International trade is largely a business of documentations. This is due
to the fact that the goods can be in transit for more than 2months but the
documents gives evidence of the shipment and details of the goods. This in turn
gives comfort the buyer, broker, bank, insurance and any other party involve in
the transaction. Documentations are so vital in international trade and
therefore could jeopardise the success of an export project if not properly
done. For example it can hinder the clearance of the goods at either the port
of loading or the port of discharge. Under a letter of credit transaction, it
can delay the payment if the documents have some discrepancies.
Based on the nature of the documents involve, they could be broadly
categorise into commercial, financial and regulatory documents. The commercial
documents include Bill of lading, commercial invoice, packing list, certificate
of analysis etc. The financial documents include Draft and Bill of Exchange
while the regulatory documents vary from one country to the other and from one
product to the other. In Nigeria it involves NXP, NESS receipt, NAFDAC
Certificate, MANCAP Certificate, Health Certificate etc
A new entrant in the export business should answer the following
questions about the paperwork as he prepares to start the business and they
include the following: What are the documents required in the export process?
Where can the documents be obtained? When are the documents supposed to be
processed? Who are the people that need the documents? Why the documents are necessary?
Which documents are required for different categories of products? How does the
exporter prepares the documents to be issued by his company? I will attempt to
answer these questions in a concise manner in order to give the readers a
foundation for further research.
The first question states, what are the documents required in the export
process? The basic export documents include transport documents (Bill of
lading, Airwaybill, Road Waybill etc), Commercial Invoice, Packing list,
Quality and Quantity Certificate, Certificate of Origin, Phytosanitary
Certificate, Fumigation Certificate, NXP form, Export Certificate, Certificate
of Incorporation, Proforma Invoice, Receipt of payment Nigeria Export
Supervision Scheme (NESS) fee, Single goods declaration, NXP endorsed by the
Nigerian Customs Service and Clean certificate of inspection etc.Kindly note that
not all these documents (especially the certificates) are required for every
export transaction
The second question poses a great challenge to an exporter and it
states, where can the documents be obtained? The transport document is obtained
from the carrier (Shipping line, Airline etc), the exporter issues the
Commercial Invoice, Packing list and proforma invoice on his letter head. The
Quality and Quantity Certificate are issued by the inspection agent appointed
by the buyer, Certificate of Origin can be issued by NACCIMA, Phytosanitary
Certificate is issued by Nigerian Agricultural Quarantine Service, Fumigation
Certificate is issued by federal produce, NXP form can be obtained from
commercial banks, Export Certificate is issued by the Nigeria Export Promotion
Council, Certificate of Incorporation is issued by the Corporate Affairs
Commission, NESS fee can be paid in some commercial banks, Single goods
declaration and Endorsed NXP are obtained from the Nigerian Customs Service and
the Clean Certificate of Inspection is issued by the government appointed
inspection agents and this include Cobalt International, Carmine Assayer and
Neroli Technology.
The next question states that, when are the documents supposed to be
processed? This is also a very crucial question because if the documents are
not issued in the correct period, this could jeopardise the success of the
transactions. The documents obtained and processed through the bank before
shipment are called the pre export documentations and they include NXP form,
Export Certificate, Certificate of Incorporation, Proforma Invoice, Receipt of
payment Nigeria Export Supervision Scheme (NESS) fee. The documents processed
and obtained after shipment are called post export documentations. These can be
divide into two groups namely the Shipping Documents (transport documents (Bill
of lading, Airwaybill, Road Waybill etc), Commercial Invoice, Packing list,
Quality and Quantity Certificate, Certificate of Origin, Phytosanitary
Certificate, Fumigation Certificate etc) and the Exchange Control
Documents (Single goods declaration, NXP endorsed by the Nigerian Customs
Service and Clean certificate of inspection)
The fourth question states that, who are the people that need the
documents? The pre export documents need to be processed by the exporters
through the bank in order to legally clear their goods for export in Nigeria.
The shipping documents are needed buy the seller to show evidence of shipment
and claim payment and they are needed by the buyer to meet the regulatory to
meet the regulatory requirements needed to clear the goods at the port of
discharge. Finally the exchange control documents are needed by the banks to
confirm that export proceeds received by an exporter were based on legally
exported items before reporting to the inflow to the Central Bank of Nigeria.
The fifth question is a question of function and it states, why are the
documents are necessary? These documents are very vital because of what they
represent. For example a Bill of lading in the hand of an exporter performs
three major functions which include evidence of receipt of goods by the
shipping line, evidence of contract of carriage with the shipping line and
evidence of title to the goods by the consignee stated on it. The commercial invoice
also have a number of functions which include showing the details of the item
and the amount to be paid, it forms the basis for the payment of duty and
amount to be insured. The packing list helps the exporter in stuffing the
container, it helps the customs in their examination and helps the importer in
calculating the total units of items in the container. Other documents like
certificates help the importer to confirm the quality, quantity, origin and
parameters of the goods.
The second to the last question states that, which documents are
required for different categories of products? It is very important to note at
this point that while the pre export documentations and exchange control
documents are constant for every shipment (especially if it is going through
the seaport), the shipping documents varies from one products to the other. For
example Agricultural produce like cocoa will require Phytosanitary and
Fumigation Certificates but these are not needed for solid minerals. Processed
food will require NAFDAC certificate but non-food Item will not require this
document but will require MANCAP certificate. It is therefore important for the
exporter to investigate and know which of these documents applies to his
product before commencing the export project.
The last question that needs to be answered by the exporter states that,
how does the exporter prepares the documents to be issued by his company? The
documents to be issued by the exporter include the proforma invoice, commercial
invoice and packing list. The content of both the proforma and commercial
invoice are similar and these include the items being shipped, unit price,
quantity, total value, Incoterms and other cost. The proforma is issued before
shipment while the commercial (or final invoice) is issued based on the items
that were eventually shipped. The packing list contains the the details of the
packaging materials ( bag, carton, pallet etc), the number of items inside each
pack, the container number, unit weight etc. Samples of these documents can be
obtained on the Internet. You can also find it in my book title Export Business
Made Easy.
On a final note, proper documentations are very critical to the success
to an export transaction. The paperwork therefore require detailed investigation
and understanding in other to avoid all the challenges that may arise at both
the port of loading and port of discharge due to wrong documentations.
For questions on
this thought, you can reach me via email to bayemibo@3timpex.com
