What Is a Consular Invoice?
A consular invoice is a document certifying a shipment of goods and shows information such as the consignor, consignee, and value of the shipment. Generally, a consular invoice can be obtained through a consular representative of the destination country and must be certified by the consul of the country of destination, who will stamp and authorize the invoice.
Understanding Consular Invoice
The consular invoice is required by some countries to facilitate customs and collection of taxes. The process of submitting and authorizing a consular invoice is called consularization and it can help speed up the process of importing goods into a new country. Latin American countries, Iraq, Australia, and Nigeria are some of the countries requiring such an invoice.
- A consular invoice is a document specifying the contents and details of a shipment certified by the consul of the country the merchandise is being sent to.
- Countries requiring a consular invoice include Latin American countries, Kenya, Uganda, Tanzania, Mauritius, New Zealand, Myanmar, Iraq, Australia, Fiji, Cyprus, Nigeria, Ghana, Guinea, and Zanzibar.
- Customs officials use the invoice to confirm what's in the shipment, the number of goods, and the cost—and thus determine the import duty.
- The export price is scrutinized relative to the market price in the original country to make sure an unfair trade practice called "dumping" is not taking place.
- With dumping, an exporter sells goods in a foreign market for less than what they cost at home to have a competitive advantage over other suppliers.
In order to complete the consularization process, the company or individual seeking to export the goods must file the paperwork and pay any associated fees for processing. Once the paperwork has been processed, the exporter is given a copy of the invoice and the second copy is filed with the customs office. A consular invoice contains information about the product, its destination, and the declared value of the product. You can expect the invoice to list the following:
- Port of destination
- Port of loading
- Description of goods
- Amount of charges
- Value of shipment
- Marks and numbers
- Name of certifier
A consular invoice also includes a copy of the commercial invoice in the language of the country, giving full details of the merchandise shipped. In general, the purpose is to provide the foreign customs authority with a complete, detailed description of the goods so that the correct import duty can be levied. Additionally, the export price of the goods may be evaluated against the current market price in the exporter’s country to avoid the process of export dumping from taking place.
Dumping is when a product is sold in a foreign market for a price lower than the cost in the home market in order to maintain an advantage over other suppliers of the product. It is considered an unfair trade practice and is regulated by national governments. In the case of consular invoicing, the invoice can be used to calculate the price differences between imported products and the price of the product to the country it is being exported to prevent the unfair trade practice of dumping.