Process and Documentation for Export of leather

Presented by:

Abusufian Rasheed Rana Rashid waqas

Salman Yamin

General Perspective of Export Documentation

NTN Sales Tax Registration Bank Account Current Chamber Membership Documents for Clearing Agent

Packing List. Commercial Invoice. Letter of Credit (L/C). Certificate of Origin which is issued by Chamber of Commerce. National Tax Number Certificate

Form “E” Submission of Export Documents to the bank.

Letter of Credit

• A guarantee from the importer’s bank that it will act on behalf of the importer and pay the exporter for the merchandise if all relevant documents specified in the letter of credit are presented according to the terms of the letter of credit.

– In essence the importer’s bank is substituting its creditworthiness for that of the importer.

Parties Involved in a LC Transaction

A. Importer

B. Importer Bank

C. Exporter

D. Exporter Bank (seller’s Bank)

E. Shipping Company

G. Insurance Company

Time Draft

• A written order instructing the importer or his agent, the importer’s bank, to pay the amount specified on its face on a certain date.

Bill of Lading

• A document issued by the common carrier specifying that it has received the goods for shipment; it can serve as title for the goods.

Banker’s Acceptances

• The exporter’s bank presents the shipping documents and the time draft to the importer’s bank.

• After taking title to the goods via the bill of lading, the importer’s bank accepts the time draft.

• At this point the banker’s acceptance is created.

– It is a negotiable money market instrument.

– A secondary market exists for banker’s acceptances.

Banker’s Acceptances

• Banker’s acceptances can be held to maturity by the exporter.

• The exporter can also sell it (at a discount) in the money market.

• Since the risks are similar, B/As trade at rates comparable to certificates of deposit.

Diagram of Letter of Credit Transaction

Importer Bank (foreign) Exporter Bank (US)

Importer

Exporter

Products Products

$

Docs

$

$

Docs

Process of a Typical Export Transaction

Importer’s Bank

Exporter’s Bank

Importer Exporter

Money

Market

Investor

Purchase order 1

2 Letter of Credit 3

4 6 9

5 Shipment of goods

14 10 11

Shipping Documents and

time draft accepted 7

Payment-discounted value of B/A 8

B/A

12

13 16 B/A presented at maturity

15

Export procedure of Leather Coordinator (Mr.Iqbal, 2015)

– Order Sheet

• Sample design (in paper or soft form)

• Size

• Rate

• Quantity

• Quality

– Performa Invoice

– Cargo and Custom clearing documentation

Performa Invoice

Buyers

Description of Goods

Total Quantity

Value

Currency

Shipment Type

INCOTERMS

Delivery Date

Payment Mode

Cargo and Custom clearing documentation

• The Shippers Letter of Instruction for Issuing AIRWAY bill

• Packing List/Weight Note

• Invoice

• Letter of credit

• Cargo Agent

• Form E

• Clearing Agent

• Covering letter

• Covering schedule

The Shippers Letter of Instruction for Issuing AIRWAY bill

Packing List/Weight Note Invoice

Form E AZO Certificate

GSP Form-A AIRWAY Bill

GD-I Form (Goods declaration Form)

Charges for Exports

• Service Charges=0.15% minimum

• With holding Tax= 1% @Leather

• Export development charges= FOB value 0.25% (MEHKARI, 2003)

• Courier charges=1500 minimum.

• Container charges= 1200$-2500$ per Container

Any Question ?