Non-shipping Documents used in Foreign Trade
International trade is the most extensive form of formal trading relation and the using of formal statutory documents. These documents make international trade easier and help traders of different countries to understand one another. These documents are used throughout the world. International trade documents are used to divide transaction costs and responsibilities between buyer and seller and to reflect the state of the art transportation practices.
To import products from another country, at first, the importer gives indent to the exporter. In this indent, the indenting agent and the supplier inform their name, description of products, price, and the number of letter of credits is assigned in the indent.
In foreign trade, no trade occurs in moral. After getting the indent the supplier sends a contract through the indenting agent to the importer. In this contact, importer signs this contract and resent to the supplier. In this way, most of the sales contracts are made.
Letter of Credit
Letter of Credit is a commitment, usually by a bank on behalf of a client, to pay a beneficiary stated the amount of money under specified conditions. It’s a written commitment to pay, by a buyer’s or importers through the bank to the seller’s or exporter’s bank.
Before sending the products to the ship, the exporter contacts with the shipping company. So exporter makes a contract with the shipping company identifying the place of destination or shipment, product name and nature and the rent.
Program invoice is an invoice which is issued by the exporter after getting the indent. In this invoice name of products, amount, price, time, expenses are given. Program invoice is issued by the exporter.
Balance of payment
A statement summarizing all the economic and financial transactions between companies’ banks, private households, and public authorizers of one nation with those of the other nations of the world over a specific time period.
The documents are required to complete customs entry to secure the release of imported merchandise.
Letter of indemnity
A document which the writer issues to another party agreeing to protect them from liabilities for the performance of certain acts.
Licensing agreement is the issuance of a license permitting the use of patents, copyright, trademarks or other technologies.
These are the shipping and non-shipping documents which are essential for the foreign trade. The exporter and the importer are very familiar with these documents.