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1. LETTER OF CREDIT(FOB)

FROM :( NAME * & ADDRESS OF OPENING BANK )

TO :( NAME & ADDRESS OF ADVISING BANK )(For Shipments from Haldia ) STATE BANK OF INDIA OVERSEAS BRANCH KOLKATA SWIFT CODE SBININBB106 (For Shipments from Vizag ) STATE BANK OF INDIA OVERSEAS BRANCH VIZAG SWIFT CODE SBININBB123

40A TYPE OF L/C :IRREVOCABLE

20 L/C Number :

31C DATE OF ISSUE :

31D DT. & PLACE OF EXPIRY : __________________________________IN INDIA

50 NAME & ADDRESS OF THE:APPLICANT

59 NAME & ADDRESS OF THE: Steel Authority of India Limited,BENEFICIARY Central Marketing Organization, Ispat Bhwan 40

J.N.Road, Kolkatta-700071, India

32B AMOUNT OF CREDIT IN :US DOLLARS /EURO/ANY

OTHER FREELY EXCHANGEABLE CURRENCY (IN FIGURES & WORDS)

39A PERCENTAGE CREDIT : AS PER CONTRACTAMOUNT TOLERANCE

41A CREDIT AVAILABLE WITH: STATE BANK OF INDIA, KOLKATA/VIZAG and or ANY BANK IN INDIA

CREDIT AVAILABLE BY : NEGOTIATION

42C DRAFTS : AT SIGHT

42A DRAFTS TO BE DRAWN ON:

43P PARTIAL SHIPMENT : AS PER CONTRACT

43T TRANSHIPMENT : AS PER CONTRACT

44A SHIPMENT FROM :

44B SHIPMENT TO :

44C LATEST DATE OF SHIPMENT :

45A DESCRIPTION OF GOODS :a) Description of Materialsb) Size ( in mm) (except for Pig Iron) and Quantity (in MT)c) Specificationd) Tolerance (except for Pig Iron)e) Quantityf) Quantity Toleranceg) Price per MT (in USD/Euro/any other freely exchangeable currency)

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Letter Of Credit

Letter of Credit  L/c also known as Documentary Credit is a widely used term to make payment secure in domestic and international trade. The document is issued by a financial organization at the buyer request. Buyer also provides the necessary instructions in preparing the document.

The International Chamber of Commerce (ICC) in the Uniform Custom and Practice for Documentary Credit (UCPDC) defines L/C as:

"An arrangement, however named or described, whereby a bank (the Issuing bank) acting at the request and on the instructions of a customer (the Applicant) or on its own behalf :

1. Is to make a payment to or to the order  third party ( the beneficiary ) or is to accept bills of exchange (drafts) drawn by the beneficiary.

2. Authorized another bank to effect such payments or to accept and pay such bills of exchange (draft).

3. Authorized another bank to negotiate against stipulated documents provided that the terms are complied with.

A key principle underlying letter of credit (L/C) is that banks deal only in documents and not in goods. The decision to pay under a letter of credit will be based entirely on whether the documents presented to the bank appear on their face to be in accordance with the terms and conditions of the letter of credit.

Export   Operations Under L/C

Export Letter of Credit is issued in for a trader for his native country for the purchase of goods and services. Such letters of credit may be received for following purpose:

1. For physical export of goods and services from India to a Foreign Country.2. For execution of projects outside India by Indian exporters by supply of goods and

services from Indian or partly from India and partly from outside India.3. Towards deemed exports where there is no physical movements of goods from outside

India But the supplies are being made to a project financed in foreign exchange by multilateral agencies, organization or project being executed in India with the aid of external agencies.

4. For sale of goods by Indian exporters with total procurement and supply from outside India. In all the above cases there would be earning of Foreign Exchange or conservation of Foreign Exchange.

Banks in India associated themselves with the export letters of credit in various capacities such as advising bank, confirming bank, transferring bank and reimbursing bank.

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2. COMMERCIAL INVOICE

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Commercial Invoice

A document containing a record of the transaction between a seller (exporter) and a buyer (importer), containing information such as a complete listing and description of the goods including prices, discounts and quantities, and the delivery and payment terms. A commercial invoice is often used by governments to determine the true value of goods for the assessment of Custom duties, and must therefore conform to the regulations of the importing country.

A commercial invoice (in addition to other information), must identify the buyer and seller, and clearly indicate the

(1) date and terms of sale,

(2) quantity, weight and/or volume of the shipment,

(3) type of packaging,

(4) complete description of goods,

(5) unit value and total value, and

(6) insurance, shipping and other charges (as applicable).

Commercial Invoice Customs

1. Information Included : A commercial invoice must include the names of both the buyer and seller of the goods. It must also indicate the date of the sale, the weight of the shipment and the number of items included, etc

2. Language : Commercial invoices are bilingual. One copy will be in the language of the sender and the other in the language of the receiver. This reduces the risk of any misinterpretation of what goods are contained in the shipment, and allows a more accurate decision of what to charge in terms of taxes and duty fees.

3. Format : Commercial invoices can be handwritten or typed and printed. Commercial companies have printed forms to fill out by hand, or templates on the computer that that they can fill out and print

4. Penalties : If a shipment does not contain a commercial invoice for the goods included in the shipment, the package will be returned to the sender. You will not be reimbursed for the shipment fee you already paid, so you will be paying double to ship the goods if you do not include an invoice the first time.

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3. SHIPPING BILL

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Shipping bill

Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. Usually the Shipping Bill is of four types and the major distinction lies with regard to the goods being subject to certain conditions which are mentioned below:

Export duty/ cess Free of duty/ cess Entitlement of duty drawback Entitlement of credit of duty under DEPB Scheme Re-export of imported goods

It is a requisite for seeking the permission of customs to export goods. It contains a description of export goods by sea/air. It contains a description of export goods, number and kind of packages, shipping marks, and number numbers, value of goods, the name of the vessel, the country of destination, etc. On the other hand, importers have to submit copies of document called Bill of Entry for customs clearance. Later, a copy has to be given to the bank for verification.

The following are the documents required for the processing of the Shipping Bill:

GR forms (in duplicate) for shipment to all the countries. 4 copies of the packing list mentioning the contents, quantity, gross and net

weight of each package. 4 copies of invoices which contains all relevant particulars like number of

packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc.

Contract, L/C, Purchase Order of the overseas buyer. AR4 (both original and duplicate) and invoice. Inspection/ Examination Certificate.

The formats presented for the Shipping Bill are as given below:

White Shipping Bill in triplicate for export of duty free of goods. Green Shipping Bill in quadruplicate for the export of goods which are under

claim for duty drawback. Yellow Shipping Bill in triplicate for the export of dutiable goods. Blue Shipping Bill in 7 copies for exports under the DEPB scheme.

Note :- For the goods which are cleared by Land Customs, Bill of Export (also of 4 types - white, green, yellow & pink) is required instead of Shipping Bill.

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4. CERTIFICATE OF ORIGIN

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Certificate Of Origin

The certificate of origin is a document certifying the country in which the product was

manufactured, and in certain cases may include such information as the local material

and labor contents of the product.

Some importing countries require a certificate of origin to establish whether or not a

preferential duty rate is applicable. A popular example of the certificate of origin is the

Form A, which is often called the GSP Form A.

The certificate of origin (C/O)is an alternative to the declaration or the certification

and/or legalization of the commercial invoice. The C/O is based on the rules of the

country of origin.

The country of origin is the country where the goods are grown, produced or

manufactured. The manufactured goods must have been substantially transformed in

the exporting country as the country of origin, to their present form ready for export.

Certain operations such as packaging, splitting and sorting may not be considered as

sufficient operations to confer origin.

The certificate of origin includes the Form A, Chamber of Commerce Certificate of

Origin, Exporter's Certificate of Origin, and Free Trade Market Certificate of Origin. The

trade agreement, import practice, and letter of credit (L/C) stipulation determine the

type of C/O needed..

India is signatory to World Trade Organization because of which Indian exports are

accorded preferential treatment available to all WTO members. Secondly, India has also

entered into bilateral and multilateral trade pacts with its trade partners because of

which Indian exports get into these countries at concessional import duty regime. In

order to avail the preferential treatment, the Indian exporter are required to furnish

the proof that the goods manufactured are, indeed, of Indian origin. Hence, the need for

Certificate of Origin.

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5. CHAMBER OF COMMERCE CERTIFICATE OF

ORIGIN

Chamber of Commerce Certificate of Origin

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The importer or the importing country may require a specific certificate of origin (C/O)

form issued by a Chamber of Commerce in the exporting country. Some countries may

further require the consular legalization of the C/O after the Chamber of Commerce

certification. The certification and legalization normally require payment of a fee.

Indian Chamber of Commerce (ICC) The ICC is authorized by the Directorate General of

Foreign Trade and Ministry of Commerce, Govt. of India to issue Non-preferential

Certificate of Origin to the exporters.

ICC has been efficiently providing this service at a nominal cost. Special discounts are

available for ICC members. The exporters seeking Certificate of Origin have to execute

an indemnity bond in favour of the ICC before they can avail of this service for the first

time. Thereafter preprinted certificate of origin forms can be obtained from the ICC

office.

Exporters can get the certificate of origin and allied documents duly attested and signed

by one of the authorized signatories of ICC by paying the requisite service charges.

6. CONSULAR INVOICE

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Consular Invoice

Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand,

Burma, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the

prescribed format and is signed/ certified by the counsel of the importing country

located in the country of export. 

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A document certifying a shipment of goods and shows information such as the

consignor, consignee and value of the shipment. A consular invoice can be obtained

through a consular representative of the country you're shipping to. The consular

invoice is required by some countries to facilitate customs and collection of taxes.

A consular invoice also has a copy of the commercial invoice in the language of the

country, giving full details of the merchandise shipped. In general, the purpose is to

provide the foreign customs authority with a complete, detailed description of the

goods so that the correct import duty can be levied.  

As the name implies, the consular invoice is a specific invoice issued by the Consul of the

importing country. Many importing countries, mainly less developed countries, have

already phased out this invoice. It is used for customs clearance and other purposes, as

such any errors or omissions on the invoice may cause problems and fines at the

customs in the importing country. The consular invoice is a form of non-tariff barrier.

The format of the consular invoice form varies greatly, but it contains essentially the

same data as in the commercial invoice and packing list. The invoice form is either in the

language of the importing country or bilingual. The exporter's declaration normally is

included in a consular invoice. The consular legalization and payment of a consular fee

is required. The consular fee can be a percentage of the FOB invoice value. Export from

India required special document depending upon the type of product and destination to

be exported. Export Documents not only gives detail about the product and its

destination port but are also used for the purpose of taxation and quality control

inspection certification.

7. MATE’S RECEIPT

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Mate’s Receipt

A mate’s receipt is a receipt, issued and signed by the carrying ship’s chief mate (or the

ship’s agent on his behalf), for goods received on board.

It may be encountered in virtually any conventional trade (general cargo, dry bulk or

tanker), but has been replaced in the liner trades (i.e. container and ro-ro shipping) by a

more modern document, the Standard Shipping Note.

It is the document on which the details entered on the bill of lading are based; the

information on both mate’s receipt and bill of lading should therefore be identical. The

mate’s receipt should not be copied directly from the shipping note presented when the

goods are brought alongside, but should be compiled from a ship’s tally or measurement

and show the actual quantity and condition of the goods as received. should, when the

condition or quantity of the cargo justifies it, be endorsed with remarks such as “torn

bags”, “stained bales”, “rusty drums”, etc. and should, where the ship’s and shipper’s

tallies disagree, be made out for the smaller figure, with the clause “X more (drums) in

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dispute; if onboard to be delivered”, “X” being the difference between the tallies.

It will normally be on the ship owner’s form, in a triplicate pad or book kept on board.

The original should be given to the person delivering the goods to the ship, a copy

should go to the agent, and a second copy should be retained in the pad on the ship for

comparing with bills of lading before signature, and for use in compiling the cargo plan.

It is not a document of title to the goods shipped and does not pass any title by its

endorsement or transfer.

In ports and trades where mate’s receipts are used, the shipper must usually present

the signed mate’s receipt to the agent in order to be issue with the signed set of original

bills of lading before the vessel sails.

8. BILL OF LADING

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Bill Of Lading

A bill of lading is a type of document that is used to acknowledge the receipt of a

shipment of goods. A transportation company or carrier issues this document to a

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shipper. In addition to acknowledging the receipt of goods, a bill of lading indicates the

particular vessel on which the goods have been placed, their intended destination, and

the terms for transporting the shipment to its final destination.Inland, ocean, through,

and air waybill are the names given to bills of lading. An inland bill of lading is a

document that establishes an agreement between a shipper and a transportation

company for the transportation of goods. It is used to lay out the terms for transporting

items overland to the exporter's international transportation company. An ocean bill of

lading is a document that provides terms between an exporter and international carrier

for the shipment of goods to a foreign location overseas.

A through bill of lading is a contract that covers the specific terms agreed to by a

shipper and carrier. This document covers the domestic and international

transportation of export merchandise. It provides the details of the agreed upon

transportation between specific locations for a set monetary amount. An air waybill is a

bill of lading that establishes terms of flights for the transportation of goods both

domestically and internationally. This document also serves as a receipt for the shipper,

proving the carrier's acceptance of the shipper's goods and agreement to carry those

goods to a specific airport.

The bill of lading performs the following functions:

A contract of carriage between the shipper of the cargo and the carrying shipping

company.

The name of the shipper and the receiver of the goods the consignee.

The contents of the packages as declared by the shipper.

Shipping details such as: port of loading and the port of discharge.

The bill of lading is a freight invoice and indicates if the freight costs have been

prepaid by the exporter or will be paid by the importer, "freight collect".

The bill of lading states the number of packages, weight and dimension of the

shipment.

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9. GR FORM

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GR Form

GR Form is an exchange control document required by the Reserve Bank of India(RBI).As per the exchange control regulations, an exporter has to realize the proceeds of the goods he has exported within 180 days of their shipment from india. In order to ensure this, the RBI has introduced the GR procedure.

This is a declaration by the exporter in the format prescribed by RBI to be submitted along with the shipping bill to customs. The declaration must contain the information about sender, consignee , description of goods , full export value of goods in foreign currency , etc. The exporter submits a duplicate of GR form with its bank along with shipping documents. The bank endorses the copy after realization of sales proceeds and sends it to RBI. The original copy submitted at customs is also directed to RBI by the customs. The RBI confirms the realization of the proceeds as per full export value after comparing the two copies.

GR form is to be submitted in duplicate to the customs at the port of shipment along with the shipping bill. Customs will give their running serial number on both the copies after admitting the customs shipping bill. Customs authorities will certify the value declared by the exporter on both the copies of the GR form at the space earmarked and will also record the assessed value. They will then return the duplicate copy of the form to the exporter and retain the original for transmission to the RBI. Within 21 days from the shipment of goods, exporter must lodge the duplicate copy of GR together with relative shipping documents with the authorized dealer named in the GR form for negotiation of export bills.

After the documents have been negotiated, the authorized dealer will report the transactions to the RBI. The duplicate copy of GR form together with a copy of invoice will be retained by the authorized dealer till full export proceeds have been realized and thereafter submitted to the RBI.

On account of introduction of Electronic Data Interchange System at certain custom offices, the existing declaration in GR form has been replaced by a declaration in form of SDF(Statutory Declaration Form).

Contents of GR form:

Name of the exporter and buyer

The currency in which payment is expected,

The country of destination and the commission if any, to be paid etc.

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10. PACKING LIST

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Packing List

The packing list is an extension of the commercial invoice, as such it looks like a commercial invoice.

The exporter or his/her agent---the customs broker or the freight forwarder---reserves the shipping space based on the gross weight or the measurement shown in the packing list.

Customs uses the packing list as a check-list to verify the outgoing cargo (in exporting) and the incoming cargo (in importing). The importer uses the packing list to inventory the incoming consignment.

A packing list accompanies the international shipment and is used to inform transportation companies about what they are moving as well as to allow the customer and others involved in the transaction to check what has been shipped against the proforma invoice. It is a good safeguard against shipping incorrect cargo!

It is assumed that the pneumatic tools in the sample L/C contain the following data:

" Package No. ": The entries preferably arranged in sequence from the lowest number to the highest, that is, from package No. 1 and up. From the sample L/C, enter "C/No. 1-50" or the like in the field (Package No.), provided it is not inconsistent with the marks and numbers on the master cartons.

" Item No. "   and   " Description of Goods “ : The description of the goods in the packing list can be in general terms, provided it is not inconsistent with the description in the L/C. From the sample L/C and data of the pneumatic tools above, entering "A380" and "'ABC' Brand Pneumatic Tools" in the fields will satisfy the requirements.

“Signature” And/Or “Stamp”: The packing list and commercial invoice need not be signed, unless otherwise stipulated in the letter of credit (L/C). In practice, the original and the copy of the packing list and commercial invoice are often signed.

“Corrections or Changes in the Packing List”: Any visible corrections or changes made in the packing list must be initialed, as in the commercial invoice and all other export documents, by their respective issuers. In practice, the initial usually is done using a rubber stamp bearing the word "CORRECTION"

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11. SHIPPER’S DECLARATION FOR DANGEROUS GOODS

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Shipper’s Declaration for Dangerous Goods

Purpose and Use:

The International Air Transport Association (IATA) requires that all shipments tendered to air carriers and air freight forwarders classed by regulation as dangerous goods be accompanied by the IATA Shipper’s Declaration for Dangerous Goods. The shipper is responsible for correct and accurate completion of the form per IATA requirements and to ensure that all requirements have been met including packaging, marking, and required information related to the product being tendered.

Dangerous Goods & Safety Worldwide

The IATA 'DG Center of Expertise' strives to lead industry efforts to ensure the safe handling of dangerous goods in air transport, by providing a broad array of technical knowledge, products, services and training solutions tailored to meet industry needs.

Setting the Standards Leads to Safety!

Ensuring that undeclared dangerous goods do not get on board an aircraft is one of many key objectives of IATA's dangerous goods program. By defining standards for documentation, handling and training, and by actively promoting the adoption and use of those standards by the air cargo industry, a very high degree of safety has been achieved in dangerous goods transport.

Effectiveness and Efficiency

Working closely with governments in the development of the regulations, including ICAO and other national authorities, IATA ensures that the rules and regulations governing dangerous goods transport are both effective and efficient. The goal is to make it just as easy to ship dangerous goods by air as any other product so it removes any incentive to by-pass the regulations.

Dangerous Goods Regulations (DGR)

Information is key to any safety program, no less for dangerous goods in air transport. Through its Dangerous Goods Regulations and a comprehensive and effective training program, IATA ensures that shippers, forwarders, and carriers have the tools and resources to ship dangerous goods safely.

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12. CERTIFICATE OF INSURANCE

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Certificate Of Insurance

Document issued by an insurance company, it certifies that an insurance policy has been

bought and shows an abstract of the most important provisions of the insurance

contract. But it is not a substitute for the actual policy, and is normally a non-negotiable

document-it cannot be assigned to a third party, and is unacceptable under the terms of

a letter of credit and in making a claim. In life and health insurance a COI is issued to the

members of a group insurance plan, evidencing their participation. In marine insurance

(where cargo is insured against a floating insurance policy) COI serves to assure the

consignee that insurance is in effect for the goods in transit and a proper policy will

follow. Also called insurance certificate

Brief introduction into the world of insurance.

An insurance certificate is a representation of the insurance policy taken out by the

buyer or the seller (depending on the Incoterms) for a shipment.

• Blank insurance certificates are supplied by the insurer pre-signed and bearing the

open policy number of the exporter. For an air shipment, an air waybill serves as an

insurance certificate.

• For a sea shipment, an insurance certificate is issued as evidence of the existence of

the marine insurance policy.

• The marine insurance policy is a contract between the insured and the insurer which

defines the terms of the agreement between the insured and the insurer.

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13. PROFORMA INVOICE:

Proforma Invoice:

A proforma invoice is quote in an invoice format that may be required by the buyer to apply for an import license, contract for pre-shipment inspection, open a letter of credit or arrange for transfer of hard currency.

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A proforma may not be a required shipping document, but it can provide detailed information that buyers need in order to legally import the product.Proforma invoices basically contain much of the same information as the formal quotation, and in many cases can be used in place of one. It should give the buyer as much information about the order as possible so arrangements can be made efficiently. The invoices inform the buyer and the appropriate import government authorities details of the future shipment; changes should not be made without the buyer’s consent. As mentioned for the quotation, the points to be included in the proforma are:

1. Seller’s name and address

2. Buyer’s name and address

3. Buyer’s reference

4. Items quoted

5. Prices of items: per unit and extended totals

6. Weights and dimensions of quoted products

7. Discounts, if applicable

8. Terms of sale or Inco term used (include delivery point)

9. Terms of payment

10. Estimated shipping date

11. Validity date

For example, country A does not require person X to have a visa before entering the country but person X is in country B which requires a visa from country A in order to allow X to depart. In that case country A may issue a pro-forma visa to X, meaning the only object of the visa is to satisfy the formal requirement for X to have a visa and not any real requirement by country A

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14. ATA CARNET/TEMPORARY SHIPMENT CERTIFICATE

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ATA Carnet

An ATA Carnet a. k. a. "Merchandise Passport" is a document that facilitates the temporary importation of products into foreign countries by eliminating tariffs and value-added taxes (VAT) or the posting of a security deposit normally required at the time of importation. Apply for an ATA Carnet.

ATA stands for the combined French and English words Admission Temporaire - Temporary Admission. Carnet is a French word meaning book of tickets (or stubs).

The ATA Carnet---the carnet de passage or carnet---is a customs document allowing for temporary duty-free importation of certain commercial and exhibit samples without the customs declaration, delay or hassle at the port (or point) of entry and exit. Carnets do not cover consumable goods (i.e., food and agricultural products), disposable items or postal shipments.

The ATA Carnet system was developed by the International Chamber of Commerce (ICC) in Paris, France, for the convenience of agent, buyer, employee, or representative going abroad. It is being used by countries participating in the system. The participating countries of ATA Carnet system includes India also

The carnet shows information such as the carnet number, validity (one year usually), name of the issuing office, place and date of issue, name of the holder (company), name(s) of the representative, and the intended use of the goods. Only the person(s) named in the carnet may take the samples on the trips. Name(s) can be added in the carnet by means of a written request to the issuing office.

The customs officer at the country of exportation will inspect the samples and validate the carnet before departure to confirm the goods against the General List.

The carnet has a number of sheets, each sheet has a counterfoil (above the perforations) and voucher (below the perforations).

When the business traveller arrives at the country of importation, the customs officer verifies the goods, signs and stamps the importation counterfoil and voucher, and detaches the voucher. The samples must be removed within a time the goods are allowed temporary entry.

When the business traveller leaves the country of importation, the customs officer verifies the goods, signs and stamps the re-exportation counterfoil and voucher, and detaches the voucher, as proof that the samples have been taken out of that country.

15. CUSTOMS DECLARATION FORM

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C ustoms Declaration Form

It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code

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number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender.

Despatch Note, also known as CP2. It is filled by the sender to specify the action to be taken by the postal department at the destination in case the address is non-traceable or the parcel is refused to be accepted.

Principles

1. The Customs formalities in respect of postal items shall be governed by the provisions of this Chapter and, insofar as applicable, by the provisions of the General Annex.

2. National legislation shall specify the respective responsibilities and obligations of the Customs and of the postal service in connection with the Customs treatment of postal items.

3. The clearance of postal items shall be carried out as rapidly as possible.

4. The exportation of goods in postal items shall be allowed regardless of whether they are in free circulation or are under a Customs procedure.

5. The importation of goods in postal items shall be allowed irrespective of whether they are intended to be cleared for home use or for another Customs procedure.

6. The Customs shall designate to the postal service the postal items which shall be produced to them for the purposes of Customs control and the methods of production of these items.

7. The Customs shall not require postal items to be produced to them at exportation for the purposes of Customs control, unless they contain:

goods the exportation of which must be certified; goods which are subject to export prohibitions or restrictions or to export duties

and taxes; goods having a value exceeding an amount specified in national legislation; or goods which are selected for Customs control on a selective or random basis.

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16. CUSTOMS INVOICE

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Customs Invoice

Extended form of commercial invoice required by customs (often in a specified format)

in which the exporter states the description, quantity and selling price, freight,

insurance, and packing costs, terms of delivery and payment, weight and/or volume of

the goods for the purpose of determining customs import value at the port of

destination

The customs invoice must contain specific information about the shipment that it

accompanies. Those requirements include a descriptive statement of the contents,

quantity, selling price, insurance, weight or volume, cost of packaging and the terms of

payment upon delivery. Complete information is required to determine import fees

when it reaches its destination port.

1. Reasons for Requirements : Correct invoice completion helps the customs officials

to classify the shipment. Proper classification also ensures proper declaration of

value for contents. The declaration of value guarantees the accurate collection of

duty fees. A carefully completed invoice allows mechanical processing of cargo and

this permits a higher quality of trade statistics reporting.

2. Expectations of Information : When a customs invoice presents the appropriate

information, it is easier to expedite the processing of a shipment. There are 18

necessary items of information on the customs invoice. Each addresses a concern

important to at least one of the three agencies who did the work on these

requirements.

3. Charges and Fees :Once valuation is complete, the next six pieces of information

relate to charges and applicable fees. The customs officer expects to find symbols

and numbers that identify the original sale, the quantity and weight of individual

items, purchase price of contents and the transaction currency. Another section of

the invoice requests sender to note the country of origin, discounts on contents and

other charges (freight, insurance, packing, commissions) that relate to the shipment.

The specific information appearing above is relevant to completion of the customs

invoice requirements. However, some of the requirements of previous parts of this

chapter still apply to the manner of handling cargo at the port of destination.

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17. THE AIR WAYBILL

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Air Waybill

The air waybill, unlike the ocean bill of lading is not a document of title to the goods

described therein, however it does perform several similar functions these are:

It is a receipt for the goods

It is evidence of the contract of carriage between the exporter and the carrier

It incorporates full details of the consignor/shipper, the consignee/receiver and

the consignment/goods

It is an invoice showing the full freight amount

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It must be produced, be it in an electronic format, at the airport of discharge for

clearing purposes

All copies of the air waybill, together with the commercial invoice, packing list,

certificate of origin and any other document which may be necessary for clearing the

goods through customs, these documents are carried in the flight captain's bag.

Airway bill can be comprised in two parts:

MAWB (Master Airway bill) – shipments sent on a direct basis, not consolidated.

HAWB (House Airway bill) – shipments sent on a consolidation basis whereby grouping

together various clients consignments under one MAWB being issued by the freight

forwarder.

The goods in the air consignment are consigned directly to the consignee and dated by

the actual carrier or by the named agent of a named carrier.

It must mention whether freight has been paid or will be paid at the destination point.

18. INSPECTION CERTIFICATE OR

INSPECTION REPORT

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Inspection Certificate

“Certificate of Inspection” is issued by the Inspection Agency concerned certifying that the consignment has been inspected before shipment as per the requirements of the Exports (Quality Control and Inspection) Act, 1963. It satisfies the conditions relating to quality control and inspection as applicable to it and is certified export worthy.

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The inspection certificate---inspection report or report of findings---is required by

some importers and/or importing countries. The export-trader uses such a report in the

inspection of goods purchased from a manufacturer. The export-manufacturer also uses

such a report in the inspection of its own productions.

In case an inspection certificate is required, the importer may stipulate in the letter of

credit (L/C) to use a specific independent surveyor.

In the case of a foreign government required pre-shipment inspection, which is

stipulated in the L/C, the report of findings can be in the form of a security label

attached on the invoice. The label bears the number and date of the corresponding

report of findings issued by the foreign government engaged surveyor

This certificate is required:

o by customs before allowing shipment of goods or o by a banker to negotiate the documents.

This certificate bears cross references of invoice or contract number.

Inspection can be done by o Inspection Agency appointed by the Government of India, i.e. Export

Inspection Agency, Textile Committee, Central Silk Board etc. o Inspection Agency may also be nominated by importing countries’

Government i.e. SGS and OMIC by some African Countries. o Sometimes buyer himself appoints an independent private inspector to

inspect the goods.

If an inspection is a part of transaction, then exporter is required to arrange for necessary inspection.

It can be a certificate of quality, weight, analysis, or the like.

19. PURCHASE ORDER

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Purchase Order

A

purchase order (PO) is a commercial document issued by a buyer to a seller, indicating

types, quantities, and agreed prices for products or services the seller will provide to

the buyer. Sending a purchase order to a supplier constitutes a legal offer to buy

products or services. Acceptance of a purchase order by a seller usually forms a one-off

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contract between the buyer and seller, so no contract exists until the purchase order is

accepted.

There are several reasons why companies use purchase orders.

Purchase orders allow buyers to clearly and explicitly communicate their intentions to

sellers, and sellers are protected in case of a buyer's refusal to pay for goods or services.

Purchase orders also help a purchasing agent manage incoming orders and pending

orders. Purchase orders also are an economical choice for a business because they

streamline the purchasing process to a standard procedure.

Getting financial assistance from commercial lenders or financial institutions is another

reason of using purchase orders. There are various trade finance facilities that almost

every financial institution allow to businessmen against such purchase order such as:

1. Before Shipment credit facility

2. Post Shipment credit facility

3. Trade Finance facility

4. Foreign Bill Purchase credit facility

5. Bill retirement credit facility

20. PHYTOSANITARY CERTIFICATE

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Phytosanitary certificates

Phytosanitary certificates or Fumigation certificates are issued to indicate that

consignments of plants, plant products or other regulated articles meet specified

phytosanitary import requirements and are in conformity with the certifying statement

of the appropriate model certificate. Phytosanitary certificates should only be issued for

this purpose.

Model certificates provide a standard wording and format that should be followed for

the preparation of official phytosanitary certificates. This is necessary to ensure the

validity of the documents, that they are easily recognized, and that essential information

is reported.

Importing countries should only require phytosanitary certificates for regulated

articles. These include commodities such as plants, bulbs and tubers, or seeds for

propagation, fruits and vegetables, cut flowers and branches, grain, and growing

medium. Phytosanitary certificates may also be used for certain plant products that

have been processed where such products, by their nature or that of their processing,

have a potential for introducing regulated pests (e.g. wood, cotton). A phytosanitary

certificate may also be required for other regulated articles where phytosanitary

measures are technically justified (e.g. empty containers, vehicles, and organisms).

Importing countries should not require phytosanitary certificates for plant products

that have been processed in such a way that they have no potential for introducing

regulated pests, or for other articles that do not require phytosanitary measures.

Official attachments to the phytosanitary certificate should be limited to those instances

where the information required to complete the certificate exceeds the available space

on the certificate Any attachments containing phytosanitary information should bear

the phytosanitary certificate number, and should be dated, signed and stamped the

same as the phytosanitary certificate. The phytosanitary certificate should indicate, in

the appropriate section, that the information belonging in that section is contained in

the attachment. The attachment should not contain any information that would not be

put on the phytosanitary certificate itself, had there been enough space.