Introduction
Exporting goods from Nigeria involves more than moving cargo from one country to another. It requires the coordinated management of goods, money and legal responsibility across borders.
From the sale contract and shipping arrangements to payment, regulatory compliance and potential cargo claims, each stage carries legal and commercial considerations that exporters should understand before their goods leave the country.
The Sale Contract: Where Everything Begins
A well-drafted sale contract should clearly establish the description and quality of the goods, price, payment terms, delivery point, applicable Incoterm, shipping and insurance responsibilities, required documents, inspection procedures, governing law and dispute resolution mechanism.
Particular attention should be given to Incoterms such as FOB, CFR and CIF, as these determine important responsibilities relating to delivery, freight, insurance and risk. Exporters should not accept an Incoterm simply because it appears in the buyer’s proposed contract.
Quality and inspection provisions should also be precise. Rather than using vague descriptions such as “good quality,” the contract should identify the applicable standard, who conducts the inspection and whose certificate will be accepted.
The Bill of Lading: A Critical Shipping Document
The bill of lading performs several important functions. It serves as a receipt for the goods, evidence of the contract of carriage and, in appropriate circumstances, a document of title.
The distinction between a clean bill and a claused bill is particularly important where payment is made through a letter of credit. A claused bill may create a documentary discrepancy and affect payment.
Exporters should therefore ensure that the bill accurately reflects the condition and quantity of the cargo and should never pressure a carrier to issue a clean bill for visibly damaged or short cargo.
Payment and Trade Finance
Exporters should carefully consider how payment will be secured. Common arrangements include letters of credit, documentary collections and open-account transactions.
A key principle is that banks deal in documents, not goods. Even where goods have been properly shipped, discrepancies in the required documents can create payment problems.
Trade finance can also help exporters manage the period between preparing or shipping goods and receiving payment, through facilities such as pre-shipment finance, post-shipment finance and export bill discounting.
Regulatory Compliance
Compliance begins before the goods reach the port. Depending on the nature of the export, requirements may involve CAC, TIN, NEPC, Nigeria Customs Service, NAQS, NAFDAC, SON and CBN.
Exporters should also ensure that documents such as the Form NXP, certificates of origin, phytosanitary certificates and other product-specific approvals are accurate and consistent with the goods being shipped.
Managing Port Charges and Cargo Risks
Demurrage and detention can quickly increase the cost of an export transaction. Before shipment, exporters should understand the available free days, applicable rates, terminal charges, documentation deadlines and which party is responsible for each charge.
Where cargo is lost, damaged or delayed, exporters should act promptly by preserving evidence such as photographs, survey reports, shipping documents and correspondence. They should also be aware of applicable limitation periods for maritime claims.
Five Questions Every Exporter Should Ask
Before goods leave the premises, an exporter should be able to answer:
What am I responsible for?
When does my risk end?
What document proves my position?
Who pays if something goes wrong?
What is my deadline for taking action?
A clear contract, accurate documentation, proper regulatory compliance and an understanding of shipping and payment risks can help Nigerian exporters avoid costly disputes and protect their commercial interests throughout the export process.
These issues become even more important when maritime operations, international trade and commercial agreements intersect.
In our webinar, “Maritime & Legal Considerations for Exporters,” we explored the legal and commercial issues exporters should consider when moving goods across borders by sea from contracts and shipping documents to risk, liability and compliance.
