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 document.
We will study a few major documents involved in international trade other than the transport document.
Purchase Order| PO
The consignee generates the purchase order. The purchase order contains the product detail and quantity which the consignee wishes to purchase. In general, the consignee issues the purchase order against the quotation received from the vendor.
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 consignees to apply for import licenses, open the 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 the 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 invoices. You have to present the commercial invoice with the cost breakdown to the customs or border control body at the time of cargo clearance.
As well as value in the commercial invoice has to mention in the CusDec. Further, commercial invoice uses for tax settlements in many countries. For the exporter, it acts as evidence of sales too. A commercial invoice is issued 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 is pasted on the packages other than 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 emphasize the origin or the manufacturing country of the cargo. If a product resales without a value addition certificate of origin should be the same even the same product resales several times.
CO is a must as the CO contains 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 of a country issues the certificate of origin. CO is important in customs clearance as it helps to identify whether the cargo should accept by 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 animal and plant products as well as for the pharmaceutical products.
For plant products level of salmonella and E- Coli (Escherichia coli) should be less than 10% which is measured by the analytical test.
The kosher certificate also confirms the product or the raw materials are fit for consumption. Also, confirm the packing is as per the kosher requirements. The kosher certificate comes with 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 authorized agents can issue the certificate.
Phytosanitary mainly uses for edible products like meat, herbs, or plants and their parts and any other food recognize under which should get the certification.