Responding to Inquiries from Potential Customers

Provide Pro forma Invoice Inquiries from abroad usually accompanied by request for “pro forma” invoice – A quotation in an invoice format which Includes: Product description and specifications Material costs Price Quantity Shipping costs Delivery terms Procedures

Proforma Invoice A-Plus Avocado 411 South Street, Modesto, CA 97049 USA Phone: 123-456-7890 fax 123-456-7899 Date: 15-Apr-06   Proforma No.: 01FPJ0406 Sold To: Ship To: Fresh Produce of Japan, Fresh Produce of Japan 3-1-2721 Rydo-cho, Tokyo 665-0921, Japan 3-1-2721 Rydo-cho, Tokyo 665-0921, Japan Ship Date 25-Apr-06 Ship Terms: CIP Tokyo, Japan Order No.: 01-0406-AA Currency: USDollars Ship Via: Ocean Freight Payment Terms: 50% Prepay+50% Net 90 days invoice Item Weight kg/case Unit Qty No. Description Net Gross Price Units Total AA-10 Haas Avocados - Size 10 20.0 22.0 $0.25 100,000 25,000.00 AA-15 Haas Avocados - Size 15 23.0 25.0 $0.30 150,000 45,000.00 Freight 4,250.00 Insurance 700.00 Harmonized (Schedule B)  No.: 0804. 40.0000 - A  vocado All Products are of USA   Origin Totals Net wt Gross wt Dollars 54,500 59,500 250,000 $ 74,950.00 I certify that the above is true and correct Please sign your authorization & fax back: A+A -Export Manager Sign Here:

Sample Pro Forma Invoice http://www. tradeport PRO FORMA INVOICE FROM: Innovation Technologies 983 Stanley Ave. San Diego, CA 93820 (619) 567-1938 DATE:May 8, 1995Reference No.:3245Payment Terms:Letter of CreditCountry of Origin:USAEstimated Date Of Shipment:45 daysQuoteValid Through:October 8, 1995SOLD TO: Grupo Estevez, S.A. de C.V. Tamales No. 1 Piso 2 18378 Cd. Polanco Mexico SHIP TO: Juarez Industriale 454 Blvd. Cortez 1114 Mexico D.F. Mexico Quantity Description Unit Price Total Price 100 each Computer Motherboards Five (5) sealed cartons Gross Weight: 10 lbs. US $ 50.00 US $ 5,000.00 EX Factory Freight Forwarder Fees Air Freight Insurance CIF Mexico 5,000.00 100.00 1,200.00 20.00 US $ 6,320.00 Price, availability and delivery subject to confirmation at time of order. Authorized Signature _____________________________ Date______________________

Sample Pro Forma Invoice See Center for International Trade Development Website http://www.citd.org/startup/eb/appendix.cfm?sec=86

To Complete Pro Forma Invoice Exporters must set a price for their product Determine the terms of sale

2. Determine (Incoterms) Terms of Sale Exporter must know the terms before preparing a quotation or a pro forma invoice. Incoterms are standardized names created by the International Chamber of Commerce (ICC) for describing terms of sale.

Diagram of INCO terms http://www.export911.com/e911/export/incoterm

Most Common Incoterms Term Definition Risk Cost Include on Quotation EXW Ex Works Buyer arranges for pick up of goods at the seller’s location. Seller is responsible for packing, labeling, and preparing the goods for shipment on a specified date or time Buyer assumes all risk Buyer pays all transportation costs N/A FCA Free Carrier Seller is responsible for costs until the buyer’s named freight carrier takes charge Seller and Buyer Split FAS Free Alongside Ship (over water only) Buyer arranges for the ocean transport. Seller is responsible for packing labeling, preparing the goods for shipment, and delivering the goods to the dock. Seller: until the goods reach the dock. Buyer: from dock to destination Buyer: all ocean transport costs. Seller is responsible for costs associated with transporting the goods to the dock. Costs of transporting goods to the dock.

Most Common Incoterms Term Definition Risk Cost Include on Quotation FOB* Free On Board FOB should also never be used unless you specify what and where such as "FOB ocean vessel at New York City Seller arranges for ocean transport of the goods, preparing the goods for shipment, and loading the goods onto the vessel. The goods ship ocean freight collect. Buyer: Once the items are on board Seller: Wharfage (charges to load the goods onto the ship) and freight forwarder fees. Costs, until on board CFR Cost and Freight Seller has the same responsibilities as when shipping FOB, but shipping costs are prepaid by the seller, instead of shipping collect. Seller: assumes the risk until the shipment reaches the overseas dock. Seller: costs of freight fees up to destination. Add Freight to cost of product. CIF Cost, Insurance, and Freight Seller has the same responsibilities as when shipping CFR with addition of including a marine insurance policy Seller:; until the shipment reaches the overseas dock. Seller insurance and freight forwarder fees. Insurance, freight and cost of goods

FOB Example FOB, New Orleans for 3 ice makers. You as the exporter are responsible for all costs in delivering the goods to New Orleans and loading the icemakers on board a vessel named by the German firm. You are responsible for arranging any export clearances (licenses, taxed, fees). The German firm is responsible for booking space for cargo and pays for the ocean freight.

CIF Example CIF (Named foreign port of destination) YCI quotes its German customer CIF Bremerhaven for 3 ice makers. YCI arranges for and pays all transportation costs to the Port of Bremerhaven. YCI arranges and pays for the marine insurance policy. YCI, however, is only responsible for risk of loss until loading of the icemakers on board the vessel in New Orleans.

FAS Example YCI, the U.S. exporter, quotes the German firm FAS, New Orleans for 3 ice makers. YCI is responsible for all costs in getting the goods to the Port of New Orleans alongside the nominated vessel prior to sailing time. The German buyer is responsible for booking space, paying ocean freight and arranging for all export clearances.

Source for INCOTERMS For a complete list of INCOTERMS, including responsibilities of the parties, see Incoterms 2000. http://www.dsl.co.nz/index.asp?page=incoterm.htm

Pro forma invoices should include two statements. One that certifies the pro forma invoice is true and correct and another that gives the country of origin of the goods. The invoice should also be clearly marked "pro forma invoice." When final commercial invoices are being prepared prior to shipment, it is advisable to check with the U.S. Department of Commerce or another reliable source for any special invoicing requirements that may be required by the importing country.

If assistance is needed in figuring CIF or CIP prices, an international freight forwarder can help. The exporter should furnish the freight forwarder with a description of the product to be exported and its weight and cubic measurement when packed. The freight forwarder can compute the CIF price usually at no charge.

Document WHAT EXPORT SHIPPING DOCUMENTS DO I NEED? vary widely according to the country of destination and the type of product being shipped. Failure to comply can delayed or end payment; goods could be seized or you could be fined, denied further export privileges, or jailed.

International Documentation 90% of all documents are created by the Exporter 10% of documents required by exporting country 90% of documents required by importing country All documents used by the Importer/customs broker to clear customs Shipping documents are created by the transportation company

International Documentation Purchase Order Proforma Invoice Commercial Invoice Consular Invoice Packing List/Slip Weight List Certificate of Origin NAFTA Certificate of Origin

International Documentation Shipper’s Export Declaration Inspection Certificate Clean Report of Finding Bovine Free Certificate Beneficiary Certificate U.S. Government Agency Certifications Export License Import License

International Documentation Date: 15-Apr-06 Customer: Fresh Produce of Japan   Country of Destination: Japan Payment Terms : 50% Prepay/50% Net 90 Days Invoice Incoterms: CIP Tokyo, Japan Required Documents: Yes No Exporter Importer Purchase Order X Proforma Invoice Consular Invoice Commercial Invoice Packing List Certificate of Origin NAFTA Certificate of Origin Validated Export License Import License Shipper's Export Declaration (SED) Shipper's Letter of Instruction (SLI) Inspection Certificate Weight List Bovine Free Certificate Beneficiary Certificate U.S. Government Agency Certifications FDA Certificate of Conformity Certificate of Free Sale Other Documents: Fumigation Certificate

Most Commonly Required Documents U.S. Shipper's Export Declaration Used by the U.S. Census Bureau to compile trade statistics and to help prevent illegal exports. The SED and instructions on how to fill it out are available from a variety of sources including the U.S. Government Printing Office (202-512-0000) and the U.S. Census Bureau's home page. Do I Need to Submit an SED for My Shipment? Required for any shipment valued at $2,500 or above (If the shipment is valued at over $2,500 but is made up of various commodities falling under several Schedule B numbers none of which is valued at $2,500 or higher, no SED is required.) Required for any shipment to particular countries, such as Cuba, Libya, and North Korea, and for any shipment requiring a validated export license. Required for shipments to Puerto Rico, the U.S. Virgin Islands and the former Pacific Trust Territories even though they are not considered exports (unless each Schedule B item is under $2,500). Shipments to Canada do not require an SED. (Shipments to third countries passing through Canada do need an SED.) Sample http://www.citd.org/startup/eb/appendix.cfm?sec=89

Bill of Lading Purpose Contract among three parties to provide transportation of cargo Consignor -party delivering goods to the carrier; usually the seller Carrier - party accepting legal responsibility to provide transportation; often the transportation company Consignee - party entitle to receive the cargo; buyer, bank, an agent Once the carrier or freight forwarder completes the bill of lading, he becomes bound to forward the goods to the agreed destination in the same condition as they were received.

Types of Bill of Lading Straight bill of lading: non-negotiable. allows only the appropriate person specified in the bill of lading to pick up the goods. This is usually the preferred type of bill of lading for beginning importers as it offers the buyer the most protection by prohibiting the release of the goods to anyone but the party specified in the documentation. Sample http://www.citd.org/startup/eb/appendix.cfm?sec=91

Shipper's order bill of lading: negotiable bill of lading. can be bought, sold, or traded while the goods are in transit and is used for letter of credit transactions. The customer usually needs the original or a copy as proof of ownership to take possession of the goods. serves as a certificate of ownership or title to the goods. When written to order, it serves as a negotiable instrument through which title is transferred from the exporter to the importer.

Air waybill - carrying agreement between the shipper and the air carrier. In contrast to the ocean bill of lading it is a non-negotiable instrument and serves as a shipping contract and receipt to the shipper. certifies that the airline has accepted the goods as listed on the air waybill and agreed to carry the goods to the airport of destination in accordance with the conditions of the contract. Sample http://www.citd.org/startup/eb/appendix.cfm?sec=92

Export Packing List itemizes the material in each individual package and indicates the type of package: box, crate, drum, carton, and so on. shows individual net, legal, tare, and gross weights and measurements for each package (in both U.S. and metric systems). The list is used by the shipper or forwarding agent to determine the total shipment weight and volume and whether the correct cargo is being shipped. Sample http://www.citd.org/startup/eb/appendix.cfm?sec=90

Export Manager - A Plus Avocado A+A A-Plus Avocado 411 South Street Modesto, CA 97049 USA Phone:123-456-7890 fax 123-456-7899 Invoice No.: 112345 Date: 25-Apr-2006 COMMERCIAL INVOICE Name Fresh Produce of Japan       Order No. 56789 Address 3-1-2721 Rydo-cho       Payment Terms 50% Prepay & 50% Net 90 Day @ invoice Sold To: City Tokyo 665-0921 State   ZIP Ship Via Ocean Freight Country Japan         Ship Terms CIP Tokyo, Japan Item No. Description     Qty   Unit Price TOTAL AA-10 Haas Avocados - Size 10     100,000 ea $0.25 $25,000.00 AA-15 Haas Avocados - Size 15     150,000 ea $0.30 $45,000.00                   FOB Value $70,000.00 Freight $4,250.00 Ship To: Fresh Produce     Insurance $700.00 3-1-2721 Rydo-cho     Total     Tokyo 665-0921       USDollars $74,950.00 Japan       These commodities, technology or software were exported from the United States of America in accordance with the Export Administration Regulations. Diversion contrary to U.S. law prohibited. Export Manager - A Plus Avocado

Certificate of Origin Some nations require a signed statement as to the origin of the export item. Available through chamber of commerce. May be required even though the commercial invoice contains the information Sample http://www.citd.org/startup/eb/appendix.cfm?sec=96