International Trade Documentation: Everything You Need to Know

What you'll learn

Making sure you have the right documentation is a key part of international trade. Accurate, precise documentation minimises the risk of problems and delays.

Key points to remember

* make sure a clearly written agreement is drawn up between your company and the buyer, including details of the exact place of delivery of the goods and responsibility at every stage of the journey

* make sure you know the specific documents you will need to move goods through customs and to assess the relevant duties and taxes

* you will need documentation relating to the transport of goods and insurance for the duration of the journey

* appropriate documentation can be an important part of the payment mechanism

* consider the requirements of the country the goods are exported from, and the country they are imported into

Work together and seek help if needed

It is important to work with your counterparty on preparing the correct documentation. For example, if you are shipping goods to a customer abroad, they should tell you what documentation they require from you.

If you are dealing with a non-English-speaking country, it may be a good idea to provide an additional set of trade documents in the local language.

You may want to get help handling the documentation. Many companies use the services of a freight forwarder. Read our tips on using a freight forwarder.

Trade documentation

If you are not sure, it is worth seeking advice on this. Your local Chamber of Commerce should be able to advise you on what you will need, and you can also ask your customer. There are several common types of international trade documentation you may need for export:

Certificate of origin (COO)

Indicates where a product was manufactured, produced or processed. It may be required for customs clearance in the destination market. Your Chamber of Commerce can issue it.

Commercial invoice

Contains information for the customs authorities that helps them assess whether goods can enter or leave the country and what, if any, checks are needed. It also helps them determine duties and taxes. Every consignment must have its own commercial invoice.

Packing list

The packing list is the only way a consignment can be cleared for a new market and, most importantly, the only way a customs or border officer can tell what should be in each box being shipped abroad.

UK export licence

For certain controlled goods, such as weapons, medicines, plants and animal products, a licence may be required. Read the guidance on whether you will need an export licence on GOV.UK.

Local regulations

If you are exporting, you should check whether any special documentation is required to satisfy local regulations. For example, you may need documentary proof that your goods meet local product standards.

Dangerous goods

Dangerous goods must be accompanied by the appropriate special documentation. Read the guide to completing transport documents on GOV.UK.

Insurance

You may need to insure the goods and may also need to provide proof of insurance to your customer, especially if you are passing the cost on to them. You should discuss what documentation your customer and your insurer require.

Transport documentation

Transport documentation is needed to give the carrier instructions on what to do with the goods. It is also used to establish liability for, and sometimes ownership of, the goods during their journey.

Read the overview of how to complete transport documents in the guidance on GOV.UK.

Common types of international transport documentation include:

Export cargo shipping instruction

The export cargo shipping instruction gives the freight forwarder details of the goods and how they should reach their destination.

Standard shipping note

Contains information about your goods and the companies involved in sending, transporting and receiving them. You must use a standard shipping note if you are shipping goods abroad.

Bill of lading or waybill

A bill of lading (sea transport) or waybill (air transport) acts as documentary proof that your carrier has received the goods.

You should keep these as evidence in case of any later problems with the shipment.

CIM consignment note

The CIM consignment note gives details of the goods being transported.

If you are shipping dangerous goods, you must also complete a dangerous goods declaration. See the guide to carrying dangerous goods on GOV.UK.

Proof of insurance

You may need to insure the goods and may also need to provide proof of insurance to your customer, especially if you are passing the cost on to them. You should discuss what documentation your customer and your insurer require.

Read the overview of how to complete transport documents in the guidance on GOV.UK.

Payment documentation

Appropriate documentation plays an important role in making and receiving payments. It reduces the risk that the customer will not pay or the supplier will not deliver the goods.

Common types of payment documents you should consider include:

Bank collection or documentary collection (D/C)

Using a documentary collection, the exporter prepares a bill of exchange specifying how much is to be paid and when.

The exporter's bank instructs the buyer's bank to release the documents in exchange for payment (documents against payment) or acceptance of the bill (documents against acceptance). In the latter case, the buyer agrees to make payment on a specified future date.

Documentary collection is used mainly for sea shipments.

Letter of credit, also known as documentary credit

A letter of credit (L/C) is a guarantee from a bank on behalf of the buyer.

The buyer's bank agrees to pay the exporter as soon as all the correct documents are received - such as transport documents showing that the correct goods have been shipped. The exporter must provide the required documentation within the agreed timeframe and without discrepancies.

If you use one of these payment methods, it is important to understand what documentation they require and to make sure it is accurate. Payments under a letter of credit can be particularly tricky, because the exporter must provide exactly the right documentation to be paid.

Whatever payment method you agree on, you should have a clearly written agreement setting out what amount is due, in what currency, and when. The agreement should also clearly state who is responsible for any bank charges and who is responsible for the goods throughout the export journey."