/ By tjchinafreight ivy / Shipping

The difference between virtual overseas warehouse and overseas warehouse

Cross-border e-commerce and cross-border logistics coexist synergistically. Compared with the booming cross-border e-commerce in my country, the shortcomings of cross-border logistics are becoming more and more prominent, which restricts the development of cross-border e-commerce to a certain extent. In addition to using the domestic direct mail mode, traditional cross-border e-commerce can also use the overseas warehouse mode. The virtual overseas warehouse is a mode between domestic only delivery and overseas warehouse delivery.

Virtual Warehouse is an international logistics model that combines the advantages of physical overseas warehouses, and is more intended to make up for its shortcomings. By generating a tracking number in the destination country of the domestic (Shenzhen) system, the centralized goods are directly delivered by high-quality air. In the destination country, the electronic express pre-clearing method is adopted to shorten the delivery time of the express in the destination country.

Overseas warehouse mode

1. Headway transportation
Cross-border e-commerce transports goods to overseas warehouses by sea, air, land or intermodal.

2. Warehouse management
Through the warehouse management system, cross-border e-commerce merchants can effectively view overseas warehoused goods and manage inventory in real time.

3. Local delivery
According to the order information, the overseas warehouse center distributes the goods to customers by local post or express.

Disadvantages: need to stock up, there is inventory risk and increase capital cycle costs, it is inconvenient to operate multiple SKUs at the same time, increase inventory storage costs and operating costs, overseas national policy changes will cause certain losses and troubles

Virtual overseas warehouse mode

1. First of all, the virtual overseas warehouse model does not require sellers to stock up, there is no inventory risk, and there is no financial pressure;

2. The virtual overseas warehouse mode is equivalent to having local overseas warehouse inventory at all sites on any platform;

3. The virtual overseas warehouse model shows local delivery, which improves consumers' purchasing confidence and purchasing experience, increases sales, and increases profits. At the same time, it also prevents buyers from malicious returns and exchanges because the delivery address is displayed in China;

4. The overall logistics cost of the virtual overseas warehouse model will be similar to the local delivery price, but the timeliness will be much faster. After all, it is equivalent to taking a special line to the destination country by yourself;

5. The virtual overseas warehouse model can respond to changes in foreign policies at any time, operate flexibly, reduce risks, and is more suitable for small sellers who are not particularly well-funded. Details (dimensional: ues5588)

Disadvantages: At present, virtual overseas warehouses are not recognized on e-commerce platforms.

Suitable for the crowd: small amount of capital, weak risk tolerance.

/ By tjchinafreight ivy / Shipping

Practical knowledge of export supervision warehouse

What is an export regulated warehouse?

Export supervision warehouse, commonly known as "export warehouse", refers to a warehouse established with the approval of the customs to store, bonded logistics and provide value-added services for goods that have completed customs export procedures. The export supervision warehouse and the bonded warehouse are collectively referred to as "two warehouses", which are the basic form and carrier of bonded logistics.

What are the types of export supervision warehouses?

Export distribution warehouse
A warehouse for storing export goods for physical departure.
Domestic knot transformation warehouse
A warehouse that stores export goods for domestic carry-over.

Which goods can be stored in the export supervision warehouse?

With the approval of the customs, the export supervision warehouse can store the following goods:

  • General trade export goods.
  • Processing trade export goods.
  • Export goods transferred from other areas and places under special customs supervision.
  • Goods imported for assembling export goods, and packaging materials imported for repackaging of goods in export-supervised warehouses.
  • Other goods for which customs export procedures have been completed.

Which goods cannot be stored in export supervision warehouses?

Export supervision warehouses shall not store the following three types of goods:

  • The country prohibits the import and export of goods.
  • Unapproved countries restrict entry and exit of goods.
  • Other goods that are not allowed to be stored by the customs.

What are the practical functions of the export supervision warehouse?

Goods storage, assembly and distribution
Processing trade export goods, general trade export goods, goods imported for assembling export goods, and packaging materials imported for changing the packaging of goods can be stored in the export supervision warehouse at the same time, and can be assembled and distributed according to regulations. In addition, goods can also be transferred between export supervision warehouses and other special customs supervision areas and bonded supervision places.

Carry out value-added services for circulation

With the approval of the competent customs, value-added services such as quality inspection, grading and classification, sorting and packaging, marking, marking, filming, and packaging change can be carried out in the warehouse. The domestic equipment and materials needed to carry out value-added circulation services in the export supervision warehouse can only be transported into the warehouse after being examined and approved by the competent customs, and the customs shall implement registration management for this business.

Some warehouses that meet the conditions can realize warehousing tax rebate
For export supervised warehouses that are approved to enjoy the policy of tax rebate upon entry into the warehouse, the customs will handle the tax rebate certificate procedures for export goods after customs clearance of the goods. For export supervised warehouses that do not enjoy the policy of tax rebate upon entry into the warehouse, the customs will handle the tax rebate certificate procedures for export goods after the goods actually leave the country.

Approved warehousing goods can be distributed and reported
With the approval of the competent customs, for the goods stored in the export supervision warehouse with small batches and frequent batches, the goods can be stored in batches, and then the customs declaration formalities can be handled in a centralized manner within the specified time limit.

Inbound cargo replacement
For the goods that have been stored in the export supervision warehouse and are required to be replaced due to quality and other reasons, the goods can be replaced with the approval of the customs in charge of the warehouse. Before the replaced goods are released from the warehouse, the replacement goods should be put into the warehouse first, and the commodity code, product name, specification, model, quantity and value of the original goods should be the same.

/ By tjchinafreight ivy / International

Time limit and necessary materials for foreign trade export tax rebate

01 When handling export tax rebates, pay attention to declaration procedures and time concepts

Export enterprises should pay special attention to the declaration procedures and the concept of time when handling export tax rebates to avoid losses.

When handling export tax rebates, you should pay attention to four time limits

30 days: After the foreign trade enterprise purchases import and export goods, it should promptly ask the supplier for a special VAT invoice or ordinary invoice, which is an anti-counterfeiting tax-controlled VAT invoice, and must go through the certification procedures within 30 days from the date of invoicing.

90 days: Foreign trade enterprises must go through the export tax rebate declaration procedures within 90 days from the date of export declaration of the goods, and production enterprises must go through the tax exemption and credit declaration procedures within three months from the date of export declaration of the goods.

180 days: The export enterprise must provide the local competent tax refund department with the verification form of export foreign exchange receipts (except for forward foreign exchange receipts) within 180 days from the date of export declaration.

3 months: If the paper tax refund certificate for export goods of an exporter is lost or the contents are incorrectly filled in, and it can be reissued or changed according to relevant regulations, the exporter may apply to the tax refund department for an extension of the declaration of tax refund (exemption) for export goods within the declaration period. , After approval, the application can be extended for 3 months.

02 Tax classification of export goods tax refund (exemption)

According to the current tax system, my country's export tax refund (exemption) tax is the value-added tax and consumption tax within the scope of turnover tax (also known as indirect tax);

The tax refund (exemption) for export goods is the value-added tax and consumption tax that have been paid in all aspects of domestic production and circulation of export goods.

Turnover tax generally refers to the so-called tax on items characterized by commodities. As far as my country's current tax system is concerned, turnover tax includes value-added tax, business tax, consumption tax, land value-added tax, customs duties and some local industrial and commercial taxes.

03Export tax rebate attached materials

1 customs declaration
The customs declaration form is a document filled in by the import and export enterprise to go through the declaration procedures to the customs when the goods are imported or exported, so that the customs can check and release the goods based on this.

2 Export sales invoice
This is the document filled out by the export enterprise according to the sales contract signed with the export buyer. It is the main document for foreign purchases, and it is also the basis for the accounting department of the export enterprise to record the sales revenue of export products.

3 Purchase Invoice
The main purpose of providing purchase invoices is to determine the supplier, product name, measurement unit, and quantity of export products, whether it is the sales price of the manufacturer, so as to divide and calculate the purchase cost.

4 Foreign exchange settlement bill or foreign exchange receipt notice

5 Waybill and Export Insurance Policy
It belongs to the direct export or entrusted export of self-made products by the manufacturer. If the settlement is based on the CIF price, the export cargo waybill and export insurance policy should also be attached.

6Contract Information
Enterprises that have the business of processing re-exported products with imported materials shall also submit the contract number, date, name and quantity of imported materials and parts, name of re-exported products, cost of imported materials and various taxes paid to the tax authorities. amount, etc.

7 Product tax certificate

8 Certificate that the export receipts have been written off

9 Other materials related to export tax rebates

04Goods tax refund method

At present, the tax refund methods for foreign-invested enterprises export goods include "first levy and then refund" and "exemption, credit, and refund" tax.

2 "First come and go back"

It refers to the goods exported by the production enterprise by itself or through the agency, which shall first be taxed according to the tax rate stipulated in the interim regulations on value-added tax, and then the tax authority in charge of the export tax rebate business shall comply with the stipulated tax rebate rate within the national export tax rebate plan. Approve tax refund.

2 Tax basis

The tax refund amount shall be calculated by multiplying the FOB value of the export goods in the current period by the exchange rate in RMB.

"FOB" (written as FOB price in English) is the FOB price at the port of shipment, but this FOB price is a symbolic price, that is, the seller will hand over the necessary shipping documents to the buyer to collect the payment according to the contract, and the risks of the buyer and the seller are divided. All are limited by the loading of goods on the ship. Therefore, the FOB price is the responsibility of the buyer to charter the ship and book the space, and apply for insurance to pay the transportation insurance fee.

The most commonly used conversion methods for FOB, CFR and CIF prices are as follows:

FOB price = CFR price - freight = CIF price × (1 - insurance premium × insurance rate) - freight

Therefore, if the enterprise trades at the CIF price as the foreign export, after the goods leave the country, the foreign freight, insurance premiums, commissions and financial expenses incurred by the enterprise should be deducted; if the transaction is made at the CFR price, the freight should be deducted.

3 Calculation formula

Tax payable for the current period = output tax of goods sold in the current period + FOB price of exported goods in the current period × exchange rate in RMB × tax rate - all input tax in the current period

Current tax refund amount = FOB price of exported goods × foreign exchange RMB price × tax refund rate

Relevant explanation of the above calculation formula

①The input tax for the current period includes all the domestic purchased materials, water and electricity charges, transportation expenses that can be deducted, and the current value-added tax levied by the customs for the current period. The input tax can be deducted.
②The exchange rate of RMB shall be determined according to the two methods stipulated in the financial system, namely, the price of the day announced by the state or the average price of the price at the beginning and end of the month. Once the calculation method is determined, the enterprise cannot change it within a tax year.
③ If the actual sales revenue of the enterprise is inconsistent with the amount recorded in the foreign exchange verification form submitted by the export goods, the tax authority will levy the tax based on the larger amount and refund the tax based on the amount recorded on the export goods declaration form.
④ If the amount of tax payable is less than zero, it will be carried forward to the next period to offset the amount of tax payable.

/ By tjchinafreight ivy / International

DDP vs DDU: Shipping Incoterms Explained

Delivery Duty Paid (DDP)

In exporting, the seller enters into an agreement with the buyer to deliver the goods to the buyer's location overseas. Such agreements will specify the terms and conditions under which business will be conducted, especially those that will incur costs associated with the export of goods.
A very important point of the agreement is who will be responsible for paying duties and taxes at the port of destination.
A sale or purchase agreement is called Delivery Duty Paid (DDP) when it is agreed between the exporter and the importer that the former will pay all duties at the port of destination.

Seller's responsibility

In the DDP Shipping Agreement, the seller's responsibility to ensure successful delivery is:

  • Verify that all risks of loss or damage to the goods are financially covered up to the point of delivery.
  • Handle the export process at the point of shipment, complying with all required protocols, such as providing licenses and documentation as required for specific shipments.
  • To bear any costs of customs clearance at the place of delivery. If the product is taxed due to value fluctuation (VAT), the seller will also pay any additional tax.
  • Check that products and shipments arrive at international locations for proper termination of liability.
  • Take financial responsibility for shipping costs from the packing area to the point of delivery.
  • Organize and establish carrier connections with all shipping companies that assist in the delivery of goods.

Delivery Duty Unpaid (DDU)

The ICC stopped using the incoterm DDU in 2010, but it is still widely used. The ICC has officially replaced it with the Incoterm® rules DAP, which is delivered on site, but with the same trade rules as DDU.
DDU means that the buyer is responsible for paying any customs fees, duties or taxes in the country of destination. All these fees must be paid by customs to release the goods after the goods arrive at the pre-agreed location, such as the on-site delivery at Jebel Ali port. The seller is liable until the agreed point of delivery, at which stage the buyer is liable.

Seller's responsibility

DDU shipping and DDP shipping are very similar, but the biggest difference between the two is that the seller does not bear the economic responsibility after the goods arrive abroad. Some of the main responsibilities of the seller in DDU shipping services are:

  • Takes responsibility for providing permits, permits and documents required for delivery to Buyer's pickup location.
  • Ship the buyer's goods to the country of delivery.
  • All financial responsibility is assumed for any damage, theft or loss that occurs in the shipment prior to its arrival at the delivery destination.
  • Make sure that the buyer's goods arrive at the designated shipping location.
  • Pay shipping for any shipping charges related to labor and loading costs. This can also include purchasing insurance for the goods.
  • Provide buyers with the latest information on successful deliveries.

This type of agreement between buyer and seller is called Delivery Duty Unpaid (DDU). The International Chamber of Commerce has replaced Incoterm DDU with DAP (Delivered On Site) in its latest publication "Incoterms® 2020".

How to calculate DDU and DDP fees:

Fob amount. Plus: 1. All local charges at the export port 2. Sea freight (whether positive or negative) is the amount of cif. If you want ddu: plus the local charge at the destination port If you want ddp: plus the destination customs duties in port

Delivery on Place (DAP) and Delivery on Ground (DPU)

In the ICC's latest publication "Incoterms® 2020", the term DAP (Delivered On Site) has replaced DDU. Another important term that has been replaced is DAT (delivered at the terminal). DAT is replaced by DPU (Delivered at Place Unloaded), and the designated unloading location can be anywhere, not limited to the terminal.
DAP and DPU are two Incoterms® similar to DDU. DAP stands for Delivered at Place and DPU stands for Delivered at Place Unloaded. Under DAP, the buyer is responsible for paying duties and taxes and unloading.
The seller arranges the transportation and delivery of the goods to a pre-agreed location, ready for unloading. DAP can be used for any transport protocol.
In a DPU, the seller is responsible for delivery and unloading at the locations specified in the agreement between him and the buyer.

/ By tjchinafreight ivy / International

Certificate of Origin

What is a Certificate of Origin (CO)?

A Certificate of Origin (CO) is a document that indicates the country in which the item or goods were manufactured. A certificate of origin contains information about the product, destination and exporting country. For example, an item might be labeled "Made in the USA" or "Made in China."

CO is an important form, required by many cross-border trade treaty agreements, because it can help determine whether certain goods are eligible for import, or whether goods are subject to customs duties.

Why do I need a Certificate of Origin?

If you are shipping internationally, you may need to obtain a Certificate of Origin (COO) for your shipment.
The COO is often required when there is a need to know the country of origin for economic, political or environmental reasons, such as whether there are import quotas, boycotts or anti-dumping measures.
If you ship between countries that share a trade agreement, the COO certifies to customs authorities that the goods are eligible for reduced import duties or taxes.
Some plant and animal products subject to the CITES agreement also require a certificate of origin.

Two types of CO

There is no standardized Certificate of Origin (CO) form for global trade, but the CO, usually prepared by the exporter of goods, contains at least basic details about the product being shipped, the tariff code, the exporter and importer, and the country of origin. After the exporter understands the specific requirements of the border control in the importing country, he will record these details, obtain a CO notarized by the Chamber of Commerce, and submit the form with the shipment. The detailed requirements depend on the type of goods exported and the export destination.

The two types of CO are non-concessional and preferential. Non-preferential COs, also known as "ordinary COs," refer to goods that do not qualify for tariff reduction and exemption treatment under inter-country trade arrangements, while preferential COs state that they are eligible. In the United States, the Generalized System of Preferences (GSP), enacted by Congress in 1974 to promote economic development in poor countries, eliminated tariffs on thousands of products imported from more than a hundred countries with preferential status. Countries such as Bolivia, Cambodia, Haiti, Namibia and Pakistan are currently on the list, as are many other third world or developing countries. The EU and countries around the world have their own versions of the GSP, which mainly promote economic growth through trade with friendly countries.

How to get a certificate of origin?

You can apply for one at your local chamber of commerce - keep in mind that you will need one for each shipment.

In some countries, you can apply for a COO directly online. In other countries, you fill out the standard Certificate of Origin form and submit it to your local Chamber of Commerce for stamping and approval.
Since applying for a Certificate of Origin can be complicated, to save time, you can have an agent (such as a freight forwarder) do it for you.
Keep in mind that some countries require the certificate to be legally approved by the Embassy or Ministry of Foreign Affairs, which may take more time.

Which countries require a certificate of origin?

Any country may require a COO for any product, so be sure to check with your local chamber of commerce if necessary.

Some of the international trade relationships that typically require a Certificate of Origin are:

  • Shipping from EU to countries with EU trade agreements - using EUR.1 file or EUR-MED file
  • For shipments between Canada, the United States and Mexico - use the NAFTA Certificate of Origin
  • For shipments between the US, Central America and the Dominican Republic - use the CAFTA-DR Certificate of Origin
  • Shipping to some countries in the Middle East and Africa - usually requires a Certificate of Origin
  • Shipping to some countries in Asia such as China, India, Malaysia or Singapore - usually requires a Certificate of Origin
/ By tjchinafreight ivy / International

GSP

What is GSP?

The GSP is a preferential tariff system that provides a formal exemption from the more general rules of the World Trade Organization (WTO). In short, this means that WTO members must treat imports from all other WTO members equally as they treat imports from their "best" trading partners.

  • The Generalized System of Preferences (GSP) is an umbrella that covers most of the preferential schemes that industrialized countries give to developing countries.
  • It involves reducing most-favored-nation (MFN) tariffs or enabling tax-free entry of eligible products exported from beneficiary countries to donor markets.

Developing countries automatically receive the GSP if:

  • Classified by the World Bank as an income level below "upper middle income"
  • Do not benefit from other arrangements (such as free trade agreements) that give them preferential access to the EU market
  • In addition, if GSP+ is granted, the beneficiary must ratify 27 international conventions (see GSP+ above) and work with the Commission to monitor the implementation of these conventions.

LDCs automatically get the benefits of the "everything but arms" arrangement, even if they have another arrangement.

GSP benefits

  • Promote economic growth and development in developing countries by helping beneficiary countries increase and diversify trade with developed countries.
  • Jobs - The transfer of GSP imports from terminals to consumers, farmers and manufacturers has provided tens of thousands of jobs in developed countries.
  • The GSP increases the competitiveness of firms because it reduces the cost of imported inputs that firms use to manufacture goods.
  • GSP promotes global values ​​by supporting beneficiary countries in providing workers' rights to their people, enforcing intellectual property rights and supporting the rule of law.

There are several ways that GSP regulations can ensure that the interests of European industry are safeguarded:

  • GSP beneficiaries who are “high-middle-income” countries will be removed from the GSP.
  • GSP beneficiaries may lose preferences for specific product categories deemed sufficiently competitive: Suspension of tariff preferences 2017-2019External link.
  • EU industries can request safeguards based on evidence that imports from GSP beneficiary countries have caused serious economic hardship to the industry: safeguards for Cambodian and Myanmar rice.
/ By tjchinafreight ivy / Shipping

Inspection Requirements for Limited Quantity Packaging of Hazardous Chemicals

With the release of the "Measures for the Safety Administration of Road Transport of Dangerous Goods" (hereinafter referred to as the "Measures"), the mode of transport in small packages has once again entered the public eye. Small pieces of dangerous goods such as aerosols, 84 disinfectants, daily chemical reagents, etc. The transportation of highly hazardous products has always been a hot topic in the industry.

These dangerous goods themselves are transported in small quantities, and if they are packaged in reliable, strong and durable packaging, or if certain conditions are met, their transport will be much less dangerous.

One of the major features of the "Measures" is the introduction of the exemption of small package transportation, which clarifies the legal and legal transportation behavior of small package transportation in my country from the level of administrative enforcement of laws and regulations.

01 Legal and regulatory basis

In Chapter 3.4 of the International Maritime Dangerous Goods Regulations, it is clarified that a limited quantity of dangerous goods shall be packaged according to the limited quantity and comply with the provisions of this chapter, except for the 7 cases listed (there is no test requirement for relevant packaging testing in 4.1.1.3) , without any other provisions of these Rules.
For this reason, if an enterprise uses a limited quantity of packaging when exporting hazardous chemicals by sea, it is not necessary to provide the "Outbound Cargo Transport Packaging Performance Inspection Result Sheet".

02 Packaging Restriction Requirements

Combination packaging should be used: Dangerous goods should be transported in limited quantities in inner packagings with suitable outer packagings, and intermediate packagings may be used. When transporting items such as aerosols or small gas containers, inner packaging is not required.
With the exception of 1.4 S explosives, shrink-wrapped or stretch-wrapped pallets that meet the specified conditions may be used as outer packaging. If fragile or breakable inner packagings made of glass, porcelain, coarse ceramics or certain plastics are used, they should be placed in qualified intermediate packagings.
Glass or ceramic inner packagings containing liquid corrosives of Class 8 (packing group II) shall be placed in compatible and rigid intermediate packagings as required.
In a word, combined packaging is required when transporting in limited quantities. Inner packaging and outer packaging are necessary, but for intermediate packaging, it can be judged whether it is necessary or not.
However, unlike exception packaging, a limited number of packaging testing requirements are not mandatory.

03 Package Weight

For example, the more common recent alcohol spray, UN No. 1170, is available in a limited quantity of 5L for Group III packaging. That is to say, the maximum volume of each small package cannot exceed 5L. If the small package is fragile or fragile, such as the inner package made of glass, porcelain, coarse ceramics or some plastics, it needs to be placed in an intermediate package that meets certain requirements, and then placed in the outer package. The total gross weight of the package should not exceed 20 kg. If the inner packaging is not fragile or breakable, no intermediate packaging is required, and the total gross weight of the package should not exceed 30 kg.
Notice! Limited quantities do not apply to all dangerous goods.

04 Packaging Marking Requirements

Of course, in addition to the selection requirements of the packaging itself, the packaging marking requirements are also another important feature that distinguishes the limited quantity from other modes of transportation.
After selecting the correct limited quantity packaging mark, you also need to choose the size of the limited quantity packaging mark reasonably according to the size of the actual product packaging.

05 Contents of limited quantity packaging inspection

For the packaging of dangerous chemicals exported in limited quantities, the customs shall comply with Chapter 3.4 of the International Maritime Dangerous Goods Transport Regulations, as well as the "Limited Quantity and Packaging Requirements for Dangerous Goods" (GB 28644.2-2012), and the "Export Dangerous Goods Packaging Inspection Regulations for Limited Quantities" (SN/T 4149-2015) and other requirements for inspection.

/ By tjchinafreight ivy / International

Different types of letters of credit

What is a letter of credit?

A letter of credit is a guarantee or assurance to the seller that they will get paid on a large transaction. They are especially common in international or foreign exchange transactions. Think of them as a form of payment insurance provided by financial institutions or other accredited parties to the transaction. The earliest letters of credit were common in the 18th century and were called travelers' letters of credit. The most common contemporary letters of credit are commercial letters of credit, standby letters of credit, revocable letters of credit, irrevocable letters of credit, revolving letters of credit, and red-term letters of credit, although there are several others.

Commercial letter of credit
This is a standard letter of credit commonly used in international trade. It can also be called a "Documentary Credit" or "Import and Export Credit". 1 The bank acts as a neutral third party to release funds when all the conditions of the agreement are met.

Standby Letter of Credit
This type of letter of credit is different: it offers payment if something doesn't happen. 2 Standby letters of credit do not facilitate a transaction, but provide compensation in the event of a problem. A standby letter of credit is usually similar to a commercial letter of credit, but only pays if the payee (or "beneficiary") can prove they didn't get what was promised in the agreement. Standby letters of credit are a form of insurance that ensures you get paid, and they also guarantee that services will be performed satisfactorily. They can be used with negotiable letters of credit.

Irrevocable letter of credit.
This Letter of Credit may not be cancelled or amended without the consent of the beneficiary (Seller). This Letter of Credit reflects the Bank's (Issuer's) absolute liability to the other party.

Revocable Letter of Credit.
The bank (issuing bank) can cancel or amend this type of letter of credit at the customer's instruction without the prior consent of the beneficiary (seller). After the L/C is revoked, the Bank shall not assume any responsibility to the beneficiary.

Red Clause LC.
The seller may require prepayment of a letter of credit for an agreed amount prior to shipment of the goods and presentation of the required documents. This red clause is so called because it is usually printed in red on the document to draw attention to the "advance payment" clause of the letter of credit.

Revolving letter of credit
A revolving letter of credit can be used for multiple payments.
If buyers and sellers want to repeat business, they may not want to obtain a new letter of credit for each transaction (or each step in a series of transactions). This type of letter of credit allows a business to conduct multiple transactions using a single letter of credit before the letter of credit expires, and the validity period of the letter of credit may be three years or less.

Negotiable letter of credit
A transferable letter of credit can be transferred from one "beneficiary" (payee) to another. They are usually used when an intermediary is involved in a transaction.

Back to back
Back-to-back letters of credit can be used when an intermediary is involved but a negotiable letter of credit is not suitable.

What are the benefits of using a letter of credit?

A letter of credit places the risk of the transaction on the bank rather than the buyer or seller. They provide a secure payment method that ensures funds get where they need to be. Letters of credit also provide parties with the opportunity to incorporate safeguards, regulations or other quality control measures.

How to get a letter of credit?

Many banks offer letters of credit, so you can get one by contacting your bank's representative. Banks with dedicated international trade or business departments are likely to offer letters of credit. If your bank doesn't offer a letter of credit, it may point you to an institution that does.

/ By tjchinafreight ivy / International

Australia wants to build a new port in Darwin, but breaking the contract will not be a new move?

Australia

It is unclear whether the new port will be for industrial use only, or will it be able to accommodate naval ships from strategic partners in the US and UK?

Darwin Port has a significant geographical location. It is the closest modern deep-water port to Asia and China. It is the commercial gateway for Australia to connect with the Asian market. In 2015, Landbridge Group won the 99-year lease for the commercial operation of Darwin Port with a contract price of 506 million Australian dollars. After the deterioration of Sino-Australian relations, there have been voices in the Australian government claiming that the lease posed a security threat and demanded forced divestment. In May 2021, the Australian government asked the Ministry of Defence to review the lease agreement, but the Ministry of Defence's investigation report pointed out that there was no national security reason for the Australian government to overturn the lease agreement.

The Australian government will announce the construction of a new port in the strategically important city of Darwin after leasing existing facilities to a Chinese company, the Australian Broadcasting Corporation reported on March 31.
The ABC said it was unclear whether the new port would be for industrial use only or a facility that could accommodate visiting naval ships from US and British strategic partners. It added that it is understood that Prime Minister Scott Morrison's government will make an announcement during the Australian election campaign in the coming weeks.

The government has allocated A$1.5 billion ($1.1 billion) for new port infrastructure in the Northern Territory, where Darwin is the capital, Infrastructure Minister Barnaby Joyce said in a statement on Tuesday, the NBC said.
China Landbridge Group secured a 99-year lease for Darwin Harbour commercial operations for A$506 million in 2015. Australia's northernmost city is the naval entry point into the increasingly competitive Indo-Pacific and is part of a decade-long security deal with a key Australian ally, and is home to about 2,500 US Marines.

Since the Landbridge takeover was criticised by then US President Barack Obama, Australia's diplomatic and trade relations with the world's second-largest economy have fallen sharply amid moves to limit Chinese investment in critical infrastructure and utilities. Several lawmakers in the Morrison government said Chinese ownership of the port had posed a security threat and called for forced divestment.
In May 2021, Defence Minister Peter Dutton said the Australian government was looking into whether Landbridge should abandon its leases under a set of tough laws passed in 2018 on foreign investment in infrastructure. Two months ago, an Australian parliamentary inquiry asked the government to consider revoking the lease on national security grounds.
In December, an Australian defence review found there was no national security reason to overturn the 99-year lease of Darwin Port to the Chinese company. dard

/ By tjchinafreight ivy / Shipping

What to pay attention to when exporting to India by sea

1. Exporting to India: Challenges

U.S. exporters must be aware of certain obstacles when exporting to India. But with careful planning and assistance from agencies like US Business Services, exporters of all sizes can definitely succeed in the Indian market. According to the National Business Guide for India, the challenges include:
High tariffs and protectionist policies
Exporters and investors face an opaque and often unpredictable regulatory and tariff regime. xxx
price sensitivity
Even before the economic slowdown and the pandemic, Indian companies and consumers were extremely price-sensitive.

Infrastructure
Inadequate road, rail, port, airport, education, power grid and telecommunications infrastructure are major obstacles to the country's efforts to achieve strong economic growth. India's continued urbanization and rising incomes have led to increased demand for improved infrastructure to provide public services and sustain economic growth.

Data localization requirements and e-commerce restrictions
The Indian government is aggressively pursuing a policy of requiring Indian data to be processed and stored only in India, which has severely impacted the business of many US companies. The proposed data protection bill currently being passed through the Indian legislature will affect a wide range of businesses in India and internationally. Changes to laws on what and how e-commerce companies can sell online are an unexpected blow to the U.S. online giant. The new law limits discounts for e-commerce companies and prohibits companies from selling products from companies they affiliate or own.

Local content requirements
In specific sectors, including information and communication technology (ICT), electronics and solar energy, the Indian government is seeking local content requirements to stimulate an increase in the contribution of manufacturing to GDP. These policies have had a negative impact on U.S. exporters.

State power
Companies should be prepared to face the different business and economic conditions in India's 29 states and 7 federal territories. Power and decision-making in India is decentralized, with major differences at the state level in terms of political leadership, quality of governance, regulations, taxation, industrial relations and education levels.

Intellectual Property (IP)
India is one of the most challenging major economies in the world in terms of intellectual property protection and enforcement.

customs clearance - TJ

2. Customs regulations

First of all, all goods transferred to the inland freight station in India must be transported by the shipping company, and the final destination column of the bill of lading and manifest must be filled in as the inland point. Otherwise, it is necessary to dig out the box at the port or pay a high fee for changing the manifest before transshipment to the inland.

Secondly, after the goods arrive at the port, they can be stored in the customs warehouse for 30 days. After 30 days, the customs will issue a notice of delivery to the importer. If the importer cannot pick up the goods on time for some reason, he can apply to the customs for an extension as needed. If the Indian buyer does not apply for an extension, the exporter's goods will be auctioned after 30 days of storage in customs.

3. Customs clearance

After unloading (usually within 3 days), the importer or its agent must first fill in the Bill of Entry in quadruplicate. The first and second pages are retained by the customs, the third page is retained by the importer, and the fourth page is retained by the bank where the importer pays the tax. Otherwise, high detention fees must be paid to the port authority or airport authority.

4. Return regulations

Indian Customs stipulates that the exporter needs to provide the original importer's certificate of abandonment of the goods, the relevant delivery certificate and the exporter's request for return letters and telegrams, and entrust the shipping agent to complete the return procedures after paying the port storage fees, agency fees and other reasonable fees.

If the importer is unwilling to issue the exporter with the certificate of rejection of the goods, the exporter can rely on the letter of the importer's refusal to pay or take delivery or the letter of the importer's non-payment redemption provided by the bank or the shipping agent, the relevant delivery certificate and the seller's request. The letter and telegram for the return of the goods shall be entrusted to the shipping agent to directly submit the return request to the relevant Indian port customs and go through the relevant procedures.