CHAPTER 5.
IMPORT IMPLEMENTATIONS
Lecturer: Dr. Vu Thi Hanh (SBS, Belgium)
Email: vuhanhftu@[Link]
Phone: 0914676782
5.1. IMPORT MARKET AND PARTNER SELECTION
5.1.1. Import market and partner selection
- Product recognition
+ Species, quantity, quality…
- Import market assessment
+ Market capacity, market demand
- Partner selection
+ Financial capacity, reputation, business capability
5.2. TYPES OF IMPORT
5.2.1. Direct import
5.2.2. Indirect import
5.2.3. On-site import
5.3. IMPORT DEMAND AND COSTS IDENTIFICATION
5.3.1. Optimal order quantity identification
An amount of goods ordered is sufficiently enough for market demand satisfaction, saving
transaction and storage cost.
The formula:
𝐴𝑃 𝑆𝑄
𝐶= 𝑓 (𝑄)= +
𝑄 2
𝑆 𝐴𝑃
𝑓 ′ (𝑄)= − 2
√
Q optimal 2 𝑄
2A 𝑃
A: annual demand 𝑓 ′ (𝑄)=0⇒𝑄=
𝑆
Q: the amount of each order
P: Cost for each order
S: Average storage cost per year
C: Total ordering, shipping and storage costs per year
5.3. IMPORT DEMAND AND COSTS IDENTIFICATION
5.3.2. Import pricing identification
5.4. IMPORT CONTRACT NEGOTIATION
5.5. FULLY-EQUIPPED MACHINE IMPORTS
5.5.1. Stages of complete equipment import
- Feasible study
- Preliminary technical design
- Basic technical design
- Detailed technical design
- Equipment supply and building construction
- Trial and official production
5.5. FULLY-EQUIPPED MACHINE IMPORTS
5.5.2. Modes of complete equipment import
- Specialized equipment
- Equipment with user license
- Equipment with user license and
- Turn key project
- Cost-plus contract
- Product in hand project
- Market support project
5.6. IMPORT ORGANIZATIONS
5.6.1. Opening the L/C
- The importer requests a bank to open an L/C committing to pay for the exporter if the export after
having delivered the commodity presents a full set of documents which is in conform with the
content of the L/C.
- The importer fills in the L/C application form, pays L/C opening fee and deposits. L/C opening
document includes:
+ L/C application form
+ A copy of commercial contract
+ Export license of the Ministry of Trade and Industry
5.6. IMPORT ORGANIZATIONS
5.6.2. Application for import license
- Import license for prohibited items
- Import license by Ministries.
- Trial license: Applied for products which were first imported into Vietnam and which were not
listed as prohibited items.
5.6. IMPORT ORGANIZATIONS
5.6.3. Import custom procedure
- Custom declaration: The importer must prepare documents which include:
+ Declaration form: 2 originals
+ Commercial contract or other documents which are considered as an agreement or contract: 1 copy
+ Commercial invoice: 1 original and 1 copy
+ Bill of Lading: 1 copy
• Supplementary documents:
+Packing list: 1 original, 1 copy
+ Registration paper of State quality inspection
+ Certificate of inspection
+ Declaration form of import value
+ Import license
+ Certificate of origin
5.6. IMPORT ORGANIZATIONS
- Presenting goods for inspection
The inspection varies depending on risk levels and incudes
+ Level 1: Green door: No detailed inspection of documents, Goods inspection exemption
+ Level 2: Yellow door: Detailed inspection of documents, Goods inspection exemption.
+ Level 3: Red door: Detailed inspection of documents, Detailed inspection of goods. 3 levels of goods
inspection:
• Wholly inspected
• 10% of goods inspected
• 5% of goods inspected
5.6. IMPORT ORGANIZATIONS
5.6.4. Signing a shipping contract with a carrier
Depends on parties’ relationship, the property of goods and shipping condition. The Seller concludes
a shipping contract under the following terms:
- CFR, CIF: For the Buyer’s benefit.
- DAT, DAP, DDP: For the Seller’s benefit.
Charter shipping contract is concluded if goods quantity is in great amount and if goods are in bulk.
Liner shipping contract is concluded if goods quantity is in small amount
5.6. IMPORT ORGANIZATIONS
5.6.5. Forwarding goods
- By a forwarder
+ Receives goods from the exporter
+ Concludes a shipping contract with the carrier and screens the carriage activity if authorized by the
Importer.
+ Collects documents related to the carriage such as B/L, ROROC (report on receipt of cargoes),
COR (cargo outturn report), LR (letter of reservation)
+ Carry out the import custom procedure
+ Involves in goods storage, products classification.
5.6. IMPORT ORGANIZATIONS
5.6.5. Forwarding goods
- By the Importer
+ If cargoes are not loaded into a container
• Concludes an authorization contract with a carrier
• Concludes a hiring workers contract
• Contact with some agencies to know about the information of a vessel
• Ready to receive goods
• Select a person to settle down problems
• Pays costs related to forwarding goods
• Collects the preliminary documents such as: ROROC, COR, CSC, LOR
5.6. IMPORT ORGANIZATIONS
5.6.5. Forwarding goods
- If the cargoes are fully loaded in a container
+ Full container load
• Concludes a contract for hiring a container
• Presents B/L for an delivery order (D/O) to receive goods
• Carries a full container load to a discharging place
• Discharging goods under the control of the customer
+ If the cargoes are less loaded in a container
• Presents B/L for D/O to receive goods
• Collects necessary reports at the time of goods received
5.6. IMPORT ORGANIZATIONS
5.6.6. State quality control, Goods inspection, quarantine, hygiene inspection (Ref book)
5.6.7. Dispute settlement relating to imports
- Claim and claim settlement
- Arbitration or tribunal court
5.7. IMPORT ASSESSMENT
5.7.1. Foreign currency rate of import
Means an amount of VND obtained when an unit of foreign currency is expensed
5.7.2. Rate of income
5.7.3. Break even point
5.7. IMPORT ASSESSMENT
5.8.1. Import authorization contract
5.8.2. Import contract