Assignment

Economy
British Dictionary definitions for economics
Economy is the social science concerned with the production and consumption of goods and
services and the analysis of the commercial activities of a society.
Wikipedia, the free encyclopedia definitions for economy
An economy (Greek οίκος-household and νέμoμαι - manage) or economic system consists of the
production, distribution or trade, and consumption of limited goods and services by different
agents in a given geographical location. The economic agents can be individuals, businesses,
organizations, or governments. Transactions occur when two parties agree to the value or price
of the transacted good or service, commonly expressed in a certain currency.
Economics definition
The science that deals with the production, distribution, and consumption of commodities.
Note : Economics is generally understood to concern behavior that, given the scarcity of
means, arises to achieve certain ends. When scarcity ceases, conventional economic theory may
no longer be applicable.
Origin of economics……… 1785-1795
dam Smith known as the
Father of Economics,
established the first modern
economic theory, called the
Classical School, in 1776.
Smith believed that people who acted in
their own self-interest produced goods and
wealth that benefited all of society. He
believed that governments should not restrict
or interfere in markets because they could
regulate themselves and, thereby, produce
wealth at maximum efficiency. Classical
theory forms the basis of capitalism and is
still prominent today.
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The nature of economy
More than money makes up an economy's
economic environment. Natural resources -raw
materials now and in the future are important.
If synthetic gold or tobacco were developed
or, in the case of the latter, became
unfashionable, Zimbabwe's economy would
be ruined.
Topography may produce two, three or
more submarkets in a country. Zambia, for
example, has "rural" and "urban" areas with
different needs and wants.
Extremes of climate - like the Southern African drought in 1992 can devastate economies and
derail any economic development plans and exports. Simply, products are not available to
export, because they are being consumed by the domestic economy.
Economic measures
There are a number of ways to measure economic activity of a nation. These methods of
measuring economic activity include:
 Consumer spending
 Exchange rate
 Gross domestic product
 GDP per capita
 GNP
 Stock Market
 Interest rate
 Government debt
 Rate of Inflation
 Unemployment
 Balance of Trade

Environmental Economics
nvironmental economics is an emerging area in the realm of economic science. Before
1970s a little attention was paid for the growth and development of this part of the area of
knowledge in economics.
The first oil stock in 1971
and thereafter the emergence of
relatively higher levels of
environmental damages at the
global level prompted the
scholars in this field to apply
economic tools to
environmental science. Studies
on environmental
science are plentifully
available, however they
do not cover the economic
content of environment.
Similarly, early economists of
the classical and neoclassical
regime made specific
comments about the significance
of nature and environment,
but did not include them in their exposition of theories. Today, people all over the world have
realized that environment is not just the study of flora and fauna, but a synthesis of study of
various branches of knowledge like Science, Economics, Philosophy, Ethics, Anthropology, etc.
Therefore, a study of environmental economics calls for a detailed understanding about various
environmental factors, their influence in the economy, their functions upon the environment, and
their impacts upon the life of the people of the present and future.
Meaning Of Environmental Economics
Arun Balasubramanian1 stated that “no longer is economics merely a science of production and
distribution, it has to take into account the ecological repercussions of economic activities that
could affect both production and distribution.” It means that economics as a subject cannot exist
in isolation, it cannot even be a mere study of how goods and services are produced, but at the
same time it has to take into consideration the impacts of the use of resources on the
environment. The impacts may be in the form of externality, pollution, exhaustion, etc. Any
study on the economic content of production, distribution, development, etc., cannot be
completed without touching upon the environmental aspects like externality, pollution, damage,
exhaustion, depletion etc.
Environmental economics can therefore be defined as that “part of economics which deals with
interrelationship between environment and economic development and studies the ways and
means by which the former is not impaired nor the latter impeded2.” It is thus a branch of
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economics which discusses about the impacts of interaction between men and nature and finds
human solutions to maintain harmony between men and nature.
Environmental economics teaches us how to promote economic growth of nations with least
environmental damage. Classical and neoclassical school of thoughts underestimated the
environmental issues of production and consumption, since they considered these issues merely
as social issues. When the environmental goods get transferred into economic goods, the
problems of environmental damage crop up, and therefore the need to interact with economic
principles.
Economy & The Environment—INTERLINKAGES
Man cannot exist in isolation. Man’s life is interconnected with various other living and non-
living things. His life also depends on social, political, economic, ethical, philosophical and other
aspects of social system. In fact, the life of human beings is shaped by his living environment.
What exactly is living environment?
Environment means “all the conditions, circumstances, and influences surrounding and affecting
the development of an organism or group of organisms”. It also means that the complex of
physical, chemical and biotic factors that act upon an organism or an ecological community and
ultimately determine its form and survival.
Other Feature of a Economy
 Inflation: In economics, inflation is an increase in a currency supply relative to the
number of people using it. As a result of this supply inflation the general price level of
goods and services in an economy over a period of time rise. When the price level rises,
each unit of currency buys fewer goods and services. Consequently, inflation reflects a
reduction in the purchasing power per unit of money – a loss of real value in the medium
of exchange and unit of account within the economy.
Formula for calculating Inflation =
(WPI in month of current year-WPI in same month of previous year)
-------------------------------------------------------------------------------------- X 100
WPI in same month of previous yea

 Unemploymennt : Unemployment occurs when a person who is actively searching
for employment is unable to find work. Unemployment is often used as a measure of the
health of the economy. The most frequently cited measure of unemployment is the
unemployment rate. This is the number of unemployed persons divided by the number of
people in the labor force.
Country 1996 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011
Bangladesh 35.2 35 40 40 40 2.5 2.5 2.5 5.1 4.8 5
 Proverty: A state
or condition in which
a person or
community lacks the
financial resources
and essentials to
enjoy a minimum
standard of life and
well-being that's
considered acceptable in society. Poverty status in the United States is assigned to people
that do not meet a certain threshold level set by the Department of Health and Human
Services.
The effects of poverty can be felt at every level of society — from the individual living in
poverty to the political leader attempting to provide solutions. Whether it is health

conditions or increased crime rates, poverty reaches just about every aspect of life. Let’s
looks at the five biggest effects of poverty in order to understand the severity of the
problem:
1. Malnutrition The most common effect of poverty is malnutrition.
This is especially seen in children of poor families. People living in poverty rarely have
access to highly nutritious foods. Even if they have access to these foods, it is unlikely
that they are able to purchase them. The healthiest foods are usually the most expensive;
therefore, a family on a very small budget is much more likely to purchase food that is
less nutritious, simply because that is all they can afford.
Sometimes people in poverty are malnourished simply because they do not eat enough of
anything. For some people around the world, quality food is a luxury. A total of 14.3
percent of people in developing countries face hunger and about 25 percent of Sub-
Saharan Africa is considered malnourished. Poor nutrition causes 45 percent of deaths in
children under the age of 5. Malnutrition can also lead to many other health issues as
well.
2. Health One of the most severe effects of poverty is the health effects that
are almost always present.
This includes things from diseases to life expectancy to medicine. Diseases are very
common in people living in poverty because they lack the resources to maintain a healthy
living environment. They are almost always lacking in nutritious foods, which decreases
their bodies’ ability to fight off diseases. Sanitation conditions are usually very low,
increasing the chance of contracting a disease. Sometimes these diseases can be minor,
but other times they can be life-threatening. In general, people living in poverty cannot
afford appropriate medicines to treat these illnesses.
Life expectancy and child mortality are greatly affected by poverty. Statistics show that
life expectancy in poor nations is up to 30 years below that of wealthy nations, like the
United States. Child mortality is shockingly high in poor countries; 13.5 percent of
children die before the age of 5 in poor countries. This number is the average for poor
countries, however some African nations have a child mortality rate of 20 percent.
3. Education Education is largely affected by poverty.
Many people living in poverty are unable to attend school from a very early age. Families
may not be able to afford the necessary clothing or school supplies. Others may not have
a way for their children to get to school. Whatever the reason, there is a clear correlation

between families living in poverty and their lack of education. Without the ability to
attend school, many people go through life illiterate.
The literacy rates in countries with high poverty levels indicate that these two are linked.
Low literacy rates can affect society in various ways including the labor force and
politics. Obtaining a basic education could bring 171 million people out of poverty. A
bad cycle is created; poverty prevents people from gaining a good education, and not
obtaining an education prevents people from escaping poverty.
4. Economy Among the effects of poverty includes its impact on the economy
of the country.
Mainly, the number of people living in poverty influences employment rates heavily.
Without an education, people are unlikely to find a paying job. Unemployment hinders a
country from developing into a strong economic system. A high unemployment rate can
impede a country from progressing in all aspects.
The labor force suffers when a large part of the citizens cannot contribute to economic
development. For example, the Indian economy has not been able to develop at a high
rate for many years because of the high number of people living in poverty. About 22
percent of the population in India lives in poverty and their economy can only improve
when this percentage decreases.
5. Society Poverty also has social effects.
Many people living in poverty are homeless, which puts them on the streets. There also
seems to be a connection between poverty and crime. When people are unemployed and
homeless, social unrest may take over and lead to increases in crime. When people have
nothing and no money to buy necessities, they may be forced to turn to theft in order to
survive. Homelessness and high crime rates impact of a country’s people and can create
many problems within a society.
It is clear that poverty has far-reaching effects on all people. By improving global
poverty, economies could prosper, health could improve and countries can develop into
strong global presences. All countries will benefit when decreasing global poverty
becomes a priority in the world.

 Labor Cosrt: The sum of all wages paid to employees by an employer.
 Balance ofPayment: The balance-of-payments accounts of a country record the
payments and receipts of the residents of the country in their transactions with residents
of other countries. If all transactions are included, the payments and receipts of each
country are, and must be, equal.
 Productivity : Economic productivity is the value of output obtained with one unit of
input. For example, if a worker produces in an hour an output of 2 units, whose price is
10$ each, then his productivity is 20$. It is clear that both technological and market
elements (as output quantities and prices) interact to determine economic productivity.
Economic systems
conomic system defines how the various entities in an economy interact. People have
defined an economic system variously to include government policies, which is very
important especially in modern times. Ancient systems were pretty simple. Trade was
done using systems like barter trade which was very straight forward. There were few treaties
and almost no real rules of engagement. You only exchanged what you had for what you needed,
or wanted. However, in modern monetary economies, the setting is quite intricate. Huge
established companies have a lot of influence in the way business is done. Treaties and
agreements are made every day, and governments have made numerous laws to define trade, thus
warranting the need for a more comprehensive definition of what an economic system is. In
modern economics, therefore, an economic system can be described as an organized manner in
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which a particular government chooses to allocate goods and services in the country. Modern
economic systems are about more than just trade. They define the values of a society, or a
country, as well as the political structure of that society.
There are about three or four basic questions in economics. One is, which goods are to be
produced? The other one is: how are the goods going to be produced. The third question is: who
is going to get those goods and services that have been produced; and the fourth question
addresses how change is going to be effected and accommodated in an economy. Effectively, the
structure of an economic system seeks to answer these questions. The system sets the rules of
play for all participants in an economy, and defines how they are going to interact with each
other.
Importance of Economic Environments
• Managers study economic environments to estimate how market trends and government
policy influence the performance of their companies.
• A country’s economic policies are a leading indicator of government’s goals and its
planned use of economic tools and market reforms.
• Economic development directly impacts citizens, managers, companies, policymakers,
and institutions.
When a company wants to do business in another country, it studies conventional wealth,
income, employment, and policy standards. The dynamic nature of political and economic events
requires that it also anticipate new situations. Besides assessing the foreign markets in which
they operate, managers also need to monitor those in which they do not.

Globalization
connects countries
in many ways;
hence, economic
change in one
country likely has
consequences in
other countries.
Companies also
watch economic
changes in those
countries where
they may not
operate but where
competitors do. Improving economic performance or revised economic policies in a particular
country may strengthen their rivals.
Since the 1980s, managers enjoyed economic opportunities as countries adopted the principles of
capitalism and the practices of free markets. We have recently seen the credit crisis reset
expectations. Now, in the aftermath of the global meltdown, there is growing government
involvement in economic affairs. Changing economic policies reveal the ambitions of the
government and the likely implications to economic freedoms.
Countries Classifies by economic Systems:
Four Types of Economic Systems Classifies countries in different sections:
 Pure Market Economy
 Pure Command Economy
 Traditional Economy
 Mixed Economy

Let’s review each of these types of economies………………...
Pure Market Economy: NO government involvement in economic decisions.
Private firms account for all production. Consumers decide WHAT should be produced.
They do this through the purchases they make. Businesses determine HOW the products
will be produced. They must be competitive. WHO buys the products? The people with
the most money are able to buy more goods and services.
Pure Command Economy: All resources are government-owned. One person
(dictator) or a group of officials decide WHAT products are needed. The government
runs all businesses, controls all employment, and decides HOW goods and services will
be produced. The government decides WHO receives the products that are produced.
Traditional Economy: Economy is shaped largely by custom or religion. Customs
and religion determine the WHO, WHAT, and HOW. Example: India has a caste system
which restricts occupational choice. (A social class separated from others by distinctions
of hereditary rank, profession, or wealth.)
Mixed Economy : Most economies in the world today are mixed. Classification is
based on how much government intervention there is. In the U.S. the government
accounts for about 1/3 of all U.S. economic activity.

World Bank
The International Bank for Reconstruction and Development (IBRD), commonly referred to as
the World Bank, is an international financial institution whose purposes include assisting the
development of its member nation’s territories, promoting and supplementing private foreign
investment and promoting long-range balance growth in international trade.
The World Bank was established in December 1945 at the United Nations Monetary and
Financial Conference in Bretton Woods, New Hampshire. It opened for business in June 1946
and helped in the reconstruction of nations devastated by World War II. Since 1960s the World
Bank has shifted its focus from the advanced industrialized nations to developing third-world
countries.
Organization and Structure: The World Bank Group (WBG) was established in 1944 to
rebuild post-World War II Europe under the International Bank for Reconstruction and
Development (IBRD). Today, the World Bank functions as an international organization that
fights poverty by offering developmental assistance to middle-income and low-income countries.
By giving loans and offering advice and training in both the private and public sectors, the World
Bank aims to eliminate poverty by helping people help themselves. Under the World Bank
Group, there are complimentary institutions that aid in its goals to provide assistance.
The president of the World Bank comes from the largest shareholder, which is the United States,
and members are represented by a Board of Governors. Throughout the year, however, powers
are delegated to a board of 24 executive directors (EDs). The five largest shareholders - the U.S.,
U.K., France, Germany and Japan - each have an individual ED, and the additional 19 EDs
represent the rest of the member states as groups of constituencies. Of these 19, however, China,
Russia and Saudi Arabia have opted to be single country constituencies, which means that they
each have one representative within the 19 EDs. This decision is based on the fact that these
countries have large, influential economies, which requires that their interests be voiced
individually rather than diluted within a group. The World Bank gets its funding from rich
countries as well as from the issuance of bonds on the world's capital markets.
The organization of the bank consists of the Board of Governors, the Board of Executive
Directors and the Advisory Committee, the Loan Committee and the president and other staff
members. All the powers of the bank are vested in the Board of Governors which is the supreme
policy making body of the bank.
The board consists of one Governor and one Alternative Governor appointed for five years by
each member country. Each Governor has the voting power which is related to the financial
contribution of the Government which he represents. The Board of Executive Directors consists
of 21 members, 6 of them are appointed by the six largest shareholders, namely the USA, the

UK, West Germany, France, Japan and India. The rest of the 15 members are elected by the
remaining countries. Each Executive Director holds voting power in proportion to the shares held
by his Government. The board of Executive Directors meets regularly once a month to carry on
the routine working of the bank.
The president of the bank is pointed by the Board of Executive Directors. He is the Chief
Executive of the Bank and he is responsible for the conduct of the day-to-day business of the
bank. The Advisory committees appointed by the Board of Directors. It consists of 7 members
who are expects in different branches of banking. There is also another body known as the Loan
Committee. This committee is consulted by the bank before any loan is extended to a member
country.
Membership and Fees Of World Bank: There are 195 member countries that are
shareholders in the IBRD, which is the primary arm of the WBG. To become a member,
however, a country must first join the International Monetary Fund (IMF). The size of the World
Bank's shareholders, like that of the IMF's shareholders, depends on the size of a country's
economy. Thus, the cost of a subscription to the World Bank is a factor of the quota paid to the
IMF.
There is an obligatory subscription fee, which is equivalent to 88.29% of the quota that a country
has to pay to the IMF. In addition, a country is obligated to buy 195 World Bank shares
(US$120,635 per share, reflecting a capital increase made in 1988). Of these 195 shares, 0.60%
must be paid in cash in U.S. dollars while 5.40% can be paid in a country's local currency, in
U.S. dollars, or in non-negotiable non-interest bearing notes. The balance of the 195 shares is left
as "callable capital," meaning the World Bank reserves the right to ask for the monetary value of
these shares when and if necessary. A country can subscribe a further 250 shares, which do not
require payment at the time of membership but are left as "callable capital." (Learn more about
the IMF in An Introduction To The International Monetary Fund.)

Capital Resources of World Bank:
The initial authorized capital of the World Bank was $ 10,000 million, which was divided in 1
lakh shares of $ 1 lakh each. The authorized capital of the Bank has been increased from time to
time with the approval of member countries. Member countries repay the share amount to the
World Bank in the following ways:
2% of allotted share are repaid in gold, US dollar or Special Drawing Rights (SDR). Every
member country is free to repay 18% of its capital share in its own currency. The remaining 80%
share deposited by the member country only on demand by the World Bank.
Functions:
World Bank is playing main role of providing loans for development works to member countries,
especially to underdeveloped countries. The World Bank provides long-term loans for various
development projects of 5 to 20 years duration. The main functions can be explained with the
help of the following points:
 World Bank provides various technical services to the member countries. For this
purpose, the Bank has established “The Economic Development Institute” and a Staff
College in Washington.
 Bank can grant loans to a member country up to 20% of its share in the paid-up capital.
 The quantities of loans, interest rate and terms and conditions are determined by the Bank
itself.
 Generally, Bank grants loans for a particular project duly submitted to the Bank by the
member country.
 The debtor nation has to repay either in reserve currencies or in the currency in which the
loan was sanctioned.
 Bank also provides loan to private investors belonging to member countries on its own
guarantee, but for this loan private investors have to seek prior permission from those
counties where this amount will be collected.

Multimodal transport
(Multimodal transportation system also known as combined transport) is the transportation of
goods under a single contract, but performed with at least two different means of transport; the
carrier is liable (in a legal sense) for the entire carriage, even though it is performed by several
different modes of transport (by rail, sea and road, for example). The carrier does not have to
possess all the means of transport, and in practice usually does not; the carriage is often
performed by sub-carriers (referred to in legal language as "actual carriers"). The carrier
responsible for the entire carriage is referred to as a multimodal transport operator.
Multimodal transport is effected by a multimodal transport operator who holds a multimodal
transportation contract and assumes responsibility for compliances as carrier.
Examples of multimodal transportation :
 Air + road ( transportation )
 SEA + Air ( transportation )
 Sea + Rail +Road ( transportation )
 Road + Air + Rail + Sea ( transportation )
Types of Transport Document Covering at Least Two Different Modes of
Transport :
1) Multimodal Transport Bills of Lading
2) Through Bill of Lading

Multimodal Bill of Lading:
ill of lading will cover more than one mode of transportation is called multimodal bill of
lading. Multimodal Transport Bills of Lading are mostly printed on International
Federation of Freight Forwarders Associations (FIATA) standard pre-printed bill of
lading forms. Multimodal transport document defined on UNCTAD / ICC Rules for Multimodal
Transport Documents (ICC publication 481) as follows, a multimodal transport document (MT
document) means a document evidencing a multimodal transport contract and which can be
replaced by electronic data interchange messages insofar as permitted by applicable law and be,
(a) issued in a negotiable form or,
(b) issued in a non-negotiable form indicating a named consignee.
Important Note : Multimodal Transport Bills of Lading and Combined Transport Bills of
Lading has the same meaning and application under letter of credit rules.
Through Bill of Lading : Through Bill of lading is virtually identical to the Multimodal
Transport Bill of lading but with one major difference. The Multimodal Transport Bill of Lading
is issued by the Multimodal Transport Operator (MTO) (generally the sea carrier) who takes
responsibility of the goods (e.g. shortages, losses, damages) during the entire period of transport,
thus not only for the sea passage but also for the other transport modes as well. The Through Bill
of Lading is issued by the sea carrier but the carrier states on the contract of carriage that he is
only responsible of the goods for that part of the carriage he takes care of, such as the sea
passage only.
Multimodal / Combined Bill of Lading in Letters of Credit Transactions :
A transport document covering at least two different modes of transport (multimodal or
combined transport document), however named, must appear to:
i. indicate the name of the carrier and be signed by: the carrier or a named agent for or on
behalf of the carrier, or - the master or a named agent for or on behalf of the master.
ii. indicate that the goods have been dispatched, taken in charge or shipped on board at
the place stated in the credit.
iii. indicate the place of dispatch, taking in charge or shipment and the place of final
destination stated in the credit,
iv. be the sole original transport document or, if issued in more than one original, be the
full set as indicated on the transport document.
v. contain terms and conditions of carriage or make reference to another source
containing the terms and conditions of carriage (short form or blank back transport document).
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Multimodal Transport Operator:
Any person who concludes a multimodal transport contract and assumes responsibility for the
performance thereof as a carrier. It use two mode of transportation……..
Based on the above definition, we can say that under the current scenario all of the below entities
MAY be termed as a Multi Modal Transport Operator :
Shipping Lines – because under Carrier Haulage, they undertake rail, road modes of
transport – either via their own infrastructure or via 3rd party.
Freight Forwarder – because in a lot of cases specially where they issue House
Bills, they are taking on the role of the carrier and as such may and in a lot of cases do offer rail,
road and sea modes of transport – either via their own infrastructure or via 3rd party
NVOCC Operators – because in most cases the NVOCC performs/undertakes the
services of a Shipping Line/Freight Forwarder combined, along with the risks/responsibilities
that comes with performing such services.. This could include but not restricted to offering rail,
road and sea modes of transport – either via their own infrastructure or via 3rd party
Unmoral Transport
The transport of goods by one mode of transport by one or more carriers.
Intermodal Transport
The transport of goods by several modes of transport from one point of origin via one or more
interface points to a final port or point where one of the carriers organizes the whole transport.

Technical discussion on labeling requirements
For the customer’s information and production, according to the international labeling act, all
garments to be imported into importing country must be labeled with correct and sufficient
information as follows……….
Identification Number: It is a customer requirement that one of the
following 3 identifications that must be attached to the garments.
1) The full name of the importing company with full mailing address.
2) A registered trade mark which usually bears symbol ®or ™ or ©.
3) An identification number.
Country of Origin: As part of the requirement it must clearly indicate on the label
where the goods are made. Ex: MADE IN BANGLADESH, MADE IN JAPAN etc. is
the country of manufacture, production, or growth where an article or product comes
from. There are differing rules of origin under various national laws and international
treaties. When shipping products from one country to another, the products may have to
be marked with country of origin, and the country of origin will generally be required to
be indicated in the export/import documents and governmental submissions.

Fiber contents: According to the USA fiber content must be clearly shown on the
label. The following rules are :
 The fiber of the biggest percentage by weight must appear first and then second
biggest percentage and then smallest persentage.Ex:45% polyester,30%
reon,25% cotton.
 If the garments has different part in different fiber contents, must indicate the
contents of each part with the shell fabric of the body.
 Ex: shell=65% polyester,35%=cotton.
 Padding=100% polyester
Warning clause on Poly bag:
 Apart from U.S. customs regulation all information will be printed on the poly bag which
is important to know:
 On all the polybag must be print the following clause to warn them about the danger of
suffocation:
 Warning-keep away from babies and children etc
Do not use in cribs, beds, play-pens “This bag is not a toy’’

Letter of Credit
A letter of credit is a document from a bank guaranteeing that a seller will receive payment in
full as long as certain delivery conditions have been met. In the event that the buyer is unable to
make payment on the purchase, the bank will cover the outstanding amount.
The name "letter of credit" derives from the French word "accreditation", a power to do
something, which derives from the Latin "accreditivus", meaning trust
Why documentation is so important in letters of credit?
There are many important points in a letter of credit transaction that need to be taken care of
professionally. However, documentation is much more important than any other part of the letter
of credit transactions. This importance stems its power from the letter of credit structure. Letters
of credit transactions are related to the documents only.
Import document:
In order to release of imported goods from the port the following documents to be submitted by a
C&F agent.
1. Bill of Entry: Bill of entry is one of the major import document for import customs
clearance. As explained previously, Bill of Entry is the legal document to be filed by CHA or
Importer duly signed. Bill of entry must be filed within thirty days of arrival of goods at a
customs location.
2. Commercial Invoice: Invoice is one of the documents required for import customs
clearance for value appraisal by concerned customs official.
3. Bill of Lading / Airway bill : Bill of leading is one of the documents required for
import customs clearance. Bill of lading under sea shipment or Airway bill under air shipment is
carrier’s document required to be submitted with customs for import customs clearance purpose.
1. Import License: This license may be mandatory for importing specific goods as per
guide lines
2. provided by government.
3. Insurance certificate: Insurance certificate is one of the documents required for import
customs clearance procedures. Insurance certificate is a supporting document against importer’s
declaration on terms of delivery.
4. Purchase order/Letter of Credit: Purchase order is one of the documents required for
import customs clearance. A purchase order reflects almost all terms and conditions of sale
contract which enables the customs official to confirm on value assessment
5. Packing list
6. UD

7. Certificate of origin
8. VBF-6A(value board form )
9. Stamp
10. Copy of master LC
11. Latter of credit authorization
12. Performa invoice
13. Psi(pre-shipment inspection)
Export documentation
In order to release of imported goods from the port the following documents to be submitted by a
C&F agent. An exporter should be submitting the following documents to the customer authority
of a station:
1. Shipping bill of entry
2. Export L/C
3. Packing list
4. Invoice
5. UD/UP
6. VBA-9A.form to be supplied by the C&F agent
7. Export permission form(EXP)
Factors to be considered by the LC
• Account holder of the bank first of all, L/C applicant must be a client of the bank. If a
new client comes in for opening L/C, he/she has to open an account with the bank first.
• Trustworthiness: this is the vital issue while considering about opening L/C. the past
experience of drillings with that person is considered. For a new applicant, his/her previous
dealings with other bank are considered.
• Volume of business: the volume of business is also a major factor to be considered.
• Post-import retirement: post-import retirement is another factor that will have to be
considered for opening L/C.
• Detailed analysis of financial condition: detailed analysis of financial condition of the
applicant is required for the process, especially for a new applicant.

Form of a Letter of credit in Bangladesh

Documents Requirements While Applying For L/C:
In credit operation all parties deals with documents. And not with goods, services and other
performance to which documents may relate. The following documents are required for opening
L/C with bank for a few applicant.
Trade license
Import registration certificate (IRC)
Tax identification number(up to date)
VAT registration certification (up to date)
Membership certificate of a bona fide trade body(up to date)
Chamber membership certificate
L/C application
LCA form duly filled in and signed by the importer
IMP form-duly filled and signed by the importer
Charge document
Supplier’s credit report
Applicant credit report
Other necessary papers depending on the nature of import.
L/C ISSUING PROCESS:
1. Buyer and seller agree to conduct business. The seller wants a letter of credit to
guarantee payment.
2. Buyer applies to his bank for a letter of credit in favor of the seller.
3. Buyer's bank approves the credit risk of the buyer, issues and forwards the credit to its
correspondent bank (advising or confirming). The correspondent bank is usually located in the
same geographical location as the seller (beneficiary)
4. Advising bank will authenticate the credit and forward the original credit to the seller
(beneficiary).
5. Seller (beneficiary) ships the goods, then verifies and develops the documentary
requirements to support the letter of credit. Documentary requirements may vary greatly
depending on the perceived risk involved in dealing with a particular company.

6. Seller presents the required documents to the advising or confirming bank to be
processed for payment.
7. Advising or confirming bank examines the documents for compliance with the terms
and conditions of the letter of credit.
8.If the documents are correct, the advising or confirming bank will claim the funds by:
Debiting the account of the issuing bank.
Waiting until the issuing bank remits, after receiving the documents.
Reimburse on another bank as required in the credit.
9. Advising or confirming bank will forward the documents to the issuing bank.
10. Issuing bank will examine the documents for compliance. If they are in order, the
issuing bank will debit the buyer's account.
11. Issuing bank then forwards the documents to the buyer.
Documentation for shipment:
THE COMMERCIAL INVOICE OR TRADE INVOICE
•it is issued by the Beneficiary of the letter of credit .
•Applicant (Buyer) is indicated as the invoiced party, unless otherwise stated in the letter
of Credit is not titled “pro-forma” or “provisional” invoice.
• The description of the goods corresponds with the merchandise description in the letter
of credit.
•No additional detrimental description of the goods appears that may question their
condition or value.
•Details of the goods, prices and terms as mentioned in the letter of credit are included in
the invoice.
•Any other information supplied in the invoice, such as marks, numbers, transportation
information, etc., is consistent with that of the other documents.

 CERTIFICATE OF ORIGIN
(A document in which certification is made as to the country of origin of the merchandise.)
• it is a unique document and not combined with any other document.
• it is signed, notarized, legalized, etc. as required by the letter of credit.
• the data on it is consistent with that of the other documents.
• the country of origin is specified, and that it meets the requirements of the letter of
credit.
 WEIGHT LIST / CERTIFICATE
• it is an unique document and not combined with any other document.
• it is signed if a certificate is called for, or as otherwise stated in the letter of credit.
• the data on it is consistent with that of the other documents.
 PACKING LIST
A list which shows number and kinds of packages being shipped, totals of gross, legal and net
weights of the packages, and marks and numbers on the packages.
• it is a unique document and not combined with any other document.
• it corresponds with the requirements of the letter of credit. A detailed packing list
requires a listing of the contents of each package, carton, etc. and other relevant information
 INSPECTION CERTIFICATE
• Inspection firm nominated in the letter of credit.
• it is signed, if any, issued the certificate.
• it complies with the inspection requirements of the letter of credit it contains no
detrimental statement as to the goods, specifications, quality, packaging, etc. unless authorized
by the letter of credit.

 INSURANCE DOCUMENT
Document issued by an insurance company, usually to order of shipper, under a marine Policy
and in cover of a particular shipment of merchandise. Policy/certificate/declaration/cover note, as
required by the letter of credit, is presented full set of the insurance documents issued is
presented. It is issued and signed by the insurance company, the underwriter or their agents, and
the insured. If so required by the insurance document date of issuance or date from which cover
is effective at the latest from the date of loading on board or dispatch or taking in charge of the
goods, as the case may be value of the goods insured is as required by the letter of credit. It is
issued in the same currency as the letter of credit, unless otherwise allowed in the letter of credit.
 TRANSPORT DOCUMENT
A document which provides the terms of the contract between the shipper and the transportation
company to move freight between stated points at a specified charge.
• full set of originals issued is presented, unless otherwise stated in the letter of credit
name of the consignee is as required in the letter of credit.
• the name and address, if any, of the notifying party is as required in the letter of credit
• the indication of freight prepaid or freight collect costs, as required by the terms of the
letter of credit.
REFFERNCE
 http://www.whatiseconomics.org/
 http://dictionary.reference.com/browse/economics
 http://www.tradingeconomics.com/bangladesh/inflation-cpi
 http://borgenproject.org/5-effects-poverty
 http://www.econlib.org/library/Enc/BalanceofPayments.html
 Sankar, S. (2001) Environmental Economics, Margham Publications, Chennai. p. 7.
 http://www.investopedia.com/articles/03/042303.asp#ixzz3YVwR9rBg
 www.maritimeknowhow.com
 https://www.google.com/search?q=letter+of+credit&biw=1024&bih=646&source=lnms
&tbm=isch&sa=X&ei=JiCWVYaSHovjuQT9koCgDA&sqi=2&ved=0CAcQ_AUoAg#tb
m=isch&q=membership+of+world+bank&imgrc=xgAQj3QYFPi3bM%3A

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