Week 8: Export Documentation & Insurance

Question 1

Packing List

Answer 1

• Contains detailed info of items being shipped
• Describes composition / packaging of load plus quantity / weight / measures for each package
• Used for insurance claim

Question 2

Certificate of Origin

Answer 2

• Used as declaration of the goods to be of Australian origin
• Require this to establish where consignment was produced
• Documents need to be authenticated by one of the designated bodies

Question 3

Bill of Lading

Answer 3

• Issued by carrier to acknowledge receipt of goods on board for transportation to a specific location for delivery to the consignee
• Serves as evidence of the contract of carriage between exporter and carrier / document of title transfer
• Negotiable

Question 4

Air Waybill

Answer 4

• Primary document of carriage for transportation by air (contract between exporter and air carrier)
• Not negotiable / doesn’t serve as document of title

Question 5

Commercial Invoice

Answer 5

• Customs document

- Used as customs declaration provided by person / corporation that is exporting an item across international borders

Question 6

Principles

Answer 6

Insurable Interest:
- The insured has interest in the subject matter at the time of entering contract (not gambling arrangement)

Utmost Good Faith
- Must fully disclose risk to insurer at time of agreement (up front and honest)

Indemnity

• Putting the insured in the place they were before insurance
• Based on ‘agreed value’ / ‘sufficient compensation’ for replacement

Subrogation
- Cannot claim insurance for the same cargo from two insurers (cannot be over-compensated)

Question 7

What Makes Insurance Cheaper?

Answer 7

• Good Vessel
• Packaging Issues
• Characteristics of goods
• Value ($$ = higher premium)
• Transit (time / distance / location)
• Experience of past losses
• Level of Cover Needed e.g. 100% full coverage is more expensive than 20% indemnity
• Volume of trade to be insured

Question 8

Export Finance Insurance Corporation (EFIC)

Answer 8

Is a self-funded corporation wholly owned by the Commonwealth Government aimed at supporting international growth of Australian firms

Question 9

EFIC Provides:

Answer 9

• Financial solutions
• Insurance to Australian exporters / banks against non-payment by overseas buyers / banks
• Medium to long term finance facilities to buyers of Australian exports to assist with purchase of exports