For those fascinated by international trade, let’s go through the rudiments of export where lengthy processies are boiled down to 3 baby steps: documentation preparation, customs clearance and shipping, and billing.
1. Preparation: documentation, market and product package.
The process starts with preparing a properly established, legally recognized business as follows:
A commercial registration as a juristic person with the Department of Business Development, Ministry of Commerce. A VAT registration with the Revenue Department, Ministry of Finance, to request a taxpayer code and identification card.
The commercial registration is in accordance with governing regulations and the type of product being registered for trade, such as fresh, refrigerated and frozen produce requires a farm for export registration with the Department of Agriculture, Ministry of Agriculture and Cooperatives. Fishery products require a fishing permit as well as fishing and fish trading professional registration with the Department of Fisheries, Ministry of Agriculture and Cooperatives. Orchid flowers requires an orchid export permit from the Department of Agriculture, Ministry of Agriculture and Cooperatives.
Submitting an offer to sell and the quotation to foreign importers.
Accepting and preparing orders.
Preparing shipment and export documentation as instructed by the buyer or importer in another country as compulsory for the exporter to enclose with the export.
2. Customs Clearance and Shipping
The customs clearance process involves submission of thorough documentation and lengthy details required to facilitate export into a foreign country. As no margins of error are allowed, some exporters opt to obtain the service of a professional customs broker or shipping agent to ship goods overseas on their behalf. Such service may include the provision of cargo ships and preparation of customs documents in compliance with customs standard operating procedures.
Sub-customs procedures may vary by product type according to certificate requirements to be enclosed with the shipment. Information is available in detail at the Department of Export Promotion’s website, at www.depthai.go.th. General steps, nonetheless, are as follows.
Request for a safety and quality standard certificate, such as requesting a Health Certificate for food, vegetables, fruits, and fishery products.
Request for a certificate of origin with the Department of Foreign Trade, Ministry of Commerce, to grant tax deductible benefits to the importer and a competitive price edge to Thai products.
Request for a cargo ship or aircraft reservation, according to required modes of shipment, and a valid product insurance plan.
Plan export management according to the conditions specified by the buyer in the letter of credit, or L/C, in all respects. Failure to do so at the risk of non-payment for products shipped.
Prepare customs clearance documentation, which includes the following:
Export shipping order
Product invoice with listed items and product price equal to that of all specified in the export shipping order
Request for product inspection and container loading
There are 2 customs clearance systems to choose from
The manual process starts with customs documentation and coordinates examination, product price assessment for applicable export duty, documentation data-entry into the computer system, and the final product check before releasing cargo out of the port to complete the customs clearance process
The EDI system requires advance registration as an EDI user where the exporter enters and submits required information in the invoice and the export shipping order through an authorized application online via personal computer where the submitted information is automatically sent to customs. Upon customs examination and approval, the exporter will be notified of the appointment with the date and time to visit to make the payment. Subsequently, the product is released to the cargo ship, along with all required export documents and certificates enclosed by the exporter, to complete the customs clearance process.
Shipped products, whether by water or by air, the exporter must submit pertaining documents to the seller’s bank for payment collection. Such documents include the L/C or PO (purchase order), bill of lading issued by the carrier to the agent consigning the goods, along with the invoice, packing list and bill of exchange. To complete the billing process, the seller’s bank then examines the documents and sends them to the bank of the overseas buyer to notify the buyer to make the payment and transfer the amount to the seller through the seller agent’s bank.
Compiled by BLOG.SCGLogistics
References and photos : freepik.com, businesslinx.globallinker.com/bizforum/article/