Reyansh Goswami

A TEU or a Twenty-Foot Equivalent Unit is a 20-feet long shipping container that is widely used as the benchmark for calculations in shipping & logistics.TEU ratio is calculated by simply dividing the length in feet of the container by Twenty. For example, a (20ft x 8ft x 8ft) container will be 1 TEU. A (40ft x 8ft x 8ft) container will be 2 TEU (48ft x 8ft x 8ft) the container will be 2.4 TEU. TEUs are the standard unit of measuring the carrier capacity. Since it's the minimum unit, TEUs can be converted to other container dimensions.

The banks determine your business’s eligibility for an overdraft based on these factors:

• Financial Viability of the Business/Individual: Banks ask for the financial statements, tax statements, and bank statements of the business entity as well as its primary owners to check whether the business is financially viable to repay the borrowed amount. Some of the important criteria are your business’s turnover, profitability, debt-equity ratio, working capital ratio and banking turnover.
• Vintage of the business: When applying for an overdraft, the documents related to your business’ incorporation will determine the vintage. Ideally, it should be more than two years for being eligible for the facility.
• Collateral value: Most overdraft facilities require security or collateral. The bank determines the market value and verifies legal ownership of the pledged security. The Loan to value (LTV) ratio - the amount which you want to borrow divided by the value of the security -- should meet the bank’s requirements to avail the facility. Most banks require LTV to be at least 80% for lending the proposed amount.
• Credit Score: Banks determine the credit score such as CIBIL of the business entity as well as its primary owners (proprietor, partners, directors, owners of the property) to verify their creditworthiness. The ideal CIBIL score should be 750 or more.

The type of documents required for exports customs clearance usually depends on the type of goods being shipped. It may also vary depending on the country of origin and the destination of the cargo. However, as a thumb rule, there are a set of general documents that most businesses need to comply with when exporting goods:

• ProForma Invoice
• Customs Packing List
• Country of Origin or COO Certificate
• Commercial Invoice
• Shipping Bill
• Bill of Lading or Airway Bill
• Bill of Sight
• Letter of Credit
• Bill of Exchange
• Export License
• Warehouse Receipt
• Health Certificates

Created in 1950, OFAC is part of the U.S. Treasury Department of Terrorism and Financial Intelligence. The legal basis for OFAC’s jurisdiction and control can be found in the Trading with The Enemy Act (TWEA), International Emergency Economic Powers Act (IEEPA), the Foreign Asset Control Regulations 31 CFR Part 500, as well as other statutes, laws, and executive orders surrounding countries such as Iran, Cuba, Russia, Venezuela and more.

The scope of OFAC rules and regulations includes blocking assets of foreign parties, trade restrictions, and controlling financial transactions, among other things. OFAC has jurisdiction over all U.S. persons and citizens, and foreign entities, which means the scope of this agency’s reach is very far.

Recently, several extensive and public violations have caused many organizations to take a second look at their sanctions/embargo compliance and to implement programs to help adhere to OFAC regulations.

Errors often arise when trying to capture movements of goods or trade activities about which little information is available or which are inherently complex to measure, such as:

• Goods that by their nature are difficult to classify — Errors may arise in the product code allocated due to the complexity of the classification (around 9 400 subheadings in the CN), for instance for chemical or pharmaceutical products.
• Processing trade valuation — Errors arise when the processing costs are reported rather than the trade value corresponding to the total amount which would be invoiced if the goods were sold or bought.
• Product with embedded services — Errors arise when the total amount of the contract (transaction including the supply of goods and services) is reported rather than the value of the goods alone.
• Repairs versus processing — Repairs should be excluded from trade in goods statistics but processing should be included. Errors may arise when the distinction between repairs and processing is difficult to make.
• Quasi transit — Intrastat declarations may be missing for goods imported from a non-EU country for immediate dispatch to another Member State or goods imported from another Member State for immediate dispatch to a non-EU country.
• Triangular trade — trade involving three Member States through sales/purchase contracts but with physical movement of goods between only two of them. A problem arises when the trade is reported according to the sales/purchase contract rather than the physical movement.