Chapter14 Export documentation

Four contracts to execute the export sales contract 1 the contract of carriage 2 the financial contract 3 the contract of cargo insurance 4

14.1 E-commerce The electronic age has transformed the international trade environment through quicker and more efficient documentation negotiation and processing procedures.

14.2 Air waybill The air waybill is the consignment note used for the carriage of goods by air. It is often called an air consignment note and is not a document of title or a transferable or negotiable instrument. The air waybill is basically a receipt for the goods for dispatch and is prima facie evidence of the conditions of carriage.

Air waybill must be completed in at least three parts embracing Add Your Title the carrier (signed by the consignor) for the consignee (signed by the consignor and carrier) for the consignor (signed by the carrier)

14.3 ATA carnets ATA carnets may be used to simplify Customs clearance of goods being temporarily exported. They replace normal Customs declarations both at export and re-import. They also replace normal Customs documents and security requirements in many countries worldwide into which goods are being temporarily imported.

14.4 Bill of exchange Under the terms of the Bill of Exchange Act 1882, a bill of exchange has been defined as an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand, or at a fixed or determinable future time, a certain sum in money to or to the order of a specified person or bearer.

Drafts can be drawn either at sight-payment to be made on demand or on presentation-or at a particular ‘ tenor ’ ( ‘ usance ’ ) – payment to be made at a fixed or determinable future date, usually within 180 days of sight of the bill of exchange by the drawer-or within 180 days of the date of the draft. The general procedure for letters of credit is for drafts to be drawn on a bank, but some credits require them to be drawn on the importer. Drafts can be drawn in pairs called ‘ first ’ and ‘ second ’ bills of exchange.

The bill of exchange contains the following date: the date; a specific sum, which should agree with the amount on the export invoice; the ‘ tenor ’, that is, whether payment is to be at sight or at a stated period after sight or at a fixed date; the name of the drawee; the name and signature of the drawer; the name of the payee or order or bearer; the endorsement of the payee where applicable.

document drawn incorrectly or for a sum different to the credit amount avoided discrepancies designation of the signature on the document not specified if required, e.g. director or partner

14.5 Bill of lading A bill of lading is receipt for goods shipped on board a vessel, signed by the person (or his or her agent) who contracts to carry them, and stating the conditions in which the goods were delivered to (and received by) the ship. It is not the actual contract, but forms excellent evidence of the terms of the contract.

Legislations relative to maritime transport 1 Hague Rules 2 Visby Rules 3 Hamburg Rules

Types and forms of bills of lading Shipped bill of lading Received bill of lading Through bill of lading Stale bill of lading Groupage and house bill of lading Transhipment bill of lading Clean bill of lading

Claused bill of lading Negotiable bill of lading Non-negotiable bill of lading Container bill of lading Combined transport bill of lading Straight bill of lading Negotiable FIATA Combined Transport Bill FIATA Multi-modal Transport Bill of Lading (MTBL) Combined Transport Document/Multi-modal Transport Document Through Transport Document (TTD)

Functions a receipt for goods shipped a transferable document to the goods evidence of the terms of the contract of affreightm ent a quasi- negotiable instrument

14.6 Cargo insurance policy and certificate It is important to bear in mind when the shipper, exporter, or agent is preparing the insurance document for presentation to the bank, that it is in the currency of the document for presentation to the bank, that it is in the currency of the documentary letter of credit; the insurance is for the value specified in the credit; it covers all risks specified in the credit; the insurance document is dated prior to the dispatch of goods or indicates that cover is effective from the shipment date; finally the insurance policy is presented when the credit so stipulates.

14.7 Certificate of origin The certificate of origin specifies the nature, quantity and value of the goods, etc. together with their place of manufacture.

14.8 Certificate of shipment The FIATA Forwarder ’ s Certificate of Receipt (FCR) and Forwarder ’ s Certificate of Transport (FCT) are becoming increasingly accepted in the trade as the recognizable document confirming a receipt of the goods. Alternatively the freight forwarder may issue a letter detailing the goods received by the forwarder, or in a form similar to a Bill of Lading (where the goods have actually been dispatched).

14.9 Charterparty A charterparty is a contract whereby a shipowner agrees to place his or her ship, or part of it, at the disposal of a merchant or other person (known as the charterer), for the carriage of goods from one port to another port on being paid freight, or to let his or her ship for a specified period, his or her remuneration being known as hire money.

Charterparty demisenon-demise Lump sum charter Gross form of charter Net terms Free-in-and-out (FIO) charter Liner terms

14.10 Convention on the contract for the international carriage of goods by road (CMR) CMR come into force in the UK in October The contract of carriage, found in the CMR consignment note, is established when it is completed by the sender and carrier with the appropriate signatures or stamp being recorded thereon. The CMR consignment note is not a negotiable or transferable document or a document of title.

14.11 Courier receipt This document is used where the goods are dispatched by courier service, usually involving small parcels and packets.

14.12 Dock receipt This may be issued by a Port Authority to confirm receipt of cargo on the quay or warehouse pending shipment. It has no legal role regarding processing financial settlement of international consignments.

14.13 End use Certificate This is a document complete by the international buyer indicating/specifying the use to which the product or service will be employed and details of any ‘ on sale ’ and likewise the use to which the product will be engaged. Required by many Governments in countries anxious to avoid the illegal/abusive use of arms/defense equipment sold overseas.

14.14 Exchange permit They are usually issued by Government departments, Chambers of Commerce, or Chambers of Industry, thereby authorizing import of a specific commodity. It is a means of regulating the flow of specific commodity imports and the funds associated with them.

14.15 Export Cargo Shipping Instruction (ECSI) At the time of booking a cargo for shipment, exporters or their agents complete the Export Cargo Shipping Instruction and forward it to the shipping company, usually electronically.

Commercial invoice Customs invoice Consular invoice Pro-forma invoice Export invoicing

14.17 Export licensing

1 open general Export License (OGEL) 3 the individual or bulk license 2 he Open individual Export License (OIEL)

14.18 Health certificate A health certificate is issued when agricultural and animal products are being exported to certify they comply with the relevant legislation in the exporter ’ s country.

14.19 Intermodal certification This document arises from the Intermodal Safe Container Act which became operational in the USA from April 1997.

14.20 International Convention concerning the carriage of Goods by Rail (CIM) The CIM consignment note is completed by the shipper, agent or originating rail carrier and has six copies. It embraces the original of the consignment note, the invoice, the arrival note, the duplicate of the consignment note, the duplicate of the invoice, and a supplementary copy.

14.21 Instructions for dispatch International IATA scheduled airlines require shippers to complete an Instruction for Despatch form (IDG) to enable an air waybill to be raised detailing the carriage to be performed.

14.22 Letters of hypothecation This is a banker ’ s document outlining conditions under which the international transaction will be executed on the exporter ’ s behalf, the latter of whom will have given certain pledges to his or her banker. It may be by direct loan, acceptance, or negotiations of draft thereto.

14.23 Letters of indemnity The role of the letter of indemnity is to permit cargo to be released to a consignee without production of the original endorsed bill of lading, or to permit the issue of a duplicate set of documents when the original bills of lading have been lost or mislaid in transit. It is a document of legal and commercial convenience, and should be used with care and caution.

14.24 Mate’s receipt A Mate ’ s receipt is sometimes issued in lieu of a bill of lading. It has no legal authority regarding the processing of the financial settlement of international consignments but merely confirms cargo is placed on board a ship pending issue of a bill of lading.

14.25 Packing list The document, sometimes called a packing note, is provided and completed by the shipper at the time the goods are dispatched and accompanies the goods and the carrier ’ s documents such as bill of lading, sea waybill, air waybill, CIM and CMR consignment notes throughout the transit.

14.26 Parcel post receipt The parcel post receipt is issued by the Post Office for goods sent by parcel post. It is both a receipt and evidence of dispatch.

14.27 Phytosanitary (plant health) certificate The importation of all plant material, forest trees and other trees and shrubs, and certain raw fruit and vegetables must be accompanied by a phytosanitary certificate in most countries.

14.28 Pre-shipment inspection certificate This embraces their quality, the quantity being exported and the price(s) proposed and market price(s) comparison at the time of shipment.

The other chapter Quality certificate Weight certificate Veterinary and health certificate Ship ’ s delivery order Shipper ’ s letter of instruction