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PROJECT REPORT ON
EXPORT PROCEDURE & DOCUMENTATION
PREPARED BY
SHAIKH ARSHAD NAZIR HUSSAIN
SUBMITTED TO PUNE UNIVERSITY IN
PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF
PGDIEM
ACADEMIC YEAR
2013 - 2014
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DECLARATION
I Mr. SHAIKH ARSHAD NAZIR HUSSAIN , HEREBY DECLARE THAT I HAVE COMPLETED THIS PROJECT
ON EXPORT PROCEDURE AND DOCUMENTATION IN THE ACADEMIC YEAR 20122013. THE
INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.
DATE:
PLACE: (SIGNATURE OF THE STUDENT)
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CERTIFICATE
I HEREBY CERTIFY THAT Mr. SHAIKH ARSHAD NAZIR HUSSAIN OF SINHGAD INSTITUTE OF BUSINESS
ADMINISTRATION AND COMPUTER APPLICATION , HAS COMPLETED THE PROJECT ON EXPORT
PROCEDURE AND DOCUMENTATION IN THE ACADEMIC YEAR 2012 2013. THE INFORMATION
SUBMITTED IS TRUE, ORIGINAL AND AUTHENTIC TO THE BEST OF MY KNOWLEDGE.
SIGNATURE OF PRINCIPAL SIGNATURE OF PROJECT GUIDE
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ACKNOWLEDGEMENT
IT IS THE MATTER OF GREAT PLEASURE AND PRIVILEGE TO BE ABLE TO PRESENT THIS
PROJECT REPORT ON EXPORT PROCEDURE AND DOCUMENTATION.
THE COMPILATION OF THE PROJECT IS A MILESTONE IN THE LIFE OF THE MANAGEMENT
STUDENT AND ITS EXECUTION IS INEVITABLE WITH THE CO-OPERATION OF THE PROJECT GUIDE. I
WISH TO RECORD A DEEP SENSE OF RESPECT AND GRATITUDE TO MY PROJECT GUIDE, PROF.
MONA FOR HER ENCOURAGEMENT TO COURSE OF MY WORK. IT IS DUE TO THE ENDURING
EFFORT
I ACKNOWLEDGE MY INDEBTNESS TO VARIOUS AUTHORS FOR MAKING USE OF VALUABLE
INFORMATION LIBERALLY.
IT IS MY PROUD PRIVILEGE TO EXPRESS MY DEEP SENSE OF APPRECIATION AND
GRATITUDE TO MY PARENTS AND FRIENDS FOR THEIR SUPPORT AND CO-OPERATION IN THE
COURSE OF THE PROJECT EITHER DIRECTLY OR INDIRECTLY INVOLVED IN TIME WITH THEIR
VALUABLE CONTRIBUTION.
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CONTENTS
ABOUT COMPANY
Company origin
Introduction
Company profile
Vision & Mission
Board of directors
Milestones
Our customers
Awards/Recognition
Products overview
Units of AVTEC
OBJECTIVESMETHODOLOGY
INTRODUCTION OF TOPIC
STUDY OF THE TOPIC
Export documentation
Objectives of documentation
Essential documents
Import documentation
Custom procedure for import
BENIFITS OF THE STUDY
LIMITATIONS OF THE STUDY
RECOMMENDATIONS & CONCLUSION
REFERENCES
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COMPANY ORIGIN
AVTEC
One stop shop for powertrain
& precision engineered components
The story of evolution revolves around the wheel, the
single important invention that propelled mankind towards the
Bronze Age and beyond. The wheel itself did not evolve too
much since then there was no need for it to. However, it
became the pivotal point for most machines thereafter.
At AVTEC, we approach our business in the same way.While our core values have not changed, we apply them to our
innovations on a regular basis. And our challenge is to perfect
them in the shortest possible time. We move forward, never
resting, in search of the next best thing for our customer. This
has, in turn, made us the chosen supplier for the worlds best
automobile manufacturers.AVTEC, the largest independent manufacturer of power
trains and transmissions in India is a part of the C. K Birla
group. The group spans four continents and has a global
revenue of over USD $1.8 billion with interests in major
industrial segments including automobile, bearings,
powertrain for auto and off highway, paper, cement, buildingproducts, electrical products and information technology.
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INTRODUCTION
The C.K Birla Group was established by the late Mr.
Braj Mohan Birla, a great visionary. The group has a track
record of successful partnerships and collaborations with
global technology leaders.
The group has over the years promoted and established alarge number of industrial undertakings. We manufacture a
diverse range of products and employ a massive trained work
force. Backed by vast manufacturing experience, in-house
research and selective collaborations, the group has developed
a range of relevant and proven technologies that have been
applied in the implementation and management of industries
in four continents.
AVTEC is the largest independent manufacturer of
engines and transmissions, supplying critical auto components
to reputed global original equipment manufacturers including
GM, Ford, Mahindra & Mahindra, Caterpillar, BEML,
Hindustan Motors, Tata Motors, Daimler, AllisonTransmission, Eicher and export to F.G. Wilson (USA/UK.
We execute value engineering projects as well from our R&D
for all existing customer products to cut down the cost. We
are also in the business of sourcing of automotive components
mainly related to engine and transmission.
The group has a track record of successful partnershipsand collaborations with global technology leaders.
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In addition to this, we have world class facilities for
engine/transmission testing and validation. Our prestigious
clients like GMI and FIL rely on our dynamometers/test rigs
for their regular production and new development of engines
and transmissions. With our experience in managing the
homologation activities with the Indian certifying agencies,
we are able to support our customers for homologation
activities in India as well.
Finally, we have launched an engineering services
organization to serve our customers and to make a presence in
the global engineering design outsourcing market. Our team
of experienced engineers are ready to take-up assignments
with skill and confidence.
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VISION &MISSION
VISIONWe shall create a value proposition for our customers, shareholders, business partners and employees through becomingfirst choice supplier in Powertrain and Precision Engineeredproducts & services.
MISSIONWe aim to grow with profitability and continuously improveproduct quality and services through employee involvement,adoption of best-in-class manufacturing systems andprocesses. By forging mutually beneficial relationship with allstake holders we want to achieve
Customer confidence Benchmark level of Return on Investment Growth in revenue in line with our long term strategy
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BOARD OF DIRECTORS
Mr. Chandra Kant BirlaCHAIRMAN
Mr. Prabhakar Kadapa-- CEO&MANAGINGDIRECTOR
Mr. A. Sankaranarayanan
Mr. Naresh Chandra
Mr. Amal Ganguli
Mr. Haigreve Khaitan
Mr. J. M. Trivedi
Mr. Steven Enderby
Mr. Prabir Talati
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COMPANY PROFILE
Basic Information
Company Name: AVTEC Limited
Business Type: Manufacturer
Product/Service
(We Sell):
Auto Engines and Transmissions, AutoComponents, auto Gears, Shafts
Address: Pithampur Sector 3, Sagore , DistrictDhar
Number of
Employees: 501 - 1000 People
Ownership & Capital
YearEstablished: 1987
Legal
Representative/
Business Owner: Mr. Sudhir Rao
Trade & Market
Main Markets:
orth AmericaSouth AmericaWestern EuropeEastern EuropeEastern AsiaSoutheast AsiaMid East
AfricaOceania
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Total Annual
Sales Volume: US$50 Million - US$100 Million
Factory Information
No. of R&D
Staff: 21 - 30 People
Contract
Manufacturing: OEM Service Offered
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MILESTONES
1984
Power Unit Plant set up at Indore to manufacture Power
Units and Auto components
Technical Collaboration with Isuzu Motors, Japan
1985
The Power Products Division was formed at Hosur near
Banglore. This division entered into an agreement withAllison Transmission (Division of General motors
Corporation) to manufacture CL(B)T series of Hauling
Transmissions & CRT series of cycling Transmissions in
India
1988
PUP Indore started assembling Power Units
PPD Hosur tied up with Twin Disc Inc. Of USA to
manufacture T(R)T 2000 series of cycling transmissions
1994
PUP Indore received the coveted ISO 9001 Certification
1996
The first Transmission was exported from PPD Hosur
1997
PUP Indore implemented the concept of Manufacturing
Systems Engineering (MSE)
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2000
PUP Indore got the coveted ISO 14001 Certification
2003
PUP Indore got the TPM excellence award by JIPM
2006
PUP Indore entered into an agreement with Tata Motors
for manufacturing gear box components for their small
car project
2008
AVTEC Kharagpur plant established to focus on manual
transmission components for small cars and Planetary
Gears for heavy trucks
2009
Commercial Production for small cars started from
AVTEC Kharagpur plant
2010
Commercial Production for heavy vehicles started from
AVTEC Kharagpur
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OURCUSTOMERS
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AWARDS /RECOGNITION
AVTEC has now beencertified as a Q1 supplier,once again demonstratingthe high quality of itsproducts Ford ranks as oneof the worlds largestautomotive manufacturerswith locations in North
America (Ford), Europe(Ford, Volvo, Land Rover,Jaguar and Aston Martin)and Asia (Mazda). In orderto guarantee a uniformlyhigh production andquality standard throughoutthe world, Ford hasestablished its own qualitysystem that aims to ensurethat suppliers meet thesestandards. This system isknown asQ1.
Quality Policy / Processes
Disposal of Sewage and ETPDischarge through a SewageTreatment Plant (STP).Conversion of Kitchen andDining Hall Waste to usefulmanure through a Wormi-culture Process.
Pre-Treatment of IndustrialEffluents in ETP before dis-charging into a Sewage LineDisposal of Sewage and ETPDischarge through a SewageTreatment Plant.
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AVTEC has been awarded the Export House certificate by theOffice of the Joint Director General of Foreign Trade, Ministry OfCommerce & Industry, Government of India.
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PRODUCTS OVERVIEW
AVTEC manufactures Engines, Transmissions and
precision components for our customers in the segments givenbelow
Automotive Segment
Passenger Car Commercial Vehicles
Non Automotive Segment
Mining and Construction Equipment Material Handling Oil Field Applications Railways Wind Mill Genset Applications
COMPETENCIES
At AVTEC, we have developed the capacity and capabilityfor future growth and projects by adopting LeanManufacturing Concept. This allows us to maintain the best
manufacturing cost and keep our business competitive in theindustry. We offer the following key services to our customers
Design and development of powertrain assemblies Contract manufacturing of customer designed powertrain
systems Manufacturing and supply of critical and precision
engineered components
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To enable this AVTEC is equipped with
Excellent machining facilities for all critical castings andforgings
Superior gear manufacturing and inspection facilities thatensure quality
Heat treatment facilities Tool designing facilities to match specific job
requirements
Diesel Engines
We are engaged in manufacturing of diesel engines. Ourrange of diesel engines are manufactured from high qualitycomponents. These engines are widely used in automotiveindustries and various other industries. Our diesel enginesand portable diesel engines give better mileage.
Diesel Engine (2.0L) Diesel Engine (3.9L) Turbo Diesel Engine
(2.0L)
Engine Components
We offer a complete range of engine components like CoverRear, Housing Piston, drive gear, lay shaft, Shifter Sleeve,sliding cluth etc. Our range of diesel/petrol engine
components are made from highly quality materials. Theseengine components are highly demanded by our clients.
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Collar Countershaft Gear Cover Rear
Drive Gear Housing Piston Reverse Idler Gear
Petrol Engines
We design and provide an exclusive range of PetrolEngine/Diesel Engine in Cut Section. Widely used inautomobile and engineering industries. Our range of petrolengines are pass through the strict quality parameters andthus ensure complete satisfaction to our clients. We alsooffer these products at affordable prices in the market.
Petrol Engine (1.3L) Petrol Engine (1.6L) Petrol Engine (1.8L)
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UNITS OF AVTEC
POWER UNIT PLANT-
PITHAMPUR
AVTEC PUP-Pithampur plants business is categorizedinto two streams consisting of contract manufacturing andproprietary products.
The Power Unit Plant has state-of-the-art manufacturing
facilities which are intelligently designed and adhering tostringent Quality Management Systems. Our quest for higheroperational efficiency and best cost performance has madethis plant a specialized entity to produce various componentsincluding cylinder heads, cylinder blocks, crankshafts,connecting rods for engines and gears, sleeves, shafts andtransmission cases, apart from dedicated product specific
assembly live.
In its aim of maintaining stringent quality standards, AVTECmaintains
Dedicated facilities for each customer Product validation facilities
NABL accredited laboratories Capabilities for Product Engineering
POWER PRODUCT DIVISIONHOSUR
The Power Products Division in Hosur manufactures
off-highway hauling transmissions (both automatic and power
shift), in technical collaboration with Allison Transmission
Inc and cycling transmissions for off-highway, material
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handling and locomotive segments which are designed in-
house.
It also manufactures, on a contract basis, transmission forglobal automobile manufacturers and can contract
manufacturers for off-highway major aswell.
UNIT PLANT
KHARAGPUR
AVTEC Kharagpur plant was established in 2008 to
focus on Manual Transmission Components for small cars and
Planetary Gears for heavy trucks.
The Kharagpur plant offers manufacturing facilities for a
wide range of transmission components required for small
cars to heavy trucks. It features state-of-the-art machines such
as Gleason Gear Grinding, ECM Vacuum Carburizing,Cinamatic Laser Welding, etc. to cater to customer
requirement and to achieve the best quality in its class.
UNIT PLANT
MEPZ CHENNAI
The Plant in the Madras Export Processing Zone (MEPZ)was commissioned with a view to export transmissions and
Components. The first transmission was exported from this
unit in August 2006. The facility has since then expanded
with state-of-the-art machinery to machine Castings and
Forgings for meeting global customers requirements.
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OBJECTIVES
Training is must in any professional course as student along
with theoretical knowledge get aware of its practical
application alsoThe objective is :
1.To understand about International Business procedure.
2.To understand Trade procedure.
3.To understand documentation in foreign trade.
4.To make Controlling and Repeatable processes.
5.To identify relevant document for each activity.
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METHODOLOGY
ANALYSIS OF WORKING PROCEDURE OF
INTERNATIONAL BUSINESS in AVTEC
It includes:
1.Searching of exporters and importers with the help of
Tele calling.
2.Analyze the exporter/importer Profile .It can be fake or
not.
3.To manage all requirements of according to sale contract.
4.Submission of Export / import document in Banking.
5.For Import, Applying for Letter of credit.
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INTRODUCTION OF THE TOPIC
Documentation is a general term for a multiplicity of
documents in a chosen mix of media and with a certaincollection. Purpose of documentation is the use to support atool or a process.
Classical documentation is a set of documents printed onpaper. Documentation (to document) also refers to the processof providing evidence.
Documentation may include
written information for any read, projection or technicalperforming,
data media of any format and for any reproduction, other content.
Common types of documentation include user guides, white
papers, on-line help, quick-reference guides. It is lesscommon to see hard-copy (paper) documentation.Documentation is distributed via websites, software products,and other on-line applications.
Specializing documentation
Marketing Communications (MarCom) MarComwriters endeavor to convey the company's valueproposition through a variety of print, electronic, andsocial media. This area of corporate writing is oftenengaged in responding to proposals.
Technical Communication (TechCom) Technicalwriters document a company's project or service.Technical publication include user guides, installationmanuals, and troubleshooting/repair/replace procedures.
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Legal Writing This type of documentation is oftenprepared by attorneys or paralegals who could be inprivate practice or retained as corporate council.
Compliance documentationThis type of documentationcodifies Standard Operating Procedures (SOPs), for anyregulatory compliance needs, as for safety approval,taxation, financing, technical approval, etc.
OBJECTIVES OF DOCUMENTATION:
(i) Reduce non-completion risk. Due to this risk,exporters want to keep title to the goods until they arepaid and importers want to wait to pay until they havethe goods.
(ii) Reduce foreign exchange risk.
(iii)All foreign trade involves a time lag, so thedocumentation can free up funds and help in thefinancing.
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STUDY OF THE TOPIC
EXPORT DOCUMENTATION
Export documentation is a tedious but necessary process
that all exporters must pay close attention to, as
documentation requirements vary considerably by country,
commodity, and situation. Although exporters must fill out
and submit many different forms for each international
shipment, most require similar data elements and can (and
should!) be duplicated precisely from one document to the
next. Fortunately, there are software products that capture the
primary details of the shipment and insert them into the
necessary documents without flaw. This Fast Fact will
describe many of the documents your business will need in
order to export successfully.
Export documents could be classified into two categoriesdepending upon the specific requirements satisfied by them:(1) Regulatory and (2) Operational.
(1) Regulatory Requirements:
An exporter has to follow strictly the regulation of boththe exporting country as well as that of the importing country.For example, there is exchange control in India. Thereforewhen we export goods, we have to give an undertaking to theRBI that we shall realize the foreign exchange in lieu of thegoods exported. We do this by submitting GR form, and it isobvious that we cannot export unless we submit this
document. Then there are certain commodities which aresubject to export regulation. We have to obtain a licence for
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exporting the controlled commodities. Thus, anotherdocument has necessarily to be used. In order to build up animage of Indian goods abroad there is a system of compulsory
pre-shipment inspection and quality control of a number ofexport goods. The exporter has to obtain an inspectioncertificate. This gives rise to still another document. There area number of importing countries which stipulate that theexporter must submit certain specified documents dulycertified by their missions in the exporting country. Thiscondition makes it essential the use of the consular invoice
and in some cases the use of the legalized invoice. There arecountries specially the Commonwealth countries and alsothose developed countries which have offered concessions tothe developing countries under the Generalized System ofPreferences which demand that the exporters must submit acertificate of origin. Thus, the exporter has to submit GRform, export licence inspection certificate, consular invoice,legalized invoice and certificate of origin. These are examplesof regulatory documents.
(2) Operational Requirements:
The customs authorities are charged with theresponsibility of verifying compliance on the part of theexporters with all types of regulations in force in the country.
For their own record purposes, they have devised the Shippingbill. No shipping company or airline will accept any exportcargo unless the customs authorities have granted theirpermission on the shipping bill. Along with the shipping bill,commercial invoices and packing lists are also to besubmitted.
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Essential Documents
The invoice and bill of lading are the two documents
required for every export shipment. As such, you shouldensure that all other documents associated with the shipmentmatch the information on these documents.
(a) Invoices :An invoice orbill is a commercial documentissued by a seller to the buyer, indicating the products,quantities, and agreed prices for products orservices the seller
has provided the buyer. An invoice indicates the buyer mustpay the seller, according to thepayment terms. The buyer hasa maximum amount of days to pay for these goods and issometimes offered a discount if paid before the due date.
TYPES OF INVOICE:-
(i) Pro-forma Invoice: A pro-forma invoice is an invoicesent to the buyer before the shipment, giving the buyer achance to review the sale terms (quantity of goods, value,specifications) and get an import license, if required in theircountry. It also allows the buyer to work with their bank toarrange any financial process for payment. For example, toopen a Documentary Credit (Letter of Credit), the buyersbank will use the pro-forma invoice as a source of
information. The exporter/seller should not send theircustomer a pro-forma invoice unless they fully understandwhat they are offering to the buyer. If no changes are requiredon the pro-forma invoice after the buyer reviews it, theexporter can simply change its date and title and turn it into acommercial invoice.
(ii) Commercial Invoice:A commercial invoice is preparedby the seller/exporter and addressed to the buyer/importer,
and is one of the first documents prepared when a transaction
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has been agreed upon. The invoice identifies the buyer andseller, describes the goods sold and all terms of sale, includingIncoTerms, payment terms, relevant bank information,
shipping details, etc. An invoice may be itemized to show costof goods, freight, and insurance, or other special handling.The invoice may be numbered and have multiple purchase
order numbers. U.S. Customs does not actually need a copyof the invoice, unless requested, but the information includedis used to prepare other documents.
(iii) Consular invoice:A consular invoice is the commercialinvoice stamped or notarized by the consulate or embassy ofyour customers country, if required. For example, if you areexporting to Egypt and your buyer requires a consular invoice,the Egyptian embassy in Washington, D.C. will do this for asmall fee. Usually a freight forwarder will offer this service,but an exporter can send the original invoice to the consulate,have it notarized/legalized as required, pay the fee, and have
the documents returned or forwarded on. It is important tounderstand that consular invoices are required in the buyers
country, so you need to add the time/costs associated withobtaining one to the price of the goods you are shipping.
(b) Material Handling
(i) Packing List: A packing list is prepared by the shipperand is a detailed break down of the items within a shipment. Itmay also include any special marks for identification. Forexample, the customer may want ABC XX in blue letters on
the side of the packaging. For insurance claims and trackingpurposes, it helps to describe what is in each package. The
packing list should also reference the customers purchase
order number and destination. Often, a packing list is taped topalletized cargo or on the main carton/box of a shipment sothat the importers customs agency or any transportation
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handlers can have easy access to it to know what the goodsare and their destination. The quantity and items listed on thecommercial invoice must match with the packing list, but not
necessarily match the pro-forma invoice. Some companiesprepare a packing list that is identical to the commercialinvoice, minus the prices and other monetary details.
(ii) Dock (or Warehouse) Receipt: The dock or warehousereceipt is issued by a warehouse supervisor or port officer andcertifies that the goods have been received by the shippingcompany. This document is used to transfer accountabilitywhen goods are moved by the domestic carrier to the port ofembarkation and left with the international carrier. At thistime, the carriers Bill of Lading is also signed by both parties
and copies are issued accordingly.
(c) Bills of Lading (B/L) : A Bill of Lading is issued bythe carrier to the shipper for receipt of the goods, and is a
contract between the owner of the goods and the carrier todeliver the goods. Sometimes the B/L acts as title to the goodsso an Original B/L is issued- usually a set of three. Whoeverpresents one of those Original, Negotiable B/L can takepossession of the goods. A B/L can be either negotiable ornon-negotiable.
TYPES OF BILLS OF LADING :-
(i) Non-negotiable (or straight) B/L: Indicates that theshipper will deliver the goods to the buyer and that title of thegoods has not beentransferred to the shipper (i.e., the buyer orseller owns the goods while they are being shipped). Thistype of B/L is often used when payment for the goods has
already been made in advance.
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(ii) Negotiable (or shippers order ) B/L: Serves as atitle document to the goods, issued to the order of a party,usually the shipper, whose endorsement is required to effect
its negotiation. It can also be issued to the order of thebuyers bank as part of a documentary credit/letter of creditstipulation so that when the buyers bank receives the Original
B/L, they can endorse it over to the buyer at the time ofpayment for the buyer to clear the goods at customs.Sometimes the negotiable B/L may be consigned To Order
without reference to a company. A negotiable B/L can be
bought or traded while the goods are in transit, whereas aStraight B/L is non-negotiable and is consigned to thebuyer.
The B/L is frequently electronically manifested by theshipping line company using the data sent by the shipper or itsagent. Bills of Lading also include a notify party (usuallythe buyer or their agent) so that when the vessel arrives at theport of destination, the carrier can notify the party that thegoods are available, are in need of customs clearing, or areready for pick up. Usually the importer can pick up the goodsafter customs clearance and duties are paid. Freight Collect
means the consignee pays the freight charges as well. FreightPrepaid means the shipper pays the freight charges, but not
customs clearance unless the terms are delivered duty paid.
If payment is due to the exporter before the importer receives
the goods, advance charges can be added to the bill so theimporter pays for the goods along with the other charges. Twochecks should be received so the carrier can forward onecheck to the exporter for the cost of goods.
(iii) Inland Bill of Lading:Issued by the trucking companyand/or the railroad line for taking the goods from the
exporters facility to the port of embarkation or consolidationfacility.
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(iv) Ocean Bill of Lading (OBL): The Ocean B/L is aninvoice, and may be issued as a clean bill of lading,meaning the carrier certifies that the goods have been received
without visible damage. An On-Board B/L may be issuedwhen the goods are received into the carriers port facility,
basically confirming the cargo will be sailing.
(v) Air Way Bill (AWB):The Air Way Bill is a form of billof lading used for the air transport of goods. AWBs are non-
negotiable, mainly because of the short amount of time thatthe goods are in transit. The original AWB is rarely needed by
the importer at the other end of the shipment to prove
ownership of goods. A house airway bill is issued by a
freight forwarder on behalf of the actual carrier, which is the
case when a freight forwarder has a contract rate with an air
cargo service to expedite the documentation.
(d) Letters of Credit (L/C): A letter of credit is a document
issued by a bank committing to pay the seller/exporter a stated
amount of money on behalf of the buyer/importer as long as
the specific terms and conditions are met. Of all shipping
documents, errors or making changes to the L/C are the most
costly and time consuming because of the risk of payment inerror.
TYPES OF LETTER OF CREDIT:-
(i) Irrevocable :An irrevocable letter of credit can neither beamended nor cancelled without the agreement of all parties tothe credit. All letters of credit are deemed to be irrevocable
unless otherwise stated. Here, the importer's bank gives a
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binding undertaking to the supplier provided all the terms andconditions of the credit are fulfilled.
(ii) Unconfirmed : The advising bank forwards anunconfirmed letter of credit directly to the exporter withoutadding its own undertaking to make payment or acceptresponsibility for payment at a future date, but confirming itsauthenticity.
(iii) Confirmed :A confirmed letter of credit is one in whichthe advising bank, on the instructions of the issuing bank, hasadded a confirmation that payment will be made as long ascompliant documents are presented. This commitment holdseven if the issuing bank or the buyer fails to make payment.The added security to the exporter of confirmation needs to beconsidered in the context of the standing of the issuing bankand the current political and economic state of the importer'scountry. A bank will make an additional charge for
confirming a letter of credit. In many cases, the confirmingbank is located in Beneficiarys country.
Confirmation costs will vary according to the countryinvolved, but for many countries considered a high risk willbe between 2%-8%. There also may be countries issuingletters of credit, which banks do not wish to confirm - theymay already have enough exposure in that market or not wish
to expose themselves to that particular risk at all.
(iv)Standby Letters of Credit :A standby letter of credit isused as support where an alternative, less secure, method ofpayment has been agreed. They are also used in the UnitedStates of America in place of bank guarantees. Should theexporter fail to receive payment from the importer he may
claim under the standby letter of credit. Certain documents arelikely to be required to obtain payment including: the standbyletter of credit itself; a sight draft for the amount due; a copy
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of the unpaid invoice; proof of dispatch and a signeddeclaration from the beneficiary stating that payment has notbeen received by the due date and therefore reimbursement is
claimed by letter of credit. The International Chamber ofCommerce publishes rules for operating standby letters ofcredit - ISP98 International Standby Practices.
(v) Revolving Letter of Credit :The revolving credit is usedfor regular shipments of the same commodity to the sameimporter. It can revolve in relation to time or value. If the
credit is time revolving once utilised it is re-instated forfurther regular shipments until the credit is fully drawn. If thecredit revolves in relation to value once utilised and paid thevalue can be reinstated for further drawings. The credit muststate that it is a revolving letter of credit and it may revolveeither automatically or subject to certain provisions.Revolving letters of credit are useful to avoid the need forrepetitious arrangements for opening or amending letters ofcredit.
(vi) Transferable Letter of Credit :A transferable letter ofcredit is one in which the exporter has the right to request thepaying, or negotiating bank to make either part, or all, of thecredit value available to one or more third parties. This type ofcredit is useful for those acting as middlemen especially
where there is a need to finance purchases from third partysuppliers.
(vii) Back-to-Back Letter of Credit :A back-to-back letterof credit can be used as an alternative to the transferable letterof credit. Rather than transferring the original letter of creditto the supplier, once the letter of credit is received by the
exporter from the opening bank, that letter of credit is used assecurity to establish a second letter of credit drawn on the
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exporter in favour of his importer. Many banks are reluctantto issue back-to-back letters of credit due to the level of risk towhich they are exposed, whereas a transferable credit will not
expose them to higher risk than under the original credit.
Certificates
(i) Certificate of Origin (C/O):A document prepared by theoriginal manufacturer and certified by a quasi-official
authority - such as a Chamber of Commerce - stating the
items country of origin. Most countries that require a C/O
will accept a generic C/O as long as all of the required data
elements are given. However, some countries, like Israel, have
a special green C/O form that must be used. To take
advantage of duty free provisions in a U.S. Free Trade
Agreement, be sure to use the particular C/O that addresses
the rules of origin criteria for each country.
(ii) Certificate of Insurance: This document indicates thetype and amount of insurance in force on a particularshipment for loss or damage while in transit. It is sometimesreferred to as Marine insurance, but may cover the entirevoyage.
(iii) Certificate of Inspection:Some customers will requirea pre-shipment inspection to satisfy their own requirementsor local regulations, according to an industry, government, orcarrier specification. Neutral organizations specialize in thesetypes of certifications, whereby an inspector checks the goodsin question prior to shipment. Sometimes an inspector canlook at a sample, but other times inspection must occur when
the goods are packaged to issue a certificate.
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(iv) Certificate of Free Sale: This form may be required bythe importing country to ensure that the goods offered forentry comply with domestic requirements for sale in the U.S.
It is often required for agricultural, medicinal, or cosmeticproducts and can be issued by the VEDP or U.S. FDA.
(v) Certificate of Authentication (Apostille): An originaldocument that has been notarized may requireauthentication by the Secretary of the Commonwealth. An
Apostille certificate will be issued according to the country(language) of destination, confirming the status of the notarywho has witnessed the original document.
(vi) Phytosanitary Certificate: Primarily a documentrequired to import goods into the U.S., confirming compliancewith phytosanitary safety regarding agricultural and animalhealth standards.
Special Documents
(i) Declaration of Dangerous Goods (DGD): A DGDdeclares the nature, quantity, and quantity of hazardousmaterials and reports the proper classification for each item.
(ii) ATA Carnet: A Carnet, sometimes referred to as amerchandise passport, is used for shipping goods tocountries on a temporary, duty-free basis only. For a fee, thispassport allows a company to ship needed materials to foreigntrade shows or conduct repairs overseas. Within a year, thematerials must return to the U.S. in order to avoid a hefty fine.
(iii) Mate Receipt: A mate receipt is a receipt issued by the
commanding office of the ship when the cargo is loaded onthe ship, and contains information about the name of the
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vessel, berth, date of shipment, description of packages, marks
and number, condition of the cargo at the time of receipt on
board the ship etc.
(iv) Challan: A challan is a document handed to the
transporter carrying the goods to the port of dispatch along
with one copy of invoice in order to give a proof that the good
carrying is for export purpose and valid. It contains all detail
of goods and consignee etc.
Export documentation advise the federal agencies thatoversee it, should include:
_ Correct valuation_ Correct classification_ Accurate of written statements and affirmations_ Verified license requirements
_ Correct SED information_ Accurate reporting of of Denied Party status_ Legitimate claim of export readiness
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IMPORT DOCUMENTATION
An essential feature of all import sales transactions is
import documentation. There are various categories ofdocuments required in international trade transactions. This
section lists the basic documentation required for an import
shipment. Not all the documents listed below are required for
every import transaction; many of them are applicable to
specific products or circumstances.
Instruction Documents
(i)Forwarder's instruction: Most freight forwarders havea printed forwarder's instruction form, but the requiredinformation may also be printed on the exporters companyletterhead. Information required includes instructions forbooking of cargo, information for completing transport
documents, description of goods as per the letter of credit etc.
(ii) Shipping instruction: Where a shipping company has acomputerised bill of lading system, it provides pre-printedshipping instruction forms which must be completed by theexporter/freight forwarder. The bill of lading is drawn up fromthe information provided on this form. If the exporter/freightforwarder prepares the bill of lading independently, then ashipping instruction must be attached. However, manyindependent shipping lines do not insist on the shippinginstruction document.
(iii) Bank instruction: When the exporter is selling on thebasis of a letter of credit, the instructions stipulated in theletter of credit must be followed. However, if selling on the
basis of sight or usance draft under documentary collection,bank instructions must be generated to secure payment for the
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goods. Information supplied would include description ofcargo, name of vessel, date of shipment etc; a detailed list ofall documents submitted; payment method etc.
Transport Documents
(i)Air waybill: This transport document serves as:
documentary evidence of the conclusion of a contract ofcarriage
proof of receipt of the goods for shipment
an invoice for the freight a certificate of insurance guide to airline staff for the handling, dispatch and
delivery of the consignment.
The document consists of three originals and nine copies
and is only issued in a non-negotiable form. The first original
is intended for the carrier and is signed by the shipper; the
second original, the consignee's copy, is signed by the shipper
and accompanies the goods; the third original is signed by the
carrier and is handed to the shipper as a receipt for the goods
after they have been accepted for carriage. The copies are
dispatched by the airline authorities as required to on-carriers,
airport authorities, etc or they serve as delivery receipts,
invoices etc. The standard IATA air waybill applies to the
carriage of goods over any distance and by as many airlines as
are required to convey the goods to their final destination.
(ii) Road waybill :There is no standard transport documentfor road haulage. Road hauliers usually design their ownwaybills which serve as evidence of a contract of carriage and
as receipts for consignment of goods.
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Payment Documents
(i) Commercial invoice (c/i): This should be virtually thesame as the pro-forma invoice and should contain all the finaland accurate details relating to a particular order. The importlicence number and the l/c number should all be stated on thecommercial invoice. Also the price and the delivery termshould be consistent with the sales contract. The commercialinvoice need not be signed unless a signature is specificallycalled for in the l/c.
(ii) Certificate of origin (c/o): if it is a required document
(iii) Packing declaration: The packing list indicates thenumber of packs involved, the contents of each pack and theindividual weights, dimensions and HS numbers. This listenables the customer to check that the correct number of unitshas been received. Customs authorities can also easily identify
a specific pack they wish to inspect.Customs Procedure for Imports
All goods declared for consumption must be landed andentered within 7 days after the arrival of the importing ship orwithin such additional time as the Secretary for Customs mayallow. Failure to do so will result in them being conveyed to a
custom warehouse. If the goods are not properly entered andall duties and charges are not paid within 3 months after thegoods have been placed in a customs warehouse, they may besold at public auction.
Goods may be stored in bond, without payment of duties,in any bonded warehouse or in an unbonded warehouseapproved by the Secretary for Customs. State warehouses are
also available.
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Irrespective of the mode of transport used whenimporting goods, the importer or his freight forwarder isrequired to present the following documents to the customs
authorities:
(i) Bill of entry: Goods may not be imported into SouthAfrica unless a bill of entry is submitted to and accepted bythe customs authorities. An original of the form, a DA500 isrequired by Customs.
(ii) Customs Worksheet:This is a customs document which
details rates of exchange and conversion of rates of theforeign currency amounts into South African Rands.
(iii) Commercial invoice:The commercial invoice must bepresented to customs with the bill of entry as well as relevanttransport documents to be stamped by customs. This enablescustoms to check the validity of the value of a consignment ofgoods as stated in the DA500.
(iv) Import permit (if necessary): This document isrequired for certain goods and commodities only in terms ofimport control regulations. If an import permit is required, theimport permits number and the expiry date should appear onthe DA500.
(v) Special import certificates or permits: Apart fromthose goods requiring an import permit, a number of productsare subject to inspection and/or to the issue of special permitsby certain authorities prior to the goods being imported.
(vi) Transport documents: i.e. the Bill of Lading (sea), theair waybill (air), the freight transit order (rail), and the road'waybill'.
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BENEFITS OF THE STUDY
As far as benefit of the project is concerned, the project
has fulfilled the desired need. The project has shown
documents which will really help AVTEC in export- import.
Some major befits of the project are:
Documented Processes
As now all the processes are properly documented, so thedepartment can have a fully standardized procedure of doing
the things. Now each employee knows there responsibility.
Time Saving
The main asset of todays era is time. How the company is
utilizing time of Human Resources, is a critical parameter.
Because of unstructured processes earlier there used to be a
lot of discrepancies. But now as mapped processes are there
so a number of errors are supposed to get prevented, which
will save time.
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LIMITATIONS OF THE STUDY
Some of the limitations of the study are as follows :
I nteraction with Process Owner/Participants
The one of the major hurdle in the project was interaction
with Process Owner/ Participants. Because all the mangers are
having packed schedule and even the presence of them is not
ensured.
Getting data
It was again a major problem. As there was not a single
repository for the data, so it was a tough job to collect relevant
data. It resulted in wastage of time as well.
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RECOMMENDATION AND CONCLUSION
An agile and changing business can succeed only if its
workforce is equally dynamic, flexible and knowledgeable. Itcalls for continuous learning environmenta workforce that is
given every opportunity to learn, grow and develop skills to
drive the Company towards achieving its business goals.
Various programs are imparted that constitutes latest
emerging technologies and management practices. At AVTEC
they mix and match intensive training with equal thrust on jobskills and behavioural development. Group therapies and
seminars are organized to encourage professional rapport and
keep employee morale running high.
At AVTEC learning is a continuous activity and their
associates have a overabundance of learning programs to
choose from. They have devised programs for all levels, be it
fresh graduates or senior Executives. The needs are addressed
as per the requirements of business and programs are designed
and developed such that they will make their employees
deliver value-for-money to their customers.
Participation in structured training programs & rotational
assignments are encouraged to help employees develop a
wider perspective and gain expertise in manifold functions.
The fully equipped Learning Centre is housed in a
gracious old-world structure, surrounded by leafy trees, lawns,
pathways and flower-beds. It also manages a well-stocked
library of management books and journals.
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REFERENCES
http://www.avtec.in www.exportvirginia.org
http://www.citeman.com/4112-role-of-export-documentation
http://www.outsourcing.org/
Wikipedia
http://www.mbendi.com/import/sa/import_documentation.htm
#Doc2
http://www.mbendi.com/import/sa/import_documentation.htm
#Doc1
Business magazines
http://dictionary.reference.com
http://www.avtec.in/http://www.avtec.in/http://www.exportvirginia.org/http://www.citeman.com/4112-role-of-export-documentationhttp://www.outsourcing.org/http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://dictionary.reference.com/http://dictionary.reference.com/http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc1http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.mbendi.com/import/sa/import_documentation.htm#Doc2http://www.outsourcing.org/http://www.citeman.com/4112-role-of-export-documentationhttp://www.exportvirginia.org/http://www.avtec.in/Top Related