Although managing export documentationcan be a challenge, it is important to take time to familiarize yourself with the key documents and their uses.
Your export shipment terms will be setout in the contract between your business and the buyer, and typically include:
· detailed specification of goods
· packing requirements
· conditions of carriage
· dates of shipment
· prices
· payment arrangements.
Check the contract details carefully. Any errors, such as omissions or conflicting information, will cause delays inshipment. This can delay payment, lead to additional and unnecessary expenses,put the contract at risk, and possibly damage your reputation.
A generally accepted set of international commerce terms, known as Incoterms, has been developed to minimize possible misunderstandings in contracts.
Basic Export Documentation
You will incur penalties if you fail to do this.
Entries should be lodged with Customs 48 hours prior to export,unless you have been granted exemption.
Your export entry will need to have adescription of goods to be exported, plus:
· Tariff item number (also known as an Harmonized System Code)
· Quantity, specifying the number and kind of packages
· FOB value
· Gross weight
· Method of transport, and ship name or flight number.
Your export entries will need to belodged electronically. Beyond that, you may wish to consider engaging a Customs broker or freight forwarder to help you fulfill your obligations.
Companies with a large volume of exportentries can purchase Electronic Data Interchange (EDI) software, which transfers their export entries to Customs electronically.
However, it is the customsin the country of import that has the legal jurisdiction to determine the tariff classification of your product as it enters their market, according to their tariff document.
The Harmonized System (used in 98percent of international merchandise trade) means tariff codes are common to six digits; beyond that, there is variation between different tariff documents.
Again, you may consider consulting acustoms broker or freight forwarder concerning the classification of your products for specific markets. Some customs authorities offer a binding tariff ruling service.
This usually means that for a fee, and based on provision of exact samples, they will formally commit to a tariff classification for your product, which can be applied to subsequent shipments of identical goods.
Despite the increasing use of electronic transmission of documentation and reporting procedures it is important to keep hard copies and paper files for legal and tax purposes for exports.
Commonly used documents
Although documentation varies from country to country, the following are some commonly used export documents:
Commercial invoice (or certified invoice)
Your invoice or 'charge' documentcontains details of the seller, buyer, goods, price, and terms of sale (such as FOB or CIF). This document is used to clear your goods, and must follow the Customs requirements of the country you are exporting to.
Bill of lading (B/L)
A document of title issued by or for the shipping company accepting goods for shipment with information about the goods carried and the terms of transport. On delivery of the goods the consignee (the person goods have been sent to) needs to surrender a negotiable copy of the bill of lading to take possession of the goods.
Variations of these documents are amarine bill of lading, a combined transport document, or house bill of lading.
Airway bill (AWB)
The AWB is equivalent to a bill of lading for goods sent by air. Courier companies often have their own additional documentation that travels with the goods.
Certificate of origin
The origin of goods exported will determine the customs duty that is charged. Certification of origin issometimes incorporated in the commercial invoice. However, it is often a separate document, issued or counter signed by the Chamber of Commerce in the country of origin.
Certificate of content
This document details the content of goods if you are claiming any preferences on entry into some markets(especially Australia), or avoiding penalties in others. Contact your freight forwarder for more about what constitutes acceptable content.
Letter of credit (LC)
A LC is issued by a financial institution and represents a guarantee of payment by the person receiving the goods (consignee) to the exporter. In most cases the guarantee is irrevocable.In order to receive payment, the exporter will need to produce the LC together with stipulated supporting documents including the invoice, B/L and proof of insurance.
Insurance policy certificate
Your insurance certificate must comply with all the terms in a letter of credit. The insurance coverage of goods being shipped without a letter ofcredit is determined by arrangements between buyer and seller.
