A world of opportunity

An introduction to

Export / Import
Marketing, administration and procedures
AVOIDING SOME COMMON PROBLEMS
A stepwise workshop based presentation
by Dr Fred Key, HDBA, MRSC, MIFST, MIEx
Businessman with 35 years working experience of international commerce.

Revised Nov. 2014

Composition, text and photography - Copyrights of Fred Key - 2012 and 2014 except where
indicated.

Forward

This latest draft serves as an introduction to the administration and mechanics of Export-Import normally
operated in International Commerce and gives an overview of specific marketing considerations.

The work is based on my own training and working experience in this field for over 35 years.
It eventually became my turn to train new employees, some graduates in business disciplines.

This course will be delivered by a series of PowerPoint aided presentations within workshop situations.

Though this draft includes comprehensive Lecturers Notes, it is intended that only the bullet points (in Blue
print usually) will be projected from a simplified version, during live presentations.

The treatise is adaptable for delivery to student of different age and ability levels, also for Distance Learning.

Handouts of larger format documents such as specimen commercial agreements may be provided to students
on paper during workshops. These are included with this work as Annexes, for the sake of convenience.

The course culminates with business projects both in Export and in Import, whereby the student can put
learning gathered into virtual practise.

Fred Key
2

22 January, 2013

Contents
1
.2
3

Cover page
Forward.
Table of contents

4
5
6
7
8
9
10

Part 1: Introduction
Value of Britains Exports and Imports.
Where U.K. exports go to.
Exporting Do you have a U.S.P. ?
Photo: producing Fry-Light for export.
Importing.
Illustration of Innovation seeking World Markets.

11
12
13
14-19

Part 2: Moving Cargo

Pallets, Containers etc.
Containerised shipments FCL / LCL
Photos of different shipping / transport modes

20
21
22
23
24
25
26
27
28

Part 3: Export/Import Marketing, Exploration - Finding your Golden Nugget.

Finding your overseas market.
Apply the principles of Marketing
Typical export marketing structure diagram.
Costing: Competing in foreign markets.
Protecting you intellectual property.
Sourcing from abroad.
Speak INCOTERMS
INCOTERMS in action.

29
30
31
32
33
34
35
36
37
38
39-41

Part 4: Export-Import Administration:

Import duties, levies, carbon duty. VAT (added 3 slides)
VAT in international commerce - Exports
VAT in Imports
CHIEF
Part 5 Financial cautions:
Checking Credit worthiness of client (now 55-56).
Getting paid and Banking procedures, Barter or Offset Agreements
Protecting currency exchange fluctuations.
Inspection: Survey reports on cargo.
Part 6: Insurance: business, marine, credit insurance.

42
43
44
45
46
47
2

Part 7: Documentation and Standard Correspondence

The Export Quotation.
The Export invoice type A.
The Export invoice type B. covering letter.
The invoice covering letter.
Bill of Exchange (Standard).
The American Bill of Exchange

49
50
51
52

Part 8: Understanding Transport Documentation

Bill of Lading
Airfreight instructions
Airway Bill

52
54-55
56-58
59

Part: 9 London Chamber of Commerce: Certificates of Origin

ATA Carnet and ATA Member countries
EUR1 Certificate
ATR Movement Cert. for Turkey

60
61

Part 10: Customs Procedures: Customs Freight Simplified Procedures (CFSP)

The National Export System and
CHIEF Customs Harmonised Import-Export Freight

62-64
65

Costing for Export

Competing effectively in Export markets

66-69

Part 11: The Agreement between Exporter and Importer

70
71
72
73

Getting paid and Bank Procedures

Cautionary guide to documents
Debt recovery abroad
Factoring

74-75
76
77

Part 12: Documentary Credits example Avoiding snags with your L/C
Documentary Collections: Sight Draft and C.A.D. (Printed handouts will be
supplied). Avoiding problems.

78-83

Import-Export controls, licensing and Controls

84-86

Modern Piracy

87

Outward Project: Research Export Market and Distributor for product X. may
combine with e commerce. Agency/Distribution Agreement, Protect I.P., Admin of
export (payment by bank collection, cover marine Insurance, obtain Certificate of
Origin), Follow up support (P.R., Advertising, budgeting etc.).

88

Inward Project: Source product Y for import. Inward, market research, Investigate
distribution channels, retailer base, e commerce. Agreement with Principal
including I.P. Admin of import (Cover Marine Insurance if needed, Pay by L/C and
customs duties/levies). Product support programme (P.R., Advertising and budget)
Useful names and contacts

89

Introduction: Part 1
Exporting: Selling and shipping goods out of the country in which you are based to another country.
Importing: Buying and receiving goods from another country into the country in which you are based.
Re-export: Export to other countries of products already imported into your country.

Other forms of Export and Import:

Invisible Exports such as the income Britain receives from:
Insurance and Reinsurance: operated by brokers and agents of Lloyds of London and the
International insurance companies.
Intellectual Property licensing to firms in other countries (Patents, Registered Design, Copyright,)
relating to technical and design innovations, software developments, performing and other kinds of art,
literature. Also Trade Marks (Coca-Cola, Starbucks, etc.).
Tourism, Education, Consultancy, Licensing (technology, photography, Films,
etc.), and more

UK Import/Export
statistics

IMPORTS:
EXPORTS:

(2008)

645,700,000,000
468,700,000,000

Where the UKs exports go

Exporting: Do you have a

USP?
Is your product in one of these categories?

Technical innovation

Design innovation

Niche speciality product

Typical regional product

Branded or Label product

British product of premium quality

A subsidised agricultural product

Other? Collectables, second hand items etc

Do your Market Research and Consumer Research: Japanese people dont need cheese graters
because they dont generally eat cheese and you cant sell fridges to Eskimos!
7

Production of Fry-Light cooking oil spray

for export Markets -

Significant contributor to turnover and profitability.

The ways and means:
Utilising plant and staff spare capacity.
Increased production leads to automation .
Automation leads to reduced product unit cost.
Effective Export Department.
Effective Imports of vegetable oils and raw materials
by competent Import Department.

Importing
So many products we buy or
touch, with the exception of
most processed food
products, are imported
today.

Illustration by Marko

Many products originally designed in the West, are

produced in the Far East and other cheap labour
countries, at lower cost than we can achieve in the
West, usually because their production cannot be
highly automated.

10

THE RIDE-ON-CARRY-ON CHILD SEAT

Designed by an American air-hostess Seeking Distributors

Part 2: Moving cargo

Bulk Carriers or Tankers:
For fuels, minerals and grain.
Specialised tankers for small deliveries of liquid fuel (gazoline) or liquefied butane/propane (LPG).
Containers onto containerships: For goods which can be conveniently loaded into shipping
container 12ft. or 24ft. Length, usually then loaded on flat bed lorries which are then winched onto sea
going ships or on adapted flat-bed railway carriages to travel through undersea tunnels (the Channel
Tunnel) and onward to city destinations, then reloaded onto lories for delivery to client warehouse.
There are specialised containers for carrying perishable goods requiring refrigeration or freezing
and liquid carrying storage-tank containers and so on.
Roll-on-Roll-off: goods loaded on lorries/trailers driven onto ferries for short
sea journeys or loaded on railway trains which can go through undersea tunnel. Conveniently the
lorry/trailer is driven from loading point to delivery point in a faster and more continuous process.
There are rear loading trailers and side-curtain side loading trailers which are easier to access with
pallets.
Air-Freight: Usually for High individual value items, or urgently required goods, or some deep inland
destinations. Parcels are usually stuffed into one or more containers which are then loaded on aircraft.
Couriers (D.H.L., U.P.S., etc.) or Post Office: By surface or by air when sending samples and
generally high value items and individual/personal orders, such as via online shopping.
DANGEROUS GOODS: such as explosives, flammable liquids, harmful chemicals, radioactive materials
REQUIRE SPECIAL HANDLING AND MUST BE NOTIFIED AND AGREED WITH TRANSPORTERS.

11

Pallets, containers and other platforms

The Pallet:
Standard British pallet
European pallet

1m x 1.2m
1m x 0.8m

Containers:
Standard shipping container

6m (20 ft) x 2.4m (8 ft) - or 12m(40 ft) x 2.4m (8 ft)

Specialised container types:

Temperature controlled insulated and refrigerated containers:
-

Same external size as above but smaller inner dimensions due to thickness of walls.

Flat bed containers/platforms such as for steel rods.

Tankers fitted within a container frame, to carry bulk liquid cargo.
To calculate the number of pallets or packs you can stuff into a container or trailer, websites such
as sea-rates.com will assist. Visualise a loaded pallet to be one large parcel for the purpose of
calculation.
Seek assistance from logistics operators and forwarding agents such as Corten (cortenltd.com).
Loading limit for road transport in the U.K. is 20 MT axle weight, about 18MT of goods.
11

Containerised Shipments:

FCL: (Full Container Load) - If you are filling

g container with your goods.
ull Bill of Lading.

an entire
You will be issued

LCL: (Less than Container Load) - If you are sending a small

t (volume) of goods to only take up part of the space of a shipping
ner. The vacant space normally being taken up by goods from
r
exporter/importer. You will be issued with a Certificate of
ent.
LCL is is sometimes referred to a Grouppage

tainer ship sailing towards

Black Sea ports

IMPORT - EXPORT

INSTRUCTION AND
WORKSHOP

Roll-on-Roll-off Ferry carrying vans, trailers

Bulk carrier for minerals, grain, crude oil etc.

Bulk carrier (Coalier unloading at Piombino Steel Works)

OIL (LIQUID FUEL) TANKER

Air Freight

Air transport gets from Liverpool to

New York in 6 hours, whereas a ships
journey would last 7-10 days.
The difference in time is greater
proportionately for longer distances
The very high cost of air-freight
compared to that of sea/ocean freight
Makes it only logical for urgent
deliveries or expensive and delicate
items such as luxury watches.

Library photo

20

Part 3 Import/Export
Marketing
Finding your golden nuggets!
Market research: For consumer products, your client must be convinced that you have done your market
research in his/her territory and that there is proven demand for your product in the territory (the target market)
at the retail price you have pre-calculated for the territory and that you will adapt your product as necessary for
the target market.
A reputable market research agency can help you. Clients may recommend an agency.
If you are Exporting or Importing you must demonstrate to the chosen Importer-Distributor or your Client how
your sales have progressed on the home market. Unless for example you are only manufacturing a product
for export (cholesterol-free liquid egg is in great demand in the U.S.A. but not in the U.K.).
Agree a convincing promotional package: apart from a good website, give examples of media advertising
(show images, clips) including product demonstrations (in store), articles prepared to get the press/TV
interested, personality endorsement, sampling allowance, etc. The Social Media: Face Book, Twitter, etc.
Discuss Promotional spend.
Ensure that you/your distributor will engage in P.R. directly or through the Advertising or P.R. Agency who will
organise advertising, to get the maximum editorial article coverage. Consumer and Trade magazines will
always have features such as What is New (in the market), New Gadgets, etc. Advertisers get priority in
editorial departments.
As alternative to a Distributor or in addition for the Distributor to handle (for suitable products) is Online
Marketing: particularly via the distribution networks of Amazon, EBay, Alibaba and others, can be the sole or
complementary channel of sales in many territories for certain categories of products. Best to back this up
with selectively directed advertising.
20

Finding your overseas market

First do Market Research to establish local taste, preferences and customs.
You cant sell fridges to Eskimos or cheese graters to Japan
DESKTOP SEARCHING:
Seek Importer-distributors or groups of
retailers in the target market. Or you may
seek contract manufacturers or licensees
to make or market your product.
Search engines: Google, Yahoo etc.
(British) Consulates Commercial Attaches.
(U.K.) Business Link T.0845 600 9006
UK Trade & Industry T. 0207 215 5000
or equivalent in the country of export.
(British) Chambers of Commerce in the
Capital of the country.
Intelligence: For example, by contacting as an
Individual British or American famous
food/confectionery/tea product exporters of
famous brands, asking them how you could find
their products in a certain market, they will give
you the details of their importers and ask you to
contact them.

VISIT THE MARKET:

Exhibit at Trade Fairs - seek (U.K.)
government assistance.
Travel to the capital of the country or the
region of interest (skis may sell best in
mountainous regions) and visit retailers
and wholesalers of your type of product.
Get to speak to the people on the ground
and let them pass you to their managers.
These may lead you to their own
head office or to importers they know.
Meet your countrys commercial attache: Discuss
Importers/distributors to contact
Look in outlets or with users for products in your
field of interest
Certain relevant (imported) products like
imported food products may have the importers
name and address displayed on the package.
There may be a similar Product imported or
locally made which your chosen Distributor has
not bothered to look for (meaning you could be
wasting your time and money advertising).
21

Apply the principles of Marketing (the classic book stuff) lets discuss:

THE CLASSIC 4 Ps:

Product
Price (affordability + competition)
Place in position and enablement to
effect. For shops: address, position,
situation.
Promotion (design, packaging
advertising, Public relations.

------------------------------------ You can think of more Ps:

Patent (Intellectual Property)
Perception (design, packaging )
Process
(Sales, Transport, Distribution, Display)
Participation (Agent, Distributor, )

Personalisation

PESTLE ANALYSIS:

Political factors (embargo?)

Economic (can they afford it?)
Social (local taste, customs)
Technological
Have electricity? 115 or 230 volts?
Irrigation pumps for Bangladesh - best
power by (integral) solar cells.

Environmental: (No market for

snow-boots in Egypt. Coats sold in
Siberia are thicker than those sold in
Cyprus).

TYPICAL EXPORT MARKETING STRUCTURES

22

Costing: Competing in
markets

Eg: Competing against a French producer on the French market

If you are a U.K. manufacturer, one of your heaviest costs will be your general
overheads and in particular your fixed overheads and any advertising budget.
I have found in my own food manufacturing business, that I could effectively compete abroad, say in
France, by reasoning as follows:
Consider adjusting the product to suit the taste, labelling regulations and other compliance
requirements.
We gave our product a desirable edge better presentation, more nutritional, more allergy friendly
and adapted it to the markets taste and labelling language
Since current fixed overheads are covered (rent, rates, Insurance,) by our Home Trade, we could
afford to export at minimal (close to zero) fixed overhead cover and reduce our export price,
Supplementing your national sales by exports will also keep your suppliers of components busier and
they should give you lower unit prices for larger order quantities, thus improving your margins. For
example if you are a food or sauce sauce manufacturer using: bottles, cans, jars, lids, labels, mostly
produced in Britain; enabling you to gain quantity discounts, reduce overall unit shipping costs and
reduce costs for larger imports of raw material and so again improve your margins.
Exports kept our machines running constantly and our staff happier!
See slide 57 for Example see Annex 4 slide 58 and for details see Annex 5 Slide 48.

Protect your intellectual property and

identity
Before venturing with innovations into export markets, endeavour to apply for patent
registration or design registration in that territory within the time allowed to you, usually within
12 months of your first application to the Intellectual Property register in your base country.
Unfortunately, this can be expensive!
Register your brand and company name as web addresses in your markets.

Consider Having your invention, innovative design manufactured under license in the target
territory such as the U.S.A. or if a labour intensive product, manufactured in a cheap-labour
country and shipped out from there.
Agree in writing with your agent or importer distributor (and get them to obtain further written
agreement from any sub-agents/importers/distributors) that they will hold and consider at all
times your companys name, identity, brands, designs, technology, whether or not registered,
including your web address - as your property and that they will assist you in every way in
protecting such property.

24

Sourcing from abroad

So many consumer product we buy or touch, with the exception of most processed food products are
imported nowadays, even products originally designed in the West, because they can usually be
produced in the Far East and other cheaper labour countries (often also less regulated), at far lesser
cost than we can achieve in Britain. It is up to you have to find new opportunities.
How do you get into this trade?
Look for innovation overseas: in any field and in any product such as the suit case mounted baby seat
Ride-on-carry-on. Seek innovative products you may have encountered on overseas journeys. Visit
Trade Fairs abroad. The U.S.A. is a great source of new ideas. Visit their shops, view their TV ads.,
etc.
Identify a need and then Google-search for the product.
Look for regional speciality which has become popular with British tourists such as the Spanish spiced
sausage Chorizo or their wonderful Manchego cheese. Turkey is becoming a popular tourist
playground and visitors get to like their cheeses and other foods, jewellery, household ornaments etc.
Register with foreign consulates, informing them of your competence and availability to act as agent or
distributor for a certain category of products.
Eventually ask your principal (the exporter) for an exclusivity agreement and what promotional budget
they can allocate (see specimen agreement in following slides 33-34.
25

Speak INCOTERMS
The most commonly used terms based on the rules of the International Chamber of Commerce:
For any mode of Transport:
Ex W
Ex Works specify the place like Greenwich (place of works).
FCA
Free Carrier Stratford container terminal.
CIP Carriage and Insurance Paid to Les Halles Paris (or Your warehouse, Greenwich).
DAT
Delivered at Terminal .. (Stratford Container Terminal London).
DAP
Delivered At Place ..
DDP
Delivered Duty Paid your warehouse - Dusseldorf.
(common also FOT = Free on Truck .)
Rules for sea and Inland Waterways Transport:
FASFree Alongside Ship Felixtowe such as FAS Felixtowe
FOB
Free on Board - such as FOB San Francisco
CFR
Costs and Freight such as CFR Hamburg (or commonly also as C & F Hamburg)
CIF Cost, Insurance and Freight such as CIF New York
The full list and rules are obtainable from the International Chamber of
Commerce or by looking up INCOTERMS on Wikipedia.

27

Incoterms in action

Part 4: Export/Import
admin
Export and Import administration procedures are similar.
You could say that one works in reverse of the other.

Exporter and Importer interact in handling mostly he same documentation.

Example: The Exporter sends Importer an Invoice and a Certificate of Shipment for goods and
the Importer has to administer, check and deal with the documents received.

Duties: Importer have to concern themselves with either import duties and sometimes levies and
import licenses and conversely the Exporters have to get involved in knowing the duties in export
markets and may need export licenses and can claim Agricultural Refunds.

Exporter has to get Export-Clearance of goods and documents through port and Customs at origin.

Importer has to get Import-Clearance for the goods through port and customs at receiving end.
Lets start with Export administration procedures since they encompass most of the reciprocal
import admin procedures
28
25

Import duties, levies, VAT

IMPORT DUTIES:
Have to be established and calculated
into the cost of importation of a
Product by studying the website:

These rules apply in the European Union and may

apply in other ways in other countries:

Thus Commodity No. is 20 09 111110

LEVIES : C.A.P. Common Agricultural Policy On Agricultural Goods such as any foodstuff
(solid or liquid), check if any Levy is applicable,
which you must also add to cost (see C.A.P.
LEVIES) or deduct from cost (see C.A.P.
subsidies).
You may need to apply for an import
license for certain basic agricultural goods eg: sugar
and other materials. Check first.
Also check: Packaging Waste Regulations.
EQUIVALENT CARBON PRICE LEVIES:
Example: Import levy and carbon price component for
Synthetic greenhouse gases eg: CFC (Chlorinated
Fluorocarbons) and blends thereof. Which are used to
Pressurise some aerosols and fire extinguishers etc.

From U.S.A. Import Duty 35%

Visit hmrc.gov.uk defra.gov.uk. Check also Packaging

Waste Regulations tax on wasted packaging Etc.

www.gov.uk/trade-tariff
Which helps you classify in several steps the
Tariff of product as for example that of:
Orange Juice 20% sugar content (20 Deg. Brix)
Search for Processed foods Chapter 20
Then find
Juices ..Heading 09
Then look up Orange juice not exceeding 20Brix
(20% Total sugars) 111110

IMPORTS: VAT IS CHARGED ON LIABLE IMPORTS (FOOD NORMALLY ZERO RATED).

EXPORTS: NORMALLY ZERO RATED. IF YOU RE-EXPORT PRODUCT ON
WHICH YOU PAID VAT, YOU CAN RECLAIM THE VAT PAID, FROM
CUSTOMS HMRC . (Explained further on following slides)

- Exporters and Importers should be registered for VAT

- Forwarding and Clearing Agents also register with customs,
and learn to operate the CHIEF system
For assistance on such classifications telephone:

Telephone:0300 200 3700

Textphone:0300 200 3719

Outside UK:+44 2920 501 261

Continued on next slides -

SUBSIDIES:
If you are exporting agricultural products the
Levies usually work in reverse, as Subsidies.
Again check in RPA (Rural Payment Agency) or phone
for guidance.
Rates of Levy/Subsidy are normally reported
next to the Commodity No. in gov.uk/trade-tariff.
Rates change daily- so check!
Visit: http://rpa.defra.gov.uk/rpa/index.nsf/vDocView
Or visit: defra.gov.uk and go to RPA Index

Guidance by telephone: 0191 2265050, 0345 603 7777

26

VAT IN INTERNATIONAL TRADE - EXPORTS

.

Supplies of goods and services to, from and within a free zone are taxable in the normal way. If you need more
information you should read Notice 702/9 Warehousing and free zones. Explained in online UK Customs
publication HMRC VAT notice 700:
HELPLINE 0300 200 3700
PARAG. 5.5 Exported goods
If you export goods to a customer outside the EU, your supply is normally zero-rated provided that you meet the
appropriate conditions.
There are a number of notices which deal with exports. You will find out more about these, and the conditions
which you must meet to zero-rate your supplies, in Notice 703 Exports and removals of goods from the United
Kingdom.
PARAG. 5.6 Exported services
Some supplies of services to overseas customers are zero-rated, but many are standard-rated. You will find more
about this in Section 29.
PARAG. 5.7 Intra-EU supplies of goods
If you supply goods to a VAT-registered customer in another EU Member State and the goods are removed from
the UK to another EU country, your supply may be zero-rated provided you meet the appropriate conditions.
You will find out more about the VAT treatment of supplies of goods within the Single Market, and the conditions
you must meet to zero-rate your supplies, in Notice 725 The Single Market.
PARAG. 5.7.1 EC Sales List
UK traders registered for VAT who make supplies of goods or services to traders registered for VAT in the other
Member States are required to send in lists of their EC supplies. The EC Sales Lists are used to control the
taxation on supplies within the EC.
You will find more details on EC Sales Lists in HMRC Notice 725 The Single Market.

VAT IN ITERNATIONAL TRADE IMPORTS

5.2 Imported goods

When goods are imported into the UK from outside the EU, VAT is normally due at the same rate as on a
supply of those goods in the UK.
VAT must be paid when you import the goods or, if you or your agent is approved for duty deferment, you can
defer payment with any duty.
If you import goods into the UK from outside the EU, you should read Notice 702 Imports and Notice 101
Deferring duty, VAT and other charges.
5.3 Warehoused goods
Similar arrangements to those above apply if you remove goods from an approved warehouse.
You should read the following Notices:
Notice numberTitle197Excise goods: Holding and movement179Mineral (Hydrocarbon) Oils: Duty and VAT:
Warehousing and related procedures, or232Customs warehousing, and702/9Warehousing and free
zones5.4 Services received from outside the UK
If you are the customer and you receive from outside the UK any services subject to theB2B general rule for
the place of supply of services, the services are treated as if you supply them, and you must account for any
output tax due on them. You can recover the VAT on these services as input tax, subject to the normal rules.
If you think that you might receive services of this kind from outside the UK, please read Notice 741A Place
of supply of services.
If you receive from outside the UK any B2B general rule services, their value counts towards your taxable
turnover. This applies even if the only supplies you make in the UK are exempt.
It is simpler if you are registered for VAT in the UK, which most businesses are.

CHIEF

Customs Handling of Import and Export Freight

USUALLY, ONLY OPERATED BY YOUR FORWARDING OR CLEARING AGENT:

Changes to legislation means the handling system for imports and exports needs to
change. Find out about the CHIEF replacement programme.
Contents:

Documents https://www.gov.uk/chief-trader-import-and-export-processing-system

If you import or export goods you, or an agent acting on your behalf, will already use the Customs
Handling of Import and Export Freight (CHIEF) service to track these goods through ports and airports,
and to complete customs requirements electronically.

Future process and procedure changes to European Union (EU) legislation under the Union Customs
Code (UCC) can not be accommodated within the existing CHIEF service. HM Revenue and Customs
(HMRC) is therefore planning to replace the current CHIEF service.

This new service will need to:

identify and collect the right duties and taxes

release goods through inter-operation with port and airport inventory systems

allow frontier and inland freight controls within the UK to be used by the nominated agency or authority

electronically process all the required customs declarations

record trade and transport statistics

accommodate the UCC changes

HMRC is looking at other changes needed under the Union Customs Code and their EU wide
implications.

More information will be added to this page as the Replacement Programme moves on.

Part 5: Cautions, Insurance,

Inspection, Currency
fluctuation.

Check it out!
CHECKING THE CREDIT WORTHINESS AND REPUTATION OF YOUR
FUTURE CLIENT
It is customary to ask your considered future client, to let you have the name and address
of their bankers and two or three suppliers as references.
You should also seek regular financial reports (at least yearly), from Credit Checking
Companies
Check references:
etc.) or your bank or accountants.
Bank
reference: such as Dun & Bradstreet, Credit Supplier
Write to your bank to enquire as per Annex 1.
Business Manager
HSBC Bank
38 Dartford High Street
Dartford
Dear Sir/Madam,
CREDIT REFERENCE:
Would you please obtain reference on the Status and
Reputation, current credit worthiness and ability to settle
additional business to usual commitments worth Euros .. per
month with . days credit terms of:
Zographos Surgical product Distributors S.A.
232 Olympus Street,
Athens 412, Greece.
Bankers:
National Bank of Greece
Pergamon Place, Athens, Greece.
Yours Faithfully,

Dear Sirs
We have been given your name as supplier by Zographos
Surgical of Olympus Street, Athens as we are considering
starting trading with them in the near future.
We are writing to enquire about your trading experience with
them and would appreciate your assistance in giving us the
following information:
- Number of years of trading.
- Annual volume of business.
- Credit terms.
- Average credit taken.
- Present/current credit situation.
If you are pleased with their achievements in marketing your
products and any other information which could assist us in
our plans.
Yours faithfully,

30

Getting paid
These are the usual forms settlement and finance.

SECOND BEST:
a) Letter of Credit (not Irrevocable):.

SAFEST MODES:

b) Cash Against Documents (C.A.D): ..

Payment in advance: effected by client to your export

bank account: particularly if the client is an unknown.
A small discount encourages advance payment.

d) Sight Draft Collection:

Bankers Guarantee: basically assuring you that a bank

pays you on presentation of invoice etc.
Irrevocable Letter of Credit or Documentary Credit:
or Irrevocable L/C or Irrevocable Documentary Credit.
This guarantees that the issuing bank pays you when
you submit all requested documents and requirements.
For example of application form Google your banks Foreign
Collections, e.g.: NATWEST application for letter of credit.

e) Dated Draft Collection:

Forms examples of application forms Google your banks Foreign
Collections, e.g.: NATWEST application for Documentary Credit,
Application for foreign collection etc.

TRUSTWORTHY ?
OPEN ACCOUNT: Such as Account 60 days,
or Monthly Account.
Refer to annex 3 slide 47 for important information ...
BARTER (Offset Agreements): practised in some
Cases, usually in government defence material purchase
and the aerospace industries in exchange for a related
service or goods (raw materials) or shares etc.
See Wikipedia: Offset Agreements

Refer to annex 3 slide 47 for important information

FINANCE AND EXPORT CREDIT RISK INSURANCE :

Finance can be arranged through mostly the main U.K.
banks.

Small transactions: such as in mail-order business Credit Cards and Pay Pal are normally used.

Credit Insurance is arranged by some insurers and for

exports there is the U.K. Export Credit Guarantee.
Refer to annex 3 slide 55 for important details
30

Factoring and Insuring debt (Credit Insurance) is

discussed later in this programme (past slide 50).

Protecting against currency fluctuation

Your older colleagues will have known times of remarkable currency stability
but recent times have seen sudden currency relationships changes which can
eat up your profit or produce a loss if you are working on thin margins,
whether you are Exporting or Importing.
A FORWARD CURRENCY CONTRACT allows you to fix a rate of exchange in
advance, which then determines the price you will pay for Imports of the
moneys you will receive for Exports in your own national currency (Pounds
Sterling for example if you are U.K. based).
MAJOR BANKS AND CURRENCY MERCHANTS normally operate these contracts.
EXPORTING: Then you would sell currency forward to coincide with the maturity date of
say a Documentary Credit in you favour, paying in a foreign currency.
IMPORTING: You would purchase currency forward to coincide with the maturity date of
a debt, say an 180 days Draft (a written promise to pay a supplier, via the banks, an agreed amount at
an agreed date - See examples of drafts on slides 42 and 43).
You can also buy or sell currency forward if you speculatively predict that there will be a currency
fluctuation you can take advantage of by building a reserve in a certain currency, e.g.: U.S. Dollars,
say to pay for future expected imports of goods from the U.S.A.
THE COSTS: Apart from exchange charges/commissions, expect to pay for interest charge on the
extended credit if for example buying Australian Dollars 180 days forward.
It is worth talking to your bank and/or specialists in the field such as FC EXCHANGE
tel. 0207 989 0000. They should give you all the details.

31

Inspection and
certification
If you are not completely sure of your suppliers competence
reliability and compliance you can use surveying and/or inspection
agencies to ensure that you obtain the product you want, produced
and inspected the way you want and that it complies with your
requirements, and specification or an internationally
recognised standard such as I.S.O. 9001, ISO 200, EN 16001.
Conversely, your client may require the same inspections to be carried out on
your process and goods as is often the case with government agencies
purchase orders.
- Cargo Inspection and testing organisations such as Intertek
- Production monitoring and quality control orgs. such as Bureau Veritas
- Marine Insurance surveyors such as Lloyds Marine Surveyors, who will
ascertain that the tanker or bulk carrier for example is fit for the journey, task
and purpose.
Search engines, such as Google will give you much more detail and contacts.
Lloyds Marine Surveyors. Also other firms who run courses and qualifications in those
spheres.
31

Insurance

INSURANCEINSURANCE INSURE IF YOU ARE A MANUFACTURER AND IF YOU ARE EXPORTING OR IMPORTING GOODS

or make sure that the shipment will be insured by your counterpart.

MARINE INSURANCE

General Average: Ancient tradition in the shipping world and one of the conditions of carriage on board dictate that: A
deliberate jettison of merchandise in the face or a peril example having to dump goods overboard for the sake of the
safety of the vessel (the whole) and other goods The cost is shared proportionately by the owners of the saved
merchandise under the General Average rule.
-

All Risks It is always advisable to cover marine Insurance for ALL RISKS INCLUDING WAR, LOCK OUTS SRCC
(Strikes, Riots & Civil Commotions) from the nearest point you are not covered to the farthest delivery point for
which you are not covered, ideally you should take cover WAREHOUSE TO WAREHOUSE.
Normally you would cover C.I.F. value plus lets say 10% to cover the loss of profit you would suffer by not being able to
sell the lost or damaged goods.
Your insurance package should also cover you for default goods in transit insurance in the country where you operate, as
you are unlikely to be fully compensated for any related loss.
Ensure that your counterpart has covered Marine Insurance If you are selling or buying Ex Works or F.O.B., basis etc.
for the same extent of risks as you would AND
you must take your own Default Insurance, in case the Importer client fails to insure. Note that you are liable to pay for
goods sold to you (Ex Works, F.O.B. etc.) if they are lost or damaged in transit. Therefore insurance matters either way.
Claims payable in London: If your foreign counterpart covers insurance, make sure that the policy enables claims to be
payable in London, giving the name of the London office to be contacted in the event of loss or damage.
The shipping and air cargo companies will only give you very small compensation for loss or damage to your
goods. Therefore taking up appropriate insurance is vital.

Piracy: Insurers are reluctant to give cover for sailings into or through regions known for incidents of Piracy.
So check !

( for further discussion).

39

MORE CAUTIONS
on Insurance and Limited liability
. WHO

CAN ADVISE ? Best insure with firms which give a comprehensive range of business insurance products and the

best advice.

If you are just starting with Exporting or Importing, or only do so occasionally, your Forwarding Agent or the shipping
company can advise and can effect Marine Insurance Cover for specific shipments(s).
Some Banks (foreign documentation departments) can also advise upon and effect for you Marine Insurance Cover for
individual shipment(s)

If you are or become a regular exporter/importer a good business insurance broker (sometimes your current business
insurance broker) and some insurance companies can arrange an Open Marine Policy for your company or a
comprehensive cover for your estimated annual value of Goods in Transit (nationally) and Imports/Exports.

Your importer will probably require you to have Product Liability cover with international cover (including USA if
possible)naming the Exporter as Interested Party and the Importer on this basis can obtain Default Product Liability
Insurance. This in case a product of yours which he imports causes injury or loss and he has to make a claim on the
Exporter but something goes wrong.

BUSINESS INSURANCE - Public/Product Liability:

As part of your insurance package, if you are a manufacturer you should normally have Product Liability and Public
Liability insurance and you should also have corresponding cover for (at least) the territory you are exporting to.
If you are a Trader (Exporter or Importer) you must consider Default Insurance for at least the territory you are trading in
in case your suppliers do not meet any liabilities which your company may have to face because of their faulty products.

- WHY GO LIMITED? Trading as a Limited Company, shelters Directors personal exposure to financial risks and certain
liabilities.

AND MORE CAUTIONS

.

BUSINESS INSURANCE - Public/Product Liability:

As part of your insurance package, if you are a manufacturer you should normally
have Product Liability and Public Liability insurance and you should also have
corresponding cover for (at least) the territory you are exporting to.
If you are a Trader (Exporter or Importer) you must consider Default Insurance for at
least the territory you are trading in in case your suppliers do not meet any liabilities
which your company may have to face because of their faulty products.

WHY GO LIMITED? Trading as a Limited Company, shelters Directors

personal exposure to financial risks and certain liabilities.

Protect your innovations: Patent registrations, Design registration, Trade

Marks and Copyright if necessary in at least your main present and future main
markets. Capture your internet domain in such territories and ensure that your agents
and distributors undertake to keep your IP and your domain as yours and to defend
you onm their territory.

Part 6: standard
correspondence

Export quotation or offer

Abacus Foods Ltd.
Unit 5 Greenwich Industrial Estate
Greenwich, London SE10 1RE
T. +44 (0) 208 304 9467 F. +44 (0) 208 304 5678
sales@abacusfoods.co.uk
Registered in England No. 234567 V.A.T REGISTRATION NO. 123456
1st August 2012
Eurofoods Importers
Euro Buildings
Durban
South Africa
OFFER / QUOTATION REF. YOUR ENQUIRY OF 15 Jul. 2012
Dear Sirs,
We thank you for your enquiry and are pleased to offer as follows:
20 pallets each 100 cartons 24x500g tins BOBs Tomato Soup @ 4.00/CTN
(State Estimated when you guess at a figure and dont have a fixed price for the item)
Sea Freight(containerised on pallets)
1000.00
Marine Insurance (if required)
100.00
Certif. of origin (if required)
40.00
Estimated Bank Charges

50.00
TOTAL CI.F. DURBAN

Ex Works Greenwich .
Estimated F.O.B. Charges
Survey Charges

8,000.00
500.00

600.00

11,590.00

EXPORT; VAT ZERO RATED V.A.T REGISTRATION NO. ( to enable recovery of V.A.T.)

MARINE INSURANCE COVERED FOR 110% of CIF value for all risks including War, and SCRC (meaning: Civil Insurrection and Commotion, Strikes, Lockouts), Claims payable in
Durban (certain goods such as frozen foods can specially covered for freezers not working, therefore enquire with Broker)
Payment by Irrevocable Documentary Credit in our favour
payable at SIGHT (or at 60 days from date of shipment)
confirmed by (our bank or A First Class London Bank)
Permitting partial shipment and transhipment
Our bankers: Greenwich Commercial bank
Greenwich High Road Branch
London SE10 4YZ
Sort code . Account IBAN (Ensure that you have opened an Export bank account which only pays your main account)

*Particularly important when dealing with clients you do not know by reputation.
Subject to our standard conditions of business printed on the reverse (or herewith attached ) and any variation agreed between the parties made in writing.

38

Export invoice type A:

CIF

Normally only effected if you can ship a complete order as specified by your offer and/or the requirements of a
Documentary Credit or bank guarantee.
Abacus Foods Ltd
5 Church Industrial Estate, Greenwich, London SE10 7HL
T. +44 (0) 208 304 9467 F. +44 (0) 208 304 9468

sales@abacus.co.uk
Eurofoods Importers INVOICE NO. 2456
Euro Buildings
ACCOUNT NO. 012
Cape Town DATE 1 Oct. 2012
South Africa
YOUR ORDER NO. 5042
DATED 3 Sept. 2012
TO Shipment of containerised canned foodstuff as specified below:
Shipped on M/V ANTONIA
Sailed from Felixtowe 30 Sept 2012 with destination Cape Town
Voyage No. 342,
Bill of Lading of Blue Line No. 48924:

To:

20 pallets each 100 cartons 24x 500g tins BOBS Tomato Soup
Details as per our offer/quotation of 1 st August, 2012, copy attached.

C.I.F. Cape Town 11,550.00

MARINE INSURANCE COVERED FOR 110% of CIF value for all risks including War,and SCRC (meaning: Civil Insurrection and Commotion,
Strikes, Lockouts, - Claims payable in Durban
EXPORT; VAT ZERO RATED V.A.T. REGISTRATION NO. .(to enable recovery of V.A.T you may have paid).
Payment by Irrevocable Documentary Credit in our favour
payable at SIGHT (or at 60 days from date of shipment)
confirmed by (our bankers or a First Class London Bank)
Permitting partial shipment and transhipment
Our bankers: Greenwich Commercial Bank, (Ensure that you have an Export bank account which only credits your main account)
Greenwich High Road Branch,
London SE10 4YZ
Sort code . Account . IBAN
Subject to our standard conditions of business (normally given with initial offer/quotation and any modification agreed between the parties).

39

Export invoice type B:

Ex Wks /

FOB
A standard export invoice which leaves you the flexibility of supplying and pricing for a lesser (or greater) number of goods if permitted by the
client and any documentary credit document. You may ask the client to amend his documentary credit to permit a lesser or greater quantity of
products Partial Shipment Permitted as long as charged pro rata on an ex works or F.O.B. basis for example.

Abacus Foods Ltd

5 Church Industrial Estate, Greenwich, London SE10 7HL
T. +44 (0) 208 304 9467 F. +44 (0) 208 304 9468

1st August 2012

Eurofoods Importers
Euro Buildings
Durban
South Africa

sales@abacus.co.uk
Company registered in England No.123456 V.A.T. Reg. No. 678910

YOUR ORDER / INDENT NO. 1234 OF 25 August. 2012

Dear Sirs,
We confirm shipping of your order as follows:
19 pallets each 100 cartons 24x500g tins BOBs Tomato Soup @ 4.00/CTN ( THE PRICE QUOTED) Ex Works Greenwich .
F.O.B. Charges
500.00
Sea Freight
(containerised on pallets)
1000.00
Marine Insurance
400.00
Survey Charges 600.00
Estimated Bank Charges
50.00
If you can only only find out actual bank charges and other at some later time state Estimated
TOTAL CI.F. DURBAN
10,150.00
EXPORT; VAT ZERO RATED V.A.T REGISTRATION NO. 678910 (to enable you to reclaim V.A.T.)

7.600.00

Payment by Irrevocable Documentary Credit in our favour

payable at SIGHT (or at 60 days from date of shipment)
confirmed by (our bank or A First Class London Bank)
Permitting partial shipment and transhipment
Our bankers: Greenwich Commercial bank
Greenwich High Road Branch
London SE10 4YZ
Sort code . Account . IBAN (Ensure that you have opened an Export bank account which only pays your main
account*)
Subject to our standard conditions of business printed on the reverse (or herewith attached ) and any variation agreed between the parties made in writing.

*Particularly important when dealing with clients you do not know by reputation.

38

Invoice covering letter

Eurofoods Importers
Euro Buildings
Durban
South Africa

Abacus Foods Ltd

5 Church Industrial Estate, Greenwich, London SE10 7HL
T. +44 (0) 208 304 9467 F. +44 (0) 208 304 9468

Date 21 Oct. 2012

sales@abacus.co.uk

Your order/indent No. 1234

Shipped on M/V Mantova Sailed 21 Oct. 2012
Destination Cape Town Voyage 34 Estimated arrival 30 Nov. 2012
Certificate of Shipment of Blue Line No. 48924
Dear Sirs,

We thank you for your valued business and have pleasure in announcing the shipment of your above mentioned order as follows:
In case of Collection through Bank:
a) We enclose the following copy documents, originals submitted though ...Bank for presentation to you C.O.D. (or against acceptance of our draft
at sight, 30, 60, 90days (as pre-agreed):
In case of negotiation against Letter of Credit:
OR b) We enclose the following copy documents, originals being submitted to .Bank for negotiation against your letter of credit:
In case of Open Account:
OR c) We enclose original documents as follows: (in the case of business conducted on Open Account / Account 30,60,90 days etc.)
Invoice in 3 copies
Copies Bill of Lading / Certificate of Shipment
Certificate of Origin EUR1 (as and if required)
Health Certificate / Surveyors Report etc. (as and if required)
The invoiced food products fall under Harmonised Customs Tariff 2405 5000 (this is optional information).
We wish you safe and timely arrival of the goods, and look forward to being of service again in the near future.
Yours faithfully,

39

The bill of exchange

Sometimes referred to as DRAFT
Normally supplied by Commercial Stationers as Books of Bills of Exchange
FRONT OF BILL

No.

At sight pay this sole/ first/ second of exchange ------/ second / first unpaid for the sum of
............................................................................................
.....................................................................................................................................
To the Order of: (drawer) Normally the seller
Abacus Foods Ltd
Greenwich Commercial Bank
5 Church Trading Estate
High Street
London SE10 4YZ
Greenwich, London SE10 2XY
Reference: Order No. ..,, L/C of HSBC No. ..

Name of Bank: (of drawer) the sellers bank

_______________________________________________________________________________________________

BACK OF BILL

On the reverse: The drawee normally the Buyer or Client accepts this Draft by writing:
To Bank of Transvaal, Liberty Road, Cape Town. The Buyers bank usually issuing bank in case of L/C
Authorised signatory signature ...
Date.
For: CAPE IMPORTS PTY LTD.
and applying company stamp over signature
42

American bill of exchange

FRONT OF DRAFT (BILL)
$ 25,000

Date 10 October 2012

No. .

TENOR (course of time) 90 days after sight

PAY TO THE ORDER OF (the Seller) Abacus Foods Ltd., Church Trading Estate, Greenwich, London SE10
with Account at:
(Bank of Seller) Greenwich Commercial Bank, High St. Greenwich, London SE10 A/c 40-42-25 406090
The sum of

Twenty five thousand only ---------------------U.S. DOLLARS (the total invoiced -normally)

REFERENCE: Drawn under Letter of Credit (details and date)

Issued by Bank of New York
DRAWN ON:
Bank of America (the Buyers bank and in the case of L/C the bank issuing the L/C)
22-24 Lexington Ave.
New York, U.S.A.

...

Abacus Authorised signatory

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

BACK OF DRAFT (BILL)

The Buyer (the Drawee or Payee who banks with Bank of America, given as example, must endorse draft (sign date
and apply company stamp over signature) on reverse to confirm acceptance.
43

Part 8: Transport

documents

Transport or Transit documents take the form suitable for the mode of shipment: From an
exporters and an Importers view points:
1. Bill of Lading (Connaissement): is issued by the sea/ocean shipping companies for
conventional shipments of full container loads or fully compartmentalised goods.
2. Certificate of shipment: is issued by sea going container operators for goods from different
exporters which are grouped in the same container for shipment to the same port for different
respective importers. This method of grouping consignments is termed Grouppage.
3. Way Bill: is issued by international road transport operators, the vehicles are big lorries or
vans usually referred to as trailers and articulated trailers or artics as a short description.
4. Airway Bill: issued by Air Freight operators much in the same form.

Part 9 - Bills of Lading

Airway Bill

Airway Bill

LONDON CHAMBER OF COMMERCE SERVICES

www.londonchamber.co.uk
Apart from general Certificates of Origin:

LINKS TO OTHER EXPORT DOCUMENTATION SERVICES:

European Community EC Certificate of Origin

Arab-British Certificates of Origin
EUR1 Movement Certificates
ATR Movement Certificates

Export Documentation Price List May 2014

Members receive up to 50% discount on most export documents. For more
information on Certificates of Origin, EUR1 and ATR Movement Certificates or any
other export documents contact us on T: +44 (0)20 7203 1852 or E: Export
Documentation.
To speak to our team about how LCCI membership can help you connect with other
businesses, influence on your behalf and provide practical support; contact us
on T: +44 (0)20 7203 1881 or E: membersales@londonchamber.co.uk.
Alternatively you can give us a few details here and we'll call you back or complete
an online application form.

ATA Carnet

"Istanbul Convention" redirects here. For the Council of Europe Convention on preventing and
combating violence against women and domestic violence, sometimes referred to as "Istanbul
Convention", see Convention on preventing and combating violence against women and domestic
violence.

Jointly administered by the World Customs Organization (WCO) - www.wcoomd.org and

the International Chamber of Commerce through its World Chambers Federation, the ATA Carnet
is an international customs document that permits the tax-free and duty-free temporary export and
import of goods for up to one year.

The Carnet eliminates the need to purchase temporary import bonds. So long as the goods are reexported within the allotted time frame, no duties or taxes are due. Failure to re-export all or some
of the goods listed on the Carnet results in the payment of applicable duties and taxes.

Failure to remit those duties results in a claim from the foreign customs service to the importer's
home country.

The acronym ATA is a combination of French and English terms

"Admission Temporaire/Temporary Admission."
.

ATA Member countries:

The ATA Carnet System is currently in force in the following 73 countries and regions:

Albania, Algeria, Andorra, Australia, Austria, Belarus, Belgium/Luxembourg, Bosnia and

Herzegovina, Bulgaria, Canada, Chile, China*, Cte d'Ivoire, Cyprus, Czech Republic, Croatia,
Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hong Kong, Hungary, Iceland,
India, Iran, Ireland, Israel, Italy, Japan, Republic of Korea, Latvia, Lebanon, Lithuania, Macau,
Macedonia, Madagascar, Malaysia, Malta, Mauritius, Mexico, Moldova, Mongolia, Montenegro,
Morocco, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Romania, Russia,
Senegal, Serbia, Singapore, Slovak Republic, Slovenia, South-Africa, Spain, Sri Lanka, Sweden,
Switzerland, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom and
United States of America.

In China, India and the UAE, the use of Carnets is limited to fairs and exhibitions.

A system similar to the ATA Carnet System operates on the basis of bilateral agreements
between Chinese Taipei and a certain number of ATA Carnets including the EU Member States,
Australia, Canada, Israel, Korea, Malaysia, New Zealand, Norway, Singapore, South Africa,
Switzerland and the United States of America.

EUR.1 movement certificate

This is a form, which is used in international commodity traffic. The application of this form is based on
application of various bi- and multilateral agreements within the Pan-European preference system (the
European Union Association Agreement ).

In the free trade agreements goods are defined, which apply to cheaper rates of duty or to be completely dutyfree introduced, on the condition that they were completely manufactured in a member country or in such were
so far worked on that they become on an equal footing in accordance with the agreements of the origin of the
products. In order to profit from the preferential rate during a customs clearance , a EUR.1 movement certificate,
in short EUR.1, must be handed over to the competent authority (usually a customs administration), in which
the manufacturer certifies the origin of the goods.

The EUR.1 is recognized also as a certificate of origin in the external trade in legal sense. In place of a
movement certificate also a declaration of origin on the invoice can be provided by the manufacturer or sender
of the goods, if the amount of items with EUpreferential origin of a single shipment does not exceed 6,000 -If it
concerns an approved exporter, the delimitation of 6,000 Euro applies. If it is not an approved exporter it does
not apply, The creator of such a movement certificate or declaration of origin must be able to prove the origin
characteristics of the goods with a possible check on supplier declarations.

The exporter fills in the form and then hands it over or sends it in to the competent authorities, usually customs,
who stamp it and send it back to the exporter.

List of countries with which the EU has a Free Trade Agreement

where the EUR.1 is used:

Africa

America

Albania
Bosnia and Herzegovina
Georgia
Iceland
Liechtenstein
Serbia/Kosovo
Macedonia
Norway
Serbia
Switzerland
Moldova, Republic of
Ukraine

Middle East

Chile
Colombia
Mexico
Republica Dominicana

Europe

Tunisia
South Africa
Algeria
Egypt
Morocco

Israel
Jordan
Lebanon
Syria

ACP countries

Regulated through the Cotonou-agreement, which is not a traditional FTA, but rather a non-reciprocal agreement
(ACP | African, Caribbean, and Pacific Group of States)

African, Caribbean and Pacific Group of States. Features documents, mission statement, information on member countries, agendas and press releases. www.acpsec.org

ATR MOVEMENT CERTIFICATE FOR TURKEY

WHAT IS AN ATR MOVEMENT CERTIFICATE AND WHY DO I NEED ONE?

The ATR Certificate entitles goods, which are in 'free circulation' in the EU (i.e. the
goods are EU-originating, or on importation into the EU all the relevant duties and taxes
have been paid) to receive preferential import duty treatment when shipped to Turkey.
This applies to all eligible goods except agricultural goods, minerals and steel which
require an EUR1 Movement Certificate.
When completing an ATR form it is advisable that the exporter or authorised agent
consults HM Revenue & CustomsNotice 812
HOW LONDON CHAMBER OF COMMERCE CAN HELP
ELECTRONICALLY.
Over the counter from London Chamber of Commerce, 33 Queen Street,
London EC4R 1AP or at one of the Chambers export document branch offices
By post
HOW DO I APPLY FOR AN ATR MOVEMENT CERTIFICATE?
1. Obtain a Blank Original ATR Form from the London Chamber of Commerce
2. Read the Guidance Notes below
3. Apply over the counter, by post or electronically

Part 10-

Customs Freight Simplified Procedures (C

Administered by HM Revenue & Customs (HMRC), is an electronic customs system for imported third country goods

It allows faster release of goods from countries that are not members of the European
Community (EC) at the frontier or inland, the use of simpler customs declarations and cash-flow benefits to importers
CFSP isnt compulsory but you may find it useful.
There are two CFSP procedures.
The Simplified Declaration Procedure
(SDP) is used for releasing goods at the frontier to most customs procedures.
This may be useful if you are importing perishable goods.

The Local Clearance Procedure (LCP) is used for moving goods from the frontier to storage and then releasing them
customs procedure. This guide shows you how to become authorised for CFSP, how its accounting
systems and customs procedures work, whether an agent could help you, and how to find expert help.
CFSP eligibility and restrictions
CFSP are electronic customs declaration processes for speeding up the importation of goods from third countries.
You can opt to use either the SDP or LCP. In both cases you submit the declaration in two stages.
Either of these procedures can be used independently or they can be combined to suit your purpose.
Eligibility of goods for CFSP
CFSP is suitable for most goods from third countries. However, controlled goods may only be released
from the frontier using SDP - ie you cannot use LCP to release controlled goods inland, with certain exceptions.
Licensing - controlled goods and CFSP
(More to follow, so look up and read on, please )

The National Export System

(NES) is a computer-based system which enables export declarations to
be made electronically, replacing manual processing.
Use of NES is mandatory for exporters, who must be authorised to use it.
NES operates within the nationwide electronic Customs Handling of
Import and Export Freight system (CHIEF) which controls the movement of international cargo.
The EUs Export Control System (ECS), electronically controls indirect exports and was built onto
CHIEF in the UK so there is usually no requirement to submit a separate safety and security declaration,
as a CHIEF export declaration contains the additional ECS fields.

Re-Exports etc. :
Goods under a transit procedure within the EU prior to export to a third country are also covered in this documen
The National Export System and how to use it:
The electronic NES must be used by exporters to declare to customs
their intention to export goods to third countries - ie countries outside the EU.

Gaining access to NES:

NES operates via CHIEF, the nationwide computer system that electronically controls
and records the UKs international cargo movements.
All export declarations must be submitted electronically to CHIEF. See CHIEF: trader import and export process
Two export simplified procedures are available under NES: the Simplified Declaration Procedure (SDP)
or the Local Clearance Procedure (LCP).
For authorisation to use one of these you should complete and return
the NES application form. Access the NESapplication form C&E 48 from the HMRC website.
So please, Google search and read on.

Costing for export

COST PER UNIT OF SALES ABROAD:
Subtract your U.K. sales and marketing costs to find
Your Net Export Ex Works price per per unit of sale. Then
to arrive at the end user product cost abroad
you have to add the following:
Cost of shipping per sales unit from your warehouse to
clients warehouse including marine insurance (120% of C.I.F.
value?) and shipping/forwarding agents charges also any
special packaging, pallets and treatment.
Cost of interest on credit and bank charges. Add a 1 - 5%
margin for possible currency fluctuation if invoicing in other
than Pounds Sterling.

SOME INTERNATIONAL COMMERCIAL TERMS:

(Memorise these and their meanings)
For complete description see INCOTERMS:
-

Cost of any Credit Protection Insurance.

Cost of any fixing of currency exchange
Cost of obtaining any certificates of origin and consular
legalisation, If required by Importer etc.

Import duties if any and Sales Tax (V.A.T.) in importing

country. Specially if you are selling Delivered Duty paid
(Franco):
Obtain information on import duties and other taxes as well as
any E.E.C. export levy/rebate from H.M. Customs & Revenue on Harmonised Tariff of your product and relative import duty
and import license and quota conditions in country of import.
Your Importer should also assist you. See H.M.R.C. website.
Importer Margins: Get your importer/distrubutor to agree to a
reasonable gross margin and add that.
Retail margins: Get a good idea of retail margins and any
regional sales taxes and add those to come to your final
estimated retail price.
Marketing costs: advertising, commissions.
All to be calculated per unit of sales.

Ex Works: Cost of your product at your factory or warehouse

gate.
F.A.S. Felixtowe: Normally means delivered Free Along Side of
ship at port of departure or sea going container at container
terminal eg: Startford London Container Terminal.
F.O.B. Sheerness: Normally means delivered free on board a
ship at Dover, (usually nowadays packed in sea going container).
CFR NEW YORK Covers cost of export clearance, delivery to
port of exportation and forward transport (Freight) to port of
destination, sometimes this term is stretched to cover freight all
the way to an inland address). You must ensure that the
importer has covered Marine Insurance with claims payable
in London if appropriate out of your control AVOID.
C.I.F. SAN FRANCISCO: Covers the same as
C & F plus (includes) the cost of Marine Insurance.
FRANCO or DELIVERED say DELIVERED NEW DELHI, or
FRANCO NEW DELHI (can specify DUTY PAID): delivered to a
point specified by importer: Covers in addition to C.I.F. the cost
of import customs clearance work (not the import duty unless
specified) in import country and onward cartage to specified
INLAND address/warehouse (New Delhi) - See INCOTERMS for
full definition.

58

Costing Example:
This is not intended to be a full cost exercise
PRODUCT: Example spray cooking oil in 250ml plastic bottles fitted with a spray device.
Let us say that our accountants have calculated that our mainly national total overheads in the last financial year
corresponded to 25% of our total sales. It would not be fair to assume the same for our exports, rendering us
uncompetitive overseas.
COSTING FROM PRODUCTION TO PORT OR POINT OF ARRIVAL per bottle:
250ml of spray oil composition
Plastic bottle and spray-pump
Cost of outer case divided by 12

COST OF MATERIALS
Direct Energy cost (pasteurisation, running machines, heat/light)
Direct labour cost
Amortisation of plant and maintenance costs
Other direct internal costs
Advertising / promotional allowance 20%

Sterling
0.16
0.10

0.04
0.30
0.01
0.02
0.01
0.01
0.04
0.35
0.69

EXPORTERS PROFIT 10%

0.04
If shipped to Russia, via sea ports Odessa or Murmansk, ultimate destination Moscow by full container or trailer loads or grouppage*:
Aggregate of C.I.F charges, proportioned =====
TOTAL C.I.F. Russian Port

0.73
------

IMPORT DUTIES into let us say Russia 20% on C.I.F.cost converted to St.
Inland transport to Moscow
converted to St..

0.09

0.05
0.14
TOTAL DELIVERED Importers Warehouse duty paid (cost to the importer) convert. to St
0.87
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------IMPORTERS AND RETAILERS ADDED COSTS: Note: Uplift of 25% on cost (or cost x1.333) gives a 25% gross margin. (See Annex Margins)

Uplift by Importers 25% uplift on return** 1.16x100/75 = (1.16x1.333)

Expressed in St.
Wholesale list price
1.16
Uplift by Retailers 25% uplift on return** 1.54x100/75 = (1.54x1.333)
Expressed in St.
Net Retail price
1.54
Add Sales Tax, say 20%
Expressed in St.
Actual Ret. Price
1.85
CONCLUSION: Competition retail Price is 1.50, this gives the opportunity to increase our profit margin and or our advertising budget or
remain keenly cheaper to kill off the competition. Our product may have the PATENTED advantage of a fixed 1Cal output per spray,
vitamin E (as antioxidant) and using Sunflower lecithin which is non allergenic against soya lecithin with its allergenic connotation.

Annex 6 EXPORT PRICE LIST BASIS Based on shipments of 10 pallets of combined

goods. Shipping cost based on say 100 per 1000kg or per m whichever is the greatest.
Marine insurance 1.5% cover for all risks including war and SCRC for CIF value + 10%
CASE PRICE
Estimated
PRODUCT
FOB
Estimated
EX WORKS
CIF 10%
DESCRIPTION
LIVERPOOL
CIF 10%
BOSTON
NUMBER OF
BOSTON PER
PER CASE
Per cs in US $
WITH CASE AND
CASES PER
CS in St
Based on
PALLET
LOADED ON SHIP
PALLET
AT PORT OF
1.00=$1.608
DIMENSIONS
SHIPPED LCL TO
WITH
LIVERPOOL;
subject to rate
PORT
OF
BOSTON;
PALLETISED
Export
CUSTOMS
adjustment. at
AND WEIGHTS

TOMATO KETCHUP
cs12x300ml bottles
7.2 kg
Palletised:
1.8m Lx1.2m Wx1.2m H

MAYONNAISE
cs 12x250g jars
6.0kg
1.8mLx1.2mWx1.1mH

ENGLISH MUSTARD
cs 12x170g tubes
2.04kg
1.8mLx1.2mWx1.15mH

WEIGHT AND
MEASURES

CLEARED

UNLOADED, NOT
CLEARED

time receipt order.

6.00/cs ExWk.
80 cases
756kg
2.6 m (cu. m.)

6.60

9.85

US $15.76

5.70/cs ExWk.
100 cases
600kg
2.4 m

6.30

8.40

US $13.44

4.80/cs ExWk.
150 cases
306kg
2.48 m

5.50

7.15

US $11.46

Competing effectively
The Fry-Light example in the Irish Republic
PRODUCT: Fry-Light TM cooking oil in 250ml plastic bottles fitted with a spray-pump,
dispensing exactly one Cal. of oil spray per spray actuation, so easy to count Cals.
CONSIDERATION: to compete against a cheaper to make Belgian made Flora brand
aerosol cooking oil retailing in the Irish Republic at Euros. 2.29 for 200ml.
OVERHEADS: As manufacturer, our main consideration will be that of overheads
(variable and fixed) which aggregate the annual costs such as total wage bill, rent,
rates (recurring tax on premises), national advertising, power, water/sewerage,
business insurance, waste collection, maintenance, depreciation and travel costs.
Since these overheads were already covered by our National business; for Exports I
only used to allocate direct costs, meaning that I did not attach to exports the all office
costs or the National (U.K.) Sales Directors salary and travel costs.
In practice I covered the specific export related overheads by judgement, within the
gross profit I was able to reach, and allowed for local Distributorss margin, freight
charges, any import duties, etc. in order to compete in any export market.
EFFECT: We were able to make available a technically superior product at slightly
better value than that of the competition on the supermarkets shelf:
Fry-Light 1 Cal. spray
Eur 2.57 for 250ml (Eur 1.03/100ml)
Flora aerosol
Eur. 2.29 for 200ml (Eur 1.14/100ml)
and we made a nice little Export profit to add to our National Sales profits Thanks!
The increases in production resulted in increased plant efficiency, also greater automation
and increased quantities of imports = lower prices = bigger margins ! Thanks again !!
More details on costing see slide 21 and handout slide 43 and photo slide 48.

57

Part 11-

Agreements type A

THE AGREEMENT BETWEEN SELLER (the Principal)

AND BUYER (sometimes known as the Distributor). The main points:

Name and address of Seller:

Purpose of the agreement: The Seller appoints the Buyer as Exclusive Distributor within the territory and for the products which the Seller
manufactures as specified below.:

Name and address of Buyer:

TERRITORY: South Africa (for example) Product(s) description: .......

value plus 10%).

Price(s):

Delivery Terms: C.I.F.10% South African Port (meaning you insure the goods for C.I.F.

Payment and Credit Terms: Irrevovable Letter of Credit at Sight confirmed by HSBC Bank , London, or other methods.
Duration of agreement: 1st June 2012 to 31st May 2013 Renewable automatically? Cancellation: reasons for
General conditions of Business: Each Seller will normally have its peculiarities in business. This should include for example that ownership of goods
remains with the seller until invoice is fully paid for whilst responsibility for suitable transport and storage of the goods starts at Eg.:departure from
the sellers control or warehouse. Also that Buyer must test the product to ensure suitability for purpose, before using it (in production, as example.
DUTIES OF SELLER: To manufacture and supply the Product(s) as per agreed specification and effect deliveries as instructed and supply the
following documentation (as needed):
- Detailed Invoice (showing cost of goods (Ex.Works, F.O.B, C.I.F.), and any calculations leading to total price.
- Packing Note showing number and weight and measurements of goods and how assembled
- Bill of Exchange: Sole, or in duplicate or in triplicate (Will be detailed later).
- Bill of Lading or Certificate of Shipment. If via documentary collection: B/L in triplicate, BLANK ENDORSED, NOTIFY PARTY: (usually
the name and address of Buyer), showing the goods exactly as described on the L/C accepted CLEAN ON BOARD for Containerised Shipment
sailing within 30 days of receipt of order for direct sailing to South African Port (outlined in part 2).
- Certificate of origin: In this case a Eur1 certificate which you can complete yourself on the appropriate form (will be outlined in Part 2). Other
cases require Chamber of Commerce certificate plus Consular Legalisation.
- Insurance policy or certificate of insurance: Covering all marine risks including war and civil disturbance or insurrection for C.I.F. value plus
10%, claims payable in London / Durban.
Survey/Inspection/Control certificate: This is only normally required for particular trades and goods.

64

Agreements type B
THE AGREEMENT BETWEEN SELLER (the Principal)
AND BUYER (sometimes known as the Distributor). Main points:

Name and address of Seller:

Name and address of Buyer:
Purpose of the agreement: The Seller appoints the Buyer as Exclusive Distributor within the territory and for the products which the Seller
manufactures as specified below.:
Territory: South Africa
Product(s) description: .......
Price(s):
Delivery Terms: C.I.F.10% South African Port (meaning you insure the goods for
C.I.F. value plus 10%).
Payment and Credit Terms: The seller will issue for every order (or for a certain contract of supply) an Irrevocable letter of Credit (could also be
a Standby L/C) confirmed by a First Class London Bank (or the Buyers bank) in favour of the Buyer allowing part-shipment and transshipment for up to a St.amount (up to the maximum amount of cost of goods), shipping and insurance.
Duration of agreement: 1st June 2012 to 31st May 2013
Renewable automatically?/ by further mutual agreeable extension of term.
Duties of Seller: To manufacture and supply the Product(s) as per agreed specification and effect deliveries as instructed by individual written
orders from the Buyer and to deliver to specified container terminal (or suitable sea going vessel) within 30 days of receipt of order,
furnishing the following documents:
- Detailed Invoice (showing cost of goods (Ex.Works/F.O.B), cost of shipping, insurance, certificate of origin costs, surveyor/Test laboratory
costs if applicable
- Bill of Exchange: in duplicate or in triplicate (Will be outlined in part 2)
- Bill of Lading or Certificate of Shipment IN TRIPLICATE, BLANK ENDORSED, NOTIFY PARY IN NAME AND ADRESS OF BUYER,
showing the goods as described accepted CLEAN ON BOARD for Containerised Shipment sailing within 30 days of receipt of order for
direct sailing to South African Port. (Outlined in part 2).
- Certificate of origin: As U.K. exporters use an Eur1 certificate which you can complete yourself on the app (will be outlined in Part 2).
Other countries can require Chamber of Commerce cert. of origin legalised by their consulate.
- Insurance policy or certificate of insurance: Covering all marine risks including war and civil disturbance or insurrection for C.I.F. value
plus 10%, claims payable in London / Durban
Survey/Control certificate: This is only normally required for particular trades and goods.
Should be effected by a specified survey organisation such as the Lloyds Maritime Surveyor whose duties should be specified such as
tests and inspections before and during loading and sealing of container for example). Example: to ensure that a Bulk Carriers (oil-tanker)
which has discharged crude oil is thoroughly cleaned and dried before loading it with grain (wheat / soya beans etc.) and quality control
inspection/tests on the grain (quality
For Food Products could include a Health Certificate issued by an appropriate authority such as the local Environmental Health Authority.

Agreements

Duties of Seller

Duties of Seller:
To manufacture and supply the Product(s) as per agreed specification and effect deliveries as instructed by individual written orders
from the Buyer and to deliver to specified container terminal (or suitable sea going vessel) within 30 days of receipt of order,
furnishing the following documents:
- Detailed Invoice (showing cost of goods (Ex.Works/F.O.B), cost of shipping, insurance, certificate of origin costs, surveyor/Test
laboratory costs if applicable
- Bill of Exchange: in duplicate or in triplicate
- Bill of Lading or Certificate of Shipment (for LCL) fir example: IN TRIPLICATE if L/C, BLANK ENDORSED, NOTIFY PARY IN
NAME AND ADRESS OF BUYER, showing the goods as described accepted CLEAN ON BOARD for Containerised Shipment
sailing within 30 days of receipt of order for direct sailing to South African Port. (Outlined in part 2).
- Certificate of origin: As U.K. exporters use an Eur1 certificate which you can complete yourself on the app (will be outlined in Part
2). Other countries can require Chamber of Commerce cert. of origin legalised by their consulate.
- Insurance policy or certificate of insurance: Covering all marine risks including war and civil disturbance or insurrection for
C.I.F. value plus 10%, claims payable in London / Durban
Survey/Control certificate: This is only normally required for particular trades and goods.
Should be effected by a specified survey organisation such as the Lloyds Maritime Surveyor whose duties should be specified
such as tests and inspections before and during loading and sealing of container for example).
Example: to ensure that a Bulk Carriers (oil-tanker) which has discharged crude oil is thoroughly cleaned and dried before loading it
with grain (wheat / soya beans etc.) and quality control inspection/tests on the grain (quality
For Food Products could include a Health Certificate issued by an appropriate authority such as the local Environmental Health
Authority.
50

Agreements

Duties of Buyer

Duties of the Buyer:

To pay the seller for the goods ordered and shipped as instructed by the Buyer.
To exercise maximum efforts in the marketing and promotion of the Sellers product(s). To always hold and consider
the Sellers brands and other Intellectual property and technology/design whether registered or not as the Sellers
property and to assist the Seller in defending its intellectual property registered or assumed (such as the passing off of
brand or design).
Buyers distribution margins and selling price structure
Promotion and Advertising budget: The Seller will advance . OR The Seller and the Buyer will share 50/50 a
mutually approved promotion/advertising programme for the first 12 months of launch to a minimum of . and a
maximum of ..
Termination: At any time after the first 6 months of trading either party can terminate this agreement by giving the
other side 90 days notice by registered air mail letter/ fax/ email.
Breach of agreement: Should one side breach agreement, the second side has the right to terminate the agreement
unless the fist side corrects the breach within 3 working days of notification by any means from the second side and if
breach not rectified by that time or by further agreement within the 3 working days, it will enable the offended party to
terminate this agreement by giving 14 days notice.
Delivery of notices: Delivery of notices can be effected by email or by fax and will be deemed as received by the

Getting paid and banking procedures

SECOND BEST:

Protect yourself from fraud by opening an

Export Bank Account which receives payments
for exports
but does
not pay anyone
else but you.
These
are the usual
forms settlement
and finance.
SAFEST MODES:
Payment in advance in Green Notes or to your export
bank account: particularly if the client is an unknown.
A small discount encourages advance payment.
Bankers Guarantee basically assuring you that a bank
pays you on presentation of invoice etc.
IRREVOCABLE letter of credit also termed Irrevocable
L/C or Irrevocable Documentary Credit, stipulating that:
The bill of lading to be drawn up in the Consignee box:
CONSIGNED TO ORDER and BLANK ENDORSED,
With the descriptions of all details: nature and number of
goods and terms of payment exactly as written on your
quotation (as banks check everything to the letter and
do not easily accept mistakes):
To permit partial shipment and transhipment
To be CONFIRMED through your own bank and give
address. Your own bank should give you more leniency
on discrepancies than other banks or at worse, a First Class London Bank normally
meaning an old established British Bank, (not the Bank
of Baroda). Stipulate PARTIAL SHIPMENT PERMITTED, also
TRANSHIPMENT PERMITTED. All this will be explained.
If you are an Agent for a Supplier/Manufacturer you can
have a TRANSFERABLE L/C.
An L/C can be used as collateral to obtain finance.
Credit Cards and PayPal are normally used for small
value transactions.

a) Letter of Credit (not Irrevocable):.

b) C.O.D. = Cash Against Documents: ..
d) SIGHT DRAFT:
e) DATED DRAFT:
For all the above methods follow your banks instructions and complete
their forms.
TRUSTWORTHY ?
OPEN ACCOUNT: Such as Account 60 days,
or Monthly Account (settlement at end of month following
shipment).
To proceed with such OPEN accounts you have to know
and trust your client implicitly and check at least yearly
that they remain profitable through credit
checks by agencies such as Dunn & Bradstreet,
your bank or directly through the equivalent of Company
House in the country of the client.
BARTER (goods exchange): practised in some cases.
FINANCE AND EXPORT CREDIT RISK INSURANCE :
Finance can be arranged through mostly the main U.K.
banks and those banks who have entered into the
governments scheme (M.G.A.) for certain countries or
for others directly with UK Export Finance. An L/C can
be used as collateral. Usual min. invoice value 25,000
.Credit Insurance is arranged by some insurers and for
exports there is the U.K. government Export Credit
insurance Guarantee scheme (ukexportfinance) 52

CAUTIONARY GUIDE
TO DUPLICATE DOCUMENTS and their allocation:
1.

ADVANCE PAYMENT: If you are paid in advance, you can in practice

give up the three originals of the B/L or Cert of Shipment and any
insurance docs. to the importer. Always send sets of docs by registered
airmail or by air courier on three different days to meet different aircraft.

2.

L/C: IF YOU WILL BE PAID VIA CONFIRMED IRREVOCABLE L/C,

In theory, you should give over all documents of title (Originals of B/L or Cert of
Shipment) against the L/C via the bank.
However, in practise, I insist to keep one original out of the 3 until I got paid,
because if for some reason the buyer changes his mind, or he or his bank protest
any item of documents and no compromise can be reached, the goods have to be
returned to you.
Then you hold a document which will enable you to get the goods back with less
complications. You also keep one orig. of the Insurance Policy/Certificate.

3.

D/C and C.A.D.: Normally, you send two originals of the B/L via the bank and hold
onto one original of all the documents for the same reasons.

DEBT RECOVERY ABROAD

Whilst it is relatively easy to recover debt from a liquid company or firm
within the UK, by threatening court action or starting court action, what do we
do when the Debtor is abroad?
My way was to ask my UK patent agent to ask their counterpart abroad to
recommend a local debt collector. Usually the client was in financial trouble
and I was only able to obtain partial satisfaction.
If you dont have this connection, you can telephone your embassy or
consulate abroad to recommend a lawyer.
You can also contact international law firms based in London or your capital
city but they are so costly and will only deal with big debts.
Nobody told me that there are established International Debt collectors,
such as the Maidstone, Kent based STA International debt collection agency.
I also discovered the Credit Services Association who can put you in the right
Direction with members sucs as Atradius and Coface.
Intrum Justitia specialise in debts from South America and Portugal.
In Turkey debtors taken to court can get away with a fine and not pay the debt.
PREVENTION IS BETTER THAN CURE
SO CHECK YOU CLIENT OUT AT THE START AND THEN AT LEAST YEARLY.
The trouble and expense you incur should be relative to the sums involved.

FACTORING
.

MEANING INVOICE OR DEBT FACTORING

This means you get a bank or similar to finance the sale or an order and therefore
Factor the invoice.
In some instances if agreed, the Factor also takes the risk or any
bad debt and normally insures against it.
They check the financial position and
reputation of your client before they agree to factor.
As example Bibby Financial Services offers a comprehensive funding and collection
Service and have a multilingual team and a global network of companies.
Others are Close Finance, Squire Capital and GE Finance.

Avoiding snags with your L/C

The Banks standard forms for Letter of Credit Application as the one of HSBC with have printed suggestions for your instructions such as:
Part shipment: Not allowed
Transhipment: Not Allowed
Time for presenting documents to the bank: 15 days (after ship sailing).
.

To avoid sometimes unpredictable problems, this is what I have practised:

However, if you are manufacturing an order of 2000 cases of ketchup for the client and
particularly if a special formula with a special brand labelled in let us say Arabic etc. You
may need to ask for:
the L/C to allow partial shipment at pro-rata FOB price basis; or
for the L/C to allow Ordered quantity +/- 10% charged at pro-rata FOB price basis.
If your ship which is intended to sail from Southampton England to Mumbai India has mechanical
problems or is damaged during the sailing, it may out of necessity be diverted to the nearest harbour
along its journey at the time of the problem. If sailing through the Suez Canal, the ships captain finds
it appropriate to anchor for repairs at Port-Said and the goods to be TRANSHIPED to another vessel
in order to complete the voyage to Mumbai. Therefore stipulate: Transhipment Allowed.
Time for presentation: If the goods you are shipping are for one of those countries such as Iran who
require Certificate of Origin LEGALISED by their consulate in London, you may need more time for
presentation of documents and I insist for at least 21 days. This will not cause inconvenience for
or incur Demurrage costs to the importer, because the sailing time to such destinations may be will
be of at least 21 days.
Notre that once the London bank has your documents they then send them to
the importers local bank by air courrier, and soon after they are passed to the Importer after his
acceptance of the draft (the Bill of Exchange).

Documentary Collection (D/C) or commonly, Sight Draft:

Printed handout available: As Exporter, an application to your bank enclosing
transaction documents appertaining to goods shipped, including Bill of Lading
(first and Second only) with draft(s) (bill of exchange) sole or first and second,
giving instructions for the documents to be released by the banks
correspondent abroad to the Importer upon his acceptance of the draft (which
could be at SIGHT or at
60 days, 180 days etc.

Cash Against Documents:

Printed handout available: As Exporter, an application to your bank enclosing
transaction documents relating to goods shipped, with instructions to the bank
for the documents to be released to the banks correspondent abroad upon
receiving monetary settlement for the invoice for transmission to you the

Import and export licences:

Goods which may require If your business is considering exporting or importing goods, you will need to check if you
need a licence.
There are controls on exports of military or paramilitary goods, technology, artworks,
plants and animals, medicines and chemicals. Licence requirements may depend on the
potential use of the item - eg if it has a military application (usually referred to as dual-use
goods) and where you are exporting to.
There are also controls on imports including firearms, plants and animals, foods,
medicines, textiles and chemicals. Whether you need a licence can also depend on
where the goods are coming from.
Exporting or importing controlled goods without the right licence is a criminal offence, so
its important to check first.

EXPORT CONTROLS:
.

For further information, read Export controls: an introductory guide

or email the Department for Business, Innovation & Skills (BIS)
Export Control Organisation ateco.help@bis.gsi.gov.uk to check whether
restrictions are likely to apply.
As well as applying to specific types of products, restrictions also apply to certain
destinations - in particular those to which trade sanctions and arms embargoes apply.
There are also some export-import controls on temporary exports and imports.
To keep updated about current arms embargoes and changes to strategic
export control legislation, you can subscribe to receive the ECOs Notices to Exporters.

Import and Export Licences

for Agricuiltural Products
.

Check which licences and quotas are available for your products
If you intend to trade in agricultural products in the groups listed below, you will need a licence
unless certain limited exceptions apply:
meat (beef and veal), pigmeat and poultry meat products, sugar, cereals and rice products
fruit and vegetables (including garlic and preserved mushrooms)
milk and milk products
processed goods
eggs
olive oil
ethyl alcohol
Hemp
Exceptions may apply when exporting to entitled destinations such as ships.
To find out about these, check the Traders Guide to Importing and Exporting CAP Goods
Traders guide to importing and exporting CAP goods (ET1) (PDF, 1.5MB, 188 pages)
and the trader guidance for your specific commodity.
Within each scheme, products are defined under Commodity Codes (also known as CN Codes).
To find out the types of licence that are available and the Commodity Code for your product,
use the Trade Tariff.

Examples cont
USA have tough regulations applying to food and
processed foods which to be made available nationally,
have to be passed by the Philadelphia Health Authority,
which is the strictest.
Food Colouring and food additives regulations may vary
from one national jurisdiction to another and your
product has to comply to be legal in that jurisdiction.
Many categories of goods are differently regulated and
may have to be tested and certified by approved
agencies.

.
Import
licences and Export Licences
for for Agricultural products:

Common Agricultural Policy import licences

Imports of food and agriculture products covered by CAP (CAP goods) from outside the EU are often subject to customs duty
and may require a licence that will need to be presented. For some goods, a tariff quota can be applied for.
Tariff quotas allow imports to be made at a reduced rate of duty and are subject to presentation of an appropriate import licence.
What are CAP goods?
CAP covers food, agricultural and horticultural products and their derivatives.
You canfind the full list of goods covered by CAP in Notice 780 on the HM Revenue & Customs (HMRC) website.
The RPA operates a number of CAP trade schemes for specific products some of which may reduce the duty you pay.
You can find guidance to the RPAs CAP schemes in leaflet ET1 on the RPA website.

EXAMPLE OF SOME GOVERNMENTAL

PROCEDURES:
China is a huge potential market.
To my knowledge, the importer has to obtain an import accreditation
permit know in short as AQSIQ.
The U.K. exporter has to obtain in collaboration with the importer a
Compulsory Compliance Certificate, which in some instances could
involve product testing by an approved agency or laboratory.
Always check with your Importer partner or with the Commercial Office
of your country consulate as to the local requirements for the category
of goods you are dealing with.

MODERN PIRACY
U.S. Navy ship pursuing a suspect pirate vessel off the coast of East Africa
.

INSURANCE AND MODERN PIRACY

Modern Piracy is a calamity affecting mostly the regional
waters of Indonesia, Somalia, Nigeria, Bangladesh.
The pirates seem mostly interested in cargo ships and
tankers, then demand very large monetary ransoms.
At one stage some 500 ships were affected as in 2005.
Naturally, Insurance companies can refuse insuring cargo destined to sail
Through such regional water..
Always check with your Marine Insurance broker, before you accept an order,
whether they can provide you with cover for such regions (before you commit to
the client).

W E Cox Claims Group present

a PIRACY UPDATE Developments
Affecting
As the situation
in the
Gulf of Aden continues with new
Cargo
Insurers
piracy cases being reported on a regular basis, despite the efforts of Navies to protect
commercial shipping, a recent case heard in the English High Court has provided
clarification for Insurers of Cargo and Hull, when considering the legality of ransom
payments and the effect this may have on policy coverage.
The case in question, one with which W.E. Cox Claims Group was involved, is that of the
BUNGA MELATI DUA, a chemical tanker that was hijacked in the Gulf of Aden on 19th
August 2008. The vessel was held by Somali pirates, until such time as a ransom was
paid some 41 days later. Following release of the vessel she sailed to Rotterdam, her
original destination, arriving on 26th October 2008.
The case was brought by owners of two cargo interests against their insurer, under a
policy covering piracy, claiming that the cargo became an actual total loss once the vessel
was seized by the pirates and taken to Somali waters. The argument they made was that
they were irretrievably deprived of the cargo under section 57(1) of the Marine Insurance
Act 1906. The alternative argument was that the cargo had become a constructive total
loss by virtue of section 60(1) of the Act, in that the cargo had been reasonably
abandoned on account of its actual total loss appearing to be unavoidable.
Mr Justice Steel found in favour of the insurers, on the grounds that the cargo could not
be deemed an actual or constructive total loss. Previous experience with similar cases
had given clear indication that the motivation of the pirates was financial gain. There was
nothing to suggest that upon payment of ransom the Ship, Crew and Cargo would not be
released. This being borne out by the subsequent events.

Outward Project:
This project could take the form of a workshop linked to students of a business
school abroad. One side is exporting and another is importing.

Research local customs and preferences.

Establish Customs Tariff and duties, levies and other taxes at port of entry.

Costing: Estimate wholesale and retail price on that market for product X

Research Export Market and Distributor for product X. May be able to combine with e commerce if available.

Establish Representation and Distribution agreement with Importer/Distributor

Avoid if you can describing Importer as agent because they acquire compensation rights (10% of last years
turnover) when contracts are revoked, at least in the EEC.
Will you sell on Ex works, F.O.B. ,CAF basis etc.(when you should establish the quality of the Importers insurance)
or CIF or DDP when you must establish Marine Insurance cover.

Consider registering any I.P. (Patents, etc.) in that territory and a website in your identity.

Admin of export (Pay by bank collection, Cover marine Insurance, Certificate of Origin required),

Follow up support (P.R., Advertising, budgeting etc.).

Report in detail including completed bank collection or L/C application (Natwests is easy to download), find out
insurance costs from broker, any finance issues from bank or UKTI). Ask British Consulate commercial office or
friends/relatives you may know in that territory for opinion on local preferences, etc. Refer to slide 48 for more details.

60

Inward Project:
- Inward, market research,
- Source product Y for import.
- Negotiate price.
- Establish Customs tariff, duties, levies other taxes.
- Estimate resultant wholesale and retail prices.
- Create agreement or contract of Exclusive Territorial Representation & Distribution and agree
terms with Exporter (normally you import and pay the Exporter for the goods and you sell the goods).
Alternative is a Main Agent agreement. Agents work on commission only as client pays Exporter.
- Investigate sub-distribution/sub-agents/wholesaling/retailer base/e commerce.
- Admin of import (Cover Marine Insurance if needed, Pay by L/C).
- Product support programme (P.R., Advertising and budget), market routes: retailers, e commerce etc.).
Report fully on market research and your distributorship structure etc investigation of products
available and your selection and approach to Exporter and agreeing contract. Show admin details
and application to bank for L/C (easiest is to download from Natwests website). You can say to
parties you seek assistance from such as Customs authorities, that you are doing a students project.

61

SOME USEFUL NAMES AND ADDRESSES

Export markets information and research
Business Link
government website (gov.uk)
see Export-Import
T0845 600 9006
UKTI (U.K. Trade & Industry) government agency, contact via Google search
T. 0845 539 0419 part of Dept. of Innovation and skills: T 0207 215 5000
INTERNATIONAL TRADE BUSINESS AND FINANCE GUIDE:
Trade for Good, book by Kevin Shakespeare Academy Press
WWW.tradeforgood.info
Business Banking: HSBC business.hsbc.co.uk T. 08455 832922
charles.woodgate@hsbc.com
Bank - International services: HSBC
7831300
philip.levers@hsbc.com

business.hsbc.co.uk T. 0800

Customs tariffs Commodity codes: gov.uk/trade-tariffs

T. 01702 36607

Variable Levies: defra.gov.uk T. 0845 603 7777 rpa/index.nsf/vDocView

Forwarders: logistics brokers and customs clearance:
CORTEN LOGISTICS cortenlogistics.com
T. 020 7490 0512
rob.donald@cortenltd.com
Insurance: Business, marine and credit insurance:
BLUEFIN
bluefingroup.co.uk
T.01638 782440
judy.vincent@bluefingroup.co.uk
Process and product inspection, testing, audit, quality control and certification:
BUREAU VERITAS
Google search
T.08454 596201 Enquiries.
T.01925 854360 Certification
Cargo and installation inspection / testing for petroleum related products and
other products
INTERTEK
Intertek.webcm@intertetek.com
LLOYDS REGISTER OF SHIPING lr.org

T.01708 680248

arun.jha@lr.org

T. 020 77099166