Answer 1: INCOTERMS

The Incoterms is called as International Commercial Terms. Incoterms are abbreviated with 3 letter published by the International Chamber of Commerce (ICC), which is commonly used in international commercial transactions. Incoterms rules are generally paying attention on clearly communicate tasks, costs for transporting the goods including insurance, duties etc. A number of terms of trade on three letters related to the common contractual sales methods

Incoterms formally define the following aspects of international sales

. The tasks to be performed by the exporter

. The tasks to be performed by the importer

. What activities will be paid by the exporter

. What activities will be paid by the importer

. When the transfer of responsibility takes place

There are thirteen Incoterms in total

1 CIF (Cost, Insurance and Freight)2 FOB (Free on Board)3 DDP (Delivered Duty Paid)4 DDU (Delivered Duty Unpaid) 5 EXW (Ex Works)6 CFR (Cost and Freight)7 CPT (Carriage Paid to)8 CIP (Carriage and Insurance Paid to)9 DAF (Delivered at Frontier) 10 DES (Delivered EX-ship)11 DEQ (Delivered Ex-quay)9 12 12 FCA (Free Carrier)13 FAS (Free Alongside Ship)

Assumption:    Suppose Nutraberry ltd. is located at Auckland is special for producing nutraceutical ingredents and functional foods. The company wants to establish the business in Japan and India by selling the products. Nutraberry works as a seller or exporter. Auckland port is in Exporter country that is in Newzealand and Mumbai port is in importer country that is in India. Description of Incoterms according to the rules is as follow:-

1. EXW (Auckland)

This is the first and easy method for transporting the goods with maximum responsibility on the buyer and minimum on seller.

Seller has the responsibility to packing the goods and clear custom for buyer. Buyer is responsible for uploading EXW means that the seller ready the goods on the agreed date in exporting

country. Nutraberry ltd has not the responsibility to load the goods on the collection

vehicle and not clear for export. Buyer pays all transportation costs and also takes the risk of delivery of goods to

their final destination The buyer is also responsible for handling all other paper works This term is used for any type of goods and any mode of transportation.

2. FCA (Auckland)

Nutraberry ltd delivers the goods, cleared for export, to the buyer’s designated carrier to a named and defined location.

Seller has the responsibility to packing the goods and provides documents for clear custom for buyer.

One more responsibility is added to seller that is seller must load goods on the support of buyer.

The document signifying key transfer of responsibility is the receipt by the carrier to the exporter.

It is used for any mode of transportation. Its syntax is FCA (Auckland) and it is used for any type of goods.

3. FAS (Auckland Port)

Nutraberry ltd must place the goods alongside the ship in port. The seller must clear the goods for export. Seller has the responsibility to packing the goods and provides documents for

clear custom and seller must load goods on the support of buyer. One extra duty is added to exporter, deliver the goods where specified by the

importer. Suitable only for maritime transport but not for multimodal sea in containers This term is mostly used for any type of goods.

4. FOB (Auckland Port)

Nutraberry ltd must load the goods on board a ship designated by the buyer. The buyer should ask the seller for information about the ship and the port where

the goods are loaded, and there is no reference to, or the ability to use a carrier or freight forwarded.

Costs and risks are shared when the goods are actually on board the ship. Packing of goods, provide documents, deliver goods to port of departure and

pays to loaded on board are the responsibilities of exporter. The seller must clear the goods for export. The term applies to maritime and inland waterway transport only but not for

multimodal sea in containers. This Incoterms is used for any type of goods

5. CFR (Mumbai Port)

Seller arranges international transportation for delivering the goods specified by the importer.

However, the risk is transferred to the buyer once the goods are loaded on the ship.

The seller responsibilities are to packing goods, provide documents, clear goods and deliver at the port of destination.

Insurance for goods is not included in exporter costs. It is used for any type of goods and ocean transport only.

6. CIF (Mumbai port)

Under this Incoterm the Exporter has arranges and pays the freight cost as well as pay for insurance

The main duties of the exporter are package of goods, clear the goods for export, document for clearing customs as well as cost of loading.

The exporter can transport any kind of goods in this term. The mode of transportation is ocean transportation only.

7. CPT (Mumbai)

This Incoterm is almost same as CFR except for transportation but the duties of exporter and importer are almost same.

The seller pays for transportation. Risk transfers to the buyer from the handling of goods to the first carrier at the

place of shipment in the country of export. This term is used for non ocean and multimodal and any type to goods.

8. CIP (Mumbai)

It is same to CIF Incoterm except for transportation. It is specialized to non ocean transportation and any type of goods. Nutraberry ltd pays for carriage and insurance to the point of destination, the risk

passes when the goods are handed over to the first carrier. Exporter arranges and pay for international transportation of goods and for

insurance.

9. DES (Mumbai port)

When goods are delivered by the seller, the passing of risk does not occur until the ship arrived at the port of destination.

The seller pays the same freight and insurance costs likely to CIF. Reading the cost of goods and duties, taxes etc are for the buyer. A term commonly used to transport bulk commodities such as coal, grain and

where the seller either owns or has charted their own vessel. It is used for only ocean transportation.

10. DEQ (Mumbai port)

This is similar to DES, but the passing of risks does not occur until the goods have been unloaded at the destination at the expense of exporter.

Duties of exporter are provide documents of custom clearing, clear goods for export, arrange and pay for transport.

Seller also pays for unloading goods at port of destination. It is mostly used for bulk goods and ocean transportation.

11. DAF (place of delivery)

This term can be used only when goods are transported by rail and road. Goods delivered to the importer at the border between two countries. The Seller arranges for customs clearance and pays for transportation from the

factory to its border. This term is used for any type of goods but only for land based transportation.

12. DDU (Mumbai)

This term means that the seller agrees to deliver the goods to the buyer to a location in the importing country.

A transaction in international trade, where the seller is responsible for the safe delivery of goods to a named destination.

Seller pays all the costs to transport goods in the city of importing country. Importer only clear customs in importing country.

Responsibilities of exporter are to provide documents of clear custom, clear goods and arranges the transportation.

It is used for any type of goods and any transportation.

13. DDP (Mumbai)

The seller is responsible for delivering the goods at the place in the country after having cleared customs.

Seller pays all costs to bring the goods to the destination. One more duty is added to seller that is seller also clear customs in importing

country. Seller is not responsible for unloading. This term is used for any transportation and any type of goods.

Part 2 Import Procedure

JAPAN

Import clearance: The person who import goods must declare them to the Director-General of Customs, and should get the import permit after necessary examination of the goods in question. The first step is to provide import declaration. Procedures start with the housing of the import declaration and ends with the issuance of import permit after necessary examination and payment of customs duties and indirect taxes. In this way, they are taking the necessary measures to ensure the fulfillment of the requirements for the control of foreign exchange and other regulations regarding the import of goods

Prohibited items:

Sharp or cutting tools, including tools (but not limited to): knives, box cutter, letter openers, scissors, tools and dealer, and screwdrivers and arrows

Sporting Goods or club such items including (but not limited to): baseball bats, gathered cues, golf clubs and lacrosse sticks, ski poles, and brass knuckles and hammers and seminars and didgeridoos

Lighters, including butane gas and battery powered and lighter Grandma

Restricted items:

All liquids, aerosols, gels or pastes such as water, drinks, creams, perfumes, sprays, gels, toothpaste, lip gloss and mascara should be in individual containers no more than 100ML in size

Must be re all containers in a tightly closed plastic transparent bag no larger than one liter (about 20CM x 20cm or 8 inches × 8 inches)

Allows only one bag per passenger It must be sealed plastic bag and presented separately from other carry-on

baggage screening at the point It can be packed in containers of liquids more than 100mls in your check in

luggage.

CUSTOMS TARRIF AND TAXES:

Import duty and sale tax:

Country HS Code Duty Rate Sales Tax Product

Japan 1302 19 120 25.00% Nil Blackberry Current extract

CUSTOMS DOCUMENTS TO BE SUBMITTED: Commercial Invoice Bill of lading or Air Waybill The certificate of origin Phytosanitary certificate and pre inspection certificate. Packing lists Insurance certificates etc

 Laws and Regulations Related to Banned Goods

Law on the Protection of Wildlife and Hunting Firearms and Swords Control Law Banned toxic and harmful substance Pharmaceutical Affairs Law control of fertilizers system law on the sugar price stabilization explosives control system law on the examination and regulation of chemicals in their manufacture, etc. High Pressure Gas Safety Law

Laws and Regulations Concerning Quarantine

Food Sanitation Law Plant Quarantine Act

Domestic law infectious animal control Prevent rabies law

Laws and Regulations Concerning Narcotics

cannabis control system

Activated law to combat drugs

Drug and mental control system

Opium Law

ENVIRONMENTAL PROTECTION AND POLLUTION CONTROL

Water Pollution Control Ordinance Waste disposal ordinance Environmental impact assessment ordinance Dumping at sea ordinance

HEALTH AND SANITATION REQUIREMENTS Food Sanitation Law

The Food Sanitation Law aims to protect public health, by prescribing necessary regulations from the standpoint of preventing health hazards that may be caused by the consumption of foods. Nutraberry who wishes to import food items (including such non-food items as containers and packages, tableware, and toys for infants) for the purpose of sale or for other commercial purposes must submit a food import notification to the quarantine station, on each import occasion.

Plant protection law

Food items that are made from plants, such as vegetables, fruits, and tea, are subject to plant quarantine. The purpose of plant quarantine is to prevent foreign pests from spreading and harming valuable plants in Japan

INDIA

IMPORT LICENCEIn India, Import License is issued by the Director General of Foreign Trade. Most

imports into India do not require a license. Provided they fall within the scope of

the Open General License they may be imported freely without restrictions. Before arrival of goods, the documents should be kept ready which are required for import clearance. The major documents required are Bill of Lading or Airway bill, commercial invoice, packing list, Cargo Arrival Notice, Freight certificate, purchase order or LC and other specific documents for your goods.

IMPORT BAN AND RESTRICTIONSProhibited Goods

Wildlife products Human bone structure Set sea shells Drugs and psychotropic substances Pornographic and obscene material Counterfeit goods and pirated goods from any violation of intellectual property

rights and an enforceable legal terms Aero models (such as toy helicopter remote control) that operate on radio waves

high availability because of possible interference with communications networks, security services aircraft.

Literature and maps of where the Indian external borders incorrectly show, due to the Government of India.

Chemicals listed in Table 1 to the United Nations Chemical Weapons Convention in 1993.

Beef tallow, fat / oil of animal origin Exotic birds with the exception of a few of them specified Wild animals and their products

Restricted Goods Medicines and drugs Firearms and ammunition Birds and live animals, including pets Plants and their products such as fruits and seeds Endangered species of flora and fauna species, whether living or dead. Any goods for commercial purposes: for profit, profit or commercial use. Radios is not approved for normal use Gold, silver, and other ornaments Currencies exceeds the limits specified Phone and telephony equipment restricted frequencies Silk worms and seeds and silk worm pupae Family planning devices (NOC from the Ministry of Health required) Vintage products, replicas of artifacts or weapons Sand and soil Whole human blood plasma and some products derived from human blood Sandal wood (excluding handicrafts and oil products)

CUSTOMS DOCUMENTS TO BE SUBMITTEDThe documents required to complete import customs procedure are:

Commercial Invoice Bill of lading or Air Waybill The certificate of origin Letter of credit Material certificate Insurance policy certificate Import license Health and safety certificate

Custom Tarrifs And Taxes:

Import duty and sale tax:

Country HS Code Duty Rate Sales Tax Product

India 1302 19 19 30% Nil Blackberry Current Extract

LAWS AND REGULATIONS RELATED TO BANNED GOODS Customs Regulations 1956 :-

e Foreign Trade (Development and Regulation) Act, 1992

the Customs Act, 1962

Prevention of Food Adulteration Act, 1954 (PFA)

the Food Safety and Standards Authority Act, 2006 (FSSA)

The Livestock Importation Act, 1898

Destructive Insects & Pests Act, 1914, PFS Order, 1989 and Plant Quarantine (Regulation of Import into India) Order, 2003

ENVIRONMENTAL PROTECTION AND POLLUTION CONTROL The Environment (Protection) Act, 1986

Water Pollution Act

Air Pollution Act

Forest Conservation Act

Wildlife Protection Act

Biological Diversity Act

Public Liability Insurance Act

Noise pollution Act

Rule relating to Management of Hazardous Substances .

LAWS AND REGULATIONS CONCERNING QUARANTINE Destructive insects and pests act,1914 Plant Quarantine (Regulation of Import into India) Order, 2003. International plant protection convention WTO-SPS agreement International standard of Phytosanitary measure

LAWS AND REGULATIONS CONCERNING NARCOTICS PIT NDPS ACT (The prevention of illicit traffic in narcotics drugs and

psychotropic substances act, 1988) NDPS ACT (The narcotics drugs and psychotropic substances act,1985) RCS ORDER,1993

Part 3

There are several documents are used in the export procedure. These are the most commonly used documents for export:

Commercial Invoice: The commercial invoice is essentially a bill from the exporter to the importer

describing the parties to the agreement, the goods to be sold, and the terms involved, as agreed between the exporter and importer.

The mode of payment must be mention on the invoice. It must follow the requirements of the importing country, where the commercial

invoice used to clear the goods from customs.Bill of lading:

The bill of lading serves as a receipt of shipment when the goods is delivered to the predetermined destination.

When goods delivered at the destination then it must be signed by an authorized representative from the carrier, shipper and receiver.

A bill of lading contains consignor's  and consignee's name names  of the ports of departure and destination name of the vessel dates  of departure and arrival itemized list of goods being transported with number of packages and kind

of packaging, marks  and numbers on the packages weight  and/or volume of the cargo Freight rate  and amount

Airway bill: The airway bill is similar to the bill of lading for the goods send by the air. An air waybill is a legal document made out between the shipper and the air

carrier for carriage of goods and is obtained from the air carrier It is a non-negotiable transport document.

Certificate of origin: A document indicates that which country a good was manufactured. The certificate origin contain information regarding the product destination and

country of export and is required by many treaty agreements before being accepted into another nation.

Letter of credit: LC is open by a bank of a buyer in favour of seller on behalf of importer

Bank promising to pay an agreed amount of money upon receipt by the bank of certain documents within a specified time.

In some time when buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

Certificate of inspection:

When the charging of high-value products or when dealing with customers very conscientious, could be required inspection certificate.

Provide inspection certificate as evidence that what is shipping is, what ordred the client, and also of good quality.

INSURANCE POLICY CERTIFICATE

• Insurance policy is an insurance policy has been taken out insurance that prove the goods shipped, and it gives full details of the insurance coverage.• Insurance certificate attests that the shipment was insured under a specific policy of openness which is to cover the loss or damage to the goods during transport.

Health and safety certificate: Some countries require a health or sanitary certificate when animals,

animal products, fish, plants and food products are skilled. These certificates confirm that the goods are free from disease or pests

(insects), and that products have been prepared in such a way that they reach prescribed standards.

Normally, these certificates are issued by the Department of Agriculture.