Documentation of foreign trade export document (Pre-Shipment)

1. Commercial invoice: Commercial invoice is a document containing a record of the transaction

between a seller (exporter) and a buyer (importer).
It (in addition to other information), must identify the buyer and seller, and clearly indicate the
 Date and terms of sale
 Quantity, weight and/or volume of the shipment,
 Type of packaging
 Complete description of goods
 Unit value and total value, and
 Insurance, shipping and other charges (as applicable)
The buyer needs the invoice to prove ownership and to arrange payment. A commercial invoice is
often used by custom to determine the true value of goods for the assessment of custom duties and
tax.
2. Packing list: A packing List is a document which details the contents of each individual package
or container and indicates itemizes quantity, description, the type of package such as box, crate,
drum, carton, the quantity of packages, total net and gross weight (in kilograms), package marks,
dimension and so on.
The packing list should be attached to the outside of a package in a waterproof envelope or
plastic sheath marked "Packing list enclosed".
The list is used by the shipper or forwarding agent to determine
- The total shipment weight and volume and
- Whether the correct cargo is being shipped.
In addition, customs officials (both local and foreign) may use the list to check the cargo
3. Utilization Permission/ Utilization Declaration (In case of garments): How much inputs and
packaging materials will be used in manufacturing exportable products is basically determined by
the Utilization Declaration (UD) or the Utilization Permission (UP).
- In the case of readymade garments industries, the UD issued by Bangladesh
Garments Manufacturers and Exporters Association.
- In the case of other export-oriented industries, the UP issued by the Customs Bond
Commissionrates.
4. Shipping Bill
Shipping bill is prepared by the exporter and submitted to the Customs. It is required to seek
permission of customs to export goods by Sea/Air.
Shipping Bill normally contains: the name and address of the importer/consignee and exporter,
invoice number and date, name of vessel carrying the goods, name of master or agents, port at
which goods are to be discharged, country of final destination, description of goods, quantity
details of each case, value of the goods, number of packages with total weight, marks and
numbers, etc.
5. Export permission attested by bank
6. Certificate of origin (CO): Certain nations require a signed statement about the origin of the
export item. Such certificates are usually obtained through a semiofficial organization such as a
local chamber of commerce. In many cases, a statement of origin printed on company letterhead
will sufficient. For example: “Made in Bangladesh”
The following documents need to be submit to get certificate of origin:
a) Shipping bill
b) Non-negotiable bill of lading
c) Copy of L/C attested by bank
d) Copy of Back to back L/C
e) CO set filled by the applicant
f) Pay order
g) ID card issued by BGMEA
h) Enrolment Certificate
i) Commercial invoice
j) Packing list
 What is Back to Back letter of credit?
Back-to-back letters of credit occur when a buyer gives a letter of credit to a seller, who then
obtains a letter of credit for a supplier.
The need for a back to back letter of credit arise because the beneficiary of the original latter of credit
may have to procure the goods from the actual producer or supplier who may not supply the goods
unless payment is guaranteed by the bank in the form of letter of credit.

7. Inspection Certificate: A document on the specification of shipment including quantity, quality

certifying that merchandise (such as perishable goods) was in good condition at the time of
inspection, usually immediately prior to shipment. Inspection usually performed by a third party.
Inspection certificates are often obtained by exporter or local agent of buyer from independent
testing organizations, which is then forwarded to the importer.
To obtain this following documents should be submitted to the local agent of buyer:
a) Copy of commercial invoice b) Copy of Packing list c) Copt of bill of lading d) VISA/
License/CO e) Other documents as per L/C terms
8. Consular invoice
A document certifying the genuineness of a shipment of goods and shows information such as the
consignor, consignee and value of the shipment. It is usually issued by the consulate of the
importing country situated in the exporting country.
It must be prepared in the language of importing country.
9. Marine insurance
Marine insurance is the insurance taken out to cover the risks involved in all forms of
transportation, for example, sea, road, rail and air, from the point where the goods are loaded
onto their first form of transport until they arrive at their final destination.
10. Clearance letter against the allotment of EPB
If exporter is a garment exporter under quota category, he has to obtain a clearance letter against
the allotment from Export Promotion Bureau.

Commercial Invoice vs. Consular Invoice

Commercial Invoice Consular Invoice

Commercial invoices are utilized by customs It is used by the country's customs officials to
officials to determine the value of the goods in verify the value, quantity, and nature of the
order to assess customs duties and taxes. shipment.

C&F Agent
Who is C&F agent?
 Export-import procedures are very complex and time-consuming. Clearing and Forwarding (C&F)
agent are expert and well versed with the customs and shipment procedures.
 Clearing and forwarding agents are authorized by the Government not only to help the importers
and the exporters but also to bring any irregularities in the customs rules and regulations by the
customs, importer and exporter to the notice of the custom officials.
Role of C&F agent

In Export Procedure In Import procedure

 Warehousing facilities before the goods are transported to docks.  Keep information of the
 Transportation of goods to docks and arrangement of warehousing at port. arrival of the means of
 Booking of shipping space or air freighting. transport (shipping craft)
 Advising the exporter as regards the relative cost of sending the goods by  Receive the goods from the
different airlines/shipping lines as well as selection of the route of the flight/ sea custom on behalf of importer
route.  Carrying out the customs
 Making arrangements for shipment of goods to be on board the ship/plane. formalities (pay custom
 Arranging for marine/cargo insurance of the shipment. duties) and
 Preparation and processing of shipping documents required for custom  Assure responsibility of
clearance such as Bills of Lading, Dock Receipt, Export Declarations, Consular forwarding the goods to the
Invoice, Certificate of Origin, etc. importer.
 Forwarding the documents to the exporter for their negotiation with the bank
Documents need to submit to the C&F agent: • Shipping Bill of entry
• Export L/C
• Invoice
• Packing list
• Utilization permission
(UP)/ Utilization
Declaration (UD)
• Export permission form

Export Documents (after shipment)

1. Bill of Lading: A bill of lading is a document provided by a shipping corporation/captain to an
exporter to acknowledge receipt of cargo for shipment
11. The bill of lading is the ‘proof’ of a contract of shipment between the shipper and the carrier.
12. The bill of lading also acts as a receipt for goods received by the carrier in good condition from
the shipper.
13. The bill of lading gives the holder the ‘title’ to the shipment.
Classification of Bill of Lading
a) Clean or Dirty Bill of lading: A ‘Clean Bill of Lading’ is a BOL that the shipping carrier has to
sign off on saying that when the packages were loaded they were in good condition.
If the packages are damaged or the cargo is marred in some way (rusted metal, stained paper,
etc.), they will need to issue a “Dirty Bill of Lading.”
b) On board or shipped and receive for shipment bill of lading:
14. On board or shipped BOL confirms that the carrier (shipping company) has received and loaded
the containers physically on board the specified ship or voyage. This is DEFINITE proof that the
container(s) have been loaded.

15. Received for shipment BOL confirms that the carrier has “received” the containers at the port
facility for loading onto a specific ship or voyage. This DOES NOT mean that the container(s) has
been shipped on board.
c) Thorough / port to port BOL It allows for the shipping carrier to pass the cargo through several
different modes of transportation and/or several different distribution centers.
Shipping carrier takes responsibility to send goods one port to another though there are multiple
mode of transportation but does not take risk.
d) Stale bill of lading: A Bill of Lading may be considered "Stale" if it is presented long after the
sailing of the carrying Vessel.
e) Charter party bill of lading: If one shipper or a group of shippers arrange to send their goods to
final destination, a vessel is chartered. In such cases, as a proof of receipt of goods, the charterer
who charters/ lease the ship issues a document of title which is called Charter party bill of lading.
f) Negotiable and Non-negotiable bill of lading:
A negotiable bill of lading instructs the carrier to deliver goods to anyone (third party) in
possession of the original endorsed negotiable bill, which itself represents title to and control of
the goods.
A non-negotiable bill of lading sets out a specific consignee to whom the goods are to be shipped,
and does not itself represent ownership of the goods.
g) Liner bill of lading: These are issued by shipping companies when goods carried on regular line
vessels with schedule run and reserved docks at destination.
h) House bill of lading: House Bill of Lading issued by a C&F agent who act as a shipping agent on
receipt of goods from shipper agreeing to deliver goods at destination.
i) Short form or blank bill of lading:
In a short form bill of lading/blank back bill of lading, the terms and conditions of carriage on the
reverse (back) of the bill of lading (B/L) are omitted, instead they are listed on a document other
than the B/L.
The short form B/L saves the cost of printing (i.e., no printing on the back of the B/L) and if the
terms and conditions of carriage change, there is no need to reprint the B/L form.
j) Third party bill of lading: It is issued when third party is beneficiary rather than exporter
k) Combined or multi-mode transport bill of lading: Combined bill of lading or Multimodal
transport bill of lading are transport documents covering transport by more than one mode of
transport. Shipping companies take all responsibility to send goods one port to another though
there are multiple mode of transportation and also take risk.
Negotiation of export documents
Negotiating Bank, who negotiates documents delivered to bank by beneficiary of LC/ exporter.
It verifies documents and confirms the terms and conditions under LC on behalf of beneficiary to
avoid discrepancies
Role of Negotiating Bank: When the export bill is drawn under letter of credit arrangement, it is the
duty of negotiating bank to examine carefully whether all the documents required under L/C are
presented and whether they are drawn in conformity to the terms of letter of credit. If the documents
are in order and comply with the total terms of letter of credit only, the negotiating bank makes the
payment to the exporter.
If there is any discrepancies in export documents
 the negotiating bank does not make the payment to the exporter and ask exporter
to remove discrepancies
 If exporter remove discrepancies, the negotiating bank makes payment. But if
exporter does not remove discrepancies then it will inform opening bank or issuing
bank about discrepancies and sent the documents to issuing bank in collection.
And receive the payment from reimbursing bank for exporter.
The following documents are essential for negotiation
1. Application form supplied by bank
2. Bill of exchange
3. Commercial Invoice
4. Bill of lading as per original export L/C terms
5. Packing list
6. Inspection Certificate
7. Beneficiary Statement
8. Certificate of the country of origin
9. VISA/ License/GSP from Export Promotion Bureau
10. Properly signed MCD (Multi-Country Declaration)
11. Export permission to be approved by customs authority
12. Other essential documents.
LIM
Loan against Imported Merchandise (LIM) is a facility provided by the bank to the importers who are
in shortage of fund to retire the import bills and thus to clear the goods from the port authority.
LIM Accounts may be created in the following two cases: a) LIM account on importer’s request b)
Forced LIM Account
Forced LIM
Sometimes, it is observed that the importers do not come forward to retire the documents even after
arrival of the cargo. In that circumstances, it is advisable on the part of the branch to arrange
clearance of the goods by creating forced LIM.
When Forced LIM is created?
When it is need
To save the consignment from incurring demurrage, auction by the customs, deterioration
inequalities etc.
To protect the interest of the bank and held the goods as cover against the importers liability
forced LIM is created.

Short Note:
Bill of exchange: A written, unconditional order by one party (the drawer) to another (the
drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill),
for payment of goods and/or services received.
 The drawee accepts the bill by signing it, thus converting it into a post-dated check and a
binding contract.

• Weight list measurement: By adding details of the weight, a packing list is used as a weight
list. It includes the measurement of
Weight of the each package (such as boxes, crates, drums etc.)
Net weight of the shipment
Gross weight of the shipment

• MCD( Multi-Country Declaration): A form declaring that exporter goods originate from
multiple countries (i.e. if raw materials from one country were transformed into goods in other
country)

• Bill of Lading Vs Bill of Entry

Bill of lading Bill of Entry
A bill of lading is a document which A declaration by an importer of the exact nature,
acknowledge receipt of cargo for shipment. precise quantity and value of goods that have
landed.

Prepared by the shipping corporation or his Prepared by a qualified customs clerk or broker.
agent
It is examined by customs authorities for its
accuracy and conformity with the tariff and
regulations.

It is It presenting the total assigned value of goods

16. A ‘proof’ of a contract of shipment between of import entered at a customhouse, and the
the shipper and the carrier. corresponding duty charged on the cargo.
17. A receipt for goods received by the carrier in
good condition from the shipper.
18. Holder’s title to shippment

• Pro forma invoice: Pro forma invoices are commonly used as preliminary invoices with a
quotation. It gives description of the items and notes the cost along with the other important
information such as shipping weight and transport charges.
It is simply a document that declares the seller's commitment to provide the goods or services
specified to the buyer at certain prices. It inspire a buyer to buy product.

Problems in preparing and processing of documents of foreign trade in BD

1. Supply of wrong information by importer and exporter

2. Corruption in every stage in of processing
3. Time consuming
4. Dependency on middle organization
5. Lengthy process in port.

Give your suggestion to reduce the corruption during the documentary procedure

I think the documentary procedure of export and import should be digitalized. Exporter and importer
can directly submit necessary document through online. It will help to minimize the dependency on
middle organizations.