1
Chapter 9
Marketing 4220
International Sourcing, Logistics
& Transportation
International Documents
5/25/2015
1
International Documents
Documentation Requirements
Invoices
Export Documents
Import Documents
Transportation Documents
Documents as a Marketing Tool
2
Documentation Requirements
Most international transactions require numerous documents:
It is important that each of these documents be filled correctly and within a specific time frame. Each document has different requirements.
It is common to issue more than one original document – one for each of several parties.
Most countries still require documents to be printed on paper and not submitted electronically.
3
Invoices
Commercial invoices for transactions conducted in an international environment are much more complete and detailed than in a domestic environment. They must include:
A detailed description of the goods, with HS number, so that the goods can be classified correctly by Customs
The Incoterms® rule of the transaction
Details on the costs of domestic transportation, loading, insurance, etc., to help Customs determine the dutiable value of the goods
Details on the weight and dimensions of the goods
Details on the itinerary of the shipment
The terms of payment
4
A simple
international
invoice
5
Other Invoices
Pro forma Invoice
A quote (preview of the commercial invoice) provided by the exporter to the importer for the purpose of obtaining a letter of credit.
Consular Invoice
A commercial invoice that is printed on stationery provided by the consulate of the country in which the good will be imported.
Specialized Invoice
Some countries require that invoices be printed on special forms.
6
Export Country’s Regulations
Export Documents
Shipper’s Export Declaration
Export License
Certificate of End-Use
Destination Control Statement
Export License
An export license is an express authorization by a given country’s government to export a specific product before it is shipped.
What types of products need an export license?
Depending on the country of export, it could be:
National treasures, antiques, or works of art
Products put under control for political or military purposes
Scarce natural resources
8
An Export
License from
Malaysia
U. S. Export Controls
The United States export control policies (regrouped under the Export Administration Regulations [EAR] and administered by the Bureau of Industry and Security) focus on three elements to determine if an export needs a license:
The type of product exported
The person or entity purchasing the product
The ultimate country of destination
It is the always the responsibility of the exporter to ensure that the goods can be legally exported from the United States.
10
U. S. Export Controls
- Produ ...
Export management involves coordinating all parties involved in an export business to secure export orders and ensure timely shipment of goods according to buyer specifications. The main objectives are to secure export orders and ensure timely delivery of quality goods as agreed. Exports can be classified as merchandise, services, projects, or deemed exports. Key export documents include commercial invoices, certificates of origin, bills of lading or airway bills, packing lists, and insurance documents. Regulatory documents must also be provided to comply with export inspection, customs, and foreign exchange regulations.
This document provides information on export procedures and documentation in India. It discusses the key types of exports (physical and deemed), types of exporters (manufacturer and merchant), and the various documents required for export including commercial documents and regulatory documents. The commercial documents discussed in detail are the commercial invoice, inspection certificate, and marine insurance policy. The commercial invoice provides important shipment details, the inspection certificate confirms quality standards are met, and marine insurance protects goods in transit.
This document discusses the various documents required for exporting goods internationally. It notes that exports require many documents to satisfy regulations and payment requirements, including export declarations, consular invoices or certificates of origin, bills of lading, commercial invoices, and insurance certificates. Additional optional documents include import/export licenses and packing lists. The number of documents can vary significantly between shipments but sometimes exceeds 50 documents involving over 25 parties. Software is available to help manage the complex documentation process for exports.
The document discusses various export trade documents used in international trade, including financial documents like bills of exchange, commercial documents like proforma invoices and certificates of origin, transport documents like bills of lading, and risk covering documents like insurance policies. It provides details on the purpose and contents of key documents like bills of exchange, commercial invoices, certificates of origin, bills of lading, and insurance policies.
This document defines various categories of exporters and importers and provides explanations of key export and import documentation terms. It discusses the different types of exporters such as manufacturer exporter, merchant exporter, AEZ, BTP, EOU, and service provider. It also defines categories of importers. The document then provides details on various export documents including commercial invoices, packing lists, bills of lading, certificates of inspection and origin, and regulatory documents. It explains types of bills of lading and transport documents used in export and import transactions.
The document discusses various modes of entry into international business, including export trade, import trade, contract manufacturing, licensing, franchising, joint ventures, and wholly owned subsidiaries. Export trade involves selling goods and services to foreign firms, while import trade is purchasing goods and services from foreign firms. Contract manufacturing involves outsourcing production to foreign firms. Licensing and franchising allow firms to profit from their intellectual property through fees and royalties paid by foreign partners. Joint ventures and wholly owned subsidiaries establish ongoing foreign operations through partnerships or full ownership of foreign subsidiaries.
INTERNATIONAL TRADE DOCUMENTS used in Export and Import Procedures are Commercial Invoice, Packing List, Certificate of Origin, Irrevocable Letter of Credit, Bill of Lading and CMR Document.
Export management involves coordinating all parties involved in an export business to secure export orders and ensure timely shipment of goods according to buyer specifications. The main objectives are to secure export orders and ensure timely delivery of quality goods as agreed. Exports can be classified as merchandise, services, projects, or deemed exports. Key export documents include commercial invoices, certificates of origin, bills of lading or airway bills, packing lists, and insurance documents. Regulatory documents must also be provided to comply with export inspection, customs, and foreign exchange regulations.
This document provides information on export procedures and documentation in India. It discusses the key types of exports (physical and deemed), types of exporters (manufacturer and merchant), and the various documents required for export including commercial documents and regulatory documents. The commercial documents discussed in detail are the commercial invoice, inspection certificate, and marine insurance policy. The commercial invoice provides important shipment details, the inspection certificate confirms quality standards are met, and marine insurance protects goods in transit.
This document discusses the various documents required for exporting goods internationally. It notes that exports require many documents to satisfy regulations and payment requirements, including export declarations, consular invoices or certificates of origin, bills of lading, commercial invoices, and insurance certificates. Additional optional documents include import/export licenses and packing lists. The number of documents can vary significantly between shipments but sometimes exceeds 50 documents involving over 25 parties. Software is available to help manage the complex documentation process for exports.
The document discusses various export trade documents used in international trade, including financial documents like bills of exchange, commercial documents like proforma invoices and certificates of origin, transport documents like bills of lading, and risk covering documents like insurance policies. It provides details on the purpose and contents of key documents like bills of exchange, commercial invoices, certificates of origin, bills of lading, and insurance policies.
This document defines various categories of exporters and importers and provides explanations of key export and import documentation terms. It discusses the different types of exporters such as manufacturer exporter, merchant exporter, AEZ, BTP, EOU, and service provider. It also defines categories of importers. The document then provides details on various export documents including commercial invoices, packing lists, bills of lading, certificates of inspection and origin, and regulatory documents. It explains types of bills of lading and transport documents used in export and import transactions.
The document discusses various modes of entry into international business, including export trade, import trade, contract manufacturing, licensing, franchising, joint ventures, and wholly owned subsidiaries. Export trade involves selling goods and services to foreign firms, while import trade is purchasing goods and services from foreign firms. Contract manufacturing involves outsourcing production to foreign firms. Licensing and franchising allow firms to profit from their intellectual property through fees and royalties paid by foreign partners. Joint ventures and wholly owned subsidiaries establish ongoing foreign operations through partnerships or full ownership of foreign subsidiaries.
INTERNATIONAL TRADE DOCUMENTS used in Export and Import Procedures are Commercial Invoice, Packing List, Certificate of Origin, Irrevocable Letter of Credit, Bill of Lading and CMR Document.
Some of the documents required in export transaction are preliminary inquiry and offer, confirmation of order, export license, finance among others. There are two dozen commercial and regulatory documents that are involved in the pre-shipment stage of an export transaction.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
The document outlines the key steps and documentation requirements for export transactions. It discusses the preliminary steps like obtaining an IEC number and export license. It then covers important documents at various stages like customs formalities, shipping documents, payment documents, inspection certificates, and documents for excisable goods. The main export documents include the commercial invoice, packing list, bill of lading, certificate of origin, while regulatory documents include the shipping bill, export application, and exchange control forms.
The document outlines the key steps involved in an export transaction process:
Step 1) Exporters must register with the Director General of Foreign Trade to obtain an Importer-Exporter Code number for first time exports.
Step 2) Exporters must register with relevant export promotion councils and obtain necessary permits from other authorities.
Step 3) Exporters can begin procuring orders by providing samples, agreeing on contract terms, and receiving a purchase order.
Step 4) Exporters manufacture goods and arrange for quality certification and packaging for shipping.
LIST OF DOCUMENTS AND PROCEDURE OF EXPORTSSaloni Aul
This document discusses international marketing procedures and documentation for exports. It begins by defining exports as goods produced in one country and shipped to another for sale or trade. Some key points include:
- Commercial documents needed for exports include invoices, bills of lading, airway bills, bills of exchange, and letters of credit.
- Regulatory documents include those for registration and shipment like shipping bills and marine insurance policies.
- Assistance documents allow exporters to avail incentives, including applications for registration and documents needed to claim duty drawbacks.
- Importing countries may require consular invoices, certificates of origin, customs invoices, and certified invoices from exporters.
The document concludes by outlining the export procedure
This document provides information on various types of commercial documents used in international trade. It discusses principal documents like commercial invoices, packing lists, bills of lading, certificates of origin and bills of exchange. It also mentions auxiliary documents required for regulatory purposes like shipping bills, exchange control forms, and certificates needed for customs clearance and claiming benefits. The document gives details on the purpose and use of each document in conveying trade-related information between exporters and importers.
The document provides an overview of common export documents required for international trade. It discusses documents like the shipper's export declaration, commercial invoice, certificate of origin, bill of lading, temporary import certificate, insurance certificate, export packing list, import license, consular invoice, inspection certification, dock receipt, and warehouse receipt. It also summarizes specific documents required for exporting goods via post like the customs declaration form, dispatch note, commercial invoice, consular invoice, customs invoice, legalized/visaed invoice, certified invoice, packing list, certificate of inspection, and black list certificate. The document outlines various certification documents that may be needed depending on the good and destination like manufacturer's certificate, certificate of chemical analysis, certificate of
This document discusses common import and export documents involved in international trade. It is divided into four main sections:
1. Commercial documents which include documents like quotations, sales contracts, pro formas, invoices, packing lists, certificates of inspection, insurance policies, testing certificates, health certificates, and phytosanitary certificates.
2. Transport documents such as bills of lading, air waybills, dock receipts, and shipping guarantees which provide evidence of contracts between shippers and carriers.
3. Financial documents including letters of credit, collections, bills of exchange, trust receipts, and promissory notes related to payment terms.
4. Government documents like certificates of origin and G
The document discusses export documentation in India, outlining the various stages and required documents. It describes the preliminary stage involving organizing, registering, and appointing agents. The pre-shipment stage involves order confirmation, letter of credit, production, packing, inspection, and more. The shipment stage involves customs processing and loading. The post-shipment stage involves document dispatch, shipment advice, and proceeds realization. It also classifies documents as commercial, regulatory, export assistance, and those required by importers. Principal commercial documents facilitate transfer of goods and payment and include invoices, bills of lading, and certificates.
The document outlines various export documentation requirements. It discusses both commercial documents and regulatory documents. Commercial documents include invoices, packing lists, bills of lading, certificates of origin, and insurance documents. Regulatory documents include forms for customs, port authorities, and foreign exchange controls. In total there are around 15 commercial documents, with 8 considered principal documents, and 7 regulatory documents required for export.
International Trade Logistics - Documentation.pptxDiksha Vashisht
Documents are at the heart of all logistics processes. Invoices, bills of lading, shipping slips, customs documents, and packing lists are just a few of the (typically) paper documents that are passed through many hands from supplier to receiver to end customer
Unit 3 Part 1 international trade documentation.pptxMbeumuna1
This document provides an overview of a university unit on international trade documentation. It outlines the unit's objectives which are to list and explain required documentation for cross-border trade and evaluate importation procedures in Namibia. It then categorizes export and import documents into commercial documents, transportation documents, regulatory documents, and export assistance documents. For each category, it provides examples and descriptions of common documents like bills of lading, certificates of origin, and import licenses.
Export and import policies as per india , u.s., eu, japanPriyanka Gangarapu
This document summarizes export and import policies and procedures for pharmaceuticals in India, the US, and the EU. It outlines the general steps for export and import, including obtaining licenses and permits, packaging and labeling, shipping procedures, and customs requirements. It provides details on import regulations and documentation required in India and the US, including forms, fees, and conditions for licenses.
Export Procedures and Documentation Assinement.pdfJaspreet singh
The document provides a thorough exploration of the complexities involved in exporting goods and services across international borders. It covers essential topics such as export procedures, documentation requirements, and the critical role of regulatory compliance. Furthermore, a practical example scenario elucidating the export of construction machinery from India to the United States is included to provide practical context.
Direct import refers to a major retailer purchasing products directly from an overseas manufacturer, bypassing local suppliers. This allows the retailer to potentially save on costs compared to indirect imports, where a local supplier acts as an intermediary between the overseas manufacturer and the retailer. The key stages of direct importing are locating a foreign manufacturer, procuring the goods from them, and ensuring all required import documentation is in order, such as bills of lading, invoices, bills of entry, import licenses, insurance certificates, purchase orders, and other documents required for import customs clearance depending on the good and any applicable duty benefits.
This document provides information on import and export procedures and documentation in India. It discusses the key steps in the import process, including trade enquiry, obtaining an import license, acquiring foreign exchange, opening a letter of credit, obtaining necessary documents, customs formalities, payment, and closing the transaction. Similarly, it outlines the export process and various pre-shipment documents, shipping documents, regulatory documents, and other auxiliary documents involved. The document aims to explain the standardized documentation requirements and procedures for imports and exports according to Indian laws and regulations.
The document outlines an export documentation framework, categorizing export documents into commercial, legal, and incentive dimensions. Under the commercial dimension, key documents needed for international shipments include a commercial invoice, bill of lading or airway bill, cargo insurance policy or certificate, and bill of exchange. The legal dimension involves documents required to comply with laws regulating the export and import of goods between countries. The incentive dimension refers to documents needed to claim export incentives from governments.
This document provides an overview of air cargo management. It discusses various topics such as packing, labeling, cargo acceptance, introduction of airway bills, cargo manifestation, security clearance, loading, arrival/offloading, delivery, import/export licensing, purchase orders, commercial invoices, packing lists, certificates of origin, shipping bills, customs procedures, custodian responsibilities, and electronic data interchange systems. The overall aim is to describe the end-to-end process for transporting cargo via air and ensuring regulatory compliance.
This document provides an overview of air cargo management. It discusses various topics such as packing, labeling, cargo acceptance, introduction of airway bills, cargo manifestation, security clearance, loading, arrival/offloading, delivery, import/export licensing, purchase orders, commercial invoices, packing lists, certificates of origin, shipping bills, customs procedures, custodian responsibilities, and electronic data interchange systems. The overall aim is to describe the end-to-end process for transporting cargo via air as well as the various documentation involved.
1. Exports contribute significantly to increasing a country's revenue and manufacturer/trader profits, which creates jobs. However, exporting involves risks that are eased by ECGC insurance policies.
2. ECGC offers various export credit insurance policies covering commercial and political risks depending on the type of exports and destination country.
3. Exporters must register for an IEC, RCMC, and with ECGC. They must ensure their products are export-worthy and meet quality standards before pursuing overseas sales.
Business UseWeek 1 Assignment #1Instructions1. Plea.docxfelicidaddinwoodie
Business Use
Week 1: Assignment #1
Instructions
1. Please read these two articles:
· Using forensics against a fitbit device to solve a murder: https://www.cbsnews.com/news/the-fitbit-alibi-21st-century-technology-used-to-help-solve-wisconsin-moms-murder/
· How Amazon Echo could be forensically analyzed! https://www.theverge.com/2017/1/6/14189384/amazon-echo-murder-evidence-surveillance-data
2. Then go around in your residence / dwelling (home, apartment, condo, etc) and be creative.
3. Identify at least five appliances or devices that you THINK could be forensically analyzed and then identify how this might be useful in an investigation. Note - do not count your computer or mobile device. Those are obvious!
4. I expect at least one paragraph answer for each device.
Why did I assign this?
The goal is to have you start THINKING about how any device, that is capable of holding electronic data (and transmitting to the Internet) could be useful in a particular investigation!
Due Date
This is due by Sunday, May 10th at 11:59PM
Surname 6
Informative speech on George Stinney Jr.
A. Info research analysis
The general purpose of the speech was to inform people about the civil injustice being done against the African American community in the United States. The specific purpose of the speech was to portray to the audience how an innocent 14-year old black boy suffered in the hands of the South Carolina State law enforcing officers. He was falsely accused of killing two white girls and electrocuted within two months after conviction.
I decided the topic of my speech after perusing through all the suggested topics ad found that the story of George Stinney Jr. was touching and emotional entirely.
This topic benefits the audience and the society in general by giving them an insight of the cruelty that the American law system has against the African American community. The audience gets to know how the shady investigations were done with claims that George had pleaded guilty to the charges of murder when there was no real evidence tying him to the crime or a signed plea agreement.
The alternative view that I found in the research was the version of the investigating officer of the case who claimed that the 14-year old boy managed to kill two girls aged 11 and 7 with a blunt object and ditch them in a nearby trench. This alternative point of view did not make sense because it is hard for a 14-year old boy to use the force that was reported by postmortem results to kill the girls. Therefore, I knew everything was a lie and I had to take the point of view of George’s innocence.
B. informative outline
Introduction:
George Stinney Jr. was an African American boy born on October 21, 1929 in Pinewood, South Carolina, U.S. He is considered as the youngest person to be executed by the United State government in 20th century.
Main body
Investigations of the alleged crimes (Bickford, 05)
The investigations concerning the alleged crimes of George S.
Business UsePALADIN ASSIGNMENT ScenarioYou are give.docxfelicidaddinwoodie
Business Use
PALADIN ASSIGNMENT
Scenario:
You are given a PC and you are faced with this scenario: you don’t know the password to the PC which means you can’t login so you can use a forensic tool like FTK IMAGER to capture the hard drive as a bit-for-bit forensic image AND/OR
1. The hard drive is either soldiered onto the motherboard (there are some new hard drives like this!) or cannot be removed because the screws are stripped (this has happened to me);
2. Even if you figured out the password or got an admin password the PC may have its USB ports blocked via a GPO policy (this is very common in corporations now);
3. Even if you can get the GPO policy overridden you may have some concerns about putting it on the network (which is true especially if you are dealing with malware).
So what you can you do? The best solution is to boot the PC up into forensically sound environment that lets you bypass the password aspect; GPO policy; etc and take a bit-for-bit image. One software that has done the job very well for me is Paladin.
How to get points
If you can send me a screenshot showing me that you had installed Paladin .ISO and made your USB device a bootable device with Paladin using Rufus then you get 10 points.
If you can send me a screenshot showing that you had a chance to boot your computer into Paladin then you will earn an extra 10 points. It is not necessary for you to take a forensic image of your PC but I have included generic instructions here.
Assumptions:
1. You have downloaded Rufus on your computer
2. You have downloaded Paladin on your computer.
Instructions:
1. Make sure you have at least one USB drive.
2. If not down already, download Rufus from https://rufus.ie/.
3. If not done already, download the Paladin ISO image from this website: https://sumuri.com/product/paladin-64-bit-version-7/ which is free. It’s suggested price is $25.00 but you can adjust the price to $0 then order. To be clear – do not pay anything.
4. Insert the USB device in your computer.
5. Run Rufus where you install the Paladin .ISO file on the USB device and make it bootable. Now I could provide you step by step instructions, but this is a Masters class so I want you to explore a bit and figure this out. One good video is this: https://www.youtube.com/watch?v=V6JehM0WDTI.
6. After you are done using Rufus where you have installed Paladin.ISO on the USB device and made it bootable then make sure the USB device is in the PC.
7. Restart your PC. Press F9(HP) laptop) or F12 (Dell laptop) so you can be taken into the BIOS bootup menu.
8. This is where things get a bit tricky e.g. your compute may be configured differently where you have to adjust your BIOS settings. If you do not feel comfortable doing this then stop here. I do not want you to mess up your computer. You have already earned ten extra points!
9. If you still proceed then you will see a list of bootable devices. You may, for example, see a list of devices. Pick the device .
More Related Content
Similar to 1Chapter 9Marketing 4220 International Sourcing, Logisti.docx
Some of the documents required in export transaction are preliminary inquiry and offer, confirmation of order, export license, finance among others. There are two dozen commercial and regulatory documents that are involved in the pre-shipment stage of an export transaction.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/ZEcPAc
The document outlines the key steps and documentation requirements for export transactions. It discusses the preliminary steps like obtaining an IEC number and export license. It then covers important documents at various stages like customs formalities, shipping documents, payment documents, inspection certificates, and documents for excisable goods. The main export documents include the commercial invoice, packing list, bill of lading, certificate of origin, while regulatory documents include the shipping bill, export application, and exchange control forms.
The document outlines the key steps involved in an export transaction process:
Step 1) Exporters must register with the Director General of Foreign Trade to obtain an Importer-Exporter Code number for first time exports.
Step 2) Exporters must register with relevant export promotion councils and obtain necessary permits from other authorities.
Step 3) Exporters can begin procuring orders by providing samples, agreeing on contract terms, and receiving a purchase order.
Step 4) Exporters manufacture goods and arrange for quality certification and packaging for shipping.
LIST OF DOCUMENTS AND PROCEDURE OF EXPORTSSaloni Aul
This document discusses international marketing procedures and documentation for exports. It begins by defining exports as goods produced in one country and shipped to another for sale or trade. Some key points include:
- Commercial documents needed for exports include invoices, bills of lading, airway bills, bills of exchange, and letters of credit.
- Regulatory documents include those for registration and shipment like shipping bills and marine insurance policies.
- Assistance documents allow exporters to avail incentives, including applications for registration and documents needed to claim duty drawbacks.
- Importing countries may require consular invoices, certificates of origin, customs invoices, and certified invoices from exporters.
The document concludes by outlining the export procedure
This document provides information on various types of commercial documents used in international trade. It discusses principal documents like commercial invoices, packing lists, bills of lading, certificates of origin and bills of exchange. It also mentions auxiliary documents required for regulatory purposes like shipping bills, exchange control forms, and certificates needed for customs clearance and claiming benefits. The document gives details on the purpose and use of each document in conveying trade-related information between exporters and importers.
The document provides an overview of common export documents required for international trade. It discusses documents like the shipper's export declaration, commercial invoice, certificate of origin, bill of lading, temporary import certificate, insurance certificate, export packing list, import license, consular invoice, inspection certification, dock receipt, and warehouse receipt. It also summarizes specific documents required for exporting goods via post like the customs declaration form, dispatch note, commercial invoice, consular invoice, customs invoice, legalized/visaed invoice, certified invoice, packing list, certificate of inspection, and black list certificate. The document outlines various certification documents that may be needed depending on the good and destination like manufacturer's certificate, certificate of chemical analysis, certificate of
This document discusses common import and export documents involved in international trade. It is divided into four main sections:
1. Commercial documents which include documents like quotations, sales contracts, pro formas, invoices, packing lists, certificates of inspection, insurance policies, testing certificates, health certificates, and phytosanitary certificates.
2. Transport documents such as bills of lading, air waybills, dock receipts, and shipping guarantees which provide evidence of contracts between shippers and carriers.
3. Financial documents including letters of credit, collections, bills of exchange, trust receipts, and promissory notes related to payment terms.
4. Government documents like certificates of origin and G
The document discusses export documentation in India, outlining the various stages and required documents. It describes the preliminary stage involving organizing, registering, and appointing agents. The pre-shipment stage involves order confirmation, letter of credit, production, packing, inspection, and more. The shipment stage involves customs processing and loading. The post-shipment stage involves document dispatch, shipment advice, and proceeds realization. It also classifies documents as commercial, regulatory, export assistance, and those required by importers. Principal commercial documents facilitate transfer of goods and payment and include invoices, bills of lading, and certificates.
The document outlines various export documentation requirements. It discusses both commercial documents and regulatory documents. Commercial documents include invoices, packing lists, bills of lading, certificates of origin, and insurance documents. Regulatory documents include forms for customs, port authorities, and foreign exchange controls. In total there are around 15 commercial documents, with 8 considered principal documents, and 7 regulatory documents required for export.
International Trade Logistics - Documentation.pptxDiksha Vashisht
Documents are at the heart of all logistics processes. Invoices, bills of lading, shipping slips, customs documents, and packing lists are just a few of the (typically) paper documents that are passed through many hands from supplier to receiver to end customer
Unit 3 Part 1 international trade documentation.pptxMbeumuna1
This document provides an overview of a university unit on international trade documentation. It outlines the unit's objectives which are to list and explain required documentation for cross-border trade and evaluate importation procedures in Namibia. It then categorizes export and import documents into commercial documents, transportation documents, regulatory documents, and export assistance documents. For each category, it provides examples and descriptions of common documents like bills of lading, certificates of origin, and import licenses.
Export and import policies as per india , u.s., eu, japanPriyanka Gangarapu
This document summarizes export and import policies and procedures for pharmaceuticals in India, the US, and the EU. It outlines the general steps for export and import, including obtaining licenses and permits, packaging and labeling, shipping procedures, and customs requirements. It provides details on import regulations and documentation required in India and the US, including forms, fees, and conditions for licenses.
Export Procedures and Documentation Assinement.pdfJaspreet singh
The document provides a thorough exploration of the complexities involved in exporting goods and services across international borders. It covers essential topics such as export procedures, documentation requirements, and the critical role of regulatory compliance. Furthermore, a practical example scenario elucidating the export of construction machinery from India to the United States is included to provide practical context.
Direct import refers to a major retailer purchasing products directly from an overseas manufacturer, bypassing local suppliers. This allows the retailer to potentially save on costs compared to indirect imports, where a local supplier acts as an intermediary between the overseas manufacturer and the retailer. The key stages of direct importing are locating a foreign manufacturer, procuring the goods from them, and ensuring all required import documentation is in order, such as bills of lading, invoices, bills of entry, import licenses, insurance certificates, purchase orders, and other documents required for import customs clearance depending on the good and any applicable duty benefits.
This document provides information on import and export procedures and documentation in India. It discusses the key steps in the import process, including trade enquiry, obtaining an import license, acquiring foreign exchange, opening a letter of credit, obtaining necessary documents, customs formalities, payment, and closing the transaction. Similarly, it outlines the export process and various pre-shipment documents, shipping documents, regulatory documents, and other auxiliary documents involved. The document aims to explain the standardized documentation requirements and procedures for imports and exports according to Indian laws and regulations.
The document outlines an export documentation framework, categorizing export documents into commercial, legal, and incentive dimensions. Under the commercial dimension, key documents needed for international shipments include a commercial invoice, bill of lading or airway bill, cargo insurance policy or certificate, and bill of exchange. The legal dimension involves documents required to comply with laws regulating the export and import of goods between countries. The incentive dimension refers to documents needed to claim export incentives from governments.
This document provides an overview of air cargo management. It discusses various topics such as packing, labeling, cargo acceptance, introduction of airway bills, cargo manifestation, security clearance, loading, arrival/offloading, delivery, import/export licensing, purchase orders, commercial invoices, packing lists, certificates of origin, shipping bills, customs procedures, custodian responsibilities, and electronic data interchange systems. The overall aim is to describe the end-to-end process for transporting cargo via air and ensuring regulatory compliance.
This document provides an overview of air cargo management. It discusses various topics such as packing, labeling, cargo acceptance, introduction of airway bills, cargo manifestation, security clearance, loading, arrival/offloading, delivery, import/export licensing, purchase orders, commercial invoices, packing lists, certificates of origin, shipping bills, customs procedures, custodian responsibilities, and electronic data interchange systems. The overall aim is to describe the end-to-end process for transporting cargo via air as well as the various documentation involved.
1. Exports contribute significantly to increasing a country's revenue and manufacturer/trader profits, which creates jobs. However, exporting involves risks that are eased by ECGC insurance policies.
2. ECGC offers various export credit insurance policies covering commercial and political risks depending on the type of exports and destination country.
3. Exporters must register for an IEC, RCMC, and with ECGC. They must ensure their products are export-worthy and meet quality standards before pursuing overseas sales.
Similar to 1Chapter 9Marketing 4220 International Sourcing, Logisti.docx (20)
Business UseWeek 1 Assignment #1Instructions1. Plea.docxfelicidaddinwoodie
Business Use
Week 1: Assignment #1
Instructions
1. Please read these two articles:
· Using forensics against a fitbit device to solve a murder: https://www.cbsnews.com/news/the-fitbit-alibi-21st-century-technology-used-to-help-solve-wisconsin-moms-murder/
· How Amazon Echo could be forensically analyzed! https://www.theverge.com/2017/1/6/14189384/amazon-echo-murder-evidence-surveillance-data
2. Then go around in your residence / dwelling (home, apartment, condo, etc) and be creative.
3. Identify at least five appliances or devices that you THINK could be forensically analyzed and then identify how this might be useful in an investigation. Note - do not count your computer or mobile device. Those are obvious!
4. I expect at least one paragraph answer for each device.
Why did I assign this?
The goal is to have you start THINKING about how any device, that is capable of holding electronic data (and transmitting to the Internet) could be useful in a particular investigation!
Due Date
This is due by Sunday, May 10th at 11:59PM
Surname 6
Informative speech on George Stinney Jr.
A. Info research analysis
The general purpose of the speech was to inform people about the civil injustice being done against the African American community in the United States. The specific purpose of the speech was to portray to the audience how an innocent 14-year old black boy suffered in the hands of the South Carolina State law enforcing officers. He was falsely accused of killing two white girls and electrocuted within two months after conviction.
I decided the topic of my speech after perusing through all the suggested topics ad found that the story of George Stinney Jr. was touching and emotional entirely.
This topic benefits the audience and the society in general by giving them an insight of the cruelty that the American law system has against the African American community. The audience gets to know how the shady investigations were done with claims that George had pleaded guilty to the charges of murder when there was no real evidence tying him to the crime or a signed plea agreement.
The alternative view that I found in the research was the version of the investigating officer of the case who claimed that the 14-year old boy managed to kill two girls aged 11 and 7 with a blunt object and ditch them in a nearby trench. This alternative point of view did not make sense because it is hard for a 14-year old boy to use the force that was reported by postmortem results to kill the girls. Therefore, I knew everything was a lie and I had to take the point of view of George’s innocence.
B. informative outline
Introduction:
George Stinney Jr. was an African American boy born on October 21, 1929 in Pinewood, South Carolina, U.S. He is considered as the youngest person to be executed by the United State government in 20th century.
Main body
Investigations of the alleged crimes (Bickford, 05)
The investigations concerning the alleged crimes of George S.
Business UsePALADIN ASSIGNMENT ScenarioYou are give.docxfelicidaddinwoodie
Business Use
PALADIN ASSIGNMENT
Scenario:
You are given a PC and you are faced with this scenario: you don’t know the password to the PC which means you can’t login so you can use a forensic tool like FTK IMAGER to capture the hard drive as a bit-for-bit forensic image AND/OR
1. The hard drive is either soldiered onto the motherboard (there are some new hard drives like this!) or cannot be removed because the screws are stripped (this has happened to me);
2. Even if you figured out the password or got an admin password the PC may have its USB ports blocked via a GPO policy (this is very common in corporations now);
3. Even if you can get the GPO policy overridden you may have some concerns about putting it on the network (which is true especially if you are dealing with malware).
So what you can you do? The best solution is to boot the PC up into forensically sound environment that lets you bypass the password aspect; GPO policy; etc and take a bit-for-bit image. One software that has done the job very well for me is Paladin.
How to get points
If you can send me a screenshot showing me that you had installed Paladin .ISO and made your USB device a bootable device with Paladin using Rufus then you get 10 points.
If you can send me a screenshot showing that you had a chance to boot your computer into Paladin then you will earn an extra 10 points. It is not necessary for you to take a forensic image of your PC but I have included generic instructions here.
Assumptions:
1. You have downloaded Rufus on your computer
2. You have downloaded Paladin on your computer.
Instructions:
1. Make sure you have at least one USB drive.
2. If not down already, download Rufus from https://rufus.ie/.
3. If not done already, download the Paladin ISO image from this website: https://sumuri.com/product/paladin-64-bit-version-7/ which is free. It’s suggested price is $25.00 but you can adjust the price to $0 then order. To be clear – do not pay anything.
4. Insert the USB device in your computer.
5. Run Rufus where you install the Paladin .ISO file on the USB device and make it bootable. Now I could provide you step by step instructions, but this is a Masters class so I want you to explore a bit and figure this out. One good video is this: https://www.youtube.com/watch?v=V6JehM0WDTI.
6. After you are done using Rufus where you have installed Paladin.ISO on the USB device and made it bootable then make sure the USB device is in the PC.
7. Restart your PC. Press F9(HP) laptop) or F12 (Dell laptop) so you can be taken into the BIOS bootup menu.
8. This is where things get a bit tricky e.g. your compute may be configured differently where you have to adjust your BIOS settings. If you do not feel comfortable doing this then stop here. I do not want you to mess up your computer. You have already earned ten extra points!
9. If you still proceed then you will see a list of bootable devices. You may, for example, see a list of devices. Pick the device .
Business UsePractical Connection WorkThis work is a writte.docxfelicidaddinwoodie
Business Use
Practical Connection Work
This work is a written assignment where students will demonstrate how this course research has connected and been put into practice within their own career.
Assignment:
Provide a reflection of at least 500 words of how the knowledge, skills, or theories of this course, to date, have been applied, or could be applied, in a practical manner to your current work environment.
If you are not currently working, then this is where you can be creative and identify how you THINK this could be applied to an employment opportunity in your field of study.
Requirements:
Provide a 500 word minimum reflection.
Use of proper APA formatting and citations. If supporting evidence from outside resources is used those must be properly cited.
Share a personal connection that identifies specific knowledge and theories from this course.
You should NOT provide an overview of the assignments given in the course. Reflect and write about how the knowledge and skills obtained through meeting course objectives were applied or could be applied in the workplace.
// Pediatric depressionTherapy for Pediatric Clients with Mood Disorders
An African American Child Suffering From Depression
BACKGROUND INFORMATION
The client is an 8-year-old African American male who arrives at the ER with his mother. He is exhibiting signs of depression.
Client complained of feeling “sad” Mother reports that teacher said child is withdrawn from peers in class Mother notes decreased appetite and occasional periods of irritation Client reached all developmental landmarks at appropriate ages Physical exam unremarkable Laboratory studies WNL Child referred to psychiatry for evaluation Client seen by Psychiatric Nurse Practitioner
MENTAL STATUS EXAM
Alert & oriented X 3, speech clear, coherent, goal directed, spontaneous. Self-reported mood is “sad”. Affect somewhat blunted, but child smiled appropriately at various points throughout the clinical interview. He denies visual or auditory hallucinations. No delusional or paranoid thought processes noted. Judgment and insight appear to be age-appropriate. He is not endorsing active suicidal ideation, but does admit that he often thinks about himself being dead and what it would be like to be dead.
The PMHNP administers the Children's Depression Rating Scale, obtaining a score of 30 (indicating significant depression)
RESOURCES
§ Poznanski, E., & Mokros, H. (1996). Child Depression Rating Scale--Revised. Los Angeles, CA: Western Psychological Services.
Decision Point OneSelect what the PMHNP should do:Begin Zoloft 25 mg orally daily
Begin Paxil 10 mg orally daily
Begin Wellbutrin 75 mg orally BID
.
Business System Analyst
SUMMARY:
· Cognos Business In experience intelligence with expertise in Software Design, Development, and Analysis, Teradata, Testing, Data Warehouse and Business Intelligence tools.
· Expertise in Cognos 11/10.2, 10.1, 8.x (Query Studio, Report Studio, Analysis Studio, Business Insight/Workspace, Business Insight/Workspace Advanced, Metric Studio (Score carding), Framework Manager, Cognos Connection)
· Expertise in Installation and Configuration of Cognos BI Products in Distributed environment on Windows
· Expertise with Framework Manager Modeling (Physical Layer, Business Layer, Packages) and Complex Report building with Report Studio.
· Expertise developing complex reports using drill-through reports, prompts, dashboards, master-detail, burst-reports, dynamic filtering in Cognos.
· Expertise in creating Dashboard reports using Java Script in Report studio.
· Expertise in building scorecard reports and dashboard reports using metric studio.
· Expertise with Transformer models and cubes that were used in Power play analysis and also these cubes were used in various Analysis Studio reports.
· Expertise with MDX Functions in Report Studio using Multi-dimensional Sources.
· Expertise with Cognos security (LDAP, Active Directory, Access manager, object level security, data security).
· Expertise with Tabbed Inter-phases and with Interactive Behavior of value based chart highlighting.
· Sound Skills in developing SQL Scripts, PL/SQL Stored Procedures, functions, packages.
· Expertise on production support and troubleshoot/test issues with existing reports and cubes.
· Experienced with MS SQL Server BI Tools like SSIS, SSRS and SSAS.
· Expertise in creation of packages, Data and Control tasks, Reports and Cubes using MS SQL Server BI Tools.
· Ability to translate business requirements into technical specifications and interact with end users to gather requirements for reporting.
· Good understanding of business process in Financial, Insurance and Healthcare areas.
· Expertise in infrastructure design for the cognos environment and security setup for different groups as per business requirement.
· Creating training material on all the Ad-Hoc training
· Expertise in all the basic administrative tasks like deployments, routing rule setup’s , user group setup , folder level securities etc.
· Have deployment knowledge of IBM Cognos report in Application servers like WAS.
· Have knowledge on handling securities and administration functionalities on IBM Cognos 10.x
· Good work ethics, detail oriented, fast learner, team oriented, flexible and adaptable to all kinds of stressful environments. Possess excellent communication and interpersonal skills.
Technical Skills:
BI Platform
Cognos 11,10.2, 10.1, 8.x (Query Studio, Report Studio, Analysis Studio, Business Insight/Workspace, Business Insight/Workspace Advanced, Metric Studio (Score carding), Framework Manager, Cognos Connection)
Data Base
MS Access, MS SQL Server, Orac.
Business StrategyOrganizations have to develop an international .docxfelicidaddinwoodie
Business Strategy
Organizations have to develop an international Human Resources Management Strategy, when they expand globally. Which do you think is more critical for international Human Resource Management:
Understanding the cultural environment, or
Understanding the political and legal environment?
Please choose 1 position and give a rationale; examples are also a way to demonstrate your understanding of the learning concepts.
.
Business StrategyGroup BCase Study- KFC Business Analysis.docxfelicidaddinwoodie
Business Strategy
Group B
Case Study- KFC Business Analysis
Abstract
Introduced in 1952 by Colonel Sanders
Second largest restaurant chain today in terms of popularity
Annual revenue of $23 billion
Diversified its menu to suit cultural needs of people across different countries
Hindering factors in KFC’s growth are growing consumer health consciousness, animal welfare criticism, environmental criticism
Introduction
KFC was born in 1952 and its founder was Colonel Sanders
First franchise to grow globally over international market
By the 1960s – 1980s the market was booming in countries like England, Mexico, China
Management and ownership transferred over the years to Heublin, Yum Brands and PepsiCo.
Annual revenue of $23 billion in 2013
KFC had expanded its menu to suit cultural needs of people across different countries
Hindering factors in KFC’s growth are growing consumer health consciousness, animal welfare criticism, environmental criticism, logistic management issue in UK, cultural differences in Asian countries towards accepting the fried chicken menu.
Factors contributing to KFC’s global success
The core reason for KFCs success is it’s mandate to follow strict franchise protocols that have continuously satisfied customers demands:
The quality of the chicken cooked in KFC has certain specific guidelines
The size of the restaurant should be 24x60 feet.
The restaurant washrooms and ktichen has certain cleanliness standards
Food that is not sold off needs to be trashed
The workers need to have a specific clothing and uniform.
A certain % of the gross earnings should be used for advertisement and R&D
Air conditioning is mandatory in the outlets
Global number of KFC restaurants in the past decade
Importance of cultural factors to KFC’s sales success in India and China
Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values
“Culture is everything that people have, think, and do as members of their society”, which demonstrating that culture is made up of (1) material objects; (2) ideas, values, attitudes and beliefs; and (3) specified, or expected behavior.
Many scholars have theorized and studied the notion of cross-cultural adaptation, which tends to move from one culture to another one, by learning the elements such as rules, norms, customs, and language of the new culture (Oberg 1960, Keefe and Padilla 1987, Kealey 1989). According to Ady (1995),
“Cultural adaptation is the evolutionary process by which an individual modifies his personal habits and customs to fit into a particular culture. It can also refer to gradual changes within a culture or society that occur as people from different backgrounds participating in the culture and sharing their perspectives and practices.”
Cultural factors in India that go against KFC’s original recipe.
.
Business Strategy Differentiation, Cost Leadership, a.docxfelicidaddinwoodie
This document discusses various concepts related to business strategy and competitive advantage. It begins by defining a business-level strategy and outlining the "who, what, why, and how" of competing for advantage. It then discusses how industry and firm effects jointly determine competitive advantage. Key ideas around generating and sustaining advantage through barriers to imitation are presented. The document also discusses concepts like differentiation advantage, cost leadership, learning curves, economies of scale, value chains, and the resource-based view of the firm. Strategic coherence and dynamic strategic activity systems are defined.
Business RequirementsReference number Document Control.docxfelicidaddinwoodie
Business Requirements
Reference number:
Document Control
Change Record
Date
Author
Version
Change Reference
Reviewers
Name
Position
Table of Contents
2Document Control
1
Business Requirements
4
1.1
Project Overview
4
1.2
Background including current process
4
1.3
Scope
4
1.3.1
Scope of Project
4
1.3.2
Constraints and Assumptions
5
1.3.3
Risks
5
1.3.4
Scope Control
5
1.3.5
Relationship to Other Systems/Projects
5
1.3.6
Definition of Terms (if applicable)
5
1 Business Requirements
1.1 Project Overview
Provide a short, yet complete, overview of the project.
1.2 Background including current process
Describe the background to the project, (same section may be reused in the Quality Plan) include:
This project is
The project goal is to
The IT role for this project is
1.3 Scope
1.3.1 Scope of Project
The scope of this project includes a number of areas. For each area, there should be a corresponding strategy for incorporating these areas into the overall project.
Applications
In order to meet the target production date, only these applications will be implemented:
Sites
These sites are considered part of the implementation:
Process Re-engineering
Re-engineering will
Customization
Customizations will be limited to
Interfaces
the interfaces included are:
Architecture
Application and Technical Architecture will
Conversion
Only the following data and volume will be considered for conversion:
Testing
Testing will include only
Funding
Project funding is limited to
Training
Training will be
Education
Education will include
1.3.2 Constraints and Assumptions
The following constraints have been identified:
The following assumptions have been made in defining the scope, objectives and approach:
1.3.3 Risks
The following risks have been identified as possibly affecting the project during its progression:
1.3.4 Scope Control
The control of changes to the scope identified in this document will be managed through the Change Control, with business owner representative approval for any changes that affect cost or timeline for the project.
1.3.5 Relationship to Other Systems/Projects
It is the responsibility of the business unit to inform IT of other business initiatives that may impact the project. The following are known business initiatives:
1.3.6 Definition of Terms (if applicable)
List any definitions that will be used throughout the duration of the project.
5
A working structure is the fundamental programming that bargains with all the mechanical social affair and other programming on a PC. It other than pulls in us to visit with the PC without perceiving how to talk the piece PC programs language's. A working structure is inside theory of programming on a contraption that keeps everything together. Working systems visit with the's contraption. They handle everything from your solace and mice to the Wi-Fi radio, gathering contraptions, and show. Symbolically, a worki.
Business ProposalThe Business Proposal is the major writing .docxfelicidaddinwoodie
Business Proposal
The Business Proposal is the major writing assignment in the course. You are to create and submit a formal proposal that suggests how to change something within an organization. This organization can be large or small, a place of employment now or in the past, or an organization to which the students belong. From past experiences, it is best to use a business with fewer than 200 employees, and one with which you have personal experience. It could be a place where you currently work or a place you have worked or volunteered in the past.
The change can be specific to a unit or can apply to the whole organization; it can relate to how important information is distributed, who has access to important information, how information is accessed, or any other change in practices the students see as having a benefit. The proposal should be directed to the person or committee with the power to authorize the change. However, if you are working within a large organization, and asking for a small organizational change, communicating with a CEO or president may not make the most sense. You need to think about who within the organization might be the best person for the type of change suggested.
For the submission, you are to follow the guidelines for formal proposals available in Chapter 10 of the text. You can review 10.1, 10.4, and 10.19 for more information about specific components for a well-written formal business proposal. A complete proposal must have all required sections of a formal report excluding the copy of an RFP and the Authorization. The final draft of the proposal should be 1500–2000 words, and include the following necessary formal proposal components:
Letter of transmittal
Executive summary
Title page
Table of contents
List of illustrations
Introduction
Background: Purpose/problem
Proposal: plan, schedule, details
Staffing
Budget
Appendix
Formatting does matter for this assignment, and you are to check the text for details about how to format and draft the different proposal segments. Proposals don't just have text; graphics and charts are necessary, too. In addition, research is important, and footnotes and references must be included. All content should be concise, clear, and detailed. The proposal should be well-written with appropriate grammar, spelling, and punctuation.
This is a scaffolded writing project that consists of four assignments.
.
Business ProjectProject Progress Evaluation Feedback Form .docxfelicidaddinwoodie
Business Project
Project Progress Evaluation
Feedback Form Week 3
Date:
__________________________________________________
Student Name:
__________________________________________________
__________________________________________________
Project Title: Effect Of Increasing Training Budget
Project Type: Business Research
Researchers:
Has a topic been chosen and a problem statement created?
Yes { } NO { }
Was the problem statement submitted in a 1-4 page paper that includes an introduction to the topic with appropriate documentation?
Yes { } No { }
Specifically, if any, needs additional content or rewriting to create more clarity? What specific recommendations do you have to help in this process?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
What is your workable timetable that states specific objectives and target completion dates for completing the final draft of the plan? Write the timetable below:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Feedback Form #3 – Project Proposal and Plan
▼
THE UK’S LEADING PROVIDER OF EXPERT SERVICES FOR IT PROFESSIONALS
NATIONAL COMPUTING CENTRE
IT Governance
Developing a successful governance strategy
A Best Practice guide for decision makers in IT
IT Governance
Developing a successful governance strategy
A Best Practice guide for decision makers in IT
The effective use of information technology is now an accepted organisational imperative - for
all businesses, across all sectors - and the primary motivation; improved communications and
commercial effectiveness. The swift pace of change in these technologies has consigned many
established best practice approaches to the past. Today's IT decision makers and business
managers face uncertainty - characterised by a lack of relevant, practical, advice and standards
to guide them through this new business revolution.
Recognising the lack of available best practice guidance, the National Computing Centre has
created the Best Practice Series to capture and define best practice across the key aspects of
successful business.
Other Titles in the NCC Best Practice series:
IT Skills - Recruitment and Retention ISBN 0-85012-867-6
The New UK Data Protection Law ISBN 0-85012-868-4
Open Source - the UK opportunity ISBN 0-85012-874-9
Intellectual Property Rights - protecting your intellectual assets ISBN 0-85012-872-2
Aligning IT with Business Strategy ISBN 0-85012-889-7
Enterprise Architecture - underst.
BUSINESS PROCESSES IN THE FUNCTION OF COST MANAGEMENT IN H.docxfelicidaddinwoodie
BUSINESS PROCESSES IN THE FUNCTION OF COST
MANAGEMENT IN HEALTHCARE INSTITUTIONS
1
1
st
IVANA DRAŽIĆ LUTILSKY
Departement of Accounting
Faculty of Economics and Business
University of Zagreb
Croatia
[email protected]
2
nd
LUCIJA JUROŠ
Faculty of Economics and Business
[email protected]
Abstract: This paper is dealing with the importance of business processes regarding costs
tracking and cost management in healthcare institutions. Various changes within the health
care system and funding of hospitals require the introduction of management information
systems and cost accounting. The introduction of cost accounting in public hospitals would
allow the planning and control of costs, monitoring of costs per patient or service and the
calculation of indicators for the analysis and assessment of the economic performance of the
business of public hospitals and lead to the transparency of budget spending. A model that
would be suited to the introduction in the public hospital is full cost allocation model based on
activities or processes that occur, known as the ABC method. Given that this is a calculation
of cost of services provided through various internal business processes, it is important to
identify all business processes in order to be able to calculate the costs incurred by services.
Although the hospital does not do business with the aim to make a profit, they must follow all
the costs (direct and indirect) to be able to calculate the full costs i.e. the price of the service
provided. In addition, the long-term sustainability of business activities in terms of funding
difficulties and the continuous growth of cost of services provided, hospitals must control and
reduce the cost of the program and specific activities. Therefore, the objective of this paper is
to point out the importance of business processes while introducing ABC method.
Keywords: Business Processes, Cost management, ABC method, Healthcare Institutions
1
This work has been fully supported by University of Zagreb funding the project “Business processes in the
implementation of cost management in healthcare system”, Any opinions, findings, and conclusions or
recommendations expressed in this paper are those of the authors and do not necessarily reflect the views of
University of Zagreb.
mailto:[email protected]
1 Introduction
In recent years, the efficiency of the management in health care services and the system of
quality in health care institutions significantly increased. Patients expect more from
healthcare providers and higher standards of care. At the same time, those who pay for
health services are increasingly concerned about the rising costs of health care services, but
also the potential ineffectiveness of the health care system. Consequently, there is a broad
interest in understanding the ways of efficient work of health care management and .
Business Process Management JournalBusiness process manageme.docxfelicidaddinwoodie
Business Process Management Journal
Business process management: a maturity assessment of Saudi Arabian
organizations
Omar AlShathry,
Article information:
To cite this document:
Omar AlShathry, (2016) "Business process management: a maturity assessment of Saudi Arabian
organizations", Business Process Management Journal, Vol. 22 Issue: 3, pp.507-521, https://
doi.org/10.1108/BPMJ-07-2015-0101
Permanent link to this document:
https://doi.org/10.1108/BPMJ-07-2015-0101
Downloaded on: 04 September 2018, At: 00:11 (PT)
References: this document contains references to 26 other documents.
To copy this document: [email protected]
The fulltext of this document has been downloaded 1083 times since 2016*
Users who downloaded this article also downloaded:
(2016),"Process improvement for professionalizing non-profit organizations: BPM approach",
Business Process Management Journal, Vol. 22 Iss 3 pp. 634-658 <a href="https://doi.org/10.1108/
BPMJ-08-2015-0114">https://doi.org/10.1108/BPMJ-08-2015-0114</a>
(2016),"Ownership relevance in aspect-oriented business process models", Business
Process Management Journal, Vol. 22 Iss 3 pp. 566-593 <a href="https://doi.org/10.1108/
BPMJ-01-2015-0006">https://doi.org/10.1108/BPMJ-01-2015-0006</a>
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https://doi.org/10.1108/BPMJ-07-2015-0101
*Related content and download information correct at time of download.
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Business process management:
a maturity assessment of Saudi
Arabian organizations
Omar AlShathry
Department of Information Systems,
Imam Mohammed Bin Saud University, Riyadh, Saudi Arabia
Abstract
Purpose – Business Process Management (BPM) has become increasingly common among organizations
in d.
Business Plan[Your Name], OwnerPurdue GlobalBUSINESS PLANDate.docxfelicidaddinwoodie
Business Plan[Your Name], Owner
Purdue Global
BUSINESS PLAN
Date
1. EXECUTIVE SUMMARY
1.1 Product
1.2 Customers
1.3 What Drives Us
2. COMPANY DESCRIPTION
2.1 Mission and Vision Statements
2.2 Principal Members at Startup (In Unit 7 you will expand on this section to include medium and long term personnel plans for all team members, including the line staff.)
2.2.1 Using chapter 10 of your text, write the plan, using the section in Chapter 10 that shows how to introduce each team member and describe their background and responsibilities. You will start with the leaders and managers, then discuss other employees as needed for your company to grow.
2.2.2 Use this spreadsheet to show the planning
Leaders/managers (unit 1)
When needed (number of months/years after opening)
Outside Services Needed
Key Functions
Add line staff (Unit 7)
2.3 Legal Structure
3. MARKET RESEARCH
3.1 Industry (from SBA, Business Guides by Industry, and Bureau of Labor Statistics)
3.1.1 Industry description
3.2.1 Resources used
3.2 Customers (from SBA site fill in worksheet, then use text for spreadsheets and follow-up explanations)
Add SBA part here:
Then, fill in spreadsheet using this example from the text:
Housewife:
Married Couple:
Age:
35–65
Age:
35–55
Income:
Fixed
Income:
Medium to high
Sex:
Female
Sex:
Male or Female
Family:
Children living at home
Family:
0 to 2 children
Geographic:
Suburban
Geographic:
Suburban
Occupation:
Housewife
Occupation:
Varies
Attitude:
Security minded
Attitude:
Security minded, energy conscious
Older Couple:
Elderly:
Age:
55–75
Age:
70+
Income:
High or fixed
Income:
Fixed
Sex:
Male or Female
Sex:
Male or Female
Family:
Empty nest
Family:
Empty nest
Geographic:
Suburban
Geographic:
Suburban
Occupation:
White-collar or retired
Occupation:
Retired
Attitude:
Security minded, energy conscious
Attitude:
Security minded, energy conscious
Explain who you are targeting and where they are located. Insert information here using these guidelines:
Information About Your Target Market – Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:
Distinguishing characteristics – What are the critical needs of your potential customers? Are those needs being met? What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?
Size of the primary target market – In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group? For more information, see the market research guide for tips and free government resources that can help you build a market profile.
How much market share can you gain? – What is the market share.
Business PlanCover Page Name of Project, Contact Info, Da.docxfelicidaddinwoodie
Business Plan
Cover Page
Name of Project, Contact Info, Date
Picture/graphics
Table of Contents
Executive Summary
The Company
The Project
The Industry
The Market
Distribution
Risk Factors
Financing
Sources
List of sources, specific articles, and websites
I WILL PROVIDE MORE INFORMATION IN CHAT TO COMPLETE PROPOSAL.
.
Business Planning and Program Planning A strategic plan.docxfelicidaddinwoodie
This document discusses business planning and program planning. It explains that a strategic plan specifies how a program will achieve its objectives, while a business plan defines the path of a business and includes its organizational structure and financial projections. The document also discusses how the financial projection element of a business plan can impact a program's strategic planning process by influencing the program's budget. Finally, it notes that a program plan should include a funding request, as outlined in a business plan, to help secure necessary resources and facilitate achieving the program's goals and objectives.
Business Plan In your assigned journal, describe the entity you wil.docxfelicidaddinwoodie
Business Plan: In your assigned journal, describe the entity you will utilize and explain your decision.
Must be:
At required length or longer
Written in American English at graduate level
Received on or before the deadline
Must pass turn it in
Written in APA with references
.
Business Plan Part IVPart IV of the Business PlanPart IV of .docxfelicidaddinwoodie
Business Plan Part IV
Part IV of the Business Plan
Part IV of the business plan is due in week 7. Together with this part, you must show to your instructor that you have implemented the necessary corrections based on the part I feedback.
Part IV Requirements
1. Financials Plan
a. Present an in-depth narrative to demonstrate the viability of your business to justify the need for funding.
b. In this section describe financial estimates and rationale which include financial statements and forms that document the viability of your proposed business and its soundness as an investment.
c. Tables and figures must be introduced in the narrative.
i. Describe the form of business (sole-proprietor, LLC, or Corporation).
ii. Prepare three-year projections for income, expenses, and sources of funds.
iii. Base predictions on industry and historical trends.
iv. Make realistic assumptions.
v. Allow for funding changes at different stages of your company’s growth.
vi. Present a written rationale for your projections.
vii. Indicate your startup costs.
viii. Detail how startup funds will be used to advance your proposed business
ix. List current capital and any other sources of funding you may have
x. Document your calculations.
xi. Use reasonable estimates or actual data (where possible).
2. Continuous Improvement System
a. Present a brief summary of the continuous improvement processes that you will utilize for quality management (Six sigma, TQM, etc).
.
BUSINESS PLAN FORMAT Whether you plan to apply for a bu.docxfelicidaddinwoodie
BUSINESS PLAN FORMAT
Whether you plan to apply for a business loan or not, you need to have a roadmap or plan to get you from where you are to the successful operation of your business. The pages that follow demonstrate the content of a simple business plan which has been found to be successful in obtaining startup funds from banks. You are encouraged to use all or whatever portions of this fit your business.
Please DO NOT write page after page of drivel or copy from someone else’s plan or one of those templates you can find on the Internet. In most cases this will not “sound" like you, nor will it be short and to the point. Those who read these things are busy people and will not be inclined to spend time reading irrelevant paperwork.
Throughout this sample, there are
italicized
comments which are meant to guide you in preparation. If you follow this format it is reasonable to expect a finished document with 15-20 pages plus the supporting documents in the last section.
If you have good quality pictures of your space, products or other items, you might include them as another way to convey just what you plan to do. A map of your location, diagram of floor space, or other illustration is also sometimes helpful. On the other hand, do not add materials simply to “bulk-up” the report.
While content is critical, it is also important to make this presentation look as good as possible. For this course, you will create the business plan in Word and submit the plan and all attachments through the Assignment drop box. That means all attachments have to be in digital form. For a bank loan or an investor, you would normally provide them with a print version. Print the pages in black ink on a high quality tinted letterhead paper. Color is not necessary but would add some interest in headlines, etc. Bind the document in a presentation folder or with a spiral binding. Don’t simply punch a staple in the upper left corner.
If your were going to pursue a bank loan or an investor, it would be normal to take this business plan to your SCORE counselor for a review and critique.
NOTE: Before you begin your inspection of the simple plan outline which follows, take a moment to review the Business Plan Checklist on the next page.
BUSINESS PLAN CHECKLIST
By way of review, here is a concise list of the basic requirements for a Business Plan, as recommended by the MIT Enterprise Forum:
·
Appropriate Arrangement
- prepare an executive summary, a table of contents and chapters in the right order.
·
Right Length
- make it not too long and not too short, not too fancy and not too plain.
·
Expectations
- give a sense of what founder(s) and the company expect to accomplish three to seven years in the future.
·
Benefits
- explain in quantitative and qualitative terms the benefit to the consumer of the products and services.
·
Marketability
- present hard evidence of the mar.
How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
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How to Add Chatter in the odoo 17 ERP ModuleCeline George
In Odoo, the chatter is like a chat tool that helps you work together on records. You can leave notes and track things, making it easier to talk with your team and partners. Inside chatter, all communication history, activity, and changes will be displayed.
This presentation includes basic of PCOS their pathology and treatment and also Ayurveda correlation of PCOS and Ayurvedic line of treatment mentioned in classics.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Executive Directors Chat Leveraging AI for Diversity, Equity, and InclusionTechSoup
Let’s explore the intersection of technology and equity in the final session of our DEI series. Discover how AI tools, like ChatGPT, can be used to support and enhance your nonprofit's DEI initiatives. Participants will gain insights into practical AI applications and get tips for leveraging technology to advance their DEI goals.
Executive Directors Chat Leveraging AI for Diversity, Equity, and Inclusion
1Chapter 9Marketing 4220 International Sourcing, Logisti.docx
1. 1
Chapter 9
Marketing 4220
International Sourcing, Logistics
& Transportation
International Documents
5/25/2015
1
International Documents
Documentation Requirements
Invoices
Export Documents
Import Documents
Transportation Documents
Documents as a Marketing Tool
2
Documentation Requirements
Most international transactions require numerous documents:
2. It is important that each of these documents be filled correctly
and within a specific time frame. Each document has different
requirements.
It is common to issue more than one original document – one
for each of several parties.
Most countries still require documents to be printed on
paper and not submitted electronically.
3
Invoices
Commercial invoices for transactions conducted
in an international environment are much more complete
and detailed than in a domestic environment.
They must include:
A detailed description of the goods, with HS number, so
that the goods can be classified correctly by Customs
The Incoterms® rule of the transaction
Details on the costs of domestic transportation, loading,
insurance, etc., to help Customs determine the dutiable value of
the goods
Details on the weight and dimensions of the goods
Details on the itinerary of the shipment
The terms of payment
3. 4
A simple
international
invoice
5
Other Invoices
Pro forma Invoice
A quote (preview of the commercial invoice) provided by
the exporter to the importer for the purpose of obtaining a
letter of credit.
Consular Invoice
A commercial invoice that is printed on stationery provided by
the consulate of the country in which the good will be imported.
Specialized Invoice
Some countries require that invoices be printed on special
forms.
6
4. Export Country’s Regulations
Export Documents
Shipper’s Export Declaration
Export License
Certificate of End-Use
Destination Control Statement
Export License
An export license is an express authorization by a given
country’s government to export a specific product before it
is shipped.
What types of products need an export license?
Depending on the country of export, it could be:
National treasures, antiques, or works of art
Products put under control for political or military purposes
Scarce natural resources
8
An Export
License from
Malaysia
5. U. S. Export Controls
The United States export control policies (regrouped
under the Export Administration Regulations [EAR]
and administered by the Bureau of Industry and Security) focus
on three elements to determine if an export needs a
license:
The type of product exported
The person or entity purchasing the product
The ultimate country of destination
It is the always the responsibility of the exporter to ensure that
the goods can be legally exported from the United States.
10
U. S. Export Controls
- Product -
The Bureau of Industry and Security maintains a Commerce
Control List, in which all products of concern to the United
States are given an Export Control Classification Number
(ECCN).
Products need a license because they may be potentially
dangerous or have “dual use.”
Goods in the CCL may fall under the control of one or more
government agencies including the Department of Defense,
Department of State or the Drug Enforcement Agency.
Items not requiring a license are classified as “EAR99.”
6. Most goods are classified EAR 99.
11
U. S. Export Controls
- Person or Entity -
Even if a product is classified as EAR99, exporters still
need to determine if the purchaser of the product is on one
of several lists:
The Entity List
The Unverified List
The Specially Designated Nationals
and Blocked Persons List
The Denied Persons List
A product sold domestically can still be subject to export
controls, if the purchaser is on one of these lists.
12
U. S. Export Controls
- Country-
7. The U.S. government considers some countries “friendly”
and others “unfriendly.”
For five countries, the U.S. has a total embargo, and no
products can be exported there; Currently the U.S. has an
embargo on Cuba, Iran, North Korea, Sudan and Syria.
For other countries there are many limits to what can be
shipped there: Burma/Myanmar, the Democratic Republic
of the Congo, Iraq, the Ivory Coast, Liberia, Libya, Somalia,
Yemen and Zimbabwe.
If a license is necessary, an exporter needs to obtain
an Individual Validated Export License, or the express
authorization to ship to a country.
13
Destination Control
Statement
A Destination Control Statement is required for products
that have obtained a Validated Export License:
“This merchandise licensed by U.S. for ultimate destination
[country]. Diversion contrary to U.S. law prohibited.”
8. 14
Shipper’s Export
Declaration
The Shipper’s Export Declaration (SED) is a data-collection
document. It is used to tabulate what products are exported
from the United States, and to which countries they are
exported.
Most other countries have a similar data-gathering export
requirement. The European Union has a similar requirement,
called the Single Administrative Document.
Interestingly, the United States does not require an SED
for shipments to Canada but it is required for shipments
to the U.S. Virgin Islands, Puerto Rico and Guam.
15
The United
States Shipper’s
Export
Declaration
9. End Use Certificate
An End-Use Certificate is a document required
by some exporting countries in the case of sensitive
exports, such as ammunition, to ensure that the product
is used for acceptable (to the exporting country’s
government) purposes.
17
Export Taxes & Quotas
Some countries require exporters to pay an export tax
on certain commodities.
Export quotas are a limit, set by the exporting country’s
government, on the quantity of a specific commodity
that can be exported in a given year.
Governments control their exports when the commodity
that is exported is scarce.
They can also do it when their country is one of the few
that produces a particular product.
10. 18
Importing Country’s Regulations
Import Documents
Import License
Certificate of Origin
Import Forms
Certificate of Insurance
Certificate of Inspection
Certificate of Free Sale
Phyto-Sanitary Certificate
Consular Invoice
Certificate of Manufacture
Certificate of Analysis
Certificate of Certification
Other Certificates
Origin of Goods
Certificate of Origin
A Certificate of Origin is a document provided
by the exporter’s chamber of commerce that attests
the goods originated from the country in which
the exporter is located.
Certificate of Manufacture
A Certificate of Manufacture is a document provided
by the exporter’s chamber of commerce that attests that
the goods were manufactured in the country in which the
exporter is located.
The NAFTA Certificate of Origin is actually a Certificate
of Manufacture.
11. 20
A Certificate
of Origin from
New Zealand
A NAFTA Certificate of Origin (Certificate of
Manufacture) from
The United States
Inspection of Goods
Certificate of Inspection
A Certificate of Inspection is a document provided
by an independent inspection company that attests the
goods conform to the description contained in
the invoice provided by the exporter.
Certificate of Analysis
A Certificate of Analysis attests that the goods conform
to the chemical description and purity levels contained
in the invoice provided by the exporter.
12. Phyto-Sanitary Certificate
A Phyto-Sanitary Certificate attests that agricultural goods are
free or pests and disease and conform to the standards of the
importing country.
23
A Certificate of Analysis from Iran
A Phyto-Sanitary Certificate from
The Ukraine
Conformity of the Goods
Certificate of Certification
A document provided by an independent inspection company,
or by the Agricultural Department of the exporting country’s
government, that attests that the goods conform to the
agricultural standards of the importing country.
Certificate of Free Sale
A document that attests that the product exported conforms to
all of the regulations in place in the exporting country and that
it can be sold freely in the exporting country.
13. Some importers use this certificate as a guarantee of quality
if worried that the exporter will ship sub-standard goods.
26
A Certificate of Certification from the Czech Republic
A Certificate of Free Sale from Thailand
Certificate of Insurance
A Certificate of Insurance is a document provided
by the exporter’s insurance company that attests
that the goods are insured during their international voyage.
A certificate of insurance can be based on a single policy
specifically contracted for a particular voyage or it can be based
on the open policy that covers all of an exporter’s shipments.
In the case of an open policy, the insurance company
provides the exporter with a series of certificates
to use as needed.
29
14. A Certificate of
Insurance from
Australia
Other Import Documents
Consular Invoice
A commercial invoice that is printed on stationery
provided by the consulate of the country in which the
good will be imported.
Import License
The express authorization, granted by the government of
the importing country, to import a particular product in
a given country.
Import Forms
All countries have specific administrative forms that have to
be submitted by the importer in order to clear Customs.
31
Transport Documents
Ocean Bill of Lading
Air Waybill
Intermodal Bill of Lading
15. Uniform Bill of Lading
Bills of Lading
Charter Parties
Aircraft Leases
Packing List
Manifest
Bill of Lading
A bill of lading is a generic term used to describe a document
that fulfills three functions in international transport:
It is a contract between the and the shipper. The carrier agrees
to transport the goods from A to B for a given price.
It is a receipt for the goods. Signed by the carrier, it signifies
that the goods were received in good condition.
It is a certificate of title. Whichever party has the original bill
of lading is the owner of the goods.
However, it can get slightly more complicated.
33
Bill of Lading as
a Contract of Carriage
A bill of lading is a contract between the carrier (the company
operating the mode of transportation) and the shipper (the firm
that enters the contact with the carrier) .
The shipper is either the exporter or the importer, depending on
16. the Incoterm s® rule used; the Incoterms® rule determines
which is responsible to arrange for pre-carriage, main carriage
or on-carriage.
For a given amount of money, the carrier agrees to transport
the goods from a certain location to another.
Each contract of carriage can be negotiated, but most are
standard agreements. Some include the costs of loading
and unloading the goods, others do not.
34
Bill of Lading as
a Receipt for Goods
There are two alternatives when the carrier receives
the goods in the exporting country:
If the goods are received in good condition, the carrier just
signs the bill of lading, without any other annotation. Such a
bill of lading is called a clean bill of lading.
If the goods are received in a condition that concerns the
carrier (dirty, wet, poorly packaged, rusty, leaking etc.), the
shipper makes an annotation of the issue, then signs. Such a bill
of lading is called a soiled bill of lading.
Letters of credit always call for a clean bill of lading.
35
17. Bill of Lading as
a Certificate of Title
On a bill of lading, there is a box called “consignee,” in which
the shipper identifies the firm that will take delivery of the
goods from the carrier. There are two alternative ways to fill
this box:
If the box is left blank or the words “to order” are used, then
the bill of lading is said to be negotiable, and the owner of the
goods in the destination port is the entity with the original bill
of lading. The goods can be sold while they are being
transported.
If the name of the consignee is entered, then only that firm can
pick up the goods from the carrier. Such a bill of lading is
called a straight bill of lading.
Only ocean bills of lading are negotiable.
36
Types of Bill of Lading
A bill of lading takes different names depending on the mode
of transportation chosen:
It can be called an ocean bill of lading for transportation by
ocean
An air waybill when the goods travel by air
An intermodal bill of lading when the goods travel on more
than one mode of transportation under a single contract
A uniform bill of lading when the goods travel by road or rail
The shipper (the firm that enters the contact with the carrier) is
either the exporter or the importer, depending on the
18. Incoterms® rule used.
37
An Ocean Bill of Lading from Hong Kong
An Air Waybill from the
United States
Charter Party
A charter party is a type of contract of carriage between a
carrier and a shipper, in which the shipper uses all or most of
the carrying capacity of the ship. It is generally used to
transport bulk commodities, such as grain, fertilizer, ore or oil.
A charter party can be a contract for a single voyage,
but it can also be for a series of voyages to transport a large
quantity of a particular commodity, or for a specific duration of
six months or a year.
40
19. Aircraft Leases
(1 of 2)
A shipper intent on utilizing the entire capacity of an aircraft
enters into a lease agreement. The agreement can be for a single
voyage, a series of voyages, or a duration.
Wet Lease
An agreement under which the owner of the aircraft provides
the airplane, insurance, maintenance services, fuel, and a flight
crew to the lessor, who has to cover all of the other variable
costs, such as airport fees.
ACMI Lease
An agreement under which the owner of the aircraft provides
the airplane, crew, maintenance, and insurance to the lessor,
who has to cover all of the other variable costs, such as airport
fees and fuel.
41
Aircraft Leases
(2 of 2)
Dry Lease
An agreement between the owner (lessor) of an aircraft
and the lessee in which the owner provides only the aircraft and
no other services.
Damp Lease
An agreement between the owner of an aircraft and the lessee,
under which the owner provides some services in addition to the
aircraft itself. For example, an ACMI lease is a damp lease
because it does not cover fuel.
20. 42
Packing List & Manifest
Packing List
A document prepared by the exporter that lists out what
a shipment contains, in great detail. A packing list always
accompanies every shipment.
Manifest
A document generated by the shipping company
(the carrier), which lists all cargo onboard the transportation
vehicle. There is a manifest for every voyage undertaken
by the carrier.
The manifest is frequently requested by the Customs authorities
of a port of call.
43
Shipper’s Letter of Instruction
A Letter of Instruction is a document in which the shipper
spells out how it wants the carrier to handle the goods while
they are in transit.
For refrigerated cargo, it specifies the temperature that must
be maintained in the container and the monitoring frequency
of that temperature. For live cargo, the frequency of feeding,
quantities required, and water needs.
For manufactured goods, the letter of instruction can specify
a position on the ship. To minimize movements, the cargo can
be stowed below deck, at the water line. If it is dangerous,
21. the shipper can request a stow above deck.
44
Dangerous Goods
Shipments of dangerous goods are regulated by the
International Maritime Organization’s International Maritime
Dangerous Goods Code, the International Civil Aviation
Transport Association’s Dangerous Goods Regulations,
the International Civil Aviation Organization’s Technical
Instructions for the Safe Transport of Dangerous Goods
by Air or by local shipment codes.
All require different additional documents and specific stowing
instructions.
45
Electronic Data Interchange
- EDI - (1 of 2)
Electronic Data Interchange (EDI) is the electronic exchange
of documents, from computer to computer.
EDI allows the instantaneous notification of the other party
when a particular step in the shipping of goods has taken place.
Under a DAT shipment, for example, once the goods have been
unloaded at the terminal, the exporter can notify the importer
electronically that the goods are now its responsibility.
Under a CPT shipment, the exporter can notify the importer
22. that the goods have been delivered to the first carrier.
46
Electronic Data Interchange
- EDI - (2 of 2)
The sender and the recipient must reach two agreements in
order for EDI to work well:
They must agree to a technical EDI understanding —the
specific technology used for the exchange. The United Nation’s
EDI FACT standard is the most likely to eventually prevail as
the international standard, but there is currently no official
international standard.
There must also be a legal agreement between the parties
defining the responsibilities, timing, liabilities for errors, the
“evidentiary value” of messages and other legal issues.
47
Document Preparation as
a Marketing Tool (1 of 2)
An exporter that does an excellent job at preparing documents
can get a strategic advantage, as the importer is likely to be able
to clear Customs quickly and process payment efficiently if all
documents conform.
23. The pro forma invoice must be a perfect preview
of the actual invoice.
The commercial invoice must be clear, detailed and precise.
It must include all the information that is necessary for the
importer to clear Customs and minimize the duty that it has
to pay.
All the certificates requested have to be provided in the manner
requested.
48
Document Preparation as
a Marketing Tool (2 of 2)
The correct number of originals and copies of all
documents must be prepared or collected.
The packing list must be prepared carefully
and precisely. An incomplete or imprecise packing
list increases the probability of a Customs inspection.
The export paperwork must be prepared and filed
correctly and in a timely manner.
49
24. 9-16Chapter 9: International Commercial Documents
Chapter 9: International Commercial Documents9-15
Chapter 9
International Commercial DocumentslEARNING oBJECTIVES
At the end of this chapter, YOU SHOULD:
1 Identify the basic functions of commercial invoices in
international trade.
2 Identify the basic functions of export documents in
international trade.
3 Identify the basic functions of import documents in
international trade.
4 Identify the basic functions of transportation documents in
international trade.
5 Identify the basic functions of electronic data interchange
(EDI) in international trade.
6 Understand the strategic advantages for an exporter of having
good document preparation.
Preview
A sure thing about international commerce: it requires large
amounts of paperwork.
This chapter examines invoices, export documents, and export
controls.
Chapter Outline9-1 Documentation Requirements
I. Most international trade transactions require numerous
documents, filled out with specific information and instructions,
and filed in a certain time frame
9-2 Invoices9-2-1 Commercial Invoice
I. The invoice that accompanies the shipment is called the
commercial invoice
II. This invoice should present precisely what the importer is
being billed for
a. A very precise description of the product should be given
b. The tariff paid is a function of the classification (type) of the
product imported
c. Tariff rates are determined using a multiplicity of criteria:
25. i. Number of units in shipment
ii. Dimensions
iii. Weight
iv. Total value
d. Terms of trade (Incoterms)
e. Detailed list of items exporter has pre-paid for importer
f. Terms of payment
g. Currency of payment
h. Shipping information
i. Customary information—names, addresses, …etc.9-2-2 Pro
forma Invoice
I. Not an invoice but a quote
II. Must be written with extreme care to avoid discrepancies
with letter of credit which can result in complexities
surrounding amendments
III. Should include an expiration date
a. Under Uniform Commercial Code of the United States (UCC)
and under the domestic laws of many other countries, the offer
can be withdrawn at any time, without prejudice, for almost
whatever reason
b. In international transaction conducted under the United
Nations’ Convention on the International Sales of Goods (CISG)
the offer cannot be withdrawn by the seller (or the buyer) before
its expiration date. Most countries have now adopted this
convention9-2-3 Consular Invoice
I. Necessary for exports to decreasing number of Latin
American countries
II. Commercial invoice printed on stationery of importing
country’s consulate and stamped by the consulate
III. Time consuming
IV. Favored by countries attempting to accurately forecast
needs for foreign currency
V. Also generates revenues as fees are expensive
VI. Considered to be a trade barrier9-2-4 Specialized
Commercial Invoices
I. Some countries require that all commercial invoices be
26. printed on a standard form
II. Form is usually easily available at a low cost from
specialized printers of international stationery
III. In general, these requirements are not considered trade
barriers
9-3 Export Documents
I. A country’s government may require a number of documents
before a product can be exported
II. United States requires Shipper’s Export Declaration (SED)
III. In some cases, government wants to control outflow of
certain goods and will require an export license9-3-1 Shipper’s
Export Declaration
I. Shipper’s Export Declaration (SED) is a data-collection
document required by U.S. government for:
a. Exports valued at more than $2,500 per item category ($500
for parcels sent through the postal system)
b. Shipments requiring an Individual Validated Export License
c. SED must be sent to U.S. Customs Service
II. SED allows U.S. government to tell what products are
exported from U.S. to where
III. Census Bureau has developed incentives for electronic
filing of SEDs9-3-2 Export Licenses
I. An express authorization by a given country’s government to
export a specific product before it is shipped
II. Reasons for export license:
a. Government is attempting to control the export of national
treasures or antiques
b. Government is trying to exert some control over foreign trade
for political or military reasons9-3-3 U.S. Export Controls
I. Basis of U.S. export policy:
a. Previous secret agreement among western countries to deny
access to some military technologies
b. Export Administration Act once controlled the type of goods
that could be exported to certain “unfriendly” countries
27. c. Fenwick Anti-Terrorist Amendment of the Export
Administration Act prevents exports to nations supportive of
international terrorism
d. Comprehensive Anti-Apartheid Act, which created a number
of regulations for exports to the country of South Africa
II. These documents brought into existence the current
Commerce Control List, which details which products can and
cannot be shipped to certain countries
a. List is updated regularly, and published in the U.S. Export
Administration Regulations (EAR)
b. In 1996, the EAR were completely revised to reflect a major
shift from a policy of “everything that is not explicitly
authorized needs an export license” to a policy of “everything is
authorized unless it is specifically prohibited”
III. For some products, therefore, the United States government
wants to ascertain that the goods are purchased for a legitimate
commercial (not military) purpose
IV. Bureau of Industry and Security (BIS) publishes the
Commerce Control List (CCL) in the EAR, which gives an
Export Control Classification Number (ECCN) to each product
V. When license is not required, the exporter must determine if
importer or intermediary is on:
a. The Entity List—people, companies, and organizations
engaged in weapon proliferation, drug smuggling, or terrorism
b. The Unverified List—individuals, companies, and
organizations that are suspected of illegal activities
c. The Specially Designed Nationals and Blocked Persons
List—U.S. persons with whom exporters are expressly warned
not to do business
d. The Denied Persons List—U.S. persons, companies, or
organizations whose export privileges have been revoked
VI. When license is required, the U.S. government requires:
a. The exporter to obtain an Individual Validated Export
License—an express authorization to ship that particular
product to a particular country
b. Writing of a Destination Control Statement on the
28. Commercial Invoice and the Shipper's Export Declaration: This
merchandise licensed by U.S. for ultimate destination [country].
Diversion contrary to U.S. law prohibited.
VII. Product not on the CCL or whose ECCN does not call for
an export license is classified as “EAR99”—statement needs to
be included on Shipper’s Export Declaration9-3-4 End-Use
Certificates
I. Certifies that the product is going to be used for a legitimate
purpose
II. Most of these certificates are provided by the governments of
the importing country9-3-5 Export Taxes
I. Several countries require exporters to pay an export tax on
certain commodities
II. May be used when goods are minerals in short supply, or
when the product has been heavily subsidized by the
government 9-3-6 Export Quotas
I. Several countries have export quotas to limit amount of
certain goods leaving country
II. Strategy can be used to control scarce resources or prices of
products for which country has monopoly
9-4 Import Documents
I. Reasons for import documents:
a. Keep out shoddy goods
b. Determine appropriate tariff classifications
c. Help determine import goods values
d. Protect importers from fraudulent exporters
e. Limit or eliminate imports government finds inappropriate
II. Country may use import documents to promote
protectionism9-4-1 Certificate of Origin
I. Most common document
II. Must be signed by exporter’s chamber of commerce
III. Statement that goods originated in a specific country
IV. Often used by importing countries to determine tariff of
goods9-4-2 Certificate of Manufacture
29. I. Similar to Certificate of Origin
II. Attests to location of manufacture of exporting product9-4-3
Certificate of Inspection
I. Sometimes requested by importer
a. Document signed by independent third party attesting to
authenticity and accuracy of shipment
b. Several ways useful to importers:
i. In purchases based on documentary collection or letter of
credit, banks only inspect documents before making importer’s
payment
ii. If merchandise is defective, no way to stop payment
iii. Certification of inspection provides protection for importer
in that goods are examined
II. Pre-shipment inspection (PSI) required by some companies9-
4-4 Certificate of Analysis
I. Attests to composition of certain products
II. Usually provided by independent laboratory or another
independent inspection company9-4-5 Phyto-Sanitary
Certificate
I. For agricultural products and foodstuffs
II. Usually written by governmental agency in charge of
agriculture or food service (U.S. Department of Agriculture or
Food and Drug Administration)9-4-6 Certificate of Certification
I. Define technical characteristics of good before it can be
imported
II. Usually written by independent company or trade
association9-4-7 Certificate of Free Sale
I. Certificate of Free Sale attests that the goods are legal for
sale in the exporting country
II. For some importing countries, a CFS guarantees that the
goods meet basic standards of performance and that they are not
second-rate
III. A CFS also guarantees that the goods are not past their
normal shelf life9-4-8 Import License
I. Some countries require importers to have an import license
II. Designed to prevent importing if non-essential or overly
30. luxurious products in developing countries with a short supply
of foreign currency9-4-9 Consular Invoice
I. May be required by importing country
II. Regular commercial invoice printed on stationery provided
by country and visa-ed by its consulate in exporter country9-4-
10 Certificate of Insurance
I. Incoterms determine if Certificate of Insurance is
responsibility of exporter or importer
II. Readily available from insurance company insuring the cargo
9-5 Transportation Documents9-5-1 Bill of Lading
I. Fundamental international shipping document in ocean
transportation
a. It is a contract
b. It is a receipt for the goods
c. It is a certificate of title
II. Also called ocean bill of lading or, when applicable, air
waybill9-5-2 Uniform Bill of Lading
I. Fulfills same functions as ocean bill of lading
II. Used for inland transportation
III. In most cases, uniform bill of lading is a straight bill of
lading9-5-3 Intermodal Bill of Lading
I. Fairly recent document due to increased carrier-managed
intermodal shipments
II. In most cases, they are straight bill of lading9-5-4 Air
Waybill
I. Fulfills same functions as ocean bill of lading but for air
freight
II. It is always a straight air waybill9-5-5 Charter Parties
I. A contract between the shipper and the carrier when the
shipper uses all or most of the carrying capacity of a vessel
II. Most charter parties are industry-specific
III. Charter parties can include or exclude the crew of the ship
(in that case, they are called bareboat charter parties)
IV. Concept also applies to airfreight:
31. a. Wet lease means that the aircraft owner also provides crew,
fuel, maintenance, and insurance to the lessor
b. Dry lease means that the aircraft owner only provides the
aircraft
c. Damp lease is one in between (one or more of the crew,
insurance, maintenance, and fuel are provided). Most typical is
an ACMI lease (Aircraft, Crew, Maintenance, and Insurance—
but no fuel)9-5-6 Packing List
I. Always accompanies a shipment
II. Spells out how many containers are in the shipment and what
merchandise is in each container9-5-7 Shipper’s Letter of
Instruction
I. Delivered to shipping company if shipper (exporter or
importer depending on terms of trade or Incoterms) wants
specific directions followed during transport
II. Can be critical in livestock shipments9-5-8 Shipments of
Dangerous Goods
I. Regulated by:
a. International Maritime Organization’s International Maritime
Dangerous Goods Code
b. By the International Air Transport Association’s Dangerous
Goods Regulations
c. By the International Civil Aviation Organization’s Technical
Instructions for the Safe Transport of Dangerous Goods by Air
d. Local shipment codes, such as the United States’ Code of
Federal Regulations, Title 49 (abbreviated 49CFR)
II. Good to use specialized shipper to handle paperwork,
packaging, and labeling of goods9-5-9 Manifest
I. Manifest is shipping document not similar to what has been
seen so far in this chapter
II. Lists exact makeup of cargo, ownership, port of origin, port
of destination, specific handling instructions, …etc.
III. Officially an internal document of the shipping company,
but is often examined by government entities
32. 9-6 Electronic Data Interchange9-6-1 Proprietary Commercial
Electronic Data Interchange
I. Alternative way to send documents is through Electronic Data
Interchange (EDI)
II. EDI is an electronic exchange of documents from computer
to computer
a. Sender and recipient must agree to technical parameters of
EDI
b. Sender and recipient must have legal agreement:
i. Definition of responsibilities
ii. Timing of contract information
iii. Liabilities for errors
iv. Evidentiary value of messages in court (to date courts go by
laws designed for written documents) 9-6-2 Network Electronic
Data Interchange: Swift’s Bolero System
I. Society for Worldwide Interbank Financial
Telecommunication (SWIFT) developed secure electronic
network to exchange banking documents like letters of credit
II. Bolero is similar to SWIFT but allows transmission of all
sorts of documents like invoices, bills of lading, certificates,
…etc.
a. Does not offer payment capability
b. Shared EDI network as opposed to being proprietary
c. Competes on many points with TradeCard:
i. Bankers have longtime trust of company that developed
Bolero
ii. TradeCard has advantage of having payment capabilities
III. Paper documents should disappear by 2010–2015
9-7 Document Preparation as a Marketing Tool
I. Excellent preparation of documents, both before shipment and
after shipment, is essential and can earn the thorough exporter a
competitive advantage
Key terms
ACMI lease
A type of leasing contract in which an airplane is leased, along
with a crew, maintenance services, and insurance.
33. air waybill
A bill of lading used in the transportation of goods by air,
domestically or internationally. An air waybill is always
straight.
bill of lading
A generic term used to describe a document issued by the
carrier to the shipper. A bill of lading is (1) a contract between
the carrier and the shipper whereby the carrier agrees to deliver
the goods for an agreed-upon price to an agreed-upon
destination; (2) a receipt for the goods, whereby the carrier
certifies that it received the goods in good condition from the
shipper; and (3) a certificate of title, whereby the party in
possession of the original bill of lading is the owner of the
goods.
carrier
The transportation company that will provide transportation
services to the shipper.
certificate of analysis
A document provided by an independent inspection company
that attests that the goods conform to the chemical description
and purity levels contained in the invoice provided by the
exporter. A Certificate of Analysis is always obtained by the
exporter in the exporting country before the international
voyage takes place.
certificate of certification
A document provided by an independent inspection company
that attests that the goods conform to the manufacturing
standards of the importing country. A Certificate of
Certification is always obtained by the exporter in the exporting
country before the international voyage takes place.
34. certificate of conformity
Another term for a Certificate of Certification. See Certificate
of Certification.
certificate of free sale
A certificate that attests that the product that is exported
conforms to all of the regulations in place in the exporting
country and that it can be sold freely in the exporting country.
certificate of inspection
A document provided by an independent inspection company
that attests that the goods conform to the description contained
in the invoice provided by the exporter. A Certificate of
Inspection can also attest that the value of the goods is reflected
accurately on the invoice. A Certificate of Inspection is always
obtained by the exporter in the exporting country, before the
international voyage takes place. Such an inspection is called a
pre-shipment inspection (PSI).
certificate of insurance
A document provided by the insurance company of the exporter
that attests that the goods are insured during their international
voyage. This certificate is obtained only at the request of the
importer, and for transactions under certain Incoterm terms of
trade, such as CIF and CIP.
certificate of manufacture
A document provided by the exporter’s chamber of commerce
that attests that the goods were manufactured in the country in
which the exporter is located.
certificate of origin
A document provided by the exporter’s chamber of commerce
that attests that the goods originated in the country in which the
35. exporter is located.
charter party
A type of contract of carriage between a carrier and a shipper,
in which the shipper uses all or most of the carrying capacity of
the ship to transport commodities such as oil, ore, grain, or
polymer pellets.
clean bill of lading
A bill of lading that reflects the fact that the carrier received
the goods in good condition. It is characterized by the presence
of only a signature of the carrier’s representative, and nothing
else. All letters of credit require a clean bill of lading. See
soiled bill of lading.
Commerce Control List
A list maintained by the Bureau of Industry and Security that
details which commodities and products cannot be exported
from the United States without the express authorization of the
U.S. government. Such express authorization is called an
individual validated export license.
commercial invoice
The invoice sent by the seller to the buyer, detailing the goods
purchased and the amount due. A bill. In international trade, a
commercial invoice should be quite detailed and include all of
the pertinent information.
consignee
The party named on a bill of lading as the owner of the goods,
or, at least, as the party to whom the goods should be
surrendered at their destination. The consignee will have the
original bill of lading at the point of arrival of the goods.
consular invoice
A commercial invoice that is printed on stationery provided by
the consulate of the country in which the goods will be
36. imported. The consulate sells that stationery. Some consular
invoices need to be visa-ed by the consulate as well.
damp lease
A damp lease is an agreement between the owner (lessor) of an
aircraft and the lessee, under which the owner provides some
services in addition to the aircraft itself. For example, a damp
lease could include the aircraft, maintenance, and insurance, but
not the crew, which would need to be hired by the lessee.
deemed export
A product sold in the United States to a non-U.S. citizen.
Destination Control Statement
A formal statement which an exporter has to print on its invoice
and on the Shipper’s Export Declaration if the goods shipped
are subject to a validated export license: “This merchandise
licensed by U.S. for ultimate destination [country]; diversion
contrary to U.S. law prohibited.”
dry lease
A dry lease is an agreement between the owner (lessor) of an
aircraft and a lessee, in which the owner provides only the
aircraft, without any other services. See wet lease and damp
lease for alternative contracts.
Electronic Data Interchange (EDI)
A method to send documents (invoice, certificates, packing
lists, and so on) from one company to another using electronic
means. EDI is different from fax transmission in that it does not
transfer a copy of a sheet of paper, but sends the information it
contains, which is then used by the recipient to create a
document.
end-use certificate
A document required by some governments in the case of
37. sensitive exports, such as ammunition, to ensure that the
product is used for purposes that are acceptable to the exporting
country’s government.
export license
The express authorization, granted by the exporting country's
government to the exporter, to export a particular product.
export quota
A limit, set by the exporting country’s government, on the
quantity of a specific commodity that can be exported in a given
year.
export tax
A tax collected on the value of the goods exported.
foul bill of lading
Another term for a soiled bill of lading, which is a bill of lading
reflecting the fact that the carrier received the goods in
anything other than good condition; it is characterized by the
presence of comments or notes in addition to the signature of
the carrier’s representative.
import license
The express authorization, granted by the government of the
importing country, to import a particular product in a given
quantity. An import license is granted to the importer.
Individual Validated Export License
The express authorization, granted by the government of the
exporting country, to export a particular product, or to export to
a particular country or particular individual.
intermodal bill of lading
A bill of lading used in the intermodal transportation of goods,
38. domestically or internationally. An intermodal bill of lading is
generally straight.
intermodal shipment
An international shipment that will use several means (modes)
of transportation (rail, road, air, ocean, barge) under a single
bill of lading. In most instances today, goods shipped on an
intermodal bill of lading are containerized.
manifest
A document, internal to the shipping company (the carrier), that
lists all cargo onboard the transportation vehicle.
negotiable bill of lading
A bill of lading on which the name of the consignee has been
left blank or where the words “to order” have been entered.
Such a bill of lading allows the owner of the goods to sell them
while in international transit. The transfer of ownership is done
with the bill of lading, since it is a certificate of title to the
goods. Whoever has the original bill of lading when the cargo
arrives in the port is the owner of the goods.
Non-Vessel-Operating Common Carrier
A shipment consolidator or freight forwarder that does not own
any means of transportation but issues its own bills of lading
and therefore acts as a carrier.
ocean bill of lading
A bill of lading used in international transportation of goods on
oceangoing vessels. An ocean bill of lading can be straight or
negotiable and can be clean or soiled.
packing list
A detailed list of what is contained in a shipment.
39. phyto-sanitary certificate
A document provided by an independent inspection company, or
by the agriculture department of the exporting country’s
government, that attests that the goods conform to the
agricultural standards of the importing country. A Phyto-
Sanitary Certificate is always obtained by the exporter in the
exporting country, before the international voyage takes place.
pre-shipment inspection (PSI)
An inspection conducted by an independent inspection company
before goods are shipped internationally. The inspection is
conducted at the request of the importer or of the importing
country’s government to ensure that the invoice reflects
accurately the type of goods shipped by the exporter and their
value. A pre-shipment inspection generates a Certificate of
Inspection.
pro forma invoice
A quote provided by the exporter to the importer for the purpose
of the importer obtaining a letter of credit. The pro forma
invoice should contain exactly the same information as the
future commercial invoice, for the same total cost, so as to
prevent discrepancies at the time of the letter of credit
settlement.
shipper
The party to an international transaction that is responsible for
arranging the transportation of the goods. Depending on the
Incoterm used and on the leg of the journey in consideration,
the shipper is either the exporter or the importer.
Shipper’s Export Declaration
A document collected by U.S. Customs designed to keep track
of the type of goods exported from the United States, as well as
their destination and their value.
40. shipper’s letter of instruction
A document in which the shipper spells out how it wants the
carrier to handle the goods while they are in transit.
soiled bill of lading
A bill of lading that reflects the fact that the carrier received
the goods in anything other than good condition; it is
characterized by the presence of comments or notes in addition
to the signature of the carrier’s representative. See clean bill of
lading.
straight bill of lading
A bill of lading on which the name of the consignee has been
entered. Such a bill of lading is non-negotiable, which means
that the ownership of the goods cannot change in transit.
to-order bill of lading
A bill of lading on which the name of the consignee has been
left blank, or where the words “to order” have been entered.
Such a bill of lading allows the owner of the goods to sell them
while in international transit. The transfer of ownership is done
with the bill of lading, because it is a certificate of title to the
goods. Whoever has the original bill of lading when the cargo
arrives in the port is the owner of the goods.
uniform bill of lading
A bill of lading used in the transportation of goods on trucks
and trains, either domestically or internationally. A uniform bill
of lading is generally straight.
visa
A process by which the consulate of the country in which the
goods will be imported reviews and approves the consular
invoice for a fee. A visa shows on the consular invoice as a
rubber stamp or a seal.
41. wet lease
An agreement under which the owner (lessor) of an aircraft
provides the airplane, insurance, maintenance services, and a
flight crew to the lessee, who has to cover all of the other
variable costs, such as fuel and airport fees.
PowerPoint SLIDES – STUDY THEM – PRINT THEM OUT !
· Documentation Requirements (1 slide)
· Invoices (3 slides)
· Export Documents (12 slides)
· Import Documents (13 slides)
· Transportation Documents (14 slides)
· Electronic Data Interchange (2 slides)
· Document Preparation as a Marketing Tool (2 slides)
Additional Resources
Johnson, Thomas E., Donna L. Blade, Export/Import Procedures
and Documentation, Revised and Updated Fourth Edition, 2010,
Amacom, American Management Association, 1601 Broadway
Avenue, New York, NY 10019.
A Basic Guide to Importing, U.S. Customs Service, Department
of the Treasury, Government Printing Office, Washington, DC
20402.
A Basic Guide to Exporting, U.S. Department of Commerce,
Government Printing Office, Washington, DC 20402.
The UNZ & Co. Sourcebook: A How-to Guide for Exporters and
Importers, Unz & Co., 190 Baldwin Avenue, P.O. Box 308,
Jersey City, NJ 07303.
International Maritime Dangerous Goods Code, 1994,
Consolidated Edition, International Maritime Organization, 4
Albert Embankment, London SE1 7SR, United Kingdom,
www.imo.org.
42. Dangerous Goods Regulations, 51st Edition, January 2010,
International Air Transport Association, 33 Route de l'Aéroport,
Case Postale 672, CH-1215 Genève 15 Aéroport, Switzerland
and 2000 Peel Street, Montréal, Québec, Canada H3A 2R4.
Code of Federal Regulations, Title 49, Government Printing
Office, Washington, DC 20402.
The discussion example and question;
What do you believe are the advantages of conducting
43. international trade using electronic document transmissions,
such as EDI, Bolero or Trade Card? Are there any obvious
disadvantages?
1
Chapter 8
Marketing 4220
International Sourcing, Logistics
& Transportation
Managing Transaction Risks
5/23/2015
1
Managing Transaction Risks
Sales Contract’s Currency of Quote
The System of Currency Exchange Rates
Theories of Exchange Rate Determinations
Exchange Rate Forecasting
Managing Transaction Exposure
International Banking Institutions
Currency of Payment as a Marketing Tool
2
44. Managing Transaction Risks
Sales Contract’s Currency of Quote
The System of Currency Exchange Rates
Theories of Exchange Rate Determinations
Exchange Rate Forecasting
Managing Transaction Exposure
International Banking Institutions
Currency of Payment as a Marketing Tool
3
Sales Contract Elements
Terms of Trade
Incoterms® rules determine the costs the exporter should
pay, the costs the importer should pay, and the point at which
the responsibility for the cargo shifts from one to the other.
Terms of Sale
The terms of sale determine the method of payment and
the intermediaries involved in the payment and the handling of
the documents from the importer to the exporter.
Currency
The currency in which the transaction is undertaken: it can be
the exporter's country's currency, the importer's country's
currency or a third country's currency.
45. 4
Sales Contract Currency
Two factors should be considered when choosing a currency
for the sales contract:
Risk of Currency Fluctuation
A speculative risk: the risk could result in positive or negative
outcomes, depending on which way the exchange rate
fluctuates.
Risk of Currency Convertibility
A pure risk: a payment received in a foreign currency cannot be
converted into the exporter’s currency.
5
Currency Convertibility
Hard Currency
A currency that can easily be converted to another currency
Convertible Currency
46. A currency that can be converted to another currency
Soft Currency
A currency that cannot be easily converted into another
currency
Inconvertible Currency
A currency that cannot be converted into another currency
Sales Currency Choices
An exporter and an importer can agree on three possible
alternatives when choosing the currency in which a
sales contract will be paid:
The exporter’s country’s currency
The importer’s country’s currency
47. A third country’s currency
7
Exporter’s Currency
The exporter and the importer agree that the currency of the
transaction will be the currency of the exporter's country.
The exchange rate risk is nil for the exporter; all of
the risks are borne by the importer, and it has to
determine how it will handle its transaction risks.
In addition, the possible convertibility problems of
the currency are to be resolved by the importer.
8
Importer’s Currency
The exporter and the importer agree that the currency of
the transaction will be the currency of the importer's country.
48. The exchange rate risk is nil for the importer;
all of the risks are borne by the exporter, and it
has to determine how it will handle its transaction risks.
In addition, the possible convertibility problems
of the currency are to be resolved by the exporter.
9
Third Country’s Currency
The exporter and the importer can agree that the currency
of the transaction will be a third country's currency.
The exporter and the importer each bear the risks
of currency fluctuation of their respective country's
currency against the currency of the transaction.
In some cases, the exporter and the importer choose
an artificial currency (a non-circulating currency)
for the transaction, the Special Drawing Rights (SDRs)
of the International Monetary Fund. International liability
conventions are expressed in SDRs.
10
49. Special Status of the Euro
The euro was first created as an artificial currency.
In January 2002, it became a circulating currency.
When new countries join the euro zone, their legacy
currency’s value is translated using a fixed currency
exchange rate with the euro.
The stated goal of the European Union is to eventually
transform the euro into a challenger to the U.S. dollar
as the preferred third-country currency.
Other currencies used as a third-country’s currency
are the Japanese yen, the Swiss Franc and the British pound.
11
The Euro Banknotes
Euro-Dollar Exchange Rate
2001-2013
How many dollars a euro is worth. Source: Federal Reserve
Bank..
50. Exchange Rate Quotations
Direct Quotation
The value of the foreign currency expressed in units
of the domestic currency.
For example, the direct quotation for the euro in U.S. dollar
terms was $1.3236/€, on August 1, 2013.
This is the preferred way of quoting the euro, the British
pound and the Australian dollar.
Indirect Quotation
The value of the domestic currency expressed in units
of foreign currency.
For example, the indirect quotation for the yen against
the U.S. dollar was ¥99.54/$ on August 1, 2013.
Most currencies are expressed as indirect quotations: the
Canadian dollar, the Swiss franc, and the Japanese yen, etc.
14
Exchange Rate Quotations
=
51. There is an inverse relationship between the two methods of
quoting a currency exchange rate between two currencies:
Types of Exchange Rates
The exchange rate between two currencies can be quoted in a
number of ways:
Spot Exchange Rate
Forward Exchange Rate
Currency Futures
Currency Options
16
Spot Exchange Rate
The spot exchange rate is the exchange rate for a foreign
currency for immediate delivery.
This “immediate delivery” is somewhat subject
to interpretations that vary from country to country
and, within one country, from one currency to another;
however, it is (roughly) the price of a foreign currency
to be delivered within 48 hours.
This is the most-commonly used exchange rate,
and it can be found in just about any periodical
52. (The Wall Street Journal, The New York Times,
Financial Times) or financial website.
17
Forward Exchange Rate
The forward exchange rate is the exchange rate
for a foreign currency to be delivered any number
of days in the future.
The party entering into a forward currency contract
with a bank is committing to purchasing one currency
with another at a certain price on a certain date.
The published forward exchange rate quotes are for
30 days, 90 days, 180 days, or one year in the future.
Forward rates are only published in financial newspapers
such as The Wall Street Journal or Financial Times.
18
53. Currency Futures
Currencies are also traded as commodities, in the futures’
market.
Futures are contracts between a seller (called the “short”)
and a buyer (called the “long”).
In the U.S., currency futures are limited to fixed
quantities (100,000 Australian dollars, 62,500 British
pounds, 100,000 Canadian dollars, 125,000 euros, 5,000,000
Japanese yen, and 500,000 Mexican pesos) and to fixed
settlement dates (the third Wednesday of the months
of March, June, September, and December).
Because of the limits placed on amounts and dates,
futures are rarely used in international trade transactions.
19
Currency Options
Currency options is a method used to protect against
fluctuations in the value of a currency in the future.
A firm can purchase options to buy, or options to sell
a particular currency at a particular price on a given date.
Unlike in the futures market, options can be for any amount,
and at any date.
An option is the right to buy (or sell) a currency, at a pre-
54. determined price (called the strike price), but it is not the
obligation to buy or sell at that price. The owner of the option is
the one who decides whether to exercise that option.
20
Call Options
A call option is an option with which a firm agrees to
buy a particular currency at a particular price on a
given date.
Suppose a U.S. firm purchases an option to buy euros for
$1.35/€ on 01/01/201_. It pays U.S. $5,000 for that option.
Two scenarios can take place on 01/01/201_:
If the spot exchange rate is lower than $1.35/€, the firm will
purchase the euros on the spot market, and forgo the
option.
If the spot exchange rate is higher than $1.35/€, the firm
will exercise the option, and pay $1.35/€ for the euros.
55. 21
Put Options
A put option is an option with which a firm agrees to sell
a particular currency at a particular price on a given date.
Suppose a U.S. firm purchases an option to sell British
pounds for $1.25/£ on 03/01/2017. It pays U.S. $2,000
for that option.
Two scenarios can take place on 03/01/2017:
If the spot exchange rate is higher than $1.25/£, the
firm will sell the pounds on the spot market and
forgo the option.
If the spot exchange rate is lower than $1.25/£ ,
the firm will exercise the option and obtain $1.25/£ for
its pounds.
22
Types of Currencies
(1 of 2)
Floating Currency
A currency whose value is determined by market forces. The
56. exchange rate of a floating currency varies frequently.
Pegged Currency
A currency whose value is determined by a fixed exchange rate
with another, stronger currency.
For example, the Lithuanian litas was pegged to the U.S. dollar
until February, 2002 and then became pegged to the
European euro.
Artificial Currency
A currency that is not in circulation. As of 2013, there is
only one artificial currency, the Special Drawing Rights of
the International Monetary Fund.
23
Types of Currencies
(2 of 2)
Currency Bloc
A group of currencies whose values fluctuate in parallel
fashion.
The currencies within the group have a fixed exchange rate,
but their exchange rates with currencies outside of the
group float.
Before the introduction of the euro, the European
currencies traded as a currency bloc. Several currencies in
Europe are pegged to the euro and act as a currency bloc.
57. Dollarization
A phenomenon where other countries decide to adopt the
U.S. dollar as their circulating currencies.
Panama and Ecuador utilize the dollar as their domestic
currency.
24
Exchange Rate Determination
The exchange rate between two currencies fluctuates
due to a number of different relationships:
Purchasing Power Parity
Fisher Effect
International Fisher Effect
Interest Rate Parity
Forward Exchange Rate
58. 25
Purchasing Power Parity
Purchasing Power Parity is an economic theory that holds
that exchange rates should reflect the price differences
of each and every product between countries.
The idea is that exchange rates should fluctuate in such
a way as to “equalize” the price differences of similar
products between countries, so that a set amount of currency
would purchase the same goods in any country of the world.
26
Big Mac Index
Purchasing Power Parity in reality is essentially
impossible to achieve and measure given the disparity
of goods and services that are purchased worldwide.
Even for a perfectly uniform good, like a Big Mac hamburger,
there are wide discrepancies in its price from one country to
another.
A fine illustration of this inconsistency is with the Big Mac
Index, published by The Economist – Table 8.5 on page 279
of the 4th Ed. text. It observed that the price of one Big Mac
59. sandwich can vary from 36% (India) to 183% (Venezuela) of
the U.S. price or 5.1 times as much in Venezuela vs. India.
Practically speaking, the World Bank version of PPP uses
a basket of goods and calculates how much domestic currency
an average person would have to spend to purchase it.
27
Fisher Effect
The Fisher effect is an economic theory that holds
that the interest rates that businesses and individuals pay
to borrow money should be uniform throughout the
world.
Also, he nominal interest rates that they actually pay
in a given country are composed of this common (“real”)
interest rate and the inflation rate of that country.
Therefore, if a country has a higher inflation rate
than others, its nominal interest rates will also be higher:
Nominal interest rate = real interest rate + inflation rate
60. 28
International Fisher Effect
The International Fisher effect is an economic theory
that holds that the spot exchange rates between two countries’
currencies should change in function of the
differences between these two countries’ nominal interest rates.
If a country has a higher nominal interest rate, it means (based
on the Fisher effect), that it has a higher inflation rate.
Therefore, if a country has a higher nominal interest rate
than other countries, the value of that country’s currency
will decrease over time.
29
Interest Rate Parity
Interest Rate Parity is an economic theory that holds
that the forward exchange rate between two currencies
should reflect the differences in the interest rates
in those two countries.
If a country has a higher interest rate than others,
speculators would borrow in other countries and invest
these funds in the high-interest country.
Since this would create a demand for the high-interest
country’s currency, the value of that country’s currency
61. would go up, quickly negating the higher interest rate.
30
Forward Exchange Rates
Forward exchange rates theory is an economic theory
that holds that forward exchange rates for currencies are
good predictors of the future spot exchange rates of
that currency.
It is self-evident that speculators forecast, from all
of the information available on interest rates, inflation
rates and other economic factors, what the future value
of a currency will be.
These forecasts are reflected in the forward exchange rates for
that currency.
In essence, the forward exchange rate of a currency
reflects the collective consensus of currency forecasters
and speculators.
31
62. Forecasted Difference in Inflation Rates
Change in Expected Spot Exchange Rate
Forward Exchange Rate Discount/Premium
Difference in Nominal Interest Rates
Purchasing Power
Parity
Fisher Effect
Interest Rate
Parity
Unbiased
Predictor
International
Fisher Effect
Relationships
of Rates
Exchange Rate Forecasting
Technical Forecasting
A method of forecasting exchange rates based upon
time-series analysis. Future movements in the value
of a currency are “mathematically” linked to its past
movements.
Fundamental Forecasting
A mathematical model that uses the exchange rate of
a specific currency as the dependent variable and
the expected inflation rates, nominal interest rates, forward
interest rates and real interest rates as the
63. independent variables.
Market-based Forecasting
A method of forecasting based on the premise that “the
market knows best” and that, therefore, the forward exchange
rate of a given currency is the best unbiased predictor of the
future spot rate of a particular currency.
33
Managing Transaction
Exposure
Transaction exposure is the risk represented by the fluctuation
in exchange rates between the time at which two companies
enter in an international contract and the time at which that
contract is paid.
These risks can be retained by the firm or be “hedged.”
Hedging is a term used to represent several techniques
designed to reduce the uncertainty of exchange rate
fluctuations.
By hedging, a firm does not eliminate its transaction exposure,
it only manages it.
64. 34
Risk Retention
Risk retention strategy is a risk management strategy in
which a company elects to retain a certain type of risk and
decides not to insure that risk.
Three types of companies typically choose this option:
Very large traders
Exporters or importers that have little exposure
Firms that do not evaluate the international currency transaction
risks clearly; they have no policy, or have a management
that is not well versed in the intricacies of international
trade.
35
Hedging Strategy
There are two possible strategies for a firm with transaction
exposures:
65. Determine what its decision should be on an invoice-
by-invoice basis, depending on the currency at stake,
the amount of the invoice, and its forecast of currency’s
exchange rate.
Set a policy that the firm follows for all of its foreign currency
receivables and payables.
36
Hedging Techniques
Forward-Market Hedging
A technique that utilizes the forward market for currencies
to manage a firm’s transaction exposure.
Money-Market Hedging
A technique that utilizes the banking system in the foreign
country to manage a firm’s transaction exposure.
Options-Market Hedging
A technique that utilizes the options market for currencies to
manage a firm’s transaction exposure.
37
66. Forward Market Hedging
for an Exporter (1 of 2)
A U.S. company is selling a product to an Italian firm
on March 1, 201_; the invoice is payable in euros on June 2,
2019_ (90-day credit). The amount that the firm would like to
collect is $200,000.
If it used the spot exchange rate on March 1, 2019 (U.S.
$1.2661/€), the firm would bill the customer € 157,965.00.
However, as of March 1, 2019, the 90-day forward exchange
rate for the euro is U.S. $1.2530/€ indicating that the market is
expecting a decrease in the value of the euro against the
U.S. dollar.
The firm therefore decides to invoice its customer for:
$200,000/1.2530 = € 159,617.00.
38
Forward Market Hedging
for an Exporter (2 of 2)
A forward market hedge, in this case, would consist
of the U.S. firm entering a forward contract with a bank,
in which it would promise to sell € 159,617.00 to the bank
on June 2, 2019, at the predetermined (forward) exchange
rate of U.S. $1.2530/€.
67. On that date, the U.S. company presents €159,617.00 to the
bank and collects the U.S. $200,000 it wanted to collect.
The U.S. firm is unconcerned about the spot exchange rate
of the euro on June 2, 2019.
39
Forward Market Hedging
for an Importer (1of 2)
A German firm is purchasing a machine from a British
firm for £250,000.00. The machine is delivered on April 4,
2019, and payment is expected (in pounds) on July 6, 2019.
On April 4, 2019, this amount was equivalent to € 272,200.00
because the spot exchange rate between the U.K. pound
and the euro was € 1.1008/£.
However, on April 4, 2019, the pound was expected to rise
in value and the 90-day forward exchange rate with the euro
was € 1.1220/£.
40
Forward Market Hedging
for an Importer (2 of 2)
68. A forward market hedge in this case would consist of the
German firm entering into a contract with a bank from which it
promises to purchase £250,000 on July 6, 2019, at a
predetermined (forward) exchange rate of € 1.1220/£.
On that date, the German firm hands € 280,500.00 to the bank
and obtains in exchange the £250,000 that it needs to pay its
British supplier.
The German firm could determine on April 4, 2019, exactly how
much it had to pay for the machine and is unconcerned about the
spot exchange rate of the British pound on July 6, 2019.
41
Money Market Hedging
for an Exporter (1 of 2)
A firm located in Switzerland sells a piece of machinery
to a firm located in Japan for the equivalent of SwF 150,000.00.
It bills the customer in Japanese yen.
The transaction takes place on January 16, 201x, with
a payment date of March 15, 201x. The transaction amount is
¥12,115,545.00, because the exchange rate on January 16, 201x,
is ¥80.7703/SwF.
The Swiss firm can use a money market hedge, by borrowing
from a Japanese bank the present value (as of January 16, 201x)
of ¥12,115,545.00 on March 15, 201x.
69. 42
Money Market Hedging
for an Exporter (2 of 2)
If the commercial lending rate in Japan is 3 percent per annum
(about 0.5 percent for two months), the amount the
Swiss firm borrows is:
¥ (1-0.005) x 12,115,545.00 = 12,054,967.28.
On March 15, 201x, the Swiss firm pays the bank back,
using the payment of ¥12,115,545.00 made by its customer.
On January 16, 201x, the Swiss firm would exchange the
proceeds from the loan (¥12,054,967.28) for SwF 149,250.00
(the exchange rate on January 16, 201x is ¥80.7703/SwF). This
amount is roughly equal to the payment of SwF 150,000.00 it
had expected, decreased by the cost of getting the money two
months earlier.
The Swiss firm is unconcerned about the spot exchange rate of
the yen on March 15, 201x.
43
Money Market Hedging
for an Importer (1 of 2)
70. On May 2, 201x, a firm located in Denmark purchases raw
materials from a firm located in Australia, which asks to be paid
in Australian dollars.
The amount of the invoice is A$20,000,000, payable on
November 1, 201x.
The Danish firm can eliminate its exposure to exchange
rate fluctuations by using a money market hedge.
It can invest a sum in an Australian bank that will mature
to A$20,000,000 on November 1, 201x.
44
Money Market Hedging
for an Importer (2 of 2)
Assuming an annual interest rate of 4 percent paid on deposits
in Australia (or 2 percent for six months), the Danish firm
would have to invest A$20,000,000/(1 + 0.02) = 19,607,845
krone to have enough to cover its obligation on November 1,
201x.
On May 2, 201x, the Danish firm then converts DKr
80,288,498.36 into Australian dollars (the exchange rate is
A$0.2444/DKr on May 2, 201x).
The Danish firm is unconcerned about the spot exchange rate of
the Australian dollar on November 1, 201x.
45
71. Options Market Hedging
for an Exporter (1 of 3)
A company located in the United States sells a large piece of
equipment to a firm located in the United Kingdom and agrees
to be paid in pounds.
The invoice, for £1,000,000, is issued on December 10, 201x,
but is not payable until March 10, 201x.
The exporting firm can minimize its currency fluctuation risk
by using an option hedge; on December 10, 201x, it purchases a
put option—the right to sell £1,000,000 on March 10, 201x —
at an agreed-upon exchange rate of U.S. $1.3615/£.
46
Options Market Hedging
for an Exporter (2 of 3)
If the spot exchange rate on March 10, 201x, is lower
than U.S. $1.3615/£, then the American firm will exercise
its option and sell the currency at that price.
If the spot rate is higher than U.S. $1.3615/£, the firm
will let its option lapse and will sell the currency it received
at the spot market rate.
47
72. Options Market Hedging
for an Exporter (3 of 3)
Because the exchange rate on March 10, 201x, is U.S.
$1.3842/£, the firm sells its pounds without using its option.
The firm still incurs the cost of the option, which is
approximately 1.25 percent of the contract amount or about U.S.
$17,018.75.
However, this cost is offset by the fact that it sells its British
pounds for U.S. $22,700 more than it had anticipated.
The net profits on this financial transaction are U.S. $5,681.25.
48
Options Market Hedging
for an Importer (1 of 3)
A company located in Spain purchases a plant located in
Canada. The contract is signed on June 28, 201x, and the firm
has agreed to make three installment payments of Can
$1,000,000 each on December 28, 201x, March 28, 201x and
June 28, 201x (6 months, 9 months, and 12 months after
purchase).
In order to minimize its currency risks, the Spanish firm
can use an option hedge by purchasing call options—the right to
buy Can $1,000,000—at exchange rates of:
Can $1.6522/ € for December 28, 201x
Can $1.7081/ € for March 28, 201x, and
Can $1.7452/ € for June 28, 201x.
73. 49
Options Market Hedging
for an Importer (2 of 3)
Because the spot exchange rate for the Canadian dollar
was Can $1.7316/ € on December 28, 201x, the Spanish firm did
not exercise its option, purchased the Canadian dollars on the
spot market and sent them to the Canadian supplier.
On March 28, 201x, the spot market was Can $1.6488/ €,
and therefore the Spanish firm exercised its option
and purchased the Canadian dollars at Can $1.7081/ €
(the strike price of its option), because it was a more favorable
exchange rate than the spot market.
50
Options Market Hedging
for an Importer (3 of 3)
As for its future June 28, 201x payment, the firm still
has the possibility of saving money if the spot rate is more
favorable than its option rate; if not, it will exercise its option.
The cost of these successive options for the Spanish firm
was approximately 1.25 percent, 1.5 percent, and 2 percent
of the contract amounts for December, March, and June,
respectively, for a total of approximately € 29,000.00.
However, the costs were reduced by the fact that the firm saved
€ 27,753.00 in December by not having to spend as many euros
as it had anticipated.
74. 51
International Banking
Institutions (1 of 3)
Central National Banks
Every country in the world has a Central Bank, or some
institution that acts as one.
They are responsible for the creation and control of the
monetary supply and they function as a check clearinghouse.
International Monetary Fund
The IMF was created to oversee the fixed exchange rate system
created by the Bretton-Woods Conference.
Today it helps countries manage their balance of payments and
lends them money when they experience difficulties with their
balance of payments.
52
International Banking
Institutions (2 of 3)
Bank for International Settlements
The BIS was created after World War I to manage Germany's
war reparation payments.
Since then, it has evolved into a major international institution,
providing support to Central Banks and acting as a
clearinghouse between central banks.
World Bank
Created to help countries rebuild their infrastructure
75. after World War II, it has slowly changed to become the bank in
charge of financing large infrastructure projects.
The government borrowing the funds must be a member of the
IMF.
53
International Banking
Institutions (3 of 3)
Export-Import Bank (Ex-Im Bank)
A United States federal agency whose purpose is to provide
assistance to U.S. exporters in the form of loans,
loan guarantees, and political risk insurance policies.
SWIFT
The Society for Worldwide Interbank Financial Tele-
communication is a corporation supporting an Electronic Data
Interchange network that was created by banks to obtain a
secure and reliable means of transferring financial information
internationally.
It allows the communication of Letters of Credit and
miscellaneous fund transfers.
54
Sales Contract Currency
as a Marketing Tool
There are four approaches that an exporter can pursue:
Elect to quote in the exporter’s currency.
76. Elect to quote in the importer’s currency
and minimize the risk of exchange rate fluctuation
with a forward market hedge.
Elect to quote in the importer’s currency
and minimize the risk of exchange rate fluctuation
with a money market hedge.
Elect to quote in the importer’s currency
and minimize the risk of exchange rate fluctuation
with an options market hedge.
55
8-16Chapter 8: Currency of Payment (Managing Transaction
Risks)
Chapter 8: Currency of Payment (Managing Transaction
Risks)8-15
Chapter 8
Currency of Payment (Managing Transaction Risks)lEARNING
oBJECTIVES
At the end of this chapter, YOU SHOULD:
Identify the risks that currency exchange rates pose for both the
importer and exporter.
Identify the system of currency exchange rates.
Identify theories of exchange rate determination.
Identify means of exchange rate forecasting.
Identify means of managing transaction exposure.
Identify international banking institutions.
Preview
This chapter looks at some of the risks exporters take in dealing
77. with currencies of different nations. It also discusses ways
currency fluctuations can be predicted and how participants in
international trade can protect themselves from currency
valuation swings that may be against them. Some of the more
technical aspects of the chapter can be omitted if they are too
complex for the level at which the course is offered.
Chapter Outline
Introduction
I. Previous chapters have shown that exporters and importers
must agree on:
a. Terms of trade
b. Terms of sale
II. Another issue of concern is currency for the transaction
a. Exporter country’s currency?
b. Importer country’s currency?
c. Third country’s currency?
8-1 Sales Contracts’ Currency of Quote
I. Risk of currency fluctuation
II. Convertibility of currency8-1-1 Exporter’s Currency
I. Exchange rate fluctuation risk is nil for exporter
II. Exchange rate risks borne by importer8-1-2 Importer’s
Currency
I. Exchange rate fluctuation risk is nil for importer
II. Exchange rate risks borne by exporter8-1-3 Third Country’s
Currency
I. Exporter and importer responsible for fluctuations of their
country’s currency against that of third country
II. Artificial currency such as Special Drawing Rights (SDRs)
on International Monetary Fund (IMF) can be used8-1-4 The
Special Status of the Euro
I. Originally an artificial currency
II. Began circulation in 2002
III. Truly an international currency designed to challenge
international status of U.S. dollar
78. 8-2 The System of Currency Exchange Rates8-2-1 Types of
Exchange Rate Quotes
I. The exchange rate of two currencies is the value of one
currency expressed in units of the second
a. The first way to value a currency is the direct quote, or the
value of the foreign currency expressed in units of the domestic
currency
b. The second way to value a currency is the indirect quote, that
is the value of the domestic currency expressed in units of
foreign currency
c. Direct quote = _____1_____
Indirect quote
II. Spot exchange rate—the exchange rate for a foreign currency
for immediate delivery (at foreign exchange kiosks and banks
worldwide)
III. Forward exchange rate—the exchange rate for a foreign
currency to be delivered 30, 90, or 180 days from date of quote
a. Outright rate—the rate at which a commercial customer
would purchase the currency
b. It has to be differentiated from the swap rate, which is the
method used by banks and other financial institutions to express
a forward exchange rate and is expressed in points
IV. Currency futures
a. Currencies are traded on futures’ market as “commodities”
(Chicago Mercantile Exchange in U.S.)
b. Currency options’ market:
i. U.S.-style option gives a company the right to exercise its
option at any time until the expiration date
ii. European-style option allows exercising of option only on
that date
V. Current options
c. Two types of options:
i. Call option is a right to buy, but not an obligation to buy
ii. Put option is a right to sell, but not an obligation to sell
iii. An option is priced by the “market” between companies
79. wanting to purchase options and speculators and other
companies who are selling options8-2-2 Types of Currencies
I. Floating currencies—foreign currencies whose value changes
(or can change) daily against other currencies
a. Countries most involved in world trade have floating
currencies
b. Some countries attempt to control the floating ability of their
currencies
II. Pegged currencies
a. Countries with very volatile currencies may try to peg their
currency to currency that is more stable
b. Pegging currency to a stable currency will make exchange
rate predictable
c. Country may replace currency with that of another country—
Panama and Ecuador adopted U.S. dollar or were involved in
dollarization of their economies
III. Floating currency blocs—European Monetary System
a. Countries may trade so much with each other that they
develop a currency bloc
b. European Monetary System (EMS) gave rise to the euro
c. Blocs can eventually develop into a fixed exchange rate
among all the internal currencies of involved countries.
8-3 Theories of Exchange Rate Determinations8-3-1 Purchasing
Power Parity
I. Theory holds that exchange rates should reflect the price
differences of all products. Big Mac Index should illustrate this
(Table 8-5).
II. This is essentially impossible to achieve and measure, given
disparity of goods and services purchased worldwide
III. Theory holds that exchange rates should reflect differences
in inflation rates between countries
IV. Mathematical illustrations:
Spot value of Currency F at time t in Country D_(1+ inflation
80. rate in Country D)t
Spot value of Currency F at time 0 in Country D = (1+
inflation rate in Country F)t
or
S(et) = (1 + infD)t
S(e0) (1 + infF)t8-3-2 Fisher Effect
I. Observation that a country’s nominal interest rate comprises
inflation rate in country and real interest rate borrowers are
paying
II. Such real interest rate is expected to be “uniform”
throughout the world
III. Mathematical representations:
(1 + real interest rate) × (1 + inflation rate) = 1 + nominal
interest rate
or
(1 + rir)(1 + inf) = 1 + nir or nir = inf + rir + (inf × rir) ≈
inf + rir8-3-3 International Fisher Effect
I. Observation that exchange rates reflect the differences
between nominal interest rates in different countries
II. It posits that, if nominal interest rates are higher in country
F than in country D, then country F’s currency should be
expected to decrease in value relative to country D’s currency
III. Conceptually, the expected spot rate reflects the fact that an
investor would get the same yield on an investment, whether it
is made in country D or country F
IV. Mathematical representations:
Spot value of Currency F at time (t+1) in country D
Spot value of Currency F at time t in country D =
(1 + nominal interest rate in country D)
81. (1 + nominal interest rate in country F)
or
S(et+1) = (1 + nirD)
S(et) (1 + nirF)8-3-4 Interest Rate Parity
I. This theory links the forward exchange rate of a foreign
currency to its spot rate, using the differences in nominal
interest rates between the foreign country and the domestic
country
II. The principle is that the forward exchange rate should be
expressed as a discount if the foreign country is experiencing
higher nominal interest rates than the domestic country, and
should reflect a premium if the foreign nominal interest rates
are lower
III. In other words, at time t, the forward exchange rate F {t +
1}(et) for delivering currency F n days from t—that is, at time t
+ 1—reflects the difference between the nominal interest rate in
Country D and the nominal interest rate in Country F, adjusted
for the length of n days
IV. Mathematical representations:
Fn(et) – S(et) × 360 = nirD – nirF
S(et)n8-3-5 Forward Rate as Unbiased Predictor of Spot Rate
I. This theory holds that forward exchange rates for
currencies are good predictors of the future spot exchange rates
of that currency
II. In other words, if the forward rate for a currency shows a
discount of 2 percent for a maturity date of n days, then the spot
rate in n days should be 2 percent lower than it is today
III. Conceptually, the relationship is that the forward exchange
rate of currency F at time t in Country D for delivery at time t +
1 is the expected (average) spot value of currency F at time t +
1 in Country D
IV. Mathematical representation:
82. Ft+1(et) = S(et+1) 8-3-6 Entire Predictive Model
I. The five relationships can be combined to understand how
each can be used to forecast expected spot exchange rates
II. See Figure 8-3 in text, page 282
8-4 Exchange Rate Forecasting8-4-1 Technical Forecasting
I. So-called technical forecasting methods are essentially all
based upon time-series analysis
a. Simple moving averages
b. Sophisticated ARIMA (auto-regressive integrated moving
average; also called Box-Jenkins) methods
c. Neural-network models which require dedicated software
packages and pretty powerful computers
d. Several possible sources on technical forecasting are listed in
this chapter’s bibliography
II. Technical forecasting is based on the premise that future
movements in the value of a currency are “mathematically”
linked to its past movements
III. Patterns are then duplicated with very recent data to
forecast the future exchange rates of the currency
IV. Such technical forecasts are valuable in determining the
possible variations of a currency’s exchange rate in the short-
run
V. In the long run, they tend to accumulate errors fairly quickly,
as they ignore the economic fundamentals of exchange rate
determination8-4-2 Fundamental Forecasting
I. Development of a causal model
a. Exchange rate of a specific currency is dependent variable
b. Expected inflation rates, nominal interest rates, forward
interest rates, and real interest rates as independent variables
c. Use of large multiple linear regression and analysis of
variance (ANOVA) techniques
II. Problem with causal models is:
a. Difficulty in accounting for all possible influences on a
currency’s exchange rate
83. b. Limiting inevitable collinearity of independent variables8-4-3
Market-Based Forecasting
I. Based on premise that “market knows best”
II. Market’s “wisdom” may be skewed by objectives of
speculators
III. Does not account for government interventions
8-5 Managing Transaction Exposure
I. Exposure to risk of using foreign country’s currency is called
transaction exposure
II. Transaction exposure can be retained by the firm or hedged
III. Transaction exposure strategy is dependent on:
a. Company’s forecast of exchange rate
b. Size of firm
c. Ability of firm to weather risk
d. Size of invoice
e. Company’s sophistication in international finance
IV. Usually better to hedge foreign exchange risk8-5-1 Risk
Retention
I. Large traders tend to retain their risks
II. Exporters/exporters with little exposure tend to retain their
risks
III. Some firms do not evaluate risks, so, rightly or wrongly,
they retain their risks8-5-2 Forward Market Hedges
I. Company sells forward a future receivable in a foreign
currency
II. Company purchases forward currency necessary to cover
foreign payment
III. Hedge means company knows how much it would collect or
pay8-5-3 Money Market Hedges
I. Use of banking system of the country of the currency in
which the receivable or the payable is going to be paid
II. Is effective since it allows the firm to use the exchange rate
as of the date of the transaction rather than speculate on the
value of the exchange rate at the date of payment
84. III. Minimizes the risks of currency fluctuations8-5-4 Options
Market Hedges
I. It is also possible to hedge a foreign currency fluctuation
risk with options. This is a yet more sophisticated alternative,
which is essentially equivalent to remaining unhedged
(retaining the risk), and to purchasing an insurance policy to
protect against unfavorable exchange rate fluctuations. If the
exchange rate turns unfavorably, the firm can exercise its
option—its insurance policy—and is covered. If the exchange
rate turns favorably, the firm can still benefit from this situation
by not exercising its option, albeit while losing the cost of the
option
II. This strategy involves purchasing put or call options, or
the option to sell or purchase certain currencies at a certain
exchange rate on (European-style options) or before (U.S.-style
options) a certain date. This agreed upon exchange rate is called
the strike price
III. Options are very expensive
IV. Options are only commonly traded for a limited number of
currencies
V. Amounts are not as flexible as in forward markets
VI. Some banks will write options that are tailored to their
customers’ needs
VII. For firms sophisticated in international trade, this strategy
has great potential
8-6 International Banking Institutions8-6-1 Central National
Banks
I. Central banks create and control monetary supply:
a. Through market operations
b. Through control of currency
II. Function as a check clearinghouse
III. In some countries, they also try to “manage” exchange rate
of the national currency and the national foreign exchange
reserves8-6-2 International Monetary Fund
85. I. Created in 1944 at the Bretton Woods Conference
II. Designed to oversee the fixed exchange rate system that
conference had started
III. With end of gold standard in 1971, IMF changed its focus to
helping countries manage balance of payments
IV. IMF lends money to countries that experience difficulties
with their balance of payments—loans usually accompanied by
conditions to which the country has to agree: inflation control
and money supply growth are often on the list
V. IMF is also curator of artificial currency called a “Special
Drawing Rights” (SDRs)
a. Designed to supplement the U.S. dollar in its role as the
international currency
b. SDR’s value is determined by a basket of four currencies
(U.S. dollar, European euro, British pound, and Japanese yen)
c. SDR not often used by businesses
d. Often used by governments to settle their debts with each
other
e. Also used in the settlement of disputes under the liability
conventions of ocean cargo shipping8-6-3 Bank for
International Settlements
I. Initially designed to handle Germany’s World War I
reparation payments
II. Evolved into major supporter of central banks (which make
up its membership)8-6-4 International Bank for Reconstruction
and Development—World Bank
I. Created in 1945 after Bretton Woods Conference
II. Designed to help countries rebuild their infrastructure after
World War II
III. Now finances large infrastructure projects8-6-5 Export-
Import Bank
I. Export-Import (Ex-Im) Bank is U.S. government agency
II. Makes loans to large exporters
III. Makes loan guarantees to banks financing exporters
IV. Makes political risk insurance policies available through
Foreign Credit Insurance Associations (FCIA)8-6-6 Society for
86. Worldwide Interbank Financial Telecommunication
I. SWIFT is bank-created agency to support Electronic Data
Interchange (EDI) network
II. Allows communication of letters of credit and miscellaneous
fund transfers
III. High security gives it same value as original paper
documents
8-7 Currency of Payment as a Marketing Tool
I. Flexibility is primarily important
II. Importer’s currency is generally preferred by importers,
and currency exchange risk can be hedged
Key terms
artificial currency
A currency that is not in circulation. After the euro was changed
into a circulating currency on January 1, 2002, the only
artificial currency left was the Special Drawing Rights of the
International Monetary Fund. Its value is determined by the
value of a basket of four currencies: the euro (approximately 34
percent of the SDRs value), the Japanese yen (approximately 11
percent), the U.S. dollar (approximately 44 percent), and the
British pound (approximately 11 percent).
Bank for International Settlements
The bank that advises central banks and provides a
clearinghouse for exchanges between central banks.
call options
A method used to speculate on the value of a currency in the
future. A firm can purchase options to buy (called call options)
or options to sell (called put options) a particular currency at a
particular price, called the strike price, on a given date. Since
the complexity of the options market is substantial, the reader is
advised to learn a lot more about this alternative before
venturing into the options market.
87. central bank
The entity that controls the money supply of a nation and
functions as a clearinghouse for inter-bank exchanges.
convertible currency
A currency that can be converted into another currency. A
convertible currency can be a hard currency (easy to convert) or
a soft currency (not so easy to convert), but it can be converted.
currency
The monetary unit used in a particular country for economic
transactions (e.g., the dollar in the United States, the British
pound in the United Kingdom, the euro in Europe, and the yen
in Japan).
currency bloc
A group of currencies whose values fluctuate in parallel
fashion. The currencies within the group have a fixed exchange
rate, but their exchange rates with currencies outside of the
group float.
currency futures
A method used to trade currencies; the value of a fixed quantity
of foreign currency for delivery at a fixed point in the future is
determined by market forces. These currencies are traded as are
other commodities’ futures. In the United States, they are traded
on the Chicago Mercantile Exchange.
currency options
A method used to speculate on the value of a currency in the
future. A firm can purchase options to buy (called call options)
or options to sell (called put options) a particular currency at a
particular price, called the strike price, on a given date. Since
the complexity of the options market is substantial, the reader is
advised to learn a lot more about this alternative before
88. venturing into the options market.
direct quote
The value of a foreign currency expressed in units of the
domestic currency; for example, the euro was worth $1.4011 as
of May 25, 2009. Some currencies are traditionally expressed as
direct quotes.
dollarization
A phenomenon whereby other countries decide to adopt the U.S.
dollar as their circulating currency. Panama and Ecuador have
gone through a “dollarization” of their respective economies.
euro
As of July 2013, the common currency of seventeen of the 27
countries of the European Union, developed in the early 1990s
and placed in circulation on January 1, 2002. In July 2013,
Croatia was added to the European Union, for a total of 28
countries, and Latvia adopted the euro for a total of eighteen
countries using the euro.
Eurozone
The seventeen countries of Europe in which the euro is the
currency. Eighteen as of January 1, 2014.
Ex-Im Bank
An agency of the U.S. federal government that provides
financial assistance to U.S. exporters.
exchange rate risk
The risk represented by the fluctuation in exchange rates
between the time at which two companies entered into an
international contract and the time at which that contract is
paid.
89. Fisher effect
An economic theory that holds that the interest rates that
businesses and individuals pay to borrow money should be
uniform throughout the world and that the nominal interest rates
that they actually pay in a given country are composed of this
common interest rate and the inflation rate of that country.
floating currency
A currency whose value is determined by market forces. The
exchange rate of a floating currency varies frequently.
forward exchange rate
The exchange rate of a foreign currency for delivery in 30, 90,
or 180 days from the date of the quote.
forward market hedge
A financial technique designed to reduce exchange rate
fluctuation risks in which a business agrees to purchase (or sell)
a particular currency at a predetermined exchange rate at some
future time (generally 30, 60, 90, 180, or 360 days later).
hard currency
A currency that can easily be converted into another currency.
inconvertible currency
A currency that cannot be converted into another currency.
indirect quote
The value of a domestic currency expressed in units of a foreign
currency; for example, the dollar was worth 94.82 yen as of
May 25, 2009. Some currencies are traditionally expressed as
indirect quotes.
90. Interest Rate Parity
An economic theory that holds that the forward exchange rate
between two currencies should reflect the differences in the
interest rates in those two countries.
International Fisher effect
An economic theory that holds that the spot exchange rates
between two countries’ currencies should change in function of
the differences between these two countries’ nominal interest
rates.
International Monetary Fund
The international organization created in 1945 to oversee
exchange rates and develop an international system of
payments.
money market hedge
A financial technique designed to reduce exchange rate
fluctuation risks. When a business has to make a payment at a
future date and is pursuing a money market hedge, it invests the
funds in an interest-bearing account abroad. The amount
invested is the amount it owes, discounted for the interest that it
will earn: At maturity, the business will have sufficient funds to
cover its obligations. In the case of a business anticipating a
collection, the technique calls for the business to borrow from a
bank abroad and reimburse the bank with the funds provided by
its creditor.
options market hedge
A financial technique designed to reduce exchange rate
fluctuation risks in which a business purchases (or sells)
options in a particular currency. See currency options.
outright rate
The exchange rate of a foreign currency for delivery in 30, 90,
91. or 180 days from the date of the quote. The outright rate is the
rate at which a commercial customer would purchase the
currency. It has to be differentiated from the swap rate, which is
the method used by banks and other financial institutions to
express a forward exchange rate.
pegged currency
A currency whose value is determined by a fixed exchange rate
with another, more widely traded currency. As the value of the
reference currency fluctuates, so does the value of the pegged
currency, but the exchange rate between the two remains
constant.
points
In a forward exchange rate, the difference between the outright
rate and the swap rate. Points are not fixed units; their value
depends on the way a currency is expressed, but is the smallest
decimal value in which that currency is traded. For example, the
indirect quote for the Japanese yen/U.S. $ exchange rate was
94.82 yen as of May 25, 2009. A “point” for this currency rate
is therefore worth 0.01 yen. The direct quote for the European
euro/U.S. $ exchange rate was $1.4011 on the same date; a
“point” for this currency is therefore worth U.S. $0.0001.
Purchasing Power Parity
An economic theory that holds that exchange rates should
reflect the price differences of each and every product between
countries. The idea is that a set amount of money (regardless of
the currency in which it is expressed) would purchase the same
goods in any country of the world.
put options
A method used to speculate on the value of a currency in the
future. A firm can purchase options to buy (called call options)
or options to sell (called put options) a particular currency at a
particular price, called the strike price, on a given date. Since
92. the complexity of the options market is substantial, the reader is
advised to learn a lot more about this alternative before
venturing into the options market.
risk retention
A risk management strategy in which a company elects to retain
a certain type of risk and decides not to insure that risk.
soft currency
A currency that cannot be easily converted into another
currency; either it is inconvertible, it is only convertible into
other soft currencies, or it has an exchange rate that differs
substantially between sales of the currency and purchases of the
currency.
Special Drawing Right (SDR)
An artificial currency (it does not circulate, see artificial
currency) of the International Monetary Fund. Its value is
determined by the value of a basket of four currencies: the euro
(approximately 34 percent of the SDR’s value), the Japanese
yen (approximately 11 percent), the U.S. dollar (approximately
44 percent), and the British pound (approximately 11 percent).
spot exchange rate
The exchange rate of a foreign currency for immediate delivery
(within 48 hours).
strike price
A method used to speculate on the value of a currency in the
future. A firm can purchase options to buy (called call options)
or options to sell (called put options) a particular currency at a
particular price, called the strike price, on a given date. Since
the complexity of the options market is substantial, the reader is
advised to learn a lot more about this alternative before
venturing into the options market.
93. swap rate
The exchange rate of a foreign currency for delivery in 30, 90,
or 180 days from the date of the quote. The swap rate is the
difference between the current spot rate and the rate at which a
commercial customer would purchase the currency. It is
expressed in points that must be subtracted or added to the spot
rate. The swap rate is the method used by banks and other
financial institutions to express a forward exchange rate. The
sum of the swap rate and the spot rate yields the outright rate,
which is the rate paid by a commercial customer for the
currency.
SWIFT- Society for Worldwide Interbank Financial
Telecommunication
An interbank electronic network for the secure transfer of funds
and documents.
term of sale
An element in a contract of sale that specifies the method of
payment to which an exporter and an importer have agreed.
Specifically, the term of sale will specify cash in advance, letter
of credit, documentary collection, open account, or TradeCard
transaction.
term of trade
An element in a contract of sale that specifies the
responsibilities of the exporter and of the importer.
Specifically, the term of trade will specify which activities must
be performed by the exporter and which by the importer, which
activities are paid by the exporter and which by the importer,
and where in the international transportation process the
transfer of responsibility for the merchandise takes place.
transaction exposure
The risk represented by the financial impact of fluctuations in
exchange rates in an international transaction. A small exposure