Instructions ▪ fit ▪ distribute ▪ exceeded ▪ diagonally

1. … vehicle carefully. 2. Do not place items … across the wagon. 3. When loading is complete, ensure that it fully complies with the … given in our Rail Instruction Manual. 4. Examine load carefully and make … it is undamaged and suitable for loading. 5. … longer, heavier pieces on the bottom of the load. 6. Make sure that load is … . 7. Ensure vehicle is … to be loaded. 8. Strap … loads. 9. When checking the vehicle, give special … to door securing mechanisms. 10. Examine vehicle and load … after loading. 11. … load as evenly as possible and make sure wheels are evenly loaded. 12. Check whether vehicle capacity has not been … .

b) Now match the correct sentences with the Instructions below.

a before loading: 1, …..

b during loading: ….

c after loading: …

Exercise 12 Match the payment methods (1-6) with the definitions (a-f).

1 Advance payment 2 cash on delivery 3 open account

4 Documents against payment 5 documentary credit 6 bank guarantee

a Customer pays immediately on receiving the goods. This service is usually provided by the post office. b Used to cover financial risk in international transaction e.g. if a buyer does not pay. c The exporter supplies the goods and the importer/customer pays for them at an agreed date in the future. d Involves the buyer’s and the seller’s bank. It is a promise made by the opening bank* that payment will be made on receiving documents that comply with the terms agreed. e Also called cash against documents (CAD). It means that the exporter has full control over the document until payment has been made by the importer. f Customer/importer has to pay for the goods before they are shipped.

* opening bank – банк, що видає акредитив

(1-f, 2-a, 3-c, 4-e, 5-d, 6-b)

Exercise 13 a) Read the text about insurance for international rail transport.

As with any commercial transaction, there are risks associated with trading internationally. Three main risks arise in international trade. These are loss, damage and delay, including detention at customs. The contracts on transportation internationally should use Incoterms (International Commercial Terms) to specify exactly how these risks are shared between buyer and seller.

Incoterms are an internationally recognised set of trading terms that spell out exactly when responsibility for the costs and risks of a transaction shift from seller to buyer. This affects the insurance needs because the greater the costs you’re responsible for, the greater the insurance cover you’ll need to arrange.

A typical cargo insurance policy covers goods in transit via road, rail, sea or air. In its simplest form it provides cover against accidental damage and other risks. The other extreme is a comprehensive all-risk policy, covering a range of specified accidents – including damage during loading, theft and negligence.

The cost of your insurance and in which circumstances you’ll receive compensation will depend on:

• the value of the goods in transit

• the expiry date of the insurance policy

• whether the journey is domestic or international

Without insurance you have only the minimum protection for your goods because freight forwarders and carriers typically have limited liability in the event of loss, or damage or delay. This comes from internationally ratified conventions and the standard trading conditions of transport associations.

b) Answer the following questions.

1. What are main risks in international trade? 2. Why are Incoterms used? 3. How is cost of the cargo related to the insurance cover? 4. What cases does a comprehensive all-risk policy cover? 5. What factors should be taken into account while receiving compensation? 6. Is it true that without insurance there is only minimum protection for the goods? Why?

Exercise 14 a) Read the text about Incoterms.

Incoterms were created by the International Chamber of Commerce in 1936. They are used to create a bridge between different members of the industry by acting as a uniform language. According to the Incoterms 2010 taken effect on January 1^st 2011, there are 11 different terms, each of which helps users deal with different situations involving the movement of goods. These Incoterms are:

Sea and Inland Waterway Transport only

1. CFR (Cost & Freight + named destination port) – вартість та фрахт (the seller pays the costs and freight to bring the goods to the port of destination, risk is transferred to the buyer once the goods have crossed the ship’s rail, insurance for the goods is not included, it is at the cost of the buyer)

2. CIF (Cost, Insurance and Freight + named destination port) – вартість, страхування та фрахт (exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer)

3. FAS (Free Alongside Ship + named loading port) – франко вздовж борта судна (the seller must place the goods alongside the ship at the named port, clear the goods for export; it is NOT used for multimodal sea transport in containers, typically used for heavy-lift or bulk cargo)

4. FOB (Free on Board + named loading port) – франко борт судна (the seller must themselves load the goods on board the ship nominated by the buyer, cost and risk being divided at the ship’s rail, the seller must clear the goods for export, the buyer must instruct the seller the details of the vessel and port where the goods are the be loaded, not for multimodal sea transport in containers)

Any Mode of Transport

5. CIP (Carriage and Insurance Paid to + named place of destination) – перевезення та страховка сплачені до (the containerised transport/multimodal equivalent to CIF, the seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier)

6. CPT (Carriage Paid to + named place of destination) – перевезення сплачено до (the general/containerised/multimodal equivalent of CFR, the seller pays for carriage to the named point of destination, but risk passes when the goods are handed over to the first carrier)

7. DAP (Delivered at Place + named place) – поставка у місці призначення (under it, delivery is when the seller puts the goods at the disposal of the buyer at a named place, on a vehicle ready for unloading, but not unloaded)

8. DAT (Delivered at Terminal + named place) – поставка на терміналі (delivery under it takes place when the seller puts the goods at the disposal of the buyer unloaded at the named terminal)

9. DDP (Delivered, Duty Paid + named destination place) – сплачена доставка та мито (the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty)

10. EXW (ex works + named place) – франко завод (the seller makes the goods available at his premises, the buyer is responsible for all charges, it places the greatest responsibility on the buyer and minimum obligation on the seller)

11. FCA (Free Carrier + named place) – франко перевізник (the seller hands over the goods, cleared for export, into the custody of the first carrier, named by the buyer, at the name place, it is suitable for all modes of transport, including carriage by air, rail, road, and containerised/multimodal sea transport)

b) You are a British exporter. What were the Incoterms here?

1. You paid for the goods to be transported to the docks at Harwich. Afterwards they become the buyer’s responsibility. 2. You made the goods ready for collection, but the buyer had to do everything else. 3. You paid all the costs involved in getting the goods to Spain, but left the costs of unloading to the importer. 4. You paid all the costs involved in getting the goods to Mexico, but the buyer took over the risk from the time the goods were loaded onto the ship in London. 5. You paid for the goods to be transported to Dover and loaded onto the ship, but that was all.

Unit VIII CUSTOMS PROCEDURES

Pre-reading activity:

Make a list of all the different areas of customs activity you can think of by adding appropriate verbs from the box:

collect, enforce, regulate, protect, perform

1 _________ economic activity

2 _________ taxes and duties

3 _________ economic interests

4 _________ fiscal function

5 _________ legislation