DEBRE BIRHAN UNIVERSTY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MSNSGEMENT
IMPORT /EXPORT POLICY Individual Assignment

Course code (Mktm3111)

Name ID
Argaw Dagne DBUD/521/12

DEBRE BERHAN , ETHIOPIA

NOVEMBER, 2023

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 Import export policy and procedure

Assignment 1

D 1. ______________are an international set of trade terms that has been adopted by

many countries and defines exactly the responsibilities and risks of both the buyer and seller
including while the merchandise is in transit.

A. FOB

B. CIA

C. CIF

D. Inco terms

E. All of the above

F. None of the above

E 2. In determining the mode of transportation the exporter considers the following issues
except:

A. Geographical proximity

B. Speed

D. All of the above

E. None of the above

C. Products perish ability & demand

D 3. The exporter may accept open account modality method only when:

A. The exporter is confident of the buyer's financial standing & reputation

B. There is long- & well-established relationship between the two parties

C. The political environment is sound & stable in the importer's country.

D. All of the above

E. None of the above

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 A 4. Actions of legitimate government authorities to confiscate cargo, war, revolution,
terrorism, and strikes that impede the conduct of international business are:

A. Political risk

B. Transportation risk

C. Foreign credit risk

D. All of the above

E. None of the above

B 5. Import customs clearing procedure begins with;

A. Inspection and release of cargo

B. Submission of an import declaration form

C. Duty collection

D. Submission of supporting documents

E. All of the above

F. None of the above

6. Generally, in a customs clearance process, there are loads of documents to be verified and
submitted, either electronically or physically with the consignment. Explain why?

❖ In a customs clearance process, there are numerous documents to be verified and

submitted, either electronically or physically with the consignment, due to several
reasons:

A. Regulatory Compliance: Customs clearance involves adherence to various national

and international regulations. The submission of specific documents ensures that the
goods comply with the legal requirements of the importing country.

B. Tariff Classification and Valuation: Customs authorities need to determine the

correct tariff classification and value of the imported goods to calculate duties and
taxes. Proper documentation helps in this process.

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 C. Origin of Goods: Documents such as a certificate of origin provide information about
where the goods were produced. This is crucial for determining eligibility for
preferential trade agreements and applying the correct tariffs.

D. Customs Duties and Taxes: Documents like the commercial invoice and bill of
lading provide details about the value of the goods. This information is essential for
calculating the customs duties and taxes applicable to the imported items.

E. Security Concerns: Verification of documents helps customs authorities ensure that

the cargo does not pose security risks. It allows them to screen shipments for potential
threats such as smuggling or the transport of prohibited goods.

F. Trade Statistics: Accurate documentation contributes to the compilation of trade

statistics. Governments use this data to analyze trade patterns, monitor economic
trends, and formulate trade policies.

G. Record-Keeping: Proper documentation is crucial for record-keeping purposes. It

helps customs authorities track the movement of goods, conduct audits, and ensure
transparency in international trade transactions.

H. Risk Assessment: Customs authorities use documentation to assess the risk

associated with a particular shipment. This allows them to allocate resources
effectively for inspections and other compliance checks.

I. Electronic Data Interchange (EDI): Many countries have adopted electronic

systems for customs clearance, such as the use of Electronic Data Interchange (EDI).
Electronic submission of documents speeds up the clearance process and reduces the
likelihood of errors.

J. Facilitation of Trade: While the documentation process may seem extensive, it is

designed to facilitate international trade by ensuring that goods move smoothly across
borders while meeting legal and regulatory requirements.

In summary, the verification and submission of documents in the customs clearance process
are essential to facilitate the smooth and lawful movement of goods across international borders
while ensuring compliance with various legal, regulatory, and security standards.

7. List and explain the dominant mode of transportation in import export trade?

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In international trade, various modes of transportation are utilized to move goods across
borders. The dominant mode of transportation often depends on factors such as the nature of
the goods, distance, cost considerations, and time sensitivity. The primary modes of
transportation in import-export trade include:

❖ Ocean Freight (Shipping):

• Explanation: Ocean freight is a dominant mode for transporting large quantities

of goods over long distances. It is particularly suitable for bulk commodities and
heavy goods. Containerization has significantly contributed to the efficiency of
ocean freight, allowing for easy handling and transfer of standardized containers
between different modes of transport.

❖ Air Freight:

• Explanation: Air freight is the fastest mode of transportation, making it ideal

for time-sensitive and high-value goods. It is commonly used for perishable
goods, electronics, and goods requiring quick delivery. While it is relatively
more expensive than ocean freight, it offers the advantage of rapid transit.

❖ Road Freight:

• Explanation: Road freight involves the transportation of goods by trucks or

lorries. It is a flexible mode suitable for both short and medium distances. Road
freight is often used for transporting goods within a region or between
neighboring countries. It provides door-to-door service and is well-suited for
just-in-time deliveries.

❖ Rail Freight:

• Explanation: Rail freight is an efficient and cost-effective mode for transporting

goods over land, especially for large quantities of bulk goods. It is commonly
used for moving goods over long distances within continents or regions. Rail
transport is known for its environmental efficiency and can be an essential part
of intermodal transportation systems.

❖ Pipeline Transportation:

• Explanation: While less common for general cargo, pipelines are crucial for
transporting liquids and gases, such as oil and natural gas. Pipeline transportation

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 is often used for specific industries like energy, and it is particularly efficient for
continuous and high-volume transport.

❖ Intermodal Transportation:

• Explanation: Intermodal transportation involves the use of multiple modes of

transportation (e.g., a combination of ship, train, and truck) in a single, integrated
logistics system. This approach optimizes the strengths of each mode, offering a
more efficient and cost-effective solution for long-distance transportation.

The choice of the dominant mode of transportation depends on various factors, including the
type of goods being transported, the distance to be covered, cost considerations, and time
requirements. Often, a combination of different modes, known as multimodal or intermodal
transportation, is employed to leverage the advantages of each mode and create an integrated
and efficient supply chain.

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 Assignment 2

B Countries cannot benefit from their differences by reaching arrangement in what

each does or naturally endowed.

A. True

B. False

B 2. Export trade refers to purchase of goods by one country from another country or
inflow of goods and services from foreign country to home country.

A. True

B. False

A 3. The packing list serves a useful purpose of the exporter while dispatching the
consignment as a cross check of goods sent.

A. True

B. False

A 4. Which of the following statement is (are) wrong statement.

A. Absolute advantage is the ability of a nation to produce a good more efficiently than any
other nation

B. A positive trade balance is known as a trade surplus

C. A company could produce for export by using its excess

production capacity

D. All of the above

E. None of the above

A 5. The non-revenue functions of customs clearing includes the following except:

A. Health control of passengers and crews

B. Process duty and vat payments as applicable

C. Compile statistical data about the country's import and export

trade

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 D. All of the above

E. None of the above

6. What are the problems or difficulties involved in import export trade? Mention and explain
at least three?

Import-export trade, while essential for global economic activity, is not without its challenges.
Here are three common problems or difficulties involved in import-export trade:

❖ Customs and Regulatory Compliance:

• Explanation: Navigating through the complex web of customs regulations and

compliance requirements of different countries can be challenging. Each country
has its own set of rules regarding import and export procedures, tariff
classifications, documentation, and licensing. Failure to comply with these
regulations can result in delays, fines, or even the rejection of shipments.

❖ Currency Exchange and Payment Risks:

• Explanation: Dealing with multiple currencies introduces the risk of exchange

rate fluctuations, which can impact the overall profitability of transactions.
Additionally, payment risks are inherent in international trade, especially when
dealing with new or unfamiliar trading partners. Issues such as delayed
payments, non-payment, or disputes over payment terms can pose significant
challenges.

❖ Logistical Challenges:

• Explanation: Efficient logistics is crucial in international trade, and challenges

in transportation, shipping, and warehousing can disrupt the supply chain.
Delays in transit, damage to goods during transportation, or issues with customs
clearance can lead to increased costs and customer dissatisfaction. Moreover,
geopolitical factors, natural disasters, or unexpected events can further
complicate logistics planning.

❖ Cultural and Language Differences:

• Explanation: Cultural and language variations can create communication

challenges and misunderstandings between trading partners. Differences in

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 business practices, negotiation styles, and ethical standards may affect the
success of international transactions. Building effective relationships and
understanding the cultural nuances of business dealings are critical for successful
import-export trade.

❖ Political and Economic Instability:

• Explanation: Political and economic instability in either the exporting or

importing country can pose significant risks. Sudden policy changes, trade
restrictions, or economic downturns can impact the demand for goods, disrupt
supply chains, and affect the overall success of trade transactions.

❖ Quality Control and Standards:

• Explanation: Meeting the quality standards and technical regulations of

different countries can be challenging. Varied product standards, safety
regulations, and certification requirements may need to be addressed, and failure
to comply can result in rejected shipments or additional costs for modifications.

It's important for businesses engaged in import-export trade to be aware of these challenges
and develop strategies to mitigate risks. This may involve staying informed about regulatory
changes, conducting thorough due diligence on trading partners, implementing effective
logistics management, and having contingency plans for unexpected events.

7. List down the five primary goals of chambers of commerce?

Chambers of Commerce play a vital role in supporting and promoting the business community.
The primary goals of chambers of commerce vary, but they generally focus on fostering
economic growth, advocating for businesses, and providing resources and support. Here are
five primary goals:

➢ 1.Promoting Business and Economic Growth:

Chambers work to stimulate economic development and growth in their respective regions.
They support local businesses by organizing events, trade shows, and networking opportunities
to facilitate business connections and collaborations.

➢ 2. Advocacy and Representation:

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Chambers serve as advocates for businesses by representing their interests to government
bodies, policymakers, and regulatory agencies. They work to influence policies and legislation
that impact the business community, aiming to create a favorable business environment.

➢ 3. Providing Networking Opportunities:

Chambers of Commerce create platforms for businesses to connect, network, and build
relationships. Events such as business mixers, seminars, and conferences offer opportunities
for professionals to exchange ideas, share experiences, and explore potential collaborations.

➢ 4. Offering Business Support and Resources:

Chambers provide resources and support services to help businesses thrive. This may include
access to educational programs, training workshops, market research, and information on
business best practices. Chambers often act as a central hub for business-related information
and assistance.

➢ 5. Facilitating International Trade:

Chambers play a role in promoting international trade by facilitating connections between local
businesses and foreign markets. They may offer assistance with export-import processes,
provide information on global markets, and organize trade missions or delegations to enhance
international business opportunities.

It's important to note that the specific goals and activities of chambers of commerce can vary
based on their size, location, and the industries they serve. However, these overarching goals
reflect the common objectives of chambers in supporting and advancing the interests of the
business community.

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