Third Session :Presentation on (Export/Import Documentation Incoterms and procedures of Export /Importby Rajan Sharma

Objective of this Class:

Acquaint the participants with the following:

a. Document required for export and Import

b. Import and export procedure

c. Choosing the right means and mode of transportation

d. International Incoterms and its implication in business contract and negotiation.

e. Packing ,warehousing and distribution.

f. Problems in shipping out of Nepal

Raw materialssupplier

Final consum

er

Retailer Component manufactur

er

Assembler

Logistics: transport, storage, packing and

handling

An example of a simple supply chain

IN THE NEPALESE CONTEXT:

The right type(s) of material(s)

In the right quantity(s)

To the right location(s)

At the right time(s), and

For the right cost

Increasingly, a sixth “right” must be added

Delivered with the right tailored services

What is Logistics ?

It generally involves all activities involved in securing:

What does Each Incoterm determine ?

When and where the seller provides the goods to the buyer and when and where the buyer is obliged to pay the contracted price

Obligations for export/import licences, duties, taxes, etc.

Obligations to arrange and pay for transportation and insurance

Conditions for delivery by the seller and acceptance by the buyer

Allocation of responsibility for risk of loss or damage

Allocation of costs associated with movement of the goods

Provisions regarding notices of delivery or dispatch of the goods

Proof of delivery, transport documents or electronic messages

Requirements of seller to check quantity & conformance of goods with the contract and to provide suitable packaging and markings

Obligations of mutual assistance, information and documentation

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Incoterms are grouped into four categories:

ITC

“E” Terms - Ex-works

“F” Terms - Main carriage not paid by seller

“C” Terms - Main carriage paid by seller

“D” Terms - Delivered on arrival

Incoterms – Point of delivery of the goods and transfer of risk

E EXW Ex worksUpon delivery of goods at the seller’s premises

(named place)

FCA Free carrier Upon delivery of goods to the carrier(named place)

FAS Free alongside ship

Upon delivery of goods alongside ship (namedport of shipment)

F

FOB Free on board When the goods pass the ship’s rail at the namedport of shipment

CFR Cost and freight When the goods pass the ship’s rail at the port ofshipment

CIF Cost, insurance andfreight When the goods pass the ship’s rail at the port of

shipment

CPT Carriage paid to

Upon delivery of goods to the carrier(named place)

C

CIPCarriage and insurance paid to

Upon delivery of goods to the carrier(named place)

DAF Delivered at frontier

Upon delivery of goods at frontier (named place)- not unloaded

DES Delivered ex ship

When goods are placed at the disposal of thebuyer on board the ship (named port of

destination)

DEQ Delivered ex quay

When goods are placed at the disposal of thebuyer at the quay (named port of destination)

DDU Delivered duty unpaid

Upon delivery of goods (at named place ofdestination) not cleared for import and not

unloaded

D

DDP Delivered duty paid

Upon delivery of goods cleared for import (atnamed place of destination), duty paid but not

unloaded

Incoterms – Point of delivery of the goods and transfer of risk

DELIVERY and TRANSFER OF RISK can take place at many points between the seller’s premises and the

buyer’s premises

BuyerSeller

EXW FCA

CPT

CIP

FOB

CFR

CIF

FAS DES DEQ DDUDDP

Waterborne transport only

DAF

Cus-toms

Transport by land

Cus-toms

Cus-toms

Cus-toms

TRANSFER OF COSTS takes place at points that are sometimes

different

BuyerSeller

EXW FCA

CPT

CIP

FOBFAS DES DEQ DDUDDP

Waterborne transport only

DAF

CFR

CIF

Import clearance costs on account of the buyer

Export clearance costs on account of the seller

Transport insurance costs on account of the seller

Unloading costs on account of the seller only if in its contract of carriage

Transport by land

**

*

Cus-toms

Cus-toms

Cus-toms

Cus-toms

DAF terms are commonly used for land transport

Customs Customs

COUNTRY OF EXPORT COUNTRY OF IMPORT

Delivered at frontier, export customs cleared

DAF

INCOTERM used in the Sales Contract

Contract of carriage

Custom & practice of trade

The role of the Incoterm used and custom & practice of the trade

in establishing the contract of carriage

Transport Operator(s)

BuyerSeller

ITC

Freight Forwarders Responsibility and Duties:

Duties and responsibilities of the freight forwarding agent when contracted by the shipper(who may be the exporter or importer depending on the Incoterm used):Advise on the most appropriate mode of transport.Arrange reservation of space on a vessel, train or aeroplane.

Take delivery of the goods.

Pack products into containers or onto pallets.

Store goods in transit (before loading on board).

Insure the cargo.

Weigh and measure the goods.

Prepare loading and, if necessary, transhipments.

Transport the goods to a named port or airport of origin.

Freight Forwarders… cont..

Duties and responsibilities of the freight forwarding agent when contracted by the importer (whether or not the importer is the shipper):

Follow-up on the movement of the goods.

Receive and control documents related to the goods.

Ensure customs documents are prepared in advance.

Take delivery of the goods.

Check on goods storage during transhipments.

Assist with customs clearance.

Deliver the goods to the consignee.

Export Documents: Letter of Credit/Advance payment certificate and

Covering letter of bank Invoice (Description of Goods and value per unit and

total. Packing list (Volume and weight break of each Pc) Certificate of origin and GSP Pan /Vat/Company registration certificate copy Authority Letter CTD ATA CARNET

Yellow paper (Custom declaration) Currency declaration Form Handicraft Certificate (for handicraft Goods) Visa in case of garments export Plant Quarantine certificate in case of Plants/Food

items Permission from department of Forestry in cage of

Forest product Certificate from Agriculture department in case of

agro products. Sample goods and special goods permission from

department of Customs ie: diplomatic /Personal effects

Human remains: Fumigation certificate for Agro products or wooden

goods.

Documents for Import Goods: Letter of credit with Covering letters from bank NTWCL Invoice Packing List Certificate of origin Bank forms, Custom declaration AWB/HBL or MBL ( Transport Documents) Permission Certificate from department of custom Permission Certificate from department of commerce

Authority permission by importer (consignee)Insurance covering paperDelivery Order paper from transporterCTD In case of Land Shipment: Mode and Means of Shipment and how to

choose the right mode and means of transport.Air/AirAir/SeaLand/sea.Airplane, Trucking, Train, Ship :

Payment methods

Letter of creditTelegraphic transferAdvance paymentCash against documents

Factors to be considered in the means and mode of transport:

TimeCostPlace of deliveryLoading pointTran-shipment pointCustoms point and infrastructure and cost.

Packing /Marks and Numbers :

DistributionWarehousing (storage)

It protects your product your during transportation. It protects your product your during transportation. It breaks down your product to sellable units (e.g. It breaks down your product to sellable units (e.g.

transforming staple goods into consumer units), transforming staple goods into consumer units), or it simply makes the product accessible to or it simply makes the product accessible to consumers.consumers.

It conveys a message to the buyer/consumer (e.g. It conveys a message to the buyer/consumer (e.g. advertisement or instruction for use etc.).advertisement or instruction for use etc.).

Traditional Distribution Systems

Factory Factory Factory Factory Factory Factory

18 routes

dispatchesper

Import

factory

PortFrontier Airport

Customs

Douane

Minimum of 6

Minimum of 3deliveries per

Factory Factory Factory Factory Factory Factory

12 routes

Maximum of 2dispatches

perImport

Maximum of 1

delivery perfactory

PortFrontier Airport

(B) Using cross-docking centres

CustomsDouane

Using Cross-docking Centres

Option A: Star delivery plan

100 km 100 km

160 km

A

B

C

D

Option B: Multi-point delivery plan

50 km

50 km

50 km

50 km

A

B

C

D

Document required for exporting to EU

GSP(Derogation)Other necessary quality certificationHealth and Sanitization certificateHACCPEnvironment issuesChild labor issues

Export procedure

Preparing shipmentHaulage , choosing the means and mode

of transport, sending pre-alert, issuing the right transport document, negotiation with bank,

Other document compliance.

Import Procedure:

Product findingPrice negotiationadding document cost, haulage cost,

customs cost, tax in the exporting country,Arranging shipping, information flow,

trans-shipment point procedure ,import procedure of the country. dealing with customs etc.

Problems:L/C ComplianceTransport Document ComplianceShipment dateL/C expiryDelivery problem/Delivery orderDiscrepancy due to transportation problemBank release.

Thank You for your Attention.

Any Questions ??????