The
liberalisation of the international trading environment
has increased opportunities for companies to expand
their business beyond domestic boundaries. Given
the limited size of the domestic market, it is increasingly
necessary for companies to seek out export markets
to expand their business.
Companies, especially the small and medium scale
companies are unable to export due to the lack of
knowledge about the export business. In an effort
to provide guidance for Malaysian exporters, MATRADE
has published a Business Handbook on "How to
be an Exporter - Questions and Answers on Export
Procedures" which is now available online.
What
are the key steps in exporting?
Step
1
The exporter checks the Malaysian rules
and regulations as to whether his goods
can be exported and whether an export
license is necessary from the government.
(see Export Control
by the Government)
Step
2
The exporter identifies the export target
country and conducts a market research
for his goods including the country's
import system and relevant tariff level.
(In most cases, the importer has to
obtain at his own risk and expenses
any import or other official authorization
and carry out all customs formalities
in his country.
However, in certain limited cases
based on the agreement with the importer,
the exporter has to carry out all
these necessary procedures which include
obtaining the import license.
(see Marketing Research)
Step
3
The exporter tries to find buyers in
the target country through various sources
and chooses a potential buyer.
(see How to Find Importers)
Step
4
The exporter sends the business offer
to the potential overseas buyer while
investigating the buyer's credit rating
through a bank or any other third party
.
(see Credit Inquiry)
Step
5
If the buyer agrees with the exporter's
offered price, including the terms and
conditions, and if the credit rating
on the buyer is found acceptable, the
exporter concludes the sales contract
with the importer.
Step
6
The exporter receives a Letter of Credit
from the importer if the agreement between
the seller and buyer stipulates that
the transaction is based on the Letter
of Credit.
(see L/C, D/P
and D/A terms).
Step
7
If the exporter requires financing for
the exportation of goods, he applies
for export finance from a commercial
bank. At the same time he also applies
for an export license at the relevant
government organizations, if the export
of the product is subject to export
licensing.
(see Export Finance)
Step
8
The exporter prepares the goods for
shipment in the manner agreed with the
importer. This includes the inspection
of the goods at an approved agency designated
by the importer.
The exporter also obtains necessary
documents pertaining to the goods
such as a certificate of origin and
a quarantine certificate from the
relevant authority if it is so required
by the agreement and/or the letter
of Credit.
Step
9
The exporter books shipment space, and
arranges for marine insurance. Usually,
the exporter will entrust these arrangements
to the freight forwarder/custom agent.
The exporter (shipper) arranges the
goods for shipment to be brought into
the bonded area (such as Container Freight
Station or Container Yard).
There, the shipment undergoes preshipment
inspection (if required by the importer),
measuring, weighing and customs clearance.
The goods are then loaded on board
the ship. These tasks are undertaken
by the customs agent/freight forwarder
on behalf of the exporter.
(see Shipping Instructions)
Step
10
The exporter arranges export credit
insurance with the Malaysia Export Credit
Insurance Berhad, should he wish to
protect himself from commercial and
political risks.
(see Insurance)
Step
11
The exporter forwards an exchange contract
with the bank, if necessary, to avoid
the risk of foreign exchange fluctuation.
(see How to avoid Foreign
Exchange Risk)
Step
12
When the goods are loaded on board the
ship, the shipping company issues the
Bill of Lading (B/L) which functions
as a title deed (certificate of title)
of the shipped goods. The exporter receives
it from the freight forwarder/customs
agent. The exporter informs the importer
of the quantity and details of the goods
shipped, name of the carrier, departure
date, etc. by sending the shipping advice.
The exporter prepares the Bill of
Exchange (Draft), applies for negotiation
of the Documentary Bill at the negotiating
bank, submits the B/L together with
other shipping documents and collects
payment in exchange. At this stage,
the exporter will have completed all
the necessary export procedures.
(see How to Collect
Payment)
