GLOSSARY OF FREQUENTLY USED TERMS IN FOREIGN TRADE

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

 

A

A FORM
CERTIFICATE OF ORIGIN OF THE GSP (Generalized System of Preferences). It is an import document that evidences the preferential treatment provided to developing countries.

AIRWAY BILL
Air freight consignment document completed by the issuer or on his behalf. AWB. The AWB confers title to the goods.

ARBITRATION
Purchase of an asset at a given market to sell it at a different market, thus taking advantage of the differences in prices. Ordinarily applied to the purchase and sale of currency and other financial securities.

AWB
Airway Bill. Airway bill of lading.

B

BAF
Bunker Adjustment Factor. Fuel Adjustment Factor. It influences on the calculation of freight costs.

BEARER BL
The holder of the document is the owner of the goods.

BILL OF LADING
Entry Manifest. See also CIM note for the International Carriage of Goods by Rail, CMR note for the International transportation of goods by road, and CTBL (Combined Transport Bill of Lading). Is the equivalent to the note for the transportation of goods by road and to the AWB. It is a receipt handed over to the shipper for the goods delivered. It reflects the existence of a contract for the carriage of goods by sea and it operates so as to grant rights over the goods.

BL TO THE ORDER
Whenever any BL is issued to the order of someone, the owner of the goods (the holder of the BL), may turn it into: a straight bill of lading (by way of endorsement), put it to the order of a different company, or leave it with the endorsement singed in blank. These are the widest used instruments.

BONDED WAREHOUSE
Open or closed facility for the temporary storage of goods while clearance is requested. Bonded Warehouses may be managed by customs authorities, other public agencies or private authorities.

BREAKING BULL
It is the total or partial decomposition of the container to proceed with its storage or transport of cargo to the receiver.

C

CARGO MANIFEST
Bill of Lading.

CARICOM
Caribbean Community and Common Market. Since 1973. Mainly English speaking countries: Antigua- Barbuda, Bahamas, Belize, Dominica, Granada, Montserrat, Saint Lucia, Saint Vincent and the Grenadines, St. Kitts y Nevis.

CARRIER
Transporter

CERTIFICATE OF ANALYSIS
Document that certifies that the nature, composition, degree, etc. of the goods corresponds with the quality contracted.

CERTIFICATE OF HEALTH
Document that certifies that the goods have been inspected and that they are in perfect conditions for human consumption.

CERTIFICATE OF INSURANCE
Document that evidences that the insurance policy for an actual issuance has been taken out.

CERTIFICATE OF ORIGIN
Document that identifies the goods shipped and expressly declares where they were manufactured. In Argentina, as in many other countries, these certificates are issued by the Chambers of Commerce.

CERTIFICATE OF PRE-SHIPMENT INSPECTION
Certificate that states that the goods have been inspected and are in accordance with what is mentioned in a contract or a proforma invoice. Certificates of PSI are issued by specialized companies. SGS, Bureau Veritas, Lloyds, etc. Usually, 10% is inspected, but this depends on each particular country.

CERTIFICATE OF STORAGE
It is required in those cases in which storage is compelled to have been made prior to dispatching the goods.

CERTIFICATE OF WEIGHT
Document in which the weight of the goods is registered (net and gross weight) pack by pack.

CFR
Incoterm. Cost and Freight.

CHARTER PARTY
If an exporter hires a tramping vessel, the document issued is the Charter Party BL. It is not governed by the same principles which apply to an ordinary BL; it is governed by the article.

CIF
Incoterm. Cost, insurance, and freight (previously C&F).

CIP
Incoterm. Cost and insurance paid.

CIS
Commonwealth of Independent States. Since 1991. Member countries: Russia, Belarus, Ukraine, Moldavia, Azerbaijan, Georgia, Armenia, Kazakhstan, Turkmenistan, and Tajikistan.

CLEARANCE
Compliance with any customs formalities required to import and export goods or to make them subject to other systems, transactions, or customs destinations.

COLLECT SURCHARGE
Surcharge for collection of the cost of freight at destination.

COMMODITY
Goods the price of which is set by the international supply and demand. As a general rule, they consist in raw materials such as mining and agricultural products.

COMMON EXTERNAL TARIFF
Early stage in the commercial integration process of a certain group of countries; therefore, a uniform tariff protection system is provided for to benefit those countries’ production with respect to the import of non-originating products.

CONFISCATION
Sanction which consists in final deprivation of the title to the goods.

CONSIGNEE
It refers to an individual or legal entity in the name of whom the goods are manifested or who acquires goods by endorsement.

CONSIGNMENT NOTE
Document which declares the conditions under which goods are transported.

CONSOLIDATED CARGO
Set of goods owned by various consignees that are grouped to be carried in similar containers, provided always that they may be protected by one and the same transportation document.

CONSOLIDATION
System of issuance of different packages from different consignors under an agent to a common destination. Also called &ququot;Batch Consignment".

CONTAINER
It is the material meant to wrap up a product and protect it from the moment it comes out of the production line to the moment it is received by consumers.

CPT
Incoterm which means “Carriage paid to” (previously, DCP). By the issuer of a Standby credit.

CS
Congestion Surcharge.

CUSTOMS
Agency responsible for the application of customs laws and for controlling collection of customs duties and other taxes.

CUSTOMS AGENT
Subject to the provisions set forth in the Customs Code (Law No. 22,415), customs agents are individuals who perform proceedings related to imports, exports and other customs operations before the customs authorities in the name and on behalf of others (YPF S.A.).

CUSTOMS BROKER
Legal entity responsible for making any necessary arrangements with relation to any customs documents.

CUSTOMS CONTROL
Set of measures oriented to ensure compliance with the laws and regulations required to be applied by the customs office.
 
CUSTOMS DECLARATION
It is the document submitted by importers (or their broker or forwarding agent) in furtherance of the clearance of the goods, so that they may take full responsibility for the goods.

CUSTOMS DESTINATION
Expression of the intention of the owner, consignee, or sender of the goods which, evidenced in a declaration, states the customs system to be applied to the goods under the customs’ authority.

CUSTOMS DUTIES
Taxes set in the Customs Duties levied on the goods which enter the customs territory. Tariff.

CUSTOMS TRANSPORTATION AGENT
For the purposes of the Customs Code (Law 22.415), customs transportation agents include any individual or legal entity which, acting on behalf of carriers, are responsible for managing such proceedings as may be related to introducing the relevant transport and its cargo to the customs service.

CUSTOMS VALUATION
Evaluation of goods by the customs authorities for the purpose of paying any customs duties. Such evaluation may consist either in a physical evaluation (good inspection on site) or in a document revision (inspection of the documents).

CUSTOMS VALUE
In order to assess the Customs duties to be applied, the Customs Office defines “Customs Value”, which is the value of the goods plus such other expenses (insurance, transport, etc.) as may have been incurred until the moment on which the goods pass through customs. The type of tariff to which the goods may be subject will be applied on this customs value. The tariff to be applied depends on the goods and on the country of origin. The relevant VAT will be applied to the result of applying the tariff to the customs value. This value is the Value of the Goods.

CUSTOMS WAREHOUSE
Area controlled by the Customs Office where the goods do not pay any import duties. Customs warehouses are mostly used whenever an importer ignores which will be the final destination of the imports. The same operations as in Free Trade Zones. The longest any merchandise may stay at a Customs Warehouse is five years. Customs warehouses may be public or private.

 

D

DAF
Incoterm. Delivered at Frontier. Free Border.

DDP
Incoterm. Delivered Duty Paid.

DDU
Incoterm. Delivered Duty Unpaid.

DEAD-WEIGHT TONNAGE
It includes the weight of the cargo and the consumables of a vessel.

DECLARATION OF GOODS
Act made as prescribed to state the customs system to be applied.

DEQ
Incoterm. Delivered Ex Quay (previously, EXQ).

DES
Incoterm. Delivered Ex Ship (previously, EXS).

DRAW BACK
Restoration of customs duties levied on the import of goods. This benefit is subject to the legal regulations in force in each country.

 

E

ECU
European Currency Unit now replaced with the Euro.

EEU
European Economic Union. Today, it is called European Union.

ELS
Extra Length Surcharge

ERDF
European Regional Development Fund

EU
European Union (see).

EURO
Sole European currency. See ECU.

EWS Extra Weight Surcharge
Surcharge for extra weight in hiring freight.

EXPORT
Customs system which allows for the legal exit of national goods and services.

EUROPEAN UNION
It consists of fifteen countries: Ireland, Great Britain, France, Spain, Portugal, Germany, Belgium, Holland, Luxemburg, Denmark, Sweden, Austria, Greece, Finland, and Italy. It is the most developed integration agreement worldwide. It has its own flag (twelve yellow stars in a circle on a blue background) and its own hymn. It has a sort of lawmaking body which entails citizenship representation called European Parliament, and it has its own executive and judicial branches.

EXCHANGE RATE
The price of a given currency in relation to a different currency.

EXEMPTION
Administrative procedure whereby any goods necessary to carry out some projects may be exempted from paying import duties. 

EXPORT LICENSE
It is a license required in some countries, which grants permit to export specific goods within a given term.

 

F

FCL
Full Container Load

FCL
Full Container Load. It includes the costs of stowage and unstowage.

FCLA (Full Container Load Allowance)
Discount in the cost of freight for using a full container.

FEEDER VESSEL
Feeder vessels.

FILO. Free in Liner Out
Freight hiring clause. All of the port operations are born by the goods, except for unloading at the point of destination.

FINAL EXPORT
Destination of exports for consumption is that by virtue of which the goods exported may remain for an indefinite period of time outside the customs territory. For LOCE operations, it usually consists of product samples or exceeding amounts.

FIOS
Free in and out stowed. Freight hiring clause. All of the port operations are born by the goods. The freight only covers the carriage of goods by sea.

FINAL IMPORTS
The destination of imports for consumption is that by virtue of which the goods imported may remain within the customs territory for an indefinite period of time.

FINANCIAL LEASE (LEASING)
Lease of physical assets; in particular, capital assets, by some financial institutions, which offer a purchase option by means of the capitalization of the lease fees paid.

FLOATING POLICY
Floating policies discover the insurance policy, in general terms, and leave the name of the vessel and other particular pieces of information to be determined in subsequent declarations. In the event of any mistake or omission, by means of a floating policy, the declaration may be modified even after the arrival of the goods or after loss of the goods.

FOB
Incoterm. Free on Board.

FOB EXPENSES
Expenses incurred in receiving, towing and loading goods from receipt in port until loaded on board.

FORCE MAJEURE
A provision which operates so as to restrict the responsibilities of suppliers and carriers under certain circumstances. E.g.: natural disasters, wars, etc.

FPA
Free of Particular Average. This provision protects goods against any loss, total damage, and gross average.

FRA
Forward Rate Agreement. This is an agreement executed between two parties on the type of interest to be applied to a deposit on a future date.

FRANCHISE
In the context of customs terminology, franchise is the total or partial exemption of the obligation to pay taxes, as prescribed by law.
In commercial terms, assignment of the right to use a patented record or registered trademark, in accordance with international standards.

FREE TRADE PORT AREA
It is a territory benefited by exemptions and bonuses as regards customs duties. Goods may be loaded and unloaded.

FREE TRADE WAREHOUSE
Closed store authorized by the Government and marked in the national territory, where the goods are not considered to be in customs territory.

FREE TRADE ZONE (FTZ)
A national enclave created by the competent authorities of each state for the purpose of considering the goods there, as though they were not within national territory for the application of any relevant customs duties, restrictions, and any other tax. Every type of goods is allowed at Free Trade Zones; goods of every nature, amount, country of origin or destination. Goods may be loaded, unloaded, transshipped, stored, and handled. There are Free Trade Zones in almost all the countries in the world. Free Trade Zones offer tax advantages such as the suspension of customs duties, VAT, and special taxes; neither quantitative nor qualitative restrictions are applied, etc.
 
FREIGHT
Cost of the transportation of goods.

 

G

GATT
General Agreement on Tariffs and Trade.

GROSS AVERAGE
It is the deliberate sacrifice of cargo for the purpose of safeguarding the vessel or other goods on the vessel.

GSP
Generalized System of Preferences.

GUARANTEE
Obligation undertaken, to the satisfaction of the customs authorities, for the purpose of securing payment of customs duties and other taxes or compliance with other obligations undertaken with respect to such authorities.

 

H

HAWB
House Airway Bill. It is the AWB issued by a forwarding agent instead of a regular aircraft company. 

HOUSE BL
The BL is issued by a forwarding agent. It is a non-negotiable instrument, which does not confer rights upon the goods.

 

I

IATA
International Air Transport Association.

IMPORTATION
Customs system which allows for the legal entry of goods or services of foreign origin for consumption purposes.

IMPORTS FOR CONSUMPTION PURPOSES
Free disposition of the nationalized goods in compliance with the relevant legal provisions in force.

IMPORT LICENSE
It is a license required in some countries, which allows for the entry of goods in the importing country. If the goods are not subject to any customs restrictions, import licenses are issued automatically.

INCOTERMS
The International Commercial Terms are the international rules outlined for the interpretation of the commercial terms set by the International Chamber of Commerce. Their purpose consists in setting forth defined criteria on expense distribution and the transmission of risks, between exporter and importer. There are 13 Incoterms: EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DES, DEQ, DAF, DDP, and DDU. Incoterms govern: delivery of goods, transmission of risks, distribution of costs, any document-related proceedings. However, they regulate neither the payment method nor the applicable laws.

INSURANCE POLICY
It is the document which evidences the conditions pursuant to which the goods are insured. An insurance policy may be issued as a nominative policy or as a payable-to policy.

INTERMODAL TRANSPORTATION
Carriage on different means of transport (by air, sea, road, or rail). (= Multimodal Transportation).

INTERNATIONAL FREIGHT FORWARDER
Or "Carrier". International freight forwarders dispatch and receive shipments, and they are responsible for cargo consolidation and unconsolidation, acting as multimodal transport operator.

ISO
International Organization for Standardization. 

 

L

LCL
Less than Container Load. It just provides for the cargo on a vessel, it does not provide for stowage or unstowage services.

LIFO
Liner in Free out. Freight hiring clause. All of the operations carried out at the port are born by the goods, except for stowage at destination. The freight only covers carriage by sea.

LINER TERMS
For regular service vessels.

LOADED ON BOARD
It states that the goods have been loaded on board. 

LOGISTIC OPERATOR
Private company which renders logistic services both for import and export operations.

LONG TON
Long Ton = 2,240 pounds = 1,016.16 Kg.

 

M

MANIFEST
The list of the cargo carried on a vessel.

MAQUILA
Process whereby goods are entered in the country for the only purpose of introducing any relevant added value to labor.

MATE´S RECEIPT
It is a document signed by the captain of a vessel acknowledging receipt of the goods on board. On the basis of this document, ship owners issue BLs.

MERCHANDISE
Item which may be made subject to the application of different systems, operations, and customs destinations.

MERCOSUR
South America Common Market. Since 1991. It consists of Brazil, Argentina, Paraguay, and Uruguay.

METRIC TON
Metric Ton = 2,204 pounds =1,000 Kg.

MTO
Multimodal transport operator.

 

O

ON BOARD PROVISIONS
Also called Supplies. Goods meant for consumption by passengers and crew members on board the means of transport of international traffic, either to be sold or not; stuff necessary for functioning, supply and maintenance of the means of transport, including fuel, carburant and lubricants, but excluding such equipment parts and spare parts as may be on board at arrival or that may be shipped during their stay at the customs territory; as well as any goods to be sold to passengers and crew members to disembark them.

OUTSIDERS
Vessels which do not form part of any Maritime Conference. 

OVERSTAY
The amount of money paid by exporters for any delays in loading, unloading or for using a space at a port or warehouse beyond a specified term.

 

 

P

PACKAGING
It is the science, art, and technology of conditioning products for their storage, transportation, distribution, and sale at their optimum cost, thus ensuring that they arrive at their destination in good state of repair, including the container, packing, supplementary materials, and the packing or bottling system.

PACKING
The material or container meant to provisionally wrap up or contain, whether bottled or not, during manipulation, transport, and storage.

PACKING LIST
It is a list which specifies the content of each pack o fan export operation.

PALLET
Platform which consists of two levels joined by sticks. Measures: Universal= 1200 x 1000 mm Europallet =1200 x 800 mm. Maximum height = about. 1.70 m.

PRIVATE AUTHORIZED CUSTOMS WAREHOUSE
Facility set aside for the storage of such goods as may be solely owned by the depositary.

PROFORMA INVOICE
It is a preliminary invoice delivered by exporters to importers in order to accurately inform importers which is the price they are going to pay for the goods and the payment method.

PROVISIONAL IMPORTATION
The destination of Provisional Importation is that by means of which the goods imported may remain at the customs territory within a definite period of time and for a particular purpose, thus being subject, as from the moment of release, to the obligation of reexporting it for consumption purposes prior to expiration of the term mentioned above.

PUBLIC AUTHORIZED CUSTOMS WAREHOUSE
Store meant for the storage of goods of different owners.

 

R

RED CLAUSE
It makes it possible for the exporter to dispose, either in whole or in part, of the amount of the credit prior to the submission of the documents required by the credit and even prior to sending the goods. It entails Financing of the exporter by the importer.

ROLL ON ROLL OFF
Vessels for the transportation of rolled cargo.

 

S

SAMPLES
Goods which have as sole purpose to show their characteristics; they lack any commercial value themselves.

SDT
Declaration of shippers for the transportation of dangerous goods.

SEA PROTEST
It may consist of casting away, collision or non-complying with presentation of cargo.

SHIPPER
Company responsible for transporting the goods from the port of origin to the port of destination either in an import or in an export operation.

SHORT TON
Short Ton = 2,000 pounds = 907.18 Kg.

SPECIAL AREA
Area which forms part of the Customs Warehouse. This area is meant to store dangerous goods, and therefore any necessary safety measures must be observed.

SPREAD
Difference between the borrower and lender interest rate.

STOWAGE
Loading operation which provides for the handling of the goods to the means of transport.

STRAIGHT BLs
They are issued to the order of a specific person, who will be entitled to take possession of the goods upon prior identification and submission of one of the original BLs. Straight BLs may not be endorsed.

SUPPLIES
See On board provisions.

SWIFT
Society for Worldwide Interbank Financial Telecommunication. Messages of electronic exchange of data among banks. 

 

T

TARIFF
Duty paid by an importer upon the entry of products to a given market. See Customs Duties.

TARIFF POSITION
It allows to incorporate the tariff position of a product or service. Use the 6-digit International number. The international 6- digit in our countries adds from 4 to 6 for a better specification of a product or service. The international 6-digit code

TEMPORARY EXPORT
By means of Temporary Export, the goods exported may remain outsider the customs territory for a stated purpose and for a given term, thus being subject, from the very moment of export, to the obligation of being reimported for consumption purposes prior to the expiration of the term mentioned. (For example: catalytic converters for regeneration).

TRANSHIPMENT
The process of de transferring cargo from a means of transport to another means of transport.

 

U

UN
United Nations.

UN
United Nations. UNCTAD
United Nations Conference on Trade and Development

UNSEAWORTHINESS AND UNFITNESS EXCLUSION CLAUSE
Coverage is not provided in the event of unseaworthiness of the ship or vessel, or of the ship or vessel’s unfitness with respect to the means of transport (which may be by road), container or truck, for the safe transportation of the insured interest, unless the insured or the insured’s employees has/have not been aware of such unseaworthiness or unfitness at the moment on which the insured interest was loaded on the ship or vessel. If the insured or the insured’s employees knew of such conditions after loading, the Insured’s right to claim would not be forfeited. Knowledge of the insured’s agents, not of the insured’s employees at the moment of loading the vessel; anyway, this situation will not inure to the detriment of the rights of the insured.

 

V

VAT
Value Added Tax.

W

WTO
World Trade Organization. It replaces the GATT.