International Trade Terms Glossary | Imex International Kanpur

ACCEPTANCE Any agreement to purchase goods under specified terms. An agreement to purchase goods at a stated price and under stated terms.

AD VALOREM According to value

ADVANCE AGAINST DOCUMENTS A loan made on the security of the documents covering the shipment.

ADVISING BANK A bank, operating in the exporter's country, that handles LETTERS OF CREDIT for a foreign bank by notifying the exporter that the credit has been opened in his or her favor.

ADVISORY CAPACITY A term indicating that shipper's agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented.

AIR WAYBILL A BILL OF LADING that covers both domestic and international flights transporting goods to a specified destination.

ALONGSIDE A phrase referring to the side of a ship. Goods to be delivered "alongside" are to be placed on the dock or barge within reach of the transport ship's tackle so that they can be loaded aboard the ship.

ALTERATION A change in the boundaries of an activated zone or subzone.

ALTERNATIVE INVENTORY CONTROL SYSTEM (AICS) A former system of inventory control, manual or automated, based on records maintained by a zone grantee, operator or individual zone user.

APPLICANT A corporation applying for the right to establish, operate and maintain a foreign-trade zone.

ARBITRAGE The process of buying FOREIGN EXCHANGE, stocks, bonds and other commodities in one market and immediately selling them in another market at higher prices.

ASIAN DOLLARS U.S. dollars deposited in Asia and the Pacific Basin.

ATTRIBUTIVE BASIS Method of accounting for merchandise where direct identification of the goods with the shipment as admitted to the zone has been lost.

AUDIT-INSPECTION PROCEDURES Provide the framework for Customs to reduce on-site supervision of zones and for zone operators/users to increase zone operating flexibility through the method of supervising zones.

BALANCE OF TRADE The difference between a country's total imports and exports.

BARTER Trade in which merchandise is exchanged directly for other merchandise without use of money.

BENEFICIARY The person in whose favor a LETTER OF CREDIT is issued or a DRAFT is drawn.

BILL OF LADING A document that establishes the terms of a contract between a shipper and a transportation company under which freight is to be moved between specified points for a specified charge.

BONDED WAREHOUSE A warehouse authorized by CUSTOMS authorities for storage of goods on which payment of DUTIES is deferred until the goods are removed.

BOOKING An arrangement with a steamship company for the acceptance and carriage of freight.

CARNET A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds.

CASH AGAINST DOCUMENTS (C.A.D.) Payments for goods in which a commission house or other intermediary transfers title documents to the buyer upon payment in cash.

CASH IN ADVANCED (C.I.A.) Payment for goods in which the price is paid in full before shipment is made.

CASH WITH ORDER (C.W.O.) Payment for goods in which the buyer pays when ordering and in which the transaction is binding on both parties.

CERTIFICATE OF INSPECTION A document certifying that merchandise was in good condition immediately prior to its shipment.

CERTIFICATE OF MANUFACTURE A statement in which a producer of goods certifies that manufacture has been completed and that the goods are now at the disposal of the buyer.

CERTIFICATE OF ORIGIN A document, certifying the country of origin of specified goods.

COST AND FREIGHT (C & F) A pricing term indicating that the cost of the goods and freight charges are included in the quoted price.

CHARTER PARTY Written contract between the owner of a vessel and a "charterer" who rents use of the vessel or a part of its freight space.

COST AND INSURANCE (C & I ) A pricing term indicating that the cost of the product and insurance are included in the quoted price.

COST, INSURANCE, FREIGHT A pricing term indicating that the cost of the goods, insurance, and freight are included in the quoted price.

CLEAN BILL OF LADING A receipt for goods issued by a carrier that indicates that the goods were received in "apparent good order and condition", without damages or other irregularities.

CLEAN DRAFT A draft to which no documents have been attached.

COLLECTION PAPERS All documents submitted to a buyer for the purpose of receiving payment for a shipment.

COMMERCIAL ATTACHÉ The commerce expert on the diplomatic staff of his/her country's embassy or large consulate.

COMMERCIAL INVOICE An itemized list of goods shipped, usually among an exporter's COLLECTION PAPERS.

COMMON CARRIER An individual, partnership, or corporation that transports persons or goods for compensation.

CONFIRMED LETTER OF CREDIT A letter of credit, issued by a foreign bank, whose validity has been confirmed by a U.S. bank.

CONSIGNMENT Delivery of merchandise from an exporter (consignor) to an agent (consignee) under agreement that the agent sell the merchandise for the account of the exporter.

CONSTRUCTIVE TRANSFER A legal fiction which permits acceptance of a Customs entry for merchandise in a zone before its physical transfer to the Customs territory.

CONSULAR INVOICE A document, required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment.

CONVERTIBLE CURRENCY A currency that can be bought and sold for other currencies at will.

CORPORATION, PRIVATE Any corporation which is organized for the purpose of establishing, operating and maintaining a foreign-trade zone and which is chartered under a special act of the State within which it is to operate such a zone.

CORPORATION, PUBLIC A State, political subdivision thereof, a municipality, a public agency of a State, political subdivision thereof, or municipality, or a corporate municipal instrumentality of one or more States.

CORRESPONDENT BANK A bank that, in its own country, handles the business of a foreign bank.

COUNTERTRADE The sale of goods or services that are paid in whole or in part by the transfer of goods or services from a foreign country.

CREDIT RISK INSURANCE Insurance designed to cover risks of nonpayment for delivered goods.

CUSTOMS The authorities designated to collect duties levied by a country on imports and exports.

CUSTOMS TERRITORY Territory of the U.S. in which the general tariff laws of the U.S. apply.

CUSTOMHOUSE BROKER An individual or firm licensed to enter and clear goods through Customs.

DATE DRAFT A draft that matures in a specified number of days after the date it is issued, without regard to the date of ACCEPTANCE.

DEACTIVIZATION Voluntary discontinuation of the activation of an entire zone or subzone by the grantee or operator.

DEFAULT An act or omission that will result in a claim for duties, taxes, charges or liquidated damages under the FTZ Operator's Bond

DEFERRED PAYMENT CREDIT Type of LETTER OF CREDIT providing for payment some time after presentation of shipping documents by exporter.

DESTINATION CONTROL STATEMENT Any of various statements that the U.S. Government requires to be displayed on export shipments and that specify the destinations for which export of the shipment has been authorized.

DEVALUATION The official lowering of the value of one country's currency in terms of one or more foreign currencies.

DISCREPANCY - LETTER OF CREDIT When documents presented do not conform to the letter of credit.

DISPATCH An amount paid by a vessel's operator to a charterer if loading or unloading is completed in less time than stipulated in the charter party.

DISTRIBUTOR A foreign agent who sells for a supplier directly and maintains an inventory of the supplier's products.

DISTRICT DIRECTOR The district director of customs in whose district the zone is located.

DISTRICT ENGINEER The engineer of the Department of the Army in whose district the zone is located.

DOCK RECEIPT A receipt issued by an ocean carrier to acknowledge receipt of a shipment at the carrier's dock or warehouse facilities.

DOCUMENTARY AGAINST ACCEPTANCE (D/A) Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer only upon the buyer's acceptance of the attached draft.

DRAFT An unconditional order in writing from one person (the drawer) to another (the drawee), directing the drawee to pay a specified amount to a named drawer at a fixed or determinable future date.

DRAWBACK Articles manufactured or produced in the United States with the use of imported components or raw materials and later exported are entitled to a refund of up to 99% of the duty charged on the imported components.

DRAWEE The individual or firm on whom a draft is drawn and who owes the stated amount.

DRAWER The individual or firm that issues or signs a draft and thus stands to receive payment of the stated amount from the drawee.

DUMPING Exporting/Importing merchandise into a country below the costs incurred in production and shipment.

DUTY A tax imposed on imports by the customs authority of a country.

EURODOLLARS U.S. dollars placed on deposit in banks outside the United States; usually in Europe.

EXCHANGE PERMIT A government permit sometimes required by the importer's government to enable the importer to convert his or her own country's currency into foreign currency with which to pay a seller in another country.

EXCHANGE RATE The price of one currency in terms of another, i.e., the number of units of one currency that may be exchanged for one unit of another currency.

EXHIBITION The showing of merchandise within a zone, usually to prospective buyers.

EXIMBANK The Export-Import Bank of the United States.

EXPORT BROKER An individual or firm that brings together buyers and sellers for a fee but does not take part in actual sales.

EXPORT COMMISSION HOUSE An organization which, for a commission, acts as a purchasing agent for a foreign buyer.

EXPORT LICENSE A government document that permits the "Licensee" to engage in the export of designated goods to certain destinations.

EXPORT MANAGEMENT COMPANY A private firm that serves as the export department for several manufacturers, soliciting and transacting export business on behalf of its clients in return for a commission, salary, or retainer plus commission.

EXPORT TRADING COMPANY A firm similar or identical to an export management company.

FIRST IN-FIRST OUT (FIFO) An accounting method based on an assumption regarding the flow of goods that older stock is disposed of first, in accordance with good merchandising policy.

FORCE MAJEURE The title of a standard clause in marine contracts exempting the parties for nonfulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods, or war.

FOREIGN EXCHANGE The currency or credit instruments of a foreign country.

FOREIGN FIRST (FOFI) An accounting method based on an assumption regarding the flow of goods that foreign status merchandise is disposed of first.

FOREIGN SALES AGENT An individual or firm that serves as the foreign representative of a domestic supplier and seeks sales abroad for the supplier.

FOREIGN-TRADE ZONE/FREE TRADE ZONE A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, or used for manufacturing, etc., within the zone and reexported without duties being paid.

FOREIGN-TRADE ZONES ACT The Foreign-Trade Zones Act of June 18, 1934, (48 Stat. 998-1003; 19 U.S.C. 81a-81u) as amended.

FOREIGN-TRADE ZONES BOARD The Board which is established to carry out the provisions of the Foreign-Trade Zones Act.

FOUL BILL OF LADING A receipt of goods issued by a carrier with an indication that the goods were damaged when received.

FREE ALONGSIDE (F.A.S.) A pricing term indicating that the quoted price includes the cost of delivering the goods alongside a designated vessel.

FREE IN (F.I.) A pricing term indicating that the charter of a vessel is responsible for the cost of loading and unloading goods from the vessel.

FREE PORT An area such as a port city into which merchandise may be legally moved without payment of duties.

FREIGHT FORWARDER An independent business which handles export shipments for compensation.

GATT/GENERAL AGREEMENT ON TARIFFS AND TRADE A multilateral treaty intended to help reduce trade barriers between the signatory countries and to promote trade through tariff concessions.

GENERAL EXPORT LICENSE Any various export licenses covering export commodities for which VALIDATED EXPORT LICENSES are not required.

GRANTEE A corporation to which the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board.

GROSS WEIGHT The full weight of a shipment, including goods and packaging.

IMPORT LICENSE A document required and issued by some national governments authorizing the importation of goods into their individual countries.

INLAND BILL OF LADING A bill of lading used in transporting goods overland to the exporter's international carrier.

IRREVOCABLE LETTER OF CREDIT A letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee.

LETTER OF CREDIT(L/C) A document, issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a specified sum of money under specified terms, usually the receipt by the bank of certain documents within a given time.

LICENSING A business arrangement in which the manufacturer of a product grants permission to some other group or individual to manufacture that product in return for specified royalties.

MANIPULATION Processing wherein merchandise is packed, unpacked, repacked, cleaned, sorted, graded or otherwise changed in condition but not manufactured.

MANUFACTURE Generally, the production of articles for use from raw or prepared materials by substantially transforming such materials into new forms.

MARINE INSURANCE Insurance that compensates the owners of goods transported overseas in the event of loss that cannot be legally recovered from the carrier.

MARKING Letters, numbers, and other symbols on cargo packages to facilitate identification.

MERCHANDISE Includes goods, wares, and chattels of every description except Prohibited Merchandise, building materials, production equipment and supplies for use in operation of a zone.

MERCHANDISE, DOMESTIC Merchandise which has been produced in the U.S. and not exported therefrom.

MERCHANDISE, FOREIGN Imported Merchandise which has not been properly released from Customs custody into the Customs territory of the U.S.

MERCHANDISE, FUNGIBLE Merchandise which for commercial purposes is identical and interchangeable in all situations.

MERCHANDISE, MIXED STATUS Foreign Merchandise which has been combined with Domestic Merchandise in the zone.

MERCHANDISE/OPERATIONS, PROHIBITED Merchandise, the importation of which is prohibited by law on grounds of public policy or morals, or excluded by order of the Foreign-Trade Zones Board..

MERCHANDISE/OPERATIONS, RESTRICTED Merchandise which may not be authorized for delivery from Customs custody without a special permit, or a waiver thereof by an agency of the U.S. Government.

NONPRIVILEGED FOREIGN (NPF) Foreign Merchandise or non-tax-paid domestic merchandise upon which the duty and applicable taxes will be determined at the time of entry from the zone for consumption.

OCEAN BILL OF LADING A bill of lading indicating that the exporter consigns a shipment to an int'l carrier for transportation to a specified foreign market.

ON BOARD BILL OF LADING A bill of lading in which a carrier certifies that goods have been placed on board a certain vessel.

OPEN ACCOUNT A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment.

OPEN INSURANCE POLICY A marine insurance policy that applies to all shipments made by an exporter over a period of time rather than to one shipment only.

OPERATOR A corporation, partnership, or person that operates a zone or subzone under the terms of an agreement with the Grantee.

OPERATOR'S BOND All zone operators must submit to Customs a bond to assure compliance with Customs regulations.

ORDER BILL OF LADING A negotiable bill of lading made out to the order of the shipper.

PACKING LIST A list showing the number and kinds of items being shipped, as well as other information needed for transportation purposes.

PARCEL POST RECEIPT The postal authorities' signed acknowledgment of delivery to receiver of a shipment made by parcel post.

PRIVATE EXPORT FUNDING CORPORATION (PEFCO) Lends to foreign buyers to finance exports from U.S.

PERILS OF THE SEA A marine insurance term used to designate heavy weather, stranding, lightning, collision, and seawater damage.

PHYTOSANITARY INSPECTION CERTIFICATE A certificate, issued by the U.S. Department of Agriculture to satisfy import regulations for foreign countries, indicating that a U.S. shipment has been inspected and is free from harmful pests and plant diseases.

POLITICAL RISK In export financing the risk of loss due to such causes as currency, inconvertibility, government action preventing entry of goods, expropriation or confiscation, war, etc.

PRIVILEGED FOREIGN (PF) Foreign merchandise or non-tax paid domestic merchandise upon which the duty and applicable taxes have been determined at the time this status is approved.

PRO FORMA INVOICE An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and important specifications.

PURCHASING AGENT An agent who purchases goods in his or her own country on behalf of foreign importers such as government agencies and large private concerns.

QUOTA The quantity of goods of a specific kind that a country permit to be imported without restriction or imposition of additional DUTIES.

QUOTATION An offer to sell goods at a stated price and under specified conditions.

REACTIVATION A resumption of the activated status of an entire area that was previously deactivated without any change in the operator or the area boundaries.

REGIONAL COMMISSIONER The Regional Commissioner of Customs for the Customs Region in which the zone is located.

REMITTING BANK Bank that sends the draft to overseas bank for collection.

RESIDENT MEMBER The official that has been delegated authority by the Secretary of the Army to act on nondiscretionary zone matters.

RETAIL TRADE Generally, sales or offers to sell goods or services to individuals for personal use.

REVOCABLE LETTER OF CREDIT A letter of credit that can be canceled or altered by the drawee (buyer) after it has been issued by the drawee's bank.

SCHEDULE B Refers to Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States.

SHIPPER'S EXPORT DECLARATION A form required for all shipments by the U.S. Treasury Department and prepared by a shipper, indicating the value, weight, destination, and other basic information about an export shipment.

SHIP'S MANIFEST An instrument in writing, signed by the captain of a ship, that lists the individual shipments constituting the ship's cargo.

SIGHT DRAFT A draft that is payable upon presentation to the drawee.

SPOT EXCHANGE The purchase or sale of foreign exchange for immediate delivery.

STANDARD INDUSTRIAL CLASSIFICATION (SIC) A standard numerical code system used by the U.S. Government to classify products and services.

STANDARD INTERNATIONAL TRADE CLASSIFICATION (SITC) A standard numerical code system developed by the U.N. to classify commodities used in international trade.

STATE Any State, the District of Columbia, and Puerto Rico.

STEAMSHIP CONFERENCE A group of steamship operators that operate under mutually agreed upon freight rates.

STRAIGHT BILL OF LADING A nonnegotiable bill of lading in which the goods are consigned directly to a named consignee.

SUBZONE A special purpose zone established as part of a zone project for a limited purpose, that cannot be accommodated within an existing zone.

TARE WEIGHT The weight of a container and packing materials without the weight of the goods it contains.

TENOR Designation of a payment as being due at sight, a given number of days after sight, or a given number of days after date.

THROUGH BILL OF LADING A single bill of lading covering both the domestic and international carriage of an export shipment.

TIME DRAFT A draft that matures either a certain number of days after acceptance or a certain number of days after the date of the draft.

TRAMP STEAMER A ship not operating on regular routes or schedules.

TRANSACTION STATEMENT A document that delineates the terms and conditions agreed upon between the importer and exporter.

TRANSFER To take merchandise with zone status from a zone for consumption, transportation, exportation, warehousing, cartage or lighterage, vessel supplies and equipment, admission to another zone, and like purposes.

TRUST RECEIPT Release of merchandise by a bank to a buyer in which the bank retains title to the merchandise.

UNIQUE IDENTIFIER NUMBER (UIN) This inventory method controls merchandise in a zone by unique numbers and/or letters that identify merchandise admitted to a zone.

USER A person or firm using a zone for storage, handling or processing of merchandise.

VALIDATED EXPORT LICENSE A required document issued by the U.S. Government authorizing the export of specific commodities.

VESSEL/AIRCRAFT SUPPLY The supply of goods or equipment free of duties and taxes under section 309 of the Tariff Act, to eligible vessels or aircraft for use while actually engaged in foreign trade, or in transit to any U.S. possession.

WAREHOUSE RECEIPT A receipt issued by a warehouse listing goods received for storage.

WHARFAGE A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.

WITHOUT RESERVE A term indicating that a shipper's agent or representative is empowered to make definitive decisions and adjustments abroad without approval of the group or individual represented.

ZONE LOT NUMBER (ZLN) A collection of merchandise maintained under an inventory control method based on specific identification of merchandise admitted to a zone by lot and lot number.

ZONE PROJECT All of the zone and subzone sites under a single grantee, normally in a single port of entry.

ZONE RESTRICTED (ZR) Merchandise admitted to a zone for the sole purpose of exportation or destruction.

ZONE SITE The physical location of a zone or subzone.

ZONE STATUS The status of merchandise admitted to a Foreign-Trade Zone, i.e., domestic (D), non-privileged foreign (NPF), privileged foreign (PF), or zone restricted (ZR) status.