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.