Lodgement Of Import Documents

Lodgment of Import Documents refers to the process of submitting all necessary import-related documents to the concerned authorities or banks for clearance, payment, and release of imported goods. It’s a critical step in international trade, ensuring that all legal, financial, and regulatory requirements are properly met.

Here’s a clear breakdown of what it involves:

Definition

Lodgement of Import Documents means presenting the set of shipping and commercial documents to the importer’s bank (issuing bank) or customs authority for:

Processing payment under a Letter of Credit (L/C), or
Clearing goods from customs.

Key Documents Required

Bill of Exchange (Draft) – Issued by the exporter demanding payment.
Commercial Invoice – Lists goods, value, and terms of sale.
Bill of Lading / Air Waybill – Proof of shipment and ownership.
Packing List – Details the contents, weight, and packaging.
Certificate of Origin – States the country where goods were produced.
Insurance Certificate – Provides shipment coverage details.
Inspection Certificate (if required).
Import Registration Certificate (IRC) – Required in many countries.
Letter of Credit (L/C) – Payment assurance document.
Customs Declaration Form.

Process Flow (Typically under Letter of Credit)

Exporter Ships Goods → Sends documents to their bank (Negotiating Bank).
Negotiating Bank → Forwards documents to Importer’s Bank (Issuing Bank).
Importer’s Bank (Lodgement) → Receives and checks the documents.
Importer’s Bank Informs Importer → Requests payment or acceptance.
Importer Pays or Accepts Bill → Bank releases documents to importer.
Importer Lodges Documents with Customs → To clear goods from the port.

Purpose of Lodgement

Ensures goods are released only after payment or acceptance under agreed terms.
Provides legal proof of trade compliance.
Protects both buyer and seller from financial or delivery disputes.
Enables customs clearance and release of imported goods.

⚖️ Regulatory and Banking Importance

In countries like Bangladesh, India, and Pakistan, the importer’s bank must lodge import documents with Bangladesh Bank / Reserve Bank / Central Bank for foreign exchange regulation compliance.
Lodgement helps track import payments, foreign exchange utilization, and trade balance reporting.

Example

An importer in Bangladesh opens an L/C with Agrani Bank to buy machinery from Germany. After shipment:

The German exporter sends shipping documents to their bank.
The bank forwards them to Agrani Bank.
Agrani Bank lodges the documents in its system.
The importer is notified, pays (or accepts draft), and receives documents.
The importer uses them to clear the goods through customs.

If import documents found in order, it is to be made entry in the bill register & necessary voucher to be passed putting bill number on the documents, completing the necessary formalities. This process is called Lodgement. Documents must be lodged immediate after receipt of the same not exceeding seven working days.
Proper lodgement is very much important to save the interest of the bank and the client.

Works related to lodgement

a) Maintenance of Register:

Bill Register should include date, serial no./Bill no., Bill of Exchange No, Amount, Name of negotiating Bank. B/L No. Date, Merchandise, retirement date & other particulars.
After lodgement, documents to be kept under lock & key until handing over the same to the party/C&F Agent at retirement stage.

b) Application of Rate: Foreign Currency would be converted at B.C. Selling rate ruling on the date of Lodgement.
c) Exchange control Form: IMP & TM form must be filled in & signed by the importer at the time of Lodgement/Opening L/C.
d) Endorsement of LCAF: LCAF must be endorsed showing utilization of shipment. The relative LCA form is to be endorsed with full particulars of Bill and the amount remitted just on the right side on the back of LCA form where endorsement was earlier made while opening the L/C. The L/C file is also stamped with Bill number and amount in Foreign Currency. The shipping documents marked with Bill number are then put into a separate cover marking Bill number and kept in safe custody for ultimate delivery to the importer on retirement of the import bill. The importer is then notified to retire the import documents by sending a cost memo indicating the amount payable by him under different heads.
e) Noting on the File: Utilized amount showing Bill No to be noted on the printed format of L/C files.
f) Intimation to the Importer: Importer is to be advised with full particulars of shipment to retire the documents on the date of lodgement.
g) Acceptance: Usance bill is to be presented to the importer for acceptance, if it is discrepant or received on collection under consignment basis. Upon receipt of acceptance, maturity date to be conveyed to the negotiating Bank. If it is not accepted due to discrepancies, disposal instruction of negotiating Bank to be asked.
h) Reminder to be issued to the client.
i) Discrepant Document not to be paid without importer’s acceptance.
j) L/C liability to be reversed and Bills liability to be created.

Accounting of Cash Bills Lodegment

a)   Reversal of Original Contra entry:
Dr. Bankers liability for L/C (Cash) (Foreign/Local)                                                           Tk.
Cr. Customers Liability for L/C   (Cash) (Foreign/Local)                                                                      Tk.
(b)   Dr.-   Murabaha Import Bills (MIB) (F.C multiplied by B.C Selling rate)                              Tk.
Cr.-    ETCA – HO- (Reimbursing Bank @ TT & OD)                                                           Tk.
Cr.-    Income A/C – Exchange Earnings                                                                            Tk.
Dr.-   Sundry Deposit A/C – Margin on L/C (Cash)                                                             Tk.
Cr.-    Murabaha Import Bills (MIB) (Foreign/Local for proportionate amount)                      Tk.
(c) Dr.- MIB (Profit portion for 12 months on total landed cost after deducting cash security)            Tk.
Cr.- Profit receivable                   Tk.
Dr.- Profit receivable                    Tk.
Cr.- Income A/C – (Realised monthly, on daily product basis)                                                 Tk.

“Lodgement of Import Documents” refers to the process where the issuing bank (the importer’s bank, often under a Letter of Credit) formally receives, records, and scrutinizes the shipping and commercial documents sent by the exporter’s bank.

The main purpose of lodgement is for the issuing bank to:

Verify Compliance: Ensure the documents strictly comply with the terms and conditions stipulated in the Letter of Credit (LC) or the collection instructions.
Notify the Importer: Inform the importer that the documents have arrived and are available for their review and subsequent action.

Lodgement is a crucial step before the final stage, which is retirement of the documents (where the importer pays or accepts the bill and takes possession of the documents needed for customs clearance).

Lodgement Process Overview

The lodgement process typically involves the following steps:

Receipt: The issuing bank receives the import documents (e.g., Bill of Lading, Commercial Invoice) from the negotiating or collecting bank (the exporter’s bank).
Scrutiny: The issuing bank examines all documents for completeness, consistency, and strict compliance with the LC terms (or collection instructions).
Lodgement: If the documents are found to be in order, the bank formally records them in its books. If discrepancies are found, the bank notifies the negotiating bank and the importer.
Notification: The bank notifies the importer of the arrival and lodgement of the documents, along with any relevant details or discrepancies.

Key Import Documents Involved in Lodgement

The set of documents presented for lodgement typically includes, but isn’t limited to:

Document Category	Document Name	Purpose
Financial	Bill of Exchange/Draft	A formal demand for payment by the exporter.
Commercial	Commercial Invoice	Details of the goods, sale value, and terms. Crucial for customs valuation.
Commercial	Packing List	Details the contents, weight, and dimensions of each package.
Transport	Bill of Lading (B/L) or Air Waybill (AWB)	Serves as a receipt for the goods, a contract of carriage, and a document of title to the goods.
Insurance	Insurance Certificate/Policy	Provides proof of cargo insurance coverage.
Other	Certificate of Origin (COO)	Certifies the country where the goods were produced. Used for tariff determination.
Other	Inspection Certificate	Certifies that the goods meet quality or quantity specifications, if required by the LC.

Lodgement vs. Retirement

Lodgement is distinct from the next step, Retirement, which involves the importer’s action:

Feature	Lodgement	Retirement
Action By	Issuing Bank (Importer’s Bank)	Importer
Primary Focus	Document control and verification against LC terms.	Payment or acceptance of the draft.
Outcome	Importer is notified documents are received and checked.	Documents (especially the Bill of Lading) are released to the importer for goods clearance