1. Import/ Export Process – Phase 1: Negotiate and Securing the Deal Importer –Buyer in South Africa needs fabric for production –Looks at the following before importing: The Target Market – is it growing, stable, declining or dead. The competition – where are they getting material, what is their pricing structure; what competitive advantage do they have with sourcing How much of the material is needed and what quality Where are the suppliers (Internet, Embassy, Chambers of Commerce, other sources) –Discusses all of the requirements with identified sellers Exporter –Seller in India accepts enquiry –Does an analysis to see if buyer can afford to buy and pay on time –Looks at what he/she is allowed/ not allowed to import into the buyers’ country. –Does costing based on incoterms – different incoterms have very real financial implications for example Ex Works vs CIF –Also costs each element of the export process and sourcing/ manufacturing process –Establishes most feasible lead time. –If everything makes business sense, then exporter prepares a quotation and a proforma invoice.

2. Import/ Export Process – Phase 1: Negotiate and Securing the Deal Importer/ Buyer –Evaluates quotation with regards to costs, lead time, production requirements. –Looks at seller’s financial stability. –Evaluates impact of Incoterms – is it better to handle shipment or have the seller do so – there is cost vs amount of control over process to consider here. –Uses proforma invoice to set up a purchase order with the seller chosen to provide fabric needed. –Transaction is set in motion once buyer receives a signed copy of the purchase order from the seller. Exporter –Signs the purchase order and returns signed purchase order to buyer (importer).

3. Import/ Export Process – Phase 2: Payment Phase Importer/ Buyer: –Decides on payment instrument: Documentary Credit Irrevocable Unconfirmed Irrevocable Confirmed Open Account Advance Payment Payment against Documents –Contacts negotiating or issuing bank and advises which form of payment. –For example chooses Draft and Letter of Credit (safe option when you do not know the seller) –List of terms and requirements is sent to the bank – generally includes the following: Description of goods Quantity of goods Technical description Documents required Details of consignee – generally issuing bank until money is received from buyer Details of who must be notified when cargo arrives Latest date of shipment Shipping ports to be used –L/C issued by issuing bank and sent to the seller and the advising or confirming bank –Buyer pays the issuing bank once the bank has confirmed that all conditions have been met – bill of lading is endorsed by the bank and cargo is released to the buyer Exporter/ Seller: –Prepares his/ her goods and documents based on the requirements of the L/C and purchase order –Provides required documentation to advising bank in order to ensure all requirements are met. –Advising bank then pays seller the price as agreed as per the purchase order if all is correct. –The advising bank sends all the documentation to the issuing bank who then reimburses the advising bank.

4. Import/ Export Process – Phase 3: Logistics or Delivery Export Three main parties work with the seller/ exporter –C&F Agent Exporters responsibility when Incoterms require that the seller ships to destination port or clears goods in country of origin Incoterm defines who carries risks/ responsibilities Seller must make sure that the correct quantity and quality is delivered at the right price and that deadlines are met Make sure that the following is provided to the C&F agent: Detailed shipping instructions, F178, Certificate of Origin, Consular invoice, Commercial invoice, Export permits, Packing list, Copy of L/C They must all be 100% correct or nothing will be cleared when it arrives at port in the buyers’ country and the L/C will not be paid. A good agent will make sure that even a new employee at the seller’s office will get this right – if you struggle, the person who is your contact here will always be able to help you set up correct documentation. When exporting to the USA make sure that the ISF is set up and sent two days before the vessel sails. Make sure your agent is on top of this. A copy of this document is provided as an example.

5. Import/ Export Process – Phase 3: Logistics or Delivery Export The C&F Agent and Customs C&F Agent provides SAD500/ SAD501 (Bill of Entry) and all other relevant documentation (like the ISF) to Customs C&F agent requests Customs clearance in country of origin Customs will clear goods if all paperwork is correct.

6. Import/ Export Process – Phase 3: Logistics or Delivery Export Exporter and Shipping Agent/s The exporter/ seller hands over the goods to the shipping companies involved in the movement of goods This could involve many steps – first a move from the factory/ warehouse to the port by rail/ road – shipping agent will provide bill of lading to show cargo has been picked up. By rail this would be a rail consignment note At the port, the goods will be accepted and will be moved to the ship as per the schedule A draft bill of lading will be issued that needs to be checked – all parties that need to be notified, which would include the C&F agent in the importing country, the buyer and the address where it will be delivered to. Make sure all the information is correct, including the HS Code as some items are duty free and others are not. The wrong code can lead to problems when something was supposed to be duty free. The shipping agent then issues the bill of lading or airway bill if all is correct and moves the goods as per the contract. When goods are moved between countries on the same continent, this could also just involve a Road manifest or a Rail Consignment Note – for example process in BLNS countries. Take photos of cargo being picked up in case there is damage along the way … The bill of lading, air waybill, road manifest or rail consignment note will be given to Customs for Clearance purposes at the port of arrival in the country of import. The C&F agent will courier necessary documentation to issuing bank and buyer for customs clearance in country of import.

7. Import/ Export Process – Phase 4: Imports Once cargo has been shipped and the bill of lading has been sent to the C&F agent of the buyer/ importer, the C&F agent sends Customs the necessary paperwork for customs clearance in the country of import. Documents involved include SAD500, 501, 502, 503, 505, 507, 554 SAD501 – Bill of Entry (EDI) Once cargo is available for transport to buyer, the C&F agent notifies the primary mode of transport with a notice of arrival and pickup number – an appointment is made and cargo is picked up The buyer provides the C&F agent with instructions and documents as to where goods will be delivered. Specific example – what happens at the border of BLNS countries Types of cargo – FCL, LCL, Bulk, Break-bulk

8. Imports/ Exports Process Summary Phase 1 – Negotiate and securing the dealNegotiatesecuring Phase 2 – Payment phasePayment Phase 3 – Logistics and delivery exportsLogisticsanddelivery Phase 4 – Logistics and delivery importLogistics