SCRUTINY & NEGOTIATION OF EXPORT DOCUMENTS
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LEGAL
FRAMEWORKS:
A. Guidelines for Foreign
Exchange Transactions (GFET)
B. Foreign Exchange Regulation
Act-1947
C. Export Policy
D. Different directives of NBR
E. Different publications of
ICC
-UCPDC
-URC
-URR
-Incoterms
-ISBP
Negotiation:
Negotiation
means the purchase by the nominated bank if drafts (drawn on a bank other than
the nominated bank) and/or documents under a complying presentation, by
advancing or agreeing to advance funds to the beneficiary on or before the
banking day on which reimbursement is due to the nominated bank.
Steps:
- Certifying EXP Forms
- Receiving Export Documents
- Scrutiny of Documents
- Negotiation/Purchasing
- Forwarding Documents to Applicant’s Bank
- Realization of Export Proceeds
- Reporting to Bangladesh Bank
1.Certifying
EXP Forms:
- At the request of exporter, EXP is certified by AD
- 4(four) copies (Original, Duplicate, Triplicate and Quadruplicate)
- Certification of EXP as per Chapter 8, Para 7 of GFET
- Entry in EXP issue register
2.Receiving
Export Docs along with exporter’s forwarding/ application:
- Bill of Exchange
- Commercial Invoice
- Packing/weight list
- Transport Documents (Bill of lading / Airway Bill / Railway Bill/ Postal Receipt etc.).
- Inspection Certificate
- GSP, Certificate of Origin
- EXP Forms (3 copies)
- Others (as required in the LC)
3. Scrutiny of Documents:
General:
- LC Expired
- Late Shipment
- Early shipment
- Late presentation
- Installment/partial shipment
- LC over drawn
Export
Documents should be examined in terms of L/C. Specially the following things
should be examined:
a.
Bill of Exchange:
- Drawn on LC issuing bank
- Date & Signature
- Amount in figure & words
- Tenor
b.
Commercial Invoice:
- Date and number of Commercial Invoice
- Invoice value as per EXP
- Description of goods, Unit price, quantity
- Applicant’s and Beneficiary’s name & address
- Number of originals to be presented, etc.
c.
Bill of Lading/ AWB:
It
is one of the most important documents. So it should be scrutinized very
carefully:
- B/L Number & Date
- Full set of B/L
- Made out to the order of Negotiating Bank
- Notify party
- On Board notation with signature
- Description of goods
- Port of loading/discharge
- Freight prepaid/collect
- Signed as per capacity
- Whether any defective clauses or clean BL
(*
Specimen Signatures of the transport companies should be preserved)
d.
Others
- Description & quantity as per LC in Packing List, GSP/CO, Inspection Certificate
- Gross weight, net weight are identical in documents
- Inspection Certificate issued as per LC
- Whether any unfavorable information in the contents of the inspection certificate regarding quality of the goods
e.
EXP Forms:
- Signature of the customs authority
- 3 copies are presented.
- Any short or excess shipment (short shipment certificate or amendment)
4.
Negotiation/purchase of Documents:
- Getting approval of negotiation/purchase from the chain of Management.
- Preparing vouchers
Calculation
of CM value:
(Where
BTB LC facility is availed)
Total invoice value in FC : ------------
Less FC for BTB payment :-----------
Less FC for ERQ :
------------
Less foreign Bank charges : -----------
Vouchers:
Dr. FDBP/FBP Account (only CM portion)
(For sight bill, @ OD sight
export)
(For usance bill, @ usance
rate)
Cr. CD A/C
Cr. Packing Credit/ Others Loan A/C
Cr. S/D Tax on export, Courier charge etc.
5.
Forwarding Documents to Applicant’s Bank:
- In prescribed format by the Bank
- Addressed as per LC
- Endorsement on Bill of Exchange and B/L, Insurance Cover Note (if any)
6.
Realization of Export Proceeds:
Dr. General A/C ID, HO (CM portion @ TT Clean &
rest portion @ OD
Sight Export)
Cr. FC Held
(@ OD Sight Export)
Cr. ERQ Account (@ OD Sight Export)
Cr. FBP A/C
Cr. I/A Exchange Earnings
7.
Reporting to Bangladesh bank.
- Duplicate of EXP should be reported to B. Bank within 14 days from the date of shipment through ID.
- After realization of exports proceeds, Triplicate of EXP will be reported to B.B. in usual monthly return through ID.
Handling
of Discrepant Documents:
- Beneficiary may be advised for rectification
- Discrepancies may be referred to issuing Bank for their acceptance and getting acceptance documents may be negotiated
- Indemnity duly stamped and signed is to be provided by the Beneficiary
- The branch may send the documents on collection basis with the permission of the exporter.
Non
-Repatriation or Delay in Repatriation:
- Repatriation period (Maximum 120 days from the date of shipment)
- If overdue, to be reported to Bangladesh Bank (Chapter 8, Para 15 of GFET)
- Delay in repatriation (Interest for period beyond 21 days of purchase)
- Steps for repatriation-
-Whereabouts of goods
-Correspondence
-Intimation of discrepancy
to the exporter
-If discount is offered,
prior approval from Bangladesh Bank
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