Documents used in International trade

Business studies study module
  • Enquiry/Inquiry. A letter sent by an importer to the exporter asking about the supply of the goods and the terms of sale.
  • Order of Indent. This asks the supplier to supply goods. It may specify the goods to be supplied and suggest the preferred mode of transport for them. An indent may be open or closed

Open Indent. Here the importer does not specify the supplier and the goods to be bought and therefore the exporter or export agent is free to choose the supplier

Closed Indent. Here the importer specifies the supplier and the goods to be bought

  • Letter of Credit. A document issued by the importers bank to the exporter’s bank to assure the exporter of the payment for the goods ordered. The exporter can then be paid by his bank on the basis of this letter.
  • Import Licence. A document issued by the country to allow the importer to buy goods from abroad.
  • Bill of Lading. A document of title to goods being exported issued by the shipping company to the importer who should use it to have goods released at the port of entry.
  • Freight Note. A document prepared by the shipping company to show the transportation charges for goods.
  • Certificate of insurance. A document issued by the insurance company or agent, undertaking to cover the risk against the loss or damage to goods being exported.
  • Certificate of Origin. A document that shows the country from which the goods are being imported have originated from.
  • Commercial Invoice. A document issued by the exporter to demand for the payment for the sold on credit to the importer.

It shows the following;

  • The name and address of the exporter
  • The name and the address of the importer
  • The price charged
  • The terms of sale
  • The description of the consignment
  • The name of the ship transporting the consignment

Consular Invoice. A document that shows that the prices of the goods that have been charged is fair as certified by the consul with the embassy of the exporting country.

  • Proforma Invoice. A document sent by the exporter to the importer if he/she is not willing to sell goods on credit. It may be used to serve the following purposes;
  • Serve as a formal quotation
  • Serve as a polite request for payment before the goods are released for the customer
  • To enable the importer to initiated the clearing of the custom duty early enough to avoid delays
  • Used to by the importer to obtain permission from the Central Bank to import goods
  • Airway Bill. Issued by the airline company to show the charges for the goods being transported
  • Letter of Hypothecation. A letter written by the exporter to his/her bank authorizing it to resell the goods being exported. This occurs if the bank fails to get payment on the bill of exchange drawn on the importer that it has discounted for the exporter. Should there be a deficit after the resale, the exporter pays the deficit
  • Weight note. A documents that shows the weight and other measurements of the goods being delivered at the dock
  • Shipping advice note. A document issued by the exporter to his/her shipping agent containing instruction for shipping goods.

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