SESSION III EXPORT DOCUMENTATION FRAMEWORK

Commercial and regulatory documents like B/L, B/E, and Invoices

EXIM Policy
EXIM Policy a.k.a Trade Policy w.r.t. EXIM

Free Trade: NO RESTRICTION!

Export- Import Documentation

Documentation and procedures are integral part of EXIM operations Successful execution of export orders

requires
compliance with procedural formalities

and documentary provisions

innovative skills & meticulous planning

Export- Import Documentation

In India, several documents have been

prescribed to ensure compliance of

I.Export Trade Control

II.Foreign Exchange Regulations

III.Quality Control & Pre-shipment Inspection IV.Central Excise, etc.

Documentation is complex and difficult BUT its

CRITICAL!

Why do we need documentation?

tradition

buyer and sellers are separated by long

distances Formal contract (duties/responsibilities) is necessary *protection of interests

The operational constraint .

both the entities are located in

different countries

with
different laws and regulations

Also, documentation is linked with the claim of export assistance and

incentives provided by the government.

Proper documentation enables

the importers to get the contracted

goods and

the exporters to get the payment &

export incentives

No International trade transactions can be

completed w/o these 3 intermediaries 1. CARRIER transport & deliver 2. INSURANCE COMPANY cover risk 3. BANKER collect sale proceed

DOCUMENTATION CATEGORIES
Trade documents may be broadly

categorised into 3 heads

1. Commercial documents

2. Legal or Regulatory documents

3. Incentive and Assistance Claim documents

COMMERCIAL DOCUMENTS
Trade between entities located in two countries BEGINS with the

CONCLUSION of an international sales

contract

COMMERCIAL DOCUMENTS
Under the contract,

Exporters obligation WYSIWYG on time

Importers obligation remit as per the contractual provisions

WYSIWYG (What-You-See-Is-What-You-Get)

COMMERCIAL DOCUMENTS
Possession of docs imply ownership of goods

Docs represent goods shipped by exporter

These docs entitle the importer
To goods at destination, AND To compensation by insurance, in the event of damage or loss

COMMERCIAL DOCUMENTS

Sub-categories of Documents
Docs as per requirement of the contracts

Commercial Invoice
Packing list

Insurance Certificate/Policy
Bill of Exchange Shipment Advice

COMMERCIAL DOCUMENTS

Sub-categories of Documents
Certificate of Origin Inspection certificate Transportation documentation -bill of lading forwereder

-airway bill
-combined trasport document

LEGAL (REGULATORY) DOCUMENTS

Documentation as per requirement of GOI 1) Export License if necessary 2) Ar4/Ar5 Form 3) Pre-shipment Inspection Certificate 4) Export Declaration form 5) GR/PP/VPP/COD/Softex Form 6) Shipping Bill customs
*GR Form Guaranteed Receipt Form ,Softex Software export declaration

form , COD--Cash on Delivery, PP-- goods to be sent by Post Parcel

Declaration Forms
The prescribed export declaration forms concerning bankers are: i. GR Form : Export to all countries made otherwise than by post. ii. PP Form : Export to all countries by post parcel, other than on VP COD basis. iii. Softex Form : Export of computer software in non-physical form. GR /PP forms are made in two copies, VP / COD forms are to be submitted in a single copy, Softex form is prepared in three copies.
Where the specified categories of shipping bills are processed electronically, the declaration in Form SDF (Statutory Declaration Form) in respect of such shipping bills shall be submitted. GR forms(with manual shipping bill) / SDF (with computerised shipping bill) will be submitted to customs, PP forms will be tendered to post office. Softex forms will be submitted to Department of Electronics (DOE) located in software technological park (STP) or electronic hardware technological park (EHTP)

LEGAL (REGULATORY) DOCUMENTS

Docs as per requirement of importing country

1) Customs Invoice
2) GSP Certificate Of Origin

*Generalized System of Preferences (GSP)

COMMERCIAL INVOICE
First and the only complete document for a shipment from among the set of commercial documents. serves as a basis for preparation of all other documents

COMMERCIAL INVOICE
CI is needed at both pre-shipment and postshipment stages for Obtaining Export Inspection Certificate, Clearance from excise and customs Negotiating documents with the bank.

COMMERCIAL INVOICE
CI performs three main functions

It is a Document of Content,
It is a Bill by exporter,

It is a Packing List
*It also sets forth the terms of shipment and payment and can operate as Certificate of Origin

DOCUMENT OF CONTENT
CI must fully identify the shipment by

recording leading identification marks and

numbers given on the packages being shipped

Description of goods correspond with the

description given in the L/C or contract

DOCUMENT OF CONTENT
Quantity should be as per L/C or the contract

Should be EXACT if stated in numbers or units,

could be broken if PART SHIPMENT allowed or

a TOLERANCE if granted.

SELLERS BILL
It should state the net price (commission or discount) + a detailed break up of price CI is made in the name of the BUYER as

specified in the L/C or Contract

It must be signed by an authorized person.

Invoice should not bill for value

exceeding/less than the tolerance limit

SHIPMENT DOCUMENTS
It states the terms of shipment

It should include date and port of shipment.

It should include terms of sale, the contracted

terms (FOB, CFR, CIF etc.)

In some cases, break-up of CFR/CIF components may also be given

Data Required for making C.I.

Name and address of the shipper Invoice number and date Buyers & Sellers order number

Name & address of the overseas customer

(buyer)

Name of the vessel and sailing date

Terms of payment

Data Required for making C.I.

Insurance reference Customs and consular declaration Shipping marks and number on packages Quantities & description of commodities Specification of packaging Bill of Lading number Import license number & date Letter of credit number & date

BILL OF LADING/MULTIMODAL TRANSPORT DOCUMENT/AIRWAY BILL/RAILWAY/LORRY/POST PARCEL/COURIER RECEIPT

These documents state and evidence the mode, manner and date of shipment. These docs define the contractual rights and obligations of the parties lawful holders can claim goods at the destination and at will

BILL OF LADING/MULTIMODAL TRANSPORT DOCUMENT/AIRWAY BILL/RAILWAY/LORRY/POST PARCEL/COURIER RECEIPT Bill of Lading given by forwarder to exporter It performs 3 functions: 1.evidence of contract of affreightment (between the ship owner and the charterer) 2.A receipt of goods 3.Document of title

INSURANCE POLICY / CERTIFICATE

Why ?

limited liability of the carrier and other

intermediaries (warehouse operators, CNF agents, port authorities etc)

INSURANCE POLICY / CERTIFICATE

Cargo insurance covers in transit risks

The risk is in the form of indemnity

Company pays back an insurable value in the form of

an agreed sum of money

Cargo Insurance always defines the risk to be covered. Different policies for different risks.

BILL OF EXCHANGE
Definition Its legally defined as an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to which it is addressed to pay on demand or at a fixed or determinable future time a certain sum of money, to or to the order of, a specified person or to bearer.

EXPORTER (Drawer) (Payee)

1 5 DOCS CUSTOMS GOODS 6

EXPORTERS BANK (collecting bank)

IMPORTER (Drawee)

3 IMPORTERS BANK (remitting bank) 4 DOCS (MASTER/HOUSE AWB)

BILL OF EXCHANGE
It performs the role of bridging time gap between shipment of goods and receipt of sale amount.

This is required to be honored either by actual

payment or by an undertaking to make

payment at a future date by the party on

whom it is drawn.

BILL OF EXCHANGE
After payment/undertaking the importers bank will hand over the documents to the importer for taking possession of goods.

Can be either a Sight Draft (for DP Docs

Against Payment) OR Usance/Term Draft (for

DA Docs Against Acceptance)

BILL OF EXCHANGE
Sight Draft is one that is payable on presentation to the drawee, i.e. when it is sighted by him.

Usance Draft is payable after the expiry of a

certain period of time after the bill has been

sighted

BILL OF EXCHANGE
Sight Bill of Exchange BILL OF EXCHANGE
Bill of exchange for Date Place On demand, Pay this First of Exchange (Second of the same date and tenor being unpaid) to the order of (exporters bank) a sum of .... only for value received vide Airway Bill No./Bill of Lading No. dated . and place the same to account.

To : Drawee
Usance Bill of Exchange

For : Drawer (exporter)

BILL OF EXCHANGE Bill of exchange for Date Place . Days after date, Pay this First of Exchange (Second of the same date and tenor being unpaid) to the order of (exporters bank) a sum of .. only for value received vide Airway Bill No./ Bill of Lading No. dated . and place the same to account. To : Drawee For : Drawer (exporter)

LEGAL/REGULATORY DOCUMENTS

THE BASIC OBJECTIVE: To account for movement of goods and foreign exchange

To protect economic, political, cultural and

other interests, and

To implement bilateral and multilateral

trade agreements.

LEGAL/REGULATORY DOCUMENTS

AIM: Ensuring legitimate exports To ensure legal compliance

LEGAL/REGULATORY DOCUMENTS

Docs Required in India for EXIM IEC PAN Registration Cum Membership Certificate Export License