Ogowelz

The Wholesale Trade, Economic Point of View and Enterprising Strictly.

Saturday, 16 June 2018

FOREIGN TRADE (Export)


      This consist either of export and import transactions. Foreign trade there by comprises all buying and selling of goods between two different countries or between a group countries and another group. Some commercial houses are concerned solely with import trade for example produce importers of butter, bacon, rubber wax or fresh and dried grains. Other houses are solely concerned  with export trade  for example exporters of  caterpillars, tractors .Others still  combine  both  these  divisions of trade , importing  raw materials  and exporting  articles  manufactured from those  materials.

                         DIFFICULTIES OF FOREIGN TRADE.
       There are certain difficulties associated with foreign trade that are not present in home trade. These difficulties are speculated as follows-


  1.      The fact that the goods must be transported overseas.
  2.      The shipping risks involved.
  3.      The necessity in certain cases for the employment of foreign   agents.
  4.      The differences of language, customs and law in the importing and exporting countries.
  5.    The complications introduced by the imposition in so many countries of tariffs, quotas and prohibitions.
  6.      The different currency systems involving the problems and hazards of foreign exchange.
  7.      The long  credit  that must  frequently  be allowed  to buyers and the consequent  locking  up of the exporter’s  capital  with the attendant  risk of bad debts.
In order, there is the need to explain some of the documents used in foreign export trade, which are as follows-

                                   BILL OF LADING.
          This can be considered into three economical point of view in foreign /Import trade. 

(A) It is a receipt  for the goods  and  an acknowledgement that they  have  been  put on board  the vessel  named in the  bill of lading. However the receipt is qualified. The packages  are referred to as  “said  to be marked  and numbered or  addressed as per margin  and the shipping company  declares  that it is unaccountable  for marks , numbers, weight, contents, description, quality, quantity, value, measure, gauge, brand and condition” Thus, though the shipping company is bound to deliver the packages  in the same states as they were received, the burden of proof  that they are not in the same state  is upon  the shipper.

(B) It is a contract between the ship owner and the shipper setting forth the terms on which the ship owner agrees to carry the goods.  The owner of a general ship I.e an unchartered ship is a common carrier and as such is an insurer of the goods he undertakes to carry. He is protected   from liability in many cases where goods are damaged or lost, both by statute law and by the terms of the bill of lading. A large  portion  of the printed  part  of a Bal  consists of the enumeration  of  conditions  and exceptions  which exempt  the ship owner  from liability  for loss or damage. It is because  of these  limitations  of liability  by statute  and by terms  of the bill of lading  that a shipper is bound  in order  to protect himself  fully to take out a policy  of marine insurance.

(C) A document of title of proof of the possession of the goods and a right to dispose them. The possession  of the goods  and the  goods  may be sold  and delivered  by the seller  transferring  for value  to the buyer  the document  of title. Several such documents  besides  the bill of lading  are used  in commerce  in connection  with foreign trade egg, dock warrant  and the ware house  keeper’s receipt. A bill of lading , then is a symbol of the goods  as long as  they at sea  and until  they have been  delivered  to some  person  who is entitled to have them. The person  entitled  to receive  the goods  is the person  who is in lawful possession  of the bill of lading and that person  to whom  the consignee  has transferred  the bill of lading  or to  that person ‘s transferee  for value. It will be seen  that a bill of lading  is of the nature  of a  negotiable  instrument like cherub  because  no one  can by  the transfer   of a bill of lading  give  the transferee  a better title  to the goods  represented by  it than  he has  himself. The consignee or transferee  of a bill of lading  can only  obtain  the goods  from a shipping  company  by producing  and surrendering  the bill of lading . But if  the bill  is lost , delivery  will be made , provided  the claimant  satisfies  the shipping  company  that  he is entitled  to receive  the goods  and indemnifies  the shipping company  against  loss  by giving  a bankers guarantee.
       Bills of lading are usually drawn in sets of three and while originals used to have to be stamped 6d each well this is no longer necessary. In addition  to the three  originals  normally  prepared , further  copies  may be  made  out  for  the shipping  company’s use. All the three copies signed by the company are returned to the shipper. The shipper sends  one original  with the invoice  and other relevant  documents to the consignee  by the same  vessel  that carries the goods  or by air  mail and a second  original  with duplicate  documents  attached  by the next  available  steamer or by air mail; so  that  the first set miscarry , the second set  may be available. The third original he keeps by him. Where  the services  of a bank  are employed  in connection  with an export  transaction, the shipper  drawing the bill  of  exchange  on the consignee  for the value of the shipment , the  shipping documents  to be delivered  to the consignee  against  his acceptance  or payment  of the bill of exchange, two  or  three copies  of the bill of lading , according to the  country of destination  each with the relevant  documents  attached  go to the bank. The bank  forwards  them  to their  correspondents  in the consignee’s town  with instructions  that  the  documents  are to  be released  to the consignee  only upon  his  acceptance or payment of the bill. When goods  are offered for shipment , obviously not in good  order  and condition , the bill of lading  given  to the shipper  is  known as a clause  bill  in order nomenclature  a foul bill that is the bill  gives  the details  of the state of goods .Such a bill  of lading  is not  easily  negotiated  and the shipping  company may  on request  and against a suitable  indemnity given  to the  company  e.g. a bankers,  guarantee , issue a clean bill of lading.


                                                      FORMS OF SHIPPING INVOICE.

CONSULAR INVOICE.
    This document is required by many foreign governments for the purpose of assessing the duty payable by the importer in the foreign country. The  forms  are obtained  from the consulate  of the foreign  country  and they must  be filled  in by the exporter  with complete  details  of the goods described  according  to the  import  list  of the foreign country and their value  and the truth  of the particulars  given   must  be sworn  before  the foreign Consul. Usually they are made out in triplicate, sometimes in quadruplicate, the foreign consul retaining two or three of the copies. The copy retained by the exporter is sent to the consignee with the other shipping documents. The fees charged by various consulates vary and are sometimes heavy. Consular invoices differ greatly in form, no two being alike. Sometimes they are in English language or in foreign language. A consular invoice does not supersede but is additional to the ordinary commercial invoice.

                    COMBINED CERTIFICATE OF VALUE AND ORIGIN.
This document is used  by the British  merchants  and manufacturers  in  connection  with shipments  to the dominions. The front  of the document  accommodates  the invoice  for the shipment  on the back  is a signed  declaration  of its value  and of  the  British origin of  the goods.

                                  CERTIFICATE OF ORIGIN.
       This is used  where the government  of one  country  has entered  into agreement  with  the government  of another  by the terms of which  under the  most  favored  nation  clause  the two  governments  permit the  importation  of each other’s goods  ate lower rate  of duty  than the full  scheduled rate. In order  to avail  themselves  of the  lower duty , the importers  of the two  countries  request  their sellers  to attach  to their invoices  a declaration  that  the goods  in question are wholly  or mainly  of the particular  exporting  country’s manufacture. Such declarations may be signed by a customs official or by the officials of a chamber of commerce. While  the customs  form  is still  in existence  the chamber  of commerce  form  is the only  one  that is  normally  encountered in present day shipping.
Mate’s receipt- Where goods are conveyed  to the carrying vessel  by lighter  and loaded  there from , the deliverer  receives  from the responsible  officer  of the ship  a document  termed  a mate’s receipt. This receipt is exchanged afterwards for the bill of lading.
Freight Note- This shipping company’s debit note giving details of the charge for freight. Where a shipping  agent  is employed , his charge  note  will include  besides  the  freight, details  of all other  shipping  charges  that the agent  has incurred  on behalf of the shipper.

                                               CHARTER-PARTY.
       Ships are also chartered  under this document , a ship may  to all  intents  and purposes  be leased  from its owners  so that  the  control  and possession of the ship are transferred  to the charterer and the masters and the crew  become  the charterer’s servants. This sort of charter is not a contract for carriage at all. In other cases. the charterer  requires  the whole  carrying  power  of the ship , the crew  and it’s navigation  remains  with the master employed  by the owners. Such a charter party may be for a certain definite voyage or for a definite time. A charter of the latter kind, which is a contract for carriage, provides inter alia that the charterer shall load a full and complete cargo or specifies the weight of the cargo to be loaded. This is reasonable since empty cargo space means a loss of freight to the owners. Furthermore it stipulates  that  the work of loading  and unloading  shall be accomplished  within  a certain  number  of running or  consecutive days termed  lay days.
The charterer is therefore  responsible  for seeing  that  the cargo  is brought  to the ship’s  side  In time  for the  loading  to be done within  the stipulated  period  and that  the  consignee  is ready  to receive  the cargo  at the port of discharge. It is further  usually  agreed  that a charterer  may  detain  the  vessel  for a stated number of days  beyond the stipulated  lay days  by paying the  owners  an agreed sum  per day  for these  extra days. This payment is called Demur rage. Even railways are paid demur rage for the retention of their wagons/coaches by their users. A charter party may carry goods for other shippers  in this case the bills of lading will be expressed  as being  subject  to the conditions  contained  in the charter party  but commonly  vessels  are chartered  to carry  cargoes  all of one kind  for example, cocoa, coal, timber e.t.c.

                                  CUSTOMS SPECIFICATIONS.
      Exporters of most types  of goods  must  within six days  of final  clearance  of the ship  carrying  their goods  send  to the customs house authorities  a document  known as  a customs specification containing  a specification  of exported goods  described  according to  the official import and export list, with quantities  and .F.O.B  value  and the  final  destination  of the goods. If the goods  shipped  are manufactured  or produced  in Nigeria or Ghana  a white form is used, if the  goods  of foreign  or colonial manufacture  or production  are shipped exports  and if these goods are not subject  to duty  on entering  this country  or if  dutiable ,the duties  have been paid , a pink form is used. There  are special forms  for exports  of coal , Arms and ammunition etc. These specifications are used for official  abstracts of foreign trade  complied  and published by the board of  trade. In case of dutiable goods  which involve  the  payment  of customs  duty  or excise duty  if the goods  are  used  for home  consumption, exporters  or their agents  enter  into bonds  for the due  observance  of the government  regulations.
            For these classes of goods, other specifications must be entered by the exporter, according to the particular kind of dutiable goods and the operation involved. Thus forms  there are forms  for the exportation of wet goods  and for dry goods  for  goods trans-shipped  for goods  exported  by parcel post  or by  air lines and for goods  removed  from one  bonded warehouse to another. The reason why warehouses  where dutiable  goods  are stored  are termed  Bonded warehouses  is because  the owners   enter  into monetary  bonds  of large  amount  that their  warehouses  shall  be conducted  with strict  regard  to the regulations. These warehouses are in fact under the joint control of the government and the proprietors. Similarly, transport firms engaged in transporting dutiable goods from one warehouse to another or from warehouse to the dock or vice versa are called Bonded Carmen and also enter into bonds for the proper performance of their duties.

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