For international trade, several commercial documents are used during exchanges between operators.
The sales contract is the initial document that specifies the seller's obligation to deliver the agreed-upon goods and the buyer's obligation to pay for them. The sales contract defines the goods sold as well as the conditions of the sale and delivery, in principle specifying the Incoterm® chosen by the parties. The form of the sales contract is generally open: it may be supplemented by general conditions of sale or even replaced by a purchase order.
Pro forma invoice
The pro forma invoice is a provisional invoice without accounting value that serves as a proposal for a commercial offering. A buyer may use a pro forma invoice to obtain an import authorization. It also contains the conditions of sale of the goods. If the offering and conditions are confirmed by the buyer, this buyer will send a purchase order to the seller.
The commercial invoice is the reference document for any logistics transaction. It is used to establish the export and import declaration, the transport title, the documents of origin and any payment by documentary credit. It is therefore required for any international consignment and is always required for customs clearance. It contains the basic information on the transaction, in particular:
- contact information of shipper and recipient (name and address)
- date of issuance
- invoice number
- designation of goods (name, type, etc.)
- units of measurement
- quantity of goods
- unit value
- total value of items
- total value of invoice and payment currency
- conditions of payment (method and date of payment, discount, etc.)
- conditions of delivery in accordance with chosen Incoterm®
- method(s) of transport
It should be noted that Luxembourg VAT law imposes mandatory wording on sales invoices.
The packing list is a document that lists all the packages in a shipment. It is attached to the commercial invoice and the transport documents and is used to verify the compliance of the shipment with the order. This is an item required by customs that shows the identification of each package (brands, gross and net weight, sizes, volume, contents etc.).
Letter of credit
The letter of credit, also called documentary credit, is a bank's commitment to pay a determined amount to a shipper of goods, against the remittance, within a set time, of compliance documents proving that the goods have indeed been shipped. Documentary credit is subject to strict rules issued by the International Chamber of Commerce.
Certificate of insurance
The insurance covering the transported goods may be obtained directly from an insurance company, or provided by the carrier. It does not cover civil liability.
The insurance certificate is established by the insurance company. It documents the policy chosen: the value of the shipment, the insured value, the insurance premium and the coverage chosen. It will be used by the beneficiary in the case of damages.