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Trade Terms Dictionary

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*NEW TRADE TERM DICTIONARY HERE*

Visa: A signature of formal approval on a document. Obtained from Consulates.

ATA Carnet
A customs document which enables one to carry or send goods temporarily into certain foreign countries without paying duties or posting bonds.
Acceptance
The act of a drawee acknowledging in writing on the face of a draft, payable at a fixed or determinable future date, that he will pay the draft at maturity.
Acceptance Draft
A sight draft, documents against acceptance. See "Sight Draft," "Documents Against Acceptance."
Airwaybill
The carrying agreement between shipper and air carrier which is obtained from the airline used to ship the goods.
All Risks Clause
An insurance provision which provides additional coverage to an Open Cargo Policy, usually for an additional premium. Contrary to its name, the clause does not protect against all risks. The more common perils it does cover are theft, pilferage, non-delivery, fresh water damage, contact with other cargo, breakage, and leakage. Inherent vice, loss of market, and losses caused by delay are not covered.
Authority to Pay
A document comparable to a revocable letter of credit but under whose terms the authority to pay the seller stems from the buyer rather than from a bank.
Balance of Trade
The balance between a country's exports and imports. 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 which provides the terms of the contract between the shipper and the transportation company to move freight between stated points at a specified charge.
Bonded Warehouse
A building authorized by customs authorities for the storage of goods without payment of duties until removal.
Brussels Tariff Nomenclature
See "Nomenclature of the Customs Cooperation Council."
Buying Agent
An agent who buys in this country for foreign importers, especially for such large foreign users as mines, railroads, governments, and public utilities. Synonymous with "purchasing agent."
C. & F. - Cost and Freight: Same as C.I.F., except that insurance is covered by the buyer.
C.I.F.
Cost, Insurance, and Freight. A pricing term under which the seller pays all expenses involved in the placing of merchandise on board a carrier and in addition prepays the freight and insures the goods to an agreed destination.
Carrier
A transportation line that hauls cargo.
Certificate of Free Sale
A certificate, required by some foreign governments, stating that the goods for export, if products under the jurisdiction of the U.S. Federal Food and Drug Administration, are acceptable for sale in the United States, i.e., that the products are sold freely, without restriction. FDA will issue shippers a "letter of comment" to satisfy foreign requests or regulations.
Certificate of Inspection
A document in which certification is made as to the good condition of the merchandise immediately prior to shipment. The buyer usually designates the inspecting organization, usually an independent inspection firm or government body.
Certificate of Manufacture
A statement by a producer, sometimes notarized, which certifies that manufacture has been completed and that the goods are at the disposal of the buyer.
Certificate of Origin
A document in which certification is made as to the country of origin of the merchandise.
C.F.R. (Cost and Freight) and C.I.F. (Cost, Insurance, and Freight)—indicate that the seller will deliver the goods onto a vessel and pay all the normal charges to get the cargo to the named seaport. The buyer assumes all risks from the time the cargo is placed onto the vessel at the seaport of loading. C.I.F. also indicates that the seller arranges for insurance as an automatic condition of the contract. 
Chamber of Commerce
An association of businessmen whose purpose is to promote commercial and industrial interests in the community.
Clean Bill of Lading
A bill of lading signed by the transportation company indicating that the shipment has been received in good condition with no irregularities in the packing or general condition of all or any part of the shipment. See "Foul Bill of Lading."
Collection
The procedure involved in a bank's collecting money for a seller against a draft drawn on a buyer abroad, usually through a correspondent bank.
Collection Papers
The documents submitted, usually with a draft or against a letter of credit, for payment of an export shipment.
Commercial Attaché
The commercial expert on the diplomatic staff of his country's embassy or large consulate in a foreign country.
Commercial Invoice
A trade invoice.
Commission Agent
See "Foreign Sales Representative."
Commission Representative
See "Foreign Sales Representative."
Conference Line
A member of a steamship conference. See "Steamship Conference."
Confirmed Letter of Credit
Issued by a bank abroad whose validity and terms are confirmed to the beneficiary in the United States by a U.S. bank.
Consignee
The person, firm, or representative to whom a seller or shipper sends merchandise and who, upon presentation of the necessary documents, is recognized as the owner of the merchandise for the purpose of the payment of customs duties. This term is also used as applying to one to whom goods are shipped, usually at the shipper's risk, when an outright sale has not been made. See "Consignment."
Consignment
A term pertaining to merchandise shipped to a consignee abroad when an actual purchase has not been made, under an agreement by which the consignee is obligated to sell the goods for the account of the consignor, and to remit proceeds as goods are sold.
Consul
A government official residing in a foreign country who is charged with the representation of the interests of his country and its nationals.
Consular Invoice
A detailed statement regarding the character of goods shipped, duly certified by the consul of the importing country at the port of shipment.

Contingency Insurance Insurance taken out by a shipper supplementary to insurance taken out by the consignee abroad; especially to cover shipments made on a "C. & F." basis.

Correspondent Bank
A bank which is a depository for another bank, accepting deposits and collecting items for its bank depositor.
Country of Origin
The country in which a product or commodity is manufactured or produced.
Credit Risk Insurance
A form of insurance which protects the seller against loss due to default on the part of the buyer. See "FCIA."
Customs
The agency or procedure for collecting duties imposed by a country on imports or exports.
D/A
See "Documents Against Acceptance."
D/P
See "Documents Against Payment."
Delivered at Frontier
The seller's obligations are fulfilled when the goods have arrived at the frontier-but before "the customs border" of the country named in the sales contract.
Delivered Duty Paid
While the term "Ex Works" signifies the seller's minimum obligation, the term "Delivered Duty Paid," when followed by words naming the buyer's premises denotes the other extreme-the seller's maximum obligation and may be used irrespective of the mode of transport.
Delivered Duty Unpaid
The seller must deliver the goods to the named destination and is responsible for all costs involved in transportation, including exportation. The buyer handles the import formalities.
D.E.Q. Delivered Ex Quay—indicates that the seller must deliver the goods onto the quay (dock or wharf), having cleared the goods for import and paid all taxes, duties, etc. applicable to that clearance. 
Delivery Point
See "Specific Delivery Point."
Demurrage
Excess time taken for loading or unloading a vessel as a result of acts of a shipper. Charges are assessed by the shipping company.
DISC
See "Domestic International Sales Corporation."
Discount (Financial)
A deduction from the face value of commercial paper such as bills of exchange, in consideration of receipt of cash by the seller before maturity date.
Discrepancy-Letter of Credit: When documents presented do not conform to the terms of the letter of credit, it is referred to as a "discrepancy."
Distributor
A firm that sells directly for a manufacturer, usually on an exclusive basis for a specified territory, and which maintains an inventory on hand.
Dock Receipt
A receipt issued by an ocean carrier or its agent, acknowledging that a shipment has been delivered and received at the dock or warehouse of the carrier.
Documentary Credit
See "Letter of Credit (Commercial)."
Documentary Draft
A draft to which documents are attached.
Documentation/Documents
See "Shipping Documents."
Documents Against Acceptance (D/A)
A type of payment for goods in which the documents transferring title to the goods are not given to the buyer until he has accepted the draft issued against him.
Documents Against Payment (D/P)
A type of payment for goods in which the documents transferring title to the goods are not given to the buyer until he has paid the value of a draft issued against him.
Domestic International Sales Corporation (DISC)
An export sales corporation set up by a United States company under U.S. Government authorization to promote exports from the United States by giving the exporter economic advantages not available outside such authorization.
Draft
The same as a "bill of exchange." A written order for a certain sum of money, to be transferred on a certain date from the person who owes the money or agrees to make the payment (the drawee) to the creditor to whom the money is owed (the drawer of the draft). See "Date Draft," "Documentary Draft," "Sight Draft," "Time Draft."
Drawback (Import)
The repayment, up to 99%, of customs duties paid on merchandise which later is exported, as part of a finished product, is known as a drawback. It refers also to a refund of a domestic tax which has been paid, upon exportation of imported merchandise.
Drawee
One on whom a draft is drawn, and who owes the stated amount. See "Draft."
Drawer
One who "draws" a draft, and receives payment. See "Draft."
Duty
The tax imposed by a government on merchandise imported from another country.
EMC
Export Management Company.
ETC
Export Trading Company.
Ex (Point of Origin)
A pricing term under which the seller's only responsibility is to clear the goods for export and make them available to the buyer at an agreed upon location (factory, warehouse, ship, etc.). The buyer then bears the full cost and risk involved in transporting the goods to his desired location. Other terms used are "Ex Works," Ex Ship," and "Ex Quay."
Exchange Permit
A governmental permit sometimes required of an importer to enable him to convert his own country's currency into a foreign currency with which to pay a seller in another country.
Exchange Regulations/Restrictions
Restrictions imposed by an importing country to protect its foreign exchange reserves. See "Exchange Permit."
Eximbank
The Export-Import Bank of the U.S. in Washington. See "Guide to Export Assistance."
Excise Tax
A domestic tax assessed on the manufacture, sale, or use of a commodity within a country. Usually refundable if the product is exported.
Expiration Date
The final date upon which the presentation of documents and drawing of drafts under a letter of credit may be made.
Export
To send goods to a foreign country or overseas territory.
Export Broker
One who brings together the exporter and importer for a fee and then withdraws from the transaction.
Export Declaration
See "Shipper's Export Declaration."
Export License
A governmental permit required to export certain products to certain destinations.
Export Management Company (EMC)
A firm which acts as local export sales agent for several non-competing manufacturers. (Term synonymous with "Manufacturer's Export Agent.")
Export Merchant
A producer or merchant who sells directly to a foreign purchaser without going through an intermediate such as an export broker.
E.X.W. Ex Works
Indicates that the buyer is responsible for cargo when it's available at the seller's factory. 
F.A.S.
Free Along Side, as in "F.A.S. (Vessel)," a pricing term under which the seller must deliver the goods to a pier and place them within reach of the ship's loading equipment.
F.C.A.—Free Carrier At
—indicates that the seller delivers the goods to the named place 'free' of any transportation cost, having cleared the cargo for export. The seller accepts transportation costs, risks, and responsibilities until the cargo is handed over at the named place. 
FCIA
Foreign Credit Insurance Association.
Floating Policy
See "Open Policy."
F.O.B.
Free on Board, as in "F.O.B. (Vessel)," a pricing term under which the seller must deliver the goods on board the ship at the point named at his own expense. Similar terms are "F.O.B. (Destination)" and F.O.B. (Named Point of Exportation)."
FOR/FOT
FOR and FOT mean "Free on Rail" and "Free on Truck." These terms are synonymous since the word "truck" relates to the railway wagons. They should only be used when the goods are to be carried by rail.
Foreign Sales Representative
A representative or agent residing in a foreign country who acts as a salesman for a U.S. manufacturer, usually for a commission. Sometimes referred to as a "sales agent" or "commission agent." See "Representative."
Foreign Trade Zone
An area where goods of foreign origin may be brought in for re-export or transhipment without the payment of customs duty.
Foul Bill of Lading
A receipt for goods issued by a carrier bearing a notation that the outward containers or goods have been damaged. See "Clean Bill of Lading."
Free Carrier (...named place)
The seller must clear the goods for export, and deliver them to a carrier at a specific point determined by the buyer. The buyer then bears all costs and risks of transporting the goods to the desired destination. Also see "Named Point and "Specific Delivery Point."
Free Port
An area generally encompassing a port and its surrounding locality into which goods may enter duty-free or subject only to minimal revenue tariffs.
Free Sale
See "Certificate of Free Sale."
Freight Carriage (paid to)
Like C&F "Freight Carriage paid to..." means that the seller pays the freight for the carriage of the goods to the named destination. However, the risk of loss of or damage to the goods, as well as the risk of any cost increases, is transferred from the seller to the buyer when the goods have been delivered into the custody of the first carrier and not at the ship's rail.
Freight Carriage (and insurance paid to)
Like "Freight or Carriage paid to..." but with the addition that the seller has to procure transport insurance against the risk of loss of or damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium.
Freight Forwarder
An agent who assists his exporter client in moving cargo to a foreign destination.
General Agreement on Tariffs and Trade (GATT)
The General Agreements on Tariffs and Trade is a multilateral trade treaty among governments, embodying rights and obligations. The detailed rules set out in the Agreement constitute a code which the parties to the Agreement have agreed upon to govern their trading relationships.
General License (Export)
Government authorization to export without specific documentary approval.
Gross Weight
Total weight of goods, packing, and container, ready for shipment.
Handling Charges
The forwarder's fee to his shipper client.
Import
To bring merchandise into a country from another country or overseas territory.
Import License
A governmental document which permits the importation of a product or material into a country where such licenses are necessary.
In Bond
A term applied to the status of merchandise admitted provisionally into a country without payment of duties. See "Bonded Warehouse."
Inco Terms
Indicate whether the buyer or the seller carries the risk, responsibility, liability, or costs at specific points during a transaction.
Inconvertibility
The inability to exchange the currency of one country for the currency of another.
Inherent Vice
Defects or characteristics of a product that could lead to deterioration without outside influence. An insurance term. See "All Risk Clause."
Insurance Certificate
A document issued by an insurance company, usually to order of shipper, under a marine policy and in cover of a particular shipment of merchandise.
Invoice
See "Commercial Invoice," "Consular Invoice."
Irrevocable
Applied to letters of credit. An irrevocable letter of credit is one which cannot be altered or canceled once it has been negotiated between the buyer and his bank.
Joint Venture
A commercial or industrial enterprise in which principals of one company share control and ownership with principals of another.
L/C
Letter of Credit.
Legal Weight
The weight of goods plus any immediate wrappings which are sold along with the goods; e.g., the weight of a tin can together with its contents. See "Net Weight."
Letter of Credit (Commercial)
Abbreviated "L/C." A document issued by a bank at buyer's request in favor of a seller, promising to pay an agreed amount of money upon receipt by the bank of certain documents within a specified time.
License
See "Exchange License," "Export License," "Import License," "Validated License."
Licensing
The grant of technical assistance and service and/or the use of proprietary rights, such as a trademark or patent, in return for royalty payments.
MEA
Manufacturer's Export Agent. See "Export Management Company." Manufacturer's Export Agent (MEA): See "Export Management Company."
Marine Insurance
An insurance which will compensate the owner of goods transported overseas in the event of loss which cannot be legally recovered from the carrier. Also covers air shipments.
Marks
A set of letters, numbers and/or geometric symbols, generally followed by the name of the port of destination, placed on packages for export for identification purposes.
Maturity Date
The date upon which a draft or acceptance becomes due for payment. Most-Favored-Nation Status: All countries having this designation receive equal treatment with respect to customs and tariffs.
Named Point
See "Specific Delivery Point."
Net Weight
Weight of the goods alone without any immediate wrappings; e.g., the weight of the contents of a tin can without the weight of the can. See "Legal Weight."
Nomenclature of the Customs Cooperation Council
This was known as the "Brussels Classification Nomenclature" prior to January 1, 1975. It is the customs tariff adhered to by most European countries and many other countries throughout the world, but not by the United States.
"On Board" Bill of Lading
A bill of lading in which a carrier acknowledges that goods have been placed on board a certain vessel.
Open Cargo Policy
Synonymous with "Floating Policy." An insurance policy which binds the insurer automatically to protect with insurance all shipments made by the insured from the moment the shipment leaves the initial shipping point until delivered at destination. The insuring conditions include clauses naming such risks insured against as "perils of the sea," fire, jettison, forcible theft, and barratry. See >'Perils of the Sea," "Barratry," "All Risks Clause."
"Order" Bill of Lading
A bill of lading, negotiable, made out to the order of the shipper.
Packing List
A list which shows number and kinds of packages being shipped, totals of gross, legal, and net weights of the packages, and marks and numbers on the packages. The list may be requested by an importer or may be required by an importing country to facilitate the clearance of goods through customs.
Perils of the Sea
A marine insurance term used to designate heavy weather, stranding, lightning, collision, and sea water damage.
Piggybacking
The assigning of export marketing and distribution functions by one manufacturer to another.
Port Marks
See "Marks."
Pro Forma Invoice
An invoice forwarded by the seller of goods prior to shipment to advise the buyer of the weight and value of the goods.
Quota
The total quantity of a product or commodity which may be imported into a country without restriction or the penalty of additional duties or taxes.
Quotation
An offer to sell goods at a stated price and under stated terms.
Rate of Exchange
The basis upon which money of one country will be exchanged for that of another. Rates of exchange are established and quoted for foreign currencies on the basis of the demand, supply, and stability of the individual currencies. See "Exchange."
Revocable
Applied to letters of credit. A revocable letter of credit is one which can be altered or canceled by the buyer after he has opened it through his bank. See "Irrevocable."
Royalty Payment
The share of the product or profit paid by a licensee to his licenser. See "Licensing."
S/D
See "Sight Draft."
S.I.T.C.
See "Standard International Trade Classification."
Sales Agent
See "Foreign Sales Representative."
Sales Representative
See "Foreign Sales Representative."
Sanitary Certificate
A certificate which attests to the purity or absence of disease or pests in the shipment of food products, plants, seeds, and live animals.
Schedule B
Refers to "Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States." A seven-digit Schedule B number must be entered on the shipper's U.S. Export Declaration for every commodity shipped.
Shipper's Export Declaration
A form required by the U.S. Treasury Department and completed by a shipper showing the value, weight, consignee, destination, etc., of export shipments as well as Schedule B identification number.
Shipping Documents
Commercial invoices, bills of lading, insurance certificates, consular invoices, and related documents.
Ship's Manifest
A true list in writing of the individual shipments comprising the cargo of a vessel, signed by the captain.
Sight Draft (S/D)
A draft so drawn as to be payable upon presentation to the drawee or at a fixed or determinable date thereafter. See "Documents Against Acceptance," "Documents Against Payment."
Specific Delivery Point
A point in sales quotations which designates specifically where and within what geographical locale the goods will be delivered at the expense and responsibility of the seller; e.g., F.A.S. named vessel at named port of export.
Standard Industrial Classification (SIC)
A numerical system developed by the U.S. Government for the classification of commercial services and industrial products. Also classifies establishments by type of activity.
Standard International Trade Classification (SITC)
A numerical system developed by the United Nations to classify commodities used in international trade as an aid to reporting trade statistics.
Steamship Conference
A group of vessel operators joined together for the purpose of establishing freight rates. A shipper may receive reduced rates if the shipper enters into a contract to ship on vessels of Conference members only.
Stocking Distributor
A distributor who maintains an inventory of goods of a manufacturer.
Straight Bill of Lading
A bill of lading, non-negotiable, in which the goods are consigned directly to a named consignee.
Tare Weight
The weight of packing and containers without the goods to be shipped.
Tariff
A schedule or system of duties imposed by a government on goods imported or exported; the rate of duty imposed in a tariff.
Tenor
The time fixed or allowed for payment, as in "the tenor of a draft."
Time Draft
A draft so drawn as to mature at a certain fixed time after presentation or acceptance.
U.S. Standard Master
A single business form with combined stencil which includes space for information required on many different export forms. Use of this form eliminates multiple typing.
Validated License
A government document authorizing the export of commodities within the limitations set forth in the document.
Wharfage
Charge assessed by carrier for the handling of incoming or outgoing ocean cargo.

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