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ACCEPTANCE |
This term has several related
meanings: (1) A time draft (or bill of exchange) that the
drawee has accepted and is unconditionally obligated to pay at
maturity. The draft must be presented first for acceptance -
the drawee becomes the “acceptor”- then for payment. The word
“accepted” and the date and place of payment must be written
on the face of the draft. (2) The drawee’s act in receiving a
draft and thus entering into the obligation to pay its value
at maturity. (3) Broadly speaking, any agreement to purchase
goods under specified terms. An agreement to purchase goods
at a stated price and under stated terms. |
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AD
VALOREM |
According to value. One of
the generic methods used to establish actual duty charges on
shipments, using monetary valuation as a basis for calculation
rather than non-monetary standards (e.g., fixed amount per
unit, ton, bushel, etc.) which are known as “specified”
duties. |
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ADVANCE BANK |
A loan made on the security
of documents covering the shipment. |
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ADVISING BANK |
A bank, operating in the
exporter’s country, that handles letters of credit for a
foreign bank by notifying the export firm that the credit has
been opened in its favor. The advising bank fully informs the
exporter of the conditions of the letter of credit without
necessarily bearing responsibility for payment. |
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ADVISORY CAPACITY |
A term indicating that a
shipper’s agent or representative is not empowered to make
definitive decisions or adjustments without approval of the
group or individual represented. (Compare Without Rreserve.) |
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AFFREIGHTMENT, CONTRACT OF |
An agreement by a steamship
line to provide cargo space on a vessel at a specified time
and for a specified price to accommodate an exporter or
importer, who then becomes liable for payment even though he
is later unable to make the shipment. |
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AFTER
DATE |
A phrase indicating that
payment on a draft or other negotiable instrument is due a
specified number of days after presentation of the draft to
the drawee or payee. |
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AFTER
SIGHT |
A phrase indicating the
payment on a draft or other negotiable instrument is due a
specified number of days after presentation of the draft to
the drawee or payee. |
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AGENT |
See Foreign sales agent. |
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AIR
WAYBILL |
A bill of lading that covers
both domestic and international flights transporting goods to
a specified destination. This is a non-negotiable instrument
of air transport that serves as a receipt for the shipper,
indicating that the carrier has accepted the goods listed and
obligates itself to carry the consignment to the airport of
destination according to specified conditions. Compare
Inland bill of lading, Ocean bill of lading, and Through bill
of lading. |
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ALL-RISK CLAUSE |
An insurance provision that
all loss or damage to goods is insured except that of inherent
vice (self-caused). |
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ALONGSIDE |
The side of a ship. Goods to
be delivered “alongside” are to be placed on the dock or barge
within reach of the transport ship’s tackle so that they can
be loaded aboard the ship. |
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ANTIDIVERSION CLAUSE |
See Destination control
statement. |
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ANTIDUMPING DUTY |
A charge levied on imported
goods sold on the U.S. market to offset the difference between
the sale price on the U.S. market and the exporter’s home
market or between the U.S. sale price and the cost of
producing the goods. (See Dumping). |
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APPARENT CONSUMPTION |
An estimate of domestic
consumption calculated as product shipment plus imports minus
exports. |
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APPRAISEMENT |
The determination, by a
proper Customs official, of the dutiable value of imported
merchandise following procedures outlined in the Tariff Act of
1930, as amended. |
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ARBITRAGE |
The process of buying foreign
exchange, stocks, bonds, and other commodities in one market
and immediately selling them in another market at higher
prices. |
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ARBITRATION CLAUSE |
A clause in a sales contract
outlining the method under which disputes will be settled. |
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ASIA
PACIFIC ECONOMIC COOPERATION (APEC) |
An organization established
in 1989 to promote trade and investment in the Pacific Basin.
APEC now comprises eighteen economies located in and around
the Pacific Ocean: Australia, Brunei, Canada, Chile, China,
Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand,
Papua New Guinea, the Philippines, Singapore, South Korea,
Taiwan, Thailand, and the United States. |
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ASIAN
DOLLARS |
U.S. dollars deposited in
Asia and the Pacific Basin. Compare Eurodollars. |
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AT
SIGHT |
A phrase indicating that
payment on a draft or other negotiable instrument is due upon
presentation or demand. |
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ATA
CARNET |
See Carnet. |
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AUTHORITY TO PAY |
A letter used mostly in the
Far Eastern trade, addressed by a bank to a seller of
merchandise, notifying him that it is authorized to purchase,
with or without recourse, drafts up to a stipulated amount
drawn on a certain foreign buyer in cover of specified
shipments of merchandise. |
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AUTO
PACT |
An agreement on automotive
products between the governments of the United States and
Canada that went into effect in September 1966. The pact has
resulted in a large increase in bilateral automotive trade. |
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AW |
All-water: direct ports of
call with no overland service. |
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BAF |
Bunker adjustment factor, a
fuel surcharge. |
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BALANCE OF TRADE
|
The difference between a
country’s total imports and exports. If exports exceed
imports, a favorable balance of trade exists; if not, a trade
deficit is said to exist. |
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BANK
AFFILIATE ETC |
An ETC partially or wholly
owned by a banking institution as provided under the ETCA. |
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BANK
HOLDING COMPANY |
Any company which directly or
directly owns or controls, with power to vote, more than five
percent of voting shares of each of one or more other banks. |
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BANKER’S BANK |
A bank that is established by
mutual consent by independent and unaffiliated banks to
provide a clearinghouse for financial transactions. |
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BARRATRY |
Negligence or fraud on the
part of a ship’s officers or crew resulting in injury or loss
to the ship’s owners. |
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BARTER |
Trade in which merchandise is
exchanged directly for other merchandise without use of
money. Barter is an important means of trade with countries
using currency that is not readily convertible. |
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BEGGAR-THY-NEIGHBOR POLICY |
A course of action through
which a country tries to reduce unemployment and increase
domestic output by raising tariffs and instituting non-tariff
barriers that impede imports, or by accomplishing the same
objective through competitive devaluation in currency. |
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BENEFICIARY |
The person in whose favor a
letter of credit is issued or a draft is drawn. |
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BIG
EMERGING MARKETS (BEMs) |
A group of fast-growing
economies that the Department of commerce has identified as
major U.S. export markets in the future: Argentina, Brazil,
the Chinese Economic Area (China, Hong Kong, and Taiwan)
India, Indonesia, Mexico, Poland, South Africa, South Korea,
and Turkey. In 1994, the total population of the BEMs was 2.8
billion, about half of world population. |
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BILATERAL TRADE AGREEMENT |
A formal agreement involving
commerce between two countries. Such agreements sometimes
list the quantities of specific goods that may be exchanged
between participating countries within a given period. |
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BILL
OF EXCHANGE |
See Draft. |
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BILL
OF LADING |
A document that establishes
the terms of a contract between a shipper and a transportation
company under which freight is to be moved between specified
points for a specified charge. Usually prepared by the
shipper on forms issued by the carrier, it serves as a
document of title, a contract of carriage, and a receipt for
goods. Also see Air waybill, Inland bill of lading, Ocean bill
of lading and Through bill of lading. |
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BLOCKED EXCHANGE |
Exchange which cannot be
freely converted into other currencies. |
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BONDED WAREHOUSE |
A warehouse authorized by
customs authorities for storage of goods on which payment of
duties is deferred until the goods are removed. |
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BOOKING |
An arrangement with a
steamship company for the acceptance and carriage of freight. |
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BOOKING NUMBER |
A number assigned to a
contract of affreightment used as an identifying reference on
bills and correspondence. |
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BUYING AGENT |
See Purchasing agent. |
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C&F NAMED PORT |
See CFR. |
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CABLE
ADDRESS |
A code word of less than 10
letters, registered annually with the Central Bureau of
Registered Addresses, used in lieu of the entire name and
address of a firm receiving or sending cablegrams in order to
reduce the number of words required in a cablegram. |
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CARNET |
A customs document permitting
the holder to carry or send merchandise temporarily into
certain foreign countries (for display, demonstration, or
similar purposes) without paying duties or posting bonds. |
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CASH
AGAINST DOCUMENTS (CAD) |
Payment for goods in which a
commission house or other intermediary transfers title
documents to the buyer upon payment in cash. |
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CASH
IN ADVANCE (CIA) |
Payment for goods in which
the price is paid in full before shipment is made. This
method is usually used only for small purchases or when the
goods are built to order. |
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CASH
WITH ORDER (CWO) |
Payment for goods in which
the buyer pays when ordering and in which the transaction is
binding on both parties. |
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CCCN |
The customs tariff used by
many countries worldwide, including most European nations but
not the United States. It is also known as the Brussels
Tariff Nomenclature. |
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CERTIFICATE OF INSPECTION |
A document certifying that
merchandise (such as perishable goods) was in good condition
immediately prior to its shipment. |
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CERTIFICATE OF MANUFACTURE |
A statement (often notarized)
in which a producer of goods certifies that manufacture has
been completed and that the goods are now at the disposal of
the buyer. |
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CERTIFICATE OF ORIGIN |
A document, required by
certain foreign countries for tariff purposes, certifying the
country of origin of specified goods. |
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CFR -
COST AND FREIGHT |
(...named port of
destination) - An international commercial term which means
that the seller must pay the costs and freight necessary to
bring the goods to the named port of destination but the risk
of loss of or damage to the goods, as well as any additional
costs due to events occurring after the time the goods have
been delivered on board the vessel, is transferred from the
seller to the buyer when the goods pass the ship’s rail in the
port of shipment. The CFR term requires the seller to clear
the goods for export. This term can only be used for sea and
inland waterway transport. When the ship’s rail serves no
practical purpose, such as in the case of roll-on/roll-off or
container traffic, the CPT term is more appropriate to use. |
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CHAMBER OF COMMERCE |
An association of business
people organized to promote local business interests. |
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CHARTER PARTY |
A written contract, usually
on a special form, between the owner of a vessel and a
“charterer” who rents use of the vessel or a part of its
freight space. The contract generally includes the freight
rates and the port involved in the transportation. |
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CIF -
COST, INSURANCE AND FREIGHT |
(...named port of
destination) - An international commercial term which means
that the seller has the same obligations as under CFR but with
the addition that he has to procure marine insurance against
the buyer’s risk of loss of or damage to the goods during the
carriage. The seller contract for insurance and pays the
insurance premium. The buyer should note that under the CIF
term the seller is only required to obtain insurance on
minimum coverage. The CIF term requires the seller to clear
the goods for export. This term can only be used for sea and
inland waterway transport. When the ship’s rail serves no
practical purposes such as in the case of roll-on/roll-off or
container traffic, the CIP term is more appropriate to use. |
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CIP -
CARRIAGE AND INSURANCE PAID TO |
(...named place of
destination) - An international commercial term which means
that the seller has the same obligations as under CPT but with
the addition that the seller has to procure cargo insurance
against the buyer’s risk of loss of or damage to the goods
during the carriage. The seller contract for insurance and
pays the insurance premium. |
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CLAUSED BILL LADING |
One on which the common
carrier has noted exceptions to having accepted a shipper’s
merchandise for transportation in “apparent good order and
condition.” |
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CLAYTON ACT |
A major U.S. antitrust law
passed in 1914 to supplement the Sherman Act. The Clayton Act
dealt primarily with the prohibition of price discrimination
among buyers by sellers in the sale of commodities and the
acquisition of the company’s stock by a competitor. |
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CLEAN
BILL OF LADING |
A receipt for goods issued by
a carrier that indicates that the goods were received in
“apparent good order and condition,” without damages or other
irregularities. Compare Foul bill of lading. |
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CLEAN
DRAFT |
A draft to which no documents
have been attached. |
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COCOM |
“The Coordinating Committee
on Multilateral Export Controls,” a voluntary group of
countries consisting of Belgium, Denmark, France, Federal
Republic of Germany, Greece, Italy, Japan, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Turkey, United Kingdom,
Canada and the United States. This group administers a common
set of export controls. |
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CODE
OF CONDUCT |
International instruments
that indicate standards of behavior by nations, states, or
multinational corporations deemed desirable by the
international community. Each of these codes is monitored by
a special committee that meets under the auspices of GATT and
encourages consultations and the settlement of disputes
arising under the code. |
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COLLECTION PAPERS |
All documents (commercial
invoices, bills of lading, etc.) submitted to a buyer for the
purpose of receiving payment for a shipment. |
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COMBINATION EXPORT MANAGER |
A firm which acts as an
export sales agent for more than one U.S. manufacturer, all of
which are non-competitive with the others. Business is
transacted under the names of the manufacturers and revenue is
derived from sales commissions. |
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COMMERCIAL ATTACHE |
The commerce expert on the
diplomatic staff of his or her country’s embassy or large
consulate. |
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COMMERCIAL CODE |
A published code designed to
reduce the total number of words required in a cablegram. |
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COMMERCIAL INVOICE |
An itemized list of goods
shipped, usually included among an exporter’s collection
papers. |
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COMMISSION AGENT |
See Purchasing agent. |
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COMMODITY CREDIT CORPORATION |
A government corporation
controlled by the Department of Agriculture to provide
financing and stability to the marketing and exporting of
agricultural commodities. |
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COMMODITY GROUPINGS |
A numerical system used by
the U.S. Bureau of the Census to group imports and exports in
broader categories than are provided by the Tariff Schedules.
Currently, Schedule A is used to categorize imports, Schedule
E for exports, Schedule B was replaced by Schedule E in 1978. |
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COMMON CARRIER |
An individual, partnership,
or corporation that transports persons or goods for
compensation. |
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COMMON EXTERNAL TARIFF |
A tariff rate uniformly
applied by a common market or customs union, such as the
European Community, to imports from countries outside the
union. |
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COMPARATIVE ADVANTAGE |
A central concept in
international trade theory which holds that a country or a
region should specialize in the production and export of those
goods and services that it can produce relatively more
efficiently than other goods and services, and import those
goods and services in which it has a comparative disadvantage. |
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CONDITIONALLY FREE |
Merchandise which is free of
duty under certain conditions and provided the conditions can
be satisfied. |
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CONFIRMED LETTER OF CREDIT |
A letter of credit, issued by
a foreign bank, the validity of which has been confirmed by a
U.S. bank. An exporter whose payment terms are a confirmed
letter of credit is assured of payment by the U.S. bank even
if the foreign buyer or the foreign bank defaults. See
Letter of credit. |
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CONSIGNEE |
This would be the buyer or
importer. |
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CONSIGNEE MARKS |
A symbol placed on packaged
for export for identification purposes; generally consisting
of a triangle, square, circle, diamond, cross, with letters
and/or numbers as well as port of discharge. |
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CONSIGNMENT |
Delivery of merchandise from
an exporter (the consignor) to an agent (the consignee) under
agreement that the agent sell the merchandise for the account
of the exporter. The consignor retains title to the goods
until the consignee has sold them. The consignee sells the
goods for commission and remits the net proceeds to the
consignor. |
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CONSIGNOR |
This would be the seller or
exporter. |
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CONSTANT DOLLARS |
Values adjusted to a base
price level, calculated by dividing current dollars by a price
deflator. Use of constant dollars eliminates the effects of
price inflation and permits the comparison of output volumes
over time. Also known as “real” dollars. |
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CONSUL |
A government official
residing in a foreign country who is charged with the
representation of the interests of his country and its
nationals. |
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CONSULAR DECLARATION |
A formal statement, made to
the consul of a foreign country, describing goods to be
shipped. Approval must be obtained prior to shipment. |
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CONSULAR INVOICE |
A document, required by some
foreign countries, describing a shipment of goods and showing
information such as the consignor, consignee, and value of the
shipment. Certified by a consular official of the foreign
country, it is used by the country’s customs officials to
verify the value, quantity, and nature of the shipment. |
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CONSULATE |
The jurisdiction, term of
office, or official premises of a consul. |
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CONSUMER PRICE INDEX (CPI) |
A measurement of the relative
price levels of various goods and services purchased by
consumers. |
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CONVERTIBILITY |
The degree to which a
particular currency may be traded for another in foreign
exchange markets. “Hard” currencies enjoy nearly universal
acceptance and are thus said to have (good) convertibility. |
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CONVERTIBLE CURRENCY |
A currency that can be bought
and sold for other currencies at will. |
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COPYRIGHT |
The writings of an author are
protected against copying. Included within the protection of
copyright laws are literary, dramatic, musical, artistic, and
computer software works. |
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CORRESPONDENT BANK |
A bank that, in its own
country, handles the business of a foreign bank. |
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COST
AND INSURANCE |
A pricing term indicating
that these costs are included in the quoted price. |
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COUNTERTRADE |
The sale of goods or services
that are paid for in whole or in part by the transfer of goods
or services from a foreign country. (See Barter.) |
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COUNTERVAILING DUTY |
An additional duty imposed by
the Secretary of the Treasury in order to offset export
grants, bounties or subsidies paid to foreign suppliers in
certain countries by the government of the country for the
purpose of promoting export. |
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CPT -
CARRIAGE PAID TO |
(...named place of
destination) - An international commercial term
which means that the seller
pays the freight for the carriage of the goods to the named
destination. The risk of loss of or damage to the goods, as
well as any additional costs due to events occurring after the
time the goods have been delivered to the carrier, is
transferred from the seller to the buyer when the goods have
been delivered into the custody of the carrier. |
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CREDIT RISK INSURANCE |
Insurance designed to cover
risks of nonpayment for delivered goods. Compare Maine
insurance. |
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CURRENT DOLLARS |
The actual dollar amount paid
in sales transactions. |
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CUSTOMHOUSE BROKER |
A individual or firm,
licensed by the Treasury Department, engaged in entering and
clearing goods through Customs. The duties of a broker
include preparing the entry blank and filing it; advising the
importer on duties to be paid; advancing duties and other
costs; and, arranging for delivery to his client, his trucking
firm, or other carrier. |
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CUSTOMS |
The authorities designated to
collect duties levied by a country on imports and exports.
The term also applies to the procedures involved in such
collection. |
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CUSTOMS BONDED WAREHOUSE |
A warehouse where imported
goods may be stored for a total of three years without the
payment of duty or taxes. |
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CUSTOMS COURT |
The court to which importers
might appeal or protest decisions made by Customs officers. |
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CUSTOMS VALUE |
The value of U.S. imports as
determined by the U.S. Customs Service. Generally defined as
the price actually paid, excluding U.S. Import duties,
freight, insurance, and other charges incurred in bringing
merchandise to the United States. |
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D/A SIGHT DRAFT |
Documents against acceptance
sight draft. A method payment for goods in which documents
transferring title are delivered to the buyer as soon as he
signs an acceptance, stamped on a draft, guaranteeing payment
of the draft. |
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DAF -
DELIVERED AT FRONTIER |
(...named place) - An
international commercial term which means that the seller
fulfills his obligation to deliver when the goods have been
made available, cleared for export, at the named point and
place at the frontier, but before the customs border of the
adjoining country. The term frontier may be used for any
frontier including that of the country of export. Therefore,
it is of vital importance that the frontier in question be
defined precisely by always naming the point and place in the
term. The term is primarily intended to be used when goods
are to be carried by rail or road, but it may be used for any
mode of transport. |
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DATE
DRAFT |
A draft that matures in a
specified number of days after the date it is issued, without
regard to the date of acceptance. See Draft, Sight draft, and
Time draft. |
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DDP -
DELIVERED DUTY PAID |
(...named place of
destination) - An international commercial term which means
that the seller fulfills his obligation to deliver when the
goods have been made available at the named place in the
country of importation. The seller has to bear the risks and
costs, including duties, taxes and other charges of delivering
the goods thereto, cleared for importation. Whilst the EXW
term represents the minimum obligation for the seller, DDP
represents the maximum obligation. |
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DDU -
DELIVERED DUTY UNPAID |
(...named place of
destination) - An international commercial term which means
that the seller fulfills his obligation to deliver when the
goods have been made available at the named place in the
country of importation. The seller has to bear the costs and
risks involved in bringing the goods thereto (excluding
duties, taxes and other official charges payable upon
importation as well as the costs and risks of carrying out
customs formalities). |
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DEFERRED PAYMENT CREDIT |
Type of letter of credit
providing for payment some time after presentation of shipping
documents by exporter. |
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DELIVERY INSTRUCTIONS |
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