Training Material YA Consult 1

EXPORT PROCEDURES
AND DOCUMENT
PREPARATION

Compiled by: Yeshiwas Ademe

For Training

Aug 2018
 Introduction

 Not all of the export documents will be necessary

for every transaction. However, familiarity with all
of them is beneficial. Samples of many of these
export documents can be obtained from our files.
 The number of documents the exporter must deal
with varies depending on the destination of the
shipment. Because every country has different
import regulations, the exporter must be careful to
provide proper documentation.

Training Material
 Pro Forma Invoice

 A pro forma invoice is an invoice prepared by the

exporter before shipping the goods, informing the

buyer of the goods to be sent, their value, and other

key specifications. It also can be used as an offering

of sale or price quotation.

Compiled Training Material
 Contract

One of the primary peculiarities of the documentary credit

is that the payment obligation is independent from the
underlying contract of sale or any other contract in the
transaction. Thus the bank’s obligation is defined by the
terms of the letter of credit alone, and the sale contract
is irrelevant.
 Purchase contract

 Sales contract

 Format

 Content
Compiled Training Material
 Content

Dates
Reference
Buyer
Seller
Commodity
Quantity
Quality
Price
Shipment
Terms of Payment
Governing rules
Bag mark
Signature

Training Material
 Specifications
6

Training Material
 Terms of Payment

Letter of credit
 The importer's bank issues this financial instrument

to the exporter/supplier. In this document, the

importer's bank substitutes its own credit for that of
the importer and commits to a designated beneficiary
(the exporter) to pay a stated amount within a stated
time frame. The shipper/exporter must comply with
all of the terms and conditions of the letter of credit
for the provision mentioned above to hold and to be
honored.
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 Terms of Payment cont…
8

Irrevocable
 According to UCP all credit must be Irrevocable.

Confirmed
 Confirmation: Confirmation is a definite undertaking from the confirming

bank to honor or negotiate a complying presentation in addition to that of

the issuing bank.
 Confirming bank: The Bank which adds confirmation to an LC is termed

as Confirming Bank. It does so at the request of the issuing bank and

taking authorization from the issuing bank.
At Sight LC
 It is a kind of credit that the announcer bank after observing the carriage

documents from the seller and checking all the documents immediately
pays the required money.

Training Material
 Types of LCs
9

 Revocable Letter of Credit

 Irrevocable LC

 Confirmed LC

 Unconfirmed LC

 Transferrable LC

 Un-transferable LC

 Deferred/Usance LC

 At Sight LC

 Red Clause LC

 Back to Back LC

We shall see LC in detail on separate ppt.

Training Material
 CAD (Cash against documents)

10

 In cash against documents transaction, you ship the

goods but retain ownership and control of them until
your buyer pays for them.
 You ship the goods before payment but don’t release
the documents to transfer ownership and possession of
them (‘shipping documents’) until your overseas buyer
has made an irrevocable payment for the goods. Your
bank and your buyer’s bank facilitate the transfer of
the payment and shipping documents. Alternatively,
you can use your agent in your buyer’s country
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 CAD (Cash against documents)…
11

 The main steps in cash against documents transaction are:

 You ship the goods to your buyer in accordance with the export contract.

 Either:

 you present the relevant shipping documents, including the document of title
(usually the bill of lading) and invoice, to your bank, which sends the documents
to the buyer’s bank or
 you send the shipping documents to your agent in the buyer’s country.
 Your buyer provides payment for the goods to their bank or your agent,
who in turn transfers the payment to your bank.
 In return for the payment your buyer’s bank or your agent hands over the

shipping documents to the buyer, who then takes control of the goods.
 We shall see in detail about CAD separately.

Training Material
 Documents Required (Sample)

12

The Seller Shall Provide Shipment Advice To The Buyer Within

__ Working Days Of Sailing Of Vessel. Apart From This The
Following
Original Bills Of Lading
Commercial Invoice
Packing List In Originals
Certificate Of Origin Issued By Chamber Of Commerce
Phytosanitary Certificate
Analysis Certificate
Certificate Of Weight And Quality Issued By
GMO And Allergen Certificate
Note: all documents to be in triplicate unless mentioned
Training Material
 Caution On Document presentation
13

If the documents tendered

under the Letter of credit
deviate from the language of
the Letter of credit the bank
is entitled to withhold
payment even if the
deviation is purely
terminological.
Training Material
 Export permit

14

 An Export permit is a government document that authorizes

the export of specific goods in specific quantities to a
particular destination. This document may be required for
most or all exports to some countries or for other countries
only under special circumstances.
Customs declaration
 Shipper’s Letter of Instruction/ Shipping instruction

 The shipper’s letter of instruction is issued by the exporter to

the forwarding agent and includes shipping instructions for

air or ocean shipment.
Way bill
Training Material
 Commercial Invoice

15

 A commercial invoice is a bill for the goods from the seller to the
buyer. These invoices are often used by governments to determine
the true value of goods when assessing customs duties.
Governments that use the commercial invoice to control imports
will often specify its form, content, and number of copies, language
to be used, and other characteristics.
 Normally, exporters use the same invoice for both domestic and
international trade. However, some countries require special forms.
The invoice must include the dates of billing and shipping, names
of exporter or manufacturer, consignee, terms of sale, mode of
payment, description of goods, country of origin, packing marks
and numbers, numbers of units, price per unit, total price,
transportation mode and any other information required by the
country of destination. Training Material
 Export Packing List

16

 Considerably more detailed and informative than a standard

domestic packing list, an export packing list lists seller, buyer,
shipper, invoice number, date of shipment, mode of transport,
carrier, and itemizes quantity, description, the type of package,
such as a box, crate, drum, or carton, the quantity of packages,
total net and gross weight (in kilograms), package marks, and
dimensions, if appropriate. Both commercial stationers and
freight forwarders carry packing list forms. A packing list may
serve as conforming document. It is not a substitute for a
commercial invoice. In addition, U.S. and foreign customs
officials may use the export packing list to check the cargo.

Training Material
 Bill of lading

17

 A bill of lading is a contract between the owner of

the goods and the carrier (as with domestic
shipments). For vessels, there are two types: a
straight bill of lading, which is non-negotiable, and a
negotiable or shipper's order bill of lading. The latter
can be bought, sold, or traded while the goods are in
transit. The customer usually needs an original as
proof of ownership to take possession of the goods.
 Draught at sight

Training Material
 CERTIFICATES OF ORGIN

18

 The Certificate of Origin (CO) is required by some countries for all or

only certain products. In many cases, a statement of origin printed on
company letterhead will suffice. The exporter should verify whether a
CO is required with the buyer and/or an experienced shipper/freight
forwarder or the Trade Information Center.
 Note: Some countries (i.e., numerous Middle Eastern countries) require
that certificate of origin be notarized, certified by local chamber of
commerce and legalized by the commercial section of the consulate of
the destination country. For certain Middle Eastern countries, the Arab
countries embassies  may also provide such services.
 For textile products, an importing country may require a certificate of
origin issued by the manufacturer. The number of required copies and
language may vary from country to country.

Training Material
 Certificate of Origin for claiming benefits under Free Trade Agreements and special benefits

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 Special certificates may be required for countries

with which Ethiopia has special trade agreements
and preferential and LDC benefits.

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 Phytosanitary Certificate
All shipments of fresh fruits and vegetables, seeds, nuts, flour, rice,
grains, lumber, plants, and plant materials require a phytosanitary
certificate. The certificate must verify that the product is free from
specified epidemics and/or agricultural diseases. Additional information
and forms are available from Ministry of Agriculture
Animal and Plant Health Inspection Service (APHIS).
 Fumigation Certificate
The Fumigation Certificate provides evidence of the fumigation of
exported goods (especially agricultural products, used clothing, etc.).
This form assists in the quarantine clearance of any goods of plant or
animal origin. The seller is typically required to fumigate the commodity
at his or her expense a maximum of 15 days prior to loading.

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 OTHER CERTIFICATES
FOR SHIPMENTS OF SPECIFIC GOODS

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Additional certificates are needed for different

purposes. Check with your importer, 
freight forwarder, or contact the Trade Information
Center for further information.

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 OTHER CERTIFICATES…
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Certificate of Analysis:
 A certificate of analysis can be required for seeds,

grain, health foods, dietary supplements, fruits and

vegetables, and pharmaceutical products.
Certificate of Free Sale
 Certificate of free sale may be issued for biologics,

food, drugs, medical devices and veterinary medicine.

More information is available from the 
Food Health and Drug control and Administration and
Health authorities in some regions.
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 OTHER CERTIFICATES…
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Dangerous Goods Certificate

 Exports submitted for handling by air carriers and air freight forwarders
classified as dangerous goods need to be accompanied by the Shipper’s
Declaration for Dangerous Goods required by the International Air
Transport Association (IATA). The exporter is responsible for accuracy of
the form and ensuring that requirements related to packaging, marking,
and other required information by IATA have been met.
 For shipment of dangerous goods it is critical to identify goods by proper

name, comply with packaging and labeling requirements, which vary

depending upon the type of product shipper and the country shipped to.
 More information on labeling/regulations is available from
the International Air Transportation Association  websites.
 For ocean exports, hazardous material regulations are contained in the

International Maritime Dangerous Goods regulations.

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 OTHER CERTIFICATES…
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 Halal Certificate
Required by most countries in the Middle East, this certificate states that the fresh or frozen meat or
poultry products were slaughtered in accordance with Islamic law. Certification by an appropriate
chamber and legalization by the consulate of the destination country is usually required.
 Health Certificate

For shipment of live animals and animal products (processed foodstuffs, poultry, meat, fish, seafood,
dairy products, and eggs and egg products). Note: some countries require that health certificates be
notarized or certified by a chamber and legalized by a consulate. Health certificates are issued by the
Ministry of Agriculture’s Animal and Plant Health Inspection Service (APHIS).
 Ingredients Certificate

A certificate of ingredients may be requested for food products with labels that are inadequate or
incomplete. The certificate may be issued by the manufacturer and must give a description of the
product, contents, and percentage of each ingredient; chemical data; microbiological standards;
storage instructions; shelf life; and date of manufacture. If animal fats are used, the certificate must
state the type of fat used and that the product contains no pork, artificial pork flavor, or pork fat. All
foodstuffs are subject to analysis by Ministry of Health laboratories to establish their fitness for use.

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 OTHER CERTIFICATES…
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 Inspection Certificate
 Weight and Quality certificates should be provided in accordance with LC
terms and relevant regulations for loading at port and loading at
source/mill site as appropriate. A certificate of origin certified by the local
chamber of commerce at the load port and a phytosanitary certificate
issued by Ministry of Agriculture and fumigation certificate are to be
provided to the buyer. Costs of all inspection, as well as
certificates/documents at the load port, are usually the responsibility of the
seller. Independent inspection certificates may required in some instances.
 Weight Certificate
 A certificate of weight is a document issued by customs in other countries
but here it is by buyer designated Inspection Company, certifying gross
and net weight of the exported goods.

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 OTHER CERTIFICATES…
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 Pre-Shipment Inspections
 The governments of a number of countries have contracted with
international inspection companies to verify the quantity, quality,
and price of shipments imported into their countries. The purpose of
such inspections is to ensure that the price charged by the exporter
reflects the true value of the goods, to prevent substandard goods
from entering the country, and to deflect attempts to avoid payment
of customs duties. Requirements for pre-shipment inspection are
normally spelled out in letter-of-credit or other documentary
requirements. Inspections companies include SGS and Intertek or
others. Some countries require pre-shipment inspection certificates
for shipments of used merchandise.

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 OTHER CERTIFICATES…
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 Insurance Certificate
 Insurance certificates are used to assure the consignee that
insurance will cover the loss of or damage to the cargo
during transit. These can be obtained from your
freight forwarder or publishing house. Note: an airway bill
can serve as an insurance certificate for a shipment by air.
Some countries may require certification or notification.
 Radiation Certificate
 Some counties including Saudi Arabia may require this
certificate for some plant and animal imports. The certificate
states that the products are not contaminated by radioactivity.
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 Other (Product-Specific) Certificates

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Shaving brushes and articles made of raw hair must

be accompanied by a recognized official certificate
showing the consignment to be free from anthrax
germs. Used clothing requires a disinfection
certificate. Grain requires a fumigation certificate,
and grain and seeds require a certificate of weight.
Many countries in the Middle East require special
certificates for imports of animal fodder additives,
livestock, pets, and horses.

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 OTHER EXPORT-RELATED DOCUMENTS

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 Dock Receipt and Warehouse Receipt/ Stuffing report

A dock receipt and warehouse receipt are used to transfer
accountability when the export item is moved by the
domestic carrier to the port of embarkation and left with the
ship line for export.
 Import License

Import licenses are the responsibility of the importer and vary

depending upon destination and product. However, including
a copy of an import license with the rest of your
documentation may in some cases help avoid problems with
customs in the destination country.
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Any questions? you are

well come!

Training Material NSPLC

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Thank you
for your attention!

Training Material NSPLC