INTERNATIONAL TRADE PROCEDURE AND DOCUMENTATION
ASSIGNMENT NO. – 1
SUBMITTED BY – TARUNJEET SINGH
ROLL NO. - 063058
Importance of Export Documents in International Business
Export documentation plays a vital role in international marketing as it facilitates the smooth flow of goods and payments thereof across national frontiers. It is widely considered as the heart and soul of international business as no form of international business can be done without the presence of proper documentation. A number of documents accompany every shipment. These documents must be properly and correctly filled. Export documentation is, however, complex as the number of documents to be filled in is large, so also is the number of concerned authorities to whom the relevant documents are to be submitted. Moreover documents required differ from country to country. Incorrect documents may lead to non delivery of goods to the importer. You may get the correct documents after some time but in the meantime storage charges may have to be paid. More importantly, the importer will think twice before importing from the same exporter. Thus, the process of proper and relevant documentation is essential for facilitating smooth international trade. When the buyer and the seller are operating in two countries, the commercial practices and the legal systems are different. Thus, for ensuring that the respective interests of the buyer and the seller are protected, certain documentary formalities become essential. Similarly, every country has its own laws governing imports and exports. Consequently, the exporter has to comply with laws in his country through documentary formalities. At the same time, he has to send some documents to the importer, which will enable him to take possession of the goods after getting permission from the concerned governed department (i.e. the customs authorities). There is yet another reason for documentation in export trade. Such documentation is linked with the claim of export incentives given by almost all countries world over. Since most of these incentives are to be claimed after shipment, the exporter has to give documentary proof of the fact of shipment.
While there are advantages to the documentary system some inherent risks are also attached to the system in a way that paper documents are most susceptible to forgery, alteration or simple misrepresentation. These shortcomings can be minimized to a large extent if the trading community makes sure before entering into an international contract of sale that they possess adequate knowledge and skills in preparation of documents and thoroughly understand the documentary obligations required of them. We will now discuss the different aspects of international trade which are catered to by the export import documents. Commercial Aspect - Trade between two business firms located in different countries begins with the conclusion of an export contract. Under the contract, the duty of the exporter is to ship the contracted goods in the agreed form (e.g., packing) and by agreed mode of transport as well as according to agreed time schedule. On the other hand, it is the duty of the importer to remit sale value to the exporter according to agreed terms of payment. In this process of physical movement of goods from the exporter to the importer and remittance of sale value in the reverse order, neither the exporter nor importer is personally and physically involved. Instead goods are handed over to a shipping company or an airline, which issues a receipt for these goods. Further, since goods in transit may be damaged or lost due to some accident, the exporter may be required to get an insurance policy. While these two documents will protect the interest of the importer, the exporter will ensure that these documents are not in the possession of the importer unless he has either paid for the goods or he has made a promise to make payment at...
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