If anyone wants to start an import trade he should know the general procedure of import trade which usually involves the following stages:
The general procedure of import trade
1. Trade inquiry: The first step in importing is to make trade inquiries. The intending importer makes trade enquirers form possible exporters. A trade inquiry is a written request from the intending importer for information regarding:
- The availability of goods,
- Terms of supply,
- Terms of payment
- Size and weight,
- Design, etc.
In reply to the inquiry, the importer shall receive a quotation, which contains the detailed answers to the queries made. An intending importer should make a thorough comparison of the various quotations before taking the decision to import.
2. Obtaining import licenses: An importer can import goods in the country only when he has a proper import license issued by the Government of Bangladesh.
For this purpose, an importer has the application to the Controller of Imports and exports and exports, Ministry of Commerce, Government of Bangladesh, in the perceived form for obtaining the import license.
3. The arrangement of foreign exchange: The importer will have to arrange for the necessary foreign exchange in order to make payment to the exporter in this currency. In our country, the Central Bank of Bangladesh (Bangladesh Bank) controls all transactions relating to foreign exchange.
However, the Bangladesh Bank does not release foreign exchange directly to the importers. An importer finally gets the foreign currency from the Exchange Bank concerned after fulfilling all the necessary formalities.
4. Placing the indent (or order): The importer prepares the details of goods he wants to import and gives it to any import agent. The indent (order) contains instructions from the importer as to the quantity, quality, prices of goods, mode of payment, shipping procedure, date of delivery, nature of packing, etc. The import-agent sends the intent to an expert agent for necessary actions.
5. Dispatch of the goods by export agent: After the export agent gets the indent, he purchases the required goods, packs these goods as specified, gets them insured and sends them to the importer. The export agent also sends all the documents of title of goods to the importer.
6. Appointment of clearing agent: The importer appoints a clearing agent at the port to get possession of his goods. For this purpose, he endorses all relevant documents in favor of the learning agent. The clearing agent will work on behalf of the importer and will charge a commission for his service.
7. Endorsement for delivery of goods: After getting the relevant documents, the clearing agent goes to the office of the shipping company for ht endorsement of the delivery of the goods in his name.
After this procedure, the clearing agent can get the goods to form the captain of the particular ship. But the shipping company makes such an endorsement only when freight has been paid in full.
8. Payment of import duty: Goods may be duty-free or liable for duty. In case of duty-free goods, no import duty is to be paid at the customs office.
For goods on which duties are to be paid, the importer has to pay the import duty in the customs office before possession of the goods. The objective of levying import duty is to protect domestic industries against foreign competition and also to conserve scarce foreign exchange reserves.
9. Payment of dock dues: After paying the import duty, the clearing agent prepares two copies of dock challans and submits them to the dock authorities. The dock authorities charge the dock dues and issue a receipt for the same. The goods cannot be taken out from the dock until the dock charges are paid.
10. Taking delivery of the goods: The clearing agent has a right to check the goods before taking delivery. If the goods are in proper condition, he can take delivery of the goods.
If the agent finds something irregular, he can lodge a complaint with the shipping company to check the contents of the packet.
11. Dispatch of goods by clearing agent: After taking delivery of the goods from the shipping company, the clearing agent will dispatch the goods to the importer.
The agent gets the railway receipt from the railway authorities and sends it to the importers so that the importer can take the delivery of goods from the railways.
12. Sending documents to importer: The clearing agent sends the documents like railway receipt, bill of entry, dock challan, details of his expenses and commission, etc., to the importer by post.
13. Taking delivery of goods from the railway station: The importer gets the delivery of goods from the railway or the transport company by showing the relevant receipt.
If the clearing agent has not paid the freight, the importer will have to pay the freight to the carries in order to receive the goods.
14. Making of payments: The mode of payment for imports depends on the agreement between the importer and the exporter. If the documents have been received against acceptance, the importer has to honor the bill of exchange on the due date.
After the bill is paid, the import transaction comes to a close, In the case of documents against payment, the importer pay s immediately, within a short period after the presentation.
Related Content of Import-Export:
- What is the Definition of Import?
- Documents used in Import Trade
- What is the Definition of Export?
- Stages of Export Involvement
- Procedures for Export Trade
- Documents used in Export Trade
- Standard Terms of Sale