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The
Fundamentals of Export
Documentation
Accuracy Saves
Time and Money
by Eric W. Petersen
As appearing in
ExportAmerica, October 2003
The basics of U.S. export
documentation include but are
not limited to a commercial
invoice, packing list,
certificate of origin,
shipper's letter of
instructions, shipper's export
declaration, and ocean bill of
lading or air waybill.
Depending upon the ultimate
destination, further
documentation may be required
in order to fulfill the terms
of sale as well as to adhere
to the particular customs
regulations of a given nation.
Generally speaking, nations of
both Latin America and the
Middle East may not be as
lenient as European or Pacific
Rim nations when assessing
compliance with their
individual documentation
requirements, assessments that
could result in customs
penalties and fines, temporary
seizure of goods, or the
forfeiture of goods.
Absolute adherence to export
documentation requirements
need not be viewed as simply
the task of complying with
U.S. and foreign customs
regulations. On the contrary,
documentary compliance is an
important task when completing
any export transaction and in
some cases can help to avoid
any negative financial
repercussions associated with
errors in documentation.
In most cases, a freight
forwarder, airline, or
steamship line will prepare
the air waybill or ocean bill
of lading on behalf of an
exporter. Both of these
documents are essential to
their respective mode of
transportation; each clearly
defines the terms and
conditions of the export
transaction and should also be
consistent with any and all
additional information
provided on the remaining
export documents. The waybill
and the bill of lading each
confirm receipt of the cargo
to be shipped, contain a
description of the cargo, and
set forth the contract of
carriage between the
owner/shipper and the carrier.
Commercial Invoice
Obviously, a seller issues
a commercial invoice to a
buyer in an export
transaction. Along with an
ocean bill of lading or an air
waybill, the commercial
invoice needs to present the
principal information of the
export transaction and
includes the following:
- Name of the seller of
the goods
(shipper/exporter)
- Name of the buyer of the
goods (consignee/importer)
- Commercial value in U.S.
dollars (unit price/total
value)
- General description of
the goods
- Date of the transaction
- Any applicable reference
numbers (e.g., invoice
numbers, purchase order
numbers, letter or credit
number, etc.)
- Original signature (not
required for every
destination)
- Diversion clause
- Terms of sale
- Terms of payment
Packing List
In addition to clearly
identifying the seller and
buyer of the goods (in
accordance with the commercial
invoice), the packing list,
prepared by the
seller/shipper, should also
clearly indicate the specifics
of each package. As with other
export documents, the
information on a packing list
must be consistent with each
export document presented to
U.S. Customs. Any
discrepancies between a
packing list and an air
waybill or ocean bill of
lading regarding the exact
number of packages and weight
will generally result in
customs clearance delays at
destination. A basic packing
list contains the following
information:
- Name of the seller of
the goods
- Name of the buyer of the
goods
- Date of the transaction
- Any applicable reference
numbers
- The quantity and type of
packages shipped (e.g.,
cardboard cartons, wooden
crates, skids, etc.)
- The net weight and gross
weight of each package
- The dimensions of each
package
Certificate of
Origin
A certificate of origin is
not required for every
destination, although it is
should be considered an
important export document for
several reasons. Some nations
may require a certificate of
origin to compile statistical
trade data, while other
nations may use a certificate
of origin for financial
reasons (e.g., to assess the
eligibility of goods for
preferential duty rates or
duty-free importation). Most
nations use and accept many
formats of a certificate of
origin provided they contain
the necessary information.
However, some nations, Israel
in particular, will only
accept one distinct type of
certificate or origin. A
standard certificate of
origin, prepared by the
shipper or the forwarder,
contains the following
information:
- Name of the seller of
the goods
- Name of the buyer of the
goods
- General description of
the goods
- Date of the transaction
- Any applicable reference
numbers
- Original signature
- Diversion clause
- Named origin of goods
- In many cases, the
certificate of origin will
need to be notarized by a
local chamber of commerce
Shippers Letter of
Instruction/Shippers Export
Declaration
A shipper's letter of
instructions (SLI) is used to
clarify the exporter's
intended transportation and
payment terms to the
respective freight forwarder,
airline, or steamship line.
A shipper's export declaration
(SED) is required for export
from the United States, and it
provides necessary export
information to several U.S.
government agencies. The U.S.
principal party of interest (USPPI)
must complete the SED. The
USPPI is defined as the
exporter for export control
purposes. However, there are
instances in which a foreign
party may act as the principal
party of interest (PPI), in
which case it is necessary for
the U.S. exporter is to
provide a foreign power of
attorney. The SED must also
clearly identify the ultimate
end user of the export
shipment. Generally, when the
value of each exported
commodity (Schedule B number)
is less than $2,500 and is not
licensable, an export
declaration is not submitted
to U.S. Customs; however, U.S.
Customs must be notified of
this exemption on the bill of
lading or air waybill. (An SED
is not required for most
shipments to most countries if
the value of each
commodity/Schedule B number is
less than $2,500.
Nevertheless, an SED is
required for shipments to
certain countries and for
shipments subject to export
licenses regardless of value.
See the resource list for more
information.)
Although the SLI and SED are
available separately, they are
now commonly merged into one
document. Also, a signature on
the SED (or the merged SLI and
SED) acts as a one-time
limited power of attorney for
any involved third parties
such as freight forwarders.
The SLI and SED generally
contain the following
information:
- Name of the USPPI or
foreign PPI
- Name of the ultimate
consignee of the goods
- Intermediate consignee,
if applicable
- General description of
the goods
- Date of exportation
- Any applicable reference
numbers
- Original signature by a
duly authorized officer or
employee of the USPPI
- Diversion clause
- U.S. state of origin
- Mode of transportation
- Port of loading and
unloading
- Temporary import number
and or import entry
number, if applicable
- Request for insurance
coverage (or denial)
- Return or abandon
instructions should a
consignment be
undeliverable
- Country of ultimate
destination
- Schedule B number and
value of each commodity
tendered for export
- Export license number or
license exemption
- Export Control
Classification Number (ECCN),
if applicable
- Origin of production
(domestic, foreign, or
items produced for the
Foreign Military Sales
program)
Export documentation may
vary on a shipment-by-shipment
basis; as such, clear
instructions should be
obtained for each export
transaction. Financial
documents, such as a sight
draft or a letter of credit,
may stipulate that additional
export documents be provided
in order to fulfill the terms
of a given contract. Some
destination countries may also
require that their respective
consulates in the United
States legalize certain
documents prior to export from
the United States. Other
documentation, such as
inspection certification,
export licensing, or an
insurance certificate, may be
required depending on the
commodity, the destination,
and/or the transaction. The
importer of U.S. goods may be
responsible for other
documentation (e.g., an import
license) that affects the
export shipment. A freight
forwarder or any other
third-party transportation
company assisting an exporter
can provide specific
documentation requirements on
a shipment-by-shipment basis.
About the Author
The author works for a
multinational freight
forwarding and transportation
logistics company. Shipment
documentary requirements vary
by country and transaction and
are subject to change. This
article is only a general
guide, and it should not be
used without checking with
customs and foreign trade
regulatory authorities in both
the United States and the
country of destination of an
export shipment.
Resources
For information about when
to file an SED, see the
"Need Help Completing the
SED" link, which is
accessible from the SED header
of the U.S. Census Bureau's
foreign trade page (www.census.gov/foreign-trade/www
). The user guide of AESDirect
(www.aesdirect.gov)
also provides information on
SED filing requirements. (The
Automated Export System, or
AES, is an electronic means of
filing shipment information
directly to U.S. Customs; it
is an alternative to paper
SEDs. The AES offer options
for transmitting data to U.S.
Customs. One option is
AESDirect, the Census Bureau's
free, on-line program.) The
U.S. Bureau of Customs and
Border Protection has an
export site that includes
information and interagency
links regarding the AES,
export licenses, denied
persons lists, and more http://www.customs.gov/
.
Date
Updated: March 27, 2007
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