CHAPTER CONTENT

 Export contract implementation procedures

 Import contract implementation procedures
 Documentation
 Export procedures

□ Assumption:
Contract has been signed, in which:
- Terms of delivery: CIF, Incoterms 2020

- Cargo: bulk (not containerized)

- Payment: by irrevocable L/C

 EXPORT PROCEDURES

1. Ask the buyer to open an L/C

2. Apply for license and other export formalities
3. Prepare export commodities
4. Arrange carriage
5. Apply for pre-shipment inspection
6. Purchase cargo insurance
7. Implement export customs clearance
8. Deliver goods to carrier
9. Prepare documents and receive payment
10. Claim and resolve dispute
 1. Require importer to open L/C

Example contract’s payment term:

Acceptable letter of credit to be issued in favor of the seller

within 7 days from the date of the contract accepted by the
buyer. The seller has option to ask for amendment within 3
days of the receipt of original letter of credit.

➔ Urge importer to issue L/C according to sales contract

➔ Check draft L/C => check L/C
Checklist for reviewing L/C (important fields)
40A: Form of documentary credit
31D: Date and place of expiry
Relevant parties – 52A Issuing bank, 57D Advising through
bank, 50 Applicant, 59 Beneficiary
32B: Currency code, amount
41D: Available with …. By….
42C: Drafts at …
44C: Latest date of shipment
45A: Description of goods and services
31D Date and place of expiry
46A: Documents required
47A: Additional conditions

 Request for L/C amendment if necessary
 2. Applying for export license (if needed)

LIST OF EXPORTED OR ANNEX III DECREE 69/2018/ND-CP

IMPORTED GOODS REQUIRING
LICENSES OR UNDER GIVEN
CONDITIONS
Collecting goods

3. PREPARING
Packing
EXPORT GOODS

Marking
 3. Preparing export goods
 Collecting/ producing/ processing goods
 Based on?
 Preliminary quality inspection

 Packing & marking

 Packing/ packaging in conformity with

 Contract stipulations
 Nature of the commodity
 Mode of transport, weather
 Regulations of the import country
 Saving packaging materials & utilizing container’s space
 Marking according to

 Contract stipulations
 Regulations of the import country
 4. Arrange carriage

- Using freight forwarding service

- Contract with NVOCC (non-vessel operating
common carrier)
- Contract directly with shipping lines
 Freight Forwarders (FF)
 What is the role of FF in transportation?

To facilitate the movement of cargo to the overseas destination on

behalf of shippers and process the documentation or perform
activities related to those shipments.

They advise shippers on the most economical choice of

transportation, book space, and arrange for pickup, transportation,
delivery of goods and also customs clearance

Issue house bill of lading

 NVOCC
 A NVOCC (Non -Vessel Operating Common Carrier) may be
defined as an entity that provides ocean freight services as a
“carrier” albeit it may be with or without own operated vessels.
 The NVOCC accomplishes this by buying slots or space from a
VOCC (Vessel Operating Common Carrier) and reselling the
same to their customers who can be exporters or forwarders.
 NVOCC issues their own House Bill of Lading as a “carrier” and
in doing so undertakes the responsibilities of a carrier subject to
of course the terms, conditions and liabilities of their bill of
lading.
 Shipping lines

 A shipping line is a company that operates the ships

that actually carry the containers (owned or leased)
and cargo from load port to discharge port.
 Issue master bill of lading
 TYPES OF CHARTER

Liner Voyage Time

charter Charter charter
 TYPES OF CHARTER
Liner terms
 Ship is operated on one or more fixed routes, with
advertised, scheduled sailings
 Cases? Cargo in not very large quantity ( a carton –
hundreds of tons)
 A liner cargo vessel will accept any suitable cargo if
space permits. Most liners are container ships, or
multi-purpose vessels.
 Basic procedure:
- Book a ship space, check the Booking note
- Load shipment
- Make payment and receive B/L
 TYPES OF CHARTER
Voyage terms
- Hiring the whole or part of a vessel and crew for a voyage
between a load port and a discharge port.
- Cases? Cargoes in large quantity (fulfilling a whole
vessel)
- The carrier may be a person who owns the ship or hires a
ship for trading freight
- Ships run according to the charterer’s requirements The
charterer pays the vessel owner on a per ton or lump-
sum basis.
- The owner pays the port costs, fuel costs and crew costs.
 TYPES OF CHARTER
Time chartering
- Renting a ship for a period of time or for a specified trip
voyage with or without the ship’s crew
- Cases? – cargoes in large quantity or to exploit the ship ~
find cargoes to earn freight
- The charter pays hires, fuel, tugs, harbor dues
 5. PURCHASE CARGO INSURANCE

 Based on:
- Sales contract, L/C requirement, Incoterms
- Characteristics of commodities
- Type of vessel, route of shipment
- Product package
- Position of goods loaded on ship
- (CIF – Clause C)
 TYPES OF MARINE INSURANCE POLICY

(a) Institute Cargo Clause A: This policy covers all the risks
of loss or damage to goods. This is the widest cover.
(b) Institute Cargo Clause B: This policy covers risks less
than under clause ‘A’.
(c) Institute Cargo Clause C: This policy covers lowest risks.

War and Strikes, Riots and Civil Commotion (SRCC) clause is

excluded in all the above policies. These risks can be covered
by specifically asking for, paying additional premium.
TYPES OF MARINE INSURANCE POLICY

- Open policy  Voyage policy

o Marine insurance policy in o Marine insurance
which the insurer agrees to policy for risks to a ship's
provide coverage for all cargo during a specific
cargo shipped during voyage.
the policy period o Used mainly by exporters
o Used mainly by who need to ship only
large exporter who ship by occasionally or only in
sea routinely small amounts of cargo.
 6. PRE-SHIPMENT INSPECTION

4.1 Self-certification
- Manufacturer’s certificate
4.2 Inspection by third-party agents
 the goods conform to the requirements indicated by
the reference document (eg the pro forma invoice)
 the goods are fit for their intended purpose and will be
adequately packed for shipment.
 6. PRE-SHIPMENT INSPECTION

4.3 Inspection by Government Authority

 Department of Standards Metrology and Quality
 Vietnam Register
 Department of Food Hygiene and Safety
 Department of Sanitory and Phytosanitory
 Department of Animal Health
 7. EXPORT CUSTOMS CLEARANCE

- Mandatory
- Who does? - Exporter/Forwarder/Carrier
(1) Customs declarations
(2) Receive the classification of customs declaration
form
(3) Liquidate the customs declaration form and export
the goods
 7. EXPORT CUSTOMS CLEARANCE

(1) Customs declarations

Traditional declaration
- Prepare a dossier of documents (customs declaration form,
contract, commercial invoice, packing list…)
- Submit at the relevant Sub-department of Customs
E-customs declarations
- Input information of e-customs declaration based on the
dossier of documents to CD software (ECUS)
- Receive the declaration tax rate, number
 7. EXPORT CUSTOMS CLEARANCE

(2) Receive the classification of customs declaration

form
- Green - cleared
- Yellow – inspect the dossier of documents
- Red - present both the dossier of documents and goods
for customs inspection
- Pay customs duties and fulfill other financial obligations
(if any)
- Clear the goods and carry out post-clearance inspection
(3) Liquidate the customs declaration form and export
the goods
- Green – email the customs declaration form to the
relevant Sub-department of Customs
- Yelow – submit the documents and customs
declaration form for inspection and stamp, submit
the stamped customs declaration form to the
customs officers in charge for liquidation
- Red - … and take the cargo to the customs inspection
place
 8. DELIVER THE EXPORT CARGO

 Bulk cargo
 Containerized cargo
 Ful container load (FCL)

 Less than container load (LCL)

8. DELIVER THE EXPORT CARGO
Receive Empty
container from C.Y
(Container yard)

CONTAINER
Packing goods into
container, sealed
under supervision of Cargo list
Customs authority

Transporting container Transporting

to C.Y, delivered to goods to CFS to
carrier
be consolidated

Received for shipment

B/L House B/L
9. PREPARE DOCUMENTS AND RECEIVE
PAYMENT

 Meet requirements of L/C

https://www.letterofcredit.biz/index.php/2018/07/
30/how-to-check-a-letter-of-credit-as-an-exporter/
- Prepare a dossier of documents
- Check documents carefully
- Present the documents within the due date and at
the right bank
- Get payment (at sight L/C)
 10. CLAIM

Claim
10. CLAIM
10. CLAIM
 IMPORT PROCEDURES

Assumption
Terms of delivery: FOB, Incoterms 2020
Cargo: bulk (not containerized) Payment:
by irrevocable L/C
 IMPORT PROCEDURES

1. Obtain import license

2. Open L/C
3. Urge exporter to deliver goods and prepare storage
warehouse to take delivery
4. Arrange carriage
5. Purchase cargo insurance
6. Make payment or acceptance to get the dossier of
documents
7. Implement import customs clearance
8. Take delivery
9. Goods inspection
10. Claim and dispute resolution
 1. Obtain import license

LIST OF EXPORTED OR ANNEX III DECREE 69/2018/ND-CP

IMPORTED GOODS REQUIRING
LICENSES OR UNDER GIVEN
CONDITIONS
3 types of license
- Import license
- License subject to quotas
- Automatic import license
Note: The issuance of the import license is subject to
specialized management of competent ministries.
 2. Open L/C

 Application for L/C

 Pay L/C issuance fee and L/C deposit
 Deposit range from 0% to 100% L/C value
 3. Urge exporter and prepare warehouse

- Urge exporter to deliver goods by email, fax, phone…

- Prepare warehouse to take delivery
4,5. Make contract of carriage and insurance

- Contract of carriage: same as for exporter

- Contract of insurance:
In cases of Incoterms group E, group F and CFR, CPT
=> buy insurance for buyers’ benefits
FOB => buy insurance
 6. Make payment or acceptance to get the
dossier of documents

 The bank will inform the buyer of the dossier of

documents
 The buyer pay or accept to pay for the documents
 7. Import customs clearance
- Who does?
- Make customs declarations
- Based on flows of goods (green, yellow, red), present
the goods for customs inspection
- Pay customs duties and fulfill other financial
obligations
- Clear the goods and carry out post-clearance
inspection
 8. Take delivery

2 ways:
 Using forwarding service
 Working directly with Port authority to take delivery:
+ Take goods from Port warehouse (authorize the port
authority to receive the commodity from the vessel.
+ Take goods directly from the vessel.
 9. Import goods inspection

Inspection of goods and containers may be required:

 on arrival at the seaport or airport of first entry
 at a third party site that has been approved by the
department.
Some goods subject to quality inspection by the
department.
For example:
Medical equipment – Institute of Medical Equipment
and Health Projects
DOCUMENTS IN IMPORT-EXPORT TRADE

1. Commercial Invoice (Hóa đơn thương mại)

2. Certificate of Origin (Chứng nhận xuất xứ)
3. Packing List (Phiếu đóng gói)
4. Certificate of quantity, weight,quality (Chứng nhận
số lượng, trọng lượng, chất lượng)
5. Inspection Certificate (Chứng nhận giám định)
DOCUMENTS IN IMPORT-EXPORT TRADE

6. Transportation documents
 Marine/Ocean/Port-to-Port Bill of Lading
 Charter Party Bill of Lading
 Multimodal (Combined) Transport Document
 Air Transport Document (Air Waybill)
 Road, Rail, or Inland Waterway Transport
Documents
 Courier Receipt (Biên lai chuyển phát)
DOCUMENTS IN IMPORT-EXPORT TRADE

7. Insurance Policy (or Certificate)

8. Payment document : Bill of Exchange; Benificiaries
Certificate
9. Other documents: Letter of indemnity; Customs
Declaration Form...
 Commercial invoice

 Issuer – seller
 The seller requests the buyer to pay the sum on the
invoice
 No fixed or compulsory form (inv number, seller,
buyer, goods descriptions, term of delivery, ports,
unit prices, total value…)
 In line with the contract and L/C requirements (if
payment by L/C)
 Commercial invoice

 Used to
 Ask for payment

 Do customs declarations, take delivery of the goods and claim

 Supply detail of the goods that serve as a benchmark on

checking the goods
 Packing list

 Issuer – seller
 A description on the packaging of the shipment
(seller, buyer, goods descriptions, term of delivery,
ports, quantity of packages, packaging materials,
gross & net weight, measurement…)
 No fixed or compulsory form
 Certificate of quality

 Issuer – manufacturer/ exporter/ third party

 Purpose - to confirm that the quality of the goods is
in conformity with the contract
 Contents – consignment information and inspection
results
 Certificate of quantity/ weight

• usually issued by the manufacturer/ exporter/

a third-party inspector, verifying the actual
quantity or weight of shipped goods.
• It includes details on the goods' description,
measured quantity or weight, inspection date
and location, and the inspector’s certification.
→ ensuring that the shipped quantity matches
contractual terms, helping prevent disputes.
 Certificate of origin

 Issuer – authorized agency of exporter’s country

(Impport-export management departments of cities,
branches of VCCI, management departments of
economic zones)
 Roles of C/O?
 Application for C/O – at C/O issuing organization or
through Electronic C/O System
 Certificate of origin

 Forms of C/O
 Form A

 Form B

 Form O

 Form X

 Form T

 Form D

 Form AK

 Form S

 Form E
 Sanitary Certificate

 Food commodity
 Issuer - Department of Standards Metrology and
Quality, Department of Food Hygiene and Safety
 To confirm that the goods are free from harmful
pests, diseases, or contaminants, ensuring they are
safe for human consumption or entry into the
destination market.
 Veterinary Certificate

 Animal commodity
 issued by a licensed veterinarian or a competent
veterinary authority.
 certifies that animals, animal products, or animal
feed meet certain health standards and regulations.
=>Verifying that the animals or products are free
from specified diseases, ensuring they are safe for
transport and import into the destination country.
 Phytosanitary Certificate

• issued by a national plant protection

organization, certifying that plants, plant
products, or related items meet the importing
country's health standards.
→ confirming that the items are free from pests,
diseases, and contaminants that could harm
agriculture or the environment, ensuring safe
international trade of agricultural goods.
 Certificate of fumigation

• confirming that goods, particularly agricultural

products or wooden packaging materials, have
been treated with fumigants to eliminate pests,
insects, or other harmful organisms.
• Issued by an authorized fumigation provider,
this certificate ensures that the treated goods
comply with the pest-control requirements of
the importing country, helping prevent the
spread of invasive species.
Halal Certificate
Booking note
 Bill of lading

• issued by a carrier/ freight forwarder/ NVOCC, detailing

the type, quantity, and destination of the goods being
transported. It serves three primary functions:
 (1) Receipt of Goods: It confirms that the carrier has
received the goods in the specified condition.
 (2) Contract of Carriage: It represents the contract between
the shipper and the carrier for transporting the goods.
 (3) Title of Goods: It acts as a document of title, allowing the
holder to claim ownership and take possession of the goods
upon arrival.
 → Providing evidence of shipment and is often required for
Bill of Lading (B/L) Transportation
documents
• On Board B/L: Confirms that goods have been loaded on board
the vessel for shipment.
• Received for Shipment B/L: Acknowledges receipt of goods by
the carrier but does not confirm they are loaded on the vessel.

• To Order B/L: A negotiable B/L where the consignee can endorse

the document to another party.
• Straight B/L: A non-negotiable B/L that names a specific
consignee who alone is entitled to take delivery.
• To Bearer B/L: A negotiable B/L where possession of the
document grants ownership of the goods.
Bill of Lading (B/L) Transportation
documents
• Charter Party B/L: Issued under a charter party arrangement,
typically for full shiploads, subject to charter party terms.
• B/L Surrendered: Indicates that the original B/L has been
surrendered to the carrier, allowing the goods to be released
without the document.
• Seaway Bill: A non-negotiable document serving as a receipt for
the goods and evidence of the contract of carriage but does not
confer ownership or require surrender for release.
 Transportation
Other Transportation Documents documents

• Cargo Manifest: A detailed list prepared by shipping lines that

includes all goods loaded on the vessel, specifying quantities and
descriptions for customs and shipping purposes.
• Delivery Order (DO): An instruction from the carrier to release the
cargo to the consignee or a designated agent at the destination.
• Stowage Plan: A document detailing the arrangement of cargo
within the vessel to optimize space and ensure balance, stability,
and safety during transit.
 Other Transportation Documents
• Minutes of Ship Tunnel Inspection: A record of inspection carried
out to verify the structural and safety standards of ship tunnels.
• Report on Receipt of Cargo (ROROC): A report documenting the
receipt and condition of cargo upon arrival.
• Cargo Outturn Report (COR): A report on the actual cargo
received at the destination, noting any discrepancies in quantity
or condition compared to the manifest.
• Certificate of Short landed Cargo (CSC): A certificate indicating
any shortfall in cargo received, used for claims and adjustments.
• Letter of Reservation (LOR): A document used to reserve space on
a vessel, often issued when booking space or in cases of disputed
cargo conditions.
 Insurance
Insurance Policy Polcy

• An Insurance Policy is a formal contract between the insurer and

the insured, detailing the terms, coverage, and conditions of
financial protection against specified losses.
--> confirming the contract's terms, acknowledges payment of
premiums, and outlines the claims process.
• The policy's main purpose is to provide financial security,
clarifying the rights and responsibilities of both parties in case of
a covered event.
 Warehouse Receipt (Warrant) Warehouse

• A Warehouse Receipt is a document provided to shippers documents

to confirm that goods have been received for storage in a warehouse.
• Its main purposes are to:
(1) Confirm the receipt of goods for storage.
(2) Ensure that the stored goods will be released either to the
owner or a third party designated by the owner through endorsement.
• A Warehouse Receipt consists of two parts:
(1) a certificate of storage, verifying the goods are stored
(2) a certificate of pledge, which can serve as collateral or a claim to the
goods.
 Bill of exchange
• Sight B/E: B/E which is payable as soon as it is presented for payment.
• Time B/E: B/E that allows a delay in payment
• Named B/E: B/E that is specifically designated for an individual or
organization whose name is written on the bill.
• To bearer B/E: B/E that does not have a specific name written on it ➔
anyone who holds the bearer bill of exchange can claim the payment.
• To order B/E: B/E that is payable to a specific person or their order. The
bill can only be transferred or endorsed to another party through a
valid endorsement by the payee.
 L/C Payment document

• Revocable L/C: Can be altered or canceled by the issuing bank at

any time without prior notice to the beneficiary (seller). Due to this lack of security
for the seller, it is rarely used in international trade.
• Irrevocable L/C: Cannot be changed or canceled without the consent of all parties
involved (the issuing bank, the seller, and sometimes the buyer). This type provides
a higher level of security and is widely used in trade.
• Confirmed L/C: An L/C confirmed by a second bank (often in the seller’s country) in
addition to the issuing bank. This confirmation provides added security to the seller,
ensuring payment even if the issuing bank fails to meet its obligations.
• Unconfirmed L/C: An L/C that is only backed by the issuing bank, with no additional
confirmation from a second bank. The seller relies solely on the issuing bank for
payment.
 Payment document
L/C
• Sight L/C: Payable immediately upon presentation of the required
documents by the seller to the issuing or confirming bank. It ensures prompt
payment after shipment.
• Usance (Deferred Payment) L/C: Allows payment to be made at a specified
future date, giving the buyer time to sell the goods and gather funds before
paying the seller.
• Transferable L/C: Allows the beneficiary to transfer all or part of the payment to
a secondary beneficiary. Commonly used in transactions involving
intermediaries, such as trading companies.
• Back-to-Back L/C: Consists of two L/Cs—one issued by the buyer’s bank to the
intermediary, and another issued by the intermediary’s bank to the final
supplier. This type is often used when a middleman is involved in the trade.
 Payment document
L/C

• Standby L/C: Acts as a secondary payment mechanism, similar to a guarantee. It

only comes into effect if the buyer fails to fulfill their payment obligations. Used
as a form of assurance in high-risk transactions.
• Negotiable L/C: Allows any bank to negotiate the documents, not just the
issuing or confirming bank. This flexibility benefits the seller by providing
multiple payment options.
• Non-Negotiable L/C: Only allows specific banks to negotiate the documents,
often the issuing or confirming bank. It restricts the seller’s ability to obtain
payment through other banks.
 Custom documents

• Customs declaration form

• Import/export license
• Certificate of inspection and certificate of hygiene
• Quality inspection certificate
• Certificate of origin (C/O)
• Consular invoice
• Customs invoice