Chapter 4 CARGO DOCUMENTS 4 Cargo Documents 4

Chapter 4 CARGO DOCUMENTS

4. Cargo Documents 4. 1 Letter of credits 4. 2 Cargo manifest 4. 3 Mate’s receipt 4. 4 Packing list 4. 5 Certificate of origin (COO) 4. 6 Commercial invoice 4. 7 Pro forma invoice

4. 1 Letter of Credit

4. 2 Cargo Manifest • A shipping document used by customs personnel reviewing a particular transport vehicle's intended trip that summarizes all bills of lading that have been issued by the carrier or its representative for that particular shipment. For example, a cargo manifest might be used for shipments made by sea, air or land, and will generally show the shipment's cosigner and consignee, as well as listing product details such as number, value, origin and destination. Read more:

• A bill of lading is a waybill. It acknowledges receipt of the items to be sent. It specifies the terms of delivery e. g. how the freight will be conveyed whether ground, ship, or air, and how many days transit. A manifest is an itemized list. It is usually issued by customs, and it lists the contents put on a ship or plane

Manifest Correctors • Once the manifest is updated in the shipping lines system and the bill of lading has been released, the documentation is deemed to be complete. . However, at times there are requests from the clients to make some changes to the details that have been submitted. . • The only way that these changes can be effected after the bill of lading has been issued is by way of a corrector. .

• Lets assume the client is changing the description of the cargo. . A typical manifest corrector would then show as below : • Bill of Lading No. : SISA 1234567 • Container No (s) : SISU 6754321 • Port of Load : Durban • Port of Discharge : Mombasa • Cargo description now reads : 140 packages anabolic steroids (this is what the bill of lading and manifest currently shows) • Cargo description should read : 23 cartons containing 150 cans muscle enhancing drugs (this should have been the right description)

• The manifest corrector generally also makes reference to whether the original bill of lading has been amended or not. . In some cases it is possible that after the submission and filing of the manifest, the client returned the full set of incorrect OBL’s and got a new set of OBL’s with the right description. . • This manifest corrector is then sent to the shipping lines agents at the port of discharge who in turn will submit this to the customs and port authorities as required by their regulations. . There also cases where customs authorities belonging to certain countries might not allow any amendments to be done to certain cargo descriptions etc as it might affect the customs duty valuation already made based on a certain commodity. . • All shipping lines charge a fee at their discretion depending on the corrector itself. .

4. 3 Mate’s receipt • Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel. It is not a document of title and is issued as an interim measure until a proper bill of lading can be issued.

Shipping note, dock receipt and mate’s receipt n The goods are transported to the docks accompanied by a shipping note. The note is handed to the superintendent of the docks, advising him that the goods are to be shipped. This note gives details of marks, references, number and description of packages, weight, and port of destination. Each package making up a shipping consignment must be distinguished by the so-called leading mark which is necessary for identification of the goods. All relevant documents must also bear this mark.

n The shipping note is signed by the wharfinger and returned to the shipper (consignor), confirming that the goods are stored and awaiting shipment. This is a dock receipt or a wharfinger's receipt. The shipper then lodges bills of lading with the shipowner or agent. Cargo is loaded aboard ship under the supervision of the chief officer or cargo officer. Once the goods are on board the ship, a mate's receipt may be sent, acknowledging that the goods have been loaded. The mate's receipt serves as a document of title until the bill of lading is ready.

4. 4 Packing List • Packing List (also known as a bill of parcel, unpacking note, packaging slip, (delivery) docket, delivery list, manifest or customer receipt, shipping list) is a document which details the contents, and often dimensions and weight, of each package or container. It serves to inform all parties involved with shipping, including transport agencies, government authorities, and customers, about the contents of the package. It helps them deal with the package accordingly.

4. 4 Packing list • Packing List helps you to create and maintain packing lists. It not only lets user to create a list from scratch, but also allows you to generate lists from an existing one. This application comes with a pre-loaded packing master list. You can simply open the master list(or any existing list). Click on “Generate List/Mass Change” menu item. Check the items you want for your trip and you will have a new packing list ready in no time. You can group items by category, location and luggage. Each items also has note, quantity and weight fields. Mass change features allow you to edit lists more easily. You may also email and share your lists. Printing out a copy of the lists helps you in case of lost luggage.

• Key features include: • Pre-loaded master list • Create new list from scratch or generate from existing one • Support Multiple lists • Share/Sync lists between devices and users(full version with separate purchase of Packing List Cloud Connector only) • Reorder categories/items using drag/drop • Mass change for easy editing • Group by location/luggage for easy packing

4. 5 Certificate of Origin • A Certificate of Origin (CO) is a document attesting that goods in a particular export shipment are wholly obtained or produced or manufactured or processed in a particular country.

WHAT IS A CO? A Certificate of Origin (CO) is a document attesting that goods in a particular export shipment are wholly obtained or produced or manufactured or processed in a particular country Example: UK history and structure European Community - CO

EXAMPLES OF CO FORMS International Template for COs Kyoto Convention - 1999 CCPIT/CCOIC - China Dubai Chamber of Commerce and Industry - UAE

THE CERTIFICATE OF ORIGIN § Why needed – Official reasons • Importing country regulations – Commercial reasons • Customer request – Financial reasons • Letter of credit

ABOUT ORIGIN § Exporters must declare the origin of goods and complete the reverse of the application (pink) copy of the CO § It is important that documentation staff understand the rules of origin that apply to certificates

ABOUT ORIGIN European community regulations have 2 different sets of rules for determining origin: § Non preferential rules of origin for COs § Preferential origin rules for EUR 1/ATR/suppliers declarations

ABOUT ORIGIN Non Preferential Origin – European community regulations 2913/92 and 2454/93 apply – Both sets of rules are in PROCEDURES MANUAL

ABOUT ORIGIN Preferential Origin – Movement of goods between EC and countries with a preferential trade agreement – EUR 1 or ATR certificates required – Chambers now authenticate these documents – HM revenue and customs are responsible for verification of origin status – Rules and procedures contained in customs notices 812, 827, 828 & 832

HOW TO ESTABLISH ORIGIN § Identify goods – Goods must be clearly identified – Normal trade descriptions should be used – Brand names should NOT be used on their own

HOW TO ESTABLISH ORIGIN § Applicant makes origin claim on reverse of application (pink) copy § Each of the 3 possible origin claims has specific criteria which the goods must satisfy

HOW TO ESTABLISH ORIGIN § Box 1 will be ticked where the goods are wholly obtained or produced in the UK - Animal, vegetable or mineral products (incl. fish) - Products made exclusively from any of these - Scrap, waste or used products for recycling

HOW TO ESTABLISH ORIGIN § Box 2 should be ticked where the goods are of UK origin by virtue of the processing that the goods have been subjected to in the UK i. e. because of economically justified substantial process

HOW TO ESTABLISH ORIGIN § Box 3 is completed where the goods are not of UK origin § Supporting proof of origin is required – Check the evidence provided – Does it clearly support the origin claim – If in doubt request further proof

REVISION OF CERTIFICATION PROCESS § 4 primary checking operations – – Formal undertaking Signature Face checking Accuracy of origin claim

THE CERTIFICATION PROCESS § Formal undertaking – Is a formal undertaking from the applicant held on file? – Must be renewed every 2 years (annually if combined with signature list) – Company agrees to abide by Standard Rules and indemnifies Chamber against inaccuracy of documents – A template of a formal undertaking and letters of indemnity for members and non-members are available in the ICC WCF International CO Guidelines

THE CERTIFICATION PROCESS § Signatures – A list of authorized signatories must be held on file – Specimen signatures must be provided (renewed annually)

THE CERTIFICATION PROCESS § Face Checking – Is product described in sufficient detail – Are all necessary fields completed – Are all documents consistent – Metric system must be used

THE CERTIFICATION PROCESS § Accuracy of origin claim – – – Origin claim must be checked Supporting documents Insufficient evidence - further proof required Possible company visit? Maybe a phone call sufficient

THE CERTIFICATION PROCESS Remember the 4 primary checking operations: § Formal undertaking § Signature § Face checking § Accuracy of origin claim

THE CERTIFICATION PROCESS § Double Checking – Once the entire checking operation is complete the documents should be passed to another staff member to be double checked

THE CERTIFICATION PROCESS § Stamping and signing – When satisfied certify the certificate – The official stamp applied to box 8 – Authorized signatory signs in box 8 (CEOs must attend Certification Assessment course) – Authorized signatory name stamp to box 8 This procedure will vary for EXPRESS CERTIFICATES

CERTIFICATION OF INVOICES AND DOCS § Issuing bodies authenticate the signature on invoices, packing lists, declarations etc. § Face check for obvious errors or statements that are clearly false

CONFIDENTIALITY § Office environment § Duty of confidentiality to customer § Quiet area § Visits by external organizations - Fraud Squad, MI 5, HM Revenue & Customs (HMRC) - see next slide

FRAUD § Inform your chief executive immediately § Ensure there is an appropriate statutory order before handing over documents for examination § For further advice contact WCF

CUSTOMER CARE § Quality Service – Follow CPG guidelines – Checks are necessary to avoid delays for goods and payments – If documents are incorrect advise in friendly but firm manner and offer assistance where needed

CUSTOMER CARE § Consistency: – Companies need to feel confident in the consistency of service offered by the chamber network – Companies should be made aware of opening times for documentation – Pricing – Availability of e-Cert for EC and Arab docs

CUSTOMER CARE § Confidentiality – Segregation of personal callers – Stamping of documents away from the public area

RECENT CO TRENDS § Preferential Certificates of Origin (PCO) § Electronic Certificates of Origin (ECO)

4. 6 Commercial Invoice • Commercial invoice is the cargos manifest the exporter trades to the importer and the payment settlement between them.

Commercial Invoices • • Commercial Invoice Commercial invoice is the cargos manifest the exporter trades to the importer and the payment settlement between them. Commercial invoice functions as following: A manifest traded by the exporter to the importer; Certificate of accounting, valuating and inspection of goods at the importer’s side; One of document in a whole set of Customs declaration and clearance for either exporter or importer; Payment details substituting the draft; Details for other documents related.

• • Invoice Preparing Commercial invoice contains the major items as invoice Number, its nomination, issuing date and issuer, the title, the mark, good description, quantity, unit price and total amount, among which the good description, unit price and total amount are critical to the functions outlined above. 1) Seller’ item should be the same with what the L/C and the contract regulate and filled with full name and address. 2) Buyer’s item is also called the consignee or the receipt, which should be the same with L/C applicator under L/C payment in case of no relevant regulations in L/C, or should be the buyer’s name in the contract or the ordered name under collection. 3) Invoice No. is fabricated by the exporter and should not to be forgotten, which is the No. of the draft for the same consignment.

• 4) The issuing date of invoice should be later than that of the L/C’s issuing date and before the shipment date, or at least before the submitting date or expiry of L/C. • 5) Place of departure and the destination should be filled in accordance with both L/C and B/L. • 6) Transportation carriage item should show both carriage name and voyage No. after the advice from the carriers or agencies. • 7) Marks should be written word by word in accordance with those in other documents. In case of no regulation in L/C, marks could be prepared in accordance with contract’s requirements. And provided that no such specification occurred in L/C and contract, marks could be printed to the seller’s will but be shown on all documents related in the same way.

4. 7 Pro forma Invoice • Proforma invoice is an informal invoice same with commercial invoice in contents used for offer by the exporter. The word proforma” can be read in proforma invoice and thereof admits alterations in appliance with signed contract.

• An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. It notes the kind and quantity of goods, their value, and other important information such as weight and transportation charges. Pro forma invoices are commonly used as preliminary invoices with a quotation, or for customs purposes in importation. They differ from a normal invoice in not being a demand or request for payment.

Proforma Invoice A-Plus Avocado 411 South Street, Modesto, CA 97049 USA Phone: 123 -456 -7890 fax 123 -456 -7899 Date: 15 -Apr-06 Proforma No. : 01 FPJ 0406 Sold To: Ship To: Fresh Produce of Japan, Fresh Produce of Japan 3 -1 -2721 Rydo-cho, Tokyo 665 -0921, Ship Date 25 -Apr-06 Ship Terms: CIP Tokyo, Japan Order No. : 01 -0406 -AA Currency: USDollars Ship Via: Ocean Freight Payment Terms: Item No. Weight kg/case Japan 50% Prepay+50% Net 90 days invoice Unit Qty Description Net Gross Price Units Total AA-10 Haas Avocados - Size 10 20. 0 22. 0 $0. 25 100, 000 25, 000. 00 AA-15 Haas Avocados - Size 15 23. 0 25. 0 $0. 30 150, 000 45, 000. 00 Freight 4, 250. 00 Insurance 700. 00 Harmonized (Schedule B) No. : 0804. All Products are of USA Origin Totals Net wt 54, 500 40. 0000 - A Gross wt 59, 500 vocado Units 250, 000 I certify that the above is true and correct Please sign your authorization & fax back: A+A -Export Manager Sign Here: Dollars $ 74, 950. 00