The Meaning of Importance of Import Trade
Explain the meaning and importance of import trade
Import trade is the trade that involves buying goods from abroad. Examples of goods in Tanzania they are bought from abroad are cars, petrol and computer.
There are basically five main reasons for which a country may decide to import a certain good or service:
- it simply does not exist
in the country: a mineral which is not in the country’s soil, an
agriculture product that can’t be produced there, an innovation that has
been introduced in other countries; - it does not exist at a specific level of quality; thus, a country imports better products than domestic production, also as far as advertising or packaging are concerned;
- it represent a product variety that is appreciated domestically but not produced exactly in this horizontal or mixed differentiation;
- it is cheaper abroad,
since producers there are more efficient, are faced by lower costs,
better exploit economies of scale and/or accept lower profits; - at the current domestic price, producers do not supply enough
good or service as the demand requires, also because of ex ante
coordination problems; accordingly, consumers buy abroad for
insufficient domestic production.
IMPORTANCE OF IMPORT TRADE
- Enable a country to obtain goods it cannot produce due to geographical and technological reasons.
- Goods are imported to satisfy certain cultural, religious and sentimental feeling.
- It encourage specialisation
- Stimulating international understanding
- Foreign earning; international trade enables a country to earn foreign currencies and revenue through tariffs.
The Main Organizations Involved in Import Trade in (Tanzania)
Identify the main organizations involved in import trade in (Tanzania)
Import procedures
Introduction
Import
means goods and services brought to Tanzania from a foreign country.
Importprocedures have to be followed in order to clear goods from
Customs control as per the East Africa Community Customs Management Act
(EACCMA) 2004.
means goods and services brought to Tanzania from a foreign country.
Importprocedures have to be followed in order to clear goods from
Customs control as per the East Africa Community Customs Management Act
(EACCMA) 2004.
Imports
to Tanzania are subjected to different stages whereby the importer is
advised to make declaration through his appointed Clearing and
Forwarding Agent by lodging documents at least seven days before arrival
of the vessel.
to Tanzania are subjected to different stages whereby the importer is
advised to make declaration through his appointed Clearing and
Forwarding Agent by lodging documents at least seven days before arrival
of the vessel.
Importation procedures to Tanzania
- The importer is required to appoint a Licensed Clearing and Forwarding Agent (CFA) to clear goods
- List of Clearing and Forwarding Agents
- Documentation
process is done online through Tanzania Customs Integrated System
(TANCIS) and can be completed before arrival of thegoods - Customs
agents/importers are urged to complete a Declaration and self
assessment through Tanzania Customs Integrated System (TANCIS) and
attach along with other relevant import/ supporting documents at least 7
days prior to the arrival of the goods
Import documents include:
- Final Invoice
- Agent’s Authorization Letter from the importer
- Import permits from TFDA, TBS etc
- Exemption documents (If applicable)
- Packing List
- Transport documents i.e Bill of Lading/Airway Bill/Road Consignment note
Note
TRA
rejects illegible and incomplete with insufficient descriptions through
Integrated Query System (IQS) which is available in TANCIS. Pre –
Arrival Declaration Procedure
rejects illegible and incomplete with insufficient descriptions through
Integrated Query System (IQS) which is available in TANCIS. Pre –
Arrival Declaration Procedure
What is Pre – Arrival Declaration?
Pre
– Arrival Declaration (PAD) is the system used by Customs and Excise
department to process importation documents during clearance of goods.
However the initial process starts with the importer through his/her
appointed Clearing and Forwarding Agent. (CFA)
– Arrival Declaration (PAD) is the system used by Customs and Excise
department to process importation documents during clearance of goods.
However the initial process starts with the importer through his/her
appointed Clearing and Forwarding Agent. (CFA)
Note: The following regimes do not undergo Pre – Arrival Declaration Process
- Diplomatic cargos
- Qualified returning residents Baggage Declaration forms
- Post Parcel and courier services
- ZNZ cases
- Temporary Importation
- EPZD
- Export declarations
- Petroleum products
- Goods cleared under Provision declarations
- Transit declarations
The
importer hands over the importation documents either manually or
electronically to the CFA who uploads them in the PAD system and lodges
the same to TRA; whereby a reference number is automatically generated;
these include:
importer hands over the importation documents either manually or
electronically to the CFA who uploads them in the PAD system and lodges
the same to TRA; whereby a reference number is automatically generated;
these include:
- Final Invoice
- Declaration Form C 36
- Agent’s Authorization Letter
- Import permits i.e. TFDA, TBS, chemical permit etc
- Exemption documents
- Packing List
- Transport documents i.e Bill of Lading/Airway Bill/Road Consignment
- TIN Certificate (importer)
Note:
Legible copies of Pro-forma invoices are acceptable for verification
and registration purposes only but not for issuance of any clearance
report (P-PAD, A-PAD etc.)
Legible copies of Pro-forma invoices are acceptable for verification
and registration purposes only but not for issuance of any clearance
report (P-PAD, A-PAD etc.)
Note: Current other stations exclude Dar es salaam and Tunduma
TRA
will verify the submitted PAD application for completeness, legality
and confirm acceptance by registering the number generated upon lodgment
by the agent. An automatic email notification is sent to the CFA.
will verify the submitted PAD application for completeness, legality
and confirm acceptance by registering the number generated upon lodgment
by the agent. An automatic email notification is sent to the CFA.
- TRA
performs Customs Tariff Classification and Valuation and issues a
Pre-Assessed PAD (P-PAD) for PADs registered with complete set of final
documents. PAD registered with incomplete set of final documents are
held pending for submission of same. - TRA issues a Pre-Assessed PAD (P-PAD) which is available for download by CFAs from the TRA PAD online for review.
- The
agent is supposed to pass over the P- PAD to the importer to go through
and check for correctness for accepting the P-PAD or reject the same
through IQS - If P-PAD is accepted by the importer; CFA will apply for an Assessed PAD (A-PAD) via www.trapad.co.tz
along with scanned documents as applicable, such as permits and/or
certificates issued by Other Governments Departments (TBS, Government
Chemist, TDFA etc.) and supporting documentation to justify tax
exemptions, if any. - TRA verifies the application and issues an
Assessed PAD (A-PAD) available for download by CFA’s from this website.
An automatic email notification is sent to the CFA. - The A-PAD
EDI data becomes available for download by CFAs from this website for
upload into On the basis of the A-PAD issued the CFA will assess Duties
and Taxes through TANZANIA SINGLE ADMINISTRATIVE DOCUMENT(TANSAD) - The agent will hand over TANSAD to the importer ready for payment of duties and taxes to the Bank.
- TRA
perform the selectivity process by subjecting the TANSAD to
Computerized Risk Management System (CMRS); basing on the results.
Note: GREEN color signifies direct release while YELLOW documentary check/SCANNER and RED physical examination or scanner.
- Goods are examined and released from Port or Airport
Note: For TANCIS users (Currently Dar es salaam and Tunduma)
- If declaration is “Rejected” CFA is supposed to submit a fresh declaration to accommodate TANCIS requirement.
- TANSAD will be processed to payment stage before manifest is submitted.
- Cargo Manifest write-off is shifted to a Customs Release Order stage (CRO).
- CFA will get Acceptance Notice with a Payment Notice generated based on declared Values.
- CFA
will get Amendment Acceptance Notice once amendment they sent passes
the validation check. If the officer rejects the amendment CFA will get
Amendment Rejection Notice for TANSAD; otherwise officer will work on
the document classification, valuation and verification. - Once verification is completed, the results will be registered by the officer.
- Verification results will be submitted to the supervisor for approval.
- CFA will receive Assessment Notice.
- CFA has to accept or object the Assessment Notice
- CFA has to object the officer Assessment through Integrated Query System (IQS)
- If CFA accept the Notice and the assessment have increased compared to the declared values, an Additional Payment Notice
will be generated within the assessment notice. This payment notice
value will be the difference of the final amount and initial generated
payment notice. - If there is a discrepancy between manifest data
and declaration, CFA will receive Clearance Suspension Notice. CFA will
need to amend the declaration as guided by inspection results and
re-submit. - When Payment is received, inspection completed accordingly, CFA will receive Release Order for the respective goods.
How long does this process take before getting my goods?
- A
total number of 48hours (4 days) has been set for processing of
Pre-Arrival Declarations from registration to issuance of the necessary
clearance report (A-PAD) for PADs submitted with or upon receipt of
sufficient documentation that meet the required standard. - The P-PAD for PADs submitted with complete set of final documents should be processed and issued within 48 hours.
- Note:
The P-PADs for PADs registered without complete set of final documents
should be processed and issued 48 hours after receipt of the same, i.e
if the final documents are received after two weeks, the process starts
that day. - A-PADs should be processed and issued within 24 hours
after receipt of an A-PAD application together with complete set of the
required documents. - After lodgement of TANSAD and payment of duties if any, selectivity will be conducted within 24 hrs.
- Goods
are selected for direct release, green will get the release order from
the port or entry point, those selected for documentary check will be
checked at CSC, and those selected for physical verification are
examined and release at the port and point or entry
Difference between Two Types of Imports Direct and Indirect
Differentiate, the two types of imports direct and indirect
TYPES OF IMPORT TRADE
- Direct
import-in these case goods are imported for the sole use of the
importer himself for the furtherance of his production programme. For
instance, if a company wants to operate a bottling plant and requires
machinery for that specific purpose, it has to import all that is wanted
in its name directly, without making use of middlemen. - Indirect
import these are channelled through wholesale import merchants. The
merchant in this case do not use the goods themselves; but sell them at a
profit to shopkeepers who operate the retail business.
The Import Procedure and Formalities with Special emphasis on: Documentation; Terms of Payment; Terms of delivery
Explain the import procedure and formalities with special emphasis on: Documentation; term of payment; Terms of delivery
Some
of the most important documents used in import trade are as follows:
(i) Indent (ii) Bill of Lading (iii) Bill of Entry (iv) Letter of Credit
(v) Bill of Sight (vi) Dock Challan (vii) Dock Warrant.
of the most important documents used in import trade are as follows:
(i) Indent (ii) Bill of Lading (iii) Bill of Entry (iv) Letter of Credit
(v) Bill of Sight (vi) Dock Challan (vii) Dock Warrant.
There are many documents used in import trade which have already been discussed in the Import Procedure.
To name a few, the most important documents used in import trade are:
- Indent:
An indent is an order placed by an importer with the exporter for the
supply of certain goods. It is usually prepared in duplicate or
triplicate. The indent may be of several types like open indent, closed
indent and confirmatory indent. An indent contains the following information:
(a) Quantity of goods to be imported (b) Quality of goods (c) Method of
forwarding the goods (d) Nature of packing (e) Mode of setting payment
(f) Price to be charged (g) Sale of delivery - Bill of Lading:
It is an acknowledgement of receipt of goods on board of the ship. It
contains terms and conditions on which the goods are to be taken to the
port of destination. The exporter sends one copy of bill of lading to
the importer enabling him to clear the goods from the ship. - Bill of Entry: This is a form supplied by the custom office to the importer and is to be filled in triplicate. The bill of entry contains following particulars:
(a) Name and address of the importer (b) Name of the ship (c) Package
number (d) Marks on the package (e) Description of goods (f) Quantity
and value of goods (g) Name, address and country of the exporter (h)
Port of destination (i) Custom duty payable - Letter of Credit:
A letter of credit, popularly known as ‘L/C or ‘L.C:’ is an undertaking
by the issuer (usually importer’s bank) that the bills of exchange
drawn by the foreign dealer on the importer will he honoured on
presentation up to a specified amount. Letter of credit is needed
because exporter wants to be sure that payments will be made as agreed
by the importer. - Bill of Sight: If the importer
is not in a position to supply the detailed particulars of goods
because of insufficient information supplied by the exporter, he
(importer) has to prepare a statement called ‘bill of sight’. The bill
of sight contains only the information possessed by the importer
along-with a remark that he is not in a position to give complete
information about the goods. The bill of sight enables him to open the
package and examine the goods in the presence of custom officer so as to
complete the bill of entry. - Dock Challan: It
is a form to be filled by the importer or his clearing agent in the dock
for payment of dock charges. Dock charges are paid when all the
formalities of the customs are completed. The goods imported will be
delivered only when dock charges are paid. - Dock Warrant: This is document issued by Warehouse keepers to the persons who have deposited the goods with them. Transport Documents
- Shipping Order S/O;
A document with details of the cargo and the shipper’s requirements,
and is the basic document for preparing other transport documents such
as bill of lading, air waybill, etc. Prepared by: shipper / transport
companies - Dock Receipt D/R or Mate’s Receipt; A
receipt to confirm the receipt of cargo on quay / warehouse pending
shipment. The dock receipt is used as documentation to prepare a bill of
lading. It has no legal role regarding processing financial settlement.
Prepared by: shipping company - Bill of Lading (B/L);
An evidence of contract between the shipper of the goods and the
carrier. The customer usually needs the original as proof of ownership
to take possession of the goods. There are two types: a STRAIGHT bill of
lading is non-negotiable and a negotiable or shipper’s ORDER bill of
lading (also a title document) which can be bought, sold or traded while
goods are in transit and is used for many types of financing
transactions. Prepared by: shipping company - House Bill of Lading (Groupage)
A bill of lading issued by a forwarder and, in many cases, not a title
document. Shippers choosing to use a house bill of lading, should
clarify with the bank whether it is acceptable for letter of credit
purpose before the credit is opened. Advantages include less packing,
lower insurance premiums, quicker transit, less risk of damage and lower
rates than cargo as an individual parcel / consignment. Prepared by:
forwarder - Sea Waybill A receipt for cargo which
incorporates the contract of carriage between the shipper and the
carrier but is non-negotiable and is therefore not a title document.
Prepared by: shipping company - Air Waybill (AWB)
A kind of waybill used for the carriage of goods by air. This serves as
a receipt of goods for delivery and states the condition of carriage
but is not a title document or transferable / negotiable instrument.
Prepared by: airline - House Air Waybill (HAWB)
An air consignment note issued by an air freight agent to provide the
cargo description and records. Again, it is not a title document.
Prepared by: forwarding agent - Shipping Guarantee
Usually a pre-printed form provided by a shipping company or the bank,
given by an importer’s bank to the shipping company to replace the
original transport document. The consignee may then in advance take
delivery of goods against a shipping guarantee without producing the
original bill of lading. The consignee and the importer bank will be
responsible for any loss or charges occurred to the shipping company if
fault is found in the collection. It is usually used with full margin or
trust receipt to protect the bank’s control to the goods. Prepared by:
importer’s bank / shipping company / consignee - Packing List (sometimes as packing note)
A list providing information needed for transportation purpose, such as
details of invoice, buyer, consignee, country of origin, vessel /
flight date, port / airport of loading, port / airport of discharge,
place of delivery, shipping marks / container number, weight / volume of
merchandise and the fullest details of the goods, including packing
information. Prepared by: shipper
Financial Documents
- Documentary Credit D/C
A bank instrument (issuing or opening bank), at the request of the
buyer, evidencing the bank’s undertaking to the seller to pay a certain
sum of money provided that specific requirements set out in the D/C are
satisfied. Prepared by: the issuing bank upon an application made by the
importer - Standby Credit An arrangement between
a customer and his bank by which the customer may enjoy the convenience
of cashing cheques, up to a value. Or a credit set up between the
exporter and the importer guaranteeing the exporter will pay the
importer a certain amount of money if the contract is not fulfilled. It
is also known as performance bond. This is usually found in large
transactions, such as crude oil, fertilizers, fishmeal, sugar, urea,
etc. Prepared by: exporter / issuing bank - Collection Instruction
An instruction given by an exporter to its banker, which empowers the
bank to collect the payment subject to the contract terms on behalf of
the exporter. Prepared by: exporter - Bill of Exchange (B/E) or Draft
An unconditional written order, in which the importer addressed to and
required by the exporter to pay on demand or at a future date a certain
amount of money to the order of a person or bearer. Prepared by:
exporter - Trust Receipt (T/R) A document to
release a merchandise by a bank to a buyer (the bank still retains title
to the merchandise), the buyer, who obtains the goods for processing is
obligated to maintain the goods distinct from the remainder of his /
her assets and to hold them ready for repossession by the bank. Prepared
by: importer - Promissory Note A financial
instrument that is negotiable evidencing the obligations of the foreign
buyer to pay to the bearer. Prepared by: importer
Government Documents
- Certificate of Origin (CO)
This certifies the place of manufacture of the exported goods to meet
the requirements of the importing authorities. Prepared by: Trade and
Industry Department and five Chambers of Commerce [1] - Certificate of Origin Generalized Systems of Preferences (GSP) Form A (or as Form A)
A CO to support the claim for preferential tariff entry (a reduced or
zero rate) of the exporting country’s products into the GSP donors under
the GSP they operate. In general, a Form A is issued only when the
goods concerned have met both the origin rules of the preference
receiving country as well as the origin criteria of the respective donor
country’s GSP. Prepared by: Trade and Industry Department and five
Chambers of Commerce - Import / Export Declaration
A statement made to the Director of Customs at port of entry / exit,
declaring full particulars of the shipment, eg. the nature and the
destination / exporting country of the ship’s cargo. Its primary use is
for compiling trade statistics. Prepared by: exporter / importer - Import / Export Licence
A document issued by a relevant government department authorising the
imports and exports of certain controlled goods. Prepared by: Trade and
Industry Department, Customs & Excise Department, etc - International Import Certificate (IIC)
A statement issued by the government of country of destination,
certifying the imported strategic goods will be disposed of in the
designated country. In Hong Kong, it is issued only to meet an exporting
country’s requirement. Prepared by: Trade and Industry Department - Delivery Verification Certificate (DVC)
A statement issued by the government of country of destination,
certifying a specific strategic commodity has been arrived in the
designated country. In Hong Kong, it is issued only to meet an exporting
country’s requirement. Prepared by: Trade and Industry Department - Landing Certificate
A document issued by the government of country of destination,
certifying a specific commodity has been arrived in the designated
country. In Hong Kong, it is issued by the Census and Statistics
Department. Application requirements include letter stating the reason
for the application, import declaration & receipt; bill of lading,
sea waybill & land manifest; supplier’s invoice; and packing list
(if any). Prepared by: Census and Statistics Department - Customs Invoice
A document specified by the customs authorities of the importing
countries stating the selling price, costs for freight, insurance,
packing and payment terms, etc, for the purpose of determining the
customs value. Prepared by: exporter
RULES FOR SEA AND INLAND WATERWAY TRANSPORT
- FAS Free Alongside Ship;
“Free Alongside Ship” means that the seller delivers when the goods are
placed alongside the vessel (e.g., on a key or a barge) nominated by
the buyer at the named port of shipment. The risk of loss of or damage
to the goods passes when the goods are alongside the ship, and the buyer
bears all costs from that moment onwards. - FOB Free On Board ;
“Free On Board” means that the seller delivers the goods on board the
vessel nominated by the buyer at the named port of shipment or procures
the goods already so delivered. The risk of loss of or damage to the
goods passes when the goods are on board the vessel, and the buyer bears
all costs from that moment onwards. - CFR Cost and Freight;
“Cost and Freight” means that the seller delivers the goods on board
the vessel or procures the goods already so delivered. The risk of loss
of or damage to the goods passes when the goods are on board the vessel.
the seller must contract for and pay the costs and freight necessary to
bring the goods to the named port of destination. - CIF Cost, Insurance and Freight; “Cost,
Insurance and Freight” means that the seller delivers the goods on
board the vessel or procures the goods already so delivered. The risk of
loss of or damage to the goods passes when the goods are on board the
vessel. The seller must contract for and pay the costs and freight
necessary to bring the goods to the named port of destination.
‘The
seller also contracts for insurance cover against the buyer’s risk of
loss of or damage to the goods during the carriage. The buyer should
note that under CIF the seller is required to obtain insurance only on
minimum cover. Should the buyer wish to have more insurance protection,
it will need either to agree as much expressly with the seller or to
make its own extra insurance arrangements.
seller also contracts for insurance cover against the buyer’s risk of
loss of or damage to the goods during the carriage. The buyer should
note that under CIF the seller is required to obtain insurance only on
minimum cover. Should the buyer wish to have more insurance protection,
it will need either to agree as much expressly with the seller or to
make its own extra insurance arrangements.
INTERMEDIARIES IN IMPORT TRADE
- Clearing agent
- Freight forwarder,
forwarder, or forwarding agent, also known as a non-vessel operating
common carrier (NVOCC), is a person or company that organizes shipments
for individuals or corporations to get goods from the manufacturer or
producer to a market, customer or final point of distribution.[1]
Forwarders contract with a carrier or often multiple carriers to move
the goods. A forwarder does not move the goods but acts as an expert in
the logistics network. These carriers can use a variety of shipping
modes, including ships, airplanes, trucks, and railroads, and often
multiple modes for a single shipment. For example, the freight forwarder
may arrange to have cargo moved from a plant to an airport by truck,
flown to the destination city, then moved from the airport to a
customer’s building by another truck.
Role of Clearing Agents
A clearing agency assume the following duties:
- furnish,
whenever required by Customs Administration, an authorization from each
of the firms or persons by whom he is employed to act as their Customs
Agent; - not represent a client in Customs in any matter which the
licensee dealt as an officer or employee of Tanzania Revenue Authority
or of the facts of which he gained knowledge while in Government
service; - where he knows that a client has not complied with the
law or has made any error in or omission from any document which the law
requires such client to execute, advise his client promptly of the fact
of such non-compliance, error or omission and immediately bring the
matter to the notice of the appropriate officer of Customs in writing; - Exercise
due diligence to ascertain the correctness of any information which he
imparts to a client with reference to any Customs operations; - Not withhold information relating to Customs operations from a client who is entitled to such information;
- promptly
pay over to Government when due, all sums received for payment of any
duties, taxes or other debts or obligations owing to the Government and
promptly account to his clients any money received for them from
Government, or received from them in excess of Governmental, or the
other charges properly payable in respect of the clients Customs
operations - not attempt to influence the conduct of any officer
of Customs in any matter pending before the Customs by the use of
threat, false accusation, duress or the offer of any special inducement
or promise of advantage, or of any gift or favour or other thing of
value; - not procure or attempt to procure, directly or
indirectly, information from Customs records or other Government sources
of any kind to which access is not granted by proper authority; - not
employ in any capacity, with power of attorney, by delegation or
otherwise, for the promotion of or in connection with the work relating
to the licence: (a) any person whose application for licence or Customs
Clearance identity card has been refused; or (b) any person whose
licence or Customs clearance identity card has been revoked or whose
conduct as a partner, manager, director, officer or servant has been the
cause of the revocation of the licence or Customs Clearing agent
identity Card; - Not lend money to any officer or employee in the
service of the Rwanda Revenue authority or become surety for the
repayment of money borrowed by any such officer or employee; and - Inform the Customs administration any change of address before such change is affected.
