Chapter – 8
Export
Discuss the
Procedure of Export
The procedure of export trade is as
follows:
1. RECEIVING
THE ORDER
The first stage in the export trade
is the receipt of an order from a foreign merchant. the order directs the
exporter to forward certain goods. The order should give the necessary
instructions, such as marks, number, mode of forwarding, insurance, quantity,
quality, size etc and also the prices which the importer is ready to pay for
the commodities.
2. EXPORT
LICENSE
It is required to be taken by the
exporter from the Chief Controller of exports and imports. Export license is a
permission from the government for the export of certain goods. The export
license helps the government in regulating and controlling the exports of a
country.
3. WRITING TO
THE IMPORTER FOR THE LETTER OF CREDIT
Before the exporter arranges for the
shipment of goods, he asks the importer to open L/C in his favour with the
bank. L/C is a security given by the issuing banker that the exporter will be
paid for the goods exported by him. It authorizes the exporter to draw bills of
exchange on the banker for receiving payment and the bank permits their honour.
4. ASSEMBLING
THE GOODS
When L/C has been opened, the
exporter will proceed to collect the goods. He will send the order to his
warehouse for the goods for packing. If the goods are not in stock, he will
purchase them from the local markets. The goods must be according to the order
and all conditions should be duty followed.
5.PACKING AND
MARKING THE GOODS
Packing is an important part of the
export procedure and should receive due attention. Any instruction given by the
importer bust be strictly observed. The measurements should be marked on the
outside. In some cases gross weights are also indicated on the package.
6.
APPOINTMENT OF A FORWARDING AGENT
The services of a forwarding agent
can be taken for forwarding the goods. The forwarding agents are paid a certain
commission and they undertake all the custom formalities on behalf of the
exporter.
7. OBTAINING
SHIPPING ORDERS
Shipping order is received from a
shipping company by an application. In the application, the full particulars of
commodities with the port of destination are given. The shipping company, carry
the goods to the port of destination at a certain shipping order.
8. CUSTOM
FORMALITIES
In export trade the following custom
formalities are undertaken:
A) SHIPPING BILL
The shipping bill is a form
containing the detailed description of goods such as marks, numbers, quantity,
quality, country of destination and the name of the ship. It is available from
the custom office and is filled up by the agent for paying the export duty.
This form enables the custom officials to calculate the amount of duty.
B) DOCK DUES
FORM
It is available from the lending and
shipping office. It is filled up by the exporter or his agent by the payment
because back authorities render some services regarding the export of the
commodity.
9. LOADING
THE GOODS AND GETTING MATE RECEIPT
After paying custom duty and dock
charges, the exporter makes arrangement for loading them on the ship. The
packages as they are received on the ship are counted and their packing is
carefully examined. The captain at the ship then issues the receipt for the
goods received and this receipt is called a mate receipt. A mate receipt is
said to be claim, when it contains low, adverse remarks, regarding the goods.
It is said to be dirty when it contains certain remarks regarding their
defective packing.
10. BILL OF
LADING
The exporter, after receiving the
mate receipt presents it to the shipping company and obtains in exchange a
document called Bill of Lading. The Bill of Lading can be transferred freely
and it performs three functions:
1. It is an official receipt of the goods, placed on board the ship.
2. It is a contract to carry goods to the port of destination.
3. Its holder is entitled to take delivery of goods by presenting it on the port of destination.
1. It is an official receipt of the goods, placed on board the ship.
2. It is a contract to carry goods to the port of destination.
3. Its holder is entitled to take delivery of goods by presenting it on the port of destination.
11. MARINE
INSURANCE POLICY
Certain goods are required to be
insured before they are dispatched to a foreign country. Goods are insured with
a marine insurance company and the policy is sent by the exporter to the
importer.
12.
CERTIFICATE OF ORIGIN
This is the certificate which shows
the origin of the commodities being exported. That shows the origin of the
country in which they were manufactured. Due to special trade agreements
between certain countries goods sent from one country to another generally
receives preferential treatment in respect of the import duties. Certificate of
origin is obtained by the exporter for being sent to the importer, so that he
must be able to get advantage of preference in import duty.
13.
PREPARATION OF INVOICE
The exporter having shipped and
having gone through all the formalities is now in a position to prepare the
invoices. the invoice contains a detailed description of the goods shipped and
the charges incurred.
14. RECEIVING
PAYMENTS
The exporter generally receives
payments by drawing a bill of exchange upon the bank where the importer has
opened a letter of credit. He also attaches with it the necessary documents
such as Invoice, Bill of Lading, Marine Insurance Policy, Certificate of Origin
etc. When all these documents are sent with the Bill of Exchange, it is called
documentary of Bill Exchange
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