EXPORT/IMPORT PROCEDURES. FOB FREE ON BOARD Cost of freight & insurance to a certain point in the...
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Transcript of EXPORT/IMPORT PROCEDURES. FOB FREE ON BOARD Cost of freight & insurance to a certain point in the...
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EXPORT/IMPORT PROCEDURES
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FOBFREE ON BOARD
• Cost of freight & insurance to a certain point in the transportation link (usually within the exporting country) is included in the seller’s price.
• Buyer must pay for freight beyond that point.
• Specification of fob location is critical.– Ex-factory, Ex-city, Ex-port.
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CIFCOST, INSURANCE, &
FREIGHT• Cost of freight and insurance to a port in
the importing country is included in the seller’s price.
• Buyer must pay for freight beyond the port.
• Specification of CIF location is useful.– Ex-port.
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C&FCOST & FREIGHT
• Cost of freight to a port in the importing country is included in the seller’s price.
• Buyer must pay for insurance from the originating point and freight beyond the port.
• Specification of C&F location is useful.– Ex-port.
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LANDED PRICE
• Usually refers to the ultimate cost of the product to the buyer at his/her place of business after paying for cost, freight, insurance, and customs fees and duties.
• Useful benchmark for comparing quotes from different suppliers.
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EXPORT LICENSE
• THE U.S. HAS TWO TYPES OF LICENSES:– VALIDATED LICENSE– GENERAL LICENSE
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IMPORT LICENSE
THE IMPORTER MAY NEED TO OBTAIN AN IMPORT LICENSE.
MAKE SURE YOUR BUYER HAS ONE IF NECESSARY.
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EXPORT DOCUMENTS• Shipper’s export declaration with Export
license
• Commercial (and Consular) Invoice
• Bill of lading (airway bill)
• Packing list
• Insurance certificate
• Special purpose certificates– Ex: Country of origin, Quality, Standards, etc.
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SHIPPER’S
EXPORT
DECLARATION
FORM
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IMPORT DOCUMENTS
• Import license (if required)
• Import declaration form (Summary Form)
• Customs bond
• Special tariff considerations
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COLLECTION DOCUMENTS
• Consignment
• Open Account
• Documents against acceptance D/A
• Documents against payment D/P
• Letter of Credit
• Cash in advance
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LETTER OF CREDIT
• A letter issued by a bank to guarantee payment to the seller on proof of shipment
• Irrevocable: A L/C that is irrevocable.
• Confirmed: A L/C that is endorsed by a second bank, that takes up the responsibility to pay the seller.
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IRREVOCABLE
LETTER
OF
CREDIT
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CONFIRMED L/C
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D/A AND D/P• D/P: Documentary upon Payment
– Documents are released to buyer upon payment.
• D/A: Documentary upon Acceptance– Documents are released to buyer upon his
acceptance.
D/A is like open account.
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DOCUMENTARYCOLLECTION