Major Documents Needed in Connection With Export Transaction Documents Related To Goods

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Major Documents needed in Connection with Export Transaction

Documents related to goods

Export invoice: Export invoice is a sellers' bill for merchandise and contains information about goods such as quantity, total
value, number of packages, marks on packing, port of destination, name of ship, bill of lading number, terms of delivery and
payments, etc.

Packing list: A packing list is a statement of the number of cases or packs and the details of the goods contained in these packs. It
gives details of the nature of goods which are being exported and the form in which these are being sent.

Certificate of origin: This is a certificate which specifies the country in which the goods are being produced. This certificate
entitles the importer to claim tariff concessions or other exemptions such as non-applicability of quota restrictions on goods
originating from certain pre-specified countries. This certificate is also required when there is a ban on imports of certain goods
from select countries. The goods are allowed to be brought into the importing country if these are not originating from the banned
countries.

Certificate of inspection: For ensuring quality, the government has made it compulsory for certain products that these be
inspected by some authorized agency. Export Inspection Council of India (EICI) is one such agency which carries out such
inspections and issues the certificate that the consignment has been inspected as required under the Export (Quality Control and
Inspection) Act, 1963, and satisfies the conditions relating to quality control and inspection as applicable to it, and is export
worthy. Some countries have made this certificate mandatory for the goods being imported to their countries.

Documents related to shipment

Mate's receipt: This receipt is given by the commanding officer of the ship to the exporter after the cargo is loaded on the ship.
The mate's receipt indicates the name of the vessel, berth, date of shipment, description of packages, marks and numbers,
condition of the cargo at the time of receipt on board the ship, etc. The shipping company does not issue the bill of lading unless it
receives the mate's receipt.

Shipping Bill: The shipping bill is the main document on the basis of which customs office grants permission for the export. The
shipping bill contains particulars of the goods being exported, the name of the vessel, the port at which goods are to be discharged,
country of final destination, exporter's name and address, etc.

Bill of lading: Bill of lading is a document wherein a shipping company gives its official receipt of the goods put on board its
vessel and at the same time gives an undertaking to carry them to the port of destination. It is also a document of title to the goods
and as such is freely transferable by the endorsement and delivery.

Airway Bill: Like a bill of lading, an airway bill is a document wherein an airline company gives its official receipt of the goods
on board its aircraft and at the same time gives an undertaking to carry them to the port of destination. It is also a document of title
to the goods and as such is freely transferable by the endorsement and delivery.

Marine insurance policy: It is a certificate of insurance contract whereby the insurance company agrees in consideration of a
payment called premium to indemnify the insured against loss incurred by the latter in respect of goods exposed to perils of the
sea.

Cart ticket: A cart ticket is also known as a cart chit, vehicle or gate pass. It is prepared by the exporter and includes details of the
export cargo in terms of the shipper's name, number of packages, shipping bill number, port of destination and the number of the
vehicle carrying the cargo.

Documents related to payment

Letter of credit: A letter of credit is a guarantee issued by the importer's bank that it will honour up to a certain amount the
payment of export bills to the bank of the exporter. Letter of credit is the most appropriate and secure method of payment adopted
to settle international transactions

Bill of exchange: It is a written instrument whereby the person issuing the instrument directs the other party to pay a specified
amount to a certain person or the bearer of the instrument. In the context of an export-import transaction, bill of exchange is drawn
by exporter on the importer asking the latter to pay a certain amount to a certain person or the bearer of the bill of exchange. The
documents giving title to the export consignment are passed on to the importer only when the importer accepts the order contained
in the bill of exchange.

Bank certificate of payment: Bank certificate of payment is a certificate that the necessary documents (including bill of exchange)
relating to the particular export consignment has been negotiated (i.e., presented to the importer for payment) and the payment has
been received in accordance with the exchange control regulations.

Export Documentation In Pakistan


Now a days export license is no MORE required to export. Only the following initial documents are required to export: --

National Tax Number Certificate, which is issued by the Income Tax Department on filing of application form accompanied with
one attested photocopy of NIC.

Commercial exporter is not required to register with sales tax department. But if you pay the sales tax on purchasing the goods
from local market it will be better for you to get yourself register with sales tax department so that you may claim refund of your
input tax deducting on your purchases. Once you are registered in sales tax department you will be obliged to file monthly sales
tax return irrespective of the fact that you have been involved in any sales tax activity or not.

Current bank account is required for export proceedings and documents.

Membership certificate of Chamber of Commerce, Industries or any relevant trade association is required.

Once the consignment, to be exported arrives at the port, usually a clearing agent's services are sought. The following documents
are required to provide to clearing agent to clear the consignment:

Packing list, Commercial invoice, Letter of Credit (LC), Certificate of origin which is issued by the chamber of commerce,
National Tax Number Certificate

Form "E"

(State bank form): All exports from Pakistan which are subject to Foreign Exchange Regulations are required to be declared on
form 'E' which is in sets of four copies each. The exporter should submit the full set of Form 'E' to the bank after it has been
completed and signed by the exporter himself or his authorised agent. While certifying Form 'E', bank should ensure that exporters
give only one address in Form 'E'. After the form is certified by the bank, it should be submitted to the Customs/Postal authorities
at the time of shipment alongwith the shipping bill. The Customs authorities will detach the original copy and after filling in the
portion relating to them and affixing their seal and signature thereon forward it to the State Bank. The Customs authorities will
return the duplicate, triplicate and quadruplicate copies to the exporter or his authorised agent who will retain the quadruplicate for
his own record and submit the duplicate and triplicate copies to the Authorised Dealer alongwith the shipping documents within
14 days from the date of shipment.

Submission of Export Documents to the bank: All shipping documents covering goods exported from Pakistan and declared on
form 'E' must be passed through the medium of bank within 14 days from the date of shipment. The exporter must submit the
duplicate (bearing Customs seal and signature of Customs Officials with Code number) and triplicate copies of form 'E' alongwith
the shipping documents, invoices etc., to the bank who had certified the form 'E'. An extra copy of the shipper's invoice must be
attached to the triplicate copy of the form 'E'.

Bill of exchange

A bill of exchange or "draft" is a written order by the drawer to the drawee to pay money to the payee. A common type of bill of
exchange is the cheque defined as a bill of exchange drawn on a banker and payable on demand. Bills of exchange are used
primarily in international trade, and are written orders by one person to his bank to pay the bearer a specific sum on a specific
date. Prior to the advent of paper currency, bills of exchange were a common means of exchange.

A bill of exchange is an unconditional order in writing addressed by one person to another, signed by the person giving it,
requiring the person to whom it is addressed to pay on demand or at fixed or determinable future time a sum certain in money to
order or to bearer. (Sec.126)

It is essentially an order made by one person to another to pay money to a third person.

A bill of exchange requires in its inception three parties—the drawer, the drawee, and the payee.

The person who draws the bill is called the drawer. He gives the order to pay money to the third party. The party upon whom the
bill is drawn is called the drawee. He is the person to whom the bill is addressed and who is ordered to pay. He becomes an
acceptor when he indicates his willingness to pay the bill. (Sec.62) The party in whose favor the bill is drawn or is payable is
called the payee.

Generalist System Preference:

Generalized System of Preferences (GSP) is a preferential tariff system extended by developed countries (also known as
preference giving countries or donor countries) to developing countries (also known as preference receiving countries or
beneficiary countries). It involves reduced MFN Tariffs or duty-free entry of eligible products exported by beneficiary countries to
the markets of donor countries.

What is a Certificate of Origin?

A Certificate of Origin (CO) is a document attesting that goods in a particular export shipment are wholly obtained or produced or
manufactured or processed in a particular country (country of origin). Virtually every country in the world considers the origin of
imported goods when determining what duty will be assessed on the goods or, in some cases, whether the goods may be legally
imported at all.

There are two varieties of certificates. The main type issued by chambers is "Non-Preferential CO", i.e. an “ordinary CO” which
certifies the country of origin of a particular product does not qualify for any preferential treatment.

"Preferential C.O" refers to C.O. which enables products to enjoy tariff reduction or exemption when they are exported to
countries extending these privileges: e.g. GSP, Commonwealth Preference Certificate. Certificates of Origin may be needed to
comply with Letters of Credit, foreign Customs requirements or a buyer’s request.

What is a Bill of Lading?

A bill of lading (which can be referred to as a BOL,or B/L) is a specific document issued by a carrier, for example by a company’s
shipping department or a ship’s master, which acknowledges that specified goods or cargo have been received on board for
conveyance to a location specifically named for delivery to the consignee. The consignee is usually identified in this document.

What is a Through Bill of Lading?

A through bill of lading generally involves at least two different modes of transport being used. This means using either of road,
rail, air, and sea. The term “through bill of lading” is derived from the word “bill”, which in this context is a schedule of costs for
services supplied or about to be supplied. This term also derives from the verb “to lade” which in this sense means to load cargo
onto a carriers such as a ship or another form of transport such as a barge, truck or plane.

Bill of Lading Types

Straight Bill of Lading

This type of bill states that the goods are consigned to a specified person and it is not negotiable free from existing equities. In
other words any endorsee acquires no better rights than those held by the endorser. For example, should the carrier or another hold
a lien over the goods as security for unpaid debts, the endorsee is bound by the lien. However, if the endorser wrongfully failed to
disclose the charge, the endorsee will have a right to claim damages for failing to transfer an unencumbered title.

This type of bill is also known as a non-negotiable bill of lading.

Order Bill of Lading

This type of bill uses express words in oder to make the bill negotiable. For example, it states that the described delivery is to be
made to the further order of the consignee by using such words as “delivery to Company Ltd. or to order or assigns”. In this
respect, the specific bill can now be endorsed by Company Ltd. or the explicit right to take delivery is able to be transferred by the
physical delivery of the bill which is accompanied by adequate evidence of Company Ltd.’s intention to transfer.

This type of bill is also known as a negotiable bill of lading.

Bearer Bill of Lading

This type of bill states that delivery will be made to the holder the bill. Such bill may be created explicitly or it is an order bill that
fails to nominate the consignee whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by
physical delivery.

Surrender Bill of Lading

Under a term import documentary credit the bank releases the documents on receipt from the negotiating bank but the importer
does not pay the bank until the maturity of the draft under the relative credit. This direct liability is called Surrender Bill of Lading
(SBL), i.e. when we hand over the bill of lading we surrender title to the goods and our power of sale over the goods.

The BL must contain the following information:

Name of the shipping company; Flag of nationality; Shipper's name; Order and notify party; Description of goods; Gross/net/tare
weight; and Freight rate/measurements and weighment of goods/total freight.

Letters of Credit: It is named a Letter because initially the LCs were issued manually in a Letter format address by Issuing Bank
to Beneficiary confirming its conditional undertaking to reimburse the Beneficiary, the amount of the LC provided above 2 basic
conditions are fulfilled.

Standard Forms of Documentation:

When making payment for product on behalf of its customer, the issuing bank must verify that all documents and drafts conform
precisely to the terms and conditions of the letter of credit. Although the credit can require an array of documents, the most
common documents that must accompany the draft include:
Commercial Invoice
The billing for the goods and services. It includes a description of merchandise, price, FOB origin, and name and address of buyer
and seller. The buyer and seller information must correspond exactly to the description in the letter of credit. Unless the letter of
credit specifically states otherwise, a generic description of the merchandise is usually acceptable in the other accompanying
documents.

Bill of Lading
A document evidencing the receipt of goods for shipment and issued by a freight carrier engaged in the business of forwarding or
transporting goods. The documents evidence control of goods. They also serve as a receipt for the merchandise shipped and as
evidence of the carrier's obligation to transport the goods to their proper destination.

Warranty of Title
A warranty given by a seller to a buyer of goods that states that the title being conveyed is good and that the transfer is rightful.
This is a method of certifying clear title to product transfer. It is generally issued to the purchaser and issuing bank expressing an
agreement to indemnify and hold both parties harmless.

Letter of Indemnity
Specifically indemnifies the purchaser against a certain stated circumstance. Indemnification is generally used to guaranty that
shipping documents will be provided in good order when available.

Types of Letter of Credit:

Acceptance Draft - payable at a fixed or determinable future date, upon the face of which the drawee has acknowledged in
writing his or her obligation to pay at maturity. See also "banker's acceptance" and "trade acceptance".

Account Party - The party instructing the bank to open a letter of credit and on whose behalf the bank agrees to make payment.
In most cases, the account party is the importer/buyer, and is also known as the applicant.

Advice of Fate - Notification of the status of a collection that is still outstanding. When a draft bears this phrase, the time begins
to run from its date. The date of maturity is therefore fixed and does not depend on the date of acceptance of the draft.

Advising Bank - A bank that accepts a letter of credit from the issuing bank, verifies its authenticity, and forwards it to the
beneficiary. The advising bank does not take on any payment obligations.

After Sight - When a draft bears this phrase, the time begins to run from the date of its acceptance.

Air Waybill (of lading) - A signed receipt and a contract to deliver goods by air. Such bills are non-negotiable and do not convey
title to the goods as do “To Order” bills of lading used by ocean and land carriers. The title passes to the party to whom the goods
are consigned (the Consignee).

Amendment - Change to terms of a letter of credit. Beneficiary has the right to refuse the amendment under an irrevocable letter
of credit.

Assignment of Proceeds - A request by the beneficiary to pay all or part of the funds due to him to a third party. This instrument
does not transfer rights in the letter of credit nor the title to the goods.

Back-to-Back Letter of Credit (L/C) - Letter of credit issued for the account of a buyer who is already holding an L/C in his or
her favor. The back-to-back L/C is issued in favor of the supplier to cover the same shipment as stipulated in the credit already
held by the buyer. Terms of both L/Cs, except for the amount and expiration date, are so similar that the same documents
presented under the back-to-back credit are subsequently applied against the credit in favor of the buyer. However, the
buyer/beneficiary of the first credit substitutes this draft and invoice for those presented by the supplier. See also “letter of credit”.

Cash Against Documents (CAD) - Payment for goods in which an intermediary (usually a bank) releases title documents to the
buyer upon payment in cash.

Cash in Advance (CIA) - A term of trade in which the exporter does not ship goods until payment is received; offers the least
risk to sellers and the most risk to buyers.

Clean Draft - A sight or time draft (bill of exchange) which is not accompanied by additional documents. Also referred to as
"Clean Collection".

Deferred Letter of Credit (L/C) - Letter of credit that calls for payment at a future date, but does not require a draft. See also
“letter of credit” and “usance letter of credit”.

Documents Against Acceptance (D/A) - Instructions given by a shipper to his or her acceptance bank that the documents
attached to a time draft for collection are deliverable to the drawee/payer against his or her acceptance of the draft.

Documents Against Payment (D/P) - Instructions given by a shipper to his or her bank that the documents are deliverable to the
drawee/payer only against his or her payment of the draft.
Red Clause - Clause in a letter of credit that authorizes the advising/negotiating bank to make an advance payment to the
beneficiary before presentation of shipping documents, usually against a simple receipt.

Usance (Time) Credit - Letter of credit that calls for payment against drafts calling for payment at some specified date in the
future. Gives buyers time to sell the goods to get the funds to reimburse the issuer.

Usance Letter of Credit (L/C) - Letter of credit that calls for payment at a future date -- generally within six months -- and
requires a draft drawn on the issuing/paying bank for the amount of the invoice. See also “letter of credit”.

Sight Letter of Credit: A letter of credit that is payable once it is presented along with the necessary documents.

A sight LC means that whenever the Bill of Exchange is presented at counter, it must be paid then and there (ofcourse if the LC
docx are in order). While a Usance Bill is first presented then accepted and after that it is paid. Usance bills are usually for a
period of 30, 60, 90 days. So if a usance bill is of 30 days then it would be paid 30 days after presentation and acceptance.

Export procedure:

All the exports work under the imports and exports act that is changed by the state in every year. When the importer send the L.C
to bank in respect to import or when the L.C comes to the advising bank from the issuing bank then the concerned officer allot the
number to the L.C and get registered. The concerned officer write down the name of issuing bank and the party name in a register
and intimate the party about L.C. the exporter after receiving the L.C from bank will prepare the documents as per the L.C usually
the following documents have to be prepared by the exporter:

Bill of lading, Covering letter, E- Form, Bill of exchange, Packing list, Commercial invoice, Quota documents in case of quota
country, Certificate of origin, Special custom invoice

Exports: Introduction and registration: Imports and exports act 1950 have empowered the federal Govt to control the import
and export in Pakistan. Pakistan is developing country and like other developing countries its imports exceeds than exports. To
control this situation the registration of import and export has been made obligatory under the registration order 1993. The
authority of registration has been given to export promotion bureau. No importer and exporter who has no granted registration
shall indent, import and export of any good into or out of Pakistan. The requirements for getting registration are as under:

Application form, Photocopy of I.D card., Copy of memorandum and article of association (in case of limited company).,
Ownership deed of office., Fee payment., Certificate of incorporation.

The export form (E-FORM): E-FORM means “export form” which is the first and foremost requirement for the exports from
Pakistan. It is control instrument by Govt of Pakistan by which it monitors the receipts from exports and checks the goods that are
transferred without foreign exchange. All banks which are engaged with the foreign exchange are required to print and maintained
the E form that is checked by the state bank of Pakistan. For export an e form is issued by the bank on the request letter of a
company. Two separate registers are maintained by the bank one for his use and the other one are for the requirement of the SBP.
On issuance of E forms the banker lists it in the register and makes sign from the exporters. Banks record the name of party,
amount, the goods description, port of destination, importer name port of loading etc.

The functional utility of E-FORM:

The export form has four copies. The exporters and banks use it. Without it the exporter can not make export. These copies are
used as:

Original copy is for SBP that is checked by the higher authority. Duplicate copy is for the bank use that is upraised by the custom
authorities. Triplicate for the use to report of SBP at the time of payment received. Quartiplacte is for the company used.

Usage of E- FORM:

E- FORM is an important document for export. It has its own importance such as this form is used as a checker means it monitor
that what things are going abroad and in return what things we are getting. So it creates a check and balance on the foreign
exchange. It shows the total quantity and quality of the goods that is sending to another country. An E – Form shoe the party
worth that is very helpful for the party and the bank. Bank can create a party limit for the credit on the behalf of it and a party can
arrange a loan for its future requirements from the bank. It shows the terms of payment by the importer and the delivery terms by
the both parties that is helpful in case of any discrepancy during the contact.

Short shipment notice:

A shipment may be cancelled by the importer or exporter due to many reasons. The cancellation of the export letter is called short
shipment notice. In this situation the company has to inform the bank. Company has to give a written letter to the bank that he is
not the export so please cancelled their e form. On the other hand bank at the time of receiving the letter will stop the e form and
cancelled the all documents.

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