Abandonment: Refusing delivery of a shipment
that is so badly damaged in transit, it has little or no value.
Acceptance: An international banking instrument known as a time
draft or bill of exchange that the drawee has accepted and is unconditionally
obligated to pay at maturity.
Ad valorem: a tariff that is calculated based
on a percentage of the value of the product.
Advising bank: A bank operating in the exporter’s
country that handles letters of credit for a foreign bank by notifying
the exporter that the credit has been opened in their favor.
Agency for International Development (AID) shipments:
The Agency for International Development is a U.S. Government agency
created to provide relief to developing countries who must purchase
products and services through U.S. companies. Specialized export
documentation is necessary to complete the transactions.
All-inclusive: term of sale used to notate “all charges
are included”.
Allowance: Typically afforded a consignee as a “credit”
or “deduction” on a specific export transaction.
All-risk cargo insurance: A clause included in
marine insurance policies to cover loss and damage from external
causes during the course of transit within all the terms and conditions
agreed to by the underwriters.
Arbitration: Wording included in export contracts
introducing an independent third party negotiator into the dispute
resolution in lieu of litigation.
Arrival notice: Advice to a consignee on inbound
freight. Sometimes referred to as a prealert. Contains details of
the shipments arrival schedule and bill of lading data.
“As is”: An international term denoting
that the buyer accepts the goods as is, it is a connotation there
may be something wrong with the merchandise, and the seller limits
their future potential liability.
Automated Broker Interface (ABI): the electronic
transmission and exchange of data between a customhouse broker and
CBP.
Automated Export Systems (AES): the electronic
transmission of the Shipper’s Export Declaration to Census,
BIS and CBP.
Automated Manifest System (AMS): the electronic
transmission of a carrier/vessel’s manifest between the carrier/steamship
line and CBP.
Balance of trade: The difference between a country’s
total imports and exports. If exports exceed imports, a favorable
balance of trade, or trade surplus, exists; if not, a trade deficit
exists.
Barter: The direct exchange of goods and/or services
without the use of money as a medium of exchange and without third
party involvement.
Bill of lading: A document that establishes the
terms of a contract between a shipper and a transportation company
under which freight is to be moved between specified points for
a specified charge. Usually prepared by the shipper on forms issued
by the carrier, it serves as a document of title, a contract of
carriage, and a receipt of goods.
Bond: A form of insurance between two parties obligating
a surety to pay against a performance or obligation.
Bonded warehouse: A warehouse authorized by customs
authorities for storage of goods on which payment of duties is deferred
until the goods are cleared and removed.
Breakbulk cargo: Loose cargo that is loaded directly
into a conveyance’s hold.
Bretton Woods Conference: A meeting under the auspices
of the United Nations at Bretton Woods, New Hampshire, in 1944,
that was held to develop some degree of cooperation in matters of
international trade and payments and to devise a satisfactory international
monetary system to be in operations after World War II. The particular
objectives intended were stable exchange rates and convertibility
of currencies for the development of multilateral trade. The Bretton
Woods Conference established the International Monetary Fund and
the World Bank.
Bunker Adjustment Fee (BAF): fuel surcharge issued
by a steamship line.
Bureau of Industry & Security (BIS): Dept of Commerce agency
responsible for Export Administration Regulations, formerly known
as Bureau of Export Administration.
Carnet: A customs document permitting the holder
to carry or send merchandise temporarily into certain foreign countries
without paying duties or posting bonds.
Certificate of Origin: document used to certify the country
of origin for a product.
Clingage: When shipping bulk liquids, the residue
remaining inside the conveyance after discharge.
Combi: An aircraft with pallet or container capacity
on its main deck and belly holds.
Commission agent: An individual, company, or government
agent that serves as the buyer of overseas goods on behalf of another
buyer.
Commodity specialist: An official authorized by
the U.S. Treasury to determine proper tariff and value of imported
goods.
Consignment: Delivery of merchandise from an exporter
(the consignor) to an agent (the consignee) under the agreement
that the agent sell the merchandise for the account of the exporter.
The consignor retains the title to the goods until the consignee
has sold them. The consignee sells the goods for commission and
remits the net proceeds to the consignor.
Consolidator: An agent who brings together a number
of shipments for one destination to qualify for preferential rates.
Cost, insurance, freight (CIF): A system of valuing
imports that includes all costs, insurance, and freight involved
in shipping the goods from the port of embarkation to the destination.
Countertrade: The sale of goods or services that
are paid for in whole or part by the transfer of goods or services
from a foreign country.
Credit risk insurance: Insurance designed to cover
risks of nonpayment for delivered goods.
Currency: National form for payment medium: dollars,
pesos, rubles, naira, pounds, etc.
Distributor: A foreign agent who sells for a supplier
directly and maintains an inventory of the supplier’s products.
Dock Receipt: documented receipt the shipment has
been received by the steamship line.
Draft: negotiable instrument presented to the
buyer’s bank for payment.
Drawback: duties to be refunded by government
when previously imported goods are exported or used in the manufacture
of exported products.
Domestic International Sales Corporation (DISC):
Established in 1971 by U.S. legislation, DISCs were designed to
help exporters by offering income tax deferrals on export earnings.
DISCs were phased out in 1984.
Dumping: Exporting or importing merchandise into
a country below the costs incurred in production and shipment.
Duty: A tax imposed on imports by the customs authority
of a country. Duties are generally based on the value of the goods
(ad valorem duties), some other factor such as weight or quantity
(specified duties), or a combination of value and other factors
(compounded duties).
Embargo: A prohibition on imports or exports as
a result of a political eventuality.
European Community (EC): The twelve nations of Europe that
have combined to form the world’s largest single market of
more than 320 million consumers. The EC includes Belgium, Denmark,
France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain, the United Kingdom, and West Germany.
Export: To send or transport goods out of a country for
sale in another country. In international sales, the exporter is
usually the seller or the seller’s agent.
Export-Import Bank of the United States (Ex-Im Bank): Ex-Im
Bank facilitates and aids the financing of exports of U.S. goods
and services through a variety of programs created to meet the needs
of the U.S. exporting community. Programs, which are tailored to
the size of a transaction, can take the form of direct lending or
loan guarantees.
Export management company: A private company that
serves as the export department for several manufacturers, soliciting
and transacting export business on behalf of its clients in return
for a commission, salary or retainer plus commission.
Export trading company: An organization designed
to facilitate the export of goods and services. It can be a trade
intermediary that provides export-related services to producers
or can be established by the producers themselves, though typically
export trading companies do not take tittle to goods.
Ex Works (EXW) from Factory: The buyer accepts
goods at the point of origin and assumes all responsibility for
transportation of the goods sold. Also: Ex Warehouse, Ex Mine, Ex
Factory as defined in Inco Terms, Chapter 6.
Fair trade: A concept of international trade in
which some barriers are tolerable as long as they are equitable.
When barriers are eliminated, there should be reciprocal action
by all parties.
Force majeure: Expressed as “acts of God.”
Conditions found in some marine contracts exempting certain parties
from liability for occurrences out of their control, such as earthquakes
and floods.|
Foreign Corrupt Practices Act of 1977: U.S. legislation
with stringent antibribery provisions and guidelines for recordkeeping
and internal accounting control requirements for all publicly held
corporations. The act makes it illegal to offer, pay, or agree to
pay money or any item of value to a foreign official for the purpose
of getting or retaining business.
Foreign Credit Insurance Association (FCIA): An
insurance program, previously government managed and underwritten,
now privately held, that insures commercial and political risks
for U.S. exporters.
Foreign sales agent: An individual or company that
serves as the foreign representative of a domestic supplier and
seeks sales abroad for the supplier.
Forfaiting: The selling, at a discount, of a longer-term
receivable or promissory note of a buyer.
Franchising: A form of licensing by the service
sector for companies that want to export their trademark, methods,
or personal services.
Free along side (FAS): A system of valuing imports
that includes inland transportation costs involved in delivery of
goods to a port in the exporting country but excludes the cost of
ocean shipping, insurance, and the cost of loading the merchandise
on the vessel.
Free domicile: Terminology used for “door
to door” deliveries.
Free on Board (FOB): A system of valuing imports
that includes inland transportation costs involved in delivery of
goods to a port in the exporting country and the cost of loading
the merchandise on the vessel, but excludes the cost of ocean shipping
and insurance.
Free port: An area such as a port city into which
merchandise may legally be moved without payment of duties.
Free trade: A theoretical concept to describe international
trade unhampered by governmental barriers such as tariffs or nontariff
measures. Free trade typically favors the reduction or elimination
of all tariff and nontariff barriers to trade.
Free trade zone (FTZ): A port designated by the
government of a country for duty-free entry of any nonprohibited
goods. Merchandise may be stored, displayed, or used for manufacturing
within the zone, and re-exported without the payment of duties.
Freight all kinds (FAK): A mix of cargoes traveling
as one.
General Agreement on Tariffs and Trade (GATT): A multilateral
treaty to which 85 nations (or more than 80 percent of world trade)
subscribe; it is designed to reduce trade barriers and promote trade
through tariff concessions, thereby contributing to global economic
growth and development.
Generalized System of Preferences (GSP): notes
duty free/reduced tariffs on imports from the countries listed on
the GSP list.
Harmonized Tariff System of US (HTSUS): system
of classifying products imported into the U.S. by number.
International Air Transportation Association (IATA):
In bond: transportation of merchandise under custody
of a bonded carrier.
Harter Act: Legislation protecting a shipowner
from certain types of claims that are due to actions of the crew.
Haz-mat: Hazardous materials regulated by various
government agencies,
DOT/CFR Title 49, IATA, IMCO, Coast Guard, etc. Personnel who interface
with Haz-mat cargoes need to be certified to do so.
Hedging: A mechanism that allows an exporter to take a
position in a foreign currency to protect against losses due to
wide fluctuations in currency exchange rates.
Hold: The space below deck inside an ocean-going
vessel.
Irrevocable letter of credit: A letter of credit
in which the specified payment is guaranteed by the bank if all
terms and conditions are met by the drawee (buyer). See also Revocable
letter of credit.
ISO 9000: Issued in 1987 by the International Organization
for Standardization, ISO 9000 is a series of five international
standards that establish requirements for the quality control systems
of companies selling goods in the European
Community. It now includes many additional countries
and companies throughout the world.
Joint venture: A business undertaking in which
more than one company shares ownership and control.
Letter of credit: A document is issued by a bank
per instructions from a buyer of goods that authorizes the seller
to draw a specified sum of money under specified terms, usually
the receipt by the bank of certain documents within a given period
of time.
Licensing: A business arrangement in which the
manufacturer of a product (or a company with proprietary rights
over certain technology, trademarks, etc.) grants permission to
some other group or individual to manufacture that product (or make
use of that proprietary material) in return for specified royalties
or other payment.
Logistics: The science of transportation covering
the planning and implementation of specific strategies to move materials
at a desired cost.
Mala fide: Misrepresentation or in bad faith.
Maquiladora: A tax-free program allowing the import
of materials into Mexico for manufacturing of goods for export back
to the United States. Now declining in importance as a result of
NAFTA.
Marine insurance: Insurance covering loss or damage
of goods during transit. It covers all modes of transport.
Market research: Specific intelligence about the
market in which a seller proposes to sell goods or services. This
information is gathered through interviews, commissioned surveys,
and direct contact with potential customers or their representatives.
Marks and numbers: The references made in writing
to identify a shipment on the exterior packing, typically referenced
in the documentation.
North American Free Trade Agreement (NAFTA): An
agreement that creates a single unified market of the United States,
Canada, and Mexico.
Office of Foreign Asset Controls (OFAC): Dept of
Treasury office issuing regulations on transfers/funding of money.
Paperless release: electronic release of a shipment
by CBP prior to hard copies being presented.
Open account: A trade arrangement in which goods
are shipped to a foreign buyer without guarantee of payment. The
obvious risk this method poses to the supplier makes it essential
that the buyer’s integrity be unquestionable.
Overseas Private Investment Corporation (OPIC):
A government-sponsored organization that promotes investment in
plans and equipment in less-developed countries by offering guarantees
comparable to Ex-Im Bank.
Political risk: In exporting, the risk of loss
due to such causes as currency inconvertibility, government action
preventing entry of goods, expropriation, confiscation, or war.
Power of attorney: A document that authorizes a
customs broker or freight forwarder to act on the exporter’s/importer’s
behalf on issues relative to customs clearance, transportation,
documentation, etc.
Premium: Insurance dollars paid to an underwriter
to accept a transfer of risk
.
Prima facie: at face value
Proforma invoice: (1) invoice prepared by the supplier
to the buyer, usually as a means to secure financing. (2) invoice
prepared by an importer when the supplier’s invoice does not
mean the invoice requirements set forth by CBP.
Protectionism: The setting of trade barriers high
enough to discourage foreign imports or to raise the prices sufficiently
to enable relatively in-
efficient domestic producers to compete successfully with foreign
producers.
Purchasing agent: An individual or company that
purchases goods in their own country on behalf of foreign importers,
such as government agencies or large private concerns.
Remarketers: Export agents, merchants, or foreign
trading companies that purchase products from an exporter to resell
them under their own name.
Revocable letter of credit: A letter of credit
that can be cancelled or altered by the drawee (buyer) after it
has been issued by the drawee’s bank. Compared to a irrevocable
letter of credit, which is totally binding without both parties
written agreement.
Tariff: A tax on imports or the rate at which imported
goods are taxed.
Terminal handling charge: fee assessed by a terminal
for handling a shipment.
Time draft: A draft that matures in a certain number
of days, either from acceptance or date of draft.
Tracking: A forwarder’s or carrier’s
system of recording movement intervals of shipments from origin
through to final destination.
Trade acceptance: See Acceptance.
Transfer risk: The risk associated with converting
a local foreign currency into U.S. dollars.
Transmittal letter: Cover communication outlining
details of an export transaction and accompanying documentation.
Twenty-foot equivalent (TEU): Twenty-foot equivalent
or standard measure for a twenty-foot ocean freight container. Two
TEUs represent one forty-foot standard container.
Ullage: Measuring the amount of liquid or dry bulk
freight in the hold of a vessel by measuring the height of the stow
from the opening on deck.
Uniform Customs & Practice: international rules
governing documentary collections.
United States Agency for International Development (USAID):
A U.S. Governmental agency that carries out assistance programs
designed to help the people of certain lesser-developed countries
develop their human and economic resources, increase production
capacities, and improve the quality of human life as well as promote
the economic or potential stability in friendly countries.
Value-added Tax (VAT): An indirect tax assessed
on the increase in value of goods from the raw material stage through
the production process to final consumption. The tax to processors
or merchants is levied on the amount by which they have increased
the value of items that were purchased by them for use or resale.
This system is used in the European Community.
Warehouse Receipt: receipt given to signify goods
have been received into a warehouse
Weight breaks: Discounts to freight charges are
given as the total weight increases at various weight breaks: 50
pounds, 100 pounds, 500 pounds, etc.
Wharfage: Charges assessed for handling freight
near a dock or pier.
With average: A marine insurance term meaning that
shipment is protected for partial damage whenever the damage exceeds
an agreed percentage.
Zone: Freight tariffs are often determined by certain
geographic areas called zones.
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