slide 2-40 - world banklnweb90.worldbank.org/eca/transport.nsf/0/786e3f9f52ad321485256b7… · what...

Module 2-2: Commercial Transaction Documents Facilitator

2-47

Overview

Start International Transaction Documents with the overview of the

part. Show the Slide 2-39 and clarify each topic given in the

overview.

Objectives

What are you expecting to learn in this part?

(Let the participants share their expectations.)

Show the Slide 2-40. Inform the participants about the objectives.

Make sure the participants understand each objective clearly.

Please turn to page 2-48 of your manual.

Overview

1 minute

2 minutes

Question

Objective

New Page

Slide 2-39

Slide 2-40


2-48

Scenario

Let the participants read the scenario, and then discuss it from

different perspective. Give concrete examples from SECI region.

Introduction

Start the process with introduction of the Part 2.

In introduction emphasize and explain the importance of foreign

trade documents for buyer and seller.


1 minute

Attention

Facilitator

2 minutes

New Page

Scenario


2-49

Documents Used in International Trade

Inform the participants about the necessity of documents for border

crossing.

Are the documents currently used in international trade

necessary or only a formality?

(Ask several of the participants. Give 2 minutes for answers.)

Show the Slide 2-41 and list the document categories as listed in

the second paragraph.

Direct attention of the participants to the post-it box and explain

“The Purpose of Documents”.


Post-it

Facilitator

Question

4 minutes

Slide

New Page

Slide 2-41


2-50

Commercial Documents

Show the Slide 2-42 and list the Commercial Documents.

Request for Quotation

Show the Slide 2-43, 2-44 and continue process with explaining

the Request for Quotation and give following example.

Explain the Request for Quotation as explained in the second

paragraph of the page. (Appendix A-1)


“What is Request for Quotation”.


Slide

Slide

1 minute

2 minutes

Facilitator

Post-it

New Page

Slide 2-42

Slide 2-43 Slide 2-44


2-51

Emphasize the example of request for quotation as mentioned at

the middle of the page.

Quotation

Show the Slide 2-45 and continue process.

Explain the Quotation as explained in the paragraph.

(Appendix A-2)


“Important Points Regarding Quotation”.


Attention

Slide

Post-it

4 minutes

Facilitator

New Page

Slide 2-45


2-52

Show the Slide 2-46, 2-47 and continue process with explaining

the Quotation and give following example.

What is the difference between Request for Quotation and

Quotation?


Emphasize the example of Quotation as mentioned at the bottom of

the page.


Question

Attention

New Page

Slide 2-46

Slide 2-47

Slide


2-53

Pro Forma Invoice

Show the Slide 2-48 and continue process explaining Pro Forma

Invoice.

Pro Forma Invoice is not the actual commercial invioce but it is

almost exactly what the real invoice will look like. Explain it as

mentioned at the paragraph. (Appendix A-3)

Direct attention of the participants to the post-it box and explain “Pro

Forma Invoice”.

Why do you think an importer would want more formal

document? What are the advantages for him/her?


Summarize and write the answers of the participants on the flipchart.


Slide

4 minutes

Post-it

Facilitator

Question

Flipchart

New Page

Slide 2-48


2-54

Terms and Conditions of Sale

Show the Slide 2-49 and continue process with explaining the

terms and Conditions of Sale.

Sometimes quotations and pro forma invoices are accompanied by

other documents known as Standard Terms and Conditions of Sale.

Explain it as mentioned in the first paragraph of the page.


“Terms and Conditions of Sale”.

What kind of benefits does the buyer or the seller take of extra

information on the terms and conditions of sale?




Slide

Question

Facilitator

Post-it

Flipchart

4 minutes

New Page

Slide 2-49


2-55

Purchase Order


Purchase Order.

Explain the purchase order with its examples as mentioned in the

first paragraph of the page. Give a copy of Purchase Order to the

participants (Appendix A-4).


“Important Point about Purchase Order”.

Order Acceptance and Confirmation


Order Acceptance and Confirmation.

Explain the Order Acceptance and Confirmation as mentioned in the

bottom paragraph of the page.


Post-it

Slide

Facilitator

2 minutes

2 minutes

Facilitator

Slide

New Page

Slide 2-50

Slide 2-51


2-56

Sales Contract

Show the Slide 2-52 and continue instruction with explaining Sales

Contract.

In some cases, importers order informally, by telephone, although

this system has been partly replaced by fax and e-mail. The

exporter then sends an order confirmation, which the importer signs

and returns. This procedure creates a contract of sale.


Slide

Facilitator

2 minutes

New Page

Slide 2-52


2-57

Commercial Invoice

Show the Slide 2-53 and continue process with explaining

Commercial Invoice (Appendix A-5).

Direct attention of the participants to the post-it box. The Invoice

should be English or accompanied by an accurate translation.

What does a commercial invoice give evidence of? If this

document is not used what type of problems could be

encountered?




Slide

Post-it

5 minutes

Question

Flipchart

New Page

Slide 2-53


2-58

Show the Slide 2-54 and continue process with Invoices’

Information.

Banking Process


Banking Documents.

The processes of paying and getting paid require relatively few

documents. Explain these banking documents as mentioned in the

paragraphs at the bottom of the page.


Slide

Slide

Facilitator

4 minutes

New Page

Slide 2-54

Slide 2-55


2-59

What are the reasons for and advantages of using banking

documents in international trade?



Transportation and Insurance Documents

Show the Slide 2-56 and continue process with explaining

Transportation and Insurance

The purposes of most of these documents is to keep track of

merchandise as it passes from one hand to another to make sure it

isn’t delivered to someone who is not supposed to recevie it.


Slide

Question

Facilitator

Flipchart

2 minutes

New Page

Slide 2-56


2-60

Packing List

Show the Slide 2-57 and continue process with packing list.

(Appendix A-6)


“Packing List”.

Bill of Lading

Show the Slide 2-58 and continue process with explaining Parties

of Bill of Lading.

Direct attention of the participants to the post-it box and explain “Bill

of Lading”.

What advantages does the Bill of Lading provide for the buyer

and seller?



Slide

Post-it

Slide

Post-it

Question

1 minute

6 minutes

New Page

Slide 2-57

Slide 2-58


2-61

Explain the parties involved in a Bill of Lading as mentioned in the

paragraphs.

What type of relationship is there among the consigner, carrier

and consignee in the Bill of Lading process?



Question

Facilitator

New Page


2-62

Three Functions of Bill of Lading


three functions of Bill of Lading.

There are three functions of Bill of Lading. Explain each function as

mentioned in the page.

Give a 10 minutes break.


Slide

1 minute

Facilitator

New Page

Slide 2-59

Break


2-63

Straight Bill of Lading

Show the Slide 2-60 and continue process with explaining Straight

Bill of Lading.

The Bill of Lading, which names one specific consignee to whom

delivery must be made, is the Straight Bill of Lading. Explain it as

mentioned in the paragraph (Appendix A-7,8).

Direct attention of the participants to the post-it box and explain “Bill

of Lading”.

In which situations is the Straight Bill of Lading preferred?




Slide

Question

6 minutes

Facilitator

Post-it

Flipchart

New Page

Slide 2-60


2-64

Straight Bill of Lading shall contain several requirements. Explain

these requirements as mentioned in the paragraphs.


Straight Bill of Lading form.


Slide

Facilitator

New Page

Slide 2-61


2-65

Explain the filling procedures of the Straight Bill of Lading document.

Emphasize the second paragraph which gives important information

about the document.


Attention

New Page


2-66

Order Bill of Lading


Order Bill of Lading.

A second type of Bill of Lading is the Order Bill of Lading. Explain

it as mentioned in the paragraph of the page.


“Order Bill of Lading”.


Slide

3 minutes

Facilitator

Post-it

New Page

Slide 2-62


2-67

Bearer Bill of Lading

Explain the Bearer Bill of Lading as mentioned in the first paragraph

of the page.

Why would the seller prefer to use a Bearer Bill of Lading?

From what risks does this method protect the seller?


Through Bill of Lading

Explain the Through Bill of Lading as mentioned in the related

paragraph of the page.


“Through Bill of Lading”.


Post-it

Facilitator

Question

3 minutes

2 minutes

Facilitator

New Page


2-68

Taking Exception

Show the Slide 2-63 and continue process with Taking Exception.

The process of noting damage or discrepancies on the B/L is called

Taking Exception. Explain it as mentioned in the first paragraph of

the page.

Attention that if a letter of credit is to be paid conditionally on the

issuance of a B/L, a shipped B/L is the safest for the purchaser.

Received, On Board and Shipped Bill of Lading

Explain the subject as mentioned in the last paragraph of the page.


Slide

Attention

Facilitator

Facilitator

1 minute

2 minutes

New Page

Slide 2-63


2-69

Why the Bill of Lading is marked received, on board or

shipped? In a trade process why is this easiness way to mark

it?


Shipper’s Letter of Instruction

Show the Slide 2-64 and continue process with the Shipper’s

Letter of Instruction.

Give each participant an example copy of Export Shipping

Instructions. Explain the document (Appendix A-9).

Explain the subject as mentioned in the paragraphs.


“Note about the Shipper’s Letter of Instruction”.


Question

Slide

Facilitator

Post-it

Attention

New Page

4 minutes

Slide 2-64


2-70

What are the advantages and risks of a Shipper’s Letter of

Instruction for the buyer and seller?



Delivery Order and Freight Release

Show the Slide 2-65 and continue process with Delivery Order

and Freight Release.

A written order by the shipper that names the party to whom delivery

is to be made is called a Delivery Order if for an inland carrier, and

a Pier Release if for an ocean carrier. Explain the subject as

mentioned in the related paragraphs of the page (Appendix A-10).

What are the general functions of the documents that are used

in trade process?



Slide

Flipchart

Facilitator

Question

Question

New Page

4 minutes

Slide 2-65


2-71

Airwaybill

Explain airwaybill as mentioned in the first paragraph of the page

(Appendix A-11).

Certificate of Origin

Explain the document with using the Appendix A-12.

Why do we need Certificate of Origin? Please give us

examples from your experiences.


Customs Invoice

Explain the document with using the Appendix A-13.

What is the difference between customs, consular and the

commercial invoice?



Question

Question

New Page

1 minute

1 minute

1 minute

Facilitator

Facilitator

Facilitator


2-72

Consular Invoice

Explain consular invoice as mentioned in the first paragraph of the

page (Appendix A-14).

Rebilling Invoice

Why do we use rebilling invoice? Please indicate the points

for usage.


Inspection Certificate

Explain the document as mentioned in the last paragraphs of the

page (Appendix A-15-16).

What kind of problems you think we could have at the

destination point if we do not have an Inspection Certificate?



Question

Question

New Page

1 minute

1 minute

1 minute

Facilitator

Facilitator


2-73

Case: The Malayan Fishing Company

�� After this exercise the participants will be able to analyze the

document process in a trade operation.

�� Give each participant one copy of case.

�� Let the participants read the case.

�� Ask the case questions to different participants.

�� After all give feedback to the participants and finish the

exercise.

Attention that the training is the best solution in this case.


Exercise

New Page

7 minutes

Attention


2-74

Summary

Summarize the important points of Part 2 and continue process

with the progress check .

There is an old expression: “Trade moves on paper”. Some day this may change to,

“Trade moves electronically”, but this is only beginning to happen internationally. What we are

seeing is electronic transfer of documents, through fax and the internet, but they still must be

created and studied pretty much like in the old days.

Fortunately, many of the prerequisite documents, like those between airlines and the

airports they fly into and out of, are never seen by the importer or the exporter. Also, most

shipments are reasonably uncomplicated. If you send rubber bands from United States to

England, by airfreight on open-account terms, documents won’t be much of a problem. On the

other hand, if you want to ship repeating rifles to Singapore, by sea freight on a letter of credit,

you would better be prepared for reams of paper.


Summary

New Page

2 minutes


2-75


New Page


2-76

Progress Check

Let the participants take the test and explain the correct answer for

each question after completion of the test.

1. A Bill of Lading is basically a contract among three parties to provide the

transportation of cargo. Name the 3 parties involved:

a. Consignor – agent – carrier

b. Consignor – carrier – consignee

c. Carrier – consignee – agent

d. Consignee – distributor – consignor

e. Consignor – agent - carrier

2. Before a Bill of Lading is issued, a representative of the carrier will

inspect the shipment for damage to make certain that the contents of the

shipment are as requested. If no damage can be noted and the contents

of the shipment match the B/L, what kind of B/L will be issued?

a. Straight B/L

b. Order B/L

c. Clean B/L

d. Normal B/L

e. Through B/L

3. The party to a B/L who is entitled to receive the cargo may be a buyer,

the seller, a bank, an agent, etc. What do we call this party?

a. Consignee

b. Consignor

c. Carrier

d. Agent

e. Distributor

Check

10 minutes


2-77

4. If there are a number of carriers each providing transport for one leg of a

journey and they have agreed for a single B/L to contract for all

transportation then what kind of B/L will be issued?

a. Clean B/L

b. Through B/L

c. Order B/L

d. Straight B/L

e. Normal B/L

5. If the cargo has been loaded on the conveyance but the conveyance has

not yet begun its journey, how is the B/L marked?

a. Shipped

b. Taking exception

c. Received

d. On board

e. Air waybill

6. If any damage can be seen or if the contents are not what was

represented, a notation will be made and the document is then called:

a. Taking exception

b. Interline agreement

c. Clean B/L

d. Foul B/L

e. Order B/L


2-78

7. The document, similar to the B/L, used in air cargo operations is called a:

a. Air B/L

b. Packing list

c. Airwaybill

d. Manifest

e. Order list

8. Some country’s customs services ask that an invoice be prepared on

their standardized form. This form is called a:

a. Commercial invoice

b. Special customs invoice

c. Consular invoice

d. Pro forma invoice

e. Rebilling invoice

9. If an invoice is prepared to substitute for the original invoice due to

shipment being divided or the consignee is to be changed or any other

change is made since the original invoice was issued, this type of invoice

is called a:

a. Rebilling invoice

b. Pro forma invoice

c. Consular invoice

d. Special customs invoice

e. Commercial invoice


2-79

10. A written order by the shipper that names the party to whom delivery is

to be made for an inland carrier, is called:

a. Delivery instructions

b. Inspection certificate

c. Packing list

d. Pier release

e. Delivery order