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   All Risk Insurance Cover
Where a credit stipulates "insurance against all risks", bank will
accept an insurance document which contains any "all risks", bank
   will accept an insurance document which contains any "all risks"
notation or clause, whether or not bearing the heading "all risks".
 
   Acceptance
A draft, payable at a fixed or determinable future date, upon the
face of which has been acknowledged in writing the unconditional
obligation of the person upon whom it is drawn to pay it at
   maturity. 1) Bank Acceptance: A draft of which a bank is drawee
and acceptor. 2) Trade Acceptance: A draft of which the drawee
and acceptor is a mercantile concern. Such an acceptance usually
arises from the sale of merchandise.
 
   Acceptance Credit
An acceptance credit is drawn on and accepted by a bank or
acceptance house with whom there is no underlying trade
   transaction and then discounted either with the accepting bank or a
third party which could be another bank or discount house.
 
   Accepting Bank
A bank which, by writing "accepted" across the face of a bill of
   exchange and by signing the bill agrees to pay the face amount of
the bill at maturity.
 
   Acceptor
Drawee who signs a bill of exchange and thereby undertakes to pay
   the bill at its maturity.
 
   Accountee
   (See Drawee)
 
   Advance Freight
Freight paid in advance. it enables the shipper to endorse the bill of
   lading with a freight release and the importer to take immediate
delivery.
 
   Advice of Fate
Collecting banks are to advise fate in accordance with the following
rules containing: (i) Form of advice (ii) Method of advice (ii) (a)
   Advice of payment (b) Advice of acceptance (c) Advice of non-
payment or non-acceptance, protest, etc. Such instructions will be
given with the original collection form.
 
   Advising Bank
   A bank usually operating in the exporter's country, that handles
letters of credit for a foreign bank by notifying the export firm that
 the credit had been opened in its favour. The advising bank fully
informs the exporter of the conditions of the letter of credit. It is
the duty of the advising bank to verify the credit and advise the
beneficiary. The advising bank is the issuing bank's agent and is
usually located in the exporter's country.
 
   After Date
When a draft bears this phrase, the time begins to run from its
   date. The date of maturity is, therefore, fixed and does not depend
upon presentation or acceptance.
 
   Against all Risks
   Insured against all generally accepted risks in marine insurance.
 
   Air Way Bill
An air transport document that covers both domestic and
international flights transporting goods to a specified destination.
This is a non-negotiable instrument of air transport that serves as a
   receipt for the shipper, indicating that the carrier has accepted the
goods listed and obligates itself to carry the consignment to the
airport of destination according to specified conditions.
 
   Anticipatory Credit
Red/Green Clause Credit or Anticipatory Credit is a Letter of Credit
containing a clause authorising the advising bank to make advances
   to the beneficiary/exporter before the beneficiary presents the
required documents under the credit. It is a method of pre-
shipment finance for the exporter.
 
   Alongside
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 abroad the ship.
 
   Anticipatory Credit
Red/Green Clause Credit or Anticipatory Credit is a letter of credit
containing a clause, authorising the advising bank to make
   advances to the beneficiary/exporter before the beneficiary
presents the required documents under the credit. it is a method of
pre-shipment finance for the exporter.
 
   Applicant
The person who initiates a Letter of Credit, i.e. the person who
applies to his bank to issue a credit in favour of the
   beneficiary/exporter. The applicant is the importer (buyer) of
goods.
 
   Assignee/Allocatee
A third party to whom, in certain defined circumstances, either a
part of all of the proceeds obtained under a Documentary Credit
   can be paid. The assignee/allocatee does not have a bank
guarantee of payment.
 
   Assignment/Allocation of Proceeds
An assignment follows a request to the Paying/Accepting Bank by
the Beneficiary to assign all or part of the proceeds to a third party.
   This request may be made prior to, or at the time of presentation of
documents for payment.
 
   At Sight
A bill of exchange payable on presentation rather than on a specific
   date.
 
   Aval
Payment of a bill of exchange or promissory note which is
   guaranteed by the signature of a third person on the bill.
 
   A.A.A.
   See American Arbitration Association.
 
   AAR
   against all risks
 
   Acceptance House
Financial institution lending money on the security of bills of
exchange. It may lend money on a bill or add its name to a bill
drawn on another party, especially in foreign trade. Acceptance
   houses often lend money to an exporter to cover the gap between
the production of goods and the receipt of proceeds from their sale.
The loan is made through a Bill of Exchange and is sometimes
called an acceptance credit.
 
   A/D
   See After date.
 
   ADR
   See alternative dispute resolution.
 
   Ad Valorem Duty
A duty assessed as a percentage rate of the value of the imported
   merchandise. See customs duty.
 
   Advance Payment Guarantee/Bond
A guarantee that advance payments will be returned if the party
   having received such payments does not perform its part of the
contract.
 
   Advance Against Documents
A loan made on the security of the documents covering the
   shipment.
 
   Agent
One who represents a principal or who buys or sells for another. A
   person who is authorised by another to act on his behalf in
transactions with third parties.
 
   Agio
   Premium paid for exchange of one currency for another.
 
   Allocation Of Proceeds
   (See Assignment)
 
   Aligned Export Documentation System
   Method whereby as much information as possible is entered on a
'master' document so that all or part of this information can be
 reproduced mechanically/electronically on to individual forms of a
similar design.
 
   Alternative Dispute Resolution (ADR)
A general term for a variety of dispute-resolution mechanisms
which may be used as alternatives to traditional litigation before
   governmental courts or tribunals. May be said to include such
techniques as conciliation, mediation, arbitration, re-negotiation,
and mini-trial.
 
   American Arbitration Association (A.A.A.)
Perhaps the world's largest arbitration forum and institution; the
great bulk of cases handled under its rules and procedures are
   domestic US cases, although the A.A.A. does have specific rules for
international cases.
 
   AN
   Arrival notice.
 
   Applicant
The person who initiates a Letter of Credit, i.e. the person who
applies to his bank to issue a credit in favour of the
   beneficiary/exporter. The applicant is the importer (buyer) of
goods.
 
   AQ
   Any quantity.
 
   Arbitration
A method of resolving commercial disputes where both parties are
required to submit the documents relevant to the case to an
   outside agency for an independent judgement and to accept that
judgement.
 
   ATA Carnets
Everybody who needs to take valuable goods across frontiers
temporarily can save time and money by using ATA Carnets. Simple
international customs documents, the Carnets enable travellers
taking goods abroad (samples of value, exhibits at trade fairs,
   professional equipment etc.) to avoid all duty payments and
tiresome formalities at the customs. Carnets are issued through a
40-country guarantee chain organised by the ICC's International
Bureau of Chambers of Commerce.
 
   At Call
   Money or funds at call i.e. immediately available.
 
 
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   Bill of Exchange
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.
 
   Bid Bond
Broadly speaking, the purpose of the Bid Bond (tender bond) is to
provide a financial assurance of the intention of the party
   submitting the tender (principal) to sign the contract if his tender is
accepted.
 
   Bill Of Lading (B/L)
   A document issued when goods are entrusted to a shipping
company for carriage. It can serve as a formal receipt for the goods
by the shipowner, a memorandum of the contract of carriage, and
documentary evidence of control over the goods. The holder or
consignee of the bill has the right to claim delivery of the goods
from the shipping company when they arrive at the port of
destination. Bills of Lading may be negotiable (order B/L) or non-
negotiable (straight B/L). Bills of Lading may also be distinguished
by the mode of transport used for the shipment. See Marine Bill of
Lading, multimodal transport Bill of Lading, air waybill, railway
consignment note and sea waybill. B/L terminology: · Ocean marine
- the classic B/L, a negotiable instrument used for goods shipped on
board ocean-going vessels. · on board/shipped - a B/L evidencing
the Loading on board of cargo in good condition. · received for
shipment - a B/L which only evidences that goods have been
received, not that they have been loaded on board; common with
container shipments delivered to port terminal; must be converted
by subsequent «on board., notation if shipper needs an "on board"
or "shipped" document for payment under a letter of credit. · clean
- a B/L which contains no notation indicating that the goods have
been wholly or partially lost/damaged. · dirty / foul/ claused - a B/L
with a notation to the effect that the goods have been
partially/wholly lost or damaged. · straight - a non-negotiable B/L;
consignee only needs to identify himself to pick up the goods. ·
order - a negotiable B/L, issued "to the order" of a particular party,
commonly the shipper · through -a B/L used when shipment will
involve successive transport stages with different carriers. · direct -
a B/L for direct transport between loading and discharging ports. ·
multimodal combined transport- a B/L issued to cover transport
involving successive stages via different transport modes, e.g.,
road transport followed by sea followed again by road transport. ·
FIATA FBL (FBL) - a standard-form B/L issued by a freight
forwarder; considered under the UCP 500 - along with other
forwarder bills in which the agents accepts full responsibility as a
carrier - as acceptable as a clean on board B/L issued by a carrier. ·
house - a B/L issued by a forwarder in its own name ("house")
covering grouped consignments. · freight pre paid - a B/L indicating
on it that the freight has been paid. · liner - a B/L issued subject to
the terms and conditions of a shipping line. · short form - a B/L
which does not contain the full terms and conditions of the contract
 of carriage; instead, it contains an abbreviated version of the
carrier's condition, with a reference to the full set of conditions. ·
Stale - a B/L which is presented late (for documentary credit
purposes, a B/ L must be presented within a certain number of days
after shipment). · Full set of originals - for documentary credit or
collection purposes, the buyer may require the seller to produce a
full set (commonly up to three) of signed originals - that is, B/L's
which bear the original signature of the ship's master or agent. ·
Waybill - a non-negotiable transport document.
 
   Bolero
Originally a system for transmission of electronic bills of lading. In
   the process of being expanded by SWIFT into an electronic platform
for transmission of all trade documents.
 
   Bonded Warehouse
A warehouse authorised by customs authorities for storage of goods
on which payment of duties is deferred until the goods are removed
   for domestic consumption. If the goods are re-exported, no duty
has to be paid at all. See foreign trade zone.
 
   Breakbulk (BB)
Non-containerised cargo which is grouped or consolidated for
shipment, and then is later broken down, sub-divided or distributed
   at a further destination point. Breakbulk cargo is often unitised
cargo on pallets or packed in boxes; specialised breakbulk vessels
tend to carry their own loading/ unloading machinery.
 
   Bunker Adjustment Factor (Also, BAF)
A surcharge charged by ocean carriers to account for fluctuations in
   the cost of shipping fuel, which is known as bunker fuel.
 
   Buy Back Or Compensation Trading
An agreement to provide (for instance) technology, the construction
   of an entire project, the licensing of patents or trademarks in return
for agreeing to take part of the output as payment.
 
   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 a shipper and a transportation company under
which freight is to be moved between specified points for a
   specified charge. Usually prepared by the shipper on forms issued
by the carrier. It serves as a document of title, a contract of
carriage, and a receipt for goods. A receipt for goods issued by a
carrier that indicates that the goods were received in "apparent
good order and condition", without damage or irregularities.
 
   Blocked Currency
   Currency which cannot be freely converted into other currencies.
 
   Back to Back Credit
Two documentary credits, the second being issued on the
understanding that reimbursement will be obtained from documents
   presented under the first credit issued. The first credit acts as
security for the second and the beneficiary of the first credit
becomes the applicant of the second credit.
 
   Bank Bills
   (See Acceptance Credit)
 
   Bank Draft
Similar to a Bill of Exchange, except here the bank is the drawee
   instead of an individual or company.
 
   Beneficiary
The person in whose favour a letter of credit is issued or a draft is
   drawn, usually the seller or exporter.
 
   Berth Bill of Lading
Bill of Lading issued by the master of a vessel belonging to a
   regular shipping line.
 
   Bill Broker
   Firm or individual who buys and sells bills of exchange.
 
   Bankers Acceptance
A Bill of Exchange accepted by a bank usually for the purpose of
financing a sale of goods to or by the bank's customer. The Bill may
   be drawn, for example, by an exporter on the importer's bank and
be sold on the open market at a discount. See Bill of Exchange.
 
   BAF
   See Bunker adjustment factor.
 
   Bank Guarantee
Contract between a bank as guarantor and a beneficiary in which
the bank commits itself to pay a certain sum under certain,
   specified conditions. Thus, a demand guarantee is one in which the
bank agrees to pay against the simple written demand of the
beneficiary.
 
   Bankers Draft
Draft payable on demand and drawn by or on behalf of the bank
   itself.
 
   Barter
Trade in which merchandise is exchanged directly for other
merchandise without use of money. Barter is an important means
   of trade with countries using currency that is not readily
convertible.
 
   Basis Point
One thousandth; 1/100 of 1%; i.e., 100 basis points is equal to
   1%.
 
   B/B
   Breakbulk (cargo).
 
   B/D
   Bank draft.
 
   Berne Union
   International Union of Credit and Investment Insurers.
 
   B/G
   Bonded goods; see Bonded warehouse.
 
   Bilateral Clearing
Often used in international trade between developing countries.
Trade and other payments are balanced and settled once yearly by
   the central banks involved. Settlements often take place in
convertible currencies.
 
 

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   Certified Invoice
A Commercial invoice which also contains a statement by the
exporter/seller which is required by the importer/buyer e.g. that
   the goods are in the order required or that the goods come from a
specific country.
 
   Confirmation
Telex advice of transaction giving full details on amounts, value
dates, rates and payment mechanisms. Formal memorandum
   issued to the parties of transaction, recording (confirming) the
details of the transaction.
 
   Cost and Freight, Free Out
Includes the cost of the goods, freight charges and unloading. Most
   grain/sugar is traded on this basis.
 
   Claused Bill Of Lading
A claused, or foul bill of lading contains notations or remarks as to
   defects in the goods and/or packaging. See Bill of lading and Clean
bill of lading.
 
   Counter Trade
Form of international trade popular amongst economies with low
   stocks of hard currency. Transactions work on the basis of
exchange of goods rather than formal payment.
 
   Call
A demand for payment under a loan or guarantee. In the case of
demand guarantees, the abusive resort to the guarantee (i.e., in
   the absence of non-compliance by the principal) is sometime
referred to as an unfair call.
 
   CBD
   Cash before delivery
 
   Certificate Of Inspection (also, certificate of quality)
A document certifying the quality, quantity and/or price of a given
shipment of goods. The inspection certificate is often required by
buyers, especially those paying via documentary credit, from
   sellers, in order to assure that the goods are of contract quality.
Generally, the buyer will designate a neutral, independent
inspection company.
 
   CEDEL
Institution centred in Luxembourg that acts as a clearing
   corporation for international securities as well as a variety of value-
added information and products.
 
   CHAPS (Clearing House Automated Payments System)
The UK banks' electronic cash transfer system for sterling payments
   and receipts.
 
   CHIPS (Clearing House Inter Bank Payment System)
CHIPS is the New York Clearing House Interbank Payment System.
   It is an electronic banking system for automated payment and
transfer of funds. CHIPS operates same day settlement.
 
   CIA
   Cash in Advance.
 
   CLD
   Cleared (through customs).
 
   Clearing House
Adjunct to commodity/stock exchanges through which transactions
executed on the floor are settled. Also charged with assuring the
   proper conduct of delivery procedures and the adequate financing
of trading.
 
   Collateral
   An asset pledged by a borrower to a lender making a secured loan.
 
   Collecting Bank
The "collecting bank" may be any bank, (other than the remitting
bank) involved in processing the collection order. The collecting
   bank usually acts as agent of an exporter's bank in collecting
payment from an importer. The collecting bank is usually situated
in the importer's country.
 
   Collection
Collection means the handling by banks on instructions received, of
documents in order to: 1) obtain acceptance and/or payment 2)
   deliver commercial documents against acceptance and/or, as the
case may be against payment, or 3) deliver documents on other
terms and conditions.
 
   Commercial Paper
Unsecured promissory notes issued by corporations at a discount to
   par to provide short term financing.
 
   Commission
Pro-rata remuneration for work done as an agent. Brokerage can be
   charged according to an official minimum scale laid down by an
Exchange.
 
   Commission Agent
A foreign sales representative who is paid a percentage of the sales
   he or she generates. See also Agent and Foreign sales agent.
 
   Commitment Fee
Fee charged by a bank on the unused portion of a loan or term note
   facility.
 
   Commodity
In financial markets the main categories of commodity are grain,
   livestock, food and fibres, oil, wood, metals and bullion.
 
   Commodity Future
Futures are traded for a range of underlying commodities such as
grains, soya, meats, cotton, coffee, sugar and lumber. A future is
   an exchange-traded contract with standard specifications, for the
purchase and sale of a quantity of an underlying item.
 
   Commodity Swap
The two parties exchange payments over successive periods
   representing the differential between the current price of a
commodity and one agreed at the outset.
 
   Compound Duty
A combination of both a specific rate of duty and an ad valorem
rate of duty. Whereas specific duties are based on factors such as
   weight or quantity, ad valorem duties are based on the value of the
goods. See customs duty.
 
   Counterparty
The bank's opposite number in a financial transaction. The
   individual/institution on the opposite side of a financial transaction;
the other party to a contract.
 
   Courtage (French)
   Brokerage; brokerage fee
 
   Cover Note (also, brokers cover note)
An insurance document indicating coverage of a particular shipment
under an open cover policy. To be distinguished, particularly as
   regards presentation under a documentary credit, from an
insurance policy or an insurance certificate.
 
   CPT
   Carriage Paid To...(named point). See Incoterms.
 
   Credit
Revolving credit with no fixed maturity date, which a bank has the
   option, once annually to convert into a term loan.
 
   Credit Risk Insurance
   Insurance designed to cover risks of non-payment for delivered
 goods.
 
   C/S
   Case(s).
 
   CSC
   Container service charge.
 
   Currency Future
A contract for the future delivery of a commodity, currency or
security on a specific date. In contrast to forward contracts, futures
contracts are for standard quantities and for standard periods of
time and are primarily traded on an exchanges. Forward
   transactions enable importers and exporters ' who will have to
make, or will receive, payment in a foreign currency at a future
time to protect themselves against the risk of fluctuations in the
spot rate.
 
   Currency Option
The contractually-agreed right to buy (call option) or to sell (put
option) a specific amount of a foreign currency at a predetermined
   price on a specific date (European option) or up to a future date
(American option).
 
   Customs Broker
Licensed agent or broker whose function is to handle the process of
   clearing goods through customs for importers.
 
   Customs Union
An association between two or more countries whereby they
eliminate tariffs and other import restrictions on each other's goods
   and establish a common tariff on the goods from all other
countries. The European Community -is the best known example of
a customs union.
 
   CW
   Commercial weight.
 
   CWO
   Cash with order.
 
   CWT
   Hundredweight; unit of measurement.
 
   Cable Transfer
An order transmitted by one bank to another bank in a foreign
   country with instructions to pay a specific amount to a designated
person or account.
 
   Carnet
   (See ATA Carnets)
 
CIP – Carriage and Insurance Paid to (…named place of
   destination)
   “Carriage and Insurance paid to…” means that the seller delivers
the goods to the carrier nominated by him but the seller must in
addition pay the cost of carriage necessary to bring the goods to
 the named destination. This means that the buyer bears all risks
and any additional costs occurring after the goods have been so
delivered. However, in CIP the seller also has to procure insurance
against the buyer’s risk of loss of or damage to the goods during
the carriage. Consequently, the seller contracts for insurance and
pays the insurance premium.This term may be used irrespective of
the mode of transport including multimodal transport.
 
CIF – Cost, Insurance and Freight (…named port of
   destination)
“Cost, Insurance and Freight” means that the seller delivers when
the goods pass the ship’s rail in the port of shipment. The seller
must pay the costs and freight necessary to bring the goods to the
named port of destination BUT the risk of loss of or damage to the
   goods, as well as any additional costs due to events occurring after
the time of delivery, are transferred from the seller to the buyer.
However, in CIF the seller also has to procure marine insurance
against the buyer’s risk of loss of or damage to the goods during
the carriage
 
   Cash Against Documents
Payment for goods in which a bank, commission house or other
intermediary transfers title documents to the buyer upon payment
   in cash. Full shipping documents are sent to a bank or an agent at
the port of destination with instructions that they are to be handed
over to the consignee only in exchange for the sum due.
 
   Cash with Order
Payment in advance, whereby the buyer of the goods sends
   payment to the seller with his order for goods. It is the most secure
method of payment for the seller.
 
   Certificate of Origin
A document, required by certain foreign countries for tariff
   purposes, certifying the country of origin of specified goods.
 
   CFR – Cost and Freight (…named port of destination)
“Cost and Freight” means that the seller delivers when the goods
pass the ship’s rail in the port of shipment. The seller must pay the
costs and freight necessary to bring the goods to the named port of
destination BUT the risk of loss of or damage to the goods, as well
as any additional costs due to events occurring after the time of
   delivery, are transferred from the seller to the buyer. The CFR term
requires the seller to clear the goods for export. This term can be
used only for sea or inland waterway transport. If the parties do not
intend to deliver the goods across the ship’s rail, the CPT term
should be used.
 
   Charter Party
Contract under which the charterer has the use of the ship for the
carriage of goods for a voyage or a certain time. It sets forth the
terms of the arrangement such as freight rate and ports involved in
   the trip contemplated. Such a contract may also act as security for
a loan to the shipowner from a bank. the money paid to the owner
is known as Freight.
 
   Charterer
   Person who hires a vessel either on a voyage or time basis.
 
   Clean Bill
   (See Bill of Lading)
 
   Clean Collections
Clean collection means collection of financial documents not
   accompanied by commercial documents.
 
   Clean Credits
A Letter of Credit opened by a bank, guaranteeing payment of any
   Bills of Exchange drawn on that bank. These Bills have no
supporting documents attached.
 
   Clean Transport Documents
A clean transport document is one which bears no clause of
   notation which expressly declares a defective condition of the goods
and for the packaging.
 
   Clearing System
A system where bills of exchange, cheques etc. drawn upon
   individual clearing banks are settled.
 
   Commercial Documents
"Commercial documents" means invoices, shipping documents of
   title or other similar documents, or any other documents
whatsoever, not being financial documents.
 
   Commercial Invoice
An itemised list of goods shipped, usually included among an
exporter's collection papers. The commercial invoice is written
   evidence of the contract. A document evidencing demand by an
exporter/seller for payment for goods sold.
 
   Common Carrier
An individual, partnership or corporation that transport persons or
   goods for compensation.
 
   Common Law
A legal system broadly based on previous court decisions,
   precedents or past practices.
 
   Confirming Bank
A confirming bank confirms an irrevocable credit (qv) upon the
authorisation or request of the issuing bank. Where an Advising
Bank guarantees payment of a Letter of Credit, it is known as a
   confirming bank. the bank's role changes from a mere advisory role
to a role of assuming liability for payment, acceptance or
negotiation of the credit. Such liability if in addition to and not
instead of that already given by the issuing bank.
 
   Confirmed Letter of Credit
A letter of credit issued by the buyer's bank, Bank A, the validity of
which has been confirmed by Bank B. An exporter whose payment
terms are a confirmed Letter of Credit is assured of payment by
Bank B even if the buyers or Bank A refuse payment. Payment
   under a confirmed Letter of Credit is guaranteed twice i.e. by both
the Issuing Bank (Bank A) and the Confirming Bank (Bank B).
Payment under a confirmed Letter of Credit is conditional under
documents being presented in order.
 
   Consignee
   The party to whom the goods are dispatched.
 
   Consignment
A term used of merchandise shipped to an agent abroad when an
actual purchase has not been made but under an agreement by
   which the consignee is obligated to sell the goods for the account of
the consignor. The act of transferring goods or delivering them for
transport.
 
   Consignor
Otherwise known as the shipper. This is the party who dispatches
   the goods and is usually but not always the beneficiary of the
credit.
 
   Consular Declaration
A formal statement made by the consul of a foreign country
   describing goods to be shipped.
 
   Consular Invoice
A detailed statement regarding the character of goods shipped, duly
   certified by the consul at the port of shipment and required by
certain countries.
 
   Contract of Carriage
Determines the obligations of the shipper or the sender with
   respect to handling over the goods for carriage to the carrier.
 
   Correspondent
In a bilateral deal or relationship, the provider of correspondent
   banking services. A bank having direct connection or friendly
service relations with another.
 
   Correspondent Bank
Bank that accepts deposits of and performs banking services for
other banks, depository institutions in centers where the others are
   not physically represented. A bank that, in its own country, handles
the business of a foreign bank.
 
   Cost and Freight
   (See CFR)
 
   CPT – Carriage Paid To (…named place of Destination)
“Carriage paid to…” means that the seller delivers the goods to the
carrier nominated by him but the seller must in addition pay the
cost of carriage necessary to bring the goods to the named
destination. This means that the buyer bears all risks and any other
costs occurring after the goods have been so delivered. “Carrier”
   means any person who, in a contract of carriage, undertakes to
perform or to procure the performance of transport, by rail, road,
air, sea, inland waterway or by a combination of such modes. This
term may be used irrespective of the mode of transport including
multimodal transport.
 
   Counter Credits
   Similar to back-to-back credits (qv). the only difference is that the
merchant bank is involved with both credits i.e. as the
advising/confirming/payment bank in respect of the first credit and
 as issuing bank in respect of the second credit.
 
   Country Risk
The risk that the financial position of organisations in a particular
   country and their ability to pay debts could be affected by changes
or developments in that country.
 
   Customs Duty
   Border tax usually levied on import.
 
   Credit
Revolving credit with no fixed maturity date which a bank has the
   option once annually to convert into a term loan.
 
Conference - (also, steamship conference, shipping
   conference)
A group of steamship companies or shipping lines which have
associated to offer regular service on specific routes at publicly-
announced prices. Conferences generally offer specific rebates for
regular or high-volume shipments. Shipment by conference lines is
   sometimes referred to as liner shipping and the freight rates are
referred to as "liner terms". Shipping lines which are not members
of a conference for a particular route are known as outsiders,
independent lines, or non-conference liners. See also Liner terms.
 
   Confirmed Letter Of Credit
A documentary credit issued by a foreign bank which has been
confirmed by another bank (usually a local bank or an international
   leading bank), the confirmation consisting in: an additional
irrevocable undertaking to pay according to the terms of the credit.
 
   Counterpurchase
Counterpurchase is the agreement of an exporter to purchase a
   quantity of unrelated goods or services from a country in exchange
for and approximate in value to the goods exported.
 
   Countertrade
All foreign trade transactions resulting from exporters'
commitments to take products from the importers or from their
respective countries in full or part payment for their exports.
Countertrade is typical of trade with East European and less
   developed countries, which often suffer from a lack of foreign
exchange and/or credit facilities. Countertrade transactions include
barter, buy-back or compensation, counterpurchase, offset
requirements, and swap. See respective terms.
 
   Contingency Insurance (or "difference in conditions")
Insurance coverage taken out by one party to an international
transaction to complement and fill in any gaps in the coverage
taken out by the counterparty. Thus, the open account exporter on
FOB Incoterms does not have an obligation to insure the goods
   during the main international transport, but may wish in any event
to take out contingency insurance so that if the goods are lost or
damaged there will be no loss to the buyer (such a loss might lead
to disagreements or disruption of commercial relations with the
buyer, even if the seller was not legally at fault).
 
 
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   Demurrage
the charge made for delay to barges, ships, etc. after a stated free
   period at port of discharge.
 
   DDC (also D.D.C.)
Sometimes said to be "delivered destination charges" referring to
various miscellaneous charges in the port of destination:
   alternatively said to refer to dispatch money at discharge; see
Dispatch money
 
   Demurrage
The charge made for delay to barges, ships, etc. after a stated free
   period at port of discharge.
 
   Door To Door
A transport service covering carriage from the seller's premises to
the buyer's premises. Note that this term refers to a freight charge
in a carriage contract between a carrier and a shipper, and thus is
distinct from the issue of the Incoterm chosen in the contract of
sale (an agreement between seller and buyer). Depending on the
circumstances of the transaction, it could be possible to quote
prices on either EXW, FCA, CPT, CIP, DDU, or DDP Incoterms in
conjunction with so-called "house to house" transport services.
Attention should be given to the inclusion of loading/unloading
charges in the "house to house" rate, especially in comparison with
   the responsibility under the respective Incoterm for loading or
unloading. The shipper should make sure that the transport service
corresponds to the contractual obligations under Incoterms. It is
sometimes said that "door to door" services imply that loading and
unloading are not included in the freight charge, but this is not a
standard rule and traders; should inquire in each particular case.
Door to door is sometimes used, synonymously with house to
house, but it is claimed by some that there is a distinction between
the two, namely that "house to house" only refers to rental rates
for containers from container yard to container yard; See house to
house.
 
   Date Draft
   A draft which matures a specified number of days after issuance
 
   D/D
   Delivered.
 
   Deadfreight
   Freight charge to paid even when shipment was not made, owing to
failure by shipper or charterer to actually ship goods in the shipping
 space for which a reservation was made.
 
   Deadweight
   Total carrying capacity of a vessel.
 
   Deck Cargo
Goods shipped on the deck of a ship rather than in its holds. Since
deck cargo is more exposed to the elements, traders may wish to
   stipulate that goods not be carried on deck (except in such cases as
transport of hazardous materials, in which case carriage on deck
may be mandatory).
 
   Deferred Air Freight
   Air freight offered at cheaper rates for non-urgent shipments.
 
   Del Credere
As relates to international commercial agency relationships: a del
credere agent is one who guarantees the ability to pay of
prospective clients he has brought to the principal; in exchange, the
   del credere agent is usually accorded a higher percentage
commission than is a regular agent. As relates to risk in general:
del credere risk is the risk that a party will be unable to meet its
financial obligations.
 
   DEL.
   Delivery.
 
   Delivery
Deliver the goods into the custody of the carrier or another person
named by the buyer or chosen by the seller at the named place or
   point on the date or within the period agreed for delivery and in the
manner agreed or customary at such point.
 
   Delivery Order
An order, commonly addressed to a terminal superintendent or
warehouse manager, directing the release of specified cargo to a
particular receiver. The order may in some cases be issued by
seller, shipper or consignee, while in other contexts the order will
be issued by the shipping' line or carrier. Commonly, a delivery
order directs delivery of part of a larger consignment, which is itself
   covered by a single bill of lading; i.e., the issuance of several
delivery orders "splits up" the cargo covered by the bill of lading. In
any event, delivery orders should be clearly distinguished from bills
of lading: the delivery order is not a negotiable document, nor does
it evidence receipt of the goods, nor does it contain the provisions
of the transport contract under which the goods were shipped.
 
   Demand Guarantee
A guarantee usually issued by a bank, under which the beneficiary
is only required to make a demand in order to receive payment. In
contrast to the conditional or suretyship guarantee - which require
the beneficiary to provide proof of the principal's default, a demand
guarantee only requires that the beneficiary make a simple
   demand, and therefore this latter type of guarantee is relatively
risky in terms of exposure to an unjustified demand on the part of
the beneficiary. Some protection against such an unfair demand
can be obtained by making the guarantee subject to the Uniform
Rules for Demand Guarantees (URDG 458).
 
   Deposit Facility
An ESCB standing facility which counterparties may use to make
   overnight deposits remunerated at a pre-specified interest rate.
 
   Destuffing
   Unloading goods from a container; See also Stripping, Devanning.
 
   Devanning
   Unloading goods from a container; See also Stripping, De-stuffing.
 
   Discrepancy
Documentary credit context: a discrepancy arises when documents
presented under a documentary credit do not conform to the terms
of the credit; generally, an error, contradiction or omission related
   to the documents constitutes the discrepancy. The bank will refuse
to pay against the documents unless the applicant (buyer) agrees
to amend the credit or otherwise waive objections to payment
under the credit.
 
   Dirty Bill Of Lading
A notation on a Bill of Lading as to some defect in relation to goods
   being shipped.
 
   Discounting A Bill of Exchange
Occurs where the owner of a Term Bill of Exchange sells it, once it
is accepted, to a bank or other party. The seller receives the face
   value of the Bill less discount. This discount amount represents the
cost of funds plus profit/fee to the investor/buyer.
 
   Dispatch Money (Also, Despatch)
An incentive payment offered by a shipowner to a charterer in
exchange for completing loading or unloading in less time than is
   specified in the charter party contract (this time is often calculated
as a number of "lay days"). See also Charter party, Demurrage.
 
   Distributor
An independent person or legal entity which sells goods locally on
behalf of a foreign principal. Distributors can be distinguished from
agents ' because distributors buy the goods in their own name,
   then re-sell them at prices which they have some liberty to set.
Distributorship is frequently based on a contract which grants the
distributor exclusivity for a specific territory. See for comparison,
foreign sales agent.
 
   DK.
   Dock.
 
   D/O
   See Delivery order.
 
   Dock Receipt
A document certifying receipt of goods by the international carrier
   at the port of departure.
 
   Documentary Credit
   A commercial Letter of Credit providing for payment by a bank to
the named beneficiary, who is usually the seller of merchandise,
 against delivery of such documents as may be specified in the
Credit.
 
   D/S
Days after sight (payment term often used in conjunction with bank
   drafts and documentary credits).
 
   Dumping
The practice of selling a product in a foreign market at an unfairly
low price (a price which is lower than the cost in the home market,
or which is lower than the cost of production) in order to gain a
competitive advantage over other suppliers. Dumping is considered
   an unfair trade practice under the GATT and World Trade
Organisation agreements; it is regulated by national governments
through the imposition of anti-dumping duties, in some cases
calculated to equal the difference between the product's price in the
importing and the exporting country.
 
   Deferred Payment Credit
Type of letter of credit providing for payment some time after
   presentation of shipping documents by exporter. Deferred Payment
credits do not require the seller to draw a Bill of Exchange.
 
   DAF – Delivered At Frontier (…named place)
“Delivered at Frontier” means that the seller delivers when the
goods are placed at the disposal of the buyer on the arriving means
of transport not unloaded, cleared for export, but not cleared for
import at the named point and place at the frontier, but before the
customs border of the adjoining country. The term “frontier” may
be used for any frontier including that of the country of export.
   Therefore, it is of vital importance that the frontier in question be
defined precisely by always naming the point and place in the term.
This term may be used irrespective of the mode of transport when
the goods are to be delivered at a land frontier. When delivery is to
take place in the port of destination, on board a vessel or on the
quay (wharf), the DES or DEQ terms should be used.
 
   DES – Delivered Ex Ship (…named port of destination)
“Delivered Ex Ship” means that the seller delivers when the goods
are placed at the disposal of the buyer on board the ship not
cleared for import at the named port of destination. The seller has
to bear all the costs and risks involved in bringing the goods to the
   named port of destination before discharging. If the parties wish
the seller to bear the costs and risks of discharging the goods, then
the DEQ term should be used. The term can be used only when the
goods are to be delivered by sea or inland waterway or multimodal
transport on a vessel in the port of destination.
 
   Dirty Bill of Lading
A notation on a Bill of Lading as to some defect in relation to goods
   being shipped.
 
   Discounting a Bill of Exchange
Occurs where the owner of a Term Bill of Exchange sells it, once it
is accepted, to a bank or other party. The seller receives the face
   value of the Bill less discount. This discount amount represents the
cost of funds plus profit/fee to the investor/buyer.
 
   Discrepancy - Letter of Credit
   When documents presented do not conform to the letter of credit, it
 is referred to as a discrepancy. Also when documents conflict with
each other, discrepancies arise.
 
   Documentary Collection
Means collection of (a) financial documents accompanied by
commercial documents and (b) commercial documents not
accompanied by financial documents. A method of settlement
whereby the seller initiates the banking system, the collection of
   money due to him from the buyer. Payment will be made against a
Bill of Exchange and documents of title. Documents can be released
against acceptance (D/A) or against payment (D/P). If no
Documents of Title are attached, the collection is known as Clean
Collection (see Clean Collection, Clean Bill and Documentary Bill).
 
   Documentary Credits
A commercial letter of credit providing for payment by a bank to
the named beneficiary, who is usually the seller of merchandise
   against delivery of such documents as may be specified in the
credit.
 
   Documentary Letter of Credit
   (See Documentary Credit)
 
   Documents
Means financial documents and/or commercial documents. Financial
documents:. Means bill of exchange, promissory notes, cheques,
payment receipts or other similar instruments used for obtaining
   the payment of money. Commercial documents: Means invoices,
shipping documents, documents of title or other similar documents,
whatsoever, not being financial documents.
 
   Documents Against Acceptance
Instructions given by a shipper to his bank that the documents
   attached to a draft for collection are deliverable to the drawee
against his acceptance of the draft.
 
   Documents Against Payment
Instructions given by a shipper to his bank that the documents
   attached to a draft for collection are deliverable to the drawee only
against his payment of the draft
 
   Draft
A draft is 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 (see Bill of Exchange).
 
   Drawee
The individual or firm on whom a draft is drawn and who owes the
   stated amount.
 
   Drawer
   Party drawing a Bill of Exchange, normally the seller Exporter).
 
   Drawing
A presentation of documents under a Documentary Credit requiring
   payment, acceptance, or negotiation. Also sometimes referred to as
a drawdown.
 
   Due Date
The date a Bill of Exchange or a Documentary Credit is due for
   payment.
 
   Delivery
Deliver the goods into the custody of the carrier or another person
named by the buyer or chosen by the seller at the named place or
   point on the date or within the period agreed for delivery and in the
manner agreed or customary at such point.
 
   DDP – Delivered Duty Paid (…named place of destination)
"Delivered duty paid" means that the seller delivers the goods to
the buyer, cleared for import and not unloaded from any arriving
means of transport at the named place of destination. The seller
has to bear all the costs and risks involved in bringing the goods
thereto, including, where applicable, any ‘duty’ (which term
includes the responsibility for and the risk of the carrying out of
customs formalities and the payment of formalities, customs duties,
   taxes and other charges) for import in the country of destination.
Whilst the EXW term represents the minimum obligation for the
seller, DDP represents the maximum obligation. This term should
not be used if the seller is unable, directly or indirectly to obtain the
import licence. This term may be used irrespective of the mode of
transport but when delivery is to take place in the port of
destination on board the vessel or on the quay (wharf), the DES or
DEQ terms should be used.
 
   DDU – Delivered Duty Unpaid (…named place of destination)
Delivered duty unpaid means that the seller delivers the goods to
the buyer not cleared for import and not unloaded from any arriving
means of transport at the named place of destination. The seller
has to bear the costs and risks involved in bringing the goods
thereto, other than, where applicable, any duty (which term
includes the responsibility for and the risks of the carrying out of
customs formalities, and the payment of formalities, customs
   duties, taxes and other charges) for import in the country of
destination. Such duty has to be borne by the buyer as well as any
costs and risks caused by his failure to clear the goods for import in
time. This term may be used irrespective of the mode of transport
but when delivery is to take place in the port of destination on
board the vessel or on the quay (wharf), the DES or DEQ terms
should be used.
 
 

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   Endorsement
The transfer of title of a document by means of a signature, which
   is normally but not always on the reverse of the document.
 
   Event Risk
A Major trading risk for financial institutions. Refers to the
   magnified effects of events on markets due to increasing
transparency.
 
   ECU
   European Currency Unit.
 
   EDI Procedures
Electronic Data Interchange - rapidly expanding computer
   communications market that allows two-way transfer of forms and
other non-simplistic data
 
   EFTPOS: Electronic Funds Transfer At Point Of Sale
An electronic terminal at the actual point of sale will read a plastic
   card from the customer's bank and immediately debit the account
with the cost of the goods.
 
   EMC
   See export management company.
 
   E.S.C.B
   European System of Central Banks.
 
   EST.
   Estimated.
 
   E.T.A
   Estimated time of arrival.
 
   E.T.D.
   Estimated time of departure.
 
   E.T.S.
   Estimated time of sailing.
 
   EU
   European Union.
 
   Eurocurrency
A currency being used or traded outside the country which issued
   the currency. The most widely used Eurocurrency is the Eurodollar.
 
   European Currency Unit (ECU)
The ECU is the European Union's accounting unit and is a popular
   private financial instrument. It is expected that the ECU will give
way to the EURO in the 1999-2002 period.
 
   Export Credit Insurance
   Special insurance coverage for exporters to protect against
commercial and political risks of making an international sale.
Export credit insurance is available from insurance underwriters as
well as from government agencies. Examples of well known public
export credit agencies include the U.S. Eximbank, the U.K. Export
 Credits Guarantee Department, and France's COFACE.
 
   Eximbank
   Export Import Bank of the United States
 
   Export Commission House
An organisation which, for a commission, acts as a purchasing
   agent for a foreign buyer.
 
   Export House
Responsible as an export merchant for buying goods outright and
   selling them on their own account; acting as an export department
or agent on behalf of a client; or acting for an overseas buyer.
 
   Export Management Company
A company which acts to some extent as the export department of
   many manufacturers. It provides advice on overseas markets and
helps in marketing the company's product.
 
   Embargoes
Complete bans on trade exports to or imports from a particular
   country.
 
   Export License
A government document that permits the licensee to export
   designated goods to certain destinations.
 
   Exporting
The oldest form of entry into international markets, where a firm
decides to maintain its production facilities at home and export its
   products to foreign countries. In direct exporting, export tasks are
carried out directly by the firm itself. In indirect exporting these
tasks are delegated either to agents or to export firms.
 
   Export Quota
(a) Quota Set under an international commodity agreements
whereby exporting countries of a particular commodity accept limits
   on their exports. (b) Bilateral or multilateral agreement between
countries governing exports of industrial or other goods.
 
   EXW – EX Works (...named place)
“Ex works” means that the seller delivers when he places the goods
at the disposal of the buyer at the seller's premises or another
named place (i.e. works, factory, warehouse, etc.) not cleared for
   export and not loaded on any collecting vehicle. This term thus
represents the minimum obligation for the seller, and the buyer has
to bear all costs and risks involved in taking the goods from the
seller’s premises.
 
   Exchange Controls
Regulations designed to restrict or prevent certain foreign currency
transactions mainly by a country's nationals. Also likely to cover
   movement of precious metals, especially gold and silver. Controls
are used to maintain and protect a country's financial position and
the value of its currency.
 
   Exchange Rate
   Rate at which a currency is exchanged for another currency.
 
 

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   Foreign Sales Agent
An individual or firm that serves as the foreign representative of a
   domestic supplier and seeks sales abroad for the supplier
 
   Free Trade Area
A group of countries which agree to eliminate tariffs and other
import restrictions on each other's goods, while each participating
country applies its own independent schedule of tariffs to imports
   from countries that are not members. Well known examples are the
North American Free Trade Association (NAF'TA), the European Free
Trade Association (EFTA), and Mercosur.
 
   Facility Fee
Charge paid by borrowers to banks for the extension of a credit
   facility.
 
   Factor
   Agent who transacts business for another on a commission basis.
 
   Factoring
Service which enables a company to collect money on credit sales.
The factor purchases the company's invoiced debts for cash, but at
   a discount, and then seeks repayment from the original purchaser
of the company's goods or services.
 
   FAK
   See Freight all kinds.
 
   FB
   Freight bill.
 
   F&D
   Freight and demurrage
 
   FCL
   Full container load.
 
   F.C.P.
   Fonds commun de placement. Simplified type of S.I.C.A.V.
 
   FO
   Free out; See Free in and out
 
   F.O.C.
   Free of charge.
 
   F.O.D.
   Free of damage.
 
   Force Majeure
The title of a standard clause in marine contracts exempting the
parties for non-fulfilment of their obligations as a result of
   conditions beyond their control, such as earthquakes, floods or
wars.
 
   Foreign Exchange Swaps
Simultaneous spot and forward transactions of one currency against
another. The ESCB will execute open market monetary policy
   operations in the form of foreign exchange swaps, where the NCBs
or the ECB buy or sell euro spot against a foreign currency and
simultaneously sell or buy it back forward.
 
   Foreign Trade Zone (FTZ)
Special commercial and industrial areas in or near ports of entry
where foreign and domestic merchandise may be brought in
without being subject to payment of customs duties. Merchandise,
including raw materials, components, and finished goods, may be
stored, sold, exhibited, repacked, assembled, sorted, graded,
cleaned or otherwise manipulated prior to re-export or entry into
   the national customs authority. Duties are imposed on the
merchandise (or items manufactured from the merchandise) only
when the goods pass from the zone into an area of the country
subject to the Customs Authority. Foreign trade zones are also
called free trade zones, free zones, free ports or bonded
warehouses.
 
   Forfaiting
The purchase by the forfaiter of an exporter's accounts receivable
which are based on negotiable instruments such as bills of
exchange and promissory notes. In contrast to factoring, forfaiting
   involves a series of independent, medium to longer term obligations
of higher value. Since the forfaiter purchases the bills on a non-
recourse basis, he assumes both commercial and political risk.
 
   Forward Rate
The price of a foreign currency which is bought or sold for delivery
and payment at a fixed future time, usually 30, 60 or 90 days.
Forward transactions enable importers and exporters who will have
   to make, or will receive, payment in a foreign currency at a future
time to protect themselves against the risk of fluctuations in the
spot rate.
 
   Franchising
   A system based on the licensing of the right to duplicate a
successful business format or industrial process. The franchisor
(licensor) permits the franchisee (licensee) to employ its business
processes, trademarks, trade secrets and knowhow in a
contractually-specified manner for the marketing of goods or
services. The franchisor usually supports the operation of the
franchisee's business through the provision of advertising,
accounting, training, and related services and in many instances
 also supplies products required by the franchisee for the operation
of the franchise. The franchisee, in return, pays certain moneys to
the franchisor (in terms of fees and percentage commissions) and
agrees to respect contractual provisions dealing, inter alia, with
quality of performance. The two principal kinds of franchise
contracts are master franchise agreements, under which the
franchisor grants another party the right to sub-franchise within a
given territory, and direct or unit franchise agreements, which are
direct contracts between the franchisor or sub-franchisor and the
operator of the franchise unit.
 
   Free In And Out (F.I.O.)
A transport or freight term which indicates that loading/ discharging
costs are not included in the freight; in the charter party context
this means that loading/discharging are not the shipowner's
   responsibility - the charterer is responsible for loading/discharging.
Also possible to use either Free in (FI) or Free out (FO)
independently. Also used with addition of stowed and/or trimmed:
e.g., FIOS, or FIOST.
 
   Freight All Kinds [FAK]
   Freight rate applicable to all types of goods.
 
   Free Balances
Keeping cash in a current account in the books as an overseas
correspondent. This account, a nostro account from the perspective
   of the bank depositing the cash, is mirrored by a reconciliation
account in the books of the bank holding the balance.
 
   Free Market
Unrestricted movement of items in and out of a market,
unhampered by tariffs or other trade barriers Market in which
   supply and demand fix prices without the influence of outside
factors, i.e. Government or Central Bank intervention.
 
   Free Port
An area such as a port city into which merchandise may legally be
   moved without payment of duties.
 
   Front End Fees
Fees paid when a loan is arranged, such as management fees.
   Transfer fees on a transferable credit are usually 'Front End Fees'.
 
   FAS – Free Alongside Ship (...named port of shipment)
“Free Alongside Ship” means that the seller delivers whenever the
goods are placed alongside the vessel at the named port of
   shipment. This means that the buyer has to bear all costs and risks
of loss of or damage to the goods from that moment. The FAS term
requires the seller to clear the goods for export.
 
   FCA – Free Carrier (…named place)
“Free Carrier' means that the seller delivers the goods, cleared for
export, to the carrier nominated by the buyer at the named place.
It should be noted that the chosen place of delivery has an impact
   on the obligations of loading and unloading the goods at that place.
If delivery occurs at the seller’s premises, the seller is responsible
for loading. If delivery occurs at any other place the seller is not
responsible for unloading.
 
   FOB – Free On Board (…named port of shipment)
“Free On Board” means that the seller delivers when the goods
pass the ship’s rail at the named port of shipment. This means that
the buyer has to bear all costs and risks of loss of or damage to the
   goods from that point. The FOB term requires the seller to clear the
goods for export. This term can be used only for sea or inland
waterway transport. If the parties do not intend to deliver the
goods across the ship’s rail, the FCA term should be used.
 
 

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   GATT - General Agreement on Tariffs and Trade
A multilateral treaty intended to help reduce trade barriers between
signatory countries and to promote trade though tariff concessions.
Created in 1945, GATT's original purpose was to combat the
   worldwide restrictions and protectionism that contributed to the
post-Second World War economic recession. The latest round was
the Uruguay round.
 
   Generalised System Of Preferences (GSP)
Tariff cuts and quota increases intended to encourage exports from
   developing countries
 
   Grace Period
Length of time during which repayments of loan principal are
excused. Occurs at the start of the loan period, often in connection
   with soft loans to developing countries, where the terms and
conditions are mild.
 
   Group Of Five (G5)
The more important members of the Group of Ten (G-10). These
   comprise the USA, Japan, West Germany, France and Britain.
 
   Group Of Seven (G-7)
Group of seven industrialised countries - USA, Japan, Germany,
   France, Britain, Canada and Italy.
 
 

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   Hague-Visby Rules
Set of rules amending the Hague rules, published in 1968, which
   have not been implemented by as many countries as the
predecessor Hague Rules.
 
   Hague Rules
International Convention for the Unification of Certain Rules relating
to Bills of Lading - Brussels Convention of 1924 - A set of rules for
international transport contained in an international treaty first
published in 1924 and subsequently implemented by the greater
   part of world trading nations. The Hague Rules were revised and
updated in the so-called Hague Visby Rules, published in 1968,
which have not received so universal an implementation as their
predecessors.
 
   House Air Waybill (House AWB; Or, HAWB)
   A transport document issued by an air freight consolidator.
 
   House Bill Of Lading (House B/L)
A bill of lading issued by a freight forwarder. Often covers a
consignment of parcels from various shippers that has been
   grouped or consolidated by the forwarder. The forwarder may, for
example, receive a single groupage bill of lading from the carrier,
then issue a series of house B/L's to the respective shippers.
 
 

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   International Chamber of Commerce (ICC)
The ICC is a world business organisation which acts to promote the
greater freedom of world trade, to harmonise and facilitate business
and trade practices and to represent the business community at
   international levels. The ICC is Paris based and is represented by
National Committees and Councils in over 50 countries and has
members in over 40 others.
 
   I.O.U.
Generic term for any promissory note. An I.O.U. requires a date,
   signature and amount to be legally enforceable.
 
   IATA
International Air Transport Association, air transport industry
   association and issuer of standard air waybill form.
 
   IBCC
 International Bureau of Chambers of Commerce; an ICC-
administered network of national, local and municipal chambers of
   commerce. Administrator of ATA Carnet system for temporary duty-
free admission of industrial/commercial samples.
 
   IBCC-NET
An international data bank for the posting of commercial offers,
including the purchase and sale of consumer goods and
   commodities; operates through networks of chambers of
commerce.
 
   ICC Arbitration
Refers either to ICC RuIes for Conciliation and Arbitration or the
   process of submitting an arbitral complaint to the ICC Court of
lnternational Arbitration.
 
   I.C.C.H.
(International Commodities Clearing House) Central clearing house
   for commodities trades that has a supervisory role in some futures
markets.
 
   ICPO
Irrevocable Corporate Purchase Order; an offer to buyer stated
   goods under specified terms and conditions; for example of misuse.
 
I.C.C. (International Chamber of Commerce q.v.) Court Of
   Arbitration
The court is the leading body in international commercial
arbitration. Founded in 1923 by businessmen to settle international
   disputes of a business character, its impartiality is now recognised
everywhere.
 
   Inland Clearance Depot (Inland Dry Port)
   A combination transport terminal and customs clearance center.
 
   Institute Clauses
Standard international transport insurance clauses, published by
the Institute of London Underwriters. The Institute Cargo Clauses
are 3 sets of clauses providing different levels of protection: the "A"
   Clauses correspond to the general notion which is commonly
referred to in the trade as "all risks" coverage, while clauses "B"
and "C" indicate a lower level of coverage and a greater number of
exclusions.
 
   INV.
   Invoice.
 
   ISO 9000
International production quality standards established by ISO
(International Standards Organisation). Certification that an
   exporter meets ISO 9000 manufacturing standards, for example,
may be a minimum requirement for competing in certain markets
or for certain tenders.
 
   Import Cover
Number of months of gross imports whose cost would be covered
   by a country's monetary reserves.
 
   Indemnity
A financial guarantee whereby the recipient is protected against
   losses.
 
   International Maritime Bureau
Formed in 1981 to offer practical assistance in countering the
maritime fraud problem. Offers member companies and
   organisations information and advice about trading partners,
specific ports, etc. Undertakes investigations, negotiation,
authentication of documents, ship monitoring and other services.
 
   Invoice Discounting
The purchase of selected invoices (i.e. trade debts) at a discount.
An invoice discounter provides finance to a client by purchasing
   debts and the discount reflects a rate of interest on the money
advanced.
 
   Irrevocable Credits
These are Letters of Credit which cannot be amended or canceled
without the consent of all parties involved. The exporter is therefore
   assured of payment provided the prescribed documents are
presented in order.
 
   Irrevocable Confirmed Credits
These are Letters of Credit which cannot be amended without the
   consent of all parties and payment of which is guaranteed by two
banks, i.e. by a confirming bank and the issuing bank.
 
   Issuing Bank
An issuing bank is a bank which opens a Letter of Credit for a buyer
   and for the benefit of seller. This bank guarantees payment to the
supplier on fulfillment of the terms and conditions of the Credit.
 
ICC (International Chamber of Commerce qv) Court of
   Arbitration
The court is the leading body in international commercial
arbitration. Founded in 1923 by business to settle international
   disputes of a business character, its impartiality is now recognised
everywhere.
 
   ICC Uniform Customs and Practices
An internationally accepted code of rules which, being subject to
review and update, provides the basis against which certain types
   of transaction e.g. collections, documentary credits
bonds/guarantees etc. are regulated.
 
   Import Duty
Tariff or customs tax levied on goods crossing a national border.
   Import surcharge is an additional duty.
 
   Import Restrictions
Methods taken to reduce or control imports through a variety of
measures including import deposits, licenses or quotas. May be
   intended to correct a country's overall balance of payments deficit,
or to protect a specific industrial sector.
 
   Incoterms
   Internationally recognised abbreviations of shipping terms which
have been abbreviated by the International Chamber of Commerce
 (ICC) - for example: CIF, CFR, FOB, FAS etc. The purpose of
Incoterms is to provide a set of international rules for the
interpretation of the most commonly used trade terms in foreign
trade.
 
 

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   LKG. & BKG.
   Leakage and breakage.
 
   Licensing
A business arrangement in which the manufacturer of a product (or
a firm with proprietary rights over certain technology, trademarks,
   etc.) grants permission to some other group or individual to
manufacture that product (or make use of that proprietary
material) in return for specified royalties or other payment.
 
   Liner Terms
Freight rates which include loading/unloading charges according to
the custom of the respective ports - which unfortunately varies
widely. "Liner terms" is, thus, not yet a standard designation, and
may or may not include cargo handling charges or the costs of
   moving cargo between the ship's hold and the quay; traders are
therefore well advised to require full details in advance from
carriers. The ICC is currently working on establishing a standard
liner term.
 
   Liner Shipping
Services provided by a steamship company or shipping line, under
   which cargo vessels operate according to a fixed schedule and
publicly-advertised freight rates.
 
   Lighters
Barges used for unloading sea vessels when normal harbour
   facilities are non-existent or unavailable.
 
   L.I.F.O.
In international trade: liner in free out; referring to a freight charge
which includes the cost of loading in the port of departure but does
   not include unloading costs in the port of destination. In accounting
practice: last in first out.
 
   Licensing
   A contractual arrangement in which the licensor's patents,
trademarks, service marks, copyrights, or know-how may be sold
or otherwise made available to a licensee for compensation
negotiated in advance between the parties. Such compensation
may consist of a lump sum royalty, a “running” royalty (based on
 volume of production), or a combination of both. Licensing enables
a firm to enter a foreign market quickly and poses fewer risks than
setting up a foreign -manufacturing facility. Furthermore, it allows
parties to overcome tariff and non-tariff barriers of trade.
 
   Lex Mercatoria
Internationally accepted general trade practices; the international,
   informal law of merchants.
 
   Letter Of Indemnity (LOI)
A document commonly used in international trade to allow a carrier
to release goods to a receiver who is not yet in possession of the
bill of lading (exceedingly common in the oil trade, for example).
   The letter of indemnity is, in essence, a guarantee which the
receiver provides to the carrier assuring the carrier that he will not
suffer any financial loss by having released the goods in the
absence of a bill of lading. Also referred to as a steamer guarantee.
 
   LCL/FCL
A way of quoting container freight rates in which the carrier agrees
   to pack the container on departure as well as unpack the container
at destination.
 
   LCL
Less than container load. Refers to shipments of goods which will
have to be packed together with other consignments in order to fill
up a container. LCL/FCL - A way of quoting container freight rates
in which the carrier agrees to pack the container at the outset (LCL)
   but the unpacking at destination must be carried out by the
receiver or consignee. A common approach for buyers who wish to
consolidate small purchases from multiple suppliers in a foreign
market into container shipments.
 
   Letter Of Credit (L/C; Also, Documentary Credit, D/C)
   A document issued by the importer's bank stating its commitment
to honour a draft, or otherwise pay, on presentation of specific
documents by the exporter within a stated period of time. The
documents the importer requires in the Credit usually include, at a
minimum, a commercial invoice and clean bill of lading, but may
also comprise a certificate of origin, consular invoice, inspection
certificate, and other documents; The most widely used type of
Credit in international trade is the irrevocable Credit, which cannot
be changed or cancelled without the consent of both the importer
and the exporter. In a confirmed irrevocable Credit, the confirming
bank adds its irrevocable commitment to pay the beneficiary (the
confirmation is an additional guarantee of payment). Types of
L/C: ? irrevocable - a Credit which cannot be retracted or revoked
once the beneficiary has been notified; there is a presumption
under the UCP 500 that a Credit is irrevocable. ? advised -a Credit
the opening of which the beneficiary has been informed by a local
bank. ? confirmed -a Credit which has received an additional
guarantee of payment by a local or highly reputable bank. ? back-
to-back -a system utilised by middlemen/intermediaries to finance
a single transaction through the use of two L/C's opened in
succession (e.g.,"back-to-back") in order to permit the
middleman/broker to use the ' proceeds from the first Credit to pay
off his supplier under the second credit. ? transferable -an L/C
which allows the beneficiary to make part or all of his Credit
payable to another supplier; used in middleman/brokerage
contexts; distinguishable from back-to-back L/C's because the
transferable Credit requires the knowledge and authorisation of the
importer (applicant/principal). ? revolving -a Credit which can be
 drawn against repeatedly by the beneficiary; : can take a variety of
different forms, depending on whether the credit is limited ' in
terms of time, number of possible drafts, maximum quantity per
draft, or maximum total quantity. ? cumulative revolving L/C -
revolving L/C under which unused amounts . can be carried forward
and become available under the next draft. ? red clause - an L/C
allowing payments of advances to the beneficiary (originating in the
wool trade in Australia, these clauses used to printed in red ink). ?
deferred - an L/C under which payment by the importer is to take
place a specified time after his receipt of the shipping documents. ?
sight - an L/C under which the beneficiary is entitled to present a
sight draft or sight bill of exchange, which is a call for immediate
payment upon acceptance of shipping documents. ? import - an L/C
used to finance importation of goods. ? standby - akin to a demand
guarantee or bank guarantee, the standby L/ C is generally used to
assure performance or payment by the counterparty.
 
   Laydays/Laytime
The time allowed by the shipowner to the charterer or shipper in
which to load or discharge the cargo. May be expressed in days or
hours, or tonnes per day. Laydays may be set in running days
(every calendar day), working days (excludes Sundays and holidays
observed by the port), or weather working days(excludes in
   addition days where operations are prevented by bad weather). It
may be contractually provided that if the charterer or shipper
loads/unloads more quickly than is necessary, he will be eligible for
payment of an incentive called dispatch money; if the
loading/unloading time is excessive, however, the charterer or
shipper may have to pay a penalty known as demurrage
 
   LTL
   Less than truck load.
 
   LOI
   See Letter of indemnity.
 
   Letter of Credit
A Letter of Credit is a written undertaking by a bank, the issuing
bank, to the seller(the beneficiary) in accordance with the
instructions of the buyer (the applicant) to effect payment up to a
   prescribed amount within a prescribed time period against
prescribed documents, provided these are correct and in order (i.e.
they conform with the instructions of the applicant).
 
   Line of Credit/Credit Line
(Also called a Bank Line) An agreement by a bank to give a
customer the right but not the obligation to draw funds up to a
   specified limit, over an agreed period and typically, for an agreed
purpose.
 
   Leading (See Lagging)
   The making of contracted payment EARLIER than scheduled.
 
   LDG.
   Loading.
 
 
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   MTO
   See Multimodal transport operator.
 
   Multimodal Transport Operator (MTO)
A carrier who concludes multimodal transport contracts; i.e.,
   contracts involving transport by more than one mode of carriage,
and for which the MTO accepts liability as a carrier.
 
   Multimodal Transport Bill Of Lading
Bill of lading used for carriage whenever there are at least two
   different forms of transport, such as shipping by rail and by sea.
See bill of lading.
 
   Most Favored National Clause (MFN)
All members of GATT must adhere to the MFN Clause which
stipulates that if a country grants a tariff reduction to one country,
   it should grant the same concession to all other members at the
same time.
 
   Moodys
Moodys Investors Service of the USA operates a bond rating service
for corporate, municipal and foreign country debt, ranking the debt
   from AAA to C. It is similar to Standard and Poors, whose ratings
run from AAA to D.
 
   Mirror Accounts
Mirror Accounts are reconciliation accounts in the books of a bank
   in which a Nostro Account (q.v.) is held.
 
   Master Document/Form
Central document in export administrative systems under which all
necessary information is entered into a single master document or
computer file, which is then used to generate all shipping and
export documents. See also Chapter 15 on export software
systems; also known as ‘aligned export documentation systems’.A
   document issued by the carrier to the shipper, indicating receipt of
the goods, but not loading on board. Like a B/L, a mate's receipt
can be either clean or claused/dirty/foul, depending on whether or
not the goods have been received in apparent good condition. The
mate's receipt can later be exchanged for the bill of lading.
 
   Marginal Lending Facility
ESCB standing facility which counterparties may use to receive
   overnight credit against a pre-specified interest rate.
 
   MO
   Money order.
 
   Marine/Ocean Bill of Lading
used in foreign trade to describe fully the details of goods being
sent. A Marine Bill of Lading can give the holder the right of
procession to the goods and acts as a receipt for the goods and a
   contract of carriage. It is a negotiable instrument and a document
of title. The shipowner is compelled to release goods to the first
presenter of a bill of lading, in the absence of prima facie evidence
of fraud.
 
   Marine Insurance Policy
A contract of indemnity by which an insurance company undertakes
to refund to the assured the amount of loss arising from such
marine casualty as may be insured against. Marine insurance is
   more extensive than other kinds because it may provide not merely
for losses arising from fire but from piracy, wreck and generally all
injuries sustained at sea.
 
   Multimodal Transport Documents
Documents relating to two or more systems of transport e.g. air
   and rail.
 
 

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   Negotiating Bank
The bank that negotiates - or purchases - a Bill of Exchange or
Documents presented under a Letter of Credit. Negotiation is
defined under UCP500 as 'the giving of value for Draft(s) and or
   document(s) by the bank authorised to negotiate. Unless the
negotiating bank has confirmed the Credit, such negotiation is 'with
recourse'.
 
   NVOCC
   see Non-vessel-operating common carrier.
 
   Ne (NE)
   Not exceeding.
 
   NCND
See Non-circumvention non-disclosure agreement; Warning: often
   contains a false reference to non-existent ICC standard rules.
 
   Nostro Accounts
Foreign currency accounts maintained at a correspondent bank
   abroad to make and receive payments in that currency.
 
   Non-Vessel-Operating Common Carrier (NVOCC)
A company providing point-to-point international transport of goods
although it does not necessarily operate or own transport vehicles
or equipment. NVOCC's will commonly contract -with a shipper to
   move goods from exporter's premises to importer's premises and
will issue their own door-to-door transport document, although they
will in fact sub-contract the different stages of the transport chain
to various road hauliers " and ocean carriers.
 
   Non-Circumvention Non-Disclosure Agreements (NCNDs)
A type of contract frequently requested by international brokers or
middlemen in order to prevent buyers from trying to go around the
   broker to deal directly with suppliers. Warning: these agreements
are sometimes ERRONEOUSLY said to be issued pursant to ICC
ruIes - such ICC RuIes are NON EXISTENT.
 
   Negotiable
There is no connection between the ICC and these documents.
While the ICC is in fact studying the possibility of issuing a model
   international brokerage agreement, it will certainly not include the
term "non-circumvention non-disclosure" in its title.
 
   Negotiable Instrument
An item is said to be negotiable if the title to it can be legally
   transferred from one party to another.
 
   N/S/F
(a) The property in the instrument passes by mere delivery or
endorsement and delivery. (b) The transferee obtains an absolute
   title. (c) No notice need be given to the person liable on the
instrument. Examples are bank note, bearer bonds, treasury bills,
Bills of Exchange and cheques.
 
   Non Durables
   Not sufficient funds
 
   N/F
   Consumer or producer goods with a limited life.
 
   NCV
   No funds
 
   N.C.B
   No commercial value.
 
 

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   O OP
   See Open policy.
 
   Owner’s Risk (OR).
Also: O.R.B. - Owner’s risk of breakage; O.R.F. - Owner’s risk of
   fire; O.R.L. - Owner’s risk of loss (or leakage).
 
   Order Bill Of Lading
A negotiable bill of lading, which is made out to, or to the order of,
a particular person and can be transferred by endorsement and
   delivery of the bill. In practice, the bill is made out either to the
shipper’s order or to the consignee or his order. See bill of lading.
 
   Open Market Transactions
Instrument of monetary control of central banks consisting in
operating in the financial markets by buying and selling outright
   (spot or forward) or under repurchase agreements and by lending
or borrowing claims and marketable instruments in currencies as
well as precious metals.
 
   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.
 
   Offset
A type of countertrade transaction. In an offset contract, which may
be required by importers' governments as a condition for approval
of major sales agreements, the exporter makes an additional
agreement to buy goods and services from the importer's country.
In a "direct offset" transaction, an exporter may be required to
   establish manufacturing facilities in the importing country or to use
a specified percentage of the components in the product sold from
the importer's country. In an indirect offset, an exporter may be
obliged to buy goods or services from the importing country without
any link to the product sold. See countertrade.
 
   O/O
   Order of.
 
   O/N
   Order notify.
 
   Ocean Bill Of Lading
   Marine bill of lading.
 
   Outright Transaction
The central bank buys or sells spot and forward assets outright in
   the market.
 
 
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   PSI
   See Pre-shipment inspection.
 
   PU & D.
   See Pick up and delivery.
 
   Phase A
   Early 1998. Launch of economic and monetary union.
 
   P/A
   Power of attorney
 
   Purchasing Agent
   An agent who purchases goods on behalf of foreign buyers.
 
   PSV
   post-shipment verification; See Pre-shipment inspection.
 
   Pro Forma Invoice
A sample invoice provided by an exporter prior to a sale or
shipment of merchandise, informing the buyer of the price, kinds
and quantities of goods to be sent, and important specifications
(weight, size, and similar characteristics). The pro forma invoice not
only acts as the contractual offer (which may be accepted by the
importer's transmission of a purchase order), it is intended to be
   exactly replicated in the final commercial invoice, so that the buyer
receives no surprises as regards either the goods or the price.
Importers may need a pro forma invoice to be able to apply for an
import licence or a foreign exchange permit. In the case of a letter
of credit, the pro forma invoice is frequently used to inform the
importer of the amount for which the letter of credit has to be
opened.
 
   Pre-Shipment Inspection (PSI)
An inspection of contract goods prior to shipment to ascertain their
quality, quantity or price. Importers may insist on PSI, requiring
the exporter to furnish a certificate of inspection (commonly, issued
by neutral, internationally-respected firms such as SGS or Bureau
   Veritas), so that the importer is assured of receiving goods of
contract quality/quantity. Government agencies may require
inspection certificates as regards price, so as to prevent parties
from under- or over-invoicing in an attempt to pay lower customs
duties or evade foreign-exchange restrictions.
 
   Pier-To-Pier (Quay To Quay)
   Freight quote which only covers from export pier to import pier
(that is, which excludes handling charges to bring cargo to and
 from piers).
 
   Pick Up And Delivery (PU & D)
Freight quote includes service of picking cargo up at shipper’s
   premises and delivering it at consignee’s premises.
 
   Paris Club
A forum of the main creditor governments to co-ordinate their
   policies vis-à-vis debtor governments that have difficulty serving
the foreign official loans they obtained.
 
   Parcel Post Receipt
The postal authorities' signed acknowledgement of delivery to
   receiver of a shipment made by parcel post.
 
   Paramount Clause
The clause in a bill of lading or charter party invoking coverage by
the Hague Rules, Hague-Visby Rules, or by the particular
   enactment of these rules in the country with jurisdiction over the
contract.
 
   Pallet
Flat support of wood or steel on which goods can be stacked and
   which can be easily moved by forklift trucks
 
   Promissory Note
An unconditional promise in writing made by the buyer to the seller,
signed by the buyer, agreeing to pay on demand, or at a fixed or
determinable future date, a certain sum of money to, or to the
order of, a specified person or to the bearer. The essential
   difference between it and a Bill of Exchange is that a Promissory
Note is written by the buyer and sent to the seller who is owed
payment, i.e. it is an IOU. Both instruments settle indebtedness in
International Trade. (It is legally enforceable).
 
   Political Risk Analysis
Analysis of the risk of loss of assets, earning power and managerial
   control due to events or actions that are politically biased or
politically motivated.
 
   Pledge
An undertaking by a trader to pledge goods or cash received for
   goods to a bank or other person as security for an advance. It is
normally accompanied by a Trust Receipt.
 
   Performance Guarantee/Bond
A performance guarantee is intended as a safeguard against the
party to whom the contract is awarded (the principal) failing to
   meet his obligations under such a contract which normally requires
a period of time for its completion.
 
   Packing List
A list showing the number and kinds of items being shipped, as well
   as other information needed for transportation purposes.
 
   Payee
The party named on a cheque or bill of exchange to whom payment
   is to be made.
 
   Paying Bank
A bank nominated by the Issuing Bank to make settlement on its
behalf of either a Sight payment, Deferred Payment or a Maturing
   Acceptance drawn under a Documentary Credit claimed by the
Paying/Accepting or Negotiating Bank.
 
   Phytosanitary Inspection Certificate
A certificate, issued by a Department of Agriculture or other
specialist organisation to satisfy regulations, indicating that a
   shipment has been inspected and is free from harmful pests and
plant diseases.
 
   Pre-Advice
Sometimes an Issuing Bank may telex basic details of a
Documentary Credit to the Advising Bank, requesting the basic
details be passed to the Seller. The Advising Bank will do this
   without any engagement on its part. The pre-advice will not be the
operative credit instrument but the issuing Bank is obliged to issue
or amend a Credit, in terms not inconsistent with the pre-advice
without delay.
 
   Pre-shipment Finance
   Covers an exporter's costs before shipment of goods.
 
   Presenting Bank
The presenting bank is the collecting bank making presentation to
the drawee. The presenting bank is responsible for seeing that the
   form of the acceptance of a Bill of Exchange appears to be complete
and correct.
 
   Principal
- The principal is the customer entrusting the operation of collection
to his bank. - The principal is the party tendering or the party to
   whom the contract has been awarded. - The face amount of a
security, exclusive of any premium or interest.
 
   Phase C
   January July 2002. Final changeover to the single currency.
 
   Phase B
Early 1999. Effective start of EMU and emergence of a critical mass
   of activities in euro.
 
   PD
   Port dues
 
   PA
   Particular average.
 
   PPD. (OR P P )
   Pre-paid.
 
   POD
   Pay on delivery.
 
   P/N
   See Promissory note
 
 

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   Remitting Bank
The bank to which the principal party to a transaction has entrusted
the operation of collection. A remitting bank remits/sends the Bill
   and/or documents for payment to the importer's bank. The
remitting bank is usually the exporter's bank and is situated in the
exporter's country.
 
   ROT
   See Retention of title.
 
   Rolled Over
   A term used in relation to a continuance of existing credit.
 
   R.T.G.S
Real-Time Gross Settlement System. A settlement system
   operating on an order-by-order basis and in real time.
 
   Roll-On/Roll-Off (RORO)
A combination of road and sea transport, where loaded road
vehicles are driven on to a ferry or ship (roll-on/roll-off ship) and
   off at the port of destination. Major benefits of RoRo are reduced
handling of the actual goods and packages, competitive costs for
unit loads and scheduled services.
 
   Reverse Transaction
The central bank buys or sells assets under a repo or conducts
   credit operations against collateral.
 
   Reserve Requirement (Minimum)
The requirement for institutions to hold minimum reserves with the
central bank. The reserve requirement of an institution is calculated
   by multiplying the reserve ratio for each category of items in the
reserve base by the amount of those items in the institution's
balance sheets.
 
   Reefer Box/Container/Ship
A refrigerated container or ship. Refrigeration may either be
mechanical, which means involving an external power supply, or by
   expendable refrigerant (dry ice, liquefied gases, etc.), which
requires no external power supply.
 
   Reciprocity
The idea behind reciprocity is that if Bank X in the major trading
centre chose Bank Y as its correspondent in, for example, the
   developing world, then Bank Y would reciprocate by ensuring that
all international business originating in their bank for Bank X's
country would be rooted through Bank Y as a reciprocal gesture.
 
   Railway Consignment Note
A freight document indicating that goods have been received for
   shipment by rail. See bill of lading.
 
   R & C.C.
Insurance clause: riots and civil commotion; also: s.r.c.c. - strikes,
   riots and civil commotion.
 
   Red Clause Credit
   See "Anticipatory Credit"
 
   Re-Exports
Export of imported goods of commodities without substantial
   processing or transformation.
 
   Reimbursing Bank
A bank nominated by the issuing Bank to make settlement on its
behalf, for a Sight Payment, Deferred Payment or maturing
   acceptance drawn under a Documentary Credit claimed by the
Paying/Accepting or Negotiating Bank.
 
   Retention of Title
A supplier's legal entitlement to ownership of goods supplied
   pending receipt of payment.
 
   Revocable Credits
A Letter of Credit which can be amended or canceled at any time by
the importer without prior notice to the exporter. It serves as a
   means of arranging payment rather than guaranteeing payment,
i.e. it is little more than an expression of intent.
 
 

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   Spot Rate
Rate of exchange quoted for purchases and sales of a foreign
   currency for immediate delivery and payment.
 
   SAD
   abbreviation after names of corporations in French and Spanish-
 speaking countries: Societe Anonyme (Fr.); Sociedad Anonima
(Sp.).
 
   Specific Duty
A duty based on some measure of quantity, such as weight, length,
   or number of units. See customs duty.
 
   S/N
   See Shipping note.
 
   S & T
   Shipper's load and tally; See Shipper's load and count.
 
   S & C.
   See Shipper's load and count.
 
   SITC
Standard International Trade Classification - A standard numerical
   code system developed by the United Nations to classify
commodities used in international trade.
 
   SIT (Systeme Interbancaire De Telecompensation)
A clearing system set up in France to supplement the manual
   delivery system or Ordinateurs de Compensation.
 
   S.I.C.A.V
Société d’investissement à Capital Variable. Most common French,
   Luxembourgish and Swiss type of Investment Funds.
 
   Short-Form Bill Of Lading (B/L)
A simplified B/L which contains a reference to or an abbreviation of
   the carrier's full B/L or carriage conditions.
 
   Short Delivery (SD) Also, Short-Landed Cargo
Non-delivery of cargo at the intended port. When reported, will
   result in ship's agent sending a cargo tracer to see if the cargo has
been mis-delivered in another port.
 
   Shippers Load And Count (S & C)
A carrier's notation disclaiming responsibility for the quantity of the
cargo's contents; the quantity declared is thus purely the shipper's
   statement. If there is a dispute because less than contract quantity
is delivered, the carrier wishes to be free from liability and that the
receiver will have to claim directly against the shipper or insurer.
 
   Shipper - Export Trade
The party (as between exporter and importer) who enters into a
contract of carriage for the international transport of goods. The
party receiving the goods (the importer or buyer) may be called the
   receiver or the consignee. Depending on the Incoterm chosen,
either the exporter or importer (or a middleman) can be the
shipper.
 
   Sea Waybill
   A transport document for maritime shipment, which serves as
evidence of the contract of carriage and as a receipt for the goods,
but is not a document of title. To take delivery of the goods,
 presentation of the sea waybill is not required; generally, the
receiver is only required to identify himself, which can speed up
processing at the port of destination. See bill of lading.
 
   SD
   See Short delivery.
 
   Settlement Date
   The date on which a transaction is executed.
 
   Sight bill of Exchange
A Bill of Exchange which is payable on receipt (on sight) by the
   paying bank.
 
   Sighting Goods
"Sighting goods" implies more than just seeing the goods delivered.
   It also involved the inspection and the written acceptance of those
goods by the buyer.
 
   Sitpro
Simpler Trade Procedures Board involved in the revisions of
   documentation and trade procedures to facilitate trade
developments.
 
   Standby Credit
Standby Credits are Documentary Credits as defined by UCP500.
Standby Credits allow buyer and seller deal on open account. The
   Standby Credit is only drawn under when the buyer defaults on
payment obligations. Standby Credit are often used to satisfy the
same functions as Bid Bonds, Performance Bonds etc.
 
   Steamship Conference
A group of steamship operators that operate under mutually
   agreed-upon freight rates and operate regular schedules services.
 
   Straight Bill of Lading
A non-negotiable bill of lading in which the goods are consigned
   directly to a named consignee.
 
   S.W.I.F.T.(Society for Worldwide International Transactions)
A society registered in Brussels used by over 500 banks in 26
countries worldwide and linked with interbank networks in the USA
for the purpose of intercommunication. An electronic system for
   sending payment messages as well as reconciling Nostro accounts
and Foreign Exchange transactions. It is a bank's co-operative and
provides a speedy twenty-four hour secure network.
 
   Switch Branching
Switch branching is where a bank utilises two clearing banks for a
   single major currency, rather than the precedent of using just one.
 
   Swap
The trading of almost identical products (such as oil) from different
   locations to save transportation costs. See countertrade.
 
   Surety/Surety-Ship Bond/Guarantee
   A surety bond is a guarantee, usually issued by an insurance or
 surety company, that a particular company will perform according
to a contract. In order to collect payment under such a bond, the
beneficiary normally must prove actual default on the part of the
counterparty, as by furnishing a court judgement, arbitral award or
official certificate. Suretyship bonds may be issued subject to the
ICC Uniform Rules for Contract Bonds.
 
   Surcharge
Charges added to ocean freight, variously, for bunker (fuel),
   currency fluctuation, congestion, port detention, or extra risk
insurance.
 
   Stuffing
   Loading goods inside a container.
 
   Stowage
The placing of cargo in a ship's hold in such a fashion as to assure
   safe and stable transport.
 
   Stripping
   Unloading goods from a container; See also Devanning, Destuffing
 
   STC (Said To Contain) / STW (Said To Weigh)
Notations on transport documents · by which carriers give notice
that they do not wish to accept responsibility for the accuracy of a
   shipper's declarations as to the content, weight or quantity of a
particular shipment. See also, Shipper's load and count.
 
   Steamer Guarantee
   See letter of indemnity.
 
 

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   Tenor
A Bill of Exchange offering a period of Credit to the payee and
   payable at the end of the term of credit.
 
   TEU
Twenty-foot equivalent units; a means of measuring the carrying
capacity of container ships; e.g., a ship can be said to be capable of
   3000 TEU's, which is roughly equivalent to saying it could carry
3000 standard containers.
 
   Types of L/C:
   ? irrevocable - a Credit which cannot be retracted or revoked once
the beneficiary has been notified; there is a presumption under the
 UCP 500 that a Credit is irrevocable. ? advised -a Credit the
opening of which the beneficiary has been informed by a local bank.
? confirmed -a Credit which has received an additional guarantee of
payment by a local or highly reputable bank. ? back-to-back -a
system utilised by middlemen/intermediaries to finance a single
transaction through the use of two L/C's opened in succession
(e.g.,"back-to-back") in order to permit the middleman/broker to
use the ' proceeds from the first Credit to pay off his supplier under
the second credit. ? transferable -an L/C which allows the
beneficiary to make part or all of his Credit payable to another
supplier; used in middleman/brokerage contexts; distinguishable
from back-to-back L/C's because the transferable Credit requires
the knowledge and authorisation of the importer
(applicant/principal). ? revolving -a Credit which can be drawn
against repeatedly by the beneficiary; : can take a variety of
different forms, depending on whether the credit is limited ' in
terms of time, number of possible drafts, maximum quantity per
draft, or maximum total quantity. ? cumulative revolving L/C -
revolving L/C under which unused amounts . can be carried forward
and become available under the next draft. ? red clause - an L/C
allowing payments of advances to the beneficiary (originating in the
wool trade in Australia, these clauses used to printed in red ink). ?
deferred - an L/C under which payment by the importer is to take
place a specified time after his receipt of the shipping documents. ?
sight - an L/C under which the beneficiary is entitled to present a
sight draft or sight bill of exchange, which is a call for immediate
payment upon acceptance of shipping documents. ? import - an L/C
used to finance importation of goods. ? standby - akin to a demand
guarantee or bank guarantee, the standby L/ C is generally used to
assure performance or payment by the counterparty.
 
   Translation Exposure
This refers to parent companies with foreign subsidiaries. There is a
risk of reporting lower profits or exchange losses in the
   consolidated accounts of the group, due to adverse exchange rate
movements.
 
   Transaction Exposure
Starts with commitment to make a payment or receive income in a
foreign currency at a future date. There is a risk that an adverse
   exchange rate movement before the payment or receipt occurs
could increase costs or reduce income in the domestic currency.
 
   Trade Credit
The use of credit from suppliers is a major source of finance. It is
particularly important to small and fast growing firms. The costs of
   making maximum use of trade credit include: (a) the loss of
supplier's goodwill (b) loss of cash discounts
 
   Trimming
The operation of shovelling and spreading, within the ship's hold,
dry bulk cargoes such as cement, ore or grains, so as to avoid
   weight imbalances which might hinder the ship's handling or
unloading.
 
   Tramp Vessel
A "freelance" seagoing cargo vessel, available on a contract basis to
carry cargoes to any given port. To be distinguished from liner
   ships, operating according to advertised routes, schedules and
rates.
 
   Trade Netting
 A consolidation and offsetting of individual trades into net amounts
   of securities and money between partners or among member of a
clearing system.
 
   Trade Acceptance
A bill of exchange drawn by the seller/exporter on the
   purchaser/importer of goods sold, and accepted by such purchaser.
See bill of exchange.
 
   T/L
   Total loss.
 
   TIR
TIR Carnets are transport documents used to cover international
transport shipments on road vehicles such as trucks/lorries. TIR
Carnets, issued pursuant to the 1949 TIR Convention, allow the
   truck or other vehicle to pass through all TIR-member countries
without having to go through customs inspection until reaching the
country of destination.
 
   Time Deposit
   Bank deposit of fixed maturity.
 
   Time Draft (Time Bill)
A financial instrument demanding payment at a future fixed date,
or a specified period of time after sight (30, 60, 90 days etc.), or
   after the date of issue. It is also called a usance draft (usance bill).
See Draft.
 
   Through Bill Of Lading
A B/L issued to cover transport by at least two successive modes of
   transport.
 
   TIIC
   See Terminal handling charge.
 
   Tariffs
   Taxes imposed by governments on imported and exported goods.
 
   Telegraphic Transfer
   A cable payment order. A method of payment by bank transfer.
 
   Tender Bond
   (See Bid Bond)
 
   Term Credit
A documentary letter of credit which stipulates that payment will be
made to the exporter at a date later than the date on which the
   exporter presents the documents i.e. at some specified date in the
future.
 
   Terms of Trade
Relationship between export and import price indices. If export
   prices rise more quickly or fall at a slower pace than import prices,
there is a favorable ratio.
 
   Title
   The legal right to ownership.
 
   Trade Barrier
Artificial restraint on the free exchange of goods and services
   between countries, usually in the form of tariffs, subsidies, quotas
or exchange controls.
 
   Trade Bill
A Trade Bill is a Bill of Exchange "accepted" by a trader. It has
   more risk attached to it than a Bank Bill.
 
   Trade Finance
Trade Finance is a borrowing facility secured against the asset in
question - in most cases the raw materials being bought or the
goods being imported. It does not impinge upon the existing
   overdraft limit or borrowing capacity of the company and so can
facilitate a growth in working capital that it may not be possible to
arrange otherwise.
 
   Transferable Credit
Transferable Credits allow middlemen finance international trade
transactions without having their own financial resources. The
Beneficiary of a Transferable Credit can arrange with the Advising
   Bank to transfer all or part of the Credit to supplier/transferees
anywhere in the world, up to the value of the main Credit but only
in the manner and to the extent agreed by the Advising Bank.
 
   Transferee
   The recipient of a Credit transferred by the first Beneficiary.
 
   Transferor
The beneficiary of a transferable Documentary Credit who transfers
   the Credit to a second Beneficiary, subject to the restrictions
imposed by 'UCP500'.
 
   Transit Credit
Involves a bank confirming and possibly opening a letter of credit
between buyer and seller in other countries. When the buyer and
   seller are both in a country different to that of the bank confirming
the credit, the credit is known as a transit credit.
 
   Transport Documents
Documents indicating loading on board of dispatch or taking in
   charge.
 
   Trust Receipt
An undertaking signed by a buyer against which a bank releases
merchandise to him for the purpose of manufacture or sale but
retains the title thereto. The buyer obligates himself to maintain the
   identity of the goods or the proceeds thereof distinct from the rest
of his assets and to hold them subject to repossession by the bank.
It is used in conjunction with a pledge.
 
   Terminal Handling Charge (THC)
   Handling charges assessed for services rendered within container
terminals or with respect to containers which will be processed
through terminals. When delivery or pickup of the goods is
 expected to be at a container terminal, traders are well-advised to
stipulate precisely which party will pay for all or part of the terminal
handling charges.
 
   T.A.R.G.E.T
Trans European Automated Real-time Gross settlement Express
   Transfer system. A payment system interconnecting all member
states’ individual real-time-settlement systems (RTGS).
 
 

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   Uniform Customs and Practice (UCP)
Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce Publications number 500
(referred to as UCP500) is the existing set of rules and regulations
   covering Documentary Credits which came into effect on 1st
January 1994. Most countries in the world adhere to UCP500. Since
the publication of UCP500, the ICC has issued four position papers
to clarify some of the Articles of UCP500.
 
   UCC-(US)
Uniform Commercial Code, the codification of American commercial
   U law, followed in substantially uniform fashion by the US states.
Article 5 of the UCC deals with letters of credit.
 
   Usance Draft (Usance Bill)
Time draft; a written demand for payment which comes due at a
   specified future date.
 
   Ultra Vires
Legal jargon for transaction(s) that stem from unlawful activities
   and is/are therefore deemed to be null and void.
 
   Unidroit
Institute for the Unification of Private Law- International
governmental organisation headquartered in Rome. Administrative
   organisation of treaties conventions, model instruments, and legal
guides and research.
 
   Unfair Calling Insurance
Insurance coverage to protect principals who have issued demand
guarantees or bonds against an unfair or abusive call of the bond/
   guarantee (i.e., one which is not truly based on non-performance
by the principal).
 
   UNCTAD
   United Nations Commission for Trade and Development- UN Agency
 based in Geneva, which has developed numerous international
instruments as regards trade with developing or transition
economies. Notably, UNCTAD houses the ITC (International Trade
Centre), a developer of useful guides and manuals for small to
medium-sized exporters.
 
 

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   Vostro Accounts
Account maintained abroad by a bank in the currency of the
country in which the account is held. The bank holding the account
   would refer to it as a vostro account while the bank depositing in it
would refer to it as a nostro account.
 
   Vienna Convention – 1980
Vienna Convention on the International Sale of 'Goods.
International treaty signed by approximately 45 nations, including
most leading trading nations. Amounts to a virtual commercial code
   for international sales transactions, but excludes contracts for
services, securities, electricity, and some others; parties may be
able to "opt out" of coverage by the Vienna Convention by explicitly
stating so in the contract of sale.
 
 

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   Warehouse-To-Warehouse Clause
Insurance coverage of international cargo from export warehouse
   to import warehouse; coverage may also be substantially extended
or limited according to time.
 
   WTDR
   A US government credit report on a foreign firm.
 
   World Wide Web (WWW; The Web)
   A graphics standard which has become; a virtual subset of the
Internet; organisations, universities and companies maintain
 presences on the Web via "home pages", which are much like
animated telephone-book advertisements; the information on the
home page may be highlighted (hypertext) in which case the viewer
may click on the particular text to obtain access to another data
base, home page, or further information.
 
   Worldscale
   A scale for quoting freight rates for oil tankers.
 
   Warehouse Receipt (WR)
A document issued by a warehouse operator acknowledging receipt
of goods; also referred to as a dock warrant or shed receipt. A
   warehouse warrant, in contrast, generally connotes a document of
ownership/control over goods stored in a particular warehouse.
 
   WPA
   With particular average; see marine insurance.
 
   WP (W/O P)
   Without prejudice.
 
   With Average (WA)
Marine insurance term meaning that coverage includes partial loss
   (and not just total loss) of the cargo. See marine insurance.
 
Wharfinger- (also Wharf inspector, Wharf superintendent,
   Dock superintendent)
Personnel in charge of receiving and registering goods in a port on
behalf of the carrier. Wharfinger's signature of the shipping note
   assures the shipper that it can proceed to draw up bills of lading
pursuant to the terms of the note.
 
   Wharfage (WFG)
   Charge for the use of docks.
 
   Waybill (WB)
A non-negotiable transport document, issued for either ocean
   transport (sea waybill) or air transport (air waybill).
 
   WA
   See With average.
 
   Warranty
Confirmation by a borrower that certain information provided as a
   precondition of lending is correct.