Export Procedure and Documentation

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Introduction

Proper export procedure and documentation is crucial to international marketing, as both importer and exporter are situated in different countries and are governed by different legislative framework.

The export transaction chain consist of a number of entities, which provide a smooth functioning of business.

A number of government regulatory agencies facilitate trade between exporter and importer.

Both exporter and importer have to comply with these regulations and trade customs.

Apart from these there are issues related to payment.Hence, an export manager has to make himself fully aware

of all of these.

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Contents of this Presentation

Attention !!!The entire Presentation is divided into

two parts:1. Pre – Shipment Documents2. Export Procedure

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Part I – Pre Shipment Documents

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Pre-Shipment Export Documents

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Pre-Shipment Export Documents

• These Documents can be classified into two major categories:– Commercial Documents– Regulatory Documents

• Commercial Documents can be further classified into:– Principal Documents– Auxiliary Documents

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Commercial Documents

Commercial Documents:These are the documents, which as per trade

customs, are required to be prepared and used by exporters and importers for their legal and other incidental Responsibilities.

The Commercial Documents are further classified into:

Principal Documents:Required for enabling physical transfer of goods along with their

title-of-ownership, from exporter to importer.

Auxiliary Documents:Required for preparation/ procurement of ‘Principal Documents’.

They act as the base for preparation of ‘Principal Documents’.

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Commercial Documents (I) :– Principal Documents

Principal Documents:Are of following types:

Commercial Invoice: It is the key document for an export transaction, and is prepared by

exporter.Provides a very comprehensive information regarding: consignee’s

details, country of origin of goods, country of final destination, terms of delivery and payment, detailed description of goods, kind of packaging, quantity, marks and numbering etc.

Annexure 15.3

Packing List:Packing List provides details of how the goods are packed, the contents

of different boxes, cartons etc.Details of the weights and measurements of each package in

consignment.It is used by the carrier while deciding on the loading of consignment.Annexure 15.5

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Commercial Documents (I) :– Principal Documents

Inspection Certificate: According to ‘Quality control and Inspection Act’, it is mandatory to

obtain an export inspection certificate. This is asked by an importer for ensuring the quality of merchandise

as per export contract. Annexure 15.11 & 15.12

Ocean/Marine Bill of Lading (B/L) It is a transport document issued by the shipping company, for

accepting the goods for carrying of merchandise. It is also known as ‘document of title’, which means the legitimate

holder of the document is entitled to claim the owner ship of the goods covered therein.

Hence, the importer cannot obtain the possession of the goods until they surrender the signed Bill of Lading

Annexure 15.6

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Commercial Documents (I) :– Principal Documents

Airway Bill (AWB) : It is the Bill of Lading used for air transport. But unlike ocean bill of lading, it does not have very strict rules.

Combined Transport Document (CTD) : The Combined Transport Document covers the movement of cargo from place of

containerization to place of destination using a multi-modal transport. Can be used for goods, which are stuffed for padding purposes. Annexure 15.6

Certificate of Origin : This document is used as an evidence of the origin og goods in the importing country. It includes the details of goods covered, where they were grown or manufactured It is used for deciding the liability and the rate of importing duty in the importing country. Annexure 15.8

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Commercial Documents (I) :– Principal Documents

Insurance Policy/Certificate:Since the carrier and other intermediaries, such as C&F agents and other

port authorities, warehousing operators etc. have a limited liability during the process of cargo movement from exporter to importer, they cannot be held responsible in the event of loss.

Therefore, in order to provide protection to the cargo owner, an insurance cover is necessary.

Annexure 15.13 & 15.14

Mate’s Receipt:On the receipt of cargo on board, the master of the vessel issues ‘Mate’s

Receipt’ for every shipment taken on board.The port authorities take this from chief officer of the vessel.The shipper then collects this Mate’s Receipt from port authorities after

clearing all dues.After collecting this, the shipper or his agents prepares Bill of Lading.Annexure 15.7

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Commercial Documents (I) :– Principal Documents

Bill of Exchange:An unconditional order in writing prepared and signed by exporter

and addressed to importer, asking him to pay on demand in future date, a sum of money.

Generally two copies are prepared, and sent through different modes, whichever is received first is excepted.

Shipment Advice :Soon after shipment has taken place, the Shipment Advice is sent

to importer, giving an advance information of details of delivery.It generally covers details of Vessel/Flight, port of discharge and

port of destination, export order number, description of cargo, quantity etc.

Is used for confirming safe delivery and making arrangements for receiving the export.

Annexure 15.15

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(II) :– Regulatory Documents

• Regulatory Documents fulfill the statutory requirement.

• They are required for benefit of both importer and exporter.

• These documents are related various government authorities, like: Directorate General of Foreign Trade etc., Reserve Bank of India etc.

• These documents are also needed by other bodies like export inspection agencies, banks and custom & central excise authorities etc.

• They can be of many kinds.

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(II) :– Regulatory Documents

Exchange Control Declaration Forms:Under the Foreign Exchange Management Act, for every export

activity taking place out of India, the exporter has to submit an Exchange Control Declaration Form.

Exports to Bhutan and Nepal are exempted from such declaration.The aim of this document to ensure realization of export

proceedings by the exporter as per Foreign Exchange Management Act.

Shipping Bill/ Bill of Export:Shipping Bill is the main document required by custom authorities.The export cargo is allowed to be charted on the port sheds and

docks only after the Shipping Bill has been stamped by custom authorities.

It is called Bill of Export if shipment is being done by land.Annexure 15.20, 15.21, 15.22

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(II) :– Regulatory Documents

– Bill of Entry:• After unloading, the imported cargo is transferred to the

custody of an authorized agency such as Port Trust Authority or Airport Authority.

• This is done for a custom examination, duty payment, and other formalities, then the cargo is released to the importer.

• Hence, for getting custom clearance at this stage the exporter has to produce Bill Of Export in four copies.

• The format of this is standardized by Central Board of Customs and Clearance Excise.

• It can be of three types.• Annexure 15.23

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(II) :– Regulatory Documents

ARE -1This document is in form of application.It is prepared by exporter at the time of removal of goods. and

made for jurisdictional central excise superintendent.It contains details of consignment, such as value of consignment

and amount of duty involved etc.The exporter has to submit this document 24 hours in advance

from the time of removal of goods, in four copies.It acts as a proof of exports.Annexure 15.24

ARE -2This document is used for refund of excise duty paid on finished

goods as well as production inputs.It strengthens ARE-1.Annexure 15.25

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(II) :– Regulatory Documents

– Blacklist Certificate:• Countries which have strained political relationships, or at war with one

another, require Blacklist Certificate as an evidence of the following:– The point of origin is not a particular country.– The parties involved like intermediaries, bank, insurance companies etc are

not blacklisted.

• It needs to be furnished by an exporter only when specifically asked for.

– Health/ Veterinary/ Sanitary Certificate:• The importer at times require this certificate for foodstuffs etc, from a

responsible authority.• This is done to ensure that the cargo is not contaminated.

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Part II – Export Procedure

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Summary of Export Procedure

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Thank You !!!

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