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What are Incoterms? What does it mean to ship goods CIF? FAS? C&F?
- These are pricing/shipping terms developed by the International Chamber of Commerce with legal consequences concerning risk.
- CIF means the buyer wants to know the cost, insurance, and freight pricing of the goods.
- FAS means free alongside ship pricing, the buyer wants to know the cost of the goods brought alongside the ship ready for loading.
- C&F... The buyer wants to know the cost of the goods freight shipping and pricing, he is not interested in insurance.
EMC (Export Management Company)
This business helps exporters enter foreign markets and work on commission. An exporter could hire an EMC to help with exports to Mexico.
ETC (Export Trading Company)
Since 1982, exporters of different products in the US can work together as an export trading company to export products with violating anti-trust laws. For example, a bank, insurance company, transportation company, and five manufacturers could work together to export products.
What is a carnet?
This document acquired from the International Chamber of Commerce lets a businessman take samples abroad and return without paying import or export duties.
Inventory levels, the distributor's discount, and definition of territory are common clauses in these types of agreements.
Elements in an International Commercial Invoice, How are they different from a domestic invoice?
They are usually written in two languages, contain a non-diversion statement to other countries, and use metric measures.
What is a commercial draft?
It is a written order by the seller to the buyer to pay the exporter a sum of money. Like a promissory note, it is evidence of debt. If accepted and dated by a bank, it is known as a banker's acceptance draft. If dated and accepted by the buyer, it is known as a trade acceptance draft. A seller obtains his money by presenting the draft to a bank. its form resembles a check. A sight draft is paid when presented. A time draft is paid according to the date on the draft, which can be more than 30 days.
Three functions of a Bill of Lading
Issued by the carrier, it is evidence of title, evidence of receipt of goods, and a contract for carriage.
What information is required when applying for a business loan from the Export-Import Bank?
A financial statement from the company, credit references, and the type and price of U.S. goods to be exported.
What is the Foreign Credit Insurance Association (FCIA)?
The FCIA works with the Export-Import Bank to guarantee the exporter against commercial, political, and war risks.
What is an offset purchase contract?
- If an importer requires that a certain percentage of an order be produced in his country, this is an offset agreement.
- For example, a foreign country buying a large ship could require that 40 percent of the ship's value be produced in the buyer's country to offset the purchase price.
- If an importer requires you to purchase his goods in exchange for buying your goods, you have entered a counterpurchase agreement.
- For example, if a country buys $50 million from your company, it can require that you purchase $50 million worth of goods from the importing country.
What documents are required in a letter of credit (LOC)?
A commercial invoice, bank draft, and clean bill of lading are always required in a LOC.
What is the warranted free clause in an insurance contract?
It indicates what is not covered under the policy.
Programs provided by the Export-Import Bank
Although it gives some small direct loans to importers of American products, its main activity is to give loan guarantees to banks. It also provides a working capital loan to produce the exported goods. It does not give loans to US importers of foreign products.
What is a customs broker?
This business helps get an importer's goods through customs. A customs broker can provide the bond for importation an even pay the customs duty. The customs broker can file all required customs documents electronically. Large firms often select a firm that combines the services of the freight forwarder and customs broker so that a single firm is responsible for exporting and importing the merchandise.
What is a customs drawback to importers?
- It is a refund of customs duties to the importer for some legitimate reason.
- For example, if an importer has already paid its duties but wants to return the merchandise to the exporter, he can ask customs for a drawback or refund of his duties.
What documents are needed to make an import into the U.S.?
A customs entry manifest, commercial invoice, and a packing list.
From which regions can imports enter duty free?
The Caribbean Basin countries (CBI), developing countries entitled to the Generalized System of Preferences (GSP countries), and free trade arrangements, such as Canada, Mexico, and Chile.
What are some important services provided by customs brokers?
They will prepare and submit import documentation; use their bond for entry of the importer's goods; pay customs duties; and see that goods are shipped to your business.