| [1] Definition |
(1) A transaction to import goods in the purpose to export to third countries without changing the goods' orignal state and the character and withdrawal the intermediary service fee(Earning as FOB-CIF) in other words, the difference amount from paid import earning amount.
(2) The intermediary trade is to import goods from third countries when there is a limitation to procure the domestic goods and to sell the goods to third countries to expand foreign market continuously.
(3) A cautious is required if a final importing country is restricting import from a intial exporting country, there could be a retaliatory act which is a restriction to import which will evidently lead to a trading policy confusion for the final importing country.
(4) For the occasion import ship diversifying goods, a certificate of the country of origin should be attached to prevent importing using intermediary trade from Southeast Asia and Hong Kong. |
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| [2] Procedure |
(1) Conclude an export contract
(2) L/C received
(3) Conclude a import contract
(4) Export/Import license |
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| - Requisites for export/import license |
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1. According to the prohibition to carry in other than bonded areas, there is an export permit(return permit) but no import permit.
2. Take over and send the transportation documents through a export/import license confirming bank.
3. Licensing is feasible for the goods restricted for export without fulfilling the restricted conditions. |
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(5) Open L/C
(6) Sell shipping and bill of change (The initial exporter).
(7) Settle import earning or receive export earning (A license foreign exchange bank). |
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| - Permission for payment method (Authorization) |
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1. If paying import earning after receiving export earning, an authorization is required from the president of the related bank.
2. In other cases, a transaction is possible without separate authorization. |
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| - Export earning collecting method |
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| - When selling bill of change to receive export earning, the intermediator replace the commercial invoice and bill of change. |
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[3] Goods delivery method |
(1) Normally, the goods are directly transport to a final importing country from a intial importing country when using a intermediary trade and in this case, third parties documents are quoted for the B/L and the transportation documents excluding the commercial invoice.
(2) Seller -- The initial exporter
(3) Notify Party -- Intermediator (Or the final importer)
(4) Consignee -- The final importer or the final importing bank
(5) Examples of clauses quoting third parties' documents |
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| - The transport documents indicating as the consignor of the goods a party other than the beneficiary of the credit acceptable. |
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(6) If transshipment from a intermediating country, it is usually a case when a intermediator is reluctant to disclose either party of an initial exporter or the final importer or to avoid trading policy of the final importing country. In this case, the intermediator re-prepares B/L and the transportation documents and present them to a final importer.
(7) Things to be cautious |
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<1> Changing the country of origin is not allowed
<2> If the goods are quota goods, process based on the exporting country's quota.
<3> The intermediary trade method is not allowed within the same country. |
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[4] Export performance acknowledging range -- Basis on each countries' law.
[5] Transferring L/C to a foreign country |
(1) Transferring L/C to a foreign country has the similar effect as intermediary trade.
(2) Condition for transferring -- When transferring, reducing unit price than the master L/C, reducing delivery date and increasing insurance coverage rate are possible .
(3) The 1st beneficiary has the right to request the difference amount due to unit price reducing by preparing separate invoice and bill of change. (The right to replace invoice)
(4) Required documents |
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<1> Master L/C
<2> L/C transferring application
<3> The other party's consent (Offer) |
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[6] The difference in Intermediary Trade and Merchandising Trade |
(1) A intermediary trader is a intermediator of the final importer and the initial exporter which is the subject of a trade contract. In another words, the intermediator withdrawals the sales difference by selling the purchased goods, and when there is a dispute with the transaction, the intermediator becomes the involved party for the dispute.
(2) Since a intermediary trader is someone who arranges a transaction between the final importer and the initial exporter to directly engage in transaction by receiving transaction fee, the trader is not an actual party involved in trade transaction. Therefore, the intermediator is not the actual involved party for the dispute when it occurs.
(3) When engage with intermediary trade, the goods and the shipping documents are normally passing through a intermediator for a delivery to the final importing country and with the transaction, the goods and the shipping documents are directly delivered to the final importer from the initial exporter. |
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Trade Helper 
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Export/Import procedure according to the Intermediary Trade method
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