Transcript Document
Third Session :
Presentation on
(Export/Import Documentation
Incoterms and procedures of Export
/Import
by
Rajan Sharma
Objective of this Class:
Acquaint the participants with the following:
a. Document required for export and Import
b. Import and export procedure
c. Choosing the right means and mode of
transportation
d. International Incoterms and its implication in
business contract and negotiation.
e. Packing ,warehousing and distribution.
f. Problems in shipping out of Nepal
An example of a simple supply chain
IN THE NEPALESE CONTEXT:
Raw
materials
supplier
Logistics: transport, storage,
packing and handling
Component
manufacturer
Assembler
Retailer
Final
consumer
What is Logistics?
It generally involves all activities involved in securing:
The right type(s) of material(s)
In the right quantity(s)
To the right location(s)
At the right time(s), and
For the right cost
Increasingly, a sixth “right” must be added
Delivered with the right tailored services
What does Each Incoterm determine ?
1. When and where the seller provides the goods to the buyer and when
and where the buyer is obliged to pay the contracted price
2. Obligations for export/import licences, duties, taxes, etc.
3. Obligations to arrange and pay for transportation and insurance
4. Conditions for delivery by the seller and acceptance by the buyer
5. Allocation of responsibility for risk of loss or damage
6. Allocation of costs associated with movement of the goods
7. Provisions regarding notices of delivery or dispatch of the goods
8. Proof of delivery, transport documents or electronic messages
9. Requirements of seller to check quantity & conformance of goods with
the contract and to provide suitable packaging and markings
10. Obligations of mutual assistance, information and documentation
Incoterms are grouped into four
categories:
“E” Terms - Ex-works
“F” Terms - Main carriage not paid by seller
“C” Terms - Main carriage paid by seller
“D” Terms - Delivered on arrival
ITC
Incoterms– Point of delivery of the goods and transfer of risk
E
F
C
EXW Ex works
Upon delivery of goods at the seller’s premises
(named place)
FCA
Free carrier
FAS
Free alongside
ship
Upon delivery of goods alongside ship (named
port of shipment)
FOB
Free on board
When the goods pass the ship’s rail at the named
port of shipment
CFR
Cost and freight
When the goods pass the ship’s rail at the port of
shipment
CIF
Cost, insurance and
freight
When the goods pass the ship’s rail at the port of
shipment
CPT
Carriage
paid to
Upon delivery of goods to the carrier
(named place)
CIP
Carriage and
insurance
paid to
Upon delivery of goods to the carrier
(named place)
Upon delivery of goods to the carrier
(named place)
Incoterms – Point of delivery of the goods and transfer of risk
D
DAF
Delivered at
frontier
DES
Delivered
ex ship
When goods are placed at the disposal of the
buyer on board the ship (named port of
destination)
DEQ Delivered
When goods are placed at the disposal of the
buyer at the quay (named port of destination
DDU Delivered
Upon delivery of goods (at named place of
destination) not cleared for import and not
unloaded
DDP Delivered
Upon delivery of goods cleared for import (at
named place of destination), duty paid but not
unloaded
ex quay
duty unpaid
duty paid
Upon delivery of goods at frontier (named place
- not unloaded
DELIVERY and TRANSFER OF RISK can take place at many
points between the seller’s premises and the buyer’s premises
Customs
Customs
Seller
Buyer
EXW FCA
CPT
CIP
FAS FOB
CFR
CIF
DES
DEQ
Waterborne transport only
Transport
by land
Customs
Customs
DAF
DDU
DDP
TRANSFER OF COSTS
takes place at points that are sometimes different
Customs
Customs
Seller
Buyer
EXW FCA
FAS FOB
DES
CFR
CIF
Export clearance costs
on account of the seller
DEQ
*
Waterborne transport only
Transport
by land
insurance
* Transport
costs on account of
the seller
Customs
Customs
DAF
DDU
DDP
CPT
CIP
*
Import clearance
costs on account
of the buyer
Unloading costs on account
of the seller only if in its
contract of carriage
DAF terms are commonly used
for land transport
COUNTRY OF EXPORT
COUNTRY OF IMPORT
Customs
Customs
DAF
Delivered at
frontier, export
customs cleared
The role of the Incoterm used
and custom & practice of the trade
in establishing the contract of carriage
INCOTERM used in
the Sales Contract
Seller
Contract of
carriage
Transport Operator(s)
Custom & practice
of trade
Buyer
Freight Forwarders Responsibility and Duties:
Duties and responsibilities of the freight forwarding agent
when contracted by the shipper(who may be the exporter or
importer depending on the Incoterm used):
Advise on the most appropriate mode of transport.
Arrange reservation of space on a vessel, train or aeroplane.
Take delivery of the goods.
Pack products into containers or onto pallets.
Store goods in transit (before loading on board).
Insure the cargo.
Weigh and measure the goods.
Prepare loading and, if necessary, transhipments.
Transport the goods to a named port or airport of origin.
Freight Forwarders… cont..
Duties and responsibilities of the freight forwarding agent
when contracted by the importer (whether or not the
importer is the shipper):
Follow-up on the movement of the goods.
Receive and control documents related to the goods.
Ensure customs documents are prepared in advance.
Take delivery of the goods.
Check on goods storage during transhipments.
Assist with customs clearance.
Deliver the goods to the consignee.
Export Documents:
Letter of Credit/Advance payment certificate and
Covering letter of bank
Invoice (Description of Goods and value per unit and
total.
Packing list (Volume and weight break of each Pc)
Certificate of origin and GSP
Pan /Vat/Company registration certificate copy
Authority Letter
CTD
ATA CARNET
Yellow paper (Custom declaration)
Currency declaration Form
Handicraft Certificate (for handicraft Goods)
Visa in case of garments export
Plant Quarantine certificate in case of Plants/Food
items
Permission from department of Forestry in cage of
Forest product
Certificate from Agriculture department in case of
agro products.
Sample goods and special goods permission from
department of Customs ie: diplomatic /Personal
effects
Human remains:
Fumigation certificate for Agro products or wooden
goods.
Documents for Import Goods:
Letter of credit with Covering letters from bank
NTWCL
Invoice
Packing List
Certificate of origin
Bank forms,
Custom declaration
AWB/HBL or MBL ( Transport Documents)
Permission Certificate from department of custom
Permission Certificate from department of commerce
Authority permission by importer (consignee)
Insurance covering paper
Delivery Order paper from transporter
CTD In case of Land Shipment:
Mode and Means of Shipment and how to
choose the right mode and means of transport.
Air/Air
Air/Sea
Land/sea.
Airplane, Trucking, Train, Ship :
Payment methods
Letter of credit
Telegraphic transfer
Advance payment
Cash against documents
Factors to be considered in the means
and mode of transport:
Time
Cost
Place of delivery
Loading point
Tran-shipment point
Customs point and infrastructure and cost.
Packing /Marks and Numbers :
It protects your product your during transportation.
It breaks down your product to sellable units (e.g.
transforming staple goods into consumer units),
or it simply makes the product accessible to
consumers.
It conveys a message to the buyer/consumer (e.g.
advertisement or instruction for use etc.).
Distribution
Warehousing (storage)
Traditional Distribution Systems
Frontier
Airport
Port
Customs
Douane
Minimum of 6
dispatches
per
Import
18 routes
Minimum of 3
deliveries per
factory
Factory
Factory
Factory
Factory
Factory
Factory
(B) Using
cross-dockingCentres
centres
Using
Cross-docking
Frontier
Airport
Port
Customs
Douane
Maximum of 2
dispatches
per
Import
12 routes
Maximum of 1
delivery per
factory
Factory
Factory
Factory
Factory
Factory
Factory
Option A: Star delivery plan
A
100 km
B
100 km
160 km
C
D
Option B: Multi-point delivery plan
A
50 km
50 km
B
D
50 km
50 km
C
Document required for exporting to EU
GSP
(Derogation)
Other necessary quality certification
Health and Sanitization certificate
HACCP
Environment issues
Child labor issues
Export procedure
Preparing shipment
Haulage , choosing the means and mode
of transport, sending pre-alert, issuing the
right transport document, negotiation with
bank,
Other document compliance.
Import Procedure:
Product finding
Price negotiation
adding document cost, haulage cost,
customs cost, tax in the exporting country,
Arranging shipping, information flow, transshipment point procedure ,import
procedure of the country. dealing with
customs etc.
Problems:
L/C Compliance
Transport Document Compliance
Shipment date
L/C expiry
Delivery problem/Delivery order
Discrepancy due to transportation problem
Bank release.
Thank You for your Attention.
Any Questions ??????