Basics of Exporting - Export Documents

Airway Bill

The airway bill, a non-negotiable instrument, serves as a receipt for the shipper. Issued by the airline or consolidator, the AWB indicates that the carrier has accepted the listed goods and obligates itself to carry the consignment to the airport of destination, in accordance, with the conditions listed on back of the original bill. In addition, the AWB serves as documentary evidence of the conclusion of the contract of carriage, freight bills, certificates of insurance, the customs declaration. The waybill is a guide to carrier's staff in handling, dispatching and delivering of the shipments.

The carrier will not carry any part of the consignment until it receives the entire shipment and the exporter issues the AWB. As stated on the back, the carriers reserve the right to move the shipment in any way they can. This means they can transfer it to other carriers and/or even truck it if they feel it is in everyone's best interest.

Keep in mind that the AWB is non-negotiable, and it cannot be used as a collection instrument. Shipments against a draft should be consigned to a local bank (in the city where the consignee is located) and the consignee's name and address shown as a party to be notified. Even though the AWB's have a space for insurance, check with the carrier to make sure that they offer the coverage. Some carriers do not.

Certificate of Inspection

Many foreign firms require this document for protection in quality and conformity disputes with the shipper. The document, typically in the form of an affidavit from either the shipper or an independent inspection firm, certifies the quality, quantity and conformity of the goods to the Purchase Order.

Certificate of Insurance

A qualified insurance broker issues a Certificate of Insurance on behalf of the shipper. The shipper provides this document and/or instructions referenced in the letter of credit whenever Letter of Credit or Documentary procedures require him to provide evidence of risk coverage for merchandise shipped. Most freight forwarders have a blanket policy available and can issue the certificate on behalf of customers.

Certificate of Origin

This document certifies that goods were manufactured in the United States. The shipper must sign the certificate, and when required, an accredited chamber of commerce or trade bureau must certify it. Then, an accredited chamber of commerce or trade bureau must certify it. Sometimes it must also be sent to a consulate for endorsement. This document must be signed by the exporter (or his representative such as a forwarder), notarized and then signed by a chamber of commerce before presenting it to the consul. A phytosanitary certificate (discussed below) can serve as a certificate of origin.

Certificate of Weight

Foreign buyers occasionally require this document for control purposes. Exporters can use a certified copy of the Packing List to fill this request. An export inspection company can certify the Packing List.

Commercial Invoice

Normally, exporters use the same invoice for both domestic and international trade. However, some countries require special forms. The invoice must include the dates of billing and shipping, names of exporter or manufacturer, consignee, terms of sale, mode of payment, description of goods, packing marks and numbers, numbers of units, price per unit, total price, transportation mode and any other information required by the country of destination.

Consular Invoice

This document covers all the usual details of a commercial invoice and packing list is written in the language of the foreign country for which goods are destined. Special forms are obtainable from the consulate. Consular fees are payable to the consulate certifying and legalizing the documents. (Note: It is suggested that the sales contract show consular fees and other costs such as messenger fees as the responsibility of the buyer to prevent misunderstanding or argument). In dealing with consular documents, keep in mind that these are very technical documents. Their preparation should be completed by experienced personnel such as forwarders.

Most countries have requirements pertaining to commercial invoices such as the language used, what information is shown, legalization, etc. Still others (particularly Latin American countries) require a consular invoice in addition to the commercial invoice.

This document is presented to the consul for legalization to ensure that the items being shipped are in accordance with existing import regulations of the receiving country. In attempting to enforce accuracy, consulate employees may go to extremes to see that the form is executed correctly. If a consulate overlooks an error and customs officials at the destination detect it, the buyer is likely to encounter delays and/or fines.

Customs Form CF349

Exporters who ship using U.S. water ports must report all shipments on customs form CF349. The United States uses this form to levy a fee of .125% based on the value of the shipments collected.

Delivery Order/Dock Receipt

This document contains the same information as the short-form intermodal bill of lading, and is sent to the carrier, who acknowledges the shipper's booking of space for the cargo described in the document.

Distribution License

This permit, issued by the Office of Export Licensing, allows firms with international export programs to make multiple exports of authorized products to approved consignees. You can obtain this license, valid for up to four years, by filling out the following forms, available at the U.S. Department of Commerce:

1. Application for Export License BXA-622 Form
2. Application for Statement of Foreign Consignee in Support of Specialty License BXA-6052P Form.

Forwarder's Export Invoice

The forwarder generally pays all third party charges such as inland freight, port charges, insurance, air/ocean freight, consular charges, messenger fees, etc., and bills the shipper for all of these charges under one invoice, the "Forwarder's Invoice." Supporting documents back up this invoice.

Letter of Credit

Importer's bank issues this financial instrument to the supplier. In this document, the opening bank substitutes its own credit for that of the importer and undertakes a commitment to a designated beneficiary (the exporter) to pay a stated amount within a stated time frame. The exporter must comply with all of the terms and conditions of the Letter of Credit for the provision mentioned above to hold.

Letter of Distribution

International shipments usually require copies of documents be sent to various parties such as the consignee, overseas agent, shipper, etc., and this is normally accomplished through a letter of distribution which shows who is to receive which documents.

Loss and Damage Claim

Exporters use this form to claim insurance compensation for goods lost or damaged during exportation. The claim must fully describe lost items and supporting documents, such as copies of the Commercial Invoice, Bill of Lading and Insurance Certificate.

Manufacturer's Certificate

If buyer intends to pay for goods prior to shipment, a lengthy lead time exists. If the buyer does not want to tie up funds in advance, he may require the seller to prepare a certificate stating that the goods ordered have been produced in accordance with the contract. Upon receipt of this document, the buyer will forward payment and shipping instructions to the seller.

Ocean Bill of Lading

The ocean bill of lading serves as a document of title, a contract of carriage between the steamship company and the shipper and a receipt for goods given by the steamship company to the shipper. The bill of lading confirms where to deliver the goods, how freight charges will be paid and to whom the goods are consigned. The bill of lading spells out all legal responsibilities and liability limits for all parties to the shipment. Since an original bill of lading is a negotiable instrument (copies are not), the shipper/exporter may want to prepare it in such a way that he can retain title to the goods. In addition, the shipper/exporter should find out whether the destination country requires specific wording on the OB/L before filling it out.

Two types of bills of lading exist. The shipper uses the first type, non-negotiable ''straight bills," when consigning the shipment directly to the final buyer. Meanwhile, the shipper uses the second type, negotiable "order bills," when he does not want title to pass to the buyer until certain conditions have been met. In this instance, the specified shipper must endorse bill of lading before delivery can occur. An order bill of lading must also show the party to be notified at destination.

Order bills of lading play a important part in international transactions, especially when dealing with letters of credit and drafts. Most letters of credit call for "on board" bills of lading, which provide proof to the buyer that the shipment has been placed on board the vessel.

Packing List

Customs officials use this list to check cargo; while, buyers use it to inventory merchandise received. The packing list describes all items in the box, crate, pallet, or container, plus the type, dimensions, and weight of the container.

Phytosanitary Certification

Most countries require that a phytosanitary certificate accompany shipments of raw fruits, vegetables, and plants. The document certifies the product to be free from quarantine pests and significantly free from injurious pests, which could damage crops. In addition, treatments such as fumigation or cold storage, required by the importing country, or which are necessary to meet pest free standards, are supervised by the certifying official and documented on the certificate.

Exporters, packers or shippers, and other parties involved in the transaction may request phytosanitary certificates. As a matter of convenience and efficiency, phytosanitary inspections are usually carried out at shipping point, often as the product is being graded and packed.

It is the responsibility of the exporter to ensure that an English copy of the import permit (if required) is furnished to the certifying official so that she may ensure that conditions are met. In addition, the inspector must have the destination, name and address of the foreign consignee, manifest of the load, etc. Without this required information, the inspection cannot be performed and the certificate will not be issued.
Phytosanitary certificates are provided through the USDA's Animal Plant Health Inspection Service (APHIS) and similar state agencies. The state and federal certificates serve the same purpose and the choice is a matter of preference for the parties involved. The phytosanitary inspection is unrelated to quality, grades, and classifications.

Power of Attorney

Exporters give Freight Forwarders and Customs Brokers the right to act as their agent with this document.

Pro Forma Invoice

The buyer uses this document when he applies for importation, and if required, for a letter of credit. Therefore, it is important that the invoice include all the necessary information for an import application, that it reflects your product in a very precise manner and that it includes every conceivable cost you might have to bear.

In order to create a pro forma invoice, you need to know:

1. Equipment/items that the customer desires, and its value, weight, and dimensions of the shipment, cubic dimension.
2. By what means the equipment is going to be shipped. Your forwarder will help you determine the charges for the freight, insurance premium charges, legalization charges (depending upon the country), and the cost for handling the letter of credit. If inland transportation is involved, he can figure those rates as well.
3. Packing method: crates, pallets, or containers.
4. Where the equipment will be landed.

A sample pro forma invoice is included in Appendix H.

Shipper's Export Declaration

This form must be prepared for every shipment that goes beyond the borders of the United States, with the following exceptions: a) shipments to the possessions of the United States; excluding Puerto Rico, b) shipments valued at less than U.S. $2500.00. Forms may be obtained from the field offices of the U.S. Department of Commerce, freight forwarders or the Government Printing Office. See Automated Export System below for details on submitting the Shipper's Export Declaration online.

The "export dec" must be prepared in full, signed by an officer of the export company (power of attorney may be issued to permit signing by another employee or by an independent freight forwarder), and is generally prepared in quadruplicate. Steamship companies and airlines must attach a copy of every export declaration to the ship's manifest and file with the U.S. Department of Customs before clearance is issued. The "export dec" is used for export control and for export statistics and should never be sent outside of the United States. The shipper export declaration includes a listing of the products shipped by Schedule B number, otherwise known as Harmonized System, or HS codes. These numbers are important because they are the means by which governments levy tariffs and otherwise control trade. HS or Schedule B numbers can be obtained through the U.S. Bureau of the Census.

Shipper's Declaration for Dangerous Goods

International Air Transport Association and International Maritime Organization regulations require shippers to declare dangerous cargoes to their air and ocean carriers.

IATA and IMO use separate documents, which they publish in their respective codes.

Automated Export System
The Automated Export System (AES) is the paperless way to file the Shipper's Export Declaration (SED) and the ocean manifest information directly to U.S. Customs. For more information on AES you can call the AES toll-free Answerline at 1-800-549-0595 or send an e-mail to leslie [dot] s [dot] albertson [at] customs [dot] treas [dot] gov.

The AES works like this: The export process begins when the exporter decides to export merchandise. The exporter or his authorized forwarding agent makes shipping arrangements with the carrier. The exporter or his authorized forwarding agent transmits the shipper's export information using AES. This information can come directly from the exporter or his authorized agent or through a service center or port authority. The AES validates the data against editing tables and U.S. Government agency requirement files and generates a confirmation message or error messages back to the filer. The carrier or an authorized forwarding agent transmits the export manifest data using AES. The AES validates the transportation data then generates either a confirmation message or an error message. Any error messages generated by AES must be corrected and the corrections transmitted to AES.

Shipper's Letter of Instruction

The importance of the shipper furnishing the freight forwarder with clear, precise instructions cannot be stressed enough. Remember, that the forwarder is an extension of your export department. He needs to know as much about the transaction as you do so that he can comply with all of your customer's requirements. Failure to furnish the forwarder with accurate shipping instructions can create unnecessary problems, some of which are listed below:

1. Failure to collect against a letter of credit because the forwarder was unaware that there was a letter of credit involved.
2. Failure to insure the shipment.
3. Forwarder shipping of freight prepaid instead of collect.
4. Failure to prepare certain documents called for on the letter of credit, thinking that the shipper would prepare them.
5. Returning of original documents to the shipper for him to distribute them, instead of sending them to a bank and/or consignee.

Transmittal Letter

This document is prepared with a bank draft and used to send shipping documents to a remitting bank for processing either a collection or payment/negotiation under a letter of credit. Shippers include their precise and complete instructions concerning how documents should be handled and payments remitted in the transmittal letter.

Additional Information Sources for Information about Documents

Not all of the export documents will be necessary for every transaction. However, familiarity with all of them is beneficial. Samples of many of these export documents can be obtained from the website of UNZ and Company. Software to produce the documentation may also be purchased from UNZ and Company. Contact: Unz & Company, 700 Central Avenue, New Providence, NJ 07974-1139. Phone: (800) 631-3098 In NJ: (908) 665-8850 Fax: (908) 665-7866, or use the website: www.unzco.com.

The number of documents the exporter must deal with varies depending on the destination of the shipment. Because every country has different import regulations, the exporter must be careful to provide proper documentation. If your company does not rely on the services of a freight forwarder, the following are methods of obtaining information on foreign import restrictions:

• Foreign government embassies and consulates in the United States. A list of diplomatic contacts is available from the US Department of State's homepage
  www.state.gov/www/about_state/contacts/diplist/index.html
• The Bureau of National Affairs Export Reference Guide on the web is a comprehensive and convenient source for information on foreign markets and rules, policies and practices for getting products to overseas customers. It can be obtained from the Bureau of National Affairs at www.bna.com/index.html