Export Documentation

For the small business exporter, managing the required documentation can seem daunting. But
having the correct information for your documents and knowing where, when, and to whom to
send them speeds up the processing of individual transactions and inspires the confidence of your
customers. Indeed, where letters of credit are involved, correct documentation is essential for you
to receive payment.
What You Need to Know Why is export documentation necessary?
Documentation is used to keep shipment and delivery on schedule, to describe cargo, for customs
clearance, to indicate the ownership of goods for collection purposes or in the event of dispute,
and to obtain payment.
What are "Incoterms?"
Incoterms are standard, internationally recognized trade terms used in sales contracts to help
traders in different countries understand one another. Export documentation requirements often
depend on the Incoterms used.
Where can I get help with export documentation?
Export documentation is subject to frequent change and amendment, and requirements vary from
country to country. For accurate, up to date information, you can contact the International
Chamber of Commerce, International Trade Association, Trade Information Center, Export
Assistance Centers, or an embassy or consulate of the country to which you're exporting goods.
Freight forwarders usually offer assistance with packing and documentation along with their
services for physical transportation of goods. You may also wish to consult a professional export
counselor.
What to Do Understand the Different Types of Documentation
The following documents are commonly used in exporting, but which of them are necessary in a
particular transaction depends on the product being shipped as well as the requirements of the
U.S. government and the government of the importing country. Always check with the U.S.
Government Export Portal or other reliable sources to determine which documents you need.

 Bill of Lading. A contract between the owner of the goods and the carrier (as with domestic
shipments). For vessels, there are two types: a straight bill of lading, which is non-negotiable,
and a negotiable or shipper's order bill of lading, which can be bought, sold, or traded while the
goods are in transit. The customer usually needs an original bill of lading as proof of ownership
to take possession of the goods.
 Air (or Ocean) Waybill. Issued by an airline (or ocean shipper) when goods are received for
transport; the waybill travels with the cargo. It is similar to a bill of lading, but cannot serve as a
document of title.
 Shipper's Export Declaration. Available from the U.S. Government Printing Office and
commercial outlets.
 Commercial Invoice. A bill for the goods from the seller to the buyer. These invoices are often
used by governments to determine the true value of goods when assessing customs duties.
Governments that use the commercial invoice to control imports will often specify its form,
content, number of copies, language to be used, and other requirements.
 Certificate of Origin. Required by some countries. In many cases, a statement of origin printed
on company letterhead will suffice. Special certificates are needed for countries with which the
U.S. has special trade agreements, such as Mexico, Canada, and Israel. For example, a NAFTA
Certificate of Origin is needed for shipments to Mexico and Canada.
 CE Mark. Designates goods that have met the requirements to be marketed throughout the
European Union (EU). Once a manufacturer has earned a CE mark for its product, it may affix
the mark to the product, and then the product may be marketed throughout the EU without
having to undergo further procedures in each EU member country.
 Insurance Certificate. Assures the consignee that insurance will cover the loss of or damage to
the cargo during transit. This certificate can be obtained from the freight forwarder.
 Export Packing List. Itemizes the material in each individual package and indicates the type of
package, such as a box, crate, drum, or carton. Both commercial stationers and freight forwarders
carry packing list forms.
 Import License. Must be obtained by the importer. Including a copy with the rest of your export
documentation, however, can sometimes prevent problems with customs in the destination
country.
 Consular Invoice. Required in some countries. It describes the shipment of goods and shows
information such as the consignor, consignee, and value of the shipment. Forms may be obtained
from the destination country's embassy or consulate in the U.S.
 Inspection Certification. Required by some purchasers and countries to attest to the
specifications of the goods shipped. Inspection is usually performed by a third party, often an
independent testing organization.
 Dock Receipt and Warehouse Receipt. Used to transfer accountability when the export item is
moved by the domestic carrier to the port of embarkation and left with the shipping line for
export.
 Destination Control Statement. Appears on the invoice and waybill to notify the carrier and all
foreign parties that the item can be exported only to certain destinations.
 Export License. Required by the U.S. government for dual use exports (commercial items that
could have military applications) or exports to embargoed countries. Most export transactions do
not require specific approval from the U.S. Government. Before shipping your product, make
sure you understand the concept of dual use and how U.S. export regulations may affect your
business.

Know the Best Way to Send Documentation

Electronic Data Interchange is increasingly important to the international exchange of
commercial information, replacing much paperwork transfer. EDI greatly reduces the time
required for document exchange and increases accuracy by eliminating transcription errors. EDI
systems use international conventions and standards of formatting for data, so that documents
such as invoices and orders can be exchanged between trading partners in different countries.
EDI requires a computer with a modem and communications software (to provide data
translation) at either end of a telephone line.
The Internet can also be used to send documentation. Benefits include speed, accuracy, and the
ability to send to a large number of recipients using one system. Disadvantages include the
challenge of adequately securing data and the potential risk of dealing with unknown parties
placing orders.

What to Avoid You Fail to Do it Right from the Start

Make sure your documentation is correct and complete before you submit it the first time. If you
submit incomplete or incorrect documents, you may experience shipping delays affecting your
cash flow, as well as penalty payments.
You Neglect to Research What's Needed
Before you begin your documentation, get as much information as possible from government
agencies, freight forwarders, or other experienced parties, professional export counselors, and
others, to make sure you have all the information you need.

Know Your Incoterms: An Overview

Incoterms are a set of rules which define the responsibilities of sellers and buyers for the delivery
of goods under sales contracts. They are published by the International Chamber of Commerce
(ICC) and are widely used in commercial transactions.

Introduction
Incoterms are a set of rules which define the responsibilities of sellers and buyers for the delivery of
goods under sales contracts. Shippers worldwide use standard trade definitions (called Incoterms) to spell
out who’s responsible for the shipping, insurance, and tariffs on an item; they’re commonly used in
international contracts and are protected by International Chamber of Commerce copyright. Incoterms
significantly reduce misunderstandings among traders and thereby minimize trade disputes and litigation.
Familiarize yourself with Incoterms so you can choose terms that will enable you to provide excellent
customer service and clearly define who is responsible for which charges.

What are the Current Incoterms?

In 2010, the two main categories of Incoterms were updated and are organized by modes of transport.
Used in international as well as in domestic contracts for the first time, the new groups aimed to simplify
the drafting of contracts and more clearly stipulate the obligations of buyers and sellers:
Group 1. Incoterms that apply to any mode of transport are:

 EXW Ex Works
 FCA Free Carrier
 CPT Carriage Paid To
 CIP Carriage and Insurance Paid To
 DAT Delivered at Terminal
 DAP Delivered at Place
 DDP Delivered Duty Paid

Group 2. Incoterms that apply to sea and inland waterway transport only:

 FAS Free Alongside Ship

 FOB Free on Board
 CFR Cost and Freight
 CIF Cost, Insurance, and Freight
 View Incoterms 2010 with Definitions

eCommerce Incoterms
Most B2B ecommerce agreements will use EXW, CPT, or CIF; most business-to-consumer (B2C)
transactions will use CPT or CIF (and sometimes DDP). Except for DDP, the Incoterms mentioned above
require the buyer to pay all tariffs and taxes upon arrival. To make sense of all these terms, you should
take the time to understand their usage. For more on ecommerce and exporting, visit the eCommerce
Resource Center.

Incoterms Considerations

 When the goods you export arrive at their destination, the importing country requires that all
applicable tariffs (import taxes levied by the destination country) and local taxes, including value-
added tax (VAT), be paid. Many companies require the buyer to pay these tariffs and taxes.

 Buyers typically want to know the final price, with shipping and taxes included (known as the
“landed cost”), before they agree to buy, but you might not be able to provide it—tariffs and taxes
vary widely throughout the world, so determining those rates before you ship can be difficult. Be
clear about your policy on tariffs—specifically, who pays and when payment will be due.

 The shipping companies you select often act as freight forwarders, helping you complete shipping
documents, helping you estimate duties and taxes, pre-paying them for you, and then invoicing
you. If you use the U.S. Postal Service for lighter weight shipments, its local partner in the
buyer’s country will collect duties and taxes.

Where can I learn more about the new Incoterms?

 View the Make the Export Sale: Shipping Basics video.

 See the Incoterms reference chart and web page.
 Watch an Incoterms webinar.
 Visit ICC for more training on Incoterms, and get a current copy of Incoterms.
 See the logistics page at export.gov, or get help from your local U.S. Commercial Service office.

 For sample language, you can use on your website, check out the Standard Terms for
Shipping section on export.gov.

Background on Incoterm 2010 Update

Why were the Incoterms 2000 revised?

Incoterms 2010 are the updated version of Incoterms. Incoterms 2010 have been developed because of an
extensive review of current shipping practices and trends to keep up with the rapid expansion of world
trade. The key drivers for this update include: a need for improved cargo security, changes to the Uniform
Commercial Code in 2004 that resulted in a deletion of U.S. shipment and delivery terms, and new trends
in global transportation.

Can I still use the Incoterms 2000?

According to the International Chamber of Commerce, all contracts made under Incoterms 2000 remain
valid even after 2011. In addition, although the ICC recommends using Incoterms 2010 from January
2011 onward, parties to a sales contract can agree to use any version of Incoterms after 2011. It is
important, however, to clearly specify the chosen version of Incoterms being used (i.e. Incoterms 2010,
Incoterms 2000, or any earlier version).
What does HS code stand for?
HS Code stands for Harmonized Commodity Description and Coding System.. ...
The Harmonized Commodity Description and Coding System generally referred to as
“Harmonized System” or simply “HS” is a multipurpose international product nomenclature
developed by the World Customs Organization (WCO).

What is the HS Code for export?

Export codes, also known as Schedule B numbers, are administered by the U.S. Census Bureau.
All import and export codes used by the United States are based on the Harmonized System
(HS). The HS assigns 6-digit codes for general categories. This 6-digit code is known as the
Harmonized System number.
Why is HS code required?
The Harmonized Commodity Description and Coding System, HS Code for short, is a common
standard worldwide for describing the type of commodity that is shipped. Every commodity that
enters or crosses most international borders has to be declared to customs using this code.
Is HS code same as tariff code?
Harmonized Tariff Schedule of the United States (HTSUS) Code. The Harmonized
Tariff Schedule code is a 10-digit import classification system that is specific to the United
States. ... An HTS code takes the same form as an HS code for the first six digits, and then has
four differing last digits.
Is the HS code the same for all countries?
The World Customs Organization (WCO) has been administering 6 digits HS codes schedule. ...
However, each country can modify by adding two digits or four digits as per their requirements
without changing first six digits. In other words, first six digits of HS code (HTS code)
are same in all countries.
Is HS code the same as commodity code?
Unlike the HS, this system uses 10-digit commodity codes. The first six digits are based on the
international HS, while the next four further distinguish goods in certain categories. This means
you can convert a Harmonized Tariff code to an HS code by removing the last four digits.
What is a HS Code for customs?
HS Codes (or HTS Codes), also known as the Harmonized Commodity Description and Coding
System, or simply the Harmonized System, are a standardized international system to classify
globally traded products. The system was first implemented in 1988 and is currently maintained
by the World Customs Organization.
How are HS codes determined?
In the US, products are assigned an additional four digit code, known as the Schedule B number,
to classify them further. This four digit code is added to the end of the HS code to make a 10
digit code. ... The data they collect is then used to publish US export statistics.