Bright Bangla International

Indenting Export & Import

AARIZ Export & Import

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Makes launching and managing your own export/import business easy. It is home to experts who provide clear, practical advice on entrepreneurship, management and business setup.

We help people all around the world start import-export business of their preferable country! We assist to grow or start import-export business of their own, no matter where they from or what is their current business experience.

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We help people all around the world start import-export business of their preferable country! We assist to grow or start import-export business of their own, no matter where they from or what is their current business experience.

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Export & Import Procedure

The major concern of international trade is related to import and export of goods and services. Export orders must conform to the terms of a contract between buyer and seller and in most case, the contract is sent from the foreign buyer. Before the confirmation of a contract, it must be scrutinized with the product details and their specifications, terms of payment, price, delivery schedule, etc.

The immediate task of an exporter is to acknowledge the export order which is different from its acceptance. Then s/he should proceed to examine the export order carefully concerning the item, product specification, pre-shipment inspection, payment conditions, special packaging, labeling and marking requirements as well as shipment and delivery date, marine insurance, documentation etc. If the exporter is satisfied with these aspects, a formal confirmation of the export order is sent from the buyer’s end and exporter should proceed to enter into a formal contract with the overseas buyer. The aspects relating to the process of an export order are discussed as under:

Before starting the RMG export business, a manufacturer cum exporter has to collect some documents which will widely use in executing export/import order. They are;

  • Trade License
  • TIN License
  • VAT License
  • Memorandum of Association and Articles of Association /Partnership Agreement
  • Certificate of Incorporation
  • Rent Agreement or Ownership proof
  • Holding Tax payment receipt
  • NoC declaration from the Local Authority
  • Bank Account and Solvency Certificate
  • Fire Service License
  • Environment Clearance Certificate
  • Membership Certificate from incumbent Association/Chamber.
  • Group insurance for the workers employed in the factory
  • Approved Building layout plan and structural design from concerned govt. authority
  • Export Registration Certificate (ERC)/ Import Registration Certificate (IRC)

Nature:

Export order is a document from any specific foreign buyer to purchase items from the exporter. It would indicate the exporter’s Pro-forma invoice/quotation number and issuing date, including item, quantity, price, delivery date, shipping marks, insurance, payment terms etc. Before acceptance, the export orders should be scrutinized in all aspects. The following documents are commonly used in exporting.

  1. Pro-Forma Invoice
  2. Bill of lading
  3. Commercial invoice
  4. Certificate of origin
  5. Inspection certification
  6. Dock receipt and warehouse receipt
  7. Destination control statement
  8. Insurance certificate
  9. Export license (ERC)
  10. Export packing list

The process of exporting product starts after communicating with buyers. In this case, we will discuss the process covering the RMG product. In general, an exporter exports his product following these ten steps.

  • Step -1: Communicating with Buyer

The starting point for any Export Transaction is an inquiry. An inquiry for the product should, inter alia, specify the following details or provide the following data.

  • Size details of products – Std. or oversize or undersize, Drawing – if available, Sample – if possible, Quantity required, Delivery schedule.
  • Mode of Dispatch – Sea, air or Sea/air.  Mode of Packing.
  • Price requirement on FOB or C & F or CIF basis
  • Terms of Payment which would be acceptable to both end of Buyer and exporter; buyer or exporter can propose to open Letter of Credit or any specific valid transaction process which is to be compiled from both ends.
  • Any requirement of Pre-shipment inspection if needed and then specify agency.
  • Any Certificate of Origin required – If so, from which agency.
  • Or any other requirements.
  • Step -2: Pro-forma  Invoice (P I) Generation

In the second step of exporting, Manufacturer Exporter or Merchant Exporter will study the inquiry in details and forward the related query to the incumbent persons to gather the answers. After that, he will provide a Pro forma Invoice to the Buyer as per the demand of buyers.

A sample of pro forma invoice has been attached in annexed for your better perception.

  • Step -3: Order placement and Acceptance

If the offer is acceptable to the Buyer in terms of price, delivery and payment, the Buyer will then place an order to the Exporter, giving as much data as possible in terms of specifications, quantity etc.

Under international business transaction mode, both exporter and importer define their roles and responsibilities to each other with sales contracts. A sale contract is a legal binding document for both parties. In practice, a small volume of international sales is handled by Pro-forma invoices whereas medium size sales are covered under sale contracts. Big volume of sale contracts should be written by lawyers. In addition to the volume of the trade transaction, the duration of the business is another point of consideration when deciding to use a Pro-forma invoice or sale contract. If the business transaction will be completed over a while such as 1 year or more than that period, sale contracts should be preferred instead of Pro-forma invoices.

At this stage, the exporter requests the importer to open an irrevocable letter of credit (L/C) in favor of an exporter in a nominated scheduled bank.

After getting the L/C confirmation, Exporter immediately acknowledges receipt of the order, giving a schedule for the delivery committed.

  • Step – 4: Goods readiness & documentation

Once the buyer accepts the offer and places an order, the marketing merchandiser schedules a production plan and also trace the status of production. In the meantime, approving sample from the buyer and also maintaining the quality is mandatory. After that, when goods are ready and duly packed in Export worthy cases/cartons (depending upon the mode of dispatch), the commercial Invoice is prepared by the Exporter. A sample of the commercial invoice has been attached in annexed 2 of this book.

If the number of packages is more than one, a packing list is a must.

  • Step – 5: Documents for C & F agent

Exporting any products through the valid channels, exporters may need to handle a large number of documents depending on the requirements of both exporter’s government and the government of the importing country.

In such a situation, most of the exporters seriously consider having the clearing and forwarding (C&F) agent to handle the formidable amount of documentation that exporting requires since C&F agents are specialists in this process. The C&F agent should be a reputed firm with experience in handling export/import cargo. If the goods are to be exported by sea, the C&F agent should have branches in the major ports like Chattogram and Mongla.

Thus, the exporter will hand over the following documents to the C&F agent for forwarding the export goods to shipping agent through customs. Necessary papers related to C&F agents and exporter are;

  • Commercial Invoice and Packing List.
  • Export Manifesto.
  • Copy of Letter of Credit
  • Packing List.
  • Certificate of Origin and Export Registration Certificate
  • Under the claim of Drawback of duty.
  • Export Form
  • Any other declarations or documents as required by Customs.
  • Bill of Export will be generated by the Customs based on the above documents.
  • Step – 6: Customs Clearance

C&F agent presents the required documents to the customs for letting the consignment to export. After assessment of the shipping bill and examination of the cargo by Customs (where required), the export consignments are permitted by Customs for ultimate Export. This is what the concerned Customs officials call the ‘LET EXPORT’ endorsement on the shipping bill.

  • Step – 7: Document Forwarding

After completing the shipment formalities, the C&F Agents are expected to forward to the Exporter the following documents:

  • Customs signed Export Invoice & Packing List.
  • Duplicate of Form Export Manifesto.
  • Exchange control copy of the Shipping Bill / Bill of Export.
  • Bill of Lading or Airway bill, as the case may be.
  • Step – 8: Bills negotiation

The Exporter will have to negotiate the relevant export bill through authorized dealers of Central Bank, viz., Banks with these authenticated shipping documents as payments terms mentioned in the L/C.

Broadly, payment terms can be:

  • DP Terms (Documents Against Payment)
  • DA Terms (Documents Against Acceptance)
  • Letter of Credit, payable at sight or payable at… days.

Under the Generalized System of Preference (GSP), imports from developing countries enjoy certain duty concessions, for which the exporters in the developing countries are expected to furnish the GSP Certificate of Origin to the Bankers, along with other shipping documents.

  • Step – 9: Bank to bank documents forwarding

The negotiating Bank will scrutinize the shipping documents and forward those to the importer’s bank. After receiving these documents, importers bank will hand over these documents to the importers as per negotiation for clearing the consignment.

It is expected of such authorized dealers of Central Bank to ensure receipt of export proceeds.

  • Step – 10: Receipt of Bank certificate

Authorized dealers will issue Bank Certificates to the exporter, once the payment is received and only with the issuance of the Bank Certificate, the export transaction becomes complete.

It is mandatory on the part of the Exporters to negotiate the shipping documents only through authorized dealers of Central Bank, as only through such a system Central Bank can ensure receipt of export proceeds for goods shipped out of this country.