Chapter 6 Trade Documents

CHAPTER 5
TRADE DOCUMENTS
706021- Chapter 5: Trade documents 1

THE BUYER’S OBLIGATIONS
• Accept the goods supplied

• Pay for at the time of delivery
THE SELLER’S OBLIGATIONS
• Deliver the goods exactly

• Guarantee the goods to be free from faults
• Handle over all required documents to
buyer

CONTENT
FINANCIAL DOCUMENT
TRADE DOCUMENT
• COMMERCIAL DOCUMENT
• TRANSPORT DOCUMENT
• INSURANCE DOCUMENT
DEFINITION
Something tangible that records

communication or facts with the help of
marks, words, or symbols. A document
serves to establish one or several facts,
and can be relied upon as a proof thereof.
Generally speaking, documents function
as evidence of intentions, whereas
records function as evidence of activities.

TRADE DOCUMENTS
Documents are important for the following
reasons:
(a) as an evidence of shipment and title of goods;
(b) for obtaining payment;
(c) to provide a specific and complete description of the goods;
(d) for assessment of correct Duty for clearance purpose;
(e) for obtaining Export Licences;
(f) for obtaining export finance;
(g) for completing Pre-shipment Inspection;
(h) for claiming export benefits like Duty Drawback, etc…

LAYOUT FOR TRADE DOCUMENT
Further reading:
United Nations Layout Key for Trade

Documents (UNLK/ ISO 6422)–
Recommendation 1

United Nations Layout Key
for Trade Documents
(UNLK/ ISO 6422) - most
key trade documents
DATA ELEMENTS
Consignor/ exporter/ shipper: name/ address
Consignee/ importer: name/ address
Transport details: places, modes and means of transport
Date, reference no., etc…
Terms of delivery and payment
Shipping marks/ container no.
Number and kind of packages

FINANCIAL DOCUMENT
BILL OF EXCHANGE
PROMISSORY NOTE
CHEQUE
CARD

BILL OF EXCHANGE (Draft)
A bill of exchange is an unconditional order in

writing, addressed by one person to another,
signed by the person giving it, requiring the
person to whom it is addressed to pay on demand
or at a fixed or determinable future time a sum
certain in money to, or to the order of, a specified
person or bearer
(Bill of Exchange Act, 1882)

BILL OF EXCHANGE (Draft)
The following points should noted:

A Bill of Exchange must be in writing
It must be dated
It must contain an order to pay a certain

sum of money
The money must be payable to a definite

person or to his order to the bearer
The draft must be accepted for payment

by the party whom the order is made
Example

COMMERCIAL DOCUMENTS
COMMERCIAL INVOICE
PACKING LIST
QUALITY/ QUANTITY/ WEIGHT CERTIFICATE
INSPECTION CERTIFICATE
FUMIGATION CERTIFICATE
CERTIFICATE OF ORIGIN (C/O)

COMMERCIAL INVOICE
A bill for the merchandise from the seller to the buyer.
Basic information about the transaction:
• Description of the goods

• Delivery and payment terms
• Order date, and number.
- The overseas buyer needs the commercial invoice to clear goods

from customs, prove ownership, and arrange payment.
- Governments in importing countries also use commercial
invoices to determine the value of the merchandise for assessment
of customs duties.
JIANGSU HOTIY CORPOARATION
HOTIY BUILDING,50 ZHONGSHAN.,NANJING,CHINA
COMMERCIAL INVOICE
JYSK CHANALEF SILK A/S BRIGHT A2400A/98
TO: BULIDING14,SKOVSGERD DK-9990 NO: 041021
BROVET. DENMARK DATE: 03HL21401
202-612-1068
S/C NO.:
L/C NO.: SHANGHAI COPENHANGEN
FROM TO BY
MARKS&NO.S DESCRIPTION QUANTITLES UNIT PRICE AMOUNT

CIF COPENHAGEN
JYSK X’MASDECORATIONS
COPENHAGEN 2-A15261 250BOXES USD4.15/BOX USD1,037.50
A24001/98 2-A15261-1 40BOXES USD6.45/BOX USD258.00
1-7 2-A15261-2 23BOXES USD6.45/BOX USD148.35
313BOXES USD1,443.85
TOTAL:
SAY US DOLLARS ONE THOUSAND FOUR HUNDERED AND FORTY THREE POINT
EIGHT FIVE ONLY
JIANGSU HOTIY CORPOARATION

SHANDONG IMP/EXP CORP
62 JIANGXI RD, QINGDAO, CHINA
FAX TEL E-MAIL
COMMERCIAL INVOICE
NAN HENG INTERNATIONAL
TO MESSRS: TRADING CO. LTD INVOICE NO. SIC002
104/4 LARDP RD. WANGT DATE: NOV. 14,1998 TO DEC. 30,199
ANNGKAPI. BKK L/C NO.: 001-10397-1998
CONTRACT NO.: 99A15AAL5029
SHIPMENT FROM QINGDAO, CHINA TO BANGKOK, THAILAND
MARKS & NOS QUANTITY & DESCRIPTION UNIT PRICE AMOUNT
TRI-CIRCLE BRAND
BRASS PADLOCK USD7.357 USD6,621.30
NHIT
900 DOZ PER DOZ
BANGKOK
PACKED IN 9 WOODEN CFR BANGKOK
NO.1-9
CASES OF 100 DOZ. EACH
SAY US DOLLARS SIX THOUSAND SIX HUNDRED TWENTY ONE
POINT THREE ONLY
SHANDONG IMP/EXP CORP16
SPECIAL INVOICES
PROVISIONAL INVOICE
FINAL INVOICE
DETAILED INVOICE
NEUTRAL INVOICE: do not record seller name
PRO-FORMA INVOICE
CONSULAR INVOICE
CERTIFIED INVOICE

PRO-FORMA INVOICE
A pro - forma invoice is a provisional invoice sent

to the prospective buyer, usually in response to
the latter’s request for a price quotation. A
quotation usually describes the product, and
states the price at a specific delivery point, the
time of shipment, and the terms of payment. But
it is not intended for payment purpose
 Non-commercial Invoice

Functions
To serve as a formal quotation or as a price reference
To enable the buyer to make necessary preliminary

arrangements, such as obtaining an import license
for the goods he would like to order
To inform the buyer of the amount payable for goods to

be shipped.

CONSULAR INVOICE
Certain nations require a consular invoice

for customs, statistical, and other
purposes. It must be obtained from the
consulate of the country to which the
goods are being shipped and usually
must be prepared in the language of that
country.

CERTIFIED INVOICE
Certain nations require an

invoice being certified to
determine the origin of
shipment. It usually is
obtained from local
chambers of commerce.

Article 18 Commercial Invoice - UCP 600
a. A commercial invoice:
• i. must appear to have been issued by the beneficiary

(except as provided in article 38);
• ii. must be made out in the name of the applicant
(except as provided in sub-article 38 (g);
• iii. must be made out in the same currency as the
credit; and
• iv. need not be signed.
c. The description of the goods, services or performance in a
commercial invoice must correspond with that appearing in
the credit.

PACKING LIST
An export packing list itemizes the material in each individual

package and indicates the type of package (e.g., box, carton)
It shows weights and measurements for each package (the
net and gross weight of the total consignment)
Net weight (NW) the actual weight of the items
Gross weight (GW)  the weight of the items plus the weight
of the packing material.

FUNCTIONS
To serve customs in the exporting

and importing countries to check the
cargo
To help the exporter to ascertain the

total cargo weight, the volume, and
shipment of the correct merchandise
To serve port authorities to plan the

loading and offloading of cargo.

SPECIAL P/Ls
DETAILED PACKING LIST
NEUTRAL PACKING LIST
PACKING & WEIGHT LIST

CERTIFICATE OF ORIGIN
A certificate of origin is required by

certain countries to enable them to
determine whether the product is
eligible for preferential duty treatment.
It is a statement as to the origin of the
export product and usually is obtained
from local chambers of commerce.

ORGANIZATION
In Vietnam, the agency authorized

to issue C / O include:
• Ministry of Trade and Industry  FTA
• Chamber of Commerce and Industry of
Vietnam (VCCI)  (MOIT is authorized) 
GSP
• For goods produced, processed in IZs
and EPZs have the regulatory
requirements regarding the origin of the
management boards of IZs and EPZs
level.
MOIT
http://www.ecosys.gov.vn
• CEPT (Common Effective Tariff
FORM D Preferences)/ AFTA
• ASEAN
FORM • ASEAN-JAPAN (AJCEP)

• VN-JAPAN (VJEPA)
AJ/VJ
• ACFTA
FORM E • ASEAN-CHINA
• AKFTA
FORM AK • ASEAN-KOREA
MOIT
http://www.ecosys.gov.vn
• AIFTA
FORM AI • ASEAN-INDIA
FORM • AANZFTA
• VN-JAPAN (VJEPA)
AANZ
FORM S • VN-LAO/ CAMBODIA

VCCI
http://www.covcci.com.vn
• GSP (Generalized System of
FORM A Preferences)
• 70 countries/ mainly: USA/ EU/
FORM B • All countries
• Textile export
FORM T • VN-EU
• O-Form: member countries of the

FORM O/X world's coffee association.
• X-Form: non-member countries

VCCI
http://www.covcci.com.vn
FORM • Hand-made goods (except textile)

HANDRICAFT export to EU
FORM • Hand-made textile export to EU

HANDLOOM
Others • Venezuela/ GSTP/ MEXICO

A&Z CO.,LTD.
171 VO THI SAU STR., 3rd DIST., HOCHIMINH
CITY, VIETNAM. TEL: 84.8.9326498
VIETNAM
A&Z MFG LTD.
17642 GORGOUG, HAMBURG,
GERMANY. TEL: 096789900
BY SEA: BACH DANG V.132

FROM: HOCHIMINH CITY, VIETNAM
TO: HAMBURG, GERMANY
B/L No. 12345 DATE 19/5/2008
SHIPPING MARK:
A&Z MFG LTD.
CONT./SEAL No. BAGS “W”42.02 1,000 PCS 12345

12345 / 65432 18/5/2008
CUSTOMS DECLARATION FOR
EXPORT COMMODITIES
No. 12345678 DATE 18/5/2008
VIETNAM
GERMANY
HOCHIMINH CITY, 19/5/2008 HOCHIMINH CITY, 19/5/2008

FUMIGATION CERTIFICATE
The Fumigation Certificate, in respect of

international shipping of sea freight, also referred
to as a 'pest control certificate' is the proof that
wooden packing materials used in international
sea freight shipping e.g. wooden pallets and
crates, wood, wool etc… have been fumigated or
sterilized prior the international shipment.
Fumigation certificates in international shipping

usually contain details such as purpose of
treatment, the articles in question, temperature
range used, chemicals and concentration used,
etc.

Some purchasers and countries may

require a certificate attesting to the
specifications of the goods shipped,
usually performed by a third party, Export
inspection agency. Such requirements are
usually stated in the contract and
quotation. Inspection certificates are
generally requested for certain
commodities with grade designations,
machinery, equipment, and so forth.
Health • Department of Animal Health
Certificate
Health
Certificate for • Department of Animal Health
Products of
Animal
Phytosanitary • Plant Protection Department
Certificate
Sanitary • Nafiquaved (National Fisheries

Certificate Quality Assurance and Veterinary
Directorate)
INSURANCE DOCUMENTS
When the exporter provides insurance, it is
necessary to furnish an insurance document
that states the type, terms, and amount of
insurance coverage.
The certificates are negotiable and must be

endorsed before presentation to the bank.
• Insurance certificate
• Insurance policy
Article 28: Insurance Document and
Coverage
Must appear to be issued and signed by an insurance company, an
underwriter or their agents or their proxies
Cover notes will not be accepted.
The date of the insurance document must be no later than the date of
shipment, unless it appears from the insurance document that the cover
is effective from a date not later than the date of shipment.
If there is no indication in the credit of the insurance coverage required, the

amount of insurance coverage must be at least 110% of the CIF or CIP value
of the goods.
TRANSPORT DOCUMENTS
BILL OF LADING (B/L):

A bill of lading is a contract of carriage between
the shipper and the steamship company
(carrier). It certifies ownership and receipt of
goods by the carrier for shipment. It is issued by
the carrier to the shipper evidencing that the
goods in good condition have been received for
shipment or shipped on board the named vessel;
promising to deliver the goods to the named
consignee.
BILL OF LADING (B/L)
A bill of lading is a contract of carriage

between the shipper and the steamship
company (carrier). It certifies ownership
and receipt of goods by the carrier for
shipment. It is issued by the carrier to the
shipper evidencing that the goods in good
condition have been received for shipment
or shipped on board the named vessel;
promising to deliver the goods to the
named consignee.

B/L
All bills of lading should be signed by either
shipping company，captain ，authorized carrier
agent.
Bills of lading are usually made out in three

originals (signed) and three copies (unsigned)
”full set of”
Front B/L  cargo details
Reverse B/L  terms and conditions of the

contract of carriage

FUNCTION OF B/L
(1) it is a receipt from the carrier

to the shipper;
Generally,
bill of
lading (2) it is a documents of title;
has three
main
functions ：
(3) it is an evidence of the
contract of carriage between
the carrier and the shipper.
CONTENTS OF B/L
 Number of bill of  Marks and numbers
lading  Descriptions of goods
 Shipper  Number of packages
 Consignee  Gross weight/
 Notify address mesurement
 Vessel/ Voyage  Freight and charges
 Port of loading  Number of original B/L
 Port of Discharge  Place and date of issue
 Port of Destination  Signature
FORMS OF B/L
Place carrier’s receipt for carriage

The carrier issuing a “shipped on
Shipped on board board bill of lading” acknowledges
that the goods have been loaded on
bill of lading board his ship.
In case a “ received for shipment”

Received for bill of lading is issued, it means that
shipment bill of he confirms only that the goods
lading have been delivered under his
custody.
NOTE: For payment under documentary L/C, the “Received for Shipment
B/L “is not acceptable.
CLEAN RECEIVED FOR SHIPMENT
DATE:…..
ON BOARD
DATE:…..

FORMS OF B/L
Acknowledges receipt of the goods
Receipt of the goods “ in apparent

Clean bill of lading good order and condition” without
any qualification
If a bill of lading bears such

notations as “ five boxes broken”,
“ some bags torn”, “ case No. 12
Unclean of lading missing,” etc. is known as an
Unclean Bill of Lading, which
would be refused by the opening
bank whose credit calls for Clean
B/L
FORMS OF B/L
Ownership
Made out to a named consignee
(usually the buyer or importer)
Straight bill of without adding the words “ to order”
lading or “or order” only the named
consignee may take delivery of the
goods not negotiable
Made out “ to order” or “or to

To order bill of order of” negotiable, that is, it
lading can be bought, sold, or traded
 by endorsement

ABC CO., LTD
SAME AS CONSIGNEE

TO ORDER
ABC CO., LTD.

TO ORDER OF EXIMBANK
ABC CO., LTD.

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CHAPTER 5

706021- Chapter 5: Trade documents 1

• Accept the goods supplied

THE SELLER’S OBLIGATIONS

• Deliver the goods exactly

706021- Chapter 5: Trade documents 2

Something tangible that records

706021- Chapter 5: Trade documents 4

(b) for obtaining payment;

(c) to provide a specific and complete description of the goods;

(d) for assessment of correct Duty for clearance purpose;

(e) for obtaining Export Licences;

(f) for obtaining export finance;

(g) for completing Pre-shipment Inspection;

(h) for claiming export benefits like Duty Drawback, etc…

United Nations Layout Key for Trade

706021- Chapter 5: Trade documents 6

Consignor/ exporter/ shipper: name/ address

Consignee/ importer: name/ address

Transport details: places, modes and means of transport

Date, reference no., etc…

Terms of delivery and payment

Shipping marks/ container no.

Number and kind of packages

706021- Chapter 5: Trade documents 8

706021- Chapter 5: Trade documents 9

A bill of exchange is an unconditional order in

706021- Chapter 5: Trade documents 10

The following points should noted:

It must contain an order to pay a certain

The money must be payable to a definite

The draft must be accepted for payment

706021- Chapter 5: Trade documents 12

QUALITY/ QUANTITY/ WEIGHT CERTIFICATE

CERTIFICATE OF ORIGIN (C/O)

706021- Chapter 5: Trade documents 13

A bill for the merchandise from the seller to the buyer.

Basic information about the transaction:

• Description of the goods

- The overseas buyer needs the commercial invoice to clear goods

MARKS&NO.S DESCRIPTION QUANTITLES UNIT PRICE AMOUNT

JIANGSU HOTIY CORPOARATION

MARKS & NOS QUANTITY & DESCRIPTION UNIT PRICE AMOUNT

NEUTRAL INVOICE: do not record seller name

706021- Chapter 5: Trade documents 17

A pro - forma invoice is a provisional invoice sent

706021- Chapter 5: Trade documents 18

To serve as a formal quotation or as a price reference

To enable the buyer to make necessary preliminary

To inform the buyer of the amount payable for goods to

706021- Chapter 5: Trade documents 19

Certain nations require a consular invoice

706021- Chapter 5: Trade documents 20

Certain nations require an

706021- Chapter 5: Trade documents 21

• i. must appear to have been issued by the beneficiary

706021- Chapter 5: Trade documents 22

An export packing list itemizes the material in each individual

Net weight (NW) the actual weight of the items

706021- Chapter 5: Trade documents 23

To serve customs in the exporting

To help the exporter to ascertain the

To serve port authorities to plan the

706021- Chapter 5: Trade documents 24