The type and use of the most complete foreign trade documents in history
In the practice of international trade, documents are typically prepared and issued by exporters, commodity inspection agencies in the exporting country, and other relevant parties. Shipping companies and importers usually require these documents to be in English or bilingual (Chinese-English). Common foreign trade documents include:
1. **Contract (CONTRACT)**
A contract is a formal agreement between the buyer and seller. It can be issued by either party, with the seller issuing a Sales Confirmation and the buyer issuing a Purchase Confirmation. In addition to standard elements like the names of the parties, date and place of signing, product description, payment method, and breach liability, it may also contain specific terms based on the nature of the goods. Formal contracts often include detailed clauses, such as those related to letters of credit and force majeure. For bulk cargo prone to discrepancies during transport, such as minerals or agricultural products, the contract may include an "overloading and short-loading" clause, allowing for a 5% variation in quantity. While contracts are typically signed in duplicate, they are often treated less formally in practice, with faxes serving as memorandums. Commercial credit, advance payments, and letters of credit play a more significant role than the contract itself. Some countries even include clauses like “effective after the letter of credit is issued,†further reducing the contract’s binding power.
2. **Invoice (INVOICE)**
Also known as a commercial invoice, this document is issued by the exporter to detail the goods being shipped, including their names, quantities, unit prices, total value, and other relevant descriptions. The format is flexible, but essential elements must be included. Each invoice should have a unique number and issue date. If multiple copies are needed, they should be clearly marked as "ORIGINAL" or "COPY." At the end, the phrase "E.&O.E." (Errors and Omissions Excepted) is often added, indicating that corrections are allowed if errors occur.
3. **Proforma Invoice (PROFORMA INVOICE)**
Similar in format to a commercial invoice, a proforma invoice serves as a preliminary document used for quoting and confirming transactions. It is often used by customers who prefer to confirm the transaction through a formal invoice. Additional details such as delivery dates can be included in the remarks section. Proforma invoices are also required for pre-applications when import licenses or foreign currency usage is involved. They are commonly used in international express deliveries as part of the customs declaration process.
4. **Packing List (PACKING LIST)**
This document provides detailed information about the packaging of goods, such as product name, quantity, weight, volume, and other specifications. Unlike the invoice, it does not include the value of the goods. It is usually provided in multiple originals and copies.
5. **Bill of Lading (BILLOFLOADING)**
Issued by the shipping company, the bill of lading serves as proof of ownership and is used to claim goods at the destination. It contains essential details such as the consignor, consignee, destination, and description of the goods. There are different types, including Air Waybills (AWB) and Ocean Bills of Lading (B/L). Typically, three original copies are issued, and any one can be used to collect the goods. Once the goods are picked up, the remaining copies become invalid. To prevent loss, it is advisable to provide only one or two originals unless specified otherwise. The ocean bill of lading must also include the "ONBOARD DATE," which is crucial for determining the actual delivery date.
6. **Shipping Advice**
This is a notice sent to the consignee before or immediately after the ship departs. It includes key information such as the consignor, consignee, and shipment details.
7. **Insurance Policy (INSURANCE POLICY)**
To protect against potential damage during international transportation, traders often purchase insurance for high-value goods. Insurance policies are issued by underwriters and cover various risks, including basic and additional risks. Basic coverage includes Free from Particular Average (FPA), With Average (WPA), and All Risks (AR). Additional risks cover theft, moisture, leakage, and other external factors. The insurance amount is typically calculated as CIF value plus a 10% markup. For smaller shipments, a flat fee is often applied instead of detailed calculations.
8. **Inspection Certificates**
These include quality, weight, health, and other certificates issued by official or third-party inspection agencies. Exporters must register with the Commodity Inspection Bureau and submit samples for testing. Certificates are necessary for compliance with national regulations or customer requirements. Third-party inspectors like SGS are also widely used, especially in regions where local inspection capacity is limited.
9. **Certificate of Origin**
This document proves the origin of the goods and is essential for tariff classification. It includes the General Certificate of Origin (GCO) and the GSP Form A. These documents are issued by the Commodity Inspection Bureau and help determine whether preferential tariffs apply.
10. **Beneficiary Statement (BENEFICIARY CERTIFICATION)**
This is a declaration issued by the exporter under a letter of credit. It confirms certain conditions or obligations that cannot be proven by official documents. The format is flexible, but it must include the words “WE HEREBY CERTIFICATE THAT...†followed by the required statement.
11. **Forwarder’s Certification**
Issued by the shipping company, this document confirms that the carrier meets specific customer requirements, such as vessel age or flag restrictions.
12. **Export Verification Forms**
These are used by the State Administration of Foreign Exchange to manage foreign exchange earnings. They are submitted along with export declarations and are later used for tax refunds after payment is received.
13. **Export Customs Declaration Form**
This form is submitted to customs for export clearance. Many exporters use freight forwarders to handle the process. After customs clearance, the form is stamped and returned for further processing.
14. **Letter of Credit**
A letter of credit is a financial instrument issued by the buyer’s bank, guaranteeing payment to the seller upon fulfillment of the terms. Once opened, the letter of credit is sent to the seller for confirmation and execution.
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