Major Discrepancies-IRC-ICC-Procedure Retirement etc.
Bankers Of the Article
Major Discrepancies-IRC-ICC-Procedure Retirement etc.
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Write the common major discrepancies those to be checked on receiving Export/Import documents
Common discrepancies:
a) Claused (unclean) Bill of Lading
b) Charter party B/L (unless stipulated in the L/C)
c) Full set of B/L not presented
d) Bill of Lading does not evidence whether freight is paid or not.
e) Stale Bill of Lading/documents not presented in time.
f) Shipment effected from port other than that stipulated in the L/C.
g) Weightment Certificate not presented.
h) Weight differ between documents.
i) Third party B/L or short form Bill of Lading submitted.
j) Late shipment
k) Short shipment
l) Shipping marks and numbers differ between documents
m) Description of goods on invoice differs from that in L/C.
n) Documents inconsistent with each other.
o) Amounts in invoice and Bill of Exchange differ.
p) Certificate of Country of origin of the goods not submitted.
q) L/C amount exceeded
r) L/C expired
s) Packing list not submitted
t) Inspection Certificate not submitted
u) Fumigation/Health Certificate (fit for human consumption) not submitted
v) Bill of Exchange drawn on a wrong party
w) Absence of signatures where required, on documents printed.
x) Cuttings, alterations in documents not authenticated.
y) Bill of Lading, Insurance documents or bill of exchange are not endorsed correctly.
z) LCA number or Inventors registration number not mentioned in the invoice.
14) State the procedure of retirement of import documents.
When the documents are received from foreign correspondent and checked with L/C file by two officers to ascertain the correctness, if it is found in order, then make entry in the Bill register and pass the reverse liability voucher within five working days from the time of receipt is called Lodgement. When the party release/retire the documents from the L/C issuing Bank by cash payment or by Murabaha Post Import (MPI), Mudaraba, Musharaka, Bai-muazzal of TR arrangement is known as Retirement. Documents must not be handed over to the importer without payment or arrangement of payment.
15) What are the requirements of a new importer for getting Import Registration Certificate (IRC)?
1) Application in a prescribed form.
2) Valid Trade license.
3) Membership certificate of the respective trade organization or Membership from the Chamber of Commerce & Industry.
4) Registered partnership deed/Memorandum and Articles of Association alongwith Certificate of Incorporation.
5) Two copies attested photograph of the applicant(s).
6) Affidavit from 1st class Magistrate.
7) Asset Certificate of the applicant(s).
8) Ownership deed or Lease deed of the office premises alongwith rent receipt.
9) Bank solvency certificate.
10) Tax Identification Number (TIN) Certificate.
11) Money receipt of requisite fee. 12) Any other document as required.
16) Who issues the Import Registration Certificate (IRC)?
After submission of the application by the intending importers for IRC along with the papers in mentioned above
(a) and deposit of requisite fees, on being satisfied the Chief Controller of Import & Export (CCI&E) issue IRC to the Industrial Consumers or Commercial importers with their half yearly/yearly entitlement mentioning item of commodities.
17) What are the contents of an IRC?
i. Validity period & issue date mentioned
ii. Name of the importer mentioned
iii. Sometimes amount limited
iv. Sometimes item limited.
18) Who are the exempted persons from Registration as an Importer?
In terms of the Importers, Exporters and Indentors (Registration order 1981), no person can import goods into Bangladesh unless registered with the CCI &E or exempted from the provision of the said order. Personal user needs no registration. They may import beyond USD5,000/- with the permission from CCI&E.
Persons exempted for registration:
(i) Government departments
(ii) Local authorities or Statutory bodies
(iii) Recognized Educational institutions
(iv) Hospitals
(v) Imports of goods which does not involve remittance of foreign exchange
(vi) Reading materials or medicine imported for personal use within permissible limit.
(vii) Capital machineries & spare parts for new industry.
19) Write stepwise the procedures/formalities for Import.
A. Procurement for Import Registration Certificate (IRC): To carry on the business of import, the first thing needs is registration. An application to be submitted by the intending importer for IRC alongwith the undernoted papers/documents to the Chief Controller of Import & Export (CCI&E).
(i) Application in the prescribed form.
(ii) Valid Trade license
(iii) Membership certificate of the respective trade body or Membership from the local Chamber of Commerce & Industry.
(iv) Registered partnership deed/Memorandum & Articles of Association alongwith Certificate of Incorporation with Registrar of Joint Stock Company.
(v) Two copies attested photographs of applicant(s).
(vi) Affidavit from 1st class Magistrate.
(vii) Asset certificate of the applicant(s)
(viii) Ownership deed or Lease deed of the office premises alongwith rent receipt.
(ix) Bank solvency certificate.
(x) Tax Identification Number (TIN) certificate.
(xi) Any other document as required. On receiving the application and papers, the office of the CCI&E will scrutinize these and being satisfied they will issue Demand notice for deposit the Import Registration fees to the Bank through Treasury Challan. Original copy of deposited Treasury challan to be also deposited to the office of CCI&E. Thereafter the Chief Controller of Import & Export will issue Import Registration Certificate which will contain the name of importer, Date of issue, validity period, sometimes items limited and sometimes amount limited for a period.
B. Purchase contract with the Seller: Upon registration, the importer will collect Proforma Invoice directly from the seller through negotiating the price, quantity, quality and other terms & conditions over phone/Telex/Fax/e-mail or letter. Sometimes sellers appoint their Agent in some countries who issue offer letter of sale to the importers describing all terms & conditions which is called Indent.
C. Opening of Import L/C: After obtaining the Proforma Invoice or Indent, the importer will go to his banker or any other bank and approach them for opening of L/C. The bank will verify the Proforma Invoice or Indent whether the item or other terms of the Proforma Invoice or Indent are restricted by the law of the land. If everything is ok, they will settle the percentage of margin and the banker may ask the importer to deposit the margin and other requisite paper(s). Then Bank collects the credit report of the exporter. After completing the formalities, the banker will issue Letter of Credit (L/C).
D. Advising and Confirming the L/C: The L/C issuing bank (importer’s bank) in accordance with the instruction/request or as per arrangement, the issuing bank request another bank (advising bank) located in the seller’s/exporter’s country to advise the L/C to the beneficiary. The issuing bank may also request the advising bank or any other corresponding bank to confirm the credit, if necessary. The Advising bank inform/advises the seller/exporter that the L/C has been issued.
E. Exporter’s duty: As soon as the exporter receives the L/C and is satisfied that all the terms & conditions of the L/C are in conformity with the proforma invoice or indent and he can meet the terms & conditions, then he will arrange to make the shipment of the goods within the time frame. After making shipment of the goods in favour of the importer then the exporter submit the requisite documents to his bank for negotiation of the export bill.
F. Negotiating bank: The exporter bank is called Negotiating bank. They receive export documents from the exporter and scrutinize these with the L/C copy and if found OK then they send the documents to the L/C issuing bank through reputed Courier service or Registered post.
G. Lodgment of documents by the L/C issuing bank: After receiving the documents from the negotiating bank, the issuing bank will examine the documents and if found in order, they make payment instruction to the Reimbursing bank from our NOSTRO account with them. If any discrepancies found in the documents, the issuing bank must inform the negotiating bank within five working days from the date of receipt of the documents and payments will be held up until settlement of the discrepancies. If the importer agreed in writing to receive the discrepant document, then bank may instruct the Reimbursing bank to pay the bill amount to the negotiating bank.
H. Retirement of documents and release of imported goods: After lodgement of the documents against L/C, the issuing bank then request the importer for retirement of documents after making payment or retire the documents duly arrange for making payment to release the goods from the port authority duly observed custom formalities. If the importer did not come forward to retire the import documents from the bank for any reason, the bank will then create a forced loan in the name of the importer and arrange to release the goods from the port authority after observing custom formalities through their CNF agent and took the goods under Bank’s control.
20) What is ICC? Write the name of publications (rules) of ICC.
ICC is stands for ‘The International Chamber of Commerce’. ICC is the world business organization, a representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world. ICC was founded in 1919. The headquarters of the International Chamber of Commerce is in Paris of France. The ICC Bangladesh was established in 1994.
20) What are the functions of ICC?
The fundamental mission of ICC is to promote trade and investment across frontiers and help business corporations meet the challenges and opportunities of globalization. ICC has main three activities: rules setting, dispute resolution and policy.
21) Write the name of publications (rules) of ICC.
Publications of ICC:
1. UCP – 600
2. ISBP – 681
3. URC – 522
4. ISP – 98
5. URDG – 758
6. URR – 725
7. INCOTERMS 2010 – 715E
22) What is UCPDC?
UCPDC means “Uniform Customs and Practice for Documentary Credits” .The International Chamber of Commerce (ICC) in 1933 first published UCPDC. The latest revised edition of UCPDC600 came into force from 01.7.07. The rules of UCPDC-600 are applicable to any documentary credit.
24) How many numbers of articles of UCPDC, ICC Publication -600. There are 39 (thirty nine) articles in the UCPDC, ICC-600
25) Write the number of articles of UCPDC, ICC Publication -600. Article
1 Application of UCP “
2 Definitions “
3 Interpretations “
4 Credits V Contracts “
5 Documents V Goods, Services or Performance “
6 Availability, Expiry date and Place for Presentation “
7 Issuing Bank Undertaking “
8 Confirming Bank Undertaking “
9 Advising of Credits and Amendments “
10 Amendments “
11 Tele transmitted and Pre-Advised Credits and Amendments “
12 Nomination “
13 Bank-to-Bank Reimbursement Arrangements “
14 Standard for Examination of Documents “
15 Complying Presentation “
16 Discrepant Documents, Waiver and Notice “
17 Original Documents and Copies “
18 Commercial Invoice “
19 Transport Document Covering at least Two different Modes of Transport. “
20 Bill of Lading “
21 Non-Negotiable Sea Way Bill “
22 Charter Party Bill of Lading “
23 Air Transport Document “
24 Road, Rail or Inland Waterway Transport Documents “
25 Courier Receipt, Post Receipt or Certificate of Posting “
26 “On Deck”, “Shipper’s Load and Count”, “Said by Shipper to Contain” and Charges Addit Charges additional to Freight. “
27 Clean Transport Documents “
28 Insurance Document and Coverage “
29 Extension of Expiry Last Date or Day of Presentation “
30 Tolerance in Credit Amount, Quantity and Unit Price “
31 Partial Drawing or Shipment “
32 Installment Drawings or Shipments
33 Hours of Presentation “
34 Disclaimer on Effectiveness of Documents “
35 Disclaimer on Transmission and Translation “
36 Force Majure “
37 Disclaimer for Acts of an Instructed Party “
38 Transferable Credits “
39 Assignment of Proceeds
26) What do you understand by INCOTERMS?
The word INCOTERMS is an abbreviation of International Commercial Terms. INCOTERMS are a set of standard terms used in contracts for international sales and utilized to determine the obligation of the parties – buyers and sellers. These rules describe DELIVERY – RISKS and COSTS involved in the delivery of goods from sellers to buyers. First version of INCOTERMS was published in 1936. There were 13 INCOTERMS in the version of 2000. The latest version of INCOTERMS 2010 (ICC publication no. 715E) consists of 11 rules, each rule is represented by 3 letters, that clearly set out the duties, costs and transfer of risks involved in the delivery of goods from sellers to buyers. These rules (terminology) provide a wide choice to sellers and buyers as to how they wish to share these duties, costs and risks in the contract of sale (Indent or Proforma invoice) by express incorporation. INCOTERMS 2010 came into effect from 1st January 2011.
27) What are the differences between INCOTERM 2000 and 2010?
Four INCOTERMS – DDU (Delivered Duty Unpaid), DAF (Delivered At Frontier), DES (Delivered Ex Ship) and DEQ (Delivered Ex Quay) are eliminated from the version of 2000. Two new terms/rules DAT (Delivered At Terminal) and DAP (Delivered At Place) are created in the version of 2010.
28) Divide the INCOTERMS according to transport mode.
Any mode of transport
(i) EXW EX Works
(ii) FCA Free Carrier
(iii) CIP Carriage and Insurance Paid to
(iv) CPT Carriage paid to
(v) DAT Delivered AT Terminal
(vi) DAP Delivered At Place
(vii) DDP Delivered Duty Paid