Documents required for an international sale can vary significantly from transaction to transaction, depending on the destination and the product being shipped. At a minimum, there will be two documents: the invoice and the transport document. The buyer will usually provide the seller with a list of documents needed to get the goods into his country as expeditiously and inexpensively as possible. Some documentary requirements are not open to negotiation, as they are needed by the importer to clear customs at the port of destination. International market involves various types of trade documents that need to be produced while making transactions. Each trade document is different from other and present the various aspects of the trade like description, quality, number, transportation medium, indemnity, inspection and so on. So, it becomes important for the importers and exporters to make sure that their documents support the guidelines as per international trade transactions. A small mistake could prove costly for any of the parties. For example, a Trade Document about the Bill of Lading is a proof that goods have been shipped on board, while Inspection Certificate, certifies that the goods have been inspected and meet quality standards. So, depending on these necessary documents, a seller can assure a buyer that he has fulfilled his responsibility whilst the buyer is assured of his request being carried out by the seller.
The following is a list of documents often used in international trade:
1. Air Waybill;
2. Bill of Lading;
3. Certificate of Origin;
4. Draft (or Bill of Exchange);
5. Insurance Policy (or Certificate);
6. Packing List/Specification;
7. Inspection Certificate.
1. Air Waybills: Air Waybills make sure that goods have been received for shipment by air. A typical air waybill sample consists of of three originals and nine copies. The first original is for the carrier and is signed by a export agent; the second original, the consignee’s copy, is signed by an export agent; the third original is signed by the carrier and is handed to the export agent as a receipt for the goods. safety reasons which ensure that the document never comes into the hands of an unauthorised person. Only one original is sufficient to take possession of goods at port of discharge so, a bank which finances a trade transaction will need to control the complete set. The Bill of Lading must be signed by the shipping company or its agent, and must show how many signed originals were issued. To be acceptable to the buyer, the B/L should: 1. Carry an “On Board” notation to showing the actual date of shipment, (Sometimes however, the “on board” wording is in small print at the bottom of the B/L, in which cases there is no need for a dated “on board” notation to be shown separately with date and signature.) 2. Be “clean” have no notation by the shipping company to the effect that goods/ packaging are damaged.
2. Bill of Lading (B/L): Bill of Lading is a document given by the shipping agency for the goods shipped for transportation form one destination to another and is signed by the representatives of the carrying vessel. Bill of lading is issued in the set of two, three or more. The number in the set will be indicated on each bill of lading and all must be accounted for. This is done due to thesafety reasons which ensure that the document never comes into the hands of an unauthorised person. Only one original is sufficient to take possession of goods at port of discharge so, a bank which finances a trade transaction will need to control the complete set. The Bill of Lading must be signed by the shipping company or its agent, and must show how many signed originals were issued. To be acceptable to the buyer, the B/L should:
1. Carry an “On Board” notation to showing the actual date of shipment, (Sometimes however, the “on board” wording is in small print at the bottom of the B/L, in which cases there is no need for a dated “on board” notation to be shown separately with date and signature.)
2. Be “clean” have no notation by the shipping company to the effect that goods/ packaging are damaged.
3. Certificate of Origin: The Certificate of Origin is required by the custom authority of the importing country for the purpose of imposing import duty. It is usually issued by the Chambers of Commerce and contains information like seal of the chamber, details of the good to be transported and so on. The certificate must provide that the information required by the credit and be consistent with all other document. It would normally include : 1. The name of the company and address as exporter. 2. The name of the importer. 3. Package numbers, shipping marks and description of goods to agree with that on other documents. 4. Any weight or measurements must agree with those shown on other documents. 5. It should be signed and stamped by the Chambers of Commerce.
4. Bill of Exchange: Bill of Exchange is a special type of written document under which an exporter ask importer a certain amount of money in future and the importer also agrees to pay the importer that amount of money on or before the future date. This document has special importance in wholesale trade where large amount of money is involved. On the basis of the due date there are two types of Bill of Exchange: Bill of Exchange after Date: In this case the due date is counted from the date of drawing and is also called bill after date. Bill of Exchange after Sight: In this case the due date is counted from the date of acceptance of the bill and is also called bill of exchange after sight.
5. Insurance Certificate: Also known as Insurance Policy, it certifies that goods transported have been insured under an open policy and is not actionable with little details about the risk covered. It is necessary that the date on which the insurance becomes effective is same or earlier than the date of issuance of the transport documents. Also, if submitted under a LC, the insured amount must be in the same currency as the credit and usually for the bill amount plus 10 per cent. The requirements for completion of an insurance policy are as follows:
(а) The name of the party in favour of which the documents has been issued.
(b) The name of the vessel or flight details.
(c) The place from where insurance is to commerce typically the sellers warehouse or the port of loading and the place where insurance cases usually the buyer’s warehouse or the port of destination.
(d) Insurance value that is specified in the credit.
(e) Marks and numbers to agree with those on other documents.
(f) The description of the goods, which must be consistent with that in the credit and on the invoice.
(g) The name and address of the claims settling agent together with the place where claims are payable.
(h) Countersigned where necessary.
(i) Date of issue to be no later than the date of transport documents unless cover is shown to be effective prior to that date.
6. Packing List: Also known as packing specification, it contains details about the packing materials used in the shipping of goods. It also includes details like measurement and weight of goods. The Packing List must:
(i) have a description of the goods (“A”) consistent with the other documents.
(ii) have details of shipping marks (“B”) and numbers consistent with other documents.
7. Inspection Certificate: Certificate of Inspection is a document prepared on the request of seller when he wants the consignment to be checked by a third party at the port of shipment before the goods are sealed for final transportation.