In this global trade era, entrepreneurs are required to have sufficient knowledge about import and export procedures, both from customs, shipping and banking, all of which are inter-related. Understanding Customs Procedures in Export-Import Transactions are crucial for the success of export and import trade. Below is a brief description of export procedures and customs regulations related.
First of all, the exporter send offer sheet to a potential buyer, with other documents attached such as: specification of goods, price list, packaging, quantity, photos of products if necessary, supply ability, payment system, sales condition (FOB/CNF/CIF) etc. Usually if this offer gets positive response, the buyer will ask the sample of product to be sent.
If all the terms and conditions have been agreed by buyer and seller, the seller (exporter) will send Pro forma Invoice (PI) to the buyer.
Purchaser or importer will open the L / C (Letter of Credit) through a bank, located on the domicile of importer, that has export-import services. This Bank will forwarded all documents to the Correspondence Bank ( a domestic foreign-exchange bank chosen by exporter) .
Exporter prepares to send the goods as soon as possible, as the L/C has expired date and shipping takes time. If there is an estimation of late delivery, exporter should inform the importer so the L/C can be amended.
Besides L/C, the eksporter should prepare other documents such as: COC (Certificate of Origin, issued by Ministry of Commerce), Quality Statement, Packing List, Commercial Invoice, Certificates (related to kind of goods being exported) and Export License.
The next step is to deal with Customs procedure. Exporter should fill in Export Declaration and submit it with supporting documents to Customs Service Office (CSO) where the export goods will be loaded. Export Declaration has to be registered, other documents have to be examined, and certain exported goods have to be physically inspected to get approval from CSO. Export Declaration can be registered through Correspondence Bank, attached with Promissory Notes stated that the exporter will paid the duty if necessary.
As the goods ready to deliver, exporter should immediately contact the freight forwarder (shipping agent) to deal about the payment, whether it will be CNF or CIF. As for FOB, the importer will contact their local freight forwarder.
While the goods are being shipped to destination country, the freight forwarder will issued B/L (Bill of Lading) or Airway Bill. The exporter should submit this document along with other documents needed to Correspondent Bank that related to L/C. It is required to be completed so the exporter can negotiate with the Bank for receiving payments resulting from export of goods.
