ARTICLE 1: COMMODITY - QUANTITY - UNIT PRICE - AMOUNTDescription &Pkgs 1 DISPOSABLEFACE MASK560001 PALLETSPC US$0.0297TOTAL 8 PALLETS448000 PC US$0.0297 US$1,663.20 2169,10kg: One thousa
DRAFT A CONTRACT AND EXPLAIN ARTICLES INCLUDED 4 I DRAFT A CONTRACT
EXPLANATION OF THE ARTICLES
ARTICLE 1: COMMODITY - QUANTITY - UNIT PRICE – AMOUNT
There are two types of commodities:
1 Disposable face mask 210*90*3P (Length: 210mm; Width: 90mm; 3 layers)
- Price: US$0.0324 for each piece In total: US$ 12,700.80
- Net weight: 1932,56 kg ( only weight of face masks)
2 Face mask 210*90*3P (I) CR (Length: 210mm; Width: 90mm; 3 layers)
- Price: US$0.0297 for each piece In total: US$1,663.20
- Net weight: 2169,10 kg (only weight of face masks)
1 Time of shipment: It indicates the date that the shipment is scheduled to leave the port of Haiphong, Vietnam, is in May 2016 (Fixed period of time).
2 Port of Loading: The cargo will be loaded in Haiphong port in Viet Nam
3 Port of Discharging: Incheon, South Korea, is the final port where the cargo will be released.
4 POD Terminal: The terminal at the Port of Discharge is Sun Kwang Newport Container Terminal Co., Ltd.
5 Port of Delivery: Incheon, South Korea is the ultimate delivery location for the cargo
6 POL Terminal & Info: The port of loading is Green Port, and Mr Dao Manh Dang's contact details are supplied for any questions you may have about it.
7 Vessel/ Voyage No.: The vessel's name is STAR VOYAGER, and the voyage number is 0001N.
8 Partial Shipment: In this contract, because there is only one container for 8 pallets in total, there is no need for partial shipment.
9 Transit Shipment: Shipments in transit are permitted, allowing the cargo to be moved via a transiting port In this contract, The transit port for this shipment is Sun Kwang Newport Container Terminal Co., Ltd
10 Actual Shipper: The actual shipper for this shipment is VEGA REX HANOI CO., LTD.
11 Notice of Shipment: After the Bill of Lading (B/L) date, the seller has three days to notify the buyer The details that need to be supplied are the number of goods, their total amount, the name and nationality of the vessel, the B/L number, the date, the estimated time of arrival (ETA), and the estimated time of departure (ETD) This information is to be sent by fax or cable.
This means that within 30 days of the Bill of Lading (B/L) date, the items must be paid for through bank transfer (T/T stands for Telegraphic Transfer) An essential document in international trade, the Bill of Lading certifies the transportation of goods The payment is required to cover the entire invoice value, which includes the total cost of the goods being supplied
Besides specifying the payment method, it indicates banking information and the name of the beneficiary In detail:
- The name of the organization or business that will get the money is known as the beneficiary It is "PURITECH VINA CO., LTD." in this instance.
- The beneficiary's address gives the location of the business that will be paid.
- The account number is associated with the beneficiary's bank account where the payment should be transferred.
- The beneficiary's account bank is determined with the use of the SWIFT code, a globally recognized bank identity code.
- Beneficiary’s bank: VIETCOMBANK OF VIETNAM": This is the name of the bank where the beneficiary has their account.
- Bank Address provides the physical address of the beneficiary's bank, helping to identify the location of the bank branch where the account is held.
The terms and conditions related to the packaging and marking of the items for shipment are described in this part of the contract The following clarifies this particular clause:
- Eight pallets will hold all of the goods that are being sent This is to guarantee that the products are sufficiently safeguarded both in transit and in storage.
- Each pallet has a net weight of 271.14 kg, and the eight pallets' combined net weight comes to 2169.10 kg The weight of the products alone, without the weight of the packaging, is referred to as their "net weight."
- Each pallet weighs 281.14 kg gross, which includes the weight of the products and the packaging The gross weight of all eight pallets added together comes to 2249.10 kg
- According to this section, it is the seller's duty to make sure the products are packed securely to avoid any breakage, loss, or damage during transit Should the packing be discovered to be flawed or insufficient, the vendor bears responsibility for any ensuing problems or damages.
- "No mark": This denotes that the items' packaging does not require any particular labels or marks to be attached In some cases, goods may require specific markings or labels for identification or handling purposes, but in this contract, it specifies that there are no such requirements.
The content of this article implies that the goods being traded under the contract have a specific certificate of origin, which is recognized as "C/O form AK," issued by the Hanoi Regional Import-Export Management Department
The contract outlines the necessary documents that need to be sent or received by each party to the agreement Including:
- Original certificate of C/O form AK
- Export goods declaration (customs clearance)
These papers are necessary for the contract to be carried out successfully They fulfill a number of functions, such as confirming the transaction's specifics, guaranteeing efficient customs clearance, and abiding by legal and regulatory requirements.
The main goal of this article is to address unforeseen circumstances that are beyond the control of either party and render contract performance impossible or extremely difficult Examples of these circumstances include natural disasters, wars,and strikes In these situations, the terms of the contract will be adjusted to account for the effects of these occurrences, guaranteeing flexibility and justice for all sides.
This article states that conciliation and negotiation shall take priority in the event of a dispute In the event that a settlement cannot be reached, arbitration will take place at the Vietnam International Arbitration Center The losing party is liable for paying the arbitration fees, and the arbitrator's decision is final.
Claims shall be settled by Arbitration: Vietnam International Arbitration Center (VIAC)
Address: Floor 5, VCCI Building, 171 Vo Thi Sau Street, District 3, Ho Chi Minh City.
Article 9 aims to define precise terms and regulations for exchanges between two parties.These conditions include the language of communication, the scope of the contract, the process for amending the contract, the effective date of the contract, and the distribution of copies of the contract between the parties Overall, the article aims to provide clarity and structure to the parties involved in the transaction.
ANALYZE DOCUMENTS
ANALYZING AND CHECKING THE EXISTING DOCUMENTS
Because the exported goods are containerized and the mode of transport is multimodal, we recommend using the CPT Incoterms 2010 rather than CNF Incoterms
With containerized cargo that can move through various transport modes, CPT offers convenience and clarity in cost and responsibility management Under CPT, the seller ensures delivery to the specified destination, with all costs and risks shifting to the buyer upon delivery to the carrier, making the seller responsible for shipping costs and issues until the goods reach the destination.
Therefore, following the change in terms of delivery mentioned in the contract, we will replace the “CNF” rule of these documents with the CPT Incoterms 2010.
A commercial invoice is a required document for the export and import clearance process It is sometimes used for foreign exchange purposes In the buyer’s country, it is the document that their customs officials use to assess import duties and taxes Three main purposes of this document:
- Making customs declarations, taking delivery of the goods, and claim
- Supply details of the goods that serve as a benchmark for checking the goods
+ Name: PURITECH VINA CO., LTD
+ Address: VINH BAO HAMLET, VINH KHUC VILLAGE, VAN GIANG DISTRICT, HUNG YEN PROVINCE, VIETNAM
+ Name of Contact Person: MS LANH
+ Address: 63-16, SANDAN RO, PYEONGTAEK SI, GYEONGGI DO, KOREA (ROK)
+ Name of Contact Person: MS PAEK SU A
- Notify party’s information: SAME AS CONSIGNEE means PURITECH CO., LTD
Notify Party is the company named on the bill of lading that will be notified when the goods arrive so PURITECH CO., LTD will be informed by the carrier or freight forwarder about the shipment's arrival or any changes in its status.
- Term of delivery: CPT INCHEON, KOREA (Incoterms 2010)
- Mode of shipment: BY SEA
The goods started to be shipped on this day
- Port of Loading (From): HAI PHONG, VIETNAM
- Port of Delivery (To): INCHEON, KOREA
- Ship’s name/ Voyager number: STAR VOYAGER / 0001N
- Method of payment: T.T (TTR - Telegraphic Transfer Remittance)
- Time of payment: 30 DAYS FROM B/L DATE
This is a deferred payment since the buyer is given 30 days from the B/L date to make the payment and settle the invoice.
- Currency of settlement: US$ ( United States Dollar)
This indicates that there are no specific markings or symbols on the package.
Commercial invoice has no fixed or compulsory form so in this dossier of documents, it already generally includes sufficient information about the transaction. However, here are some recommendations of adding more details to make it better:
- Not mention the edition of Incoterms: In this case, due to the time written in the documents, it may be Incoterms 2010
- Not include the origin of goods:
The thing that this dossier of documents contains an origin C/O form AK has proved that this trade stresses the advantages of Preferential Tariff Treatment As a result, including the origin of goods in the commercial invoice can unify and certify more of the information This also helps to avoid customs clearance delays and potential penalties, since many importing countries have rules and regulations governing the importation of goods, including rules related to the country of origin
This part is optional but it might be required for customs declaration In the customs declaration form, there is an HS code of products, but the commercial invoice does not cause information inconsistency between document types HS codes also play a vital role in specifying detailed descriptions of the products to avoid misunderstandings, especially when the commercial invoice is placed at the top of the document.
- Lack of certifications or declarations for the information:
An invoice typically should include the signature of the authorized legal representative or a certification stamp from a third-party entity, with the Chamber of Commerce being the most commonly required third party for validation This is particularly important because, in certain instances, there's a necessity for invoices to be endorsed by the commercial division of the importing country's embassy in the exporter's home country The usual process involves the exporter first obtaining certification from the Chamber of Commerce and then submitting the documents to the relevant embassy for final approval.
A packing list is a list that describes in detail the information about packages, including weights, measurements, and detailed lists of the goods in each package The packing list should be included in a carton or package and can be attached to the outside of a package with a copy inside.
The packing list needs to clearly show what the seller has sold to the buyer,allowing the buyer to inspect and cross-reference to see if it matches the order placed; helps the seller, buyer, or a third party be able to calculate how many items are in the container, what the total weight is, how the transportation equipment should be arranged, etc.
+ Name: PURITECH VINA CO., LTD
+ Address: VINH BAO HAMLET, VINH KHUC VILLAGE, VAN GIANG DISTRICT, HUNG YEN PROVINCE, VIETNAM
+ Name of Contact Person: MS LANH
+ Address: 63-16, SANDAN RO, PYEONGTAEK SI, GYEONGGI DO, KOREA (ROK)
+ Name of Contact Person: MS PAEK SU A
- Notify party’s information: SAME AS CONSIGNEE means PURITECH CO., LTD
- Term of delivery: CPT INCHEON, KOREA (Incoterms 2010)
- Mode of shipment: BY SEA
- Port of Loading (From): HAI PHONG, VIETNAM
- Port of Delivery (To): INCHEON, KOREA
- Ship’s name/ Voyager number: STAR VOYAGER / 0001N
- Method of payment: T.T (TTR - Telegraphic Transfer Remittance)
- Time of payment: 30 DAYS FROM B/L DATE
*Except for the title, the contents mentioned above are the same as those in the commercial invoice
Net weight (NWT) of 7 pallets: 1,932.56 KGS
(The actual weight of the goods is 1,932.56 KGS)
Gross weight (GWT) of 7 pallets: 2,002.56 KGS
(The total weight of both the goods and all the external packaging accessories is 2,002.56 KGS)
Net weight (NWT) of 1 pallet: 236.54 KGS
(The actual weight of the goods is 236.54 KGS)
Gross weight (GWT) of 1 pallet: 246.54 KGS
(The total weight of both the goods and all the external packaging accessories is 246.54 KGS)
- Total net weight (NWT): 2,169.10 KGS
- Total gross weight (GWT): 2,249.10 KGS
The Packing list and commercial invoice of this set of documents have some similar contents The difference is that the packing list instead of referring to the currency, it refers to the net weight and gross weight of the shipping goods.
This packing list has been organized and provided detailed key information related to the goods It includes complete details on quantity, type of goods, net weight, gross weight, and packaging specifications This facilitates the buyer in easily inspecting and cross-referencing to ensure the accuracy of the goods compared to the order.
However, it has some small errors:
- This packing list is missing the seller's confirmation (seller's signature and stamp) Only when signed and stamped will the packing list be considered valid.
- It has a mistake in writing the unit in the TOTAL line In Commercial Invoice, the unit in Total line is “PC” but in this Packing list, it is “KG” instead, which causes the discrepancy in unit of these two documents.
This is a document issued by shipping lines to shippers when scheduling transport, which acknowledges the receipt of a booking for the transportation of goods as well as provides key information related to the shipment Booking receipt notice (or Booking note) is commonly used in international shipping and logistics when a company or individual arranges to have their cargo transported from one location to another, often across international borders The booking receipt notice serves as confirmation that the shipment has been scheduled and is in the process of being arranged for transport.
- Carrier (Booking Note issuer): Heung-A Shipping CO., Ltd.
- Port of Loading (POL): HAIPHONG, VIETNAM
- Port of Discharge (POD): INCHEON, KOREA
- Port of Delivery: INCHEON, KOREA
“Port of Discharge” and “Port of Delivery” are theoretically different While POD refers to the specific port where the goods are unloaded from the transport vessel or vehicle upon arrival in the destination country, the Port of Delivery refers to the final destination point where the goods are delivered to the consignee or receiver and it could be another location within the destination country, such as a warehouse, distribution center, or the actual address of the consignee However, in this transaction, both parties agreed to make them at the same location, which means the goods have to be delivered to INCHEON, KOREA, and unloaded from the vessel simultaneously.
- Vessel/Voyage No.: STAR VOYAGER / 0001N
Both parties should note that these dates are estimates and may be subject to variations depending on factors like shipping conditions, routes, and potential delays
- Empty Container Pick-Up Place: VNT LOG DEPOT
This refers to the location or point where an empty shipping container is made available for the shipper or cargo owner to pick up and use for loading their goods It is typically a designated area or depot provided by the shipping company or container owner where empty containers are stored and can be collected by the party responsible for packing and loading the cargo.
Info: Mr Dao Manh Dang : 84-31-3741066
- POD Terminal: Sun Kwang Newport Container Terminal Co., Ltd
- Transit Port: Sun Kwang Newport Container Terminal Co., Ltd
THE PROCEDURE OF EXPORTER TO IMPLEMENT THE CONTRACT
Request the buyer to fulfill payment obligations
According to the commercial invoice, these companies use Telegraphic Transfer (TT) as the method of payment Therefore, there is no need to open a Letter of Credit (L/C).
TT payment involves the electronic transfer of funds telecommunication system such as telex or cable, from the buyer/importer to the seller/exporter, through a bank or a similar organization Typically, electronic fund transfers are completed within two to four business days, depending on the origin and destination of the transfer, as well as any currency exchange requirements.
Apply for a license and other export formalities
An export license is a government document that indicates approval to export a specific number of goods to specified countries Certain goods are subject to special surveillance by the authorities and may only be exported by the organization that holds the export license Examples of such goods are protected animal species (CITES), narcotics, dual-use goods, etc These goods are always handled in a two- stage export procedure The list of exported or imported goods requiring licenses or under given conditions is noticed at ANNEX III DECREE 69/2018/ND-CP
In Doc 4, the goods that the Vietnamese partner exported were disposal face mask 210*90*3P and face mask 210*90*2P (I) CR so the seller does not need to apply for an export license.
Prepare export carriage
This is a mandatory task for the export department Export goods preparation involves ensuring that the merchandise is ready with the correct product name, quantity, quality, packaging, and labeling Make sure that it can be delivered on time as specified in international trade contracts The process of preparing export goods includes the following elements: Concentrating on producing export products,packaging, and marking of merchandise.
If the firm is a trading enterprise that collects for resale, the seller must collect goods from other suppliers But in this case, Puritech PureTech Vina Enterprises directly produces its goods and services and exports its products Based on the requirement in the Export contract, the company must make a production plan: prepare raw materials and sources, human resources, equipment, and machinery to carry out production, ensure quantity and quality, and specify the type and delivery time to deliver the goods to the buyer.
- Contract stipulations: This means that the packaging should adhere to any specific requirements or agreements mentioned in a contract or agreement between the parties involved It's important to meet the packaging standards as agreed upon in the contract.
Make sure the packing had already been done before the time of shipment: 1May 2016 According to the contract, the seller has to package goods in 7 pallets of disposal face mask 210*90*3P and 1 pallet of face mask 210*90*2P(I) CR So the total is 8 pallets which can be loaded in a container (20ST)
- Mode of transport and weather: Because the goods are delivered by sea, the mode of transportation would be a vessel and the seller has to ensure the proper packaging that can protect goods from damage during transit, especially in adverse weather conditions.
- Regulations of the importing country: Different countries have various regulations and requirements regarding the packaging of imported goods But in this case, Korea has no special conditions that are concluded in the contract.
- Saving packaging materials & utilizing container space: Efficient packaging aims to minimize waste and optimize the use of container space This can help reduce costs, lower environmental impact, and maximize the number of items shipped in a given container.
Shipping mark: NO MARK Except for the title, the contents mentioned above are the same as those in the commercial invoice.
Arrange carriage
Based on the Incoterm 2010 CNF applied, the seller must contract for and pay the cost and freight necessary to bring the goods to the named port of destination, the risk passes to the buyer when the goods are placed on board the vessel at the shipment port or procured already so delivered This means the seller also has to arrange the carriage
The PuriTech Company used a NVOCC (Non-Vessel Operating Common Carrier), contacting the shipper Vega Rex, Hanoi CO., LTD Then Vega Rex, Hanoi CO., LTD worked with Hueng A shipping company to make the Booking receipt notice Vega Rex would take an empty D/O The type of charter was voyager The content of the ship charter contract has been specified in the Bill of Lading. Information about the specific itinerary is:
- Ocean vessel’s name: STAR VOYAGER
- Seal number/Marks and numbers: HAS993391
- Number of containers or packages (pkg): 20 X 1 (8 PALLETS)
- Place of receipt: Haiphong, Vietnam, cy (container yard)
- Place of delivery: Incheon, Korea, cy
- Port of Loading: Haiphong, Vietnam
- Port of Discharge: Incheon, Korea
The Export Company is required to pay the freight charges to the shipping company at the loading port After the company has paid the freight fees, the cargo can then be loaded onto the ship.
Purchase cargo insurance
Based on CNF in Incoterm 2000, the seller does not need to buy any insurance unless they expressly agreed otherwise in the sales contract Therefore, either PuritechPureTech Vina Enterprises or Vega Rex Company has no obligation to buy the insurance.
Pre-shipment inspection
A Pre-shipment inspection is a step in freight shipping that allows the seller to fix any issues before initiating payment; it is the stage of checking the appropriate level of import and export goods exports compared to the requirements set out in international new contracts A pre-shipment inspection will only occur once 100% of the ordered units are produced and 80% are packed to eliminate the risk of only checking cherry-picked samples (the-pre-shipment-inspection-procedure) The inspection record will be the legal record to use when complaints about the quantity and quality of goods.
In the contract, at the request of the buyer, the exporter must invite an independent inspection agency to conduct the pre-shipping inspection process.
Therefore, the exporter PuriTech Co must give the Certificate of Origin Request to Phòng Quản lý Xuất Nhâp Khẩu khu vực Hà Nội However, before doing this, the seller should check quality inspection: only goods that meet the quality standards specified in the contract are allowed to be exported, and the amount of weight: The amount weight of each package, total quantity, and weight.
In the case of the first application for CO, the applicant must submit the following documents:
Register the signature sample of the person authorized to sign the CO application and the seal of the trader.
Tax code registration certificate (notarized copy).
Step 2: The officer receives and checks the file
After receiving and examining the records, the officer will send the notice in the following cases:
To be issued with CO and to indicate the time of issue.
Please double-check the documents.
Refuse to issue CO in the cases prescribed by law.
Step 3: Return the certificate of origin CO
Import Customs Declaration Form for Raw Materials
Other supporting documents: + Commercial Invoice, + Details Purchase and Packaging Agreement, + Consumption Norms for Raw Materials.
The representative of Puritech company (exporter) signing in the Certificate ofOrigin (C/O) has to confirm that the contents and the above details and statements and documents are accurate; that all goods are manufactured in Vietnam and comply with the origin requirements specified for these goods in the ASEAN - Korea Free TradeArea Preferential Tariff for the goods exported to Korea; Signed and confirmed by a representative of Allied Development company; Signed and confirmed Received by the competent authority: Phòng Quản lý Xuất Nhập Khẩu khu vực Hà Nội.
Export customs clearance
Customs declaration is the necessary and mandatory procedure at border crossings, seaports, and airports to allow goods and means of transport to be imported, admitted, or exported across national borders Customs clearance of exported goods includes 3 steps:
To carry out customs clearance, customs declarants need to prepare customs documents: Customs declaration, Contract, Commercial Invoice, Booking Note, Confirmation that the container has been landed at the port yard In addition, depending on each case, there are additional documents such as the following: Detailed list of goods, certificate of inspection, certificate of export of goods C.O. After that submit at the relevant Sub-department of Customs.
Or the seller can choose E-customs declarations which input information of e- customs declaration based on the dossier of documents to CD software (ECUS) andReceive the declaration tax rate and number.
Step 2: Receive the classification of the customs declaration form
According to current Vietnamese regulations, Import goods and Vietnam when carrying out import customs clearance procedures are divided into 3 colors:
- Yellow – inspect the dossier of documents
- Red - present both the dossier of documents and goods for customs inspection
Step 3: Liquidate the customs declaration form and export the goods For green declarations
- The declaration has been cleared on the software.
- The system automatically grants customs clearance and issues it to the declarant "Decision on customs clearance of goods".
- At the end of the day, the system gathers all green declarations and transfers them to VCIS.
For red and yellow declarations
- Issue the Notice of request for physical inspection of goods for goods classified in the red channel or when the customs authority uses CKO to change the channel.
- Immediately after the customs office completes the CEE operation: The system automatically grants the clearance permit and issues it to the declarant
"Decision on customs clearance of goods".
Deliver the export cargo
The exporter chose delivery in containers by sea - Full container goods - FCL. The Full Container Load (FCL) delivery process includes the following:
1 Receive Empty container from C.Y (Container yard) after having the information of the booking receipt notice issued by Hueng A Puritech
Co used an NVOCC like Vega Rex, Hanoi CO, so Verga will do this step
2 Packing goods into the container, sealed under the supervision of the Customs authority This step can belong to Verga or Puritech depending on the contract between 2 companies
3 Verga Rex Cox would transfer the container to C.Y., and deliver it to the carrier - the Ocean Logistics Co.
Prepare documents and receive payment
- Prepare a dossier of documents: compile a collection of documents, papers, and information related to a specific issue or objective.
- Check documents carefully: The seller should check carefully because if there are any errors in documents, discrepancies will be charged.
- Confirm payment and ensure that both the buyer and the seller have agreed on the payment term of 30 days
Payment method: TT (Bank transfer)
Beneficiary name: PURITECH VINA CO., LTD
Address: Vinh Bao Hamlet, Vinh Khuc Village, Van Giang District, Hung Yen Province, Viet Nam
Beneficiary’s bank: VIETCOMBANK OF VIETNAM
Bank Address: 136A - 137A, Thao Nguyen townhouses, Ecopark town, Van Giang district, Hung Yen province.
- Get payment: Once the payment is received within the agreed timeframe, the exporter acknowledges the receipt and updates their financial records.
Claim
Claims and solving claims, if any:
- Seriously consider claims from partner
- Respond as soon as possible
- Use consultancy services in need
- Prioritize to settle the complaint in the spirit of cooperation and goodwill.
- Claims shall be settled by Arbitration:
Vietnam International Arbitration Center (VIAC)
Address: Floor 5, VCCI Building, 171 Vo Thi Sau Street, District 3, Ho Chi Minh City.