Foreign Trade Class 8 - Customs Formalities and Documentation Flashcards
Transport Documents for:
1.Ocean freight
2.Air freight
3.Road Transport
4.Rail freight
- Bill of lading
- Air waybill
- CMR document (Contrat de Transport International de Marchandise par Route)
- Cim document ( Chicago and Illinois Midland)
Bill of lading functions:
- A receipt for the goods
- Evidence of the Contract of Carriage
- A document of Title
Bill of lading 1st purpose:
A receipt for the good:
Definition: A document issued by the shipping company, confirming the receipt of goods on board and indicating the obligation to deliver them.
Types of B/L:
-Clean Bill: Goods received in apparent good order and condition.
-Claused Bill (Unclean, Dirty, or Foul Bills): Goods damaged or in bad order, such as inadequate packing or a shortage of packages.
“-Said to Contain…” Bill: Carrier does not inspect the contents, which can lead to disputes and makes it challenging to take action against the carrier.
What information does a B/L contain?
Name(s) and Address(es)
Ship From
Ship To (port of destination)
Reference Numbers e.g. purchase order, BOL number
Details of the goods e.g. description, quantity/number of pieces, packages etc
Value
Weight
Freight charges
Special Instructions
Bill of Lading 2nd purpose:
B/L as Evidence:
-B/L serves as evidence of the Contract of Carriage -between the shipper and the carrier.
The contract outlines rates and terms for the shipment.
-Booking Process:
Shipment is officially booked when the Contract of Carriage is agreed upon.
-Booking Confirmation:
Carrier typically confirms the booking by sending a booking confirmation.
-B/L Distinction:
B/L is not the Contract of Carriage itself.
The contract is established before the B/L is prepared and issued.
B/L 3rd purpose
A document of title:
Evidencing Contract of Carriage:
B/L serves as evidence of the Contract of Carriage and transfers ownership (title) of the goods.
-Ownership Transfer:
The bearer of the B/L is considered the owner of the goods.
Exporter transfers ownership to the importer through the B/L.
-Negotiability:
2 or 3 “negotiable” originals + copies are issued.
“Negotiable” implies the exporter’s transfer of ownership via the B/L to the importer.
-Exporter Protection:
Acts as protection against non-payment; exporter may withhold the B/L until payment is received.
-Presentation Requirement:
Signed original negotiable bill must be presented to the shipping company at the destination port for the release of goods.
Other import/export documents
Pro forma invoice
Purpose: Facilitates negotiation between seller (exporter) and buyer (importer).
Nature: Provisional document providing a quotation with a specific price at a given date.
Price Flexibility: Prices may change due to delays between proforma and commercial invoice issuance.
Country Requirements: Required by certain countries (e.g., for import permits or quotas).
Import Process Aid: Useful for initiating the import process, assisting with documentation and regulatory requirements.
Other import/export documents
Commercial Invoice
Transaction Document:
Bill for merchandise from the seller (exporter) to the buyer (importer).
Information Included:
Contains basic transaction details such as goods description, delivery and payment terms, order date, etc.
International Transport Requirement:
Essential for international transport; a key document in the shipping process.
Customs Application:
Customs authorities use the commercial invoice to determine the value of goods and apply duties.
Buyer’s Role:
Used by the buyer (importer) to prove ownership and arrange payment of duties.
Other import/export documents
Certificate of Origin
Purpose:
Needed to prove the origin of goods, often required for international trade.
Eligibility for Preferential Duty:
Used to determine eligibility for preferential duty (tariff) treatment.
“Wholly” or “Sufficiently” Obtained:
Examples:
Wholly Obtained: Goods entirely produced in one country (e.g., minerals extracted, plants grown).
Sufficiently Obtained: Products with significant manufacturing or processing in a specific country.
Issuing Authority:
Typically obtained from local Chambers of Commerce; in Belgium, it is obtained from Customs and Excise Administration.
EU Options:
EUR-1 (most common) or EUR-MED for products from Pan-Euro-Mediterranean countries (e.g., EU, Turkey, Georgia).
Presentation Requirement:
Must be presented in the receiving country to benefit from preferential duty.
Other import/export documents
Export Packing List:
Detailed Documentation:
Comprehensive document detailing all aspects of the shipment.
Inclusions:
Lists all parties involved, content, quantity, packing methods, weight, and dimensions.
Customs Requirement:
May be necessary for customs clearance.
Checklist Function:
Functions as a checklist for customs clearance procedures.
Attachment Method:
Can be included inside the package or attached on the outside for easy access.
Other import/export documents
Pre-shipment Inspection Certificate:
Certification Process:
Involves private companies checking shipment details and issuing a certificate.
Government Use:
Not always required but may be used by governments to prevent customs duty evasion.
Verification of Value:
Assists in verifying that the price charged by the exporter is accurate for the goods.
Quality Assurance:
Ensures the quality of the goods is sufficient.
Customs Duty Accuracy:
Helps ensure that customs duties are correctly assessed.
Other import/export documents
Export manifest
Required in EU.
Confirmation that goods left (were exported).
For customs of receiving country.
Other import/export documents
Declaration of customs value
Document to prove value of goods for duties.
Other import/export documents
Customs import declaration
For clearance.
