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1. Commercial invoice
2. Bill of lading
3. Consular invoice
4. Certificate of origin
5. Inspection certification
6. Dock receipt and warehouse receipt
7. Destination control statement
8. Insurance certificate
9. Export license
10. Export packing list
The starting point for any Export Transaction is an enquiry.
An enquiry for product should, inter alia, specify the following details or provide the following data
Size details - Std. or oversize or undersize
Drawing, if available
Sample, if possible
Quantity required
Delivery schedule
Is the price required on FOB or C& F or CIF basis
Mode of Dispatch - Sea, air or Sea/air
Mode of Packing
Terms of Payment that would be acceptable to the Buyer - If the buyer proposes to open any Letter of Credit,
any specific requirement to be complied with by the Exporter
Is there any requirement of Pre-shipment inspection and if so, by which agency Any Certificate of Origin required - If so, from what agency.
Once the goods are ready duly packed in Export worthy cases/cartons (depending upon the mode of despatch),
the Invoice is prepared by the Exporter.
If the number of packages is more than one, a packing list is a must.
Even If the goods to be exported are excisable, no excise duty need be charged at the time of Export, as export
goods are exempt from Central Excise, but the AR4 procedure is to be followed for claiming such an
Similarly, no Sales Tax also is payable for export of goods.
EXPORT DOCUMENTATION AND PROC
Exporters should seriously consider having the freight forwarder handle the formidable amount of documentation t
freight forwarders are specialists in this process. The following documents are commonly used in exporting; whiused in each case depends on the requirements of both our government and the government of the importing cou
STEP1: Enquiry :
STEP 2: - Proforma generation :
It is advisable that the Exporter immediately acknowledges receipt of the order, giving a schedule for the
delivery committed.
STEP 5: Goods readiness & documentation :
STEP 6: Goods removal from works :
After studying the enquiry in detail, the exporter - be it Manufacturer Exporter or Merchant Exporter - will provide
a Proforma Invoice to the Buyer.
STEP 3: Order placement :
If the offer is acceptable to the Buyer in terms of price, delivery and payment terms, the Buyer will then place an
order on the Exporter, giving as much data as possible in terms of specifications, Part No. Quantity etc. (No
STEP 4: Order acceptance :
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There are different procedures for removing Export consignments to the Port, following the AR4 procedure, but
it would be advisable to get the consignment sealed by the Central Excise authorities at the factory premises
itself, so that open inspection by Customs authorities at the Port can be avoided.
If export consignments are removed from the factory of manufacture, following the AR4 procedure, claiming
exemption of excise duty, there is an obligation cast on the exporter to provide proof of export to the Central
The Exporter is expected to provide the following documents to the Clearing & Forwarding Agents, who are
entrusted with the task of shipping the consignments, either by air or by sea.
Invoice
Packing List
Declaration in Form SDF (to meet the requirements as per FERA) in duplicate.
AR4 - first and the second copy
Any other declarations, as required by Customs
On account of the introduction of Electronic Data Interchange (EDI) system for processing shipping bills
electronically at most of the locations - both for air or sea consignments - the C&F Agents are required to file
with Customs the shipping documents, through a particular format, which will vary depending on the nature of
Under claim of Drawback of duty
Without claim of DrawbackExport by a 100% EOU
Under DEPB Scheme
After completing the shipment formalities, the C & F Agents are expected to forward to the Exporter the
Customs signed Export Invoice & Packing List
Duplicate of Form SDF
Exchange control copy of the Shipping Bill, processed electronically
AR4 (original duplicate) duly endorsed by Customs for having effected the Export
Bill of Lading or Airway bill, as the case may be.
With these authenticated shipping documents, the Exporter will have to negotiate the relevant export bill
through authorized dealers of Reserve Bank, viz., Banks.
Under the Generalized System of Preference, imports from developing countries enjoy certain duty
concessions, for which the exporters in the developing countries are expected to furnish the GSP Certificate of
Origin to the Bankers, along with other shipping documents.
Broadly, payment terms can be:
DP Terms
DA Terms
Letter of Credit, payable at sight or payable at... days.
The negotiating Bank will scrutinize the shipping documents and forward them to the Banker of the importer, to
enable him clear the consignment.
It is expected of such authorized dealers of Reserve Bank to ensure receipt of export proceeds, which factor
has to be intimated to the Reserve Bank by means of periodical Returns.
STEP 7: Documents for C & F agent :
Step11: Bank to bank documents forwarding :
STEP 12: Customs obligation discharge :
As indicated above, Exporters are also expected to provide proof of export to the Central Excise authorities, on
STEP 8: Customs Clearance :
After assessment of the shipping bill and examination of the cargo by Customs (where required), the export
consignments are permitted by Customs for ultimate Export. This is what the concerned Customs officials call
STEP 9: Document Forwarding :
STEP 10: Bills negotiation :
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Authorized dealers will issue Bank Certificates to the exporter, once the payment is received and only with the
issuance of the Bank Certificate, the export transaction becomes complete.
It is mandatory on the part of the Exporters to negotiate the shipping documents only through authorized
dealers of Reserve Bank, as only through such a system Reserve Bank can ensure receipt of export proceeds
the basis of the Customs endorsements made on the reverse of AR4s and get their obligation, on this score,
STEP 13: Receipt of Bank certificate :
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DURES
hat exporting requires;
h of them are actuallytry.
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Berth Where the vessel docks.
Bonded Warehouse
secure us oms approve ac y w ere cargo
and containers are stored under close
surveillance.
Breakbulk
Loose cargo containers and non-containerized
cargo; vessel whose hatch is built to
accommodate various bulk commodities.
Breakbulk Vessel
Carries containers and non-containerized cargo;
vessel whose hatch is Vessel built to
accommodate various bulk commodities.
CarrierOne who owns, operates or charters vehicles of transportation for movement of cargo.
Bulk Carrier Vessel specifically built to carry raw materials.
CellContainer slot where container fits into place on
vessel.
Cell Guides A guide for each container slot.
ChassisTrailer or wheeled unit on which a container is
placed in order to move container over the road.
COFCContainer on a Flat Car. Containers moving on
articulated flat rail cars without chassis.
Connecting Carrier An intermediary carrier utilized to connect cargo
to/from mother vessel
Container Ship Vessel built to accommodate ocean containers.
Cross Docking
the receiving dock to the shipping dock,
eliminating the need to place the merchandise in
storage.
Port of Discharge -
Port where vessel is off loaded and cargo
discharged.
Port of Loading - Port where vessel is loaded and cargo stowed
Ship's Manifest -
Contains a list of the shipments comprising the
cargo of the vessel.
Short-Shipped - Cargo manifested but not loaded.
Breakbulk -
Loose cargo containers and non-containerizedcargo; vessel whose hatch is built to
accommodate various bulk commodities.
Breakbulk Vessel -
Carries containers and non-containerized cargo;
vessel whose hatch is Vessel built to
accommodate various bulk commodities.
Bulk Carrier - Vessel specifically built to carry raw materials.
Bulk Containers - Containers used specifically for raw materials.
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Carrier -
One who owns, operates or charters vehicles of
transportation for movement of cargo.
Container Pool / Depot -
Where containers are stored . Carrier location to
hold empty containers, various points for shipper's
utilization; an area designated for storage of
empty .
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Banding Securing of cargo on a pallet generally by a steel/metalstripping.
Bolster Bracing of a commodity in a container
Chains and BindersUsed to secure (brace & chock) oversize cargo to equipment.
Container
A truck trailer body that can be detached from the chassis for
loading into a vessel, a rail car or stacked in a container depot.
Containers may be ventilated, insulated, refrigerated, flat rack,
vehicle rack, open top, bulk liquid or equipped with interior
devices. A container may be 20 feet, 40 feet, 45 feet, 48 feet or
53 feet in length, 8'0" or 8'6" in width, and 8'6" or 9'6" in height.
Container Number Identification number assigned to each container.
Container Pool / Depot
Where containers are stored usually inland for container
availability to shippers or consignees. Carrier location to hold
empty containers, various points for shipper's utilization; an area
designated for storage of empty .
Container Yard Facility where full and empty containers are stored.
CooperWarehouse worker assigned to reconstruct or repair cartons,
crates, boxes, etc.
Lift-on / Lift-off -The method by which cargo is loaded and discharged by the use
of a crane.
Roll-on / Roll-off -
The method by which wheeled vehicles can be directly driven on
and off a vessel.
Barges(noun)Conveyance used to carry loose cargo or containers in smaller
volumes than mother vessels.
Commodity DescriptionCommodity Description - Description of goods being shipped.
AMS - Automated Manifest Systems.
Bay -Section of a vessel where containers or cargo is stored.
Bolster -Bracing of a commodity in a container.
Cell -Container slot where container fits into place on vessel.
Cell Guides - A guide for each container slot.
CFS/CFS -
Cargo received and stuffed by carrier at origin and devanned bycarrier at destination.
CFS/CY -
Cargo received and stuffed by carrier at origin then delivered
intact at destination.
Commodity Description -Description of goods being shipped.
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Consolidation -
Effort extended to put same destination cargo together in same
container for ease of delivery.
contract of carriage
Binding agreement (evidenced usually by an air waybill, bill of
lading, or passenger ticket) which contains conditions of carriage
that spell out the obligations and rights of a carrier and a
shipper/passenger. The carrier undertakes to deliver
goods/passengers from a named place of departure to a nameddestination, in consideration for freight/fare. This contract
addresses issues associated specifically with what is being
carried, and how the liability and compensation for damage or
injury to (or loss of) the goods/passengers is assessed,
apportioned, and paid.it contains also the carrier's policy
regarding baggage, bumping, cancellation and delays, claims
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Cargo Receipt -
Air waybill
House Air Waybill (HAWB)
Arrival Notice -
lading
Bill of Lading (B/L)
Clean Bill-of-Lading
On Board Bill-of-Lading
Carrier’s Certificate
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dock receipt
Bill of Lading Number
Booking
Claim
Combined Transport Bill of
Lading
Consolidation
Credit Agreement
Container Ship
Containers
Arrival Notice-
Booking -
Collect -
advice of shipment
certificate of origin
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certificate of insurance (COI)
advice of shipment
CIF
FOB
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A receipt of cargo for shipment by a consolidator.
• documentary evidence of the conclusion of a contract of
carriage. • proof of receipt of the goods for shipment
An air waybill issued by an airfreight consolidator. (See
also Air Waybill)
Documentation that notifies consignee of arrival
information and freight charges due. Form produced by
carrier for advanced notification to consignee of cargo
arrival.
1. Placement of cargo in its transporting vessel.2. Cargo carried in a transportation vessel
A receipt for the cargo and a contract for
transportation between a shipper and the ocean
carrier. It may also be used as an instrument of
ownership which can be bought, sold, or traded
while the goods are in transit. To be used in this
manner, it must be a negotiable "Order" Bill-of-
Lading. This is sometimes abbreviated as
"Blading, or B/L"
A clean Bill-of-lading is issued when the shipment
is received in good order. If damage or a shortage
is noted, a clean bill-of-lading will not be issued.
An On Board Bill-of-Lading certifies that the cargo
has been placed aboard the named vessel and is
signed by the master of the vessel or his
representative. On letter of credit transactions, an
On Board Bill-of-Lading is usually necessary for
the shipper to obtain payment from the bank.
U.S. Customs form used in lieu of bill of lading.
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Is a document issued by a direct ocean freight carrier to
acknowledge receipt of ocean freight shipment at the
carrier's shipping terminal.
Carrier’s reference number assigned to bill of lading.
Cargo commitment made to carrier (i.e. a reservation).
A request for payment by a customer due to a shortage or
damage to cargo.
Provides a combined transport by at least two different
modes of transportation from a place at which the goods
are taken to a place designated for delivery.
Effort extended to put same destination cargo together in
same container for ease of delivery.
Agreement between carrier and shipper for release of
cargo with promise to pay ocean freight within specifiedtime. Document signed by the shipper which binds
shipper to credit terms of the conference or agreement
body.
Ocean going vessel designed to carry containers.
Containers are designed to give maximum protection
against weather, damage, and theft. Basic sizes for
containers are 20, 35, and 40 feet in length, 8 feet wide
and 8 feet high.
Documentation that notifies consignee of arrival
information and freight charges due. Form produced by
carrier for advanced notification to consignee of cargo
arrival.Cargo commitment made to carrier (i.e. a reservation).
Money to be paid at destination prior to release of bills of
lading.
Letter or form sent by an exporter to a foreign buyer
informing that the shipment of the ordered goods is on its
way. A copy of the invoice and the packing slip (and
sometimes a copy of bill of lading) may also be attached.
Also called advice note.
Document that certifies a shipment's country of origin. It is
used between members of a trading block or where
special privileges are granted to goods produced in
certain countries. Certificate of origin is commonly issued
by a trade promotion office, or a chamber of commerce in
the exporting country. Also called declaration of origin.
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Document issued by an insurance company, it certif ies
that an insurance policy has been bought and shows an
abstract of the most important provisions of the insurance
contract. But it is not a substitute for the actual policy, and
is normally a non-negotiable document-it cannot be
assigned to a third party, and is unacceptable under the
terms of a letter of credit and in making a claim. In life
and health insurance a COI is issued to the members of a
group insurance plan, evidencing their participation. In
marine insurance (where cargo is insured against a
floating insurance policy) COI serves to assure the
consignee that insurance is in effect for the goods in
transit and a proper policy will follow. Also called
insurance certificate.
Letter or form sent by an exporter to a foreign buyer
informing that the shipment of the ordered goods is on its
way. A copy of the invoice and the packing slip (and
sometimes a copy of bill of lading) may also be attached. Also called advice note.
CIFmeans Cost Insurance and Freight. That means
the shipper/trader has to pay the cost of shipment up
to the ship, insurance cost of cargo and freight cost up
FOBstands for Free On Board which means the
shipper pays only costs up to loading on ship in port
and insurance cost , but freight charges are payed by
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Customs Clearance
Shipment cleared by Customs for
movement.
Customs Duty
Monies paid to U.S. Customs for
goods entered into U.S. from
foreign countries.
Customs Station Area where containers are brought
for Customs inspection.
Customs Warehouse
Where cargo is temporarily stored
awaiting inspection or where cargo
is stored when seized by Customs
due to lack of permit/entry.
Certificate of OriginFormal document (required at
destinations) stating origin of cargo
and relevant cargo details.
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Forwarder, Freight
Forwarder, Foreign
Freight Forwarder
Consignee/Importer
Consignor
Claim -
Company Guarantee -
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An independent business that arranges the transport of
shipments for exporters. The firm may ship by land, air, or sea,
or it may specialize in one of these. Usually it handles all the
services connected with an export shipment, including
preparation of documents, booking of space, warehousing, pier
delivery, and export clearance. The firm may also handle
banking and insurance services on behalf of the exporter.
Ultimate receiver of cargo designated on the original bill of
lading.
Person or firm by whom articles are shipped (i.e. shipper).
A request for payment by a customer due to a shortage or
damage to cargo.
A letter of guarantee from a company identifying the carrier of
responsibility associated in the release of goods in lieu of bill of
lading. Protection in writing to carrier by private company.
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Commercial Invoice
A document on shipper’s letterhead that
contains an accurate description of the
merchandise and show country or origin. All
items must be itemized.
Consular Invoice
Document required by some foreign
countries showing exact information as to
consignor, consignee, value description, etc.
for a shipment.
C & F -
Cost and Freight. Terms of sale. Seller
quotes price including the cost of goods and
all transportation charges to the named point
of destination.
Consular Invoice-
Document required by some foreign
countries showing exact information as to
consignor, consignee, value description, etc.
for a shipment.
Consulate Copy -
Copy of the B/L signed for consulate
purpose.
Container Number -
Identification number assigned to each
container.
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Incoterms
acceptance letter of credit (L/C)
Unconfirmed Letter of Credit
sight letter of credit
Standby Letter of Credit
Revocable Letter of Credit
Irrevocable Letter of Credit
Commercial Letter of Credit
Confirmed Letter of Credit
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Acceptance of Bill of Exchange
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the International Chamber of Commerce has developed a set
of terms known as Incoterms. This basic terms used in
international sales contracts, and describe the responsibility of
seller and buyer (transfer of risk from buyer to seller).
Unlike a normal L/C, this type of documentary credit does not promise
to pay the beneficiary immediately upon presentation of the customary
documents, but has the additional requirement of a time or term draft
drawn on a named bank.
Aletter of creditwhere only thebankissuing it has agreed to
guaranteepayment. This differs from aconfirmed letter of credit,
where at least two banks guarantee payment. This increases
theriskfor the bank that honors the letter of credit, as it only has
one, rather than two, ways to seek recourse.
A letter of credit that is payable as soon as the required documents
have been presented.
In the event that the bank's customer defaults on a payment to the
beneficiary, and the beneficiary documents proof of its loss consistentwith any terms set forth in the letter, a standby letter of credit may be
used by the beneficiary to secure payment from the issuing bank.
An revocable letter of credit may be cancelled or modified after its date
of issue, by the issuing bank.
An irrevocable letter of credit includes a guarantee by the issuing bank
that if all of the terms and conditions set forth in the letter are satisfied
by the beneficiary, the letter of credit will be honored.
A commercial letter of credit assures the seller that the bank will
provide payment for any goods or merchandise shipped to the bank's
customer, assuming the seller provides any required documentation of
the transaction and its shipment of the purchased goods.
A letter of credit, issued by a foreign bank, which has been verified and
guaranteed by a domestic bank in the event of default by the foreign
bank or buyer. Typically, this form of letter of credit will be sought when
a domestic exporter seeks assurance of payment from a foreign
importer.
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Acceptance of bill of exchange is an act by which drawee accepts the
drawer's bill of exchange by signing under the words 'accepted' on
face of the bill. It is the drawee's signed engagement to honor the bill
as presented.
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Bank Guarantee
Bank Draft-
SWIFT(no.or code)
T/T payment
credit term.
non-payment risk
non-delivery risk
open account
deferred payment
D/P – Documents against Payment
D/A – Documents against Acceptance
Clean Collection
Cash Against Documents
Bank Realization certificate
advice of fate
advice of credit
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advising bank
advice for advising bank
advice for beneficiary
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Accepted in lieu of original bill of lading to release cargo.
A bank instrument wherein payment of funds is guaranteed.Society for Worldwide Interbank Financial Telecommunication-a
network international banks using when money wire transfer
Telegraphic transfer (TT), as one of the payment method of cash in
advance. It is one of the payment method between sellers & buyers
The time you give the buyer to pay is called the credit term.
Credit relationship in which the buyer pays upon the receipt of goods,
or on deferred payment basis.
where a person buys and receives and item with a commitment tobegin making payments at a future date.
The export documents and the bill of exchange provided to a
collecting bank are only made available to an importer when payment
is made. The collecting bank then transfers the funds to the seller
through the remitting bank.
The export documents and a time/usance bill of exchange are sent to
a remitting bank. The documents are then sent to a collecting bank
with instructions to release the documents against a buyer’s
acceptance of the bill of exchange.
The exporter creates a bill of exchange, which is sent without any
export documents to a buyer for collection through the remitting bankto the collecting bank. There is less security for an exporter since the
documents are sent directly to the importer.
This process lacks the security and legal protection of a documentary
collection since the exports documents are sent through a remitting
bank to a collection bank without a bill of exchange. It is, however, still
a collection through the banking system.
A Bank Realization certificate is a certificate that is issued by the bank
to the exporter through which export proceeds can be realized in an
orderly manner. Bank Certificate of Export & Realization is most
commonly sought by companies who have exported goods under the
Duty Entitlement Pass Book Scheme.
Written confirmation from an accepting or collecting bank to the
originating or remitting bank (which sent one or more collection
documents) whether the item was honored or dishonored by the
payee.
Communication from a bank informing a party that the same bank or
its correspondent bank (the issuing bank) has opened a letter of credit
in that party's favor.
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Correspondent bank (usually in the exporter's country) of an issuing
bank (usually in the importer's country) that receives a letter of credit
(L/C) from the issuing bank for authenticating it and informing
('advising') the exporter (the L/C's beneficiary) that a L/C has been
opened by the importer in the exporter's favor. The advising bank
usually also takes on other roles in the transaction, such as (1)
confirming the letter of credit (playing the role of the 'confirmingbank'), (2) accepting a bill of exchange by endorsing it (becoming the
'accepting bank') and/or, (3) paying the exporter on presentation of
documents (becoming the 'paying bank' or 'negotiating bank'). Also
called adviser bank or nominated bank.
Communication from an issuing bank to the advising bank.Forwarding of a letter of credit (L/C) by its issuing bank to the L/C's
beneficiar usuall an ex orter .