Import export terms

AAR Againstall risks.
Acceptance
(also, acc.)
The agreementwritten on a draft and signed by the drawee - who becomes the acceptor - to pay the
specified amounton the due date. The term is also applied to the accepted time draft itself.
Acceptance
Credit
A documentarycredit which requires,amongstthe documents stipulated,provision ofa term bill of exchange. The bill is
then generallyaccepted by the bank on which it is drawn or discounted.The practical resultis that the beneficiary is paid
promptlyat a discount.
Acceptor The person who accepts a bill of exchange drawn on them.Until they accept, they are called the drawee.By accepting the
bill the acceptor undertakes to pay the person presenting the bill the face value of that bill.On payment the acceptor retires
the bill.Where the acceptor is the initial provider of the credit, by arrangement,on maturity of the bill, they require the
borrower to place their funds on an amountequivalentto the face value of the bill.
Ad valorem Duty A duty assessed as a percentage rate of the value of the imported merchandise.
Advance Clause
Credit
These credits incorporate a clause which authorises the advising bank to make an immediate paymentto the beneficiaryof
an amountup to the total of the credit, or some lesser nominated amount.The Advance clause facility may in some
instances stipulate thatthe advance is to be made againstproduction ofspecified documents (e.g.storage warrants,
insurance cover note), but more often is not subjectto any special conditions.
The advance facility thus authorises the beneficiaryto draw up to the amountspecified prior to producing the relative
export shipping documents.In effect it enables the beneficiaryto obtain an overdraft from the advising bank,gu aranteed
by the buyer's bank,and to repay the loan with the proceeds ofthe drawing(s) made in terms ofthe credit.
Advance
Payment
Guarantee /
Bond
This is a guarantee that advance payments will be returned if the party having received such payments doe s notperform its
part of the contract.
Advice of Fate A requestfor advice of payment/non-payment(acceptance/non-acceptance) ofa bill of exchange.
Advising Bank The bank that notifies or advises the exporter that a credit has been opened in the exporter’s favour. The advising bank,usu ally
of the conditions ofthe documentarycredit withoutitselfmaking a paymentcommitment.
After Date Payment on a negotiable instrument,such as a bank draft, becomes due a specified number ofdays after presentation ofthe dr a
Agent / Agency
Agreement
An agentis an independentperson or legal entitywhich acts on behalfof another (the 'principal').In international transactions,g
behalfof a foreign principal,earning commission on sales eventuallyconcluded between the principal and the ultimate client.To
subsidiaries - who are not independent,or through distributorship relations,which involve the distributor's buying and re -selling i
distinguished frombuying or purchasing agents,as the respective rights and obligations are quite different.
Air Waybill (also
airbill or AWB)
Agreement
A non-negotiable shipping documentused bythe airlines for air freight.It is a contract for carriage that includes carrier con ditions
addition,it contains shipping instructions to airlines,a description ofthe commodityand applicable transportation charges .Itperfo
transport.
All Risks (AR) A type of insurance coverage providing somewhatmore than the minimum coverage,at a premium above the base amountpaid
does notin fact cover all risks - thus, for example, coverage of war, riots and strikes is notusuallyincluded;moreover,there is no
should understand whatexactly is covered in all risks coverage,and decide whether or not they need additional coverage ,befor
Applicant In the documentarycredit process,normallythe buyer or importer,who applies (thus,the applicant) for a documentarycredit in fa
Appreciation A rise in the value of a currency in terms of foreign currencies.
Arbitrage Simultaneous buying and selling offoreign exchange for the sake of realising profits from discrepancies between exchange rate
between forward margins for differentmaturities,or between interestrates prevailing atthe same time in different centres or in di
Arbitration A process ofdispute resolution in which a neutral third party (arbitrator) renders a decision after a hearing at which both parties h
voluntary or contractually required.The advantages ofarbitration - compared to litigation - are neutrality, confidentiality, reduced
Internationally,the main arbitration body is the International Chamber ofCommerce,other arbitration institutions include the Lon
of Arbitration, and the American Arbitration Association (AAA).
ATA Carnet 'Admission Temporaire/TemporaryAdmission'.An international customs documentfor the temporaryduty-free admission ofgoo
purposes.ATA Carnets are issued byNational chambers ofcommerce,which guarantee the paymentof d uties to local customs
Aval A bank's guarantee to pay a bill of exchange. An irrevocable,unconditional promise to pay on the due date. The use of avals is c
AWB A non-negotiable shipping documentused bythe airlines for air freight.It is a contract for carriage that includes carrier conditi ons
addition,it contains shipping instructions to airlines,a description ofthe commodityand applicable transportation charges.Itperfo
transport.
Back to Back (or
head and
counter) Credit
A documentarycredit (counter) taken out by a seller (importer) to allow purchase ofgoods required to meeta sale covered unde
first credit(head) can be offered in supportof security to the importer’s bank.As applicantfor the second credit(counter) the imp
made under it, regardless ofwhether or not they are paid under the original credit.Should be distinguished from a transfera ble c

BAF Bunker
Adjustment
Factor)
A surcharge levied by the shipping companyto cover any extra fuel costs incurred between the time a rate is quoted and when th
bunkering costs have decreased in the meantime.
Banker’s
Acceptance
A bill of exchange accepted by a bank usuallyfor the purpose offinancing a sale of goods to or by the bank’s customer.The bill
importer’s bank and be sold on the open marketat a discount.
Banker’s Cover
Note
An insurance documentindicating coverage ofa particular shipmentunder an open cover policy. To be distinguished,particularl
an insurance policyor aninsurance certificate.Also known as a ‘banker’s cover note’.
Bank Guarantee Contract between a bank as guarantor and a beneficiaryin which the bank commits itselfto pay a certain sum under certain,s pe
which the bank agrees to pay againstthe simple written demand ofthe beneficiary.
Bank to Bank
Payment
A transfer of funds (airmail or cable) between remitter and beneficiaryvia the banking system.
Barter The direct exchange of goods and/or services for other goods and/or services withoutthe use of moneyand without the involvem
with countries using currencythat is not readilyconvertible.
Basis Points One thousandths;1/100 of 1%, i.e. 100 basis points is equal to 1%.
B/B Non-containerised cargo which is grouped or consolidated for shipment,and then is later broken down,sub-divided or distribute
unitised cargo on pallets or packed in boxes;specialised breakbulk vessels tend to carry their own loading/unloading machinery
Beneficiary Documentarycreditcontext: generally,the exporter-seller;the one on whose behalfthe documentarycreditis opened by the app
one who will receive paymentunder the bond should the specified documents or contingencies be produced.
Berne Union International Union ofCredit and InvestmentInsurers.
B/G Bonded Goods.
Berth Terms Freight rates which include loading/unloading charges according to the custom of the respective ports - which unfortunately varie
designation,and mayor may not include cargo handling charges or the costs of moving cargo between the ship’s hold and the q
in advance from carriers.The ICC is currently working on establishing a standard liner term.
In New Zealand,a liner (or berth) term shipping rate indicates thatthe shipping companyorganises the stevedoring onto and ou
mostships picking up general cargo.It particularly applies to any containerised cargo butnotalways to bulkbreak (loose) c argo
shipping/forwarding agents.
Bid (buying) Rate Bid (buying) Rate
Bid / Tender
Bond
Provides an assurance ofthe intention of the party submitting a tender (i.e. the principal) to sign a contract if their tend er is accep
Bill of Exchange SA negotiable instrumentthatrepresents an unconditional demand for payment.Together with the Bill of Lading it forms the b as
with the exporter’s commercial invoice it can be used to charge the importer for the goods.
Defined by the Bill of Exchange Act as:
‘An unconditional order in writing,addressed byone person to another, signed bythe person giving it requiring the person to who
determinable future time,a sum certain in money to or to the order of a specified person,or to a bearer’.
A bill is signed by a drawer and addressed to a drawee,who becomes the acceptor by writing their name across the face of the b
the payee.
Bill of
Lading(B/L)
A documentissued when goods are entrusted to a shipping companyfor carriage.It can serve as a formal receiptfor the goods
carriage,and documentaryevidence of control over the goods.The holder or consignee ofthe bill has the right to claim deli very
at the port of destination.Bills oflading maybe negotiable (order B/L) or non-negotiation (straightB/L).Bills of lading mayalso b
shipment.See marine bill oflading,multimodal transportbill oflading,air waybill, railwayconsignmentnote and sea waybi ll.
B/L terminology:
• Ocean/Marine The classic B/L,a negotiable instrumentused 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;c
mustbe converted by subsequent“on board” notation if shipper needs an ‘on board’ or ‘shipped’ documentfor payment u nder a
• Clean A B/L which contains no notation indicating thatthe goods have been whollyor partially lost/damaged.
• Dirty/Foul/Claused A B/L with a notation to the effect that the goods have been partially/whollylostor damaged.

• StraightA non-negotiable B/L;consignee onlyneeds to identify himselfto pick up the goods.
• Order A negotiable B/L,issued ‘to the order’ of a particular party, commonlythe shipper.
• Through A B/L used when shipmentinvolves successive transport stages with differentcarriers.
• DirectA B/L for direct transportbetween loading and discharging ports.
• Multimodal/Combined Transport A B/L issued to cover transportinvolving successive stages via differenttransportmodes,e.g.
transport.
• FIATA FBL (FBL) A standard form B/L issued bya freightforwarder; considered under the UCP500 - along with other forwarde
carrier - as acceptable as a clean on board B/L issued bya carrier.
• House A B/L issued bya forwarder in its own name (house) covering grouped consignments.
• FreightPre-Paid A B/L indicating on it that the freight has been paid.
• Liner A B/L issued subjectto the terms and conditions ofa shipping line.
• Short-Form A B/L which does not contain the full terms and conditions ofthe contract of carriage;instead,it contains an abbrev
the full setof conditions.
• Stale A B/L which is presented late (for documentarycreditpurposes,a B/L mustbe presented within a certain number ofdays
• Full Set of Originals For documentarycreditor collection purposes,the buyer may require the seller to produce a full set(comm
bear the original signature ofthe ship’s master or agent.
• Waybill A non-negotiable transportdocument.
Bill of Lading
Guarantee
A letter from an importer to the shipping companyin which the importer undertakes to indemnifythe shipping companyagainstth
an original bill oflading.The importer’s letter ofundertaking requires the prior endorsementor guarantee by their bankers before
Blank
Endorsement
An endorsementin blank specifies no endorsee and a bill so endorsed becomes payable to bearer and may be negotiated by de
may convert the blank endorsementinto a special endorsementby writing above the endorser’s signature a direction to pay the b
Bolero Originallya system for transmission ofelectronic bills oflading.In the process ofbeing expanded by SWIFT into an electronic pla
Bonded
Warehouse
A warehouse authorised bycustoms authorities for storage ofgoods on which paymentof duties is deferred until the goods are r
exported, no duty has to be paid at all .See Foreign trade zone.
Bond Warrant The documentoftitle to goods being held in bond storage.
Box Rate A specific freightrate (usuallydefined by individual commodity) for shipmentofa full container,irrespective of the volume it conta
Breakbulk (BB) Non-containerised cargo which is grouped or consolidated for shipment,and then is later broken down,sub -divided or distribute
unitised cargo on pallets or packed in boxes;specialised breakbulk vessels tend to carry their own loading/unloading machine ry
Bunker
Adjustment
Factor(also,
BAF)
A surcharge levied by the shipping companyto cover any extra fuel costs incurred between the time a rate is quoted and when th
bunkering costs have decreased in the meantime.
Business Day
and Non-
Business Day
Business daymeans anydate that is not a non-business day.
Non-business daymeans anySaturday or Sunday or any bank holiday(not being a part holiday) within the meaning of‘The Ban
premises every day on which those premises are notopened for business.
Buy - Back
(compensation)
A form of countertrade under which exporters of, e.g. heavy equipment,technology,or plant facilities agree to purchase a ce rtain
production.
CABAF An adjustmentfactor incorporating the bunker and currency adjustments.
CAF This is an adjustmentofthe freight rate caused by a significantchange in the relative exchange rates in the shipping line’ s baske
date. This may be a positive (surcharge)or a negative (rebate) adjustment.
Call A demand for payment under a loan or guarantee.In the case of demand guarantees,the abusive resortto the guarantee ( i.e.in
sometimes referred to as an unfair call.
Case of Need The drawer of a bill, and any endorser,maystate the name of a party to whom the holder may resortin case of need, i.e. in case
payment. Such a party is called the referee in case of need.
Cash Against Indicated invoice amountto be paid by the buyer/importer at sighton presentation ofrelative commercial documents e.g.bill of la

Documents(CAD)
CBD Cash before delivery
Certificate of
inspection
(also,certificate
of quality)
A documentcertifying the quality, quantity and/or price of a given shipmentofgoods.The inspection certificate is often re quired
from sellers,in order to assure thatthe goods are of contract quality. Generally, the buyer designates a neutral,independen tinsp
Certificate of
origin
A certificate that is usuallyissued bya local Chamber ofCommerce.It establishes the country where the merchandise was prod
It is often required by the customs authorities ofa country as part of the entry process,for instance to grant preferential tariff trea
country.
c&f (C&F) Costand freight. Warning! This is a common butnon-standard version ofthe Incoterm ‘CFR’.
CFR Costand Freight.
Charter Party A contract under which a charterer agrees to rent/hire the use of a ship or part of a ship from the ship owner.The charterer in so
known as charter party bills oflading,subjectto the conditions of the original charter party contract. the charter party itselfis not
owner and charterer under which the ship owner hires outall or part of their ship for a given period to the charterer.
CIA Cash in Advance
CIF (also c.i.f.) Cost,Insurance and Freight. The exporter mustprocure and pay for insurance for the benefitof the importer.A documentaryc re
and the seller mustpresentan insurance documentin order to receive payment.
CIF & CI (also
CIF&C or (CIF&I)
Cost,insurance,freight,and commission (C) and/or interest(I). Warning! These are variants on the standard Incoterms 2000 ter
international standard definitions.Traders may,therefore,wish to inquire and expresslystipulate as to the precise require ments
CIP Carriage and Insurance Paid To... (named point).
CISG UN Convention on Contracts for the International Sale of Goods (Vienna 1980).
Claused Bill of
Lading
A claused,or foul bill of lading contains notations or remarks as to defects in lading the goods and/or packaging.
Cld Cleared (through customs).
Clean bill of
lading
A bill of lading indicating thatthe goods were received in apparentgood order and condition.A clean bill is one which contains n
carrier or its authorised representative.Note that a clean bill does nothave to have any positive affirmation or mention to the effe
does contain a notation of damaged or missing merchandise,the bill of lading is called ‘claused’,‘foul’ or ‘ dirty’.
Clean Bills Bills of Exchange (drafts, cheques,etc.) drawn payable overseas and which are not accompanied bycommercial documents.
CMR International road transportconvention.
Collecting Bank In a documentarycollection,the bank acting as an agent for the seller’s bank in collecting paymentor acceptance of a time draft
remitting bank).
Commercial
Invoice
A documentcontaining a record of the transaction between a seller (exporter) and a buyer (importer),containing information suc
including prices,discounts and quantities,and the delivery and payment terms.A commercial invoice is often used by governm e
assessmentofCustom duties,and musttherefore conform to the regulations ofthe importing country.
Commission
Agent
A foreign sales representative who is paid a percentage ofthe sales they generate.
Common Carrier In some jurisdictions,a legal term referring to carriers who offer transportservices to the general consumer or business public.In
employees,sub-contractors or agents ofthe manufacturer/shipper.
Compound Duty A combination ofboth a specific rate of duty and an ad valorem rate of duty. Whereas specific duties are based on factors such a
value of the goods.
Conference (also steamship conference,shipping conference) A group of steamship companies or shipping lines which have associated to o
announced prices.Conferences generallyoffer specific rebates for regular or high-volume shipments.Shipmentbyconference li
freight rates are referred to as ‘liner terms’.Shipping lines which are notmembers ofa conference for a particular route a re know
liners.
Confirmation of
Documentary
Credit
If the beneficiary, upon receiptof a documentarycreditin their favour, has any doubts as to the standing ofthe issuing ba nk or th
requesttheir local bank to confirm that credit. Additionally requests to confirm a credit can be incorporated into the documentary
bank is agreeable to add its confirmation,it adds its own separate engagement(normallyunder a uthority from issuing bank) to th
drawings under the creditwill be honoured.Thus the local bank adds to the credit its own backing in addition to that of the issuin
Confirming Bank In documentarycredit transactions,the bank which adds its own irrevocable bank undertaking for paymentin addition to that give
located in the exporter’s country.

Consignee In international export transactions:the intended receiver of a cargo shipment.The named person or legal entity having the right
and generallyrecognised as the legal owner for customs purposes.In international representation or distributorship relations (viz
merchandise,who receives paymentin the form of commission or a discountas and when sales are made butdoes nothave to p
Consignment This is a method of financing trade.When goods are shipped on a consignmentbasis,related shipping documents are despatch
which is instructed to deliver them, free of payment, againsta form of receiptunder-taking paymentwhen the merchandise is so
Payment is usuallymade when the goods are sold,or within a specified time thereafter,and title to the goods remains with the e
Consular
Declaration
A description ofgoods to be shipped,made in official form to a consulate.
Consular Invoice An invoice covering a shipmentofgoods certified by the consul of the country for which the merchandise is destined.The invoice
value, quantity and nature of the merchandise imported to determine the importduty. In addition,the export price may be exa min
Contingency
Insurance
(ordifference in
conditions)
Insurance coverage taken out by one party to an international transaction to complementand fill in any gaps in the coverage take
exporter on FOB Incoterms does nothave an obligation to insure the goods during the main international transport,butmay wish
the goods are lostor damaged there is no loss to the buyer (such a loss mightlead to disagreements or disruption ofcommerc ia
at fault).
Contract of
Carriage
This is an agreementbetween the shipper and the carrier (or their agent). Incoterms are not embedded in the contract.
Contract of Sale This is an agreementbetween the seller and the buyer. Incoterms are embedded in the contract.
Correspondent
Bank
A bank which performs certain operations on behalfofanother bank, usuallyin a different country. Correspondentbanks hold de
reciprocal basis.It is through networks of correspondentbanks thattrade banks are able to service and supportinternationa l bu
Counter-
Purchase
Counter purchase is the agreementofan exporter to purchase a quantity of unrelated goods or services from a country in excha
Countertrade All foreign trade transactions resulting from exporters’ commitments to take products from the importers or from their respective c
Countertrade is typical of trade with EastEuropean and less developed countries,which often suffer from a lack of foreign excha
barter, buy-back or compensation,counterpurchase,offsetrequirements,and swap.
Courtage This is the French term for brokerage; brokerage fee.
Cover Term given to describe the Bank’s procedure to protect itselffrom the risk of adverse fluctuations in foreign exchange deali ngs.
Cover Note An insurance documentindicating coverage ofa particular shipmentunder an open cover policy. To be distinguished,particularl
an insurance policyor an insurance certificate.Also known as a ‘banker’s cover note’.
CPT Carriage Paid To... (named point).
Credit Risk
Insurance
An exporter’s insurance againstnon-paymentby the importer.
Cross Rate In calculating a spotor future price between two currencies,reference to their respective quotations in a third currency de termine
CSC Container service charge.
Currency
Adjustment
Factor(CAF)
This is an adjustmentofthe freight rate caused by a significantchange in the relative exchange rates in the shipping line’ s baske
date. This may be a positive (surcharge) or a negative (rebate) adjustment.
Currency Future A contract for the future delivery of a commodity,currency or security on a specific date. In contrastto forward contracts, futures
periods oftime and are primarilytraded on an Exchange. Forward transactions enable importers and exporters who will have to m
future time,to protect themselves againstthe risk of fluctuations in the spotrate.
Currency Option The contractually-agreed rightto buy (call option) or to sell (putoption) a specific amountofa foreign currency at a predetermine
future date (American option).
Customer
Foreign
Currency
Account CFCA)
These accounts record overseas currencyfunds held by the Bank on behalfof a customer.
Customs Broker Licensed agentor broker whose funct goods through customs for importers.
Customs Duty Tax levied by the governmenton goods crossing the customs border,usuallya tax imposed on imports.Duties,or tariffs,are eith
some other factors such as weightor quantity (specific duties),or a combination ofvalue and other factors (compound duties).
Customs Union An association between two or more countries wherebythey eliminate tariffs and other importrestrictions on each other’s goo ds
countries.The European Communityis the bestknown example of a customs union.
CWO Cash with order.

CWT Hundredweight;unitof measurement.
DAF Delivered at Frontier.
Date Draft A draft which matures a specified number ofdays after issue.
D/D Delivered
DDC(or DDC) Sometimes said to be ‘delivered destination charges’.Referring to various miscellaneous charges in the portof destination;alter
DDP Delivered Duty Paid.
DDU Delivered Duty Unpaid.
Deadfreight Freight charge to be paid even when shipmentwas notmade,owing to failure by shipper or charterer to actually ship goods in th
Deadweight Total carrying capacity of a vessel.
Dealing The buying and selling offoreign currencies in the foreign exchange markets ofthe world.
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 mayw is
such cases as transportofhazardous materials,in which case carriage on deck may be mandatory).
Deferred air
freight
Air freight offered at cheaper rates for non-urgentshipments.
Delivery Delivery under a forward exchange contract(full or partial)is when the actual exchange of foreign currency for New Zealand dolla
Delivery order An order, commonlyaddressed to a terminal superintendentor warehouse manager,directing the release ofspecified cargo to a
issued byseller,shipper or consignee,while in other contexts the order is issued bythe shipping line or carrier.Commonly, a del
which is itselfcovered by a single bill of lading;i.e. the issue ofseveral delivery orders “splits up” the cargo covered by the bill of
does it evidence receiptof the goods,nor does it contain the provisions ofthe transportcontract under which the goods were sh
Demand draft A bill of exchange payable at sightor on demand.
Demand
guarantee
A guarantee usuallyissued by a bank,under which the beneficiary is only required to make a demand in order to receive payme
which require the beneficiaryto provide proof of the principal’s default,a demand guarantee onlyrequires thatthe beneficiary ma
guarantee is relatively risky in terms of exposure to an unjustified demand on the part of the beneficiary.Some protection a gains
guarantee subjectto the ICC Uniform Rules for Demand Guarantees (URDG458).
Demurrage The extra charges paid to a ship owner or carrier when a specified period for loading/unloading is exceeded.The demurrage ma
shipper.
Air cargo: The detention of containers by shippers or receivers of freightbeyond a specified free time.The airlines tender carrier
unloading ofthe unit. In the event the container is not returned to the carrier within a specific time (usually36 to 48 hours) a ch ar
thereof beyond the allowed time.
Depreciation A decline in the value of a currency in terms of foreign currencies.
DEQ Delivered Ex Quay.
DES Delivered Ex Ship.
Destuffing Unloading goods from a container.
Devaluation A downward change in the official parity of an exchange rate from that which it was previously set.
Devanning Unloading goods from a container.
Dimensional
weight
Density, i.e. weightper cubic foot. The Dimensional WeightRule was developed as a practice application to low density shipm en
cubic dimensional weightrather than upon actual weight.
Discount The purchase by a bank or finance house of a bill of exchange at face value less interest.It is used as a financing tool,sh ould th
before the bill matures.
The person for whom the bill is discounted remains liable until the bill is paid although the discounter (bank) looks to the accepto
is sold prior to maturity it is also said to be sold at a discount.
Discount Interest
Rate
Discountrefers to the amountof interestfor the period of finance deducted from the face value of a bill of exchange or pro misso
per cent per annum related to the face value of the bill of exchange or promissorynote.
Discrepancy Documentarycreditcontext: a discrepancyarises when documents presented under a documentarycreditdo not conform to the
omission related to the documents constitutes the discrepancy.The bank refuses to pay againstthe documents unless the appli
objections to paymentunder the credit.
Dispatch Money
(also,despatch)
An incentive paymentoffered by a ship owner to a charterer in exchange for money (also,completing loading or unloading in l es
contract (this time is often calculated as a number of‘lay days’).

Distributor An independentperson or legal entity which sells goods locallyon behalfof a foreign principal.Distributors can be disting uished
own name,then re-sell them atprices which they have some libertyto set. Distributorship is frequentlybased on a contract which
D/O An order, commonlyaddressed to a terminal superintendentor warehouse manager,directing the release of specified cargo to a
issued byseller,shipper or consignee,while in other contexts the order is issued bythe shipping line or carrier.Commonly, a del
which is itselfcovered by a single bill oflading;i.e. the issue ofseveral delivery orders “splits up” the cargo covered b y the bill of
does it evidence receiptof the goods,nor does it contain the provisions ofthe transportcontract under which the goods were shi
Dock receipt A documentcertifying receiptof goods by the international carrier atthe port of departure.
Documentary
collection
A method of paymentunder which the shipping documents relating to a particular cargo are released to the importer on payment
(documents againstacceptance:‘D/A’) of a documentarydraft drawn on them by the exporter. Under collections,the exporter pr
(the remitting bank) in their country, which then forwards the documents and draftto the collecting bank in the buyer’s coun try. T
of the goods,are only released bythe collecting bank when the buyer either pays or accepts the draft.
Documentary
Credit (D/C)
A documentarycredit is issued bythe Importer’s bank stating its commitmentto honour the draft (or otherwise pay) on presen tat
period of time.The minimum documents the importer requires in the creditusuallyinclude a commercial invoice and clean bill of
consular invoice,inspection certificate,and other documents.The mostwidelyused type of credit in international trade is the irre
The following are the main types of documentarycredit:
• Irrevocable: A credit which cannotbe retracted or revoked once the beneficiaryhas been notified.(There is a presumption und
• Advised: A credit opening,of which a local bank informs the beneficiary.
• Confirmed: A credit which has received an additional guarantee of paymentby a local or highlyreputed bank.
• Sight: The beneficiaryis entitled to presenta sightdraft or sightbill of exchange, which is a call for immediate paymentupon ac
• Revolving: A credit which can be drawn againstrepeatedlyby the beneficiary; can take a variety of different forms,depending o
possible drafts,maximum quantityper 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
• Red clause: This allows pre-shipmentadvances to be made to the exporter at the risk and expense of the applicant.
• Deferred: A D/C under which payment by the importer is to take place a specified time after their receipt of the shipping docum
• Transferable: A D/C which allows the beneficiaryto make part or all of their creditpayable to another supplier;used in middlem
D/Cs because the transferable creditrequires the knowledge and authorisation ofthe importer (applicant/principal).
• Back to back: A system utilised bymiddlemen/intermediaries to finance a single transaction through the use oftwo D/C’s opene
middleman/broker to use the proceeds from the firstcredit to pay off their supplier under the second credit.The importer ma ybe
• Import:A D/C used to finance importation ofgoods.
• Standby: The primary function of the standby creditis to serve as a securityor a guarantee rather than as a payment mechanis
in the event that the contractual partner fails to perform or fulfil certain obligations.
Document of
Title
An instrumentwhich enables the holder to deal with the property described in itas if they were the owner, e.g. bill of ladi ng.
Documents
Against
Acceptance(D/A)
The documents transferring title to goods are delivered to the buyer (drawee)onlyupon the buyer’s acceptance of the attached d
Documents
Against Payment
(D/P)
In the case of a sightdraft, the documents transferring title to goods are released to the buyer/importer only againstcash payme
Door To Door A transportservice covering carriage from the seller’s premises to the buyer’s premises.Note that this term refers to a fre ightcha
and thus is distinctfrom the issue ofthe Incoterm chosen in the contract of sale (an agreementbetween seller and buyer).D epe
possible to quote prices on either EXW, FCA, CPT, CIP, DDU or DDP Incoterms in conjunction with so-called ‘house to house’ tr
of loading/unloading charges in the “house to house” rate,especiallyin comparison with the respo nsibilityunder the respective In
sure that the transportservice corresponds to the contractual obligations under Incoterms.It is sometimes said that‘door to door
in the freightcharge, but this is not a standard rule and traders should inquire in each particular case.Door to door is so metimes
by some thatthere is a distinction between the two, namelythat ‘house to house’ onlyrefers to rental rates for containers from co
Draft An unconditional order in writing,signed bya person (drawer) such as a buyer, and addressed to another person (drawee),typ ic
moneyto yet another person (payee), often a seller.A draft, also called a bill of exchange, may be payable to a named perso n o
mostcommon versions ofa draft are:
• sightdraft, which is payable on presentation or demand
• time (or usance) draft,which is payable at either:
- a future fixed (specific) date
- a future determinable date (e.g.30, 60, 90 days, etc.).
Drawee The individual or firm on whom a draft is drawn. The drawee is instructed by the drawer to pay a specified sum ofmoneyto, or to
collection,the drawee is generallythe buyer.
D/S Days after sight(payment term often used in conjunction with bank drafts and documentarycredits).
Due date The date on which a bill of exchange or other instrumentbecomes due and payable.
Dumping The practice of selling a productin a foreign marketat an unfairly low price (a price which is lower than the cost in the home mar

to gain a competitive advantage over other suppliers.Dumping is considered an unfair trade practice under the GATT and World
governments through the imposition ofanti-dumping duties,in some cases calculated to equal the difference between the produc
Electronic Data
Interchange
The computer-to-computer transmission ofbusiness messages (such as purchase orders,invoices,booking instructions,etc.) ac
Endorsement A writing on the back of an instrument.It is a means oftransference ofliability/title of exchange, e.g. bill of lading etc., and the wr
to be operative.
An endorsementmaybe:
• In Blank: where the person to whom the instrumentis payable merelysigns (endorses) and delivers the instrumentto another.
• Special: where the name ofthe transferee is specified.
• Restrictive: where further transfer of the bill is prohibited or which expresses a mere authorityto deal with the bill as directed an
• Conditional: where the endorsementcontains certain conditions.
• Without Recourse: an endorsementhaving the effect of negotiating a bill,but negating the liability of the endorser.
Est. Estimated.
ETA Estimated time ofarrival.
ETD Estimated time ofdeparture.
ETS Estimated time ofsailing.
EU European Union.
Eurocurrency A currency being used or traded outside the country which issued the currency.
European
Currency Unit
(ECU)
The ECU is the European Union’s accounting unitand is a popular private financial instrument.The ECU gives way to the EURO
Exception
Ratings
Rates setat a certain percentage above the general commodityrates because they apply to commodities thatrequire special ha
Exchange
control (EC)
Governmentregulations covering the inflow and outflow of foreign exchange.
Exchange Rate/
Foreign
Exchange Rate
The rate which would apply when changing the moneyof one country for that of another country.
Ex Factory Warning!This is a non-standard trade term,a variation of the preferred formulation ‘EXW’.
Export Broker An individual or firm that brings together buyers and sellers for a fee withouttaking part in actual sales transactions.
Export Credit
Insurance
Special insurance coverage ofexporters to protect againstcommercial and political risks for making an international sale.Export
as well as from governmentagencies.Examples ofwell known public export creditagencies include EXGO, HIH Winterheur and
Export License A governmentdocumentgranting the ‘Licensee’ the rightto export a specified quantity of a commodityto a specified country. Th
exports and in other countries only under special circumstances.
E&OE Errors and Omissions Excepted:when appended to a signature on a shipping document,indicates a disclaimer ofresponsibility
Ex Works (also
EXW)
A set of 13 internationally-standard trade terms (also known as delivery2000 terms).Incoterms allows the parties to designate a
divided between the seller and the buyer. Incoterms also allocate responsibilityfor customs clearance/duties between the parties
terms,they do not apply to a given transaction unless the parties specificallyincorporate them as by referring to Incoterms,e.g.$
cases,Incoterms applyregardless ofexplicitmention in the contract, if there is a custom oftrade or prior course ofdeali ng which
a presumption in favour of applicabilityof Incoterms).Incoterms are elements ofthe contract of sale,which may be derived from
only apply to the seller and buyer, one of whom assumes the role of shipper and enter into a contract of carriage.The contract o
allocation oftransportcosts and risks,butthis depends on the shipper giving precise directions to the carrier to ship acc ording to
the 13 currently valid Incoterms,their standard abbreviations.
Factoring In the export trade: the financial service consisting ofthe granting of a cash advance againstaccounts receivable from foreign cu
managementservices offered by specialised firms,called factors,to sellers/exporters,particularlythose who deal with a stream
exporter transfers title to its foreign accounts receivable to a factoring house in exchange for cash at a discountfrom the face val
credit risk assessment,collection ofoverdue foreign accounts,and administration ofaccounting ledgers.
FAK A tariff term used for air freight, allowing for any type of commodityto be consolidated.A forwarder with a bulky lightpro duct can
maximise the space and weightavailable.
FAS Free Alongside Ship.
FAWG (Free at
Wharf Gate)
An expression thatis sometimes used in trans-Tasman trade because the trans-Tasman service sea freightrates include wharfa
insurance cover should be negotiated separatelyand clearly specified in contracts and invoices.

Loading
Port/Discharge
Port
FB Freight Bill.
FCA Free Carrier.
FCL Full container load
FCL/FCL A way of quoting container freight rates in which the shipper loads the container and the consignee unloads the container.
FCL/LCL A way of quoting container freight rates in which the shipper loads the container and the carrier unloads the container.
F&D Freight and demurrage.
Fixed Term
Contract
A Forward Exchange contract due on a specific date.These bestsuita customer who wants to be certain of the date of deliver y.
contract rate may be subjectto adjustment.
FO Free out.
FOB Free on Board.
FOB Airport Free on board airport;a trade or delivery term used when delivery is effected at an airport. Warning! No longer a valid Incoterm.
was felt that the term was the source of much potential disagreement,especiallyas regards allocation ofcustoms clearance and
FCA.
F.O.C. Free of charge.
F.O.D. Free of Damage.
FOR Free on rail.Warning! No longer a valid Incoterm, but still used by some traders.The problem is thatthere is on occasion confus
suitable term from Incoterms 2000 is FCA.
Force Majeure A clause which protects the parties to a contract in the event that a part of the contract cannot be performed due to causes which
avoided by exercise of due care. These causes maybe earthquakes,floods,storms or war.
Foreign
Exchange
The system or process ofconverting one national currency into another and of transferring moneyfrom one country to another.
Foreign Sales
Agent
An individual or firm that serves as the foreign representative of a domestic
Foreign Trade
Zone (also FTZ)
Special commercial and industrial areas in or near ports of entry where foreign and domestic merchandise maybe broughtin wit
Merchandise,including raw materials,components,and finished goods,maybe stored,sold,exhibited, repacked,assembled,s
reexport or entry into the national customs authority.Duties are imposed on the merchandise (or items manufactured from the m
an area of the country subjectto the Customs Authority. Foreign trade zones are also called free trade zones, free zones, free po
Forfaiting The purchase by the forfaiter of an exporter’s accounts receivable which are based on negotiable instruments such as bills ofexc
forfaiting involves a series ofindependent,medium to longer term obligations ofhigher value.Since the forfaiter purchases the b
and political risk.
Forward
Contract -Fixed
Term
These contracts specifya ‘fixed’ future date at which it is anticipated delivery of the foreign currency will be effected. If delivery is
contract rate applies.However,delivery may be made at any time during the term of the contract but if prior to the stated d ue da
accordance with forward margins then applicable.
Forward
Contract -
Optional Term
Where an importer is uncertain of delivery date, they are faced with the possibilityof an adjustmentofthe contract rate ag ainstth
some considerable time before expiry date.
To remove this uncertainty, they may take out a contract with a firm rate quoted for delivery at any time within a stated period,e.
Delivery within the optional period would be effected at the contract rate, while earlier deliveries would necessitate an adjustmen
term contracts.
Forward Deal An agreementto buy or sell foreign currency againsteither New Zealand Dollars or another foreign currencyfor value on a date
Forward
Discount
The term applied to a foreign currency which is less expensive to trade forward than for spotsettlement.A forward discount favo
to the spotrate e.g. importer.
Forward
Exchange (FEC)
An arrangemententered into between customer/bank wherein customer agrees to buy/sell foreign currency from/to bank for deliv
Forward Margin The premium or discounton forward rates againstspotrates.
Forward
Premium
The term applied to a foreign currency which is more expensive to trade forward than for spotsettlement.A forward premium fav
subtracted from the spotrate e.g. exporter.

Forward Rate The price of a foreign currency which is boughtor sold for delivery and paymentat a fixed future time,usually30, 60 or 90 days.
will have to make,or will receive, payment in a foreign currency at a future time,to protect themselves againstthe risk of fluctuat
FOT Free on truck. Warning! No longer a valid Incoterm, but still used by some traders.The problem is thatthere is on occasion confu
shipments.The suitable term from Incoterms 2000 is FCA.
Franchising A system based on the licensing ofthe right to duplicate a successful business formator industrial process.The franchiser (licen
business processes,trademarks,trade secrets and ‘know-how’ in a contractually-specified manner for the marketing ofgoods or
the franchisee’s business through the provision ofadvertising,accounting,training and related services and in many instanc es a
operation of the franchise.The franchisee,in return, pays certain moneys to the franchiser (in terms offees and percentage com
dealing,inter alia,with quality of performance.The two principal kinds offranchise contracts are master franchise agreements,u
sub-franchise within a given territory, and direct or unit franchise agreements,which are directcontracts between the franchise r
Franco The French term,in the context of European shipping,for ‘Free delivered’:the shipper pays all charges to a particular point. Warn
Free In and Out
(FIO)
A transportor freight term which indicates thatloading/discharging costs are notincluded in the freight; in the charter party conte
owner’s responsibility- the charterer is responsible for loading/discharging.Also possible to use either Free in (FI) or Free out (F
and/or trimmed (T), e.g. FIOS or FIOST.
Free Into Store
(FIS)
This is a price basis rather than a shipping term or an Incoterm. It is commonlyused in sales to Australia.
The correct Incoterms are DDU or DDP, i.e. Delivered Duty Unpaid and Delivered Duty Paid .
Free Trade Area A group of countries which agree to eliminate tariffs and other importrestrictions on each other’s goods,while each partici pating
imports from countries thatare not members.Well known examples are the North American Free Trade Association (NAFTA), th
Freight All Kinds
(FAK)
A tariff term used for air freight, allowing for any type of commodityto be consolidated.A forwarder with a bulky lightpro duct can
maximise the space and weightavailable.
Freight
Forwarder
Assembles and consolidates small shipments into a single lotand assumes,in some cases,full responsibilityfor transportatio n o
FTZ A group of countries which agree to eliminate tariffs and other importrestrictions on each other’s goods,while each participating
imports from countries thatare not members.Well known examples are the North American Free Trade Association (NAFTA), th
Funding The placing of funds in overseas accounts in order to meetthe bank’s dailyrequirements.
FX The system or process ofconverting one national currency into another and of transferring moneyfrom one country to another.
General
Commodity Rate
An air freightrate applicable on all commodities exceptthose for which specific rates have been filed. Such rates are based on w
Gross Weight Entire weightof a shipment,including containers and packaging material.
Hague Rules
Hague Visby Rules
HAWB
Hedge Contract(FEH)

Holder
Holder in due Course
House air waybill (also ‘house AWB’ or ‘HAWB’)
House bill of lading (house B/L)
House to House
IATA International Air TransportAssociation,air transportindustryassociat
form.
IBCC International Bureau of Chambers ofCommerce;an ICC-administere
municipal chambers ofcommerce.Administrator ofATA Carnet syste
industrial/commercial samples.
ICC International Chamber ofCommerce,the world business organisation
approximately7000 members in more than 140 countries.
ICC Arbitration Refers either to ICC Rules for Conciliation and Arbitration or the proce
the ICC Court of International Arbitration.
ICPO Irrevocable Corporate Purchase Order;an offer to buyer stated goods
for example of misuse.

In Bond As applied to air freight coming into a country the term ‘in bond’ desig
clearance of cargo is postponed until the cargo reaches an inland cus
cargo to clearance procedures atcongested gatewaycities.
Incoterms 2000 A set of 13 internationally-standard trade terms (also known as delive
parties to designate a pointat which the costs and risks oftransporta
and the buyer. Incoterms also allocate responsibilityfor customs clea
Incoterms are not law but are contractual standard terms,they do not
parties specificallyincorporate them as by referring to Incoterms,e.g.
(in exceptional cases,Incoterms applyregardless ofexplicit mention i
trade or prior course of dealing which indicates reliance on Incoterms
presumption in favour of applicabilityof Incoterms).Incoterms are ele
be derived from the seller’s tender or pro forma invoice. Thus,Incoterm
one of whom assumes the role of shipper and enter into a contract of
should agree with the Incoterm in terms of allocation oftransportcosts
shipper giving precise directions to the carrier to ship according to the
definition of the 13 currently valid Incoterms,their standard abbreviati
Indemnity A form of contract when a party (who thereby becomes primarilyliable
loss they may suffer as a resultof a transaction with a third party.
Inspection Certificate A certificate generallyissued bya respected independentagency.It ve
specifications ofthe good shipped is in conformitywith the sales cont
Institute Clauses Standard international transportinsurance clauses,published bythe In
Institute Cargo Clauses are 3 sets of clauses providing differentlevels
correspond to the general notion which is commonlyreferred to in the
clauses ‘B’ and ‘C’ indicate a lower level of coverage and a greater nu
Instrument A formal legal documentin writing,e.g. a bill of exchange.
Inv. Invoice.
ISO 9000 International production qualitystandards established byISO (Interna
Certification that an exporter meets ISO 9000 manufacturing standard
requirementfor competing in certain markets or for certain tenders.
Issuing (or opening) Bank The buyer’s bank which establishes a documentarycreditat the reque
beneficiary(seller/exporter).It is also called the buyer’s bank or openi
Laydays/Laytime The time allowed by the ship owne
load or discharge the cargo.May b
per day. Laydays may be set in ru
days (excludes Sundays and holid
working days (excludes in addition
bad weather). It may be contractua
shipper loads/unloads more quick
paymentof an incentive called dis
time is excessive,however, the ch
penalty known as demurrage.
LC Letter of Credit
LCL Less than container load.Refers to
packed together with other consig
LCL/FCL A way of quoting container freight
the container at the outset(LCL) b
carried out by the receiver or cons
who wish to consolidate small pur
foreign marketinto container shipm
LCL/LCL A way of quoting container freight
the container on departure as well
Ldg. Loading.
Letter of Credit A documentarycredit is issued by
commitmentto honour the draft (o
specific documents bythe exporte
minimum documents the importer

commercial invoice and clean bill o
certificate of origin,consular invoic
documents.The mostwidelyused
irrevocable credit.
The following are the main types o
• Irrevocable: A credit which cann
beneficiaryhas been notified. (The
that a credit is irrevocable.
• Advised: A credit opening,ofwh
• Confirmed: A credit which has re
paymentby a local or highly repute
• Sight: The beneficiaryis entitled
exchange, which is a call for imme
shipping documents.
• Revolving: A creditwhich can be
beneficiary; can take a variety of d
credit is limited in terms oftime,nu
quantity per draft, or maximum tot
• Cumulative revolving L/C: Revo
can be carried forward and becom
• Red clause: This allows pre-shi
exporter at the risk and expense o
• Deferred: A D/C under which pa
specified time after their receiptof
• Transferable: A D/C which allow
their creditpayable to another sup
contexts; distinguishable from bac
credit requires the knowledge and
(applicant/principal).
• Back to back: A system utilised
single transaction through the use
(e.g.‘back to back’) in order to perm
proceeds from the first creditto pa
credit. The importer maybe unawa
situation.
• Import: A D/C used to finance im
• Standby: The primary function o
security or a guarantee rather than
agreement,the beneficiaryclaims
partner fails to perform or fulfil cert
Letter of Indemnity A letter from an importer to the shi
undertakes to indemnifythe shipp
of delivering goods withoutproduc
importer’s letter ofundertaking req
by their bankers before itis accept
Liability In banking,a liabilityis a commitm
be director contingent.
Direct liabilityis that which sooner
trade finance loan,surrendered bi
establishment.
Contingentliabilityis one which m
documentarycreditestablished wh
Licensing A contractual arrangementin whic
service marks,copyrights,or know
available to a licensee for compen
the parties.Such compensation m
“running’ royalty (based on volume
Licensing enables a firm to enter a
risks than setting up a foreign man
parties to overcome tariff and non-
L.I.F.O. In international trade:liner in free o
includes the costof loading in the
unloading costs in the portof dest

out.
Lighters Barges used for unloading sea ves
non-existentor unavailable.
Liner Shipping Services provided by a steamship
cargo vessels operate according t
freight rates.
Liner Terms/Berth Terms Freight rates which include loadin
custom ofthe respective ports - wh
terms” is,thus,not yet a standard
cargo handling charges or the cos
hold and the quay; traders are the
in advance from carriers.The ICC
standard liner term.
In New Zealand,a liner (or berth) t
shipping companyorganises the s
is the standard type of freight rate
It particularlyapplies to any contai
bulkbreak (loose) cargo and there
the shipping/forwarding agents.
Lkg. & Bkg. Leakage and Breakage.
Lodgement Instruction The written instructions from a cus
authority to act in respectof collec
Use WestpacTrust’s LodgementIn
03551WT).
LOI A letter from an importer to the shi
undertakes to indemnifythe shipp
of delivering goods withoutproduc
importer’s letter ofundertaking req
by their bankers before itis accept
Long(overbought)Position Excess of purchases over sales o
assets.
LTL Less than truck load.
Margin or Forward Margin The premium or discount for the term and currency involved in a forward
Margin/Spread The differences between the buying and selling rates ofa foreign exchan
and lending rates in deposits.The expression is also used with respectt
between costof borrowing and return from lending.
Marine Bill of Lading(also
ocean bill of lading)
The classic documentofthe traditional export trade, it plays three potent
• As a receiptfor the cargo and evidence that the goods have been rece
• Evidence of the terms ofthe contract of carriage between the shipper a
• An instrumentenabling transfer ofcontrol over delivery of the goods (n
bill to trade the goods in transitby simple endorsementand physical tran
Marine Insurance Generic term for insurance covering international transportofexport tran
transportis not a predominantleg in the transportchain.Marine insuran
specific policyor certificate (exporters should payattention to which of th
credit), or by open cover under which the insurer covers an indefinite nu
declares each shipmentto the insurer as they are made.
Policy terms:
• Average - Loss or damage.
• General average - Loss occurring when extraordinarymeasures are ta
• Particular average - Partial loss or damage;loss to an individual cargo
• With average (WA) or With Particular Average (WPA) - Coverage of
at least3% of the cargo’s insured value.

• Free of Particular Average (FPA) - coverage does notpartial loss,a v
• Free of Particular Average American Conditions (FPAAC) - Covera
sinking,collision,stranding or fire.
• Free of Particular Average English Conditions (FPAEC) - Coverage
to a vessel’s sinking,collision,stranding or file.
Master Document/Form Central documentin export administrative systems under which all nece
master documentor computer file,which is then used to generate all shi
Mate’s Receipt A documentissued bythe carrier to the shipper,indicating receiptofthe
B/L, a mate’s receiptcan be either clean or claused/dirty/foul,depending
received in apparentgood condition.The mate’s receiptcan later be exc
MO Money Order
Multimodal Transport Bill of
Lading
Bill of lading used for carriage whenever there are at leasttwo different fo
and by sea.
Multimodal Transport
Operator(MTO)
A carrier who concludes multimodal transportcontracts,i.e.contracts inv
of carriage and for which the MTO accepts liabilityas a carrier.
M/V Motor Vessel.
NCND Warning! This often contains a false reference to non-existentICC stand
NCV No commercial value.
NE (also ne) Not Exceeding.
Neg Negotiate a bill.For the Bank’s purposes,this is synonymous to the ‘disco
Negotiable Instrument A written documentthatcan be used to transfer the rights embodied in itb
made outto bearer) or by endorsementand delivery(in the case of instru
instruments,such as the bill of exchange and the cheque,are negotiable
excluded, while the bill of lading is negotiable onlyif made negotiable byth
Nominated Bank The bank that is stipulated in a documentarycredit as authorised to pay o
accept drafts.A nominated Bank is normallybound to pay under the credi
Note:
If the Bank has added its confirmation to the creditit becomes a confirmin
Non- Circumvention Non-
Disclosure Agreement (also
NCND)
A type of contract frequently requested by international brokers or middle
go around the broker to deal directly with suppliers.
Warning! These agreements are sometimes erroneouslysaid to be iss ue
do not exist: there is no connection between the ICC and these documen
possibilityof issuing a model international brokerage agreement,itcertain
circumvention non- disclosure’ in its title.
Non-Vessel- Operating
Common Carrier (also
NVOCC)
A companyproviding point-to-pointinternational transportofgoods althou
transportvehicles or equipment.An NVOCC commonlycontracts with a s
premises to the importer’s premises,and issues their own door-to- door tr
sub-contractthe differentstages ofthe transportchain to various road hau
Nostro Account A bank accountheld by a bank with its foreign correspondentbank,in the
Notary Public A public officer whose chiefduties are certifying deeds and documents,no
Noting A minute or memorandum made by a Notary Public on a bill of exchange
Exchange Act instructs that noting to be done within 24 hours ofdishonou
It consists oftheir initials, their charges and the date. In the case of bills o
Australasia itis preparatory to a formal protest.
The Bank can ‘note’ or ‘protest’ a bill of exchange if a Notary Public is not
NVOCC A companyproviding point-to-pointinternational transportofgoods althou
transportvehicles or equipment.An NVOCC commonlycontracts with a s
premises to the importer’s premises,and issues their own door-to- door tr
sub-contractthe differentstages ofthe transportchain to various road hau
Ocean Bill of Lading The classic documentofthe traditional export trade, it plays three potential
• As a receiptfor the cargo and evidence that the goods have been receive

• Evidence of the terms ofthe contract of carriage between the shipper and
• An instrumentenabling transfer ofcontrol over delivery of the goods (neg
trade the goods in transitby simple endorsementand physical transfer ofth
Offered (selling) Rate Exchange rate at which dealers are prepared to sell foreign exchanges in th
therefore able to buy foreignexchange from those dealers.
Offset A type of countertrade transaction.In an offset contract, which may be requ
condition for approval of major sales agreements,the exporter makes an a
services from the importer’s country.In a ‘direct offset’ transaction,an expo
manufacturing facilities in the importing country or to use a specified perce
from the importer’s country.In an indirect offset, an exporter may be oblige
country withoutany link to the product sold.
O/N Order Notify.
O/o Order of.
Open Account This is a method of settling paymentfor trade transactions.The supplier sh
receiving and checking the related shipping documents,credits the supplie
amount.
The accountis then settled periodically,say monthly,by the buyer sending
an airmail or telegraphic remittance in favour of the exporter.
Open Policy (OP) A type of insurance policyintended to cover an indefinite number offuture i
remains in force until cancelled.Under the open policy, individual successi
declared to the insurer and automaticallycovered on or after the inception d
and savings for all parties concerned,especiallywhen the insured conduct
transactions.
Open Position Difference between total spot/forward purchases and spot/forward sales in
or the difference between the totals of foreign currency assets and liabilitie
Optional Term Contracts These forward exchange contracts usuallyhave an option period between 1
Order Bill of Lading A negotiable bill oflading,which is made out to, or to the order of, a particu
endorsementand deliveryof the bill.In practice,the bill is made out either t
their order.
Outright An ‘outright(forward)’ is the purchase or sale of foreign currency for deliver
days ahead.
Overdue A bill of exchange is said to be overdue when the time for its paymenthas p
when it appears to have been in circulation for an unreasonable length ofti
OR Owner’s Risk.Variations are:
• ORB - Owner’s Risk ofBreakage
• ORF - Owner’s Risk ofFire
• ORL - Owner’s Risk ofLoss (or leakage).
Packing List A highly-detailed listdescribing the weight,volume,content and packaging fo
Par The term applied when the forward price of the purchase or sale offoreign cu
Paramount Clause The clause in a bill of lading or charter party invoking coverage by the Hague
particular enactmentofthese rules in the country with jurisdiction over the co
Paying Bank (or paying
agent)
The bank that reviews the documents presented bythe exporter and arrange
the terms and conditions ofthe documentarycredit.
PD Port Dues.
Performance Bond
(guarantee)
A bond or guarantee which has been issued as securityfor one party’s perfo
perform the beneficiaryunder the bond/guarantee mayobtain payment.A pe
or conditional variety, which means thatthe beneficiarymay or may not be re
order to obtain payment.
Pick up and Delivery (PU&D) Freight quote includes service ofpicking cargo up at shipper’s premises and
Pier-to-Pier (quay to quay) Freight quote which only covers from export pier to importpier (that is, which
and from piers).
P/N An unconditional written promise to pay a specified sum ofmoneyon deman

specified person,or to bearer. Promissorynotes are negotiable instruments
an accepted bill of exchange.
POD Pay on Delivery.
Point/Pip The lastdecimal place ofan exchange rate quotation.
Post - Shipment Finance The finance required for the period of time after goods have been shipped b
PPD.(or PP) Pre - Paid.
Prepayment To secure promptdelivery, which would be importantif goods are in shortsu
importer with ample resources mayagree to pay for goods atthe time the or
When prepaying,the importer carries all the risk. They place implicitfaith in t
Pre-Shipment Finance Goods in the exporter’s hands prior to shipmentnaturallyrepresenta certain
This is called pre-shipmentfinance and varies between traders and manufac
and the terms of paymentagreed upon between the buyer and seller.
Pre - Shipment Inspection
(PSI)
An inspection of contract goods prior to shipmentto ascertain their quality, q
requiring the exporter to furnish a certificate of inspection (commonly,issued
such as SGS or Bureau Veritas), so that the importer is assured ofreceiving
Governmentagencies mayrequire inspection certificates as regards price,s
invoicing in an attempt to pay lower customs duties or evade foreign-exchan
Presentation The act of presenting a bill of exchange or documents for acceptance,paym
Pro Forma Invoice A sample invoice provided by an exporter prior to a sale or shipmentofmerc
kinds and quantities ofgoods to be sent,and importantspecifications (weigh
forma invoice not only acts as the contractual offer (which may be accepted
order), it is intended to be exactly replicated in the final commercial invoice,s
regards either the goods or the price.Importers mayneed a pro forma invoic
foreign exchange permit.In the case of a documentarycredit, the pro forma
importer of the amountfor which the documentarycredithas to be opened.
Promissory Note An unconditional written promise to pay a specified sum ofmoneyon deman
specified person,or to bearer. Promissorynotes are negotiable instruments
an accepted bill of exchange.
Protest A solemn declaration bya Notary Public stating that they have demanded ac
that it has been refused with the reasons,ifany, given by the drawee or acce
is to give satisfactoryevidence of the dishonour to the drawer or other antec
the case of a bill drawn and payable outside Australasia.
PSI An inspection ofcontract goods prior to shipmentto ascertain their quality, q
requiring the exporter to furnish a certificate of inspection (commonly,issued
such as SGS or Bureau Veritas), so that the importer is assured ofreceiving
Governmentagencies mayrequire inspection certificates as regards price,s
invoicing in an attempt to pay lower customs duties or evade foreign-exchan
PSV Post- ShipmentVerification.
Purchasing Agent An agentwho purchases goods on behalfofforeign buyers.
Qualified Acceptance An acceptance which in express terms varies the effect of the bill of exchange
• Conditional: Pays by the acceptor dependenton the fulfilmentof a conditio
• Partial: Pays part of the amountonly for which the bill is drawn.
• Local: Pays only at a particular or specified place.
• Qualified as to Time: A bill drawn for two months accepted payable in three
• Acceptance by some Drawees only: The holder may refuse to take a qual
unqualified acceptance they may treat the bill as dishonoured.
Railway Consignment Note A freight document indicating thatgoods have been received for shipmentby ra
Rebate An interestadjustmentused when retiring a bill of exchange before it is due.
Reconciliation The process ofmatching outstanding credit/debitentries appearing in statemen
banks/branches to contra entries posted to the relative Nostro account.
Recourse The right of a holder of a bill of exchange to demand paymentfrom a person ot
‘withoutrecourse’,in which case the endorser does notbecome liable to any ho

Red Clause L/C A letter of creditprovision allowing the beneficiaryto draw partial advance paym
setout in red ink, therefore the ‘red clause’ designation.Generally,the eneficia
the authorised advances,to presentdrafts along with a statementthatshipping
Similar to Advance Clause Credits;used mainlyin Australia and New Zealand i
those countries.
Reefer Box/ Container/ Ship A refrigerated container or ship.Refrigeration mayeither be:
• Mechanical,which means involving an external power supply
• By expendable refrigerant(dry ice, liquefied gases,etc.), which requires no ex
Remittance Documents
Against Acceptance
(REM D/A)
An advance facility similar to a REM D/P except that the bill of exchange allows
documents maybe released on acceptance ofthe bill.
Remittance Documents
Against Payment(REM D/P)
An advance facility which provides for negotiation or purchase ofbills ofexchan
where accompanying documents are to be released on paymentofthe bill over
Remittance Under Letter of
Credit Liability(REM L/C)
A bank facility which records the liabilityfor negotiation or purchase ofbills ofe
Remitting Bank In a documentarycollection,the bank forwarding the exporter’s documents and
buyer’s bank (collecting bank).
Restricted Articles(air
transport)
The following articles are restrictedfor air transport:
• explosives
• flammable and non-flammable compressed gas
• flammable liquids
• flammable solids
• oxidising materials
• poisons and irritating materials
• radio-active materials
• corrosive liquids and solids
• magnetised materials
• etiological agents
• polymerisable materials.
Retention of Title (reservation
of title)Clause
A contractual clause wherebya seller declares their intention to retain title or ow
by the buyer is complete.
Revaluation Change in the official parity of an exchange rate from that which it was previous
Revocable Documentary Credit As the name implies,the fundamental difference between this type of instrume
modified or cancelled by the issuing bank (possiblyon requestfrom importer/ap
Revolving Credit Is one in which,after notice of drawing againstitis received by the issuing ban
back or ‘revolves’ to its original amount,providing the credithas not expired in t
Roll-on/Roll-off (RoRo) A combination ofroad and sea transport,where loaded road vehicles are driven
at the port of destination.Major benefits of RoRo are reduced handling ofthe a
unit loads and scheduled services.
Roll-Over The extension of a maturing foreign exchange transaction or the extension of a
ROT A contractual clause wherebya seller declares their intention to retain title or ow
by the buyer is complete.
S&C A carrier’s notation disclaiming responsibilityfor the quantity of the cargo’s contents;the q
statement.If there is a dispute because less than contractquantity is delivered,the carrie
receiver has to claim directly againstthe shipper or insurer.
S&T Shipper’s load and tally.
SBL Under a term importdocumentarycredit the bank releases the documents on receiptfrom
pay the bank until the maturity of the draft under the relative credit. This direct liabilityis ca
hand over the bill of lading we surrender title to the goods and our power of sale over the
SD Non-delivery of cargo at the intended port. When reported, this results in ship’s agentsen
mis- delivered in another port.
Sea Waybill A transportdocumentfor maritime shipment,which serves as evidence of the contract of c
a documentoftitle. To take delivery of the goods,presentation ofthe sea waybill is not req
identify himself,which can speed up processing atthe port of destination.

Shading A requestto narrow,or close up, the spread or margin between foreign currencybuying a
Shipper Export trade: The party (as between exporter and importer) who enters into a contract of c
The party receiving the goods (the importer or buyer) may be called the receiver or the co
either the exporter or importer (or a middleman) can be the shipper.
Shipper’s Letter of
Instruction
A form used by a shipper to authorise an airline to issue an air waybill on the shippers be
form which authorises the airline to sign the air waybill in the name of the shipper.
Shipper’s Load and Count
(S&C)
A carrier’s notation disclaiming responsibilityfor the quantity of the cargo’s contents;the q
statement.If there is a dispute because less than contractquantity is delivered,the carrie
receiver has to claim directly againstthe shipper or insurer.
Shipper’s Receipt This is an alternative to a bill of lading used in consolidation ofcontainer shipments.Itdoe
Shipping Documents Documents often attached to bills ofexchange payable overseas.
The basic documents usually consist of:
• Invoices
• Insurance policy
• Bill of lading.
Others may include:
• Air Waybill/Air ConsignmentNote
• Certificate of Origin
• Certificate of Quality
• Veterinary Certificate
• Consular Invoice
• WeightCertificate
• Packing List.
Short(oversold)Position Excess of sales over purchases or of foreign currency assets over liabilities.(This is oppo
Short Delivery (also ‘SD’
or‘short-landed cargo’)
Non-delivery of cargo at the intended port. When reported, this results in ship’s agentsen
mis-delivered in another port.
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
Sight Draft (sight bill) A financial instrumentpayable upon presentation or demand.It mustbe presented for pay
within reasonable time.
Sight a Bill The operation of presenting to the drawee a bill drawn at a period after sight,and obtainin
which the bill is sighted.
Sola Draft A single bill ofexchange is distinguished as one in a set: the latter being marked as ‘First
of Exchange’.
Special Documentary
Credit Liability (SPECIAL
DOC L/C)
Some documentarycredits mayallow for a negotiable setof documents to be forwarded d
bank/branch concerned.In this case the customer could gain control of the goods before
from the time of establishmentofthe credit.
Specific Duty A duty based on some measure ofquantity, such as weight,length,or number of units.
Spot Exchange Foreign Exchange boughtand sold for immediate delivery - in practice almostinvariablyfo
of the deal.
Spot Rate Rate of exchange quoted for purchases and sales ofa foreign currency for immediate de
SRCC(or s.r.& c.c.) An insurance clause relating to ‘strikes,riots and civil commotion’.
STC/STW Said to contain/said to weigh.These are notations on transportdocuments bywhich carrie
responsibilityfor the accuracy of a shipper’s declarations as to the content, weightor quan
Standby Credit(also
standby letter of credit,
standby L/C)
A form of guarantee,usuallyindistinguishable from the demand guarantee.Origin lies in t
American banks from directly issuing guarantees,so they resorted to the device of the “st
used more as a security device, like a bank guarantee,than as a payment device, like a d
beneficiaryusuallyobtains paymentby presentation to a bank of a draft and some form o
that the principal is in breach of their contractual obligations.Standbycredits maybe issu
the URDG458 (to the extent permitted by national law).A standbycredit can be used to b
may agree to sell on open account terms,granting the importer 90-day creditterms,on th
in the exporter’s favour; if the importer fails to honour the exporter’s invoices,the exporter
Steamer Guarantee A documentissued when goods are entrusted to a shipping companyfor carriage.It can s

owner,a memorandum ofthe contract of carriage,and documentaryevidence of control o
has the rightto claim delivery of the goods from the shipping companywhen they arrive a
negotiable (order B/L) or non-negotiation (straightB/L).Bills of lading mayalso be disting
shipment.See marine bill oflading,multimodal transportbill oflading,air waybill, railwayc
B/L terminology:
• Ocean/Marine The classic B/L,a negotiable instrumentused for goods shipped on boa
• 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, no
with container shipments delivered to port terminal;mustbe converted by subsequent“on
‘shipped’ documentfor payment under a documentarycredit.
• Clean A B/L which contains no notation indicating that the goods have been wholly or pa
• Dirty/Foul/Claused A B/L with a notation to the effect that the goods have been partially
• Straight A non-negotiable B/L;consignee onlyneeds to identify himselfto pick up the go
• Order A negotiable B/L,issued ‘to the order’ of a particular party, commonlythe shipper
• Through A B/L used when shipmentinvolves successive transportstages with different
• Direct A B/L for direct transportbetween loading and discharging ports.
• Multimodal/Combined Transport A B/L issued to cover transportinvolving successive
transportfollowed by sea followed again by road transport.
• FIATA FBL (FBL) A standard form B/L issued bya freightforwarder; considered under
which the agents acceptfull responsibilityas a carrier - as acceptable as a clean on board
• House A B/L issued bya forwarder in its own name (house) covering grouped consignm
• Freight Pre-Paid A B/L indicating on it that the freighthas been paid.
• Liner A B/L issued subjectto the terms and conditions ofa shipping line.
• Short-Form A B/L which does notcontain the full terms and conditions ofthe contract o
version of the carrier’s condition,with a reference to the full setof conditions.
• Stale A B/L which is presented late (for documentarycredit purposes,a B/L mustbe pre
shipment).
• Full Set of Originals For documentarycreditor collection purposes,the buyer may requ
to three) of signed originals - that is,B/L’s which bear the original signature ofthe ship’s m
• Waybill A non-negotiable transportdocument.
Straight Bill of Lading A non-negotiable bill oflading,which specifies the consignee to whom the goods are to be
deliver the goods to that person only. It is often used when paymentfor the goods has be
Stripping Unloading goods from a container.
Stowage The placing of cargo in a ship’s hold in such a fashion as to assure safe and stable transp
Stuffing Loading goods inside a container.
Surcharge Charges added to ocean freight, variously, for bunker (fuel), currency fluctuation,congest
Surety/Surety-Ship
Bond/Guarantee
A surety bond is a guarantee,usuallyissued byan insurance or suretycompany,that a pa
contract. In order to collect paymentunder such a bond,the beneficiary normallymustpro
as by furnishing a courtjudgment,arbitral award or official certificate. Surety ship bonds m
Contract Bonds.
Surrendered Bill of Lading
Liability (SBL)
Under a term importdocumentarycredit the bank releases the documents on receiptfrom
pay the bank until the maturity of the draft under the relative credit. This direct liabilityis ca

hand over the bill of lading we surrender title to the goods and our power of sale over the
Swap The trading of almostidentical products (such as oil) from differentlocations to save trans
SWAP An agreementwhere one party provides foreign currency or local currency to another in a
into a contract to repurchase the currency at some future time.
SWIFT Payment International electronic funds transfer via the system known as SWIFT (Society for Worldw
offered by mostmajor banks.
Tare Weight The actual weightof the container (ULD) when empty.
Tender Bond/Guarantee A guarantee provided by a companyresponding to an international invitation to submitbids
tender bond is submitted along with the tender; the tender bond is required with the purpose
the winning bidder actuallysigns and executes the contract.
Tenor (of a bill of
exchange)
The period for which a bill is drawn (e.g. Sight, 30 days after date, etc.).
Term of a Forward
Exchange
The term of a forward exchange contract, which is the period two business days after the da
Terminal Handling Charge
(THC)
Handling charges assessed for services rendered within container terminals or with respec
terminals.When delivery or pickup of the goods is expected to be at a container terminal,tra
party will pay for all or part of the terminal handling charges.
TEU Twenty-foot equivalentunits;a means ofmeasuring the carrying capacity of container ships
TEUs, which is roughlyequivalent to saying it could carry 3000 standard (twenty-foot)conta
THC Handling charges assessed for services rendered within container terminals or with respec
terminals.When delivery or pickup of the goods is expected to be at a container terminal,tra
party will pay for all or part of the terminal handling charges.
Through Bill of Lading A bill of lading issued to cover transportby at leasttwo successive modes oftransport.
Time Draft(time bill) A financial instrumentdemanding paymentateither:
• A future fixed date
• A specified period oftime (30, 60, 90 days etc.) after either: sightthe date of issue.
It is also called a usance draftor usance bill.
TIR TIR Carnets are transportdocuments used to cover international transportshipments on roa
issued pursuantto the 1949 TIR Convention, allow a truck or other vehicle to pass through
through customs inspection until reaching the country of destination.
Trade Acceptance A bill of exchange drawn by the seller/exporter on the purchaser/importer ofgoods sold,an
Trade Finance The term ‘trade finance’ can be described simplyas finance for working capital.The main d
relates to the movement,purchase and/or sale ofgoods,services and ‘know-how’.Itusuall
currencies and exchange risks can be involved.
Tramp Vessel A ‘freelance’ seagoing cargo vessel,available on a contract basis to carry cargoes to any g
ships,operating according to advertised routes,schedules and rates.
Transferable Credit A transferable creditis a creditunder which the beneficiaryhas the rightto give instructions
acceptance,or to any bank entitled to effect negotiation,to make the credit available in who
beneficiaries).
Trimming The operation of shoveling and spreading, within the ship’s hold,dry bulk cargoes such as c
imbalances which mighthinder the ship’s handling or unloading.
UCC (US) Uniform Commercial Code;the codification of American commercial law,followed in sub
Article 5 of the UCC deals with letters of credit.
UCP500 Uniform Customs and Practice for DocumentaryCredits (1993 edition),ICC Publication No.5
international documentarycreditpractice. The UCP500 is generallyconsidered to be contract
transaction by virtue of a mention in the credit application form.
The UCP500 may also have additional force as a trade custom.In som e countries the UCP50
generally.In other countries,the UCP500 is complementaryto national law and jurisprudence
ULD (unit load device) Term commonlyused to refer to air freighted containers.
UNCITRAL United Nations Commission on International Trade Law,a UN Agency based in Vienna, spec
instruments and conventions in the area of international trade law.UNCITRAL’s mostnotable

Convention,the Convention on the International Sale of Goods (CISG).
Also, the UNCITRAL Rules for Arbitration provide a procedural framework for international co
Rules,these do not provide direct administrative supervision ofthe arbitral process.
UNCITRAL Convention United Nations Convention on IndependentGuarantees and Stand-byLetters of Credit, 1995
UNCTAD United Nations Commission for Trade and Development,a UN Agency based in Geneva , wh
instruments as regards trade with developing or transition economics.Notably,UNCTAD hou
developer of useful guides and manuals for small to medium-sized exporters.
Unfair Calling Insurance Insurance coverage to protect principals who have issued demand guarantees or bonds agai
(i.e. one which is not truly based on non-performance bythe principal).
Uniform Customs
and Practice for
Documentary Credits
(UCP500)
Uniform Customs and Practice for DocumentaryCredits (1993 edition),ICC Publication No.5
international documentarycreditpractice. The UCP500 is generallyconsidered to be contract
transaction by virtue of a mention in the credit application form.
The UCP500 may also have additional force as a trade custom.In some countries the UCP50
generally.In other countries,the UCP500 is complementaryto national law and jurisprudence
Unitisation The practice of consolidating manysmall pieces offreightinto a single unit.
URCB Uniform Rules for ContractBonds,ICC Publication No.524.
URCG Uniform Rules for ContractGuarantees,ICC Publication No.325 (1978).
URDG Uniform Rules for Demand Guarantees,ICC Publication No.458.
Usance Draft (usance bill) Time draft; a written demand for payment which comes due ata specified future date.
Value Date The date upon which foreign exchanges boughtand sold have to be delivered and the prices pa
an accountbecomes effective and subjectto interest.
VAT Value Added Tax.
Vienna Convention 1980 Vienna Convention on the International Sale of Goods.International treaty signed byappr
nations.Amounts to a virtual commercial code for international sales transactions,butexcludes
some others;parties maybe able to ‘opt out’ of coverage by the Vienna Convention by explicitly
Vostro Account An accountheld by a bank with its foreign correspondentbank,in the currency of the bank’s do
W Tonne of one thousand kilograms.
Warehouse Receipt (WR) A documentissued bya warehouse operator acknowledging receiptofgoods;also referred to as
in contrast,generallyconnotes a documentof ownership/control over goods stored in a particular
Warehouse - to -
Warehouse Clause
Insurance coverage of international cargo from the export warehouse to the importwarehouse;co
according to time.
Warsaw Convention A multi-lateral convention which regulates in a uniform manner the conditions ofinternational tran
Waybill(WB) A non-negotiable transportdocument,issued for either ocean transport(sea waybill) or air transp
Wharfage (WFG) Charge for the use of docks
Wharfinger Also wharfinspector,wharfsuperintendent,dock superintendent.
Personnel in charge ofreceiving and registering goods in a porton behalfof the carrier. A wharfin
shipper thatit can proceed to draw up bills of lading pursuantto the terms of the note.
With Average (WA) Marine insurance term meaning thatcoverage includes partial loss (and notjusttotal loss) ofthe
Yield
Interest
Rate
Yield refers to the actual rate of interestexpressed as a rate per cent per annum relating to the net proceeds or outlay.
The formulae for converting yields to discounts and discounts to yields are as follows:
Yield = 36500 x Discount Rate
36500 - (Days to Maturity × Discount Rate)
Discount = 36500 x Yield Rate
36500 ÷ (Days to Maturity × Yield Rate)

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