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Unit 1: Export Procedure and Documentation

Certificate of Inspection: This is the certificate issued by the EIA after it has conducted the pre- Notes
shipment inspection of goods for export provided the goods fall under the notified category of
goods requiring compulsory pre-shipment inspection.
Certificate of Insurance/Insurance Policy: Insurance is an important area in the export business
as the stakes are usually very high. Protection needs to be taken in the form of insurance cover
for the duration of transit of goods from the exporter to the importer.
Regular exporters normally opt for an open insurance policy and as they make a shipment, they
are required to file an insurance declaration with the insurance company. Against this declaration,
the insurance company issues an insurance certificate, which is a negotiable instrument. The
policy covers all the terms and conditions of the cargo insurance whereas a certificate issued
under an open policy serves as an evidence of insurance of goods shipped.
Bill of Lading/Airway Bill/Combined Transport Document: These documents are also known as
Transport Documents. Let us discuss these one by one:

1. Bill of Lading: This is issued when goods are shipped using ocean (marine) transport, i.e.
ships. When the exporter finally hands over the goods to the shipping company for loading
on board the ship for transport to their foreign destination, the shipping company issues
a set of Bills of Lading to the exporter. This set serves multiple purposes. It is a receipt
signifying physical acceptance of cargo by the shipping company and also a contract of
carriage between the exporter and the shipping company for transport of the goods to
their designated destination. In addition, the bill of lading also works as a document of
title to the goods. The importer gets the right to take possession of the merchandise in his
own country only if he possesses the bill of lading. This document is the instrument used
for passing the ownership right or title of the goods to the buyer by the exporter.
A bill of lading is a negotiable instrument as it is transferable by endorsement and delivery.
However, as already explained above, it also serves some non-negotiable purposes.
Therefore, it is always issued as a set containing both negotiable and non-negotiable
copies.
A bill of lading can be ‘freight paid’ or ‘freight to pay’, depending upon whether the
freight is prepaid or is to be collected at destination. The shipping company will stamp the
bill of lading as freight prepaid in case the exporter has already paid the freight at the port
of loading and the bill of lading will be marked as freight collected or freight to pay if the
freight has not been paid and is required to be collected from the importer at the port of
discharge.
Bill of lading can be of various types:
An On Board or Shipped Bill of Lading signifies that the goods have been placed on
board the ship. Such B/Ls are required in case of FOB (Free on Board) shipments.
Received for Shipment Bill of Lading signifies that the shipping company has received
the goods for shipment. Goods are waiting for shipment and are under the custody
of the shipping line. Such B/Ls will work in case of FAS (Free Alongside Ship)
shipments.

A Clean Bill of Lading is one that does not contain any negative remark on either the
quality of goods or on the physical condition of the packaging of the merchandise
received by the shipping company. Importers worldwide insist on such B/Ls.
A Dirty or Claused Bill of Lading is one that carries a remark put by the shipping
company regarding the damage to the goods or their packaging.

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