Classification of Documents: (Used in International Trade) The international Trade documents may be classified as under a . C o m me r c i a l d o cu me n t s b.Official documents c.

Insurance documents d . T r an s p o r t d o c u me n t s e . Fi n a n c i a l a n d f i n an c i n g d o cu me n t s a . C o m me r c i a l d o cu me n t s : Invoice:An invoice is a commercial document issued by a seller to a buyer,indicating the products, quantities and agreed prices for products or serviceswith which the seller has already provided the Buyer. An invoice indicatesthat, unless paid in advance, payment is due by the buyer to the seller,according to the agreed terms. Invoices are often called Bills. a)Proforma Invoice:It is a memorandum of the terms of a contract of sale wherein the seller gives the quotation to the potential buyer. If the buyer approves its terms, he sends a definite order for supply.Such an invoice is marked with the word Proforma Invoice. b)Commercial Invoice: A commercial invoice is a bill for the goodsfrom the seller to the buyer. Commercial invoice are utilized bycustoms officials to determine the value of the goods in order toassess customs duties and taxes. c)Certified Invoice: An invoice bearing a signed statement by someonein the importers country who has inspected the goods and found thatthe goods are in accordance with the specific contract of the proforma and that the goods are of a specific country of origin. Certificate of origin: It is a specified document certifying the country of originof the merchandise required by certain foreign countries for tariff purposes. This certificate is issued by Chamber of Commerce, Trade Association or any other authorized body of the exporting country and it sometimes requires the signature of the consul of the country to which it is destined. Weight notes or certificates: This certificate indicates the weight of the goodsissued by a public agency. It can be evidenced by means of a separatedocument, or by a weight stamp/declaration of weight superimposed on thetransport document by the carrier or his agent. Packing List: The exporter must prepare a packing list showing description of items, number of containers/boxes with specification of net weight & gross weight etc. to enable the importer of the goods to check the shipment Quality or Inspection certificate:This is a certificate declaring that the goodshave been examined and found to be in accordance with the contract of sale. Itis signed by the

manufacturer or supplier or any recognized independentinspection body as required by the importer. b.Official documents: Consular Invoice: It is an invoice made out in a specially printed form of theexporter and is shown before the consul of importing country stationed in theexporters country as being correct in all respect. The consular of theimporting country then certifies the invoice. A consular invoice enables theimporter country to have all accurate record of the merchandise shipped. Legalized Invoice: Some Middle East countries require that the commercialinvoice should be countersigned and stamped by the authorized officer in their Embassy or the consulate in the exporters country instead of consular invoice. Black-listed Certificate: Under this certificate, the exporter has to provide aBlack-listed certificate evidencing that all parties involved including the bank and shipping line are not black-listed. Due to strained political relation or anyother reasons some countries do not allow transactions with some particular countries. These countries and the exporters are treated as Black-listed. Health, Veterinary and Sanitary Certificate/Photo Sanitary Certificate,Certificate of Analysis: This certificate is generally needed in purchase of foodstuff, hides and livestock and in the use of packing materials. It isissued by the recognized health authorities in the exporting countries. Thecertificate confirms that the shipment meets the required health, veterinaryand sanitary standards. c.Insurance documents There are some risks of damage, loss or destruction of goods during the time of transit.Marine Insurance plays a very vital role in this respect. The scope of Marine Insuranceextends to Sea, Land and Air conveyances only in respect of good from one country toanother country or one place to another place with short distance through the vessel, craftwhich the goods are carried or conveyed. Marine insurance comprises of the following: Marine Cargo Insurance Marine Hull Insurance Freight There are various types of marine insurance policies, which differ in respect of the cover provided to the insured. The main types are as follows: i)Floating policy: A floating policy is a contract of insurance means to cover a number of shipments, the details of which are not finalized when theinsurance contract is concluded. Under the floating policy, insurance cover is given in general terms and details of shipments are declaredsubsequently and endorsed in the policy. ii)Time policy:It covers the subject matter of insurance for a period of time. iii)Voyage policy:It insures the subject matter from one place to another irrespective of the length of time taken. iv)Mixed policy:It covers both a voyage and a period of time exceeding 30days.

v)Open cover or Blank policy: This policy is automatically covers all theshipments of the exporter up to an estimated amount during a given period. vi)Specific policy: A specific policy is a contract of insurance, which coversa specific shipment. vii)Valued policy:A valued policy is one, which specifies the agreed value of merchandise insured. viii)Unvalued policy:In this type of policy, the value of the merchandiseinsured is not specified. The insurable value of the goods is ascertainedlater on subject to the limit of the sum insured

d . T r an s p o r t D o c u me n t s : This document indicates that the goods, which are delivered to the named shippers,airlines or transporters, must be carried to a named port, airport or place of delivery.Following transport documents are being used at present in the international trade: i)Airway Bill/Air consignment Note: This document confirms the delivery of goods to an airline or its agent for transportation by air to a named consignee according to the defined and agreed terms. ii)Mates Receipt: It is a prima facie evidence of the quantity and condition of the goods received. When the goods are delivered to the shipping company for transportation, at first a temporary receipt is issued by the ships Chief Officer acknowledging the delivery of the goods alongside the carrying vessel which is known as Mates Receipt. On the basis of Mates receipt, the shipper has to pay the port dues and other charges. iii)Bill of Lading: A bill of lading is a document which is issued y the transportation carrier to the shipper acknowledging that they have received the shipment of goods and that they have been placed on board a particular vessel which is boundfor a particular destination and states the terms in which these goods received areto be carried. Normally a bill of lading contains the port of shipment and of destination, thename of consignee, the number, contents and identification marks of the goodsshipped and the amount of freight paid or to pay. The bill of lading serves three main purposes, as a document of title of the goods as a receipt from the shipping company and as a contract for transportation of the goods. Classification of Bill of lading:

Clear and clause of dirty or foul Bills of lading: On board or shipper and Received for shipment Bill of lading Through or Port to Port Bill of lading Stale Bill of lading Charter Party Bill of lading Negotiable or Non negotiable and straight or order Bill of lading Liner Bill of lading House bill of lading Short form or Blank Back Bill of Lading Third Party Bill of lading Combined Transport Bill of Lading iv)Railway consignment Note/Railway Receipt: When the exporter or his agentdelivers a consignment to the railway authorities for its onward carriage to anamed destination, they issued a receipt, indicating the details of the consignmentand destination to which they would carry it. This document is called the Rail Consignment Note or Railway Receipt. v)Roadway Bill: It is an internationally approved document of transaction whengoods are being sent by road through the countries that had ratified the CMR (Convention Merchandise Routers). vi)Post Parcel Documents: It is a receipt issued by Post Office for the parcel. The post office has received for direct delivery to the addressee. It is not a document of title of goods and generally contains the post office stamp. Fi n a n c i a l a n d f i n an c i n g d o cu me n t s There are some documents used for payment in international trade transaction such as: Bill of Exchange Promissory Note Trust Receipt Bill of Exchange:Bill of Exchange is one of the key financial instruments inInternational Trade. It is an instrument by which sellers can obtain the payment fromtheir buyers for the invoiced value of goods As per section 5 of the Negotiable Instrument Act. 1881, A bill of Exchange is an instrument in writing containing an unconditional order, signed by the market, directing a certain person to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person or the bearer of the instrument.

Features of a Bill of exchange: a . I t mu s t b e u n c on d i ti o n a l o rd e r . b. It must be written order.

c. Addressed by one person to another. The term person includescorporations, partnerships as well as natural persons. d . D u l l y s i gn e d b y t h e p e r s o n g i vi n g t h e o r d e r . e . B i l l mu s t b e p a ya b l e on d e ma n d o r o n a d e t e r mi n a b l e d a t e . f . T h e B i l l of E x c h a n g e mu s t b e ma k e p a y ab l e t o o rd e r o r t o bearer. g . I t mu s t i n d i c a t e t h e p a y me n t o f a ce r t a i n s u m Parties of a Bill of exchange: There are six parties involved in a bill of exchange. They are: a.The Drawer: b.The drawee: c.The Payee:

d.The endorser: e.The endorsee: f.The acceptor

Promissory Note: It is a negotiable instrument. As per section 4 of the Negotiable Instrument Act. 1881, A promissory note is an instrument in writing (not being a bank-note or a currency note) containing an unconditional undertaking signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of a certain person, or to the bearer of the instrument. Features of a promissory note: a ) I t mu s t b e u n c on d i ti o n a l p r o mi s e b ) M u s t b e w r i t t e n b y on e p e r s on t o an o t h e r c) Must be signed by the maker d) Promise to pay a sum of certain money to, or to the order a specific person or the bearer. e) Promissory note payable to the makers order must be endorsed by the maker. Trust Receipt: The trust Receipt is a receipt for goods, documents of title to goods,securities, etc. executed by a person, signifying that he has received the specifiedgoods, title etc and will be holding them in trust for the person or institution from whom her has received them. The person who executes the receipt is called the trustee. The trustee undertakes to keep the goods fully insured against all risks andensure overall safety of the goods entrusted to him.

Export from India required special document depending upon the type of product and destination to be exported. Export Documents not only gives detail about the product and its destination port but are also used for the purpose of taxation and quality control inspection certification. Shipping Bill/ Bill of Export

Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship's owner, seller, buyer and some other parties. For each one represents a kind of certificate document. Export Documents for Post Parcel In case of Post Parcel, no Shipping Bill is required. The relevant documents are mentioned below:

Customs Declaration Form - It is prescribed by the Universal Postal Union (UPU) and international apex body coordinating activities of national postal administration. It is known by the code number CP2/ CP3 and to be prepared in quadruplicate, signed by the sender. Dispatch Note - It is filled by the exporter to specify the action to be taken by the postal department at the destination in case the address is non-traceable or the parcel is refused to be accepted. Commercial invoice - Issued by the exporter for the full realizable amount of goods as per trade term. Consular Invoice - Mainly needed for the countries like Kenya, Uganda, Tanzania, Mauritius, New Zealand, Burma, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Zanzibar etc. It is prepared in the prescribed format and is signed/ certified by the counsel of theimporting country located in the country of export. Customs Invoice - Mainly needed for the countries like USA, Canada, etc. It is prepared on a special form being presented by the Customs authorities of the importing country. It facilitates entry of goods in the importing country at preferential tariff rate. Legalized / Visaed Invoice - This shows the seller's genuineness before the appropriate consulate or chamber or commerce/ embassy. Certified Invoice - It is required when the exporter needs to certify on the invoice that the goods are of a particular origin or manufactured/ packed at a particular place and in accordance with specific contract. Sight Draft and Usance Draft are available for this. Sight

Draft is required when the exporter expects immediate payment and Usance Draft is required for credit delivery. Packing List - It shows the details of goods contained in each parcel / shipment. Certificate of Inspection It is a type of document describing the condition of goods and confirming that they have been inspected. Black List Certificate - It is required for countries which have strained political relation. It certifies that the ship or the aircraft carrying the goods has not touched those country(s). Manufacturer's Certificate - It is required in addition to the Certificate of Origin for few countries to show that the goods shipped have actually been manufactured and is available. Certificate of Chemical Analysis - It is required to ensure the quality and grade of certain items such as metallic ores, pigments, etc. Certificate of Shipment - It signifies that a certain lot of goods have been shipped. Health/ Veterinary/ Sanitary Certification - Required for export of foodstuffs, marine products, hides, livestock etc. Certificate of Conditioning - It is issued by the competent office to certify compliance of humidity factor, dry weight, etc. Antiquity Measurement It is issued by Archaeological Survey of India in case of antiques. Shipping Order - Issued by the Shipping (Conference) Line whichintimates the exporter about the reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date. Cart/ Lorry Ticket - It is prepared for admittance of the cargo through the port gate and includes the shipper's name, cart/ lorry No., marks on packages, quantity, etc. Shut Out Advice - It is a statement of packages which are shut out by a ship and is prepared by the concerned shed and is sent to the exporter. Short Shipment Form - It is an application to the customs authorities at port which advises short shipment of goods and required for claiming the return. Mate's Receipt The mate's receipt is an acknowledgement that the shipowner has received the goods in the condition stated therein, but usually has no further legal relevance. It is usually a preliminary document only, which is later given up in return for the bill of lading, but occasionally is the only document used, in which case it may operate as if a document of title, as long as it is not marked "Non-negotiable". PHYTOSANITARY CERTIFICATE :Numerous foreign governments and buyers require a phyto for fresh plants and plant products. This certificate states that the product has been inspected and is free of harmful pests and plant diseases. They are issued by the USDA Animal and Plant Health Inspection Service.