Step by step guide to learn the Procedure of exporting from Pakistan prepared by the best corporate law firm in Pakistan.

The procedure of exporting from Pakistan

Step 1 – Exploring the international market

• Doing desktop research
• Understanding competition
• Marketing
• Attend exhibitions and conferences
• Talking to existing exporters
• Contacting buying houses/distributors.

Step 2 – Correspondence with foreign buyers

• The order must be fully understood in the smallest possible details.
• Improve the English writing skills or appoint someone who has a good grip of English conversation.
• Written replies/emails to foreign buyers must be professional looking and should be written in simple English to help a non-native English speaker understand.
• The company has to make sure that it is responsive enough to inquiries.
• Asking for the WhatsApp number in reply to a query should be considered.
• Make sure that you dealing with a genuine buyer and that the payment is going to be received once the order is delivered.

Step 3 – Getting Order Confirmation

• Once the complete understanding of the required order has been developed, a “proforma invoice” is normally generated which lists down all the details of the order, the quoted price and the delivery terms.
• A Proforma invoice or PFI can also be used to open LC.
• At this stage, the payment mode and terms must be decided.
• The simplest way is open-term payment.
• It is highly recommended that a significant percentage of advance payment be taken at this stage.
• INCOTERMS: These terms decide upon the ownership of cost, risk, and responsibility of a certain stage in the entire exporting process. Delivery terms must be agreed upon at this stage.
• PERFORMANCE CONTRACT: A performance contract is a written agreement that outlines the detailed features of the goods or services to be exported, the timeline associated with the delivery of these goods, and a penalty that must be paid by the exporter to the foreign buyer in case these features are not incorporated, or the time targets are not met.

Step 4 – Completing the Order

• Normally an order is confirmed on some agreed features of the product.
• This can be done by sending samples to a foreign buyers or getting a detailed design from them.
• In either case, the features agreed in this beginning have to be adhered to at any cost and in case this is impossible the foreign buyer should be taken into confidence.
• Depending upon the customer demand, some certification of third-party inspections may also need to be done to make sure that the final product meets the specifications agreed upon in the beginning.
• One aspect of these specifications is the packaging. This is especially important in the case of edible goods.
• AHRECA (HOtels, REstaurants, CAfes) packing is normally used for food items while pharmaceutical products have their own requirements.

Step 5 – Obtaining Required Documents

• Products related certificates
• Certificate of Origin.
  • Preferential
  • Non-preferential
• E-form.
• Commercial Invoice.
• Packaging List (PL).
• Goods Declaration (GD)

GSP+ and REX system

• GSP Plus status of Pakistan means that our exports to the European Union, Switzerland, and Norway are charged at a reduced rate of tariff. This makes our products more competitive in these countries.
• In this case, an exporter is not required to obtain a certificate of origin from the chamber of commerce.
• Instead, a statement of origin is to be included in any of the accompanying commercial export documents that contain the date of issue, description of the product, name and full address of the exporter, and name and full address of the consignee.
• Following is the statement that should be written to declare the origin:
  *The exporter….[Number of registered Exporter] of the  products covered by this document declares that except where otherwise clearly indicated, these products are of Pakistan preferential origin according to rules of the Generalized System of Preferences of the European Union and that the origin criterion me is [Letter designation of origin]
• Letter designation of origin is the standard letters defined by ‘REX Guide’ developed by the European Commission. These designations are as follows:
  • Use the letter ‘P’ for products that are wholly obtained from Pakistan.
  • Use the letter ‘W’ followed by a heading of the Harmonized System (for example ‘W’ 8612) for products sufficiently worked or processed in Pakistan.
• REX number is issued by TDAP in Pakistan

Step 6 – Packaging and Transporting

• Details of packaging should be decided in consultation with the foreign buyer.
• Exporter has to make sure that packaging layers or cargo are resilient enough to bear the kind of journey their cargo will be taking.
• The container can broadly be divided into:
  • Standard
  • High Cube
  • Open Top
  • Flat Rack, and
  • Special types
• Standard Containers come in two sizes of 40 ft and 20 ft length while their width and height are 8.6 feet respectively.

Step 7 – Custom Clearance

• Pakistan Customs mainly examines ‘Goods Declaration of (GD)’ and ‘Packaging List (PL)’ and then compares them with the physical goods packaged for export.
• The objective of preventing money laundering is done by checking if the value of the goods to be exported is declared sensibly.
• There are three types of Custom channels, Red, Yellow, and Green.
  • Goods going through Red Channel are required to be thoroughly inspected and its GD and PL are to be examined in detail.
  • Goods going through the Yellow Channel are not examined physically and normally their documents are inspected for compliance.
  • Goods going through the Green Channel are not inspected and their documentation is considered error-free.
• Because of the automation of the current system through WeBOC, the decision of which channel to chose for a certain shipment is totally computer-based and the system decides it by analyzing the history of the exporter.
• This means the new exporter has a 100% chance of getting thoroughly inspected because they don’t have any history.
• When the new exporters successfully send shipments, which are found safe and compliant and their documentation error-free then the system automatically upgraded the exporter to the yellow and gradually to the green channel.
• WeBOC or Web-Based One Customs now integrates most of the stakeholders involved in the process of exporting and had made processes quicker.
• Pakistan Customs mainly examines ‘Goods Declaration OF (GD)’ and ‘Packing List (PL)’ and then compares them with the physical goods packaged for export.
• The objective of preventing money laundering is done by checking if the value of the goods to be exported is declared sensibly.

Step 8 – Passing the cargo to the shipping line

• Once the goods are delivered to the shipping line a document called the Bill of Lading is generated.
• This is the document issued by the shipping line and serves as the receipt of goods handed over to the shipping line.
• In case the goods are sent through air transport, this document is called an Airway Bill (AWB).
• A related document called BL instructions contained the handling instructions of the goods being exported and can be given to the shipping line at the time of handing over of goods for ensuring safe handling of the consignment.
• Once the goods are loaded on the transport carrier and BL is issued, a set of documents, through the bank, is sent to the foreign buyer including a non-negotiable bill of lading.
• This is a document that helps the foreign buyer to receive the imported goods from the shipping line.
• After the goods are acquired by the foreign buyer, the payment must be received within 14 days of dispatching of goods.