SPI

Shipping Procedural Instructions to Asian Vendors For IBM Ocean Shipments to Brazil
IBM Brazil Distribution Dept. January 19th, 2000.

Table of Contents
Section 1 Introduction

w Purpose w Application w How to Use w Assistance w Published by

Section 2 Import Requirements

w Method of shipments w Documents w Labeling w Routing w General w Commercial Invoice Requirements

Section 3 Appendices

w Shipping/Routing Guide
Section 4 Cargo Delivery Advise and Cargo Pick up Request Samples Section 5 Certificate of Agreement and Compliance by the Vendor

Section 1 Introduction
Purpose
This guide documents the requirements for importing into Brazil. Noncompliance with these requirements can result in shipments being held by Brazilian Customs, monetary penalties to the IBM Corporation or loss of import privileges. The IBM Business Conduct Guidelines require all employees to comply with import and export procedures and regulations.

Application
This SPI must be provided to the vendor and followed when a PO or contract results in an import to Brazil AND IBM is responsible for Customs clearance. In all circumstances you should assume that IBM is responsible for such clearance. Note:IBM Brazil may require foreign vendors to ship low value, (<= $500,00 USD) non-production, no charge items (eg. marketing materials, samples, brochures, demo tapes/diskettes) via Courier. The invoice accompanying these shipments should state: "No Charge - Value for Customs Purposes Only" On these particular cases, IBM won't be responsible for Customs clearance, which will be done by the Carrier utilized (eg. Fedex, UPS, etc...). Nevertheless, the clearance will still be dependent upon the invoice provided by the Vendor.

How to Use
Please read the entire document. Provide it to your supplier with the information you need to provide.... P L U S Section 3 should be used to select the authorized forwarder from each geography/country.

Assistance
After the analysis of this document, if there is still any doubt, please contact IBM Brazil Distribution Dept. before shipment. For shipments to Sumare plant (Air shipments to Viracopos Airport (VCP) or Ocean shipments to port of Santos): Import Manager - Mr. Claudionor Lopes Silva Phone nbr:55-19-887-7101 Internet address: claudionor@br.ibm.com International Trade Specialists: Mr. Amarildo Juliato Phone nbr:55-19-887-7369 Internet address:amarildo@br.ibm.com

Mrs. Tania Lupe Phone nbr:55-19-887-8485 Internet address:tlupe@br.ibm.com Mr. Luiz Mauger Cordenonsi Phone nbr:55-19-887-7354 Internet address:lmauger@br.ibm.com Mrs. Thais Beccaro Phone nbr:55-19-887-7822 Internet address:tbeccaro@br.ibm.com OBS - For all people listed above, the fax number is 55-19-887-8164/7665 Published by: IBM Brazil Distribution Department.

z Sumare, SP

Section 2 Import Requirements

Method of shipments
IBM Brazil buys parts from the vendors on FOB and Ex-Works basis. Therefore, the Freight Forwarder will be required to either receive the cargo on its warehouse or to pick it up on the vendor's facility. The correct procedure for both methods are described below, in case of any doubt, please contact IBM Import Department before shipment for instructions. PORT TO PORT SHIPMENTS - FOB The vendor is responsible to deliver the cargo on the Freight Forwarder warehouse. The Inland freight must be paid by the Exporter. The Freight Forwarder is not authorized to accept any charges for the Inland Freight. Written authorization from IBM Brazil is required for any exception. A fax or e-mail to the Freight Forwarder with all information concerning the shipment must be sent to the Panalpina nearest office AND to IBM Brazil. This fax is very important for both Panalpina and IBM Brazil. It allows Panalpina to pre-book the freight on the next flight to Brazil and IBM to keep track of the cargo since the beginning. A sample of this fax is enclosed on this Shipping Instructions (CARGO DELIVERY ADVISE) The method of shipment (ocean or air) must be stated on the invoice. The vendor must send the cargo to the nearest PANALPINA office, which can be located on the list included in Section 3 - Shipping/Routing guide

DOOR TO PORT SHIPMENTS - Ex-Works Forwarder is responsible to pick up the cargo at the Vendor's facilities. For that, the Vendor will send a fax or e-mail to Panalpina with all the information concerning the cargo. A sample of this fax is enclosed on this Shipping Instructions (CARGO PICK-UP REQUEST) This fax is very important for both Panalpina and IBM Brazil. It allows Panalpina to pre-book the freight on the next flight to Brazil and IBM to keep track of the cargo since the beginning. If the Vendor does not inform the method of shipment, correct address for pick up, date for pick up, correct weight, number and dimension of volumes, the Freight Forwarder will not pick up the cargo. VERY IMPORTANT - The vendor must deliver the cargo to Panalpina with 01 Original Invoice and 01 packing list, and the vendor must ensure that 01 packing list is attached to the cargo itself. More information on the MANDATORY chapter. If the Freight Forwarder does not show up to pick up the cargo, IBM Brazil must be notified immediately, either by contacting the IBM Brazil IP (international Procurement) Department or IBM Brazil Import Department. Documents: Labeling of cases/volumes The following are required for all imports into Brazil Commercial Invoice - 2 original invoices SIGNED in Blue Ink, one send along the cargo and another one to be sent by Courier (using prepaid international freight) to the buyer at IBM Brazil IP Department. Packing list - 1 original and 2 copies for each IBM PO: 1 original to be sent along the original invoice, with the cargo, 1 copy attached to the cargo itself and another copy sent along the original invoice to be sent by Courier (using prepaid international freight) VERY IMPORTANT: All wooden pallets/skids/crates MUST receive fumigation treatment, done by a specialized company officially recognized by the Ministry of Agriculture of the Vendor's Country to prevent the entry of insects and bacterias that may carry plagues and diseases into Brazil. Beginning January 19th, 2000, a "FUMIGATION CERTIFICATE" has to accompany the original invoices and packing lists that are either handled to the driver of the Panalpina truck that will pick up the goods at the Vendor facility or to Panalpina personnel, in case of delivery of the goods by the Vendor at the Panalpina facility. This "FUMIGATION CERTIFICATE" will be arranged and paid by the Exporter. The freight forwarder won't be responsible for the certificate, since all goods should be already palletized when the freight forwarder pick up them or receive them at it's facility. Air Waybill - 1 original for air shipments.(to be provided by the freight forwarder) Ocean Bill of Lading - 1 original (to be provided by the freight forwarder) Information to be included on the packing list: EXAMPLE

Address TO:IBM Brazil Rodovia SP 101-trecho Campinas-Monte Mor,KM9 Hortolandia - SP - Brazil - 13175-000 ATTENTION: buyer name Case number: 15 IBM Part Number: Case Quantity: Shipping Location: Country of Origin: Weights: Gross: 35.5 1876578 115 pcs Taiwan Contents Made in Taiwan Net: 29.5 kgs. Vendor part number: 562b35 IBM Purchase Order: 200567

Case 15 of 80 in this shipment.

Case dimensions: 15x30x28 cm. Quantity of pallets: 25 Pallets dimensions: 120x100x80 cm. VERY IMPORTANT: One original of the packing list must be sent attached to the original invoice and sent along the cargo, a copy of the original packing list must be attached to the cargo itself and another copy must be sent along the original invoice to be sent by Courier (using prepaid international freight) to the attention of the buyer at IBM Brazil IP Department. More information on the MANDATORY chapter. Labeling of cases/volumes Carton/Package label - 1 per carton Case labels - Use 2, 1 in front, 1 on the side Also, boxes/cases must state the quantity of volumes and the particular cases number using the following example: 1/12 - Were reads as "case #1, from a total of 12 volumes" Shipping/Address label

See example below: CASE LABEL - EXAMPLE Case number: 15 IBM Part Number: Case Quantity: Shipping Location: Country of Origin: Weights: Gross: 35.5 1876578 115 pcs Taiwan Contents Made in Taiwan Net: 29.5 kgs. Vendor part number: 562b35 IBM Purchase Order: 200567

Case 15 of 80 in this shipment.

Case dimensions: 15x30x28 cm. SHIPPING/ADDRESS LABEL - Example TO:IBM Brazil Rodovia SP 101-trecho Campinas-Monte Mor,KM9 Hortolandia - SP - Brazil - 13175-000 ATTENTION: (buyer name) CARTON/PACKAGE LABEL - Example TO:IBM Brazil Rodovia SP 101-trecho Campinas-Monte Mor,KM9 Hortolandia - SP - Brazil - 13175-000 ATTENTION: (buyer name) Routing Utilize IBM contracted forwarders/carriers (See Section 3) General

w Documents must be in English w All invoices must have the name of a responsible employee of the shipper who has information or can get
information about the shipment. MANDATORY - VERY IMPORTANT INFORMATION

w For any shipments: 1 (one) original invoice, SIGNED in blue ink, and 1 (one) original packing list MUST be
placed in an envelope and handled to the driver of the truck sent by Panalpina to pick up the cargo (in case of Ex-Works shipments) or handled to the driver of the truck designed by the Vendor to deliver the cargo at the Panalpina nearest facility (in case of FOB shipments) who MUST deliver this envelope, containing the documents, to Panalpina. A Receipt or Proof of Delivery (POD), stating the quantity of volumes/pallets

delivered/received must be required from Panalpina in both cases (either Panalpina will be receiving the goods at it's warehouse or picking it up at the Vendor's facility).

w Failure to provide a original commercial invoice for any shipment may incur in penalties to the Vendor, who will
be obligated to reimburse IBM of any costs concerning Customs fines and/or warehousing costs at Brazilian Customs.

w One copy of the packing list must be attached to the box/volume, no matter if the same information is listed in
the commercial invoice.

w DO NOT send cargo of different P.O.s on the same volume/package unless under directions of IBM
International Procurement Department. If the P.O.s can be sent together, the IP Department will instruct the Vendor directly.

w IN CASE the Vendor is buying the goods from a third supplier and this third supplier is the one responsible for
delivering the goods at the Freight Forwarder or for requesting the pick up of these goods, this third supplier will be also responsible for providing al the documents/cargo information as already requested by IBM to it's original Vendors. The final responsibility to assure the compliance of these shipping instructions relies on the ORIGINAL VENDOR. The invoice, packing list, and the labels on the volumes provided by this third supplier MUST provide identification that will allow Panalpina to correctly identify the shipment. The original IBM P.O. number, part number and quantity must be on the cases/documents from the third supplier.

w Never use Door to Door (couriers) without having previous Import Department acceptance/instructions.
Couriers shipments typically are No-Charge shipments and IBM Brazil will have no means of paying the Vendor for any goods shipped under this method. The non-observance of this requirement may create a situation where IBM Brazil will be unable to legalize the importation, and therefore unable to pay for any goods wrongly shipped.

w One copy of the packing list MUST be attached to each box/or for each P.O. shipped, identifying contents of the
shipment (including P.O number, invoice number , Part number, quantity and country of origin).

w All invoices must have the name of a responsible employee (salesman or shipping area personnel) of the vendor
who has information or can get information about the shipment.

w ALSO, 1 (one) set of original invoices, SIGNED in blue ink, and packing list must be sent by Courier (using
Prepaid international freight) to IBM Brazil IP Department, to the buyer attention, to prevent any loss of documents during transit to Brazil.

Commercial (shipping) Invoice Requirements w VERY IMPORTANT: On all invoices, the following words MUST be written on bold letters ,on a visible space:
"MERCADORIA DESTINADA AO REGIME ESPECIAL DE ENTREPOSTO INDUSTRIAL SOBRE CONTROLE INFORMATIZADO - RECOF ".

w The commercial invoice MUST contain all the information below. Any changes or exception must have previous
written approval of IBM Brazil before shipment:

w Invoice nbr. w Invoice to (or Bill to) and ship to, according to P.O.

IBM Brazil Industrial Comercial e Exportadora Ltda Rodovia SP 101 - trecho Campinas/Monte Mor, Km 09 Hortolandia - SP CEP 13175-000

w Purchase order (P.O.) nbr. w Terms of payment (Net Terms,i.e.: 30 days, 45 days, etc..) and Currency being utilized w Incoterms (i.e. FOB Taiwan, EX-Factory (Ex-Works), etc.) w Method of shipping - OCEAN or AIR shipping w IBM Part number and related Vendor Part number w Description of goods, detailed and in English. This description must allow the easy determination of the nature of
the goods, without abbreviations or nicknames.

w Quantity shipped w Unit price w Total price w Quantity and dimensions of boxes/pallets (also, number of boxes/cartons per pallet), and volumes specification
(i.e. wood crates, cartons, etc..)

w Net and gross weight, both per unit and total w Country of origin/manufacturer - Complete name and address
Brazilian Legislation understands as manufacturer the one whose name is printed (or labeled) on the parts. There are situations where parts from different vendors are assembled and sold as one single part. In this case, it will be necessary to declare all manufacturers whose name appear on the part or, if there isn't any, the assembler will be considered the manufacturer.

w Bank information - should be listed the complete name, address and account number for payment purposes. w IMPORTANT: These requirements are not optional. It is the responsibility of the Vendor to ensure they are
met.

Section 3 Shipping / Routing Guide

It is absolutely essential that shipments are imported through authorized IBM contracted forwarders to ensure proper clearance through Brazilian Customs at the lowest cost. Utilize the following routing guide. Any exceptions must be authorized in advance by IBM Brazil Distribution Dept. VERY IMPORTANT Concerning all cargo coming from Asia, the freight forwarder to be contacted is PANALPINA, and a list of it's main offices in Europe is provided below. Please contact the nearest office either for delivery or to request a cargo pick up: PANALPINA - ADDRESSES AND PEOPLE TO BE CONTACTED ==================================================== Panalpina is IBM Brazil's official Freight Forwarder for all cargo coming from the Far East. Hereafter you will find a list of contact people at Panalpina's office. Please contact the nearest office either for delivery or pick-up the freight. Bangkok ======== Address: Panalpina World Transport (Thailand) Ltd. Sirinrat Building, 14th floor 3388/48-49 Rama IV Road Klongton, Klongtoey 10110 Bangkok Contact: Ms Sontaya E-mail: sontaya.wanwang@bkk.panmail.com Phone: 011 66 72 3675618-27 Fax: 011 66 72 3675616 Korea =====

Address: Seoul (SEL) Panalpina Korea Ltd. Sungwon B/D, 5F 141, Samsung-dong Kangnam-ku Seoul 135-090 Phone: (2) 5605700 Fax: (2) 5605716 Japan ===== Address: Tokyo (Sales Eastern Japan) (TYO) Panalpina World Transport (Japan) Ltd. Sunshine Building, 9/10 floor 5-31-10 Shiba Minato-ku Tokyo 108-0014 Phone: (3) 3451 7866 Fax: (3) 3451 7886 Malaysia ======= Address: Kuala Lumpur (KUL) Panalpina Transport (Malaysia) Sdn Bhd Unit 501 Block F, Phileo Damansara I No. 9, Jalan 16/11, Off Jalan Damansara 46350 Petaling Jaya Phone: (3) 7588610 Fax: (3) 7571693 Singapore =========

Address: Panalpina World Transport (S) Pte. Ltd. 61 Alexandra Terrace 08-00 Harbour Link Warehouse Singapore 119936 Contact: Ms Ester Chen E-mail: ester.chan@sg.panmail.com Phone: 011 65 2774716 Fax: 011 65 2774701 Taiwan ====== Address: Taipei (TPE) Panalpina World Transport Ltd. Panalpina Taiwan Ltd. 11/F, Transworld Commercial Building 2, Nanking East Road, Section 2 Taipei Contact: Irene Chen E-mail: irene.chen@tpe.panmail.com Phone: 011 886 2 2563 2160 Fax: 011 886 2 2541 2658 Shangai ======= Address: Panalpina China Ltd. Shangai City Rep. Office (Delegation) 28 F, Westgate Tower 1038, Nanjing Xi Road Jingan District Shangai 200041 Contact: Ms Bei Qi E-mail: qi.bei@sha.panmail.com Phone: 011 86 21 62726010 ext 700 Fax: 011 86 21 62175554

Hongkong ======== Address: Panalpina China Ltd. Top Floor, ATL Centre B Berth 3 Kwai Chung Container Terminal Hong Kong Contact: Claudia Tai E-mail: claudia.tai@hkg.panmail.com Phone: 011 852 2760 2773 Fax: 011 852 2760 2776

Section 4 - Samples for Cargo Delivery Advise and Cargo pick up Request
CARGO DELIVERY ADVISE --------------------------------------FROM: _________________________________________________________ TO: ____________________________________________________________ P/N:____________________________________________________________ PO.NBR:________________________________________________________ SHIP TO CODE:__________________________________________________ INVOICE NBR:___________________________________________________ METHOD OF SHIPMENT:__________________________________________ ORIGINAL INVOICE ALONG THE CARGO: ( ) YES ( ) NO Note: It is mandatory the shipping of 1 original invoice and 1 original packing list along the cargo. QTY OF PALLETS/BOXES:________________________________________ MEASURES:_____________________________________________________ TOTAL WEIGHT:_________________________________________________ TRACKING#_____________________________________________________ ETD:____________________________________________________________ ETA:____________________________________________________________ CARGO PICK-UP REQUEST ---------------------------------------FROM:____________________________________________________________ TO:_______________________________________________________________ P/N:_______________________________________________________________

PO.NBR.:___________________________________________________________ SHIP TO CODE:_____________________________________________________ INVOICE NBR:______________________________________________________ METHOD OF SHIPMENT: AIR ( )_______OCEAN ( )______________________ ORIGINAL INVOICE ALONG THE CARGO: ( ) YES ( ) NO Note: It is mandatory the shipping of 1 original invoice and 1 original packing list along the cargo. QTY OF PALLETS/BOXES:___________________________________________ MEASURES:________________________________________________________ TOTAL WEIGHT:____________________________________________________ ADDRESS FOR PICK-UP:_____________________________________________ DATE:_____________________________________________________________ TIME:______________________________________________________________ PERSON TO CONTACT : ________________________phone number:_________

Section 5 Certificate of Agreement and Compliance by the Vendor

Dear Vendor, Please read carefully the instructions contained on this shipping instructions. Any mistake made by you may incur in penalties to IBM, who will demand reimbursement at the vendor's expenses. Please sign this document, confirming your full understanding and return it to my attention. ____________ Buyer's name ____________________________________________ I have read this Shipping Procedures Instructions, fully understood it and agree with the compliance of all it's terms. I also acknowledge that any mistake made by me will grant IBM Brazil the right to demand full reimbursement of the costs incurred, at my own expenses. _____________________________________ Vendor Representative name/signature/date