INTERNATIONAL DOCUMENTATION

The main transaction document can be classified under the

leadings of shipping instructions and carriage documents.
1. Shipping instructions: These instructions are essential and
state exactly what a shipper wants more, where at what time
and under what terms. The documents are standard shipping
notes and dangerous good notes.
a) Standard shipping notes (SSD). This enables the shipper to
complete a one standard document for all consignments
irrespective of ports or inland depots. The document also
provides shipping authority and all those with an interest in
consignment with complete, accurate and timely information at
each movement stage and final loading into the aircraft or
shipment.
b) Dangerous goods notes. Dangerous goods legislation is now
in place worldwide for all modes of transport. Such legislation
aim to protect people, property and environment by ensuring
that such packages, tanks and vehicles containing dangerous
goods are fully identified through transportation. The main
three classes of dangerous goods are fully from the transport
perspective that is inflammable liquids, poisonous goods,
chlorossive goods. The key requirement is that dangerous
goods in course of transport are properly identified and labeled.
When delivery includes classified as dangerous, the standard
shipping note should not be issued by replaced by dangerous
goods note which contains the shippers declaration of
dangerous goods. This declaration is firstly a legal statement
by the shipper that the package containing the dangerous
goods has been properly prepared for transport secondly it
identified the dangerous goods in consignment. A special
Dangerous Goods Note is issued for air transportation.

2. Carriage documentation.
a) Bill of lading. This is a document issued by the carrier to
confirm receipt of goods to be transported to an agreed
destination. A bill of lading may serve three purposes; As a
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 receipt of goods certifying the goods described in doc are in
apparent good order except as noted on the document. The bill
should be signed by the shipper. Serves as a contract of
carriage identifying the contracting parties and settling out the
transport and costs of the agreement. It serves as a
transferable document of title affected through endorsement
and passing of the bill from one person to another.
b) Air or Sea waybills; like the bill of lading, the seaway bill acts as
a receipt of goods and evidence of the carriage. They do not
however confer the title to the goods. Way bills provide simple
alternatives to a bill of lading where the ability to transfer the
title is not required.
c)
3. Customs documentation.
Documents that may be required by customs authority
include;
a) Certificate of origin
b) Pre-shipment Inspection Certificates
c) Consular declaration
4. Letter of credit. This is an arrangement whereby the
obligation to pay the exporter is undertaken by the bank. The
bank’s credit is available to the importer who is not known and
who will not be trusted with the goods by the trader in another
country.
Types of letter of credit
1) Confirmed Letter of credit.
This is when the name of the bank from the seller’s country
is added to the identity already given by the foreign bank
concerned. However the seller receives an undertaking from
the confirming bank situated in his country. In addition to
that, the issuing bank that he will be paid on presentation by
the stipulated and agreed documentation. It should be noted
that this gives maximum security to the seller.
2) An Irrevocable or un confirmed credit.
This is a letter of credit that cannot be cancelled without the
agreement of all parties to it.
3) A revocable Letter of credit.

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 This is a letter of credit that both the buyer and seller can
cancel.
4) Standby letter of credit.
This is a type of letter that cannot be cancelled or drawn up.
The main purpose of this is for security purpose.
5) Negotiable credit.
This is issued by merchant banks which do not have a
branch banking network. It differs from the standby in that
the issuing bank engages to pay other parties.
Features of a letter of credit
a) The importer requests the bank in his country to issue
a letter of credit in favor of the exporter.
b) The name of the bank issuing the letter of credit is
stated on top of the instrument and the exporter
receiving the letter of credit should seek whether the
bank is accepted or not.
c) The instrument also mentions the name and full
address of the beneficiary that the seller in whose favor
it is issued.
d) The amount for which the credit is issued is clearly
stated.
e) Since banks are not willing to offer drafts for small or
big amounts, some flexibility is introduced.
f) The name of the person who account the credit is
opened is mentioned in the letter of credit.
g) The letter of credit lists documents to be attached to
the drafts drawn under it. These documents clearly
indicate the discharge of contractual obligations by the
exporter.
h) The letter of credit has its own expiry date indicating its
validity.
i) If the time given is not enough, the importer may
communicate with issuing bank or the importer to get
time changed.
j) The letter of credit mentions any other conditions that
may be demanded by the importer and what may have
been settled between the importer and the exporter.
5. Bills of lading
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A bill of lading is a receipt for goods shipped on a vessel signed
by a person on his Agent who contracts to carry them and stating
the conditions in which the goods were delivered to the ship.
The document is used to control the delivery of goods transported
by sea. It normally provides details of;
a) The reading marks on the goods.
b) Quantity of goods loaded.
c) Condition of goods when loaded.
Types of Bill of lading
1) Clean bill of lading
This where goods have been shipped and therefore no
damages or shortages.
2) Claused bill of lading
This is where the ship owner does not agree with any
statements made in the bill of lading for instance when the
goods have been damaged or there are shortages. (Missing
or stained etc).
3) State bill of lading
This is where the goods arrive before the bill of lading.
4) Groupage bill of lading.
This is when different buyer’s goods are put in the container
and a single bill of lading is issued.
5) Received bill of lading.
This is where the word “shipped” does not appear on the bill
of lading. It only confirms the goods received.
6) Shipped bill of lading.
This is the bill of lading that which actually indicates that the
goods have been shipped. It means that the goods are
actually on the ship or vessel although still in a Ware house.
7) Through bill of lading
This is where more than one mode of transport is used to
ship goods to the hinterland.
8) Transshipment bill of lading.
This is used by shipping companies where there is no direct
service between two ports but when the ship owner is ready
or prepared to transship the cargo at an immediate port at
his expense.
9) Negotiable bill of lading.
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 It is negotiable if the words “his on their signs” are contained
in the bill of lading, if these words are deleted; it is the
consiquce can’t transfer goods or property by means of the
bills.

MANAGEMENT OF CURRENCY FLUCTUATION

Currency fluctuations refer to changes in the value of one
currency relative to another. Managing this is crucial for
businesses operating globally, as it can impact profits and costs.
Managing currency fluctuations is crucial for businesses,
governments, and individuals to mitigate risks and capitalize on
opportunities in the global economy. Here are key strategies and
approaches for managing currency fluctuations:
Strategies include:
 Forward Contracts: Locking in exchange rates for future
transactions.
 Currency Options: Providing the right, but not the
obligation, to exchange currencies at a specific rate.
 Natural Hedging: Matching revenues and expenses in the
same currency.
 Diversification: Spreading operations across multiple
currencies to reduce reliance on one.
 Currency Clauses: Adding provisions in contracts to adjust
for currency changes.

1. Diversifying Currency Exposure

 Spread assets and investments across multiple currencies to
reduce dependency on any single one.
 Operate in regions with relatively stable currencies to
mitigate volatility.

2. Natural Hedging
 Match revenues and expenses in the same currency. For
example:
o Import raw materials and export finished goods in the
same currency.

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 o Locate production facilities closer to key markets to
align costs and revenues.

3. Active Monitoring
 Regularly monitor currency markets and geopolitical factors
that influence exchange rates.
 Use currency risk management software to track exposure
and automate responses to fluctuations.

6. Financial Reserves and Contingency Plans

 Maintain reserves in foreign currencies to manage short-
term liquidity needs.
 Establish contingency plans for sharp devaluations or
appreciations.

7. Agreements and Price Adjustments

 Include currency adjustment clauses in contracts,
allowing for pricing changes if exchange rates vary beyond
agreed thresholds.
 Regularly review and adjust pricing strategies to account for
currency movements.

8. Central Bank Interventions (For Governments)

Governments may:
 Use foreign exchange reserves to stabilize their currency.
 Adjust interest rates to attract or deter foreign investment,
influencing currency demand.

9. Long-Term Strategies
 Develop competitive advantages (e.g., technology or
efficiency) to offset the effects of currency fluctuations.
 Build long-term supplier and customer relationships to
negotiate favorable terms.

Examples of Implementation
1. Exporters: Hedge expected foreign income using forward
contracts or options.

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 2. Importers: Fix currency costs of future payments to
suppliers through hedging tools.
3. Investors: Use currency-hedged funds or diversify holdings
to spread risk across regions.

GLOBALIZATION
Globalization is the process by which businesses and markets
integrate internationally, driven by advancements in technology,
transportation, and trade policies.
 Advantages: Access to broader markets, lower production
costs, and diversification of resources.
 Challenges: Increased competition, cultural differences,
regulatory issues, and exposure to global economic
fluctuations.
Companies must adapt strategies to thrive in a globalized
environment, including localizing products, complying with
international regulations, and fostering cross-cultural
management.

COUNTERTRADE
Countertrade involves international trade transactions where
goods and services are exchanged for other goods and services
instead of money.
 Types:
o Barter: Direct exchange of goods without cash.
o Counter purchase: Two separate but related
contracts for exchanging goods.
o Buyback: Selling goods and accepting payment in the
form of products produced using the sold goods.
o Offset: Agreements to invest or purchase goods from
the importing country.
 Benefits: Helps overcome currency shortages, opens new
markets, and fosters bilateral trade.
 Challenges: Complex valuation, logistical issues, and
limited flexibility.

HEDGING
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Hedging is a financial strategy to reduce or eliminate risk
associated with price or exchange rate fluctuations.
 Common Tools:
o Forward Contracts: Agreeing to exchange at a fixed
future rate.
o Futures Contracts: Standardized agreements traded
on exchanges.
o Currency Options: Giving the buyer the option to
exchange at a set rate.
o Swaps: Exchanging cash flows or obligations in
different currencies.
 Purpose: To mitigate risks in international trade, including
currency risk, interest rate risk, and commodity price
volatility.

THE CUSTOMS AND EXCISE DEPARTMENT

They play a critical role in a country's economic, trade, and
security framework. Their primary responsibilities are focused on
regulating the movement of goods, ensuring revenue collection,
and protecting borders. Below is a detailed overview of their
roles:
1. Revenue Collection
 Customs Duty: Collect duties and taxes on imports and
exports.
 Excise Duty: Levy taxes on domestically produced goods,
especially those considered luxury or harmful (e.g., tobacco,
alcohol).
 Prevention of Tax Evasion: Ensure proper taxation on
goods and prevent smuggling to protect revenue streams.

2. Trade Facilitation
 Streamlining Trade: Simplify import and export processes
to promote international trade and economic growth.
 Enforcement of Trade Agreements: Ensure compliance
with bilateral and multilateral trade agreements.
 Customs Clearance: Verify and clear shipments entering or
leaving the country.
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3. Border Security
 Prevention of Smuggling: Combat illegal trade of
prohibited items such as drugs, weapons, counterfeit goods,
or endangered wildlife.
 Surveillance: Monitor and control border crossings to
ensure only authorized goods and individuals enter or exit.
 Protecting the Economy: Prevent the influx of
substandard, harmful, or counterfeit products that can harm
consumers and domestic industries.

4. Regulatory Functions
 Compliance with Laws: Enforce regulations related to
trade, environment, intellectual property, and health.
 Licensing and Quotas: Monitor goods subject to specific
licensing or quota requirements.
 Sanctions and Prohibitions: Enforce trade sanctions or
bans imposed by the government or international
organizations.

5. Safeguarding National Security

 Anti-terrorism Measures: Prevent cross-border movement
of goods linked to terrorism or organized crime.
 Control of Strategic Goods: Monitor the import and export
of sensitive technologies, weapons, or dual-use goods.

6. Data Collection and Reporting

 Trade Statistics: Collect and report data on imports,
exports, and duties for economic planning.
 Monitoring Trends: Identify patterns in global and
domestic trade to guide government policies.

7. Consumer and Environmental Protection

 Quality Control: Ensure imported and exported goods meet
national and international safety standards.
 Combat Illegal Goods: Prevent trade in environmentally
harmful products, such as hazardous waste or ozone-
depleting substances.
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8. Support for Economic Policies
 Encouraging Domestic Industry: Use tariffs to protect
fledgling domestic industries or penalize unfair trade
practices like dumping.
 Revenue for Development: Use the revenue collected for
national development projects, such as infrastructure or
social welfare.

In summary, Customs and Excise Departments balance

facilitating legitimate trade and travel with ensuring border
security, revenue collection, and compliance with laws and
regulations. Their work supports the economy, protects society,
and ensures the nation's security.

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