The general procedures for export trade involve the following stages:
Procedures for export trade
1. Receipt of an inquiry
The first stage in the export trade is the receipt of an inquiry by the exporter forms an importer or his agent. An inquiry is a written request by a prospective importer regarding the quantity, quality, design, price, mode of payment, etc., of goods, which he intends to purchase.
2. Sending quotation
In reply to the inquiry, the exporter sends a quotation (or Proforma invoice) in which all necessary details are given as required by the importer. The type of price quotation depends upon the inquiry of the importer.
3. Receipt of an indent (or order)
In case the importer is satisfied with the quotation from the exporter, he will send an order (or indent) for the supply of goods. The exporter should carefully check indents that begin received from the importer, so that all necessary details of the goods, their packing, bank guarantee, payment, etc., are clearly mentioned.
4. Receipt of export license
Goods cannot be exported without an export license. It can be obtained from the Chief Controller of Exports & Importer by applying on a prescribed form. If the exporter satisfies all conditions for the issue of a license, it is given to him normally for a period of three months from the date of application.
5. Conducting an inquiry about credit
The exporter would like to know the creditworthiness of the importer before dispatching the goods. The exporter likes to ensure that there is no risk of non-payment. A bank reference may be considered to be sufficient in this regard.
6. Fulfillment of foreign exchange requirements
Under the Foreign Exchange Regulation Act (FERA), the exporter has to make a declaration that he will surrender the entire foreign exchange earned on account of exports to the Bangladesh Bank within 180 days of shipment. For this purpose, he has to fill in four G.R. forms.
7. Fixation of exchange rate
The rate at which the currency of one country is exchanged for the currency of another country is called the exchange rate. The exchange rate keeps on fluctuating. Generally, the importer fixed the exchange rate by booking it in advance at the time of placing an order.
8. Preparation for export
The following things are essential for preparing for export:
- Packing, marking and forwarding of goods to be exported.
- Pre-shipment inspection of goods and excise clearance.
- Appointments of the forwarding agent.
- Booking of shipping space, etc.
9. Completing customs formalities
The exporter has to observe certain customs formalities before dispatching the goods. He has to prepare and ship bills in triplicate and applications to export in duplicate. The shipping bill is a document showing the details with regard to:
- The name of the exporter,
- Description of goods,
- The name of the ship to carry the goods,
- The name of the importer, and
- The port of destination.
Procedures for Export Trade
10. Obtaining freight note and bill of lading
The shipping company prepares a freight note mentioning the amount of freight payable. On payment of freight charges, the exporter obtains a document called Bill of Lading.
The freight is paid by the exporter and it is mentioned in the bill of lading. When the importer agrees to pay the freight, the bill of lading is marked Freight Forward.
11. Insurance of goods
Goods exporter are exposed to several risks, called the perils of the sea. Therefore, exportable goods should be insured against these risks. The insurance policy is forwarded to the importer along with other documents.
12. Preparation of necessary documents
After receiving the Advice Note from the forwarding agent, the exporter prepares the following documents:
- Export invoice
- Consular invoice
- Certificate of origin
- Foreign bill of exchange
13. Securing payment from importers
The payment of the order depends on the mutual agreement between the exporter and the importer. The customary modes of payments are bank draft, bill of exchange, Documents against Acceptance Bill (D/A Bill), and Documents against payment Bill (D/P Bill).
14. Claiming incentives from the Government
An exporter is entitled to claim certain benefits, which have been offered by Government as incentives to promote exports. These benefits include:
- The drawback of import duty and excise duty.
- Cash compensation support.
- Import replenishment.
Hope you find all procedures for export trade, if you want to know more please fill free to comment below.
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