USAID’s Trade and Investment facilitation (TIF) project | Association of Lebanese Industrialists 

USAID’s Trade and Investment facilitation (TIF) project

 

USAID’s Trade and Investment facilitation (TIF) project  1

I.            Export Guidelines 2

II.           official documents required  2

III.          samples of documents 6

IV.         shipping requirments 17

VI.         RECOMMENDATIONS 22

VII.        Conclusion  23

 

                                                  

                                                               

 

USAID’s Trade and Investment facilitation (TIF) project

The USAID-funded Trade and Investment Facilitation (TIF) project is a five years and $70,000,000 project. TIF is implemented by DAI Global.

The project is designed to address the underlying economic development problems that impede the competitiveness of Lebanon’s high-impact sectors, such as Agro-Food Processing, Manufacturing, Knowledge Economy and Services, and Tourism and Hospitality.

TIF’s purpose is to facilitate export of Lebanese goods and services to generate foreign exchange through investments that simultaneously promote job creation, income generation, and improved livelihoods throughout the country, with a strong focus on increasing women’s participation in the workforce. TIF employs a facilitative, market-led approach to support Lebanon’s productive export sectors through partnerships that are co-created, designed and delivered through the TAHWIL (“transformation” in Arabic) grants and sub-contracts facility.

As a facilitator, TIF works with and through Lebanese firms in high-impact sectors to strengthen relationships and networks, creating the necessary preconditions for transformational investment and trade by addressing the business constraints that impede growth. TIF also realigns market incentives with policy reforms to change behaviors and introduce innovations, leading to high-performing businesses accessing investment and finance, improved quality standards, expanded linkages to new markets, and enhanced productivity – yielding increased exports thereby bringing back needed foreign exchange, know-how and technology.

TIF has three main objectives:

  1. Increased exports of Lebanese goods and services.
  2. Investment facilitation leading to increased domestic investment.
  3. Improved business and investment enabling environment (BIEE).

 

 

 

Introduction

 

Lebanon enjoys a free economy and a liberal trade regime with an export-oriented economic strategy. Despite the fast-paced commercial trade- in 2019, Lebanese exports of goods reached USD 3.7 billion according to the Investment Development Authority in Lebanon (IDAL)- challenges related to bureaucratic processes highly affect export operations. Many exporters may face challenges when exporting their goods due to the complicated customs procedures and excessive labelling or packing requirements in light of a weak infrastructure and high corruption.  Moreover, lack of guidance on required documentation, responsible units or departments and estimated timeframe stalls the overall export process. These challenges tend to burden exporters during their daily operations and may result, in cases where they fail to adhere to the requirements, in jeopardizing the whole exporting procedure.

 

TIF produced the current guidelines report to raise traders’ awareness on how to prepare the documents mandatory for exporting goods from one country to another. Given that this process necessitates fulfilling many documents- which differ from one country to another- the existence of a clear and user-friendly guide is vital to facilitate the exporting process. This guideline also outlines all the pre-approvals that should be secured from the exporting country, relevant ministries, and lab tests.

 

Accordingly, a proper export documentation process ensures that the consignments are dispatched timely without any impediments. More importantly, it adds value to the exporters’ credentials as a trustworthy exporter who adheres to the trade norms and is easy to do business with.

I.Export Guidelines

For export in case the laws and regulations are not followed properly, exporting may be a very complicated process. Any export success is depending on meticulous preparation of needed permissions and ongoing updates to your legal documentation, which will ensure a smooth export from Lebanon.

It is essential to follow up the regulation at both ends importing and exporting countries in order not to face any delay or obstacle at the clearance process.

export requirements

Prior to exporting any product there must be various tests in recognized labs to ensure that the exported products meet the quality, labeling, and packaging criteria of the target country.

The Industrial Research Institute (IRI) is an approved go-to laboratory for exporters and can help in testing the qualifications.

II.official documents required

For Export to the United States of America:

  • Quietus CNSS valid for one year
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice mentioned on it FDA serial number
  • Packing List
  • PDA serial number
  • ISF form
  • Health Certificate
  • Lab Test
  • Ministry of Industry approval
  • Importer FDA Registration

For Export to Europe:

  • Quietus CNSS valid for one year.          
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice
  • Packing List
  • Certificate of Origin
  • Euro 1 Certificate
  • Health Certificate
  • Lab Test
  • Ministry of Industry approval

For Export to the Middle East:

  • Quietus CNSS valid for one year
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice
  • Packing List
  • Certificate of Origin
  • Euro 1 Certificate
  • Health Certificate
  • Lab Test
  • Ministry of Industry approval

Below is the detailed explanation of the documents needed for international shipping to comply with both export regulations and legal requirements for the destination country.

1.          Commercial Invoice:

The commercial invoice is the formal proof of sale. It contains all the information about the vendor's and buyer's export transaction, including the shipping terms.

  1. Details which should be mentioned on an invoice are the following:
    • Date
    • Invoice Number
    • Vendor Name
    • Buyer Name
    • Currency
    • Quantity
    • Unit price
    • Shipping Terms
    • Gross Weight
    • Number of Packages
    • Origin of the products
    • Company Stamp
    • Signature

2.          Export Packing List:

An export packing inventory is a shipping document that includes a full itemized list of the cargo

  1. Details which should be mentioned on a packing list are the following:
  • Date
  • Vendor Name
  • Buyer Name
  • Invoice Reference Number
  • Quantity
  • Gross Weight
  • Net Weight
  • Number of Packages
  • Company Stamp
  • Signature
  • Dimensions
  • Safety precautions
  • Packaging type

 

 

3.          Certificate of Origin:

This is a document issued by a consulate or chamber of commerce that declares the origin of produced products. The Certificate of origin should be issued based on the destination country’s laws and regulations.

4.          Euro 1 Certificate:

The EURO 1 is used to certify the origin of a product, and if applicable, benefit from favourable trade terms (tariffs mainly) under a preferential trade policy and Customs duties reduction or in some cases Exemption.

5.          FDA Approval:

The United States Food and Drug Administration is a federal agency of the Department of Health and Human Services. The FDA is responsible for protecting and promoting public health through the control and supervision of food safety, tobacco products.

Manufacturers must submit a premarket approval (PMA) application and the results of clinical testing to get approval for each company along with “FDA Product Code”.

6.          Bill of Lading:

This is the official contract between the freight carrier and the shipper or owner of the goods. It's the document that confirms the receipt of items for shipping, and it can only be signed by a carrier's authorized representative upon receipt for the cargo to be released. It contains specific details regarding the shipment destination, the products being shipped, and how they should be handled.

7.          Export License:

This is the government's legal and official document. Exporters must get a license to transport specified commodities in specific quantities. Some nations only require this document under specified circumstances, while others may make it mandatory.

 

 

III.samples of documents

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ISF Form “Importer Security Filing”

 

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FDA Approval

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Bill of Lading

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Pre Approval From The Ministry of Industry

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IV.shipping requirments

  • Packing and Labeling Requirements
  • INCOTERMS
  • HS Codes

pACKING AND LABELing requirements

The labels for food products must advise consumers of the product ingredients (including potential allergens), the “best before” or “use by” date, country of origin, and nutrition information. The address of the manufacturer or distributor is also required.

As for the packing it should apply Food Safety Practices and General Requirements, accordingly, only use packaging material that is fit for its intended purpose.

Only use material that is not likely to cause food contamination to ensure there is no possibility that the food may become contaminated during the packaging process.

HS CODES

Learn about HS Codes, which are used to classify products for customs reasons. An HS code is a unique identifier for a commodity that is used in customs tariffs and international trade statistics. Because they are correct in both the export and import countries, six-digit HS codes are commonly used on international documentation such as business invoices.

Inco Terms

The Incoterms or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law. They are widely used in international commercial transactions or procurement processes and their use is encouraged by trade councils, courts, and international lawyers. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the global or international transportation and delivery of goods. Incoterms inform sales contracts defining respective obligations, costs, and risks involved in the delivery of goods from the seller to the buyer.

The Incoterms applied:

  • EXW (Ex Works)
  • FCA (Free Carrier)
  • FOB (Free on Board)
  • CFR (Cost and Freight)
  • CIF (Cost, Insurance, and Freight)
  • CPT (Carriage Paid To)
  • CIP (Carriage and Insurance Paid to)
  • DAP (Delivered at Place)
  • DPU (Delivered at Place Unloaded)
  • DDP (Delivered Duty Paid)

 

 

 

Ex Works:

Under this arrangement, the seller ensures that the traded products are available at a location for the buyer to pick up. What does that mean? Does that mean the seller has no other responsibility? Well, yes, the seller is all free, but the buyer must move the goods and pay for all the charges ranging from loading charges to custom clearance.

FCA – Free Carrier:

This ensures that the seller delivers the product to the required location by the buyer, it can be a warehouse, or any other shipping terminal. Is it done for free? For sure, no, the seller includes the cost in the price of the product or the overall bill – considering all possible costs and risks involved.

Once products are delivered to the desired location of the buyer, the responsibility of the goods is transferred to the buyer. Now buyer would have to move those goods across that location to its warehouse. However, the seller must ensure that all paperwork is completed to ensure that goods can be exported.

FOB – Free on Board

FOB means that the Buyer must ship the product to the destination and collect the cargo from the supplier warehouse at origin.

CFR – Cost and Freight

This term refers to the idea that the seller is required to arrange for the transport of the goods by sea to the port of the destination city or country. The seller is also responsible to provide all necessary documents to the buyer so that buyer can claim the goods from the shipping company.

This doesn’t mean that the seller would provide for the insurance, it is not required under this rule, however, the seller will be responsible till goods are loaded on the vessel. After that point, it will be buyers will be responsible for any loss or damage during the transportation.

CIF – Cost, Insurance, and Freight

Cost, Insurance, and Freight is an agreement under which the seller must pay for the cost of insurance and freight during the cargo is in transit. It means that the seller is responsible for any loss or damage that would occur during the transportation of the goods.

However, once the goods reach the buyer’s destination then the responsibility of the buyer to pay for the destination terminal charges, delivery to the buyer’s warehouse, and customs charges. It looks like the safest option available to the buyer as all risk is bored by the seller till it is delivered to the desired port. Hence, the seller charges higher for all these facilities and possible risks.

CPT – Carriage Paid To

Under this agreement, the seller delivers the goods to the carrier service provider, who can be individuals or entities, who further delivers the goods to the buyer. Here, all the risks are transferred by the seller to the buyer as soon as the products are delivered to the selected carrier.

The buyer doesn’t have to pay for any freight charges or any other charges that apply from the shipping point. However, the buyer is liable to pay all applicable costs from the destination point such as custom, delivery to destination, and terminal charges.

It is possible that the seller, as it is no longer responsible, may choose some cheap alternative to deliver the product which may damage the products during the transit. Thus, making a huge problem for the buyer.

 

 

CIP – Carriage and Insurance Paid To

Carriage and Insurance Paid To refers to the condition when the seller is responsible to deliver the goods at the first carrier or any individual that has been selected for this transaction. The seller pays for the freight and the insurance charges.

It needs to be noted that the risk of the goods is transferred to the buyer as soon as the products are delivered to the first carrier. However, they are required to be insured 110% during transit. Furthermore, the buyer is still for other expenses that are applicable when goods are delivered to the destination port such as customs, terminal charges, and other delivery costs.

DAP – Delivered at Place

This contract ensures that all the risks and costs are paid by the seller. Seller is responsible for delivering it to the agreed destination and must pay for the freight, handling charges, almost everything except custom. Along with this, the seller must ensure the documentation and packaging of the products.

The responsibility is shifted to the buyer as soon as goods are available for the buyer to collect. Hence, it is the buyer’s responsibility to unload goods and clear with the custom. Even buyers would have to pay for the storage cost if goods are not cleared in the suggested period.  

DPU – Delivered at Place Unloaded

Under this incoterm rule, the seller is required to deliver the goods to the agreed destination and unload them for the buyer. Goods are under the seller’s responsibility till they are unloaded. The seller must pay for the costs related to the delivery and handling charges. However, the carriers are not required to load the goods to the buyer’s vehicle.

Once goods are unloaded then it is the buyer’s responsibility to clarify against the customs duties, inspection charges, and other taxes; even risk is transferred.

It is noticed that the seller doesn’t tend to contract under DPU terms when unloading involves complex products that involve great risk and uncertainty.

DDP – Delivered Duty Paid

Delivered Duty Paid exerts responsibility on the seller to pay for all the charges that are involved to ensure that the goods are delivered to the buyer. It involves packaging, documentation, loading charges, freight charges, export duty, origin terminal charges, destination terminal charges, delivery to destination, and import custom.

The risk is transferred to the buyer as soon as they are available at the agreed location for the delivery. It is widely used, especially for the new entrants as the risk lies with the sellers. Buyers do have to pay the extra amount to purchase those goods but this contract that goods are reached to the buyer safely.

It is noticed that this method is not so handy for the sellers, as it is very risky for them, as they must deal with different officials, and this also involves transactions with are affected by the changing exchange rate policies.

 

 

  1. SHIPPING REQUIRMENTS FOR PARTICULARE ITEMS
  • Dairy Products
  • Honey
  • Processed Meat
  • Frozen Food

Dairy Products:

  • Quietus CNSS valid for one year
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice
  • Packing List
  • Company FDA approval
  • Product FDA approval
  • Health Certificate
  • Importer FDA approval
  • Lab test
  • Pre-approval from ministry of agriculture veterinary department
  • Pre-approval from ministry of industry

Honey:

  • Quietus CNSS valid for one year
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice
  • Packing List
  • Company FDA approval
  • Product FDA approval
  • Health Certificate
  • Importer FDA approval
  • Lab test
  • Pre-approval from ministry of agriculture veterinary department
  • Pre-approval from ministry of Industry

Processed Meat:

  • Quietus CNSS valid for one year
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice
  • Packing List
  • Company FDA approval
  • Product FDA approval
  • Health Certificate
  • Importer FDA approval
  • Lab test
  • Pre-approval from ministry of agriculture veterinary department
  • Pre-approval from ministry of Industry

Frozen Food:

  • Quietus CNSS valid for one year
  • Commercial Register document
  • Commercial circular
  • ID for the person authorized to sign on behalf of the company
  • Finance License number registered at the Ministry of Finance
  • Commercial Invoice
  • Packing List
  • Company FDA approval
  • Product FDA approval
  • Health Certificate
  • Importer FDA approval
  • Lab test
  • Pre-approval from ministry of agriculture veterinary department
  • Pre-approval from ministry of Industry
  • Pre-approval from ministry of Economy

Process flow

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  • Quotation submitted to consignee.
  • Consignee confirms the offer
  • Shipper prepares the cargo
  • Shipper prepares all the legal documents
  • Shipper asks for loading schedule from the freight forwarder
  • Freight forwarders place the booking with the shipping line
  • Customs broker gets the booking from the freight forwarder and proceed with the customs formality
  • Customs broker sends the container for loading to the supplier premises or the consolidation warehouse
  • Container returns to the port to finalize the formality
  • The customs broker retrieves the health certificate once the formality is submitted
  • The freight forwarder submits the bill of leading instruction to the shipping line
  • Retrieve from the shipping line a draft Bill of leading for checking and approval from both the shipper and the consignee
  • Shipper needs to fill in the ISF and provide it to the consignee to ask their customs broker to submit it prior vessel sailing from Origin
  • FDA pre-notice approval to be applied from the consignee’s customs broker prior vessel arrival to USA
  • After vessel arrival the consignee broker has to finalize the clearance process pay the taxes and duties and release the shipment for delivery to the consignee nominated warehouse

 

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VI.RECOMMENDATIONS

 

Based on the current market situation focus of the traders at the time being is on the export business, particularly Agri food to USA, Europe and Mina region.

  • To meet the traders demand, the public authorities must facilitate the preapprovals and the analytical results not to delay the workflow and the export process.
  • The approvals should be automated and generated online by which each business holder can apply online and get the approval online without the need for going to each ministry.
  • The shipping lines should work on special rates for the export of Agri food and not to delay the cargo at the transshipment ports as those are products with expiry date.
  • To have at each country of destination a pre-clearance system by which once the container arrived at the destination port the items are immediately retrieved after the formal control.

VII.Conclusion

By having a community of Agri food traders we can get much better results by consolidating different suppliers products in one container and exported to the intended countries by which the cost will be less on the traders.

By having online pre-approvals the workflow will be much easier for the traders.

While solving the above problems its very essential for the traders to know their requirement prior proceeding with the export process to make sure their company is eligible to export their products to the named countries and if they do follow up the above required steps there won’t be any obstacles.

 

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