There are lots of documentations involved in international/foreign trade. The documents provide importers, exporters, shipping companies, banks and regulatory agencies instructions, authorisations and appropriate guides.
Some of the documents used in international/foreign trade are commercial documents, financial documents, transport documents, insurance documents and other international trade related documents.
INTERNATIONAL/FOREIGN TRADE COMMERCIAL DOCUMENTS
Quotation – This is a formal statement setting out the estimated cost for a particular job or service. A quotation should state clearly the price, details of quality, quantity, trade terms, delivery terms and payment terms. A quotation is prepared by the seller/exporter
Sales Contract – This is used to specify the terms of a transaction between two parties. Sales contract is an agreement between the buyer and the seller stipulating every detail of the transaction. Since this is a legally binding document, it is therefore advisable to seek legal advice before signing the contract. It is prepared by both the exporter and importer.
Pro Forma Invoice – This is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods. Pro Forma Invoice is usually provided by a supplier prior to the shipment of goods, informing the buyer of the kinds and quantities of goods to be sent, their value, and importation specifications (weight, size and similar characteristics). This is not issued for demanding payment but may be used when applying for an import licence / permit or arranging foreign currency or other funding purposes. It is prepared by the seller/exporter
Commercial Invoice – This is a formal demand note for payment issued by the exporter to the importer for goods sold under a sales contract. It should give details of the goods sold, payment terms and trade terms. It is also used for the customs clearance of goods and sometimes for foreign exchange purpose by the importer. It is prepared by the exporter
Packing List – This is a document that includes details about the contents of a shipped package. It is prepared by the exporter.
There is also another packing list that’s prepared by the shipping company, which contains information needed for transportation purpose, such as details of invoice, buyer, consignee, country of origin, vessel / flight date, port / airport of loading, port / airport of discharge, place of delivery, shipping marks / container number, weight / volume of merchandise and the fullest details of the goods, including packing information.
Inspection Certificate – Pre-shipment inspection is requirement for importation of goods into many countries. Inspection Certificate is a document certifying that goods were in good condition at the time of inspection, usually immediately prior to shipment. It is prepared by the Inspection Company or exporter
Insurance Policy – This is a document detailing the terms and conditions of a contract of insurance. It contains full details of the insurance coverage on the goods shipped. It is prepared by the insurer or insurance agent or insurance broker
Insurance Certificate – This provides verification of the insurance and usually contains information on types and limits of coverage, insurance company, policy number, named insured, and the policies’ effective periods. It certifies that the shipment has been insured under a given open policy and is to cover loss of or damage to the cargo while in transit. It is prepared by the insurer or insurance agent or insurance broker
Product Testing Certificate – This certifies the products are conformed to a certain international / national technical standard, such as product quality, safety and specifications. It is prepared by accredited laboratory or inspection authority
Health Certificate – It is a document issued by the competent country when agricultural or food products are being exported, to certify that they comply with the relevant legislation in the exporter’s country and were in good condition at time of inspection, prior to shipment and fit for human consumption. It is prepared by exporter / inspection authority
Phytosanitary Certificate – Frequently an international requirement that any consignment of plants or planting materials importing into a country shall be accompanied by a Phytosanitary Certificate issued by the exporting country stating that the consignment is found substantially free from diseases and pests and conforms with the current phytosanitary regulations of the importing country. Application of the certificate in Hong Kong should be made to the Agriculture and Fisheries Department. It is prepared by the exporter
Consular Invoice – A consular invoice is a document, often in triplicate, submitted to the consul or embassy of a country to which goods are to be exported before the goods are sent abroad. It shows shipment information such as consignor, consignee, and value description, etc. Certified by a consular official of the importing country stationed in the foreign country, it is used by the country’s customs officials to verify the value, quantity and nature of the shipment. It is prepared by the exporter
INTERNATIONAL/FOREIGN TRADE TRANSPORT DOCUMENTS
Shipping Order S/O – This is usually sent along with a shipment of goods so that the person receiving them can verify that the document correctly reflects the items shipped. It contains details of the cargo and the shipper’s requirements, and is the basic document for preparing other transport documents such as bill of lading, air waybill, etc. It is prepared by the shipper / transport companies
Dock Receipt D/R or Mate’s Receipt – This is a document issued by a shipping company to acknowledge that goods have been received for shipment. It is issued by shipping company
Bill of Lading (B/L) – This is an evidence of contract between the shipper of the goods and the carrier. The customer usually needs the original as proof of ownership to take possession of the goods. There are two types: a STRAIGHT bill of lading is non-negotiable and a negotiable or shipper’s ORDER bill of lading (also a title document) which can be bought, sold or traded while goods are in transit and is used for many types of financing transactions. It is prepared by the shipping company
Sea Waybill – This is a receipt for cargo which incorporates the contract of carriage between the shipper and the carrier but is non-negotiable and is therefore not a title document. It is prepared by the shipping company.
Air Waybill (AWB) – This is a kind of waybill used for the carriage of goods by air. This serves as a receipt of goods for delivery and states the condition of carriage but is not a title document or transferable / negotiable instrument. It is prepared by the Airline
House Air Waybill (HAWB) – This is an air consignment note issued by an air freight agent to provide the cargo description and records. It is not a title document. It is prepared by forwarding agent
Shipping Guarantee (SG) – This is an indemnity given by the customer, countersigned by the Bank, to a shipping company or its agent to allow the shipping company to release the goods to the customer (consignee named in the Bill of Lading) without the presentation of the original Bill of Lading. It is prepared by the importer’s bank / shipping company / consignee
INTERNATIONAL/FOREIGN TRADE FINANCIAL DOCUMENTS
Documentary Credit D/C – This is a document given to a seller by the bank at the buyer’s request to pay a stated sum of money against stipulated documents and compliance of the terms and conditions within a prescribed time limit. It is prepared by the issuing bank upon an application made by the importer
Standby Credit – This is an arrangement between a customer and his bank by which the customer may enjoy the convenience of cashing cheques, up to a value. Or a credit set up between the exporter and the importer guaranteeing the exporter will pay the importer a certain amount of money if the contract is not fulfilled. It is also known as performance bond. This is usually found in large transactions, such as crude oil, fertilizers, fishmeal, sugar, urea, etc. It is prepared by the exporter / issuing bank
Collection Instruction – This is an instruction given by an exporter to its banker, which empowers the bank to collect the payment subject to the contract terms on behalf of the exporter. It is prepared by the exporter
Bill of Exchange (B/E) or Draft – This is an unconditional written order, in which the importer addressed to and required by the exporter to pay on demand or at a future date a certain amount of money to the order of a person or bearer. It is prepared by the exporter
Trust Receipt (T/R) – This is a type of short-term import loan to provide the buyer with financing to settle goods imported under Letter of Credit where title of goods is held by the bank. It is prepared by the importer
Promissory Note – It is a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.. It is prepared by the importer
INTERNATIONAL/FOREIGN TRADE GOVERNMENT DOCUMENTS
Certificate of Origin (CO) – This certifies the place of manufacture of the exported goods to meet the requirements of the importing authorities.
Import / Export Declaration – This is a statement made to the Director of Customs at port of entry / exit, declaring full particulars of the shipment, e.g. the nature and the destination / exporting country of the ship’s cargo. Its primary use is for compiling trade statistics. It is prepared by the exporter / importer
Import / Export Licence – Is a document issued by a relevant government department authorising the imports and exports of certain controlled goods. It is prepared by Trade and Industry Department, Customs & Excise Department, etc.
International Import Certificate (IIC) – Is a statement issued by the government of country of destination, certifying the imported strategic goods will be disposed of in the designated country. It is prepared by Trade and Industry Department
Delivery Verification Certificate (DVC) – Is a statement issued by the government of country of destination, certifying a specific strategic commodity has been arrived in the designated country. It is prepared by Trade and Industry Department
Customs Invoice – Is a document specified by the customs authorities of the importing countries stating the selling price, costs for freight, insurance, packing and payment terms, etc., for the purpose of determining the customs value. It is prepared by the exporter