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