When engaging in international trade you may come across different documents. So, it is important to know these international trade documents, and their importance as well as the content of each documents.
We will study few major documents involved in international trade other than to the transport document.
Purchase Order| PO
Consignee generates the purchase order. The purchase order contains the product detail and quantity which consignee wishes to purchase. In general, consignee issues the purchase order against the quotation. So the purchase order contains the product details, prices, quantity, shipment date, seller details, purchase order number and the terms and conditions.
Most importantly, both consignee and consignor agreed purchase order becomes a contract before the law binding both parties
The proforma invoice or the PI some says PFI is a document issued by the consignor prior to the cargo dispatch. Some consignors share the quotation for products as a proforma invoice. PI is helpful for consignee to apply for import licenses, open Letter of Credit and arrange other pre-shipment work. If the payment is “Advance”, payment can arrange by presenting the PI to the bank. The proforma invoice contains all the details same as in commercial invoice.
The commercial invoice is the main document which contains the value of cargo. In general, the commercial invoice has details of per-unit cost, total quantity, price, total payable value. Other than that, it also has the name and address of the supplier, date, sometimes the customer name. The other most important element is the currency of the price. If cargo damage/loss during the voyage due to a sacrifice cargo claim or the value for goods calculate by considering the value in the commercial invoice.
If the INCOTERM is CIF some countries request to show a cost breakdown in commercial invoice. You have to present the commercial invoice to the customs or border control body when cargo clearance. As well as value in the commercial invoice has to mention in the CusDec. Further, commercial invoice use for the tax settlement in many countries. For the exporter, it acts as evidence of sales too. A commercial invoice issue only after a transaction takes place.
The packing list has similar information as the commercial invoice. The difference is the packing list doesn’t contain any detail on cargo value and the prices. Thus, it has a detailed list of cargo. The details include the weight, cargo categories, cbm volume, sometimes an identification code for each category, description of items, number of packages shipping and package marking and invoice number. For some countries, a packing list is a must when cargo clearance. Most of the time a packing list paste on the packages other than to the one sent to the consignee. This is very helpful for customs house agents when clearing the cargo. Also, it is helpful to identify the packages and sorting at the consignee’s warehouse.
Certificate of Origin (CO| COO)
The certificate of origin issues to emphasise the origin or the manufacturing country of the cargo. If product resale without a value addition certificate origin should be the same even the same product resales several times. CO is a must for the CO contain the country of manufacturing, exporter’s name and address, importer’s name and address, cargo description, HS code, quantity and the cbm, the batch number of the product lot if any. The chamber of commerce issues the certificate of origin. CO is important in customs clearance as it helps to identify whether the cargo should accept to the country or not.
The analytical certificate or the certificate of analysis test shows the quality and the purity of the product or the material. This is mostly used for the animal and plant products as well as the pharmaceutical products. For plant products level of salmonella and E- Coli (Escherichia coli) should be less than 10%.
The kosher certificate also confirms the product or the raw materials are fit for the consumption. Also, confirm the packing is as per the kosher requirements. The kosher certificate comes with the Jewish law and not every customer will ask for this.
The phytosanitary certificate certifies the quality of the material. Further, it confirms whether the materials meet the minimum sanitary requirements. The only government authorised agents can issue the certificate. Phytosanitary mainly uses for edible products like meat, herbs or plants and its parts and any other food recognise which should get the certification.