Export procedures refer to the steps in sending goods or services from one country to another. These procedures ensure that exports comply with legal and regulatory requirements while facilitating smooth transactions. To successfully manage import & export goods, certain documents are usually required. These documents serve various purposes, such as proving ownership, facilitating customs clearance, and ensuring compliance with trade regulations. Common documents required for export include.
Export Procedures.
Pakistan Customs mainly examines ‘Goods Declaration (GD)’ and ‘Packing List
(PL)’ and then compares it with the physical goods packaged for export procedure. it’s crucial to know how to export from Pakistan.There are three types of Custom channels Red, Yellow, and Green.
- Goods going through the red channel must be thoroughly inspected and its GD and PL will be examined in detail.
- Goods going through the yellow channel are not examined physically and normally their documents are inspected for compliance.
- Goods going through the green channel are not inspected and their documents are considered error-free.
After the automation of the current system through WeBOC, the decision of which channel to choose for a certain shipment is computer-based. taking into account the history of the exports and the major exports of Pakistan. The system decides it by analyzing the history of the WeBOC /PSW or Web-Based One Customs now integrates most of the stakeholders involved in the process of exporting and has made processes quicker:
- Preparation of invoice, Packing list, and other documents as per contract.
- E-form (Through authorized Commercial Bank).
- Filling of good declaration and customs clearance by the exporter himself or by the clearing agent.
- Agreement with freight forwarders for shipment.
- Loading on the cargo ship
- Issuance of Bill of landing by shipping company/freight forwarder.
- Certificate Country of origin (Through Chamber) or (Through TDAP)
- Inspection Certification by 3rd-Party Inspectors (if required)
- Sanitary/ Phyto-Sanitary Certificates issued by the Department of Plant Protection
- Insurance Certificate
4th copy of shipping documents (through customs) bill to be used for rebates on bank/sales tax refund in the context of import export business in Pakistan. The State Bank of Pakistan processes refunds and rebates. BCA (Bank Credit Advice) will be received from commercial Banks after receiving foreign exchange. The BCA is considered proof for rebates, refinance schemes, etc.
Export Documents. / Export Procedure
Goods Declaration (GD) Form.
GD stands for Goods Declaration, it`s a custom online declaration form which used to mention complete details (i.e. Quantity, Unit Price, Payment Terms, etc.) of Goods that we want to import or export from Pakistan. The latest customs clearing system in Pakistan is Weboc (Web Based One Customs) which is used for import/ export customs clearance. In Weboc we need to fill declaration form online which is called GD (Goods Declaration), Once the declared form is filled in the customs system (Weboc) and your clearing agent successfully clears your cargo from customs examination then customs allow you to load your container on the vessel and release your GD which will be used for B/L issues & This process is essential for managing top 10 exports of Pakistan and contributes significantly to Pakistan’s total exports.
Packing List (PL)
- 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 Pakistan and the destination country may use the packing list to identify the location of certain packed items they want to examine. They should 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. It identifies any markings that appear on the packages, and any special instructions for ensuring safe delivery of the goods to their final destination.
- An export packing list may also include more details than a packing slip firm created for your domestic shipments.
- Freight forwarders may use the information to create the necessary bills of lading.
- The bank may require a detailed packing list to fulfill the requirements for a letter of credit.
- Customs officials in Pakistan and the destination country may need to review certain items in the shipment.
Certificate of Origin.
- Some countries require a certificate of origin for your shipments in order to identify from which country the goods have originated. The certificate of origin is issued by the Chamber of Commerce in your area. A certificate of origin may be required even if you’ve provided the country of origin details on your commercial invoice.
- Usually, the Chamber of Commerce will charge you a fee to stamp and sign your certificate or may require you to be a member of the chamber.
- Countries require a certificate of origin to identify the appropriate duty rates for the goods upon import clearance. These certificates of origin usually require a seal from TDAP or an authorized chamber of commerce in Pakistan.
- However, an electronic certificate of origin (eCO) is recommended to avoid delays and costs attached to by-hand submissions. An eCO is faster and less expensive to obtain, allows for the option of delivering them electronically to the importer, and is registered with the TDAP which provides added credibility with numerous customs authorities.
Country Specific Certificate
In addition to the generic certificate of origin form, there are also country-specific certificates of origin. Pakistan currently has signed 4 Free Trade Agreements (FTAs), and 3 PTAs, and is eligible for 10 GSP schemes under which Pakistani goods either face reduced or zero duty rates when imported into those countries. 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 which is crucial for Pakistan textile exports to benefit from favorable trade conditions.
Bill of Lading.
There are three common bill of lading documents: inland, ocean, and airways.
An inland bill of lading is often the first transportation document required for international shipping created for your export. The inland carrier can prepare it or you can create it yourself. It’s a contract of carriage between the exporter and the shipper of the goods that states where the goods are going; it also serves as your receipt that the goods have been picked up for knowledge you can refer to the export procedures and documentation pdf available online.
In an international shipment, the inland bill of lading is not typically consigned to the buyer. Instead, it is consigned to the carrier moving the goods internationally or, if not directly to the carrier, to a forwarder, warehouse, or some other third party who will consign your goods to the carrier when ready.
If your goods are shipping by ocean vessel, you’ll need an ocean bill of lading. An ocean bill of lading can serve as both a contract of carriage and a document of title for the cargo. There are two types:
- 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.
The airway bill is required for shipments by air. It is a contract of carriage between the shipper and the carrier, and it is always non-negotiable between the shipper and the carrier, and it is always non-negotiable.
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 be provided to the clearing agent to clear the consignment:
- Packing List.
- Commercial Invoice.
- Goods Declaration: GD Form mentions complete details (i.e. Quantity, Unit Price, Payment Terms, etc.) of Goods that are being exported from Pakistan
- Letter of Credit (L/C)
- Certificate of Origin: issued by Chamber of Commerce.
Inspections.
As per the requirement of the contract and the destination country, a commercial inspection company can be hired to inspect the shipment to meet any Sanitary and Phytosanitary /regulatory requirements.
Transportation/ Shipping
After all the above matters have been cleared depending on the terms of delivery, you may hire a freight forwarding agent to deal with matters related to transport. A transporter may be hired to arrange and transport goods to the port (from upcountry if applicable) and the procurement of the container (either by the buyer or seller as per TOT) for loading the goods. facilitating smooth logistics for both Pakistan imports and exports.
At port, the container is registered and a serial number is allotted to it. After registration, the examination of documents (weight/value/quarantine/grading/invoice, etc) is conducted by the examination officer, appraiser officer (A.O), and principal appraiser. Principle officer after his satisfaction allows shipment.This process is crucial for ensuring the smooth exportation of Pakistan export products. The bill of lading is stamped and handed over to the freight forwarding agent to be forwarded to the buyer for the release of payment.
Dangerous Goods Forms
If products are considered dangerous goods by either the International Air Transport Association (IATA) or the International Maritime Organization (IMO), the exporter needs to include the appropriate dangerous goods forms with the shipment. These forms need to be completed by someone who has been trained to handle dangerous goods shipping.ensuring compliance and safety in Pakistan IT exports.
Bank Draft.
A bank draft is an important part of getting paid for the exports under a documentary collection. The seller attaches the various required documents to the bank draft and presents it to the bank to get paid. Usually, the seller’s bank will send the bank draft and related documents via the freight forwarder to the buyer’s bank. When the buyer authorizes payment for the goods, the bank releases the documents to the buyer and transfers the funds to the seller’s bank.
Quality Checks.
If any international quality check agencies are involved as per the terms and conditions between buyer and exporter, such inspection is arranged. After completing the necessary quality check (QC) formalities, the goods for export are arranged for proper packing to meet export quality. Palletization or Crating is arranged for the safety of cargo.
PAYMENT PROCEDURE.
After completion of export customs clearance procedures and collection of AWB or Bill of Lading, necessary documents for bank and overseas buyers are prepared to receive the payments. The export bill can be discounted, arranged for the collection of payment on a credit basis, or can be negotiated if the shipment is exported on the basis of a Letter of Credit.
If you have availed packing credit from the bank, the amount of discounted/ negotiated export bill amount will be adjusted once the bank receives export proceeds from your overseas buyer. If the bank does not receive such export proceeds from your overseas buyer, your bank may crystalize. such export bills. The exporter/bank can approach a credit insurance company for a claim if such cover is ensured by the exporter/bank.
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.
Letters of Credit (LC).
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 once the terms and conditions stated in the LC have been met, as verified through the presentation of all required documents.
Confirmed (LC): The opening bank confirms payment even if there are exchange difficulties. Unconfirmed LC: Payment is not guaranteed but it is cheaper. Irrevocable Letter of Credit: Cannot be revoked within the period, of its validity.
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 needed by the buyer 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..
Open Account.
An open account transaction is a sale where the goods are shipped and delivered before payment is due, which in international sales is typically in 30, 60, or 90 days.Obviously, this is one of the most advantageous options to the importer in terms of cash flow and cost, but it is consequently one of the highest-risk options for an exporter.
Because of intense competition in export markets, foreign buyers often press exporters for open account terms since the extension of credit by the seller to the buyer is more common abroad. Therefore, exporters who are reluctant to extend credit may lose a sale to their competitors. Exporters can offer competitive open account terms while substantially mitigating the risk of non-payment by using one or more of the appropriate trade finance techniques. When offering open account terms, the exporter can also seek extra protection using export credit insurance.
Consignment.
Consignment in international trade is a variation of an open account in which payment is sent to the exporter only after the goods have been sold by the foreign distributor to the end customer. An international consignment transaction is based on a contractual arrangement in which the foreign distributor receives, manages, and sells the goods for the exporter who retains title to the goods until they are sold.
Revolving Credit.
Sometimes a regular buyer does not like to waste time in opening LCs again and again. The buyer orders his bank to arrange credit in favor of the exporter which should remain in force but at no time to exceed a certain limit. The amount reverts to the original amount after each shipment and negotiation of the documentary bill.
Form ‘E’ / Financial Instrumnet.
Obtaining Form-E / Financial Instruments for every shipment from Commercial Bank is essential to meeting the Foreign Exchange Regulations of Pakistan. Form-E is issued by commercial banks to the exporters on request. 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 must 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”, the bank should ensure that exporters give only one address in Form “E”/ Financial Instruments.
After the form is certified by the bank, it should be submitted to the Customs 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 will 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.
It incorporates information on:
- The description,
- Quantity and value of goods,
- Terms of sales,
- Country of destination,
- Name and address of importer,
- Port of shipment and name of the carrying vessel. (Air Co/Truck Co etc.)
Submission of Export Documents to the bank.
All shipping documents covering goods exported from Pakistan and declared on form “E” must be passed through the medium of the bank within 14 days from the date of shipment.
The exporter must submit the duplicate (bearing Customs seal and signature of Customs Officials with Code number) and triplicate copies of form “E” along with the shipping documents, invoices, etc., to the bank that had certified the form “E‟. An extra copy of the shipper’s invoice must be attached to the triplicate copy of the form “E”.
