Introduction
An essential feature of all export sales transactions is export documentation. There are various categories of documents required in export trade. This section lists the basic documentation required for an export shipment. Not all the documents listed below are required for every export transaction; many of them are applicable to specific products or circumstances and/or countries. Examples of some of the documentation discussed in this section are given under the section entitled specimen documentation. Checklist of cost factor identified by the exporter to facilitate pricing the product for export to achieve required profit margin. Factors differ from company to company, product to product and mode of transport.
 |
Enquiry Documents |
Quotation/offer to the buyer
Pro-forma invoice: After receiving a quotation from the exporter, the buyer may request a pro-forma invoice. This is a preliminary invoice and is prepared prior to shipment or even before a firm order has been received by the buyer. The purpose is to enable the buyer to obtain an import licence (if required) or a letter of credit and to obtain foreign exchange approval prior to entering into the contract of sale.
|
Instruction Documents |
Forwarder’s instruction: Most freight forwarders have a printed forwarder’s instruction form, but the required information may also be printed on the exporters company letterhead. Information required includes instructions for booking of cargo, information for completing transport documents, description of goods as per the letter of credit etc.
Shipping instruction: Where a shipping has a computerised bill of lading system, it provides pre-printed shipping instruction forms which must be completed by the exporter/freight forwarder. The bill of lading is drawn up from the information provided on this form. If the exporter/freight forwarder prepares the bill of lading independently, then a shipping instruction must be attached. However, many independent shipping lines do not insist on the shipping instruction document.
Bank instruction: When the exporter is selling on the basis of a letter of credit, the instructions stipulated in the letter of credit must be followed. However, if selling on the basis of sight or usance draft under documentary collection, bank instructions must be generated to secure payment for the goods. Information supplied would include description of cargo, name of vessel, date of shipment etc; a detailed list of all documents submitted; payment method etc (see section on Payment Procedure for additional information)
|
Transport Documents |
1. Bills of lading
The bill of lading is a contract of carriage and has three functions:
(i) It defines in detail, the terms of the contract between the shipper and the shipping line for the carriage of goods from one specified port to another.
(ii) It is a formal, signed receipt for a specified number of packs eg crates, drums etc. which is given to the shipper by the shipping line when the shipping line receives the consignment. (It should be noted that the shipping line denies all knowledge of quantity, quality, value or condition of the contents of the packs.)
(iii) It is a document of title (i.e. a certificate of ownership) to the goods. As such, it must be produced at the port of final destination by the consignee in order to claim the goods. As a document of title, the bill of lading is also a negotiable document and the consignee may sell the goods by endorsing or handing over the bill of lading to another authorised party, even while the goods are still at sea. Although negotiable bills of lading are in common use, some countries do not allow them or make it difficult to be used and exporters should enquire whether it is accepted in the buyers country.
1.1 Bills of lading may be negotiable or non-negotiable : With a negotiable bill of lading, ownership of the goods may be transfered to a third party. The shipper marks the bill of lading, ‘to order’ to ensure that the bill of lading may be negotiated by a third party. eg the bank, through blank endorsement ie by signing on the reverse side of the bill of lading. The third party is then able to take ownership of the goods. The shipper can also also ensure that the bill of lading is only negotiated by the buyer by entering the name of the consignee on the document, instead of ‘to order’. The buyer then has the option of transfering title of the goods to a third party by endorsing in blank or to a named third party. Bills of lading can become highly negotiable documents. All original bills of lading are thus negotiable documents to some extent – it is only the copy bills of lading that are absolutely non-negotiable.
1.2 A shipped bill of lading indicates that goods have been loaded on board the vessel. This bill is required if payment is being made on the basis of a letter of credit. (also known as an on board bill of lading). A received for shipment bill of lading acknowledges that the carrier has received the goods and are in the custody of the carrier, but have not actually been loaded on board the vessel. This may be used when there is congestion at the port or in the case of dock strikes. Once the goods are on board, the bill of lading is stamped ‘on board’.
1.3 Clean and claused bills of lading: If the cargo is apparently in good order and properly packed when received by the shipping line, the bill of lading which the shipping line issues, is termed ‘clean’. The shipowner thus admits full liability for the cargo described in the bill. If, however, a defect is noted such as a bale is torn or a cask is leaking, a clause will added to the bill. The bill then becomes ‘unclean’, ‘dirty’, or ‘claused’. When an export transaction is conducted on the basis of a letter of credit, banks will refuse shipping documents bearing such clauses, unless the letter of credit specifically states that they are acceptable. eg it may be the custom of the trade to use second-hand packing, an aspect may be noted as a defect.
1.4. Freight pre-paid or freight collect bills of lading: When an exporter pays freight to the shipping line in advance, for example on a c.i.f. basis, the exporter will acquire a bill of lading marked freight pre-paid. However in instances when freight is paid on arrival of goods, eg under an f.o.b contract, the bill of lading is marked freight collect.
1.5 Stale bills of lading: This is a bill of lading which has been presented so late after the due date of delivery of goods to the port, that as a result of the delay in its presentation, the consignee/buyer has become involved in legal or administrative complications. According to Uniform Customs and Practice for Documentary Credits of the ICC, banks may refuse a transport document that is presented more than 21 days after the date of shipment. The bank may accept a stale bill of lading ‘with recourse’ if the buyer repudiates payment on the basis of non -confirming documents, the exporter must return the funds received. Preferably the shipper should approach the buyer to have the letter of credit amended to permit the presentation of a stale document, or indicate that the documents will be accepted when presented.
1.6 There are different categories of the bill of lading:
- Charter party bill of lading: Normally if commodities are to be transported in bulk (eg grain, coal, oil etc), a shipper may charter (hire) a whole vessel by entering into a contract of carriage with the shipowner, the terms of which are embodied in a legal document called the charter party. As this type of bill of lading does not contain all the essential terms of the contract of carriage, banks will refuse to accept it under a letter of credit unless instructed to the contrary by the buyer.
- Through or transhipment bill of lading: It is often necessary to employ two or more carriers to transport a consignment of goods to its final destination. Shipping lines issue bills of lading which cover the whole transit and the shipper need only deal with the first carrier. Normally, a through rate is quoted.
- Container bills of lading: These are issued by a shipping line which engages in combined transport.
- Groupage/House bill of lading: Freight forwarders are permitted to group various compatible consignments from different consignors together, and to dispatch the cargoes as one containerised consignment. The shipping line issues a ‘master’ bill of lading to the forwarder once the full container has been loaded. The freight forwarder cannot hand the original shippling line’s bill of lading and therefore issues a house bill of lading to the individual shippers. At the destination, an agent of the forwarder breaks down the consignment and distributes the goods subject to an original house bill of lading being presented. Under letter of credit, the banks may reject this form of bill of lading unless it is specifically stated that this type of bill of lading is acceptable.
A FIATA or other freight forwarder’s combined transport bill of lading can be used in the place of a forwarder’s house bill of lading. This is recognised by the ICC and according to UCP (1993 revision), will be accepted by banks in letter of credit transactions. (FIATA translated from French, stands for International Federation of Freight Forwarders Associations.)
1.7 Mate’s receipt: Associated with the bill of lading in respect of breakbulk consignments, is the mate’s receipt. When goods are loaded on board, they are inspected by tally clerks who record the date of loading, number of individual packs etc and note any defect or comment about the condition in which the goods are received. On completion of loading, the ships officer signs the mate’s receipt based on the note of the tally clerks. If there are adverse observations, the mate’s receipt is qualified and is said to be claused or unclean. If there are no adverse observations, the mate’s receipt is termed clean. The qualifications of the mate’s receipt are later embodied in the bill of lading which in turn is also claused clean or unclean. A signed copy of the mate’s receipt is given to the shipper/freight forwarder once the goods have been loaded on board ship, in exchange for the original bill of lading. The full particulars of all bills of lading are entered on the ship’s manifest which contains the details of total cargo carried by the ship and is a requirement of naval, port, customs and on occasion, consular authorities.
1.8 Non-negotiable liner waybill: Containerisation increased the speed with which cargo was transported and goods tended to arrive before the importer received the bill of lading required to take delivery of the goods. As a result, certain shipping lines introduced an alternative to the bill of lading, the non-negotiable liner waybill. This document provides for the automatic delivery of cargo to a named consignee. In contrast, the bill of lading document must reach the destination of the goods and be surrendered to the carrier before delivery can be authorised.
NOTE: The non-negotiable liner waybill is not a document of title and must be made out to the consignee. It acts only as a receipt for the cargo and as evidence of the contract of carriage.
2. Air waybill: This transport document serves as:
- documentary evidence of the conclusion of a contract of carriage
- proof of receipt of the goods for shipment “
- an invoice for the freight “
- a certificate of insurance “
- guide to airline staff for the handling, dispatch and delivery of the consignment.
The document consists of three originals and nine copies and is only issued in a non-negotiable form. The first original is intended for the carrier and is signed by the shipper; the second original, the consignee’s copy, is signed by the shipper and accompanies the goods; the third original is signed by the carrier and is handed to the shipper as a receipt for the goods after they have been accepted for carriage. The copies are dispatched by the airline authorities as required to on-carriers, airport authorities, etc or they serve as delivery receipts, invoices etc. The standard IATA air waybill applies to the carriage of goods over any distance and by as many airlines as are required to convey the goods to their final destination.
The air waybill is a fairly complex document and is seldom completed by the exporter. The services of an airfreight forwarder are usually engaged for ths purpose and clear instructions should be provided by the shipper noting any specific requirements if the transaction is under a letter of credit. Most airlines and forwarders have a standardised form for this purpose, the shipper’s letter of instruction.
With the recent development of Electronic Data Interchange (EDI), it is now possible for documents to reach the consignee before the goods have even left the exporter’s premises. This enables the consignee of airfreighted goods to prepare customs clearance documentation in advance of the goods’ arrival and consequently avoids incurring storage charges at the airport of destination.
3. Rail waybills:
Spoornet Combined Consignment Note and Truck Label (c.c.t.):
This is the official transport document in respect of carriage of bulk cargo by rail. The c.c.t. consists of two stick-on labels and two identical tear-off pages which constitute copies for the exporter and Spoornet respectively.
Spoornet Freight Transit Order (f.t.o.):
This is the official transport document in respect of carriage of containers by rail. The f.t.o. consists of five identical tear-off pages comprising a pricing copy, a checking copy, a receiver’s copy, a delivery note and a sender’s receipt.
The c.c.t. and f.t.o. documents apply to transport within the borders of South Africa and to neighbouring countries and serve both as evidence of the contract of carriage and as a receipt of goods. When goods are being exported to neighbouring states, these documents must be customs stamped before being handed to the railway officials when the goods are delivered to the forwarding station. The documents can be obtained from Spoornet Client Service Centre. Unlike air or sea transport documents, the Spoornet documents do not incorporate comprehensive conditions of carriage. The provisions contained in the Spoornet tariff book form part of the carriage contract and transporation is offered at ‘railway’s risk’ or at ‘owner’s risk’, according to the particular circumstances of the transaction. Exporters should therefore ensure that the relevant conditions are carefully noted.
Container terminal order (c.t.o.):
This is the official transport document in respect of the carriage of export containers by rail, between an inland container terminal and a Portnet container terminal. It serves as a transport instruction, a shipping instruction or a combination of the two. The c.t.o. further acts as: ”
- an instruction to Spoornet to collect an empty container and deliver it to the premises of the exporter; “
- an instruction to Spoornet to collect the packed container from the exporter’s premises and deliver it to a container terminal; “
- an instruction to Portnet to load the container on board the vessel.
As 90 per cent of container transportation is carrier haulage, it is usually the container operator who completes the c.t.o. Where merchant haulage is, however, being used, c.t.o.’s should be submitted to the container depot before noon on the day prior to the delivery of the empty container.
See section on container procedures for additional information.
4. Road waybill
There is no standard transport document for road haulage. Road hauliers usually design their own waybills which serve as evidence of a contract of carriage and as receipts for consignment of goods. Shippers must ensure that hauliers are carefully instructed in the completion of waybills.
|
Insurance Documents |
Marine insurance policy document
Certificate of insurance
See sections Export Credit Insurance and Marine Insurance for detailed information.
|
Customs Documents |
See section on Customs Procedure for Exports for detailed information on this documentation.
Examples of customs documents include:
Licensing/Registration of Customs and Excise Clients (DA185) – SARS
Bill of entry export (eg DA550)
Exchange control documents (eg Form 178 or NEP)
Export permit (if necessary)
Special export certificate or permit
Import certificate from country of destination (strategic commodities)
Declaration of good removed within the Southern African Customs Union area (SACU) (CCA1)
Relevant transport documents
Commercial invoice
|
Exchange Control Documents |
See section on Complying with Foreign Exchange Control Requirements for more detailed information.
Examples of the required documents include:
F178: Exchange control declaration, that the exporter will be receiving foreign exchange proceeds. This form, together with the Balance of Payments Reporting System (BoP) serves as a mechanism by which the South African Reserve Bank can monitor the repatriation of all foreign currency accruals to South Africa. There are separate BoP forms for outward payments and inward payments with detailed fields and categories. Goods cannot be cleared through customs without the F178 being completed by the exporter.
The F178 is completed by the exporter for every transaction or consignment except for exports to countries within the CMA and exports, irrespective of the origin of the goods involved. The F178 contains a description of the goods and their value.
Form NEP: This is completed when no exchange proceeds are to be received for exports but which have a specified insurance value. As with the F178, no NEP is required for exports of goods within the Common Monetary Area.
|
Harbour Revenue Documents |
Portnet combined export document: This document is used in respect of bulk, breakbulk and containerised cargo, and is usually completed by the freight forwarder on behalf of the exporter. It should be noted that one of the copies constitutes the mate’s receipt and is returned to the forwarder so that the bill of lading can be claimed. The document acts as a wharfage clearance certificate in terms of which Portnet wharfage charge is delared and paid to the harbour revenue authorities. Wharfage is paid to Portnet and covers the berth infrastructure costs. It also serves (in respect of bulk/breakbulk cargo) to instruct Portnet to receive the goods into the harbour and to ship them (This function is performed by the c.t.o. for containerised cargo). Shipping charges are also paid against the combined export document, levied by Portnet which covers shore handling costs, eg use of cranes for loading (This charge is equivalent ot the terminal handling charges in respect of containerised cargo which are paid against the c.t.o.
The harbour revenue authorities require the original plus a number of copies after these have been stamped by customs. On presentation of the combined export document, the exporter/freight forwarder is required to pay the shipping fee and/or wharfage clearance charge inclusive of VAT.
Container terminal order (c.t.o.): This document is required of all containerised exports. The c.t.o. is lodged with the carrier once the goods have been cleared through customs and the wharfage charge has been paid. The carrier /container operator will request to see both the customs stamped DA 550 (bill of entry) and the combined export document prior to stamping the c.t.o. See point 3 above and the section entitled container procedure.
|
Other Documents |
Payment Documents
Transport documents:
Marine insurance documents: (see point section entitled insurance for detailed information)
Draft (bill of exchange)
Pro-forma invoice:
Inspection certificates:
Commercial invoice (c/i): This should be virtually the same as the pro-forma invoice and should contain all the final and accurage details relating to a particular order. The import licence number, the foreign exchange control number (EC number) for the importing country, where applicable, and the l/c number should all be stated on the commercial invoice. Also the price and the delivery term should be consistent with the sales contract. The commercial invoice need not be signed unless a signature is specifically called for in the l/c.
Certificate of origin (c/o) : This is sometimes required by importing countries for the purpose of implementing import quotas and/or securing preferential duties for a particular product. A form supplied by a chamber of commerce is usually acceptable provided that it is certified by that chamber of commerce. The c/o is usually completed by the exporter. In some cases, a country may require, only a declaration of origin. This document is provided by the original producer who may not necessarily be the exporter and for this reason is often not acceptable to the exporter as it reveals the source of products.
Packing list: Regulations of the importing country sometime may it compulsory to have a separate packing list, compiled by the exporter/freight forwarder. The packing list indicates the number of packs involved, the contents of each pack and the individual weights, dimensions and HS numbers. This list enables the customer to check that the correct number of units have been received. Customs authorities can also easily identify a specific pack they wish to inspect.
Finance Documents
Documentation in respect of credit insurance
Forward exchange contract
Loan documentation for financing the transaction
|
Foreign Documentary Requirements |
Examples of foreign documentation that may be required include:
Phytosanitary certificate: Many countries require these certificates for the import of plant and plant products e.g. seeds, bulbs, cut flowers, etc. Phytosanitary certificates are issued by the Directorate: Plant and Quality Control, Department of Agriculture in Pretoria, which has offices at airports and other locations throughout the country. When applying for a certificate, exporters are required to present a written statement from the importing authorities of the foreign country confirming that the phytosanitary certificate is required and any other conditions and relevant information required. Alternatively, a copy of of the import permit/licence could be used as conditions regarding the importation of plants are usually stipulated in the permit. However a similar stipulation in the l/c is not acceptable. If a phytosanitary certificate is required, the necessary arrangements must be made eg field inspections carried out on plants during the growing season.
Veterinary health and public health certificates: These are usually required by countries importing live animals, fresh, chilled and frozen meat and sometimes canned products, in order to control the spread of animal diseases. A copy of the import permit specifying the conditions of importation will also be required. The certificate for live animals can be issued by a private veterinarian but the certificate is also signed by the state veterinarian. The certificate for meat is issued by the Perishable Products Export Control Board (PPECB) which has offices in Johannesburg, Durban, East London, Port Elizabeth and Cape Town.
South Africa has many agreements with many countries regarding the conditions under which food products must be traded.
Certificate of free sale: This is issued in respect of medicines being exported and serves as proof that the medicines concerned are authorised for sale in South Africa. The certificate is obtainable from the Registrar of Medicines at the Department of Health. It usually contains a statement to the effect that the products meet international standards and that the manufacturing facilities are regularly inspected.
Fumigation certificate: This document is required as proof that the packing materials eg wooden crates, wood, wool etc), second-hand clothing or certain commodities have been fumigated or sterilised. Certificates are issued by specialists containing details such as purpose of treatment, articles concerned, temperature range used, chemicals and concentration used etc.
Inspection certificate: A number of developing countries require a large portion of their imports or those imports with a specified minimum value, to be inspected prior to their being shipped (see section on inspection). The inspection procedure assists these countries in controlling problems such as values being under-declared or quantities begin overstated – techniques used to circumvent exchange control regulations. The import licence usually stipulates that a ‘clean report of findings; by a named inspection organisation is a pre-requisite to customs clearance and payment for the goods.
Quality certificate: This form of quality certificate is issued by the Directorate: Plant and Quality Control, Department of Agriculture in respect of fruit, vegetables and canned fruit juices. Inspection is carried out prior to export.
Other inspection requirements: Other inspection services may be required to ensure that imported products meet certain specifications and may take the following forms: ”
- quantity
- quality inspection according to samples or specifications
- inspection of packing
- sampling
- analysis of product
- price comparison.
The inspection may be performed by semi-government bodies such as the South African Bureau of Standards or other bodies accredited by the South African National Accreditation System.
See section on inspection for detailed information.
Consular and certified invoices: A consular invoice usually contains exactly the same information as the commercial invoice and normally has to be purchased from an embassy or consulate of the importing country. It is verified by an embassy or consulate official. The function of the consular invoice is to ensure that the value of the shipment and the description of the goods are correct. Multiple copies of the invoice may be required. It is often a requirement that the invoice be filled out in the language of the importing country. In order to verify that the commercial invoices are correct, customs authorities in the importing country may call for certified invoices i.e. commercial invoices that have been authenticated by a consulate. In many cases, these also have to be completed in the language of the importing country.
Certificate of value and/or origin: This document provides proof of the value and/or origin of the goods concerned. Importing countries may require this certificate for customs clearance of consignments. Importing countries have prescribed forms and may require authentication by a consulate or endorsement by a chamber of commerce.
There are numerous other foreign documentary requirements depending on the product and country concerned, and the exporter should always conduct a thorough investigation into the documentary requirements of each export consignment.
Dangerous Goods Documentary Requirements There are a number of special shipping instruction forms and transport documents which are required in respect of dangerous goods.
Special documentation is usually required for all shipments of dangerous goods, regardless of the mode of transport used. Dangerous goods documents are normally characterised by red chevrons framing them.
