Objective of this Class:

1. Third Session :Presentation on(Export/Import Documentation Incoterms and procedures of Export /ImportbyRajan Sharma

2. Objective of this Class: Acquaint the participants with the following: a. Document required for export and Import b. Import and export procedure c. Choosing the right means and mode of transportation d. International Incoterms and its implication in business contract and negotiation. e. Packing ,warehousing and distribution. f. Problems in shipping out of Nepal

3. An example of a simple supply chain IN THE NEPALESE CONTEXT: Logistics: transport, storage, packing and handling Raw materials supplier Component manufacturer Assembler Final consumer Retailer

4. What is Logistics ? It generally involves all activities involved in securing: The righttype(s) of material(s) In the right quantity(s) To the right location(s) At the right time(s), and For the right cost Increasingly, a sixth “right” must be added Delivered with the right tailored services

5. What does Each Incoterm determine ? 1. When and where the seller provides the goods to the buyer and when and where the buyer is obliged to pay the contracted price Obligations for export/import licences, duties, taxes, etc. Obligations to arrange and pay for transportation and insurance Conditions for delivery by the seller and acceptance by the buyer Allocation of responsibility for risk of loss or damage Allocation of costs associated with movement of the goods Provisions regarding notices of delivery or dispatch of the goods Proof of delivery, transport documents or electronic messages Requirements of seller to check quantity & conformance of goods with the contract and to provide suitable packaging and markings Obligations of mutual assistance, information and documentation 2. 3. 4. 5. 6. 7. 8. 9. 10.

6. Incoterms are grouped into four categories: “E” Terms - Ex-works “F” Terms - Main carriage not paid by seller “C” Terms - Main carriage paid by seller “D” Terms - Delivered on arrival

7. Incoterms – Point of delivery of the goods and transfer of risk Upon delivery of goods at the seller’s premises EXW E Ex works (named place) FCA Upon delivery of goods to the carrier Free carrier (named place) Free alongside ship FAS Upon delivery of goods alongside ship (named F port of shipment) FOB When the goods pass the ship’s rail at the named Free on board port of shipment CFR When the goods pass the ship’s rail at the port of Cost and freight shipment Cost, insurance and CIF When the goods pass the ship’s rail at the port of freight shipment C Carriage paid to Upon delivery of goods to the carrier CPT (named place) Carriage and CIP Upon delivery of goods to the carrier insurance paid to (named place)

8. Incoterms – Point of delivery of the goods and transfer of risk Delivered at frontier DAF Upon delivery of goods at frontier (named place) - not unloaded Delivered ex ship When goods are placed at the disposal of the DES buyer on board the ship (named port of destination) Delivered ex quay When goods are placed at the disposal of the DEQ D buyer at the quay (named port of destination) Upon delivery of goods (at named place of Delivered duty unpaid DDU destination) not cleared for import and not unloaded DDP Upon delivery of goods cleared for import (at Delivered duty paid named place of destination), duty paid but not unloaded

9. Cus- toms Cus- toms Cus- toms DELIVERY and TRANSFER OF RISK can take place at many points between the seller’s premises and the buyer’s premises Cus- toms Seller Buyer EXW FCA DDU FAS FOB DES DEQ CPT DDP CFR CIP CIF Waterborne transport only Transport by land DAF

10. Cus- toms Cus- toms Cus- toms TRANSFER OF COSTS takes place at points that are sometimes different Cus- toms Seller Buyer EXW FCA DDU FAS FOB DES DEQ DDP CFR Export clearance costs on account of the seller * CPT CIF * CIP Waterborne transport only Import clearance costs on account of the buyer Transport by land * Transport insurance costs on account of the seller Unloading costs on account of the seller only if in its contract of carriage DAF

11. Customs DAF terms are commonly used for land transport COUNTRY OF EXPORT COUNTRY OF IMPORT Customs DAF Delivered at frontier, export customs cleared

12. The role of the Incoterm used and custom & practice of the trade in establishing the contract of carriage INCOTERM used in the Sales Contract Seller Buyer Contract of carriage Transport Operator(s) Custom & practice of trade

13. Freight Forwarders Responsibility and Duties: • Duties and responsibilities of the freight forwarding agent when contracted by the shipper(who may be the exporter or importer depending on the Incoterm used): • Advise on the most appropriate mode of transport. • Arrange reservation of space on a vessel, train or aeroplane. Take delivery of the goods. Pack products into containers or onto pallets. Store goods in transit (before loading on board). Insure the cargo. Weigh and measure the goods. Prepare loading and, if necessary, transhipments. Transport the goods to a named port or airport of origin.

14. Freight Forwarders… cont.. • Duties and responsibilities of the freight forwarding agent when contracted by the importer (whether or not the importer is the shipper): Follow-up on the movement of the goods. Receive and control documents related to the goods. Ensure customs documents are prepared in advance. Take delivery of the goods. Check on goods storage during transhipments. Assist with customs clearance. Deliver the goods to the consignee.

15. Export Documents: • Letter of Credit/Advance payment certificate and Covering letter of bank • Invoice (Description of Goods and value per unit and total. • Packing list (Volume and weight break of each Pc) • Certificate of origin and GSP • Pan /Vat/Company registration certificate copy • Authority Letter • CTD • ATA CARNET

16. Yellow paper (Custom declaration) • Currency declaration Form • Handicraft Certificate (for handicraft Goods) • Visa in case of garments export • Plant Quarantine certificate in case of Plants/Food items • Permission from department of Forestry in cage of Forest product • Certificate from Agriculture department in case of agro products. • Sample goods and special goods permission from department of Customs ie: diplomatic /Personal effects • Human remains: • Fumigation certificate for Agro products or wooden goods.

17. Documents for Import Goods: • Letter of credit with Covering letters from bank • NTWCL • Invoice • Packing List • Certificate of origin • Bank forms, • Custom declaration • AWB/HBL or MBL ( Transport Documents) • Permission Certificate from department of custom • Permission Certificate from department of commerce

18. Authority permission by importer (consignee) • Insurance covering paper • Delivery Order paper from transporter • CTD In case of Land Shipment: Mode and Means of Shipment and how to choose the right mode and means of transport. • Air/Air • Air/Sea • Land/sea. • Airplane, Trucking, Train, Ship :

19. Payment methods • Letter of credit • Telegraphic transfer • Advance payment • Cash against documents

20. Factors to be considered in the means and mode of transport: • Time • Cost • Place of delivery • Loading point • Tran-shipment point • Customs point and infrastructure and cost.

21. Packing /Marks and Numbers : It protects your product your during transportation. It breaks down your product to sellable units (e.g. transforming staple goods into consumer units), or it simply makes the product accessible to consumers. It conveys a message to the buyer/consumer (e.g. advertisement or instruction for use etc.). • Distribution • Warehousing (storage)

22. Traditional Distribution Systems Minimum of 6 Port Frontier Airport dispatches per Import 18 routes Minimum of 3 deliveries per factory Factory Factory Factory Factory Factory Factory

23. Using Cross-docking Centres (B) Using cross-docking centres Port Frontier Airport Maximum of 2 Customs Douane dispatches per Import 12 routes Maximum of 1 delivery per factory Factory Factory Factory Factory Factory Factory

24. Comparing vehicle routing options: Option A: Star delivery plan A 100 km 100 km 160 km B D C

25. Comparing vehicle routing options: Option B: Multi-point delivery plan A 50 km 50 km B D 50 km 50 km C

26. Document required for exporting to EU • GSP • (Derogation) • Other necessary quality certification • Health and Sanitization certificate • HACCP • Environment issues • Child labor issues

27. Export procedure • Preparing shipment • Haulage , choosing the means and mode of transport, sending pre-alert, issuing the right transport document, negotiation with bank, • Other document compliance.

28. Import Procedure: • Product finding • Price negotiation • adding document cost, haulage cost, customs cost, tax in the exporting country, • Arranging shipping, information flow, trans-shipment point procedure ,import procedure of the country. dealing with customs etc.

29. Problems: • L/C Compliance • Transport Document Compliance • Shipment date • L/C expiry • Delivery problem/Delivery order • Discrepancy due to transportation problem • Bank release.

30. Thank You for your Attention. Any Questions ??????