Export & import are most vital part in RMG.

1. Course Title: International Trade & Transaction
Course Code: 530569
Course Instructor: Utsash Sarker, Mobile: 01732-731533
Email: utsashkumar10116@amt.nid.edu.bd
Total Credit: 02 (30 Hour)
Class hour per week: 2

2. IMPORT AND EXPORT DOCUMENTATION /
DOCUMENTATION FOR SHIPMENT
 INTERNATIONAL PURCHASE ORDER: International purchase order financing
is a type of financing that is specifically designed to help businesses with the
purchase and shipment of goods for international sales. Usually, international
transactions are based on the buyer´s Purchase Order. Issuance of a
international purchase order is normally preceded by an exchange of
information between exporter and importer with respect to the price, quality
and quantity of products, etc.

4.  INTERNATIONAL COMMERCIAL INVOICE: The International Commercial
Invoice is main document of export documentation because contains all the
information about the international sale. The item, quantity, price for the ©
globalnegotiator.com products/services sold, delivery and payment
conditions, as well as the taxes and other expenses that might be included in
the sale, are detailed in an International Commercial Invoice.

6.  PACKING LIST: The Packing List is a more detailed version of the commercial
invoice but without price information. It must include, inter alia, the following:
invoice number, quantity and description of the goods, weight of the goods,
number of packages, and shipping marks and numbers. A copy of the Packing
List is often attached to the shipment itself and another copy is sent directly
to the consignee to assist in checking the shipment when received.

8.  LETTER OF CREDIT L/C: In an Final Letter of Credit L/C the importer´s bank
agrees to the exporter (called "the beneficiary") that the exporter will get paid
if it can prove it has shipped the proper goods by providing the
corresponding documents required by the Letter of Credit. Exporters like
Letters of Credit because the advance assurance of payment ©
globalnegotiator.com ensures the seller that it will not waste time preparing
or shipping an order to a buyer who ultimately refuse to accept or pay for the
goods.

10.  BILL OF LADING B/L: A Bill of Lading B/L is a document issued by the agent of
a carrier to a shipper, signed by the captain, agent, or owner of a vessel,
furnishing written evidence regarding receipt of the goods (cargo), the
conditions on which transportation is made (contract of carriage), and the
engagement to deliver goods at the prescribed port of destination to the
lawful holder of the bill of lading.

12.  AIR WAYBILL /AWB: An Air Waybill AWB is a non-negotiable transport
document covering transport of cargo from airport to airport. The Air Waybill
must name a consignee (who can be the buyer), and it should not be required
to be issued “to order” and/or “to be endorsed” as it is not a title of property
of the merchandise. Since it is not negotiable, and it does not evidence title to
the goods, in order to maintain some control of goods not paid for by cash in
advance, sellers often consign air shipments to their sales agents, or freight
forwarders’ agents in the buyer’s country.

14.  MULTIMODAL BILL OF LADING: A Multimodal Bill of Lading is an international
transport document covering two or more modes of transport, such as
shipping by road and by sea. Only authorized forwarders integrated into
FIATA (International Federation of Freight Forwarders Associations) can issued
this document. It is addressed to the exporter, Multimodal Transport Operator
on destination country, and the importer.
 It is also used as a carriage contract and receipt that the goods have been
received.

16.  CERTIFICATE OF ORIGIN: The Certificate of Origin certifies the country in
which the goods originated or in which the preponderance of manufacturing
or value was added. It also constitutes a declaration by the exporter. Virtually
every country in the world considers the origin of imported goods when
determining what duty will be assessed on the goods. Nevertheless the
exporter´s own certification on company letterhead will suffice.
 In most countries, Chambers of Commerce are the key agent in the delivery of
certificates or origin. However, in some countries, this privilege may also be
extended to other entities such as ministries or customs authorities.

18.  INSPECTION CERTIFICATE: The Inspection Certificate for pre shipment
inspection is a document issued by an authority indicating that goods have
been inspected (typically according to a set of industry, customer,
government, or carrier specifications) prior to shipment and the results of the
inspection. In some cases the Inspection Certificate can come from the
manufacturer or shipper, but not from the forwarder or logistics firm.

20. DOCUMENTATION FOR OPENING L/C
 Purchase Order or Sales Contract
 Application for Letter of Credit
 Commercial Invoice
 Packing List
 Bill of Lading (B/L) or Airway Bill (AWB)
 Insurance Certificate or Policy
 Certificate of Origin (CO)
 Inspection Certificate

21. PARTIES INVOLVED IN AN LC
 Applicant An applicant (buyer) is a person who requests his bank to issue a
letter of credit.
 Beneficiary A beneficiary is basically the seller who receives his payment
under the process.
 Issuing bank The issuing bank (also called an opening bank) is responsible
for issuing the letter of credit at the request of the buyer.
 Advising bank The advising bank is responsible for the transfer of documents
to the issuing bank on behalf of the exporter and is generally located in the
country of the exporter.
 Confirming bank The confirming bank provides an additional guarantee to
the undertaking of the issuing bank. It comes into the picture when the
exporter is not satisfied with the assurance of the issuing bank.

22.  Negotiating bank The negotiating bank negotiates the documents related to
the LC submitted by the exporter. It makes payments to the exporter, subject
to the completeness of the documents, and claims reimbursement under the
credit.
(Note:- Negotiating bank can either be a separate bank or an advising bank)
 Reimbursing bank The reimbursing bank is where the paying account is set up
by the issuing bank. The reimbursing bank honors the claim that settles the
negotiation/acceptance/payment coming in through the negotiating bank.
 Second Beneficiary The second beneficiary is one who can represent the
original beneficiary in their absence. In such an eventuality, the exporter’s
credit gets transferred to the second beneficiary, subject to the terms of the
transfer.

24. APPLICATION PROCESS FOR AN LC
 After a sales agreement is created and signed between the importer and the exporter, the
importer applies to their bank to draft a letter of credit in favor of the exporter.
 The issuing bank (importer’s bank) creates a letter of credit that matches the terms and
conditions of the sales agreement before sending it to the exporter’s bank.
 The exporter and their bank need to evaluate the creditworthiness of the issuing bank. After
doing so and verifying the letter of credit, the exporter’s bank approves and sends the
document to the importer.
 After that, the exporter manufactures and ships the goods as per the agreed timeline. A
shipping line or freight forwarder assists with the delivery of goods.
 Along with the goods, the exporter also submits documents to their bank for compliance with
the sales agreement.
 After approval, the exporter’s bank then sends these complying documents to the issuing bank.
 Once the documents are reviewed, the issuing bank releases the payment to the exporter and
sends the documents to the importer to collect the shipment.

25. ADVANTAGES OF USING A LETTER OF CREDIT
 It reduces the risk of non-paying buyers
 It helps buyers prove their solvency
 You can customize your LC
 It helps sellers manage their cash flow
 It is quick to secure
 Smooth Customs Clearance
 International Trade Compliance