Import and Export Operating Procesures-Export Procedures

Contracts for Export in our country are mostly signed under CIF term on Letter of Credit.A lot of work is involved in carrying out this kind of contracts.The whole export process generally includes about eight procedures,among which cargo readiness,Letter of Credit,booking space or ship and document and payment are the most important ones. The following is a detailed account of the possible steps that may be involved in an export transaction.

*Export License
Many countries have export controls (foreign policy controls,national security controls etc.) over certain or all merchandises.Therefore, before arranging a contract and the subsequent overseas transaction,an exporter should ensure whether he needs or could obtain the export lisence from the government.But with EXW and FAS,it is the importer who should be responisble for obtaining the export license.

*Trade Negotiation
This is an indispensable procedure in business transaction.It generally includes the four procedure discussed,i.e. inquiry,offer,counter-offer and acceptance.When an agreement is reached,the two sides sign a business contract.

*Cargo Readiness
As soon as the contract is signed,the exporter should start to ensure the readiness of the export goods.He must get the goods ready for shipment before the stipulated delivery time.The quantity,quality,packaging and marking of the goods,and the delivery date must strictly follow the stipulations in the sales contract.

If the goods need to be inspected before shipment, the inspection should be carried out at a proper time.Necessary documents like application form ,copy of contract and L/C etc. should be presented to the inspection bureau.As an inspection certificate usually has validity,shipment should be made within the validity.Otherwise,another inspection will be needed before the goods can be shipped.

*L/C
If the payment is to be made by L/C,the exporter should ask the importer to open the L/C in time,e.g. 30 days or more before the date of shipment,depending on the nature of individual contract.With large orders or orders produced according to the special requirement of the importer,the exporter may wait until the L/C is opened to arrange to cargo readiness.
After receiving the L/C,the exporter must check the L/C against the sales contract.Special attention should be paid to the total sum,description of the goods,validity,required documents etc. Only when all the terms in the L/C are consistent with the terms of the sales contract can the export proceed to ship the goods.
If anything in the L/C is not agreeing with the contract,the exporter should ask the importer to ament the L/C immediately, in order to guarantee the collection and avoid dispute.

*Customs Clearance
The exporter should now declare the export goods to the customs by filling in certain customs forms and submitting appropriate documents such as commercial invoice, export license,copy of sales contract,and inspection certificate etc. The customs will inspect the export goods and decide if the shipment can be cleared through.Once the goods is cleared, the shipment can be made anytime. But,with the terms of EXW and FAS, the buyer should undertake to clear the goods for export in the seller's country.

*Shipping
Transport in international trade will be done either by sea,or air,or combination of roal/rail,or perhaps post.Transport by sea is by far the chiefly used method in international trade in our country. Shipment should be made according to the contract terms.Usually,the exporter shall fill in the Shipping Note to book the shipping space or ship. After receiving the Shipping Order from the carrier,the exporter may start to ensure the loading of the goods. The exporter should supervise the loading process,and get the Bill of Lading from the carrier.
Upon completion of the shipment ,the exporter should sent the importer the necessary delivery documents to enable the latter to arrange insurance (under FOB term),payment and receipt of the goods.Failing to provide these documents in time would result in the exporter's obligations for compensating for the losses of the importer.

*Insurance
The exporter on CIF or CIP term should obtain at his own expense cargo insurance as agreed in the contract.
It the importer is responsible for the insurance, the exporter should in due time send the importer all the necessary information the latter needs to arrange the coverage.

*Document and Payment
After shipment is made ,if L/C is used, the exporter should present to the negotiating bank the documents within the time specified in the L/C.All the documents must be made out in accordance with the L/C terms, such as types of documents,number of original and copies,items of the documents,etc. Documentation should be completed with absolute accuracy and clarity.
Generally, the following documents should be presented to the bank:
*invoice
*Bill of lading
*Insurance Policy
*Certificate of Origin
*Inspection Certificate
*Packing List

If documentary collection is used, the documents should be sent through banks to the importer for payment
It should be noted that the procedures for implementing a contract might be different according to the use of different payment terms or INCOTERMs.For insance,if open account or documentary collection is used, no Letter of Credit will be involved.Under CFR,the exporter will not be responsible for buying the insurance.Therefore,the above mentioned procedures may not all used in a specific single transaction.