sp itdoc mod 2.pptx

8/15/2019 SP ITDOC MOD 2.pptx

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February 14, 2016 Prepared by Sudhir Pasricha 1

Course Code : MBA 365

Course Title : International Trade Procedures & DocumentationMODULE II

Credit units : 3

I!TE"!ATIO!AL BU#I!E## $ MBA T"IM 3


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Learnin% O'ecti(es:

Learning the importance and procedural & documentation aspects of export-import of goods and services ;

Knowledge of governments, departments, international institutions involved ;

How an Export Manager to develop a systematic methodology to handle exports ;

nderstand the relevance and importance of various government policy measures for export as well as import!

International Trade Procedures & Documentation - II


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Course Contents

Module II: Documents for processing export order and legal implications

Processing of Product enquiry/quotation,

Purchase/Eport !rder, "etter of intent,

Pay#ent $er#s,

%nternationa& $ransport 'odes,

%()!$E*'S,

+dising - scrutiny of a "etter of )redit ."/),

Seeing "/) a#end#ents,

%nternationa& )ha#ber of )o##erces )P) artic&es



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Processing of Product enquiry/quotation


In)uir* is the re"uest made #y a prospective importer regarding his wish to import

$ertain goods

O++er is a proposal su#mitted #y an exporter Expressing His %ntentions to export

pecific goods at a specific price with specific terms & conditions!

Exporter usually ma'es an offer in the form of a ,ro+orma in(oice which includes (


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Proforma Invoice inc&udes the fo&&oing 7

1(a#e - +ddress of the 8uyer / %#porter

2.Description of Goods 9 technica& , physica& - che#ica& features ith detai&ed

description

3.Price 9 nit :ise - tota& price of goods in internationa&&y accepted currencies or

#utua&&y

+greed currencies ;uantity discounts, cash discounts < both in unit ise - tota&

Price indicated in the inoice shou&d be E :ors F!8, )%F etc or in other

internationa&&yaccepted for#


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4 onditions of !ale "

)#alidity 9 Period for hich %noice is a&id %#porter can accept the P% any ti#e

before a&idity period

)$scalation lause 9 Price of Products #ay increase before de&iery period due to

increase in cost of inputs - thus cost of production the eporter #ay inc&ude this

c&ause

)Delivery !c%edule 9 *ea&istic de&iery schedu&e to be indicated based on pricing

#ode %n case of )%F ;uotation, the goods hae to be de&iered to the ports of

destination

)Inspection 9 (a#e of the +uthority ho sha&& inspect the goods is to be


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February 14, 2016 Prepared by Sudhir Pasricha =



) orce 'a(eure 9 eporter #ay fai& to de&ier goods due to uncontro&&ab&e

situations &ie ar, riots, natura& ca&a#ities etc $herefore indicates force

#a>eure c&ause to get rescue in such situations

) Payment Terms 9 "ie "etter of )redit, 8i&& of Echange etc to be indicated

* +t%er +,ligations lie 9 +fter Sa&es Serices proided by eporter, proiding

spare parts, arranties, guarantees for the equip#ent, techno&ogy etc

onrmed +rder- 8uyer sends the con?r#ed order to the eporter by signing

the dup&icate copy of %noice $he signed inoice by i#porter beco#es the

con?r#ed order


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0 $1port icense 9 Eporter has to obtain the eport &icense fro# the authorities

concerned for the ite#s to be eported 9 if required

Procuring inance 9 %f the eporter does not hae required ?nance to

undertae the eports the ?nance needs to be procured fro# arious sources


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Completed on buyer's letterhead

*ate(!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

+e the undersigned -NAME OF BUYER OR COMPANY . here#y state and represent that it is our corporate

intention to purchase the commodity product !!!!!!!!!!!!!!!!!!! in the "uantity and for the price as specified in the

terms and conditions as stated #elow! his representation is made with full corporate authority and also

.esponsi#ility of the a#ove stated #uyer!$ommodity /roduct(

0rigin(

pecifications(

1uantity(

/ac'aging(

*elivery i2e 3nd chedule(

Mode of payment(

405 & $&4 target price(

*estination /ort *ischarge .ate /er *ay(%nspection(

6uarantee(

*ocuments( 5uyer s %nformation $ompany 7ame $orporate 3ddress(B 5uyer s 5an' %nformation 5an' 7ameB

wift $ode(

5an' 0fficer s 7ame itle *irect phone & 4ax(B 3ccount 7ame7um#er(

$onfirming #an' coordinates 8if any9(5an's name

address(

+e understand that any and all offers andor contracts are su#:ect to successful seller verification of funds availa#ility! +e

here#y give our written permission for the seller to conduct a soft pro#e of our account!

5uyers full name & company seal


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International Terms o+ Pa*ment




International Transport 'odes

an Transportation < Ship transport can be oer any distance by boat, ship, sai&boat or b

eans and &aes, through cana&s or a&ong riers

ing #ay be for co##erce, recreation or the #i&itary purpose Dirtua&&y any #ateria& that

can be #oed by ater hoeer, ater transport beco#es i#practica& hen #ateria& de

i#e


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I:+T$;'!

International Commercial Terms 8=%ncoterms>9 are internationally recognised standard trade terms

used in %nternational sales contracts! hey>re used to ma'e sure #uyer and seller 'now(

who is responsi#le for the cost of transporting the goods, including insurance, taxes and

duties

where the goods should #e pic'ed up from and transported to

who is responsi#le for the goods at each step during transportation


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!eeing / amendments

Letter of Credit (or Documentary Credit) is an undertaing issued by a ban

for the account of the buyer or for its on account, to pay the se&&er against the

a&ue of the draft and/or other docu#ents proided that the ter#s and conditions

of the credit are co#p&ied ith

") is usua&&y sub>ect to the nifor# )usto#s and Practice for ocu#entary)redits4 International

%am,er of ommerce Pu,lication :o. *


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International Trade Procedures & Documentation - II!eeing / amendments

+#end#ents #ust be initiated by the buyer +#end#ents are required hen the

&etter of credit does not confor# to the se&&ers require#ents $he se&&er shou&d

neer re&y on a co##it#ent fro# the buyer that a &etter of credit can be or i&& be

a#ended $he se&&er shou&d ait for the a#end#ent to arrie before re&easing the

order

$he rationa&e is fair&y straightforard7 %f the goods hae been shipped, the buyer#ay refuse to a#end the &etter of credit hoping that the se&&er i&& not pay the cost

9mendment to a etter of redit +ny change #ade to a &etter of credit after it is

issued is an a#end#ent +&& ino&ed parties#ust agree to accept the a#end#ent

$he buyer initiates the "etter of )redit bysub#itting a ritten request to the issuing ban%f approed, the +#end#ent is sent to the(egotiating 8an

+ssu#ing that the bene?ciary of the "/) and a&&other interested parties approe of the changeinc&uding the )on?r#ing 8an, the +#end#entbeco#es part of the "etter of )redit


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February 14, 2016 Prepared by Sudhir Pasricha 1A


9dvising & scrutiny of a etter of redit 6/8

orrespondent ,an 6usually in t%e e1porter>s country8 of an issuing

ban 6usually in t%e importer>s country8 that receies a &etter of credit

."/) fro# the issuing ban for authenticating it and infor#ing 6>advising>8 the

eporter 6t%e />s ,eneciary8 that a "/) has been opened by the i#porter in

the eporterLs faor $he advising ,an usua&&y a&so taes on other ro&es in

the transaction, such as 7

1 con?r#ing the &etter of credit .p&aying the ro&e of the >conrming ,an>84

.2 accepting a bi&& of echange by endorsing it .beco#ing the >accepting

,an>8 and/or, .3 paying the eporter on presentation of docu#ents .beco#ing

the >paying ,an> or Lnegotiating banL +&so ca&&ed adiser ban or no#inated

ban


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International Trade Procedures & Documentation - II9dvising & scrutiny of a etter of redit 6/8

Participants in Process1 8uyer

2 %ssuing 8an3 +dising 8an4 Se&&er .8ene?ciary

!teps in t%e etter of redit Process)8uyer and se&&er agree to ter#s inc&uding #eans of transport, period of credit oJered .ifany, and &atest date of ship#ent acceptab&e

)8uyer app&ies to ban for issue of &etter of credit 8an i&& ea&uate buyerLs creditstanding, and #ay require cash coer and/or reduction of other &ending &i#its)%ssuing ban issues "), sending it to the +dising ban by air#ai& or e&ectronic #eanssuch as te&e or S:%F$)+dising ban estab&ishes authenticity of the &etter of credit using signature boos ortest codes, then infor#s se&&er .bene?ciary)Se&&er shou&d no chec that ") #atches co##ercia& agree#ent and that a&& its ter#s

and conditions can be satis?ed)Se&&er ships the goods, then asse#b&es the docu#ents ca&&ed for in the ") .inoice,transport docu#ent, etc) $he +dising ban checs the docu#ents against the ") %f the docu#ents areco#p&iant, the ban pays the se&&er and forards the docu#ents to the %ssuing ban) $he %ssuing ban no checs the docu#ents itse&f %f they are in order, it rei#burses these&&erLs ban i##ediate&y

) $he %ssuing ban debits the buyer and re&eases the docu#ents .inc&uding transportdocu#ent, so the buyer can c&ai# the goods fro# the carrier

I t ti l T d P d & D t ti II




International %am,er of ommerce?s=PD articles.

$he %))s ai# is to proide acodi?cation of internationa& practiceoccasiona&&y se&ecting the best practice

after a#p&e debate and consideration

$he %)) ru&es of practice are designedby baners and #erchants and not by&egis&atures ith po&itica& and &oca&considerations

$he ru&es according&y de#onstrate theneeds, custo#s and practices of business8ecause the ru&es are incorporatedo&untari&y into contracts, the ru&es areKeib&e hi&e proiding a stab&e base forinternationa& reie, inc&uding >udicia&

scrutiny

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E!D O8 MODULE II

T9A! ;OU


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International Trade Procedures & Documentation II


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International %am,er of ommerce?s --=PD articles.

Uni+orm Customs and Practice +or Documentar* Credits

$he =niform ustoms and Practice forDocumentary redits .)P is a set of ru&eson the issuance and use of &etters of credit $he )P is uti&iGed by baners and co##ercia&parties in #ore than 1=5 countries in trade?nance So#e 11


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