BASIC GUIDE TO THE EXPORTER
To obtain good results in international trade operations, it is necessary to have adequately investigated the destination market, knowing the target customers and create an export plan.
This plan has to include the proposition of value, the level of detail of the competitive advantages, the management of sales, the planning of the finance, the pricing policy, payment systems, the protection against fluctuations in the exchange of rates or the
type of insurance to be used.
It is important to know the regulations of the product that is going to be exported, if thereare barriers to their importation into the country of destination, if there is any restrictions or fees, if it is to be accompanied by special documentation, what are the regulations on labelling, and the cultural differences that may exist in the process of negotiating the international sales contract.
The export plan should also provide for the logistics process to deliver the goods to the buyer. Spiforwarder is the international logistics operator that will advise you, he will select the most appropriate mode of transport and coordinate all the necessary operations to ensure that their goods arrive at their destination with the highest security, at the right time and the lowest possible cost.
This logistical process, may require the assessment of possible costs on arrival, in accordance with the rule of Incoterms 2010, or a careful planning and assurance of confidentiality in the case of triangular operations or crosstrade.
INTERNATIONAL SALES CONTRACT
This contract is a key element to develop trade relationships, to avoid potential disputes and for its economic and legal functions. There are contracts proposed by the International Chamber of Commerce for the different types of merchandise and possible situations.
The contract must contain the set of circumstances and conditions of the operation:
- Identification of the parts involved in the transaction.
- The object of the contract and description of the goods.
- Prices, terms and way of payment, possible breaches, taxes, rates, etc.
- Date and place of delivery, type of payment, insurance and guarantees.
- Shipping and delivery conditions, and the indication of the rule of Incoterms agreed.
- Commercial and financial statements required by the purchaser.
- All the contracts must be BASED on a commercial offer of the seller and its acceptance by the buyer..
Depending on the relationship of trust between the parties, the business risk and the country from where the payment will be issued, you can agree on a payment method with higher or lower guarantees.
The risk of nonpayment can be avoided by making the payment in advance, or if you hire an insurance policy or by a payment method with bank guarantees.
SIMPLE PAYMENT METHODS:
- Personal check.
- Back check.
- Simple payment order and documentary evidence.
- Simple remittance.
DOCUMENTARY PAYMENT METHODS:
Documentary remittance. It is a payment with the presentation of a series of documents and it could be on demand or in term.
Documentary credit. It is the most secure payment method, because if at the time agreed the buyer doesn’t have the agreed amount, the importer’s bank will make the payment, only if the obligations imposed by the letter of credit have been complied.
The role of customs is to control the entry and exit of goods of a country, authorize or refuse exports and imports and the transit of goods. This is not the case of the European Union where there is a free transit of people and goods in a customs regime.
In the export, customs dispatches the goods in accordance with the documentation presented by the customs representative next to the single administrative document (DUA), and collects the taxes and fees that apply.
The possible customs destinations of goods are:
- A customs procedure.
- Introduction in a free zone or free warehouse.
- Re-export outside the customs territory.
At the same time, customs regimes can be distinguished:
- Free circulation.
- Deposit: customs or different from customs, temporary storage and local places authorized for goods declared to export.
- Active or passive improvement.
- Temporary or permanent export.
- Temporary importation.
- Transformation under customs control.
SPI advises the exporting company with:
- The destinations and customs regimes that correspond with the operation.
- The documents to be presented at the customs office of export and, if applicable, in the country of destination.
- Anticipate possible delays due to inspections, wether documentary or physical goods.
- It is desirable for the importing company of the country of destination to be in charge of customs office.
DOCUMENTS TO IMPORT
Next to the single administrative document (SAD), according to the operation and the nature of the imported goods, the most common documents that must be submitted to the customs are:
- Commercial Invoice.
- Loading list, if there are several packages.
- Certificate of origin, if there are tariff reduction, or documentation that proves the source in the event of bilateral agreements.
- Models: FORM-A, EUR-1 or ATR.
- Transport and insurance data depending on the conditions of delivery agreed.
- Transport Documents, depending on the mode of transport used:
- Bill of Lading (bill of lading).
- Air Waybill (air waybill).
- Railway Consignment Note (CIM).
- Bill of lading by road (CMR).
- TIR carnet.
- Certificate T transit accompanying document.
- Product Certifications that may be required: health, veterinary, Soivre, pharmacy, phytosanitary, low voltage, approval, etc.
- Certifications in function of the commercial policy of the country of destination:
- Import license or authorization.
- Authorization of quota.
- Agrex certificate to import.
- If the value is greater than 10,000 €, the DV-1.
- Exceptionally, may require physical inspection photographs, catalogs, specific certifications, etc.
TRANSPORT INSURANCE LICENSE TO IMPORT
Based on the rule of Incoterms 2010 agreed in the contract of sale, the importing party must assess the hiring an insurance policy covering the risks on the transport of the goods from the premises of the company up to the point of final destination.
This insurance will not only cover risks of stowage, handling, storage, loading, or the carriage of the goods, but also other less common as riots, strikes or acts of piracy.
Transport insurance is different from the carrier’s liability insurance, as set forth in the international conventions which regulate each transport mode, in which the compensation is restricted by the weight and value of the goods. The insurance contract of carriage is left to the discretion of the holder of the risks covered, the compensation and indemnification. Generally, the risks are covered by policies that reflect the “ICC Clauses (Institute Cargo Clauses)”, of the Institute of London insurers. They adopt three
modalities, A, B and C, being A the one that provides greater coverage.