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The Fundamentals of Export Documentation
by Eric W. Petersen
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
SLI/SED
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.
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 (www.customs.gov/xp/cgov/export).
