question_answer

Your firm is planning to import textile machinery from Canada. Describe the procedure involved in importing.

Answer:

Ans.     In order to import textile machinery from Canada, the firm will have to take the following steps:

(a) The firm (the importer) should first make an enquiry about the price of the machinery, terms and conditions on which the selected Canadian exporter is willing to supply the goods and such related information. It should then send the trade enquiry to the exporter. On receipt of the trade enquiry, the exporter will prepare a quotation and send it to the importer.

(b) The importer must find out whether the goods to be imported are subject to import licensing. If needed, it must secure an import license.

(c) The firm must then convert domestic currency into foreign currency to make payment to the exporter. This is done by submitting an application to a bank in the prescribed form along with documents.

(d) Once the import license is obtained, the importer can place an order with the exporter specifying the price, quantity and quality of the goods required.

(e) The importer will be required to send a letter of credit to the Canadian exporter. This letter is obtained from the importer's bank and acts as a bank guarantee that a draft of a specified amount drawn on it by the exporter will be honoured.

(f) The next step is for the importer to arrange for finance in order to make payment to the exporter on the arrival of the goods. This is necessary to avoid penalties on account of any delay in payment.

(g) Once the goods are shipped, the exporter will send a shipment advice to the importer. This document is proof of dispatch of the goods and contains information about the bill of lading, name of the vessel with date, port of export, description of goods, etc.

(h) The importer must then prepare a bill of exchange that is to be handed over to the exporter's banker in exchange for the export documents. After this is done, the importer is required to instruct its bank to transfer money to the exporter's bank account.

(i) An import general manifest will be issued by the person in charge of the carrier (ship or airliner) in which the goods are being imported. This is done in order to inform the officer in charge at the dock or the airport about the arrival of the goods. This document contains information about the goods being imported, and it is on the basis of this document that unloading of the cargo will take place.

(j) Once the goods arrive at the port, the importer must get customs clearance, which in turn requires a delivery order, a port duty dues receipt and a bill of entry.