Chapter 9: Performance of Import and Export Contract Abstract: this chapter mainly talks about the main steps

in the general process in performance of the contract and its related issues that should be paid close attention to. Section 1: Performance of Export Contract Section 2: Performance of Import Contract Section 3: Main documents of import&export Section 1: Performance of Export Contract Exporter will experience many steps in performance of the export contract under CIF terms, payment by L/C. They are as follows: 1. Preparation of the goods, applying for inspection 2. Urging the establishment of L/C, examination of L/C, asking amendment to the L/C (1) Urging establishment of L/C (2) Examination of L/C Both the bank and export firm have the responsibility to examine the L/C. The bank mainly examines the contents, such as authenticity, background of issuing bank, credit ability, payment ability, etc. The export firm mainly examines the consistence of the L/C and contract (3) Asking amendment to the L/C Both applicant and beneficiary can ask for amendment to an L/C. If the beneficiary asks for amendment, the usual procedure is that the buyer should first obtain consent form the beneficiary and then instruct the opening bank to amend the L/C. Beneficiary----applicant----issuing bank----advising bank----beneficiary 3Shipment, Making Declaration to the Customs, Taking out Insurance (1) Steps of shipment 1, checking the date of shipment, fills in the booking note of the export goods (B/N) 2. Shipping company or shipping agency issues the shipping order 3. After shipment, the master or mate issues the mates receipt 4. Shipper exchanges the mates receipt for the bill of lading from the Ocean Shipping Agency. (2) Declaration to the Customs There are three kinds of companies making declaration to the customs: the specialized enterprise for customs clearance, the agent, the enterprise dealing with it on its own? (3) Taking out Insurance four lining examining the four condition documents with goods, documents without goods, no documents, no goods, no goods, no documents Three balance means to achieve an effective coordination among goods, documents and shipments. 4. Making out documents for settlement under L/C (1) Three means to make settlement under L/C 1. Make Settlement after the Payment Is Made 2. Make Time Settlement 3. Make Settlement through Negotiation (2) Several methods to deal with discrepancies 1. Discrepancies addressed by documents 2. Discrepancies addressed by telegraph 3Documentary collection

Section 2: Performance of Import Contract The main steps in the general process in performance of the import contract are (under FOB terms, payment by L/C) as follows: 1. 2. 3. 5. 6. Open L/C Conclusion of the transport contract Cover insurance Customs entry Taking delivery and allocation

4. Examination of documents and payment for the purchanse price

Section 3: Main documents of import&export 1. Main operating documents of import&export (1) Inspection certificate (2) Customs declaration (3) Insurance policy (4) Shipping order (5) Mates receipt (6) The checking form of collecting foreign currency (7) Tax-refund form of export goods 2. Main documents of import&export for settlement (1) Bill of exchange (B/E) (2) Invoice 1. Commercial Invoice Note: The column of To__ in a commercial invoice refers to consignee. Case analysis: 2. Customs Invoice The customs invoice is one of the documents required by the customs which has a unified form. 3. Consular Invoice 4. Manufacturers Invoice 5. Proforma Invoice The proforma invoice is an invoice sent for forms sake. It serves as a price reference and enables the buyer to make the necessary preliminary arrangements, such as obtaining an import licence. (3) Bill of Lading (4) Insurance Policy (5) Certificate of Origin (6) Genernalized System of Preferences Documents (7) Packing List, Measurement List and Weight Memo (8) Inspection Certificate 3. Basic principles of making and examming documents. Accuracy, complete, prompt, concise, neat The order of issuing documents is as follows: Commercial Invoice, Packing List; Certificate of Origin; Inspection Certificate; Insurance Policy; Bill of lading; Draft Summary: This chapter mainly talks about the main steps in the general process in performance of the contract and its related issues that should be pay close attention to. Key point: Import&export documents

Difficult point: document for settlement under the L/C Questions:

1. What kind of work do both parties need to do to fullfill the import&export contract? 2. What are the precautions of amending L/C?
3. What kind of the methods do we have to deal with the discrepancy?

4. Whatre the methods of making document for settlement? Termination of the export contract The exporter and the importer under an export contract need carefully to consider how the contract will come to an end. In the real world, a contract is terminated when the exporter and the importer fully and properly performed their duties under their mutual benefit. In practice, the seller delivers the goods required under the contract, and in the quantity and the quality stipulated by the contract, while the buyer pays the price of the contract and takes the delivery of goods. Nevertheless, there are many reasons why the export sale contract cannot be performed as it should have been, and these include: -Casualty events affecting the goods during the course of transport from the buyer to the seller; -Political risk in either export or import markets; -Force majeure (those events frustrate the performance of the contract and which are beyond the control of both parties to the contract); -Failure of ability of pre-shipment finance; -Failure on the buyers part to pay for the goods in accordance Hon thnh hp ng