1 CHAPTER XII SHIPPING DOCUMENTS  Commercial Invoice  Packing List  Ocean Bill of Lading  Marine Insurance Policy  Special Shipping Documents  Pro Forma Invoice Copyright(c) 2012 Dr. Chase C. Rhee

2 Commercial Invoice  Must be signed by the shipper or his agent  Information required in a commercial invoice (1)Port of entry (2)Date, place, and names of seller and buyer (3)Detailed description of the goods (4)Quantities in weights and measures (5)Purchase price (6)For consignment, the value of each item that would be in the ordinary course of trade Copyright(c) 2012 Dr. Chase C. Rhee

3 Commercial Invoice (7)Kind of currency (8)All charges incurred after the port of exportation: freight, insurance, commission. (9)All rebates, drawbacks, and bounties allowed after exportation (10) Country of origin (11)All goods and services furnished for the production not included in the invoice price Copyright(c) 2012 Dr. Chase C. Rhee

4 Commercial Invoice Commercial Invoice  Special Requirements  Separate invoice required for each shipment  Assembled shipments: May be included in one invoice if same consignee by one carrier  Installment shipments: May be included in one invoice if they arrive within 10 consecutive days  Production assists: Must be included Provided to exporter by importer free or at a reduced cost Dies, molds, tooling, printing plates, artwork, engineering work, design, and financial assistance Copyright(c) 2012 Dr. Chase C. Rhee

5 Commercial Invoice  Exchange rate: If exporting country uses two or more exchange rates, show exchange rate used  Pro forma invoice: When a commercial invoice is not available at the time merchandise is entered Pro forma invoice (prepared by importer) must be filed by importer Bond must be submitted for production of required invoice within 120 days. If needed for statistical purpose, within 50 days. Copyright(c) 2012 Dr. Chase C. Rhee

6 Frequent Errors in Invoicing 1) Commission or royalty not included in the price 2) Cost of goods paid to domestic manufacturer instead of exporter's price including his profit 3) Omitting value of materials supplied by Importer. Must be included in the invoice price 4) Replacement goods excluded. Must show full price less allowance for defective goods Copyright(c) 2012 Dr. Chase C. Rhee

7 Frequent Errors in Invoicing 5) If sold at list price less a discount, invoice shows net price instead of full price less discount 6) Goods sold at a CIF price but FOB price shown 7) Importer is shown as purchaser, even if Importer is sales agent or partner of exporter who shares proceeds Copyright(c) 2012 Dr. Chase C. Rhee

8 Packing List  Packing recommendations  Pack and invoice in systematic matter  Show exact quantity of each item in each package  Put marks & numbers of each package  Show those marks & numbers on invoice  Packing list  Easy identification & separation of shipments  Gross Weight and Net Weight  Dimensions of each package  No price shown Copyright(c) 2012 Dr. Chase C. Rhee

9 Ocean Bill of Lading  It carries the title to the goods  Goods can be sold during transit with endorsement of the B/L  Carrier does not release goods without original B/L Copyright(c) 2012 Dr. Chase C. Rhee

10 Ocean Bill of Lading  Letter of Credit & Ocean Bill of Lading:  UCP 600 sets forth the conditions acceptable and unacceptable to banks for payments  Exporter must make sure the B/L conforms to all conditions stipulated in the Letter of Credit.  Importer must check if ocean freight and surcharges are the same as quoted or agreed under FOB.  Importer must pay attention to Arrival Notice as to Arrival date and free period before demurrage starts  Free period: 12 days for Container Freight Station and 7 days for Container Yard Copyright(c) 2012 Dr. Chase C. Rhee

11 Marine Cargo Insurance Policy/Certificate  It covers a loss or a damage to the cargo during transit  Must meet the following conditions:  The same description of products as that of a letter of credit  The same coverage required in the letter of credit  The same currency as the letter of credit  Effective date of policy or certificate: the same or earlier than shipment date  Amount of insurance: not less than 110% of CIF or CIP Copyright(c) 2012 Dr. Chase C. Rhee

12 Special Shipping Documents  UNCTAD Certificate of Origin Form A or any Certificate of Origin –If CBP requests, importer must submit it for duty-free entry under special tariff treatment programs and Free Trade Agreements  NAFTA Certificate of Origin  Phytosanitary certificate  Required for importation of fruit or produce issued by exporting country's quarantine inspector  Foreign site certificate of inspection issued by USDA's quarantine inspector  Required for importation of fruit or produce Copyright(c) 2012 Dr. Chase C. Rhee

13Copyright(c) 2012 Dr. Chase C. Rhee