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TRADE DOCUMENTS
Documents drives trade
Code :706026 Chapter 5 1
Learning outcomes
Understand the importance of documentation in
export transaction
Be aware of the basic requirement and information
sources of export documentation
Describe the different types of export documents
Outline the function and contents of the major export
documents
Code :706026 Chapter 5 2
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CONTENT
LO1: Introduction
LO2: Financial document
LO3: Trade document
LO3.1: COMMERCIAL DOCUMENT
LO3.2: TRANSPORT DOCUMENT
LO3.3: INSURANCE DOCUMENT
Code :706026 Chapter 5 3
THE SELLER’S OBLIGATIONS LO1
Deliver the goods exactly
Guarantee the goods to be free from faults
Handle over all required documents to buyer
Code :706026 Chapter 5 4
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DEFINITION
Global flows of goods are not possible without a global
flow of information. This must be exchanged between
various parties, including government authorities.
The information is provided and exchanged in paper
or electronic form, the so-called trade documents.
3 requirements:
• Name of document
• Number of originals/copies
• Issuer (if needed)
Code :706026 Chapter 5 5
Significance of trade documentation
(a) as an evidence of shipment and title of goods;
(b) for obtaining payment;
(c) to provide a specific and complete description of the
goods;
(d) for assessment of correct Duty for clearance
purpose;
(e) for obtaining Export Licences;
(f) for obtaining export finance;
(g) for completing Pre-shipment Inspection;
(h) for claiming export benefits like Duty Drawback,
etc…
Code :706026 Chapter 5 6
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LAYOUT FOR TRADE DOCUMENT
Further reading:
United Nations Layout Key for Trade Documents
(UNLK/ ISO 6422)–Recommendation 1
Code :706026 Chapter 5 7
United Nations Layout Key
(UNLK/ ISO 6422) - most
for Trade Documents
key trade documents
Code :706026 Chapter 5 8
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DATA ELEMENTS
•Consignor/ exporter/ shipper: name/ address
•Consignee/ importer: name/ address
•Transport details: places, modes and means of transport
•Date, reference no., etc…
•Terms of delivery and payment
•Shipping marks/ container no.
•Number and kind of packages
•Description of goods/ Value
•Gross weight/ Net weight/ Cube
•Authentication (Signature)
Code :706026 Chapter 5 9
EXPORT
DOCUMENTS
LO2
FINANCIAL TRADE
DOCUMENTS DOCUMENTS
BILL OF COMMERCIAL INSURANCE
TRANSPORT
EXCHANGE DOCUMENTS DOCUMENTS
DOCUMENTS
PROMISSORY COMMERCIAL INSURANC
NOTE B/L
INVOICE E POLICY
INSURANC
PACKING LIST E
CHECK AWB
ERTIFICAT
E
CARD CERTIFICATE
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BILL OF EXCHANGE (Draft)
A bill of exchange is an unconditional order in
writing, addressed by one person to another, signed
by the person giving it, requiring the person to
whom it is addressed to pay on demand or at a fixed
or determinable future time a sum certain in money
to, or to the order of, a specified person or bearer
(Bill of Exchange Act, 1882)
Code :706026 Chapter 5 11
BILL OF EXCHANGE (Draft)
The following points should noted:
1. A Bill of Exchange must be in writing
2. It must be dated
3. It must contain an order to pay a certain sum of
money
4. The money must be payable to a definite person or
to his order to the bearer
5. The draft must be accepted for payment by the party
whom the order is made
Code :706026 Chapter 5 12
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Example
Code :706026 Chapter 5 13
PARTIES
Drawer
Beneficiary
Drawee
L/C VS COLLECTION ?
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COMMERCIAL DOCUMENTS LO3.1
• COMMERCIAL INVOICE
• PACKING LIST
• QUALITY/ QUANTITY/ WEIGHT
CERTIFICATE
• INSPECTION CERTIFICATE
• FUMIGATION CERTIFICATE
• CERTIFICATE OF ORIGIN (C/O)
Code :706026 Chapter 5 15
COMMERCIAL INVOICE
A bill for the merchandise from the seller to the
buyer.
Basic information about the transaction:
Description of the goods
Transaction value
Delivery and payment terms
Order date, and number.
The overseas buyer needs:
To clear goods from customs customs duties
To prove ownership, and arrange payment.
Code :706026 Chapter 5 16
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JIANGSU HOTIY CORPOARATION
HOTIY BUILDING,50 ZHONGSHAN.,NANJING,CHINA
COMMERCIAL INVOICE
TO: JYSK CHANALEF SILK A/S BRIGHT NO: A2400A/98
BULIDING14,SKOVSGERD DK-9990 DATE: 041021
BROVET. DENMARK S/C NO.:03HL21401
L/C NO.: 202-612-1068
FROM SHANGHAI TO COPENHANGEN BY SEA
MARKS&NO.S DESCRIPTION QUANTITLES UNIT PRICE
AMOUNT
CIF COPENHAGEN
JYSK X’MASDECORATIONS
COPENHAGEN 2-A15261 250BOXES USD4.15/BOX USD1,037.50
A24001/98 2-A15261-1 40BOXES USD6.45/BOX USD258.00
1-7 2-A15261-2 23BOXES USD6.45/BOX USD148.35
TOTAL:
313BOXES USD1,443.85
SAY US DOLLARS ONE THOUSAND FOUR HUNDERED AND FORTY THREE POINT
EIGHT FIVE ONLY
JIANGSU HOTIY CORPOARATION
Code :706026 Chapter 5 17
SHANDONG IMP/EXP CORP
62 JIANGXI RD, QINGDAO, CHINA
FAX TEL E-MAIL
COMMERCIAL INVOICE
NAN HENG INTERNATIONAL SIC002
TO MESSRS: INVOICE NO.
TRADING CO. LTD DATE: NOV. 14,1998 TO DEC. 30,1998
104/4 LARDP RD. WANGT L/C NO.: 001-10397-1998
ANNGKAPI. BKK CONTRACT NO.: 99A15AAL5029
SHIPMENT FROM QINGDAO, CHINA TO BANGKOK, THAILAND
MARKS & NOS QUANTITY & DESCRIPTION UNIT PRICE AMOUNT
TRI-CIRCLE BRAND
BRASS PADLOCK USD7.357 USD6,621.30
NHIT
900 DOZ PER DOZ
BANGKOK
PACKED IN 9 WOODEN CFR BANGKOK
NO.1-9
CASES OF 100 DOZ. EACH
SAY US DOLLARS SIX THOUSAND SIX HUNDRED TWENTY ONE
POINT THREE ONLY
SHANDONG IMP/EXP CORP
Code :706026 Chapter 5 18
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SPECIAL INVOICES
1. PROVISIONAL INVOICE
2. FINAL INVOICE
3. DETAILED INVOICE
4. NEUTRAL INVOICE: do not record seller name
5. PRO-FORMA INVOICE
6. CONSULAR INVOICE
7. CERTIFIED INVOICE
Code :706026 Chapter 5 19
PRO-FORMA INVOICE
A pro forma invoice is a provisional invoice sent to the
prospective buyer, usually in response to the latter’s
request for a price quotation. A quotation usually
describes the product, and states the price at a specific
delivery point, the time of shipment, and the terms of
payment. But it is not intended for payment purpose
Non-commercial Invoice
Code :706026 Chapter 5 20
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Functions
1. To serve as a formal quotation or as a price reference
2. To enable the buyer to make necessary preliminary
arrangements, such as obtaining an import license
for the goods he would like to order
3. To inform the buyer of the amount payable for
goods to be shipped.
Code :706026 Chapter 5 21
CONSULAR INVOICE
Certain nations require a consular invoice for customs,
statistical, and other purposes. It must be obtained from
the consulate of the country to which the goods are
being shipped and usually must be prepared in the
language of that country.
Code :706026 Chapter 5 22
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CERTIFIED INVOICE
Certain nations require an invoice being certified to
determine the origin of shipment. It usually is obtained
from local chambers of commerce.
Code :706026 Chapter 5 23
Article 18 Commercial Invoice
UCP 600
a. A commercial invoice:
i. must appear to have been issued by the
beneficiary (except as provided in article 38);
ii. must be made out in the name of the applicant
(except as provided in sub-article 38 (g));
iii. must be made out in the same currency as the
credit; and
iv. need not be signed.
c. The description of the goods, services or performance
in a commercial invoice must correspond with that
appearing in the credit.
Code :706026 Chapter 5 24
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PACKING LIST
An export packing list itemizes the material in each
individual package and indicates the type of package
(e.g., box, carton) It shows weights and measurements
for each package (the net and gross weight of the total
consignment)
Code :706026 Chapter 5 25
FUNCTIONS
• To serve customs in the exporting and importing
countries to check the cargo
• To help the exporter to ascertain the total cargo
weight, the volume, and shipment of the correct
merchandise
• To serve port authorities to plan the loading and
offloading of cargo.
Code :706026 Chapter 5 26
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SPECIAL P/Ls
• DETAILED PACKING LIST
• NEUTRAL PACKING LIST
• PACKING & WEIGHT LIST
Code :706026 Chapter 5 27
CERTIFICATE OF ORIGIN
A certificate of origin is required by certain countries
to enable them to determine whether the product is
eligible for preferential duty treatment.
It is a statement as to the origin of the export product
Code :706026 Chapter 5 28
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Application procedures
C/O
Preference Non-Preference
Preference Special preference Form B
GSP/MFN FTA/EPA
Multilateral
Form A Bilateral (VK/VJ…)
(AK/CPTPP…)
Code :706026 Chapter 5
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Code :706026 Chapter 5 30
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FUMIGATION CERTIFICATE
The Fumigation Certificate a pest control certificate
Some agricultural products:
- organic origin such as rice, tea, pepper, cashew, coffee ...,
- wood products that have not been surface treated, or
- goods derived from wood such as bamboo and rattan products,
handicrafts, etc
wooden packing materials used in international sea freight
shipping e.g. wooden pallets and crates, wood, wool etc…
have been fumigated or sterilized prior the international
shipment.
Methods: HT (Heat Treatment) or MB (Methyl Bromide)
Code :706026 Chapter 5 31
Code :706026 Chapter 5 32
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INSPECTION CERTIFICATE
Some purchasers and countries may require a
certificate attesting to the specifications of the goods
shipped, usually performed by a third party, Export
inspection agency. Such requirements are usually
stated in the contract and quotation. Inspection
certificates are generally requested for certain
commodities with grade designations, machinery,
equipment, and so forth.
Code :706026 Chapter 5 33
INSPECTION CERTIFICATE
Health Certificate • Department of Animal Health
Health Certificate
for Products of • Department of Animal Health
Animal
Phytosanitary • Plant Protection Department
Certificate • 30/2014/TT-BNNPTNT
Sanitary • Nafiquaved (National Fisheries
Certificate Quality Assurance and Veterinary
Directorate)
Code :706026 Chapter 5 34
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Sanitary certificate
Some countries require a health or sanitary certificate
when animals, animal products, fish, plants and food
products are skilled. These certificates confirm that the
goods are free from disease or pests (insects), and that
products have been prepared in such a way that they
reach prescribed standards. Normally, these certificates
are issued by the Department of Agriculture of the
exporter´s country. Also called certificate of health.
Code :706026 Chapter 5 35
TRANSPORT DOCUMENTS LO3.2
BILL OF LADING (B/L):
A bill of lading is a contract of carriage between the
shipper and the steamship company (carrier). It certifies
ownership and receipt of goods by the carrier for
shipment. It is issued by the carrier to the shipper
evidencing that the goods in good condition have been
received for shipment or shipped on board the named
vessel; promising to deliver the goods to the named
consignee.
Code :706026 Chapter 5 36
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Code :706026 Chapter 5 37
B/L Issuance
• All bills of lading should be signed by either shipping
company，captain ，authorized carrier agent.
• Bills of lading are usually made out in three originals
(signed) and three copies (unsigned) ”full set of”
• Front B/L cargo details
• Reverse B/L terms and conditions of the contract
of carriage
Code :706026 Chapter 5 38
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Function of B/L
Generally , bill of lading has three main functions：
(1) it is a receipt from the carrier to the shipper;
(2) it is a documents of title;
(3) it is an evidence of the contract of carriage between
the carrier and the shipper.
Code :706026 Chapter 5 39
CONTENTS OF B/L
• Number of bill of lading
• Marks and numbers
• Shipper • Descriptions of goods
• Consignee
• Number of packages
• Notify address • Gross weight/ mesurement
• Vessel/ Voyage • Freight and charges
• Port of loading
• Number of original B/L
• Port of Discharge • Place and date of issue
• Port of Destination
• Signature
Code :706026 Chapter 5 40
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FORMS OF B/L
Place carrier’s receipt for carriage
Shipped on board
bill of lading
Received for
shipment bill of
lading
NOTE: For payment under documentary L/C, the “Received for
Shipment B/L “is not acceptable.
Code :706026 Chapter 5 41
CLEAN RECEIVED FOR SHIPMENT
DATE:…..
ON BOARD
DATE:…..
Code :706026 Chapter 5 42
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FORMS OF B/L
Acknowledges receipt of the goods
Clean bill of lading
Unclean of lading
Code :706026 Chapter 5 43
FORMS OF B/L
• Ownership
Straight bill of
lading
To order bill of
lading
Code :706026 Chapter 5 44
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ABC CO., LTD
SAME AS CONSIGNEE
Code :706026 Chapter 5 45
TO ORDER
ABC CO., LTD.
Code :706026 Chapter 5 46
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TO ORDER OF EXIMBANK
ABC CO., LTD.
Code :706026 Chapter 5 47
Air waybill (AWB)
• AWB becomes a valid contract only after it has been
signed by both the shipper or a cargo agent on his behalf
and by the carrier
• AWB should be issued immediately upon receipt of the
goods and the letter of instructions from the shipper.
• The shipper prepares the AWB responsible for the
accuracy and sufficiency of the details related to the
goods listed.
• AWB non-negotiable
• AWB 3 orginals + 9-12 copy
706022-Chapter 4-Carriage of Goods by Air
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Functions
706022-Chapter 4-Carriage of Goods by Air
Air waybill (AWB)
COPY NUMBER DISTRIBUTED TO
The 1st Original (green)
The 2nd Original (pink)
The 3rd Original (blue)
Copy (white) For Agent
Copy (yellow) … For destination
706022-Chapter 4-Carriage of Goods by Air
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INSURANCE DOCUMENTS LO3.3
When the exporter provides insurance, it is necessary to
furnish an insurance document that states the type,
terms, and amount of insurance coverage.
The certificates are negotiable and must be endorsed
before presentation to the bank.
- Insurance certificate
- Insurance policy
Code :706026 Chapter 5 51
Article 28 Insurance Document and Coverage
Must appear to be issued and signed by an insurance
company, an underwriter or their agents or their proxies
Cover notes will not be accepted.
The date of the insurance document must be no later
than the date of shipment, unless it appears from the
insurance document that the cover is effective from a date
not later than the date of shipment.
If there is no indication in the credit of the insurance
coverage required, the amount of insurance coverage
must be at least 110% of the CIF or CIP value of the
goods. Code :706026 Chapter 5 52
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