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Guidelines for Exporters & Importers Introduction According to Iranian Import & Export Regulations a number of goods have to be inspected by third party independent inspectors approved by The Institute of Standards and Industrial Research of Iran (ISIRI) and Central Bank of Iran (CBI). These regulations may have been generated by ISIRI and/or CBI and in any case are binding upon the inspectors. Upon successful inspection and testing of the consignment if applicable, BIS will issue a Certificate of Inspection (COI) or Inspection Certificate (IC) based on exporter’s Letter of Credit (L/C) terms and conditions to facilitate negotiation of shipping documents at the counter of Negotiating Bank. Overview of Services Provided 1-Inspection Certificate (Quality, Quantity and Packing) Importer receives proforma invoice and nominates an inspection company guided by exporter's request (as possibly indicated in the proforma invoice) and his own preference. a) Buyer applies for opening of a Letter of Credit (L/C) at his bank, or, b) In case of Collection Transactions that L/C is not required and documents will be delivered either against payment (D/P) or against acceptance (D/A), and importer registers the intended import at his bank. a) Opening bank issues the L/C and sends it by telex or SWIFT message to the advising bank located in the country of the exporter, or b) In case of Collection Operations, i.e. either Documents against Payment (D/P), or Documents against Acceptance (D/A), importer's bank issues a registration letter indicating the related Import Registration Number. The bank sends a copy of L/C or Import Registration Letter to the importer, together with a letter instructing the importer to send a copy of the L/C or registration letter to the inspection company. Upon receipt of the L/C or Import Registration Letter and the Proforma Invoice, or one of these documents, BIS PSI Dept. allocates a File Number called BFN and sends documents and inspection assignment order to the executing office. In case documents are missing, BIS PSI Dept. contacts the importer in order to obtain them. The Executing Office in Exporter’s country will send a Notification to Exporter requesting information required to carry out the site inspection. Once this has been received, a visual inspection will then be performed. Upon satisfactory inspection and receipt of acceptable final documents a Inspection Certificate will be issued to the exporter. Random Inspection Unless the importer requests otherwise, a pre-shipment inspection is: - Check presence of 100% of packages - Select a number of packages at random - Check 100 % of the contents of the randomly selected packages - verify nature / description - verify quantity - verify if it is brand new / apparently sound etc. - take samples, if applicable - take pictures The basic rule for establishing the number of items or packages to be checked at random is the square root of N, where N is the number of items or packages. For example if we have 100 packages of the same item , 10 packages have to be drawn and we can start with the first one available then count and pick every 10th packages. Reference documents The reference documents for PSI are: 1. Importer’s copy of the Letter of Credit + amendments (if any) 2. Importer's copy of the proforma invoice + amendments (if any) 3. Exporters /supplier's packing list. This is the declaration of what exporter declares to ship. This should correspond with the Letter of Credit and the proforma invoice. 4. Any other document such as specification, analysis sheet, drawings etc. supplied by the buyer. Satisfactory inspection results If the inspection showed the goods are in accordance with the Letter of Credit, proforma invoice and other relevant documents, and also in the satisfactory condition the inspector will issue a Release Note. The Release Note will have a maximum validity of one month or less, to be determined by the executing office, depending on the intended storage of the goods. If the goods are not shipped within one month the executing office should ensure that the goods are still in the same condition as they were at the time of inspection. Supplier's written statement in this respect is acceptable, however in case of any doubts, for example on the basis of experience with the storage place or extremely long storage period, re-inspection should take place. Requirements for issuance of the Inspection Certificate The Inspection Certificate can only be issued on the basis of the following information/documents: 1. Copy of the L/C including the requirement for an Inspection Certificate issued by BIS, or authorisation from BIS PSI Dept. to waive this requirement 2. Importer's copy of the proforma invoice, or authorisation from BIS PSI Dept. to waive this requirement. 3. Satisfactory inspection results 4. Copy of clean transport document i.e. on board Bill of Lading / flight endorsed 5. Packing list 6. Final, commercial invoice Banking regulations after issuance of the Inspection Certificate Exporter sends the Inspection Certificate to the negotiating bank together with the other required documents. The negotiating bank a) In case of L/C payment checks the Inspection Certificate and other shipping documents against the L/C within 5 banking days after receipt of the documents a.1) If O.K. The exporter will be paid within 5 banking days (L/C at sight) or will be paid after deduction of issuance charges` a.2) If not O.K. The exporter will be notified and is given the possibility to take corrective action. a.3) If still not O.K. The exporter will not be paid. The negotiating bank sends the documents to the opening bank on collection basis. b) In case of collection operation: b.1) D/P (Documents against Payment) the negotiating bank will send the Documents to the opening bank for collection of the proceeds. b..2 D/A (Documents against Acceptance) the negotiating bank will send the documents to the opening bank for acceptance and collection of the proceeds. The opening bank in Iran a) In case of L/C payment, checks the Inspection Certificate and other shipping documents against the L/C within 5 banking days after receipt of the documents a.1) If O.K. Importer is notified and requested to pay the amount of exporter's invoice. Upon receipt of the payment the opening bank submits all documents to the importer. a.2) If not O.K.(minor discrepancies) The importer may accept the discrepancies and proceed as mentioned under a.1) a.3) If not O.K. (major discrepancies) In case the negotiating bank has already paid the exporter, he is instructed to withdraw the payment. The importer is instructed to present the goods for inspection to one of the authorized Iranian inspection companies. After inspection and receipt of inspection certificate, the importer submits this certificate to the bank together with a copy of invoice. The bank checks the certificate against the L/C, and if o.k. the importer is notified and requested to pay the amount of exporter's invoice, after deducting the amount of inspection fees. The remaining amount is remitted to the exporter through the negotiating bank. b) In case of collection: b.1) In case of D/P (Documents against Payment) the opening bank delivers the documents to the importer against payment. b.2) In case of D/A (Documents against Acceptance), the bank delivers the documents against acceptance by the importer. The importer submits the documents to Customs Authorities and the latter inspect the goods in order to determine the import duties. The goods are released against payment of the import duties. 2- Certificate of Inspection (COI) In addition to visual inspection, all products listed on ISIRI’s mandatory verification of conformity list will be required to undergo standards verification. An applicable ISIRI approved standard is stipulated on the L/C, P/I by the importer before the documentation is submitted by the bank to our office in Tehran. The products to be shipped are tested at an accredited laboratory. The exporter provides declaration to BIS which verifies that the product(s) complies with the product standard(s) stipulated on the L/C and/or P/I. Upon successful completion of these elements and the site inspection, the exporter then sends the required final documents, and a Certificate of Inspection (COI) is subsequently issued by BIS. Each (COI) must be attached with: A. Original MD / SD (Manufacturer’s or Supplier’s Declaration issued on their letterhead signed and stamped by them and stamped by BIS agent). B. Original Test Report issued on the accredited lab. Letterhead. In some cases and if an accredited laboratory is not available or Manufacturer’s Laboratory is ISO certified , by authorization of BIS PSI Dept., the tests can be performed in manufacturer’s lab. and witnessed by our inspector. In such cases the test report must be issued on the manufacturer’s letterhead and it must be signed and stamped by manufacturer’s lab authorities , countersigned and stamped by the inspector. Acceptable Standards ISIRI – Iranian National Standards ISO (Except ISO 9000 series & ISO 14000) IEC ITU EU Standards CODEX EN,DINEN,BSEN, BSI, DIN, AFNOR ( both France and Spain), NNI, IPQ, IBN, ON, DS, SIS, NSAI, ELOT American Standards (ANSI, ASTM, ASME, UL, API, AGI, etc.) Japanese standards (JIS) Main Auto Manufacturers’ standards ( These standards are just applicable for importers who are car manufacturers) Pegeout, KIA Motors, Nissan, Citroen, Mazda, Daewoo, Landrover, Santana, Daimler- Chrisler, Hyundai, Volvo, Ivico, Renault, MAN, ZF, Libher, Voith, etc. The above standards are acceptable by ISIRI. However, in order to facilitate testing process, the applicable standard as well as the typical test report will be sent to the executive office by BIS PSI Dept. separately for each order. The tests must be run as per the typical test report. Requirements for issuance of COI 1. Copy of the L/C including the requirement for an Inspection Certificate issued by BIS, or authorisation from BIS PSI Dept. to waive this requirement. 2. Importer's copy of the proforma invoice. 3. Satisfactory inspection results 4. Original copy of test report either on manufacturer’s or accredited laboratory’s letterhead 5. Original copy of signed and stamped manufacturer’s / seller’s declaration 6. Copy of clean transport document i.e. on board Bill of Lading / flight endorsed 7. Packing list 8. Final, commercial invoice Important Points Shipment without inspection In cases that the goods are shipped without pre-shipment inspection, according to the regulations of the Central Bank of Iran the goods are to be inspected at destination by an Iranian Inspection Company BIS being one of them. In short BIS will do inspection at destination if possible, at the request of buyer or the issuing bank. Non – Conformity Inspection Report If discrepancy observed and not removed based on the instruction received from BIS PSI Dept. the NON – CONFORMITY INSPECTION REPORT must be issued. Chamber of Commerce certification As per special regulation of the Central Bank of Iran the Inspection Certificates issued by Iranian inspection companies, including BIS do not need to be certified by the local Chamber of Commerce, if requested by the importer, but some importers do not care this point and therefore the opening bank do not delete this requirement from their standard L/C text. The executing office should recommend exporter to ask importer for LC amendment, and if for any reason LC is not amended the inspection certificate should be attested by the Chamber of Commerce at exporter's cost. Inspection Fee Inspection fee will be quoted to Buyer/ Seller as follows: Fee payable by importer : BIS quotes the fee to the importer Invoices to the importers are issued by the BIS Accounting Dept. Fee payable by exporter : Executing / Issuing office quotes directly to the exporter Invoices to the exporters are issued by the executing office. Glossary of terms AIRWAY BILL : A RECEIPT LISTING GOODS SHIPPED ON BOARD AN AIRPLANE ISSUED BY A CARRIER OR NAMED AGENT FOR OR ON BEHALF OF THE CARRIER ACCREDITED LAB : A LABORATORY THAT IS ACCREDITED BY AN INTERNATIONAL OR NATIONAL ACCREDITATION BODY, OR RECOGNIZED BY A GOVERNMENTAL AUTHORITY, OR CERTIFIED ACCORDING TO ISO 17025. APPLICANT : THE IMPORTER THE PERSON OR THE COMPANY AS INDICATED IN THE PROFORMA INVOICE / LETTER OF CREDIT, WHICH HAS GIVEN ORDER TO THE EXPORTER BENEFICIARY : THE EXPORTER THE COMPANY AS INDICATED IN THE PROFORMA INVOICE / LETTER OF CREDIT, WHICH IS ENTITLED TO RECEIVE PAYMENT AGAINST THE DOCUMENTS AS INDICATED IN THE LETTER OF CREDIT BILL OF LADING : A RECEIPT LISTING GOODS SHIPPED ON BOARD A VESSEL OR LOADED ON THE TRUCK, SIGNED BY THE MASTER, HIS NAMED AGENT, OR CARRIER OR HIS NAMED AGENT BIS : BEKHRAD INTERNATIONAL INSPECTION SERVICES, TEHRAN, IRAN BIS PSI DEPT. : PRESHIPMENT INSPECTION DEPARTMENT OF BIS FOR IMPORTATION CBI : CENTRAL BANK OF IRAN CENTRAL BANK OF IRAN : THE CENTRAL BANK, WHICH HAS ISSUED THE IMPORT REGULATIONS, AMONGST WHICH IS THE REQUIREMENT TO HAVE GOODS INSPECTED BEFORE SHIPMENT TO IRAN, AND TO HAVE AN INSPECTION CERTIFICATE COVERING THE GOODS INSPECTED. CERTIFICATE OF INSPECTION (COI) : A CERTIFICATE ISSUED BY THE INSPECTOR CERTIFYING THAT THE GOODS ARE IN CONFORMITY WITH A RELEVANT INTERNATIONAL PRODUCT STANDARD BASED ON SAMPLING OF THE GOODS AND TESTING THEM AT AN ACCREDITED LABORATORY IT SHOULD BE NOTED THAT ISSUING VOC/COI CERTIFICATE IS WORTHLESS WITHOUT THE ACCOMPANYING TEST REPORT. COMMERCIAL INVOICE : A FINAL INVOICE ISSUED BY THE EXPORTER TO THE IMPORTER, LISTING THE GOODS WHICH HAVE BEEN SOLD TOGETHER WITH THEIR PRICES . THIS IS THE DOCUMENT WHICH IS THE BASIS FOR PAYMENT BY THE IMPORTER COORDINATING OFFICE : THE OFFICE RESPONSIBLE TO COORDINATE INSPECTION : OPERTAION WITH INSPECTING OFFICE EXECUTING OFFICE : THE OFFICE LOCATED IN THE COUNTRY OF THE SUPPLIER THIS IS THE ONLY OFFICE HAVING CONTACTS WITH THE SUPPLIER THIS OFFICE PERFORMS THE PHYSICAL INSPECTION AND ISSUES THE FINAL DOCUMENTS MOST OF THE TIME IS THE SAME AS THE ISSUING OFFICE. EXCEPTIONS WILL BE ADVISED BY COORDINGATING OFFICE. EXPIRY DATE : THE LATEST DATE FOR THE EXPORTER TO SUBMIT THE DOCUMENTS AS REQUIRED IN THE LETTER OF CREDIT TO THE NEGOTIATING BANK FOR PAYMENT. EXPORTER : THE COMPANY SELLING GOODS TO THE IRANIAN IMPORTER FLIGHT ENDORCED : AN AIRWAY BILL HAVING ACTUAL FLIGHT DATE FBL : NEGOTIABLE FIATA MULTIMODAL TRANSPORT BILL OF LADING FIATA : INTERNATIONAL FEDERATION OF FREIGHT FORWARDERS ASSOCIATION FIATA MULTIMODAL : A RECEIPT LISTING GOODS WHICH HAVE BEEN DISPATCHED, TAKEN IN TRANSPORT BILL OF LADING CHARGE OR LOADED ON BOARD, ISSUED BY A CARRIER OR NAMED AGENT, MULTIMODAL TRANSPORT OPERATOR OR NAMED AGENT, OR MASTER OR NAMED AGENT. FIATA HAS DESIGNED THIS DOCUMENT FOR FORWARDERS’ USE BILL OF LADING : AN OLD VERSION OF FIATA MULTIMODAL TRANSPORT BILL OF LADING WHICH IS STILL USED IN SOME CASES ICC UCP : INTERNATIONAL CHAMBER OF COMMERCE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTERY CREDITS. IMPORTER : THE IRANIAN COMPANY, BUYING THE GOODS FROM THE EXPORTER, AND MENTIONED IN THE LETTER OF CREDIT OR REGISTRATION LETTER AS BUYER/IMPORTER. ISIRI : INSTITUTE OF STANDARDS AND INDUSTRIAL RESEARCH OF IRAN THE LEGAL AUTHORITY FOR ISSUING OPERATING PERMISSION IN IRAN TO INSPECTION COMPANIES , THE FINAL AUTHORITY IN DECIDING THE VALIDITY OF CLAIMS AGAINST INSPECTION COMPANIES AND THE PARTY IN CHARGE OF MAKING THE REGULATIONS AND PROCEDURES TO BE FOLLOWED BY INSPECTION COMPANIES FOR IMPORT OF GOODS TO IRAN ISSUING OFFICE : THE OFICE THAT ISSUES THE FINAL CERTIFICATES AND MOST OF THE TIME IS THE SAME AS EXECUTING OFFICE. LETTER OF CREDIT : THE LETTER, ISSUED BY A BANK APPOINTED BY A BUYER (I.E. ISSUING BANK OR OPENING BANK), TO ANOTHER BANK, OR BRANCH OF SAME BANK, ( I.E. ADVISING OR NEGOTIATING BANK) AUTHORISING THE NEGOTIATING BANK TO PAY A CERTAIN AMOUNT TO A SELLER AGAINST PRESENTATION OF THE FULLY CONFORMED DOCUMENTS AS INDICATED IN THE LETTER OF CREDIT M/D : MANUFACTURER'S DECLARATION NEGOTIATING BANK : THE BANK WHICH IS AUTHORIZED TO NEGOTIATE AND EFFECTS PAYMENT BASED ON L/C TERMS AND CONDITIONS NOTICE OF DISCREPANCY : THE DOCUMENT ISSUED BY THE INSPECTOR UPON COMPLETION OF AN INSPECTION WHERE DISCREPANCY (IES) BETWEEN ACTUAL GOODS AND REQUIRED SPECIFICATIONS ARE FOUND opening bank : The bank which issues the letter of credit PROFORMA INVOICE : A PROVISIONAL INVOICE ISSUED BY THE EXPORTER TO THE IMPORTER, LISTING THE GOODS WHICH ARE INTENDED TO BE TRADED, THE OFFERED PRICE AND ANY OTHER CONDITIONS. RELEASE NOTE : THE DOCUMENT WHICH IS ISSUED BY THE INSPECTOR UPON SATISFACTORY COMPLETION OF THE PRE-SHIPMENT INSPECTION. SUPPLIER : THE COMPANY SELLING THE GOODS TO THE EXPORTER OR TO ANOTHER SUPPLIER. SWIFT : SOCIETY FOR W ORLDWIDE INTER-BANK FINANCIAL TELECOMMUNICATION, AN ORGANISATION BASED IN BRUSSELS WHICH PROVIDE A SECURED AND FAST COMMUNICATION SYSTEM TO THE MEMBER BANKS WORLDWIDE S/D : SUPPLIER'S DECLARATION TEST REPORT : A DOCUMENT PROVING THAT A COMMODITY HAS BEEN TESTED. THE TEST DESCRIPTION, TEST METHODS, ACCEPTABLE LIMITS AND TEST RESULTS SHOULD BE STATED IN THE REPORT. TT/R : TYPICAL TEST REPORT TYPICAL TEST REPORT : AN EMPTY SAMPLE OF THE TEST REPORT, SHOWING THE RELATED STANDARD AND THE REQUIRED TESTS AND THE FORMAT OF THE TEST REPORT. THROUGH BILL OF LADING : A RECEIPT LISTING GOODS WHICH HAVE BEEN DISPATCHED, TAKEN IN CHARGE OR LOADED ON BOARD, ISSUED BY A CARRIER OR NAMED AGENT, MASTER OR NAMED AGENT. IT IS NOT UNDER FIATA’S REGULATIONS.
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