Exporting and Importing Procedures
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Transcript of Exporting and Importing Procedures
7/29/2019 Exporting and Importing Procedures
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EXPORT-IMPORT
TRADEBy,
Prof. Nilesh Soni
7/29/2019 Exporting and Importing Procedures
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17-2
Why Export?
Reasons to export – To serve markets where the firm has
no or limited production facilities
– To satisfy a host government’s requirement that the local subsidiaryhave exports
– To remain price-competitive in the
home market – To test foreign markets and foreign
competition inexpensively. Etc.
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17-3
Reasons to export? cont’d.
– To offset domestic market’s cyclicalsales
– To achieve additional sales
– To extend a product’s life cycle – To respond strategically to foreign
competitors
– To achieve the success the firm’smanagement has seen others achieve
– To improve the efficiency of manufacturing equipment
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12.1 Procedures of Export and Import Transaction
General Procedures of Export Transaction
Preparation for Exporting
Business Negotiation
Implementation of Contract
Settlement of Disputes
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12.1.1 General Procedures of Export Transaction
Preparation for Exporting
• Research on the countries or regions
• Research on the market
• Research on the customer
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12.1.1 General Procedures of Export Transaction
Business Negotiation
• Enquiry
• Offer and counter-offer
• Acceptance
• Conclusion of sales contract
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12.1.1 General Procedures of Export Transaction
(CIF Contract)
Implementation of Contract
• Preparing goods for shipment
• Inspection application
• Reminding, examining and modifying L/C
• Chartering and booking shipping space
• Customs formality
• Insurance
• Documents preparation for bank negotiation
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12.1.1 General Procedures of Export Transaction
(CIF Contract)
Settlement of Disputes
• Conciliation
• Arbitration
• Litigation
(cf: Fig.12-1 General Procedures of Export Transaction,CIF, Letter
of Credit, Sea Transportation, Commodity Inspection Stipulated)
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Marketing and Promotion
Market Research
Credit Information
Enquiry
Offer
Acceptance
Contract
Chartering,Space Booking
Docks
Customs Formalities
Loading, Bill of Lading
Documents Preparation for Bank Negotiation
Settlement of Disputes (if any)
Checking Name of Commodity,
Specification, Quantity, Packing
and Marking
Good Preparation
Preparation for Exporting
Business Negotiation
Performance of
Contract
Reply to Enquiry
Counter-offer
Reminding of L/C
Examination and
Amendment of L/C
Insurance Company
Insurance Policy
Inspection Authority
Inspection Application
Certificate of Inspection
Certificate of Inspection
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12.1.2 General Procedures of Import Transaction
• To conduct market investigation;
• To formulate import plan for a certain commodity;
• To send inquiries to the prospective sellers overseas;
• To compare and analyze the offers or quotations received;
• To make counter-offers and decide on which offer is most
beneficial;
• To sign a purchase contract;
• To apply to a bank for opening a letter of credit
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12.1.2 General Procedures of Import Transaction
• To book shipping space or charter a carrying vessel for taking
over the cargoes, if the contact is in terms of FOB;
• To effect insurance with the insurance company upon receipt
of shipping advice;
• To apply for inspection if necessary;
• To attend to customs formalities to clear the goods through the
customs;
• To entrust forwarding agents with all the transport
arrangements from the port to the end user’s warehouse;
• To settle disputes (if any).
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12.2 Organizations Involved in Export and
Import Transaction• The exporters
• The shipping agents at the port or airport of loading
•
The railways(in some cases)in the exporter’s country • The road hauler(in some cases)in the exporter’s country
• The port authority
• The shipping company(or sea freight)
• The airline(or air freight)
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12.2 Organizations Involved in Export and
Import Transaction
• The insurance company or brokers
• The exporter’s bank
• The importer’s bank
• The railways(in some cases)in the importer’s country
• The road hauler(in some cases)in the importer’s country
• The shipping agent at the port or airport of discharge
• The importers
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12.3 Specialist Involved in Export and
Import Transaction• A shipping agent and/or freight forwarder (forwarding agent)
will take responsibility for the documentation and arrange for
the goods to be shipping by air, sea, rail or road.• Airlines, shipping lines, railway companies or haulage
contractors will actually transport the goods.
• Both the importer’s and exporter’s banks will be involved in
arranging payments if a letter of credit or bill of exchange is
used.
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12.3 Specialist Involved in Export and
Import Transaction
• Customs and Excise officers may need to examine the
goods, check import or export licenses and charge dutyand/or VAT.
• A Chamber of Commerce may need to issue a certificate of
origin, if this is required by the importer’s country.
• An insurance company insures goods in transit.
• A lawyer if a special contract has to be drawn up.
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12.4 Documents needed in export and
import transaction
• Bill of Lading
• Commercial Invoice
• Packing List
• Weight Memo
• Certificate of Inspection
•
Certificate of Origin• Insurance Policy(certificate)
• Sales Contract