Complete Guide to Export-Import Process: Step-by-Step

Introduction

International trade may seem complicated at first, but with a systematic approach, each stage becomes clear and manageable. This comprehensive guide walks you through the entire export-import process step-by-step, from pre-planning to post-shipment management. Whether you’re a small business owner or working for a large corporation, this guide provides practical information applicable to all trade participants.

Step 1: Pre-Planning and Preparation

1.1 Business Registration and Import-Export Declaration

Before starting import-export activities:

Business Registration: Register as a sole proprietor or corporation with the tax authority
Import-Export Declaration: Register as an import-export business with the customs authority (varies by country)
Required Documents: Business registration certificate, company seal, bank account information, etc.

Country-Specific Requirements: Each country has different registration requirements for import-export businesses. It’s essential to check with the target country’s government agencies or trade associations beforehand.

1.2 Product Classification and HS Code Identification

Accurately identifying the HS Code of your product is crucial before proceeding.

For Korea: Use the Korea Customs Service (KCS) HS Code search system
International Standard: Harmonized Commodity Description and Coding System (HS Code)
Importance: Incorrect HS Code declaration can result in customs delays, fines, and penalties

Examples:

Cotton T-shirt: HS Code 6204.62 (Apparel)
Smartphone: HS Code 8517.62 (Electronic products)
Organic rice: HS Code 1006.10 (Cereals)

1.3 Research Tariff Rates and Customs Requirements

Key factors to verify:

Basic tariff rate (Most Favored Nation – MFN rate)
Preferential tariff rates if Free Trade Agreements (FTAs) apply
Whether the product is prohibited or restricted
Special certification requirements (CE mark, FDA approval, etc.)

Information Sources:

Korea: Korea Customs Service, World Customs Organization (WCO) Tariff Database
USA: USA Trade Online, Tariff Search Tool
EU: TARIC (Integrated Tariff of the European Communities)

Step 2: Supplier/Buyer Selection and Contracting

2.1 Finding Trading Partners and Due Diligence

For Exporters:

Identify reliable buyers
Conduct credit checks and financial status verification
Verify references and payment history
Check business background and experience

For Importers:

Evaluate supplier reliability and product quality
Order samples to verify quality standards
Assess production capacity and on-time delivery capability
Review certifications and compliance records

Online Platforms:

Alibaba, Global Sources, TradeKey for verified suppliers
Review ratings and buyer/supplier feedback
Cross-reference multiple sources

2.2 Negotiating Trade Terms

Key negotiation points:

Quantity and Price: Negotiate volume discounts for bulk orders
Incoterms (Shipping Terms): FOB, CIF, DDP, etc.
- FOB (Free on Board): Seller responsible until goods are loaded on ship
- CIF (Cost, Insurance and Freight): Seller covers freight and insurance to destination port
- DDP (Delivered Duty Paid): Seller responsible for all costs including tariffs
Payment Terms: Advance payment, Letter of Credit (L/C), open account, etc.
Delivery Schedule: Confirm specific shipping dates and lead times
Quality Standards: Product specifications, inspection methods, defect rates
Dispute Resolution: Include arbitration clauses for conflict resolution

2.3 Contract Execution

Essential contract components:

Trading party information and details
Product description (name, quantity, unit price, total value)
Incoterms and shipping terms
Payment method and conditions
Delivery date and shipping method
Quality standards and inspection procedures
Liability clauses and dispute resolution mechanism
Force majeure provisions

Legal Review: Having an attorney review the contract can prevent disputes and legal issues later.

Step 3: Preparing Export-Import Documentation

3.1 Essential Documents Checklist

Required for Export:

Commercial Invoice: Trading price and product description
Packing List: Packaging information, weight, dimensions
Certificate of Origin: Proof of product manufacturing country
Bill of Lading (B/L): Document issued by shipping company
Insurance Certificate: Proof of cargo insurance (required for CIF terms)
Inspection Certificate: Quality/health certification (if required)
Export Declaration Form: Official customs submission document
Customs Declaration: Detailed product and value information

Required for Import:

Commercial Invoice
Packing List
Bill of Lading or Air Waybill (AWB)
Insurance Certificate
Certificate of Origin
Additional certifications (as applicable)
Import Declaration Form
Customs Entry Document

3.2 Document Preparation Best Practices

Accuracy: All entries must be precise and complete
Consistency: Quantities, prices, and descriptions must match across all documents
Language: Prepare in English or the destination country’s official language
Required Copies: Determine the exact number of originals and copies needed
Signatures and Seals: Authorized personnel signatures and company seals are mandatory
Dating: Ensure all documents are properly dated

Step 4: Shipping and Logistics Preparation

4.1 Selecting Shipping Method

Ocean (Sea) Freight:

Advantages: Economical for large volumes; can transport most goods
Disadvantages: Longer transit time (2-4 weeks)
Best for: Large shipments, heavy items, non-urgent deliveries

Air Freight:

Advantages: Fast delivery (3-7 days); reliable timing
Disadvantages: Expensive; weight restrictions apply
Best for: Urgent shipments, high-value products, lightweight items

Land/Multi-modal Transportation:

Advantages: Economical for certain routes; flexible options
Disadvantages: Complex procedures; potential delays at borders
Best for: Cross-border shipping within regions

4.2 Selecting Freight Forwarder and Obtaining Quotes

Considerations:

Reputation and reliability
Transit time and shipping costs
Insurance options available
Tracking system capabilities
Customer service quality

Major Shipping Companies:

Ocean Carriers: Maersk, MSC, COSCO, Hapag-Lloyd
Air Carriers: DHL, FedEx, UPS, Lufthansa Cargo
Freight Forwarders: Kuehne+Nagel, DB Schenker, C.H. Robinson

4.3 Packaging and Labeling

Packaging Standards:

Meet international shipping standards
Ensure product protection: shock absorption, moisture prevention, preservation
Clear, legible labeling on all packages

Required Labels and Markings:

Shipper and consignee information
Destination address and contact details
Handling instructions (Fragile, Keep Dry, This Side Up, etc.)
HS Code (if required by exporting country)
Product description and contents

Step 5: Customs Declaration and Clearance

5.1 Export Declaration Process

Standard Procedure (Korea example):

Submit export declaration form through customs broker or directly to customs
Provide required documents: B/L, commercial invoice, packing list, certificate of origin
Customs inspection (document review or physical inspection)
Approval of export declaration
Bill of Lading issuance
Shipment loading and dispatch

Processing Time: Typically 1-3 days (same-day possible if urgent)

Export Declaration Checklist:

HS Code classification
Quantity and weight
Declared value
Destination country
Shipper and consignee details
Shipping method and carrier information

5.2 Import Declaration Process

Standard Procedure (Korea example):

Receive Bill of Lading (B/L) or Air Waybill (AWB) from shipping company
Submit import declaration through customs broker or directly to customs
Provide required documents: invoice, packing list, certificate of origin, B/L/AWB
Customs calculates tariffs and taxes
Customs inspection (if deemed necessary)
Pay customs duties and applicable taxes
Obtain clearance authorization and receive goods

Processing Time: Typically 3-7 days (longer if inspection required)

Import Declaration Checklist:

HS Code classification
CIF value (Cost + Insurance + Freight)
Tariff rate application
Origin country verification
Quantity and weight confirmation
Special requirements or certifications

5.3 Inspection and Quarantine Procedures

Items Subject to Mandatory Inspection:

Food and beverages: Health and safety compliance
Pharmaceuticals and cosmetics: Safety standards and registration
Electronics: Safety certification and compatibility standards
Textiles: Dye toxicity and chemical testing
Animal/plant products: Phytosanitary or zoosanitary certification

Government Inspection Agencies:

Korea: MFDS (Ministry of Food and Drug Safety), MEP (Ministry of Environment), AGIA (Animal and Plant Quarantine Agency)
USA: FDA (Food and Drug Administration), USDA (Department of Agriculture), EPA (Environmental Protection Agency)
EU: Member state national competent authorities

Step 6: Tariff and Tax Calculation

6.1 Customs Duty Calculation

Basic Formula:

Customs Duty = Taxable Value × Tariff Rate

Determining Taxable Value:

Usually CIF value (Cost + Insurance + Freight)
For related-party transactions: Arm’s length price
Exchange rate: Rate on customs declaration date

Tariff Rate Application:

Different rates apply based on HS Code
FTA preferential rates if applicable
Anti-dumping or countervailing duties if imposed

Calculation Example:

			
CIF Value: $10,000
Basic Tariff Rate: 10%
Customs Duty: $1,000
(With FTA preferential rate 8%: $800)

6.2 Value-Added Tax (VAT) and Consumption Tax

Korea:

VAT: 10% (applies to taxable value + customs duty + special excise tax)
Special Excise Tax: Applied to specific goods (alcohol, tobacco, etc.)

United States:

Sales Tax: Varies by state (5-10%)
No federal VAT system

European Union:

VAT: Varies by member state (15-27%)
Standard rate in most countries: 19-21%

Japan:

Consumption Tax: 10% (as of 2019)

Step 7: Payment and Fund Transfer

7.1 International Payment Methods

Bank Transfer (International Wire Transfer/SWIFT)

Safety: Most secure method, bank-guaranteed
Cost: $15-50 per transfer
Time: 2-5 business days
Best for: Large transactions, established business relationships

Letter of Credit (L/C)

Safety: Bank guarantees payment to exporter
Cost: 0.5-2% of transaction value
Time: 7-14 days (document processing)
Best for: Large orders, first-time trading with unknown parties

Online Payment Services (PayPal, Wise, Alipay)

Speed: Same-day or next-day
Cost: 1-3% fees
Limitations: Lower transaction limits
Best for: Small-to-medium transactions

Cash in Advance (CIA)

Safety: 100% secure for exporter
Disadvantage: Risky for importer
Use: Only for trusted relationships

7.2 Exchange Rate Management

Monitor exchange rates regularly
Consider forward contracts to minimize currency risk
Keep records for tax reporting (foreign exchange gains/losses)
Consult with accountant on currency exposure management

Step 8: Shipment Tracking and Goods Receipt

8.1 Tracking Shipment Status

How to Track:

Shipping company website: Enter B/L number or tracking code
Email notifications: Automatic status updates
Customer service contact: Call for real-time updates
Mobile apps: Many carriers offer tracking apps

Key Information to Monitor:

Loading and departure status
Current location and transit route
Estimated arrival date
Port operations delays or updates
Insurance requirements if cargo delayed

8.2 Customs Clearance and Goods Release

For Importers – Post-Clearance:

Confirm customs clearance completion
Arrange payment of duties and taxes
Contact shipping company for delivery
Inspect goods: verify quantity, quality, condition
Check for damage or discrepancies
Obtain final release documents
Arrange inland transportation

Damage or Loss Claims:

Report immediately to shipping company (within 24 hours)
Document with photos/videos before moving goods
Initiate insurance claim within specified period (typically 10-30 days)
Gather all supporting evidence: invoices, B/L, inspection reports
Preserve damaged items for inspection

Step 9: Post-Import/Export Management and Record Keeping

9.1 Document Retention and Archiving

Retention Periods:

Korea: 5 years (customs law requirement)
USA: 7 years (federal requirement)
EU: 4-10 years (varies by member state)
Japan: 5 years

Critical Documents to Keep:

Original contracts and amendments
Export/import declarations
Commercial invoices and pro forma invoices
Packing lists and shipping documents
Bills of Lading or Air Waybills
Insurance certificates
Customs clearance documents
Inspection and certification reports
Payment records and bank statements
Correspondence with trading partners

Storage Method:

Digital copies with secure backup
Original physical documents in secure location
Accessible for audit purposes

9.2 Accounting and Tax Compliance

Recording International Transactions:

Transaction date: Booking date or shipping date
Trading party: Exporter/importer details
Amount: Foreign currency transactions with applicable exchange rate
Description: Product details and transaction nature

Tax Reporting:

VAT/GST: Monthly, quarterly, or annual reporting (jurisdiction-dependent)
Income Tax: Annual reporting of international sales/purchases
Withholding Tax: May apply to certain transactions
Foreign Exchange Gains/Losses: Report separately

Professional Assistance: Consider working with a tax accountant familiar with international trade regulations.

Step 10: Problem-Solving and Dispute Resolution

10.1 Common Issues and Solutions

Shipping Delays

Cause: Weather, port congestion, mechanical issues
Action: Contact shipping company immediately for updates
Resolution: Request compensation or insurance claim if applicable
Prevention: Build buffer time into delivery schedules

Customs Clearance Delays

Cause: Incomplete documentation, inspection hold, regulatory checks
Action: Contact customs broker or local customs office
Resolution: Provide missing documents promptly
Prevention: Ensure all documents are accurate and complete

Goods Damage or Loss

During Transport: Insurance claim against carrier
At Port: Carrier or stevedore liability claim
At Destination: Recipient’s claim under insurance policy
Documentation Needed: Photos, video, invoices, B/L, inspection reports

Product Quality Issues

Response: Notify supplier immediately with detailed documentation
Options: Request replacement, partial refund, or full refund
Timeline: Follow contract terms for claims (typically 5-10 days)
Escalation: Leverage payment hold if using L/C or open account

Excessive Tariff Assessment

Action: File customs appeal or protest
Evidence: Provide origin documentation, comparable pricing, HS Code justification
Timeline: Must file within specified period (varies by country)
Professional Help: Engage customs broker or trade attorney

10.2 Dispute Resolution Methods

Negotiation (Direct Communication)

Process: Both parties discuss issues and seek mutual agreement
Timeline: Days to weeks
Cost: Minimal
Outcome: Flexible, business-relationship friendly

Mediation

Process: Neutral third party facilitates discussion
Timeline: Weeks to months
Cost: Moderate
Outcome: Non-binding but often leads to agreement

Arbitration

Process: Neutral arbitrator(s) hear both sides and issue binding decision
Timeline: 3-12 months
Cost: Higher ($5,000-$100,000+)
Organizations: ICC (International Chamber of Commerce), LCIA (London Court of International Arbitration)
Advantage: Confidential, final decision, internationally enforceable

Litigation (Court Process)

Process: Dispute taken to court under specified jurisdiction
Timeline: 1-3+ years
Cost: Very high ($10,000-$100,000+)
Outcome: Legally binding but potentially damage business relationship

Recommendation: Specify arbitration clause in contracts to avoid costly litigation.

Best Practices for Successful Trade

Documentation Standards

Use templates from reputable sources (ICC, customs authorities)
Ensure consistency across all documents
Keep copies of all correspondence
Maintain audit trail of document changes

Communication

Establish clear communication channels with trading partners
Use written communication for important agreements
Document all verbal discussions in follow-up emails
Regular status updates with all stakeholders

Risk Management

Diversify suppliers to reduce dependency
Start with small orders before scaling up
Obtain appropriate insurance coverage
Maintain adequate working capital for operations

Compliance

Stay updated on trade regulations and tariff changes
Maintain accurate product classification
Follow all labeling and packaging requirements
Comply with country-specific regulations

Conclusion

The export-import process involves multiple interconnected steps, but following this systematic approach makes it manageable and controllable. Success depends on accurate information gathering, reliable partner selection, thorough documentation, and strict regulatory compliance.

Tips for Beginners:

Start with smaller shipments to gain experience
Work with experienced customs brokers and trade consultants
Utilize official resources from customs authorities and trade associations
Keep detailed records of every transaction
Build relationships with reliable logistics partners
Invest in proper insurance coverage
Consider joining industry associations for support and networking

The path to successful international trade requires patience, attention to detail, and continuous learning. Use this guide as a reference, but also seek professional advice specific to your situation and destination markets.

Additional Resources

Government and Official Organizations:

Korea Customs Service: www.customs.go.kr
Korea International Trade Association (KITA): www.kita.net
International Chamber of Commerce (ICC): www.iccwbo.org
World Customs Organization (WCO): www.wcoomd.org
USA International Trade Commission: www.usitc.gov
EU TARIC Database: ec.europa.eu/taxation_customs/

Related Blog Articles:

Understanding HS Code Classification
Incoterms Explained: Complete Guide
Certificate of Origin: How to Obtain
Cargo Insurance Essentials
Bill of Lading Explained
Customs Tariffs and Duty Calculations

please consult official customs authority websites and relevant trade organizations in your country.