1Letter of Credit : a)It is a promise by a bank on behalf of the buyer (importer) to pay the seller (beneficiary/exporter) a specified sum

in the agreed currency, provided that the seller submits

the required documents by a predetermined deadline b)The Uniform Customs & Practice for Documentary Credits (UCP 600) is the official publication which is issued by the ICC . It is a body of rules
on the issuance and use of a letter of credit and applies to 175 countries (c)Many banks and lenders are subject to this regulation, which aims to standardize international trade, reduce the risks of
trading goods and services, and govern trade. LIST : Description of the goods he wants to buy from the seller ,Quantity of the goods Documentary requirements (bills of lading, commercial invoice,
packing list etc) Details of the consignee (generally the issuing bank) will be shown as the consignee and the buyer’s bank will have control of the cargo until such time they receive the money from
the buyer Details of who must be notified of the arrival of the shipment Latest date of shipment 2 PARTIES TO DOCUMENTARY CREDITS 1. Commercial Parties -There are two
commercial parties viz. Applicant and Beneficiary A. Applicant -The applicant is normally the buyer of the goods .i.e. the importer who request his bank to issue a letter of credit in favour of a
named beneficiary against tending of certain specified documents. The Role of Applicant a) Supply the bank with complete instruction.(To fill out standard application form) b) Issue instruction for
amendments if any c)Decide on discrepancies reported by the issuing bank to him. d)Arrange for fund at the payment time .B. Beneficiary -1)The beneficiary is normally the seller of goods who
receives payment under documentary credit if he has complied with terms and conditions thereof. 2)A credit issued in favour of the beneficiary to enable him or his agent to obtain payment once he
performed his part of contract and submitted stipulated documents showing compliance with the terms and conditions of letter of credit.3)In case of a transferable letter of credit, the credit is
transferred to another party,4)The original beneficiary is known as first beneficiary the person to whom the credit is transferred is known as the second beneficiary .2. Bankers -1)Issuing Bank
-The issuing bank or the opening bank is one which issue the credit, i.e. undertake, independent of the undertaking of the applicant, to make payment provided the term and conditions of the credit
have been complied with.2) Advising Bank-The advising bank advises the credit to the beneficiary thereby authenticating the genuineness of the credit 3) Confirming Bank : A confirming bank is
the one which adds its guarantee to the credit. It undertakes the responsibility of payments/negotiation/acceptance under the credit in addition to that of the issuing bank. 3TYPES OF
DOCUMENTARY CREDIT-1). Confirmed Documentary Credit a)A confirmed letter of credit is a letter of credit on which at least two banks namely the issuing bank and the
confirming bank are obliged to make payment. b) It directly creates the obligation of a financing agency doing business in the seller's financial market to a contract of sale. c) Confirmation at the
request of the Seller. 2. Unconfirmed Letter of Credit : Unconfirmed Letter of Credit. A letter of credit which has not been guaranteed or confirmed by any bank other than the bank that
opened it. b) The advising bank merely informs the beneficiary of the letter of credit terms and conditions. 4Letter Of Credit - Payment Structure :a)Sight Credit -In this the payment is
released to the beneficiary on presentation of the documents . b)Acceptance Credit-In this the beneficiary draws the Bill Of Exchange on issuing bank and allows some time for
acceptance .c)Deferred Credit-Is same as acceptance credit but there is no Bill Of Exchange .5TYPES OF LETTER OF CREDIT :a)A revocable letter of credit can be changed or cancelled
by the bank that issued it at any time and for any reason. It is uncommon b)An irrevocable letter of credit cannot be changed or cancelled unless everyone involved agrees. Irrevocable letters of
credit provide more security than revocable ones .c)An unconfirmed irrevocable letter of credit provides a commitment by the issuing bank to pay, accept, or negotiate a letter of credit. 6 Red
Clause LC:It is a specific type of letter of credit in which a buyer extends an unsecured loan to a seller 7.Revolving LC-Revolving Credit is Instead of arranging a new L/C for each separate
shipment, the buyer establishes a L/C that revolves either in value (a fixed amount is available which is replenished when exhausted) or in time (an amount is available in fixed installments over a
period such as week, month, or year). 8Transferable LC 9)Back – to – Back LC.(6) Bill Of Exchange: A Bill Of Exchange is an instrument in writing containing an unconditional order ,
signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person, or to the bearer of the instrument. 8Parties to A Bill Of Exchange :
Drawer, Acceptor\ Drawee \Payer ,Payee.).ADVANTAGES : 1)A definite date can be fixed through a BoE for receiving money from a debtor. 2)A BoE can be used as a written proof of a debt
3)A BoE is a sample & useful instrument for the settlement of accounts 4)A BoE is a useful tool in foreign trade.5)Businessmen can ease financial difficulties of one another by drawing
accommodation BoE on one another. 7DGFT :Directorate General of Foreign Trade is an attached office of the Department of Commerce, responsible for execution of the import and export Policies
of India.1)Functions and responsibilities of DGFT: a)It is the licensing authority for exporters, importers, and export and import business . b) It can prohibit, restrict and regulate exports and
imports.c)It grant 10 digit IEC (Importer Exporter Code), which is a primary requirement to Import Export. d)It has introduced ITC (HS CODE) schedule-1 for import items in India and Schedule-2 for
Export items from India. ITC (HS) codes are known as Indian Trade Classification (ITC) based on Harmonized System (HS) of Coding (9)ECGC Export Credit Guarantee Corporation of India Ltd.
( ECGC ) is a Government of India Enterprise which provides export credit insurance facilities to exporters in India. It functions under the administrative control of Ministry of Commerce & Industry.
a)Offers insurance protection to exporters against payment risks b)Provides guidance in export-related activities c)Makes available information on different countries with its own credit ratings
d)Makes it easy to obtain export finance from banks/financial institutions e)Assists exporters in recovering bad debts f)Provides information on credit-worthiness of overseas buyers .(10)IEC
Code: IEC Code is unique 10 digit code issued by DGFT – Director General of Foreign Trade , Ministry of Commerce, Government of India to Indian Companies.1)An applicant may now choose one
of the two options for application submission 2)File an online application and submit a physical copy of the application by taking a printout of the online application.3)Submit a physical copy of the
application directly at the regional DGFT office 4)Process of online application -i) Applicants can file an on-line application at the DGFT web-site http://dgft.gov.in. On-line form has been designed to
ensure feeding of all the required information by prompting user wherever a field is left blank. Applicant has to submit scanned copies of PAN and bank certificate along with their application. ii)
There are 2 options for payment of fee.(A)If fee is paid by Demand Draft, IEC will be generated only after receipt of the physical copy of the application.(B) If IEC application fee is paid through
Electronic Fund Transfer facility, IEC number will be generated by the licensing office automatically and the number can be viewed online by the applicant. iii) On the receipt of physical copy of the
application, the same IEC will be printed in 24 hours time and dispatched to the firm. 11.Principle Export Documents:1)Commercial invoice : It is a customs document. It is used as
a customs declaration provided by the person while exporting an item across international borders. .A commercial invoice must often include a statement certifying that the invoice is true, and a
signature. A commercial invoice is used tariffs, international commercial terms (like the Cost in a CIF) and is commonly used for customs purposes .2 Packing List :it is Itemized list of usually
included in each shipping package (Bottle, box, can, carton, cover, pouch, sack, wrap, etc.) giving the quantity, description, and weight of the contents . 3Certificate of inspection: When shipping
high-value products or when you are dealing with a very conscientious customer, an inspection certificate might be requested . 4.Shipment Advice : Once after shipping goods from seller’s place,
Seller need to send shipping details with complete details of carriers and expected time of arrival at buyer’s place. Shipping advice helps to track the goods as per details and importer can plan
import clearance procedures accordingly. 5Certificate of origin   is a document used in international trade. In a printed form or as an electronic document, it is completed by the exporter and
certified by a recognized issuing body, attesting that the goods in a particular export shipment have been produced, manufactured or processed in a particular country. 6 Insurance Certificate :A
document indicating the type and amount of insurance coverage in force on a particular shipment to cover loss of or damage to the cargo while in transit.7.Bill of Exchange: The payee may
change in the following situations .In case the drawer has got the bill discounted, the person who has discounted the bill will become the payee. 12Shipping Bill :A form used by Customs and
Excise before goods can be exported from the country or removed from a bonded warehouse.it is prepared by the exporter and it contains the name of the vessel ,name of the port of discharge,
country of final destination, exporter's name and address, details about packages, numbers, quantity and details about each case. Types of SHIPPING BILL:(1)Free shipping bill (2) Duitable
shipping bill (3)Draw back Shipping bill (4)Shipping bill for shipment ex board.12 . Mate Receipt: A document issued by the carrier to the shipper, indicating receipt of the goods, but not loading on
board. Like a Bill of Lading B/L, a mate´s receipt can be either clean or claused/dirt/foul, depending on whether or not the goods have been received in apparent good condition 13 A cart ticket is
also known as cart chit. This is prepared by the exporter, which contains the details of the - Vehicle number -Description of goods,-quantity.Name of the shipper.-Shipping bib number and port of
destination.-The driver of the vehicle carries the cart ticket. At the time of entry into Port the cart ticket is 'verified by the Port Authorities to satisfy that the vehicle is aiming only those goods which
are mentioned in the cart ticket 14Bill of entry : A bill of entry is a document which contain the particulars of the imported goods as well as the amount of customs duty payable.-A Bill of Entry is
normally filed by an importer or a Custom House Agent. It is filed to undergo necessary import customs clearance formalities to take the goods out customs.15 Certificate of measurement:
Freight can be charged either on the basis of weight or measurement. When it is charged on weight basis, the weight declared by exporter is accepted.(16) Methods of effecting payment in
international trade : The physical movement of goods which involves someone who undertakes to move the goods-A contract of carriage of goods with the party that undertakes to transport the
goods-Documents covering the transport of such goods.-The goods must be insured against any damage they may suffer during transit -A claim for payment –A bank undertaking the task of
collecting the money owed to the seller-A bank undertaking the task of getting the money from the buyer -Regulations within countries -Legal requirements within countries cargo is already on board
based on original cargo declaration) OOG Cargo information if any (remember cargo is already on board based on original OOG details declared including lost slots calculation. 6How to calculate
CBM and Freight Ton Firstly CBM stands for CuBic Meter.. This is the most common unit used for the measurement of volumetric cargo. Metric Tons as you know refers to the weight of cargo (1 Metric Ton = 1000 Kilograms)..
Freight Ton or Revenue Ton is derived by calculating the weight or volume of the cargo and the freight is charged based on whichever is higher.. When you have the dimensions of the package, first of all convert the measurement into
meters.. Normally dimensions are in Length x Width x Height.. If for example the dimensions of a cargo crate is 3.2 x 1.2 x 2.2 meters then the CBM is simply 3.2 x 1.2 x 2.2 = 8.448 CBM. As mentioned above, if the rate is quoted as for
example USD 12/per freight ton and the weight of the package is 1200 kgs = 1.2 tons, then the freight rate for this will be 8.448 cbm x USD.12 = USD 101.376 or 1.2 tons x USD.12 = USD.14.4 Since the CBM rate is higher, the freight rate of
USD.101.376 will apply.
1STAKEHOLDERS AND THEIR ROLES : 1 CUSTOMS Assessment and collection of customs duties on import and export cargoes as per Customs laws (Customs Act, 1962 and Customs Tariff Act, 1975); Enforcement of the
various provisions of the Customs Act governing imports and exports of cargo, baggage, postal articles and arrival and departure of vessels, air crafts 2.PORT TRUSTS Provide infrastructure facilities like berths, equipment, storage
space, navigational channels and road/rails network within the Port area. Perform vessel operations like berthing / un-berthing of vessels, Container/cargo handling operations like landing of containers/cargo from vessel, movement to
storage yard, stuffing/ de- stuffing of containers facilitating the process of examination through movement of containers to CFSs, delivery / aggregation of containers/cargo. 3.PORT HEALTH ORGANIZATION (PHO) The agency that is
responsible for the inspection of hygiene in the ship and amongst the crew, so as to control the spread of infectious diseases from incoming vessels and aircraft. 4.PLANT QUARANTINE ORGANIZATION To prevent the entry,
establishment and spread of exotic pests in India as per the provisions of The Destructive Insects & Pests Act, 1914 and the notifications issued there under. The authorized officer of the PQ department has to inspect timber and grains in
the ship hold before permitting discharge.5 IMMIGRATION AUTHORITIES The agency that is responsible for applying the immigration laws of the country and providing the needed documents for foreign crew and passengers to disembark
and embark.6.TERMINAL OPERATOR,7. VESSEL OPERATING AGENT (STEAMER AGENT/ MAIN LINE OPERATOR) The authorized representative in a specified territory acting on behalf of a steamship line or lines and attending to all
matters relating to the vessels owned by his principals. 7CONTAINER OPERATING AGENT (NVOCC/ VOCC ) They represent the container Lines and provide the steamer agent with details of the containers belonging to them in the vessel.
They also give the delivery order to the Clearing Agent/Importer for clearing the container.8. STEVEDORE A stevedore manages the operation of loading or unloading a ship. A stevedore owns gears and equipments used in the loading or
discharge operation and engages labour who actually load and discharge cargo under the direction of a stevedoring company .9.
IMPORTER / EXPORTER / CUSTOMS HOUSE AGENTS (CHA ) Importers /
exporters are the owners of the goods being imported/ exported. And they are mainly responsible for completion of customs and Port formalities either themselves or through a CHA. CHA is a person
engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operation. 2.Bill of lading refers to the transport document issued by a carrier
undertaking the carriage of goods from point a to point b to the merchant . FUNCTIONS OF B/L -1) Evidence of contract of carriage –the B/L is the evidence of the contract of carriage
entered into the carrier and the shipper or cargo owner in order to carry out the transportation of the cargo as per the sales contract between the buyer and the seller.2) Reciept of goods : Is
issued by the carrier or their agent to the shipper in exchange for the receipt of the cargo the insurance of the B/L is proff that the carrier has received the goods from the shipper or their agent in
apparent good order and condition as handed over by the shipper .Document of title of goods: It means the goods may be transferred to the holder of the B/L which then gives then holder of the B/L
the right to claim the goods or futher transfer it to someone else.TYPES OF B/L:1) Ocean B/L: Is issued by the carrier to their customer after of all charges and submission of all customs/port
document relevant to that country.2) SEA WAY BILL B/L : Is the quickest variation of B/L and is used in cases where the shipper has decieded in advance to release their hold on cargo
immediately.It is issued by the shipping line to their customer after the payment of all charges and submission of all customs/port document relevant to that country. 3)MEMO BILL B/L: Short for
memorandum bill of lading it is basically a non negotiable non transferable that is only used as a eceipt of goods and does not classify as a document of title. 4) Straight B/L-When a B/L is issued
in orginal to a named consignee it is referred to as a Straight bill of lading. 5)Original B/L –The shipment cannot be released to the consignee at destination as long as the shipper holds that original
B/L. 6) SWITCH B/L A Switch Bill of Lading is simply the second set of bill of lading that may be issued by the carrier “in exchange of” or “substituting” the first set of bill of lading. 3Where can a
bill of lading be switched and who can request shipping line to issue switch bill of lading..? A bill of lading may be switched anywhere around the world for shipments
from anywhere to anywhere.. For example in a shipment from New York to Antwerp, the bill of lading may be switched in London as long as the specific shipping line has offices in London.. Usually
a switch bill of lading happens in a location that may not be on the route of the cargo.4 Why do customers(Shippers) require a Switch bill of lading..?? When there has been a change
in the original trading conditions ; Goods have been resold (probably high-seas sale) and the discharge port has now changed to another port ; The seller (who could be an agent) does not wish
the name of the actual exporter to be known to the consignee in case the consignee tries to strike a deal with the exporter directly ; The seller does not want to know the buyer to know the actual
country of origin of the cargo.5 What can and cannot be changed in a Switch Bill of Lading..?? The only safe area that can be allowed to be changed in the switch bill of lading is the
shipper, consignee, notify information which is usually displayed in Part 1 of the bill of lading. The below details should never be allowed to be changed Place and date of shipment as changing this
could affect the terms of delivery based on the sales contract Details of cargo including the number of packages, dimensions, weight and measurement Hazardous cargo information if any
(remember cargo is already on board based on original hazardous cargo declaration) Reefer cargo information such as temperature setting, humidity settings etc (remember .7 Detention and
Demurrage Demurrage relates to cargo (while the cargo is in the container) Detention relates to equipment (while the container is empty after unpacking or before packing) Imports Exports.8
Marine Insurance :A contract of marine insurance is a contract whereby the insurer undertakes to indemnify(guarantee) the assured (insured), in manner and to the extent agreed, against marine
losses, that is to say (in other words), the losses incident (occurred ) to marine adventure 9Principles of Insurance : 1 Utmost Good FaithThe marine contract is based on utmost good
faith between on the part of two parties. Insured should give full information about the subject matter (object) to the insurer. He should not withhold any information. This
principle is based on the insured than on the underwriter. The party should act in good faith otherwise, the other party may cancel the contract Good faith - Let the buyer
beware .2Insurable interest -The insured should have an interest in the subject matter when it is to be insured which means insurable interest. In the case of ships: The owner of the ship or any
individual who has purchased the ship on a charter basis can insure the ship to its total value. In the case of cargo: The owner of the shipment can buy a marine cargo policy up to the full value of the
consignment. For an insured to be compensated by the insurer insurable interest should exist: At the time of proposing insurance Before the loss He should have reasonable expectation of acquiring
such insurable interest. He should get the compensation amount of the loss or damage of goods. The insured must get an insurable interest at the time of loss or damage otherwise, he will not be
able to claim compensation.3 Cause Proxima : The word is derived from Latin which means nearest or proximate cause. This principle helps to decide the actual cause of loss when number of
causes have contributed to the loss. To fix the responsibility of the insurer, the immediate cause should be determined. The remote cause of loss is not important in determining the
liability.4Indemnity : The principle indemnify means that the insured will be compensated only to the extent of loss suffered. There is an exception to the principle of indemnity in marine insurance.
Owing to difficulties in determining the actual value of the property at the time of loss, both of insured and insurer agree on the value of the property when the policy is first issued. At the time of
taking policy, the money value of the subject matter is decided.5Subrogation means substituting of one creditor(the person who lends money) for another. In insurance contracts, except personal
accident, health, and life, subrogation is applied to recover the loss from the errant party in marine insurance. When the loss is insured, and the insurer pays the amount of loss, the party receiving
the insurance benefit must forfeit the right to pursue the errant party. The purpose behind subrogation is that the insurer should not get more than the damages incurred to him. After paying for the
loss, the insurer has the right to be compensated from the third party liable to compensate the insured. 6 Contribution -The principle holding that two or more insurers each liable for a covered loss
should participate in the payment of that loss. Many insurance policies stipulate the formula under which contribution among multiple insurers will take place. Two standard methods are Contribution
by limits and Contribution by equal shares. In other words, the insurance law contribution clause describes as to how much the issuer(insurance Company) must pay if there is insurance in more
than one company on a given loss. Contribution clauses help to limit the liability of the insurers 10. PRE –SHIPMENT- Financial assistance extended to the exporter from the date of receipt of the
export order till the date of shipment is known as pre-shipment credit. Pre-shipment finance facilities offer liquidity to the exporter. Pre-shipment finance is generally provided for the Following
purposes :Procurement/purchase of raw material –Production, Processing, Packing ,Warehousing, Transportation. 11 METHOD OF PRE-SHIPMENT FINANCE -1)Cash packing credit loan :in this
type of credit the bank normally grant packing credit advances initially on unsecured basis .2.Advance against hypothecation : Packing credit is given to process the goods for export the advance
against security and security remains in the posseission of the exporter 3. Advance against Pledge :The bank provides packing credit against security ,The security remains in the possession of the
bank ,On collection of export proceeds, the bank makes, necessary entries in the packing credit account of the exporter.4.Advance Against Red L/C :The Red L/C received from the importer
authorizes the local bank to grant advances to exporter to meet working capital requirements relating to processing of goods for exports. The issuing bank stands as a guarantor for packing credit.5 .
Advance Against Back-To-Back L/C :The merchant exporter who is in possession of the original L/C may request his bankers to issue Back-To-Back L/C against the security of original L/C in favor of
the sub-supplier. The sub-supplier thus gets the Back- To-Back L/C on the basis of which he can obtain packing credit.6. Advance Against Exports Through Export Houses :Manufacturer, who
exports through export houses or other agencies can obtain packing credit, provided such manufacturer submits an undertaking from the export houses that they have not or will not avail of packing
credit against the same transaction.7. Advance Against Duty Draw Back (DBK) :DBK means refund of customs duties paid on the import of raw materials, components, parts and packing materials
used in the export production. It also includes a refund of central excise duties paid on indigenous materials.8. Special Pre-Shipment Finance Schemes: Exim-Bank’s scheme for grant for Foreign
Currency Pre-Shipment Credit (FCPC) to exporters. Packing credit for Deemed exports .12 POSTSHIPMENT -Once the exporter has shipped the goods, there will always be a time gap between the
date of shipment and receipt of payment. Post-shipment credit refers to the facilities extended by the banks to the exporter during this period to enable him to tide over his financial needs .Post
shipment finance is provided at concessional rates as per RBI guidelines. The proof of shipment of goods, serves as the basis of grant of such facility. 1. Export bills negotiated under L/C :The
exporter can claim post-shipment finance by drawing bills or drafts under L/C.2 Purchase (Securing) of export bills drawn under confirmed contracts: The banks may sanction advance against
purchase or discount of export bills drawn under confirmed contracts. If the L/C is not available as security, the bank is totally dependent upon the credit worthiness of the exporter.3. Advance
against bills under collection :In this case, the advance is granted against bills drawn under confirmed export order L/C and which are sent for collection. They are not purchased or discounted by the
bank. However, this form is not as popular as compared to advance purchase or discounting of bills.4. Advance against claims of Duty Drawback (DBK) 5.Advance against goods sent on
Consignment basis:The bank may grant post-shipment finance against goods sent on consignment (batch) basis.6.Advance against Undrawn Balance of Bills: There are cases where bills are not
drawn to the full invoice value of goods. Certain amount is undrawn balance which is due for payment after adjustments due to difference in rates, weight, quality etc. banks offer advance against
such undrawn balances subject to a maximum of 5% of the value of export and an undertaking is obtained to surrender balance proceeds to the bank. 6 Advance against Deemed Exports: Specified
sales or supplies in India are considered as exports and termed as “deemed exports”. It includes sales to foreign tourists during their stay in India and supplies made in India to IBRD/ IDA/ ADB aided
projects. Credit is offered for a maximum of 30 days .8.Advance against Retention Money: In respect of certain export capital goods and project exports, the importer retains a part of cost goods/
services towards guarantee of performance or completion of project. Banks advance against retention money, which is payable within one year from date of shipment.(90 days)9. Advance against
Deferred payments :In case of capital goods exports, the exporter receives the amount from the importer in installments spread over a period of time.
EXW means that the seller fulfills his obligation to deliver when he has made the goods available at his premises to the buyer. In particular, he is not responsible for loading the goods on the
vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. FCA means that the seller fulfills his obligation to deliver when he has handed over the goods, cleared
for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose within the place or range stipulated where
the carrier shall take the goods into his charge. FAS means that the seller fulfills his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the
named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. FOB means that the seller fulfills his obligation to deliver when he
places the goods on board at the port departure. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export
CFR means that the seller must pay the costs and freight necessary to bring the goods to the named port of destination but the risk of loss of or damage to the goods, as well as any additional
costs due to events occurring after the time the goods have been delivered on board the vessel is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment.
CIF means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the
vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination . CPT means that the seller pays the freight for the carriage of the
goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier is
transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. CIP means that the seller delivers the goods to the carrier or another person nominated by
the seller at an agreed place and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. DAT means that the seller delivers
when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. DAP means that the seller
delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. The seller bears all risks involved in bringing
the goods to the named place. DUTY DRAWBACK :To entitle goods to drawback, they must be exported to a foreign port, with the objective to enable the goods to be disposed of in the foreign
market as if they had never been taxed at all. For Customs purpose drawback means the refund of duty of customs and duty of central excise that are chargeable on imported and indigenous
materials used in the manufacture of exported goods a)Export goods imported into India as such;b) Export goods imported into India after having been taken for use c) Export goods manufactured /
produced out of imported material d) Export goods manufactured / produced out of indigenous material e) Export goods manufactured /produced out of imported or and indigenous materials
Types of Export Incentive Schemes & Benefits in India1.Advance Authorization Scheme -As part of this scheme, businesses are allowed to import input in the country without
having to pay duty payment, if this input is for the production of an export item. Moreover, the licensing authority has fixed the value of the additional export products to not below than 15%. The
scheme has the validity period of 12 months for imports and 18 months for carrying out the Export Obligation (EO) from the date of issue typically.2 Advance Authorization for Annual Requirement
-Exporters who have a previous export performance for at least two financial years can avail the Advance Authorization for Annual requirement scheme or more benefits.3 Export Duty Drawback for
Customs, Central Excise, and Service Tax -Under these schemes, the duty or tax paid for inputs against the exported products is refunded to the exporters. This refund is carried out in the form of
Duty Drawback. In case the duty drawback scheme is not mentioned in the export schedule, exporters can approach the tax authorities for getting a brand rate under the duty drawback
scheme.4Service Tax Rebate In the case of specified output services for export goods, the government provides rebates on service tax to exporter 5.Duty-Free Import Authorization -This is another
benefit the government has introduced by combining the DEEC (Advance License) and DFRC to help exporters get free imports on certain products . OPEN MARINE POLICY-As the name itself
says, an open marine insurance policy covers an indefinite number of inland movement of consignments. This insurance policy remains open until cancelled or the sum insured is exhausted,
whichever comes first. Under the open marine insurance policy, successive shipments are declared to the insurance company, and they automatically get covered under the open marine insurance
policy on or after the policy’s inception date.Usually, it is an annual cargo insurance policy which is issued for one sum insured to cover a number of dispatches. Here the policy covers a number of
dispatches until the sum insured is over. Also called, floating policy, the open policy helps in saving the policyholder from buying the individual insurance policy for each journey.The open insurance
policy may cover both the incoming and outgoing consignments to-and-fro India. To ensure you choose the correct sum insured, make sure that the coverage mentioned under the open marine
insurance policy is in accordance to the estimated annual turnover of goods. The open marine insurance policy offers coverage against various kinds of risks like sinking, fire, explosion, earthquake,
lightning, etc. Open policies are highly useful for the policyholder when he/she conducts a significant volume of similar transactions in a year. Such policies can be purchased by anyone who is
involved in the business of movement of goods, like import/export merchants, contractors, banks, buying agents, a shipping firm, etc. WTO -The World Trade Organization (WTO) is the only global
international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their
FEMA The Foreign Exchange Management Act, 1999 is an Act of the
parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.
Parliament of India "to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the
orderly development and maintenance of foreign exchange market in India" Salient Features of Foreign Trade: 1. (i) Change in the composition of exports:2
Change in the composition of imports. (iii) Direction of foreign trade (iv) Balance of trade (v) Dependent trade. AEO is a programme under the aegis of the
World Customs Organization (WCO) SAFE Framework of Standards to secure and facilitate Global Trade. The programme aims to enhance international supply chain
security and facilitate movement of legitimate goods. AEO encompasses various players in the International supply chain. Under this programme, an entity engaged in
international trade is approved by Customs as compliant with supply chain security standards and granted AEO status & certain benefts. AEO is a voluntary programme.
It enables Indian Customs to enhance and streamline cargo security through close cooperation with the principle stakeholders of the international supply chain viz.
importers, exporters, logistics providers, custodians or terminal operators, custom brokers and warehouse operators.