authenticity of details given in

the application.

2. What is Certificate of origin?ANS: Certificate of Origin

The Certificate of Origin is an instrument to establish evidence on theorigin of goods imported into any country. The certificates are issuedunder the ambit of the Rules of Origin of any importing country thatgrants such concessions to tariffs or merely stipulates a non preferentialcertificate without granting any tariff concession.

It is on this basis that various countries have formulated their Rules ofOrigin which grant greater access to goods from the developing and theleast developed countries under the preferential mode.There are two categories of Certificate of Origin viz.(1) Preferential and (2) Non preferential.

3. What are the contents required in commercial invoice?

ANS: After the pro-forma invoice is accepted by the importer, the exporter

must prepare a commercial invoice. The commercial invoice is requiredby both the exporter (to obtain the necessary export documents to enablethe consignment to be exported, to prove ownership and to enablepayment) and importer (who requires the commercial invoice to facilitatethe import of the goods into the country in question). In exporting, thecommercial invoice is considered a very important document as it servesas the starting or initiating document that underpins the rest of the exporttransaction.

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OVERVIEWThis is the first basic and the only complete document among commercialdocuments for the shipment. Besides fulfilling the obligation under theexport contract, the exporter needs this document for a number of other

purposes including:i) Obtaining export inspection certificateii) Getting excise clearanceiii) Getting customs clearance andiv) Securing incentives.Thus, this document is prepared at both the pre- shipment and post-shipment stages.In the first place, Commercial Invoice is a document of contents thatdescribes details of goods sent by exporter. It is the statement of account,which must contain identification marks and numbers, description ofgoods and quantity of goods. .

Second function of the commercial invoice is that it is the seller's billgiven to the buyer. As a bill, it must contain the name and address of thebuyer, unit price, amount and authorized signatures with designation.Unless required by the buyer, the total invoiced value should be net ofany commission or discount; in other words, it should be the realizableamount ofgoods as per the trade terms. Sometimes a contract requires adetailed breakup of the amount to be recorded on the invoice for enablingthe customs authority in the importing country to calculate import duty.

The following details should appear in the commercial invoice:

The document title should clearly state "Commercial Invoice" The name of the exporter (referred to as the shipper) and their

contact details (tel, fax, cell, e-mail), including physical (not postal)address

The name of the importer (referred to as the consignee, meaningthe person or firm to whom the goods are to be sent) and theircontact details (tel, fax, cell, e-mail), including physical (not postal)address (In the case of transshipment, there may be anintermediate consignee and their contact details and address

should then also be included on the invoice.) If the person or firm buying the goods (the importer) is not the

same as the person or firm to whom the goods are being sent, thenyou should include both their contact details and addresses in thecommercial invoice

The name of the person and company to notify once shipment hastaken place and their contact details and physical address (here the

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OVERVIEWcontact details such as telephone, fax and cell number and e-mailaddress are more important than the physical address)

A commercial invoice reference number

A purchase order number or similar reference to correspondencebetween the supplier and importer The date of issue of the commercial invoice A complete, detailed and clear description of the goods in question,

incorporating the appropriate HS codes and brandmarks ifapplicable (here the importer may ask you to remove these codesas they may not be the same in the importing country and may thusincur additional or higher duties to the importer's detrimentbecause of their inadvertent misuse)

The quantity of goods in question, including the number ofunits/items

The packing details unless provided in a separate packing list,including their external dimensions, cubic capacity, weight,numbers and contents of each package shipped, and kinds ofpackaging involved (pallets, boxes, bags, etc.) - if a separatepacking list is used, reference should be made in the commercialinvoice to the packing list

The grand total price of the goods for the whole consignment Where applicable, the unit prices should be indicated - the unit price

multipled by the number of units/items should be reflected in theline total. The various line totals (in the case where different itemsare included in the same commercial invoice, or where additional

services are itemised in the invoice), should add up to the totalprice for the whole consignment (also referred to as the 'GrandTotal')

The currency in which the goods will be sold (e.g. US dollars orrands)

The type and amount of any discount given, where applicable The likely delivery schedule and delivery terms The payment methods (for example cash in advance, documentary

collection, L/C, etc.) The payment terms (for example 30 days on sight) The Incoterm to be used (Incoterms 2000 - FAS, CIF, CFR, DDP, etc.)

Who is responsible for the banking fees and other related costs(insurance and freight costs are covered by the incoterm inquestion)

What the freight and insurance charges are The exporter's banking details A declaration of the country of origin of the goods The expected country of final destination Any freight details such as the port of loading and discharge

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OVERVIEW Any additional exporter-provided services that should be added to

the invoice to come to the grand total Any transhipment requirements

The validity of the commercial invoice - that is, when does the offerexpire (leaving it open-ended could be very risky) Any other information relevant to the order Make sure the commercial invoice is signed, together with the

signature's name written underneath, with initials, title and position

4. What is the difference between Proforma Invoice andcommercial invoice?

ANS: There is usually very little, if any, difference between the final

proforma invoice accepted by the importer and the commercial invoice,except that the one is titled "Proforma Invoice", while the other is titled"Commercial Invoice". Although the proforma invoice comes before thecommercial invoice, the proforma invoice really only serves as a means ofnegotiating the actual contract. We said previously that the proformainvoice is the 'offer' put to the importer by the exporter. The importer mayaccept the terms specified in the proforma invoice, but a more likelyscenario is that the importer will negotiate some of these terms with theexporter. There may be some backward and forward communicationbetween the exporter and importer before the importer finally agrees tothe transaction. Once the importer indicates that (s)he is happy with the

terms of the contract as outlined in the (final) proforma invoice, theexporter will then be requested to provide the importer with a commercialinvoice. The commercial invoice should reflect the final (agreed-upon)proforma invoice exactly - any deviances will result in problems executingthe transaction and/or receiving payment (unless such changes havebeen requested by the importer and are agreed to by the exporter).

5. What do you mean by Bill of lading? Explain various types ofBill of lading.

ANS: A bill of lading is a type of document that is used to acknowledgethe receipt of a shipment of goods. A transportation company or carrier

issues this document to a shipper. In addition to acknowledging thereceipt of goods, a bill of lading indicates the particular vessel on whichthe goods have been placed, their intended destination, and the terms fortransporting the shipment to its final destination.

Bill of lading: Bill of lading is issued by the shipping company or itsagents stating that goods are either being shipped or have been shipped.Essentially a transport document, it serves many purposes in international

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OVERVIEWcommerce. A bill of lading can be used as a traded object. The standardshort form bill of lading is evidence of the contract of carriage of goodsand it serves a number of purposes:

It is evidence that a valid contract of carriage, or a charteringcontract, exists, and it may incorporate the full terms of thecontract between the consignor and the carrier by reference (i.e.the short form simply refers to the main contract as an existingdocument, whereas the long form of a bill of lading issued by thecarrier sets out all the terms of the contract of carriage);

It is a receipt signed by the carrier confirming whether goodsmatching the contract description have been received in goodcondition (a bill will be described as clean if the goods have beenreceived on board in apparent good condition and stowed ready for

transport); and It is also a document of transfer, being freely transferable but not a

negotiable instrument in the legal sense, i.e. it governs all the legalaspects of physical carriage, and, like a cheque or other negotiableinstrument, it may be endorsed affecting ownership of the goodsactually being carried. This matches everyday experience in thatthe contract a person might make with a commercial carrier likeFedEx for mostly airway parcels, is separate from any contract forthe sale of the goods to be carried, however it binds the carrier toits terms, irrespectively of who the actual holder of the B/L, andowner of the goods, may be at a specific moment.

Surrender bill of lading

Under a term import documentary credit the bank releases theDocuments on receipt from the negotiating bank but the importer doesnot pay the bank until the maturity of the draft under the relative credit.This direct liability is called Surrender Bill of Lading (SBL), i.e. when wehand over the bill of lading we surrender title to the goods and our powerof sale over the goods.

Clean Bill of Lading

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OVERVIEWThe clean bill of lading bears an indication that the goods werereceived without damages, irregularities or short shipment, usually thewords "apparent good order and condition", "clean on board" or the

like are indicated on the B/L.

Foul Bill of Lading

The foul bill of lading---unclean bill of lading, dirty bill of lading orClaused bill of lading---is the opposite of the clean bill of lading. It bearsan indication that the goods were received with damages, irregularities orshort shipment, usually the words "unclean on board" or the like areindicated on the B/L, for example, "insufficient packing", "missingsafety seal" and "one carton short".This bill bears a superimposed clause an annotation, which expresslydeclares a defective condition of the goods. The clause may state"package number 20 broken" or "bale number 20 hook-damaged". Bysuperimposing such clauses on the B/L, the shipping company limits itsresponsibility at the time of delivery of goods at the destination. It is veryimportant to note that only a clean B/L is acceptable for negotiation ofdocuments with the bank.

Through B/L: It covers goods being transshipped enroute but where thefirst carrier has the responsibility as the principal carrier for all stages ofthe journey. For example, goods may be shipped from Bombay to Dubaiand transhipped from Dubai to a port in Latin America.

A through bill of lading is a contract that covers the specific terms agreedto by a shipper and carrier. This document covers the domestic andinternational transportation of export merchandise. It provides the detailsof the agreed upon transportation between specific locations for a setmonetary amount. An air waybill is a bill of lading that establishes termsof flights for the transportation of goods both domestically andinternationally. This document also serves as a receipt for the shipper,proving the carrier's acceptance of the shipper's goods and agreement tocarry those goods to a specific airport.

Essentially, an air waybill is a type of through bill of lading. This isbecause air waybills may cover both international and domestictransportation of goods. By contrast, ocean shipments require both inlandand ocean bills of lading. Inland bills of lading are necessary for thedomestic transportation of goods and ocean bills of lading are necessaryfor the international carriage of goods. Therefore, through bills of ladingmay not be used for ocean shipments.

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OVERVIEWReceived Bill of Lading

The received bill of lading does not prove that the goods have beenshipped. It only acknowledges that the goods have been received by thecarrier for shipment. Therefore, the goods could be in the dock orwarehouse.

On Board Bill of Lading

The on board bill of lading---shipped bill of lading---proves that thegoods have been shipped, as evidenced by the pre-printed wording or theon board notation (e.g. "on board", "laden on board" or "shipped onboard") on the bill of lading.

Short Form versus Long Form Bills of Lading

Short Form Bill of Lading

In a short form bill of lading---blank back bill of lading---the termsand conditions of carriage on the reverse (back) of the bill of lading (B/L)are omitted, instead they are listed on a document other than the B/L.Unless otherwise stipulated in the letter of credit (L/C), a short form bill oflading is acceptable.

The short form B/L saves the cost of printing (i.e., no printing on theback of the B/L) and if the terms and conditions of carriage change, thereis no need to reprint the B/L form.

Long Form Bill of Lading

In a long form bill of lading the terms and conditions of carriage areprinted on the reverse (back) of the bill of lading. The long form bill oflading is commonly used in international shipping.

Combined B/L: It covers several modes of transport for performing thecomplete journey from tlie exporting country to the importer's warehouse.For example, part of tlie journey may be completed by ship whilesubsequent parts may be undertaken by road; rail and air.

Trans-shipment B/L: It has similar characteristic as the Through BILexcept that in this case the first carrier acts only as an agent for effectingTrans-shipment of cargo.

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OVERVIEW

Charter Party B/L: It covers shipment on a chartered ship. The contractor the letter of credit will specify the nature of bill of lading that the

exporter has to procure for the importer. Generally, the importers insiston the "clean on-board shipped" bill of lading, with the prohibition of thetrans-shjpment of goods.

Express Release Bill of LadingBy default all shipments with us go on express releases. Express = telexrelease = means that you do not have to provide originals Bill of Ladingsin order to recover your goods at the destination. Shipment on expressrelease should be released at the destination upon providing a copy of theB/L received from us in e-mail. No originals required. Several countriesaround the world, particularly Argentina, Brazil, Ecuador, Certain countries

in Africa, do not accept express releases. Carrier should specify it uponissue of B/L. Then we will mail you a set of originals Bill of Ladings byUSPS First Class Mail within USA/Canada for free. Expedited orinternational mail must be prepaid. If shipper/receptionist requires a set oforiginals B/L for shipments to countries that DO accept express release,then $50 fee will be added on top of cost of the mail.

Straight Bill of Lading

In a straight bill of lading---non-negotiable bill of lading---the title tothe goods is conferred directly to a party named in the letter of credit (the

importer usually), as such the title to the goods is not transferable toanother party by endorsement. In other words, the bill of lading is notnegotiable.

The letter of credit calls for a straight bill of lading usually by usingsuch words as "consigned to [the named party]" or "issued in thename of[the named party]". The named party can obtain the goodsdirectly from the carrier at destination. Therefore, unless the cashpayment has been received by the exporter or the buyer's integrity isunquestionable, the use of a straight bill of lading is risky

Order Bill of Lading

In an order bill of lading---negotiable bill of lading---the title to thegoods is conferred to the order of shipper or to the order of a named partyin the letter of credit (the issuing bank usually). The purpose of an orderbill of lading is to protect the interest of the shipper or the named party tothe title to the goods. The title to the goods is transferable to anotherparty by endorsement, usually on the reverse (back) of the bill of lading

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OVERVIEW(B/L) by the title holder of the B/L. If the endorsement of B/L is required inthe letter of credit (L/C), all the originals must be endorsed .

The letter of credit may calls for an order bill of lading that is: (1)To orderblank endorsed orTo order of shipper and blank endorsed, (2)To order ofshipper and endorsed to order of [the named party], or (3) To order of[the named party(other than the shipper)].

To order blank endorsed or To order of shipper and blank endorsed

Unless provided otherwise, a consignment that is "to order" means toorder of shipper. The "blank endorsed" means without specifying towhom the bill of lading (B/L) is transferred. In such instance, whoeverbears the B/L after endorsement holds the title to the goods.If the sample

letter of credit requires a B/L that is "to order blank endorsed", as suchenter the words "To Order" in the Consignee field in the bill of lading andother documents/forms.

In a "to order blank endorsed" bill of lading (B/L), technically speakingwhoever bears the B/L after its issuance holds the title to the goods.

If the sample letter of credit requires a B/L that is "to order of shipperand blank endorsed", as such enter the words "To Order of UVWExports" in the Consignee field, since the shipper in such L/C is UVWExports.

In both the above sample cases, the B/L must bear blank endorsement ofthe shipper as follows:

UVW Exports

(plus the authorized signature)

And, entering the words "To Order" or "To Order of UVW Exports" in

either of the above cases is correct, but to avoid rejection of documents,always follow the wordings stipulated in the letter of credit as aprecaution.

To order of shipper and endorsed to order of[the named party]

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OVERVIEWThis letter of credit (L/C) requirement resembles the "to order of shipperand blank endorsed", except that the words "To Order of[the namedparty]" must be indicated over the shipper's endorsement.

If the sample letter of credit requires a bill of lading that is "to order ofshipper and endorsed to order of The Moon Bank", as such enter thewords "To Order of UVW Exports" in the Consignee field in the bill oflading and the endorsement as follows:

To Order of The Moon Bank

UVW Exports

(plus the authorized signature)

To order of[the named party(other than the shipper)]

The named party under this letter of credit (L/C) requirement most oftenis the issuing bank. The L/C does not call for an endorsement, thus theexporter does not have to endorse the bill of lading.

The sample letter of credit requires a bill of lading "to order of TheSun Bank, Sunlight City, Import Country", as such enter the words "ToOrder of The Sun Bank, Sunlight City, Import Country" in theConsignee field in the bill of lading and other documents/forms.

Bill of lading is a document of title that will enable the lawful holder of anyof the original B/L to take delivery of the goods at the stipulated port ofdestination, Thus, a claimant of title to goods is required to surrender anoriginal B/L (also popularly known as negotiable copy ofB/L) for claiminggoods from the shipping company or its agents. A billof lading is not anegotiable instrument, though it is transferable by endorsement and andPolicies delivery. What is the purpose of transferability of the bill oflading? Transferability enables the banks to pay money to the exporteragainst surrender of shipping documents, including B/L, even before thegoods reach the destination. Similarly, it enables the goods to be resold

by the importer before goods reach the destination. For creatingtransferability, the bill of lading has to be made in such a way that thegoods are consigned to the 'order of a party.The party could be either the exporter himself, or a negotiating or payingbank or any other party as provided in the contract or letter of credit. Forexample, if B/L is prepared in the following way, it can be transferredthrough endorsement in the same manner as in a cheque. There are threemain columns in B/L. These are Consignor (Shipper); Consignee or Order

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OVERVIEWof and Notifying party. Notifying is the party to whom the shippingcompany is to send "notice of arrival". Transferability can be created byfilling- up these columns in the following manner:

Consignor: ABC Company, New DelhiConsignee: (Or Order of) Bank of XYZ, New DelhiNotifying Pam: KNM, LondonBy not striking-off the words "Or Order Of" and, writing the name of thenegotiating bank, the bank becomes the first endorsee. Title to goods willbe transferred from the negotiating bank to the paying bank to importeron endorsements by the negotiating and the paying banks in succession.In contrast to the "Order B/L" is the consignee-named B/L.The consignee-named B/L is made out in the name of a specific party. Hence, title togoods cannot be transferred to a third party. The exporter should not shipgoods under this kind of B/L as goods can be released by the shipping

company at the destination without the presentation of the 'original'B/L.Thus, if payment from the importer has not been secured, the exportermay lose hold over goods and may not get paid. However, if payment inadvance has been received or if goods are being shipped underirrevocable letter of credit, the consignee named BL is a valid document.According to international commercial practice, BL along with othershipping documents must be presented to the bank not later than twenty-one days of the date of shipment as given in BIL. Sometimes the buyersmay also specify the last date or the number of days after shipment bywhich the documents must be submitted to the bank. Where thisstipulation is not followed by the exporter, the documents are said to

have become "stale" and B/L in such case will be known as Stale B/L. AState BII, is one which is tendered to the paying bank at so late a datethat it is impossible for it to be dispatched to the consignee in time toreach him before the goods themselves arrive at the destination port.

6. What do you mean by Airway Bill?ANS: goods themselves arrive at the destination port.Airway bill: In air carriage, the transport document is known as the airwaybill (AWB). This document constitutes prima facie evidence of theconclusion of the contract of affreighment, of receipt of goods and ofconditions of carriage. This document, therefore, performs the triple

functions as a forwarding note for the goods, receipt for the goodstendered and authority to obtain delivery of goods.By itself, AWB is not a document of title, nor is this documenttransferable. However, AWB can be made into a transferable document bywhich it can be transferred to a third party by endorsement like the B/L.But, by and large, the business and commercial practice does not treatAWB as a document of title.

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OVERVIEWThe functions of AWB are similar to B/L in regard to its characteristics asan evidence of contract and as cargo receipt. The AWB may be given as areceipt either for cargo given to the carrier pending shipment or for cargo

loaded on board the aircraft. It may either be a clean receipt or a clausedreceipt. As regards the document of title characteristics, AWB is not adocument of title, but this feature can be incorporated in it by making anOrder AWB.General practices in the trade are to get the consignee-named AWB.Consequently, goods are delivered to the consignee named in the AWB.The consignee will have to identify himself as the party named in AWBand goods may be delivered to him without any hindrance. But if theinterests of the exporter have not been protected, the consignee may gethold of the goods and may also not pay for them. Hence exportersprovide for a clause in the contract, which requires AWE to be made in the

name of the paying bank, which will ensure exchange of goods forpayment, by the importer. On the other hand, the importer can protecthim against the seller's re-routing of the goods by obtaining theconsignor's copy of the AWB (marked "Original 3 for Shipper"), which issent to him through the banking channel by the exporter alongwith othershipping documents.

The air waybill---air consignment note or airway bill of lading---serves as a receipt for goods and an evidence of the contract of

carriage, but it is not a document of title to the goods. Hence, theAWB is non-negotiable.

The goods in the air consignment are consigned directly tothe party (the consignee) named in the letter of credit (L/C).Unless the goods are consigned to a third party like the issuingbank, the importer can obtain the goods from the carrier atdestination without paying the issuing bank or the consignor.Therefore, unless a cash payment has been received by theexporter or the buyer's integrity is unquestionable, consigninggoods directly to the importer is risky.

The AWB must indicate that the goods have been accepted forcarriage, and it must be signed or authenticated by the carrier orthe named agent for or on behalf of the carrier. The signature orauthentication of the carrier must be identified as carrier, and inthe case of agent signing or authenticating, the name and thecapacity of the carrier on whose behalf the agent signs orauthenticates must be indicated.

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OVERVIEW

7. What do you mean by POST PARCEL RECEIPT?ANS: Post parcel receipt (PPR) evidences merely the receipt of the goods

exported through postal channels to the buyer. It does not evidence thetitle to goods. The parcel is consigned to the consignee named in thecontract between exporter and importer. The consignee can identifyhimself with the postal authorities at the destination and obtain deliveryof the goods.

8. What do you mean by INSURANCE CERTIFICATE OR POLICY?ANS: Cargo Insurance Policy (also called marine insurance policy)provides protection to cargo owners in the event of loss or damage tocargo in transit. This loss or damage is caused by accidents, which cannotbe known in advance and against which no protection is possible. These

may be caused by natural calamities as well as by man-made accidents. Itis therefore, necessary that the risk of loss or damage to the cargo beminimised by obtaining a suitable insurance cover from an insurancecompany.It must be pointed out that insurance cover is given irrespective of themode of transport used including sea, air, and road and rail carriers.Further, insurance cover can be secured for cargo going from thewarehouse of the consignor, to the warehouse of the consignee.Generally, the export contract determines the party (exporter or importer)that will procure insurance cover. In the F.O.B. and C& F contracts,importer obtains insurance cover after the goods have been laid on board

on carrier. On the other hand in a C.1. F. contract, it is the obligation ofthe exporter to insure goods.Sometimes, the export contract specifies the submission of 'insurancecertificate' instead of the policy to bank for negotiation of documents,Insurance certificate, which is one stage prior to insurance policy, comesinto being when a large and regular exporter obtains an open cover orconcludes an open policy. Under these two arrangements, insurancecertificates are issued on declaring shipments by the exporter as andwhen these are effected, Insurance certificate has an advantage as it cutsdowntime in getting the insurance document from the insurancecompany.

9. What do you mean by Bill of Exchange? Explain the differencebetween Sight Bill and Usance Bill

ANS: BILL OF EXCHANGESection 5 of Negotiable Instrument Act defines a Bill of Exchange as aninstrument in writing containing an unconditional order, signed by themaker, directing a certain person to pay a certain sum of money to a

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OVERVIEWcertain person or to the order of that certain person or to the bearer ofthe instrument.Bill of exchange (B/E) is an important commercial document, which

bridges the time gap between shipment of goods and receipt of saleamount. This document is prepared by the exporter and given to the bankalongwith other shipping documents for securing the sale amount. In thissense, B/E is attached to other documents, which will be given to themake payment at a future date.Simply stated, the maker ofB/E is the exporter (drawer) and the personwho is directed to pay is the importer (drawee), while the person who isentitled to receive payment is the exporter (payee) or anyone directed byhim. The sum of money to be paid by the drawee is the amount billed inthe com~nercial invoice and recorded in B/E. B/E is to be honoured eitheron demand or on presentation to the drawee make payment at a future

date.Simply stated, the maker ofB/E is the exporter (drawer) and the personwho is directed to pay is the importer (drawee), while the person who isentitled to receive payment is the exporter (payee) or anyone directed byhim. The sum of money to be paid by the drawee is the amount billed inthe commercial invoice and recorded in B/E.A bill of exchange is a useful means of settlement in that it:(a) provides written evidence of a debt which can be used in a court of

law;(b) enables the exporter to obtain immediate payment, by presentation if

it is a sight bill, or by negotiation if it is a usance bill;

(c) enables the importer to delay payment until the maturity of the bill.If a bill of exchange is a documentary bill it will be accompanied by thedocuments relating to the goods for which payment is sought. Theexporter presents the documents called for in the contract between theimporter and himself to his bank and instructs the bank to deliver them tothe importer against either acceptance or payment of the bill. If thedocuments are to be released against the importer's acceptance of thebill, the bill is called a D/A bill (documents against acceptance) and ifupon payment then the bill is a D/P bill (documents against payment). If abill is a sight or demand bill, the documents will be handed over onlyagainst payment of the bill. If the bill is a usance bill, the documents are

usually handed over against acceptance.The distinction between Demand Bill and Usance Bill can bestated as under:A demand bill is due for payment immediately after presentation,whereas, a usance bill is due for payment after a certain specified fixedperiod of time.

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OVERVIEWA demand bill does not attract stamp duty, whereas, the usance billattracts stamp duty.Bank normally purchases demand bill whereas usance bill is discounted.

Remuneration from the former is exchange, whereas, in the latter case, itis discount.A demand bill does not require acceptance, whereas a usance bill has tobe accepted.The collecting Bank, against acceptance delivers documents of usance billby the drawee or his authorised agent. In case of demand bill documentsare delivered against full payment.

10. Distinguish between Open Policy and Specific Policy?

ANS: Open Policy versus Specific PolicyOpen Policy

The open policy---blanket policy or floating policy---is issued once bythe insurer under contract to cover all shipments made by the exporterover a period of time (one year usually) subject to renewal, rather than toone shipment only. It is more often used by the large exporter.

In an open policy the exporter is required to periodically (monthly usually)declare every shipment made to any location, covering any type of goods,and using any means of conveyance, including multimodal transport andtranshipment, in order that the insurer may calculate the insurancepremiums and invoice them accordingly. The exporter completes the

insurance declaration form supplied by the insurer and/or supplies thecopy of the insurance certificates to the insurer. An insurance declarationform typically contains the information in an Insurance Application-Instructions (IAI).

Specific Policy

The specific policy---voyage policy---is issued by the insurer to cover aparticular shipment or one shipment only. The specific policy is often usedin many countries. The exporter may use the Insurance Application-Instructions (IAI) or similar form to apply for a specific policy.

Advantages of an Open Policy Over a Specific PolicyTime Saving and Convenience

In certain countries the insurance agent (broker) may hand-deliver theinsurance policy to the exporter within 4-5 hours after the receipt of theInsurance Application-Instructions (IAI) or similar form. However, in somecountries it is not uncommon that the policy is mailed to the exporter 2-3days after the receipt of the Insurance Application-Instructions (IAI) or

17
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OVERVIEWsimilar form. Considering that the national mail in some countries maytake four (4) or more days to reach the addressee, the deadline to meetthe L/C latest negotiation date may not be met. In an open policy the

exporter may have the documentary proof of insurance coverage in amatter of minutes by simply completing and signing the blank insurancecertificates supplied by the insurer.

Shipments Insured Automatically

Under the open policy the insurer most often does not know theshipments made by the exporter before the receipt of the insurancedeclaration form and/or copy of the insurance certificates, but suchshipments are insured

11. What are the legal documents required for exports from indiaand importing countries.?

ANS: Legal Documents for Exports from India

Regulatory export documents are of two types. Documents needed for differentkind of registrations of the firm and documents, which are specific to a shipment.In the first category are included applications and supporting document forobtaining(i) Importer-Exporter Code Number valid for the firm's life- time, and (ii)Registration-Cum-Membership Certificate, (RCMC) from the relevant export promotion council,

Commodity board, development authority etc., valid for a specified time period.RCMC is strictly not a legal requirement for exporting from India, but is neededfor claiming some of the important export incentives.

The application of the Importer-Exporter Code Number (IEC) is to be made in theprescribed form to the Regional Licensing authority.

RCMC is obtained from the concerned registering authority, which mayeither be an Export Promotion Council, or Commodity Board or aDevelopment Authority. Application is to be made on the prescribed formavailable from the registering authority.In the second category are the documents, which an exporter or his agenthas to prepare for shipment of goods. These documents are:

i) Foreign Exchange Regulations requires that all exports other thanexports to Nepal and Bhutan, sllall be declared on the following forms:a) GR Form: It is required to be tilled in duplicate for all exports inphysical form other than by post.b) PP Form: It id required to be filled in duplicate for all exports to allcountries made by post parcel, except when made on "value payable" orcash on delivery" basis.

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OVERVIEWc) VPICOD Form: It is required to be filled in one copy for exports to allcountries by post parcel under arrangements to realise proceeds throughpostal channels on "value payable" or "cash on delivery" basis.

d) SOFTEX Form: It is required to be prepared in triplicate for export ofcomputer software in non- physical form.All these documents serve the purpose of monitoring the realisation ofsale amount by the exporter in the stipulated manner.

Exporter Customs

Authorised

dealer

RBI

GR/SDF in duplicate

& goods

1

One copy certified for value

Exchange control copy

2

Exchange control copy

Of GR/SDF with docs

3

One copy of GR

Sent to RBI

2

Exchcontrol copy

Sent withR return, fortnightly

Once payment is recd

4

i i ) For goods that are subject to the Export Trade Control policy of theGovernment of India, documents in the form of application have beenspecified. On the basis of that the concerned authorities will grantdocuments either an export licence or an export permit will be granted bythe concerned authorities. Licence or permission is generally given on thecustoms document known as shipping bill. For obtaining export licencefrom the licensing authorities the application is either the A-X Form or B-XForm which is submitted alongwith the Shipping Bill and other documents,if any. In many cases, specific permission may have to be obtained from

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OVERVIEWparticular government ministries1 departments, in which case exporterhas to apply on his Ietter- head.iii) For a number of products under the Export (Quality Control and

Inspection) Act, 1962 and various other regulations, it is obligatory for anexporter to obtain Inspection Certificate from the notified agencies. Forobtaining this certificate, the exporter has to apply in a document calledintimation for inspection alongwith supporting documents (commercialinvoice, technical specifications, etc.) to an Export Inspection Agency.Thereafter, a certificate of inspection will be issued, which along withother documents will be submitted to the customs authorities beforepermission to ship goods is given.iv) Under the Indian Customs Act, goods cannot be loaded on board thecarriers unless permission from the customs authorities has beenobtained. This permission is accorded on a document prescribed by the

customs authorities. When goods are sent by sea or by air, this documentis known as Shipping Bill. When goods are exported by land or by rail it iscalled Application for Export. Post parcel consignment requires customdeclaration form to be filled in.There are four types of shipping bills. These are:i) Free Shipping Bill: Usually printed on white paper, it is used for export ofgoods which neither attract any export duty or cess nor are entitled to theduty drawback (an export incentive).ii) Dutiable Shipping Bill: Printed on yellow paper, it is used in case ofgoods which are subject to export duty Icess.iii) Drawback Shipping Bill: It is usually printed on green paper and is used

for export of goods entitled to duty drawback.iv) Shipping Sill for Shipment ex-bond: It is printed on yellow paper for usein case of imported goods for re-export which are kept in the customsbounded warehouses. .Application for export is used for seeking customs permission of exportgoods to the neighbouring countries like Bangladesh by road, river or rail.This is of Three Types, namely, for export of "Free", "Dutiable" and"Drawback" cargos. Customs declaration form for goods sent by postparcel is a standard form for all types of cargo. However, for claiming dutydrawback, the exporter has also to file another document known as "FormD". Port authorities in India have specified documents for bringing the

cargo into the shed for shipment as well as for payment of port charges.This document is called port - trust copy of shipping bill in Bombay dockchallan in Calcutta and Export application in Madras and Cochin. Like theshipping bill, this document is prepared by the clearing and forwardingagent of the exporter.2 Legal Documents in Importing Countries

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OVERVIEWLet us now discuss some of the well-known docu~nentsn eeded in theimporting countries because of the legal necessity. These documents are,however, obtained by the exporter to be sent to the importer.

i) Consular Invoice: Usually issued on the specified form, it is signed andstamped by the local consulate of the country to which goods areexported.,i) Customs Invoice: It is also made out on a specified form prescribed bythe customs authority of the importing country. The details given in thedocument will enable the customs authority of the importing country tolevy and charge import duty.iii) Legalised invoices: These invoices constitute a sworn affidavit by theexporter about the genuineness and correctness of the sale. These couldbe sworn before the appropriate.consulate or the chamber of commerce,as the case may be, which will put their stamp on them.

iv) Certified Invoice: This is the self-certified invoice by the exporter aboutthe origin of the goods.v) Certificate of Origin: This certificate is issued by independent bodieslike the Chamber of Commerce on a prescribed form.vi) GSP Certificate of Origin: Goods which get the benefit of preferentialimport duty treatment in countries which implement the GeneralisedSystem of Preferences should be accompanied by the GSP Certificate ofOrigin. This certificate' is given on the forms prescribed by the importingcountries.vii) Health Veterinary Sanitary Certificates: These certificates are neededin a number of countries, certifying that the goods are fit for human

consumption.

12. Write a short note on Bill of entry.

ANS: Bill of Entry: It is a document certifying that the goods of specifieddescription and value are entering into the country from abroad.

If the goods are cleared through the (Electronic Data Interchange) EDIsystem no formal Bill of Entry is filed as it is generated in the computersystem, but the importer is required to file a cargo declaration havingprescribed particulars required for processing of the entry for customs

clearance.

The Bill of entry, where filed, is to be submitted in a set, different copiesmeant for different purposes and also given different colour scheme.Bill ofEntry are of three types :-

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OVERVIEW Bill of Entry for home consumption: is to be submitted when the

imported goods are to be cleared on payment of full duty forconsumption of the goods in India. It is white colored.

Bill of Entry for Warehouses : is to be submitted when theimported goods are not required immediately by the importer buthere they are to be stored in a warehouse without payment of dutyunder a bond and cleared later when required on payment of duty.

Bill of Entry for Ex-Bond Clearance : is used for clearing goodsfrom the warehouse on payment of duty. The goods are classifiedand valued at the time of clearance from the Customs Port. Valueand classification are not determined on such Bill of Entry.

In the non-EDI system along with the bill of entry filed by theimporter or his representative the following documents are also

generally required:-

Signed invoice Packing list Bill of Lading or Delivery Order/Airway Bill GATT declaration form duly filled in Importers declaration License wherever necessary Letter of Credit/Bank Draft/wherever necessary Insurance document Import license

Industrial License, if required Test report in case of chemicals Adhoc exemption order DEEC Book/DEPB in original Catalogue, technical write up, literature in case of

machineries, spares or chemicals as may be applicable Separately split up value of spares, components machineries Certificate of Origin, if preferential rate of duty is claimed No Commission declaration

Bill ofEntry is not required in the' following cases:

a) passengers baggage ,b) favour parcelsc) mail box and post parcelsd) boxes, kennels of cargos containing live animals or birdse) unserviceable stores, e.g, dunnage wood, empty bottles, drums etc. ofreasonable valuef) ship's stores in small quantities for personal use

22
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OVERVIEWg) cargo by sailing vessels from customs ports when landed at openbundles only For imports through the medium of post there is no bill ofentry. Instead a way bill is prepared by the foreign post office for

assessment of duty.It is obligatory on the part of importers to submit Exchange Control copyof Bills of Entry for Home Consumption/Postal/Wrappers to the authorizeddealer hrough whom relative remittance was made as evidence that thegoods for which the payment was made have actually been imported intoIndia. Authorised dealer should ensure that in all cases, including cases ofadvance remittances permitted vide paragraph 7A.10, these aresubmitted by their importer customers and are verified. In respect ofimports made on D/A basis, since goods would normally be cleared beforethe due date of payment, authorised dealers should insist on productionof documentary evidence of import i.e. Exchange Control copy of Bill of

Entry for Home Consumption/Postal/Wrappers at the time of effectingremittance of the import bill. Authorised dealers should also advise thisrequirement to their importer customers in writing while delivering thedocuments against acceptance.

In case an importer does not furnish the Exchange Control copy of Bill ofEntry within three months from the date of remittance (or withinprescribed period as provided in paragraph 7A.10), the authorised dealershould issue a reminder to the importer asking him to roduce it forthwith.If there is still no response, a reminder by registered post withacknowledgement due should be issued not later than one month from

the date of the first reminder.

Summary1.There are two categories of Certificate of Origin viz.(1) Preferential and (2) Non preferential.

Amongst the Preferential Certificate of Origin are the :

1. Generalised System of Preferences ( GSP) is a non contractualinstrument by which industrialised (developed) countries unilaterally andon the basis of non reciprocity extend tariff concessions to developingcountries. The following countries extend tariff preferences under theirGSP Scheme.

United States,European Union,Canada, Australia (only to LDCs)New Zealand

JapanNorwaySwitzerlandBulgariaPoland

Hungary BelarusSlovakiaRussiaCzech Republic

GSP schemes of these countries details the sectors/ products and tariff

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OVERVIEWlines under which these benefits are available, besides the conditionsand the procedures governing the benefits. These schemes are renewedand modified from time to time. Normally the Customs of GSP offering

countries require information in Form 'A' (prescribed for GSP Rules OfOrigin) duly filled by the exporters of the beneficiary countries andcertified by authorised agencies. The List of agencies authorised to issueGSP Certificate of Origin is given in Appendix-35 of the Exim Policy and isas under:

2. Global System of Trade Preference (GSTP): In the GSTP tradeconcessions are exchanged among developing countries, who havesigned the agreement. Presently, there are 46 member countries ofGSTP and India has exchanged tariff concessions with 12 countries on alimited number of products. Export Inspection Council (EIC) is the sole

agency authorised to issue Certificate of Origin under GSTP.

3. The Agreement establishing SAPTA was signed by the seven SAARCcountries namely India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lankaand Maldives. The list of agencies, which are authorised to issueCertificate of Origin under SAPTA are notified under Appendix - 35A ofthe Handbook of Procedures (Vol 1) .

4. The Bangkok agreement is a preferential trading arrangementdesigned to liberalise and expand trade in goods progressively in theEconomic and Social Commission for Asia and Pacific (ESCAP) regionthrough such measures as the relaxation of tariff and non tariff barriers

and use of other negotiating techniques. The agencies authorised toissue Certificate of Origin under Bangkok agreement are listed inAppendix - 35A of the Handbook of Procedures (Vol 1) .

5. A Free Trade Agreement (FTA) between India and Sri Lanka wassigned on 20th December, 1998. The agreement was operationalised inMarch, 2000 following notification of the required Customs tariffconcessions by the Government of Sri Lanka and India in February, andMarch, 2000 respectively. Export Inspection Council is the sole agency toissue the Certificate of Origin under ISLFTA.

The non preferential certificate of origin merely evidences the origin of

goods from a Particular country and does not bestow any tariff benefitsfor exports to the importing nations Nation.All the exporters who are required to submit Certificate of Origin (NonPreferential) would have to apply to any of the agencies enlisted inAppendix-35B with the following documents:

(a.)Details of quantum/origin of the inputs/ consumables used in the

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OVERVIEWexport product.(b.)Two copies of invoices.(c.)Packing list in duplicate for the concerned invoice.

(d.)Fee not exceeding Rs.100 per certificate as may be prescribed by theconcerned agency.

The agency would ensure that the goods are of Indian origin as per thegeneral principles governing the rules of origin before granting theCertificate of Origin(non preferential). The Certificate would be issued asper the Format of Certificate of Origin (Non Preferential) given inAnnexure-II to Appendix-35B. It should be ensured that no correction/re-type is made on the certificate.

Customs' and consular invoices

Some countries, however, may require the commercial invoice to becompleted on their own specified forms - such commercial invoices areknown as "Customs' invoices" and may be provided in lieu of or inaddition to the standard commercial invoices referred to above. Inaddition, a "consular invoice" is required by certain countries. Theconsular invoice must be prepared in the language of the destinationcountry and can be obtained from the country's consulate, and often mustbe "consularised" (i.e. stamped by an authorised Consul official in theexporting country).

Consular InvoiceA document, required by some foreign countries, describing a shipment ofgoods and showing information such as the consignor, consignee, andvalue of shipment. Certified by a consular official of the foreign country, itis used by the country's customs officials to verify the value, quantity, andnature of the shipment.Customs InvoiceCustoms Invoice is also known as commercial invoice which is a bill forthe goods from the seller to the buyer. Commercial invoices are utilizedby customs officials to determine the value of the goods in order to assesscustoms duties and taxes.

The format of the consular invoice form varies greatly, but it containsessentially the same data as in the commercial invoice and packing list.The invoice form is either in the language of the importing country(Spanish usually) or bilingual, that is, a combination of English andSpanish usually.

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OVERVIEWThe exporter's declaration normally is included in a consular invoice.

The consular legalization and payment of a consular fee is required. Theconsular fee can be a percentage of the FOB invoice value.

The sample letter of credit (L/C) below is a comprehensive case study ofa Confirmed Irrevocable Letter of Credit opens by means ofairmail.

For the explanations of the stipulations and fields in the L/C, pleasesee Letter of Credit Particulars and Export Documentary Requirements.And, please consult the table of contents in different departments (Export,

Shipping, Production, etc.) for other topics and discussions.

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OVERVIEW

THE MOON BANK

INTERNATIONAL OPERATIONS5 MOONLIGHT BLVD.,

EXPORT-CITY AND POSTAL CODEEXPORT-COUNTRY

OUR ADVICE NO.

MB-5432 ISSUING BANK REF. NO. & DATESBRE-777 January 26, 2010

TO UVW Exports88 Prosperity Street East, Suite 707

Export-City and Postal Code

Dear Sirs:

We have been requested by The Sun Bank, Sunlight City, Import-Countryto advise that they have opened with us their irrevocable documentarycredit number SB-87654 for account of DEF Imports, 7 Sunshine Street,Sunlight City, Import-Country in your favor for the amount of not exceedingTwenty 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 thebuyer'sPurchase Order No. DEF-101 dated January 10, 2010.

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 aboveaccountee, marked "freight Prepaid", dated latest March19, 2010, and showing documentary credit number.

4. Insurance policy in duplicate for 110% CIF value coveringInstitute Cargo Clauses (A), Institute War and StrikeClauses, evidencing that claims are payable in Import-Country.

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OVERVIEW

EXPORT DEPARTMENTLetters ofcredit, credit,LC,L/C,commercialletterofcredit,irrevocableletterofcredit,confirmedlettersofcredit,revocablelettersofcredit,restricted negotiableletterofcredit.freely negotiableletterofcredit,confirmedirrevocableletterofcredit, unconfirmedirrevocableletter ofcredit,revolvingletterofcredit, SWIFT,drafts, banks,nominatedbanks,bill ofexchange.exporters,importers,exporting,importing,exportation,importation,export,import,serviceexporter. exporttrader,exporttradeportal,exporttrading,exporterassociation,exportmanufacturer,exportmarketing,exporterguides.exportdirectory,manufacturing exporter,Taiwanexporters,Taiwan importers,HongKongexporter,HongKongimporter,tradeshows,tradefairs.Chinaexporter,Chinaimporter,exportmanufacturing,exportconsulting,exporttradeleads,importtradeleads,internationalbusiness,tradeexhibitions.letterofcredit,insurance,trader,trading,exportacion,importacion,internetadvertising,onlineadvertisement,e-commerce,electroniccommerce.logistics,transportation,transports, cargoinsurance,oceanshippingcompany,courier,airlines,customsbroker.

Copyright EXPORT911

www.EXPORT911.com

Sample Document:Letter of Credit (Documentary Credit)

The sample letter of credit (L/C) below is a comprehensive case study of aConfirmed Irrevocable Letter of Credit opens by means offull text

cable (in SWIFT format).- - - - - - - - - - - - - - - - - - - - - - - - - - Transmission - - - - - - - - - - - - - - - - - - - - - - - - - - -

Received from SWIFT

Network priority: Normal

Message output Reference: 6543 010126

Message input Reference: 6543 010125

- - - - - - - - - - - - - - - - - - - - - - - - - - Message Header - - - - - - - - - -

SWIFT output delivery status: Open Asked

FIN 701 Issue of a documentary credit

Sender: The Sun BankSunlight CityImport-Country

28
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OVERVIEWReceiver:

The Moon Bank5 Moonlight Blvd.Export-City and Postal Code

Export-Country

NUR: SB-87654 Banking priority: Normal

- - - - - - - - - - - - - - - - - - - - - - - - - - Message Text - - - - - - - - - - - - - - -- - - - - - - - - - - -

20 : Documentary credit number

SB-87654

23 : Issuing bank's referenceSBRE-777

31C : Date of IssueJanuary 26, 2010

31D : Date and place of expiryMarch 26, 2010 Export-City, Export-Country

32B : Currency code amountTwenty Five Thousand U.S. Dollars (USD 25,000.00)

39B : Maximum credit amountNot exceeding Twenty Five Thousand U.S. Dollars (USD25,000.00)

40A : Form of documentary creditIrrevocable

41D : Available with ... by ...Draft(s) drawn on The Moon Bank, by payment

42C : Drafts atAt sight for full invoice value

42D : Drawee - Name and AddressThe Moon Bank, 5 Moonlight Blvd., Export-City and Postal

29


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OVERVIEW

IP/123456 dated January 18, 2010.2. Draft(s) drawn under this credit must be marked:

"Drawn under documentary credit No. SB-87654 ofThe Sun Bank, Sunlight City, Import-Country, datedJanuary 26, 2010".

3. This credit is subject to the Uniform Customs andPractice for Documentary Credits, 1993 Revision,International Chamber of Commerce Publication No.600.

48 : Period of presentationDocuments must be presented for payment within 15 days

after the date of shipment.

49 : Confirmation instructionsAdd your confirmation

50 : ApplicantDEF Imports, 7 Sunshine Street, Sunlight City, Import-Country

52A : Issuing bankThe Sun Bank, Sunlight City, Import-Country

57D : Advise through bankThe Moon Bank, 5 Moonlight Blvd., Export-City and PostalCode, Export-Country

59 : BeneficiaryUVW Exports, 88 Prosperity Street East, Suite 707, Export-City and Postal Code, Export-Country

71B : Charges

All charges outside the Import-Country are on beneficiary'saccount

72 : Sender to receiver informationThis is an operative instrument, no mail confirmation tofollow

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OVERVIEW

78 : Instruction to pay/accept/negot. bank

Documents to be forwarded to us in one lot by courier

- - - - - - - - - - - - - - - - - - - - - - - - - - Message Trailer - - - - - - - - - - - - -- - - - - - - - - - - -

MAC: ABCD1234

CHK: ABCDEFG12345

Multimodal transport contract (multimodal transport contract) means

a single contract for the carriage of goods by at least two different modesof transport.

SectionCompleted

ByDescription

1 Customer Shipper's name and address.

2 Customer Consignee's name and address.

3 Customer The three letter code of the origin airport. This is the origin airport code whether thefreight trucks or flies.

4 Customer The three letter code of the destination airport.

5 Customer Shipment Value for Customs purposes. If no value is shown in block 5, theappropriate SED exception wording is required.

6 UPS/CFS orCustomer

Handling Information - to contain any special instructions or notes regarding freight,dims, ULD numbers, and individual position weight.

7 Customer Number of Pieces.

8 Customer Gross weight.NOTE: This does not include tare weight of aircraft pallets and/or containers,however it does include the weight of wooden skids.

8A Customer Kilograms (kg) or Pounds (lbs).

9Customer

Chargeable weight. The actual weight or the dimensional weight, whichever isgreater.

9A Customer Rate/Charge - International MAWB only.

9B Customer Total - International MAWB only.

10 Customer Nature and quantity of goods, the description of cargo. This may include dimensions

The following explains the required information on each MAWB completed bythe customer and/or UPS, domestic or international. Information entered on anInternational MAWB is required to be typed or computer-printed. The customermay supply additional information, however UPS requires the informationcovered below. For further information regarding the Air Waybill form, simplyclick a circled number to link to field descriptions

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OVERVIEWor volume.

NOTE: Using the term "Consolidation" or like terms is not an acceptabledescription of goods. Description must be specific.

11 Customer Signature of shipper or his agent.

12 UPS/CFS Date of signing

13 UPS/CFS Time of signing.

14 UPS/CFS Place of signing - three letter code of the gateway.

NOTE: Refer to MAWB example in Air Cargo Forms Section.

15 UPS/CFS Signature of issuing carrier or its agent refers to:

UPS representative OR

CFS employee

NOTE: Clarify all signatures.

16-19 Customer Consignee SignaturesNOTE: 16, 17, 18 and 19 are to be completed at the destination gateway orCFS by the consignee or their agent. If the destination gateway has a CFS, the

destination gateway maintains an unsigned copy of the MAWB (#5 or #6)along with a signed, Register of Air Freight Shipments/AC-12, or work orderon file.

20 Customer Indicate Service Type if Perishable, Priority, or RFS.

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