WHAT EXPORT PERMITS / CERTIFICATES DO I NEED?

There are various export permits/certificates to be obtained, depending on the product to be exported Antiques       1.    Ghana Museum and Monuments Board   2.    Department of Game and wildlife - Products made from animal parts 3.    Cocoa Beans - Fumigation and Quality Assurance by Control Division of Ghana Cocoa Marketing Board (COCOBOD) 4.    Sawn Lumber - Forestry Commission (TIDD) ·         Mineral Ore - Minerals Commission ·         Manufactured/Processed Goods - Ghana Standards Board   ·         Fresh/Processed Fish - Ghana Standards Board   ·         Coffee, Shea-nuts & Cashew nuts - COCOBOD   ·   Food/Agric. Products (e.g. yam, pineapple, plantain, palm oil, etc.) – Plant Protection Regulatory Service ·         Rock & Rock samples - Geological Survey Department   ·         Wildlife e.g. reptiles, etc. - Dept. of Game & Wildlife ·         Pets - Veterinary Services of Min. of Food & Agriculture (MOFA) ·         Chemicals - Environmental Protection Agency (EPA) ·         Pharmaceuticals - Min. of Health (MOH) & Food & Drugs Board (FDB) ·         Palm Oil - Food & Drugs Board ·         Charcoal - Energy Commission ·         Human remains - Births & Deaths Registry ·         Timber & Wood products - Forestry Commission (TIDD) ·         Live Plants - Ministry of Food and Agriculture ·         Dangerous Weapons - Ministry of Interior Where GCNet/GCMS is operational, the declaration would be submitted electronically. ·        For validation/acceptance of the declaration, physical examination of the product by Customs Excise & Preventive Service (CEPS) is required ·     Where GCNet/GCMS is not operational, purchase a set of Ghana Customs Non-Traditional Export Forms at any CEPS post. Complete the form (typed or hand-written) and attach all relevant documents, such as invoice (where necessary), permit or certificates; and present to customs for processing. ·         If Customs is satisfied with the examination, the goods are released for export.

DIFFERENCE BETWEEN AN EXPORTER AND A SHIPPER

In simple terms,

Exporter = is a person or company or entity that is authorised by Customs and Govt authorities to export cargoes to various countries.. This is also the party responsible for filing the export declaration with the customs authorities.. Exporter may or may not be the seller of the goods..

Shipper = is a person or company or entity that is shown in all the shipping documents (bill of lading, commercial invoice, packing list) as the party responsible for procuring and/or placing the order for shipment and maybe also for arranging the freight payment etc..

Shipper need not necessarily be a registered exporter and may or may not be the seller of the goods..

FIRST-TIME IMPORTER - HOW NOT TO LOSE MONEY

There is nothing worse than being blind-sided by extra costs that you haven’t accounted for, especially after you have jumped through administrative hoops to get your first shipment across borders. These unexpected surprises can instantly turn an eager optimist into a discouraged pessimist and may impact your first experience in trade negatively. To keep you from sinking into a financial pit of despair, we’ve prepared a few questions you need to ask to avoid unnecessary financial mistakes.

1). Can you afford to finance the costs of importing?

More often than not, importing is cash intensive.  It is important to make sure you can afford your first step into the world of trade. High transport costs as well as VAT and duty charges all add to the overall costs of imports. It is also less expensive to place larger orders less often than smaller orders more often – so import orders are usually large and therefore costly. All these factors need to be taken into consideration. The mode of transport also influences the overall costs of imports – for example sea is less expensive than flight.

Most first-time importers make the mistake of not anticipating extra costs and therefore they are not completely prepared for the financial implications of importing products. It will be wise to engage the services of a freight forwarding or customs broker to assist you with understanding the trade terms of an agreement, and to talk to your bank to understand the financial implications of the orders you are thinking of placing.

It will also be sensible to keep the following pitfalls in mind when calculating importing costs:

1. Ensure you use the right calculations for VAT or Import duties
2. Ensure you have cargo insurance
3. Ensure that you have the right permits to clear good at customs so that you do not pay storage fees

2). Is there a sufficient demand for products so that you can sell it at a profit?

The process of finding the right product to import shouldn’t be skimped over.  As a potential importer you need to establish whether there is a sustainable demand for a product, whether you can import it legally, and whether you can make a decent profit from selling it or by using it in a manufacturing process to increase margins.

You also need to take in consideration the amount of money you are going to spend to source the right product. Most experts recommend travelling abroad on an import search mission where you can visit manufacturers, attend trade shows and get to know local products. This adds to your expenses. Alternatively you can make the use of a seasoned sourcing advisor that will help you find the right product, at the right quality from companies that you can trust. Their years of experience and thousands of international contacts often means that they can provide you with a better product than what you can source on your own.

3). Are you considering the fluctuations in exchange rates?

Exchange rate fluctuations are another potential risk that you could be exposed to as an importer. You’re probably buying goods priced in a foreign currency, which means exchange rate fluctuation can affect the final amount you’ll end up paying in a foreign currency. The rate could move in your favour or against you.

IMPORT PROCESS

Before we start the import process lets look at some definitions/explanations :

Consignee or Importer : Companies that are authorized by Customs and Govt authorities to import cargoes from various countries..

Place of Origin : A place from which a certain cargo originates in order to be shipped to a certain destination as per the contract of carriage.. This place of origin could also be an inland destination..

Port of Load : A seaport from which the cargo can be loaded on board a ship..

Port of Discharge : A seaport at which the cargo is discharged from a ship..

Place of Delivery : A place to which the cargo is to be delivered as per the contract of carriage.. This place of delivery could also be an inland destination..

Storage Free Days : A period of time specified by the port authorities within which period, the containers imported by the consignee must be cleared and moved out of the port or terminal.. Any containers that stay in the port or terminal over these free days will be subject to storage charges as per the port tariff..

Demurrage Free Days : A period of time specified by the shipping line within which period, the containers imported by the consignee must be cleared, and the empty container returned to the empty depot nominated by the shipping line.. Any containers that are not cleared within these specified free days will be subject to demurrage charges as per the lines tariff..

Arrival Notification : Also known as ANF – is a notification that is sent by the shipping line to the consignee and/or notify party mentioned on the bill of lading advising them of the expected date of arrival of the ship so that the consignee can arrange for the shipment to be cleared at customs either by themselves or their nominated customs clearing agent.. 

Carrier Haulage : Movement of the container from Point A to Point B under the control of the shipping line using a haulage contractor nominated by the shipping line.. In this case the consignee will pay for the same at the lines rate..

Merchant Haulage : Movement of the container from Point A to Point B directly by the consignee using his nominated haulage contractor.. In this case the consignee has the choice to negotiate his own rates for the same..

Redirection : This comes into play when the client would like to redirect a box from its original destination to another or change a mode of carriage from one to another.. Once the ANF is received from the shipping line, the client might exercise the option to change it from Carrier Haulage by rail/road to Merchant Haul by road.. The redirection request may or may not be accepted by the shipping line/port authorities depending on the time frame within which the request is submitted..

The Process

The import process essentially starts when the shipping line receives the copies of the manifest from their counterparts at the load port.. Once the manifest is captured by the shipping line or their agent into their systems, they should be able to generate an ANF that is sent to the consignee and/or the notify party nominated in the bill of lading..

Once the ANF is received by the consignee, they can then start the customs clearance process to file a B/E.. Once this B/E is filed and stamped by customs, the consignee can approach the shipping line for the release of the cargo upon arrival of the ship.. Normally below documents are required by the shipping line in order to release the cargo to the consignee :-

• Bill of Lading – this can be either an Original or a copy in the case of an Express or Way bill depending on what has been issued for the shipment..

• Bill of Entry in original authorised by customs

• Cargo Dues Order authorised by TNPA

The consignee passes on this release document to his nominated haulage contractor for the container to be delivered at their nominated destination for unpacking.. In the case of carrier haulage, the movement is automatically done by the shipping line once the above docs have been received..

Once the container has been delivered to the nominated destination and the cargo unpacked, the consignee has to return the empty containers to the depot nominated by the shipping line within the specified free days allowed.. The shipping lines monitor the incoming stock into their depots on a daily basis and charge demurrage (as per the individual lines tariff) to the consignees that deliver the empty containers to the depot later than the free days..

Only once the empty container has been turned in, the import process between the shipping line and consignee is deemed to be completed.. Further on, the shipping line has to do their manifest acquittal with customs to close off their manifest..

WHAT ARE THE DOCUMENTATION PREPARED BY THE VARIOUS PARTIES INVOLVED IN A SEA FREIGHT SHIPMENT..??

Lets examine these documents..

• Exporter – prepare Commercial Invoice, Packing List, Certificate of Origin or similar certificates, Shipping Instructions for the Bill of Lading

• Freight Forwarders – prepare Delivery Notes, Forwarders Cargo Receipt, Shipping Instructions for the Bill of Lading, Marine Insurance, Cargo inspection certificates, hazardous packing declarations

• Clearing Agents – prepare Customs Documentation, Port Documentation, Duty and VAT exemption documents where applicable

• Shipping Lines or their agents – prepare Booking confirmation, container release, prepare or generate Bills of Lading, Manifest, Manifest Corrector, Telex Release, Freight Invoices, Stowage plans, Loading Lists, Dangerous goods manifest, Out of gauge manifests and at the discharge port, they will prepare Arrival Notification, Delivery Orders, Discharge lists, Freight invoices

• Haulage companies – prepare TREM cards where haz cargo movements are involved, road permits, over-border permits, port entry documents

• Inter-modal operators – prepare documentation for inland haulage, rail movement, road permits

• Surveyors – prepare cargo inspection and survey reports based on what they have been asked to survey
  

• Banks – prepare Letter of Credits, Bill of Exchanges, Surety, Guarantees

• Insurance – prepare Marine insurance, Cargo insurance and other general insurance policies

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These are by no means the full extent of documentation involved in the shipping process.. Depending on the cargo, exporter, importer, bank, destination, shipping line, government etc etc, there may be many more documentation that is required.. But these are the basic documents that are prepared by various entities for a sea-freight shipment..

Apart from the above there are also other entities such as Port, Customs, Excise, Police, Health, Veterinary authorities that are involved with the shipments and they would be preparing their own documentation.. As you can see, a single shipment depends on the co-operation of several entities to make it happen..

If you prepare some documentation that maybe new, please do share the information with the details of what the documentation is and why it is required, for the benefit of all..

DIFFERENCE BETWEEN TRANSSHIPMENT AND CARGO IN TRANSIT

What is the difference between Transshipment and Cargo in Transit..??

What is Transshipment..?? –Transshipment or transhipment is the shipment of goods or containers to an intermediate destination, then to yet another destination. One possible reason for transshipment is to change the means of transport during the journey

How is this different from Cargo in Transit..??

A cargo that is moved from an origin point across international borders to another country over land is termed as “Cargo in Transit”..

To explain further..

There are several countries and commercial centers around the world that don’t have a seaport and these countries have to use the seaports of other countries in order to import or export their cargo..

Some examples of such countries would be

• Ethiopia which uses the port of Djibouti in Djibouti as their gateway port
• Uganda which uses the port of Mombasa in Kenya as their gateway port
• Moldova which uses the port of Constanta in Romania as their gateway port

Cargo in Transit move could be as below :

1. Cargo from Country A is moved to destination Country D via Country B (which could be a sea port) and Country C (another inland country) or
2. Cargo from Country A is moved to destination Country D overland, via countries B and C where Countries A, B, C and D are all within a union of countries like the EU

Bills of Lading and Manifest for cargoes bound for such inland country destinations, must carry the clause Cargo in transit to “name of country” .. This clause tells the gateway/transit port/country that the cargo is not meant for consumption in their country and is meant for the manifested inland country and by virtue of this clause, the cargo maybe allowed to transit international borders under customs control..

If this clause is not included in the bill of lading and manifest, the movement across the international border will not be allowed and the recipient might need to customs clear the goods at the gateway port which might not be an ideal situation for the recipient..

In some cases, shipping lines or government regulations might dictate/insist that the clause reads as “Cargo in transit to “name of country or final destination” on client care, risk and cost“..

Cargoes in transit may be moved via any mode of transportation depending on the infrastructure available..

The documentation and customs clearance processes between the countries depend on their trade and other co-operation agreements.. Unions and Communities such as EU and SADC have agreements for cargoes moving in transit within/via their territories..

To summarize :

*** Transshipment is the act of off-loading a container from one ship (generally at a hub port) and loading it onto another ship to be further carried to the final port of discharge.. Cargoes that have been off-loaded at a port for transshipment are NOT allowed to exit the port by land or rail across international borders to a land locked country unless they are declared as Cargo in Transit..

*** Cargo in Transit is the movement of cargo that is

1. discharged at a gateway seaport or
2. originating from a country within a union

across international borders to another country where the final destination is (generally) a landlocked country.

DIFFERENCE BETWEEN PRE-CARRIAGE, CARRIAGE AND ON-CARRIAGE

A simple description would be

• Pre-Carriage – The movement that happens BEFORE the container is loaded on the ship
• Carriage – The movement that happens while the container is ON BOARD the ship
• On-Carriage – The movement that happens AFTER the container is discharged from the ship 

To explain further :

Pre-Carriage – is the term given to any inland movement that takes place prior to the container being loaded at a port of loading.. Such activity can take place at the same location as the port of loading, or at a location close to the port of loading.. Example : Empty container is released in Johannesburg and moved to Pretoria for packing and then moved by road or rail to Durban port.. This activity is known as PRE-CARRIAGE..

If the activity is performed by the shipping line on behalf of the client, that is called Carrier Haulage..  In this case, normally the bill of lading shows place of origin as Pretoria.. If the activity is performed by the client or their transporter, that is called Merchant Haulage.. This activity can be performed using rail, or road transport..

Carriage – is the term given to the actual movement of the cargo on sea from the port of load to the port of discharge.. Example : When the container is moved from Durban to say Felixstowe by sea.. This activity is known as CARRIAGE..

This activity can be performed only by the shipping line/vessel operator who is undertaking to carry the cargo from point A to point B and the bill of lading issued by the ship owner/shipping line is the evidence of the contract of such carriage.

On-Carriage – is the term given to any inland movement that takes place after the container is discharged at a port of discharge.. Such activity can take place at the same location as the port of discharge, or at a location close to the port of discharge.. Example : Full container is discharged at Durban and then moved by rail to Johannesburg City Deep terminal and then further moved by road to Sasolburg for unpacking. This activity is known as ON-CARRIAGE..

If the activity is performed by the shipping line on behalf of the client, that is called Carrier Haulage. In this case, normally the bill of lading shows final destination as Sasolburg. If the activity is performed by the client or their transporter, that is called Merchant Haulage. This activity can be performed using rail or road transport.

WHAT IS A BILL OF LADING ..??

Bill of Lading (abbreviated to B/L) is one of the MOST important documents in the whole shipping and freight chain..

A Bill of Lading has 3 basic purposes or roles..

1. Evidence of Contract of Carriage
2. Receipt of Goods and
3. Document of Title to the goods

Let’s examine these roles in more detail..

1) Evidence of Contract of Carriage – emphasis on the term “Evidence“..

Many people think that a B/L is a Contract between the Seller and the Buyer and many also think that a B/L is a Contract of Carriage between the Carrier and Shipper..

Both notions are wrong..

The contract between a buyer and seller was already established when the buyer placed the order with the seller and they both discussed and agreed (verbally or in writing) the what, where, when, how and how much of the transaction in detail..

The contract between a shipper and the carrier was already established when the shipper or his agent made a booking with the carrier (shipping line) to carry the cargo from A to B..

The B/L is the EVIDENCE of the contract of carriage entered into between the “Carrier” and the “Shipper or Cargo Owner” in order to carry out the transportation of the cargo as per the contract between the buyer and the seller..

2) Receipt of Goods – emphasis on the term “Receipt“..

A B/L is issued by the carrier or their agent to the shipper or their agent in exchange for the receipt of the cargo.. The issuance of the B/L is proof that the carrier has received the goods from the shipper or their agent in apparent good order and condition, as handed over by the shipper..

3) Document of Title to the goods – emphasis on the term “Title“..

It means that the goods may be transferred to the holder of the bill of lading which then gives the holder of the bill of lading, the rights to claim the goods or further transfer it to someone else..

Based on the above roles, there are several variations of the Bill of Lading (let’s call it Types), important among which are as below..

1) Straight Bill of Lading – is a B/L issued in Original(s) to a “named” consignee and therefore is a NON-NEGOTIABLE & NON-TRANSFERABLE DOCUMENT.. Release of cargo at destination must be issued ONLY to the named consignee and ONLY upon surrender of all the original bills issued..

This bill of lading satisfies roles 1 & 2 above fully and does not satisfy role 3 (Document of Title) as the document is not negotiable or transferable..

However, straight bills of lading might be issued in original and at least 1 original of the number of originals issued must be handed back to the shipping lines agent at destination in order for the cargo to the released, and the cargo may be released ONLY to the consignee mentioned in the bill of lading..

2) Seaway Bill of Lading – is a B/L similar to a Straight Bill of Lading and is also a NON-NEGOTIABLE DOCUMENT.. But the similarity ends there..

A Seaway B/L is usually issued

1. for inter company shipments like from ACME Company Hollywood to ACME Company in the Middle of the Australian Outback or
2. where the shipment takes place between two different companies but there are no negotiations required between the two either directly or via bank for release of the cargo and
3. the shipper doesn’t need to submit an original bill of lading to anyone to secure his payment

No originals are issued in the case of a Seaway B/L and therefore no surrender is required.. This bill of lading satisfies roles 1 & 2 above and does not satisfy role 3 (Document of Title) as the document is not negotiable or transferable..

As there are no originals issued for this type of bill, the release is termed as an Express Release and is mentioned as such on the body of the bill of lading and manifest..

3) Negotiable Bill of Lading – is a B/L issued in Original(s) and maybe consigned “TO ORDER” or “TO ORDER OF SHIPPER” or “TO ORDER OF XYZ BANK” (where Letter of Credit maybe involved).. Also known as an Order Bill..

One of the most important aspects of a bill of lading is that it can be used as a negotiable instrument for payments between a buyer and seller using Letter of Credits.

A negotiable bill of lading must be treated like gold and due care must be taken not to lose it.. There are several cumbersome procedures to be followed if an original bill of lading is lost.

Another notable feature of this type of B/L is that it contains the Terms and Conditions of the Carrier on the 1st Page of the B/L.. The 1st page is what we all commonly refer to as the “back of the bill of lading”.. Seaway bills issued by some carriers do not have these Terms and Conditions on the back.

Destination port agent may issue release of cargo only after at least 1 of the issued originals are surrendered and after checking the endorsements on the back of the bill of lading as it is possible for this type of bill of lading to be endorsed or transferred to another company.. This bill of lading satisfies all of the above 3 roles.

There are also various ways in which the bill of lading is termed or titled, the purpose of which is to identify the carriers responsibility in terms of the carriage..

Below are some of the ways in which a bill of lading is termed or titled..

1) Port to Port Bill of Lading – When a B/L is issued as a Port to Port B/L (also known as Ocean Bill of Lading), the carrier’s responsibility begins at the port of loading and ends at the port of discharge and therefore the Place of Origin/Receipt or Place of Destination/Delivery should not be mentioned in the B/L.

2) Combined Transport Bill of Lading – When a B/L is issued as a Combined Transport Bill of Lading, it involves multiple modes of transport from the Place of Receipt to Place of Delivery and all these movements are carried out as a single contract by multiple service providers under the employ of the carrier..

Carrier takes responsibility for any loss or damage for the entire transport including the sea and other mode of transport..

3) Multimodal Transport Bill of Lading – Same as Combined Transport Bill of Lading..

4) Through Bill of Lading – Similar to Combined Transport Bill of Lading except that in the case of the Through Bill of Lading, the carrier is directly responsible only for the sea leg and for the inland movement they act as an agent in arranging the inland movement..

The terms on the Through Bill of Lading issued by the carrier will specifically state this, in such a bill of lading..

When a bill of lading is released as a Through Bill of Lading, the boxes like “Pre-Carriage by”, “Place of receipt by pre-carrier”, “Place of delivery by on-carrier”, “On-Carriage by” etc will be filed in..

Another misconception that most people have is terming a bill as Telex Release Bill of Lading.. There is no such term.

DIFFERENCE BETWEEN A FREIGHT FORWARDER AND CLEARING AGENT

What is the difference between a freight forwarder and clearing agent..??

This is one of the questions that many people ask.. The answer is that in the current economic and business scenario, the line dividing these two is quite thin..

Freight Forwarder : Essentially secures the business of various exporters and importers and has the ability/facility to

• storage the cargo belonging to the clients at their warehouse (usually all big forwarders have their own warehouses)
• arrange the distribution or “forwarding” of the cargo as per the instructions of their client.. This could be a regular routing or various routings
• negotiate freight rates with the shipping line to cover the interest of their clients
• book the cargo with the shipping line as per the requirement of the client
• prepare bills of lading and associated shipping/negotiating documentation (F178, Certificate of Origin, etc)
• issue their approved house bill of lading as applicable
• MAY or MAY NOT also do Customs Clearance
• may or may not be accredited to customs, port etc and cannot do customs clearance if not accredited
• almost viewed by clients as an alternative shipping line

Clearing Agent : Essentially takes care of the customs clearance aspect of the business..

• is a company accredited with the local customs authorities, border agencies, port etc
• arranges to pass the relevant documents at customs
• arrange for customs inspections as required
• check and process Duty and VAT payments as applicable
• apply for refunds etc where applicable
• cannot issue own bills of lading if not registered or acting as a freight forwarder

These are the major differences between a Freight Forwarder and Clearing Agent..