Required Documents in an Export Transaction

By Catherine J. Petersen email | bio

This article will discuss documentation that will assist you in getting paid and resources for understanding what documentation your customers might require in order to pay you. Whether the payment is to be made by cash in advance, open account, documentary collection/cash against documents, or letter of credit, the quotation process is the same.

The quotation should follow a standard format that includes the terms of payment, the international trade term under Incoterms 2000, terms and conditions of the transaction, where ownership will transfer, value of the goods, country of origin, expiration date of the quotation, and other details that are specific to your product or transaction. There is a sample quotation at the Minnesota District Export Council website.

The quotation is the offer, and the purchase order is the confirmation of order acceptance. When providing a quote to a customer you will need to consider the customer’s credit history. You will also need to determine what documents are required for Customs clearance in your customer’s country.

It is during this exchange of information, along with your knowledge about a potential customer’s credit history and political and financial risk, that you will determine what documents are required for Customs’ clearance in the buyer’s country.

You will typically be required to provide the following documents in order to clear Customs in your customer’s country:

• Commercial invoice,
• Packing list,
• International bill of lading (air waybill, ocean bill of lading, rail bill of lading or truck bill of lading),
• Certificates of origin as needed, and
• Other documentation as specified.

You can find out what documents and other information you need to provide from:

• The buyer,
• The freight forwarder handling the transaction,
• The Bureau of National Affairs through a subscription available at their website,
• The U.S. Department of Commerce at the U.S. Export Assistance Center offices,
• The Journal of Commerce through a subscription at their website,
• Courier companies have lists of documentary requirements by country posted at their websites under their "international transaction" portals,
• Export software programs, and
• The embassy of the buyer’s country.

For example, if you have a customer in Saudi Arabia, there are additional documents that are needed by your customer. The Saudi Embassy posts documentation requirements at it website.

In this example, all commercial documents, e.g. shipment of goods certificates, certificates of origin, invoices, vessel navigation certificates, bills of lading, insurance certificates, and market price certificates, must be authenticated by the U.S.-Saudi Arabian Business Council and then the Consulate Section of the Royal Embassy of Saudi Arabia. Other countries will have different document requirements and procedures.

Regardless of what country you are exporting to, the documentation prepared by the seller for the customer is critical to the buyer’s ability to easily clear Customs when the goods arrive at the agreed delivery point in the buyer’s country.

The table below summarizes commercial and regulatory uses of the documentation that companies prepare to support international commercial transactions. Each document requested by the foreign purchaser of goods is usually needed to meet government or financial institution requests or requirements. If the documentary request or requirement seems unlikely or unusual, qualify the requirement by seeking information from reliable sources, such as the Bureau of National Affairs publications, the U.S. Export Assistance Center, or the Commercial Attaché for the country in question.

In my next article I’ll describe payment options for international transactions.