MIB 3.6 on 13/08/2012 – Monday / JAMIA

Types and characteristics of

documents

Dear Students,

Lets understand the concept of Aligned Documentation System(ADS) before we step in to Types and Characteristics of EXIM documentation.

Objectives of ADS The primary objectives has been to ensure benefits

to every one in the international trade chain from easier documentation.

To enter information on an easy basis and access the information with greater convenience, ADS is adopted.

Uniform length, and standard such a-4 size paper etc.,

An exporter can develop 14 out of 16 commercial documents with help of master documents / Master Documents 1 and 2

UN lay out Key !!!!

Advantages of ADS Once the information is entered in to

Master Documents, it becomes possible to prepare many commercial and regulatory Documents with the help masking reproduction technique.

The documents are aligned to each other. All documents are printed in the same size of paper. Common items of information are given the same relative slots in each of the documents included in the system

ADS The common items of information

occupy the same relative position on each form. For example, shipper top left, references top right, signatory details bottom right and so on

Easier to complete and access This makes forms both easier to complete

and easier to process. Since common positions are used for data items, its possible to use ‘ master documents’ This makes document, can be used to produce and range of documents using a photocopier and overlays( to provide the form outlines and hide unwanted data)

BENEFIT TO ALL PARTIES

• All parties in the International Trade chain benefit from easier document pressing. Using documents that comply with UN alignment standards speed up from preparation, cut costs and reduce errors. Exporters may actually get paid quicker than otherwise >

BETTER IMAGE ALIGNED DOCUMENTS

SIMPLIFY DOCUMENT CHECKING AND TRAINING NEW STAFFS. They Even enhance Organization's professional image.

Paper size and specifications Paper A4 Size Lenth: 297 mm

Width: 210 Margins : Top 10 mm

Left 20 mm

Right 6 mm

Bottom 7 mm

Lets now step in to the types and characteristics of documents

Dear MIBian Remember few points which we had

already discussed in previous classes

…. Simply … You can put some points on common

sense about the EXIM documents ???

ARE YOU READY ?????? MIB !

1 COMMERCIAL DOCUMENTS 2 REGULATORY DOCUMENTS

Commercial documents Commercial Invoice

Inspection Certificate

Insurance Certificate

Bill of Lading / AWB

Certificate of Origin

Bill of Exchange

Shipment Advice

Packing List

Regulatory docs Shipping Bill

ARE1 from (Excise)

RBI Declaration Forms

Application for remittance of currency

Various Licenses

Bill of Entry

The objectives of CD ( cOmrce DoCM)• To effect physical transfer of goods from the

exporter’s place to the importer’s place.• To Transfer property and title of goods from

exporter to importer and • Realization of exports proceeds from the

exporter to the importer .

Out of 16 commercial documents exim doc frame work, as many as 14 docs have been standardized and aligned to one another.

The commercial documents are further classified in to Two

PRINCIPAL DOCUMENTS REGULATORY

DOCUMENTS

Commercial / Regulatory Documents

• Referring to the Commercial set of documents, it may please be observed that these set of documents are prepared from other set of documents (some of these only). These are known as auxiliary documents.

• These documents may not be required by the foreign buyer, but these are must for preparation of main export documents, known as Principle Commercial Documents.

PRINCIPAL DOCUMENTS .The Commercial Invoice,

. Packing List

. Bill of Lading/Air Waybill

. Certificate of Inspection/Quality control. Certificate of origin. Bill of Exchange and. Shipment Advice. Insurance Certificate

AUXILARY DOCUMENTS 1. Proforma Invoice

2. Intimation for inspection3. Shipping instructions4. Insurance Declaration5. Application for certificate of origin.6. Mate's Receipt7. Letter to bank ofcollection/negotiation of documents

REGULATORY DOCUMENTS

1. ARE Form ( for Central Excise)2. Shipping Bill/Bill of Export(for Customs)- For export of goods Ex. Bond- For export of duty free goods- For export of dutiable goods- For export of goods under claim of drawback

REG DOCU…• -For export of goods under claim of DEPB • 3. Port Trust Copy of Shipping Bill/ • Export Application/Dock Challan-Port • 4. Vehicle ticket • -Port

5. Exchange Control Declaration/GR/PP forms-RBI6. Freight Payment Certificate-Steamer Agents7. Insurance Premium Payment Certificate- Insurance Co.

Pro Forma invoice Prepared by the supplier prior to

shipment of merchandise, informing the buyer of the kinds and goods to be sent, their value and importation specifications(weight, size and such characteristics)

Prepared by the Exporter

COMMERCIAL INVOCE

Its A formal demand note for payment issued by the exporter to the importer for goods sold under a sales of contract. Its should give details of the goods sold,payment terms and trade terms. It is also used for the customs clearance of the goods

Prepared by EXPORTER

PACKING LIST A LIST WITH DETAILED PACKING INFORMATION OF THE GOODS BEING SHIPPED

PREPARED BY exporter

Inspection certificateA report is issued by an independent

surveyor (inspection company) or the exporter on the specifications of the shipment including quantity, quality, and price etc ,. Required by certain buyer and countries.

Prepared by Inspection company or exporter

Insurance policy/certificate Its an document evidencing –insurance

has been taken out on goods shipped, and it gives full details of insurance coverage. An insurance certifies that the shipment has been under or given open policy and is to cover loss of or damage to the cargo while in transit.

Prepared by Insurer/insurance agent or insurance broker

Product testing certificateTo certify that products are conformed

to e certain international/national technical standard such as product quality, safety and specifications etc,.

Issued by Accredited Laboratories

CONSULAR INVOICE A document required by some foreign countries,

showing shipment information such as consignor, consignee, and value description etc,. Certified by a consular official of the importing country stationed in the foreign country, its used by the countries' customs officials to verify the value ,quantity and nature of the shipment. Required for the countries like ..kenya,uganda, australia, fiji …

Preaperd by Exporter and certified by the said authority

TRANSPORT DOCUMENTATION Dock Receipt(DR) or Mate’s

Receipt: a receipt to confirm the receipt cargo on warehouse pending shipment. DR used as documentation to prepare bill of lading. Its has no legal role processing financial settlement.

Prepared by Shipping company

BILL OF LADING( B/L )A documents issued by the carrier to shipper,

acknowledging that specified have been received on board as cargo for conveyance to a named place for delivery. A through bill of lading involves the use of at least two modes of transport from road, rail, air and sea.. The term derives from the verb ‘ to LADE’ – means to load a cargo on to ship or other form of trans…………….

The basics of B/L 1. Name of the shipping company

2. Flag of Nationality!

3. Shippers’ Name

4. Order and notify party

5. Description of goods

6. Gross/Net weight etc.,

7. Freight rate/measurement /weight and total freight .

Types of Bill of Lading Order bill of lading : this bill uses express word

to make the bill negotiable i.e. it states that the delivery is to be made to the further order of the consignee using words such delivery to Z ltd ..or right to make delivery can be transferred by physical delivery of the bill accompanied by adequate evidence of Z ltd ‘s intention to transfer

Bearer Bill of Lading Delivery shall be made to whoever holds the bill. Such bill may be created explicitly or its an order bill

Surrender Bill of Lading

When we hand over the Bill of Lading , we surrender title to the goods and our power of sale over goods

A clean bill of Lading

States that the cargo has been loaded on board the ship in apparent good order and condition. Such B/L will not bear the clause or notation which expressively declares a defective condition goods and or the packing thus …its simply to acknowledge that the goods are received in good condition.

AIR- WAY BILL (AWB)

• Used for carriage of goods by AIR.• This serves as receipt of goods for

delivery and states the condition of carriage, but is not a title document or transferable/ negotiable instrument .

Issued by AIRLINE

Packing List…prepared by shipper

A list providing information needed for Transportation purpose, such as details of invoice, buyer, consignee, country of origin ,vessel/ flight/ airport of discharge/ place of delivery, shipping marks/ container number / weight – volume of merchandise and the fullest details of the goods.

Dynamic documents • Export documentation is subject to frequent change

and amendments and requirements vary from country to country .

• To avail the updated information… the following sources can be contacted

• International chamber of commerce • Trade information centre • Export assistant centre

• An embassy • Freight forwarders

Dear MIB ians Now , we need to demarcate

the line between the various documents by using their purpose, maker and usage !

ARE YOU READY ????

Documents related to Goods

• Proforma invoice • Commercial invoice • Consular invoice • Legalised invoice • Customs invoice • Packing Note and Packing list • Certficate of origin

Proforma invoice Importance and significance of PI:-

A. It forms basis of all trade transactions and further negotiations or contract is made on the basis.

B. It helps the importer to obtain the import license, where required, and obtain foreign exchange for completion of the contract

Significance of the commercial invoice Its prima facie evidence of the contract of sale and

purchase of goods. On the basis of the invoice, all other documents, in the context of export, are prepared as it is the basic documents.

C I :- Constitutes docs such as PSI- preshipment inspection, quality, excise and customs procedures.

Its useful for accounting purposes, both by the exporter and importer.

This document is required in collection / negotiation of docs through the bank.

For the claiming incentives, this documents is essential.

CONSULAR INVOICE – SIGNIFICANCE Importance to the exporter: Once invoice is signed by the

consulate of the importing country, the exporter is reasonably assured that there would nt be no problem in realization of exports proceeds or foreign exchange.

It enables prompt clearance from the customs exporters’ country for shipping the goods.

Importance to the importer: In the importers country, the customs don’t normally open the package for checking, it helps the importer to get speedy delivery of goods/ Lot of unnessary hardship which importer facses can be avoided.

Importance to the Customs: The customs of importing country can easily clear the goods/ the customs of the importing country need not open the packages for checking and can easily calculate the import duties.

LEGALISED INVOICE Certain Latin American

countries like Mexico require this. Its just like consular invoice, which requires certification from consulate or authorized mission, stationed in the exporters’ country.

CUSTOMS INVOICE When the commercial invoice is

prepared on the format prescribed by the customs of the importing country, its called ‘ Customs Invoice’ . This is the requirment of USA, Canada and AUS.

PACKING NOTE AND LIST Date of packing

Number of packing note

Number of case to which it relates to

Contents of case in terms of quantity and weight

Marking numbers

Name of exporter

Name of importer

Importer’s order number

Number and date of B/L

Name of Vessel/ flight .

Certificate of Origin [ COO] COO is required for availing concession under

commonwealth preferences as well GSTP. It facilitates the importer to adhere to the rules and

regulations of his country. Customs in the importer’s country allow the

concessional tariff only on production of COO. When goods from some countries are banned,

importing country requires COO to ensure that goods from banned countries are not entering in to the country.

Exporting country may insist on this certificate to ensure that the goods imported are not reshipped again.

DOCUMENT RELATED TO SHIPMENT

• Shipping Bill •Mate’s receipt • Cart Ticket • Certificate of Measurement • Bill of Lading • Bill of entry

Shipping Bill • The shipping bill is the main document on

the basis of which the customs permission is given. Under the computerized processing, the exporter doesn't prepare the shipping bill instead computer generated. • The customs order is called ‘ LET EXPORT

Order’ . After the shipping bill is stamped by the customs, then only the goods are allowed to be carted to the docks.

Shipping Bill contains the following particulars nature of goods exported Name of the vessel, master or agents Flag, Country of destination , the port at which the goods are to be

discharged Exporters’s address Importer’s address Details of the packages, such as numbers and marks, Quantity of each case, total number of cases and aggregate

weight. F.O.B Prices and real value as defined in the sea customs act and Whether the merchandise is Indian or foreign origin which is

exported.

The shipping Bill is prepared in five copies

•Customs copy• Drawback copy•Export Promotions copy•Port Trust copy and •Exporters copy

Importance of Shipping Bill • Its important document required by the customs

authorities for clearance of goods. The customs authorities endorses the duplicate copy of the shipping bill with ‘ Let Export Order’ .

• After the

Document related to Payment

•Letter of Credit L/C •Bill of exchange •Trust receipt •Bank Certificate of Payment

Document related to Inspection

•GP forms •Form C •Forms AR4 /AR4A

Document Related to FOREX- and also Legal documents

•GR form•PP form•VP/ COD form•SOFTEX FORM