| [1] Export/Import procedure using consignment processing method |
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1. A transaction type when a trader in a foreign country wish to utilize the skilled labor power or high technology of own's own country which an export and import are connected together according to a contract.
2. According to the transaction party's entrust, the whole or some part of raw materials are imported from a foreign country as a part of the processing fee. And after processing them, an export transaction is made by exporting the processed goods to the authorized person of a consignor.
3. Depends on the free of cost or remunerative there are processing trade on consignee with foreign exchange and processing trade on consignee without foreign exchange when procuring the raw materials,
4. Trade on consignee without foreign exchange is the general method to be used and the trade on consignee with foreign exchange method is similar to the process export method which imports raw materials first for exporting.
5. Processing trade on consign is usually used by the industries that requires relatively high level technologies such as refined oils and equipment industries. |
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<1> Conclude consignment processing trade contract
<2> Request export/Import license
<3> Customs clearance on raw materials
<4> Manufacturing, processing
<5> Export clearance on finished goods
<6> Reimbursing processing fee |
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| - Processing fee receiving method |
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1. Processing fess are usually received by remittance method in advance or by L/C method.
2. For the payments received in advance with remittance method, the export license is required before changing deposited foreign currency to the home money. |
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| <7> Declaring re-exporting |
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| (3) Processing trading contract |
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<1> Contracting process trading is expressed using CMT(Cutting, Making, Trimming) or as Consignment Processing Contract.
<2> Import items for contract |
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| - Payment method for raw materials (Quantity and whether the method is an remunerative or free of cost) - Raw materials maintenance method - Manufacturing process maintenance method - Settling the process fee and the payment method - Method to deal dispute |
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[2] Export/import using trading method consignment processing |
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<1> A transaction to use a low cost men power of the foreign countries and to use high technologies of the foreign countries.
<2> A trading transaction to export the whole or some part of the raw materials to be processed to the transaction party under the condition to pay the processing fee (Usually provided on free of cost) then process these and re-import the same finished goods to local market or sell to third countries or to local market.
<3> In step-by-step perception, the initial stage of a consignment processing trading export/import method which consigns only the processing using foreign manufacturing facilities, the method will proceed to a stage where the interested party would directly invest into a foreign market gradually to equipped with a local manufacturing facilities to be able to manufacture in local. In this case, OEM (Original Equipment Manufacturing) method is usually adopted in the initial stage then to SKD(Semi Knock-Down) method that requires some technology to assembly in the local area by exporting the middle processed raw materials and finally to CKD(Complete Knock-Down) system which would required high technology by exporting the basic raw materials to the local manufacturing facility. |
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| <1> Concluding consignment processing contract |
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| - Standard contract and offer |
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1. On the standard contract, it clearly states about raw materials, quantities of the processed goods, delivery method, processing fee, payment method, contract period and the dispute solving method.
2. Consignment Processing Contract or CMT (Cutting, Making, Trimming) Contract and usually CMT charge for the processing fee.
3. On the offer sheet, it clearly states about per transaction goods quantities, standards, unit prices and the delivery period etc. |
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<2> Export/import recommendation
<3> Request export/import license |
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1. If HS numbers (HS 10 unit), Raw materials and Processed goods are the same things like import and export public notice and such are waived from application.
2. Re-import the processed goods within the import validity period.
3. Declare re-import within certain period from the customs clearance date. (Attach duplicate import permit)
4. Re-import terms are waived if selling to third country after processing. |
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| <4> Exporting raw materials or foreign arrival import of raw materials |
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| - Local procuring raw materials and export |
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1. In case if procuring the raw materials from local market or if process some part or procure the goods in finished condition, purchasing on local L/C is
allowed.
2. Required documents to process raw materials export clearance |
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1. Export declaration form
2. Export license
3. Commercial invoice, Packing list
4. Other required documents |
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| - Procure raw materials from local market or from other third countries. |
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1. For a person who obtained export/import license for the consignment processing trading, he/she may import whole or part of the raw materials to be processed from the local market or from other third countries to process the export goods. (Allow foreign arriving import).
2. Approval condition |
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1. Prohibit carrying import goods into the country
2. The shipping documents for export goods are to be received/send by the commissioner of the import license foreign exchange bank.
3. Report to a foreign exchange bank of the import goods receipt from the country processed the goods within fixed period from the date received the goods.
4. Import license is also allowable for the import restrict goods in accordance with the laws of regulations. |
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<5> Foreign manufacturing, processing
<6> Shipping the processed goods
<7> Paying the processing fee and receiving shipping documents.
<8> Re-importing the processed goods |
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| - Standard duty on re-importing the processed goods |
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1. Tax is levy on the whole importing goods's payment amount in principle, (Raw materials amount + Processing fee).
2. But as long as the raw materials, and the HS 10 unit is same as the processed goods, the re-importing taxation is waived in accordance with the laws of regulations (Levy tax only on the processing fee)
3. Required documents when declaring re-import of the processed goods - import declaration form |
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- Export/Import license
- Price declaration form (Including the commercial invoice)
- Duplicate B/L etc. |
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| <9> Local sales or export to third countries of the processed goods. |
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| - Re-import term wavier if for local sales or sales to third countries. |
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1. The processed goods must be export allowable goods in accordance with the laws of regulations and the export earning should be collected by the foreign exchange bank that initially approved the export.
2. Based on the permitted export L/C or export contract, re-import terms are waived.
3. If selling the processed goods in local or to third countries, the separate export license can not be received on the export L/C or on the sales contract for the processed goods. |
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| <10> Reporting re-import or collecting the export earning |
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| - Follow the laws of regulations of the one's country. |
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| (3) Trading related duties refundment for consignment processing |
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<1> Duties refundment on the export goods (Raw materials) of consignment processing
--Follow the laws of regulations of each countries.
<2> Refundment when exporting the re-imported goods
--Follow the laws of regulations of each countries. |
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Trade Helper 
Ex-Import Procedure(to Way of Payment)
Export/Import procedure according to the special transaction method
Export/Import procedure according to the consignment processing(CMT ; Cutting, Making, Trimming) method 
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