Documentary Requirements

Air Waybills


An airway bill is a proof of shipment of goods by air. Air Waybills serves as a proof of receipt of the goods for shipment, an invoice for the freight, a certificate of insurance, a guide to airline staff for the handling, dispatch and delivery of the consignment. An airway bill has the following inclusions:

  • The shipper and consignee details.
  • The airport of departure and destination.
  • The goods description (weight, measure or shipping marks).
  • It must be signed 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.

 

Bill of exchange


A bill of exchange is a special type of written document under which a certain amount of money is being asked by the exporter to be paid by the importer in future and the importer also agrees to pay the exporter that amount of money on or before the date mutually agreed upon. This document has special importance in wholesale trade where large amount of money is involved.


Following persons are involved in a bill of exchange:

 

  • Drawer: The person who writes or prepares the bill.
  • Drawee: The person who pays the bill.
  • Payee: The person to whom the payment is to be made.
  • Holder of the Bill: The person who is in possession of the bill

On the basis of the due date there are two types of bill of exchange:

  • Bill of exchange after date: In this case the due date is counted from the date of drawing and is also called bill after date.
  • Bill of exchange after sight: In this case the due date is counted from the date of acceptance of the bill and is also called bill of exchange after sight.

 

Bill of Lading (B/L)


Bill of Lading is a document given by the shipping agency for the goods shipped for transportation from one destination to another and is signed by the representatives of the carrying vessel.


The main parties involve in a bill of lading are:

 

  • Shipper: The person who send the goods.
  • Consignee: The person who take delivery of the goods.
  • Notify Party: The person, usually the importer, to whom the shipping company or its agent gives notice of arrival of the goods.
  • Carrier: The person or company who has concluded a contract with the shipper for conveyance of goods

 

The bill of lading must meet all the requirements of the credit as well as complying with UCP 500. These are as follows:

 

  • The correct shipper, consignee and notifying party.
  • The carrying vessel and ports of the loading and discharge.
  • The place of receipt and place of delivery.
  • State whether freight has been paid or is payable at destination.
  • Date should be on or before the latest date for shipment specified in the credit.
  • State the actual name of the carrier or be signed as agent for a named carrier.


Certificate of Origin


The Certificate of Origin is required by the custom authority of the importing country for the purpose of imposing import duty. It is usually issued by the Chamber of Commerce and contains information like seal of the chamber, details of the good to be transported and so on.

The certificate must provide that the information required by the credit and be consistent with all other document, it would normally include:

 

  • The name of the company and address as exporter.
  • The name of the importer.
  • Package numbers, shipping marks and description of goods to agree with that on other documents.
  • Any weight or measurements must agree with those shown on other documents.
  • It should be signed and stamped by the Chamber of Commerce.


Commercial Invoice


Commercial Invoice document is provided by the seller to the buyer. Also known as export invoice or import invoice, commercial invoice is finally used by the custom authorities of the importer's country to evaluate the good for the purpose of taxation.


The invoice must have the following inclusions:

 

  • Be issued by the beneficiary named in the credit (the seller).
  • Be addressed to the applicant of the credit (the buyer).
  • Include the description of the goods exactly as detailed in the credit.
  • Be issued in the stated number of originals (which must be marked "Original) and copies.
  • Include the price and unit prices if appropriate.
  • State the price amount payable which must not exceed that stated in the credit
  • Include the shipping terms.

 

Insurance Certificate


Also known as Insurance Policy, it certifies that goods transported have been insured under an open policy and is not actionable with little details about the risk covered.


It is necessary that the date on which the insurance becomes effective is same or earlier than the date of issuance of the transport documents.

Also, if submitted under a LC, the insured amount must be in the same currency as the credit and usually for the bill amount plus 10 per cent.


The requirements for completion of an insurance policy are as follow:

 

  • The name of the party in the favor which the documents have been issued.
  • The name of the vessel or flight details.
  • The place from where insurance is to commerce typically the sellers warehouse or the port of loading and the place where insurance cases usually the buyer's warehouse or the port of destination.
  • Insurance value that specified in the credit.
  • Marks and numbers to agree with those on other documents.
  • The description of the goods, which must be consistent with that in the credit and on the invoice.
  • The name and address of the claims settling agent together with the place where claims are payable.
  • Countersigned where necessary.
  • Date of issue to be no later than the date of transport documents unless cover is shown to be effective prior to that date.

Inspection Certificate


Certificate of Inspection is a document prepared on the request of seller when he wants the consignment to be checked by a third party at the port of shipment before the goods are sealed for final transportation.


In this process seller submits a valid Inspection Certificate along with the other trade documents like invoice, packing list, shipping bill, bill of lading etc to the bank for negotiation.

On demand, inspection can be done by various world renowned inspection agencies on nominal charges.


Letter of Credit


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:

 

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


Packing List


Also known as packing specification, it contains details about the packing materials used in the shipping of goods. It also includes details like measurement and weight of goods.


The packing List must:

  • Have a description of the goods ("A") consistent with the other documents.
  • Have details of shipping marks ("B") and numbers consistent with other documents

Adapted from www.infodriveindia.com

Comments

starting for which business in vilage areas

Sir i want to start a new manufacturing unit for namkeen & farsan. I need a machinery loan for this. May i apply for loan for this?

Kindly Read the requirements for the loans first and you can find this in bank schemes section on this website.Feel free to contact banks and get their opinion.

I want to start new project of soft drink please sugest me proces for how to start .

I have export license from 2003.
Yet have not a single deal.
How can i go ahead ?

Hi,, Permalink

Which item could you export from your licence?
Please let me know?