General Trade Abbreviations
1. Acceptance :- 1) Bill of exchange that a drawee has accepted and is required to pay at maturity. Initially, this bill of exchange must be presented for acceptance and then for payment. The face of the draft must have the word accepted written on it. The place of payment must also be mentioned.
2) The act of the drawee accepting the draft and is thereby responsible to pay its value at maturity.
3) Acceptance also refers to any agreement to buy goods at a specific price and under particular terms and conditions
2. Ad Valorem :- According to value. Ad Valorem refers to the duty charged based on the value of goods and services on which it is levied.
3. Advance against documents :- A loan made on the basis of the security of documents covering the consignment.
4. Advising Bank :- A bank that operates in the exporter’s country and manages letters of credit for a foreign bank by informing the exporter that the credit has been opened in its favour.
5. Advisory Capacity :- A Shipper’s agent has no power to make any modifications without sanction of the group or individual he represents.
6. Agent/ Foreign Sales Agent/ Representative :- A foreign representative (individual or a company) of a local trader who helps the trader find sales abroad.
7. Air waybill :- A bill of lading that provides coverage for both domestic and international flights that transport products to a particular location. It serves as a proof of payment for the shipper, letting him know that the goods have been accepted by the carrier under specific terms and conditions.
8. Alongside :– This term refers to the side of a ship. Products that are to be delivered alongside are positioned on the dock or barge so as to be easily accessible to the transport ship’s tackle.
9. Anti-diversion Clause/ Destination control statement :- This term refers to a regulation that forbids exports from being shipped to places not approved by the government.
10. Arbitrage :- Arbitrage refers to purchasing foreign exchange, stocks, bonds or other commodities from a market and then selling them in a different market at greater costs.
11. Asian dollars :- U.S. dollars deposited in banks of Asia or the Pacific region.
12. ATA Carnet/ Carnet :- The acronym ATA means Admission Temporaire/Temporary Admission. It refers to international customs papers that allow the holder to import products into certain countries, for a brief period of time, without having to pay any duty or tax.
13. Balance of trade :- The balance of trade means the difference between a nation’s exports and imports. A favourable balance of trade exists when a nation’s exports exceed its imports. If imports are more than the country’s exports then a trade deficit exists.
14. Barter :– Countries with currency that aren’t easily convertible engage in barter, wherein goods are exchanged for some other goods without use of money.
15. Beneficiary :- The letter of credit is issued in favour of the beneficiary
16. Bill of exchange/ Draft :- Bill of exchange is a written and non-negotiable order by the drawer to the drawee to pay a certain amount of money for goods or services, either via a sight bill or a term bill. Once the drawee accepts and signs the bill it becomes a binding contract.
17. Bill of Exchange :– Ninety Days- This order is payable either ninety days after acceptance or ninety days after sight, whichever is mentioned on the face of the bill.
18. Bill of Lading (B/L) :- When goods are shipped via sea or when goods are packed in a container in a particular place, the Bill of Lading serves as proof that there exists a contract between the exporter and the importer or as a receipt for the goods shipped and includes details of the products’ conditions when placed onboard. B/L also acts as a document of title, which means that the firm mentioned on the bill has the right to be in possession of the goods. A transfer of title on the bill will also transfer the ownership rights.
19. Bill of Lading :– Trans-Shipment- This bill, unlike B/L, mentions the names of intermediate ports as well as the final port.
20. Bonded warehouse :- Warehouses approved by customs to store merchandise on which duty payments have been deferred until the merchandise is removed
21. Booking :- A deal with a steamship firm to accept and carry freight.
22. Brokerage :- A financial establishment that allows purchase and sale of financial securities between a buyer and a seller. Its clients include investors who purchase public stocks and other securities through the brokerage firm’s agent stockbrokers.
23. Buying agent/ Commission agent /Purchasing agent :– Buying agent is one who buys merchandise from his own country on behalf of foreign importers- governmental agencies or private firms.
24. Cash against documents (CAD)/ Documents against payment :- A payment deal in which the exporter asks the bank to transfer shipping and title papers to the importer, after the importer fully pays the bill of exchange.
25. Cash in advance (CIA) :- Payment method wherein cash for purchased goods, mostly small purchases or customized orders, is paid in full before shipment is made.
26. Cash with order (CWO) :- Payment method wherein the buyer makes payment while ordering for goods. The transaction in this method is obligatory for both the parties.
27. Certificate of inspection :- A document that verifies that goods before shipment were in a good condition.
28. Certificate of Insurance :- A document prepared by the exporter to supply proof that goods to be exported have insurance against loss or damage. However this document has no legal standing.
29. Certificate of manufacture :- A notarized statement wherein the manufacturer states that the production process for the goods has been completed and the goods are now at the disposal of the purchaser.
30. Certificate of origin :- A document that authenticates the country of origin of certain goods. However only some countries require this document.
31. CFR/C&F (Cost and Freight) :- A term used in international sales agreements that indicates that the seller must pay the cost and freight needed to ensure delivery of goods to a port of destination. The buyer makes arrangements and pays for insurance.
32. Charter party :- An agreement between the owner of a ship and the charterer who rents the ship or part of it. The agreement includes freight charges and the ports involved in shipping goods.
33. CIF (Cost, Insurance, Freight) :- A term that signifies that the quoted price includes cost of the goods, insurance and freight charges.
34. Clean bill of lading :- A proof of payment issued by a carrier that signifies that the merchandise was received in perfect condition without having undergone any damage.
35. Clean draft :- A draft to which no documents have been attached.
36. Collection papers :- Papers presented to a buyer in order to receive payment for a shipment.
37. Commercial attaché :- An officer/diplomat whose job is to promote trade between his country and the country where he works
38. Commercial invoice :- A record of shipped goods included in the exporter’s collection papers.
39. Common carrier :- A carrier (individual/firm) that moves people or merchandise for reimbursement.
40. Confirmed letter of credit :- A letter of credit supplied by a foreign bank, the legitimacy of which is confirmed by a domestic bank, under which an exporter will be paid by the domestic bank even if the foreign bank fails to pay.
41. Consignee :- The individual to whom the consignment is to be delivered is the consignee.
42. Consignment :- Delivery of goods from the consignor to the consignee under an agreement. The consignor will hold the title of the merchandise until the consignee has sold them and after selling the goods the consignee forwards the net profit to the consignor.
43. Consignor :- The individual sending the shipment to be delivered to the consignee. Sender or shipper are also some commonly used terms.
44. Consular declaration :- This term refers to a formal declaration including description of the merchandise to be shipped. The declaration is made to the consul of a foreign nation
45. Consular invoice :- A record with description of goods to be shipped along with details like the consignor, consignee, and the total value of the shipment. The invoice, required by certain foreign nations is verified by a consular official of the foreign nation. With the help of this record the customs offcial can determine the value, quantity and nature of the shipment.
46. Convertible currency :- Currencies that can be purchased and sold for some other currency.
47. Correspondent bank :- A domestic bank that manages the business of a foreign bank.
48. Counter trade :- This term refers to the trade of products or services that are paid for (fully/partially) via transfer of products or services from a foreign nation.
49. Countervailing duty :- This term refers to the duty levied as a measure to counter unfairly subsidized goods.
50. CPT (carriage paid to) and CIP (carriage and insurance paid to) :- Pricing terms that are used instead of CFR and CIR when goods are shipped by transport modes other than water. The payment for carriage, or carriage and insurance must be made to the mentioned place of destination.
51. Credit risk insurance :- This insurance provides coverage in cases of nonpayment for delivered merchandise.
52. Customhouse broker ;- A company/individual authorized to enter and clear merchandise through customs.
53. Customs ;- Officials authorized to collect duty imposed upon imports and exports by a country. The procedures used to collect this duty are also known as customs.
54. Date draft :- This term refers to a draft that matures within a certain number of days after the date it was issued, without taking into consideration the date of acceptance.
55. Deferred payment credit :- One type of letter of credit that enables payment some time after the exporter submits the shipping documents.
56. Delivery Order :- Order signed by the owner of the merchandise, directing his warehouse to deliver goods to the buyer.
57. Demand draft / Sight draft (S/D) :- A draft that can be paid when presented to the drawee.
58. Demurrage :- This term refers to the time period when the charterer continues to be in possession of the vessel even after completion of the period normally allowed to load or unload the cargo. The charterer must then pay the ship-owner for the delay.
59. Devaluation :- This term refers to decline in the value of a country's currency in terms of one or more foreign currencies.
60. DISC (Domestic International Sales Corporation-Discrepancy - Letter of credit) :- A situation wherein the submitted paper do not conform to the letter of credit.
61. Dispatch :- When a charterer completes loading or unloading before the stipulated time period then the vessel's operator pays a certain sum of money to the charterer.
62. Distributor :- This term refers to a foreign agent who trades on behalf of the supplier and also holds records/inventory of the supplier's goods.
63. Dock receipt/ Warehouse receipt :- A receipt supplied by an ocean carrier to acknowledge acceptance of a shipment at its dock or warehouse.
64. Documentary draft :- A draft to which documents are attached.
65. Documents against acceptance (D/A) :- Directions relayed to a bank by a shipper indicating that the papers transferring title to merchandise should reach the buyer (drawee) only after the buyer accepts the attached draft.
66. Draft (or Bill of Exchange) :- A written order sent by the drawer to the drawee, instructing the drawee to remit the specified amount in the name of the drawer at a fixed or determinable future date.
67. Drawback :- Refund of duty imposed upon goods produced in the United States using imported raw materials or components and the exported. 99% of the duty levied on the imported components is refunded.
68. Drawee :- The firm/individual on whom the draft is drawn and who has to pay the specified amount.
69. Drawer :- The firm/individual who issues the draft and will receive the specified amount remitted by the drawee.
70. Dumping :– Selling goods in a foreign country at rates that are lower than the rates at which the same goods are sold in the domestic market or at rates lower than the expenses involved in producing and shipping the same goods.
71. Duty : – Tax levied on imports based on the worth of goods (ad valorem duty), weight or quantity (specific duty) or a combination of worth and other aspects (compound duty) by customs officials.
72. Estimated Time of Arrival (ETA/ ETOA) :- This term refers to the measure of when a ship or some other mode of transportation is expected to reach a particular location.
73. Eurodollars :- U.S. dollars deposited in Europe.
74. Export Management Company (EMC) :- This term refers to a private company that functions as an export unit for several products and services. The company either takes the title or conducts export business on behalf of its clients and in return receives commission, remuneration or retainer plus commission.
75. Export Trading Company (ETC) :- A company that performs similar functions to an export management company.
76. Ex :- Commonly used with certain pricing terms like ex factory or ex dock and refers to how the quoted price is applicable only at the place of origin.
77. Exchange permit :- The importer’s government often requires a government permit that would allow the import company to convert their own nation’s currency into foreign currency. This foreign currency would be used to pay the trader in a different country.
78. Exchange rate :- This term refers to the number of units of one country’s currency that may be exchanged for one unit of another country’s currency i.e. the price of one country’s currency in terms of another.
79. Eximbank :- Export-Import Bank of the United States.
80. Export broker :– Firm/individual who enables dealings between buyers and sellers but does not participate in any of the transactions.
81. Export commission house :– A firm that serves the purpose of a buying agent for a foreign purchaser. In return for their service they receive a commission.
82. Export declaration/ Shipper's export declaration :- Document that describes the worth, quantity, destination, and other important information about the shipment. This document is prepared by the shipper and submitted to the U.S. Treasury Department.
83. Export license :– A document issued by the government that allows the licensee to export goods to certain locations.
84. EXW (Ex Works) :– A term commonly used in international sales contract that binds the seller to make products available to a buyer only at the seller’s property, as a result of which the seller bears no responsibility for loading, shipping, export, clearance etc. The buyer pays the expenses incurred in shipping the goods.
85. Floating policy / Open insurance policy :- Marine insurance policy for all the shipments made by the exporter over a period of time instead of just one shipment.
86. Force majeure :- A standard clause found in marine contracts that free the involved parties from non-fulfillment of their commitment in case of natural disasters or war.
87. FCIA :- Foreign Credit Insurance Association.
88. Foreign exchange :- Currency or credit instruments of a foreign country.
89. Foreign freight forwarder/ Freight forwarder/ International Freight Forwarder :- A firm that manages export shipments for compensation.
90. Foreign trade zone/Free-trade zone :- Port selected by the government that permits duty-free entrance for non-prohibited merchandise. These goods can be stored or used for production without duties being paid. Duty will only be levied upon the goods when they are moved from the zone to a place which is under customs authority.
91. Foul bill of lading :- Proof of payment for goods supplied by the carrier indicating that the merchandise was damaged when received.
92. Free alongside ship (FAS) :– This term signifies that the price quoted includes the expenses of delivering the merchandise alongside a chosen vessel.
93. Free Carrier (FCA) :– A term commonly seen in international sales contracts that indicates that the seller has the responsibility to deliver goods sold, ensure clearance for export, to a freight forwarder mentioned by the buyer.
94. Free in (FI) :– This term refers to the charterer’s responsibility for bearing the expenses of loading and unloading from the vessel.
95. Free Out (FO) :- This term refers to the charterer’s responsibility for bearing the expenses of loading goods from the vessel.
96. Free on Board (FOB) :- This term signifies that the price quoted includes expenses incurred during delivery of merchandise upon an overseas vessel supplied by or for the purchaser.
97. Free port :- This term refers to a port city into which goods may be shipped without paying any duty. The movement of goods is done legally.
98. Freight/ Cargo :- Goods moved via ship or any other mode of transportation for commercial purposes.
99. Freight All Kinds (FAK) :- Depicts airfreight rate, when special Commodity Rate is not available.
100. Freight Forward :- For goods sent freight forward; the freight costs from the consignee are collected by the shipping company.
101. Full container load (FCL) :- This term refers to ISO standard container and this container is loaded and unloaded under the account of a single shipper and a single consignee. These containers have lower freight rates.
102. General Agreement on Tariffs and Trade (GATT) :- A multilateral agreement that regulates international trade. It aims to reduce trade barrier between the involved countries and also encourage trade through concessions in tariffs.
103. General export license :– Export licenses providing coverage for export goods and these goods do not require individual export licenses or any formal application.
104. Gross weight :– This term refers to the total weight of a shipment and also includes the weight of goods and packaging.
105. Import license :- A government document that validates importing certain goods into its own country.
106. Individually validated export license :– A U.S. government issued document that validates exporting certain goods. This license is applicable for a particular transaction or period of time in which the goods are to be exported.
107. Inland bill of lading :– This term refers to a bill of lading that is used while transporting merchandise overland to the international carrier chosen by the exporter. Export shipments require both ocean bill of lading and inland bill of lading.
108. Inland Rail Depot (IRD) :- used for Customs Clearance.
109. Irrevocable letter of credit :– This term refers to a letter of credit wherein the bank will guarantee the specified payment provided the drawee fulfills all the terms and conditions.
110. Letter of credit (L/C) :– A document issued by a bank which guarantees the payment of a customer’s drafts for a particular time period and upto a particular amount.
111. Licensing :– A business understanding wherein a product manufacturer or a company that possesses proprietary rights over certain technology, trademarks etc. allows an individual or a group to manufacture the product or use the proprietary technology after paying a certain amount or specified royalties.
112. LO/LO :- This term refers to expenses incurred in using a crane to lift goods onto or off a ship.
113. Manifest /Ship's manifest :- A written document which mentions the shipments that make up the ship’s cargo. This document is signed by the captain of the ship.
114. Marine insurance :- This term refers to the insurance that provides the owners of merchandise shipped overseas with reimbursement in the event of loss that cannot be recovered from the carrier through legal means.
115. Marking (or marks) :– Letters, numbers or any other marks seen on cargo packages and enables identification.
116. Net Weight :- The weight of products excluding covering or case.
117. Ocean bill of lading :– This term refers to a Bill of lading that signifies that the exporter relegates a shipment to an international carrier to be shipped to the mentioned foreign market.
118. On board bill of lading :- This term refers to a bill of lading wherein the shipper verifies that merchandise has been place aboard a vessel.
119. Open account :– A trade agreement in which products are transported to an international buyer without any assurance of payment, thus the buyer’s reputation must be unquestionable.
120. Order bill of lading :– A bill of lading that is open to negotiations and is made out to the order of the carrier.
121. Packing list :- A catalog of number and kinds of goods being moved. It also includes any other data necessary for transportation.
122. Parcel post receipt :– A receipt signed by postal authorities to acknowledge delivery of a shipment made via parcel post.
123. Perils of the sea :– A term commonly used in marine insurance that refers to heavy weather, stranding, collision, lightning and sea water damage.
124. Phytosanitary inspection certificate :– A certificate indicating that a U.S. shipment has been examined and is free from harmful pests or plant diseases. The certificate is mandatory to fulfill import regulations for foreign nations, and is issued by the U.S. Department of Agriculture.
125. Political risk :– Currency inconvertibility, war, government measures that prevent entry of goods, expropriation or confiscation can lead to loss in export financing.
126. Private Export Funding Corporation (PEFCO) :- A corporation that provides loans to international buyers in order to finance exports from U.S.
127. Pro forma invoice :– Invoice issued by a supplier before the goods are shipped, in order to inform the purchaser of the goods being shipped, its worth, quantity etc.
128. Quota :– The quantity of products of a certain kind that a country allows to be imported without any restrictions or the obligation to pay additional tax.
129. Quotation :– A bid to sell merchandise at the specified price and under stated terms and conditions.
130. Remitting bank :– The draft is sent to the overseas bank for collection by the remitting bank.
131. Revocable letter of credit :- This term refers to a letter of credit that can be cancelled or modified by the purchaser after it has been issued by the purchaser’s bank, without notice to the exporter.
132. Spot exchange :– Buying or selling foreign exchange for instant delivery.
133. Standard industrial classification (SIC) :– A standard numerical code system that is used to classify goods and services.
134. Standard international trade classification (SITC) :– A standard numerical code system that is used to classify goods used in foreign trade. SITC has been developed by the United Nations.
135. Steamship conference :- Steamship operators who operate under mutually agreed upon freight rates.
136. Straight bill of lading :– A bill of lading that is non-negotiable and wherein the products are dispatched directly to a named consignee.
137. Tare weight :– The weight of a container and packaging, excluding the weight of products it contains.
138. Tenor (of a draft) :– Description of a payment being due at sight, a certain number of days after sight or a certain number of days after date.
139. Through bill of lading :– A single bill of lading that converts domestic and international carriage of an export shipment.
140. Time draft :– This term refers to a draft that matures after a given number of days after acceptance or a given number of days after the date of the draft.
141. Tonne :- A metric system unit of mass that is equal to 1000 kilograms or 1 megagram. It is also known as metric ton in U.S.
142. Tramp steamer :- A ship that does not operate on regular routes or schedules.
143. Transaction statement :– A statement that specifies the terms and conditions discussed agreed upon between the importer and the exporter.
144. Trust receipt :– Discharging goods by a banker to a purchaser wherein the bank holds the title of the goods. The buyer is required to maintain the goods and the returns from their sale separate from his remaining assets and to keep them ready for repossession by the bank.
145. Wharf age :- A charge reviewed by a pier or dock owner in order to handle incoming or outgoing cargo.
146. Without reserve :– This term indicates that the carrier’s agent has the authority to make decisions and adjustments on board and doesn’t require the sanction of the group or individual he represents.
