Documentary Requirements
Air Waybills
An airway bill is a proof of shipment of goods by air. Air
Waybills serves as a proof of receipt of the goods for shipment, an invoice for
the freight, a certificate of insurance, a guide to airline staff for the
handling, dispatch and delivery of the consignment. An airway bill has the
following inclusions:
- The shipper and consignee details.
- The airport of departure and
destination.
- The goods description (weight,
measure or shipping marks).
- It must be signed and dated by the
actual carrier or by the named agent of a named carrier.
- It must mention whether freight
has been paid or will be paid at the destination point.
Bill of exchange
A bill of exchange is a special type of written document under
which a certain amount of money is being asked by the exporter to be paid by
the importer in future and the importer also agrees to pay the exporter that
amount of money on or before the date mutually agreed upon. This document has
special importance in wholesale trade where large amount of money is involved.
Following persons are involved in a bill of exchange:
- Drawer: The
person who writes or prepares the bill.
- Drawee: The
person who pays the bill.
- Payee: The
person to whom the payment is to be made.
- Holder of the Bill: The
person who is in possession of the bill
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.
Bill of Lading (B/L)
Bill of Lading is a document given by the shipping agency for
the goods shipped for transportation from one destination to another and is
signed by the representatives of the carrying vessel.
The main parties involve in a bill of lading are:
- Shipper: The
person who send the goods.
- Consignee: The
person who take delivery of the goods.
- Notify Party: The
person, usually the importer, to whom the shipping company or its agent
gives notice of arrival of the goods.
- Carrier: The
person or company who has concluded a contract with the shipper for
conveyance of goods
The bill of lading must meet all the requirements of the credit
as well as complying with UCP 500. These are as follows:
- The correct shipper, consignee and
notifying party.
- The carrying vessel and ports of
the loading and discharge.
- The place of receipt and place of
delivery.
- State whether freight has been
paid or is payable at destination.
- Date should be on or before the
latest date for shipment specified in the credit.
- State the actual name of the
carrier or be signed as agent for a named carrier.
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 Chamber 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:
- The name of the company and
address as exporter.
- The name of the importer.
- Package numbers, shipping marks
and description of goods to agree with that on other documents.
- Any weight or measurements must
agree with those shown on other documents.
- It should be signed and stamped by
the Chamber of Commerce.
Commercial Invoice
Commercial Invoice document is provided by the seller to the
buyer. Also known as export invoice or import invoice, commercial invoice is
finally used by the custom authorities of the importer's country to evaluate
the good for the purpose of taxation.
The invoice must have the following inclusions:
- Be issued by the beneficiary named
in the credit (the seller).
- Be addressed to the applicant of
the credit (the buyer).
- Include the description of the
goods exactly as detailed in the credit.
- Be issued in the stated number of
originals (which must be marked "Original) and copies.
- Include the price and unit prices
if appropriate.
- State the price amount payable
which must not exceed that stated in the credit
- Include the shipping terms.
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
follow:
- The name of the party in the favor
which the documents have been issued.
- The name of the vessel or flight
details.
- 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.
- Insurance value that specified in
the credit.
- Marks and numbers to agree with
those on other documents.
- The description of the goods,
which must be consistent with that in the credit and on the invoice.
- The name and address of the claims
settling agent together with the place where claims are payable.
- Countersigned where necessary.
- Date of issue to be no later than
the date of transport documents unless cover is shown to be effective
prior to that date.
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.
In this process seller submits a valid Inspection Certificate
along with the other trade documents like invoice, packing list, shipping bill,
bill of lading etc to the bank for negotiation. On demand, inspection can be
done by various world renowned inspection agencies on nominal charges.
Letter of Credit
The International Chamber of Commerce (ICC) in the Uniform
Custom and Practice for Documentary Credit (UCPDC) defines L/C as:
"An arrangement, however named or described, whereby a bank
(the Issuing bank) acting at the request and on the instructions of a customer
(the Applicant) or on its own behalf:
- Is to make a payment to or to the
order third party ( the beneficiary ) or is to accept bills of
exchange (drafts) drawn by the beneficiary.
- Authorised another bank to effect such
payments or to accept and pay such bills of exchange (draft).
- Authorised another bank to
negotiate against stipulated documents provided that the terms are
complied with.
A key principle underlying letter of credit (L/C) is that banks
deal only in documents and not in goods. The decision to pay under a letter of
credit will be based entirely on whether the documents presented to the bank
appear on their face to be in accordance with the terms and conditions of the
letter of credit.
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:
- Have a description of the goods
("A") consistent with the other documents.
- Have details of shipping marks
("B") and numbers consistent with other documents
Thanks & Regards
Vinayak Gaonkar
9869621072/9869273067
