When the idea of taking your business international first comes to mind, it is often marred with the doubts and flurry of questions the answers to which you often don’t know. But do not let that feeling come in the way of turning your dream into reality. In the era of globalization, the governments of leading economies are making all possible arrangements for small and medium enterprises to contribute in the gross export output and achieve the ultimate dream of trade surplus for a prospering economy.
There are things that you know- the usual, obtaining a business registration certificate, acquiring the GST no. and getting an IEC Code, most of which you have probably done already for a legit business, but when it comes to exports, there’s so much you need to know, so much you need to be updated with and a lot more than you can predict.
Part of these predictions is the buyer’s preparedness. You may have left no stones unturned in readying your shipment with all necessary documents but can you say the same about the buyer? The only way you can avoid a mishap on buyer’s part is by not being in the dark and knowing everything you as well as the buyer are supposed to in order to ensure a seamless export experience.
So, instead of sitting back with a fear of faltering in your endeavors, buckle up and learn these important facts to ensure that your very first consignment reaches its intended destination, giving the best possible start to your international venture.
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This blog contains certifications as well as documents that need to be in place before you even consider getting your shipment ready. As the rules of international trade keep changing, you must keep yourself updated with information to make necessary changes in time to avoid any losses. Not all these certifications may be needed for the product you are dealing in, but an overview of these certifications will give you a fair idea on how much preparation goes into the successful export of your first shipment.
Certificate of Origin – This document certifies the country of origin of the export product. It clearly states where the product was manufactured or processed and is required by the import country’s customs department to clear the shipment. You need to get the certificate of origin which you can obtain online by raising a request at the CoO portal for exporters. Different countries have different government updated portals that serve the same purpose, Australian exporters need to login to www.dfat.gov.au.
For Chinese exporters, the CFC, China Certificate of origin can be obtained online as well. Here’s the link for more information regarding certificate formats for different export destinations https://cargofromchina.com/certificate-of-origin/
Phytosanitary Certificate – Certain regulated articles like plant commodities and plant products such as; whole plants, bulbs, tubers, seeds for propagation, fruits and vegetables, cut flowers, branches, grain, growing medium, and whole plants or parts require a phytosanitary certificate required by the importing country. The certification states that the items in the consignment are pest-free and do not contain disease-causing infections. Usually, the Department of Agriculture and Water Resources issues the certificate. The certificate can also be obtained digitally. In fact most importing countries prefer the electronic phytosanitary certificate.
Fumigation Certificate – Fumigation certificate, also known as the pest-control certificate is a document of approval issued by the licensing authority or government certified fumigation agency to indicate that shipment or shipping materials in a consignment have been properly fumigated. All the countries that require the certificate and will not clear any shipment without it are – Turkey, Colombia, Costa Rica, Chile, Japan, Switzerland, Brazil, Argentina, Korea, UK, EU, New Zealand, Australia, Mexico, Canada and United States.
Inspection Certificate – This document certifies that the concerned products/goods were in good condition immediately prior to the shipment. The Certificate of Inspection is a report of findings and is required by some importers or importing countries. The goods also include perishable items.
Pre-Shipment Inspection certificate – A pre shipment inspection certificate is a trade document issued by an independent inspection agency and is always stated in the sales contract or letter of credit. This certificate is mostly required by importing countries from Asia and Africa. Ask your buyer to specify the same in the sales contract to avoid any confusion in your own checklist.
Health Certificate – Issued by the government organization at the country of origin, the Export health certificate is issued to approve the compliance of the food shipment in terms of human consumption and meeting of safety standards required by the law in the export of such products.
Halal Certificate – Chances are if you’re a business dealing in the trade or export of meat, you know this already. And if you don’t, here’s what it states – a document that guarantees that products and services aimed at the Muslim population meet the requirements of Islamic law and therefore are suitable for consumption in both Muslim-majority countries and in Western countries where there are significant population groups who practice Islam.
Certificate of Analysis – This certificate contains the results of the scientific tests conducted on export products such as food or drugs. The list of chemicals as well as their quantities is also included in the same certificate. All exporters and manufacturers are required by the FDA to furnish this certificate. It can either be issued by the certification authority or can be prepared by the manufacturers or exporters in their own laboratory.
Radiation Certificate – Some import countries require that shipments, including but not limited to food or plant products do not contain any radioactive substances. Usually such information is stated in the sales contract but it is advisable to check the list of countries online that require such certification.
Ingredients Certificate – All food stuffs are subject to inspection and analysis by the Ministries of Health in various importing nations so it is imperative that you follow the protocol in listing down the ingredients, chemical data, storage instructions and shelf life in addition. If animal fats are used, the certificate must state the type of fat used, and that the product contains no pork, artificial pork flavor, or pork fat.
Recycling Laws – Many import countries follow packaging and recycling laws that could adversely affect your shipment if you haven’t abided by them. The UK PPT (Plastic Packaging Tax) states that any shipment’s plastic packaging that contains less than 30% recycled plastic will levy a charge of GBP200 per metric tonne.
Similarly, EUs Single Usage Plastic Directive states that single-use plastic for which the alternatives are available will be banned from shipment. Australia has several laws as well and the aim is to completely eliminate use of single use plastic in all kinds of packaging that comes in shipments.
In addition, there are several region-specific certifications that need to be obtained if you’re aiming to export your products to one of those countries. These are –
European CE Marking– If you’re exporting products to the European Union, you’ll probably need to get CE (Conformité Européenne) Marking and certification. This certification indicates that the product has been assessed by the manufacturer and is deemed fit to meet the EU safety, health and environment protection requirements.
China Compulsory Certification (CCC) – A CCC Marking is required for most goods exported to China. The CCC certification process includes application submission to Chinese authorities at CNCA, product testing which follows the application acceptance, factory audit and finally the certificate issuance.
Not just the manufacturer, but also the companies that pack, process or store commodities to be exported to the USA must be registered with Food and Drugs Administration. All facilities outside USA can simply hire a registered FDA agent who could help them acquire the FDA registration. As for your business as exporter, you must get in touch with the agent to communicate on your behalf. An online registration application must be submitted on an online portal called FDA Unified Registration and Listing System. After the registration is complete, an 11-digit registration number is issued on your registered email address. Following this, you receive a Registration certificate from your FDA agent.
So these were some of the certifications that you as an exporter or importer need in place to begin preparing the consignment for shipment. Other than the certifications, there are several documents that you need to keep ready for a seamless export experience. Some of these are –
Customs Entry Document – While Bill of Lading is the responsibility of the exporter, importers must produce the customs entry document which is a proof of receipt issued by the carrier of goods and comprises the terms of delivery as well and shipment details, and needs to be submitted by the importer at the time of customs clearance.
Consular invoice – An importer’s responsibility, a consular invoice is a document stating the content and details of a consignment/shipment certified by the consulate of the importing country. It is through this document that the custom officials are able to derive information about the shipment, and cost of goods in order to determine the import duty.
Shipper’s Letter of Instructions – Furnished by the exporter, the Shipper’s letter of instructions contains shipping instructions to the freight forwarder to ensure an accurate and safe movement of the products across border. The document also comprises the billing terms, freight and other charges.
Every step in the entire process of exports is an opportunity for you to impress your buyer and develop such a relationship that it allows you to get repeat business and orders from the same importer. So it is imperative to stay on top of your game and allow no misunderstandings to happen.
A sound communication based on proper research and preparedness leads the way to successful export and allows both you and the importer to be on the same page to avoid any issues.