Савчук. Foreign trade

Remember that, although the phrases on the right are near synonyms, they are not used in the same way as on the left. Look out for different uses of words.

Tick whether these statements are true (T) or false (F):

(a)All goods entering the EEC pay the same tariffs for all member countries.

(b)Countries belonging to the EEC have different Customs procedures.

(c)Goods under bond may be re-exported.

(d)All customs unions have the same aims.

(e)Drawback is a disadvantage to exports.

(f)All goods exported from the EEC countries have to be entered through the Customs.

(g)All goods must have a Customs number.

MOVEMENT OF GOODS AND THE EEC

Although the EEC is a free trade area, traders have to use special forms for exporting the goods. This is because forms are necessary to prevent cheating. For example traders in one country could import goods from outside the EEC, place them under bond and re-export them to another member country without paying duty. They could pretend the goods originated in their own country and avoid the common external tariff. Similarly movement forms are needed for trade with associate members such as Turkey and Egypt. These countries have preferential tariff agreements with the EEC. The forms contain declarations by shippers and the information they give about their goods is true.

Transit forms are used for goods moving about inside the EEC. If goods, imported from outside the EEC, are in transit through the EEC to non-member countries, shippers have to sign a guarantee that duty will be paid if the goods stay in the EEC.

Calling for balanced economic growth, this was to be accomplished through: 1) the establishment of a customs union with a common external tariff, 2) common

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policies for agriculture, transport and trade, 3) enlargement of the EEC to the rest of Europe. For the customs union, the treaty provided for a 10 % reduction in custom duties and up to 20 % of global import quotas.

Supply one word from the passage to complete the following and if necessary put the word in the right form:

(a)The engineer works with several _ in his company.

(b)Some of the forms look very _. They all look the same.

(c)She likes both tea and coffee, but she _ coffee in the morning.

(d)When we changed planes at Geneva we had to wait in the _ hall.

(e)The washing machine was _ for one year.

Complete these sentences:

(a)Transit forms have to be … the shippers.

(b)They help to … exporters avoiding duties.

(c)Shippers have to declare that …

(d)Special forms are needed to export from the EEC to …

(e)Shippers have to guarantee that their goods … given on the form.

Supply one suitable word for each space:

There are 2 kinds of Customs _. Either the goods need special inspection _ Customs, or they can be exported _ special inspection. All consignments have Customs _ numbers which must be shown on the _ documents. On the other hand special _ is necessary for these classes of _: export consignments that have been in _ and were imported duty free and _ in a Customs warehouse; goods for _ drawback is being claimed; consignments in _ stowage; also goods for which export _ are required. These procedures are used _ the EEC countries which have no _ among themselves and the same duties _ goods imported from non-member states. Transit _ are also used for the movement _ goods inside the community and through _ to other countries. Special forms are _ for sending goods to European Free _ Area countries or to Associated _ of the Common Market, such as Cyprus, _ Egypt and Tunisia.

MEMBERS OF THE EEC

Since 1992 the members of the EC are the same of those as the European Union (EU). There were six states which founded the original EEC: France, West Germany, Italy and the three Benelux countries: Belgium, the Netherlands and

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Luxembourg. The first enlargement was in 1973, with the accession of Denmark, Ireland and the United Kingdom. Greece, Spain and Portugal joined throughout in the 1980s. Following the creation of the EU in 1993, it has enlarged to include a further fifteen countries by 2007. These member countries were Belgium, France, Germany, Italy, Austria, Luxemburg, Denmark, the Netherlands, Finland, Sweden, Greece, Spain, Portugal, Ireland, and the United Kingdom.

At present Europe’s citizens approve of enlargement of the European Union and the entry of ten new member states scheduled for 2004. In addition to Poland, Hungary and the Czech Republic, the accession countries comprised Latvia, Lithuania, Estonia, Slovakia, Slovenia, Cyprus, and Malta.

OFFICIAL INVOICES

Some countries require that all goods imported should be accompanied by an invoice signed by their consul in the exporting country. Details concerning such countries’ invoicing requirements are in Croner’s Reference Book for Exporters.

Croner’s will also give information about certification of value and origin. These are invoices which guarantee the country of origin of the goods. They are intended to help the Customs of the importing country assess goods for duty. This invoice often requires detailed breakdowns of the cost of the goods into raw materials, labour, processing in the factory, freight, insurance and packing. It has to be signed officially by the exporters or the Chamber of Commerce.

The main idea is to prevent exporters from giving false declarations of the value of goods. For instance an exporter might make an agreement with the importer to give only the value of the goods so as to reduce the importers’ tax.

Naturally the details on all invoices for one consignment must be the same.

Rewrite each of these sentences with one word from the text:

(a)The rules of the game say that there should be a referee.

(b)When he arrived he came with his wife.

(c)The things you got to do for entry into the college are given on the application form.

(d)Where do you plan to send the goods?

(e)The cost of paying workers has to be included in the price of goods.

(f)There are various rules designed to stop accidents from taking place.

(g)A man was stopped at the airport for trying to bring drugs into the country in the artificial bottom of his suitcase.

(h)Some people try to decrease their weight for the sake of their figures.

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Supply one suitable word for each space:

There are different kinds of official _. These are required by the importing _. The purpose of these invoices is _ give information about consignments to the _ of the importing countries. Sometimes they _ to know the value of the _ or a breakdown of the costs _ the consignment. Some information about the _ of origin is also needed to _ import duties. Certificates of Origin and _ Invoices normally have to be signed _ an official organization such as the _ of Commerce or consul of the _ country. Sometimes, however, they may be _ by the exporters. But exporters must _ all the invoicing requirements of the _ they are exporting to. The regulations _ invoicing are to be found in “_ Reference Book for Exporters”.

Answer the following questions:

1.What does BTN stand for?

2.What is an associate country?

3.What is export licence?

4.What are goods in bond?

5.What are goods under drawback?

6.What is special stowage?

7.What do you know about the work of the Customs?

8.What are the prohibited goods?

9.What are restricted goods?

10.Which countries are members of the EEC?

11.What are official invoices?

12.What documents should every import declaration form be accompanied by?

13.What for is the inspection of goods conducted to?

14.What duties, taxes and fees are refundable?

15.What is a Certificate of Origin?

16.What is a Certificate of Conformity?

17.What is a Phytosanitary Certificate?

BUSINESS TALKS

Act as an interpreter:

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B: Thank you, Captain. I have brought the originals of the Bills of Lading, three copies of each. Sign them, please.

147

: : *. $ "?

B: Oh, yes. There will be the originals of the Bills of Lading, three copies of the Cargo Manifest and a copy of your Receipt.

: , @ 12

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B: The Shipper asked me to draw up a clean Bill of Lading for that consignment. He agrees to furnish you with the guarantee letter. He will settle all claims himself if there are any.

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GLOSSARY

Charges: The price for services; also expenses, coasts ( - , '). Drawback: All allowance granted by the Customs on re-export of goods on

which duty was paid on information (' * 1).

Dues: Charges made by port authorities: dock dues, port dues ( , ,

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Duty: The tax levied on the import of goods (' *).

Entry: A word used by the Customs, referring to the particulars entered in a book; can be either entry in or entry out ( ' -

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Tariff: The word used for a list of charges ( ).

Dock warrant, warehouse warrant: These are receipts issued for cargo deposited at dock warehouses ( , ).

Bonded warehouse: A store where goods are kept until the duty has been paid ( - ' *).

CHAPTER 8

PAYMENT IN INTERNATIONAL TRADE

RISKS IN INTERNATIONAL TRADE

Both sides face risks in an export transaction. This is because there is always the possibility that the other side may not fulfill the contract.

For the exporters there is the risk of buyer default; the customers might not pay in full for the goods. There are several possible reasons for this: the importers might go bankrupt; a war might start or the importers’ government might decide to ban trade with the exporting country; or they might ban imports of certain commodities. Another possibility is that the importer might run into difficulties getting the foreign exchange to pay for the goods. It is even possible that the importers are not reliable and simply refuse to pay the agreed amount of money.

For the importers there is the risk that the goods will be delayed and they might only receive them a long time after paying for them. This may be caused by port congestion or strikes. Delays in fulfillment of orders by exporters and difficult Customs clearance in the importing country can cause loss of business. There is also a risk that the wrong goods might be sent.

It is to guard against such possibilities that different methods of payment have been developed.