The work in the import performance stage mainly includes applying for import licenses, preparing payments, chartering and booking space, applying for insurance, import payment, exchanging bills of lading and receiving goods, declaring imported goods, and handling the collection of goods.
(I) Applying for import licenses
Article 2 of the Measures for the Administration of Goods Import Licenses stipulates: “The state implements a unified goods license system. The state implements import license management for goods that are restricted from import.” Import licenses are issued by the Ministry of Commerce and provincial-level local commercial authorities, and inspection and quarantine licenses are issued by the customs.
(II) Preparing for payment
After signing the contract, the importer needs to prepare funds and apply for opening an import L/C or making an advance payment.
Under the L/C settlement method, after the importer obtains the import license, it should apply to the supplier for opening an L/C through the opening bank or make payment through bank telegraphic transfer (T/T) within the opening time specified in the contract. When applying for L/C, the importer needs to bring a copy of the import contract, L/C application form, import license and other relevant import certification documents, pay a deposit, and pay the corresponding L/C handling fee. When paying by T/T, the importer needs to bring the contract, invoice, application form for purchase of foreign exchange, application form for overseas remittance and other documents.
Under the conditions of Free on Board (FOB), if the pre-shipment T/T settlement method is adopted (the buyer first remits the payment to the seller’s account by telegraphic transfer, and the seller ships the goods after receiving the payment), the importer will transfer the advance payment stipulated in the contract to the exporter through the bank; if the post-shipment T/T settlement method is adopted (after the seller has shipped the goods, the buyer pays the balance according to the copy of the bill of lading), Documents against Payment (D/P) and Documents against Acceptance (D/A) settlement methods are adopted, after the import approval is processed, the chartering and booking work will be directly carried out.
(III) Chartering and booking
Under FOB conditions, according to the delivery time agreed by the overseas exporter, the importer will handle the chartering and booking of the ship with the shipping company through the freight forwarding company. After the booking is successful, the exporter will be issued a loading instruction to let the exporter prepare for shipment. If the transaction is based on the terms of Cost and Freight (CFR), CIF, Carriage Paid to (CPT), and Carriage and Insurance Paid to (CIP), the importer does not need to charter or book a ship.
(IV) Insurance
After receiving the shipping notice from the overseas exporter, the importer will promptly go through the insurance procedures with the insurance company. After the insurance company agrees to insure and the importer pays the insurance premium, the insurance company will issue the insurance document. The importer can also sign a reservation insurance policy for imported goods with the insurance company before shipment, and then formally insure with the insurance company after receiving the shipping notice from the exporter. If the transaction is based on the terms of CIF and CIP, the importer does not need to go through the insurance procedures.