Introduction
International trade is a complex enterprise that involves the exchange of goods and services. Individuals or companies who want to engage in international trade must comply with laws and regulations in their own country, as well as in the countries they export to or import from.
International trade documents have been used for centuries to facilitate cross-border trade and to document the legal sale of goods. The origins of these documents can be traced back to bills of lading used in the 16th century in the Mediterranean to verify the delivery of goods on ships.
Below, you can find a general overview of the most commonly used documents in international trade:
Proforma Invoice
A proforma invoice is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods. It outlines a seller’s intent to deliver products or services to customers, for a specific price. As the price has not been agreed yet, it is not a true invoice.
A proforma invoice includes a description of the goods, the total payable amount and other details about the transaction.
Commercial Invoice
A commercial invoice is a document that is used to convey the price, quantity and description of goods being shipped. It is issued in duplicate, with one copy being retained by the seller and the other being given to the buyer. The information contained on this form varies based on different countries’ customs requirements but generally includes details such as:
• Company name and address
• Names of shippers
• Date of shipment
• Port of loading (where cargo was picked up)
• Port of discharge (where cargo was delivered)
• Weight or volume measurements for each product
Packing List
A packing list is a document that lists all the items that are being shipped and their quantity. A packing list is used to make sure the right items are shipped and delivered; it helps prevent losses and damage in transit.
The packing list must be signed by both parties and attached to each package with the seal of authenticity.
Certificates of Origin
A Certificate of Origin (CO) is a document that certifies that the goods were produced in a particular country. It is used to prove the origin of the goods and may be required by foreign governments or trading partners before they will accept those goods as originating from that country. The CO is a legal document, valid only if issued by authorized officers or authorities under their official seal or mark.
Certificates of Origin are issued for three types of transactions:
• Goods produced in more than one country;
• Goods produced entirely in one country but containing imported materials;
• Services rendered from an establishment outside its territory
Certificate of Free Sale
A Certificate of Free Sale is evidence that goods are legally sold or distributed without restriction and approved by the appropriate regulatory authority. This document may be required by some importing countries, as a condition of entry.
The Certificate of Free Sale allows importers to clear their goods through customs without having to provide supporting documentation for their products. In other words, this document will act as your proof that you are not breaking any trade regulations or laws for importing your goods into another country.
Shipper’s Letter of Instruction
Shipper’s Letter of Instruction (SLI) is a document is designed to detail all the requirements of your shipment from start to finish. It also known as a Shipper’s Export Declaration or SED, and it is issued by the exporter to its agents or freight forwarders.
The SLI can be an email, fax, or even delivered directly by hand.
Inland Bill of Lading
An Inland Bill of Lading is a contract signed between a shipper and a transportation company (carrier) for the overland transportation of goods. It is also a contract between the owner of the goods and the carrier stating what goods are shipping, where they are going, and where they started. It serves as proof that you have received your shipment at its destination safely.
Ocean Bill of Lading
An ocean bill of lading is a document that is used in international trade to transport goods across international waters. It serves as both the carrier’s receipt to the shipper, and as a collection document or an invoice. The ocean bill of lading also indicates where and when the cargo was loaded onto the ship.
The ocean bill of lading can be issued either by:
- An individual shipping company; or
- An agent who acts on behalf of several companies (a consolidator)
Air Waybill
An Air waybill (AWB) or air consignment note is a receipt issued by an international airline for goods and an evidence of the contract of carriage. It has to be prepared in quadruplicate. The original AWB remains with the delivering carrier, while the second copy is given to the shipper, third copy goes to customs and fourth copy stays with the receiving agent.
Dangerous Goods Forms
The form known as dangerous goods declaration (DGD) comprises crucial information regarding the nature of the shipment, packaging instructions, etc., apart from the basic shipping details. It is generally prepared by shippers.
Most countries require that you declare all items being shipped internationally to their customs offices. Some countries require that this be done electronically while others accept paper documents.
They also provide information on how these materials should be handled and packed in order to prevent accidents or damage during transportation or storage at destinations outside their country of origin.
Bill of Exchange (or Bank Draft)
A bill of exchange is a written order binding one party to pay a fixed sum of money to another party on demand or at a predetermined date. A bill of exchange often includes three parties—the drawee is the party that pays the sum, the payee receives that sum, and the drawer is the one that obliges the drawee to pay the payee.
A bank draft is an instrument used by banks for collecting funds from their customers’ accounts in an account, not for loans but for payment transactions (such as travel tickets).
International trade documents are documents that are needed to be in order to ship and sell products internationally.
The purpose of these papers is to help verify that all proper fees and taxes have been paid, which ensures that your goods make it to their destination without being delayed or going missing along the way.
The process for international trading begins with an order form from a customer who wants to purchase goods from you. You can either send them a catalog with pictures of your product line or they may request specific items, such as a certain kind of bookcase or rug (if you sell rugs). If there are any special requirements such as color or size, you need to include those details in this initial communication so that everything will match up when both parties sign off on all necessary papers later on down at customs office!
Conclusion
The international trade industry is complex and requires the use of many different types of documents. Without proper documentation, it would be difficult to conduct business outside of one’s own country. The documents listed above are some of the most commonly used in international trade today.