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Universidad Nacional Experimental Martima del Caribe

Language Coordination
English VI Administration

Unit 5
Pre-reading
I.-Answer
1.-What do you know about importing and exporting?
2.-What are some procedures and documents to import and export? Name some of them.

Basics of Import and Export


Import is to bring in the goods and services into the port of a country. It is a good brought into
a jurisdiction, especially across a national border, from an external source. The buyer of such goods and
services is referred to as an "importer". Importation as well as exportation are the defining financial
transactions of international trade.
II.-Look at the pictures. Order them with a number ( 1-5 ) to get the concept of import.
Example:

***He (the man) plays soccer at the stadium at night.

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Types of Import.
There are two basic types of import:
Industrial and consumer goods: Goods which are bought for household use, personal use, or
family use from retail stores (consumer goods), and goods which are bought by companies to
produce other products which are sold later, (industrial goods).
Intermediate goods and services, which are used by a business in the production of goods or
services. They are also referred to as producer goods.

Companies import goods and services to supply to the domestic market at a cheaper price and
better quality than competing goods manufactured in the domestic market. Companies import products
that are not available in the local market.
There are three broad types of importers:

Looking for any product around the world to import and sell.
Looking for foreign sourcing to get their products at the cheapest price.
Using foreign sourcing as part of their global supply chain.

Direct-import refers to a type of business importation involving a major retailer (e.g. Wal-Mart) and
an overseas manufacturer. A retailer typically purchases products designed by local companies that can be
manufactured overseas. In a direct-import program, the retailer bypasses the local supplier (colloquial
middle-man) and buys the final product directly from the manufacturer, possibly saving in added costs.
This type of business is fairly recent and follows the trends of the global economy.

Advantages of Import
It reduces dependence on existing markets
It exploits international trade technology
It extends sales potential of existing products
It maintains cost competitiveness in your domestic market
Disadvantages of Import
Importation of items from other countries can increase the risk of getting them which is no more
common in the warm weather.
It leads to excessive competition.
It also increases risks of other diseases from which the country is exporting the goods.
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III Answer the questions about the text above


1.-What are the types of import? Explain.
2.-Give an example of intermediate goods and services.
3.-why do companies import goods and services?
4.-What are some types of importers?
5.-Whats direct import?

IV Complete the mind map

Disadv.
Adv.

Imports

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Export is to ship the goods and services out of the port of a country. In International Trade, "exports"
refers to selling goods and services produced in the home country to other markets. The seller of such
goods and services is referred to as an "exporter".
Types of Export
Physical Export: If goods physically go out of the country.
Deemed Export: If goods and services are supplied to another entity. The goods supplied do not
leave the country and the payment for such supplies is received either in national currency or in
free foreign exchange.
Advantages of Export
Exporting is one way of increasing your sales potential.
Increasing sales & profits.
Reducing risk and balancing growth.
Sell Excess Production Capacity.
Gain New Knowledge and Experience
Disadvantages of Export
Extra costs
Financial risk
Product adaptation
Lack of market information
Requires a lot of paperwork :export licenses and documentation

V Match the terms taken from the text above with their meanings.
1.-sales potential
2.-profits
3.-production capacity
4.-financial risk
5.-product adaptation

_____ Volume of products generated by a production plant in a period by using current


resources.
_____ Process of modifying an existing product so it is suitable for different customers or
markets.
_____ A businesss expected sales of a product in a given market for a specified period.
_____ Possibility that a company will lose money.
_____ Money a business makes after accounting for all the expenses.

International Trade Documents


Export and import documents are the heart of all international trade transactions. They provide
exporters and importers with an accounting record; with instructions of what to do with freight
information; and instructions and accounting tools for collecting payments.
Export/ import documents are more complex than those used for domestic sales due to the special
characteristics of international trade:
o geographical distance
o different customs laws
o different means of transport
o greater risks, etc.
The documents required for each shipment will depend on the conditions of sale (Incoterms) agreed
between seller and buyer.
The top ten documents used in international trade are:
Purchase Order
CMR Document
Commercial Invoice
Airway Bill AWB
Packing List
Bill of Lading B/L
Letter of Credit
Multimodal Bill of Lading FBL
Certificate of Origin
Inspection Certificate
VI Match the names of the documents with the explanations.
1.-Packing list
4.-Inspection certificate
7.-CMR Document

2.-Purchase Order
5.-Certificate of origin
8.-Multimodal Bill of lading
10.- Commercial invoice

3.-Airway bill
6.-Bill of lading
9.-Letter of credit

____________________________: Issuance of an international purchase order is normally preceded by an


exchange of information between exporter and importer with respect to the price, quality and quantity of products,
etc. This document may constitute a binding offer or a binding acceptance, depending on the circumstances.
Usually in international transactions involving a large commercial buyer, the purchase order is often the main
contract form and constitutes the first legally binding offer. In such cases, the sellers signature of the purchase order
will constitute the acceptance of the transaction.
_______________________________ is an administrative document which contains all the information about
the international sale. The item, quantity, price for the products/services sold, delivery and payment conditions, as
well as the taxes and other expenses that might be included in the sale, are detailed in an International Commercial
Invoice. The importer, with the original of the International Commercial Invoice, declares to the tax authority of his
country the amount that it must pay, to who it is going to pay and the agreed means of payment. For the exporter,
this document means a documentary evidence of the sales that it has made in foreign markets.

__________________________________ is a more detailed version of the commercial invoice but without


price information. It must include, inter alia, the following: invoice number, quantity and description of the goods,
weight of the goods, number of packages, and shipping marks and numbers. A copy of the Packing List is often
attached to the shipment itself and another copy is sent directly to the consignee to assist in checking the shipment
when received.
__________________________________ the importers bank agrees to the exporter (called the beneficiary)
that the exporter will get paid if it can prove it has shipped the proper goods by providing the corresponding
documents required by the Letter of Credit.
Exporters like Letters of Credit because the advance assurance of payment ensures the seller that it will not
waste time preparing or shipping an order to a buyer who ultimately refuse to accept or pay for the goods. An
Irrevocable Letter of Credit cannot be amended or cancelled without the consent of all Parties.
___________________________________is an international consignment note used by drivers, operators and
forwarders alike that governs the responsibilities and liabilities of the parties to a contract for the carriage of goods
by road internationally. The carrier usually completes the form, but the sender - in other words the exporter - is
responsible for the accuracy of the information and must sign the form when the goods are collected. The consignee
will also sign the form on delivery, which is essential for the carrier to be able to confirm the delivery of the goods
and to justify the payment for its services.
____________________________________is a document issued by the agent of a carrier to a shipper, signed
by the captain, agent, or owner of a vessel, furnishing written evidence regarding receipt of the goods (cargo), the
conditions on which transportation is made (contract of carriage), and the engagement to deliver goods at the
prescribed port of destination to the lawful holder of the bill of lading.
A Bill of Lading is, therefore, both a receipt for merchandise and a contract to deliver it as freight. There are a
number of different types of bills of lading and a number of regulations that relate to them as a group of documents.
_____________________________________is a non-negotiable transport document covering transport of
cargo from airport to airport. The Air Waybill must name a consignee (who can be the buyer), and it should not be
required to be issued to order and/or to be endorsed as it is not a title of property of the merchandise. Since it is
not negotiable, and it does not evidence title to the goods, in order to maintain some control of goods not paid for by
cash in advance, sellers often consign air shipments to their sales agents, or freight forwarders agents in the buyers
country.
_______________________________________is an international transport document covering two or more
modes of transport, such as shipping by road and by sea. It is also used as a carriage contract and receipt that the
goods have been received. When it is issued to the order, the Multimodal Bill of Lading is title of ownership of the
goods and can therefore be negotiated. Only authorized forwarders integrated into FIATA (International Federation
of Freight Forwarders Associations) can issued this document. It is addressed to the exporter, Multimodal Transport
Operator on destination country, and the importer.
________________________________________certifies the country in which the goods originated or in which
the preponderance of manufacturing or value was added. It also constitutes a declaration by the exporter. Virtually
every country in the world considers the origin of imported goods when determining what duty will be assessed on
the goods. Nevertheless the exporters own certification on company letterhead will suffice. In most countries,
Chambers of Commerce are the key agent in the delivery of certificates or origin. However, in some countries, this
privilege may also be extended to other entities such as ministries or customs authorities.
_________________________________________ for pre shipment inspection is a document issued by an
authority indicating that goods have been inspected (typically according to a set of industry, customer, government,
or carrier specifications) prior to shipment and the results of the inspection. Inspection certificates are generally
obtained from neutral testing organizations (e.g., a government entity or independent service company such as SGS
o Bureau Veritas). In some cases the Inspection Certificate can come from the manufacturer or shipper, but not from
the forwarder or logistics firm.

VII Choose the correct answer for each explanation

1.-International transport document covering two or more modes of transport.


a.-Bill of lading
b.-Certificate of origin
c.-Multimodal bill of lading

2.-Administrative document detailing items, prices, services, delivery and payment conditions, taxes, etc.
a.-Commercial invoice
b.-Packing list
c.-Letter of credit

3.-Document indicating that goods were inspected.


a.-Certificate of origin
b.-Air waybill

c.-Inspection certificate

4.-Main contract form in international transactions constituting the first legally binding offer
a.-International commercial
b.-International purchase order
c.-CMR transport document
invoice

5.-Document where the importers bank agrees that the exporter will be paid.
a.-Letter of credit
b.-Bill of lading
c.-Commercial invoice

VII Answer the questions about the text above.


1.-What do you think are the most important documents needed in international trade? . Choose three.
Explain why?