GLOSSARY OF SHIPPING TERMS

A bill of lading is a document issued by a carrier (truc in! com"any# $%ic% ser&es as a recei"t 'or t%e !oods to be de(i&ered to a desi!nated "erson or to %is order) T%e bi(( o' (adin! describes t%e conditions under $%ic% t%e carrier acce"ts t%e !oods and detai(s t%at nature and *uantity o' t%e !oods+ identi'yin! mar s and numbers+ destination+ etc) T%e "erson sendin! t%e !oods is t%e ,s%i""er, or ,consi!nor+, t%e com"any trans"ortin! t%e !oods is t%e ,carrier,+ and t%e "erson 'or $%om t%e !oods are destined is t%e ,consi!nee,) -i((s o' (adin! may be ne!otiab(e or non.ne!otiab(e) I' ne!otiab(e (i)e)+ "ayab(e to t%e s%i""er/s order and "ro"er(y endorsed# tit(e to t%e !oods "asses u"on de(i&ery o' t%e bi(( o' (adin!) A Canada Customs Invoice is a form or document, required by Canadian Customs officials to verify the value, quantity, and nature of the shipment,
describing the shipment of goods and showing information such as the consignor, consignee, and value of the shipment.

T%e 0anada 0ustoms In&oice is re*uired on a(( e1"ort s%i"ments "assin! t%rou!% customs en route to 0anada) 0ommercia( s%i"ments to 0anada+ $%ic% are &a(ued at more t%an 23+455 (0anadian 'unds#+ may be sub6ect to duties and sa(es ta1es and must be accom"anied by a 0anada 0ustoms In&oice) T%e in&oice can be "re"ared eit%er by t%e e1"orter7im"orter or t%eir a!ents) A Certificate of Origin form is a document, required by foreign governments, declaring that goods in a particular international shipment are of a
certain origin. Even though the commercial invoice usually includes a statement of origin, some countries require that a separate certificate be completed. Customs offices will use the Certificate of Origin form to determine whether or not a preferential duty rate applies on the products being imported and whether a shipment may be legally imported during a specific quota period.

A 0erti'icate o' Ori!in is a si!ned statement as to t%e country o' ori!in o' t%e e1"orted "roducts 'or a "articu(ar s%i"ment) T%e country o' ori!in is NOT t%e country 'rom $%ere t%e "roduct is s%i""ed) T%e country o' ori!in is t%e country $%ere t%e "roduct $as manu'actured or (ast under$ent a substantia( c%an!e or modi'ication+ 'or 8TO members+ !oods can be considered ori!inatin! i' t%ere is a s%i't o' at (east t$o c%a"ters in t%e %armoni9ed code) For e1am"(e+ t%e country o' ori!in 'or 355: cotton+ nit s%irts t%at are manu'actured in 0%ina and t%en s%i""ed to t%e ;)S) and %a&e a (o!o or s(o!an "(aced on t%em+ and are t%en e1"orted to 0anada+ $ou(d be 0%ina) Ho$e&er+ i' t%e cotton nit 'abric $as manu'actured in 0%ina and t%en s%i""ed to t%e ;)S) and t%e 'abric $as trans'ormed into s%irts and are t%en e1"orted to 0anada+ t%e country o' ori!in $ou(d be considered t%e ;)S) A commercial invoice is a form identifying the seller and buyer of goods or services, identifying numbers [invoice number] date, shipping date, mode
of transport, port of entry, delivery and payment terms, and a complete listing and description of the goods or services sold including, quantities, prices, discounts.

T%e commercia( in&oice 'orm is considered t%e most im"ortant document in internationa( trade+ because merc%andise is not a((o$ed to c(ear customs at t%e destination $it%out one) T%at is e&en true i' t%e !oods are sam"(es and %a&e no commercia( &a(ue) T%is document is usua((y t%e one t%at a(( t%e ser&ice "ro&iders 'irst (oo to 'or in'ormation about your s%i"ment) It is im"ortant to "re"are t%e commercia( in&oice as c(ear(y and accurate(y as "ossib(e to a&oid "rob(ems $it% your s%i"ment) T%e 0ommercia( In&oice is a 0ustoms re*uirement+ not a trans"ortation re*uirement) 8%en someone is en!a!ed in internationa( trade+ 0ustoms re*uires a 0ommercia( In&oice 'orm) You $i(( need t$o co"ies o' t%e 0ommercia( In&oice) One must accom"any t%e 'rei!%t 'rom t%e "oint o' "ic u" to t%e "oint o' customs c(earance+ t%e ot%er s%ou(d be attac%ed to t%e -i(( o' Ladin!)

0ustoms -ro er

A "erson or 'irm (icensed by an im"orter/s !o&ernment and en!a!ed in enterin! and c(earin! !oods t%rou!% customs) T%e res"onsibi(ities o' a bro er inc(ude "re"arin! t%e entry 'orm and 'i(in! it< ad&isin! t%e im"orter on duties to be "aid< ad&ancin! duties and ot%er costs< and arran!in! 'or de(i&ery to t%e im"orter)

T%e ;)S) 0ustoms Ser&ice de'ines t%e importer of record as t%e o$ner or "urc%aser o' t%e !oods< or+ $%en desi!nated by t%e o$ner+ "urc%aser+ or consi!nee+ a (icensed 0ustoms bro er) Im"ort s%i"ments mo&in! into or t%rou!% t%e ;nited States or 0anada $%ic% %a&e not c(eared 0ustoms at t%e border and t%ere'ore tra&e( under a 0ustoms (Treasury# bond+ and are identi'ied as in-bond s%i"ments) NAFTA (
orth !merican "ree #rade !greement$ which entered into force in %anuary &''(, is a free trade agreement comprising Canada, the )nited *tates and +e,ico. !"#! e,ceeds -./ million consumers and a combined output of 0. trillion 11appro,imately 2/ percent larger than the European Community. !"#!3s consumer population is slightly smaller than the European Economic !rea which has over -4/ million consumers.

T%e A!reement= Pro!ressi&e(y e(iminates a(most a(( ;)S).Me1ico tari''s o&er a 35.year "eriod+ $it% a sma(( number o' tari''s 'or trade.sensiti&e industries "%ased out o&er a 3>.year "eriod) Me1ico.0anada tari''s are a(so "%ased out o&er a 35.year "eriod) Tari'' reduction sc%edu(es bet$een t%e ;nited States and 0anada ne!otiated in t%e 0anadian Free Trade A!reement are retained) E(iminates ot%er barriers to trade suc% as im"ort (icensin! re*uirements and 0ustoms user 'ees) Estab(is%es t%e "rinci"(e o' nationa( treatment+ 'or ensurin! t%at NAFTA.ori!in "roducts trade bet$een NAFTA countries $i(( recei&e treatment e*ua( to simi(ar domestic "roducts) Guarantees ser&ice "ro&iders o' t%e t%ree countries e*ua( treatment in t%e NAFTA area+ inc(udin! t%e ri!%t to in&est and t%e ri!%t to se(( ser&ices across borders) Estab(is%es 'i&e basic "rinci"(es to "rotect 'orei!n in&estors and t%eir in&estment into t%e 'ree trade area= (a# nondiscriminatory treatment+ (b# 'reedom 'rom "er'ormance re*uirements+ (c# 'ree trans'erence o' 'unds re(ated to an in&estment+ (d# e1"ro"riation on(y in con'ormity $it% internationa( (a$+ and (e# t%e ri!%t to see internationa( arbitration 'or a &io(ation o' t%e a!reement/s "rotections) T%e NAFTA A!reement contains s"ecia( "ro&isions 'or sensiti&e economic sectors+ inc(udin! a!ricu(ture+ automoti&e "roducts+ ener!y+ and te1ti(es and a""are() T%e A!reement a(so created a -order En&ironment 0oo"eration 0ommission and a Nort% American ?e&e(o"ment -an ) Tari'' A ta1 assessed by a !o&ernment on !oods enterin! or (ea&in! a country) T%e term is a(so used in trans"ortation in re'erence to t%e 'ees and ru(es a""(ied by a carrier 'or its ser&ices) A temporary import bond or #56 (7#emporary 5mportation under 6ond7$ is required when goods are brought into the )nited *tates or Canada without
payment of duty, by posting a bond to guarantee that they will be e,ported. #he amount of the bond is usually double the estimated duties. 8oods imported under a temporary import bond can remain in either country without the payment of duty for up to a year. #hese goods must be brought bac9 to the country of e,port before the e,piration of the bond period to avoid the assessment of liquidated damages in the amount of the bond. 5f the goods are not e,ported, the bond is forfeited, usually in the amount of twice the value of the customs duties that would have been payable on the products. #he one year period for e,portation can be e,tended upon application to the port director.

T%e im"orter $i(( $ant to enter merc%andise usin! a tem"orary im"ort bond under t%e 'o((o$in! circumstances= im"ortin! sam"(es 'or testin!+ ins"ection+ 'or ma in! a "urc%asin! decision+ or to dis"(ay a sam"(e at a trade 'air or ot%er sa(es s%o$< or an im"orter may $is% to im"ort merc%andise and to 'urt%er manu'acture it and t%en e1"ort t%e 'inis%ed "roduct) P(ease contact your customs bro er to obtain a (istin! o' !oods t%at may be admitted into t%e ;nited States or 0anada under a Tem"orary Im"ort -ond 7 TI-)

T%e ;)S) 0ustoms Ser&ice de'ines ,value for Customs purposes only7 as the value submitted on the entry documentation by the
importer which may or may not reflect information from the manufacturer but in no way reflects Customs appraisement of the merchandise.

Bill of Lading (B/L) ! document that establishes the terms of a contract between a shipper and a transportation company. 5t serves as a document of title, a contract of carriage and a receipt for goods. - Amended B/L: 6:; requiring updates that do not change financial status< this is slightly different from corrected 6:;. - B/L erms ! Conditions: the fine print on 6:;< defines what the carrier can and cannot do, including the carrier3s liabilities and contractual agreements. - B/L"s #tatus: represents whether the bill of lading has been input, rated, reconciled, printed, or released to the customer. - B/L"s ype: refers to the type of 6:; being issued. *ome e,amples are= a +emo (+E$, Original (O6;$, onnegotiable, Corrected (C6;$ or !mended (!+$ 6:;. - Canceled B/L: 6:; status< used to cancel a processed 6:;< usually per shipper3s request< different from voided 6:;. - Clean B/L: ! 6:; which bears no superimposed clause or notation which declares a defective condition of the goods and:or the pac9aging. - Combined B/L: 6:; that covers cargo moving over various transports. - Consolidated B/L: 6:; combined or consolidated from two or more 6:;3s. - Corrected B/L: 6:; requiring any update which results in money or other financially related changes. - $omestic B/L: on1negotiable 6:; primarily containing routing details< usually used by truc9ers and freight forwarders. - $uplicate B/L: !nother original 6ill of ;ading set if first set is lost. also 9nown as reissued 6:;. - %&press B/L: on1negotiable 6:; where there are no hard copies of originals printed.

- 'reig(t B/L: ! contract of carriage between a shipper and forwarder (who is usually a >OCC$< a non1negotiable document. - )overnment B/L ()BL): ! bill of lading issued by the ).*. government. - *itc(ment B/L: 6:; covering parts of a shipment which are loaded at more than one location. ?itchment 6:; usually consists of two parts, hitchment and hitchment memo. #he hitchment portion usually covers the ma@ority of a divided shipment and carries the entire revenue. - *ouse B/L: 6:; issued by a freight forwarder or consolidator covering a single shipment containing the names, addresses and specific description of the goods shipped. - Intermodal B/L: 6:; covering cargo moving via multimodal means. !lso 9nown as Combined #ransport 6:;, or +ultimodal 6:;. - Long 'orm B/L: 6:; form with all #erms A Conditions written on it. +ost 6:;3s are short form which incorporate the long form clauses by reference. - +emo B/L: )nfreighted 6:; with no charges listed. - +ilitary B/L: 6:; issued by the ).*. military< also 9nown as 86;, or "orm BB&2C2. - B/L ,umbers: ).*. Customs3 standardiDed 6:; numbering format to facilitate electronic communications and to ma9e each 6:; number unique. - ,egotiable B/L: #he 6:; is a title document to the goods, issued 7to the order of7 a party, usually the shipper, whose endorsement is required to effect is negotiation. #hus, a shipper3s order (negotiable$ 6:; can be bought, sold, or traded while goods are in transit and is commonly used for letter1of1credit transactions. #he buyer must submit the original 6:; to the carrier in order to ta9e possession of the goods. - ,on-,egotiable B/L: *ee *traight 6:;. *ometimes means a file copy of a 6:;. - -Onboard- B/L: 6:; validated at the time of loading to transport. Onboard !ir, 6o,car, Container, Eail, #ruc9 and >essel are the most common types. - Optional $isc(arge B/L: 6:; covering cargo with more than one

discharge point option possibility. - -Order- B/L: *ee egotiable 6:;.

- Original B/L: #he part of the 6:; set that has value, especially when negotiable< rest of set are only informational file copies. !bbreviated as O6;. - .eceived for #(ipment B/L: >alidated at time cargo is received by ocean carrier to commence movement but before being validated as 7Onboard7. - .econciled B/L: 6:; set which has completed a prescribed number of edits between the shippers instructions and the actual shipment received. #his produces a very accurate 6:;. - #(ort erm B/L: Opposite of ;ong "orm 6:;, a 6:; without the #erms A Conditions written on it. !lso 9nown as a *hort "orm 6:;. #he terms are incorporated by reference to the long form 6:;. - #plit B/L: One of two or more 6:;3s which have been split from a single 6:;. - #tale B/L: ! late 6:;< in ban9ing, a 6:; which has passed the time deadline of the ;:C and is void. - #traig(t (Consignment) B/L: 5ndicates the shipper will deliver the goods to the consignee. 5t does not convey title (non1negotiable$. +ost often used when the goods have been pre1paid. - - o Order- B/L: *ee egotiable 6:;.

- /ni0ue B/L Identifier: ).*. Customs3 standardiDation= four1alpha code unique to each carrier placed in front of nine digit 6:; number< !F;3s unique 6:; 5dentifier is 7!F;)7. *ea1land uses 7*E!)7. #hese prefi,es are also used as the container identification. - 1oided B/L: Eelated to Consolidated 6:;< those 6:;3s absorbed in the combining process. Bifferent from Canceled 6:;.

Ho$ si!ni'icant is t%e 'orm o' a bi(( o' (adin! or an air $aybi((@ T%e 'orm o' a bi(( o' (adin! or an air $aybi(( instructs t%e carrier on %o$ to %and(e or disburse

t%e !oods t%at t%e carrier is trans"ortin! $%en t%e carrier reac%es its destination) I' t%e bi(( o' (adin! is in ne!otiab(e 'orm+ i)e) ,order o' t%e s%i""er,+ t%e carrier $i(( %o(d t%e !oods unti( it recei&es an ori!ina( bi(( o' (adin! t%at %as been endorsed by t%e s%i""er (se((er#) I' t%e bi(( o' (adin! is in non.ne!otiab(e or strai!%t 'orm and consi!ned to t%e buyer+ t%e carrier $i(( re(ease t%e !oods to t%e buyer u"on "resentation o' t%e buyer/s identi'ication) I'+ on t%e ot%er %and+ t%e bi(( o' (adin! is in non.ne!otiab(e or strai!%t 'orm and consi!ned to a t%ird "arty+ suc% as t%e buyer/s ban + t%e carrier $i(( re(ease t%e !oods as instructed by t%e t%ird "arty consi!nee in a ,re(ease, (steams%i" !uarantee or air$ay re(ease# issued by t%e t%ird "arty consi!nee to t%e carrier) 8%at is a "ro 'orma in&oice@ A "ro 'orma in&oice is a sa(es *uotation dra'ted in t%e 'orm o' an in&oice) 8%at is a c(ean bi(( o' (adin!@ A c(ean bi(( o' (adin! is a bi(( o' (adin! t%at is issued by a carrier $%en a s%i"ment is recei&ed in !ood order) 8%at is a transs%i"ment@ Transs%i"ment is a 0ustoms "rocedure under $%ic% !oods are trans'erred under 0ustoms/ contro( 'rom t%e im"ortin! means o' trans"ort to t%e e1"ortin! means o' trans"ort $it%in t%e area o' a 0ustoms/ o''ice t%at is t%e o''ice o' bot% im"ortation and e1"ortation) 8%at is duty dra$bac @ ?ra$bac is a re'und or remission (u" to AA:+ in some cases# o' a customs duty "aid on im"orted !oods+ t%at are t%en e1"orted o&erseas) 8%ic% internationa( "ayment met%ods are most common(y used by e1"orters and im"orters@ 0as% in ad&ance+ con'irmed (etter o' credit+ ad&ised (etter o' credit+ documents a!ainst "ayment+ documents a!ainst acce"tance+ and o"en account) From an e1"orter/s "ers"ecti&e %o$ do t%e most common(y used internationa( "ayment met%ods ran in terms o' t%e most secure to t%e (east secure@ 0as% in ad&ance+ con'irmed (etter o' credit+ ad&ised (etter o' credit+ documents a!ainst "ayment+ documents a!ainst acce"tance+ and o"en account) From an im"orter/s "ers"ecti&e %o$ do t%e internationa( "ayment met%ods ran in terms o' t%e most secure to t%e (east secure@ O"en account+ documents a!ainst acce"tance+ documents a!ainst "ayment ad&ised (etter o' credit+ con'irmed (etter o' credit+ and cas% in ad&ance)

8%at is a con'irmed (etter o' credit@ A con'irmed (etter o' credit is a 'orma( $ritten underta in! issued by a ban in t%e buyer/s country (issuin! ban # and !uaranteed or con'irmed by a ban in t%e se((er/s country (con'irmin! ban # in accord $it% $%ic% bot% ban s a!ree to "ay a se((er (t%e (etter o' credit bene'iciary# a s"eci'ied amount on be%a(' o' a buyer (t%e (etter o' credit a""(icant7account "arty#+ i' t%e se((er com"(ies $it% t%e terms and conditions t%at are s"eci'ied $it%in t%e (etter o' credit) Ho$ do t%e ban s in&o(&ed in a con'irmed (etter o' credit transaction 'unction@ T%e ban t%at issues a con'irmed (etter o' credit (t%e issuin! ban # assumes t%e ro(e o' t%e 'orei!n buyer+ $%ereas t%e ban t%at con'irms t%e (etter o' credit (con'irmin! ban # assumes t%e ro(e o' t%e 'orei!n issuin! ban ) -y 'unctionin! in t%is manner+ t%e issuin! ban e''ecti&e(y e(iminates "ayment ris associated $it% t%e 'orei!n buyer $%ereas t%e con'irmin! ban e''ecti&e(y e(iminates "ayment ris associated $it% t%e issuin! ban ) Internationa( Payments In $%at ty"es o' situations is a con'irmed (etter o' credit ty"ica((y used@ A con'irmed (etter o' credit is a desirab(e (a(beit e1"ensi&e# "ayment met%od 'or a com"any buyin! a "roduct internationa((y+ and a desirab(e (a(beit e1"ensi&e# "ayment met%od 'or a com"any t%at is se((in! "roduct internationa((y) T%e buyer $%o uses t%is "ayment met%od can 'ee( com'ortab(e t%at t$o ban s are assessin! t%e se((er/s "er'ormance under t%e (etter o' credit $%ic% %as been issued on be%a(' o' t%e buyer) Li e$ise+ t%e buyer can 'ee( com'ortab(e t%at t%e se((er $i(( not be "aid i' t%e se((er does not "er'orm e1act(y as t%e con'irmed (etter o' credit re*uires) T%e se((er+ on t%e ot%er %and+ s%ou(d a(so 'ee( com'ortab(e $it% a con'irmed (etter o' credit transaction in t%at t%e se((er no$s t%at it $i(( be "aid in t%e ;)S) by a ;)S) ban i' it "er'orms in accordance $it% t%e terms and conditions t%at are s"eci'ied by t%e (etter o' credit) 8%at is an ad&ised (or uncon'irmed# (etter o' credit (L70#@ An ad&ised (or uncon'irmed# (etter o' credit is a 'orma( $ritten underta in! issued by a ban in t%e buyer/s country (issuin! ban # and con&eyed to t%e se((er7e1"orter ((etter o' credit bene'iciary# by a ban in t%e se((er/s country (ad&isin! ban #) T%e issuin! ban a!rees to "ay t%e se((er a s"eci'ied amount on be%a(' o' a buyer (t%e (etter o' credit a""(icant7account "arty#+ i' t%e se((er com"(ies $it% t%e terms and conditions t%at are s"eci'ied $it%in t%e (etter o' credit) In $%at ty"es o' situations is an ad&ised (etter o' credit ty"ica((y used@ An ad&ised (etter o' credit is a desirab(e (a(beit e1"ensi&e# "ayment met%od 'or a com"any t%at is buyin! a "roduct internationa((y+ and a desirab(e (a(beit e1"ensi&e# "ayment met%od 'or a com"any t%at is se((in! a "roduct internationa((y) T%e buyer $%o uses t%is "ayment met%od can be assured t%at t%e issuin! ban $i(( assess t%e se((er/s "er'ormance be'ore t%e issuin! ban "ays t%e se((er under t%e (etter o' credit) 0onse*uent(y+ t%e buyer can 'ee( com'ortab(e t%at t%e se((er

$i(( not be "aid under t%e (etter o' credit i' t%e se((er does not "er'orm e1act(y as t%e (etter o' credit re*uires) T%e se((er+ on t%e ot%er %and+ s%ou(d a(so 'ee( com'ortab(e $it% an ad&ised (etter o' credit transaction in t%at t%e se((er no$s t%at it $i(( be "aid under t%e (etter o' credit i' it "er'orms in accordance $it% t%e terms and conditions t%at are s"eci'ied by t%e (etter o' credit) 8%at is a documentary (etter o' credit@ A documentary (etter o' credit (a(so no$n as a commercia( (etter o' credit or a merc%andise (etter o' credit# is a (etter o' credit t%at is issued 'or t%e "ur"ose o' ma in! "ayment to a s"eci'ied bene'iciary i' t%e bene'iciary "er'orms as re*uired) ?ocumentary (etters o' credit are ca((ed documentary (etters o' credit because t%e ban s in&o(&ed in t%e (etter o' credit transaction dea( in documents as o""osed to !oods) T%e terms and conditions s"eci'ied in a documentary (etter o' credit !enera((y in&o(&e t%e "resentation o' s"eci'ic documents $it%in a stated "eriod o' time) 8%at is a standby (etter o' credit@ A standby (etter o' credit is a (etter o' credit t%at is issued in 'a&or o' t%e standby (etter o' credit bene'iciary 'or t%e "ur"ose o' ,bac in!.u", certain s"eci'ied ob(i!ations o' t%e standby (etter o' credit a""(icant) A standby (etter o' credit re*uires t%e bene'iciary/s "resentation o' documents t%at indicate t%e a""(icant %as not met t%ese ob(i!ations) Ho$ does a documentary (etter o' credit di''er 'rom a standby (etter o' credit@ T%e "rinci"a( di''erence bet$een a documentary (etter o' credit and a standby (etter o' credit is t%e 'act t%at a documentary (etter o' credit is an acti&e "ayment instrument under $%ic% "ayment is intended i' t%e terms and conditions "rescribed by t%e (etter o' credit are met+ $%ereas a standby (etter o' credit is a "assi&e "ayment instrument under $%ic% "ayment is not intended and $i(( occur on(y i' t%e standby (etter o' credit a""(icant 'ai(s to meet its ob(i!ations as s"eci'ied by t%e standby (etter o' credit) Ho$ many ban s are ty"ica((y in&o(&ed in a (etter o' credit transaction@ At (east t$o se"arate ban s are in&o(&ed in a (etter o' credit transaction+ i)e) t%e issuin! ban in t%e a""(icant/s country and t%e ad&isin!7con'irmin! ban in t%e bene'iciary/s country) 8%at is a documentary co((ection@ A met%od o' e''ectin! "ayment 'or !oods $%ereby t%e se((er7e1"orter s%i"s !oods to t%e buyer+ but instructs %is ban to co((ect 'rom t%e buyer7im"orter "ayment o' a certain sum or t%e "romise to "ay a certain sum in e1c%an!e 'or trans'errin! to t%e buyer7im"orter tit(e+ s%i""in! and ot%er documentation t%at enab(e t%e buyer7im"orter to ta e "ossession o' t%e !oods) 8%at are t%e t$o ty"es o' documentary co((ections@ T%e t$o ty"es o' documentary co((ection are documents a!ainst "ayment (a(so re'erred to as cas% a!ainst documents# and documents a!ainst acce"tance)

8%at is a dra't@ A dra't+ a(so no$n as a ,bi(( o' e1c%an!e+, is a $ritten demand 'or "ayment issued by t%e se((er or t%e se((er/s desi!nate (dra$er# a!ainst t%e buyer or t%e buyer/s desi!nate (dra$ee#) 8%at is 'actorin!@ Factorin! is t%e discountin! o' an account recei&ab(e in order to recei&e immediate "ayment) In internationa( trade+ t%is does not in&o(&e a dra't) T%e e1"orter trans'ers tit(e o' its 'orei!n accounts recei&ab(e to a 'actorin! %ouse 'or cas% at a discount 'rom t%e 'ace &a(ue) Factorin! is o'ten done $it%out recourse to t%e e1"orter) 8%at does e(ectronic 'unds trans'er (EFT# mean@ ,Funds Trans'er, means t%e series o' transactions+ be!innin! $it% t%e ori!inator/s "ayment order+ made 'or t%e "ur"ose o' ma in! "ayment to t%e bene'iciary o' t%e order) T%e term inc(udes any "ayment order issued by t%e ori!inator/s ban or an intermediary ban intended to carry out t%e ori!inator/s "ayment order) A 'unds trans'er is com"(eted by acce"tance by t%e bene'iciary/s ban o' a "ayment order 'or t%e bene'it o' t%e bene'iciary o' t%e ori!inator/s "ayment order) 8%at is a Fed8ire@ ,Fed8ire, is an acronym 'or t%e Federa( Reser&e 8ire Net$or + $%ic% is o$ned and o"erated by t%e t$e(&e Federa( Reser&e ban s in t%e ;nited States) In t%e ear(y days o' t%e Federa( Reser&e+ 'inancia( and administrati&e messa!es $ere sent bet$een t%e system/s o''ices by te(e!ra"%) 8%at is 0HIPS@ 0HIPS is an acronym 'or t%e 0(earin! House Interban Payment System o"erated by t%e Ne$ Yor 0(earin! House Association) It is an automated communications net$or and sett(ement c(earin! 'aci(ity t%at "rocesses+ 'or t%e most "art+ internationa( 'unds trans'ers amon! members a(t%ou!% it does %and(e some domestic trans'ers as $e(() 8%at is S)8)I)F)T)@ S)8)I)F)T) is an acronym 'or t%e Society 'or 8or(d$ide Internationa( Financia( Te(ecommunication or!ani9ed under -e(!ian (a$ as a non"ro'it coo"erati&e com"any) It is an internationa( communications system 'or messa!es amon! its member institutions in most o' t%e countries in t%e Americas+ Euro"e+ Ba"an+ and certain countries in Asia) Its member institutions are ban in! or!ani9ations en!a!ed in transmittin! internationa( 'inancia( messa!es (and certain non.ban in! institutions#)

#5#;E (' G *)6#5#;E H G C?!F#EE 4/& G I 4/&/(

 80104. Form and requirements for negotiation

(a) )eneral .ules23 (4) ! negotiable bill of lading may be negotiated by indorsement. !n indorsement may be made in blan9 or to a specified person. 5f the goods are deliverable to the order of a specified person, then the bill must be indorsed by that person. (5) ! negotiable bill of lading may be negotiated by delivery when the common carrier, under the terms of the bill, underta9es to deliver the goods to the order of a specified person and that person or a subsequent indorsee has indorsed the bill in blan9. (6) ! negotiable bill of lading may be negotiated by a person possessing the bill, regardless of the way in which the person got possession, ifJ (A) a common carrier, under the terms of the bill, underta9es to deliver the goods to that person< or (B) when the bill is negotiated, it is in a form that allows it to be negotiated by delivery. (b) 1alidity ,ot Affected23 #he validity of a negotiation of a bill of lading is not affected by the negotiation having been a breach of duty by the person ma9ing the negotiation, or by the owner of the bill having been deprived of possession by fraud, accident, mista9e, duress, loss, theft, or conversion, if the person to whom the bill is negotiated, or a person to whom the bill is subsequently negotiated, gives value for the bill in good faith and without notice of the breach of duty, fraud, accident, mista9e, duress, loss, theft, or conversion. (c) ,egotiation by #eller7 +ortgagor7 or 8ledgor to 8erson 9it(out ,otice23 Khen goods for which a negotiable bill of lading has been issued are in a common carrierLs possession, and the person to whom the bill has been issued retains possession of the bill after selling, mortgaging, or pledging the goods or bill, the subsequent negotiation of the bill by that person to another person receiving the bill for value, in good faith, and without notice of the prior sale, mortgage, or pledge has the same effect as if the first purchaser of the goods or bill had e,pressly authoriDed the subsequent negotiation.