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Import & export presentation

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Import & export presentation

  1. 1. Prepared by: Eric LeeInternational BusinessOculus Pte Ltd
  2. 2. Exporter Port/ Custom/ Port/ Custom/ Importer Cargowarehouse Loading Loading warehouse Ship To send the goods from Exporter’s warehouse to Importer’s warehouse To send $$ from Importer to Exporter
  3. 3. 1. Incoterms 20102. Shipping Documents3. Cargo Insurance4. Payment Modes/ Letter of Credit5. Import/ Export Procedures
  4. 4. • Incoterms – International Commercial Terms• ICC – International Chamber of Commerce, 1936 • Revised in 1953, 1967, 1976, 1980, 1990, 2000 and 2010• Spells out responsibility of both the importer and exporters • Documentations • Cost • Risk• Uniform set of rule, reduces misunderstanding and dispute, overcome diversity of interpretation• BUT, it is NOT LAW
  5. 5. 1 Ex Works EXW2 Free Carrier FCA3 Carriage Paid To CPT4 Carriage and Insurance Paid To CIP5 Delivered at Terminal DAT6 Delivered at Place DAP7 Delivered Duty Paid DDP8 Free Alongside Ship FAS9 Free on Board FOB10 Cost & Freight CFR11 Cost Insurance & Freight CIF
  6. 6. Sea, Air, Truck, Rail Only Sea FreightEx Works EXW Free Alongside Ship FASFree Carrier FCA Free on Board FOBCarriage Paid To CPT Cost & Freight CFR Cost Insurance &Carriage and Insurance Paid To CIP Freight CIFDelivered at Terminal DATDelivered at Place DAPDelivered Duty Paid DDP
  7. 7. Invoice Cert-of-Origin Import Permit Loading Custom/ Duties UnloadingPacking List Transportation Port Charges Freight Transportation Port Charges
  8. 8. Incoterms 2010 Invoice Cert-of-Origin Import Permit Loading Custom/ Duties UnloadingPacking List Transportation Port Charges Freight Transportation Port Charges
  9. 9. Invoice Cert-of-Origin Import Permit Loading Custom/ Duties UnloadingPacking List Transportation Port Charges Freight Transportation Port Charges
  10. 10. Invoice Cert-of-Origin Import Permit Loading Custom/ Duties UnloadingPacking List Transportation Port Charges Freight Transportation Port Charges
  11. 11. Invoice Cert-of-Origin Import Permit Loading Custom/ Duties UnloadingPacking List Transportation Port Charges Freight Transportation Port Charges
  12. 12. Invoice Cert-of-Origin Import Permit Loading Custom/ Duties UnloadingPacking List Transportation Port Charges Freight Transportation Port Charges
  13. 13. Sea, Air, Truck, Rail Only Sea FreightEx Works EXW Free Alongside Ship FASFree Carrier FCA Free on Board FOBCarriage Paid To CPT Cost & Freight CFR Cost Insurance &Carriage and Insurance Paid To CIP Freight CIFDelivered at Terminal DATDelivered at Place DAPDelivered Duty Paid DDP
  14. 14. Cost of Goods 10,000Packing and Mark Up 500EX WORKS 10,500Transport, Port Charges 500FAS 11,000Loading Cost 500FOB 11,500Ocean Freight 1,000CFR 12,500Cargo Insurance 500CIF 13,000
  15. 15. Incoterms 2010
  16. 16. Incoterms 2010
  17. 17. You are the exporter. Your factory is situated 100km fromthe port. Products can be moved by rail to port for loading.Port facilities are good. Insurance is easily arranged. Yourcountry is stable. Ship are available for shipment. Whatdelivery terms would you suggest for sales of your productsto each of the following countries?Country A Country CGood infrastructure Good port facilitiesEfficient inland transportation Excellent inland transportationKnown for labour dispute Buyer not reliableCountry B Country DExcellent inland transportation None of the above disadvantagesPort congestion from 10 to 90 days Country is stable Buyer is reliable
  18. 18. Basic Type of Documents- Carriers - Bill of Lading - Air Way Bill- Seller - Invoice - Packing List - Certificate of Origin- Buyer - Application of Shipping Guarantee (if necessary)
  19. 19. • Bill of Lading • Bill of exchange • Issued by shipping company showing that goods are loaded • Evidence of contract • Negotiable document • Document of title • Common types of B/L • Clean • Dirty • Stale • Through/ Tran-shipment • Combine transport • Master • House
  20. 20. Shipping DocumentsAir Way Bill– For air consignment– Issue by carrier and authorized agents– Evidence of contract– Not a negotiable document– Not a document of title– Proof of receipt/ booking (not loading)– Certificate of insurance (if requested)– Handling, dispatching and delivering the consignment
  21. 21. • Bill of Lading • Air Way Bill • Bill of exchange • For air consignment • Issued by shipping company • Issue by carrier and showing that goods are authorized agents loaded • Evidence of contract • Evidence of contract • Not a negotiable document • Negotiable document • Not a document of title • Document of title • Proof of receipt/ booking (not • Common types of B/L loading) • Clean • Certificate of insurance (if • Dirty requested) • Stale • Handling, dispatching and • Through/ Tran-shipment delivering the consignment • Combine transport • Master • House
  22. 22. • Invoice • Indicates the value of the cargo and relevant details relating to payment • Custom duties, insurance claims, declaration of permits and L/C negotiation • Type of invoice: • Commercial Invoice • Proforma Invoice • Consular Invoice • Custom Invoice • Non-commercial value Invoice
  23. 23. • Packing List • Indicates the content and description of the cargo (aka Weight measurement list, Cargo manifest, Cargo certificate) • Use for permits, customers, insurance claims • Essential contents: • Description • Measurement • Quantity • Weight
  24. 24. • Certificate of Origin • Certify where the product is produced or manufactures • Endorse by chamber of commercePurpose- Proof of country of produce – political reasons- Claim tariff rebate - FTA
  25. 25. • Shipping Guarantee • To clear cargo without original contract of carriage document e.g. Original B/L • Indemnify the carrier against any claim • Protect the carrier against any fraud • May require bankers guarantee as back-up
  26. 26. What is RISK?- Of Damage – condition of cargo before vs after- Of Loss – disappearance of cargo (i.e. stolen, hi-jack, drop into the sea)
  27. 27. • Reasons for Insurance • Protection against RISK • Prevent financial loss • Requirement by bank e.g. L/C term • Selling on certain terms e.g. CIF • Carrier’s limited liability • Reduce business anxiety
  28. 28. Refer to individual insurance policy for details
  29. 29. • Exclusion Clause • Unseaworthiness of the vessel • Wilful misconduct • Illegal act • Done on purpose • Insolvency of the carrier
  30. 30. • Claims Procedure • Inform insurance company • Cargo survey by inspection company • Cost • Cause • Notify relevant parties • Submission of documents
  31. 31. • Documents of Claims • Company’s cover letter • Original policy • Shipping invoice • Packing List • Original B/L or AWB • Survey report • Landing account (aka unloading report/ discharge report)
  32. 32. a. Advance Paymentb. Credit Accountc. Consignment Saled. Documentary Collectione. Letter of Credit
  33. 33. • Document against • Document against Payment (D/P) Acceptance (D/A) • Supplier ship goods and • Supplier ship goods and forward bill of exchange to forward bill of exchange to buyer’s bank through his buyer’s bank through his own bank own bank • No credit involved • Credit period involved • Buyer obtain title to goods • Buyer obtain title to goods after payment before payment • In case buyer default, only legal action is possible
  34. 34. • Letter of undertaking by importer’s bank to pay oversea exporter against exporter’s shipping document• Shipping document must adhere strictly to terms and conditions of the L/C• Exporter receive payment once documents are accepted without discrepancy
  35. 35. • Procedures • Sales Contract • Buyer open L/C • Issuing bank sends L/C to Advising bank • Advising bank sends L/C to seller • Seller ships cargo • Seller presents documents to negotiating bank for payment • Negotiating bank checks and pay • Negotiating bank forwards document to issuing bank • Issuing bank checks and reimburse • Buyer pays issuing bank • Issuing bank releases shipping document to buyer • Buyer uses shipping document to clear cargo
  36. 36. Established sales/ purchase contract Exporter Port/ Custom/ Port/ Custom/ Importer Cargowarehouse Loading Loading warehouse Ship Advising/ Negotiating Issuing Bank Bank Send L/C to advising bank Send L/C to seller Apply for L/C facilities Description/ price/ quantity/ arrangement etc, clearly stated Any errors or dispute/ amendments to the L/C must be made at this stage
  37. 37. Ships cargo and receive documents Clear cargo with document Cargo Ship Exporter Port/ Custom/ Cargo Port/ Custom/ Importerwarehouse Loading Ship Loading warehouse Advising/ Negotiating Issuing Bank Bank Forwards documents and Importer pays bank and Submits documents and receive reimbursement receive document receive payment from bank from issuing bank Once cargo is shipped, documents must be presented at immediately All terms and conditions must be in order and consistent All documents must be complete and in order Any discrepancy, bank will NOT pay
  38. 38. • Different type of L/C • Revocable • Irrevocable • Confirmed • Unconfirmed • Red Clause • Revolving • Transferrable • Back-to-back
  39. 39. • Advantages • Disadvantages • Secure • Over reliance on shipping • Financial assistance documents • Bank control and hold title to • No physical inspection of goods goods • Seller receive payment when • Bank not familiar with all terms are fulfilled, even shipping practices before buyer receive the • Subject to fraud goods • Very costly
  40. 40. Exporter Port/ Custom/ Port/ Custom/ Importer Cargowarehouse Loading Loading warehouse Ship1. Book Vessel 1. Obtain Shipping Documents2. Obtain Shipping Note 2. Declare import permit3. Declare export permit 3. Surrender B/L and permit shipping4. Arrange transport agent in exchange for delivery5. Deliver goods to port order6. Loading cargo onboard 4. Arrange transport7. Ship issue mates receipt 5. Collect cargo from port8. Mate’s receipt to exchange for B/L 6. Police inspection 7. Custom Check 8. Proceed to warehouse
  41. 41. Exporter Airport/ Custom/ Airport/ Custom/ Importerwarehouse Loading Loading warehouse1. Flight booking 1. Carrier arrive at airport2. Letter of instruction 2. CHA unload cargo3. Agent issue HAWB/ MAWB 3. Consignee arrange with agent4. Export permit to clear cargo5. Launch cargo to GHA 4. Agent collect cargo from GHA6. GHA load cargo into carrier 5. Import permit/ custom declaration 6. Agent deliver cargo to customer

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