This step-by-step guide is tailored for exporters and importers in the MENA region, including those facing international sanctions. It provides essential knowledge for beginners in international trade.

Step 1: Drafting an Import/Export Contract

Include the following elements in your contract:

  • Parties Involved: Specify the importer, exporter, and any intermediaries.
  • Scope of Goods: Clearly describe the goods, quantity, and quality standards.
  • Payment Terms: Define the payment method (e.g., Letter of Credit, Bank Transfer).
  • Delivery Terms: Refer to the applicable Incoterms (e.g., FOB, CIF, DDP).
  • Force Majeure Clause: Include provisions for unforeseen events.

Step 2: Verifying Contractual Parties

Follow international best practices to ensure credibility:

  • Request a Chamber of Commerce Certificate from the counterpart.
  • Check their Trade License and company registration details.
  • Use global databases like Dun & Bradstreet or Exporters.sg to verify legitimacy.
  • Engage a third-party inspection agency for due diligence.

Step 3: Guaranteeing and Securing the Contract

Ensure security through the following mechanisms:

  • Obtain a Performance Bond from the supplier.
  • Use Escrow Accounts for financial transactions.
  • Consider Bank Guarantees for additional assurance.
  • Include a clause for international arbitration in case of disputes.

Step 4: Transportation Methods in Contracts

Specify transportation details in the contract:

  • Land: Trucking or rail for cross-border deliveries.
  • Sea: Bulk or container shipping via major ports.
  • Air: Fast but costly option for high-value goods.

Step 5: Insurance in Contracts

Include insurance requirements to cover potential risks:

  • Cargo Insurance: Covers loss or damage during transit.
  • Liability Insurance: Protects against third-party claims.
  • Ensure compliance with Incoterms for specifying responsibility.

Step 6: Customs, Taxes, and Charges

Define the responsibility for additional costs:

  • Customs Duties: Clarify which party pays the import/export duties.
  • VAT and Taxes: Mention any applicable taxes and their responsibility.
  • Freight Charges: Specify whether they are prepaid or collect.

Additional Tips for Beginners

Important advice for new exporters and importers:

  • Start with small, low-risk transactions to build confidence.
  • Learn the basics of Incoterms and how they affect your contract.
  • Maintain clear and consistent communication with all parties.
  • Consult with legal and trade experts when drafting contracts.