DPL40053 EXPORT, IMPORT DOCUMENTATION AND PROCEDURES CLASS: DLS 4B ASSIGNMENT E-BOOK: CHAPTER 3 DOCUMENTATION LECTURER: PUAN NORHUDAYA BINTI MASROM MATRICS NO NAME 02DLS21F1011 NIK AIDIL AZMI BIN NIK HASSAN 02DLS21F1045 SITI AYU ZAIFA BINTI ZUBER 02DLS21F1043 AQILAH ZAHIAH BINTI MUHAMMAD SHERMAN 02DLS21F1005 MUHAMMAD ARIFF DANIEL BIN MOHD RUS
Step 1 Venus is a hot planet Step 2 Mercury is very small Step 3 Mars is a cold place Step 4 Jupiter is gas giant Step 5 Saturn has rings Step 6 The Sun is a star Step 7 Earth harbors life Step 8 Neptune is ice giant
Table of contents Pages Front page 1 What is documentation? 3 Benefits of documentation 3 Importance of documentation in export and import 4 Problems when handling documentation 4 The categories of export & import documents 5 The documentation needed in the export and import industry 6-31 References 32 2
What is Documentation? ❑ Material that provides official information or evidence or that serves as a record. ❑ The process of classifying and annotating texts, photographs, etc. The benefits of documentation ❑ Documentation is a key means of conveying information from one person or company to another, and also serves as permanent proof of tasks and actions undertaken throughout the export process. ❑ Documentation is not only required for the business purposes and business partner, but also to satisfy the customs authorities in both countries and to facilitate the transportation of and payment for goods sold. 3
Importance of documentation in export and import ❑ Takes Up a Lot of Space ❑ Prone to Damage and Being Misplaced ❑ Hard to Make Changes ❑ Access Time ❑ Lack of Security ❑ Higher Cost ❑ Easy for exporter / importer to check the delivery ❑ Help exporter / importer analyze sales performance. ❑ Prepare information for the purpose of estimation ❑ Help country control flow of import and export product Problems when handling documentation 4
The categories of export & import documents Documents in this category are the documents needed to support the information relating to the goods exported or imported Documents that fall into this category is a document setting out the rights and responsibilities of managing the export / import process. Documents that fall into this category are the documents required by the authorities of a country for purposes of control and out of goods to the countries involved. Trade Documents Contract Documents Official Documents 5
❑ After the pro-forma invoice is accepted by the importer, the exporter must prepare a commercial invoice. The commercial invoice is required by both the exporter (to obtain the necessary export documents to enable the consignment to be exported, to prove ownership and to enable payment) and importer (who require the commercial invoice to facilitate the import of the goods into the country in question). ❑ In exporting, the commercial invoice is considered a very important document as it serves as the starting or initiating document that underpins the rest of the export transaction. ❑ The commercial invoice is essentially a bill (i.e. invoice) from the seller (the exporter) to the buyer (the importer) describing the parties to the agreement, the goods to be sold, and the terms involved, as agreed between the exporter and importer. ❑ As such, the commercial invoice is the final bill exchanged between the seller and the buyer. The commercial invoice will normally be presented on the exporter's letterhead and will be addressed to the importer. ❑ It should contain full details of the consignment, including price and other related costs, in order to facilitate customs clearance. ❑ It must also be signed and dated. Freight and insurance, when included in the selling price, should be itemized separately as these charges are not subject to duty in certain countries. ❑ It is important that the commercial invoice clearly differentiates between the dutiable component of the order (the market value of the order), any other typically non-dutiable charges such as freight and insurance, and the total invoice value of the order. ➢ Commercial invoice The documentation needed in the export and import industry 6
Sample of commercial invoice 7
❑ A Consular Invoice is a documentary of proof of invoice value that is approved by the consulate office, which is a representative of a government stationed in foreign soil. It is different from a normal commercial invoice as the consular invoice receives the certified approval from a reputable source. ❑ An invoice covering a shipment of goods certified by the consul of the country for which the merchandise is destined. The invoice is used by customs officials of the country to verify the value, quantity, and nature of the merchandise imported to determine the import duty. In addition, the export price may be examined in the light of the current market price in the exporter´s country to ensure that dumping is not taking place ❑ The process of authenticating a consular invoice is called Consularization. It is an important document which is required for the facilitation of customs and tax collection purposes. ❑ The main purpose of a consular invoice is to provide a complete and detailed description of the goods to the foreign customs authority, so as to ensure that the correct import duty is levied on the goods. ➢ Consular invoice 8
Sample of consular invoice 9
➢ The marine & cargo insurance ❑ Insurance covering loss of, or damage to, goods at sea. Marine insurance typically compensates the owner of merchandise for losses in excess of those which can be legally recovered from the carrier that are sustained from fire, shipwreck, piracy and various other cases ❑ Is a staple to the transport of goods both domestic and international, and transportation intermediaries and logistics service providers are in an ideal position to offer quality Cargo Insurance, sometimes referred to as Shippers Interest, to protect their clients’ financial interests. ❑ No matter how robust a shipper’s loss-prevention strategy may be, it is reported that 30% of all freight damage in transit is unavoidable, and most losses occur on the way to or from the ports Sample of the marine & cargo insurance 10
➢ Export permits ❑ A legal document that is necessary for the export of goods controlled by the Government of export country, specifically goods included on the Export Control List. ❑ A document indicating that a government has granted a licensee the right to export specified goods to specified countries Sample of export permits ➢ Import permits ❑ Allows an importer to bring in a specified quantity of certain goods during a specified period (usually one year). Import licenses are employed 1) As means of restricting outflow of foreign currency to improve a country's balance of payments position; 2) To control entry of dangerous items such as explosives, firearms, and certain substances; or 3) to protect the domestic industry from foreign competition. Sample of import permits 11
➢ Packing list ❑ A document prepared by the shipper listing the kinds and quantities of merchandise in a particular shipment. A copy of the packing list is often attached to the shipment itself and another copy sent directly to the consignee to assist in checking the shipment when received. It is also called a bill of parcels. The packing list is issued by the exporter / shipper / consignor ❑ The packing list contains the following elements: 1) Name and address of seller (consignor) 2) Name and address of buyer (consignee) 3) Date of issuance 4) Invoice number (reference to invoice that covers the particular shipment) 5) Order or contract number 6) Quantity and description of the goods 7) Weight of the goods 8) Number of packages 9) Shipping marks and numbers 10)Quantity and description of contents of each package, carton, crate or container 11)Any other information as required in the shipper's instructions (e.g., country of origin) 12
Sample of packing list 13
➢ Weight list ❑ Document issued commonly by customs authorities of the exporting country, certifying the correct gross weight of the goods being shipped. ❑ Weight list is a traditional, which is more suitable to commodity trade where the weight of the goods is the key element. ❑ Examples of commodities, that have been traded internationally is Wheat, rice, cocoa, coffee, cotton, sugar, soybeans, iron, copper and oil are very good ❑ Basic supply and demand law regulates the commodity trade as the quality of the product is constant for all the players. ❑ Another important aspect of the commodity trade is the size of the order amounts. ❑ Generally commodity exporters and importers buy and sell bulk quantities. Key Features of a Weight List: ❑ Weight list is a traditional document. It is suitable for bulk shipments, in which relates to commodity trade. ❑ Weight list should contain weight details of the goods. ❑ There is no packaging in bulk shipments. As a result gross weight and net weight values are the same in bulk shipments. Sample of weight list 14
➢ Certificate of origin ❑ A document widely used in international trade transactions which attests that the product listed therein has met certain criteria to be considered as originating in a particular country ❑ A certificate of origin / declaration of origin is generally prepared and completed by the exporter or the manufacturer, and may be subject to official certification by an authorized third party ❑ It is often submitted to a customs authority of the importing country to justify the product's eligibility for entry and/or its entitlement to preferential treatment Where to obtain COO? ❑ The Malaysian International Chamber of Commerce and Industry (MICCI) is authorized by the Ministry of International Trade & Industry (MITI) to issue Certificates of Origin for goods exported to any country in the world. They can be applied for at our main office or at any of MICCI regional offices in Malaysia. Certificates of Origin issued by MICCI are referred to as Non-Preferential Certificate of Origin. Sample of certificate of origin 15
➢ Health & safety certificate ❑ This certificate will verified that all products are safe and free from any pollution and harmful content. These certificates are usually issued on agricultural products and livestock, such as vegetables, meat and unprocessed agricultural products meant to be exported. For example : ❑ Meat (lamb, pork, beef, poultry, venison – including prime cuts, and processed meat products etc.) ❑ Dairy (milk, yoghurt, cheese, butter & ice cream) ❑ Hides, skins, wool, feathers & lanolin ❑ Collagen, Gelatine & animal casings ❑ Egg ❑ Fish and fishery products ❑ Laboratory ❑ Pet food and animal feeds Sample of health & safety certificate 16
➢ ATA Carnet ❑ A combination of French and English phrases “Admission Temporaire Temporary Admission” ❑ A carnet is an international custom document commonly known as the merchandise passport that allows temporary importation into member countries without the payment of duties or value added taxes (VAT). ❑ It valid for up to three months and can be used for any number of visits in any member countries ❑ It covers all kind of goods except consumable goods (food and agricultural products), disposable items. Give –a ways or postal traffic. ❑ Focus on media-reporters, journalists, media and technical equipment Advantages of ATA CARNET: ❑ Simpler border entries, or exits bring certainty and reduce hassle. ❑ Costs are reduced by eliminating duties, taxes, VAT and securities. ❑ A reduction in red tape allows the time to be used more profitably. Benefits to economy ❑ ATA Carnets help local business, exporters, etc. to compete with foreign traders on equal terms on the world market. ❑ ATA Carnets facilitate the conduct of business overseas and stimulate trade (foreign and domestic). ❑ ATA Carnets contribute to encourage and stimulate technical progress Benefits to business ❑ Saves time and money ❑ Partial and split shipments are possible ❑ Easy to obtain ❑ Competitively priced 17
Sample of ATA carnet 18
➢ Consignment notes ❑ Document accompanying goods that is filled by the shipper. It serves as proof that a contract for carriage has been concluded and describes its content. It also serves as a receipt when goods are picked up from the shipper and delivered to the recipient. ❑ A document that shows the details of goods that have been sent from a seller to a buyer, and that travels with the goods ❑ Rail/air/road consignment note ❑ Document prepared by a consignor and countersigned by the carrier as a proof of receipt of consignment for delivery at the destination. ❑ Used as an alternative to bill of lading (specially in inland transport), it is generally neither a contract of carriage nor a negotiable instrument. ❑ Shipper/Sender Information How do we address you, where are you from and how do we contact you. ❑ Telephone numbers are important, preferably mobile phone numbers of the shipper. Sample of consignment notes 19
➢ Consignee/Recipient Information ❑ Who is the recipient, where is delivery address, and any contact information. ❑ If consignee is a corporate entity, indicate the department which is supposed to receive the shipment. Shipment information Commodity description: ❑ List all items in the packages separately and in detail ❑ Fill in the price or the market value of the items being shipped, which should tally with that stated in the commercial invoice. ❑ Fill in the weight and dimensions for each of the items in the shipment. If item dimensions and the weight are disproportioned, use the volumetric weight instead Sample of consignee/recipient information 20
➢ Airway bill ❑ An air waybill, also known as a consignment note, dispatch note or waybill, is a contract between the shipper and the carrier. ❑ It provides key information for the shipper and is also used for tracking the shipment and contains barcodes to identify the shipment electronically ❑ The air waybill is non-negotiable The main functions of an air waybill are: ❑ Contract of Carriage: a negotiated contract not subject to a tariff that is between the carrier and shipper for the transportation of cargo. ❑ Evidence of Receipt of Goods: a document associated with accounts payable wherein the supplier of goods provides evidence that the goods have been received by the purchaser so that the payment can then be made to the supplier ❑ Freight Bill: The air waybill may be used as a bill or invoice together with supporting documents since it may indicate charges to be paid by the consignee, charges due to the agent or the carrier. An original copy of the air waybill is used for the carrier's accounting ❑ Certificate of Insurance: The air waybill may also serve as an evidence if the carrier is in a position to ensure the shipment and is requested to do so by the shipper. ❑ Customs declaration: Although customs authorities require various documents like a commercial invoice, packing list, etc. the air waybill too is proof of the freight amount billed for the goods carried and may be needed to be presented for customs clearance 21
Sample of Airway bill 22
➢ Bill of Lading (BOL, B/L) ❑ A document issued by a carrier to acknowledge receipt of cargo for shipment. Although the term historically related only to carriage by sea, a bill of lading may today be used for any type of carriage of goods. Among other items of information, a bill of lading contains : ❑ consignor's and consignee's name, ❑ names of the ports of departure and destination, ❑ name of the vessel, ❑ dates of departure and arrival, ❑ itemized list of goods being transported with number of packages and kind of packaging, ❑ marks and numbers on the packages, ❑ weight and/or volume of the cargo, freight rate and amount ❑ This legal document protects the shipper, the carrier, and the customer all in one place. ❑ bill of lading contains all pertinent information about a given shipment. ❑ it lists the names as well as typically the addresses and phone numbers of shippers and consignees. ❑ it includes an itemized list of the goods being transported. ❑ This list should include the quantity as well as weight of the cargoIt is one document represented exporter and shipping companies who shipped the shipment from origin port to destination port. ❑ Issued by shipping company and all the information filled by the exporter ❑ Information from B/L actually the agreement between both parties which is related to shipment of the goods from origin to destination. 3 main functions: ❑ B/L is a receipt for goods. ❑ B/L is evidence of the contract carriage ❑ B/L is a transferrable of Title To Goods 23
Types of bill of lading: ➢ Order Bill of Lading ❑ A negotiable bill of lading made to the order of the shipper, who can legally sell it to anyone. An order bill of lading allows the shipper to collect for the shipment before it reaches its destination. Also called negotiable bill of lading. ➢ Straight Bill of Lading ❑ In this importer/consignee/agent is named in the bill of lading, it is called straight bill of lading. ❑ It is a document, in which a seller agrees to use a certain transportation to ship a good to a certain location, where the bill assigned to a certain party. ❑ It details to the quality and quantity of goods. ❑ A nonnegotiable written receipt provided by a shipper for a consignment that must be delivered directly to the specified party. 24
➢ Delivery order ❑ A document that can be issued by the owner of freight, consignee, shipper or a carrier to deliver the goods to another party. ❑ This information is important because delivery is one of the most important aspects to the sales process. ❑ A delivery order is simply proof of the delivery details. These days, many send a delivery order, often through email, to the shipper. There are also other delivery methods which place delivery order online, directly in the database of the shipper. Technology has removed the paper order of the past. Sample of delivery order 25
➢ Electronic data interchange (EDI) ❑ Electronic Data Interchange (EDI) is the electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper. Business entities conducting business electronically are called trading partners. ❑ Many business documents can be exchanged using EDI, but the two most common are purchase orders and invoices. At a minimum, EDI replaces the mail preparation and handling associated with traditional business communication. However, the real power of EDI is that it standardizes the information communicated in business documents, which makes possible a "paperless" exchange. ❑ The traditional invoice illustrates what this can mean. Most companies create invoices using a computer system, print a paper copy of the invoice and mail it to the customer. Upon receipt, the customer frequently marks up the invoice and enters it into its own computer system. The entire process is nothing more than the transfer of information from the seller's computer to the customer's computer. EDI makes it possible to minimize or even eliminate the manual steps involved in this transfer. 26
❑ A system of transferring money from one bank account directly to another without any paper money changing hands. ❑ EFT (electronic fund transfer) is used to move money from one account to another. The transaction is completed electronically, and the two accounts can be at the same financial institution or different financial institutions. ➢ Electronic fund transfer (EFI) THE BENEFIT OF EFI: ❑ Provide complete invoice detail ❑ Accuracy ❑ Faster ❑ Automate input to payables/receivables systems ❑ Provide the ability to combine multiple invoices in one payment ❑ Improve cash forecasting and cash flow ❑ No need for cheques or cash ❑ Streamline transaction processing ❑ Reduce operating costs ❑ Improve business relationships 27
➢ Customs forms ❑ The regulation 69 (1) of the Customs Regulations 1977 has listed the type of Customs Declaration forms prescribed as per section 142 (12) of the Customs Act 1967 for the purposes of declaring goods imported, exported, transshipped and transported. Types of customs forms: ➢ Custom form no.1 (K1) ❑ Used by importer to import goods from other country ❑ All the information required in this from when enable to determine the details of the goods imported to Malaysia. ❑ Also to ease from custom process to release import shipment at the port or border ➢ Custom form no. 2 (K2) ❑ Used by exporter who wanted to export their goods overseas ❑ It is contained all information details of the goods for export. ❑ Details are similar like Custom Form No.1 ❑ Will enable custom to process and release for export at load port or Malaysia border. 28
➢ Custom form no. 3 (K3) ❑ This form used by the company who wanted to export to east Malaysia(Domestic Export) ❑ It is require for transit purpose before the good discharge or loaded at the particular state ❑ Full details to be completed and for easy process by the custom. ❑ Use only by air or sea ➢ Custom form no.8 (K8) ❑ Approval / permit to transship duty/tax not paid goods in accordance with Section 23(2) Customs Act 1967 and Regulation 12, Customs Regulation 1977 ❑ Transit by road, i.e. the movement of duty/tax not paid goods in transit from the neighboring country via Malaysia to another country. Eg. From Thailand to Singapore via Malaysia road.(north-south highway)(Regulation 13 Customs Regulation 1977) ❑ Movement of imported (duty / tax not paid) goods from a custom port or airport to an inland Customs station (Regulation 14 Customs Regulation 1977); ❑ Movement of duty/tax not paid goods from one bonded area (licensed warehouse) to another bonded area (licensed warehouse). (Regulation 30) ❑ Movement of duty/tax not paid goods from the licensed warehouse for export (Regulation 31 Customs Regulations 1977). ➢ Custom form no. 9 (K9) ❑ This form is used as a permit / approval to remove dutiable goods from Customs Control and licensed warehouses such as Customs Warehouse, Public & Private Licensed Warehouses and Licensed Manufacturing Warehouses after the payment of relevant customs duty/ tax. ❑ This form is used for the declaration, payment of duty/tax and release of goods from the Licensed manufacturing Warehouses for sale to the local market / consumption. 29
Custom form K1 Custom form K2 Custom form K8 Custom form K9 30
➢ Letter of credit ❑ A documentary credit or bankers commercial credit, or letter of undertaking, is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exporter of goods. ❑ Buyers of major purchases may need a letter of credit to assure the seller that the payment will be made. ❑ A bank issues a letter of credit to guarantee the payment to the seller, essentially taking responsibility that the seller will be paid. ❑ A buyer must prove to the bank that they have enough assets or a sufficient line of credit to pay before the bank will guarantee the payment to the seller. Sample of letter of credit 31
References ❑ https://www.dhl.com/discover/en-my/logistics-advice/essential-guides/shipping-documents-export-importcomplete ❑ https://www.shippingsolutions.com/blog/documents-required-for-international-shipping ❑ https://www.dripcapital.com/en-in/resources/blog/documents-for-export-customs-clearance ❑ https://www.shippingsolutions.com/export-documentation-procedure ❑ https://www.trade.gov/common-export-documents ❑ https://usacustomsclearance.com/process/documents-needed-for-export-and-import/ ❑ https://research.hktdc.com/en/article/MzM0NDQ4ODg3 ❑ https://incodocs.com/blog/shipping-document-process-overview-export-import/ ❑ https://www.youtube.com/watch?v=rJ7HIf-cOpo ❑ https://www.youtube.com/watch?v=f5ZTQTrT1nI 32