INTERNATIONAL TRADE DOC DOCUMEN UMENT TATION ION AT AT
Abhilasha A bhilasha Exim Pvt. Ltd. 1
GROUP MEMBERS
AMIT MATHUR
KANIKA GUPT GU PTA A
LALIT SHARMA
PANKIL MOOLCHANDANI MOOLCHANDA NI
SWATI SINGHANIA
VED PRAKASH SHARMA 2
PRESENT PRESENTA ATION TION FLOW FLOW Introd Introduct uction ion of of Export Export Firm Firm Methods of Payment Pre-Shipment Finance Post-Shipment Post-Shipment Finance Letter of Credit Open Open Acco Accoun untt Factoring
3
Company profile y
Name : Abhilasha Exim Pvt. Ltd.
y
Priv ate Ltd. Company Compa ny & as Manufacturers & Expor ters Established As : A Priva
y
Products : Ready to Wear Wear Garmen ts, Textiles & Fashion Accessories.
y
Year of Establishment 1997
y
y
Address : Reg. Office: Jwala Building, C/21A, Bhagwan Das Road, Jaipur-302 aipur-302 001 (Rajasthan) INDIA Ph: +91 - 93140 63699 63699 Work s:
F-160/A, Sitapura Industrial Area, Tonk Road Roa d, Jaipur-302 aipur-302 022 (Raj.) INDIA Ph: +91-141-277 0728 0 728, 277 0729 Cell: Cell: +91- 94140 76688 76688 Fax: +91-141- 2771399 y
Production capacity : 25,000 - 40,000 units of Hi-Fashion garments per month.
y
Turnover : US
$ 3.4 million 4
Members of.. Registered with the following Expor t Promotion Organisation (s), Association (s), & Chamber (s) of Commerce : : y
y
Apparel Expor t Promotion Council Co uncil.. (Govt. Of India) Expor t Promotion Council for Handicraf ts ts & Textiles (Govt. of India)
y
CII (Confederation of India Indu stry)
y
CIAe (Confederation of Indian Apparel Expor ters)
5
y
Bank er s
y
Swift
: Punjab National Bank
Code - BIC : PUNB IN BB JMI
6
Cliental Details y
y
y
y
y
y
y
USA
Canada Spain i ca rica South Af r Egypt Gr ee eece Austr alia alia
7
INTERNA INTERNATIO TIONAL NAL TRADE TRADE Advantages Market expansion Economies Surplus
of scale
not wasted
BOP Global
Disadvantages Annihilation
industry Exchange rate
fluctuation Unequal
productivity
of infant
distribution of
wealth
Socio
economic setup of country
8
FISCAL INCENTIVES TO PROMOTE EXPORT Duty Drawback Tax Concession Concessi on Market development assistance Export promotion of capital goods scheme Cash compensatory support Air Freight Subsidiary
9
METHODS FOR INTERNATIONAL TRADE FINANCE According to stage of financing Pre-shipment Pre-shipment finance Post-shipment Post-shipment finance
10
METHODS FOR INTERNATIONAL TRADE FINANCE Instruments/method Instruments/methodss of financing Letter of credit Open account Factoring
11
³
Financial assistance extended to the exporter from the date of receipt receip t of the export order till the date of shipment is known as pre-shipment credit . ´ ´
12
EXPORT DOCUMENTATION
Export Documents Commercial Documents Principal
Regulatory Documents
Auxiliary
13
Commercial Documents Document
Functions
Prepared by
Quotation An offer to sell goods and should Exporter state clearly the price, details of quality, quality, quantity, quantity, trade terms, delivery terms, and payment terms.
Sales Contract
An agreement between the buyer and the seller stipulating every details of the transaction. It is a legally binding document. It is therefore advisable to seek legal advice before signing the contract.
Exporter and Importer
14
Commercial Documents Document
Functions
Prepared by
Performa An invoice provided by a supplier prior to the shipment of merchandise, informing Invoice
Exporter
Commerci It is a formal demand note for payment al Invoice issued by the exporter to the importer for
Exporter
the buyer of the kinds and quantities of goods to be sent, their value, and importation specifications (weight, size and similar characteristics).
goods sold under a sales contract. It should give details of the goods sold, payment terms and trade terms. It is also used for the customs clearance of goods and sometimes for foreign exchange purpose by the importer. importer.
15
Commercial Documents Document
Functions
Packing List A list with detailed packing
Prepared by
Exporter
information of the goods shipped. Inspection Certificate
A report issued by an Inspection independent surveyor Company or (inspection company) or the Exporter exporter on the specifications s pecifications of the shipment, sh ipment, including quality, quality, quantity, quantity, and/or price, etc; required by certain buyer and countries. 16
Commercial Documents Document
Functions
Prepared by
Insurance Policy/ Certificate
An insurance policy is an insurance document evidencing insurance has been taken out on the goods shipped, and it gives full details of the insurance coverage. An insurance certificate certifies that the shipment has been insured under a given open policy and is to cover loss of or damage to the cargo while in transit.
Insurer or Insurance Agent or Insurance Broker
A certificate to certify the products are Product conformed to a certain international/national technical standard, Testing quality, safety and Certificate such as product quality, specifications, etc.
Accredited Laboratori es 17
Transport Documents Document
Bill of Lading (B/L)
Functions
An evidence of contract between the shipper of the goods and the carrier. The customer usually needs the original as proof of ownership to take possession of the goods.
Prepared by
Shipping Company
18
Transport Documents Document
Functions
Prepared by
A kind of waybill used for the carriage Airline Air Waybill of goods by air. This serves as a receipt of goods for delivery and (AWB) states the condition of carriage but is not a title document or transferable/ negotiable instrument.
Packing List
A list providing information needed for transportation purpose, such as details of invoice, buyer, buyer, consignee, country of origin, vessel/flight date, port/airport of loading, port/airport of discharge, place of delivery, delivery, shipping marks / container number, number, weight / volume of merchandise and the fullest fulles t details of the goods, including packing information.
Shipper
19
Financial Documents Document
Functions
Prepared by
Document A bank instrument began (issuing or opening Issuing Bank buyer, upon an ary Credit bank), at the request of the buyer, evidencing the bank's undertaking to the application seller to pay a certain sum of money made by the provided that specific requirements set out in Importer
the D/C are satisfied.
Bill of Exchange (B/E) or Draft
An unconditional written order, in which the importer addressed to and required by the exporter to pay on demand or at a future date a certain amount of money to the order of a person or bearer.
Exporter
20
Regulatory Documents There are seven regulatory documents associated with the pre-shipment stage of the export transaction. They are: are:
1. GRE GRE Form ( for Central Excise) 2. Ship Shippi ping ng Bil Bill/ l/Bi Bill ll of Exp Expor ortt (fo (forr Cust Customs oms)) -
For export of goods Ex. Bond
-
For export of duty free goods
-
For export of dutiable goods
-
For export of goods under claim of drawback
-
For export of goods under claim of DEPB
21
3.
Port Trust Trust Copy of Shipping Shipping Bill/ Export Application/Dock
Challan 4. Vehicle ticket
5. Exchange Control Declaration/GR/PP forms
6. Freight Payment Certificate
7. Insurance Premium Payment Certificate
22
INTEREST SUBVENTION SCHEME y
y
Gover e t ste s i t e i terest r e
ic i
a art of
I terest s ve tion of 2 er cent on t e res i ent cre it f or seven e loymentoriente e ort sector Te
tiles incl ncl ing andl ndlooms ooms andi ndicrafts ar ets e at e r Gems & Je eller y Marin oducts arine r oducts mall & Medium e orters.
23
ost P ost
Shipment Finance is a kind of loan provided by a financial institution to an exporter or seller against a shipment that has already been made.
24
TYPES OF POST SHIPMENT FINANCE y
Export Bills Purchased / Discounted
y
Export Bills Negotiated
y
Advance Against Export Bills Sent On Collection Basis Export On Consignments Consign ments Basis Claims Of Duty Drawback
25
BENEFITS TO EXPORTERS y
y
y
Competitiv Competitivenes enesss ± Exporter Exporter able to offer offer credit terms to buyer Energize Energized d Cash flows flows ± Producer receives receives cash from export proceeds upfront and can continue production activities. Expansion Expansion Of Of Client Base Base ± Exporter Exporter able able to expand client base due to to availability of financing 26
A
f r l c e t iss e y e lf f c st s t er, st ti ti c iti s er ic t e r t e c it e t f c st er
t e ill t e
letter o letter of c f cred redit is also also nown as ank er¶s er¶s commer commer cial cred redit or docume documentar y letter o letter of cred redit.
/ used sed in domesti domesticc trad trade are called alled inland land / ¶s.
The
27
PARTIES TO A LETT LETTER ER OF CREDIT CREDIT y
Importer or o r Applicant
y
Issuing Bank
y
Beneficiary
y
y
Advising Bank Negotiating/ The Paying Bank. 28
LETTER OF CREDIT ± THE PROCESS Seller (Beneficiary)
1.
4. Advice of Documentay credit Advising Bank
Buyer Applicant
Contract
. Documentary credit Application
3. Documentary credit
ISSUING BANK.
29
O pen
Account Account is a form of trade whereby sales are made to the buyer without entering into any formal contract. The system works on complete trust between buyer & seller. 30
OPEN ACCOUNT y
y
y
Open Account is the most advantageous adva ntageous option to the importer in cash flow and cost terms. It is consequently cons equently the the highest risk option for an exporter. Exporters may also wish to seek export working capital financing to ensure that they have access to financing for both the production for export and for any credit while waiting to be paid. 31
OPEN ACCOUNT y
Open account terms may be offered in competitive markets with the use of one or more of the following trade finance techniques: Working Capital Financing 1. Export Working . Export Credit Insurance 3. Export Factoring
32
Pros & Cons y
Pros: Boost
competitiveness in the global market.
Establish
and maintain a successful trade relationship.
Cons: Exposed
significantly to the risk of nonpayment nonpa yment
Additional
costs associated with risk mitigation
measures. 33
OPEN ACCOUNT ± PROCESS
TARGET
Purchase order
VE
R
Goods
A
34
Financial transaction ³ Financial whereby a business sells its accounts receivable to a third party called a factor (financial institution) institution) at a t a discount in exchange for immediate money with which to finance continued business. ´
35
FLOW FLOW CHAR CHART OF FACTORI FACTORING NG (1) Credit Sale of Goods
Customer
Client ( ) In Invoice (6) Pays the balance
(5) Pays the amount (In recourse type customer pays through client)
(4) Payment upto 80% initially
(3) Submit Invoice Copy
Factor 36
37
