The set of documents used in international business are different from those used in domestic trade. It is important for an exporter to know these documents and their uses so as to avoid unnecessary delays in shipment and payments.
REMEMBER: Importers assume that the exporter knows his/her business and is capable of completing all the formalities of exporting.
All export transactions are based on a contract between the buyer (importer) and the seller (exporter). It is vital that you check every clause of the contract carefully. Any errors or omissions can be costly and even lead to cancellation of orders.
A contract will clearly stipulate the following:
- Detailed specification of the goods
- Quantity being ordered
- Agreed prices
- Packaging and labelling instructions
- Conditions of carriage (air, sea and destination)
- Dates of shipment
- Modes of payments
- Dispute settlement (arbitration, court of jurisdiction)
You should also familiarise yourself with the terms used in international business to avoid misunderstandings. The universally accepted set of International Commerce Terms, commonly known as known as INCOTERMS, governs trade between nations.
Click here for commonly used Incoterms
You should also know the correct description of the products, which are classified into customs tariff item numbers, also known as the Harmonized System Code or more commonly as H.S Code.
Click here for the H.S codes
Commercial Invoice is an important document for international business to happen. It is used as a customs declaration document provided by the exporter for customs control, valuation and determination of duty and taxes.
This document identifies the product being shipped and contains the following information:
- Complete name and address information of both the exporter (shipper) and the importer (consignee), including telephone, fax and e-mail addresses.
- Complete description of the product and its H.S code
- Terms of sales (Incoterms)
- Country of origin (where manufactured)
- Quantity being exported, with unit value and total value
- Number of packages and total weight
- Exporter’s/shipper’s signature and date
NOTE: A nominal or fair market value must be stated for items of no commercial value (samples, gifts) for customs purposes.
Click here for a sample of a Commercial Invoice
BILL OF LADING
The Bill of Lading (B/L) is a document of title issued by or for the shipping company (the carrier) which provides the details of the goods being carried and the terms of shipment, giving title of that shipment to a consignee, who needs to surrender a negotiable copy of the B/L to take possession of the merchandise. Bill of lading is one of the most important documents in the shipping process.
Click here for a sample of a Bill of Lading
NOTE: When a cargo is sent by air, an Airway Bill (AWB) is used.
CERTIFICATE OF ORIGIN
The Certificate of Origin, also known as movement of goods certificate, is an important international trade document attesting the origin of the goods being shipped.
There are two (2) types of Certificates of Origin (COO):
- Preferential Certificate of Origin, which enables products to enjoy privileged market access in term of tariffs reduction or tariffs exemption when exported to countries under preferential agreement (PTA & FTA) provided the Rules of Origin criteria are satisfied, i.e the goods are either wholly obtained or sufficiently processed/transformed in the country claiming the certificate of origin. These can be the E.U.R 1/EPA certificate for exports to the E.U, the COMESA Certificate of Origin, the SADC Certificate of origin.
IMPORTANT NOTE: Exporters must know the trading policies governing trade between Zimbabwe and the target market and more importantly, you must know the Rules of Origin (ROO) criteria. For additional information and guidance, exporters must check with ZIMRA for the official status and conditions
- Please find below samples of different types of Certificate of Origin required for exporting from Zimbabwe. These documents are on sale at ZimTrade at a nominal fee. Non-Preferential Certificate of Origin also known as ordinary Certificate of origin which certify that the country of origin of a particular product does not qualify for any preferential treatment.
Contract ZimTrade or ZIMRA or your freight forwarder for more details about these certificates of origin and the rules of origin.
LETTER OF CREDIT
The Letter of Credit (LC), is a document issued by a bank and represents a guarantee of payment by the person receiving the goods (the importer) to the exporter up to the amount stated on the letter of credit, provided all delivery conditions mentioned on the LC are satisfied. In order to receive payment, the exporter will need to produce the LC together with stipulated documents including the invoice, the bill of lading and insurance policy certificates.
CAUTION: Exporters using LC, for exports must pay attention to the conditions and terms of delivery stated on the LC. Non-compliance to any item thereon can result in the bank refusing to make payment.
An Insurance Policy or Certificate is required for every export sale. However, who provides the insurance cover – the Exporter or the Importer, depends on the terms of the contract (INCOTERMS).
CAUTION: Exporters should be mindful of the costs of insurance in its pricing strategy. Goods can be shipped Free on Board or Costs & Freight when the importer bears the insurance costs, or on a Cost, Insurance and Freight basis where the exporter meets the insurance costs. For more information on export insurance, please contact your insurance agent or your freight forwarder.
Phytosanitary Certificate must accompany all shipment of fresh plants, vegetables and products thereof. This certificate confirms that the products have been inspected by the authorised agency and are free from harmful pests and plant diseases. This certificate is issued by the Ministry of Agriculture.