Export Procedures:

 Register your business name and get NTN, Sales Tax number/certificate
 Open a bank account
 Register business with relevant Chamber of Commerce & Industry
 Select a product for export
 Identify potential market
 Do market specific research including size of the potential market, product preference, unit price, import regulations,
certifications required, etc
 Quote a price including packing cost, processing cost, insurance, credit, agent’s commission, octroi duties,
documentation fee, marking charges, transportation charges, export duties, etc
 Packaging should be strong and as per client’s requirements
 Select a mode of transport keeping in view the perishability of the product
 For financing pre-shipment or post-shipment credits are also available
 Insurance to recover cost in case of loss (optional)
 Sign a contract with the prospective Buyer including names of exporter/importer, unit price, total quantity, terms of
delivery (FOB, C&F etc), currency and terms of payment (Cash Against Documents or through Letter of Credit), mode of
shipment, etc
 Select a suitable clearing & forwarding agent
 Prepare shipping documents
 Transport the consignment
Documentation Checklist:

Following documents vary according to consignment:

 E-Form (through authorized Commercial Bank).

 B/L or AWB (through clearing agents)
 Commercial Invoice
 Packing List
 Certificate Country of origin (through Chamber)
 Pre-shipment certificate (if required)
 5) Documents For Clearing Agent
Once the consignment, to be exported arrives at the port, usually a clearing
agent services are sought. The following documents are required to provide to
clearing agent to clear the consignment.

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

6) Form “E”
Form “E” (State bank form): All exports from Pakistan which are subject to
Foreign Exchange Regulations are required to be declared on form „E‟ which
is in sets of four copies each. The exporter should submit the full set of Form
„E‟ to the bank after it has been completed and signed by the exporter himself
or his authorized agent. While certifying Form „E‟, bank should ensure that
exporters give only one address in Form „E‟. After the form is certified by the
bank, it should be submitted to the Customs/Postal authorities at the time of
shipment along with the shipping bill. The Customs authorities will detach the
original copy and after filling in the portion relating to them and affixing their
seal and signature thereon forward it to the State Bank. The Customs
authorities will return the duplicate, triplicate and quadruplicate copies to the
exporter or his authorized agent who will retain the quadruplicate for his own
record and submit the duplicate and triplicate copies to the Authorized Dealer
along with the shipping documents within 14 days from the date of shipment.
With that in mind, here are eight standard export documents you need to understand in
order to be successful.

1. Proforma Invoice

In a typical export exchange, everything starts when you receive an inquiry about one
or more of your products. That inquiry may include a request for a quotation.

If the inquiry came from a domestic prospect, you probably have a standard quotation
form to use. However, in an international transaction, your quote would be provided
as a proforma invoice. That’s because your international prospect may need a
proforma invoice to arrange for financing, to open a letter of credit, to apply for the
proper import licenses, and more.

A proforma invoice looks a lot like a commercial invoice, and if you complete it
correctly, they will be very similar indeed. A proforma invoice specifies the following:

 The buyer and seller in this transaction.

 A detailed description of the goods.

 The Harmonized System classification of those goods.

 The price.

 The payment term of the sale which would typically be expressed.

 The delivery details including how and where the goods will be delivered and
how much that will cost.

 The currency used in the quote, whether it’s U.S. dollars or some other
currency.

Be sure to date your proforma invoice and include an expiration date. There can be a
lot of volatility in the export process, so minimize your risk by setting a specific time
frame for your quote.
2. Commercial Invoice
Once you’ve sent a proforma invoice to your international prospect and received their
order, you need to prepare your goods for shipping, including the paperwork that must
accompany the goods. Of those documents, the commercial invoice is one of the most
important.

The commercial invoice includes most of the details of the entire export
transaction, from start to finish.

3. Packing List

An export packing list may be more detailed than a packing list or packing slip you
provide for your domestic shipments.

 Your freight forwarder may use the information on the packing list to create
the bills of lading for the shipment.

 A bank may require that a detailed packing list be included in the set of
documents you present to get paid under a letter of credit.

 Customs officials in the U.S. and the destination country may use the packing
list to identify the location of certain packed items they want to examine. It’s
much better that they know which box to open or pallet to unwrap rather than
have them search the entire shipment.

The packing list identifies items in the shipment and includes the net and gross weight
and dimensions of the packages in both U.S. imperial and metric measurements. It
identifies any markings that appear on the packages, and any special instructions for
ensuring safe delivery of the goods to their final destination.

4. Certificates of Origin

Some countries require a certificate of origin for your shipments in order to identify in
what country the goods originated. These certificates of origin usually need to be
signed by some semi-official organization, like a Chamber of Commerce or a
country’s consulate office. A certificate of origin may be required even if you’ve
included the country of origin information on your commercial invoice.

Usually a Chamber of Commerce will charge you a fee to stamp and sign your
certificate or requires you to be a member of the chamber. You’ll need to deliver a
completed form to the chamber office where they will stamp, sign and maybe even
notarize it for you.

I’ve heard of companies getting a stack of blank certificates signed and stamped by
their chamber, or even cases of a chamber giving its stamps to certain member
companies. However, these practices are not allowed and could result in a chamber
losing its ability to provide this certification. How can a chamber verify that you are
who you say you are if they don’t even control their own stamp?

Country-Specific Certificates

In addition to the generic certificate of origin form, there are also country-specific
certificates of origin. The United States currently has signed 14 free trade agreements
with 20 different countries in which U.S. goods are eligible for reduced or zero duty
rates when imported into those countries. Some free trade agreements, such as
NAFTA and CAFTA, cover multiple countries, including the U.S.

To be eligible for these reduced tariff rates, in most cases the importer must be able to
verify that the goods they are importing qualify under their specific free trade
agreement. (I say in most cases because importers must make this claim under all free
trade agreements except NAFTA. Under NAFTA, the exporter is required to make the
determination and provide the NAFTA COO.)

WHAT IS A BILL OF LADING?

A bill of lading (sometimes abbreviated as B/L or BoL) is a document issued by a carrier (or their agent) to
acknowledge receipt of cargo for shipment

A bill of lading serves different purposes. First, it is a contract for the carriage of
goods between the shipper and the transportation company. Second, it serves as a
receipt issued by the carrier upon taking possession of the goods. Third, it may serve
as a document of title that permits its holder to obtain title to, and possession of, the
goods. These transport documents expedite an export shipment from the time of
departure from your facility to delivery. When freight changes hands from the shipper
to the carrier, it is the signature on the bill of lading that signifies that the goods have
been received in "good order." That is, the goods are in the same condition as when
they left the shipper's facility, or a "clean" bill of lading has been issued.

A bill of lading without any comments regarding damage, overage or underage can
play a crucial role in permitting the seller to receive payment for the merchandise.

 Inland Bill of Lading

 Ocean Bill of Lading

 Air Waybill

Ocean Bill of Lading

As a document of title, the ocean bill of lading form authorizes the holder or another
party to take possession of the goods. There are two categories that should concern us
here. The straight bill is used when the shipment is consigned directly to the named
consignee and no other party.

 A straight bill of lading is consigned to a specific consignee and is not

negotiable. The consignee takes possession of the goods by presenting a signed,
original bill of lading to the carrier.

 A negotiable bill of lading is consigned “to order” or “to order of shipper”

and is signed by the shipper and sent to a bank in the buyer’s country. The bank
holds onto the original bill of lading until the requirements of a documentary
collection or a letter of credit have been satisfied.

Typically this type of consignment is used for open account or cash in advance
transactions. The consignee can obtain possession of the goods after arrival upon
presentation of a signed original bill of lading to the carrier. The ocean bill of lading
consigned "to order" or "to order of shipper" is negotiable once it has been endorsed
on the back by the shipper or their representative. The endorsed original ocean bill of
lading is usually sent to the bank in the buyer's country and held until the transaction
is satisfied under a documentary collection, cash against documents, or a letter of
credit.

Once the endorsed original ocean bill of lading and other required documents are in
the hands of the buyer, the buyer can transfer the bill of lading.

Airway Bill

The air waybill (AWB) is the equivalent of an ocean bill of lading used in air
transport. However, the air waybill form cannot be negotiable; in other words, it may
not be consigned "to order of shipper." An AWB is the document that controls the
routing of the exporter's cargo while it is in the hands of an air carrier or a
consolidator.

The air waybill is a contract for carriage. The face of the air waybill identifies the
shipper, the consignee, the carrier, the notify party, the freight forwarder, routing, the
description, weight and dimensions of the cargo, freight charges, and the relevant anti-
diversion clause. On the reverse of the air waybill, the carrier's contract with the
shipper and consignee are detailed.

Once the endorsed original AWB and other required documents are in the hands of the
buyer, the buyer can transfer the bill of lading. Our Shipping Solutions export
software allows you to quickly and easily prepare an air waybill and print it out on
plain paper or on an air carriers preprinted form.

TERMS OF SHIPMENT
CIF – Cost, Insurance & Freight (named port of destination)
This term is broadly similar to the above CFR term, with the exception that the seller is required
to obtain insurance for the goods while in transit to the named port of destination. CIF requires
the seller to insure the goods for 110% of their value under at least the minimum cover of the
Institute Cargo Clauses of the Institute of London Underwriters (which would be Institute Cargo
Clauses (C)), or any similar set of clauses. The policy should be in the same currency as the
contract. CIF should only be used for non-containerized seafreight; for all other modes of
transport it should be replaced with CIP.
CFR – Cost and Freight (named port of destination)
The seller pays for the carriage of the goods up to the named port of destination. Risk transfers to
buyer when the goods have been loaded on board the ship in the country of Export. The Shipper
is responsible for origin costs including export clearance and freight costs for carriage to named
port. The shipper is not responsible for delivery to the final destination from the port (generally
the buyer's facilities), or for buying insurance. If the buyer does require the seller to obtain
insurance, the Incoterm CIF should be considered. CFR should only be used for non-
containerized seafreight and inland waterway transport; for all other modes of transport it should
be replaced with CPT.
FOB – Free on Board (named port of shipment)
Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on
board the vessel. The seller must also arrange for export clearance. The buyer pays cost of
marine freight transportation, bill of lading fees, insurance, unloading and transportation cost
from the arrival port to destination. Since Incoterms 1980 introduced the FCA incoterm, FOB
should only be used for non-containerized seafreight and inland waterway transport. However,
FOB is still used for all modes of transport despite the contractual risks that this can introduce.
To succeed in today’s global marketplace and win sales against foreign
competitors, exporters must offer their customers attractive sales terms
supported by the appropriate payment methods. Because getting paid in
full and on time is the ultimate goal for each export sale, an appropriate
payment method must be chosen carefully to minimize the payment risk
while also accommodating the needs of the buyer. As shown in figure 1,
there are five primary methods of payment for international transactions.
During or before contract negotiations, you should consider which
method in the figure is mutually desirable for you and your customer.
Cash-in-Advance
With cash-in-advance payment terms, an exporter can avoid credit risk because
payment is received before the ownership of the goods is transferred. For international
sales, wire transfers and credit cards are the most commonly used cash-in-advance
options available to exporters. With the advancement of the Internet, escrow services
are becoming another cash-in-advance option for small export transactions. However,
requiring payment in advance is the least attractive option for the buyer, because it
creates unfavorable cash flow. Foreign buyers are also concerned that the goods may
not be sent if payment is made in advance. Thus, exporters who insist on this payment
method as their sole manner of doing business may lose to competitors who offer
more attractive payment terms.

Letters of Credit
Letters of credit (LCs) are one of the most secure instruments available to
international traders. An LC is a commitment by a bank on behalf of the buyer that
payment will be made to the exporter, provided that the terms and conditions stated in
the LC have been met, as verified through the presentation of all required documents.
The buyer establishes credit and pays his or her bank to render this service. An LC is
useful when reliable credit information about a foreign buyer is difficult to obtain, but
the exporter is satisfied with the creditworthiness of the buyer’s foreign bank. An LC
also protects the buyer since no payment obligation arises until the goods have been
shipped as promised.

Documentary Collections
A documentary collection (D/C) is a transaction whereby the exporter entrusts the
collection of the payment for a sale to its bank (remitting bank), which sends the
documents that its buyer needs to the importer’s bank (collecting bank), with
instructions to release the documents to the buyer for payment. Funds are received
from the importer and remitted to the exporter through the banks involved in the
collection in exchange for those documents. D/Cs involve using a draft that requires
the importer to pay the face amount either at sight (document against payment) or on a
specified date (document against acceptance). The collection letter gives instructions
that specify the documents required for the transfer of title to the goods. Although
banks do act as facilitators for their clients, D/Cs offer no verification process and
limited recourse in the event of non-payment. D/Cs are generally less expensive than
LCs.
A letter of credit is an important financial tool in trade transactions. Both, domestic as well as international
market, trades use the letter of credit to facilitate the payments and the transactions. A bank or a financial
institution acts as a third party between the buyer and the seller and assures the payment of funds on the
completion of certain obligations.
Payment at Sight LC. According to this LC, payment is made to the seller immediately (maximum within 7 days)
after the required documents have been submitted.

A letter of credit that demands payment on the submission of the required documents. The bank reviews the
documents and pays the beneficiary if the documents meet the conditions of the letter.

9. Deferred Payment LC. According to this LC the payment to the seller is not made when the documents are
submitted, but instead at a later period defined in the letter of credit. In most cases the payment in favor of Seller
under this LC is made upon receipt of goods by the Buyer
A letter of credit that ensures payment after a certain period of time. The bank may review the documents early
but the payment to the beneficiary is made after the agreed-to time passes. It is also known as usance LC. .
. Irrevocable LC. This LC cannot be cancelled or modified without consent of the beneficiary (Seller). This LC
reflects absolute liability of the Bank (issuer) to the other party.

A letter of credit that does not allow the issuing bank to make any changes without the approval of all the
parties.