Export preparation and export stage of the good

Export preparation and export stage of the good

Stages of the export of goods by car transport can be classified as follows:

Export preparation process

The following works are carried out at Export preparation stage:

• Request and production for the goods in accordance with the Contract;
• Acquisition of required documents and certificates for export;
• Fulfilment of other preparatory works related with the exportation.

The following documents must be obtained and submitted to the customs authorities during the export of goods according to the Decree of the President of the Republic of Azerbaijan "On further liberalization of foreign trade" date of June 24, 1997, No. 609:

• Legal person's code defined by State Statistics Committee;
• Contract concluded with foreign persons;
• Documents on origin of the exported goods;
• Advance payment of the exported goods or document of authorized bank on opening of the letter of credit;
• Order of the Cabinet of Ministers or positive feedback of the Ministry of Economic Development for the cases provided by these Regulations;
• Customs cargo declaration;
• Quality certificate for goods exported from the Republic of Azerbaijan to European Union countries.

The first of the above mentioned documents is required from the companies exporting for the first time, which is issued by the State Statistical Committee. The order of the Cabinet of Ministers and the feedbacks of the relevant ministries are provided for products indicated in Annexes 1 and 2 of the same document in the manner specified in Decree No. 609 (Annex 1 and 2).

According to the Legislation, exports of goods from Azerbaijan are permitted only in case of the payment to the exporter in advance and submission of the payment document, or the opening of a non-recalled letter of credit or availability of the guarantee by first-class banks. Therefore, an appropriate document must be submitted to the customs authority related to the one of three cases (cash payment, letter of credit, and bank guarantee). Detailed information about opening the letter of credit is provided in other Section, therefore we will not talk a lot about this subject in this section. As to the guaranties of the first-tier banks, it is issued by a first-tier bank appointed by the National Bank according to the information of international credit rating agencies.

Certificates obtained in regard with the export will be detailed in the relevant section. However, it should be noted that although the above list requires to obtain certificates of origin and quality for the export of goods, it is also required to obtain other certificated before submission of these certificates. Therefore, the number of certificates varies depending on the country of export and the type of goods. In general, the following certificated should be obtained related with the exportation.

As seen from the above mentioned table, other certificates (such as certificate of veterinary, phyto-sanitary, hygienic and compliance depending on the type of product) must be obtained from the relevant government agencies before certificates of origin and quality are obtained. In this section information about the required documentation and certification processes is not provided in detail as the comprehensive information is reflected in the "certification and packaging" section.
In addition to the above-mentioned documents, the following documents must be submitted to the customs authorities during the export of goods by road:

TIR carnet - document proving the safety of transport and insurance against any risks during road transport prepared according to the the Customs Convention on International Transport of Goods under cover of TIR Carnets, 1975 (TIR Convention). Actually this document refers to the transportation of goods by one of the Consignor Contracting Party by crossing one or several customs border to the destination customs body of other Contracting Party without intermediate loading of goods in road vehicles, vehicles and containers in the Republic of Azerbaijan. Provided that certain portion of the TIR transportations between the start and end is carried out with road transportation. In accordance with the Legislation, goods are exempted from payment or deposit of customs duties in the intermediate customs body (during import entry, transit entry) at the customs territory of the Republic of Azerbaijan during International Transportation of Goods. Meanwhile, goods transported in sealed road transportation vehicles, sealed trains or sealed containers usually are exempt from customs control in intermediate customs bodies during international transportation of goods carried out in the territory of the Republic of Azerbaijan. In exceptional cases customs inspections may be carried out by customs authorities in case of suspicion for infringement.

TIR Carnet (TIR Guide) consists of 4 pages cover page; non-removable sheets №-1/№ 2 and indexes of receipts №-1/№-2 (yellow colour); removable sheets №-1 and indexes of receipts № 1 (white colour); removable sheets №2 and indexes of receipts №2 (green colour) and road transport incident protocol (yellow colour). Set of the removable sheets and their indexes (№1 and №2) - As a rule, removable sheet №1 and index №1 is envisaged to be used in the customs bodies of the sender and importing country, and removable sheet №2 and index №2 is envisaged to be used in the customs bodies of the exporting and destination country. Customs Declaration journals consist of up to 20 sheets (e.g., 10 packages) and designed for the transportation by crossing the territory of up to 10 countries accordingly. TIR carnet is issued to the carrier by warranty units of the Member States of the Customs Declaration Convention adopted in 1975. As you can see, TIR carnet is required only for the countries that are members of the Convention (Annex 3). Such journals are printed in French, with the exception of the first non-removable yellow sheet printed in English and Russian. TIR carnet are filled separately for each vehicle. Detailed information about the rules for filling TIR carnet, customs clearance and other procedures is provided in the Order of State Customs Committee date of 2005, No. 45 about "Customs control for the goods during International Transportation of Goods (TIR Convention, 1975) and clearance rules of TIR booklet".

TIR carnet is required only when goods are transported in road vehicles, vehicles and containers.

"International way-bill (CMR) - the document that reflects the details of the international transportation of goods by the road transport derived from the 1956 Convention for the International Carriage of Goods by Road (CMR). This document is signed by the exporter and carrier in 4 copies. The first copy remains in the exporter, while the second copy is kept by the carrier, and the third copy is added to the accompanying documents. The 4th copy is signed and sealed by the importer and returned to the exporter. Unlike TIR carnet, CMR can be found in Azerbaijani and other languages. CMR is provided for every types of vehicles. CMR sample is attached to this Manual (Annex 5).

• Invoice confirming the purchase price of the goods. This invoice is a document reflecting the amount, quantity, weight, and etc. details of the goods shown by the seller in the purchase and sale agreement.
• Filling of customs declaration.We will talk about in the next sections.

In addition to the submission of the aforementioned documents, the exporter must specify whether the goods will be exported directly by itself or through a customs broker. By the way, let's give brief information about the customs broker.

Customs broker's duties include to carry out any operations on customs clearing and other intermediary functions in the sphere of customs business in his (its) own name at the expense and on behalf of represented person. Customs brokers perform the following activities:

• Declaration of goods and vehicles;
• Submission of documents and additional information necessary for customs clearance to customs authorities of the Republic of Azerbaijan;
• Provision of the declared goods and transportation means;
• ensure the payment of customs duties and other charges related to the declared goods and means of transport;
• Carriage, transportation and delivery of goods across the customs border;
• fulfillment of customs clearance and other necessary works for customs control as a person having authority over declared goods and means of transport.

As seen, the customs broker may carry out customs clearance, realize customs payments, and transfer goods from customs points on behalf of the exporter. The provisions on the activities of customs brokers are reflected in Articles 155-161 of the Customs Code, as well as the Decision of the Cabinet of Ministers about "Regulations on Customs Brokerage" date of of 1998, No. 101.

Customs declaration and its filling rules

It is an official document used for customs clearance of the goods and consisting of 4 main documents, and annexes in case of declaration of several goods1. The main 4 sheets of the declaration is distributed as follows:

• First sheet is kept by the customs authority and in special archive.
• Second sheet (statistical) - is kept by the Customs statistics department (unit);
• the third sheet is returned to the declarant;
• the fourth sheet is returned to the declarant and added to the documents accompanying goods during export.

The main sheet of the Customs Declaration is used to display the goods with the same title subject to the same customs regime (the goods with the same classification up to 9-digit code of the Commodity Nomenclature of Foreign Economic Activity). Additional sheets are used as an integral part of the main Customs Declaration when declaring goods with several titles. Each of the annex sheets allows to declare different three items. Customs Declaration can include information about up to 100 different goods (meanwhile, annexes more than 33 can not be attached to the main sheet). The rules for filling in the supplementary sheet are the same as the rules for filling in the corresponding paragraphs of the Customs Declaration except the column A, which is not filled by the declarant.
The customs declaration consists of 54 numerical and 4 alphabetical colums (A, B, S, D). Numerical column 7 and alphapetical colums S, D is filled by the customs authorities, remaining colums are to be filled by the declarant. "Request number" is mentioned in the column 7 by the customs authorities. Query number consists of 4 items such as 99999/9/99/9999. These items include the followings:

• Item 1 - is the code of the customs authority which performs customs clearance in accordance with the national classification of customs authorities and their structural units;
• Item 2 - the final figure of the year of adoption of Customs Declaration to the customs clearance;
• Item 3 - Order number of the current month;
• Item 4 - Serial number of the Customs Declaration cleared by the relevant customs authority.

Column D - Stamp and seal of the customs body is reflected in this column. Other comments on the results of customs control is made when necessary. Seal and stamp of the responsible person is necessary if additional information is written on the back side of the Customs Declaration.
Column S - This column of the Customs Declaration can be used for technical notes by customs authority.
The rules for filling the customs declaration are reflected in the Order of State Customs Committee date of 1998, No. 279. The following table has been compiled in this Section to simplify and make it easier to understand the rules for filling costoms declaration for exporters. Any exporter may independently fill in the customs declaration based on this table.
The empty columns in the following table means that that columns does not refer to the paragraph. Because most paragraphs has one column. The last 3 columns of the table are intended for the items 2, 8, 9, 11 of the Customs Declaration.

Customs clearance and export of the goods

The exporter shall apply to the the relevant customs authorities for the export permit after obtaining aforementioned documents (certificate of quality, certificate of origin, contract, payment document, invoice of export for the goods to be exported, customs declaration, TIR carnet and international invoice) and filling in the customs declaration. The exporter is going to the appropriate body (hereinafter, the Baku Customs Office) for customs clearance in case of positive response to the application. Thereafter, the following transactions are carried out.

Documents shall be submitted to the statistical department of the customs authority through "one stop shop" principle. The Statistics Department checks the documents and indicated the "request number" in column 7 if the documents are appropriate. Thereafter, Statistics Department submits the documents to the Finance Department. The Finance Department issues receipt for collection and payment of VAT for formalization based on documents. Exporter pays to the cashier based on the receipt (in case of cash payment) and submit the result to the Finance Department. Thereafter, Finance Department submits the document to the Deputy Chief of the Property and Cargo Department and the Deputy Chief puts stamp on the Column D. The documents are returned back to the Inspector who received the documents previously and at the end the Inspector puts stamp on the Column D as well. Hereby, customs clearance is completed and customs control starts.

Customs control inspector arrives to the place of loading together with the declarant. Goods with the weight and quantity shown in the declaration is loaded onto the truck that meets the standards under the supervision of the Inspector. Then the doors of the truck are closed and sealed. Inspector and exporter returns to the customs authority and prepare barcode. Bar code consist of the 2 parts: one for lifting, the other for trailers. Exporter submits the following documents for preparation of the bar code:

• Driving license of the driver;
• Technical passport of forklift and trailer;
• Letter of attorney if the car is not registered to the name of the driver.

Bar code is issued to the driver and added to the accompanying documentation. Then the driver can transfer the goods thorugh customs border based on these documents. In general, the driver takes the following documents with himself:

• Two copies of the page 4 of the declaration
• The pages of TIR carnet and international invoice (CMR)
• Invoice of the goods - 2 copies
• Certificate of origin and 2 copies
• Certificate of quality – 2 copies
• Copy of ISO certificate (if available)

The driver arrives at the border by the loaded and sealed transportation vehicle and submits the documents. The customs officers takes the 4th page of the original Declaration the last page of the CMR, the 2nd sheet of the Customs Declaration record that can be detached and copies of the invoice, and certificates of origin and quality. Then the truck passes the customs control and is allowed to cross the border if no shortcoming is detected. Thus, the export process is deemed completed.

Customs control

The goods are subject to customs control after customs clearance for determination of compliance of the goods with the required documents during customs border transit, proper placement of goods in line with the documents and compliance of goods with the requirements. Customs control is carried out in the following ways according to the Legislation:

• checking documents and data required for customs purposes;
• customs inspection (inspection of commodities and means of transportation, personal inspection as an exceptional form of customs control);
• registration of commodities and means of transportation;
• verbal questioning physical entities and officials;
• check of the system of accountancy and reporting
• inspection of territories and depots of warehouses of temporary storage, customs warehouses, free warehouses, free customs zones, duty-free shops and other places with commodities and means of transportation which are subject to customs control, or where activity liable to customs control is implemented;

As seen, the main activities during the customs control includes loading of goods as indicated in the cargo handling, inspection of loaded goods, inspection of vehicles with special control devices, unloading goods in case of any doubts, documentation, transfer of the goods through customs points.

One of the key departments in the structure of the State Customs Committee is the Head Office for Customs Control and its obligations include customs clearance of goods through a "one stop shop" principle and customs inspection, as well as issuing customs broker license and other authorities.

Since the customs declaration is an official document, it can be obtained only from the State Customs Committee on payment basis. Sometimes exporters pays to the brokers for filling this document instead of obtaining this document which is more expensive than getting the payment blank.

Number of the goods name means the quantity of the types of goods, not the quantity of goods (goods that are different by 9-digit level in commodity nomenclature are considered as goods type).

"0" is indicated in this Column for the goods that can be unloaded and loaded, spilling and scattering goods, as well as when goods are transported massively through the customs border, the electric lines and pipeline transport.

Citizens who concludes contracts on foreign trade transactions (purchase, sale, concession contracts, leasing agreements, etc.) on a payment basis and responsible for their reporting. If the exporter closes the contract and performs financial transactions himself/herself, then "See 2" is indicated. The column is filled in if the goods are traded on a freely-traded basis.

If any company performs declaration (brokerage, intermediary) activity on a contractual basis, then the number and date of issuance of the license authorizing the recognition of the organization as declarant shall be indicated by the state customs authorities.

Sometimes the column reflects abbreviated name of the sender country according to the Classification of World Countries (Annex 7).

If the goods with the same title (the goods subject to the same classification and same customs regime with 9-digit code according to the Commodity Nomenclature of Foreign Economic Activity) is manufactured in the different countries, "different" word is indicated in the column.

Means of transportation - the vehicle used to load goods in Azerbaijan and transport through the customs border for export.

As information, the name of the sea or river ship, the flight and board number of the aircraft, the number of railway wagon, registration number and other information shall be indicated in accordance with the type of transport.

This Column is intended for goods imported into the country and transported from one vehicle to another (in transit mode). It is a vehicle transporting goods to the country through the border as a means of transportation. If it is loaded and exported in Azerbaijan without being in the country imported, "See Column 18" is indicated.

The invoice value means the amount actually paid or payable according to the purchase and sale agreement.

In cases where the invoice value is declared in national currency - the figure "1" is indicated.

Relevant information include:

1. number of the currency control document, or bank identification number;
2. abbreviated name of the bank;
3. Number of the national currency account of legal or physical entity mentioned in column 9;
4. Number of the currency account of legal or physical entity mentioned in column 9;
5. registration number of the taxpayer issued by the Ministry of Taxes

The column is filled in during temporary storage of goods at the warehouse in the period of customs clearance of the goods.

If the goods are with the same title (the goods subject to the same classification and same customs regime with 9-digit code according to the Commodity Nomenclature of Foreign Economic Activity), but manufactured in the different countries, then "000" is indicated in the column.
In case of declaring the goods with several titles, the code of origin of each of the goods shall be indicated in supplementary sheets in accordance with the Classification of World Countries.

The first two figures show the code of the Customs Regime (Annex 6) in accordance with the Classification of the customs clearance procedures of goods. The second two digits show the code of the previous customs regime if it is known (in transit mode). "00" is indicated if the previous customs regime is unknown or not available The last two digits indicate the nature of the transit of goods in accordance with Annex 6, paragraph 2 relevant to the declared customs regime. If there are no elements envisaged in the second paragraph, then "00" is indicated.

Filled for the goods for which restrictions for number is imposed.

It is filled in case of different customs regime (mutual goods transfers in goods exchange transactions) before the declared customs regime or in case submission of temporary, incomplete (ordered transfer), periodical and general declarations. If this is not case, then this column is left empty.

Relevant data is as follows:

1. license number and date of issue, as well as its validity period:
2. Number of the document of transportation means;
3. Number and date of the transportation table;
4. Number and date of the Contract (Treaty, agreement etc.);
5. Number and date of issue of the annexes of the main documents such as contract, agreement, treaty etc.;
6. Date of issue and number of the permit of other state bodies (indicating name of the body) in case of need for the control over the goods by these bodies;
7. number and date of issue of permit for the processing of goods outside the customs territory, as well as its validity period;
8. information on certificates of origin of the goods;
9. Number and date of issue of the issued licenses and other permits including name, number and date of issue of government and state decisions on exemption from customs payments.

The relevant rules are as follows:

• The code of the type of customs fee shall be specified in "Type" column in accordance with the Classification of Customs Duties (Annex 14).
• "Basis for calculation" - the figures (customs value of the goods for customs duties and fees, 100 for VAT) giving the basis for a proper payment of customs fees are indicated in this column. This column only displays numeric characters.
• "Tarrif rates" - Rate of the customs duty, percent of the VAT (18%) is indicated in this column, but the customs fee part is left empty in this column.
• "Amount" column - Payable amount for the customs with the currency calculated for the customs value of goods.
• PM - two-digit, or literal codes of the payment method are set out in the Payment Method column in accordance with the terms and conditions of payment for existing customs payments:
• 01, or "NCP" - non-cash payment by bank;
• 02, or "CC" - payment by cash to the customs cashier office;
• 03, or "RP" – payment has been deferred;
• 04, or "EPP" - Deferred period for the customs payment has been extended;
• 05, or "CP" - conditional payment for customs payments;
• 06, or "MS" - payment on a mutual settlement basis.

Total sum of the customs payments is written in the "Total Sum" column at the bottom of the table.