customs clearance

Common Import / Export Documents

Start your day with Continental breakfast, Moroccan Couscous for the Lunch Hour, and finish off with a Chinese take-away for Dinner. Everyone fancies a versatile food-day. In today’s global world, people want to relish food items from all around the world. They like to share their mealtimes on Social Media, create small digital stories with the different types of gourmet from a diverse variety of countries. Food Industry has given meaning to the term GLOCAL in the real sense by exporting/importing the Local foods on a Universal scale. People want to eat their Olives from California, Mangoes from Pakistan, Pasta from Italy, Spices from India, and the list goes on. The industry that serves the international edible needs requires documentation. We have jotted down a listing for your comfort so that you can check the list when you are exporting your items or importing those.

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These papers are of following natures:

  1. Lading Bill

    is a paper requirement of the Government, which is a signed contract between carrier and seller. It is to emphasize the Cargo procedures, which include goods type, destination, origin, and it serves as a receipt. The shipping company compiles this document with the help of Exporter. It also comes with waybills of airways or

  2. Commercial Invoice

    is another obligation, produced by the Exporter to interpret the complete transaction from start to end. It includes essential information for each party involved in the process. These parties are banks, brokers, customs, shippers, and importer.

  3. The Export Packing List

    that allows authorities to know precisely what is in the container you are sending. It contains a piece of detailed information about which product is being exported, the quantity, the packaging… It is a mandatory document when shipping your product as it permits to customs, insurance and other partners to clearly evaluate the value of the transported goods and protects you as well when goods are missing at arrival or from any other inconvenient that might cause losing products before it gets to your client.

  4. Certificates of Origin

    , Manufacturer, and Inspections come in Food items are perishable; this credential ensures Quality and Quantity. Traders need to declare the origin as many countries have restrictions in place, and the importing authorities need to verify the source. Production certification requires a notarized paper depicting the Manufacturer’s details to make sure the product is ready for shipment.

  5. The Health Certificate

    is a document delivered by the competent authorities. It officially certifies the quality of the product. It is a crucial document, as countries do not have the same standards when it comes to quality, origin and ways the products have been manipulated. Indeed, before entering a country, the authorities need to make sure that your product is allowed in it and won’t breach the norms.

  6. Insurance

    papers are generally the insurance policy for the goods on-board. One needs to buy Insurance to prevent any significant losses or to take care of the liability. It needs to list down the specifications of the product, the extent of coverage, and proof of Insurance to satisfy buyers or the host country. The Exporter could produce this with the help of a broker, or the Insurance Company can issue the report to provide security of the goods in

  7. Commercial Demand Note

    or the Invoice is the reflection of the Sales Contract, which shows the agreement between both parties. The details contain Payment Conditions, Goods Sold, and the Trade Terms. The importer will use it for Customs’ clearance, and the document provides a legal binding for the Exporter. It is best to consult your legal advisor beforehand to work on this vital

  8. Quotation. of Terms is the detail of delivery, payment, import, export, quality, quantity, and price of the products shipped. The seller is to cultivate a Quotation before actually starting the process, and it is roughly the first step of the trade

  9. Letter of Credit

    is a Bank’s guarantee to the Exporter to pay the decided amount and to emphasize on the satisfactory completion of essential documentation. This financial document secures both parties involved in the

If you have closed a sale/purchase successfully and are getting the documents ready for the process, the list mentioned above will sort you out. Some countries might require other documents.

Customs procedures for food industry sector

Customs procedures of a country need to be modernized in such a way, which encourages its food industry sector’s growth. If you are a food trader, either it is importation or exportation, customs clearance remains a hindrance in the back of your head until it is cleared. When you are selling or purchasing your food items in a foreign location, the statuary requirements of different countries vary. Therefore, one needs to apprehend the legislations and regulations of the state where you intend to buy or sell the merchandise. These obligations must be met before aiming to clear the customs.

 

Customs is the state department, which controls the flow of imported goods and collects fees levied by the Government. Customs agency makes sure that the animals you are trading, or perishable food items, are according to the laws of importing land. Although every country has a couple of measures specific to their geographical needs, we will discuss standard customs procedures below.

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Customs Documentation

Firstly, you must gather the required documents for the customs process. These compulsory papers are Bill of Lading, Commercial Invoice, Insurance Certificate, Purchase Order, and Bill of Entry. The documented materials you include must have the perishable details of your food products. Because your products could expire, the dates and other charts need to be interpreted in the documents. Shipping paperwork is essential and could vary from country to country. You could be trading canned food, or fresh fruits & vegetables, or farm machinery; it also needs to go through proper credential work. The customs certifications or bills must be obtained to clear the customs procedure.

 

Customs duty

The duty paid on imports, or in a few cases on exports too, is centered on the food items’ value or the size, etc. A Foreign food trader might be exempted from customs duty in most countries. Still, it will depend on the particular state where you are headed. There could be a tariff charge as well, a tax on importation and exportation, which is decided between governments. One needs to pay all the customs related fees to speed up the procedure. Especially for the food industry sector because you don’t want your goods stuck at the port and perish.

 

 

Electronic systems

Everything is transforming into online and digital forms, and customs is no different. European Union has programmed a CDS. A food trader will need to contact the designated portal and create an application. Many countries have adopted these electronically processed applications, and you need to understand the selected state’s automated procedures if any.

 

 

Declaration

The official paperwork of customs declaration provides details of shipment under trade. It would contain all the imported or exported food industry’s items in a list. Any company or individual, who is the owner of the shipment, can lodge the customs declaration by themselves or by representatives.

 

 

Inspection & Presenting the goods

Customs inspectors or relevant officials can check the shipment at any time. The person-in-charge of the consignment needs to present the merchandise to the customs office as part of the procedure.

Managing Exports Risk In The Food Industry

If the Chinese Yuan weakens relative to India Rupee (INR), import of Chinese toys in India becomes relatively cheaper and therefore adversely affects the sales of Indian toy manufacturer.

Many businesses are going global! The expansion of any enterprise has not entirely flourished without indulging in the export function. There could be many reasons for exporting your products, ranging from better prices & more significant margins to market niche & business share. Whatever your reasons are for the export business, you need to be prepared for the jittery wind along the way. It has high risks of transportation, demographics, cultures, stereotypes, laws, and lack of time management for every industry. It is imperative to manage those risks to grow your business through exports.

As far as the food industry is concerned, many developing nations largely depend on their food exports. With high dependence comes excellent preparation! They need to ensure food safety and quality, meaning their items should reach their buyers in the global economy as per their standards. Keeping the global supply chain intact and every country playing its part by maintaining food control measures can manage it. If it is a balanced fit between industries and the Government, then the risk factor is minimized.

Budgeting is an export-risk factor. It depends on foreign currencies that keep fluctuating. A company’s budget could see an incline or decline based on the rapid variation of forex rates. However, in reality, the currency fluctuations even impacts companies with no dealing in international markets. For instance, a domestic toy manufacturer, who is competing with traders importing toys from China, is also exposed to fluctuations in the prices of Chinese Yuan (CNY). If the Chinese Yuan weakens relative to India Rupee (INR), import of Chinese toys in India becomes relatively cheaper and therefore adversely affects the sales of Indian toy manufacturer.

The other types of risks involved with exports can be either related to payment, transportation, customs procedures, or insurance …

However, in reality, the currency fluctuations even impacts companies with no dealing in international markets. For instance, a domestic toy manufacturer, who is competing with traders importing toys from China, is also exposed to fluctuations in the prices of Chinese Yuan (CNY). If the Chinese Yuan weakens relative to India Rupee (INR), import of Chinese toys in India becomes relatively cheaper and therefore adversely affects the sales of Indian toy manufacturer.

If you export the product without clearing the debt first, there is the risk of non-payment. Especially when you are dealing with new clients with no prior credibility, it is best to receive cash in your account before supplying. In the case of a regular client, you may afford to take such small-scale risks based on previous experiences.

“What if your client refuses to pay you the amount before receiving the product?”

Credit sales constitute a significant risk involved in the export industry. If you shipped a container of grains, for instance, on a 20 days’ credit, and the party refuses to lift stock from the shipment yard due to any given circumstances. This interruption will delay the payments and disrupt your cycle of debts. There could also be a scenario where your client claims the delivered product is unsatisfactory; hence, the fee is not cleared in time. We can not emotionally or morally influence the buyer in export business, whether it is only the food industry or as a whole. However, if it was a local customer, we could set up a real meeting in an instance and resolve the issue.

What if your client refuses to pay you the amount before receiving the product? Many people in the trading business and particularly in the food industry use a Letter of Credit. This document is a financial instrument that is secure for both sides without any risk. The payment mechanism in the export business usually revolves around the Letter of Credit. We can manage this export risk efficiently by using this instrument.

There are many risk factors, but if one learns how to overcome them or manage them, rest is only a heavenly story. Generally, all industries face risks, and the food industry is no different. The only thing that matters the most is the management of those risks. You could manage them by avoiding credit, introducing a stable exchange policy, ensuring safer financial instruments, and maintaining the highest level of quality.

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Ali Iftikhar

Ali Iftikhar

Ali Iftikhar is a Blogger from Pakistan and a Sales Manager with the experience spanning over a decade.

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