The different types of documentation fall under three major categories. Take a look at these categories and the import export document checklist under each one of them:
Commercial Documentation:
These are common documents featured in most types of trade. They might go by different names when used locally but they mostly carry out commercial functions. They show proof of purchase, insurance or consignment release, etc.
1) Bill of Lading:
This is a contractual agreement between the cargo carrier and the owner of the goods. It sets out the details of the goods in the consignment, their destination and point of origin. It serves as an undertaking on the part of the courier that he or she will deliver the cargo without fail and in the condition that they were received. It could either be a freight paid
Bill of Lading when the exporter foots the courier bill or the freight collect when the importer is required to pay the courier. It contains other pertinent details as the vessel carrying the goods, the port from which it was shipped, the destination and the exporter's details.
2) Airway Bill:
This is more or less comparable to the Bill of Lading but is used when the choice of courier service uses air carriage for goods transportation. It is basically a note for forwarding goods and enables their receipt once they get to destination.
3) Bill of Exchange:
This document makes an order for payment to be made by a specific person to the order of another specified individual. It could also be made to the bearer of the document. Whatever the case, the bill lets a debtor know when the amount specified is due for payment on a future date or on demand.
4) Commercial Invoice:
This is one of the most important documents as it summarizes the entire transaction. It has the details of the buyer, Freight Company, seller, foreign customs, bank details and import/export brokers. It also contains the price of items in the shipment as well as the terms under which they are shipped. At times, traders use a pro-forma invoice that allows for payment to be processed before goods are released.
5) Packing List:
This contains pertinent information as to what is be be expected in the package. It goes into details for instance showing how the goods are labeled, the dimensions of the package and the weight in the package. It might not be mandatory in many countries but it helps the couriers to prepare the crucial bill of lading and is therefore important.
6) Insurance Certificate:
Considering the huge amounts of cash that are usually factored into international trade, most business men take out insurance. This helps to mitigate loss in the event the worst actually happens and goods do not get to their destination. For as long as you have taken out insurance on the cargo then you need to provide proof and this document does just that.
7) Letter of Credit:
This is another very important inclusion in the export import documents list. It refers toa written commitment by a bank on the importer's side to ascertain that payment is made in full for goods supplied. This document usually stipulated certain conditions that should be met so that payment is processed. It gives the exporter much needed security in this highly risky business arena. It is particularly useful for persons who have no previous trading history, for importers in volatile countries (economically or politically) and for anyone else who values caution in business.
Regulatory Documentation:
This refers to the various forms of documentation required by law. These are aimed at providing proof that certain specified conditions have been met. They show evidence of compliance to such requirements as customs inspections and foreign exchange regulations. They include:
1) Certificate of Inspection:
These are usually issued out from the exporter's country and specifically apply for mechanical or perishable products. This includes food items and horticultural products. It shows that the goods left the exporters hands in the right condition and correct quality.
2) Electronic Export Information:
This is a requirement for all goods exceeding a certain value depending on the country of origin. In the US for instance, it applies for any consignment worth over $2,500. It is usually certified to confirm that the information given is true and accurate.
3) Certificate of Health or Sanitation:
In most cases, when importing agricultural products you might need either one or both of these documents. The products are usually checked for toxicity and pests and declared safe or otherwise. The standards vary from place to place but once you meet the basic level required then the certificate is awarded by the relevant authority. The inspection is carried out on arrival at the importing country's point of entry and any products that fail to match up are rejected. These same inspection authorities lay down their requirements and it would therefore be a great idea to ascertain that you meet them before getting the goods to the destination to avoid unnecessary loss.
Custom Clearance Documentation:
These usually take the form of certification from specific authorities and show proof that some set standards were met for the release of goods. Since regulations vary from one country to another these documents are also numerous. These are the most popular:
1) Shipping Bill for Export:
This is the major document that is required by customs to allow shipment of goods. It comes in three main variations. The shipping bills for non-duty goods. Shipping bills for duty payable goods and the duty drawback. In order to prepare it right, the preparation must be based on the export goods category. As this will vary from country to country you need to check first before selecting one.
2) Certificate of Origin:
This is a document issued by the exporting country as proof that the goods in a particular consignment actually were manufactured in that country. It comes in handy when the customs authorities of a particular country have stringent rules in place that bar exports from specific areas. It is mostly issued by the Chamber of Commerce.
3) Import License:
Depending on the regulations of specific countries, the importation of certain products might be restricted but not completely banned. In order to bring such products into the country, you will need an import license to show that you went through the right procedure and got permission to import.
Purpose of Import Export Documentation
Import export documentation ensures the safety of goods till they get to their destination. The multiple documents that are prepared and dispatched with a consignment serve as a form of security. This is because they detail precisely what an importer is to expect from the consignment. Additionally, the cargo company takes down such pertinent details as weight and dimensions of the consignment. These details are included in the airway bill or bill of lading. They make it easy to confirm whether what is received is what was actually expected. They also deter potential crooks from tampering with the consignment.
These documents are helpful in facilitating payments. Making a payment for goods that are yet to be received or even committing to pay for them in future requires documentary proof. That is one very important role served by export documentation. They will be required by a financial institution to process import financing in any form. They are also useful for individuals transferring money overseas as they detail the exact reason for the payment. Particularly when a cash transfer involves big sums of money, it is impossible to make a cash transfer without any documentary support for the transaction.
They create trust between traders. It is customary for an importer to request for an image of the invoice and packing list in order to ascertain that goods have actually been released to the cargo company. In fact, more seasoned traders know to send images of the relevant documents as soon as they can in order to quell any doubts in the mind of an importer.
There are specific documents required for export customs clearance. You cannot carry out customs clearance for any consignment without showing relevant documentation. Customs documents vary from country to country and also according to the type of goods in question. Such sensitive products as pharmaceuticals and medical equipment for instance have to meet more stringent measures for importation. They therefore require certification from various authorities to prove that they meet certain standards of quality.
They prove adherence to regulatory requirements. Exporters have to meet certain standards in both their home countries and target market countries. These vary greatly from one region to the next but are subject to severe penalties if contravened. For instance, there are certain commodities whose movement is controlled. For such commodities a trader has to get an import export license for getting out of his country and to its destination.
Documentation covers the differences in the legal frameworks binding the two trading countries. Rules and regulations on trade at times overlap while at other times they run parallel. This makes it important to have the right documentation at hand to ensure that all bases are covered. It is a protective measure for the trading partners involved as it seals all loopholes.
Documentation defines the title to specific goods. The only way that a consignee gets the right to collect goods from the port of entry is by use of the right documentation. Without such there would be chaos with goods ending up in the wrong hands and getting lost all the time. But proper documentation ensures that the recipient carries some proof of ownership to the collection point. The cargo courier is able to confirm the authenticity of this proof and proceed to release goods.
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