Final answer:
ABC Corporation is a multinational organization engaged in international marketing activities. They use various international marketing documents, including a commercial invoice, packing list, bill of lading, certificate of origin, and export license. They issue a letter of credit and follow customs clearance procedures to facilitate their import and export activities. The INCOTERMS they use vary depending on their transactions.
Step-by-step explanation:
ABC Corporation and their International Marketing Documents
ABC Corporation is a multinational organization participating in international marketing activities. They engage in both import and export activities. In terms of their international marketing documents, ABC Corporation uses several key documents to facilitate their international trade. These include:
Commercial Invoice: This document provides a detailed description of the goods being shipped, their value, and terms of sale.
Packing List: This document lists the contents of each package being shipped and provides information on the quantity, weight, and dimensions.
Bill of Lading: This document serves as a receipt of goods from the carrier and provides evidence of the contract of carriage.
Certificate of Origin: This document verifies the origin of the goods and is required for customs clearance purposes.
Export License: Depending on the nature of the goods being exported, ABC Corporation may need to obtain an export license to comply with relevant regulations and restrictions.
Letter of Credit (LC) and its Issuance Steps
ABC Corporation uses a documentary letter of credit (LC) for their international trade transactions. The steps involved in issuing a letter of credit are as follows:
Agreement: ABC Corporation and their overseas buyer agree to use a letter of credit as the payment method.
Application: ABC Corporation applies to their bank for the issuance of the letter of credit, providing the necessary information and supporting documents.
Review: The bank reviews the application and verifies the documents to ensure compliance with the agreed terms and conditions.
Issuance: Upon approval, the bank issues the letter of credit and sends it to the beneficiary (usually the exporter).
Customs Clearance Procedures
Customs clearance procedures refer to the activities involved in getting goods through customs in order to enter or exit a country. ABC Corporation follows certain customs clearance procedures, which typically include:
Document Submission: ABC Corporation provides the required customs documentation, including the commercial invoice, packing list, bill of lading, and certificate of origin.
Customs Inspection: Customs authorities inspect the goods to ensure compliance with import-export regulations, as well as to verify the accuracy of the documentation.
Duty and Tax Assessment: Duties and taxes are determined based on the value and nature of the goods. ABC Corporation pays the required duties and taxes to facilitate customs clearance.
Release and Delivery: Once the goods have successfully cleared customs, they are released and delivered to their final destination.
INCOTERMS Used by ABC Corporation
INCOTERMS are internationally recognized terms that define the responsibilities and risks of buyers and sellers in international trade. The specific INCOTERMS used by ABC Corporation may vary depending on the nature of their transactions. Some common INCOTERMS include:
EXW (Ex Works): The seller makes the goods available at their premises, and the buyer is responsible for all transportation costs and risks.
CIF (Cost, Insurance, and Freight): The seller is responsible for the cost, insurance, and freight of the goods until they reach the port of destination.
FOB (Free On Board): The seller is responsible for delivering the goods on board the vessel at the agreed port of shipment.
DDP (Delivered Duty Paid): The seller is responsible for delivering the goods to the buyer's designated place of destination, including all duties and taxes.