Question

explain Trade documentation and International Commercial Terms. (may refer to a myriad of documents) that countries and firms use to engage in international trade.

Answer 1

Trade Documentation :

Trade Documentation is the paper documents used in international trade to export goods from one country, transport the goods internationally, and import to another country, in compliance with the rules and regulations of both countries. The document used in international trade may be grouped by function into five category :

* Commercial: the invoice and packing list.

* Transport: Air waybill, Bill of lading, Sea waybill. CMR document, Rail waybill, Dock receipt, Mate´s receipt, etc.

* Legal: Documents that satisfy a governmental requirement, such as certificates of origin, Export declarations, Import licences or Consularized documents.

* Insurance: Insurance policy and Insurance certificate.

* Banking: Letters of credit, drafts, collection letters of instruction.

Internationally Commercial Terms :

International Commercial Terms are an internationally recognised set of trade term definitions developed by the International Chamber of Commerce. The terms define the trade contract responsibilities and liabilities between a buyer and a seller.There are various Internationally Commercial Term, some explain as below :

* Ex Works : The buyer virtually takes care of all the transport responsibilities and the only obligation of the seller is to have the cargo available at an agreed-upon time and premise.

* Free Carrier : The seller’s responsibility is simply to provide the cargo that has been cleared for export at a specific delivery point.This is common for intermodal transport since the transport load, such as a container, has been assembled and is ready to be picked up.

* Cost and Freight : The seller brings and unloads the cargo at a port of destination, but the buyer assumes the risk as soon as the cargo is loaded at the port of origin. The buyer has the responsibility of picking up the cargo.

* Cost, Insurance and Freight : Same as above, but the seller also provides insurance for the cargo up to the port of destination. It usually applies to bulk cargo.