Assignment of

International Business

Submitted To:
Mohammad Abul Bashar
Associate Professor
Department of Management
University Of Chittagong

Submitted By:
Srijita Saha
ID: 15302091
Session: 2014-2015
MBA 1st semester
Department of Management
University Of Chittagong

Date of Submission: 2nd December, 2020

 What is export? Explain export process and Export Documents
Definition

An export in international trade is a good or service produced in one country that is sold into
another country. The seller of such goods and services is an exporter.

Export Process

 Selection of products;
 Collection and Analysis of data on export market;
 Collection of Buyers’ List;
 Correspondence with Buyers;
 Making samples as per buyer’s requirement;
 Price Negotiation;
 Conclusion of Deed;
 Export Finance;
 Manufacturing of Products;
 Shipment of Goods;
 Registration/Enrolment Requirement;
 Repatriation of sales proceeds.

Required Documents for Importing:

 A Commercial Invoice
It is prepared by the exporter giving description and price of the goods, quantity shipped,
quality, marks number of packages, name of the buyer, L/C or contract numbers, grades,
size, name of the vessel, the date of shipment, number of Bills of Lading etc.
 An Export Packing List
It is considerably more detailed and informative than a standard domestic packing list.
 Expense Form
It is issued by the authorized dealer Bank which certifies in favor of the concerned
exporter stating that he exporter is a bonafied businessman and has made arrangement
with Bank for realization of export proceeds of the goods declared on this form within
 four months from the date of shipment. In this regard the bank undertake to ensure the
repatriation of the export proceeds against the shipment.

 Elements of EXPORT Form:

 Commodity to be exported;
 Country of destination;
 Port of destination;
 Quality;
 Value;
 Terms of sale (Firm Contract/LC or Consignment sale);
 Name & address of importer/consignee;
 Name of carrying vessel;
 Bill of Loading/Railway Receipt/Airway Bill/Truck Receipt/Post Parcel Receipt;
 Port of shipment/Post Office of dispatch;
 Land of Custom Post;
 Shipment date;
 Name of the Exporter (in block letter) with address;
 CCI & E’s Registration Number of the exporter and date;
 Sector (Public or Private) under which the Exporter falls

 Certificate of Origin: A Certificate provided by competent authority inside the

exporting country stating the origin of Exporting goods. There are two types of
Certificate of Origin
 Preferential
 Non-preferential
 Bill of Export/Shipping Bill:
Bill of Export/Shipping Bill is a document issued by the customs authority which ensure
the shipment of goods.
Elements of Bill of Export:
 Bill of Export No;
 Consign/Exporter;
  Consign/Importer;
 Declarant/Agent;
 Country of export;
 Country of origin;
 Country of Destination;
 Name of Carrier
 Currency;
 Place of loading;
 L/C New Invoice Number Exp No;
 Package and description of goods;
 Gross Weight;
 Net Weight;
 HS Code;
 Bill of Lading:
A bill of lading is a document of title to goods evidencing despatch of goods from the
exporting to the importing country. It is a contract between the owner of the goods and
the carrier.
 An Insurance Certificate
It is used to assure the consignee that insurance will cover the loss of or damage to the
cargo during transit.

 Bill of Exchange
The bill of exchange is an order on the buyer to pay the stated amount at sight or after a
certain period of use age.
 What is Import? Explain export process and Export Documents
Definition
The process of moving data or settings used in one program to another. For example, a user
may import their e-mail address book into the latest version of Microsoft Outlook.

Import Process
 Trade Enquiry
 Procurement of Import License and Quota
  Obtaining Foreign Exchange
 Placing the Indent or Order
 Dispatching a Letter of Credit
 Obtaining Necessary Documents
 Customs Formalities and Clearing of Goods
 Bonded and Duty paid Warehouses
 Appointment of clearing Agents
 Making the Payment
 Closing the Transactions

Required documents for Importing

Customs Entry document: (specified by Importing country customs) prepared by importer’s

customs broker or Importer
Customs bond if applicable for specific goods importing to Importing country or to claim
import benefits from Importing country government
Legal Undertaking (LUT) if applicable to claim import benefits from Importing country
government or to import specific products
Customs declarations wherever applicable:  Importing country import customs clearance
declarations as per specified format of importing country’s government.
Import License if applicable to be obtained from government agency of Importing country.
Insurance Certificate issued by the government authorized insurance service provider
Certificates of Inspection if applicable:  Some of the importers demands exporter (seller)
through LC or Purchase order to inspect export goods to Importing country by an internationally
recognized inspection agency like SGS, BVQI, or other Quality inspecting agency. etc.
ATA CARNET/Temporary shipment certificate if applicable
Purchase order or Letter of Credit between Importing country importer and overseas supplier
of goods.
Commercial Invoice cum packing list issued by seller of goods
Certificate of Origin issued by competent authority of origin country of goods.
Certificate of Analysis if applicable.  The buyer may insist the seller to enclose certificate of
analysis about the goods.  The same certificate helps Importing country customs authorities to
confirm the product imported to Importing country.
Certificate of Free Sale if applicable.  If goods are not commercially involved, a certificate of
sale is attached by exporter along with goods dispatched.
Weight Certificate if applicable.   Weight certificate issued by exporter is required at various
circumstances like satiability of flight, satiability of vessel, International road safety rules, import
or export duty calculation, claiming export/import benefits from government etc.
Consular Invoiceif applicable:  Some of the importing countries insists embassy attested
documents which is mandatory at importing country to customs clear goods.

What is Foreign Exchange Market? Explain the players of FX

markets
Foreign Exchange Market
The foreign exchange market (also known as forex, FX, or the currency market) is an over-the-
counter (OTC) global marketplace that determines the exchange rate for currencies around the
world. Participants are able to buy, sell, exchange, and speculate on currencies.

Foreign exchange markets are made up of banks, forex dealers, commercial companies, central

banks, investment management firms, hedge funds, retail forex dealers, and investors.
Players of FX Market

Traders

Retail traders mostly with a short term view on the Market. System follower with a wide range of
skill knowledge & resources.

Companies/ Corporation

Players that are long term in nature and aim to protect their profit against currency fluctuation
through hedging activities and other strategic methods.

Investment/ Hedge Fund

Investment with high level of skill, resources, knowledge and commitment is also a great player
in foreign exchange market. Here tren followers use latest technologies to take advantage of
price discrepancies.

Private Banks

Private Banks are main market mover nd major forex price maker. It provides liquditu to market
and credit to funds, banks, corporation and government.

Central Banks/ Government

Central Banks are the long term enablers of national, regional, or Global economic goals and
market disruptors.
 Major Instrument of FX Market
In the forex market, the following six entities are designated as financial instruments:

 Exchange-traded fund
 Forward
 Future
 Option
 Spot
 Swap

Exchange-traded Fund - referred to as ETF's. These are open-ended investment companies

that have the characteristic of being traded at any time throughout the day. These will oftentimes
attempt duplicating stock market indices such as the S&P 500. The ETF's gain strength as the
United States Dollar (USD) weakens against a different currency and therefore replicate currency
market investments. Certain funds can track the price fluctuations of the various world currencies
as they compare to the USD, and will oftentimes increase in value to counter the direction that
the USD moves in. This creates increased interest in the USD for investors and speculators.

Forward - the agreement established between two parties wherein they purchase, sell, or trade
an asset at a pre-agreed upon price is called a forward or a forward contract. Normally, there is
no exchange of money until a pre-established future date has been arrived at. Forwards are
normally performed as a hedging instrument used to either deter or alleviate risk in the
investment activity.

Future - a forward transaction that contains standard contract sizes and maturity dates are
considered futures. Futures are traded on exchanges that have been created for that purpose
exclusively. Just like with commodity markets, a future in the forex market normally designates
a contract length of 3 months in duration. Interest amounts are also included in a futures contract.

Option - commonly shortened to FX option from foreign exchange option. Options are
derivatives (financial instruments whose values fluctuate based on underlying variables) wherein
the owner has the right to, but is not necessarily obligated to, exchange one currency for another
at a pre-agreed upon rate and a specified date. When you talk about options in any form (stock
market, forex, or any other market), the forex market is the deepest and largest, as well as the
most liquid market of any options in the world.

Spot - where futures contracts normally employ a 3-month timeframe, spot transactions
encompass a 48-hour delivery transaction period. There are four characteristics that all spot
transactions have in common, namely,
1. A direct exchange between two currencies
2. Involves only cash, never contracts
3. No interest is included in the agreed upon transaction
4. Shortest of all transaction timeframes

Swap - currency swaps are the most common type of forward transactions. A swap is a trade
between two parties wherein they exchange currencies for a pre-determined length of time. The
transaction then is reversed at a pre-agreed upon future date. Currency swaps can be negotiated
to mature up to 30 years in the future, and involve the swapping of the principle amount. Interest
rates are not "netted" since they are denominated in different currencies.

Major Foreign Exchange Market

Currency Currency Name Exchange Rate = 1 EUR

USD US dollar 1.2276

JPY Japanese yen 127.13

BGN Bulgarian lev 1.9558

CZK Czech koruna 26.147

So, we can say that The USA has the Major foreign exchange maket which is followed by
Japanees YEN, Bulgarian Lev and Koruna of Czech.
 Foreign ExchangeTrading Process

Explanation:
Let’s say that you’re U.S. Company A, that you’ve received euros in payment for goods, and that
you want to sell your euros in return for dollars. To make the exchange, you may contact your
local bank or go directly to a money center bank.

On the other hand, perhaps you’re U.S. Company B and you expect to receive euros as a future
payment. To protect yourself against fluctuations in the exchange rate, you want to buy euros
that you can subsequently trade back for dollars. You could choose, say, a forward or a swap,
and your path would be essentially a mirror image of Company A’s. Finally, either Company

A or Company B could choose to convert by such means as an option or a futures contract—in

which case the trade could be made by an options and/or futures exchange, either directly or
through a broker.

How Internationl Companies Use Foreign Exchange

Companies enter the foreign-exchange market to facilitate their regular business transactions
and/or to speculate. Their treasury departments are responsible for establishing policies
for trading currency and for managing banking relationships to make the trades. From a
business standpoint, a company, first of all, trades foreign exchange for exports/imports and
the buying or selling of goods and services.