export basics on 23 rd july 2012

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EXPORT BASICS On 23 rd July 2012

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EXPORT BASICS

On 23 rd July 2012

Selection of Name of firm

• An entrepreneur can choose any name for the firms he/she want to start.• Its desirable to indicate that the

business elate to ‘ export /import business.

indication

Approval of the name of the firm

Respective authorities Such as APEC for RMG.REGIONAL LICENCING AUTHORITY

Registration of organization

•Companies Act, 1956•Partnership Act, 1932 etc

Opening of Bank Account Open a/c with a branch of any commercial

bank authorized by RBI to deal in foreign exchange.

The firm may require pre and post shipment finance for its business.

Timely credit is an important ingredients for the success or failure of Business, in particular , in international business in competitive environment.

Obtaining PAN EXPORT income is subject to a number of

exemptions and deductions under the Income Tax Act. For claiming those exemptions and deductions, it is necessary for every exporter to obtain PAN from the Income Tax authority. PAN is essential while applying for IEC

Registration with sales Tax authorities Exporter need to pay sales Tax while making

purchase, so need sales Tax number. Exporter/Purchaser has to give Form- H to the seller /Mfcter. Exporter has to make an application along with copy of L/C or export order to the sales Tax office that has jurisdiction to his office for issuance of form –H. Exporters prepares form –H , in triplicate, and issues two copies to the seller and retains one copy for his record.

IEC number • No Export or Import possible without IEC number • The registered / Head office of the applicant shall make an

application for grant of IEC number to the Regional Office , DGFT( Regional Licensing authority) having territorial jurisdiction over the firm along with the following documents,

1. Profile of the exporter /importer2. DD for Rs 1,000 as fees. (Need to Update)!! 3. Certificate from the Banker of the applicant 4. Two copies of pass port size fotos of the applicant duly

attested by the bank5. If there is any non-resident investment in the applicant firm

and such investment is with full repatriation benefit, full particulars of such investment to be disclosed and approval of RBI for such investment is to be enclosed.

6. Declaration of applicant letterhead that there is no association of the applicants firm with caution listed frims.

Licensing authority shall allot IEC number in a prescribed format. There is no expiry date for IEC. It shall be valid till it is revoked

This number is to be invariably, quoted in all documents, prescribed by rules, in particular Bill of entry for imports and Shipping bill for Exports.

prior to 1997, it was necessary for every exporter to obtain CNX number from RBI, now its no longer required as IEC number has replaced CNX number

Registration Cum membership certificate

• Its obligatory for every exporter to register with appropriate EPCs to obtain Registration cum membership certificate.

• A registered exporter receives ocean of literature and necessary guidance regarding export market information from the councils.

• Any exporter may obtain RCMC from any EPC such as Engineering EPCs/ AEPCs

• With the receipt of certificate, the exporter can be called as ‘ registered exporter’.

Registration with ECGC

The exporter should also register with ECGC of India in order to secure export payments against political and commercial risks. It also helps to get financial assistance from commercial banks and other financial organizations.

Registration under Central Excise Law • Central excise levy is applicable if the

following conditions are satisfied:a)The duty is on the goods b) goods must be excisablec)The goods must be manufactured or

produced d)The goods must be manufactured

produced in India

When registration is to be made ?( Excise)Every Mfgrer /producer of goods has to submit the

prescribed application form to the jurisdiction range officer of the central excise for registration if the total value of goods cleared for home consumption, known as Domestic Turnover

( Plz identify the amount – latest for SSIs/ non –SSI units)Allotment of registration Number: Once unit is registered

with central excise authority, they allot ECC(Excise Control Code) number. The ECC number is 15 digit code number with the first 10 igits being as same as PAN.

Applicability of Excise duty to exporter In respect of applicability of excise duty on

exports concerned, goods enjoy exemption from duty on the final product, meant for export. Where exemption is not availed, refund of excise duty paid is made, after actual export. Secondly, refund of excise duty is made on inputs used in the manufacture of goods, meant for export. The exporter has to submit the prescribed for ARE-1, in sixtuplicate.

Registration with other authorities It is desirable for the exporters to become

members of local Chamber of Commerce, Productivity council or any other trade promotion recognized by ministry of commerce and industry. Local membership helps the exporters in different ways, including in obtaining COO certificates ( country OF Origin) which is vital for exports to certain countries.

Registration for business Identification Number (BIN)

Exporters have to obtain PAN based BIN from DGFT prior to filing for customs and clearance for export goods. Purpose of BIN is to bring a common identification number to all persons dealing with various regulatory agencies, such as Central Excise and Customs Department, IT Department, Office of DGFT etc., all assessee would be considerably benefited if they have to obtain just one identification number for use by the various government agencies.

EXPORT LICENSING Part –I: Prohibited Items: These items cannot be

exported or imported. These items include wild life, exotic birds, wood and wood products in the form of logs, timber, etc .,

Part-II: Restricted Items: These are the items , export or import of which is restricted through license. They can be imported or exported only in accordance with the regulations governing in this behalf.

Part –III: Canalized Items: Goods, which are canalized, can be imported /exported through the canalizing agency, specified in the negative list. The DGFT may issue license to any other person to import or export those items, which are included in the negative list.

Lets see DOCUMENTATION

The types Documentation: Overview – Commercial and

Regulatory documents Understanding - Invoice, Packing List, Inspection

Certificate, Certificate of Origin, Shipping Bill, ARE-1, Mate Receipt, GR/SDF(Guaranteed Reciept/ Statutory Declaration Form) Bill of exchange, Bank Realisation Certificate, Bill of Lading and Airway Bill, Bill of Entry etc.

Incoterms Terms of paymentLetter of credits - Concept, Types of L/C, Parties to L/C,

L/C mechanism.

why Documents ?a) as an evidence of shipment and title of goods; (b) for obtaining payment; (c) to provide a specific and complete description

of the goods; (d) for assessment of correct Duty for clearance

purpose;(e) for obtaining Export Licenses;(f) for obtaining export finance;(g) for completing Pre-shipment Inspection;(h) for claiming export benefits like Duty

Drawback, etc.

Commercial / Regulatory Documents• Commercial set of documents are mainly used for

Commerce. In other words these are documents normally exchanged between buyer and seller. Examples : Commercial Invoice / Inspection Certificate / Insurance Certificate / Bill of Lading / AWB/ Certificate of Origin/ Bill of Exchange/ Shipment Advice/ Packing List

• Regulatory documents are required in dealing with various regulatory authorities such as customs, RBI, Excise, Licensing authorities Inspection and other Export Promotion bodies for availing incentives etc. Examples: Shipping Bill/ ARE1 from (Excise)/ RBI Declaration Forms (GR)/Application for remittance of currency/ Various Licences /Bill of Entry

Commercial / Regulatory Documents

• Referring to the Commercial set of documents, it may please be observed that these set of documents are prepared from other set of documents (some of these only). These are known as auxiliary documents.

• These documents may not be required by the foreign buyer, but these are must for preparation of main export documents, known as Principle Commercial Documents.

Commercial Documents

8. Letter to Bank for negotiation of documents

8. Bill of Exchange7. Shipping Instructions7. Packing List6. Shipping order6. Shipment Advice5. Mate Receipt5. Bill of Lading

4. Application for Certificate of Origin

4. Certificate of Origin3. Declaration for Insurance 3. Insurance Certificate2. Intimation for Inspection2. Inspection Certificate1. Proforma Invoice1. Commercial Invoice

AuxiliaryPrincipal

Understanding Documents All documents whether it is for export or import transaction

generally contain following informationName and address of the exporter and importerDocument No. and date.Order No. and datePort of dischargePort of destination Country of originDescription of GoodsMarks and nos., model nos. [if any]WeightITC HS Code No. /Indian Trade Classification. Value CurrencyTerms of payment Terms of shipment etc.

InvoiceIt is itemized statement prepared and issued by a seller

at the time of dispatching the goods to the buyer.

It helps the Customs Authorities to:ensure that goods shipped are permitted by the export

policy.compute the customs duty, if any, payable on the export or

the import.check the quantity of goods. They generally open a few

packages at random and check the veracity of details in the invoice.

check if there is any over-invoicing or under-invoicing (that may be resorted to by the importer to reduce the import duty payable).

Invoices are often called bills. Various types of invoices used in International

Trade are

• Performa Invoice• Commercial Invoice• Consular Invoice• Legalized Invoice• Customs Invoice

Packing List It is a consolidated statement in a prescribed format

detailing how goods are packed, marked and numbered including weight and dimensions of each package.

It is useful for customs at the time of examination and warehouse keeper of buyer to maintain inventory record and to effect delivery.

It have many details common from invoice but it does not indicate unit rate value of goods.

The exporter or his/her agent, the customs broker or the freight forwarder, reserves the shipping space based on the gross weight or the measurement shown in the packing list.

Packing ListCustoms uses it as a check-list to verify:

the outgoing cargo (in exporting) and the incoming cargo (in importing).

Basic functions of Packing List are: To confirm the contents of a shipment as it left the

exporter’s premises. To indicate weights, measures and the piece count (i.e.

the number of cartons or cases) in that shipment.

It is prepared in 7-10 copies or as per the requirement.

Inspection Certificate “Certificate of Inspection” is issued by the Inspection Agency concerned

certifying that the consignment has been inspected before shipment as per the requirements of the Exports (Quality Control and Inspection) Act, 1963.

It satisfies the conditions relating to quality control and inspection as applicable to it and is certified export worthy.

This certificate is required:

by customs before allowing shipment of goods or by a banker to negotiate the documents.

This certificate bears cross references of invoice or contract number.

Inspection can be done by Inspection Agency appointed by the Government of

India, i.e. Export Inspection Agency, Textile Committee, Central Silk Board etc.

Inspection Agency may also be nominated by importing countries’ Government i.e. SGS and OMIC by some African Countries.

Sometimes buyer himself appoints an independent private inspector to inspect the goods.

If an inspection is a part of transaction, then exporter is required to arrange for necessary inspection.

It can be a certificate of quality, weight, analysis, or the like.

Certificate of Origin [COO]It is a certificate indicating the fact that the goods

which have been exported have originated or manufactured in a particular country. So it is a sort of declaration testifying the origin of export.

It is normally required by an importer to clear goods from the customs.

For political and social reasons, it is insisted by Customs Authority of importing country before goods are allowed to enter in the country.

It helps the importer to take an advantage in duty concession, if any. For e.g. goods imported under Free Trade Agreement.

• On the basis of COO, Customs can ensure that certain prohibited goods of particular countries are not imported.

• It also ensures that goods have not been reshipped by a seller who has brought them into his own country from some other place of origin.

• It is sent to the importer by the exporter.

• It is issued or signed by an independent official organization, such as a Chamber of Commerce, on prescribed form.

• These are often required:– to meet Customs requirements in the importing

state – to comply with Banking requirements – for other official and commercial reasons.

• There are two categories of Certificate of Origin :1. Preferential Certificate of Origin and 2. Non-preferential Certificate of Origin

Preferential Certificate of Origin • It entitles preferential treatment in duty in the

importing country.

• These certificates are governed by rules of origin which are always part of Preferential Trading Agreements entered into between two or more countries.

• As far as India is concerned the following agreements are noteworthy:

• Generalised System of Preferences (GSP)• SAARC Preferential Trading Agreement (SAPTA)• Asia- Pacific Trade Agreement (APTA)• India-Sri Lanka Free Trade Agreement (ISLFTA)

Some of the agencies which are authorised to issue PCOO are:

Export Inspection Agencies – All products.Directorate General of Foreign Trade & its

regional offices - All products.Spices Board, Ministry of Commerce &

Industry - Spices and CashewnutsCentral Silk Board through 8 regional offices

all over India - Silk Products.Coir Board – Coir and Coir Products.Textile Committee - Textiles and made ups

Non-preferential Certificate of Origin• It evidences the origin of goods and do not

bestow any right to preferential tariffs.

• The Government has also nominated certain authorised agencies to issue Non Preferential Certificate of Origin in accordance with Article II of International Convention Relating to Simplification of Customs formalities

Shipping bill Shipping Bill is an important document required to seek

permission of customs to export goods by Sea/Air. It is prepared by the exporter and submitted to the Customs.

The exporter of any goods has to file a “SHIPPING BILL” as an entry for the purpose of export by air or sea and a “BILL OF EXPORT” in respect of export by land.

Cargo will be allowed to be carted to Dock/Port sheds only after stamping and passing of the shipping bill by customs authorities.

The exporter has to sign a declaration in the Shipping Bill regarding the truth of its contents.

Shipping Bill normally contains: the name and address of the importer/consignee and

exporter, invoice number and date, name of vessel carrying the goods, name of master or agents, port at which goods are to be discharged, country of final destination, description of goods, quantity details of each case,value of the goods as defined in the Sea Customs Act, number of packages with total weight, marks and numbers, etc.

• Types of Shipping Bills: – FREE SHIPPING BILL: Used for export of goods which

neither attract any Export duty/cess nor entitled to any Duty Drawback

– DUTIABLE SHIPPING BILL: Used when export goods are subject to Export Duty/Cess. Duty is charged either on quantity basis (Fixed amount per kg. or per Metric tonne) or on certain percentage of assessable value.

– DRAWBACK SHIPPING BILL: Used when Duty Drawback is to be claimed.

– SHIPPING BILL FOR SHIPMENT EX-BOND: Used when the goods are to be exported which have been imported earlier and kept in bond prior to re-export.

• Types of Shipping Bills: – DEPB SHIPPING BILL: When DEPB benefit is to be

claimed.

– DEEC SHIPPING BILL: This shipping bill is used for export of goods under Advance Authorisation (Duty exemption scheme).

– DEEC CUM DRAWBACK SHIPPING BILL: This shipping bill is used for export of goods where both the schemes Duty Exemption as well as Drawback are to be taken into account.

Shipping bill is required to be submitted in quadruplicate. If Drawback/DEPB claim is to be made, one additional copy should be submitted.

Copies of Shipping Bill are as under:Customs Copy: For record of CustomsExporter’s Copy: For record of Exporters/ Exporter may forward it to

shipping company. Export Promotion Copy: For office of DGFT. This copy is the most

important document for claiming duty Neutralisation/Exemption benefits plus export incentives wherever applicable.

Exchange Control Copy: For negotiating the export documents in bank. It is Proof of export for exchange purposes.

DEPB Copy: For use in the import cell of customs for registration of licence.

AREARE stands for application for removal of excisable goods

for exports by Air/Sea/ Post/Land.

Goods which are sold overseas are exempted from payment of excise duty or entitled for Rebate of Excise Duty, if excise paid goods are exported. Under both these circumstances, the document to be used is ARE.

When goods are removed without payment of duty for the purpose of export, they will get covered under the provisions of Rule 19 of the Central Excise Rules.

When excise paid goods are exported and rebate of Excise Duty is to be claimed, they will get covered under Rule 18 of Central Excise Rules.

ARE is prepared before clearance of goods from the factory gate.

ARE will specify whether goods are exported under Rule 19 or under Rule 18.

There are three types of ARE:

a) ARE 1: is used for physical export of goods.

b) ARE 2: is used when goods are removed for manufacture and packing of the goods to be exported.

c) ARE 3: is used when goods are supplied as deemed exports.

Mate ReceiptMate’s receipt is a receipt issued by the Master or Mate of the

vessel stating that certain goods have been received on board his vessel.

It is prima-facie evidence that the goods are loaded in the vessel. It contains:

the name of shipping line and vessel, port of loading, port of discharge and place of delivery, marks and numbers, number and kind of packages, gross weight,description of goods, container status/seal number,

shipping bill number and date andcondition of cargo at the time of its receipt on board the vessel.

It is serially numbered.

Mate ReceiptPort authorities recover port dues from exporter on production of

this receipt.

On payment of Dock dues, the exporter or his agent collects the receipt from the Port-Trust authorities and hands over to shipping company for preparing Bill of Lading.

Bill of Lading is prepared on the basis of Mate’s Receipt.

It is of a transferable nature.

In case of ascertaining the exact date of shipment, the mate’s receipt date is also very important.

Normally, the date of Export is regarded as “the date of Mate Receipt or the date of Bill of Lading, whichever is later”.

Export Declaration Forms (GR/SDF) As per the exchange regulations, exporters, wishing to

ship goods abroad, are required to submit Export Declaration Forms to the Customs authorities (whenever the value of the shipment exceeds US $ 25,000) before any export of goods from India is made.

It is to be filed by exporter stating that export proceeds would be realized within 180 days for non-status holder exporters and 360 days for status holder exporters.

Export Declaration Forms (GR/SDF) Relevant Declaration Forms, as prescribed by RBI under

Foreign Exchange Management (Export of Goods and Services) Regulations, 2000.

GR Form • Used for exports to all countries made other than by post

including export of software in physical form i.e. magnetic tapes/discs and paper media - When S/B is filed manually. [prepared in duplicate]

SDF Form • Appended to the shipping bill, for exports declared to Customs

Offices notified by the Central Government which have introduced Electronic Data Interchange (EDI) system for processing shipping bills notified by the Central Government. [prepared in duplicate]

These forms normally contain:– Name and address of exporter, IEC code number and description

of goods.– Name and address of authorised dealer through whom the

proceeds of the exports have been, or will be, realised.– Details of commission due to foreign agent or buyer should be

correctly declared. Otherwise, difficulties may arise at the time of remittances of such commission/ payment. An exporter should note this point very carefully.

– It should be clearly indicated whether the export is on “Outright Sale Basis” or “On Consignment Basis”

– An exporter is required to give analysis of full export value, a break-up of FOB value, freight, insurance, discount, commission, etc.

– An exporter has to mention the period within which he will realise full export value of transaction. If the shipment is on DA terms, then an exporter has to bring forex within that period. However, normally maximum period allowed is 180 days.

Statutory Declaration Form [SDF• Procedure for Distribution / disposal of copies of

SDF– The SDF form should be submitted in duplicate (to be annexed

to the relative shipping bill) to the Commissioner of Customs concerned.

– After verifying and authenticating the declaration in form SDF, the Commissioner of Customs will hand over to the exporter, one copy of the shipping bill marked ‘Exchange Control Copy’ in which form SDF has been appended for being submitted to the bank within 21 days from the date of export.

Statutory Declaration Form [SDF– Banks should accept the Exchange Control (EC) copy of the

shipping bill and form SDF appended thereto, submitted by the exporter for collection/negotiation of shipping documents.

– The manner of disposal of EC copy of shipping Bill (and form SDF appended thereto) is the same as that for GR forms.

Bill of Exchange • Bill of Exchange [BE] is a document drawn and is an

order by the exporter to the buyer to pay the money in specified exchange.

• It is also known as a draft.

• A bill of exchange is accompanied by commercial documents which are presented by a bank and released to the buyer either against payment (at sight) or against a signature for payment on a specified future date.

• It is an unconditional written order.

Bill of Exchange • When a BE is drawn on foreign firm it is termed as a

foreign draft or bill of exchange.

• It is prepared either in an international currency or Indian rupees depending on the terms of the contract.

• Accordingly, the bill is known by the name of currency in which it is drawn. e.g. a bill drawn in US dollars is known as a “Dollar Bill” and when drawn in Rupees, it is termed as “Rupees Bill”.

The most common versions of a bill of exchange are:

A) Sight Draft – – When the drawer (exporter) expects the drawee (importer) to make

payment immediately upon the draft being presented to him.

– Unless and until the Draft is received, the Negotiating/ Collecting Bank does not hand over the Shipping documents and the buyer cannot take delivery of goods.

B) Usance Draft – – When draft is drawn for payment at a date later than the date of

presentation. – It may be a fixed future (specific) date or determinable date according to

the period of credit viz. 30 days, 60 days or 90 days etc. – It is presented to the drawee (importer) who will retire the documents by

accepting the draft by putting his signature and date.

• When the payment is received in advance no Bill of Exchange is required to be drawn.• Parties to a bill of exchange

i. Drawer – who makes the order for making payment.

ii. Drawee – whom the order to pay is made.

iii. Payee – whom the payment is to be made.

Features of a Bill of Exchange:– A bill must be in writing, duly signed by its drawer,

accepted by its drawee and properly stamped.

– It must contain an order to pay. Words like ‘please pay US $ 5,000 on demand and oblige’ are not used.

– The order must be unconditional.

– The sum payable mentioned must be certain or capable of being made certain.

– The parties to a bill must be certain.

Bank Realisation Certificate • Once the export proceeds are realised, the exporter has

to prepare Bank Certificate of Export and Realisation for the purpose of claiming export benefits, incentives, etc.

• It is prepared as per Form No.1, given in Appendix 22A of Handbook of procedures.

• To prepare this certificate, the date of realisation is most essential, as the exporters have to apply for the export benefits, incentives, etc. within six months following the month/quarter of the realization month.

It is signed by the authorized signatory of the firm/company with full name in block letters with designation, full official and residential addresses.

Bankers attest this certificate as true and correct after verifying the particulars, including the date of mate receipt. This date is the most important, as this is the actual date of export.

Bank Realisation Certificate It is signed by an authorized signatory of the bank with his

name and designation.

Bankers affix certificate number and date and also mention the Authorized Foreign Exchange Dealer's Code number allotted to Bank by Reserve bank of India.

For this purpose, this certificate must be accompanied with

the following documents:-A copy of invoice, A copy of customs attested export promotion copy of the shipping

bill, A copy of Bill of Lading/ PP receipt/ Airway bill, A copy of the insurance certificate/Insurance policy/cover.

Bill of Lading (B/L)Bill of Lading is the transport document associated with

Sea freight.

It is issued by the Shipping Company or its agent or master of a ship acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified.

It is a document of title to the goods and, as such, is freely transferable by endorsement and delivery.

• Bill of Lading serves three purposes as: – Receipt given by Shipping Company as goods described on

document has been received by it/carrier.– Evidence of the contract of carriage by sea between the

shipping company and the shipper (exporter or importer). – Document of title to the goods and can be used to obtain

payment or a written promise before the merchandise is released to the importer.

• For the bill of lading to be negotiable it must be: 1. made out to the order to the shipper. 2. signed by the steamship company. 3. endorsed in blank by the shipper.

It is the only evidence to file a claim against the shipping company in the event of non-delivery, defective delivery or short-delivery of the cargo at the destination.

For preparation of B/L the exporter should submit the complete set of B/L together with mate receipt to the shipping company which will calculate the freight amount on the basis of measurement or weight.

On payment of freight, the shipping company returns the B/L duly signed and supported by requisite adhesive stamps.

Generally made out in the sets of two or three originals duly signed by the master of the ship or the agent of the steamship company.

All the originals are equally valid for taking the delivery of the goods. Once one original is utilised the other originals become null and void.

Marked as ‘Non-negotiable copy’ cannot be utilised for taking the delivery of goods.

Bill of Lading contains the following information: Shipping company’s name and address.Consignee’s name and address.Notify partyName of the vessel, Port of loading/Shipment and port of discharge.Shipping marks and Numbers, Cubic measurements, weightsDescription of the goods Number of packages.Shipped on board with date-rubber stamp.Gross weight and net weight.Freight details Signature of the shipping company’s agent.Container number if any.Shipper’s name and address.B/L Number and DateOriginalsTerms (on reverse)

Bill of Lading can be further described as under:-

Shipped on Board :- When goods are actually shipped on board.

Received for shipment :- When goods have been handed over to agent for shipment.

Through B/L:- When two or more carriers/ different modes of transport form i.e. road, rail, air, and sea employed to reach goods to their final destination.

– Transshipment B/L:- When there is no direct service between the two ports and ship-owner is prepared to transship the goods at an intermediate port.

– Stale B/L:- i.e. a late B/L that has been held too long before it is passed on to a bank for negotiation or to the consignee.

– Clean B/L:- Where the carrier has noted that the goods have been received or loaded in ‘apparent good condition’ (no apparent damage, loss, etc.).

Claused B/L:- Which contains additional clauses/notations limiting the responsibility of the shipping company which specify deficient condition(s) of the goods and/or packaging.

Combined Transport B/L:- When different modes of transport are used; usually issued when goods stuffed at shipper’s premises and delivered at consignee’s premises.

– Charter Party B/L:- Where a shipper has contracted with a shipping line to charter a vessel for the movement of cargo. It is issued by the carrier or its agent in the charter shipping. Unless otherwise authorized in the letter of credit (L/C), the charter party B/L is not acceptable in the L/C negotiation.

– Freight Paid B/L:- When freight is paid at the time of shipment or in advance, the B/L is marked, freight paid.

– Freight Collect B/L:- When the freight is not paid and is to be collected from the consignee on the arrival of the goods, the B/L is marked, freight collect.

Negotiable B/L:- It is a title document to the goods, issued “to the order of” a party, usually the shipper, whose endorsement is required to effect it’s negotiation. Thus, a shipper's order (negotiable) B/L can be bought, sold, or traded while goods are in transit and is commonly used for letter of credit transactions.

Lets stop here We shall continue with ARE next class