Acronyms and Abbreviations Used in International Trade A

AAR - Against All Risks

y

Somewhat misleading name for an insurance policy which, while providing the broadest form of insurance cover, generally excludes losses due to bad packaging, delay, inherent vice, loss of market, etc. Such policies do not name the risks covered but only list the exclusions; all unnamed risks are automatically covered. The term 'All risks' is now being phased out. In marine insurance, for example, the term 'institute cargo clauses (All Risks)' has been replaced with the new term 'institute cargo clauses (A, B, and C)'. Also called all peril insurance. A/C Account
y

Bank account or credit account with frequent or regular transactions. A/N - Arrival Notice
y

Notice sent by a carrier or agent to the consignee (and to the notify party, if any) to inform about the arrival of the shipment and number of packages, description of goods, their weight, and collection charges (if any). Also called arrival notice. A/P - Authority Purchase ; Authority to Pay
y

Document used in Japan and other Far Eastern countries, through which an importer's bank notifies a seller that the bank will accept bills of exchange drawn on the importer up to a specified limit. A/R - All Risk
y

Insurance policy that covers losses from all causes not specifically excluded in the policy. ASAP - As Soon As Possible
y

To accomplish promptly or as soon as time permits. "Frankie needed his car returned to him ASAP, so that he could get to work on time." "Despite my

busy schedule, my boss needed the paperwork ASAP because this project was a priority for the company." A/V - Ad Valorem
y

Method for charging a duty, fee, or tax according to the value of goods and services, instead of by a fixed rate, or by weight or quantity. Latin for, [according] to the value. AWB ; A/B - Airway Bill
y

Type of bill of lading that serves as a (1) receipt of goods by an airline (carrier) and (2) as a contract of carriage between the shipper and the carrier. It includes (a) conditions of carriage that define (among other terms and conditions) the carrier's limits of liability and claims procedures, (b) a description of the goods, and (c) applicable charges. The airline industry has adopted a standard format for AWB which is used throughout the world for both domestic and international traffic. Unlike a bill of lading, an AWB is a non-negotiable instrument, does not specify on which flight the shipment will be sent, or when it will reach its destination. See also forwarder's air waybill. Also called airbill or air consignment note.

B
B/B - Bid Bond
y

Written guaranty from a third party guarantor (usually a bank or an insurance company) submitted to a principal (client or customer) by a contractor (bidder) with a bid. Bid bond ensures that on acceptance of bid by the customer the contractor will proceed with the contract and will replace the bid bond with a performance-bond. Otherwise, the guarantor will pay the customer the difference between the contractor's bid and the next highest bidder. This difference is called liquidated damages which cannot exceed the amount of the bid bond. Unlike a fidelity bond, a bid bond is not an insurance policy, and (if cashed by the principal) the payment amount is recovered by the guarantor from the contractor. Also called bid guaranty or bid surety. BBS - British Standard Specification
y

A specification of grades, qualities, sizes, etc., of materials, components, etc., published by the British Standards Institution. B/E - Bill of Exchange

A written order directing that a specified sum of money be paid to a specified person. B/L - Bill of Lading
y

A document issued by a carrier to a shipper, listing and acknowledging receipt of goods for transport and specifying terms of delivery. BT - Berth Term
y

Place in a harbor beside a quay, pier, or wharf, where a boat can be moored for loading and discharging cargo or passengers. BTN - Brussels Tariff Nomenclature
y

Pre-1976 name of Customs Cooperation Council Nomenclature (CCCN), the standardized system for classification of imported goods for statistical and duty determination purposes. In 1989 CCCN too was superceded, by the harmonized commodity description and coding system. BW - Bonded Warehouse
y

The U.S. Customs Service authorizes bonded warehouses for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. The goods are not subject to duties if reshipped to foreign points.

C
CAD - Cash Against Documents
y

A transaction in which the buyer assumes the title for the goods being purchased upon paying the sale price in cash. CBM - Cubic Meter
y

Equals 106 cubic centimeters, 35.31 cubic feet, 1.30 cubic yard, 1000 liters, 264.17 US gallons, or 220 imperial gallons. CCC - The Customs Cooperation Council

Pre-1989 version of harmonized commodity description and coding system. C&F - Cost, Freight and Commission
y

Term of sale signifying that the price invoiced or quoted by a seller for a shipment does not include insurance charges, but includes all expenses up to a named port of destination. In comparison, carriage paid to (CPT) terms include all transport charges (but not insurance) up to a named place (usually the buyer's warehouse) of destination. CFS - Container Freight Station
y

Port facility for loading and unloading containerized cargo to and from ships. Also called container terminal. CFT - Cubic Ton
y

A Cubic ton is a measure of volume (compare fluid ounce). It is no longer used in the United Kingdom but seems to be still in use in the USA. C/I - Commercial Invoice ; Consular Invoice ; Certificate of Insurance ; Certificate Inspection
y

Document required by customs to determine true value of the imported goods, for assessment of duties and taxes. A commercial invoice (in addition to other information), must identify the buyer and seller, and clearly indicate the (1) date and terms of sale, (2) quantity, weight and/or volume of the shipment, (3) type of packaging, (4) complete description of goods, (5) unit value and total value, and (6) insurance, shipping and other charges (as applicable). C & I - Cost and InsuranceCIF - Cost, Insurance and Freight
y

Term of sale signifying that the price invoiced or quoted by a seller includes insurance and all other charges up to the named port of destination. In comparison, carriage and insurance paid to (CIP) terms include insurance and all charges up to a named place in the country of destination (usually the buyer's warehouse). See also cost and freight (C&F). CIF - Cost, Insurance, Freight
y

Term of sale signifying that the price invoiced or quoted by a seller includes insurance and all other charges up to the named port of destination. In comparison, carriage and insurance paid to (CIP) terms include insurance and

all charges up to a named place in the country of destination (usually the buyer's warehouse). CIP - Carriage and Insurance Paid to ~
y

[Named port of destination] Term of sale signifying that the price invoiced or quoted by a seller includes all costs up to a named port-of-destination. By comparison, 'cost, insurance, and freight (CIF)' term includes all costs only up to a named port-of-destination. CISG(Vienna Convention) - United Nations Convention on Contracts for the International Sale of Goods
y

UN-sponsored convention that establishes uniform-rules for drafting international sales contracts, and sets the legal rights and obligations of the seller and the buyer under such contracts. CISG rules apply automatically to the sales contracts between the countries who have ratified the convention. CL - Carload Lots ; Credit Line
y

A loan or collection of loans taken on by a corporation. These loans can be many different types, depending upon the needs of the company, and can vary from letters of credit to term loans, and can be committed or uncommitted. CLP - Container Load Plan
y

A list of items loaded in a specific container and where appropriate their sequence of loading. C/O : CO - Certificate of Origin
y

Document that certifies a shipment's country of origin. It is used between members of a trading block or where special privileges are granted to goods produced in certain countries. Certificate of origin is commonly issued by a trade promotion office, or a chamber of commerce in the exporting country. Also called declaration of origin. COD - Cash on Delivery
y

Payment method in which ordered goods are carried to the buyer's place but are handed over only upon full payment. Also called collect on delivery. CP - Charter Party ; Certificate Posting

Hire or lease contract between the owner of a vessel (aircraft or ship), and the hirer or lessee (charterer). Under a charterparty, a vessel is rented (in full or in part) for one or more voyages (voyage charter) or for a fixed period (time charter). Normally, the vessel owner retains rights of possession and control while the chartrer has the right to choose the ports of call. Also called charter agreement or charter contract, and written also as charter party. CPT - Carriage Paid to ~
y

Term of sale signifying that the price invoiced or quoted by a seller does not include insurance cost, but includes all other charges up to a named place of destination (usually the buyer's warehouse). In comparison, cost and freight (C&F) terms include transport charges only up to a named port of destination. CR - Courier Receipt
y

Official document issued by a port, shed, warehouse or shipping terminal operator to acknowledge receipt of items listed in it under customary or specified terms and conditions. CRF - Clean Report of Findings
y

A report issued by an inspection firm, specifying that the price has been verified and the goods have been inspected before shipment, and that both of these comply with the buyers specifications. C/S - Cargo Selectivity
y

The Cargo Selectivity System, a part of Customs' Automated Commercial System, specifies the type of examination (intensive or general) to be conducted for imported merchandise. The type of examination is based on database selectivity criteria such as assessments of risk by filer, consignee, tariff number, country of origin, and manufacturer/shipper. A first time consignee is always selected for an intensive examination. An alert is also generated in cargo selectivity the first time a consignee files an entry in a port with a particular tariff number, country of origin, or manufacturer/shipper. CTD - Combined Transport Document
y

When goods are transported using more than one mode of transport, the issuer of the Collection takes responsibility for the whole of the journey through a combined transport document.

CTL - Constructive Total Loss

y

In insurance, not an 'actual total loss' but a situation where (1) the actual total loss appears unavoidable (as in case of perishable goods), or (2) a partial loss has occurred to an extent that the property is beyond economical repair (cost of restoring it exceeds its insured value). In CTL cases, the insured may (if terms of the insurance policy permit) abandon the property by giving a 'notice of abandonment' to the insurer who then assumes all rights to the property. CWO - Cash With Order
y

Payment method in which an order is not processed until full payment is received in advance. Also called cash with order. CY - Container Yard
y

Port facility at which containers are accepted for loading onboard ships, and off-loaded containers are delivered to the consignees. Also called Marshalling yard.

D
D/A - Document Against Acceptance
y

Arrangement under documentary collection in which an exporter instructs the presenting bank to hand over shipping and title documents (see document of title) to the importer only if the importer accepts the accompanying bill of exchange or draft by signing it. DAF - Delivery at Frontier
y

The Seller's obligations end when the goods have arrived at the Frontier but before entering the Customs process at the Country named in the contract. D/D ; DD - Document Draft ; Demand Draft
y

In international trading, a bill of exchange or commercial draft that is presented for payment with the required documents such as a clean bill of lading, certificate of insurance, certificate of origin. Also called documentary bill. dd ; D/d - days after date

Date following another date by a certain number of days, and by which a payer bank will honor a draft drawn against a letter of credit (L/C). A L/C marked 'Ninety days date,' for example, means the draft will be honored ninety days after the date specified in the L/C. DDP - Delivered Duty Paid
y

Term of sale signifying that the price invoiced or quoted by a seller includes all charges freight, insurance, other associated charges, and duties (and taxes such as VAT, unless expressly exempted) up to the destination named by the buyer, irrespective of the mode of transport. In some cases the seller may also arrange an import license if it is required. DDU - Delivered Duty Unpaid
y

Term of sale signifying that the price invoiced or quoted by a seller includes all charges freight, insurance, other associated charges except import duties (and specified taxes, if any) up to the destination named by the buyer, irrespective of the mode of transport. DEQ - Delivered Ex Quay
y

A form of international trade contract that specifies that the party selling the good must deliver it to a specific wharf or quay at a shipping port. The DEQ contract will indicate if any applicable duties are paid by the seller (duty paid) or the buyer (duty unpaid). Unlike the delivery ex ship contract, the goods must actually be unloaded onto the wharf. DES - Delivered Ex Ship
y

Transaction in which the seller fulfills its obligations by delivering the goods aboard a ship at a specified port in the importing country. DEM - Demurrage
y

Penalty for exceeding free time (usually 72 hours) allowed for taking delivery of a shipment from the shipping or transporting company's warehouse. DL - Dead Load
y

Weight of a structure (such as a bridge or building) itself. See also live load. D/M - Dispatch Money

When so agreed in the charter-party, this is paid by the shipowner to the charterer as a result of the vessel completing loading or discharging before the stipulated time. D/O ; DO - Delivery Order
y

In freight-prepaid shipments, written directions from a consignor (or shipper) of a shipment to a carrier or freight forwarder to release the shipment to the named delivery party. D/P - Document against Payment
y

Arrangement under documentary collection in which an exporter instructs the presenting bank to hand over shipping and title documents (see document of title) to the importer only if the importer fully pays the accompanying bill of exchange or draft. Also called cash against documents. DP - Duty Paid
y

Sales tax on the goods imported is charged on the duty paid value of the goods. D/R - Dock Receipt
y

Document issued by a shipping company to acknowledge that goods have been received for shipment. Dock receipt transfers the accountability for the safe custody of the cargo from the shipper to the carrier, and serves as the basis for preparing the bill of lading. D/W - Dock Warrant
y

A dock-warrant is a certificate given to the owner of goods warehoused at a dock, or orders for goods kept in the warehouses connected with a dock. They are granted by the proper officer at the dock to the importer in favour of any one that he may name. These warrants are held to be negotiable, so that they may pass from one holder to another, the property of them being always vested in the holder.

E
EC - European Community

Economic and political alliance designed to foster trade and cooperation among its member countries. The European Community was created by the Maastricht Treaty in 1993, and is one of the three pillars of the European Union. Prior to 1993, this was known as the European Economic Community, which was formed after World War II. ECU - European Currency Unit
y

A composite monetary unit consisting of a basket of European Community currencies that served as the predecessor to the Euro. While it was being used, the purpose of the ECU was to provide investment opportunities that weren't specific to one currency, allowing investors a way to diversify. ED - Export Declaration
y

Customs form completed and submitted by an exporter at the port of export, it is meant to serve two major purposes: (1) to provide information on amount, nature, and value of exports to the statistical office for compilation of foreign trade data, and (2) to serves as an export control document. In some cases, an export license and/or a certificate of origin is also required to be attached. E/D - Expiry DateEDI - Electronic Data Interchange
y

Date on which an agreement, appropriation, contract, facility, offer, right, etc., ceases to be effective or operative. EFTA - European Free Trade Association
y

International organization whose purpose is to remove barriers to trade in industrial goods among its members. The EFTA's current members are Iceland, Liechteinstein, Norway, and Switzerland. Each country in the EFTA maintains its own commercial policy toward countries outside the group. EIR - Equipment Interchange Receipt
y

A document transferring a container from one carrier to another, or to/from a terminal. E/L - Export License
y

Export control document issued by a government agency to monitor the export of sensitive technologies (such as advanced computer chips, encryptiondecryption software), prohibited materials (drugs, genetically-modified

plants), dangerous materials (explosives, radioactive substances), strategic materials (uranium, advanced alloys), or goods in short supply in the home market (foodstuffs, raw materials). E/P - Export Permit
y

Some goods, and some destinations of goods, require that an exporter first receive a Federal export permit from the Department of Foreign Affairs and International Trade (DFAIT) before the goods are exported. Escrow A/C - Escrow Account
y

Account to which an accountholder makes monthly or other periodic deposits, and authorizes the bank to withdraw funds to pay for certain fixed obligations such as taxes, rent, insurance premium. ETA / ETD - Expected Time Arrival / Expected Time Departure
y

Date and time at which an air or ship journey is expected to arrive at named city or port. Also called expected time of arrival. EXIM - Export -Import Bank
y

Government or semi-government agency which commonly provides insurance cover to exporters against losses from non-payment by the importers, as a means to promote the country's foreign trade. Other services offered by EXIM banks may include (1) marine insurance, (2) post-shipment discounting of invoices, (3) pre-shipment advances against confirmed orders, and (4) help in finding new markets. EXW - Ex Works
y

Term of sale signifying that the price invoiced or quoted by a seller includes charges only up to the seller's factory or premises. All charges from there on are to be borne by the buyer.

F
FAQ - Fair Average Quality
y

A contractual term used in the grain trade, regarding determination of quality of goods shipped. Upon discharge at destination, an average sample is drawn

from the vessel, which is compared with the FAQ standard of the country of origin for the month during which bill of lading was issued. If there is a deficienty in the quality of the goods delivered as against the FAQ standard, amounting to at least l/27o of contract price, buyer is entitled to allowance for such difference. The FAQ standard is established by the London Corn Trade Association based on samples received, drawn by representatives of buyers and bill of lading holders, from vessels at discharge. If no FAQ standard exists, then the quality standard is to be determined by LCTA arbitrators. FAS - Free Alongside Ship
y

Term of sale signifying that the price invoiced or quoted by a seller includes all charges only up to the ship at the port of departure. The buyer is responsible for loading and all subsequent charges. FCA - Free Carrier
y

Term of sale signifying that the price invoiced or quoted by a seller includes charges only up to placing the goods into the custody of the carrier at a place named by the buyer. FCL - Full Container Load
y

Standard (twenty or forty-foot) container that is stuffed (loaded) and unstuffed (stripped) under the risk and account of the shipper or consignee. In general, a FCL container attracts lower freight rates than an equivalent weight of loose (break bulk) cargo. Also called full trailer load (FTL). FCR - Forwarder's Cargo Receipt
y

A non-negotiable document issued by a forwarder which will satisfy the legal requirements of a letter of credit. Since a forwarder is not an NVOCC it cannot issue actual bills of lading. The FCR is legally binding upon the forwarder and is an industry standard. FEU - Forty Feet Equivalent Units
y

Ocean-freight term meaning containerized cargo equal to one forty-foot (40 x 8 x 8 feet) or two twenty-foot (20 x 8 x 8 feet) containers. One FEU equals about 25 metric tons or 72 cubic meters. FIO - Free In and Out
y

Freight rate that includes carriage and the cost of discharging (offloading) as

per the custom of the port. FILO rate excludes the cost of loading and (where required) the cost of stowage and lashing. FOA - FOB Airport
y

Term of sale under which the price invoiced or quoted by a seller includes all charges up to placing the goods on board a ship at the port of departure specified by the buyer. Also called collect freight, freight collect, or freight forward. FOB - Free on Board
y

A shipping term which indicates that the supplier pays the shipping costs (and usually also the insurance costs) from the point of manufacture to a specified destination, at which point the buyer takes responsibility. FOR - Free on Rail
y

Pricing term indicating that the seller will put the goods on a railroad car (called 'truck' in the US) at a named loading point without any extra charge. Also called free on truck. FPA - Free from Particular Average
y

Marine insurance provision which limits the liability of an insurance company to only those losses that exceed a specified percentage of the value of the goods. It is similar to the deductible clause included in other types of insurance, but is not applicable where a cover for total loss is in force. FPA conditions are applied where the goods are extremely susceptible to damage, or are rendered almost worthless from exposure to water or heat. However, its usage differs in the UK (where it applies to partial loss caused directly or indirectly by mishaps such as burning, collision, sinking, or stranding of the ship) from its usage in the US (where it applies only to loss caused directly by such mishaps). FPA conditions have now largely been replaced by the worldwide standard 'Institute Cargo Clause C.' See also with particular average. FPAAC - Free from Particular Average American Conditions
y

An ocean marine policy provision that eliminates coverage for partial loss to cargo unless caused by stranding, sinking, fire, or collision.

G/A - General Average

y

Marine insurance provision under which damages or expenses incurred by shippers (whose cargo is exposed to a common danger) are shared among them in proportion to the value of their exposed cargo. Such damages or expenses occur by direct harm to the ship and/or to the cargo, or in a course of action to prevent initial or additional harm to them. General-average, like particular-average, is independent of the insurance cover bought for the cargo. Instead, it arises out of the contract between the cargo owner and the ship owner. Now largely replaced by relevant institute cargo clause. GATT - General Agreement on Tariff & Trade
y

UN agency for promotion of free trade between signatory countries (called contracting parties). Formed in 1947 in Geneva, its objective was to counter the devastating effect of protectionist measures (such as the US SmootHawley tariff that raised import duties from 39 percent to 53 percent) supposedly intended to mitigate impact of the great depression. GATT instituted a rule-based multilateral trading system for trade in both goods and services through a series of negotiations (called 'rounds'). It succeeded in achieving reduction in the average tariff on manufactured goods from 40 percent to about 5 percent in the industrialized nations, and in obtaining varying degrees of promised reductions from less developed nations. Its approach was based on two non-discriminatory principles, the (1) Most favored nation and national treatment, and (2) Reciprocity. It worked to eliminate all non-tariff barriers and import quotas, and advocated use of countervailing duties to fight dumping and to negate the effects of subsidies. On January 1, 1995, after the culmination of Uruguay Round, GATT was replaced by World Trade Organization (WTO). GMQ - Good Merchantable Quality
y

An implied condition respecting the state of goods sold in the course of business. Such goods should be as fit for their ordinary purpose as it is reasonable to expect, taking into account any description applied to them, the price (if relevant), and all the other relevant circumstances. The condition does not apply with regard to defects specifically drawn to the buyer's attention or defects that should have been noticed in an examination of the goods before the contract was made. GSP - Generalized System of Preference
y

Non-reciprocal concessions under which developed countries allow duty-free or low-duty entry to imports from selected developing countries up to a certain limit or quota. Also called generalized preferential tariff (GPT).

H
HAWB - House Airway Bill
y

Alternative term for forwarder's air waybill HS - Harmonized Commodity Description and Coding System
y

Six-digit coding for identification and classification of imported and exported goods, for the purpose of compiling trade statistics and determining customs tariff. Called harmonized system (HS) for short, it divides goods into about 5,000 groups and sub-groups and is in use in most countries since January 1, 1989. US tariff system is a modified form of HD that employs a ten-digit code.

I
IATA - International Air Transport Association
y

Private organization promoting cooperation among the world's scheduled airlines to ensure safe, secure, reliable, and economical air services. Through IATA, local airlines have combined their individual ticketing and reservation networks into a global system that overcomes differences in currencies, customs, languages, and laws. Founded in Hague in 1919 as International Air Traffic Association, it was given the current name in 1945 in Havana and now includes 280 airlines from 130 countries which handle over 95 percent of the world's scheduled air traffic. IATA accredits the travel agents all over the world, except the US where a local organization (Airline Reporting Corporation) provides accreditation. IATA's headquarters are in Montreal, Canada and the executive offices are in Geneva, Switzerland. Not to be confused with International Civil Aviation Organization (ICAO) which is a governmental organization. IBRD - International Bank for Reconstruction and Development
y

Original name of the World Bank. I/C - Import Certificate ; Inspection Certificate
y

Required usually for import of industrial equipment, meat products, and perishable merchandise, it certifies that the item meets the required

specifications and was in good condition and correct quantity when it left the port of departure. Also called inspection certificate or inspection report. ICC - International Chamber of Commerce
y

Paris-based trade association of the world's chambers of commerce. Established in 1919, it promotes "an open international trade and investment system and the market economy," publishes INCOTERMS, and provides arbitration services through its International Court of Arbitration (world's leading arbitral institution). Individual firms, however, may not join ICC directly but access its services through their local chamber of commerce. ICC - Institute Cargo Clause
y

Set of terms for cargo insurance policies voluntarily adopted as standard terms by many international marine insurance organizations, including the Institute Of London Underwriters and the American Institute Of Marine Underwriters. Widest insurance cover is provided under 'Institute Cargo Clause A', a more restrictive cover under 'Institute Cargo Clause B', and the most restrictive cover under 'Institute Cargo Clause C.' These clauses have replaced the older 'All Risks,' 'With Average,' and 'Free Of Particular Average' clauses. Also called American Institute cargo clauses. ICD - Inland Container Depot
y

Storage area for empty shipping containers. See also container freight station (CFS). ID - Import Declaration
y

Customs entry for imports, made and submitted by an importer or by an agent or broker on the importer's behalf. I/L - Import License
y

Permit that allows an importer to bring in a specified quantity of certain goods during a specified period (usually one year). Import licenses are employed (1) as means of restricting outflow of foreign currency to improve a country's balance of payments position; (2) to control entry of dangerous items such as explosives, firearms, and certain substances; or (3) to protect the domestic industry from foreign competition. IOP - Irrespective of Percentage

When shown in a policy this means that particular average is not subject to the franchise expressed in the standard S.G. policy form. I/P - Insurance Policy
y

Formal contract-document issued by an insurance company to an insured. It (1) puts an indemnity cover into effect, (2) serves as a legal evidence of the insurance agreement, (3) sets out the exact terms on which the indemnity cover has been provided, and (4) states associated information such as the (a) specific risks and perils covered, (b) duration of coverage, (c) amount of premium, (d) mode of premium payment, and (e) deductibles, if any. IQ - Import Quota
y

Means of restricting the quantity of imports through import licenses, either of a certain item or from a certain country. See also import restrictions. ISO - International Standardization OrganizationITO - International Trade Organization
y

Popular name for International Organization For Standardization (IOS), a voluntary, non-treaty federation of standards setting bodies of some 130 countries. Founded in 1946-47 in Geneva as a UN agency, it promotes development of standardization and related activities to facilitate international trade in goods and services, and cooperation on economic, intellectual, scientific, and technological aspects. ISO covers standardization in all fields including computers and data communications, but excluding electrical and electronic engineering (governed by the International Electrotechnical Commission or IEC) and telecommunications (governed by International Telecommunications Union's Telecommunications Standards Sector or ITUTSS). See also ISO 9000 Series and ISO 14000 Series.

L
L/A - Letter of Authority
y

Letters of authorization permit certain functions or actions. Letters of appointment assign responsibility and authority to designated personnel to control a specific function. The supply officer must maintain, in the supply office, a current file of all such letters applicable to operating the supply department. LAFTA - Latin American Free Trade Association

Organization aiming to create a common market in Latin America; to promote trade it applies tariff reductions preferentially on the basis of the different stages of economic development that individual member countries have reached. Formed in 1980 to replace the Latin American Free Trade Association (formed in 1961), it has 11 members: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela. Its headquarters are in Bogot, Colombia. L/C - Letter of Credit
y

A binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be tranferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the shipment of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability. LCL - Less than Container Load
y

Shipping term for cargo that is insufficient either in quantity or in weight to qualify for the freight rates applied to a standard shipping container. L/G - Letter of Guarantee
y

Document used mainly in the Far East (China, Japan, Korea, Singapore, Taiwan, among others) whereby an importer obligates itself to accept and pay a bill of exchange on its presentment at a certain bank. The objective of this letter is to secure that bank's acceptance of an exporter's draft, for payment through its correspondent bank (where the draft will be presented). L/I - Letter of Indemnity
y

Written undertaking by a third party (such as a bank or insurance company), on behalf of one of the parties (the first party) to a transaction or contract, to cover the other party (the second party) against specific loss or damage arising out the action (or a failure to act) of the first party. Also called indemnity bond. L/T - Long Ton
y

Imperial ton of 2,240 pounds, now largely superseded by the metric ton or tonne of 1,000 kilograms (2,204.68 pounds). A long ton is nearly the weight of

one million dollars in new one-dollar notes. Also called gross ton or imperial ton.

M
M/F - Manifest
y

Transport document that serves as a tally-sheet, and gives a detailed summary of all bills of lading (or air waybills) issued by a carrier (or its agent) for a particular voyage of a particular vessel or vehicle. For cargo carrying vessels or vehicles, a manifest lists its consignor, consignee, number, origin, destination, value, and other such information primarily for use by the customs authorities. Where the vessel or vehicle carries passengers, it lists their names, port of embarkation, port of disembarkation, etc., primarily for use by the immigration authorities. MFN - Most Favoured Nation Clause
y

Non-discriminatory trade policy commitment offered by one country to another on a reciprocal basis. Both countries apply that lowest import-duty and quota-restrictions on imports from each other which they apply on the similar imports from any other country. Under Article I of the General Agreement On Tariffs And Trade (GATT) and its successor World Trade Organization (WTO), all signatory states must extend this treatment to one another. common markets, customs unions, and free trade areas, however, are exempt from MFN provisions. MIP - Marine Insurance Policy
y

Coverage against loss of or damage to a ship; and in-transit cargo loss or damage over waterways, land, and air. M/R ; MR - Mate's Receipt
y

Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel. It is not a document of title and is issued as an interim measure until a proper bill of lading can be issued. M/T - Mail Transfer, Metric Ton, Measurement TonMTD - Multi-transport Document
y

U sed for land or sea shipments. It equals: (1) 40 cubic feet (1.12 cubic meters), or (2) 1 cubic meter (35.3 cubic feet).

N
NTB - Non-Tariff Barrier
y

Measures other than high import duties (tariff) employed to restrict imports. Two such measures are (1) direct price influencers, such as export subsidies or drawbacks, exchange rate manipulations, methods of imports valuation, customs surcharges, lengthy customs procedures, establishment of minimum import prices, unreasonable standards and inspection procedures, and (2) indirect price influencers, such as import licensing and import. NTBs, with certain exceptions, are breach of GATT (now WTO) rules but, nevertheless, their overall use has been on the increase since the Tokyo round of multilateral trade negotiations (September 1973 to April 1979) where they were first discussed. No specific definition of NTBs exists, and they are also called non tariff measures.

O
OEM - Original Equipment Manufacturing
y

Producer or manufacturer of a complete end product (such as a car engine, cooling unit, or a circuit board) or a sub-assembly (such as a carburetor, compressor, or a chip) used in an end product. OP - Open Policy
y

A cargo policy with no expiration date that provides automatic coverage of cargo to or from an Assured in a specified trade at agreed rates, terms, and conditions. Usually consists of separate Marine and War policies.

P
PA - Power of Attorney
y

Written legal authority given by one party (the principal) to another (the agent or attorney-in-fact) to act on the principal's behalf. It may be a (1) General power Of attorney that authorizes the agent to act generally on behalf of the principal, or (2) Special power of attorney that is limited to a specific act or situation. Decisions made and actions taken by an attorney in fact (within the scope of his or her authority) are legally binding on the principal. A power of

attorney can remain in force only so long as the principal is alive and does not become disabled or incapacitated. Although it is often conferred on the principal's attorney, one does not need to be an attorney at law to be an attorney-in-fact. PA - Particular Average
y

Marine insurance provision under which damages or expenses incurred by a shipper (whose cargo is exposed to a danger) are borne by that shipper only. Such damages or expenses occur by direct harm to the ship and/or cargo, or in a course of action to prevent initial or additional harm to them. Particular average, like general-average is independent of the insurance cover bought for the cargo. Instead, it arises out of the contract between the cargo-owner and the ship-owner. Now largely replaced by the relevant institute cargo clause. See also free of particular average. P/L - Packing List ; Paperless
y

Itemized list of articles usually included in each shipping package, giving the quantity, description, and weight of the contents. Prepared by the shipper and sent to the consignee for accurate tallying of the delivered goods. Also called bill of parcels, packing slip, or unpacking note. PSI - Pre-Shipment Inspection
y

Critical appraisal involving examination, measurement, testing, gauging, and comparison of materials or items. An inspection determines if the material or item is in proper quantity and condition, and if it conforms to the applicable or specified requirements. Inspection is generally divided into three categories: (1) Receiving inspection, (2) In-process inspection, and (3) Final inspection. In quality control (which is guided by the principle that "Quality cannot be inspected into a product") the role of inspection is to verify and validate the variance data; it does not involve separating the good from the bad.

Q
QC - Quality Control
y

Steps taken to make sure that a company's products or services are of sufficiently high quality. also called quality assurance.

RORO Traffic - Roll on-Roll Off Traffic

y

Ship designed to carry rolling-stock cargo which does not require cranes to be loaded or off-loaded but is driven on and off the ship's decks. See also LiftOn, Lift-Off.

S
SDR - Special Drawing Rights
y

A measure of a country's reserve assets in the international monetary system. SDRs were created by the International Monetary Fund in 1969, originally to be used as a replacement for gold and silver. Today they are commonly used for a number of accounting purposes. The value of an SDR is determined by the exchange rate of the currencies contained in the SDR. also called paper gold. SF - Square Feet, Super Foot
y

One square-foot of one-inch thick lumber (12 x 12 x 1 inch). Used as a unit of lumber volume it equals one-twelfth of a cubic foot or 2.36 liters. Also called board measure, foot board measure (FBM), or superfoot. See also cord. SITC - Standard International Trade Classification
y

UN code used solely by international organizations for reporting world-wide trade statistics. S/N - Shipping Note
y

Directs a carrier in preparing shipping documents for the subject shipment, and provides for the necessary declarations. Also called shipping note. S/O - Shipping Order
y

nventory control document that is used to identify what should be shipped from the warehouse and to whom and where it should be shipped. The shipping order usually accompanies the shipment, so that the recipient can verify that the items listed were received. The shipping order can then be used to prepare an invoice or, in the case of a collect on delivery (cod) order, can serve as

the invoice. The information included on a shipping order is typically an order number and date, shipping and receipt dates, a customer purchase order number, special shipping instructions such as "UPS" or "overnight," the buyer's name and address, the shipping address (if different), and a list of the items ordered, shipped, and/or back-ordered, including quantity and warehouse storage location. The shipping order may also include a space for the recipient's signature. SR & CCC - Strikes, Riots, and Civil Commotions Clause
y

Exemption in ocean marine policy for losses caused by strikes, riots, and civil commotion. S/T - Short Ton
y

A unit of weight of exactly 2,000 pounds, or 907.18 kilograms. In the United States, a short ton is referred to as simply a ton. In other countries, the term short ton is used to differentiate from the long ton (typically 2,240 pounds) or the metric ton (2,204 pounds). SWIFT - Society Worldwide Interbank Financial Telecommunication
y

An industry owned co-operative supplying secure messaging services and interface software to financial institutions. SWIFT encompasses over 7,000 financial institutions in 192 countries.

T/C - Travelers Check

y

Check issued by a financial institution which functions as cash but is protected against loss or theft. Traveler's checks are useful when traveling, especially in case of overseas travel when not all credit and debit cards carried by a person will be accepted. A charge or commission is usually incurred when a person exchanges cash for traveler's checks, though some issuers provide them free of charge. TEU - Twenty Feet Equivalent Unit
y

Standard unit for describing a ship's cargo carrying capacity, or a shipping terminal's cargo handling capacity. A standard forty-foot (40x8x8 feet) container equals two TEUs (each 20x8x8 feet).

THC - Terminal Handling Charge

y

A charge made for certain handling services performed at terminals. TL - Total Loss
y

Destruction of an asset or property to the extent that nothing of value is left, and the item cannot be repaired or rebuilt to its pre-destruction state. Some types of insurance policies pay the maximum covered amount only in case of total loss. TLO - Total Loss Only Insurance
y

Marine insurance policy that pays damages only if the vessel or the cargo is totally destroyed. Since total loss only very occurs, TLO policies are usually cheaper than regular policies TQ - Tale Quale(French) (=of condition on arrival)
y

In foreign exchange dealings a tale quale or tel quel rate is a net rate. It includes commission, brokerage, or in short, every charge, so that the rate is the total rate or price, to which there can be no addition. TR - Trust Receipt
y

Asset based financing: Method used for funding purchase of inventories of consumer durables (appliances, automobiles), construction equipment, etc. In this arrangement the bank holds the title and the borrower can sell the goods (and thus repay the loan) but is obligated to keep them separate from the other inventory. TS L/C - Transferable L/C
y

Irrevocable L/C with two (and only two) successive beneficiaries. In this arrangement, the first beneficiary (an intermediary or importer's foreign representative) can assign part or whole of the L/C amount to a second beneficiary (the supplier or manufacturer). To be transferable, the L/C must be so marked by the issuing bank on the instructions of the buyer or importer (the account-party). On the instructions of the first beneficiary the advising bank can transfer it to the second beneficiary but not any further. Used extensively in the Far East (China, Japan, Korea, Singapore, Taiwan, among others). See also back to back letter of credit. TT - Telegraphic Transfer

Largely obsolete method of transferring funds through a telegraph or telex link. Also called wire transfer, it has been replaced by secure cable and wireless telecommunications networks. T.T.B. - Telegraphic Transfer
y

Largely obsolete method of transferring funds through a telegraph or telex link. Also called wire transfer, it has been replaced by secure cable and wireless telecommunications networks.

U
UCC - Uniform Commercial Code
y

International trade: Documentation standards defined by the International Chamber Of Commerce (ICC) in 1933 and revised periodically thereafter. These standards are followed by practically every organization involved in foreign trade and (when not in contravention of local laws) are binding on all parties using letters of credit. Also called uniform customs and practice for documentary credit (UCP). UNCITRAL - UN Commission on International Trade Law
y

Established by the United Nations General Assembly by its Resolution 2205 (XXI) of 17 December 1966 "to promote the progressive harmonization and unification of international trade law.

V
VAT - Value Added Tax
y

A consumption tax which is levied at each stage of production based on the value added to the product at that stage.

W
WA - With AverageWAIOP - With Average Irrespective of Percentage

Marine insurance provision under which the insured cargo is covered for partial damage from seawater or loss from breakage, leakage, theft, etc. This cover, however, comes into force only when the damage or loss exceeds a certain percentage (usually 3 percent) of the cargo's value. See also particular average. WA 3PCT - With Average 3percent
y

An ocean marine policy provision that eliminates coverage for partial loss of below deck cargo amounting to less than 3 percent of insured value. Partial losses amounting to 3 percent or more of insured value are covered in full. WTCA - World Trade Center Association
y

ounded in 1970, is a not-for-profit, non-political association dedicated to the establishment and effective operation of World Trade Centers (WTCs) as instruments for trade expansion representing 316 members in 91 countries. The WTCA is an unofficial umbrella trade association that unites corporations and government agencies in international trade. WWO - Weather Working Days
y

Working days on which the weather permits work to be carried out. This often refers to the days allowed in a charter for loading or unloading a ship.

Back Freight The freight costs involved on returning the shipment to the Sender, when the Importer refuses to accept the goods. Bill A document giving evidence of indebtedness of one party to another, as, for example, a written order for goods that can be used as security for a loan to the supplier of the goods from a bank, or a security such as a Treasury bill. Bill Of Exchange A writing binding the signer or signers to pay a certain sum at a future day or on demand, with or without interest, as may be stated in the document. The Bill of Exchange looks something like a cheque which is drawn on an overseas buyer, or even on a third party as designated in the export contact, for the sum agreed as settlement. An exporter can send a Bill of Exchange for the value of goods for export through the banking system for payment by an overseas buyer on presentation.

The Bill is called a sight draft if it is made out payable at sight, ie on demand. If it is payable at a fixed or determinable future time it is called a term draft, because the buyer is receiving a period of credit, known as the tenor of the Bill. The buyer signifies and agreement to pay on the due date by writing an acceptance across the face of the Bill. Bill Of Exchange Ninety Days A Bill of Exchange which is payable ninety days after acceptance or ninety days after sight, whichever is marked on the face of the Bill. Bill Of Lading (B/L) The Bill of Lading is common when goods are shipped by sea or where goods are packed in a container. The Bill of Lading serves three main purposes. 1. It acts as evidence that there is a contract between either the exporter or importer and a chipping company to transport the goods by sea. 2. It is a receipt for goods shipped and provides certain details as to their condition when placed on board. 3. It is also a document of title, which means that the company named on the B/L has the right to possess the goods. A transfer of title on the B/L will transfer the ownership. This element of the B/L is vital to the payment arrangements for the goods. Bills of Lading are made out in sets of two or three originals, any one of them gives title to the goods. Bill of Lading Trans-Shipment This Bill is different from a standard Bill of Lading because it names intermediate ports as well as the final port. Some times may give the name of the subsequent vessel that will carry out the next part of the journey. Blacklist Certificates Blacklist Certificates provide evidence that the goods did not originate in, nor were transported via, blacklisted countries or by blacklisted vessels. Bond An interest-bearing certificate issued by a government or a business promising to pay the holder a specified sum on a specified date. A bond is a common means of raising capital. Bonded Goods Imported goods stored in a bonded warehouse, usually after the owners of the goods have deposited a bond guaranteeing that the duty will be paid when and if the goods are withdrawn for domestic sale Bonded Warehouse A secure storage area in which goods subject to excise taxes or customs duties are stored pending payment of taxes or duties. Border Tax Adjustments The remission of indirect taxes on exported goods, including sales taxes and value-added taxes, designed to ensure that national tax systems do not impede exports, and the imposition of domestic taxes on imported goods, to ensure that they do not receive preferential treatment as compared with domestically produced goods.

Break Bulk Loose, non-containerised cargo imported in bulk, usually because of size or weight considerations (such as raw materials or oversized machinery). These shipments are often separated into individual lots and routed to different destinations and/or importers. Bridging Credit Borrowing ahead of receiving payment for a sale, or short-term credit to a customer pending his or her receipt of funds from another source. Buffer Stocks Commodity stockpiles managed in such a way as to moderate price fluctuations. Goods may be sold from a stockpile when prices reach or approach predetermined ceiling prices, and they may be purchased for the stockpile when prices reach or approach predetermined floor levels. Rubber and cocoa are among the commodities considered most likely to benefit from buffer stocks, and international commodity agreements exist for both of these products. Bulk Carrier A transporter is usually an ocean-going vessel of large, heavy cargoes. "Dry" cargoes are usually mineral ores such as phosphates or manganese. Capital Goods Industrial products or other goods that are used in the creation of additional wealth, such as machine tools. Capital goods are sometimes called intermediate goods or producer goods, because they are used to produce other goods. Cargo Sharing The reservation and division of maritime traffic between designated trading partners who agree that vessels owned or controlled by either will carry a specified percentage of the cargo moving between them. Cartel An alliance or arrangement among industrial, commercial, or state-controlled enterprises producing the same commodity, aimed at regulating the purchase, production, or marketing of the commodity. CWO (Cash With Order) A payment in advance. Cash With Order usually used for small orders with new buyers and may even be asked for before production begins. COD (Cash On Delivery) Where small value goods are sent by Post Office Parcel or a courier and are released only after payment of the invoice plus COD charges. Certificate Of Health Certificates of Health, or health Inspection may be required by an overseas buyer or by the authorities in the buyers country. Certificate Of Insurance A document prepared by the exporter or the freight forwarder to provide evidence that insurance against loss or damage has been obtained for the goods to be exported.

A Certificate of Insurance has no legal standing, banks will usually insist on seeing the insurance policy, which is a legal document, rather than a certificate. Certificate Of Origin A standard document that certifies the country where the product was made. A Certificate of Origin is sometimes required by the importing countrys authorities to prove that the goods originate from a particular country. This may be necessary to enable an importer to claim preferential import duty. Certificate Of Shipment Used when trans-shipment takes place, although a Bill of Lading has been issued for the first part of the journey, a separate certificate of shipment is issued for the next part of the journey in a separate vessel. Certificate Invoice It is an invoice provided by an authorized Chamber of Commerce, some nations will require commercial invoices to be legalized by the buying nations consulate before the goods can enter the country. CET or CXT (Common External Tariff) A tariff rate uniformly applied by a common market or customs union, such as the European Community, to imports from countries outside the union. CFR or C&F (Cost and Freight) An international commercial term used in international sales contracts to signify that the seller must pay the cost and freight necessary to bring goods to a port of destination, but that the risk of loss or damage passes from the seller to the buyer when the goods pass the ship's rail in the port of shipment. CFS (Container Freight Station) Where numerous of shipments are gathered prior to shipment. Ch Fwd (Changes Forward) Ch Pd (Charges Paid) CIF (Costs, Insurance and Freight) An international commercial term used in international sales contracts, meaning that the selling price includes all cost insurance and freight for any goods sold. The seller arranges and pays for all relevant expenses involved in shipping goods from their point of exportation to a given point of importation. CIP (Carriage and Insurance Paid) An international commercial term that is used in international sales contracts to impose the same obligations on the seller as "carriage paid to" (CPT), with the exception that the seller is also responsible for contracting and paying for cargo insurance. Hence, in addition to this obligation, the seller will clear for export and pay the freight and all costs incurred for the carriage of goods to a destination named by the buyer. The risk of loss or damage passes to the buyer when the goods are delivered to the carrier.

Clean Bill Of Lading A Clean Bill of Lading is one, which has no superimposed clause or statement declaring a defect in the condition of the exported goods or the packaging, or some other aspect of the consignment. Commercial Invoice A document prepared by the exporter or freight forwarder, and required by the importer to prove ownership and arrange for payment to the exporter. It should include basic information about the transaction such as a description of the goods, address of the shipper and seller as well as delivery and payment terms. In some cases, the commercial invoice is used to assess Customs duties. Commercial Paper Short-term financial instruments that can be bought and sold, particularly promissory notes that call for the payment of specified amounts of money at a given time. CMR Note A consignment note for movements by road transport. CMR (Convention Merchandises Routiers) Individually numbered Contract of Affreightment for international road shipments. Consul Invoice An invoice which is approved and certified by the Consulate of the Country of destination, in their office in the Country of Origin. Cover Note A document, usually issued by an insurance broker to the exporter, showing details of the insurance effected. CPA (Insurance Claims Payable Abroad) CIM Individually numbered Contract of Affreightment for international dispatched by rail. CPC (Customs Procedure Cods) Identifies the procedure by which the Customs will process the goods. C/nee (Consignee) To whom the goods are addressed CRN (Customs Registered Number) A unique which identifies an Exporter or Importer to Customs. CT for EU (Community Transit) Goods moving within the EU Community. CTC (Community Tariff Code) The unique commodity code number allocated to a specific product. If no CTC exists for your goods, then one can apply to Customs for a ruling, thereby creating a new code number.

Container A special constructed metal box for shipment of goods by sea, usually either 20 or 40 foot long. Currency Fluctuations Changes in the value of one currency relative to another. An exporter can protect against loss caused by fluctuating currencies during the sales contract period by taking out a forward exchange contract with a bank. The exporter, invoicing a buyer in a foreign currency for payment at an agreed future date, sells those expected receipts to a bank in advance (ie forward) of the due date of payment. The bank agrees to buy at a pre-determined forward rate of exchange which varies according to the time of future delivery, for example, one, three or six months, or longer. No money is exchanged at the time the forward contract is made, but under its terms the exporter is guaranteed a certain rate of exchange. Customs Bond A bond that, in certain circumstances, importers must post to effect the entry of imported goods. A customs bond usually must be guaranteed by an approved surety. The bond acts as a security in order to ensure the collection of duties and taxes owed on imports and to facilitate compliance with other importation requirements. Customs Invoice A document evidencing the value of the goods, which is then used to clear them through Customs in the country of import. In some cases, the commercial invoice may be used for this purpose. DAF (Delivered At Frontier) An international commercial term (Incoterm) that is used in international sales contracts to signify that the seller must clear for export, pay for the freight, and bear all costs and risks for the carriage of goods to a named destination at a frontier but before the customs border of the adjoining country DD (Dock Dues) Payments made for passing the goods through the dock. DDP (Delivered Duty Paid) An international commercial term that is used in international sales contracts to signify the maximum obligation (just as EXW signifies the minimum obligation) on the seller's part. The seller is responsible for all risks and costs incurred to have goods delivered to a named destination. This includes the obligation to contract and pay for freight and transportation costs, unloading fees, export and import licensing fees, and other taxes. The buyer is obligated only to assist in obtaining any import license or other official authorization necessary to import the goods. DDU (Delivered Duty Unpaid) An international commercial term that is used in international sales contracts to signify that the seller is responsible for all risks and costs incurred to have goods delivered to a named destination in the country of importation. This includes the obligation to contract and pay for freight and transportation costs, export licensing fees, and other taxes (unless specifically

excluded in the contract). The buyer is responsible for obtaining import licensing, carrying out the customs formalities necessary for the importation of the goods, and paying any import duties on the goods. Delivered Docks An indication that the seller is willing to deliver the goods carriage-paid to the docks in a named port. Packing would be included in the price, but dock dues and wharfage dues would be excluded. The buyer takes responsibility from the point at which the goods are delivered to the dock. Delivery Note or Advice Note A notification to a customer of the net weight, size, dimensions etc, of a consignment from an export packer or manufacturer. Delivery Order An order signed by the owner of goods, instructing his warehouse to deliver possessions of the goods to the bearer of the order. Demurrage (storage costs) The charge made for detaining a ship or failing to ship the cargo within specified days. The term is also applied to the charge made for the detention of railway trucks. DES (Delivered Ex Ship) An international commercial term that is used in international sales contracts to signify that the seller must clear for export and must contract and pay for delivery of goods by sea or inland waterway transport to a named port of destination, but not for unloading. The seller assumes risks and costs up to arrival at the named destination, at which time the buyer, upon taking delivery of the goods, assumes all risks and responsibilities for the unloading and clearance of the goods DEQ (Delivered Ex Quay) An international commercial term that is used in international sales contracts to signify that the seller is responsible for all risks and costs incurred to have the goods delivered and unloaded at a named port of destination. This includes the obligation to contract and pay for freight and transportation costs by sea or inland waterway, unloading fees, export and import licensing fees, and other taxes (unless specifically excluded in the contract). The buyer is obligated only to assist in obtaining any import license or other official authorization necessary to import the goods. DF (Dead Freight) When the shipper is required to pay for space book, but not used. DFZ (Duty Free Zone) see also (Free Zone) An area within a country (a seaport, airport, warehouse, or any designated area) regarded as being outside its customs territory. Differential Export Tax A multi-tier export tax usually structured so that the tax on exports of a raw material exceeds the tax (if any) on exports of processed goods made from the raw material, thereby creating an incentive to process the raw material domestically.

Dock Receipt Used by an ocean carrier to acknowledge receipt of a shipment at the carrier's dock or warehouse facilities. Dock Warrant A document, representing goods warehoused at the docks, given to the owner as a recognition of his title to the goods. Documentary Bill Is used when the seller of goods to a customer abroad wishes to obtain payment or some form of security before the goods are actually delivered. The seller will draw a bill on the consignee for the value of the goods, and will attach to it the copy of the invoice, the insurance policy and the Bills of Lading. These documents will be handed to his banker, who in turn will forward them to his own correspondent at the place where the consignee of the goods are at sea. When this is done, the bank will require a letter of hypothecation empowering it to sell the goods in the event of default by the consignor.

Documentary Letter of Credit A document issued by a bank which guarantees the payment of a customer's drafts for a specified period and up to a specified amount. The Documentary Letter of Credit provides a more secure means of carrying out transactions in import-export trade than by documentary bills collection (see Bill of Exchange). A letter of credit when transmitted through a bank, usually in the exporters country, becomes the means by which the exporter obtains payment. The necessary documents, correctly completed, are presented to a bank by an agreed date. If the terms of the credit are met an exporter can receive payment from a bank immediately. Double-Column Tariff A tariff schedule listing two duty rates for some or all commodities. Under such arrangements, imports may be taxed at a higher or lower rate, depending upon the importing country's trade and other relationships with the exporting country. Some British Commonwealth countries maintain a double-column tariff that provides preferential tariff treatment to other members of the commonwealth. The United States and other countries also have lower tariffs for countries to which they grant most-favored-nation treatment. Downstream Dumping also known as Input Dumping The practice of exporting an end-product containing an input that has been purchased at less than normal value Drawback Import duties or taxes repaid by a government, in whole or in part, when the imported goods are re-exported or used in the manufacture of exported goods

Dual Pricing Selling identical products for different prices in different markets. Dual pricing often reflects export subsidy and dumping practices. Duty Suspension A unilateral non-application of a customs duty, or its application at a reduced level, usually on a temporary basis. ECI (Export Consignment Identifier) Composed of the CRN plus a commercial reference number, which could be the commercial invoice number. Embargo In international trade, government actions limiting or prohibiting imports and/or exports of goods and/or services from or to a country. Such limitations may be applied by the embargoing country against its own nationals, such as the United States embargo against trade from Cuba, or in concert with other countries against a third country, such as the 1990 United Nations embargo against trade in any form with Iraq or the earlier UN embargo against trade with South Africa. Embargoes may also be applied just against trade in certain products regardless of origin, such as the ban on trade in ivory. ETA (Estimated Time of Arrival) ETD (Estimated Time of Dispatch) Excise Tax A selective tax sometimes called a consumption tax on certain goods produced within or imported into a country. Export Merchants Export Merchants buy goods direct from an exporter in their own home market for sale abroad. For the manufacturer the transaction is almost the same as selling in the home market as the export merchants are responsible for promoting the goods to overseas buyers. ECGF (Export Credit Guarantee Facility) A scheme developed in the United Nations Conference on Trade and Development that would enable developing country exporters to refinance their export credits extended to importers in other countries under an international guarantee. Export Credit Insurance Insurance designed to guarantee that an exporter will be paid for his/her goods after delivery. If the exporter has such insurance, responsibility for collecting payment from the company that imports the goods in another country, or the company's agent, rests with the underwriter of the export credit insurance Export Quotas A specific restrictions or ceilings imposed by an exporting country on the value or volume of certain exports to protect domestic producers and consumers from temporary shortages of the goods affected or to bolster their prices in world markets. Some international commodity agreements explicitly indicate when producers should apply such restraints. Export quotas are

also often applied in orderly marketing agreements and voluntary restraint agreements, and to promote domestic processing of raw materials in countries that produce them Export Restraints A quantitative restrictions imposed by exporting countries to limit exports to specified foreign markets, usually pursuant to a formal or informal agreement concluded at the request of the importing countries. EXW (Ex Works) An international commercial term that is used in international sales contracts to signify a seller's obligation to make the goods available to a buyer only at the seller's premises (that is, works, factory, warehouse, and the like). Thus, the seller is not responsible for loading, shipping, export clearance, etc. unless otherwise agreed. All costs, risks, and obligations incurred from moving the goods from the seller's premises to the buyer's destination are borne by the buyer. Factor A mercantile agent entrusted with the possession of goods for the purpose of selling them for his principal. Such an agent may deal with the goods in his own name. FAK (Freight All Kinds) Describes an airfreight rate, when no special Commodity Rate is available. FAS (Free Alongside Ship) An international commercial term that is used in sales contracts to signify a seller's obligation to pay the costs and assume all risks for transporting goods from his or her place of business to the point of embarkation where a vessel or plane selected by the buyer will accept the goods. FCA (Free Carrier) An international commercial term that is used in international sales contracts to signify that a seller must deliver goods sold, cleared for export, to a carrier or freight forwarder specified by the buyer. The seller has no obligation with respect to import licensing or insurance. FCL (Full Container Load) FCR (Forwarders Certificate of Receipt) FIATA (International Federation of Freight Forwarders Association) Floating Insurance Policy A Floating Insurance Policy gives the regular overseas trader insurance in advance for all his shipments for some period ahead; the length of the period will depend on the shipments made from time to time under the policy and on the sum insured. FOB (Free On Board) An international commercial term used in international sales contracts. In an FOB contract, a buyer and a seller agree on a designated FOB point. The seller assumes the cost of having goods packaged and ready for shipment from the FOB point, whether this is his/her own place of business or some intermediate point. The buyer assumes the costs and risks from the

FOB point, including inland transportation costs and risks in the exporting country, as well as all subsequent transportation costs, including the costs of loading the merchandise on a vessel. If the contract stipulates "FOB vessel," the seller bears all transportation costs to the vessel named by the buyer, as well as the costs of loading the goods on that vessel. The same principle applies to the abbreviations "FOR" ("free on rail") and "FOT" ("free on truck"). Force Majeure Describes circumstances outside the immediate control of the Exporter or Importer, and generally defined as something which could not have been anticipated even with foresight. Forward Market A market in which contracts for future deliveries of goods and securities on a specified date are entered into at fixed prices. The contracts themselves are popularly known as "futures." Many commodity exchanges wool, cotton, and wheat, for example have established forward markets that permit interested parties to hedge against changes in the prices of the raw materials they use or deal in. Franco (Free) A price quoted which is free of any other charges. Free Carrier This price is all costs to a named point of loading, to be transported by a carrier by road, rail, air or sea. Free Circulation A piece of EU terminology describing goods free to move within the EU, if they were produced in the EU, or on their originally arrival in the EU Import Duty, VAT and any other applicable duty has been paid. Free Domicile This price is all costs including insurance and transport of delivery to the overseas buyers address. Free List A list of goods not subject to import duties or import-licensing requirements in a particular country. FOB (Free On Board) This price is all costs of the goods loaded on board a ship whose destination is stated in the commercial contract. Free Trade A theoretical concept that assumes international trade unhampered by government measures such as tariffs or non-tariff barriers. The objective of trade liberalization is to achieve "freer trade" rather than "free trade," it being generally recognized among trade policy officials that some restrictions on trade are likely to remain in effect for the foreseeable future. Free Zone An area within a country (a seaport, airport, warehouse, or any designated area) regarded as being outside its customs territory. Importers may therefore bring goods of foreign origin into

such an area without paying customs duties and taxes, pending their eventual processing, transshipment, or re-exportation. Free zones were numerous and prosperous during an earlier period when tariffs were high. Some still exist in capital cities, transport junctions, and major seaports, but their number and prominence have declined as tariffs have fallen in recent years. Free zones may also be known as "free ports," "free warehouses," "free trade zones," and "foreign trade zones." Freight Forward When goods are sent freight forward, the airline, shipping company, haulier collects the freight costs from the consignee before parting with the cargo. He will usually have a lien on the cargo for the cost of the freight. Freight Forwarder A person hired to move shipments from a foreign location to a domestic location, or a portion of the way. Freight forwarders handle many of the formalities involved in importing such shipments. A forwarder will also advise on suitable packing for the particular journey or commodity. He can prepare the various documents required for the different countries, giving advice on those, which the exporter must by law prepare himself. Freight forwarders are often called clearing agents or act as a clearing agent when dealing in imports. General Average A term applied to insurance policies, and more correctly defined as general average loss. This is a loss caused by, or directly consequential on, a General Average Act. A General Average Act consists in an extraordinary sacrifice or expenditure which is (a) voluntarily and reasonably made or incurred, (b) in time of imminent peril, (c) for the purpose of preserving the property imperiled in the common adventure. In practical terms, this means that if a ship, then all other shippers who have cargo on that vessel will bear the loss proportionately. General Tariff A tariff that applies to imports from countries that do not enjoy either preferential or mostfavoured-nation tariff treatment. Where the general tariff rate differs from the most-favourednation rate, the general tariff is usually an older and higher rate. GCR (General Cargo Rate) As distinct from a rate applicable to a specific commodity. Gr Wt (Gross Weight) GSP (General System of Preferences) Under which goods from certain countries are given preferential rates of import duty. H HAWB House Air Way Bill, individually numbered, identifies a particular shipment within an Airfreight Consolidation movement. The Consol itself being covered by a single MAWB Maser Air Way Bill fro identification purposes.

Hedge/ Hedging An action taken by a buyer or seller to protect his or her business or assets against a change in prices. A miller, for example, might buy a quantity of wheat to convert into flour at a given point in time and agree at the same time to sell a similar quantity of wheat that he does not own, at the same price, for delivery at a designated future point in time. If the price of wheat falls, he will lose on the flour while making a profit on the wheat he can later buy at the lower price. But if the price of wheat rises, he will make an extra profit on his flour, which he will have to sacrifice by purchasing wheat at the current high price. In either case, his production profits are protected.

HS (Harmonised System) A complete product classification system, formally known as the Harmonized Commodity Description and Coding System, that is organized in a particular framework and that employs a numbering or coding system consistent with its organizational arrangement. At the international level, the HS comprises approximately 5,000 article descriptions that appear as headings and subheadings, arranged in 97 chapters grouped in 21 sections. Hypothecation The pledging of property to secure a debt, without giving up possession of such property. I.A.T.A. (International Air Transport Association) ICC (International Chamber of Commerce) Import Substitution An attempt by a country to reduce imports (and hence foreign exchange expenditures) by encouraging the development of domestic industries regardless of domestic inefficiencies. Incoterms (International Commercial Terms) Incoterms are a uniform set of international rules, promulgated by the International Chamber of Commerce in Paris, for the interpretation of the terms most commonly used in international contracts for the sale of goods. Incoterms define the obligations of buyer and seller at every stage of an international sale of goods transaction. The Incoterms were first issued in 1953; they were last revised effective January 1, 2000. Indent An indent is merely an order. Thus, an indent number refers to the order number. Insurance An agreement or contract (commonly called a policy) between the insured, who pays a premium, and the insurer, who in return promises to compensate the insured if he suffers specified losses It is important to have insurance cover against loss or damage which may occur during shipment. The contract with the supplier should clearly state who is responsible for arranging the insurance at all stages from the time the merchandise leaves the suppliers premises until the buyer takes possession of the goods. The stages to be covered include:
y y

Transportation of the goods to the docks or the airport Time during which they are stored awaiting shipment or loading

y y y

Periods whilst on board the ship, aircraft or conveyance Off-loading and storage on arrival in destination. Transportation to the buyers premises.

It is advisable for an importer to buy goods on FCA, FAS or FOB terms in order that he can arrange the insurance in his own country. Insurance, particularly marine insurance, is a complicated subject, and it is advisable to get a professional insurance broker to arrange cover for your shipment. Insurance Certificate A document prepared by the exporter or the freight forwarder to provide evidence that insurance against loss or damage has been obtained for the goods to be exported. Invisible Trade Items such as freight, insurance, and financial services that, are included in a country's balance-of-payments accounts (in the "current" account), even though they are not recorded as physically visible exports and imports. Invoice, Pro Forma An invoice sent in advance of the goods, showing the exact details of the order, usually for the purpose of enabling payment documents to be raised. IRD Inland Rail Depot, which is used for Customs Clearance. J Jettison Throwing cargo overboard, if it is determined that such an action may save a vessel in peril. K KD (Knocked Down) Merchandise that is imported complete with all parts but in an unassembled state (such as oversized machinery), usually to facilitate packing and shipping. Laycan A ship chartering term which stands for laydays commencement and cancelling, it specifies the earliest date on which laytime can commence and the latest date, after which the Charterer can opt to cancel the Charter Party Agreement. Laytime The time allowed by the shipowner to the voyage charterer to carry out the cargo loading and/or discharging operations; Laytime may be expressed as a certain number of days or number of tons of cargo loaded/unloaded per day. L/C (Letter of Credit) A document issued by a bank which guarantees the payment of a customer's drafts for a specified period and up to a specified amount. Irrevocable Letter of credit, it means that once the buyers conditions in the letter have been

agreed by the exporter, they constitute a definite undertaking by the buyers bank and cannot be revoked without the exporters agreement. Revocable Letter of credit, it means that the terms of the credit can be cancelled or amended by an overseas buyer at any time without notice to the exporter. LCL A seafreight expression which describes cargo amount to less than a full container load. Levy, as a verb To assess or impose a tariff on imported merchandise; as a noun, the charge on imports. Liberal When referring to trade policy, relatively free of import controls or restraints and/or exhibiting a preference for reducing existing barriers to trade, often contrasted with the protectionist preference for retaining or raising selected barriers to imports. Liberalisation Unilateral or multilateral reductions in tariffs and other measures that restrict trade. Trade liberalization has been the objective of all rounds of the GATT trade negotiations LIBOR (London Interbank Offered Rate) Is the rate of interest at which banks borrow funds from other banks, in marketable size, in the London interbank market. Lien A general lien is the right, which arises by contract to retain goods until any sum due in respect of them is paid and also in respect of any sum which may be owing by the owner to the person in possession. Lighterage It is the cost of a smaller vessel or barge for moving the goods ashore (in a case of a ship not being able to tie up to a quay). Linear Reduction of Tariffs A reduction by a given percentage in all tariffs maintained by countries participating in a round of trade negotiations, with or without exceptions for products deemed to be "sensitive." It is sometimes called "horizontal reduction of tariffs," "across-the-board reduction of tariffs," or "equal percentage reduction of tariffs." LLDCs or LDCs (Least Developed Countries) Some 48 of the world's poorest countries, considered by the United Nations to be the "least developed" of the less developed countries. Loco (Within The Area Of) The word loco is always used in conjunction with a defined town or area. For example, free delivery loco Sydney would mean that goods will be delivered free within the area of Sydney, and that an additional charge would be made for any delivery outside the area.

Logistics Intermediary A person who consolidates several small shipments from various sources into a larger shipment, usually up to a full truck, car, or container load. Logistics Provider A person who acts as an agent on behalf of the shipper LO/LO The cost of using a crane to lift goods onto, or off a ship. LTL (Less-Than-Load Shipments) A shipment that has not been loaded to capacity for the particular container type or shipping method. M Manifest A document signed by the Master of a ship specifying the ship and describing the goods loaded therein. This document must be delivered to the appropriate officer of Customs within six days after the final clearance of the ship. Margin Of Preference The difference between the duty payable under a given system of tariff preferences and the duty that would be assessed in the absence of preferences. Market Disruption A situation that occurs when a surge of imports of a particular product causes a precipitous decline in sales of similar domestically produced goods. Mates Receipt A Mates Receipt provides evidence of delivery of goods to a ship. It has no legal value but it serves a useful purpose and is usually surrendered against Bills of Lading. Medium Of Exchange Documentary instrument used in commercial transactions between buyers and sellers to measure the value of the goods exchanged. The value of such instruments is usually expressed in terms of a national currency. Mercantilism An economic philosophy prominent in the 16th and 17th centuries that equated the accumulation and possession of gold and other international monetary assets, such as foreign currency reserves, with national wealth. Although this point of view is generally discredited among 20th century economists and trade policy experts, some contemporary politicians still favour policies designed to create trade surpluses, such as import substitution and tariff protection for domestic industries, as essential to national economic strength. MFN (Most Favored Nation Status) Which indicates that a specific nation will receive preferential imports duties, quotas etc.

Min Minimum, frequently used to state the minimum freight rate which applies to a small amount of cargo. Minimum Valuation Customs valuation of certain low-cost items at a higher-than-actual value. Mixed Credits A financing package that involves official government credit to supplement normal commercial credit, thus enabling an exporter to deliver goods to a buyer in another country on credit terms comparable to those of his competitors. Movement Certificate A document used within the European Union (EU) which shows the origin of the goods. Similar to a Certificate of Origin. MRA (Mutual Recognition Agreement) Agreements that generally allow conformity assessment for example, testing, inspecting, certifying of manufactured goods to be performed in the United States to another country's standards and regulations, and vice versa. An MRA can save manufacturers time and expense by avoiding excessive assessments. It also conserves U.S. regulatory agencies' resources. The United States maintains its current high health and safety standards and can adopt even higher standards without in any way violating an MRA. MV (Motor Vessel) Multilateral Aid Development assistance given by donors to recipient countries through international institutions Mutatis Mutandis Latin phrase signifying "the necessary changes having been made"; "substituting new terms." N NCV (No Commercial Value) Often used in Import Customs Entries to describe samples etc. However, in reality Customs tend not to accept that an item has no value. This can be overcome by indicating a notional value, say $1.00. Negotiation Credit A letter given by a bank advising a manufacturer or seller that the bank is authorized to accept and negotiate drafts drawn on a specified customer without liability on the part of the bank, usually for a stated amount and liable to withdrawal at any time. Net Weight The weight of goods excluding all packaging, or cases. NICs (Newly Industrializing Countries) A term coined by the Organization for Economic Cooperation and Development to describe

those relatively advanced developing nations that have enjoyed rapid economic growth in recent years and can be described as middle-income countries. Examples include Brazil, Hong Kong, South Korea, Mexico, Singapore, and Taiwan. Newly industrializing countries are sometimes referred to as newly industrializing economies (NIEs). NME (Non-market Economy) A national economy in which the government seeks to determine economic activity largely through a mechanism of central planning, as in the former Soviet Union, in contrast to a market economy, which depends heavily upon market forces to allocate productive resources. In a non-market economy, production targets, prices, costs, investment allocations, raw materials, labour, international trade, and most other economic aggregates are manipulated within a national economic plan drawn up by a central planning authority. Hence, the public sector makes the major decisions affecting demand and supply within the national economy Nominal Tariff Rate The rate of duty charged on the gross value of a given product, rather than on the value of its components Non Stat An expression used in a Customs Entry, when the quantity is of insufficient amount to be deemed to affect Customs statistics. NTBs (Non-tariff Barriers) Government measures other than tariffs that restrict imports or that have the potential for restricting international trade, even though they may not always do so. NTBs include import monitoring systems and variable levies, as well as measures that are internationally perceived as trade restrictive, even though a trade-restricting intent or effect cannot objectively be ascribed to them. Such measures have become relatively more conspicuous impediments to trade as tariffs have been reduced during the period since World War II. NV (Normal Value) The price at which merchandise is sold or offered for sale in the principal markets of the country from which it is exported. NVOCC (Non Vessel Operating Carrier) Often used to describe a major sea freight Forwarder shipping large and frequent shipments to specific ports, but does not own their own ship. O ODA (Official Development Assistance) Economic or technical assistance extended to developing countries by the governments of developed countries and by international organizations, as contrasted with gifts, loans, and investments financed by the private sector. Official development assistance is construed by the OECD Development Committee as including only "concessional" transfers to developing countries, meaning that all or part of each ODA transaction is a grant or is loaned at rate of interest and/or on repayment terms more beneficial to the recipient than market rates and terms.

Offset Requirements Conditions imposed on certain large exporters in other countries by importing governments, usually to reduce cash outflows, such as by requiring the exporter to purchase goods or services produced in the importing country, to establish manufacturing facilities in the country, or to use locally produced components in manufacturing. Offset requirements are frequently associated with sales of military equipment.

Offshore Manufacturing The foreign manufacture of goods by a domestic firm primarily for import into its home market. OMAs (Orderly Marketing Agreements) International compacts negotiated between two or more governments in which the trading partners agree to restrain the growth of trade in specified "sensitive" products, usually through the imposition of export quotas. Orderly marketing agreements are intended to ensure that future trade increases will not disrupt, threaten, or impair competitive industries or their workers in importing countries. Open Account Open Account offers the least security to an exporter. The goods and accompanying documents are sent directly to an overseas buyer who has agreed to pay within a certain period after the invoice date usually not more than 180 days. The buyer undertakes to remit money to the exporter by an agreed method. Open Insurance Cover, see Floating Insurance OPR (Outward Processing Relief) A form of export Customs Entry, which indicates to the Customs that the goods are being temporarily exported, and that will be subsequently re-imported to the Country of Origin without the need to charge Import Duty upon their return. P Packaging, Labelling, and Marking Regulations The requirement or regulation, usually by an importing country, that imported goods be packaged, labelled, or marked according to particular guidelines. Although ostensibly required to protect consumers, non-standard packaging, labelling, and marking requirements frequently pose problems for exporters and may function as non-tariff barriers. Packing List A Packing List gives details of the contents of all the packages making up the consignments and is required by Customs authorities if the packing information is not shown on the invoice. The Packaging List is usually attached to the invoice. Par Value The official fixed exchange rate between two currencies or between a currency and a specific weight of gold or a basket of currencies.

Parcel Post A valuable method of moving small units by air or sea. Parcel Ticket A variation on the Bill of Lading covering small consignments of limited value. Usually such goods are shipped at the liability of the seller. Particular Average A term used in insurance more clearly defined as a Particular Average Loss, ie a partial loss of the insured interest caused by a peril insured against and which is not a General Average Loss. The loss falls entirely on the party who has an interest in the particular goods so damaged. Port Mark An identity of the port of destination stenciled onto packaging cases. This will often include an indicator of the total number of packing cases in a consignment e.g. 1/12. Port Of Entry Point at which individuals and imported goods enter a country and clear its national customs. Preferences Special advantages extended by importing countries to exports from particular trading partners, usually by admitting their goods at tariff rates below those imposed on imports from other supplying countries. Premium A regular payment paid for an insurance policy that provides protection against a risk. Price Elasticity Of Demand The percentage change in demand for a given product likely to result if its price changes by 1 percent. A slight lowering or raising of a tariff will have a larger effect on the volume of imports of a product with a high price elasticity of demand than on a product with a low price elasticity of demand. Price Elasticity Of Supply The percentage change in supply for a given product likely to result if its price changes by 1 percent. Primary Commodity A commodity in its raw or unprocessed state, such as iron ore. In contrast, pig iron is considered a semi-processed product, and a steel girder is a manufactured item. Principal Supplier The country that is the most important source of a particular product imported by another country. In trade negotiations, a country offering to reduce its tariff or other barriers to imports of a particular item generally expects the country that is the principal supplier of that item to reduce restrictions on its imports of a product for which the first country is the principal supplier. Depending on the trade negotiations, both countries then may grant the same concessions to all other countries to which they accord most-favoured-nation treatment.

Prior Deposits A deposit required by a government of a specified sum, in domestic or foreign currency, usually corresponding to a certain percentage of the value of the imported product. Such deposits are characteristically held without interest, sometimes for many months from the time an order is placed until after the import transaction is completed and hence represent a real cost to the importer. The purpose of prior deposits is usually to discourage imports, particularly for balance-of-payments reasons, and they generally are recognized as non-tariff barriers that impede trade. Prior deposits must usually be made at the time an import license is granted. Process Patent A process or method that consists of an act, operation, or step or series thereof performed upon a specified subject matter to produce a physical result. Proforma Invoice An invoice which purports to represent what a final invoice with all attendant details will look like. PSI (Preshipment Inspection) To ensure that the quantity and quality of goods to be traded conform to the specifications of the sales contract. Purchasing Power The ability of consumers to acquire goods and services based on their possession of money and/or their recourse to credit. Aggregate purchasing power within a market or a national economy reflects total disposable income after taxes, and hence the level of employment. Q QRs (Quantitative Restrictions) Explicit limits, or quotas, on the quantity of a good that can be imported or exported during a specified time period. Such limits are usually measured by physical quantity but sometimes by value. A quota may be applied on a selective basis, with varying limits set according to the country of origin or destination, or on a global basis that specifies only the total limit and thus tends to benefit more efficient suppliers. Quotas are frequently administered through a system of licensing. Quarantine, Sanitary, And Health Laws And Regulations Government measures to protect consumer, animal, and plant health by regulating the use of dangerous preservatives and other additives in foods. The lack of internationally accepted standards makes it difficult to distinguish between legitimate health standards and protectionist measures. Quotation A quotation represents the price and conditions at which a seller is prepared to supply goods. R

Railway Consignment Note Railway Consignment Notes are similarly used to the Bill of Lading for transport by rail to an overseas destination. Received For Shipment Bill of Lading Received For Shipment Bill of Lading confirms that the shipping company has the goods in custody for shipment. Exporters load their goods at their factory into a container provided by a transport operator. The container is transported by road or rail to the port for shipment. The Received For Shipment Bill of Lading is endorsed by the carrier on loading the goods abroad ship at the port. Reciprocity The practice by which governments extend similar concessions to each other, as when one government lowers its tariffs or other barriers impeding its imports in exchange for equivalent concessions from a trading partner on barriers affecting its exports (a "balance of concessions"). Reinsurance The shifting by agreement (known in the insurance industry as a "treaty") of part of the risk (or "exposure") of the original insurer (the ceding company) to another insurer (the reinsurer). Sometimes a reinsurer will, in turn, pass on part of its risk to another reinsurer through a process known as retrocession. International reinsurance is important to developed and developing countries alike. Request List A list submitted by a country to a trading partner at an early stage of trade negotiations identifying the concessions it seeks through the negotiations. Reserve Currency A national currency such as the dollar or pound sterling, or international currency such as Special Drawing Rights, used by many countries to settle debit balances in their international accounts. Central banks generally hold a large portion of their monetary reserves in reserve currencies, which are sometimes called "key" currencies. Restitutions Payments to agricultural exporters in the European Community under the Common Agricultural Policy to cover the difference between internal and world market prices. Reverse Preferences Tariff advantages once offered by developing countries to imports from certain developed countries that granted them preferences in turn. Reverse preferences characterized trading arrangements between the European Community and some developing countries (the ACP countries) prior to the advent of the Lom Convention. Right Of Stoppage Transit The Right of an unpaid seller in certain circumstances to arrest the goods sold, after delivery to a carrier and before delivery to the purchaser. RO-RO (Roll On/Roll Off) Cargo that is rolled on and off a vessel under its own power. Roll on/roll off shipping allows

for quick and easy lading/unlading because the cargo does not need to be loaded and unloaded by winch or crane but can be driven on and off a vessel using a tractor trailer, van, or flatbed truck. Routing Orders The Party accepting responsibility for payment of the freight charges have the ultimate right to nominate the Carrier or Freight Forwarder to be used. Providing that the costs and services level involved match those allowed for in the original quotation. S SAD: Single Administrative Document An eight-part set, used either in whole or parts, to facilitate easy movement of goods within the EU. Sensitive Products Domestically produced goods considered economically and politically important in a country whose competitive position would be threatened if protection against the imports of similar goods were reduced. The steel and textiles industries in many developed countries, for example, employ large numbers of workers, often in communities that cannot in the short term offer alternative employment. For these reasons, there has been strong opposition to the reduction of tariff and other trade-restricting measures affecting sensitive products. Shipping Conference An alliance made up of a number of carriers that provide service from point to point for a defined route, which is distributed based upon market share. Sight Draft A Bill of Exchange payable at sight, ie on demand Single-Column Tariff A tariff schedule listing only one duty rate for each imported product. The United States maintained a single-column tariff schedule until 1909, when special preferences were instituted for products imported from Cuba and the Philippines. SITC (Standard International Trade Classification) An international foreign data scheme that permits international comparisons of foreign trade data. It was developed by the United Nations in 1950 and is used solely by international organizations for reporting international trade. SITPRO (Simplification of International Trade Procedures) A UK organisation who frequently become involved in improving documentation etc on a worldwide basis. Standards Technical specifications that lay down characteristics of a product such as size, quality, performance, or safety. Standards may also cover terminology, testing methods, packaging, labelling, or marking requirements.

SWIFT (Society For World-wide Interbank Financial Telecommunications) Major banks have set up a computer system for interbank transfers called the Society For World-wide Interbank Financial Telecommunications (SWIFT). Specific Limitations On Trade Government measures that restrict imports or exports of a product during a given period to an explicitly stated volume or value, usually by requiring a license or other government authorization for each export or import transaction. Specific Tariff A customs duty assessed as a stated monetary amount per unit of physical quantity, such as so many cents a pound, a bushel, or a yard, regardless of the value of the imported item. Spot Market A market in which goods or securities are traded for immediate delivery. The spot price is, therefore, the price for immediate delivery. SPS (Sanitary And Phytosanitary Measures) Any measures applied to protect human or animal life from risks arising from additives, contaminants, toxins, or disease-causing organisms in their food; to protect human life from plant- or animal-carried diseases; to protect animal or plant life from pests, diseases, or disease-causing organisms; and to prevent or limit other damage to a country from the entry, establishment, or spread of pests. These include measures taken to protect the health of fish and wild fauna, as well as of forests and wild flora. Strategic Stockpiles Accumulated stocks of raw materials or other commodities deemed essential to national defence and maintained so that a country's actual or potential supply of the goods stocked will not fall below the quantity likely to be required for a given period of national emergency. Supply Access Assurance that importing countries have fair and equitable access at reasonable prices to supplies of raw materials and other essential imports. Such assurance might include explicit constraints against the use of the export embargo as an instrument of foreign policy. Requests for such assurance reflect the desire of countries to have a consistent supply of important raw materials at stable prices. T Tariff A duty (or tax) levied upon goods transported from one customs area to another either for protective or revenue purposes. Tariff Quota Application of a reduced or zero duty rate for a specified quantity of imported goods, or for goods imported during a given period. Tariff-Rate Quota A quota that is determined on the basis of the applicable tariff rate applied to imports. A predetermined amount of a good is allowed to enter at a reduced or zero tariff rate. After the

quota has been filled, all subsequent shipments of that good during a specific period of time, such as a calendar year, are assessed a higher import tariff, usually the normal most-favourednation tariff. TBT (Technical Barriers to Trade) Are the standards and regulations imposed by governments and governmental authorities to restrict trade. Technical Regulations Regulations that lay down characteristics for products or related processes and production methods, including applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking, or labelling requirements as they apply to a product, process, or production method. Technology Transfer The movement of modern or scientific methods of production or distribution from one enterprise, institution, or country to another, as through foreign investment, international trade, licensing of patent rights, technical assistance, or training. Technology may also be transferred by giving it away (technical journals, conferences, emigration of technical experts, technical assistance programs) or by industrial espionage. Telegraphic Transfer Money is transferred by coded interbank telex and as long as the exporter makes it clear to the overseas buyer exactly to which bank and account the remittance should be made, the exporter should receive very speedy payment. Tenor The period of credit given by a Bill of Exchange. Term Draft A Bill of Exchange payable at a fixed or determinable future time Terms Of Trade The ratio of prices (unit values) of a country's exports to the prices (unit values) of its imports. Some economists have discerned a deteriorating trend in this ratio for developing countries as a whole. Other economists maintain that whereas the terms of trade may have become less favourable for certain countries during certain periods and even for all developing countries during some periods the same terms of trade have improved for other developing countries in the same periods and perhaps for most developing countries during other periods. Third-Country Dumping A situation in which the exports of a product from one country are being injured or threatened with injury as a result of exports of the same product from a second country into a third country at less than fair value. Threshold Price A minimum price. In the case of the European Community, the price for grains and other agricultural products under which ECs Common Agricultural Policy operates. The threshold

price is fixed at a level that will bring the selling price of grains up to the existing price level in the marketing region within the European Community where supplies are lowest. Tied Loan A loan made by a government agency that requires a foreign borrower to spend the proceeds in the lender's country or to buy the lender's products. TIR Initials for the French term Transports International Routiers, the name given to international road service facilities where one truck crosses many frontiers carrying goods. For example, a TIR truck could load in England and the driver could stay with it perhaps as far as the Middle East, Turkey, etc. Special Carnets are available, as distinct from ATA Carnets. Trade Agreement A bilateral or multilateral treaty or other enforceable compact committing two or more nations to specified terms of commerce, usually involving mutually beneficial concessions. Trade Barriers Government laws, regulations, policies, or practices that either protect domestic products from foreign competition or artificially stimulate exports of particular domestic products. Trade Diversion A shift in the pattern of origin of a country's imports, resulting from changes in trade policies or practices, which may or may not involve change in the overall volume or composition of the imports involved. Trade Mission Experts and/or businessmen sent by a government or by commercial interests in one country to encourage exports to the market of another country. Trademark A mark or symbol secured by legal registration used by a manufacturer or trader to distinguish his or her goods from competing goods. Transit Zone The area surrounding a port of entry in a coastal country that serves as a storage and distribution centre for the convenience of a neighbouring country a land-locked country, for example lacking adequate port facilities or access to the sea. A transit zone is administered so that goods in transit to and from the neighbouring country are not subject to the customs duties, import controls, or many of the entry and exit formalities of the host country. A transit zone is a more limited facility than either a free trade zone or free port. Transparency Visibility and clarity of laws, regulations, and procedures. Some of the codes of conduct negotiated during the Tokyo Round sought to increase the transparency of non-tariff barriers that impede trade. Transshipment A shipment that has been moved through, imported, transferred, or unladen in one or more

intermediary countries (other than their originating country) prior to importation into the final destination country. Tropical Products Traditionally, agricultural goods of export interest to developing countries in the tropical zones of Africa, Latin America, and East Asia, such as coffee, tea, spices, natural rubber, palm oil, bananas, and tropical hardwoods. U Unitisation The general approach for trying to transport goods in larger units. Pallets and containers are two means to this end. V VAT (Value -Added Tax) An indirect tax on consumption that is levied at each discrete point in the chain of production and distribution, from the raw material stage to final consumption. Each processor or merchant pays a tax proportional to the amount by which he or she increases the value of the goods purchased for resale after making his or her own contribution. The value-added tax is imposed throughout the European Community and EFTA countries, as well as in many other trading nations. Variable Levy Under the European Community's Common Agricultural Policy, a duty that increases or decreases as domestic or world prices fluctuate to ensure that the price of the imported product after payment of duty will equal a predetermined "gate" price. W Wharfinger Receipt An Acknowledgement of the receipt of goods by the wharfinger. It has no legal value.