IMPORT EXPORT Business

Terminology of export and import-Part.3

noreply@blogger.com (Anonymous) — Fri, 02 Mar 2012 14:58:00 +0000

Tariff Book

contains all the tariffs and other customs rules related to import (detailed for each product) applied by a country on its import.

Quotas

The legal limit of imported goods with low tariff was negotiated in a trade agreement

Export quota

Is the rationing of quantities of goods permitted for export, the government is resorting to this procedure either for the purpose of supporting the control in order to avoid prices rising in the local market, or to take control of the goods for defensive purposes

Certificate of Analysis
a certificate requested for materials that need to be analyzed to determine the proportion of components and if it was valid or not like food and drinks, or if it was identical to the specifications & quality standards or not. The certificate must be issued by the specialized bodies such as laboratory.

Clearance Papers
Securities is given by the customs authorities at the port to the ship's captain to indicate that the ship has fulfilled its obligations and have the right to leave the port.

Customs declaration

Passage of goods imported or exported at checkpoints or customs clearance should be provided with permits to facilitate their passage, and customs declarations, several models commensurate with the duties specified.

Import License

Is a license or permit issued to the importer by a competent governmental authority that allows him to bring limited amounts of goods or specific goods, which cannot be imported unless such license.

It is a governmental tool to control movement of trade across national borders

And a mechanism to ensure that trade policies and its implementation are respected

Export License

A Governmental document that allows the exporter to export certain goods to another country.

Harmonized System (HS)
International classification system classifies goods traded internationally under unified symbol of commodity, where the materials are placed in groups according to the nature of the materials.

Note: Harmonized system founded due to several names of goods in each country and this surely affect tariff, therefore the harmonized system constructed to unify all of these names under one code (HS code) to be recognized globally for all countries and make import easier.

Rules of Origin

A set of rules contained in the commercial agreements to facilitate the identification of country of origin, where the advantage of determining the country of origin to obtain preferential tariff exemptions provided for the importer if it was mentioned in the free trade agreements

Customs Bond

is a pledge submitted by importers, owners of warehouses, transport companies and persons who import and handle goods subject to customs duties and the purpose of this pledge to protect Government rights during the existence of these goods in the warehouse or during the handling and customs clearance.

Custom Broker

A person who has a license to clear goods and do all transactions related to imported or exported goods in customs by arranging official transactions for goods imported and customs clearance papers, also preparing papers of exported goods to be submitted to the customs authorities, as well as documents required by the government authorities in foreign countries.

Customs Clearance
Are the transactions and formalities, which include payment of fees and highlight the documents required for customs clearance of goods imported after it’s enter customs checkpoint in the airport, or seaport

Import Export Busines -Videos

noreply@blogger.com (Anonymous) — Wed, 29 Feb 2012 14:59:00 +0000

Related Video -1

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noreply@blogger.com (Anonymous) — Wed, 29 Feb 2012 14:21:00 +0000

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noreply@blogger.com (Anonymous) — Wed, 29 Feb 2012 14:20:00 +0000

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what is an import export business?

noreply@blogger.com (Anonymous) — Fri, 10 Feb 2012 23:51:00 +0000

An import export business (international trade) is an exchange of goods & services across international borders or territories in most countries.

Trading overseas (import and export business) gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries or goods which has lower price or better quality. It is the reason why you can pick between a Japanese, German and American car.

As a result of Import export business , the market contains greater degree of competition and therefore the most competitive prices, which bring home a cheaper product to the consumer
. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, stocks, and currencies. And Services are also traded: tourism, consulting, banking and transportation. A product that is sold to the global market is an export, and a product that is bought from the global market is an import .
see the related video -1

Import export business including two parties to make the exchange operation globally

• Importer, is a party who needs to purchase goods or services
• Exporter ,a party who has goods or services

If you walk into a supermarket and are able to buy South American bananas, and Brazilian coffee, you are experiencing the effects of Import and export business . also you will aware the meaning of importing and exporting.

1. Import
Retail store owners need additional products to sell so that they making a search to find their needs from foreign manufacturers, distributors, and other suppliers.

Some Advantages of importing
• increased product selection
• lower costs (competitive)

2. Export
Manufacturers can find new customers for their products in foreign countries & ship the goods and services out of the port of a country.

Businesses export their products and services for many different reasons, but generally, the benefits that can be achieved through exporting are:

• Promote business growth
• Exploit technology and expertise
• Enhance competitiveness
• Improve return on investment

Benefits of Import export business :

• allows countries to participate in a global economy
• Enhances the domestic competitiveness
• Takes advantage of international trade technology
• Increase sales and profits
• Extend sales potential of the existing products
• Maintain cost competitiveness in your domestic market
• Enhance potential for expansion of your business
• Gains a global market share
• Reduce dependence on existing markets
• Stabilize seasonal market fluctuations

10 tips to import safely

noreply@blogger.com (Anonymous) — Sun, 05 Feb 2012 15:24:00 +0000

If you contact with a supplier by email or phone for the first time and sure you have no deal with that supplier before but only you have a site of his company and a contact person.

How to be sure if the Exporter Company or factory is already exist!

1- If you get the company of supplier “exporter” from a site provides online trade like alibaba, don’t give all trust even for the golden suppliers!

2- Ask a friend,

If you have a friend in the exporter country you can give him all information related to the exporter company and ask him to check there if it was real

2- Check the chamber of commerce in your country to know if the company of exporter is registered or not.

3- Ask your embassy in the exporter country to provide you with any information concern the exporter company.

4- There are an insurance corporations in your country , choose one and give them the information you have about the supplier company , and ask them to insure the product you will export !

The insurance company will request from you to give them a little time to check!

They will check the information you gave to them by their branch in supplier’s “exporter” country.

And if the company exist and has a good reputation they will accept to ensure the product, here you will know that the supplier is real.

6- You can also check the ministry of trade and industry in your country

What after of being you sure that the company is already exist and have a good reputation?

7- You have to sign a contract with the supplier to save your rights, and the contract must be certified from the chamber of commerce in supplier’s country.

8- You have to try to pay money by LC “letter of credit” and not using TT “Money transfer”.

9- If you couldn’t Use LC and the supplier insist to get money through TT then it will be better to visit the country of supplier and pay money by yourself, also don’t go back until they load goods on board.

If you can't visit supplier's country you have to make an inspection certificate and it must be an international and trusted like SGS or TUV...., in this case the inspector will visit the supplier and check goods then send you back a certificate of inspection if the product is identical for specifications or not.

10- Make an insurance policy by asking the supplier to give you the price CIF, or you can issue it in your country if the price was FOB.

How to export and import?

noreply@blogger.com (Anonymous) — Tue, 31 Jan 2012 21:01:00 +0000

IMPORT and EXPORT Steps

1. The Seller and the Buyer sign a sales contract, and mention method of payment in the contract by letter of credit (documentary credit) as the best way to save their rights.

2. The Buyer applies Letter of credit to his issuing bank, usually in Buyer's country, in favor of Seller (beneficiary).

3. The Issuing bank requests correspondent bank or advising bank (if it is possible directly to issuing bank) in Seller's country, to advice, and confirm the credit.

4. The Advising bank, in Seller's country, forwards letter of credit (LC)To inform the seller about the terms and conditions of credit.

5. If letter of credit terms and conditions conform to sales contract, Seller prepares goods and documentation, and arranges delivery of goods to carrier.

6.The Seller presents documents evidencing the shipment and draft (bill of exchange) to paying, accepting or negotiating bank named in the credit (the advising bank), or any bank willing to negotiate under the terms of credit.

7. The advising Bank examines the documents and draft for compliance with Letter of credit terms. If complied with, the bank will accept or negotiate.

8. The advising bank sends the documents and draft to the issuing bank.

9. The issuing Bank examines the documents and draft for compliance with Letter of credit terms. If complied with, the bank will ask the buyer to accept documents and pay for him.

10. All Documents release to the Buyer after payment or on other terms agreed between the bank and Buyer.

11. The Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the goods or the delivery order.

This operation of documentary between the issuing & the advising bank is an agreement between the seller and the buyer to be written as terms in LC (letter of credit).

The advising bank keep rights for seller in order not to deceive by the buyer and vice versa, the issuing bank guarantees all rights for the buyer to be not cheated by seller.

Letter of Credit

noreply@blogger.com (Anonymous) — Tue, 31 Jan 2012 07:35:00 +0000

Letter of credit is an agreement between issuing bank (bank of the buyer), on behalf of one of its customers (applicant or buyer), authorizing another bank, known as the advising bank (bank of the seller), to make payment to the(seller). The issuing bank, on the request of its customer (applicant), issues the letter of credit. The issuing bank makes a commitment to honor drawings made under the credit. The beneficiary is usually the provider of goods or services.

Letter of Credit elements:

It is well known that each bank has its own formula in the design of the letter of credit, but all of these formulas in banks of all countries are subject to specific international standards

Letter of credit content must include the following:

Applicant:
the buyer who need to purchase goods or services, apply the LC to the issuing bank.

The applicant fills the LC paper (agreement) with all information related to his company (company name, phone,
fax...etc.) also he fill same information related to the seller and other conditions.

Beneficiary:
the seller who provides goods or services and receives a swift copy of LC from his bank (advising bank) through issuing bank (bank of the buyer)

Total amount of the order also added into LC

Port of loading: is a place (port) while the seller load the cargo on board

Port of destination: is a place (port) while the buyer receive goods which shipped by the seller

Documents:

Documents are the most important terms required to clear goods from customs after goods arriving and this operation called "customs clearance", the required documents to be requested by the applicant and mentioned in LC are:

· Commercial invoice

· Certificate of origin

· Bill of lading

· Certificate of weight

· backing list

And any other additional certificates such as certificate of insurance, inspection certificate and whatever

Shipping Terms:

When you decide to drive for somewhere you will look for the best ways can take you to your destination easily, also when you decide to choose a way to ship your goods, if you need it safer you can choose CIF (Cost, Insurance and Freight).

These types of shipping defined as The Incoterms (International Commercial Terms) are a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF.

Incoterms are used throughout the world and are accepted by banks, customs authorities, all types of carriers, transportation intermediaries and financial institutions.

In the below is a list of the most common Incoterms:

EX-WORKS

(FOB (Free On Board

(CFR (Cost and Freight

(CIF (Cost, Insurance and Freight

FCA (Free Carrier)

The goods cleared by the seller, exporter, and manufacturer for export and then delivered to the carrier specified by the buyer at the specified place. If the specified place is the seller’s factory, the seller will be in charge of loading the goods onto the transport vehicle. If the specified place is any other location, the seller will not be responsible for the transportation of goods.

Carrier can be a shipping line, an airline, a trucking firm, a railway or a freight forwarder.

FAS (Free Alongside Ship):

The seller clears the goods for export then places them alongside the vessel at the “specified port of shipment”. The buyer will be responsible for the loading fee, the main carriage, the cargo insurance and other costs implicated.

LCs can also be used in the payment terms of FAS transactions.

DDP (Delivered Duty Paid):

The seller clears the goods and makes them available to the buyer at the specified place of destination, cleared for import but not unloaded from the transport vehicle.

The exporter assumes therefore all responsibilities for delivering goods, including important clearance, duties and other costs payable upon import.

DDU (Delivered Duty Unpaid):

The seller also clears the goods for export and makes them available to the buyer at the destination place. However, cargo remains un-cleared for import. The buyer bears the import customs clearance, duties, administrative charges and any other costs upon import as well as the transport to the final destination.

The above-defined terms are a brief summary of the Chamber of Commerce Incoterms in their latest publication.

There are some other terms issued by the ICC but they are not as frequently used as the ones just mentioned. These terms are:

- CPT (Carriage Paid To)

- CIP (Carriage and Insurance Paid To)

- DAF (Delivered At Frontier)

- DES (Delivered Ex Ship)

- DEQ (Delivered Ex Quay)

Note: the importer chooses Terms which suits him to be added into LC terms, most of shipping terms are no longer useful for importers due to high risk included.

The most popular terms in using are (FOB, CFR, and CIF).

Terminology of export and import-part.2

noreply@blogger.com (Anonymous) — Tue, 31 Jan 2012 00:17:00 +0000

DDP (Deliver Duty Paid)

Pricing condition states that the seller fulfills its obligations to deliver the goods to the buyer ,or the seller “exporter is responsible for the goods from since loading on board to the buyer” importer” warehouse and this condition represents the upper limit of the obligation for the seller. We can say here deliver door to door.

Certificate of Origin

A certificate issued by the Chamber of Commerce in the exporting country indicating their place of manufacture or production of the goods to be exported. It is a necessary document to identify the nationality of the goods in order to estimate the rates of fees, and utilized in the control of the province to prevent leakage of prohibited goods.

Note:

- Certificate of origin is an important to show the country of origin to the customs

-if there was an agreement between the country of the exporter and the country of importer it will be appreciated (but how?), for example: if there was an agreement between china and USA states that any product coming from china has no tariffs in USA customs except cars, so if you were live in USA and import anything from china except cars you will not pay any tariffs in customs clearance, and certificate of origin was the evidence that improved that the goods coming from china therefore you can gain the benefit of the agreement.

Backing List

A Document issued by the exporter shows the contents of each package (package number, weight of the goods, the importer’s name, and the commercial invoice no.), simply it describes the products and specifications accurately.

Note: backing list is issued to show a number, it focus on number of packages.

Certificate of Weight

A Certificate showing the true weight of the goods and demand for goods, mostly based on weight, such as rice, sugar and iron

Note: certificate of weight shows net weight of goods and gross weight

MFN (Most Favored Nation)

a clause added to the treaties and agreements of economic, financial, air and sea, which would commit both countries to grant the same privileges or other facilities or exemptions previously granted or may grant in future to a third country, which is one of the principles of the WTO “world trade organization”

Demurrage

A Fees paid by the importer for the delay in the return shipping containers in the port of destination after giving him a week or two weeks or as agreed between the shipping company and importer.

Demurrage is calculated by counting the days from The period started at the date of goods arrival at the port of destination to the date ended by returning empty containers to the port (received by the shipping company)

Storage Fees

A fees paid (by custom broker authorized from the importer) for customs for a storage yards in the port and it paid after the expiry of the grace period given.

Note:

-The importer can store the goods only within the specified period given by customs and any additional day is counted as a storage fees.

-the authorized custom broker must finish all procedures with in the specified period.

-the grace period is different from a country to another as rules in each country.

Customs Duties
Are taxes levied usually on goods imported into the country or exported from, and this tax may be valorem estimated percentage of the value of the item, or may take the form of a fixed amount imposed on the item regardless of the value and known as Tax-quality, away of tariffs, the custom duties are mainly used as a tool for the collection of revenues to the government and as a tool to protect domestic producers from the foreign competition.

Next>Terminology of export and import-part.3

Terminology of export and import-part.1

noreply@blogger.com (Anonymous) — Tue, 31 Jan 2012 00:05:00 +0000

Proforma invoice

Is an invoice issued by the seller “exporter” at the beginning of the deal to inform the importer “buyer” by all prices and terms, and this document is adjustable for many times till the importer confirm the order.

Note: this document does not include into LC also there is no need to certify from chamber of commerce.

Commercial Invoice
is an invoice showing the quantity and value of the goods, specifications and delivery terms. This document issued by the seller and it should be certified from the Chambers of Commerce in seller’s country.

Bill of lading
is a Document issued by the carrier, which is a contract of carriage between the Exporter and the carrier, this document “Bill of lading” shows port of loading, port of destination, a means of transport, freight and payment method.

Bill of lading is considered a confirmation from the carrier with receipt the goods in the holds of the ship.

Bill of lading is an ownership contract for the importer therefore it describes goods in brief description and mention the destination.

Air Waybill
is a Document constitutes an acknowledgment and confirmation of the carrier who is ready for transporting goods.

Waybill
is a written list of the names and descriptions of cargo on a vehicle or a train or a car, and it is the official document can be accepted by the transport company in the case of the importer claimant transport company or the insurance company for the cost recovery of the lost or damaged goods during the shipping.

EXW (Ex-Works or EX-Factory)

Is a condition pricing is limited to the liability of the seller in the preparation of goods to the buyer in the premises of the vendor, such as factory or warehouse, the buyer bears all costs of transporting goods as well as any risks resulting from the receipt of goods from the seller access to places, and represents this condition the minimum obligation for the Seller.

FOB (Free On Board)
is a condition of Pricing indicate that the price of shipped goods includes only the price of the goods loaded on board in a specific place, the exporter is no longer responsible for goods after loading it on board, and the buyer bears all costs and risks that may occur to goods in vessel .

Note: the importer “buyer” has to find a carrier and pay shipping costs by himself.

CFR (Cost and Freight)

The exporter “seller” clears goods for export and is responsible for delivering goods into port of loading. Transport or Shipping costs are included (to ship goods to port of destination by the seller “exporter”)

However, once the goods pass the ship’s rail at the port of shipment, the buyer assumes responsibility for risk of loss or damage,

Note: I don’t prefer CFR term because it has no insurance so the importer will force much risks.

CIF (Cost Insurance and Freight)

The price of goods includes (cost of goods, shipping costs and insurance cost) so we can say that the exporter who find the carrier and insurance company and pay all costs for both.

> Next Terminology of import and export part.2