International marketing sample questions and answers

1. ASSIGNMENT SET-1
Ques.1 Differentiate between GATT and WTO
Ans. GATT
General Agreement on Tariffs and Trade (GATT) was made in the year 1947, that
aimed at initiating an international trade, by liberalizing policies and removing tariffs. It was
succeeded by World Trade Organization (WTO), which is a global organization, that
encourages and facilitates inter-country trade and also helps in resolving trade disputes.
GATT is a multilateral agreement, between several nations of the world, that regulates
international trade. Its primary objective is to reduce tariffs to a substantial amount along
with abolishing other trade barriers. But, in the year 1995, WTO replaced GATT. WTO has
more powers and augmented functions in dealing with the international economic affairs.
WTO
WTO stands for World Trade Organization, is the sole international body concerned with the
provisions of cross-country trade, based in Geneva, Switzerland. Basically, there is an
agreement called WTO agreement, which is duly signed and negotiated by member nations
of the world and confirmed in their parliaments.
In the real sense, WTO is a place, where the governments of member countries attempt to
resolve their trade problems, encountered by them during the trade with other countries. The
member governments (who can be ministers or their ambassadors or delegates) operate
WTO and all decisions are also taken by consensus.
Differences Between GATT and WTO
The points given below explain the difference between GATT and WTO in detail:
1. GATT refers to an international multilateral treaty, signed by 23 nations to promote
international trade and remove cross-country trade barriers. On the contrary, WTO is
a global body, which superseded GATT and deals with the rules of international trade
between member nations.
2. While GATT is a simple agreement, there is no institutional existence, but have a
small secretariat. Conversely, WTO is a permanent institution along with a
secretariat.
3. The participating nations are called as contracting parties in GATT, whereas for
WTO, they are called as member nations.
4. GATT commitments are provisional in nature, which after 47 years the government
can make a choice to treat it as a permanent commitment or not. On the other hand,
WTO commitments are permanent, since the very beginning.
5. The scope of WTO is wider than that of WTO in the sense that the rules of GATT are
applied only when the trade is made in goods. As opposed to, WTO whose rules are
applicable to services and aspects of intellectual property along with the goods.
6. GATT agreement is primarily multilateral, but plurilateral agreement is added to it
later. In contrast, WTO agreements are purely multilateral.
7. The domestic legislation is allowed to continue in GATT, while the same is not
possible in the case of WTO.
8. The dispute settlement system of GATT was slower, less automatic and susceptible
to blockages. Unlike WTO, whose dispute settlement system is very effective.

2. Ques.2 Write the short notes on the following
A. International Franchising
B. International Contract Manufacturing
Ans. A. International Franchising
International franchising is a strategic way to reduce dependence on domestic
demand and grow new, future revenue and profit centers worldwide. Extending a
brand globally through franchising involves a low risk, requires minimal investment and
offers a huge upside potential for scaling capabilities. Take a look at what
is international franchising, its benefits, examples of companies that have successfully
franchised internationally, how to get started in franchising and where to look for
additional help.
Advantages of International Franchising
Buying a franchise can be a quick way to set up your own business without starting from
scratch. There are many benefits of franchising but there are also a number of drawbacks to
consider.
 The risk of business failure is reduced by franchising. Your business is based on a proven
idea. You can check how successful other franchises are before committing yourself.
 Products and services will have already established a market share. Therefore there will be
no need for market testing.
 You can use a recognised brand name and trade mark. You benefit from any advertising or
promotion by the owner of the franchise - the 'franchisor'.
 The franchisor gives you support - usually as a complete package including training, help
setting up the business, a manual telling you how to run the business and ongoing advice.
 No prior experience is needed as the training received from the franchisor should ensure the
franchisee establishes the skills required to operate the franchise.
Disadvantages of International Franchising
 Costs may be higher than you expect. As well as the initial costs of buying the franchise, you
pay continuing management service fees and you may have to agree to buy products from
the franchisor.
 The franchise agreement usually includes restrictions on how you can run the business. You
might not be able to make changes to suit your local market.
 You may find that after some time, ongoing franchisor monitoring becomes intrusive.
 The franchisor might go out of business.
B. International Contract Manufacturing
Contract manufacturing is commonly used in international markets when one company
arranges for a company located in a different country to handle the manufacturing process of
its products. Other terms for contract manufacturing include international outsourcing and
international subcontracting. The company that needs its products manufactured will provide
the manufacturing company with the specifications for the product. This type of agreement
may also require the company to provide all necessary materials for production.
A contract for manufacturing will outline certain terms, including:
 Product quality.
 Conditions.
 Quantities.
 Delivery dates.
Model of International Contract Manufacturing
In most cases, contract manufacturing refers to the company that is manufacturing, building,
or creating the product. However, this term can also be used to refer to firms offering
specialized services for contracts related to manufacturing to multiple business

3. organizations. The firm might have created its own concept or design, or it might be acting
as the liaison between Company A, which came up with the concept, and Company B, which
manufactures that product or its specific components.
This role involves serving as a bridge between two companies that can mutually benefit one
another. The process of a standard contract manufacturing agreement includes several
steps:
 Company A enters into an agreement with Company B for the manufacturing of
Company A's product.
 Company A incorporates those products produced by Company B into its line of
items being sold to customers.
 Company A uses its own distribution, sales, customer service, and marketing
channels to put the product into the hands of its consumers or end-users.
Benefits of International Contract Manufacturing
1. Cost Advantages
A contract manufacturer may offer cost advantages over a company’s internal production
facilities. The manufacturer may, for example, be based in a country with low labor costs.
Some contract manufacturers specialize in specific types of products, setting up high-volume
production lines that allow them to produce products at a low unit cost. A company can also
obtain a cost advantage by outsourcing production rather than investing expensive capital in
production equipment and hiring skilled labor.
2. The Problem of Hidden Costs
Although companies may gain an apparent cost advantage by using a low-cost contract
manufacturer, they must also consider the additional costs of dealing with an outsourcing
partner. A company using a contract manufacturer in a low-cost country, for example, may
incur shipping costs that cancel out any unit cost advantages. The company may also have
to appoint staff to manage and monitor the performance and quality of the contract
manufacturer.
3. Operational Advantages
A company can gain significant operational advantages by using contract manufacture. If
demand for products increases, for example, a company can hire additional production
capacity to meet short-term demand without investing in its own facilities. Companies
developing new products can use contract manufacturers to produce pilot runs for test
marketing before setting up full-scale production facilities. Companies can also improve the
quality or performance of their own products by outsourcing production of components they
cannot manufacture with their own resources.
Ques.3 What are the stages in which international markets are screened and
analysed?
Ans. Stages in which international markets are screened and analysed are:-
Step One – Country Identification The World is your oyster. You can choose any country to
go into. So you conduct country identification – which means that you undertake a general
overview of potential new markets. There might be a simple match – for example two
countries might share a similar heritage e.g. the United Kingdom and Australia, a similar
language e.g. the United States and Australia, or even a similar culture, political ideology or
religion e.g. China and Cuba. Often selection at this stage is more straightforward. For
example a country is nearby e.g. Canada and the United States. Alternatively your export
market is in the same trading zone e.g. the European Union. Again at this point it is very
early days and potential export markets could be included or discarded for any number of
reasons.

4. Step Two – Preliminary Screening At this second stage one takes a more serious look at
those countries remaining after undergoing preliminary screening. Now you begin to score,
weight and rank nations based upon macro-economic factors such as currency stability,
exchange rates, level of domestic consumption and so on. Now you have the basis to start
calculating the nature of market entry costs. Some countries such as China require that
some fraction of the company entering the market is owned domestically – this would need
to be taken into account. There are some nations that are experiencing political instability
and any company entering such a market would need to be rewarded for the risk that they
would take. At this point the marketing manager could decide upon a shorter list of countries
that he or she would wish to enter. Now in-depth screening can begin.
Step Three – In-Depth Screening The countries that make it to stage three would all be
considered feasible for market entry. So it is vital that detailed information on the target
market is obtained so that marketing decision-making can be accurate. Now one can deal
with not only micro-economic factors but also local conditions such as marketing research in
relation to the marketing mix i.e. what prices can be charged in the nation? – How does one
distribute a product or service such as ours in the nation? How should we communicate with
our target segments in the nation? How does our product or service need to be adapted for
the nation? All of this information will form the basis of segmentation, targeting and
positioning. One could also take into account the value of the nation’s market, any tariffs or
quotas in operation, and similar opportunities or threats to new entrants.
Step Four – Final Selection Now a final short-list of potential nations is decided upon.
Managers would reflect upon strategic goals and look for a match in the nations at hand. The
company could look at close competitors or similar domestic companies that have already
entered the market to get firmer costs in relation to market entry. Managers could also look
at other nations that it has entered to see if there are any similarities, or learning that can be
used to assist with decision-making in this instance. A final scoring, ranking and weighting
can be undertaken based upon more focused criteria. After this exercise the marketing
manager should probably try to visit the final handful of nations remaining on the short,
short-list.
Step Five – Direct Experience Personal experience is important. Marketing manager or
their representatives should travel to a particular nation to experience first hand the nation’s
culture and business practices. On a first impressions basis at least one can ascertain in
what ways the nation is similar or dissimilar to your own domestic market or the others in
which your company already trades. Now you will need to be careful in respect of self-
referencing. Remember that your experience to date is based upon your life mainly in your
own nation and your expectations will be based upon what your already know. Try to be
flexible and experimental in new nations, and don’t be judgemental – it’s about what’s best
for your company – happy hunting.
ASSIGNMENT SET-2
Ques.1 What is counter-trade? Describe the various types of counter-trade.
Ans. Counter-Trade
Countertrade might generally be said any transaction involving a two-way transfer of goods,
rather than singular transfer of goods for money as in the conventional international trade.
there were ups and downs in the usage of countertrade techniques in the international trade
among countries at various times when hard currency was not available for financing trading
activities.
Countertrade transactions covered by the Legal Guide are those transactions in which one
party supplies goods, services, technology, or other economic value to the second party,
and, in return, the first party purchases from the second party an agreed amount of goods,
services, technology or other economic value.

5. Companies that consider countertrade typically want to expand into a foreign
market, increase sales, build customer and supplier relationships and overcome liquidity
challenges. That said, countertrade is used primarily to:
 Enable trade in countries that are unable to pay for imports. This can be the result of
a shortage of foreign currency or lack of commercial credit, for example.
 Help find new export markets or protect the output of domestic industries.
 Balance overseas trade.
 Gain a competitive edge over competing suppliers.
 Sidestep the lack of credit or other alternative financing measures.
 Develop a workaround on the rules and regulations of a foreign country.
 Foster customer goodwill. Your willingness as a seller to accept a countertrade deal
fosters long-term customer goodwill. Once the customer’s country improves, you can
capitalize on the customer goodwill cemented over the years.
Types of Counter-Trade
1. Barter
While both barter and countertrade are both used in order to solve trade balance and
hard currency problems, barter and countertrade are not synonymous. Barter is a
direct exchange of goods and services between two parties. Despite the fact that
there are lots of difficulties involved with barter, it has got substantial role in modern
international trade and should not be disregarded. If to look at it in a more structured
way, barter is a one-time transaction and involves only one contract, covering the
offsetting deliveries between the two parties. The first impression is that simple form
of barter is known to have only two parties to the transaction, whereas in reality
barter agreements have three or four parties involved. This is because it is
exceedingly difficult for one trader to find another with exactly the goods that he or
she wants. Thus, it is a lot more convenient to engage with intermediary who will pair
or match up the many barter trading participants out in the free and open markets.
However, the main problem in this system is finding an honest broker who would
match up needs and wants, therefore the role of barter in the modern international
trade is relatively small.
2. Counter purchase or reciprocal sales
This form of countertrade transactions is very much similar to the former one, but the
main difference is that more than one contract is used. At the time of concluding an
agreement for the sale of goods from one party to another, the parties agree to make
a second agreement in the future that will regulate reciprocal sales of goods. What is
interesting is that the two sets of goods may be entirely unrelated. Counter purchase
transactions can also be carried out in ratios, meaning either in the principle
agreement, or in later signed protocols, the parties establish the Counter purchase
ratio and the rules under which later export contracts will be executed. The Counter
purchase ratio stands for the amount of payments to be made in goods versus that in
cash.
3. Buy-back
A buy-back transaction may be described as a long-term arrangement in which a
party under an obligation to deliver equipment, licenses and know-how for the
construction of an industrial installation and to render appropriate technical services
undertakes to buy over a fixed period products resulting from those installations in
total or in part payments. This form of a countertrade is usually concluded for a
longer term with the purpose of buying back oil, mining or other major natural
products that require huge irreversible investments and high level of technological
machinery.

6. 4. Switch-trading
This technique is very much similar to financing model of swaps (derivative). It
sounds more like a distinctive way of financing international purchase rather than a
trading form. The main concern of parties is non-convertibility and/or absence of hard
currency where one company sells to another its obligation to make a purchase in a
given country in exchange for offsetting of payment on another transaction. However,
it is not that easy to accommodate switch-trading as matching demands is very
difficult indeed. Due to this, occasionally parties turn to professionals called “switch
traders” in order to facilitate the transaction.
5. Bilateral agreements
Bilateral agreements are more like diplomatic or political instruments rather than
trading reciprocal agreements. The reason for this statement is that usually bilateral
agreements or trade protocols are signed between governments aiming to facilitate
countertrade between the countries concerned. Sometimes legal literature claims
that these agreements are in essence giant counter purchases. These agreements
serve the purpose of ensuring that there is a balance in the value of purchases made
Ques.2 Briefly discuss the role of sales promotion and personal selling in
international marketing.
Ans. Sales Promotion
Sales promotions have the specific purpose of driving short-term sales of products or services. Because
they are highly effective in triggering short-term sales, they play a vital role in most marketing
managers' arsenal of tools to drive demand. As companies expand into international markets,
marketers usual rely on the same tools that serve them well in the domestic market. However, some
sales promotions may not work in foreign markets because of host country differences.
Methods of Sales Promotion
1.Identify the potential customers. To create a sales promotion, you must first come to
understand whom you are trying to sell the product or service, so you can then choose a
methodology that appeals to the customer. Create a scenario that describes who the
customer is, how they think and feel, what they like to do, what their household income is
and how the product or service benefits them or fills a need they have.
2. Plot your product in the life cycle, which is composed of four main stages: introductory,
growth, maturity and decline. Sales promotion efforts are different in each stage because the
needs of the audience are different in each stage. Determining where your product falls in
the product life cycle reveals how you should be marketing your product. Generally, products
in the introductory stage require sales promotions to bring awareness to customers; growth
products offer sales promotions that differentiate it from its competition; maturity requires
more of a reminder type sales promotion using coupons and special sales; and the decline
stage is typically where cost cutting measures occur to cut down on sales promotions.
3. Choose a sales promotion. Start off by choosing one method to implement as a sales
promotion. You may start by offering coupons to customers. Coupons can work for almost
any stage of the product life cycle and coupons can be distributed in a variety of ways. You
can distribute coupons online via email, in stores where the product is sold, on your business
website, in direct mail--your own direct mail campaign or in coupon supplier mailers such as
Value Pak and Red Plum.
4. Track the response rate. When you implement the sales promotion, track the response
rate of the method. For example, coupons may include a coupon code that customers have
to input in online orders or provide during a phone order to claim the savings. If the sales

7. promotion is successful—generates a profit—then you can mimic the sales promotion in
future campaigns. If not, you can modify the existing sales method or add a new method to
the mix.
PersonalSelling
Personal selling is a face-to-face selling technique by which a salesperson uses his or her
interpersonal skills to persuade a customer in buying a particular product. The salesperson
tries to highlight various features of the product to convince the customer that it will only add
value. However, getting a customer to buy a product is not the motive behind personal
selling every time. Often companies try to follow this approach with customers to make them
aware of a new product.
The company wants to spread awareness about the product for which it adopts a person-to-
person approach. This is because selling involves personal touch, a salesperson knows
better how to pitch a product to the potential customer. Personal selling can take place
through two different channels – through retail and through direct-to-consumer channel.
Under the retail channel, a sales person interacts with potential customers who come on
their own to enquire about a product. The job of the salesperson is to make sure that he
understands the need of the customers and accordingly shows various products that he
keeps under that category. Under the direct channel, a salesperson visits potential
customers in an attempt to make them aware about a new product that the company is
launching or it may have a new offer which the customers may not get from the open market.
Importance of Personal Selling
a. Persuading Prospects
Sales representatives use their personal selling skills to increase the chances of a
successful sale. They aim to understand a prospect’s needs and offer a solution to those
needs in the form of a product or service that provides strong benefits and represents value
for money. If prospects pose objections, sales representatives use their powers of
persuasion to overcome the objections and convince prospects that they are making the
right choice by buying a product or service.
b. Selling Complex Products
Companies that sell complex products must be able to demonstrate or explain products to
potential customers and deal with questions or queries. Sales representatives can present
products in a logical way, focusing on the benefits that are relevant to different decision-
makers, such as technical managers, purchasing officers or finance executives.
Representatives use their experience to gauge a prospect’s response to their sales pitch and
adjust their presentation to individual prospects’ levels of understanding or interest.
c. Managing the Sales Cycle
Personal selling is important to companies marketing products that require a long sales
cycle. In business-to-business marketing, prospects move through a buying process that
involves a number of stages, including identification of a need, development of a
specification, selection of potential suppliers, evaluation of suppliers’ offerings and a final
purchasing decision. Sales representatives can influence each stage of the process by
ensuring that prospects are fully aware of a supplier’s capability and product benefits. They
also ensure that prospects receive the product, pricing and technical information they need
to make a decision, and they maintain contact with the important decision-makers
throughout the sales cycle.
d. Developing Customer Relationships
To build long-term revenue for the future, representatives use personal selling skills to
develop strong relationships with customers. By contacting customers after they make a
purchase, for example, representatives can demonstrate that their company offers high
levels of customer care. They also maintain contact between sales to ensure that customers
consider their company when they are planning their next purchase.

8. MarketingStrategies for PersonalSelling
1. Ask Questions When trying to sell a product to a customer, you need to know why
she is interested in the product or service. Find out if she is currently a customer of
one of your competitors. If so, ask why she is unsatisfied with its products or
services, making her consider switching to yours. Inquire as to who the key decision-
makers in her company are and see if she has a timeline for making a final decision
on the product. Gathering this type of information from her will help you to know what
she's looking to gain from your company, so you are better able to meet her needs
with your sales pitch.
2. Address Concerns Ask the customer to share any concerns he has about your
product or service with you. If you are able to address these issues, you can increase
your chances of easing his mind and convincing him to bring his business to your
company. It is always better to know any potential concerns that a client has with
your company, so you have a chance to diffuse them. Sometimes the customer just
needs a little more information about your product or service to feel comfortable
making a decision.
3. Ask for the Sale Your job is not done after you have finished your sales
presentation. It is important to ask the customer for the sale. You can directly ask if
she has decided to buy your product or service, or you can do it in an indirect manner
such as asking when she would like to start receiving the services or how many of
the specific product she would like to order. This will help you to know where you
stand with the customer. If she hesitates, ask what's holding her back from the sale.
If you are able to address her concerns, you are more likely to get the sale.
4. Follow-Up A good salesperson always follows up with both prospects and clients
after making a presentation. If a prospective customer is still unsure of the benefits of
your product or service, this is another chance to address his concerns. If he has
already decided to purchase your product or service, it's important to check in and
make sure he is satisfied with it.
Ques. 3 Write the short note on the following
a. Bill of Exchange
b. Packaging list
c. Airway Bill
d. Certificate of origin
e. Consular invoice
Ans. A. Bill of Exchange
A bill of exchange is a written order used primarily in international trade that binds one party
to pay a fixed sum of money to another party on demand or at a predetermined date.
Bills of exchange are similar to checks and promissory notes. They can be drawn by
individuals or banks and are generally transferable by endorsements. The difference
between a promissory note and a bill of exchange is that the latter is transferable and can
bind one party to pay a third party that was not involved in its creation.
There are up to three parties involved in a bill of exchange transaction. The drawee is the
party that pays the sum specified by the bill of exchange. The payee is the one who receives
that sum. The drawer is the party that obliges the drawee to pay the payee. The drawer and
the payee are the same entity, unless the drawer transfers the bill of exchange to a third-
party payee.
Bills of exchange generally do not pay interest, making them in essence post-dated checks.
They may accrue interest if not paid by a certain date, however, in which case the rate must

9. be specified on the instrument. They can, conversely, be transferred at a discount before the
date specified for payment.
If these bills are issued by a bank, they can be referred to as bank drafts. If they are issued
by individuals, they can be referred to as trade drafts. If the funds are to be paid immediately
or on demand, the bill of exchange is known as a sight bill; if they are to be paid at a set date
in the future, it is known as a term bill. International trade presents unique risks that are not
often present in domestic transactions. There are several reasons for this, such as separate
legal jurisdictions and lengthy transportation routes. Most of these trades require currency
exchanges, making long-term trade arrangements sensitive to exchange-rate fluctuations.
Role of Bill of Exchange
In an international trade, bill of exchange is a negotiable instrument made by seller/exporter
addressed to the buyer/importer. Once after shipping goods, the required documents for
import along with bill of exchange are submitted with exporter’s bank to send to foreign
buyer through buyer’s bank. The said bill of exchange draws in duplicate as per specified
format.
Bill of exchange contains the reference details of shipment, amount of invoice to be
receivable from overseas buyer, the time of payment to be effected, bank details etc. A
sample body structure of a bill of exchange is as follows:
The bill of exchange is drawn on the letter head of exporter and signs under and sends to
buyer through his bank. Once after reaching documents to overseas buyer, he accepts bill
of exchange by signing on bill of exchange. On maturity date of bill of exchange, the buyer
effects amount of proceeds to the supplier of goods through his bank.
B. Packaging List
A packing list accompanies an international shipment and is used to inform transportation
companies about what they are moving. It also allows the customer and others involved in
the transaction to check what has been shipped against the performa. It is a necessary
safeguard against shipping incorrect cargo internationally. An export packing list, for
example, is far more detailed than a domestic one.
To prepare your packing list, delete all the prices on the invoice and double-check to see
that the number of cases, weight (net, gross, metric) and measurements appear on the
invoice. Then rename the document "PACKING LIST" in big, bold letters. Never substitute a
packing list for a commercial invoice.
The Packing List is a more detailed version of the commercial invoice but without price
information. It must include, inter alia, the following: invoice number, quantity and description
of the goods, weight of the goods, number of packages, and shipping marks and numbers.
A copy of the Packing List is often attached to the shipment itself and another copy is sent
directly to the consignee to assist in checking the shipment when received.
Reasons why a packing list is important:
 It supports what is actually being shipped.
 It can accompany an inspection certificate.
 It can be used as further evidence to support a method of payment but (be advised) you
must make sure you match your product description to that of any payment instrument.
 It will be used by a Custom's Broker for clearance and entry into a foreign country.
 It is used by the buyer-seller to compare what has been ordered to what has been
shipped.

10. Advance Preparation
Several weeks in advance of shipment, your freight forwarder, customs broker, bank, and
customer needs to indicate how many copies they need and where each copy needs to be
attached and distributed. You should always make three or four extra copies for your files,
just in case.
If you decide to process your shipment documentation online, select the appropriate packing
list option and then contact all parties involved in the international sale to determine if your
packing list needs to be signed.
C. Airway Bill
Transport document issued by a carrier for air transportation. If issued by the actual carrier, it
is a master air waybill. If issued by an air freight consolidator or forwarder it is a house
air waybill. The document is issued in three originals and is not negotiable so it cannot be
issued to the order; it is always nominative and non- endurable. Since it is not negotiable,
and it does not evidence title to the goods, in order to maintain some control of goods not
paid for by cash in advance, sellers often consign air shipments to their sales agents,
or freight forwarders’ agents in the buyer’s country. The standard form was designed to
enhance the application of computerized systems to air freight processing for both
the carrier and the shipper.
An Air Waybill AWB is a non-negotiable transport document covering transport of cargo from
airport to airport.
The Air Waybill must name a consignee (who can be the buyer), and it should not be
required to be issued “to order” and/or “to be endorsed” as it is not a title of property of the
merchandise. Since it is not negotiable, and it does not evidence title to the goods, in order
to maintain some control of goods not paid for by cash in advance, sellers often consign air
shipments to their sales agents, or freight forwarders’ agents in the buyer’s country.The Air
Waybill is not a negotiable document. It indicates only acceptance of goods for carriage.
D. Certificate of Origin
A Certificate of Origin (CO) is an important international trade document that certifies that
goods in a particular export shipment are wholly obtained, produced, manufactured or
processed in a particular country. They also serve as a declaration by the exporter.
Virtually every country in the world considers the origin of imported goods when determining
the duty that will be applied or, in some cases, whether the goods may be legally imported at
all.
There are two types of COs that chambers can issue:
 Non-Preferential COs, which certify that the goods’ country of origin does not qualify
for any preferential treatment. These are the main type of COs that chambers issue
and are also known as “ordinary COs.”
 Preferential COs, which certify that goods are subject to reduced tariffs or
exemptions when they are exported to countries extending these privileges. COs
may be needed to comply with Letters of Credit, foreign Customs requirements or a
buyer’s request.
Importance of Certificate of Origin
A Certificate of Origin may be requested by your customer, from any country in the world, to
establish the origin of goods being imported. Customs Authorities may require this

11. information so that duty payable can be determined and, in some cases, establish whether
the goods may be legally imported at all. The origin is not the country from which the goods
are shipped, but the country where the goods were made. Failure to have a correctly
completed and certified Certificate of Origin can result in goods being held up by Customs
authorities, and can delay payment for your shipment if you are supplying under a Letter of
Credit.
To be valid a Certificate of Origin must be certified by a Chamber of Commerce which
is authorised to certify these documents. According to the International Chambers of
Commerce (ICC), around 15 million Certificates of Origin are certified by Chambers globally
each year.
In most cases, for goods shipped from the EU, the EC Certificate of Origin is used and must
be produced using the approved pre-printed stationery. The data must be typed or printed
onto the pre-printed stationery as it is no longer allowable for these documents to be
handwritten.
There is a correct way of completing certain information to comply with regulations, and
if this is incorrect your document will be rejected by the certifying Chamber. In the UK British
Chambers of Commerce train all Issuing Body Chambers of Commerce in the correct
procedures for certifying Certificates of Origin, which ensures that the quality and validity of
these documents can be maintained at a very high standard.
E. ConsularInvoice
A Consular Invoice is a document which is submitted to the embassy of a country or consul
to be specific to which goods are to be exported before the goods are sent abroad. It can be
obtained through the consular representative of the country to which the goods are being
shipped. It is a document certifying the genuineness of a shipment of goods and shows
information such as the consignee, consignor and value of the shipment, among others.
The process of authenticating a consular invoice is called Consularization. It is an important
document which is required for the facilitation of customs and tax collection purposes.
The main purpose of a consular invoice is to provide a complete and detailed description of
the goods to the foreign customs authority, so as to ensure that the correct import duty is
levied on the goods.
Alternative terms for Consular Invoice are as follows:
• Konsularfaktura – German
• Fatura consular – Portuguese
• Facture consulaire – French
• Factura consular – Spanish
• Fattura consolare – Italian
The invoice is used by customs officials to examine and verify the value, quantity and nature
of the merchandise imported to determine the import duty. The export price is also
accordingly determined to ensure that dumping does not take place.
Significance of Consular Invoice for Exporter:
(a) Consular invoice facilitates quick clearance of goods from customs in exporter's as
exporter’s well as importer’s country.
(b) Certification of goods by the Consulate of the importing country indicates that ' the
importer has fulfilled all procedural and licensing formalities for importation.
(c) Once a consular invoice is certified by Um Consulate, the exporter is assured of the
payment from the importing Country