EXIT basics of Export - Import Export License South …3) To enable the customs authorities in the country of destination to select for opening only those packages containing the goods

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Export & Import Trading part 3

Basics of Exports

Course outlines as follows

Module 1. : Commercial Invoice. Page 2 Module 2. : The Packing note/list/certificate and markings. Page 6 Module 3. : Packing for Exports. Page 11 Module 4. : Exporter forwarding instructions. Page 13 Module 5 : Chamber of Commerce. Page 18 Module 6 : Customs Clearance. Page 21

Module 1 to 6 answer sheets Page 24 - 29


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Module 1. Commercial invoice The commercial invoice is a demand by the seller to the buyer for payment in accordance with goods provided in accordance to the sales contract. A pro-forma invoice is a statement provided by the seller of goods to be provided by seller. This could be used as a quote by the seller or be requested from the buyer before the goods have moved. The buyer may need the pro-forma invoice to obtain an import permit, raise finance or simply check any details that would be stated on the commercial invoice. The commercial invoice is seen as a serious demand of debt and can quite easily be used as evidence to sue for any irregularities to the sales contract. The invoice can also be used to prosecute, to prove any illegal agreement, such as short supply of goods to fraudulently receive payment for goods not supplied. The commercial invoice is a serious document to any official officer, as it is sufficient proof that the buyer and seller did agree to the price charged for the said goods or service invoiced. If the goods are different to the invoice then any official officer acting for any government or agency would accept that the seller did attempt to mislead the state for any known or unknown reason. The export invoice The exporter is faced with producing a wide variety of different invoices, involving a range of third party procedures, dependent on country of destination. Because the export invoice is of such importance to the overseas Customs authorities, it is they who insist on a particular format. The more technical invoice requirements are purely the result of import Customs requirements. Whatever the form of export invoice required they will all contain basically the same range of information. 1) Seller and buyer (who may not always be the same as the exporter and importer). 2) Goods description, quantity and value. 3) Trade terms (Incoterms) 4) Terms and methods of payment 5) Ancillary cost (e.g. freight and insurance) 6) Shipment details (points of departure and destination). 7) Packing Specification. The number and kind of packages, individual contents, sizes, weights, marks and

numbers.

The export invoice falls into five distinct types. 1) Commercial invoice. 2) Commercial invoice with a declaration. 3) Commercial invoice requiring third party verification 4) Consular invoice. 5) Specific Customs invoice. 1) Commercial invoice The simplest situation is one where the importing country has no special requirements at all and the exporter uses the company's standard commercial invoice, just as for a domestic sale. The only difference is that it may be zero-rated for vat. 2) Commercial invoice with declaration. It is quite common for countries to require a declaration to be typed on the invoice. The wording differs from country to country, and is often in the language of the importing country, but invariably declares the origin of the goods and that the prices are correct export prices. Customs are concerned that the origin and prices are legitimate. If the seller makes a false declaration to help the buyer escape responsibilities and obligations, then the seller is party to fraud.


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A typical declaration would be……. “ We hereby guarantee that this is a true and correct invoice and that the goods referred to are of the origin, manufacture and production of South Africa”. 3) Certified invoices. This will usually cover certification or legalization. The above declarations sometimes require a third party to validate the content of the invoice. The most common required third party would be the Chamber of Commerce. They will stamp the documents with their own certification stamp. In theory they are certifying that the invoice declaration is correct, but in practice they cannot validate the validity of the information. What they certify in practice is that the signatory of the invoice is one authorized by the company to make such declarations on behalf of the company. Exporting companies lodge the signatures of approved signatories with the Chamber for this purpose. In some cases, there is a requirement for invoices to be certified by the commercial section of the embassy of the importing country, in the country of export. The procedure may be that the exporter arranges certification at the Chamber of Commerce and then presents the documents to the appropriate embassy. Due to the association of the Chamber and the embassies, the chamber to the embassy may forward the documents. 4) Consular invoices Some countries require their own, unique, consular invoice form to be completed and returned to the Consulate for legalization. The format of such invoices varies enormously and they are often in the language of the country of import. It is possible that the consular fees could be quite high, sometimes even a percentage of the invoice value. It is perfectly acceptable to show consular fees as a separate item on the pro-forma invoice quotation. 5) Specific Customs invoice These invoice forms are particularly related to ex- Commonwealth countries however it is not that common any more. The exporter must complete the appropriate invoice form for the country of destination, which are available from specialist printers. The three vital pieces of information, which the Customs authorities at destination need to apply to import controls, are 1) description 2) origin 3) value Invoice goods description. Customs authorities throughout the world have the responsibility to control what comes into their country and the way the goods are described is very important. Therefore the means used by Customs to identify goods depends on the use of number classification systems or nomenclatures, which translate vague words into the hard data of numbers which mean the same throughout the world. It should also be noted that exports have a duty to declare their exports for statistical purposes based on accurate tariff numbers. Therefore it makes good sense to use the same goods number on the invoice for proper verification. The HS (Harmonized System) is a four-digit classification number that has been adopted by the majority of trading nations. This covers in excess of 15,000 numbers covering a wide range of goods that can now be recognized even if it is in a foreign language. Any further digits that are after the sixth digit would be used for domestic purposes. So the seventh digit in one country may be different in another country. We may include the full HS number on our invoice, as it will still be recognized in the importing country by the first six digits.


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COMMERCIAL INVOICE TEST

1. What is a commercial invoice (C.I.)? (2)

2. What is a Pro-forma invoice? (2)

3. Can a commercial invoice be used as evidence to sue or prosecute? (2)

4. How does the C.I. assist any official officer? (2)

5. Name the 7 points that could be covered in the export C.I. (7)

6. Name the 5 types of export C.I.’s. (5)

7. What is a H.S. number? (2)

8. Name 10 items we could find on the C.I. (10)

THE ABOVE TEST IS / 32 POINTS


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Module 2. The packing note/list, certificates and markings

Packing documents are documents that are used to fully describe goods for various reasons. This is mainly for two reasons, 1) When the goods are of a different nature and we need to identify where a specific item is packed and 2) When the goods are of a dangerous nature or needs special care. However, we will first cover the Packing Note (PN). This document is seen as an extension of the commercial invoice. The PN was invented to hide prices and cargo description from staff. Commercial invoice/Packing note or list. Where a shipment consists of more than a single package, it is essential that every package in the consignment bear a running number. If the packing is uniform and the goods are homogenous, then it is sufficient if the numbering sequence employed is specified on the commercial invoice, with a notation concerning the numbering of separate units in each of the packages. At the same time the gross and net mass and the dimensions may be shown on the commercial invoice. Packing Note Where the shipment consists of more than one package and the goods are different or where the quantities of the goods in packages vary, then it is essential that a complete packing list is prepared identifying every item within each package. It is normal, and more convenient, for the seller to prepare a packing list on a separate sheet. All the packages should be numbered for individual identification. The numbering is important for the following reasons. 1) To indicate at every stage in the journey how many packages make up the full consignment. 2) To provide evidence to the consignee that the full quantity of goods ordered by him has in fact been

supplied. 3) To enable the customs authorities in the country of destination to select for opening only those packages

containing the goods they wish to examine. 4) To assist the insurance underwriters in determining the correct value of any claim for loss or damage.


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Required Documents – Required for Cargo – Packing Note


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Packing certificates and marking It is essential that any seller shipping special goods must make special written declaration certifying that the goods are properly classified, packed, marked and suitable for carriage. There are two types of special goods and some goods may be a combination of both types. They are goods that a) can easily harm or (Dangerous goods) b) can easily be harmed. (Fragile or perishable Goods) Both types of goods have to have outer display of their unusual characteristics. The DG type that could easily harm, has to have an extra requirement of certification as to how they were packed to ensure that responsibility for negligence could be identified and necessary action taken. a) Packing certificates are used for dangerous goods to warn cargo carriers of the risks they are taking and should anything go wrong, it can be established who was responsible for what was packed, how it was packed, and how the packing was checked. Should anything happen to the goods in a negative way, the seller would be held liable for all consequential damages. The certificate must state the following 10 points for containerized cargo. 1) The container was clean, dry and fit to receive the goods. 2) No goods known to be incompatible have been stowed therein. 3) All packages have been externally inspected for damage and only dry, sound packages loaded. 4) All packages have been properly stowed and secured and suitable securing materials used. 5) The packages are clearly marked with distinctive label or stencil to indicate the nature of the danger to

which the goods rise. 6) The shipping container holding the packages is clearly marked with labels to indicate the nature of the

danger to which the cargo give rise, indicating the correct technical name used in shipping. 7) The dangerous goods in this container are those accepted by the carrier under the declared booking to

the carrier. 8) A Dangerous Goods Declaration is signed by the shipper or authorized person for all the goods packed

in the container. 9) No dangerous goods were tendered to the carrier for carriage without their express consent in writing. 10) All transport requirements have been met. b) Packing markings are used for high care, to warn carriers of nature of care that the goods require, as normal handling may place unacceptable risk to the goods. Goods such a fragile or have stand upright. Goods that have to be stored with care such as keep dry or away from heat. Goods that are a risk in handling such as indicating ‘sling here’ or ‘center of gravity’.


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Required Documents – Required for Cargo – Dangerous Goods Packing Declaration


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Packing Documents Test

1. What are the 2 main reasons for using packing documents? (2)

2. The Packing Note is used as an extension of what document? (1)

3. Why should all packages be numbered? (1)

4. List the 4 reasons for numbering packages of a consignment? (4)

5. What are the 2 reasons for using packing certificates and markings? (2)

6. What packing certificates used for? (1)

7. List the 10 points a Packing Certificate should state with DG cargo in containers? (10)

8. What are Packing Markings? (1)

9. Name 10 items of information we find on a Packing Note? (10)

10. Name 10 items of information we find on a DG Packing Declaration? (10)




Module 3. Packing for Exports

Protection and Packing of cargo It is universally accepted that the seller is responsible for the protection of the cargo. If we go to our local store and buy something but on our way out of the store the bag they provided breaks, the store owner is obliged to replace our damaged goods. This is the same principal that is used with insurance, and most insurance claims that are rejected are for the reason of insufficient packaging. The insurance company will not give us any written standard for packing our export consignment, as that is something we have to know, however should the damage be found to have been caused by insufficient packaging, then the claim will not be paid. We have a case of one such incident were the exporter was sending cargo to the same destination and used the same method of packaging for 10 years. She was dutifully paying her insurance premiums, only to be told by the insurance company that their findings was insufficient protection in packing. On confronting the insurance company about her 10-year good record of shipment, only to be told that she was just very lucky for 10 years. Therefore it establishes this as an important matter for the exporter. Packaging markings The preparation of cargo for carriage is never complete until appropriate identification and other necessary markings have been applied to the exterior of the packages. This should be shown on all sides of each package. If the carrier offloads our cargo at the wrong destination and it is found that we did not have sufficient markings on the packages, the carrier might escape liability for the mistake. Inherent vice Inherent vice is when the exporter failed to protect the cargo from something they loaded with the cargo that damaged the commercial value of the cargo. A good example was one where we exported container loads of outside umbrellas and cement stands to Europe. Every shipment arrived in Europe with mold on the umbrellas. The insurance findings was that the cement stands retained water, and when the ship sailed to Europe, crossed the equator, that was very hot. Under these conditions the water in the cement stands would evaporate and when cooled down would settle on the umbrellas, and caused the mold. The insurance did not pay out the claim due to the “inherent vice” clause. The exporter had to seal off the cement stands for future shipments. The most common cause of deterioration to cargo is condensation. Wood used in crates always have a small quantity of water. Under the effect of warmth, will throw out moist into the air enclosed. Packing Packing may take many forms such as bales, boxes, bundles, barrels or bundles. With bulk cargo we look to the carrier to protect the cargo in the voyage. This could be in the form of a tank container as the equipment belongs to the carrier and they then have the responsibility to sufficiently protect the cargo for the full voyage. The two ways we could ship and have to provide our own protection in packaging is break-bulk and containers. Break-bulk is sending the cargo loose in packages where the carrier would be required to handle them individually. This is where most of our claims arise; cargo is not handled in a gentle manner or could be crushed by other cargo. If the cargo were found to have sufficient strength in the packing then it would be the carriers fault for the damage. Carriers limit their financial liability should they be found guilty of not sufficiently protecting the cargo, and therefore would need insurance to cover our loss.



Containers is where we use the carriers own equipment to pack our cargo into and our main responsibility is to stop the cargo from moving in the container. The sole purpose for protection in packing whether it be break-bulk or containers is, so far as is humanly possible, to ensure that goods in international trade arrive in the hands of the overseas purchaser intact, unharmed and in the quantities invoiced. Protection and packing must therefore be designed so as to afford the goods the maximum security against impact, crushing, dropping, spillage, contamination, moisture and pilferage. The use of straw , hay or chaff must never be used since these materials harbor vermin, bacteria and other objectionable organisms. In some countries, the wood used in packing must be fumigated. Cautionary marks Whatever mode of transportation may be involved in any cargo movement, it is inevitable that the packages will be handled many times and by a variety of means which may be human or mechanical. To minimize the risk of mishandling, a series of cautionary marks have been devised which consist of international recognized symbols, none of which requires any wording to make its meaning evident. The purpose of these cautionary marks is to give warning to cargo handles throughout the transportation chain concerning the general nature of the goods within the packages Container packing Cargo which move in a container, have much better protection from risks of loss or damages. Nevertheless, we need to know what the container will experience throughout its voyage.

Shipper should exercise maximum supervision during the packing of their cargo. Light Test This is the most important test before loading a container. Place one person inside the container and then close the doors securely. The person inside the container is going to look for any small light beam that may get into the container. If light can get in, then water can get in. If this is the case then the container should be sent back and replaced with another container at no extra charge. Once the container is loaded and leaves, then outside influences beyond the control of the shipper will be exerted upon the container and in turn the commodity.

On land

o Acceleration by road or rail o Braking during shunts or by road vehicle o Cornering effect o Vehicle bouncing over rough surfaces

At Sea

o Rolling - Can move certain containers through an arc of 50 to 60 degrees o Pitching - More pronounced at the ends of the ship o Vibration - Causing chafing damage to adjacent packages o Weather-The container may be required to pass through areas of extreme temperature

The combined effect of the above, inflicted simultaneously will impose severe strain on the container, commodity and securing devices. Certainly the container will ensure greater protection to your cargo than conventional methods, provided the cargo is well packed and properly secured.



Packing precautions in containers

In order to ensure safety of your commodity the following precautions should be taken:

• Pack the commodity tightly. Any gaps existing should be filled or the cargo chocked • Any dunnage must be dry, and compatible with the cargo • Where different commodities are to be packed into the same container, separate heavy from light, and

hard from soft. Remember heavy items may need individual securing. • The center of gravity of the system should be at the center of the container and as low as possible. An

even distribution of mass over the container floor and the placing of the heavy items on the floor will achieve this.

• There must be NO SMOKING inside a container. • No attempt should be made to handle the container with improvised equipment. • Individual packages should be as full as possible to resist external pressures, or well secured within its

package. • Individual packages may lend themselves to unitization, and this should be done to fit the physical

limitations of the container and handling equipment used. • If a gap is unavoidable this should be left, if possible, along the centre line of the container for ease of

chocking or filling. • If various commodities are to be packed in the same container, compatibility must be considered. • Bear in mind that the container must be unpacked, and your methods and rotation of packing may be

unknown to the receiver.

Packing requirements

To the transport company, terminal operator and the shipping lines, it is of vital importance that the containers are stuffed in such a manner that:

• It does not exceed the axle load of a cartage trailer as laid down by the local road authorities (i.e. the

cargo must be distributed evenly in the container)

• It does not exceed the carrying capacity of a cartage trailer as laid down by the local road authorities.

• It does not exceed the carrying capacity of the container (CSC Plate Rating) NOTE: If the basic requirements are not met at the initial stage it could have an adverse effect on the further chain of movements locally and overseas.

Sealing of Containers

Each container must be sealed at the consignor’s premises when packing is completed. The container operator provides seals. For FCL and LCL containers, the packer must affix the seal for the depot operator on completion of packing. The seal number must be recorded on all shipping documents. NOTE: A broken seal or replaced seal reveals that the doors have been tampered with and that possible unauthorized entry has been made.



Packing for Exports Test

1. For what reason is most insurance claims rejected? (2)

2. What is inherent vice? (2)

3. What is a light test? (4)

4. Name two outside forces to goods on land. (4)

5. Name two outside forces to goods at sea. (4)

6. Name 5 packing precautions when loading a container. (10)

7. Name one packing requirement when loading a container. (2)

8. What should you do with the container seal number? (2)




Module 4. Export forwarding instruction The export forwarding instruction would be given by a company that owns the cargo, and given to a company that is going to assist them with all or some of their responsibilities. This will cover all the activities that is required to move the cargo from seller to the Incoterm handover point. The Clearing & Forwarding Company designed the form to help the seller think what instructions they want to give to their freight agent. This would normally start after Packing List and PSI formalities and end when the goods have arrived at the Incoterm handover point. What is a Clearing and Forwarding Agent? A Clearing agent is normally seen as one that would arrange the Customs Clearance. They deal with all the statuary requirements between the seller and customs and any other statuary body that has authorized customs to act on their behalf. The forwarder arrangers the movement of the cargo from seller’s place to Incoterm handover point. A Forwarding agent would, if they do not have their own, subcontract the clearing side to a Clearing agent. However if the clearing agent has a relationship with the trader they could very well subcontract the forwarding side. Export clearing/forwarding instruction The seller is the principal and would rely on the agent to shop around for the best rates. If the cargo is sold on a Letter of Credit then the seller would give the agent a copy of the LC to ensure that the shipment is not late and that all the required documents are processed correctly. The agent would be insistent that the principal complete this form as the agent will be held liable for any deviation from a principal’s instruction. The only sure way the clearing and/or forwarding agent could prove that they are following the principal’s instruction is by proving that all the activities arranged by them, the agent, is that what was required by the principal and the instructions given to them was by someone that was in authority to do so. It is quite common for sellers to change instructions without informing their agents, only to find that the cargo has incurred extra cost to rectify the physical state in accordance to the agreement between the seller and buyer. Unless the agents could prove that they are acting on correct instructions, they may be liable for the loss of the mistake. It is therefore common, that any change by the seller or buyer, that their agents would request a new updated forwarding instruction. The main difference between the export and import forwarding instruction is that they sit on opposite sides of an Incoterm. If the goods are sold FCA, then the Seller’s agent would not have many instructions to follow, however the Buyer’s agent would have quite a comprehensive forwarding instruction. If the goods are sold DAP, then it would be just the opposite.



Export Clearing & Forwarding instruction Shipper / exporter Reference VAT Number Consignee Notify party Place of Collection Port of loading Port of discharge Final destination Destination country Methods of payment Mode of transport Type of freight containers Number of packages Type of packages Marks and numbers Description of goods Special goods / hazardous, perishable or taint

Not any

Gross mass in kgs Measurement cm, mm, etc Cargo insurance and value A class R1000000 Documents attached Commercial invoices

Bank forms Packing Note Certificate of origin Export permit other e.g. PSI or DG certificate

Incoterms & C.I value & currency Fob Cape Town 2010 $1 000 000 Customs Export purpose code New codes from A to L Customs Export number

Tariff heading Special instructions Other I……………………….. …….the undersigned hereby declare that I am authorized to issue and sign this Clearing & Forwarding instruction for and on behalf of the Seller. I hereby declare that the information supplied in this document to true and correct and have not omitted any detail that would be important for this shipment to be executed according to the wishes of all parties concerned with this cargo. ………………….. ……………………………………… Date Name and signature Company stamp



Clearing & Forwarding Instructions Test

1. Who gives the C&F instruction? (2)

2. When would the C&F start and end? (2)

3. What is a Clearing agent? (2)

4. What is a Forwarding agent? (2)

5. On export C&F, what is important in L.C. shipments? (2)

6. How would a C&F agent prove that they have followed their client’s instructions? (2)

7. Name 10 items of information found in the export C&F instruction? (10)




Module 5. Chamber of Commerce The Chamber of Commerce is a body that supports its members to do business with its members by information and membership rules for the benefit of all its members. The Johannesburg Chamber of Commerce & Industry (JCCI) was the first of its kind in Africa, started on the 1

st April 1890.

The International Chamber of Commerce was founded in 1919 with an overriding air that remains unchanged, and that is to serve world business by promoting trade and investment. The ICC has evolved beyond the early post-war days when business leaders from the allied nations met for the first time in Atlantic City. From the first time with only Britain, USA, Belgium, France and Italy, too now more that a 130 countries and thousands of members. Setting rules and standards Incoterms. Are standard international trade definitions used in trade contracts. The ICC model contracts makes life easier for all that use it. The buyer and seller know what is expected from each party to the contract. UCP600, is the ICC’s Uniform Customs and Practice for Documentary Credits. The banks apply them to finance cargo throughout the world. Certificate of origin, the individual chambers may is issue this in accordance with the ICC’s rules to verify origin of goods for it’s members. (see page 21) International Court of Arbitration. Received over 500 new cases a year for arbitration. Services Bureaus :In the early 1980’s, ICC set up three London-based services to combat commercial crime. 1) The International Maritime Bureau, dealing with all types of maritime crime. 2) The Counterfeiting Intelligence Bureau 3) the Commercial Crime Bureau 4) In 1998 a cybercrime unit was added. The ICC Commercial Crime Services, coordinates the

activities of the specialized anti-crime services. SACOB : the South African Chamber of Business is affiliated to the ICC in Paris. The ICC are also the main business partner of the United Nations. They provide world business recommendations to the WTO World Trade Organization.





Chamber of Commerce Test

1. What is the CoC (Chamber of Commerce)? (2)

2. Where and when was this first CoC in the world? (2)

3. What was founded 29 years after the first CoC and where are they based? (2)

4. Name the 2 rule setting the ICC put in place for international trade? (2)

5. What certificate does the CoC supply for international trade? (1)

6. What international court is run by the ICC? (1)

7. Name 4 service bureaus set up by the ICC? (1)

8. What does SACOB stand for? (1)

9. Who is SACOB affiliated to? (1)

10. Who is the main business partner of the UN? (1)

11. Who provides business recommendations to the WTO? (1)

12. What does WTO stand for? (1)

13. Name 10 items of information we find on the CoC’s Certificate of Origin? (10)




Module 6. Export Customs Clearance When are goods deemed to be Exported?

Goods are deemed to be exported when the carrier hands in a manifest to customs at the exporting country.

Customs may want proof from the carrier that a SAD500 was passed for whatever is on the manifest. If a

SAD500 was not handed in for anything on that list, then customs would instruct the carrier to bring the

goods back. The goods on arrival will then go to the “cargo jail” known as the States Warehouse. If the

exporter is not able to satisfy customs, then it is sold or destroyed by customs.

When must the Export SAD500 be submitted?

For Exports, this should be done before the cargo is handed over to the carrier. On submission of the

SAD500, customs may want to inspect the goods or examine documents to prove that this was a reasonable

contract. That means, was this done at fair market price, is the seller not just trying to get money out of the

country. The exporter must have a customs release before handing it over to the carrier.

The Customs Clearance should be done before the cargo is loaded for export at the seller’s address. This is because customs may just decide to check this export and then your truck is already on its way to a Customs Exit point. You will need to turn the truck around and bring it back to your premises. On exports, the main document is the commercial invoice and any relevant export permits that may be

required. If customs want to do any further checks, they may call for the correspondence between the seller

and buyer.

The SAD500 (Single Administrative Document) Customs Declaration form is divided into 3 parts (3C’s).

1) Companies information Box 1 to 30 (Top section)

2) Cargo Information Box 31 to 46 (Middle section)

3) Calculations paid to SARS 47 to End. (Bottom section)

The most important Box is 28, this is the amount of money that is coming back into the country of export.

Companies in Box 1 to 30

This would cover all the activities between the seller and buyer. The carriers they used. The customs office

used for declaration. The countries of origin, export and destination. Details of full shipment. Places of

customs exit/entry. Clearing Agents used. Financial values.

Cargo information in Box 31 to 46

This has to do with the one HS number. As products are divided up into a worldwide Harmonized System,

each product with its own number. If there are 10 different products listed on the Commercial Invoice, then

we are going to use the SAD501, the continuation form, which has 3 cargo information sections on one form,

but then only has a small top section.

Calculations in Box47 to end ( called the money boxes)

This is the money that you are going to pay over to the government. This section is not used for exports.





Customs Clearance Test

1. When are good deemed to be exported? (2)

2. What would customs do if they found that a carrier had goods without a SAD500? (2)

3. When should the seller have the Customs Declaration done? (2)

4. Into how many parts is the SAD500 form divided and what are they known as? (4)

5. What is the most important Box on the SAD500? (2)

6. What is the first part if the SAD500? (4)

7. What is the second part of the SAD500? (4)

8. What is the third part of the SAD500? (4)

9. What form will you use if you have more than one HS number for the Customs Declaration? (2)

10. How many HS numbers can you fill in on the above form? (2)




1) Commercial Invoice Test answer sheet.

1) What is a commercial invoice (C.I.)? (2)

The commercial invoice is a demand by the seller to the buyer for payment in accordance with goods provided in accordance to the sales contract.

2) What is a Pro-forma invoice? (2) A pro-forma invoice is a statement provided by the seller of goods to be provided by seller.

3) Can a commercial invoice be used as evidence to sue or prosecute? (2) Can quite easily be used as evidence to sue for any irregularities to the sales contract.

4) How does the C.I. assist any official officer? (2) Yes, it is sufficient proof that the buyer and seller did agree to the price charged for the said goods or service invoiced.

5) Name the 7 points that could be covered in the export C.I. (7)

Seller and buyer. Goods description, quantity and value. Trade terms (Incoterms) Terms and methods of payment Ancillary cost (e.g. freight and insurance) Shipment details. Packing Specification

6) Name the 5 types of export C.I.’s. (5) Commercial invoice. Commercial invoice with a declaration. Commercial invoice requiring third party verification Consular invoice. Specific Customs invoice.

7) What is a H.S. number? (2) Harmonized System.

8) Name 10 items we could find on the C.I. (10) Exporter. Buyer. Notify Party. Vessel & Voyage. Port of Loading. Port of Discharge. Marks, No’s and kind of Packages. Quantity. Amount. Terms of Delivery and Payment. THE ABOVE TEST IS / 32 POINTS



2) Packing Documents Test answer sheet.

1) What are the 2 main reasons for using packing documents? (2) When goods are of a different or dangerous nature.

2) The Packing Note is used as an extension of what document? (1) Is seen as an extension of the commercial invoice.

3) Why should all packages be numbered? (1) All the packages should be numbered for individual identification.

4) List the 4 reasons for numbering packages of a consignment? (4) a) To indicate at every stage in the journey how many packages make up the full consignment. b) To provide evidence to the consignee that the full quantity of goods ordered by him has in fact been supplied. c) To enable the customs authorities in the country of destination to select for opening only those packages containing the goods they wish to examine. d) To assist the insurance underwriters in determining the correct value of any claim for loss or damage.

5) What are the 2 reasons for using packing certificates and markings? (2) To help identify goods that can easily harm or be harmed.

6) What packing certificates used for? (1) To warn carriers of the risks they are taking and should anything go wrong, it can be established who was responsible for what was packed, how it was packed, and how the packing was checked.

7) List the 10 points a Packing Certificate should state with DG cargo in containers? (10) Container was fit to receive the goods No incompatible goods inside All packages fit when loaded All packages fitly stowed All packages fitly marked The container fitly labeled The goods are the same as those accepted by carrier A DG declaration is signed by shipper The shipper has in writing the consent of the carrier All transport requirements have been met

8) What are Packing Markings? (1) Is used when above normal care is required for the proper handling of cargo

9) Name 10 items of information we find on a Packing Note? (10) Exporter – Buyer – Marks, No’s and Container No. - Kind of packages – Description of Goods – quantity – Gross Mass – Gross Measurement – Invoice No. and Date – Exporter’s reference.

10) Name 10 items of information we find on a DG Packing Declaration? (10) Shipper – Consignee - Forwarding agent – Vessel and Voyage No. – Marks and Numbers – Number and type of packages – Technical Name and description of goods – UN No. – IMCO Class – Signature of Authorized Representative. THE ABOVE TEST IS / 42 POINTS



3) Packing for Exports test answer sheet

1. For what reason is most insurance claims rejected? (2) That the cargo was not protected sufficiently with packaging for the complete journey.

2. What is inherent vice? (2) When something is loaded with the cargo that could have the power to damage the cargo

3. What is a light test? (4) This is to see if light can get into a container and is done by closing the container with a person inside to make that check.

4. Name two outside forces to goods on land. (4) Acceleration by road or rail Braking during shunts or by road vehicle Cornering effect Vehicle bouncing over rough surfaces

5. Name two outside forces to goods at sea. (4) Rolling- Can move certain containers through an arc of 50 to 60 degrees Pitching- More pronounced at the ends of the ship Vibration - Causing chafing damage to adjacent packages Weather-The container may be required to pass through areas of extreme temperature

6. Name 5 packing precautions when loading a container. (10) Pack the commodity tightly. Any gaps existing should be filled or the cargo chocked Any dunnage must be dry, and compatible with the cargo Where different commodities are to be packed into the same container, separate heavy from light, and hard from soft. Remember heavy items may need individual securing. The center of gravity of the system should be at the center of the container and as low as possible. An even distribution of mass over the container floor and the placing of the heavy items on the floor will achieve this. No attempt should be made to handle the container with improvised equipment. Individual packages should be as full as possible to resist external pressures, or well secured within its package. Individual packages may lend themselves to unitization, and this should be done to fit the physical limitations of the container and handling equipment used. If a gap is unavoidable this should be left, if possible, along the center line of the container for ease of chocking or filling. If various commodities are to be packed in the same container, compatibility must be considered. Bear in mind that the container must be unpacked, and your methods and rotation of packing may be unknown to the receiver.

7. Name one packing requirement when loading a container. (2) It does not exceed the axle load of a cartage trailer as laid down by the local road authorities (i.e. the cargo must be distributed evenly in the container) It does not exceed the carrying capacity of a cartage trailer as laid down by the local road authorities. It does not exceed the carrying capacity of the container (CSC Plate Rating)

8. What should you do with the container seal number? (2) Write it onto all the shipping documents. THE ABOVE TEST IS / 30 POINTS



4) Clearing & Forwarding Instructions Test answer sheet

1) Who gives the C&F instruction? (2) By the company that possesses the cargo By the company that has the right to take possession of the cargo

2) When would the C&F start and end? (2) Would start after packing note and end when offloaded at the company who takes legal possession of the goods

3) What is a Clearing agent? (2) The company that would handle the customs clearance for export or import.

4) What is a Forwarding agent? (2) The company that would handle the movement of cargo on import and export.

5) On export C&F, what is important in L.C. shipments? (2) That the shipment and documents is not late and processed correctly

6) How would a C&F agent prove that they have followed their client’s instructions? (2) By producing the principal’s written instruction and have followed it to the letter

7) Name 10 items of information found in the export C&F instruction? (10) Shipper – Reference – Customs code – Consignee – Notify party – Place of delivery – port of loading – port of discharge – Final destination – Destination country. THE ABOVE TEST IS / 22 POINTS



5) Chamber of Commerce Test answer sheet

1) What is the CoC (Chamber of Commerce)? (2) The Chamber of Commerce is a body that supports its members to do business with its members by information and membership rules for the benefit of all its members.

2) Where and when was this first CoC in the world? (2) The Johannesburg Chamber of Commerce & Industry(JCCI) was the first of its kind in the world

3) What was founded 29 years after the first CoC and where are they based? (2) The ICC was founded in 1919

4) Name the 2 rule setting the ICC put in place for international trade? (2) Incoterms and UPC600

5) What certificate does the CoC supply for international trade? (1) Certificate of origin.

6) What international court is run by the ICC? (1) The Court of Arbitration.

7) Name 4 service bureaus set up by the ICC? (1) International Maritime Bureau Counterfeiting Intelligence Bureau Commercial Crime Bureau Cybercrime Bureau

8) What does SACOB stand for? (1) South African Chamber of Business

9) Who is SACOB affiliated to? (1) The ICC in Paris

10) Who is the main business partner of the UN? (1) The ICC

11) Who provides business recommendations to the WTO? (1) The ICC

12) What does WTO stand for? (1) World Trade Organization

13) Name 10 items of information we find on the CoC’s Certificate of Origin? (10) Consignor. Consignee. Country of Origin. Mode of Transport. Destination. Item No. Marks and no. Description of goods. Gross weight. Invoice Price. THE ABOVE TEST IS / 26 POINTS



6) Customs Clearance Test answer sheet

1. When are good deemed to be exported? (2) When the carrier has handed in a manifest list of the goods that left the country.

2. What would customs do if they found that a carrier had goods without a SAD500? (2) They would make the carrier bring the goods back to this country.

3. When should the seller have the Customs Declaration done? (2) Before they load at the seller’s address.

4. Into how many parts is the SAD500 form divided and what are they known as? (4) Three parts and they are known as the 3C’s of the form.

5. What is the most important Box for Exports on the SAD500? (2) Box 28, as this indicates how much money is coming back into our country for the cargo that is going out of the country.

6. What is the first part if the SAD500? (4) Box 1 to the 30, this is all the various company’s activities of what they are doing.

7. What is the second part of the SAD500? (4) Box 31 to 46, this is all the Cargo information.

8. What is the third part of the SAD500? (4) Box 47 to the end, this is the money boxes, the money you are going to pay in various types of taxes. These boxes are not used in Exports.

9. What form will you use if we have more than one HS number for the Customs Declaration? (2) The SAD501.

10. How many HS numbers can you fill in on the above form? (2) Three. THE ABOVE TEST IS / 28 POINTS

Basics of Export exam 180 points