MONDAY EXPORT CLASS

With

DR GODWIN OYEFESO (SUCCESSEDGE EXPORTERS NETWORK)

Topic: NEGOTIATIONS DOCUMENTS WITH BANKS (Part 2)

 

  PRECAUTIONS IN SCRUTINY OF DOCUMENTS

The following are the important precautions to be taken by the exporter to ensure that the documents do not have any discrepancy.

1.  Bill of Exchange

The bill of exchange should be

• Drawn on the  party/bank  as  stated  in  the  letter  of  credit
• Drawn in favour of the negotiating bank
• Drawn for a period not exceeding six months from the date of shipment when it is usance bill
• Drawn in sets as per the terms of L/C, marked first and second bill of exchange for the net amount of the invoice

2.     Invoice

• It should be  prepared  on  the  standard  invoice  form  and  properly
• Description of the goods in the invoice should strictly conform to the description of goods in L/C.
• It should be certified by the authority as required in L/C.
• Value of the invoice should not be more than the amount available on the letter of
• Currency of the invoice should be as per L/C.

3.    Bill of Lading

• It should be presented in full set, with as many negotiable and non-negotiable copies as mentioned in letter of
• Bill of lading should be marked “shipped on board” unless L/C permits received for shipment or combined transport
• It should not contain any adverse clauses as to the condition of goods or
• It should be issued in the name of the shipper and blank endorsed or made out to the order of the overseas bank, as per the terms of L/C.
• If bill of lading states that the goods are received for shipment and later stamped “ON BOARD”, the stamp should bear the date of shipment “ON BOARD” with the authorised signature of the
• Date of shipment  should  not  be  later  than  the  date  specified  in  L/C.
• It should bear the name of the notifying party, if required in L/C.
• Additional condition such as “stored in refrigerated compartment” should be incorporated if it is requirement of the L/C.

4.  Airway Bill

The airway bill should indicate the following:

• Name of the  carrier
• Place and date of issuance
• Name of the  consignor  and  consignee
• Port of loading  and  destination
• Air way bill  should  not  be  claused  or  a  charter  party

5.  Certificate of Origin

• The Chamber of Commerce or other competent authority as required by L/C should issue
• It should state the country of origin details
• It should state  the  description  of  goods,  invoice  number  and  shipping  marks

 

  EXCHANGE CONTROL GUIDELINES

The following guidelines have to be followed while negotiating the documents by banks as well as exporters in drawing the documents.

(a)   Documents through Authorised dealer

All documents relating to exports have to be routed through the authorised dealer. The documents are allowed to be sent to the buyer, directly, only with  the  approval  of  RBI, provided advance payment has been received for full value of the consignment.

(b)   Realisation through Authorised dealer

Payment against exports should be realised through authorised  dealer  of  foreign exchange. Exporter is not allowed to  receive  the  payment  directly  from  the  buyer  in  the form of cheque, draft, currency, foreign currency  traveler  cheque,  unless  permitted  by  RBI and to the extent allowed.

(c)   Payment within six months

Usance bills should not be drawn for  more  than  six  months.  Exporter  should  obtain prior approval of RBI to extend credit for more than six months.

• Drawal of Invoice and bill of exchange: Invoice and Bill of Exchange should be drawn for the amount of shipment declared in GR/SDF/PP
• Change of Buyer: The exporter can change the In such  circumstances, fresh Bill of Exchange has to be drawn on the new buyer even for a reduced value of invoice.
• Presentation of Shipping Documents: Shipping documents should be presented to the banker for negotiation within 21 days from the date of shipment. If the documents are presented with delay, exporter has to produce necessary documentary evidence as proof for If the evidence is satisfactory, then only bank negotiates the documents.

(d)   Export of jewellery

In case of export of jewellery, GR form is to be countersigned, in advance, by the authorised dealer. In such a case, documents are to be negotiated within five days from the date of countersignature.

 

TO BE CONTINUED……

If you have questions on today’s class send them on whatsapp to +2348037163281 for answers to such questions.

Till then, you will succeed