Project on export business of leather Coordinator Sahiwal and required documentation for export. Project acquired for the International Business course by Mr.Moazzam Ali Lecturer in COMSATS INSTITUTE OF INFORMATION TECHNOLOGY SAHIWAL Letter of credit also discussed in detail

1. Process and Documentation for
Export of leather
Presented by:
Abusufian Rasheed
Rana Rashid waqas
Salman Yamin

2. General Perspective of Export
Documentation
 NTN
 Sales Tax Registration
 Bank Account Current
 Chamber Membership
 Documents for Clearing Agent
 Packing List.
 Commercial Invoice.
 Letter of Credit (L/C).
 Certificate of Origin which is issued by Chamber of Commerce.
 National Tax Number Certificate
 Form “E”
 Submission of Export Documents to the bank.

3. Letter of Credit
• A guarantee from the importer’s bank that it
will act on behalf of the importer and pay the
exporter for the merchandise if all relevant
documents specified in the letter of credit are
presented according to the terms of the letter
of credit.
– In essence the importer’s bank is substituting its
creditworthiness for that of the importer.

4. Parties Involved in a LC Transaction
A. Importer
B. Importer Bank
C. Exporter
D. Exporter Bank (seller’s Bank)
E. Shipping Company
G. Insurance Company

5. Time Draft
• A written order instructing the importer or his
agent, the importer’s bank, to pay the amount
specified on its face on a certain date.

6. Bill of Lading
• A document issued by the common carrier
specifying that it has received the goods for
shipment; it can serve as title for the goods.

7. Banker’s Acceptances
• The exporter’s bank presents the shipping
documents and the time draft to the importer’s
bank.
• After taking title to the goods via the bill of
lading, the importer’s bank accepts the time
draft.
• At this point the banker’s acceptance is created.
– It is a negotiable money market instrument.
– A secondary market exists for banker’s acceptances.

8. Banker’s Acceptances
• Banker’s acceptances can be held to maturity
by the exporter.
• The exporter can also sell it (at a discount) in
the money market.
• Since the risks are similar, B/As trade at rates
comparable to certificates of deposit.

9. Diagram of Letter of Credit Transaction
Importer Bank (foreign)
Exporter Bank (US)
Importer
Exporter
ProductsProducts
$
Docs
$
$
Docs

10. Process of a Typical
Export Transaction
Importer’s Bank Exporter’s Bank
Importer Exporter
Money
Market
Investor
Purchase order1
2
Letter of Credit3
4 6 9
5 Shipment of goods
1410 11
Shipping Documents and
time draft accepted
7
Payment-discounted value of B/A8
B/A
12
13 16
B/A presented at maturity
15

11. Export procedure of Leather Coordinator
(Mr.Iqbal, 2015)
– Order Sheet
• Sample design (in paper or soft form)
• Size
• Rate
• Quantity
• Quality
– Performa Invoice
– Cargo and Custom clearing documentation

12. Performa Invoice
Buyers
Description of Goods
Total Quantity
Value
Currency
Shipment Type
INCOTERMS
Delivery Date
Payment Mode

13. Cargo and Custom clearing documentation
• The Shippers Letter of Instruction for Issuing AIRWAY
bill
• Packing List/Weight Note
• Invoice
• Letter of credit
• Cargo Agent
• Form E
• Clearing Agent
• Covering letter
• Covering schedule

14. The Shippers Letter of Instruction for Issuing AIRWAY bill

15. Packing List/Weight Note Invoice

16. Form E AZO Certificate

17. GSP Form-A AIRWAY Bill

18. GD-I Form (Goods declaration Form)

19. Charges for Exports
• Service Charges=0.15% minimum
• With holding Tax= 1% @Leather
• Export development charges= FOB value
0.25% (MEHKARI, 2003)
• Courier charges=1500 minimum.
• Container charges= 1200$-2500$ per
Container

20. Any Question
?