Barter - Trade in which merchandise is exchanged directly for other merchandise
without use of money. Barter is an important means of trade with countries using currency
that is not readily convertible.
Beneficiary - The person in whose favor a letter of credit is issued or a draft
is drawn.
Bill of exchange - See Draft.
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 for
goods. Also see Air waybill, Inland bill of lading, Ocean bill of lading, and Through bill
of lading.
Bonded warehouse - A warehouse authorized by customs authorities for storage of
goods on which payment of duties is deferred until the goods are removed.
Booking - An arrangement with a steamship company for the acceptance and
carriage of freight.
Buying agent - See Purchasing agent.
Carnet - A customs document permitting the holder to carry or send merchandise
temporarily into certain foreign countries (for display, demonstration, or similar
purposes) without paying duties or posting bonds.
Cash against documents (CAD) - Payment for goods in which a commission house or
other intermediary transfers title documents to the buyer upon payment in cash.
Cash in advance (CIA) - Payment for goods in which the price is paid in full
before shipment is made. This method is usually used only for small purchases or when the
goods are built to order.
Cash with order (CWO) - Payment for goods in which the buyer pays when ordering
and in which the transaction is binding on both parties.
Certificate of inspection - A document certifying that merchandise (such as
perishable goods) was in good condition immediately prior to its shipment.
Certificate of manufacture - A statement (often notarized) in which a producer
of goods certifies that manufacture has been completed and that the goods are now at the
disposal of the buyer.
Certificate of origin - A document, required by certain foreign countries for
tariff purposes, certifying the country of origin of specified goods.
CFR - Cost and freight. A pricing term indicating that the cost of the goods and
freight charges are included in the quoted price; the buyer arranges for and pays
insurance.
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Charter party - A written contract, usually on a special form, between the owner
of a vessel and a "charterer" who rents use of the vessel or a part of its
freight space. The contract generally includes the freight rates and the ports involved in
the transportation.
CIF - Cost, insurance, freight. A pricing term indicating that the cost of the
goods, insurance, and freight are included in the quoted price.
Clean bill of lading - A receipt for goods issued by a carrier that indicates
that the goods were received in "apparent good order and condition," without
damages or other irregularities. Compare Foul bill of lading.
Clean draft - A draft to which no documents have been attached.
Collection papers - All documents (commercial invoices, bills of lading, etc.)
submitted to a buyer for the purpose of receiving payment for a shipment.
Commercial attache - The commerce expert on the diplomatic staff of his or her
country's embassy or large consulate.
Commercial invoice - An itemized list of goods shipped, usually included among
an exporter's collection papers.
Commission agent - See Purchasing agent.
Common carrier - An individual, partnership, or corporation that transports
persons or goods for compensation.
Confirmed letter of credit - A letter of credit, issued by a foreign bank, the
validity of which has been confirmed by a domestic bank. An exporter whose payment terms
are a confirmed letter of credit is assured of payment by the domestic bank even if the
foreign buyer or the foreign bank defaults. See Letter of credit.
Consignment - Delivery of merchandise from an exporter (the consignor) to an
agent (the consignee) under agreement that the agent sell the merchandise for the account
of the exporter. The consignor retains 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.
Consular declaration - A formal statement, made to the consul of a foreign
country, describing goods to be shipped.
Consular invoice - A document, required by some foreign countries, describing a
shipment of goods and showing information such as the consignor, consignee, and value of
the shipment. Certified by a consular official of the foreign country, it is used by the
country's customs officials to verify the value, quantity, and nature of the shipment.
Convertible currency - A currency that can be bought and sold for other
currencies at will.
Correspondent bank - A bank that, in its own country, handles the business of a
foreign bank.
Countertrade - The sale of goods or services that are paid for in whole or in
part by the transfer of goods or services from a foreign country.
Countervailing duty - A duty imposed to counter unfairly subsidized products.
CPT (carriage paid to) and CIP (carriage and insurance paid to) - Pricing terms
indicating that carriage, or carriage and insurance, are paid to the named place of
destination. They apply in place of CFR and CIF, respectively, for shipment by modes other
than water.
Credit risk insurance - Insurance designed to cover risks of nonpayment for
delivered goods. Compare Marine insurance.
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Customhouse broker - An individual or firm licensed to enter and clear goods
through customs.
Customs - The authorities designated to collect duties levied by a country on
imports and exports. The term also applies to the procedures involved in such collection.
Date draft - A draft that matures in a specified number of days after the date
it is issued, without regard to the date of acceptance. See Draft, Sight draft, and Time
draft.
Deferred payment credit - Type of letter of credit providing for payment some
time after presentation of shipping documents by exporter.
Demand draft - See Sight draft.
Devaluation - The official lowering of the value of one country's currency in
terms of one or more foreign currencies. For example, if the U.S. dollar is devalued in
relation to the French franc, one dollar will "buy" fewer francs than before.
DISC - Domestic international sales corporation. Discrepancy - Letter of credit
- When documents presented do not conform to the letter of credit it is referred to as a
discrepancy.
Dispatch - An amount paid by a vessel's operator to a charterer if loading or
unloading is completed in less time than stipulated in the charter party.
Distributor - A foreign agent who sells for a supplier directly and maintains an
inventory of the supplier's products.
Dock receipt - A receipt issued by an ocean carrier to acknowledge receipt of a
shipment at the carrier's dock or warehouse facilities. Also see Warehouse receipt.
Documentary draft - A draft to which documents are attached.
Documents against acceptance (D/A) - Instructions given by a shipper to a bank
indicating that documents transferring title to goods should be delivered to the buyer (or
drawee) only upon the buyer's acceptance of the attached draft.
Draft (or Bill of exchange) - An unconditional order in writing from one person
(the drawer) to another (the drawee), directing the drawee to pay a specified amount to a
named drawer at a fixed or determinable future date. See Date draft, Sight draft, Time
draft.
Drawback - Articles manufactured or produced in the United States with the use
of imported components or raw materials and later exported are entitled to a refund of up
to 99 percent of the duty charged on the imported components. The refund of duty is known
as a drawback.
Drawee - The individual or firm on whom a draft is drawn and who owes the stated
amount. Compare Drawer. Also see Draft.
Drawer - The individual or firm that issues or signs a draft and thus stands to
receive payment of the stated amount from the drawee. Compare Drawee. Also see Draft.
Dumping - Selling merchandise in another country at a price below the price at
which the same merchandise is sold in the home market or selling such merchandise 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 (specific duties), or a combination of value and other factors
(compound duties).
EMC - See Export management company.
ETC - See Export trading company.
Eurodollars - U.S. dollars placed on deposit in banks outside the United States;
usually refers to deposits in Europe.
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Import Export Terms - Top
Ex - From. When used in pricing terms such as "ex factory" or "ex
dock," it signifies that the price quoted applies only at the point of origin (in the
two examples, at the seller's factory or a dock at the import point). In practice, this
kind of quotation indicates that the seller agrees to place the goods at the disposal of
the buyer at the specified place within a fixed period of time.
Exchange permit - A government permit sometimes required by the importer's
government to enable the import firm to convert its own country's currency into foreign
currency with which to pay a seller in another country.
Exchange rate - The price of one currency in terms of another, that is, the
number of units of one currency that may be exchanged for one unit of another currency.
Eximbank - Export-Import Bank of the United States.
Export broker - An individual or firm that brings together buyers and sellers
for a fee but does not take part in actual sales transactions.
Export commission house - An organization which, for a commission, acts as a
purchasing agent for a foreign buyer.
Export declaration - See Shipper's export declaration.
Export license - A government document that permits the licensee to export
designated goods to certain destinations. See General export license and Individually
validated export license.
Export management company - A private firm that serves as the export department
for several producers of goods or services, either by taking title or by soliciting and
transacting export business on behalf of its clients in return for a commission, salary,
or retainer plus commission.
Export trading company - A firm similar or identical to an export management
company.
FAS - Free alongside ship. A pricing term indicating that the quoted price
includes the cost of delivering the goods alongside a designated vessel.
FCA - "Free carrier" to named place. Replaces the former term
"FOB named inland port" to designate the seller's responsibility for the cost of
loading goods at the named shipping point. May be used for multimodal transport, container
stations, and any mode of transport, including air.
FCIA - Foreign Credit Insurance Association.
FI - Free in. A pricing term indicating that the charterer of a vessel is
responsible for the cost of loading and unloading goods from the vessel.
Floating policy - See Open policy.
FO - Free out. A pricing term indicating that the charterer of a vessel is
responsible for the cost of loading goods from the vessel.
FOB - "Free on board" at named port of export. A pricing term
indicating that the quoted price covers all expenses up to and including delivery of goods
upon an overseas vessel provided by or for the buyer.
Force majeure - The title of a standard clause in marine contracts exempting the
parties for nonfulfillment of their obligations as a result of conditions beyond their
control, such as earthquakes, floods, or war.
Foreign exchange - The currency or credit instruments of a foreign country.
Also, transactions involving purchase or sale of currencies.
Foreign freight forwarder - See Freight forwarder.
Foreign sales agent - An individual or firm that serves as the foreign
representative of a domestic supplier and seeks sales abroad for the supplier.
Foreign trade zone - See Free-trade zone.
Foul bill of lading - A receipt for goods issued by a carrier with an indication
that the goods were damaged when received. Compare Clean bill of lading.
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Import Export Terms - Top
Free port - An area such as a port city into which merchandise may legally be
moved without payment of duties.
Free-trade zone - A port designated by the government of a country for duty-free
entry of any nonprohibited goods. Merchandise may be stored, displayed, used for
manufacturing, etc., within the zone and reexported without duties being paid. Duties are
imposed on the merchandise (or items manufactured from the merchandise) only when the
goods pass from the zone into an area of the country subject to the customs authority.
Freight forwarder - An independent business that handles export shipments for
compensation. (A freight forwarder is among the best sources of information and assistance
on export regulations and documentation, shipping methods, and foreign import
regulations.)
GATT - General Agreement on Tariffs and Trade. A multilateral treaty intended to
help reduce trade barriers between signatory countries and to promote trade through tariff
concessions.
General export license - Any of various export licenses covering export
commodities for which Individually validated export licenses are not required. No formal
application or written authorization is needed to ship exports under a general export
license.
Gross weight - The full weight of a shipment, including goods and packaging.
Compare Tare weight.
Import license - A document required and issued by some national governments
authorizing the importation of goods into their individual countries.
Individually validated export license - A required document issued by the U.S.
Government authorizing the export of specific commodities. This license is for a specific
transaction or time period in which the exporting is to take place. Compare General export
license.
Inland bill of lading - A bill of lading used in transporting goods overland to
the exporter's international carrier. Although a through bill of lading can sometimes be
used, it is usually necessary to prepare both an inland bill of lading and an ocean bill
of lading for export shipments. Compare Air waybill, Ocean bill of lading, and Through
bill of lading.
International freight forwarder - See Freight forwarder.
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. Compare
Revocable letter of credit.
Letter of credit (L/C) - A document, issued by a bank per instructions by a
buyer of goods, authorizing the seller to draw a specified sum of money under specified
terms, usually the receipt by the bank of certain documents within a given time.
Licensing - A business arrangement in which the manufacturer of a product (or a
firm 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.
Manifest - See Ship's manifest.
Marine insurance - Insurance that compensates the owners of goods transported
overseas in the event of loss that cannot be legally recovered from the carrier. Also
covers air shipments. Compare Credit risk insurance.
Marking (or marks) - Letters, numbers, and other symbols placed on cargo
packages to facilitate identification.
Ocean bill of lading - A bill of lading (B/L) indicating that the exporter
consigns a shipment to an international carrier for transportation to a specified foreign
market. Unlike an inland B/L, the ocean B/L also serves as a collection document. If it is
a "straight" B/L, the foreign buyer can obtain the shipment from the carrier by
simply showing proof of identity. If a "negotiable" B/L is used, the buyer must
first pay for the goods, post a bond, or meet other conditions agreeable to the seller.
Compare Air waybill, Inland bill of lading, and Through bill of lading.
On board bill of lading - A bill of lading in which a carrier certifies that
goods have been placed on board a certain vessel.
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.
Open insurance policy - A marine insurance policy that applies to all shipments
made by an exporter over a period of time rather than to one shipment only.
Order bill of lading - A negotiable bill of lading made out to the order of the
shipper.
Packing list - A list showing the number and kinds of items being shipped, as
well as other information needed for transportation purposes.
Parcel post receipt - The postal authorities' signed acknowledgment of delivery
to receiver of a shipment made by parcel post.
PEFCO - Private Export Funding Corporation. A corporation that lends to foreign
buyers to finance exports from the United States.
Perils of the sea - A marine insurance term used to designate heavy weather,
stranding, lightning, collision, and sea water damage.
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Import Export Terms - Top
Phytosanitary inspection certificate - A certificate, issued by the U.S.
Department of Agriculture to satisfy import regulations for foreign countries, indicating
that a U.S. shipment has been inspected and is free from harmful pests and plant diseases.
Political risk - In export financing, the risk of loss due to such causes as
currency inconvertibility, government action preventing entry of goods, expropriation or
confiscation, and war.
Pro forma invoice - An invoice provided by a supplier prior to the shipment of
merchandise, informing the buyer of the kinds and quantities of goods to be sent, their
value, and important specifications (weight, size, etc.).
Purchasing agent - An agent who purchases goods in his or her own country on
behalf of foreign importers such as government agencies and large private concerns.
Quota - The quantity of goods of a specific kind that a country permits to be
imported without restriction or imposition of additional duties.
Quotation - An offer to sell goods at a stated price and under specified
conditions.
Remitting bank - The bank that sends the draft to the overseas bank for
collection.
Representative - See Foreign sales agent.
Revocable letter of credit - A letter of credit that can be canceled or altered
by the drawee (buyer) after it has been issued by the drawee's bank. Compare Irrevocable
letter of credit.
Shipper's export declaration - A form required for all shipments by the U.S.
Treasury Department and prepared by a shipper, indicating the value, weight, destination,
and other basic information about an export shipment.
Ship's manifest - An instrument in writing, signed by the captain of a ship,
that lists the individual shipments constituting the ship's cargo.
Sight draft (S/D) - A draft that is payable upon presentation to the
drawee.
Compare Date draft and Time draft.
Spot exchange - The purchase or sale of foreign exchange for immediate delivery.
Standard industrial classification (SIC) - A standard numerical code system used
to classify products and services.
Standard international trade classification (SITC) - A standard numerical code
system developed by the United Nations to classify commodities used in international
trade.
Steamship conference - A group of steamship operators that operate under
mutually agreed-upon freight rates.
Straight bill of lading - A nonnegotiable bill of lading in which the goods are
consigned directly to a named consignee.
Tare weight - The weight of a container and packing materials without the weight
of the goods it contains. Compare Gross weight.
Tenor (of a draft) - Designation of a payment as being due at sight, a given
number of days after sight, or a given number of days after date.
Through bill of lading - A single bill of lading converting both the domestic
and international carriage of an export shipment. An air waybill, for instance, is
essentially a through bill of lading used for air shipments. Ocean shipments, on the other
hand, usually require two separate documents - an inland bill of lading for domestic
carriage and an ocean bill of lading for international carriage. Through bills of lading
are insufficient for ocean shipments. Compare Air waybill, Inland bill of lading, and
Ocean bill of lading.
Time draft - A draft that matures either a certain number of days after
acceptance or a certain number of days after the date of the draft. Compare Date draft and
Sight draft (see chapter 13).
Tramp steamer - A ship not operating on regular routes or schedules.
Transaction statement - A document that delineates the terms and conditions
agreed upon between the importer and exporter.
Trust receipt - Release of merchandise by a bank to a buyer in which the bank
retains title to the merchandise. The buyer, who obtains the goods for manufacturing or
sales purposes, is obligated to maintain the goods (or the proceeds from their sale)
distinct from the remainder of his or her assets and to hold them ready for repossession
by the bank.
Warehouse receipt - A receipt issued by a warehouse listing goods received for
storage.
Wharfage - A charge assessed by a pier or dock owner for handling incoming or
outgoing cargo.
Without reserve - A term indicating that a shipper's agent or representative is
empowered to make definitive decisions and adjustments abroad without approval of the
group or individual represented. Compare Advisory capacity.
To Import
Export Terms: Glossary of
Import Export Terms - Top
