Glossary
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 document against acceptance. See SIGHT DRAFT. DOCUMENTS AGAINST ACCEPTANCE.
ad valorem Literally, according-to-value. See DUTY.
advisory capacity A term indicating that a shipper's agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented. Compare WITHOUT RESERVE.
affreightment (contract of) An agreement between steamship line (or similar carrier) and an importer or exporter in which cargo space is reserved on a vessel for a specified time and at a specified price. The importer/exporter is obligated to make payment whether or not the shipment is made.
after date A phrase indicating that payment on a draft or other negotiable instrument is due a specified number of days after presentation of the draft to the drawee or payee. Compare AFTER DATE, AT SIGHT.
after sight A phrase indicating that the date of maturity of a draft or other negotiable instrument is fixed by the date on which it was drawn a specified number of days after presentation of the draft to the drawee or payee. Compare
with AFTER SIGHT, AT SIGHT.
agent See REPRESENTATIVE.
A.I.D. (Agency for International Development) A United States Government institution which administers economic aid to foreign countries, makes long-term loans for expansion programs in less-developed countries, and guarantees loans made by private enterprise. These loans often provide the funds to pay for United States products.
air waybill The carrying agreement between shipper and air carrier which is obtained from the airline used to ship the
goods. Technically, it is a nonnegotiable instrument of air transportation which serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed therein and obligates itself to carry the consignment to the airport of destination according to specified conditions. Compare INLAND BILL OF LADING, OCEAN BILL OF LADING, THROUGH BILL OF LADING.
alongside A phrase referring to the side of a ship. Goods to be delivered alongside are to be placed on the dock or lighter within reach of the transport ship's tackle so that they can be loaded aboard the ship.
antidiversion clause See DESTINATION CONTROL STATEMENT.
arbitrage The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at higher prices.
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, nondelivery, fresh water damage, contact with other cargo, breakage and leakage, inherent vice, loss of market, and losses caused by delay are not covered.
amendment—letter of credit A change in the terms, amount, or expiration date of a letter of credit.
ATA Admission Temporary Admission.
ATA Carnet A customs document which enables one to carry or send goods temporarily into certain foreign countries without paying duties or posting bonds.
at sight A phrase indicating that payment on a draft or other negotiable instrument is due upon presentation or demand. Compare AFTER SIGHT, AFTER DATE.
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.
banker's bank A bank that is established by mutual consent by independent and unaffiliated banks to provide a clearinghouse for financial transactions.
barratry Negligence or fraud on the part of a ship's officers or crew resulting in loss to the owners. See OPEN CARGO POLICY.
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 which provides the terms of the contract between the shipper and the transportation company to move freight between stated points at a specified charge.
blanket policy See OPEN POLICY.
blocked exchange Exchange which cannot be freely converted into other currencies.
bonded warehouse A building authorized by customs authorities for the storage of goods without payment of duties until removal.
booking An arrangement with a steamship company for the acceptance and carriage of freight.
broker See EXPORT BROKER.
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"
cash against documents (c.a.d.) Payment for goods in which a commission house or other intermediary transfers title documents to the buyer upon payment in cash.
cash in advance (c.i.a.) Payment for goods in which the price is paid in full before shipment is made. This method usually is used only for small purchases or when the goods are built.
cash with order (c.w.o.) Payment for goods in which the buyer pays when ordering and in which the transaction is binding on both parties.
carnet See ATA CARNET.
carrier A transportation line that hauls cargo.
CCCN (The Customs Cooperation Council Nomenclature) The customs tariff used by many countries worldwide. It is also known as the Brussels Tariff Nomenclature. Compare STANDARD INDUSTRIAL CLASSIFICATION, STANDARD INTERNATIONAL TRADE CLASSIFICATION, TARIFF SCHEDULE, COMMODITY GROUPINGS.
certificate of free sale A certificate, required by some foreign governments, stating that the goods for export, if products under the jurisdiction of the United States 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 governmental 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.
chamber of commerce An association of businessmen whose purpose is to promote commercial and industrial interests in the community.
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.
c & f (cost and freight) A pricing term indicating that these costs are included in the quoted price. Same as C.I.F., except that insurance is covered by the buyer.
c & i (cost and insurance) A pricing term indicating that these costs are included in the quoted price.
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.
c.i.f. & c. (cost, insurance, freight, and commission) A pricing term indicating that these costs are included in the price.
c.i.f. & e. (cost, insurance, freight, and (currency) exchange) A pricing term indicating that these costs are included in the price.
Clayton Act A major United States antitrust law passed in 1914 to supplement the Sherman Act. The Clayton Act deals primarily with the prohibition of price discrimination among buyers by sellers in the sale of commodities and certain corporate mergers where the effect might be to substantially lessen competition or tend to create a monopoly.
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.
clean draft A draft to which no documents have been attached.
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 All documents (invoices, bills of lading,
etc) submitted to a buyer for the purpose of receiving
payment for a shipment,
collection papers The documents submitted, usually with a
draft or against a letter of credit, for payment of an export
shipment.
commercial attache 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 PURCHASING AGENT AND FOREIGN SALES
REPRESENTATIVE.
Commodity Credit Corporation A government corporation controlled by the Department of Agriculture to provide financing and stability to the marketing and exporting of agricultural commodities.
commodity groupings A numerical system used by the United States Bureau of the Census to group imports and exports in broader categories than are provided by the tariff schedules. Currently, Schedule A is used to categorize imports, Schedule E for exports. Schedule B was replaced by Schedule E in 1978. Compare THE CUS-
TOMS COOPERATIVE COUNCIL NOMENCLATURE, STANDARD INDUSTRIAL CLASSIFICATION, TARIFF SCHEDULES.
common carrier An individual, partnership, or corporation which transports persons or goods for compensation.
compensation A form of countertrade in which the seller agrees to take full or partial payment in goods or services generated from the sale.
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 United States 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.
consignee marks See MARKS.
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 declaration A formal statement, made to the consul of a foreign country, describing goods to be shipped.
consuler invoice A detailed statement regarding the character of goods shipped, duly certified by the consul of the importing country at the port of shipment.
consulate The official premises of a foreign government representative.
contingency insurance Insurance taken out by the exporter complementary to insurance bought by the consignee abroad.
correspondent bank A bank which is a depositor in another bank, accepting and collecting items for its bank.
counterpurchase One of the most common forms of countertrade in which the seller receives cash but contractually agrees to buy local products or services as a percentage of cash received and over an agreed period of time.
countertrade International trade in which the seller is required to accept goods or other instruments of trade, in partial or whole payment for its products.
countervailing duty An extra duty imposed by the Secretary of Commerce to offset export grants, bounties, or subsidies paid to foreign suppliers in certain countries by the government of those countries as an incentive to export.
country of origin The country in which a particular commodity is manufactured.
credit risk insurance A form of insurance which covers the seller against loss due to nonpayment on the part of the buyer.
customs The duties levied by a country on imports and exports. The term also applies to the procedures and organization involved in such collection.
customhouse broker An individual or firm licensed to enter and clear through customs.
d/a See DOCUMENTS AGAINST ACCEPTANCE.
d/p See DOCUMENTS AGAINST PAYMENT.
date draft A draft drawn to mature on a specified number of days after the date it is issued, with or without regard to the date of acceptance.
delivery point See SPECIFIC DELIVERY POINT.
demurrage Excess time taken for loading or unloading a vessel as a result of a shipper. Charges are assessed by the shipping company.
Department of Commerce An agency of government whose purpose it is to promote commercial industrial interests in the country. See UNITED STATES DEPARTMENT OF COMMERCE.
destination control statement Any one of various statements which the United States Government requires to be displayed on export shipments and which specify the destination for which export of the shipment has been authorized.
devaluation The official lowering of the value of one country's currency in terms of one or more foreign currencies. Thus, if the United States dollar is devaluated in relation to the French Franc, one dollar will buy fewer francs than before.
developed countries A term used to distinguish the more industrialized nations—including all OECD member countries as well as the Soviet Union and most of the socialist countries of Eastern Europe—from developing— or less developed—countries. The developed countries are sometimes collectively designated as the "North," because most of them are in the Northern Hemisphere.
developing countries (lcds) A broad range of countries that generally lack a high degree of industrialization, infrastructure and other capital investment, sophisticated technology, widespread literacy, and advanced living standards among their populations as a whole. The developing countries are sometimes collectively designated as the "South," because a large number of them are in the Southern Hemisphere. All of the countries of Africa (except South Africa), Asia and Oceania (except Australia, Japan and New Zealand), Latin America, and the Middle East are generally considered "developing countries," as are a few European countries (Cyprus, Malta, Turkey, and Yugoslavia, for example). Some experts differentiate four subcategories of developing countries as having different economic needs and interest:
1) A few relatively wealthy OPEC countries—sometimes referred to as oil exporting developing countries—share a particular interest in a financially sound international economy and open capital markets;
2) Newly Industrializing Countries (NIC's) have a growing stake in an open international trading system;
3) A number of middle income countries—principally commodity exporters—have shown a particular interest in commodity stabilization schemes; and
4) More than 30 very poor countries ("least developed countries") are predominantly agricultural, have sharply limited development prospects during the near future, and tend to be heavily dependent on official development assistance. See LEAST DEVELOPED NATIONS.
disc See DOMESTIC INTERNATIONAL CORPORATION.
discount (financial) A deduction from the face value of commercial paper in consideration of cash by the seller before a specified 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.
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 firm that sells directly for a manufacturer, usually on an exclusive contract for a specified territory, and who maintains an inventory on hand.
dock receipt A receipt issued by an ocean carrier or its agent, acknowledging that the shipment has been delivered, or 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 United States Government authorization to promote exports from the United States by giving the exporter economic advantages not available outside such authorization.
domicile The place where draft or acceptance is made payable.
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.
dumping Exporting merchandise into a country (e.g., the United States) at prices below the prices in the domestic market.
duty The tax imposed by a government on merchandise imported from another country.
Edge Act Corporation Banks that are subsidiaries to bank holding companies or other banks established to engage in foreign business transactions. They were established by an Act of Congress in 1919.
eurodollars United States dollars placed on deposit in banks outside the United States (primarily in Europe).
ex "from" (Point of Origin) A pricing term ("Ex Factory," "Ex Warehouse," etc) under which the seller agrees to place the goods at the buyer's disposal at the agreed place, with costs from that point being paid by the buyer.
exchange permit A governmental permit sometimes required of an importer to enable him to convert his own country's currency into 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.
exchange rate The price of one currency in terms of another, i.e., the number of units of one currency that may be exchanged for one unit of another currency.
Eximbank The Export/Import Bank of the United States in Washington, DC.
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 noncom-peting 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.
Export Trading Company Act The law passed this act on October 8, 1982, designing it to encourage the formation of Export Trading Companies. It establishes an Office of Export Trading Company Affairs in Commerce, permits bankers' banks and holding companies to invest in ETCs, reduces the restrictions on export financing provided by financial institutions, and modifies the application of the antitrust laws to certain export trade.
export trading company An ETC, as envisioned by the ETC Act, is a company doing business in the United States principally to export goods or services produced in the United States or to facilitate such exports by unaffiliated persons. It can be owned by foreigners and can import, barter, and arrange sales between third countries, as well as export.
factoring A method used by businesses, including trading companies, to obtain cash for discounted accounts receivables or other assets.
f.a.s. free along side, as in fas (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.
FCIA Foreign Credit Insurance Association.
f.i.—"free in" A pricing term indicating that the charterer of a vessel is responsible for the cost of loading goods into the vessel.
f.o.—"free out" A pricing term indicating that the charterer of a vessel is responsible for the cost of loading goods from the vessel.
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)."
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 Credit Insurance Association (FCIA) An association of fifty insurance companies which operate in conjunction with the EXIMBANK to provide comprehensive insurance for exporters against nonpayment. FCIA underwrites the commercial credit risks. EXIMBANK covers the political risk and any excessive commercial risks.
foreign distribution See DISTRIBUTOR.
foreign exchange A currency or credit instruments of a foreign country. Also, transactions involving purchase and/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 sales representative A representative or agent residing in a foreign country who acts as a salesman for a United States 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 reexport 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.
f.p.a.—"free of particular average" The title of a clause used in marine insurance, indicating that partial loss or damage to a foreign shipment is not covered. (Note: Loss resulting from certain conditions, such as the sinking or burning of the ship, may be specifically exempted from the effect of the clause.) Compare with W.P.A.
FSC—"foreign sales corporation" The Foreign Sales Corporation (FSC) replaces the DISC. To qualify for special tax treatment, an FSC must be a foreign corporation, maintain a summary of its permanent books of accounting at the foreign office, and have at least one director resident outside of the United States. A portion of the foreign sales corporation's income (generally corresponding to the tax deferred income of the DISC) would be exempt from United States tax at both the FSC and the United States corporate parent levels. This exemption is achieved by allowing a domestic corporation that is an FSC shareholder a 100% deduction for a portion of dividends received from an FSC attributable to economic activity actually conducted outside the United States customs territory. Interest, dividends, royalties, or other investment income of an FSC would be subject to United States tax.
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.
free trade zone See FOREIGN TRADE ZONE.
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.
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.
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 sometimes can 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, THROUGH BILL OF
LADING.
international freight forwarder See FREIGHT FORWARDER. International Trade Administration (ITA) The ITA is a
division of the Department of Commerce designed to promote world trade and to strengthen the international trade and investment position of the United States.
inland carrier A transportation line which handles export or import cargo between the port and inland points.
insurance certificate A document issued by an insurance company, usually to order of shipper under a marine policy, and insuring a particular shipment of merchandise.
invoice See COMMERCIAL INVOICE.
irrevocable Applied to letters of credit. An irrevocable letter of credit is one which cannot be altered or cancelled once it has been negotiated between the buyer and his bank.
joint venture A commercial or industrial arrangement in which principals of one company share control and ownership with principals of another.
least developed countries (ldcs) Some 36 of the world's poorest countries, considered by the United Nations to be the least developed of the less developed countries. Most of them are small in terms of area and population, and some are land-locked or small island countries. They generally are characterized by low per capita incomes, literacy levels, and medical standards, subsistence agriculture, and a lack of exploitable minerals and competitive industries. Many suffer from aridity, floods, hurricanes, and excessive animal and plant pests, and most are situated in the zone 10 to 30 degrees north latitude. These countries have little prospect of rapid economic development in the foreseeable future and are likely to remain heavily dependent upon official development assistance for many years. Most are in Africa, but a few, such as Bangladesh, Afghanistan, Laos, and Nepal, are in Asia.
Haiti is the only country in the Western Hemisphere classified by the United Nations as "least developed."
legal weight The weight of the goods plus immediate wrappings which go along with the goods, e.g. contents of a tin can together with its can. 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 an agreed amount of money on receipt by the bank of certain documents within a specified time.
license See EXCHANGE LICENSE, EXPORT LICENSE, IMPORT
LICENSE, VALIDATED LICENSE.
licensing The grant or technical assistance service and or the use of product rights, such as a trademark in return for royalty payments.
lighter An open or covered barge towed by a tugboat and used mainly in harbors and inland waterways.
lighterage The loading or unloading of a ship by means of a barge, or lighter which because of shallow water permits the ship from coming to shore.
mea manufacturer's export agent See EXPORT MANAGEMENT COMPANY.
marine insurance An insurance which will compensate the owner of goods transported on the seas 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 wrapping, 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 term 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, and only recently by the United States.
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, THROUGH BILL OF LADING.
offset A variation of countertrade in which the seller is required to assist in or arrange for the marketing of locally-produced goods.
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 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.
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.
OPIC (Overseas Private Investment Corporation) A wholly-owned government corporation designed to promote private United States investment in developing countries by promoting political risk insurance and some financing assistance.
"order" bill of lading A negotiable bill of lading 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 might be requested by an importer or might be required by an importing country to facilitate the clearance of goods through customs,
parcel post receipt The postal authorities' signed acknowledgement of delivery to them of a shipment made by parcel post.
perils of the sea A marine insurance term used to designate heavy weather, straining, lightning, collision, and sea water damage.
phytosanitary inspection certificate A certificate, issued by the United States Department of Agriculture, to satisfy import regulations of foreign countries, indicating that a United States shipment has been inspected and is free from harmful pests and plant diseases.
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,
purchasing agent An agent who purchases goods in his/her
own country on behalf of large foreign buyers such as
government agencies and large private concerns,
procuring agent See PURCHASING AGENT.
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.
representative The word "representative" is preferred to the word "agent" in writing, since "agent", in an exact legal sense, connotes more binding powers and responsibilities than "representative". See FOREIGN SALES REPRESENTATIVE.
revocable Applies to letters of credit. A revocable letter of credit is one which can be altered or cancelled 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 licensor. See LICENSING.
s.a. (societe anonyme) French expression meaning a corporation.
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."
s/d See SIGHT DRAFT.
Sherman Act This law bars contracts, combinations, or conspiracies in restraint of trade and makes it a violation of law to monopolize or attempt to, or conspire to monopolize any trade in interstate or foreign commerce. Jurisdiction requires a direct, substantial, and reasonably foreseeable effect on domestic trade or commerce or on the export commerce of a person engaged in such commerce in the United States.
Shippers Export Declaration A form required by the United States Treasury Department and completed by a shipper showing the value, weight, consignee, destination, etc. of export shipments as well as Schedule B identification number.
shippers 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.
SIC See STANDARD INDUSTRIAL CLASSIFICATION.
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.
SITC See STANDARD INTERNATIONAL TRADE CLASSIFICATION.
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.
spot exchange The purpose or sale of foreign exchange for immediate delivery.
Standard Industrial Classification (SIC) A numerical system developed by the United States 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 and to reporting trade statistics.
state-controlled trading company In a country with a state trading monopoly, a trading entity empowered by the country's government to conduct export business.
steamship conference A group of vessel operators joined together for the purpose of establishing freight rates. A shipper might 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, nonnegotiable, in which the goods are consigned directly to a named consignee.
swap arrangements A form of countertrade in which the seller sells on credit and then transfers the credit to a third party.
switch arrangements A form of countertrade in which the seller sells on credit and then transfers the credit to a third party.
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.
tariff schedules of the united states (tsus) A standard numerical system used by the United States Customs Bureau to classify imports and exports. Compare STANDARD INDUSTRIAL CLASSIFICATION, CUSTOMS COOPERATION COUNCIL NOMENCLATURE, STANDARD INDUSTRIAL TRADE CLASSIFICATION.
TDP See TRADE AND DEVELOPMENT PROGRAM.
tenor The time fixed or allowed for payment, as in "the tenor of a draft."
through bill of lading A single bill of lading covering 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, therefore, cannot be used. Compare AIR WAYBILL, INLAND BILL OF LADING, OCEAN BILL OF LADING.
time draft A draft drawn so it matures at a certain fixed time after presentation or acceptance.
United States standard master A single business form with correctable stencil which includes space for information required on many different export forms. Use of this form enables multiple typing.
Trade Development Program (TDP) This program is designed to promote economic development in the Third World and the sale of United States goods and services to these developing countries. It operates as part of the International Development Cooperative Agency.
trade mission A mission to a foreign country organized to promote trade through the establishment of contracts and exposure to the commercial environment. They are frequently organized by federal, state, or local agencies.
tramp steamer A ship not operating on regular routes or schedules.
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/her assets and to hold them ready for repossession by the bank.
turnkey A method of construction whereby the contractor assumes total responsibility from design through completion of the task.
validated license A government document authorizing the export of commodities within limitations set forth in the document.
vertical etc An ETC that integrates a range of functions taking products from suppliers to consumers.
visa A signature of formal approval on an entree document. Obtained from a consulate.
w.a.—"with average" A marine insurance term meaning that a shipment is protected from partial damage whenever the damage exceeds 3% (or some other percentage).
warehouse receipt A receipt issued by a warehouse listing goods received for storage.
Webb-Pomerene Association Institutions engaged in exporting that combine the products of similar producers for overseas sales. These associations have partial exemption from United States antitrust laws but may not engage in third country trade or combine to export services. See HORIZONTAL ETCS.
wharfage Charge assessed by carrier for the handling of incoming or outgoing ocean 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 individual represented. Compare ADVISORY CAPACITY.
acceptance draft A sight draft document against acceptance. See SIGHT DRAFT. DOCUMENTS AGAINST ACCEPTANCE.
ad valorem Literally, according-to-value. See DUTY.
advisory capacity A term indicating that a shipper's agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented. Compare WITHOUT RESERVE.
affreightment (contract of) An agreement between steamship line (or similar carrier) and an importer or exporter in which cargo space is reserved on a vessel for a specified time and at a specified price. The importer/exporter is obligated to make payment whether or not the shipment is made.
after date A phrase indicating that payment on a draft or other negotiable instrument is due a specified number of days after presentation of the draft to the drawee or payee. Compare AFTER DATE, AT SIGHT.
after sight A phrase indicating that the date of maturity of a draft or other negotiable instrument is fixed by the date on which it was drawn a specified number of days after presentation of the draft to the drawee or payee. Compare
with AFTER SIGHT, AT SIGHT.
agent See REPRESENTATIVE.
A.I.D. (Agency for International Development) A United States Government institution which administers economic aid to foreign countries, makes long-term loans for expansion programs in less-developed countries, and guarantees loans made by private enterprise. These loans often provide the funds to pay for United States products.
air waybill The carrying agreement between shipper and air carrier which is obtained from the airline used to ship the
goods. Technically, it is a nonnegotiable instrument of air transportation which serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed therein and obligates itself to carry the consignment to the airport of destination according to specified conditions. Compare INLAND BILL OF LADING, OCEAN BILL OF LADING, THROUGH BILL OF LADING.
alongside A phrase referring to the side of a ship. Goods to be delivered alongside are to be placed on the dock or lighter within reach of the transport ship's tackle so that they can be loaded aboard the ship.
antidiversion clause See DESTINATION CONTROL STATEMENT.
arbitrage The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at higher prices.
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, nondelivery, fresh water damage, contact with other cargo, breakage and leakage, inherent vice, loss of market, and losses caused by delay are not covered.
amendment—letter of credit A change in the terms, amount, or expiration date of a letter of credit.
ATA Admission Temporary Admission.
ATA Carnet A customs document which enables one to carry or send goods temporarily into certain foreign countries without paying duties or posting bonds.
at sight A phrase indicating that payment on a draft or other negotiable instrument is due upon presentation or demand. Compare AFTER SIGHT, AFTER DATE.
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.
banker's bank A bank that is established by mutual consent by independent and unaffiliated banks to provide a clearinghouse for financial transactions.
barratry Negligence or fraud on the part of a ship's officers or crew resulting in loss to the owners. See OPEN CARGO POLICY.
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 which provides the terms of the contract between the shipper and the transportation company to move freight between stated points at a specified charge.
blanket policy See OPEN POLICY.
blocked exchange Exchange which cannot be freely converted into other currencies.
bonded warehouse A building authorized by customs authorities for the storage of goods without payment of duties until removal.
booking An arrangement with a steamship company for the acceptance and carriage of freight.
broker See EXPORT BROKER.
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"
cash against documents (c.a.d.) Payment for goods in which a commission house or other intermediary transfers title documents to the buyer upon payment in cash.
cash in advance (c.i.a.) Payment for goods in which the price is paid in full before shipment is made. This method usually is used only for small purchases or when the goods are built.
cash with order (c.w.o.) Payment for goods in which the buyer pays when ordering and in which the transaction is binding on both parties.
carnet See ATA CARNET.
carrier A transportation line that hauls cargo.
CCCN (The Customs Cooperation Council Nomenclature) The customs tariff used by many countries worldwide. It is also known as the Brussels Tariff Nomenclature. Compare STANDARD INDUSTRIAL CLASSIFICATION, STANDARD INTERNATIONAL TRADE CLASSIFICATION, TARIFF SCHEDULE, COMMODITY GROUPINGS.
certificate of free sale A certificate, required by some foreign governments, stating that the goods for export, if products under the jurisdiction of the United States 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 governmental 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.
chamber of commerce An association of businessmen whose purpose is to promote commercial and industrial interests in the community.
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.
c & f (cost and freight) A pricing term indicating that these costs are included in the quoted price. Same as C.I.F., except that insurance is covered by the buyer.
c & i (cost and insurance) A pricing term indicating that these costs are included in the quoted price.
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.
c.i.f. & c. (cost, insurance, freight, and commission) A pricing term indicating that these costs are included in the price.
c.i.f. & e. (cost, insurance, freight, and (currency) exchange) A pricing term indicating that these costs are included in the price.
Clayton Act A major United States antitrust law passed in 1914 to supplement the Sherman Act. The Clayton Act deals primarily with the prohibition of price discrimination among buyers by sellers in the sale of commodities and certain corporate mergers where the effect might be to substantially lessen competition or tend to create a monopoly.
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.
clean draft A draft to which no documents have been attached.
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 All documents (invoices, bills of lading,
etc) submitted to a buyer for the purpose of receiving
payment for a shipment,
collection papers The documents submitted, usually with a
draft or against a letter of credit, for payment of an export
shipment.
commercial attache 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 PURCHASING AGENT AND FOREIGN SALES
REPRESENTATIVE.
Commodity Credit Corporation A government corporation controlled by the Department of Agriculture to provide financing and stability to the marketing and exporting of agricultural commodities.
commodity groupings A numerical system used by the United States Bureau of the Census to group imports and exports in broader categories than are provided by the tariff schedules. Currently, Schedule A is used to categorize imports, Schedule E for exports. Schedule B was replaced by Schedule E in 1978. Compare THE CUS-
TOMS COOPERATIVE COUNCIL NOMENCLATURE, STANDARD INDUSTRIAL CLASSIFICATION, TARIFF SCHEDULES.
common carrier An individual, partnership, or corporation which transports persons or goods for compensation.
compensation A form of countertrade in which the seller agrees to take full or partial payment in goods or services generated from the sale.
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 United States 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.
consignee marks See MARKS.
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 declaration A formal statement, made to the consul of a foreign country, describing goods to be shipped.
consuler invoice A detailed statement regarding the character of goods shipped, duly certified by the consul of the importing country at the port of shipment.
consulate The official premises of a foreign government representative.
contingency insurance Insurance taken out by the exporter complementary to insurance bought by the consignee abroad.
correspondent bank A bank which is a depositor in another bank, accepting and collecting items for its bank.
counterpurchase One of the most common forms of countertrade in which the seller receives cash but contractually agrees to buy local products or services as a percentage of cash received and over an agreed period of time.
countertrade International trade in which the seller is required to accept goods or other instruments of trade, in partial or whole payment for its products.
countervailing duty An extra duty imposed by the Secretary of Commerce to offset export grants, bounties, or subsidies paid to foreign suppliers in certain countries by the government of those countries as an incentive to export.
country of origin The country in which a particular commodity is manufactured.
credit risk insurance A form of insurance which covers the seller against loss due to nonpayment on the part of the buyer.
customs The duties levied by a country on imports and exports. The term also applies to the procedures and organization involved in such collection.
customhouse broker An individual or firm licensed to enter and clear through customs.
d/a See DOCUMENTS AGAINST ACCEPTANCE.
d/p See DOCUMENTS AGAINST PAYMENT.
date draft A draft drawn to mature on a specified number of days after the date it is issued, with or without regard to the date of acceptance.
delivery point See SPECIFIC DELIVERY POINT.
demurrage Excess time taken for loading or unloading a vessel as a result of a shipper. Charges are assessed by the shipping company.
Department of Commerce An agency of government whose purpose it is to promote commercial industrial interests in the country. See UNITED STATES DEPARTMENT OF COMMERCE.
destination control statement Any one of various statements which the United States Government requires to be displayed on export shipments and which specify the destination for which export of the shipment has been authorized.
devaluation The official lowering of the value of one country's currency in terms of one or more foreign currencies. Thus, if the United States dollar is devaluated in relation to the French Franc, one dollar will buy fewer francs than before.
developed countries A term used to distinguish the more industrialized nations—including all OECD member countries as well as the Soviet Union and most of the socialist countries of Eastern Europe—from developing— or less developed—countries. The developed countries are sometimes collectively designated as the "North," because most of them are in the Northern Hemisphere.
developing countries (lcds) A broad range of countries that generally lack a high degree of industrialization, infrastructure and other capital investment, sophisticated technology, widespread literacy, and advanced living standards among their populations as a whole. The developing countries are sometimes collectively designated as the "South," because a large number of them are in the Southern Hemisphere. All of the countries of Africa (except South Africa), Asia and Oceania (except Australia, Japan and New Zealand), Latin America, and the Middle East are generally considered "developing countries," as are a few European countries (Cyprus, Malta, Turkey, and Yugoslavia, for example). Some experts differentiate four subcategories of developing countries as having different economic needs and interest:
1) A few relatively wealthy OPEC countries—sometimes referred to as oil exporting developing countries—share a particular interest in a financially sound international economy and open capital markets;
2) Newly Industrializing Countries (NIC's) have a growing stake in an open international trading system;
3) A number of middle income countries—principally commodity exporters—have shown a particular interest in commodity stabilization schemes; and
4) More than 30 very poor countries ("least developed countries") are predominantly agricultural, have sharply limited development prospects during the near future, and tend to be heavily dependent on official development assistance. See LEAST DEVELOPED NATIONS.
disc See DOMESTIC INTERNATIONAL CORPORATION.
discount (financial) A deduction from the face value of commercial paper in consideration of cash by the seller before a specified 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.
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 firm that sells directly for a manufacturer, usually on an exclusive contract for a specified territory, and who maintains an inventory on hand.
dock receipt A receipt issued by an ocean carrier or its agent, acknowledging that the shipment has been delivered, or 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 United States Government authorization to promote exports from the United States by giving the exporter economic advantages not available outside such authorization.
domicile The place where draft or acceptance is made payable.
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.
dumping Exporting merchandise into a country (e.g., the United States) at prices below the prices in the domestic market.
duty The tax imposed by a government on merchandise imported from another country.
Edge Act Corporation Banks that are subsidiaries to bank holding companies or other banks established to engage in foreign business transactions. They were established by an Act of Congress in 1919.
eurodollars United States dollars placed on deposit in banks outside the United States (primarily in Europe).
ex "from" (Point of Origin) A pricing term ("Ex Factory," "Ex Warehouse," etc) under which the seller agrees to place the goods at the buyer's disposal at the agreed place, with costs from that point being paid by the buyer.
exchange permit A governmental permit sometimes required of an importer to enable him to convert his own country's currency into 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.
exchange rate The price of one currency in terms of another, i.e., the number of units of one currency that may be exchanged for one unit of another currency.
Eximbank The Export/Import Bank of the United States in Washington, DC.
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 noncom-peting 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.
Export Trading Company Act The law passed this act on October 8, 1982, designing it to encourage the formation of Export Trading Companies. It establishes an Office of Export Trading Company Affairs in Commerce, permits bankers' banks and holding companies to invest in ETCs, reduces the restrictions on export financing provided by financial institutions, and modifies the application of the antitrust laws to certain export trade.
export trading company An ETC, as envisioned by the ETC Act, is a company doing business in the United States principally to export goods or services produced in the United States or to facilitate such exports by unaffiliated persons. It can be owned by foreigners and can import, barter, and arrange sales between third countries, as well as export.
factoring A method used by businesses, including trading companies, to obtain cash for discounted accounts receivables or other assets.
f.a.s. free along side, as in fas (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.
FCIA Foreign Credit Insurance Association.
f.i.—"free in" A pricing term indicating that the charterer of a vessel is responsible for the cost of loading goods into the vessel.
f.o.—"free out" A pricing term indicating that the charterer of a vessel is responsible for the cost of loading goods from the vessel.
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)."
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 Credit Insurance Association (FCIA) An association of fifty insurance companies which operate in conjunction with the EXIMBANK to provide comprehensive insurance for exporters against nonpayment. FCIA underwrites the commercial credit risks. EXIMBANK covers the political risk and any excessive commercial risks.
foreign distribution See DISTRIBUTOR.
foreign exchange A currency or credit instruments of a foreign country. Also, transactions involving purchase and/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 sales representative A representative or agent residing in a foreign country who acts as a salesman for a United States 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 reexport 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.
f.p.a.—"free of particular average" The title of a clause used in marine insurance, indicating that partial loss or damage to a foreign shipment is not covered. (Note: Loss resulting from certain conditions, such as the sinking or burning of the ship, may be specifically exempted from the effect of the clause.) Compare with W.P.A.
FSC—"foreign sales corporation" The Foreign Sales Corporation (FSC) replaces the DISC. To qualify for special tax treatment, an FSC must be a foreign corporation, maintain a summary of its permanent books of accounting at the foreign office, and have at least one director resident outside of the United States. A portion of the foreign sales corporation's income (generally corresponding to the tax deferred income of the DISC) would be exempt from United States tax at both the FSC and the United States corporate parent levels. This exemption is achieved by allowing a domestic corporation that is an FSC shareholder a 100% deduction for a portion of dividends received from an FSC attributable to economic activity actually conducted outside the United States customs territory. Interest, dividends, royalties, or other investment income of an FSC would be subject to United States tax.
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.
free trade zone See FOREIGN TRADE ZONE.
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.
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.
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 sometimes can 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, THROUGH BILL OF
LADING.
international freight forwarder See FREIGHT FORWARDER. International Trade Administration (ITA) The ITA is a
division of the Department of Commerce designed to promote world trade and to strengthen the international trade and investment position of the United States.
inland carrier A transportation line which handles export or import cargo between the port and inland points.
insurance certificate A document issued by an insurance company, usually to order of shipper under a marine policy, and insuring a particular shipment of merchandise.
invoice See COMMERCIAL INVOICE.
irrevocable Applied to letters of credit. An irrevocable letter of credit is one which cannot be altered or cancelled once it has been negotiated between the buyer and his bank.
joint venture A commercial or industrial arrangement in which principals of one company share control and ownership with principals of another.
least developed countries (ldcs) Some 36 of the world's poorest countries, considered by the United Nations to be the least developed of the less developed countries. Most of them are small in terms of area and population, and some are land-locked or small island countries. They generally are characterized by low per capita incomes, literacy levels, and medical standards, subsistence agriculture, and a lack of exploitable minerals and competitive industries. Many suffer from aridity, floods, hurricanes, and excessive animal and plant pests, and most are situated in the zone 10 to 30 degrees north latitude. These countries have little prospect of rapid economic development in the foreseeable future and are likely to remain heavily dependent upon official development assistance for many years. Most are in Africa, but a few, such as Bangladesh, Afghanistan, Laos, and Nepal, are in Asia.
Haiti is the only country in the Western Hemisphere classified by the United Nations as "least developed."
legal weight The weight of the goods plus immediate wrappings which go along with the goods, e.g. contents of a tin can together with its can. 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 an agreed amount of money on receipt by the bank of certain documents within a specified time.
license See EXCHANGE LICENSE, EXPORT LICENSE, IMPORT
LICENSE, VALIDATED LICENSE.
licensing The grant or technical assistance service and or the use of product rights, such as a trademark in return for royalty payments.
lighter An open or covered barge towed by a tugboat and used mainly in harbors and inland waterways.
lighterage The loading or unloading of a ship by means of a barge, or lighter which because of shallow water permits the ship from coming to shore.
mea manufacturer's export agent See EXPORT MANAGEMENT COMPANY.
marine insurance An insurance which will compensate the owner of goods transported on the seas 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 wrapping, 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 term 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, and only recently by the United States.
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, THROUGH BILL OF LADING.
offset A variation of countertrade in which the seller is required to assist in or arrange for the marketing of locally-produced goods.
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 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.
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.
OPIC (Overseas Private Investment Corporation) A wholly-owned government corporation designed to promote private United States investment in developing countries by promoting political risk insurance and some financing assistance.
"order" bill of lading A negotiable bill of lading 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 might be requested by an importer or might be required by an importing country to facilitate the clearance of goods through customs,
parcel post receipt The postal authorities' signed acknowledgement of delivery to them of a shipment made by parcel post.
perils of the sea A marine insurance term used to designate heavy weather, straining, lightning, collision, and sea water damage.
phytosanitary inspection certificate A certificate, issued by the United States Department of Agriculture, to satisfy import regulations of foreign countries, indicating that a United States shipment has been inspected and is free from harmful pests and plant diseases.
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,
purchasing agent An agent who purchases goods in his/her
own country on behalf of large foreign buyers such as
government agencies and large private concerns,
procuring agent See PURCHASING AGENT.
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.
representative The word "representative" is preferred to the word "agent" in writing, since "agent", in an exact legal sense, connotes more binding powers and responsibilities than "representative". See FOREIGN SALES REPRESENTATIVE.
revocable Applies to letters of credit. A revocable letter of credit is one which can be altered or cancelled 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 licensor. See LICENSING.
s.a. (societe anonyme) French expression meaning a corporation.
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."
s/d See SIGHT DRAFT.
Sherman Act This law bars contracts, combinations, or conspiracies in restraint of trade and makes it a violation of law to monopolize or attempt to, or conspire to monopolize any trade in interstate or foreign commerce. Jurisdiction requires a direct, substantial, and reasonably foreseeable effect on domestic trade or commerce or on the export commerce of a person engaged in such commerce in the United States.
Shippers Export Declaration A form required by the United States Treasury Department and completed by a shipper showing the value, weight, consignee, destination, etc. of export shipments as well as Schedule B identification number.
shippers 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.
SIC See STANDARD INDUSTRIAL CLASSIFICATION.
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.
SITC See STANDARD INTERNATIONAL TRADE CLASSIFICATION.
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.
spot exchange The purpose or sale of foreign exchange for immediate delivery.
Standard Industrial Classification (SIC) A numerical system developed by the United States 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 and to reporting trade statistics.
state-controlled trading company In a country with a state trading monopoly, a trading entity empowered by the country's government to conduct export business.
steamship conference A group of vessel operators joined together for the purpose of establishing freight rates. A shipper might 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, nonnegotiable, in which the goods are consigned directly to a named consignee.
swap arrangements A form of countertrade in which the seller sells on credit and then transfers the credit to a third party.
switch arrangements A form of countertrade in which the seller sells on credit and then transfers the credit to a third party.
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.
tariff schedules of the united states (tsus) A standard numerical system used by the United States Customs Bureau to classify imports and exports. Compare STANDARD INDUSTRIAL CLASSIFICATION, CUSTOMS COOPERATION COUNCIL NOMENCLATURE, STANDARD INDUSTRIAL TRADE CLASSIFICATION.
TDP See TRADE AND DEVELOPMENT PROGRAM.
tenor The time fixed or allowed for payment, as in "the tenor of a draft."
through bill of lading A single bill of lading covering 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, therefore, cannot be used. Compare AIR WAYBILL, INLAND BILL OF LADING, OCEAN BILL OF LADING.
time draft A draft drawn so it matures at a certain fixed time after presentation or acceptance.
United States standard master A single business form with correctable stencil which includes space for information required on many different export forms. Use of this form enables multiple typing.
Trade Development Program (TDP) This program is designed to promote economic development in the Third World and the sale of United States goods and services to these developing countries. It operates as part of the International Development Cooperative Agency.
trade mission A mission to a foreign country organized to promote trade through the establishment of contracts and exposure to the commercial environment. They are frequently organized by federal, state, or local agencies.
tramp steamer A ship not operating on regular routes or schedules.
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/her assets and to hold them ready for repossession by the bank.
turnkey A method of construction whereby the contractor assumes total responsibility from design through completion of the task.
validated license A government document authorizing the export of commodities within limitations set forth in the document.
vertical etc An ETC that integrates a range of functions taking products from suppliers to consumers.
visa A signature of formal approval on an entree document. Obtained from a consulate.
w.a.—"with average" A marine insurance term meaning that a shipment is protected from partial damage whenever the damage exceeds 3% (or some other percentage).
warehouse receipt A receipt issued by a warehouse listing goods received for storage.
Webb-Pomerene Association Institutions engaged in exporting that combine the products of similar producers for overseas sales. These associations have partial exemption from United States antitrust laws but may not engage in third country trade or combine to export services. See HORIZONTAL ETCS.
wharfage Charge assessed by carrier for the handling of incoming or outgoing ocean 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 individual represented. Compare ADVISORY CAPACITY.
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