PracticalCourseforImport&ExportBusiness

ThePracticeofImportBusinessChapterTwelveSection1.ImportcontrolSection2.ImportcontractCONTENTSSection4.ShipmentandinsuranceSection3.L/CissuanceandamendmentSection5.DocumentexaminationandpaymentSection5.6.7.8.9.Customsclearance….Section1Thischapterwillintroducetheproceduresofimport,becauseexportandimportarethetwosidesofacoin.Whenhandlinganimporttrade,sometradeconditionsandtermsarejusttheoppositesideofthosewedoinanexporttrade.UndertheFOBcontractwithtermsofpaymentbyaletterofcredit,thegeneralprocedureofimportbusinesscanbesummarizedasimportcontrols,importcontract,L/Cissuanceandamendment,shipmentandinsurance,documentexaminationandpayment,customsclearance,takingdeliveryandre-inspection,settlementofdisputes.ImportcontrolThefirststepinanimporttransactionistocheckwhetherthecommoditiesyouselectfallintherestrictedlistbecausetheremustbeprohibiteditemsthatcan’tbeimportedatallorthereareimportcontrols.Theimportlicensesystemisoneoftheformsthatsomecountriesusetocontroltheimports.Sampleoftheimportlicenseisshownbelow:Section

ONESection213.2ImportcontractAnimportcontractcanonlybeworkedoutwithgoodknowledgeinanumberofareas.Besidesselectingtheproducttoimport,oneshouldknowtheexportregulationsintheexportingcountriesandthecapabilityandcreditworthinessoftheoverseassuppliertofulfillthecontract.Verificationcanbedonebyconfidentialreportsaboutthesupplierthroughembassies,banks,commercialsandcreditbureaus.Thecontentsandformatsaresimilartotheexportcontractmentionedabove.Section3L/CissuanceandamendmentUnderthetermsofpaymentwithaletterofcredit,theimportershouldapplyforopeningtheL/Cintimeinfavoroftheexporterwhowouldusuallyarrangeproductionorshipmentafterreceivingtheformalletterofcredit.TheL/Cshouldbemadetofitthesalescontractterms;otherwise,theexporterwillasktheimportertoamendtheL/C,whichwillcauseextraworkandcostandmaydelaytheshipment.TheexportermightrequestforL/CamendmentsafterhehascheckedtheL/Cterms.Iftherequestismadeaccordingtothecontractterms,theimportershouldapplytotheL/Copeningbankfortheexporterhasagreeduponwiththeimporter,anditisuptotheimportertodecidewhetherheacceptstherequestornot.Ifhewishestoentertaintherequest,hemightwanttoasktheexportertopaytheamendmentfeetheL/Cissuingbankwillcharge.6.1.1.2AdditionalcoverageWhilethebasicinsurancecoveragecanbetakenoutindependently,theadditionalcoverageshallbemadecomplementarilywiththeinsurancecompanyaccordingtotheactualsituation.Theadditionalinsurancecoverageincludesgeneraladditionalrisksandspecialadditionalrisks.(1)GeneraladditionalrisksGeneraladditionalriskscoverthelossescausedbygeneralextraneousriskswhicharecoveredbyAllRisksinthebasicinsurancecoverage.Thereare11typesofgeneraladditionalrisks:(1)Theft,Pilferage,andNon-delivery(TPND);(2)FreshWaterRainDamage;(3)RiskofShortage;(4)RiskofIntermixtureandContamination;(5)RiskofLeakage;(6)RiskofClash;(7)RiskofOdor;(8)HeatingandSweatingRisk;(9)HookDamage;(10)RiskofRust;Section4ShipmentandinsuranceMorecoordinationbetweentheimporterandtheexporterwillbeneededundercertaintradetermssuchasFOB.Iftheimporterisresponsibleforshipment,heshouldarrangethetransportationandkeeptheexporterinformedoftheprogressinordertofacilitatesmoothdeliveryofthegoods.Theimportermightalsowanttosupervisetheshipmentattheloadingport.Iftheinsuranceistobearrangedbytheimporter,theimportershouldasktheexportertoadvisetheshipmentintimesothatthegoodscanbecoveredbyinsurancewithoutdelay.Section5Theopeningbankmustexamineapresentationtodetermine,onthebasisofthedocumentsalone,whetherornotthedocumentsappearontheirfacetoconstituteacomplyingpresentation.Atthesametime,theconcernedbankshallhaveamaximumoffivebankingdaysfollowingthedayofpresentationtodetermineifthepresentationiscomplying.Thisperiodisnotcurtailedorotherwiseaffectedbytheoccurrenceonorafterthedateofpresentationofanyexpirydateorthelastdayforpresentation.Inpractice,afterexaminingallthedocumentspresentedcarefully,theissuingbankmaypresentthosedocumentstotheimporterforverificationwithinsevenbankingdays.Onceconfirmed,theissuingbankwilldebittheimporter’saccountwhenreleasingtheshippingdocumentstotheimporter.Thewholetransactionnowcomestoanend.Section6CustomsclearanceAllgoodsimportedintoacountryhavetopassthroughtheprocedureofcustomsclearanceastheycrosstheborder.Thegoodsareexamined,appraised,assessed,valuedandthenallowedtobetakenoutofchargeofthecustomsforusebytheimporter.Theentireprocessofcustomsclearanceiscomplexandtocarryoutthisproceduresmoothly,thehelpofaccreditedcustomsclearingagents(alsocalledCustomsbrokers)maybenecessary,particularlyforsmallcompaniesthatarenotsimilarwiththeproceduresoritisinefficienttokeeptheirownpersonnelforcustomsclearance.Section7Takingdeliveryandre-inspectionThebuyerortheconsigneemusttakedeliveryofthegoodswhentheyhavebeendeliveredascontractedatthedischargingportintheseatransportation.Consigneesshouldsettleallthechargesandsurrendertheoriginalbillofladingforswitchofthelocaldeliveryorder.Then,theycouldmakenecessarycargoclearanceandtakecargodeliveryfromtheterminal.Adeliveryorderisissuedbythecarrierorhisagenttoenabletheconsigneeorhisforwardingagenttotakedeliveryofthecargo(theimportcargo)fromthevessel.Butspecifically,theforwardingagentortheconsigneeshouldgothroughthecustomsclearanceprocedure(orformalities)bythedeliveryorderandthenapplyforE/R(theequipmentinterchangereceipt).E/Risadocumentrequiredwhentransferringacargocontainerfromonevesseltoanother,