Trade Development
Authority of Pakistan
EXPORT PROCEDURE AND DOCUMENTATION
Introduction:
1. Exporting is merely a selling but when it is selling at home, it does not bother you because you are in personal contact with a buyer for which you do not need to comply with several procedural requirements including filling and exchanging of a lot of documents. But the difference comes when you intend to sell to some one who is thousands of miles away from you, speaking different language, having different customs, preferences, currency and import regulations. In order to facilitate trade with other countries, certain set of rules have been developed by the trading nations over the centuries which are normally followed in foreign trade today. The International Trade is governed by rules made by the World Trade Organisation (WTO). Details on WTO can be obtained from Information Advisory Centre (IAC) of the TDAP.
Selection Of A Product:
2. If you want to enter export trade, the first thing you have to do is to decide about the product which you intend to trade. You should have intimate knowledge about the product and sources of supply. If you have varied sources of supply, you will have no problem in procurement and shipment. But if you produce the product yourself at effective cost and exercise quality control, then you can become a successful exporter within shortest possible time. You can also analyse which products are exported to which country. This information is available in the IAC of TDAP.
Opening Of An Office:
3. After selection of product, you may open an office, give it a name, print letter heads, install phone and fix a sign board on your business premises.
Registration For Export
For doing the export/import an exporter/importer will have to do the following functions:-
Selection of Market:
4. The exporter cannot go to every country in the world to persuade people to buy his product.
Even the largest international firms do not trade with the whole world and not every country can or will buy what a particular exporter may sell to them. In view of scarce resources and shortage of experienced marketing personnel, the exporters should be selective and concentrate on markets which could yield the best results. For this one has to examine.
i) The economic position of the country.
ii) Size of the Market and whether it is expanding or shrinking.
iii) Market growth in a given product.
iv) Unit price of the product. Whether it is more or less than other countries.
v) Import regime in the importing country.
vi) Location of the market etc.
Quoting A Price:
5. It is easy to quote price at home. For this one has just to calculate cost of production with packing and transportation charges and add profit. But in case of export, quoting of price means many things. For this one has to examine several things including the following:-
i. What price to charge to remain competitive abroad.
ii. While calculating prices one has to think about all the cost including, packing, insurance, credit, agents commission, octroi duties, documentation fee, marking charges, transportation charges, export duties etc.
iii.. For securing good price one has also to check up price of the same product abroad. If there is a good mark up in price in foreign market, one should not loose sight of it. TDAP can help you get price information further its trade offices posted abroad.
Signing Of A Contract:
6. When prices are accepted then a contract is signed with the firm for supply of goods which becomes binding on both the buyer & seller. Contract is a document which normally contains.
I. Name of exporter
ii. Name of importer
iii. Item of sale
iv. Unit price
v. Total quantity
vi. Terms of delivery (FOB, C&F, CIF etc.)
vii. Terms of payment (Consignment, deferred payment, LC irrevocable, LC confirmed,
revolving LC)
viii. Mode of shipment (Sea, Air, Road)
xi. Currency in which transaction Will be made.
x. Validity period of a contract & delivery period.
xi. Shipping marks if any.
xii. Arbitration clause.
Terms Of Delivery:
7. When the exporter is making an offer, he quotes the price of his product. If the offer is accepted then a contract is signed between the buyer & the seller. The contract include terms and conditions under which goods are delivered.
The buyer sitting in the overseas market is normally not interested to receive charge of goods at one's factory site but he may be interested to get charge of goods on FOB basis which means free on Board at airport or seaport. It means that charges of the consignment are fully paid up to that point and the rest of the freight is paid by the buyer. Terms of delivery are not only important for quoting price but it also makes clear as to who is responsible for the goods if anything goes wrong. The most frequently used terms of delivery are as under:-
Major terms of delivery/payments etc. Is available at TDAP’s FOD service No. 103
Financing For Export:
8. The exporter should accept order which he can fulfil easily. He should have the necessary finances or access to finances for effecting shipment and the capacity to wait till the sale proceeds are received. In this connection, term of payment plays an important role as it should be timed to keep you solvent at the time of need. For export pre-shipment and post-shipment credits are available from the Govt; on concessionaire rate. The exporter can make use of it.
Packing:
9. Packing should be sea, air and road worthy. The container should be in a position to carry contents to the destination in perfect condition. For reduction in cost most economical packing material be used. Pakistan Packing Institute can help you.
Transport:
10. Light and costly items are normally sent by air where as heavy items are shipped by sea. In each case the most economical mode should be used to reduce cost.
Insurance:
11. Insurance is necessary to recover cost in case of loss. But where the exporters are sure that the chances of loss are minimum they do not insure consignment. In case the buyer insists on Insurance then it must be done.
Documentation:
The following documents are normally used in exports:-
1. E-Form (Through authorised Commercial Bank).
2. Shipping Bill (Through authorised Clearing agents).
3. B/L or AWB (Through Clearing agents)
4. Commercial Invoice
5. Packing List
6. Certificate Country of origin (Through Chamber) or
6(a) GSP (Through TDAP)
7. Pre-shipment certificate through TDAP for certain textile item s for exports to management textile item.
8. Export contract registration details are in TDAP’s FOD service No. 101
Post Shipment Documents
1. 4th copy of shipping (through customs) bill to be used for rebates on bank/sales tax refund/textile quota.
2. BCA (Bank Credit Advice) to be received from commercial banks after foreign exchange is received. The BCA is considered proof for the purpose of rebates, refinance scheme etc.