A commercial invoice is a document created for international shipments that contains important information about the export. It includes more details than a regular sales invoice and is used to calculate duties and confirm that the goods are legal. Commercial invoices are also used to create customs declarations.
It is important to obtain a commercial invoice and not a pro forma invoice, which is not accepted by customs.
What's in the commercial invoice?
Commercial invoices should be issued in English. If other languages are used, at least the detailed description of the product should be translated. Including the HS code will significantly speed up customs clearance. The invoice includes the following information:
Invoice number corresponding to the packing slip number
Invoice date
Order number
Consignee information (recipient): name, address, phone number, tax ID, etc.
Shipper Information (Sender)
Party Information Notified to Shipper
Shipping Information: Freight Forwarder, Date of Export
Clearly describe the goods (type, package quantity, unit, weight, etc.) according to the packing list and bill of lading
HS code
Incoterms on which the sale of goods is based
The price of each item in a specific currency (usually in U.S. dollars)
Total sales
Payment instructions
Insurance
Origin of the product (country of origin or manufacture)
Invoice signature with issuer stamp
When do I need to issue a commercial invoice?
A commercial invoice is required for any goods shipped outside the EU. Used as a customs declaration, provided by the exporter (shipper).
In other words, every time you ship a package from the EU to a country outside the EU, you need to fill out a commercial invoice.
Do you need to keep records of commercial invoices?
Yes, it is very important to keep records of commercial invoices and any customs documents.
If you are VAT registered, you will also need to record your exported goods in your VAT account. This is important as you will need this information at all times when completing your VAT return.
A customs declaration is a document showing a list and detailed description of the goods imported or exported. Customs declarations are mainly submitted by travelers at the borders of individual countries upon arrival or departure.
Through customs declaration, customs authorities control the type of goods or items that are imported or exported. Essentially, it is used to determine import duties or to comply with export regulations during export or import.
Through customs declaration, customs authorities control the type of goods or items that are imported or exported. Generally, the control has two main purposes:
Import: Protect the country from goods that are harmful or dangerous to the economy and the environment.
Exports: Executive orders restrict the export of certain goods and impose surveillance measures.
Passengers who fail to declare their imported or exported goods correctly may be subject to fines or confiscated goods. However, in some cases, high import duties are imposed on certain goods to prevent citizens or businesses from importing them.
Generally, it is the owner of the goods or a person acting on his behalf (representative).
The person in control of the goods can also do it. These people may be individuals or companies, and in some cases associations of individuals.
As a rule, these people should be established in the EU.
Simplified customs declaration
Simplified Declaration (Article 166 UCC)
If certain details or documents are missing when submitting the declaration, the declarant is allowed to place the goods under the customs procedure on the basis of a simplified declaration. Abnormal use simplified declaration without authorization.
Customs declarations can be submitted to Customs at the MS where the Authorised Holder is located, regardless of whether the goods are submitted to Customs at another MS (Participating MS (PMS) - Submitting Customs). To do this, economic operators must obtain central clearing authorization.
Access to the filer's record (UCC s. 182)
The authorised holder may submit a customs declaration in the form of access to the declarant's record, provided that the details of the declaration are processed by customsat the time of submission. The way to enter the declarant's record can be by submitting the goods or not. For the latter additional conditions, must be satisfied.
This type of declaration is not suitable for all customs procedures (eg exclusion of transit).
Drafting customs declarations for goods belonging to different tariff subheadings (UCC Art. 177)
This simplification allows one customs declaration to be drawn up for goods under different tariff subheadings.
In this case, import or export duties must be levied according to the tariff subheading of the goods for which the highest duty is imposed.
Self-assessment (UCC Article 185)
This enables economic operators to perform certain customs formalities normally performed by customs, such as calculating customs duties, and to perform certain controls under customs supervision
An export license is a government document authorizing or permitting certain export transactions, including technology exports. Export licenses are issued by the appropriate licensing agency after careful review of the facts regarding a particular export transaction.
Most U.S. export transactionsdo not require special approval from the U.S. government in the form of a license. In fact, only a small percentage of all U.S. export transactions require permission from the U.S. government. It is up to the exporter to decide whether the product requires a license and to study the end use of the product, in other words, to conduct "due diligence" on the transaction.
For most U.S. exports, the Bureau of Industry and Security or the U.S. Department of State's Defense Trade Controls Agency is the licensing agency.
Exporters should understand which federal department or agency has jurisdiction over the items they plan to export to determine whether a license is required.
Do I need a license?
This is one of the most frequently asked questions by trade experts in the U.S. Commerce Service Office network. The answer is usually no, as approximately 95% of all items exported from the United States do not require an export license. As a result, only a small percentage of U.S. export transactions require permission from the U.S. government.
These laws and regulations determine whether you can sell your product to international buyers, to which countries you can export it, and to which buyers you can sell. However, just because your product is among the 95% that don't require a license, doesn't mean you can sell it to anyone, anywhere.
It is up to the exporter to decide whether the product requires a license and to study the end use of the product, in other words, to conduct "due diligence" on the transaction.
For most U.S. exports, the Bureau of Industry and Security or the U.S. Department of State's Defense Trade Controls Agency is the licensing agency. Exporters should understand which federal department or agency has jurisdiction over the items they plan to export to determine whether a license is required.
Export Administration Regulations and Bureau of Industrial Security
Most U.S. procured items and some internationally procured items deemed dual-use (those with commercial and military or proliferation applications), as well as some purely commercial or purely munitions items, are subject to the Export Administration Regulations (EAR) and are and Security Bureau (Bank for International Settlements). The EAR controls exports for reasons of national security, foreign policy, supply shortages, nuclear non-proliferation, missile technology, chemical and biological weapons, regional stability, crime control, and counterterrorism.
Items within the U.S., certain items located outside the U.S., and certain U.S. activities are subject to the EAR. To determine if your item (commodity, software, or technology) is subject to the EAR, see the EAR's Commerce Control List (CCL) to see if it has an Export Control Classification Number (ECCN). If your item falls under the jurisdiction of the U.S. Department of Commerce and is not listed on the CCL, designate it as EAR99. Most EAR99 commercial products do not require a license to be exported. However, even EAR99 items may require a BIS export license depending on the item's destination, end user or end use.
The international marine cargo insurance market offers 3 types of cargo insurancedocuments.
These are the insurance policy, certificate of insurance and declaration of insurance.
In contrast to the other two insurance document types, opening statements are not often used in day-to-day practice.
Therefore, knowing the details of insurance policies and insurance certificates is very important not only for exporters and importers but also for other foreign trade participants.
An insurance policy is a legally binding written document issued by an insurance company or underwriter to the policyholder or the insured/insured.
Just like a bill of lading (which has the terms and conditions of carriage as a shipping document), an insurance policy defines the terms and conditions of an insurance contract and serves as legal evidence for an insurance agreement.
In some cases, exporters or importers do not like to insure each shipment individually, but they will sign the insurance for a certain period of time, such as 1 year.
During the insurance period, 1 year as shown in the example above, all goods of the exporter will be covered by cargo insurance. Term insurance contracts are also known as open-ended insurance.
If an exporter using open insurance requires insurance documents for a specific shipment, the insurance company issues a certificate of insurance.
Document content
Both the insurance policy and the insurance certificate should be issued by the insurance company or underwriter.
Both documents should state the same information, such as:
Insurance terms and additional risks covered
Premium amount
Shipment details such as port of shipment, port of discharge, vessel name and voyage, cargo description.
Insured currency
Insurance amount
Agent of insurance company at destination port
Claims Procedure and Required Documents
What is the difference between an insurance policy and a certificate of insurance?
Probably the only difference between an insurance policy and a certificate of insurance occurs under a letter of credit payment. Under the rules of the letter of credit, an insurance policy may be accepted in lieu of a certificate of insurance or a statement under the cover. But the opposite is invalid.
So if you are not dealing with letters of credit, there is no difference between an insurance policy and a certificate of insurance.
If you are going to present the documents under the letter of credit then you should keep in mind that you can present the insurance policy and not the insurance certificate. But you cannot present a certificate of insurance instead of an insurance policy under a letter of credit.
A document indicating the type and amount of insurance in force for a particular shipment. Used to assure the consignee that insuranceis provided to cover loss or damage to goods in transit. In some cases, the shipper may issue a document certifying that the goods are insured under a given open policy, and this certificate represents and supersedes such an open policy, the provisions of which are governing. Since objecting to such an instrument does not constitute a "policy" within the scope of the credit requirements, it has become common practice to use a special marine policy. A special marine policy is indistinguishable from an open policy and exists independently as an obligation of the underwriting company. Also known as Certificate of Insurance and Special Cargo Policy.
The importance of managing cargo insurance certificates
Cargo insurance certificates are one of the most important documents in the shipping industry as they carry the greatest risks inherent in them. A cargo insurancecertificate is a document that indicates the type and amount of insurance coverage that is valid for a given item. It is used to assure the consignee that insurance is provided to cover loss or damage to the goods in transit.
Certificates of insurance typically include the following information:
Conditions of Insurance Coverage
Transport information
Additional/Special Coverage Conditions
Instructions or Actions to Take in the Case of Loss or Damage of Goods
Billing agent contact information
Liability of Carrier, Trustee or Other Third Party
Mistake
Proper management of insurance documents is essential to understand the financial requirements of the shipping company and the consignee. Proper management of insurance documents can help detect errors on documents and help companies correct errors during shipping transactions.
Penalty or fine
Errors in insurancedocumentation may result in penalties and fines under the terms of the agreement. Effective management of insurance certificates helps avoid these consequences, making business transactions smoother.
Shot of a young man using a digital tablet while working in a warehouse
Meaning of warehouse receipt
A warehouse receipt is a form of document used in the futures market to ensure the quality and quantity of a specific commodity stored in an approved facility.Warehouse receipts are part of the processing of business transactions involving physically delivered futures contracts.
Instead of immediately moving the actual goods under the contract, the warehouse receipt is used to settle the futures contract. In the case of precious metals, a warehouse receipt can also be called a vault receipt.
Warehouse receipts can be transferable or non-transferable.
Negotiable warehouse receipt
Negotiable warehouse receipts specify that the goods can be delivered to the document holder, which means they can be used as collateral for a loan. If the borrower defaults, the lender takes over the warehouse receipt and can sell the goods for payment of the loan.
Non-negotiable warehouse receipt
A non-negotiable warehouse receipt specifies to whom the goods should be delivered.
How to use warehouse receipt?
Stored goods cannot be delivered without a receipt.
Warehouse receipts are used to settle futures contracts. A vault receipt is an example of a warehouse receipt, but it is for metal. Vault receipts show ownership of precious metals stored in warehouses, banks and other approved facilities.
Warehouse receipts are used for stored goods that will be delivered or used at a later date. They are called physically delivered commodities. Physically delivered commodities are used in the production and manufacture of many commodities.
Tracking physical inventory is a critical process for future contracts. Inventory of goods must be registered with the designated authority and must be inspected and certified before it can be used in the future market.
When to use warehouse receipts?
Warehouse receipts are typically used when a seller signs a contract with a manufacturer to purchase some item that is not in stock, and then uses the warehouse receipt to collect the product at the warehouse.
Different countries have different requirements when it comes to shipping documents. The two main world organizations that set rules and guide business organizations on this issue are the World Trade Organization (WTO) and the International Chamber of Commerce (ICC).
Most shipping documents are based on rules and regulations established by these world bodies and the respective country's governing bodies, such as chambers of commerce, customs, trade commissions, etc.
Here are the top 5 shipping documents that all shippers should be familiar with, and the differences between them.
1. Bill of Lading
If there is only one shipping document you need to know that is in the palm of your hand, it is the bill of lading.
A bill of lading, also known as a bill of lading, is a contract of carriage between a shipping company and a cargo owner. This is a document issued by the carrier to confirm receipt of your cargo for shipment on their ship.
Importer and exporter information needs to be listed clearly as the bill of lading is proof of ownership of the goods being carried on board. The information on the bill of lading should also correctly reflect the Incoterms conditions under which the transaction is conducted.
Once the goods arrive at their destination, the bill of lading needs to be presented to the carrier to release the goods, which then serve as a shipping receipt.
2. Packing list
As the name suggests, it is a document that provides details of the packaging of the shipment. The packing slip will show a description of the goods, their individual and collective packaging, dimensions, weight and markings. It may look very similar to an invoice, but it is not a substitute for a pro forma or commercial invoice.
Packing slips help customs, carriers and consignees easily identify individual shipments during inspection or receipt.
Top 5 Shipping Documents Shippers Need to Know
3. Commercial Invoice
Any international transaction involving import/export of goods must be accompanied by a proof of sale called a commercial invoice. To a large extent, it is similar to a standard invoice. But unlike a standard invoice, it contains details about the purpose of customs clearance of the goods and is one of the most important documents in ocean shipping. Details of all parties involved, including importers, exporters, freight forwarders, banks, shipping lines, etc., must be listed correctly on the commercial invoice.
Even though the information listed on the commercial invoice may be very similar to the information on the packing list, you still need to submit both documents and the information must match. Don't confuse the two as they serve different purposes.
A commercial invoice is a legal document that lists the goods sold and their selling price—that is, what the importer agrees to pay for those goods, and is sent to the party paying for the goods. As mentioned earlier, the packing list details the items in the shipment and serves as evidence in the event of disputes and claims, and is sent to the consignee of the shipment.
4. Letter of Credit
A letter of credit or "letter of credit" is a letter from a bank guaranteeing that payments made by the buyer to the seller will be received on time and in the correct amount. If the buyer is unable to pay for the purchase, the bank will be required to pay the full or remaining amount of the purchase. It is available as a facility.
Due to the nature of international transactions, including factors such as distance, different laws in various countries, and difficulty in personally understanding the parties, the use of letters of credit has become a very important aspect of international trade.
5. Certificate of Origin
According to the International Chamber of Commerce, Certificates of Origin (COO) are "important international trade documents that certify that the goods in a particular export are obtained, produced, manufactured or processed entirely in a particular country. They also serve as an exporter's declaration.
In other words, the COO identifies the country of production of the goods. This document is prepared by the exporter/manufacturer and must be certified to be valid by a government agency such as a chamber of commerce or a consulate.
A Certificate of Origin is required for customs clearance, which determines the amount of duties and taxes to be paid. It also helps determine whether there is a tax exemption in the case of special trade agreements between exporting and importing countries.
The certificate of origin needs to fill in typical information such as exporter, consignee, importer, and description of goods. For each export commodity, a COO must be created.
A document issued by or on behalf of the shipper evidencing the contract between the shipper and the carrier for the carriage of goods on the carrier's route
What is the purpose of an air waybill:
Documentary evidence of the conclusion of the contract of carriage.
Proof of insurance (if the shipper requires carrier insurance).
Directs carrier staff in handling, scheduling and delivering shipments.
What information is included in the air waybill document?
Name and address of shipper and consignee
3-letter airport code for origin and destination
Shipping value
Item description, including quantity, weight, dimensions, and materials used in item and packaging
any special instructions regarding processing
Airway bill
Who issues the AWB?
The cargo air carrier will issue an air waybill for you upon receipt of the cargo after completing the country's export customs formalities.
Shippers do not receive AWB until the goods are delivered to them.
Different from the bill of lading, the individual issues an air waybill, and the goods arrive by air, and the transportation cycle is not as good as by sea.
This is done for immediate reference to terminal shipping and trade-in customs clearance.
Who is responsible for filling out the air waybill?
To be a legal contract or agreement, the carrier or its legal agent must sign with the shipper or agent.
The air waybill must have multiple signatures, although similar organizations or individuals may act on behalf of the shipper and carrier.
Of course, each in their respective carrier and carrier packages.
How to get air waybill?
You can obtain an air waybill through an issuing agency such as the carrier or a representative on behalf of the carrier.
The AWB contains details such as details of suppliers, recipients and shipments, terms and conditions under which exchanges or transactions take place, and other important information.
A shipping label, sometimes called a package label, identifies many things about your package: its point of origin, its destination, its weight, the carrier's name, and so on. These labels are used by humans and their machine counterparts to understand where your package came from, where it needs to go, and what stops it may have made along the way.
Without a clear shipping label, packages can be delayed in transit, delivered to the wrong address, or lost completely. Any of these scenarios may lead to either a financial loss or a loss of customer trust, which makes the shipping label extremely important!
Label
The size of the label is important when shipping. It needs to be large enough to contain all the appropriate information the carrier needs to send, including barcodes that must be scannable.
The industry standard size for shipping labels is 4×6.
That means the label is 4 inches wide and 6 inches long.
All major carriers support these shipping labels, so we recommend that you use them for your business.
Depending on the printer, you can buy labels in rolls or fanfold.
Both come in standard 4×6 industrial size.
If you choose roll labels, you will want to use labels with a 1" core to fit properly into your desktop thermal printer.
Folded labels are also a good option, as they are easy to stack behind the printer and fold up after printing for easier cleanup.
How do I create a shipping label?
Shipping labels are usually created during order processing. Carriers have specific requirements for their shipping labels. There is no way to create your own templates or fill in labels manually. To create a shipping label, you must follow the carrier's requirements.
you can:
Visit your local post office and pay the label there
Arrange your own labels
When you buy a label at the post office, you're actually buying postage at the retail price, which is the most expensive pricing tier for shipping labels.
Arranging your own shipping labels has many more advantages, including discounts on postage and arranging a package pickup without having to wait at the post office. There are even ways to automate the process to reduce manual typing as much as possible.
Learn how to arrange your own shipping labels using these 3 methods:
Create Your Labels Online
1: Create your label online
2: Use Shipping Label Software
3: Fully automated with transport
If you have a large number of orders, the shipping tool can save you time and effort and eliminate the need to fill out labels manually.
When considering means of transportation, consider the following:
Which selling platforms do you need to integrate with (Shopify, Magento, etc.)
how much do you ship per month
Where do you ship to? Do you need international shipping?
A container ship passes beneath a suspension bridge as it departs for Europe.
Sea waybill
A sea waybill is a contract of carriage and proof of receipt of the goods for carriage. It is used when the exporter decides to release title to the goods. The goods can be delivered to the claimant identified in the documents. It is also known as the "Express Release Bill of Lading" or "Straight Bill of Lading".
The sea waybill is only for proof and does not confer title to the goods (non-transferable). After loading, the exporter will receive a sea waybill for reference. No other documentation was presented to the carrier; the cargo was released as soon as it arrived at the port.
Negotiable V Non-Negotiable Documents
A negotiable document or instrument allows the holder to transfer title to the goods to a third party. Usually, there are two parties to this assignment - the indorser and the endorsee.
The original bill of lading can be changed hands by endorsement, and the endorser (the original owner of the goods) transfers the ownership of the goods to the endorsee (the new owner of the goods agreed by both parties).
Goods are shipped and delivered to the party holding the original, endorsed bill of lading.
A non-negotiable instrument specifies a single party as the owner, and that ownership cannot be endorsed to a third party. In this case, the goods are shipped to the party originally designated.
An endorsement must be signed by the endorser or bearer on the front or back of the bill to be valid. The transaction is complete when the instrument is delivered to the endorsee in whose name it transfers title.
Inspections at commercial transport dock
Issue a sea waybill
Ocean bills of lading are usually made in triplicate - the original and the second to the shipper or consignor and the third to the consignee. The consignor sends the original to the consignee for customs clearance and receives the goods to his warehouse.
A sea waybill is a non-negotiable document that is released by telex or courier for easy and fast customs clearance of goods.
How to apply for ocean bill of lading?
If you want to ship your products immediately by ocean service, then it is recommended that you use a sea waybill.
You need to apply for the ocean bill of lading by writing an application.
Some important information must be placed on the app.
Vessel/Container Information
Shipping Port/Unloading Information
cargo description
Shipper Name
Consignee name
You can request a sea waybill by filling in the correct information in the application form.
You need to mention that you understand the terms and conditions of the ocean bill of lading.
You must abide by the terms and conditions.
The most important thing is that Seaway bill is not the title of the file, so you can't transfer the bill to a third
The best thing is that the consignee does not need any documentation at the port of discharge.
The carrier is responsible for customs clearance.
