SUMMARIZED NOTES ON DOCUMENTS USED IN INTERNATIOAL TRADE

DOCUMENTS USED IN INTERNATIONAL TRADE

 

  BILL OF LADING:

This contains details of goods loaded into the ship, the terms and conditions under which they have been accepted by the shipper and the shipping charges “OR” Is the contract between the exporter or the shipper and the shipping company for the carriage of the goods from the port of loading to the port of destination. It has got main three uses which are:

·         Used as a document of the title to goods

·         It’s a contract of carriage

·         It’s a receipt for the goods by the shipper

The bill of lading has got the following contents:

·         Name and address of the exporter or shipper.

·         Name and address of the shipping company.

·         Name and address of importer or agent.

·         Quantity, weight and value of goods sent.

·         Place of loading and port destination.

·         Date of loading of goods on the ship.

·         Mark description and number of packages.

·         Ports at which the goods are to be discharged.

·         Freight paid or to be paid.

·         Signature of the issuing authority with date.

·         Any other relevant details.

CERTIFICATE OF ORIGIN:

This is an important international trading document attesting that goods in particular export shipment are wholly obtained produces, manufactured or possessed in a particular country. 

3    AN INDENT;

This is an order placed by importers to the exports. When the goods to be imported, its prices it stated by the importer, the indent will be called “closed indent” and when the price of imported goods is not stated then the indent is called “open indent”.

4      LETTER OF CREDIT:

This is the document which acts as an undertaking by importer’s bank stating that payment will be made to the exporter if the required documents are presented to the bank. Advantages of the letter of credit to the exporter are;

·         Exporter gets safety and security of payment for the goods exported.

·         The exporter gets discounting facility from the bank.

·         It enables the exporter to take more initiative in promoting exports and earns foreign exchange for his country.

5    CONSULAR INVOICE:

This is a document which is issued by the trade consulate of the importing country stationed in the exporter’s country. This document contains the details of goods and the value of goods.

6     BILL OF ENTRY:

This is the document which testifies the fact that goods of the stated value and description in specified quantity are entering the country from abroad. The bill of entry has the following contents:

·         Name and address of the importer

·         Import license number of importer

·         Name and address of exporter

·         Name of port where goods are to be cleared

·         Value of goods

·         Description of goods

·         Rate and amount of import duty payable

·         Other relevant details.

7    LETTER OF HYPOTHETICATION:

This is a letter sent by exporter to the exchange bank which authorizes the exchange bank to sell the goods in case the bill is dishonored by the importer.

8    BILL OF SIGHT;

This is the document or appeal prepared and submitted by the clearing agent to the customs authority requesting to permit for the inspection of the packages, it helps to know the real value of goods imported.

DIFFERENCES BETWEEN HOME TRADE AND FOREIGN TRADE

POINTS	HOME TRADE	FOREIGN TRADE
GEOGRAPHICAL BOUNDARIES VOLUME SPECIALIZATION DOCUMENTATION RULES AND REGULATIONS RESTRICTIONS TRADE POLICIES	Same nation Accounts for about 95% National level Less number of documents Of one country Free from restrictions Uniform	Different nation Accounts for about 5% International level More number of documents Of two or more countries Subjected to series of restrictions Different

       

EXPORT PROCEDURES;

·         Enquiry and quotations

·         Indent and license

·         Assembling, packing and marketing

·         Appointment of a forwarding agent or arrange for shipment goods

·         Formalities of forwarding goods

§  taking delivery goods

§  securing shipping through charter party or without charter party

§  customs formalities

§  dock receipt

§  mate’s receipt

§  bill of lading

§  marine insurance policy

§  advice

·         other relevant documents

§  certificate of origin

§  consular invoice

·         export invoice and payment

·         advice to the importer

IMPORT PROCEDURES

·         Obtaining import license

·         Obtain foreign exchange

·         Placing an indent

·         Receipt of letter of advice and shipping documents

·         Formalities to be performed by Cleaning agent:

§  Permission from the shipping company

§  Customs formalities;

o   Bill of entry

o   Bill of sight

o   Application of import

o   Payment of import duty (if any)

§  Dispatch of goods

§  Letter of advice

§  Receiving delivery of goods