14.1 Overview 概述

14.1 Overview 概述

Suppose you are still working for that Tianjin Binhai Import &Export Co.,Ltd.and are sourcing online for a lucrative product to sell in the Chinese market.If the searching turns out promising,how do you set about importing the desired product?What procedures do you follow?And what formalities must be completed?The following instruction may help you answer these questions.

First of all,it doesn’t hurt to repeat that you must obtain the right for import and export before you can import in the name of your company.Refer to Chapter 1 in case you forget the formalities.Sometimes,an import license or a duty-exemption certificate for import is necessary before you sign the contract.If you are in the businesses of processing with imported or customer-supplied materials,or of compensation trade,approval should also be obtained from certain government departments beforehand.Once approved,your company name will be put on record by the Customs.

Secondly,it’s good to know that Incoterm FOB is preferred by many importers and thus advisable to you as a beginner.It saves you the sea freight,the insurance premium and outgoings of foreign exchange,as you can arrange for shipping and insurance on your own.

Thirdly,if payment is by letter of credit,the following requirements should be satisfied before you can apply to a bank for the opening of a credit:(1)You have the right for import and export;(2)You have a good credit standing and no bad financial record;(3)You have the credit line or a single credit required for opening the L/C;(4)The transaction is real; you are not involved in any sort of money laundering or other illegal activities; the exporter’s bank has no record of being sanctioned by any international financial organizations;and the transaction complies with the compliance review requirements of the issuing bank;(5)You have a full and valid set of transaction documents.

If the deal is the first between you and the exporter,a letter of credit is mostly required for payment.Assuming that the deal is concluded under FOB and the payment is by L/C at the request of the exporter.After signing the sales contract,you need to complete a number of tasks—opening the L/C,booking the shipping space,purchasing ocean cargo insurance,having the cargo shipped,examining the documents,making the payment,receiving the cargo at the port of destination,inspecting the commodity,clearing the goods for import,taking delivery,and making claims on the responsible party(parties)if problems arise with the delivery,the commodity or any other aspects of the deal(see Figure 14-2).

Figure 14-2 An Overview of the Import Process

If the import contract is concluded under other Incoterms rules or terms of payment,the procedures may have some differences.For example,a CFR contract shifts the task of booking shipping space to the exporter,and a CIF contract shifts both responsibilities for transportation and insurance to the exporter.And when the deal is paid by T/T or collection,you are relieved of the trouble of opening an L/C.Therefore,your duties in an import transaction vary by the contract terms,particularly the Incoterms rule and the payment terms adopted.