Glossary

A complete glossary of terms for international trade on Exporting and Importing.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

AAD (ADMINISTRATIVE ACCOMPANYING DOCUMENT)

The AAD is a 4 part control document that covers the movement of excise goods moving in duty suspension between EC Member States and also for exports of similar goods from the Community. It contains relevant information about the consignment, its origin and destination, and provides confirmation that the consignee has received the goods. For more information on the use of AAD's see Customs Notice 197.

ACCEPTANCE

The undertaking written on the face of a bill of exchange and signed by the drawee to pay the face amount of the bill on the due date, usually in exchange for documents of title to goods shipped on documents against acceptance terms (an alternative name for an accepted bill of exchange).

AD VALOREM

According to Value.

ADVANCE PAYMENT GUARANTEE

A Guarantee or bond usually issued by a bank that provides the buyer with acceptable security if the exporter fails to fulfil its obligations in the underlying contract. If the exporter requires a sum of money in advance of shipping the goods they may do so in return for an acceptable advanced payment guarantee. However, the exporter should be aware that they may not have access to that money as the bank may hold the money as security for the guarantee.

ADVISING BANK

Documentary Credits -The act of a bank notifying/conveying the terms and conditions of a documentary credit to the beneficiary. The advising bank is the issuing bank's agent, usually located in the beneficiary's country.

Guarantees - A foreign bank requested by the issuing bank (the Guarantor) to forward the latter's original Guarantee to the Beneficiary. The advising bank is not a party to the Guarantee therefore it does not incur any liability under the guarantee.

AIR WAYBILL

Air Waybill (AWB) is the most important document issued by a carrier either directly or through its authorised agent. It is a non-negotiable transport document. It covers transport of cargo from airport to airport. By accepting a shipment an IATA cargo agent is acting on behalf of the carrier whose air waybill is issued. The AWB is a Contract of Carriage and Evidence of receipt of goods. 

ALL RISKS

An Insurance Policy that covers losses from all causes not specifically excluded in the policy.

APPLICANT

For a Documentary Credit this is the person/company, usually the importer, on whose behalf a documentary credit is issued (also known as the Opener or Buyer). For a Guarantee this is the party that requests their bank to arrange the issue of the guarantee.

ARBITRATION

In cases of disputes with overseas buyer or supplies arbitration can be a way forward to resolution. Arbitration is a legal technique for resolution outside the courts. In International Trade the ICC (International Chamber of Commerce) arbitration service is recognised worldwide.

ASSIGNMENT

Irrevocable assignment by the beneficiary of a letter of credit, or a portion of its proceeds, to a third party (usually the manufacturer or supplier of the exported goods). This assignment generally takes the form of a deed of assignment given to the advising bank thereby authorising the bank to pay the amount in the assignment when proceeds from the Letter of Credit have been received.

ATA CARNET

An ATA Carnet is an international customs document that allows the holder to temporarily (up to one year) import goods into countries who are part of the Carnet Convention without payment of normally applicable duties and taxes, including value-added taxes.

The Carnet eliminates the need to purchase temporary import bonds. So long as the goods are re-exported within the allotted time frame, no duties or taxes are due. Failure to re-export all goods listed on the Carnet results in the need to pay the applicable duties. Failure to remit those duties results in a claim from the foreign customs service to the customs authority in the Carnet holder’s country.

ATR

An ATR is a preference document for Turkey. The document allows the importer to clear the goods in Turkey without paying duty or paying a reduced rate of duty depending on the goods. The document can be issued for all goods that are in free circulation in the EU i.e. goods that have had all duties applicable in the EU paid. Although the document proves that goods are in free circulation it does not prove EU origin. The Turkish importer may also request a Certificate of Origin to prove the actual origin of the goods. Customs Notice 812 gives further information on ATR's.

AVALISATION

The act of a bank guaranteeing payment of a bill of exchange or promissory note by endorsing the reverse of the instrument with the words “good per aval” and signing under the annotation, or by issuing a separate guarantee of payment. 

AVERAGE

The term 'Average' has two meanings:

In marine insurance, in the case of a partial loss, or emergency repairs to the vessel, average may be declared. This covers situations, where, for example, a ship in a storm might have to jettison certain cargo to protect the ship and the remaining cargo. 'General Average' requires all parties concerned in the venture (Hull/Cargo/Freight/Bunkers) to contribute to compensate the losses caused to those whose cargo has been lost or damaged.

'Particular Average' is levied on a group of cargo owners and not all of the cargo owners.

In the situation where an insured has under-insured, i.e. insured an item for less than it is worth, average will apply to reduce the amount payable. There are different ways of calculating average, but generally the same proportion of under-insurance will be applied to any payout due.

An average adjuster is a marine claims specialist responsible for adjusting and providing the general average statement. He is usually appointed by the ship owner or insurer.

BAF (BUNKER ADJUSTMENT FACTOR)

The Bunker Adjustment Factor (BAF) is a surcharge raised by shipping lines to take account of fluctuations in the price of marine fuel. A similar surcharge, commonly referred to as "fuel surcharge" is applied where goods are transported by air to compensate for fluctuations in the price of aviation fuel.

BENEFICIARY

A payee or recipient, usually of money or a party in whose favour a documentary credit is established, usually the exporter.

BIFA (BRITISH INTERNATIONAL FREIGHT ASSOCIATION)

BIFA is the UK trade association for international freight forwarding, logistics, cargo, trade, imports and exports.

BILL OF EXCHANGE

Also known as a draft. A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving the order. The addressee is required to pay a certain sum of money to the order of a specified person or to bearer either on demand or at a fixed or determinable future time.

BILL OF LADING

A document issued by a carrier, or its agent, to the shipper as a contract of carriage of goods. It is also a receipt for cargo accepted for transportation, and must be presented for taking delivery at the destination.

 Among other items of information, a Bill of Lading contains consignor's and consignee's name, names of the ports of departure and destination, name of the vessel, dates of departure, goods being transported with number of packages and kind of packaging, marks and numbers on the packages, weight and/or volume of the cargo, freight rate and amount.

It serves as a proof of ownership (title) of the cargo, and may be issued either in a negotiable or non-negotiable form. In negotiable form, it is commonly used in letter of credit transactions, and may be bought, sold, or traded; or used as security for borrowing money.

It is required in all claims for compensation for any damage, delay, or loss; and for the resolution of disputes regarding ownership of the cargo. The rights, responsibilities, and liabilities of the carrier and the shipper under a Bill of Lading (often printed on its back) are governed generally either by the older Hague rules, or by the more recent Hague-Visby rules.

BLANK ENDORSED

When a bill of lading is signed by the shipper and made out "to order" or "shipper's order" it should be signed on the reverse of the document. This is said to be blank endorsed. The bill of lading then becomes a bearer instrument. Any holder of a blank endorsed bill of lading can take delivery of goods from the shipping company. Any document made out to order can be blank endorsed in the same way.

BRITISH RETURN GOODS

Returned Goods Relief (RGR) provides relief from import duty, including Common Agricultural Policy (CAP) duties, excise duty and VAT on goods re-imported into the EU.

You can claim for goods from outside the EU, countries which have a customs union with the EU. The conditions for relief are different for each type of duty or tax, and if you claim relief from more than one, you must meet the conditions for each.

The re-imported goods should be in the same state they were in when they were originally exported from the EU. The goods must not have been processed, apart from routine maintenance or unforeseen repairs. Claiming RGR does not override any re-importing restrictions.

C88 OR SINGLE ADMINISTRATIVE DOCUMENT (SAD) FORM

The C88 is a customs form used for both exports and imports. The C88 is not used as frequently as in the past as most customs entries are now done electronically using the NES system.

CAD (CASH AGAINST DOCUMENTS)

This is a less expensive way of being paid than using a Letter of Credit but does not afford the seller the same level of security that a Letter of Credit does.

All the documents are sent to the buyers bank (usually through a UK bank) including the transport document and a Bill of Exchange. The buyer is informed when the documents arrive and in the case of a shipment by sea he will need to collect the documents to claim the goods. Before the bank gives him the document if the Bill of Exchange is ‘at sight’ the buyer must pay the amount due. If the goods have been sent by air he will be able to claim and receive the goods without the Air Waybill as this document does not have the same properties as a Bill of Lading. The exporter is then relying on the buyer going to the bank to receive the documents which he can obviously do in his own time.

CAF (CURRENCY ADJUSTMENT FACTOR)

The Currency Adjustment Factor (CAF) is an adjustment to the shipping line's freight tariff which takes into account variances between the currency in which freight is normally billed and those under which expenses are incurred.

CAP (COMMON AGRICULTURAL POLICY)

The Common Agricultural Policy (CAP) covers a broad range of food and agricultural produce, including basic food products and inedible organic products. In general, CAP covers basic products and commodities as opposed to manufactured products; however, some other goods are included.

CARGO INSURANCE (MARINE)

Cargo insurance (also called marine insurance) covers physical damage to, or loss of your goods whilst in transit by land, sea and air and offers considerable opportunities and cost advantages if managed correctly. Unfortunately, many UK traders do not want to become involved in arranging this type of insurance because they feel they do not have sufficient knowledge. They see it as an unnecessary expense involving extra administration, and make the mistake of allowing suppliers or customers to control this vital area of business.

CASH IN ADVANCE

Receiving payment in advance of shipping the goods is good news for the exporter but consideration should be made as to whether the exporters competitors give better payment terms such as open account or cash against documents. Sometimes the buyer will request an advance payment guarantee before payment is made (see advance payment guarantee).

CERTIFICATE OF CONFORMITY

A Certificate of Conformity may be asked for by the importer (buyer) . This is usually an undertaking on the exporters headed paper to the effect that the goods conform to certain manufacturing standards. Sometimes the exporter may ask for the Certificate of Conformity to be issued by a recognised independent inspection agency such as SGS.

COMMODITY CODE

See Tariff Code

DAN (DEFERMENT APPROVAL NUMBER)

A number allocated by HMRC to importers who have an acceptable deferment arrangement.

DANGEROUS GOODS NOTE (DGN)

Dangerous goods require completion of a dangerous goods note (DGN) before shipment. A DGN can be used for all forms of transport except air when an IATA Dangerous Goods Declaration is used. The DGN must be signed by an employee who has been trained by an official body in all aspects of transporting dangerous goods. The DGN can be created using e-z consign.

DAP (DELIVERED AT PLACE)

An INCOTERM that defines who contracts and pays for the freight and insurance and where the risk in the goods passes.

DAT (DELIVERED AT TERMINAL)

An INCOTERM that defines who contracts and pays for the freight and insurance and where the risk in the goods passes.

DDP (DELIVERED DUTY PAID)

An INCOTERM that defines who contracts and pays for the freight and insurance and where the risk in the goods passes.

DEED OF ASSIGNMENT

There are many forms of assignment but in International Trade the assignment usually refers to a contract with the bank for them to transfer some of the proceeds from a letter of credit to a third party once funds have been received.

DEFERMENT ACCOUNT

System whereby UK Customs will allocate duty and VAT incurred at import to an account for payment once a month.

DEMURRAGE

A charge made by a shipping company or a port authority for failure to load or remove goods within the time allowed. 

DISCOUNTING

The exporter enters into an agreement with either a bank or a discounting/factoring organisation whereby the exporters invoice will be paid immediately (usually 80% of invoice value). The exporter can therefore offer better terms to the buyer and will be able to manage cash flow better. There is a charge, which varies, to pay for the service.

DISCREPANCY

Any deviation from the terms and conditions of a Letter of Credit, or the documents presented for payment, or any inconsistency between the documents themselves will render them discrepant. If time allows you may be able to present new correct documents but if there is insufficient time to represent the documents can be sent out in trust, which means the importer has the choice of accepting them as they are or rejecting them and withhold payment.

DISPATCHES

The term used by HMRC to identify goods shipped to other Member States. This term is preferred instead of export.

DISTRIBUTOR

There are different types of distributors and it is essential that any agreement is made in writing so that both parties clearly understand their responsibilities under that agreement.

DISTRIBUTOR AGREEMENT

There a number of different agreements so be sure to use the right one for your needs.

DIT (Department for International Trade)

The Department for International Trade is a UK Government department working with businesses based in the United Kingdom to assist their success in international markets, and with overseas investors looking to the UK as an investment destination.

DOCUMENTARY COLLECTION

See CAD (Cash Against Documents)

DOCUMENTARY LETTER OF CREDIT

There are different types of Documentary Letters of Credit but all Letters of Credit are irrevocable which means that once in place neither the exporter nor the buyer can change any of the terms without both parties agree. The official definition of a Letter of Credit is that it is a written undertaking by a bank (issuing bank) given to the seller (beneficiary) at the request of the buyer (applicant) to pay a sum of money against presentation of documents complying with the terms of the credit within a set time limit.

DRAFT- ALSO CALLED BILL OF EXCHANGE

A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving the order. The addressee is required to pay a certain sum of money to the order of a specified person or to bearer either on demand or at a fixed or determinable future time.

DRAWBACK

The drawback system allows for the repayment of Excise duty paid on goods that have not been and will not be consumed in the UK.

DRAWEE

The person or company on whom a Bill of Exchange is Drawn.

DRAWER

The person or Company that draws a Bill of Exchange.

DUEL USE REGULATIONS

Dual-Use items are goods, software or technology (documents, diagrams etc) which can be used for both civil and military applications.  They can range from raw materials to components to complete systems, e.g.  aluminium alloys, bearings, or lasers.  They could also be items used in the production or development of military goods, e.g. machine tools, chemical manufacturing equipment and computers. Exporters will need to apply for an export licence for dual-use items which meet the defined performance characteristics detailed in the Regulation.

DUTY DEFERMENT ACCOUNT

System whereby UK Customs will allocate duty and VAT incurred at import to an account for payment once a month.

ECSI

Export Cargo Shipping Instructions.

EDI (ELECTRONIC DATA INTERCHANGE)

In its simplest form, Electronic Data Interchange, or EDI, is the computer-to-computer exchange between two companies of standard business documents in electronic format. There are two key elements in basic EDI; First, electronic documents replace paper documents. Second, the exchange of documents takes place in a standardised format. Using these two basic concepts, any business can enter the world of EDI and begin taking advantage of the speed and economy of electronic commerce.

EEA (THE EUROPEAN ECONOMIC AREA)

The European Economic Area (EEA) was established on 1 January 1994 following an agreement between the member states of the European Free Trade Association (EFTA) and the European Community, later the European Union (EU).

Specifically, it allows Iceland, Liechtenstein and Norway to participate in the EU's single market without a conventional EU membership. In exchange, they are obliged to adopt all EU legislation related to the single market, except those pieces of legislation that relate to agriculture and fisheries.

EFTA (THE EUROPEAN FREE TRADE ASSOCIATION)

The European Free Trade Association (EFTA) is a free trade organisation between four European countries that operates parallel to, and is linked to, the European Union (EU).

EFTA was established on 3 May 1960 as a trade bloc-alternative for European states who were either unable to, or chose not to, join the then-European Economic Community (EEC) which has now become the European Union (EU).

The Stockholm Convention, establishing EFTA, was signed on 4 January 1960 in Stockholm by seven countries. Today, only Iceland, Norway, Switzerland, and Liechtenstein remain members of EFTA (of which Norway and Switzerland are the only remaining founding members). The Stockholm Convention was subsequently replaced by the Vaduz Convention. This Convention provides for the liberalisation of trade among the member states.

ENDORSER

Someone who signs a document on the reverse thereby endorsing it.

EORI NUMBER

The Economic Operator Registration and Identification scheme (EORI) is an EU initiative that helps traders communicate with customs officials when they are importing and exporting goods. 

ETA (ESTIMATED TIME OF ARRIVAL)

The importer will frequently request this information from the exporter to enable him to make the necessary arrangements for clearance of the goods when they arrive. 

ETD (ESTIMATED TIME OF DEPARTURE)

Estimated time of departure. Frequently requested by the buyer so that arrangements can be made for clearance on arrival.

ETS (ESTIMATED TIME OF SAILING)

Estimated time of sailing Frequently requested by the buyer so that arrangements can be made for clearance on arrival.

EU (EUROPEAN UNION)

The European Union (EU) is a partnership of 27 democratic countries, working together for the benefit of all their citizens. It aims to promote social and economic progress among its members, common foreign and security positions, police and judicial co-operation in criminal matters, and European citizenship.

EUR1

A form to claim preferential duty rates on goods being exported to countries with which the EC has a preferential trading agreement. This can be applied for and authenticated online.

EURMED

A preferential trade agreement between the EU Member States and Morocco, Algeria and Tunisia.

EUROPEAN INVESTMENT BANK

The European Investment Bank is the European Union's long-term lending institution established in 1958 under the Treaty of Rome. A policy-driven bank, the EIB supports the EU’s priority objectives, especially European integration and the development of economically weak regions. Recently, the Bank has also been actively supporting European R&D projects as part of EU's objective of building the world's leading knowledge-based economy.

EUU (END USER UNDERTAKING)

Requested by some importers possibly where an import licence is required. The undertaking states what the intended end use of the goods is.

EX1

Export Declaration for road shipments through the EU to non EU countries. C88/SAD form.

EXPORT CONTROLS

Any item exported from the UK that is subject to export control needs a licence. The Export Control Organisation is responsible for assessing and issuing (or refusing) export licences for a wide range of controlled so called “strategic” goods. This includes military and dual-use item.

EXPORT INVOICE

The invoice is in many ways the most important document required for an export shipment. It has several functions over and above requesting payment. In most lines of business, the invoice comes at the end of the chain. In export, it comes at the beginning. The invoice is the starting point for the production of all the documentation you will require and other documents will use information shown on your invoice.

EXPORT PAYMENTS

Exports can be paid for in 4 different ways, Cash in Advance, Letter of Credit, Documentary Collection and Open Account.   Deciding which way you wish to be paid depends on many things, your relationship with the buyer, the country you are exporting to or even the size of the order.

EXW (EX-WORKS)

An INCOTERM that defines who contracts and pays for the freight and insurance and where the risk in the goods passes. EFTA was established on 3 May 1960 as a trade bloc-alternative for European states who were either unable to, or chose not to, join the then-European Economic Community (EEC) which has now become the European Union (EU). The Stockholm Convention, establishing EFTA, was signed on 4 January 1960 in Stockholm by seven countries. Today, only Iceland, Norway, Switzerland, and Liechtenstein remain members of EFTA.

FAS (FREE ALONGSIDE SHIP)

An INCOTERM that defines who contracts and pays for the freight and insurance and where the risk in the goods passes.

FCL (FULL CONTAINER LOAD)

This indicates that the exporter will take up the entire container as opposed to a groupage container where the container will carry consignments from more than one exporter.

FCR (FORWARDER CERTIFICATE OF RECEIPT)

A document provided by the freight forwarder particularly in Ex Works shipments. The document will show that the goods have been handed over to the freight forwarder.

FOB (FREE ON BOARD)

An INCOTERM that defines who contracts and pays for the freight and insurance and where the risk in the goods passes.

FORCE MAJEURE

A French term literally translated as "greater force", this clause is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and restrict participants from fulfilling obligations.

FORFAITING

Forfaiting is a form of international supply chain financing. It involves the discount of future payment obligations on a without recourse basis. It is a flexible discounting technique that can be tailored to the needs of a wide range of domestic and international transactions. 

FORM A (GSP CERTIFICATE)

Form A, which is often called the GSP Form A, is a certificate of origin. It is used under the GSP program for exportations to the donor countries from the beneficiary countries.

FORWARD EXCHANGE CONTRACT

Contract between the bank and its customer to buy/sell a fixed amount of foreign currency at a future date at a specified rate. An exporter could enter into a forward exchange contract for a DC payment or to sell the proceeds received from an export negotiation.

FREE TRADE AGREEMENTS

There are many Free Trade Agreements around the world. These basically mean that where a reciprocal free trade agreement is in place goods traded between those countries will enter duty free. The link below shows the free trade agreements that exist with the European Union and also shows additional agreements in place. Other agreements are in place which allow goods to be exported to participating countries at a reduced rate of duty. In some cases special documents are required to certify the origin or qualifying status of the goods.

FREIGHT COLLECT OR FREIGHT FORWARD

Freight/Carriage costs to be paid by the consignee.

FREIGHT PREPAID

Freight/Carriage paid by the consignor.

FUMIGATION CERTIFICATES

The Fumigation Certificate provides evidence of the fumigation of exported goods (especially agricultural products, used clothing, etc.). This form assists in the quarantine clearance of any goods of plant or animal origin. The exporter is typically required to fumigate the goods at his or her expense prior to loading.

GA (GENERAL AVERAGE)

General Average is Insurance loss or damage to a ship or its cargo that is shared among the ship owners and all the cargo owners. If goods are insured free of general average there would need to be a clause to that effect in the policy/certificate. See Average.

GATT GENERAL AGREEMENT ON TARIFFS AND TRADE

The General Agreement on Tariffs and Trade (GATT), which was signed in 1947, is a multilateral agreement regulating trade among about 150 countries. According to its preamble, the purpose of the GATT is the substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis.

GCC (GULF COOPERATION COUNCIL)

The Gulf Cooperation Council [GCC] was established in an agreement concluded on 25 May 1981 in Riyadh, Saudi Arabia between: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE. These countries declared that the GCC is established in view of the special relations between them, their similar political systems based on Islamic beliefs, joint destiny and common objectives. The GCC is a regional common market with a defence planning council as well. The geographic proximity of these countries and their general adoption of free trade economic policies are factors that encouraged them to establish the GCC.

GOST (GOST STANDARD) CERTIFICATE

At present, GOST standards include over 20,000 titles used extensively in conformity assessment activities in 12 countries. Serving as the regulatory basis for government and private-sector certification programs throughout the Commonwealth of Independent States (CIS), the GOST standards cover energy, oil and gas, environmental protection, construction, transportation, telecommunications, mining, food processing, and other industries. These can be obtained through SGS or Intertek.

GR WT (GROSS WEIGHT)

Weight of goods including packaging.

GROUPAGE

Small consignments bulked together and consigned by a forwarder or carrier to reduce the individual cost of freight.

GSP ( GENERAL SYSTEM OF PREFERENCE) FORM A

A full list of GSP countries can be found in the UK Tariff publication. Generally if goods are being imported from one of these countries the importer should ask for a GSP Certificate Form A or an EUR1. This will enable the importer to enter the goods into the EU at a lower rate of duty.

HAGUE VISBY RULES

The Hague-Visby Rules are a set of international rules for the carriage of goods by sea. The official title is "International Convention for the Unification of Certain Rules of Law relating to Bills of Lading" and was drafted in Brussels in 1928. The rules were amended in 1968 at which time they became the Hague Visby Rules.

HAWB ( HOUSE AIR WAYBILL)

Issued by a freight forwarder to a shipper as a receipt for goods which will be shipped with other cargo as one consignment to obtain better freight rates. The airline's AWB shows the forwarder as the consignor, and the name of forwarder's agent at the destination as the consignee. Although it is not a complete document of title, a forwarder's AWB has a legal-standing similar to that of a carrier's AWB.

HS CODE HARMONISED SYSTEM CODE)

An international system of classifying and describing goods. The HS is managed by the World Customs Organisation (WCO). In the European Union it is embodied in the Tariff.

IATA (INTERNATIONAL AIR TRANSPORT ASSOCIATION)

The International Air Transport Association (IATA) is an international industry trade group of airlines headquartered in Montreal, Quebec, Canada, where the International Civil Aviation Organization is also headquartered. IATA's mission is to represent, lead, and serve the airline industry. IATA represents some 230 airlines comprising 93% of scheduled international air traffic.

IATA DANGEROUS GOODS DECLARATION

Used specifically for dangerous goods being despatched by air. Relevant training must be undertaken to allow the responsible employee of the exporter to sign the declaration. The IATA Dangerous Goods Declaration can be created using e-z consign.

IBAN (INTERNATIONAL BANK ACCOUNT NUMBER)

The International Bank Account Number (IBAN) is an international standard for identifying bank accounts across national borders with a minimal of risk of propagating transcription errors. It was originally adopted by the European Committee for Banking Standards (ECBS), and was later adopted as an international standard under ISO 13616:1997 and now as ISO 13616-1:2007.

ICD (INLAND CLEARANCE DEPOT)

Instead of having your goods cleared at a port or airport, you can obtain customs clearance at an approved inland depot. There are depots throughout the UK. Normally only goods in containers, rail freight wagons or road vehicles which can be sealed may be removed for clearance inland.

IMF (INTERNATIONAL MONETARY FUND)

The International Monetary Fund (IMF) is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world

IMO (INTERNATIONAL MARITIME ORGANISATION)

The IMO is the United Nations specialised agency for improving maritime safety and preventing pollution from ships.

IMPORT DUTY

Import duty which is a charge made by the government on importation of goods is applied to most goods entering the UK. If the goods are being imported from a country where the EU has a trade agreement such as a GSP (General System of Preference) country, if the suppler provides the correct certificate this could greatly reduce or even eliminate any import duty. 

IMPORT LICENCE

If your business is considering exporting or importing goods, you will need to check if you need a licence. There are controls on exports of military or paramilitary goods, technology, artworks, plants and animals, medicines and chemicals. Licence requirements may depend on the potential use of the item - e.g. if it has a military application (usually referred to as dual-use goods) and where you are exporting to. There are also controls on imports including firearms, plants and animals, foods, medicines, textiles and chemicals. Whether you need a licence can also depend on where the goods are coming from. Exporting or importing controlled goods without the right licence is a criminal offence, so it's important to check first. You may need a licence even if you are only exporting or importing goods temporarily - e.g. taking a sample to an exhibition.

INCOTERMS

The Incoterms® 2010 rules are an internationally recognized standard and are used worldwide in International and domestic contracts for the sale of goods. Incoterms®2010 defines who pays for what, who contracts for what and where the risk in the goods passes. Companies should ensure that any quotes, orders, agreements and contracts refer to Incoterms®2010. When considering which Incoterm® to apply exporters should be particularly aware of the need to have the appropriate documentary proof of export and should be aware that some Incoterms® may not have an obligation to provide you with that documentation. 

INTERNATIONAL IMPORT CERTIFICATE

An International Import Certificates (IIC) is an end use assurance. The UK importer may be asked to provide an International Import Certificate Available by his supplier. The supplier possibly needs an export licence from is countries authorities and to enable him to gain his export licence he will need to produce the import certificate so the authorities know what the goods are going to be used for. 

IOE (INSTITUTE OF EXPORT)

The Institute of Export is the professional membership body representing and supporting the interests of everyone involved in importing, exporting and International trade. They offer a unique range of individual and business membership benefits as well as a world renowned suite of qualifications and training.

IPR (INTELLECTUAL PROPERTY RIGHTS)

Intellectual property rights, very broadly, are rights granted to creators and owners of works that are the result of human intellectual creativity.  The main intellectual property rights are: copyright, patents, trademarks, design rights, protection from passing off, and the protection of confidential information.

IPR (INWARD PROCESSING RELIEF)

Inward Processing Relief (IPR) is a method of obtaining relief from Customs duties and VAT charges. The relief applies to goods imported from outside the EU, processed and exported to countries outside the EU. IPR provides relief to promote exports from the EU and assist EU companies to compete on an equal footing in the world market. The processing allowed under IPR can be anything from repacking or sorting goods to the most complicated manufacturing. If a company manufacture, process or repair goods obtained outside the EU and export the finished product they can save Customs duty and VAT normally payable at import.

IRREVOCABLE LETTER OF CREDIT

The issuing bank and the confirming bank (if any) undertake to honour a specified credit provided the terms of the credit are observed. The irrevocable credit may be communicated to the beneficiary by the advising bank and cannot be amended or cancelled unless the issuing bank, the confirming bank and the beneficiary agree.

ISO (INTERNATIONAL STANDARDS ORGANISATION)

ISO (International Organisation for Standardisation) is the world's largest developer and publisher of International Standards. ISO is a network of the national standards institutes of 163 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system.

ISSUING BANK

The bank that opens a documentary/letter of credit at the request of its customer, the applicant. If a company or individual in the UK is intending to import controlled goods from another COCOM (Co-Coordinating Committee on Multilateral Export Controls) member country it is the norm to apply for an International Import certificate at the request of the Licensing Authority of the country of export.

An IIC constitutes an undertaking by the importer to import the goods into the country of destination, without diversion or transhipment elsewhere, and not to re-export the goods without an export licence from the Licensing Authority in the country of importation. It is also an assurance from the Government of that country that it will control any subsequent export of those goods.

JCCC

This committee is the main forum for the HMRC to consult trade on imports and exports. Customs Information Papers (CIPs) were formerly known as JCCC Information Papers, they will give information regarding customs policy and new procedures.

KEELAGE

Toll on vessels entering a port.

LASH (LIGHTER ABOARD SHIP)

A system in which fully laden barges (lighters) may be loaded aboard a larger vessel for transport. The host vessel or mothership is specially designed or modified with a door at the waterline to facilitate loading and unloading the barges. Since the LASH vessels have onboard cranes and the barges are floated away from the ship, they do not require special docks or terminals.

LAY DAYS

Days allowed for loading and unloading a ship.

LCL (LESS THAN CONTAINER LOAD)

Applies to a shipment that is not large enough to fill a standard cargo container. Such a shipment may be combined with other shipments going to the same destination port. This is called groupage.

LETTER OF CREDIT

see Irrevocable Letter of Credit

LETTER OF INDEMNITY

In today’s trading environment, cargoes of some commodities can change hands many times, although voyages can often be measured in a few days. Nevertheless documents need to be prepared and physically checked following each ownership transfer. The result of this is cargoes arriving at ports of destination before the documents.

A ship owner or carrier is not required to hand over a cargo if the related Bill of Lading is not available. Thus potentially bringing about delays and additional cost. Traders' Letters of Indemnity for Missing Documents (LoIs) have traditionally been used to enable the Carrier to release a cargo to the ultimate receiver/buyer, and to allow payment to be collected for a cargo (by other parties in the related chain of sell/buy transactions) in the absence of the documents required under normal contract payment terms. An LoI is of course only as reliable as the issuing company. For this reason many companies insist that the document must be countersigned by a bank of acceptable quality.

LIBOR (LONDON INTERBANK OFFERED RATE)

The London Interbank Offered Rate is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank market).

LIFO (LINER IN- FREE OUT)

Freight charge which includes the cost of loading in the port of departure but not the costs in the port of destination.

LLOYDS REGISTER

The Lloyd's Register Group is a maritime classification society and independent risk management organisation providing risk assessment and mitigation services and management systems certification. Historically, as Lloyd's Register of Shipping, it was a specifically maritime organisation. In the late 20th century, it diversified into other sectors, including oil & gas, process industries, nuclear and rail.

Marine Insurance Policy

A Marine Insurance Policy normally covers all shipments from the Policy holding company and will clearly show any restrictions etc. For occasional shipments or one off shipments contact ACORN who will give you a quote and provide an Insurance Certificate if required or the freight forwarder will also provide a quote. Widest insurance cover is provided under 'Institute Cargo Clause A', a more restrictive cover under 'Institute Cargo Clause B', and the most restrictive cover under 'Institute Cargo Clause C.' These clauses have replaced the older 'All Risks,' 'With Average,' and 'Free Of Particular Average' clauses. 

MFN (Most Favoured Nation)

A level of status given to one country by another and enforced by the World Trade Organization. A country grants this clause to another nation if it is interested in increasing trade with that country. Countries achieving most favoured nation status are given specific trade advantages such as reduced tariffs on imported goods.

NAS (National Advice Service)

National Advice Service is run by HM Revenue and Customs and can be contacted on 0845 0109000.

NCV (No Commercial Value)

Goods which are being sent abroad as samples or are not being charged for often need an invoice that declares that they have no commercial value. This invoice should show a value for customs purposes only.

Negotiation (Drafts or Bills of Exchange)

Negotiation is the purchase of drafts under a Letter of Credit which the issuing bank has undertaken to pay.

NES UK (Export Customs Declaration formally New Export System)

NES is an electronic based system that enables exporters/agents to send their export declarations to HM Revenue & Customs electronically.

Notary Public

A notary public is a public officer (often a solicitor) constituted by law to serve the public in non-contentious matters usually concerned with estates, deeds, powers-of-attorney, and foreign and international business. A notary's main functions are to administer oaths and affirmations, take affidavits and statutory declarations, witness and authenticate the execution of certain classes of documents, take acknowledgments of deeds and other conveyances, protest notes and bills of exchange, provide notice of foreign drafts, prepare marine.

NVOCC (Non Vessel Owning Common Carrier)

Designation for a shipment consolidator or freight forwarder who does not own any vessel, but functions as a 'carrier' by issuing its own bills of lading or air waybills and assuming responsibility for the shipments.

NWT (Nett Weight)

The weight of the goods less the packaging.

OGEL (Open General Export Licenses)

Open General Export Licences are licences which are available in the public domain. OGLs remove the need for an exporter to apply for an individual licence (but you must register for use).

OJ (Official Journal)

The Official Journal of the European Union is the gazette of record for the European Union. It has been published in 22 official languages (23 when Irish is required) of the member states, every working day since the Treaty of Nice entered into force on 1 February 2003. 

The OJEU superseded the earlier Official Journal of the European Community (OJEC) with the establishment of the European Union.The term 'Journal' is misleading, as production of the hard copy version ceased in 1997, and can now be accessed online via Tenders DirectAround 2500 new notices are advertised every week - these include invitations to tender, prior information notices, qualification systems and contract award notices. Purchasing Authorities can use the eProcurement portal, myTenders to publish OJEU and lower value tenders.

OOG (Out of Guage)

A load that does not fit into normal dimensions and may require specialist handling and carriage.

Open Account

An open account transaction means that the goods are shipped and delivered before payment is due, usually giving credit terms of between 30 and 90 days. Obviously, this is the most advantageous option to the importer in cash flow and cost terms, but it is consequently the highest risk option for an exporter.

OPR (Outward Processing Relief)

Outward Processing Relief (OPR) is a method of obtaining relief from Customs duty. The relief applies to goods imported from non-EU countries which have been produced from previously exported EU goods.OPR enables companies to take advantage of cheaper labour costs outside the EU, while encouraging the use of EU produced raw materials to manufacture the finished goods. Goods may also be temporarily exported to undergo processes not available within the EU.

The procedure also enables faulty goods to be returned to a non-EU country for repair, or for replacement with equivalent goods under the Standard Exchange System (SES).Being able to get relief from paying import duty can be very beneficial to companies, especially for cashflow reasons. Complying with the obligations to use the OPR procedure can, though, be off-putting. Langdon Systems provide an OPR module that has been designed to simplify the procedures of managing goods under OPR, whilst taking advantage of the maximum benefits available.

Packing List

An inventory of all goods shipped showing which carton/container they are packed in.

Phytosanitary Certificate

A phytosanitary certificate is required if the overseas customs wish to ensure that any wood, wood packaging, wood products and trees has been treated as required. The phytosanitary regulations also apply to plants.

Promissory Note

Short-term credit instrument consisting of a written promise by one person to pay a specified amount of money to another on demand or at a given future date. They can be secured or unsecured. If secured the payee can demand the sale of the collateral in event of non payment. Although still in use in International Trade.

Protest

The formal re-presentation of a dishonoured bill of exchange. The bill is presented by a notary public to the drawee. If refused again the notary public (representing the Bank) then issues a formal protest, an official certificate that the bill has been refused. The drawer can use this certificate to sue the drawee in court. Whether or not the drawer sues the drawee, the Bank retains recourse against the drawer & the drawee/endorser.

PSA (Pre-Shipment Advice)

A document frequently called for to enable the importer to know what has been shipped and when.

PSI (Pre-Shipment Inspection)

A pre-shipment inspection is often called for by a buyer but can protect both the buyer and supplier. An independent recognised inspection agent examines the goods prior to shipment for quality and quantity and issues a report of finding. The supplier is protected in that the buyer cannot claim the goods were incorrect and the buyer is protected as he can be sure that the goods he ordered are the same as those being shipped.

Quotas (Import)

The Import Quotas system allows the import of limited amounts of goods at a rate of duty lower than would otherwise apply. Quotas apply to certain goods from particular countries - so they are very specific.

Quotation

A quotation is an indication of the price at which the seller is prepared to sell and should state, as well as the goods and price, which Incoterm®2010 will be used in the delivery of the goods and the expected payment method and Payment terms.

Recourse

A company may request a bank to either loan them money or pay them money which is due but not yet cleared funds. The bank may do this stating that the agreement is with recourse or without recourse. With recourse would mean that should the funds not become available the bank has the right to claim the money back from the company. Without recourse would mean that the bank would have to pursue payment from the payer and not the company.

Reefer

Industry language for the term 'refrigerated container'.

Reimbursing Bank

The bank that the DC-issuing bank has named to pay the value of the DC to the negotiating/paying bank.

Retention of Title Clause

This clause is usually included in the terms of conditions of doing business. It means that in event of non payment by the buyer as a result of the buyer no longer trading the seller is able to claim back the goods without the goods becoming part of the buyers assets.

Revolving Letter of Credit

A credit that is automatically reinstated each time a draw takes place or upon receipt of authorization from the DC-issuing bank. The credit carries limits on duration and on the borrowing amount (cumulative or non-cumulative) involved for each draw.

RHA (Road Haulage Association)

The RHA is a membership organisation offering a range of services to the Road Haulage industry.

RO/RO (Roll On/Roll Off)

Short for roll on/roll/off. A ro/ro ship is designed with ramps that can be lowered to the dock so cars, buses, trucks or other vehicles can drive into the belly of the ship, rather than be lifted aboard. A ro/ro ship, like a container ship, has a quick turnaround time of about 12 hours.

RTA (Regional Trade Agreements)

Regional Trade Agreements have to be notified to the World Trade Association/Gatt These are usually agreements that allow free trade between countries within a particular region or bilateral trade at greatly reduced rates of duty. 

SB (Short Bill)

A bill of exchange that is payable on demand or within a very short time.

SD (Sight Draft)

A sight draft or Bill of Exchange that is 'Payable at sight' is synonymous with 'payable on demand', i.e. payable upon presentation to the drawee.

Ships Manifest

Captains statement giving details of ship, crew, cargo and ports of call.

Short Form Bill of Lading

A short form bill of lading is a Bill of Lading issued without the full terms of the contract of carriage being printed on its reverse. There will be reference to terms and conditions on the face of the Bill of Lading. Short term Bills of Lading are not used very frequently in the UK as there is a risk that in a dispute the holder of the Bill of Lading may claim that he was not made aware of particular conditions.

Simplified Clearance System

If your business imports any goods from outside the EU (European Union) this freight must be tracked using what is called the CFSP or Customs Freight Simplified Procedures. This is an electronic system that HM Revenue & Customs (HMRC) use to help businesses in the UK import goods from countries outside the EU (called Third Countries) efficiently. If your business uses the system it will be able to transport goods to the UK and move them through customs quickly, thus saving time and money.

SOB (Shipped on board)

B/L which certifies that the specified goods have been received in apparent good order and condition from the named shipper (consignor), and have been taken aboard the named ship (vessel) on the stated date. Banks funding a shipment require this type of B/L and not a received for shipment bill of lading. Also called onboard bill of lading.

SSN (Standard Shipping Note)

The Standard Shipping Note (SSN) is a shipping document that gives details about the contents of a consignment to carriers, receiving authorities and forwarders. The SSN is used to accompany deliveries of non-hazardous goods in transit.The SSN can be used for all consignments except dangerous goods.By using the SSN, you can complete the same standard document for all consignments, regardless of which port or depot they are going to.If you use the Customs Freight Simplified Procedures, you can use the SSN as a pre-shipment advice..When you use the SSN it gives the receiving authority complete, accurate and timely information about your consignment. So they have clear and precise details on how your goods should be handled.Using the SSN also means that everyone with an interest in your consignment has adequate information at each movement stage, until its final loading on board a vessel or aircraft.

Standby Letter of Credit

A letter of credit that guarantees payment in the case of the buyer defaulting on the purchase.

STC (Said to Contain)

Bill of lading term that the carrier acknowledges the receipt of stated number of packages but is unaware of the exact nature, quantity, and/or value of their contents. This is an important issue because, in case of an insurance claim, the carrier's liability (depending on the ruling convention, such as Hague-Visby or Hamburg) may be limited only to the number of packages (for which a standard compensation is paid) and not to the total value of the claim.

SWIFT

SWIFT is a standard format of Bank Identifier Codes approved by the International Organization for Standardization (ISO). It is the unique identification code of a particular bank. These codes are used when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks.

Tare

The actual weight of the container only, without any goods.

Tariff Numbers (also known as HS code)

The Harmonized Commodity Description and Coding System (HS) or tariff is an internationally standardized system of names and numbers for classifying traded products developed and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization with over 170 member countries based in Brussels, Belgium.

Tariff Quotas

tariff-rate quota (TRQ) is a trade policy tool used to protect a domestically-produced commodity or product from competitive imports.

Technical help for Exporters

BSI Group, also known in the UK as the British Standards Institution (or BSI), is a multinational business services provider whose principal activity is the production of standards and the supply of standards-related services. They have offices in 150 countries and can help with any standard or technical related issues.

Tenor

Term or Period of credit granted by the drawer.

Terms and Conditions

A businesses terms and conditions need to be known to the buyer at the time of agreeing to the sale. They can be sent with the quote or proforma. The terms and conditions will be relied on in the event of a dispute so it is extremely important that they are correct for your business. It is advisable to include a retention of title clause.

TEU (20ft equivalent unit)

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

Trade Agreements

There are many Free Trade Agreements around the world. These basically mean that where a reciprocal free trade agreement is in place goods traded between those countries will enter duty free. The link below shows the free trade agreements that exist with the European Union and also shows additional agreements in place. Other agreements are in place which allow goods to be exported to participating countries at a reduced rate of duty. In some cases special documents are required to certify the origin or qualifying status of the goods.

Trade Marks Registry

A trade mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities.A trademark is typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories, such as those based on colour, smell, or sound.The owner of a registered trademark may commence legal proceedings for trademark infringement to prevent unauthorized use of that trademark. However, registration is not required. The owner of a common law trademark may also file suit, but an unregistered mark may be protectable only within the geographical area within which it has been used or in geographical areas into which it may be reasonably expected to expand.

Transferable Letter of Credit

Permits the beneficiary to transfer all or some of the rights and obligations of the credit to a second beneficiary or beneficiaries.

TT (Telegraphic Transfer)

Telegraphic Transfer or Telex Transfer, often abbreviated to TT, is an electronic means of transferring funds overseas. A transfer charge is collected while sending money.

UCR (Unique Consignment Reference)

A reference, allocated by the Customs freight simplified procedures authorised trader to each import or export consignment, which can be used to trace the consignment through all the trader's records.

Unit Load Device

The term Unit Load Device (ULD) means any type of container with an integral pallet, or aircraft pallet whether or not owned by an IATA member, and whether or not considered to be aircraft equipped.

URC (Uniform Rules for Collection)

Standards of draft (bill of exchange) collection practices proposed by the International Chamber Of Commerce (ICC) for the financial institutions. Provisions of URC are not legal requirement but serve to establish common understanding of the collections terminology and expectations.

VAT

There are important VAT rules to consider if your business trades internationally. You may also have to pay import duty and VAT. Understanding the regulations will help you run your business more smoothly and effectively. Not following the rules may result in financial penalties. If you import goods, there can be by deferring import duty and VAT. Bear in mind that VAT on imports and exports is a complex subject. 

Vies

EC Website for checking EC VAT Registration Numbers.

Waybill

A waybill or consignment note is a document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods. Typically it will show the names of the consignor and consignee, the point of origin of the consignment, its destination, route, and method of shipment, and the amount charged for carriage. Unlike a bill of lading, which includes much of the same information, a waybill is not a document of title. Most Freight Forwarders and Trucking Companies use an in-house waybill called a House Bill. These typically contain 'Conditions of Contract of Carriage' terms on the back of the form. These terms cover limits to liability and other terms and conditions.

WCO (World Customs Organisation)

The World Customs Organisation (WCO) is the only intergovernmental organisation exclusively focused on Customs matters. With its worldwide membership, the WCO is now recognised as the voice of the global Customs community. It is particularly noted for its work in areas covering the development of global standards, the simplification and harmonisation of Customs procedures, trade supply chain security, the facilitation of international trade, the enhancement of Customs enforcement and compliance activities, anti-counterfeiting and piracy initiatives, public-private partnerships, integrity promotion, and sustainable global Customs capacity building programmes. The WCO also maintains the international Harmonized System goods nomenclature, and administers the technical aspects of the WTO Agreements on Customs Valuation and Rules of Origin.

WIPO (World Intellectual Property Organisation)

The World Intellectual Property Organisation (WIPO) is a specialized agency of the United Nations. It is dedicated to developing a balanced and accessible international intellectual property (IP) system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest.

WTO (World Trade Organisation)

The World Trade Organisation (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.