foreign trade
Written by Waseem Raza

 1. Bill of Lading

When the goods are dispatched by ship from one place to another, the receipt issued by the shipping company is called a bill of lading. Bill of lading represents the title to the goods. Goods cannot be received from the shipping company unless a bill of lading is presented to the shipping company. The exporter or his forwarding agent fills out the form for the bill of lading. The bill of lading is usually issued in sets of three and is accompanied by other documents such as the invoice and insurance policy. The Bill of lading contains all the data pertaining to the shipped merchandise as under:

  • Name of exporter
  • Name of importer
  • Name of ship
  • Type of goods
  • Quantity of goods
  • Mark of packing
  • Name of the port where the goods have to be unloaded

A bill of lading may be clean or foul. A clean bill of lading is issued when the captain of the vessel is satisfied with the packing of goods and he signs the bill of lading without writing any comment on it.

2. Mate’s Receipt

A mate’s receipt is a document issued by a mate of the ship. Mate is the officer responsible for cargo. Tally clerks tally the cargo and report the mate then the mate issues a receipt called “Mate’s Receipt”.

3. Freight Note

The Captain of the ship issues a freight note which contains the detail of charges payable to the shipping company. Commonly, it is prepared in quadruplicate (4 copies); one copy for the exporter; two for the importer; and one for the shipping company.

4. Marine Insurance Certificate

It is necessary for the exporter to insure the goods against different types of risks during transit. The exporters contact insurance companies and take up an insurance policy and send the same to the importer. The certificate of insurance contains a full description of the goods, marks on the packages, weight, port of origin, destination, etc.

5. Invoice

An invoice is an important business document that is made by the seller containing full information about the description of goods, the date of sale, the terms on which the goods are sold, and the full address of the buyer and seller. Invoice is issued in duplicate, one copy for the importer and the other for the exporter.

6. Consular Invoice

This is a certificate issued by the consular office of the exporting country which shows that the value of the exported goods mentioned therein is correct. Custom 167 officials of importing countries require this document if the duty is to be charged according to the value of the goods imported.

7. Bills of Exchange

The exporter may get the payment by drawing Bills of Exchange on the importer. A bill of exchange is an order to an importer for the payment of goods at a particular fixed date. This bill is sent to the importer through a bank of an importing country.

8. Certificate of Origin

This is necessary for an exporter to secure a Certificate of Origin if there is an agreement between the countries for exempting their goods from import duties or imposing less import duty. It is sent to the importer to present to the customs authorities. It indicates the origin of the exporter and it is generally issued and signed by the chamber of commerce of the exporting country.

9. Letter of Credit

A letter of credit is a document issued by the importer’s bank to the exporter’s bank, directing that the beneficiary named in the letter should be allowed credit for a specific period according to the terms and conditions mentioned in it. A letter of credit is issued in case importers and exporters may not know each other and their exporter is not sure about the importer’s creditworthiness and wants to ensure payment from a bank through a Letter of Credit.

10. Bill of Entry

This is a document on which the importer provides details of imported goods to the customs authorities in paying custom duty. It may be in three forms; black, blue, and white. A black form is used for exempted goods; a blue is used for goods to be sold within the country; and a white form is used for the goods to be re-exported. On the basis of this information, the customs authorities calculate the amount of customs duty payable by the importer.

11. Bill of Sight

A bill of sight is a request to customs authorities for checking and preparing a list of the goods in their custody in case an importer had not received the documents regarding the goods imported. In such a case, the customs authorities themselves complete the Bill of Entry at the request of an importer and then charge custom duty accordingly. 

12. Charter Party

A Charter party is a deed of agreement between a ship owner and a trader for the hire of a ship and the delivery of cargo. It contains the name of the ship, names of the parties, class of the charter party, and representation by the ship owner about the sea-worthiness of the ship and other terms and conditions. In a charter party agreement, the whole ship or a major part of it is reserved for the exporter to carry his goods to a particular place at an agreed freight. A Charter Party may be a Voyage Charter Party for a particular voyage or a Time Charter Party for a specific period.

13. Letter of Hypothecation

If an importer has no money to pay customs duty etc. at the port for goods imported, he may approach his bank for a loan. A letter of hypothecation is a document through which goods are hypothecated with the banker for obtaining a loan. If the loan is not returned according to the terms and conditions mentioned therein, the banker might take possession of hypothecated goods and may sell them for compensation.

14. Dock Warrant

It is a transferable document issued by warehouse keepers to represent the rights of ownership of goods. The holder or presenter of the dock warrant can receive the goods from the warehouse.

15. Letter of Indemnity

It is a document in which a person assures another person or firm of the compensation of loss in case of happening of specific events. Sometimes, the goods reach to port before receiving the bill of lading. In this case, the importer collects the goods by getting a letter of indemnity in the favor of the shipping company.

16. Delivery Order

The delivery order is issued by the owner of goods in the name of the port officer to hand over goods to the holder of this order. Only the holder of this document has the right to receive the goods from the port. 

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