International Trade: Central Bank, Regulations, and Customs Procedures
Central Bank and Fiscal Role
Issuance of Currency
The Central Bank holds the exclusive authority to issue banknotes and mint coins. These constitute the sole legal tender accepted nationwide.
Fiscal Agent Functions
Upon request from the Minister of Finance, the Central Bank can serve as a fiscal agent for securing domestic and international loans, provided these align with the institution’s objectives.
International Responsibilities
The Central Bank’s powers extend to collaborating with international financial entities, managing international reserves, and engaging in foreign exchange operations to support its objectives.
Foreign Exchange and Trade
Exchange Rate Management
The Central Bank formulates and oversees exchange rate policies. While the President of the Republic determines foreign trade policies, implemented by various ministries and the National Customs Service, the Central Bank maintains information systems tracking foreign trade operations and their exchange implications.
Economic Data and Statistics
Publication of Macroeconomic Statistics
The Central Bank is responsible for promptly disseminating key national macroeconomic data, encompassing monetary and foreign exchange figures, balance of payments, and national accounts.
Exports and International Trade Barriers
Export Definition and Benefits
Export refers to the legal transfer of domestically produced goods or services for consumption abroad. It offers advantages such as expanding market reach, optimizing capacity utilization, achieving economies of scale, extending product lifecycles, and reducing reliance on the local market.
Trade Barriers
Governments may implement measures to influence trade balances, sometimes resorting to practices detrimental to other nations. Common barriers include:
- Quotas: Quantitative restrictions limiting the volume of imported goods.
- Tariffs: Taxes levied on imported products, increasing their domestic price and reducing demand.
- Administrative Barriers: These can range from complex customs procedures and costly delays to stringent sanitary and quality standards that differ from international norms.
Effective international agreements to dismantle these barriers necessitate a strong commitment to liberalization.
Export Promotion Instruments
Governments employ various tools to promote exports:
- Commercial: Providing administrative support, information services, and direct product promotion through advertising and international fairs.
- Financial: Offering loans, export credits with favorable interest rates, and government-backed insurance against business risks.
- Fiscal: Granting tax breaks, rebates, and direct subsidies, although these can potentially lead to dumping scenarios.
Dumping Concerns
Concerns exist regarding ecological and social dumping, where artificially low export prices are achieved through environmentally damaging production methods or exploitative labor practices.
Sustainable Trade Practices
In the absence of artificial barriers or incentives, international trade should ideally be driven by price and quality considerations. Sustainable improvements in a country’s trade position stem from enhanced production efficiency, quality, and cost reduction through improved organization, training, and technology.
Incoterms and Contractual Framework
Purpose of Incoterms
is to provide a set of international rules for the interpretation of trade terms commonly used in international trade. >
The Convention aims among other things, the preparation of the contract, the obligations of the seller, the buyer, the transfer of risks, etc..
Instructions
The instructive type of the United Nations, proposing both seller and buyer, 24 paragraphs to be taken into account in drawing up the contract as follows:
PREAMBLE
Persons contracting authority, definitions, etc..
CONDITIONS OF CONTRACT: 1 .- Purpose of the contract: its nature, qualitative and quantitative description. 2 .- Term.
OBLIGATIONS OF THE SELLER: 3 .- Delivery of goods: date, transport, packaging, certificates, additional terms, date of commencement of the term.
4 .- Retention of title. 5 .- Control under: samples, methods. 6 .- (clauses, damages, the collateral), claims, repairs.
7 .- Instructions utilización.-plans, manuals.
OBLIGATIONS OF BUYER: 8 .- Method of payment: terms of payment, place of payment. 9 .- credit. 10. Various guarantees.
TRANSFER OF RISK AND PROPERTY: 11 .- Transfer of Risk: mode of delivery, force majeure INCOTERMS 2000.
12 .- Transfer of ownership.
AFTER SALES SERVICE: 13 .- Warranty: repair and maintenance.
PRICE AND PAYMENTS: 14 .- Price: details of the services covered. 15 .- Convertible: currencies of payment.
16 .- Price Review. 17 .- Payment Guarantee.
ARBITRATION: 18 .- Arbitration Tribunal competent organs, decisions.
Other clauses: 19 .- Professional secrecy. 20 .- Industrial property. 21 .- Language of the contract. 22 .- Law of the contract. 23 .- Election of domicile. 24 .- Date and authenticated signatures.
Customs: · · monitor and control the passage of goods across borders, · intervene in international cargo traffic for the determination of taxes, · Generate trade statistics, · Perform other functions entrusted to the laws
Destination customs: · • The expression of will of the owner, consignor or consignee that indicate the customs procedure to be given to goods entering or leaving the national territory
formalizes · · By document called a declaration, which indicate the class or type of destination concerned
Destination Customs
· · Main destinations
· · Import
· Export
· Transit
· Temporary Admission
Temporary output ·
· Warehouse Private
· Re-export