SHIPPING AND CUSTOMS FORMALITIES FOR
IMPORT & EXPORT CONSIGNMENTS
We know importers of one country procure / import goods from another country and exporters of
one country sell / export goods to other countries. There are many parties / Agencies involve with
this International trade i.e. L/C opening Bank, advising bank, importer, exporter, negotiating bank
etc. Besides, these parties the following three agencies also play a vital role to execute import
/export trade:-
i. Shipping line / Agencies / Company
ii. Custom Authority
iii. C&F Agent
Formalities to be followed by the above three Agencies in handling import and export trade
may be explained in two ways:
FOR IMPORT
a. Intimation:
Immediate after receipt of the documents/ arrival of consignments in the port, the L/C opening
bank scrutinize the documents and issue intimation to the importer, seeking disposal
instruction in case of discrepancy(s) and request the importer to retire the documents if the
documents are found in order as per L/C terms on the date of lodgement by sending cost
memo indicating the amount payable by him under different heads. The importer also receives
intimation from foreign supplier.
b. Nomination of C&F Agent:
After getting the intimation the importer either retires the import documents against full
payment or requests the Bank to arrange clearance of the consignment through enlisted C&F
agent nominated by him by extending MPI facilities.
c. Endorsement of Shipping Documents
If the importer retires import documents, bank endorse the documents in favour of the client. If
the importer requests the Bank to release the consignment from the port, the bank endorse
the shipping documents such as, certified Commercial Invoice, Bill of Lading /AWB/ Truck
Receipt, Packing List certified Invoice, Packing list which is Inspected by PSI Co. & PSI
certificate, certificate of origin etc. in favour of designated branch adjacent to the port with
request to arrange release of consignment through nominated C&F agent from among the
enlisted C&F agents of our Bank.
d. Function of CNF Agent & Custom Authority
On receipt of documents from the Bank the CNF agent goes to port authority and
produce/submit the following documents including the above documents to the custom
authority and also pay all port dues/charges and custom duties, if any.
i) Copy of L/C. (Attested by the Bank).
ii) Copy of Export L/C (Attested by the Bank), if applicable.
iii) Commercial Invoice.
iv) Proforma Invoice/Indent.
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v) Packing List.
vi) Bill of Entry (Prepared by C&F agent).
vii) LCA Form.
viii) VBF-6 Form (undertaking to abide by the rules of custom).
ix) BGMEA Certificate {(if applicable) (Declaration for taking all responsibilities)}.
x) General Bond (if applicable).
xi) Copy of Insurance Cover Note, Money Receipt, Policy.
xii) Copy of Bonded warehouse licence (if applicable).
xiii) Certified copy of IRC
xiv) No Objection Certificate (Land Port)
xv) B/L.
xvi) Bill of Exchange
xvii) Certificate of origin
xviii) Original TIN & VAT certificate if the importer is new comer or photocopy thereof.
Besides the above, certificate regarding, Fit for human/ animal /consumption, phytosanitary
/furnigation certificate, chemical Analysis test certificate and Radio activity test certificate, P.P for
Second Hand clothings, permission of chief inspector of explosives for import of explosives
including calcium carbide, permission of D.G Health for import of drugs & medicines etc. are also
required in case of import of specific items like food grain, milk food, edible oil fertilizer etc.
The CNF agents also prepare bill of entry and place the same to custom authority. When the goods
comes to the port and unloaded. The custom authority Examine/check/verify the goods whether the
item is OK or not and asses the tax/duties and the custom authority gives clearance on the bill of
entry after getting the duties (if any).
The CNF agent takes delivery of the goods from the port authority after getting D.O. (Delivery
Order) from the shipping company and bring the same to the godown of the importer/Bank as per
instruction.
For Export
a. Keep the goods ready for shipment.
On receipt of export order/LC the exporter procure /produce required goods and keep the same
ready for shipment.
b. Inspection of goods
The competent authority then inspect the goods and issue a certificate of quality as required in
the L/C /Order.
Inspection may be conducted by the following authorities:
1. Chamber of Commerce and Industries.
2. Any other agencies authorised to inspect the goods as stipulated in the L/C.
Contact with shipping company:
The exporter/CNF agent then book space in the ship for shipment of goods.
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Preparation of documents and hand over the goods to CNF agent:
The exporter then prepare the export documents.
Like invoice, packing list, fill up the EXP Form in four copies and request his Bank to certify the
EXP Form. EXP certificate & Advance receipt voucher (Incase of advance receipt or proceed
receipt within 90 days from the issuing date of EXP form)
After getting the same from the bank he has to hand over the documents to his nominated CNF
Agent. CNF agent then submit the following document to the custom authority and the custom
authority certify the EXP Form and shipping bill after proper verification/examination.
1. EXP Form with EXP certificate.
2. Commercial Invoice;
3. Packing List;
4. Copy of Export L/C;
5. Shipping bill (prepared by CNF agent);
6. Declaration from BGMEA, if applicable;
7. Quota allocation letter (for quota item);
8. Shipment sample approved by BGMEA, if applicable;
9. VBF 9 Form.
The exporter also hand over the goods to the CNF agent alongwith the documents. The CNF agent
take the goods and bring it to port and hand over the same to the shipping company after getting
custom clearance.
Shipping Bill : Port dues and berthing charges are paid in a paper which is called shipping Bill.
This is prepared by CNF agents and submitted to port authority by then after shipment of cargo
alongwith the following :
i) Invoice
ii) EXP form
iii) ERF ( Export registration form)
iv) VBF 9A
Function of Shipping Company:
When the shipping companies receive the goods they hand over the same to nominated surveyor
(LMD = Licence Measures Department) for weight and measurement, on receipt of the weight and
measurement certificate the same will be produced to Chamber of Commerce for approval.
Immediately when the cargo has been lifted on board on the basis of LMD. Mate receipts are
issued by the master/chief officer of ship and finally bill of lading is prepared on the basis of mate
receipt which is an acknowledgment of receipt of goods by shipping company.
Sending of Shipping Advice:
After shipment of goods and receipt of B/L and documents from the clearing and forwarding agents
a shipping advice to be send to the importer of the goods in abroad. So that he can arrange/ take
delivery of the consignment.
Preparation of export documents and submit the same for negotiation:
After shipment of goods the exporter collect the B/L from shipping company by payment of freight
and prepare necessary documents like invoice, packing list, certificate of origin, inspection
certificate etc. as stipulated in L/C and submit the same to his Bank for negotiation.
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Accounting Procedures of HPSM Investment System with Example:
Suppose a HPSM Transport Investment of Tk. 8,00,000/- has been sanctioned to the client Mr. A
for procurement/establishment/purchase a Minibus from Mr. B at Tk.10,00,000/- at 20% of client's
equity for a period of 5 years excluding 3 months gestation period. Please complete documentation
formalities, make a schedule of payment, pass vouchers upto 6 months from the date of
disbursement considering the following:
i) Bank's R.R. @ 15% per annum.
ii) Other charge incurred Tk. 500/- per month against payment of godown staff salary.
iii) Client makes regular payment of installments.'
Step: 1 dated: 01.02.2002 (For taking equity)
Dr. Tk. 200,000/- Party's Current Account No. - - - - -
Cr. Tk. 200,000/- HPSM Transport A/c. Mr. A
Step: 2 dated 01.02.2002 (For making disbursement)
Dr. Tk. 10,00,000/- HPSM Transport A/c. Mr. A
Dr. Tk. 10,00,000/- P.O. A/C fvg. Mr. B. i.e. supplier for Minibus.
Step: 3 dated 01.05.2002 (For accounting, the cost of gestation period)
Dr. Tk. 30,000/-HPSM Transport A/C. Mr./ A
Cr. Tk. 30,000/- Unearned Income on HPSM Transport A/c. "Mr. A"
Step: 4 dated 30.05.2002 (For charge rent)
Dr. Tk. 18,833.34 HPSM Transport A/C. Mr./ A
Cr. Tk. 18,833.34 Investment Income A/c. HPSM Transport.
Step: 5 dated 30.05.2002 (For recovery of installment)
Dr. Tk. 18,833.33 Current A/c of Mr. A /Cash
Cr. Tk. 18,8,33.33 HPSM Transport A/c. Mr. A
Note:
1. The rent of gestation period will be charged at the end of gestation period.
Entry-
Dr. HPSM A/c.
Cr. Unearned Income A/c.
2. The rent of gestation period will be spread up through out the 60 months investment
period proportionate rent of gestation period will be realised by debiting unearned Income
A/c and that should be credited to Investment Income A/c.
Entry-
Dr. Unearned Income A/c. Proportionately.
Cr. Investment Income A/c.
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