ACCEPTANCE: An agreement to purchase goods at a stated price and under stated terms.
ACCESSION: The process of becoming a member of the General Agreement on Tariffs and Trade (see GATT).
ACTUAL TOTAL LOSS: A marine insurance term; a ship is usually considered an actual total loss for insurance purposes when it has been listed as missing.
ADB: Asian Development Bank. ADB was created to foster economic growth and cooperation in the region of Asia and the Far East and to help accelerate economic development for the countries of the region.
AD VALOREM RATEAn import duty rate determined according to the value (ad valorem) of the commodity entering a country, as opposed to the weight or other basis for calculation. An ad valorem tariff is a tariff calculated as a percentage of the value of the goods when clearing customs.
ADVANCE AGAINST DOCUMENTS: A loan secured by turning over shipment documents of title to the creditor; an alternative to acceptance financing.
AFDB: The African Development Bank and Fund. Established to foster economic and social development of the independent African nations and to promote their mutual economic cooperation. AFDB membership is limited to African countries. The African Development Fund (AFDF), a loan facility, directs its loan resources towards social development projects.
CONTRACT OF AFFREIGHTMENT : An agreement between a shipping company and an importer or exporter for cargo space on a vessel at a specified time for a specified price. The importer/exporter is liable for payment whether or not the shipment is made at the time agreed upon.
AFTER DATE (A/D): A payment on a draft or other negotiable instrument due a specified number of days after the date the draft is presented to the payee.
AFTER SIGHT (A/S): A payment on a draft or other negotiable instrument due upon presentation or demand to the payee.
AIR WAYBILL: A bill of lading covering both the domestic and international portions of flights to transport goods to a specific destination. The air waybill serves as a non-negotiable receipt for the shipper.
ALL-RISK CLAUSE: An insurance clause providing that all loss or damage to goods is insured except that caused by shipper.
AMCHAMS: American Chambers of Commerce in foreign countries. As affiliates of the U.S. Chamber of Commerce, 84 AmChams, located in 59 countries, collect and disseminate extensive information on foreign markets. While membership fees are usually required, the small investment can be worth it for the information received.
ANTI-DUMPING DUTY: A tariff imposed to discourage the under-priced below foreign countrys domestic market) sale of foreign goods in the U.S. market, which might hurt U.S. manufacturers.
APEC: Asia-Pacific Economic Cooperation. A forum to advance economic cooperation and trade and investment liberalization in the Asia-Pacific region, chaired by Indonesia. In addition to trade liberalization, APEC goals include human resource development, growth of small- and medium-sized businesses, and infrastructure development.
ARBITRAGE: The practice of buying foreign currency, stocks and bonds and other commodities in one country or a number of countries and selling them in another market at a higher price to gain an advantage from the differences in exchange rates.
ARBITRATION CLAUSE: A clause in a sales contract detailing how any contract disputes will be settled.
ASEAN: The Association of Southeast Asian Nations, an economic cooperation which includes Thailand, Indonesia, Malaysia,Singapore, Philippines and Brunei. The ASEAN Alliance for Mutual Growth (AMG) is a multilateral initiative to encourage mutually beneficial trade relations between the United States and the ASEAN countries.
BUYER CREDIT: Term to provide the exporter with prompt payment by the overseas importer, who borrows the necessary funds from the bank. The payment is usually made directly by the importers bank to the exporter.
BANKERS ACCEPTANCE: A draft drawn on and accepted by the importers bank. Depending on the banks creditworthiness, the acceptance becomes a financial instrument which can be discounted.
BILL OF EXCHANGE: Also a draft. A written unconditional order for payment from a drawer to a drawee, directing the drawee to pay a specified amount of money in a given currency to the drawer or a named payee at a fixed or determinable future date.
BILL OF LADING: A document establishing the terms of a contract between a shipper and a transportation company for freight 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.
BONDED WAREHOUSE: A warehouse authorized by customs authorities for storage of goods where payment of duties on the goods is deferred until they are removed from the warehouse.
CARNETS: Customs documents permitting the holder to carry or send merchandise temporarily into certain foreign countries for trade shows or sales meetings, without paying duties or posting bonds.
CARIBBEAN DEVELOPMENT BANK (CDB): CDB, founded in 1970, provides financing to foster economic development and integration in the Caribbean. The CDBs members are the governments of Antigua, Bahamas, Barbados, Belize, British Virgin Islands, Canada, Cayman Islands, Colombia, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent, Trinidad and Tobago, Turks and Caicos Islands, the United Kingdom, and Venezuela. Headquarters are located in Barbados.
CARICOM: The Caribbean Community and Common Market, founded in 1973. Member countries are Antigua, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent, Trinidad and Tobago and Anguilla. Headquarters are in Guyana. Related organizations are the Caribbean Investment Corporation and the Caribbean Monetary Fund.
CASH AGAINST DOCUMENTS (C.A.D.): A payment method by which title to the goods is given to the buyer when the buyer pays cash to an intermediary acting for the seller, usually a commission house.
CASH IN ADVANCE (C.I.A.): A payment method for goods in which the buyer pays cash to the seller before shipment of the goods. Usually required by the seller when the goods are customized, such as specialized machinery.
CASH WITH ORDER (C.W.O.): A payment method for goods by which cash is paid at the time of order and the transaction then becomes binding for both the buyer and seller.
CERTIFICATE OF ORIGIN: A certified document detailing the origin of goods used in foreign commerce. Usually required to qualify for reduced tariffs or duties, specified in the terms of a trade agreement, such as the North American Free Trade Agreement.
CHARTER PARTY: Renting of an entire vessel or part of its freight space for a specified voyage or stipulated period of time.
C&F NAMED PORT: Cost and freight. The seller must pay all costs of goods and transportation to the named port; these costs are included in the price quoted. Buyer pays risk insurance once the goods are aboard the ship up to overseas inland destination.
C.I.F. NAMED PORT: Cost, insurance, freight. Same as C&F except seller also provides insurance up to the named destination.
C.I.F. & C. : Price includes commission as well as C.I.F.
C.I.F. DUTY PAID: The seller includes in the final price to the buyer, in addition to C.I.F., the estimated U.S. duty.
C.I.F. & E.: Price quoted includes currency exchange from U.S. dollars to foreign money as well as C.I.F.
CLEAN BILL OF LADING: A document specifying that the goods were received in apparent good order by the carrier.
COCOM: Coordinating Committee on Multilateral Export Controls, a committee of all NATO countries (except Iceland) plus Japan to coordinate and control exports of member countries, especially in high-technology equipment.
COLLECTION: An exporter draws a bill of exchange on a customer abroad and gives the bill to his/her bank to collect funds. The importer must be willing to pay. The bank charges a fee to collect payment, but is not liable should the importer refuse to release the funds.
COLLECTION PAPERS: All documents, including bills of lading, invoices and other papers, submitted to a buyer to receive payments for a shipment.
CONDITIONAL FREE: Merchandise free of duty under certain conditions, if the conditions can be satisfied.
CONFIRMED LETTER OF CREDIT: A letter of credit issued by a foreign bank with payment confirmed by a U.S. bank. An exporter who requires a confirmed letter of credit from the buyer is assured payment from the U.S. bank in case the foreign buyer or bank defaults. (See Letter of Credit.)
CONSIGNMENT: The delivery of merchandise from an exporter to a distributor specifying that the distributor will sell the merchandise and then pay the exporter. The exporter retains title to the goods until the buyer sells them. The buyer (distributor) sells the goods, retains a specified commission, and then pays the exporter.
CONSUL: A government official residing in a foreign country charged with representing the interests of his country and its nationals.
CONSULAR DECLARATION: A formal statement describing goods to be shipped, made out to the consul of the country of destination. Approval from the consul must be obtained prior to shipment.
CONSULAR INVOICE: A document required by some foreign countries showing exact information about the consignor, consignee, value and description of shipment.
CONVENTIONAL TARIFF: A tariff established in the agreements resulting from tariff negotiations under the GATT (see GATT).
CREDIT RISK INSURANCEInsurance which protects the seller against loss due to default on the part of the buyer.
CUSTOMHOUSE BROKERS: A person or firm, licensed by the U.S. Treasury Department, engaged in clearing goods through U.S. Customs. A brokers duties include preparing the entry form and filing it; advising the importer on duties to be paid; advancing duties and other costs; and arranging for delivery to the brokers client, the trucking firm or other carrier.
CUSTOMS TARIFF: Charges imposed by the U.S. government and most other governments on imported and/or exported goods.
DATE DRAFT (D/D): A draft payable a specified number of days after the date it was issued, regardless of the date of acceptance.
DELIVERED AT FRONTIER: Term referring to the sellers obligation to supply goods which conform with the contract. At his/her own risk and expense, the seller must deliver the to the buyer at the specified time and the specified frontier. The buyer is responsible for complying with import formalities and payment of duties.
DELIVERY DUTY PAID: Term referring to the sellers obligation to supply goods according to the terms of the contract. At his/her own risk and expense, the seller must deliver the goods, duty paid, at the specified time and the specified frontier, after complying with all necessary formalities at that frontier.
DEMURRAGE: Excess time taken to load or unload a vessel. A sum agreed to be paid to the ship owner for the excess time taken for loading or unloading not caused by the vessel operator, but due to the acts of a charterer or shipper. Also refers to imported cargo not picked up within prescribed time.
DESTINATION CONTROL STATEMENT: One of a number of statements required by the U.S. Government to be displayed on export shipments specifying the authorized destinations for the shipments.
DIRECT EXPORTING: Sale by an exporter directly to a buyer located in a foreign country.
DISTRIBUTION LICENSE: A license given to an exporter to replace numerous individual validated licenses when there is continuous shipping of authorized products.
DISTRIBUTOR: A foreign agent who sells directly in the foreign market for a U.S. supplier and maintains an inventory of the suppliers products.
DOCUMENTS AGAINST ACCEPTANCE (D/A): Instructions by a shipper to a bank indicating that documents transferring title to the goods should be given to the buyer only after the buyers signing a time draft. Thus the exporter extends credit to the importer and agrees to accept payment at a named future date.
DOCUMENTS AGAINST PAYMENT (D/P)Payment for goods without a guaranteed form of payment in which the documents transferring title to the goods are not given to the buyer until he/she has signed a sight draft.
DOCUMENT OF TITLE: Evidence of entitlement or ownership, such as a carriers negotiable bill of lading, which allows a party to claim title to the goods in question.
DUTY: A tax levied by a government on an import, an export or the use and consumption of goods.
DUTY DRAWBACK: A partial refund of duties paid on importation of goods which are further processed and then re-exported, or exported in same condition as imported.
EMBARGO: A restriction or prohibition upon exports or imports, for specific products or specific countries. Embargoes may be ordered by governments due to warfare or are intended for political, economic or sanitary purposes.
ENTRY PAPERS: Documents which must be filed with U.S. Customs officials describing goods imported, such as the commercial invoice, Ocean Bill of Lading or Carrier Release.
EUROPEAN ECONOMIC COMMUNITY (EEC): An economic grouping of countries also known as the European Common Market, organized by the Treaty of Rome in 1957. Member countries are Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom. The EEC was the largest trading bloc in the world until the North American Free Trade Agreement created a larger market beginning in January 1994.
EX MILL (EX WAREHOUSE, EX MINE, EX FACTORY): Obligates the seller to place a specified quantity of goods at a specified price at his warehouse or plant, loaded on trucks, railroad cars or any other specified means of transport. Obligates the buyer to accept the goods in this manner and make all arrangements for transportation.
EXPORT DECLARATION: A formal statement made to Customs at the exit port declaring full particulars about goods being exported.
EXPORT LICENSE: A permit required to export certain commodities and certain quantities to certain destinations. The purpose is to control the transfer of technologies such as hardware, software, technical data and services. Lists of goods requiring an export license are listed in the official U.S. government publication The Export Administration Regulations of the Bureau of Export Administration (BXA) of the U.S. Department of Commerce.
EXPORT MANAGEMENT COMPANY (EMC): A firm that acts as a complete export arm for a companys exporting needs. Usually an EMC will pay all expenses and receive compensation in the form of a discount off the U.S. price of the product. An organization which, for a commission, acts as a purchasing agent for either a buyer or seller.
EXPORT QUOTAS: Restrictions or set objectives on the export of specified goods imposed by the government of the exporting country. Such restraints may be intended to protect domestic producers and consumers from temporary shortages of certain materials or as a means to moderate world prices of specified commodities. Commodity agreements sometimes contain explicit provisions to indicate when export quotas should go into effect among producers.
EXPORT RATE: A freight rate specially established for application on export traffic and generally lower than the domestic rate.
EXPORT TRADING COMPANY (ETC)A business that acts as a complete export service house and, in addition, takes title to a companys exported goods.
EX SHIP: An international trade term meaning that the seller shall make the goods available to the buyer on board the ship at the destination named in the sales contract. The seller must bear the full cost and risk involved in bringing the goods to the buyer.
EX WORKS: An international trade term meaning that the sellers only responsibility is to make the goods available at sellers premises. The seller is not responsible for loading the goods on the vehicle provided by the buyer, unless otherwise agreed. The buyer bears the full cost and risk involved in bringing the goods from there to buyers desired destination. This term thus represents the minimum obligation for the seller.
FACTORING HOUSES: Types of companies that purchase international accounts receivable at a discount price, usually about two to four percent less than their face value. The fee charged the exporter is offset by the immediate availability of payment, plus the reduction in risk for the exporter. (See Forfaiting.)
F.O.B. FREIGHT ALLOWEDThe same as F.O.B. named inland carrier, except the buyer pays the freight charges of the inland carrier and the seller reduces the invoice by that amount.
F.O.B. FREIGHT PREPAID: The same as F.O.B. named inland carrier, except the seller pays the freight charges of the inland carrier.
F.O.B. NAMED INLAND CARRIER: Seller must place the goods on the named carrier at the specified inland point and obtain a bill of lading. The buyer pays for the transportation.
F.O.B. NAMED PORT OF EXPORTATION: Seller is responsible for placing the goods at a named point of exportation at the sellers expense. Some European buyers use this form when they actually mean F.O.B. vessel.
F.O.B. VESSEL: Seller is responsible for goods and preparation of export documentation until actually placed aboard the vessel.