Export Procedures in a Country
In general, sense to send products to another country is export. But export means to sell the products to the different countries. Export is very important part of foreign trade. They are the goods and services produced in one country and purchased by citizens of another country.
To export the products to the foreign country, some rules-regulations, and formalities are to be followed. The exporters of a country have to obey these formalities. These are known as the procedures of export. The procedures of export trade are given below:
The first step of the export procedure is receiving the order. Here the exporters get the order to sell products to the importers. The order may be of two types: a) Open order, and b) Fixed order.
If the order given by the importer is suitable for the exporter, the exporter receives this order and sends the acceptance letter to the importer.
Advice to open letter of credit
Letter of credit is issued by the hank to ensure the exporter to give the many on behalf of the importer. After receiving the order, exporter advises the importer to open the letter of credit (L/C) to avoid the probable problems in the future payment. Then importer opens the letter of credit and sends it to the exporter.
Procurement of Govt. Permission
After finishing the primary activities exporter must collect permission or license from the export-import controller office. If the products are included on the open list of export, no permission is essential.
Booking of exchange rate
An exchange rate often fluctuates. So in this stage, the exporters request the importers to fix the exchange rate. Importers fix the rate of exchange by the bank. As a result, the exporters reduce the risk of fluctuation of exchange rate.
Procurement of goods and packing
After receiving the permission of the government and letter of credit from the importers, the exporters collect the goods or produce the goods. Then to keep the quality and shipment exporters procure the goods and packing.
Contract of freight
The exporters make a contract with the authority of the shipping company to send the collected or produced goods. In this contract some important issue should be included; Name of the exporter, Name of the shipping company and the ship, The procedure of paying the rent, Date of starting of the departure, Conditions of the shipment, Ordinance of an accident of sea, Weight of the products, Late fees etc.
Ensuring of goods
After making the contract of freight the exporters insure the goods. To avoid the risk the exporters make the contract of insurance with the insurance company.
Processing of custom and export formalities
After those exporters have to do the formalities with the custom organization. At first, the exporters have to collect a letter from the collector of customs. Then the exporters submit all the necessary papers to the authority. These papers are Shipping Bill, Export Declaration etc.
Shipment of goods
After completing the customs clearance, the exporters have to manage all the process of shipment of goods. They have to collect mates receipt and bill of lading.
Preparation and sending of export documents
After completing all these formalities the exporters create the bill of exchange and attach other papers with it and send to the imported by hand. These papers are- Bill of lading, Marine Insurance policy, Export invoice, Certificate of origin etc.
After receiving the bill of exchange and other papers, the importers send the acceptance of documents to the exporters. Then ‘exporters receive money from the bank by discounting.
Closing of transaction
After receiving the products the importer examines those. If they become satisfied, they inform the exporters and by this letter, the export procedure is completed.
The above steps are followed accordingly to export products. So every step is important and needed to be fulfilled properly. By lapsing of one of the steps the export procedure may be lapsed and become void.