4

nqIish ommril

l ,r |' |r . r ' l ( l )l ]t n ts

V. Terms of pamnt for forign trad Cash against doumnts(CAD) .'..........67 (D/A) ................... Doumentsagainst aeptane 70 ..'....'.',.",...72 Lttr of redit .......78 Questionsfor revision VI. Terms f delivery (Inoterms) W (ex works) '.....'........80 Inotertns for shiprins.......'..... .........80 Inotermsfor iirultimod transprt..................... al 85 ....86 Inoterms overing payment of duty ..........89 Questionsfor revisiorl ............. VII. Transportation Dornstiand eanshiping Road transport......... Railwy trarrsport Air transport............. Questionsfor rvision VIII. xport doumnts The oean bill of lading Air waybill Comlnerialinvi Pro.fortna invoi Customs invoi Consuiar invoi Crtifiate of origin Questinsfor rvision I. Customs and duty Typs of duty Calulating duty ........ Customs proedure Questions for rvision ..,,....,...'.92 -.......94 .............97 ...,,..97 .......98 ... 101 ..... 109 .........111 ...........111 .............. 112 ...,......... LLz ........7|4 ..... 115 ................. 118 ..... |2o ..........L2I ..... |2

\. M r r itteI nsur an l'r 'itr r :iples f insur ar r ............. o ,I 'v1 :s o f insur ane po liy 'l'vlrr-.s loss of ()r tcstio ns fo r r evisio n l. l'ltrsinss organisations 'l.lr epr ivat seto r 'l'lr e publi seto r () estio ns fo r r evisio n ll. ,l'h stok exhange Slr nr es l.'i d.inter st sur itis.'.......... (]tlestions for rvision ( lI tl sr y l,J glish to Russian I tr r ssian to English () o o pe

..,...' 7 2 8 ................. 1 3 0 .. 133 ..... 1 3 5

....,......1 3 ............ 1 4 0 .....1 4 2

..,......,.I4 4 ....... 1 4 8 .'.., I2

.......... 1 5 b ..........1 ,7 4 .........' . 1 9 0

Foreword

l{lIlll{ll tlxperts ar on hand to answer individual

I l t..

que-

This book is primarily intended for languag students who need to aquaint themselves with nglish ommerial vabular, and desribes ertain basi priniples of ommerial pratie without aspiring to be a definitive textbook on the subjet. However, it is also a useful referene work for people in language-oriented professions. The materials rryere originall designed for ourses leading to the qualifiations of European Seretary and Foreign Language Correspondent offered by the German Chamber of Commere. For this reason. although no prior knowldg of business is neessar, students are expeted to have reahed a level of English equivaient to about 6 years of study at shool. There are twelve units, eah of whih presents a different ommerial topi in an easily omprehensible form. The essential terms are presented in small bloks for quik referene, and numerous exerises give students the pportunity to test their understanding and put the newl aquired voabular to ative use. At the end of eah unit, there are a number of Questions for revision, whih an either be set for homework or used as a basis for lassroom disussion. A omprehensiv glossary is inluded at the end of the book for referene purposs. Learners requiring translations or eplanations of ommerial terms outside the sop of this book are rferred to www.proz.com' where anv number of lan-

I.rrt, llttt not least, I would like to thank the staff rtltrl students of the International Business Shool rrrrrI Shulungs-Center Foley in Freiburg, Germany, wlr were the guinea-pigs for this book and offered r1tlltlttities of enouragement and onstrutive riti. r.|ttt;oleg Rudavin, without whom it probably wrlttldn't have ome into eistene in the first plae; rtlttl Roland Ferlihia, Kreszenz Kdfer and Mihael Kiifer, without whom it would hav taken at last t.wie as long to write. Hather Frlicchi

peoe
Tep}Il.]r''lttt?I(t' ll t:e pae BI o}t o oBa l{' r t . , , . t ' l . ( l y ) l Y I ee o a op oNI}Io o o ' l | l -l I l l l l l v ) l ( l , l J l eo B l { a o e pal l epe Bo/ loB' l l | | , I l l l l ( | ( ] ' I ' I ] o po e o a I { I x oivlo T Ba M l l l | . | ' l t | ( ) | l [ l a a e www. pr o z. o m ' 1 tlt.llt tl,l.ll .lre BIoIe poer. Tex' To ll ttrlltle' xoTea r oaoapT l|l)M()l' Me coI,a]i.vI|,r{: opI{oB yeIg651 ea tttlt.t't,'l|tlMeryapo lt(ti.() lt.(lr{Tpa o llllIttIlx aeBe pape, prra' lIIp <(IIooIIITtlIx ltpooBD

Haoee ooe IIpeI{asaeIIo / ex' o, sya'r atft,c BI, peMT oee oIIoBa. eIIo o3IIaoNI epvlIloolef., oyeo B oMep. He peIi a ae a3ooo IIpeIIoo vea' a oIIIBae eoopIe ooolloaale pI roepeo pa}It. Be e]\{ oa eoel{o oa}fi oeo ae paBoIl:a p,JI' eao, paoalox oa JIIIBII llepeBoa. aepa oToB ovlpa aTopo Bo BpM poee opal{oal{Ix Heeo Topoo aao yerx ypo poecoo Corolvl'fiyapoo ypoBel{ ael{ I{aao atlrctl\{ IIto paoI aoIvl ooe o,{e r oaoIlo INI. B ao 1 Beaa aB llpeaBea oTeIIa oepeIa eMa' 3o}IeIIa B paotl oyo IIoI{iua ope. .( oeeII paor IIoeIe epMI BII{.eeIII pal\|.' a I{ooeIIIe II p a]EIe I{ tal Ira o3IvIoE{o IIpoep oe oll{aIIe aepaa vI aI<TvIBvIpoBa eIIy. B oe a*oo pas.ea IvIe oIIpoI' oTopIe NIoy o3oBa o BIoeII oIvIaIx aa, o raT aeBe e oe o BpeilI atvil. oap oe II IIoo rpo raipyt ep[II' eo Ilepeoa o6cI{ee. a epTap, peo. ooy earox

t|||ll l'ecol/I IIpl\{eeII NIaepaa' IoI{TpIIII0 3a x oep}I( ]l l).l'v lty' e o a T r }I. l i l , l t . l ' y ; o ea P y a a , l.llr llttpl{o' l'rl.lltllla ltr.ii pe, ,rllr ltQlpa' IIoa IIe yBea Iperea r B; Iteepa a TaEe xaep, roopIe Boe

BoLI'Ie[Ieo

IIolvIo IIaaT

e' IIo pa.

rpe.

Xp purc

l. Produtsand Servies
5 5 5 5 hstags industry of hhinof distribution Srvis for Questions rvision

The stages of industry

.l'lrr.l.r. three stages in the proess of making salertre ||||l.tl)1'()duts from raw materials: l' l.lxtrative industry 'l.lrr. t.w mateials ar extrated from natural reir)ltres, for example the miner mines iron ore and tlrr. l'rmer grows wheat. 2. roessing industry 'l'lltl raw materials are proessed into a form suitable l'rl further use' for example the iron is made into [lltll and th wheat is made into flour. i}. anufaturing industry

.l'lt results of the proessing stage are made into lmi-finished and finished goods, for example the lrll is made into knives and the flour is made into lltlad. Finished goods are goods whih are omplete l themselves, for example steel forks. Semi-finished gtds must be assembled before they an be used, I'or example wooden knife handles and steel knife llldes.

* v*-*'A-*l@j i
U(1*tv
lNpU$Ty Rgs|G t}L,gY

Bn il\Nt}FtAURlNG

lt{DU9T

 o rm r i l ngI i s h

saleable raw materials extrativ industry natural resoures prossing industry manufaturing irrdustry semi-finished goods finished goods

por Ip

/ poa)

The chain of distribution

N.lr.trrrtllv manufaturer sells his produts to the the wllrllt.sale, the wholesaler sells to the retaile, and llrr. l.r'trriltr sells to the onsu.mer or end.user. Ho. tv(.v(|l.l depending on the type of produt, one or mor rrlrl'.l's rttaybe missed out. r:lrinof distribution tltatrufaturr wholesaler retilr oIlsllmer' end-user
pea3a po3BoJI ooI opoe povr (oeur) Topoe opee

o ta poN{IIIIeIt oT ppo/IlIe peypI ; o.rle3I{I ItolaIe epepaarBaIo{a poivlIIIIeIIo IIpo3Bo'Bo (a opa) oyapar oor oap; poy

xrisei. Wht kind of industry do I work in? ,|. l,m a mrktgrdene. omputers. 2. M ompnyprodus . l work on n iI riq in th North S' whih 4 ln my sprtim,i spinwoo|and sllit to ompanis kitvl,a mk x|usiv 5. I,m rOt, fishr;nan. 6' |,m Ji-se 7. W mk jweI|er. 8. W make |ether' 9. |,ma otton WaVe. steIgirdrsfor bridgs 10.y ompnynks goods? 2. xerise Ar ths F|NIsHtDr SM|-FlNIsHD 1.Umbr||s 2. ble|egs 3. omputrmonitors 4. Bott|tops 5. Door hand|s 6. oys 7. BIyl sddles Filmnts IightbuIbs for 8. 9. rpets 10.ShoeIes

How do you think th fo||owinggoods re Lr-. dist r ibut ed? her e m V b mor t h n on a nswer !
/ i 4 .'

l of f the pg |oths

Dt.,stgllr |othes ll;lrld-md hoo|tes lowers Sttioery

Servies
()ther people do not ti1;.iiltlt dirtly to produt,itln,but are needed fr exarnpl to transport the goods from the manufaturer to the ustomer, to lltsure the goods et. These people render sevies. .l'here are several types of servie: 1. Publi servies: l)ople in publi servies are employed by the government, for example ivil servants and teahers.

nqlish ommeri|

| |. tr ittr nd S e rvie s ts

2. rivate servies: Private servies are rendered by skilled people with their own organisations, for example lawers and dotors in private praties. 3. Consumer servis: Consumer servies are servies used by people in their everyday life, e.g. eletriians and hairdressers. 4. Commerial servies: Commrial servies are rendered by people who are needd for the effiient distribution of goods, for example exporters, b.nkers,agents.
to render servies publi srvis private servis onsumerservis ommerial servies peoaB y ore (oaper) yrt aIII opeeyy oMpee yy

Qustions for revision

|. (]lroose one or more of the following produts and rlr.st:ribe(in as muh detail as possible) the proess it ttlltlt:rgoes from the time the natural resoures are r.t,atedto the time it reahes the onsumer: - Bread . Paper . Leather shoes . Wooden hairs . Copper pipes Mtllttion th three stages of industry and the hain I' distribution. 2. Whih tpe of servie do you think is the most ilrlportant? If possible, rank them in desending orrltlr of importane (most important to least importnt) and explain why.

Exeris4. What kind of servido I rndr? ,l. |,m teher. 2. |,m pIumber. . l wok fr shipping ompany. 4. |,ma ustomsof fir. 5. I work in wrhouse. 6. I,man insurane broil' 7. |,m mhani. lothrng 8. I own a whoIes| ompanywhih slIs judge. 9. l,m 10.I,mn rhitet.

ll. From enquiry to sles ontrt

5 5 5 5 5 5 5
Enquiris Off ers oders ontrat S|s omp|aints adjustments and Rminds for Qustins rvision

nquiris
l. Arr enqui or inquiry is a request for informaiirlrt. When starting up in business, it is neessary to l'trlut the names and addresses of potential busirrr.spartners. one way of obtaining this informal'illlt is to send an enquir to one or more of the follw i rrg organisations: ..l'he Chamber of Commere . A bank . Anotlrr ompany - rovided the ompan's own llrttlrests are not negativel affeted b giving you l,lrisinfomation . If jlou re looking for partners or suppliers rtllroad, you an writ to the otstl]tf th foreign r:tlttntr in question. T}re onsul's tasks inlude rept rlenting his ountry's eonomi interests abroad . It is also possible to write to the enrtlss f the |'llreign ountr. Hotvever, the task of an rnbassarltlr is mainly diplomati and the embassy may not be lrl to provide as muh ommerial information. enquiry, inquiry Chambr of Commere onsulate onsul embassy ambassador tapo Topoa IIaaTa oy.lo oy ooo oo

2. General enquiry one ou have obtained the name and address of a sup. plie, you an send him a geneal enquiry asking for

nglish ommri|

l l I l l |l I l l .l l (l i l l r y to sa| s on tr at

19

information about the goods he supplies. For example, if you are a retailer of eletroni goods and are looking for new suppliers' you an write a general enquiry to a manufaturr or'holesaler and ask for atalogues and prie-lists. From these, ou an then deide whether you want to do business with this ompany. 3. Speific enquiry If you need more details, for example if you already knw what goods a ompany supplies but need information about how long it will take for the goods to reah ou' you an send a speifi inquiry. Information you may ask for in this type of inquiry inludes: . Terms of delivery . Delivery times . Terms of payment . Disounts . Types of paking
supplier general enquiry speifi enquiry terms of dliver delivery tims terms of pamnt disount paking oTaBr apo eaIII apo yoB IIoa po oa yoB ola }t,a aoBIa

l .l

', t' / lt

disounts. tr't1ttst ormtinabout quntity inf of with your exution our first order. .ttt'vry stisfied NtlW W wou|d liketo know whthryou ouIdgrnt us i() (is'redit... do|!s. of .trltlrsss xporters Russian of to wtltlldlrk know what kindof goodsyou haveto of fer. W | trrlllyour ata|ogue see tht... of llrt'foreign tradedepartment our banktold us tht you.'. 4. [nvitation to tender

Arrther way of obtaining offers from suppliers is to puban ;llltr:l advertisement in a newspaper or other an invitation lltllrtion. This advertisement is alled |,ll lnder and is a method often used by publi instit,rrtions suh as government offies. Companies who ttrtl interested an then submit their offers - in this l.lr. alled tenders - and the best one is hosen to rr1lplythe goods or servies required. offer invitation to tender tnder
I]peoeIIe oee THep TIiepa

I tre is an example of an invitation grge 20). Lxllsez

to tender (look

Rd th invittion to tndr bov and nswr the fo|lowing questions.

1' xris Here e som phrasesfrom nquiry|etters. in is Wht kindof nquiry nernd eahas? in of to ]. We ow you address the hmbr ommre
LO n O O n. . . 2 . ...a r | ooki ng for s u p p |i e r so f f i n wi n e s i n F ne...

is l, Wht organisation asking f or tendrs? skingf o? is 2. What ext|y this orgnisation ]. Wht ae th trms of paymnt? tim? 4. Wht is the dIivry to? 5' What addressare th goods to be dlivered tndrs? 6. When is the finaIdte for reiving th 7.Usingyour own words,desribe ftorswhihth orgni. whihtnderis the best' when diding onsidr stionwiI|

20

Cornmlial nglish

|| | l(lll) ('rlqulrtO s|e s ontrat

21

PUBL|sD No| oPN lNvlAIoNo NDERNo. 241101 The sup|yof .l20sets of offie furniture 1. Awarding uthority: i|borough Muniip| ounil, Highst'.iIborough 4Hj TN.] 2. Awrd roedure: Pub|i invitation tnd to \^/ith disrtionary f ontrat. wari 3. Desription the ontrat: of a) Purposeof the ontat; qo. hsupply 120stsof offifurnttur th nwll of for Vrnmnt fies th BristoI of in Road. iIborouoh. b) Divisioninto lots: .]: Lot dsks and destl units drwer Lot2:upboards sh|ving and units Thtwo iotsmybothb warded on biddr mb sprtly to or awrded 2 biddrs' to ) Termsof paymnt: Paymnt be madfoI|owing wjll eptan th furnitur' of 4. P|eand period of performne: ) Plet whih the ontratis to be prformed: Tilborough Govrnmnt fis, Bristo| Lol 12 0f Road, i|brough N]gtG . b) Durtionof ontrator time |imitfor ompletion/de|ivery of work/goods: is hf urnitur to b diiverd betwen otober and Dember 200]' 5. Reiptof bids: hefina| dtfor the reit bidsis 15th' of arh2001, non. 12 r,vhihto b mustb submittd dditin th originl, 2 opis in to is mrked suh. s Bids be sentto the addrss point to ir 1' 6. Priodduringwhihthe bidderis oundby his bid: on yerfollowing fina| datfor rit brds 'nt5' th of rn 7. riteriafor th wrd of ontrt: Theontrt shll awrdd the biddr be to whose is to b prebid ferrd withrgrd th bidder,s to bility mtthwarding to author. ity,s neds rquirmnts, msurd nd to b by rimriIy th thnil qu|ity th brd, biddr,s of th xprin ro1ts a similr with of natur onomi and dvantag' 8. Other information: As partof itsvluation the bids, awrdinq of the authority rmay qust brdcrs suppIy. of a|| to fr osts andhargs th awarding t uthority, sampIing thir urnitur.is ntirtd sampling of f lt tht wi|| tkepla th beginning April2001. t of

Offers
Wlrtln a sller makes an offer or quotation, he proto lllitJ(}s suppl his goods on the terms stated in his rl|'|.tlr. This means that if a buyer plaes an order on l.lrr'asis f the sller's offer, the seller must supply goods as promised. offers an be made orall or |,lrrl ilr writing, although oral offers are usually onfirmed Ilr writing to prevent disagremnts. Srlliited offers are made in answr to an enquir, wltreas unsoliited offers are sent on the seller's llwrr initiativ in the hope of interesting potential l:tttomers.
seller qutation buyer to pla an order soliitd offer unsoliitedoffer poaBe pae; pa. o}tyae paIe aa oTBeoe pe,o)reIIo 3apoy peo}*tIleooeo
IIIIaBe

.lOth. dated Apri|onening.'. l hnkyou for your Itter /' We hav been givenyour addrssby... pots |' As one of the |ding mnufaturers earthenwre of in Spinw wou|d liketo of fr you... you sttedtht you r |ookrng for... 4' In your enquiry glad to hear that our atlogue to ws of interest 't' We are you. tj. he hmbrof ommereinformdus that VoU r n imoorter of...

or Lxts Are thseof frs so|iitd unso|litd?

ommril EngIish

iI l l()lr) nqUiry to 5j 5ontr1

23

Essentials of an offer Ideally an offer should give information about as many as possible of the following points: a) Type of goods b) Quantit of goods ) Pries d) Disounts (e.g. for early ordering/paymentn large quantities) e) Delivery times f) Terms of delivery (see hapter VI) g) Terms of pament (see hapters III and V) h) Type of paking xerise4. n Vou math th two olumns? 1.Type of goods 2. Quantity . Pris 4. Disounts 5. rmsof dIivery 6. ermsof payment 7. Delivr tim 8. Paking Tpes of offer Firm (binding) offer: The seller must provide the goods at the pries and terms given in his offer, and may not hange or withdraw his offer after it has been mad. However, he an state how long he blnds himself to his offer (e.g. "This offer is valid until 15th. otober''). offe without eng:agement (non.binding offer): Certain fators ma mean that the seller does not want A. ash on delivery B |F Dovr . 800 units D. 2 wks aftr ript orde of .5o/o f orderspIaed of withinthe nxt 7 days F. seaworthy ontlnrs G. woodn klthn hairs H. $50 per unit

l'll llirrd himself to the terms of his offer, for eample ilr Llre ase of ertain goods where the pries flutu. rrttl (oil, gold), if stoks are limited, or if industrial rllputes mean he may not be able to deliver on time. Ilt suh ases' he an inlude ertain phrases to make i[ lear that he may withdraw his offer at any time.
firm offr, binding offer offer without engagement, non-binding offer to withdraw an offer valid flutuate limited stoks industrial dispute TBptoe peo)fielle peo}ee e oae oe/oo3Ba peJIo,eIr eer; ero y oea opaellr aa or
polvIIIIIeIIoT

Lxrts5 hese s||ersa|| found themseIvesin situtions whih meant they hd to mke nonbinding offrs, Whih of th phrses below did they use? | r. Farmrmd n offer for 100 blesof hay.Howver, .rtthe time h md hisof fer, the poor wathronditions wre mkingIl frmrsnervous. ., Mr. Vintnrprodus limited numbrof qu|ity a wins. H rloesnot produenoughof thswinesto suppIyVeryllodywho sks,and so hs to in|ud approprite an laus when mkingoffrs. l Mr. Kithener,s ompany eports fridgs nd fzrs. At prsnthe is havingproblems With his supplier, nd h gurntuntiIth vry |astminutethat th goods .n,t wilIb drspthd time. on 4 the Bostona ompnyimpots t fom Indiaand s||s However,inrasing|bour osts tt to Arnerinrtilrs.

ommI.ia| nglisl^ Il Fromenqutry sa|es ontrt to

and poo hvstmns tht th pieof t is rising rpidIy. 5. Mr . Kpr imports xoti animlssuh as snkes nd monkysfor pt shops' Natura|ly isn,t aIwassy t it obtinthes animlsjust whn the ar vrlnted' ,,his of fer is sub1t bingunsold',, to ,,his of fer rs subjtto avarIabilit',, ,,our pris are sub1et hangewithoutnoti.,, to ,,his offer is subjetto a good hrvst.,' ,.his of fr is sub1et frnlonftrmation',, to xris6. Hr is typiIf fer letter. Read it and an. swr th ouestions b|ow.
MLeod nitwer 27 Pitlohry Road d i n b u r g h l9 tG EH Sotland

of or l |sthisa so|iitd an unso|iitd fr? How do you know? How do 2. Is it a fimof fer or n of fer withoutenggemnt? you know? 3. What kind of goods r berngoffrd and how muh do they ost? 4. Wht ar th trms of delivry? tim? 5. What is the de|ivry 6. What ar th tmsof paymnt? offr in th hope of on. does the sI|r /. Wht inntive th buyrto p|aa largorde? vining

Orders
tlffer, he ma then plae an order. There are a number f different types of order: trial ordr firm ordr standing order initial order follow.up ordr merhandise otr all advane ordr bulk order repeat order
pl aa pr aa
IIooIIIII aa

If the buyeris satisfiedwitlr the termsf the seller's

21'l Januar 2001 hSottish Shop 64 Iedonln Road NwYork,NY 5275 USA DerSrrs, h forign trddprtmnt our bnkinforms tht oU ar n of us goods. Sottish imortr quiit of our ompany on f th lading is you mnufaturrs traditionl of Sottish knitwar w are sending and in our atalogu th hopof doinglusinss you' with yu b Intrsted, n of fr you th following vry Should W ab| trms: rn - hildrn,s swtrs $59 ah @ - Ladis,rn swtrs $79eh @ - Gntlemen,s swetrs $99 h aran @ paking Thepris stated abov It G|sgow inlud r and sworthy W an grantyou quntity disount 59lo ordrs 200 sweat. of off f (ll(' l)re, Or Dlivery be ffted n within wksof ript order 6 of P yrl irslt o br 't .f r 'r l r ,d y |e tteo f r d i t . b r his 1 ri s i l b1t 'r o o t i r m t l o n ' of tt W hpto harfromyu sltln assure thatyourordrwi|| l b ou xutd yourbstsatisftion' to YoursfithfuIly, MLod Knitwar

epBolraar aa oey aa oBap o poar peBaplrTer 3aa3 oor 3ala3 oopr/oopar 3aa3

Mth the two o|umns Lxercls-Z

I Tri| ordr () he Ustomer pIas one order f or goods to be a rtain quntity of delivrd t regu|r intevis, .g. 500 kq. of offe on th first dy of eah month. (b) Th seond o rdr pIaed with ompny.

/ lirm order

ommeria| nqlish

ontrt to ll I l()rnnqUirv sIes

. Standing order 4. |nitia| order

5. Fo|low_up order 6. Merhandis on aII

7' Advaneorder

8. BuIk oder 9. Rept ordr

in plaed? friendgave hlm the nam of new supp|ir Turky. vry shop.Hr lothss|| .l. / Mrs. Grrlkhas smllIoths PIease send us the fo|lowing fe for test pUrposes: of Hoquik|y nd so sh prefrsto orde |argequantities. 100 g. Frenhrost sh dosn,thve enough spain the bak of her Wever, 100 g' Brzi|ian brakfst shop to stor Iot of loths. 100 g. Jmin bIend t Mr. Whee|eris the owner of pet shop. He speiaIises 2. ...wouId grtfuI you ou|dsend us as bfor.'. b if he snks.Rent|y herd from his espiIly in rpti|es, . ...if thr is ny possibi|ity you grantingus a quantity of suppIiertht in th next fw months it will beom disount this order? on diffiultto import thm, and so snkes orrnreasing|y 4. |f this order provessatisftory will pla soni W dred fter th end of this yer wiIIbeomeonsiderabIy order nxt month. more expensiv. you whenvr 5. .".nd W wiIla|| so we requir nW stoks. is 4 Mrs. olIins th ownr of a heesshop in the south of 6' ...tob de|ivrd the end of the first wek of very by quantities sometypsof heese, of |rge Sh seIls ng|nd. month. to nd would find it onvenint have f or examp|e hddr, pirsof whitetennisshos@ $15a pair... 7. ...20,000 vrvwek. lh heddrdllvered

Thr wouId thesustomers nswr| morethanon orrt xris 8. Hr are some phrses from order |etters. What kind of ordrs hav thse ustomrs l Mr.Brown business RentIy f rom import rpets ukey.

() h ustomr quanordrsa sm|| on ,,,to rordrth goods,th ordr of whih ws pIaed tity of goods to test th qua|ity. 17'l,. Marh' (d) h ustomerommits hims|fto rl on rmsof papeto be d|ivered the |stworking '..2OO buyingthe goods.histype of orxpted. tly of ah month,Sturdays dr my hve fixd de|ivery dt. and ustomrdmnd spaeis limited l()'As our wrehouse (e) he first order p|ad with a om_ lor the goods is high,we wou|d Iiketo p|ae... pny. inresupp|yis beomrng (f ) Th Ustomr ordrs the goods l] .nd as We hav heard that ,;ingly w diffiuIt, would |ikto p|aen ordr now for a Iongtime befor he needsthem of at th goods to be de|iverd the bginning next year. or |ongtime beforthy re vai. quantityas befor' and l/. ...qua|ity lable. ied l J. W have red your temsof tadend r stisf with (g) he ustomer ordersgoodsin |rg we your onditions. hrefor wou|d |iketo p|aa... quantities. evytwo wks. !4. .'.tobe deliverd (h)h ustomer orders xtly the e|ations l,>. hope this order will |adto f urtherbusiness We sm goods as before. betweenour firmsand... (i) The ustomerp|aes one ordefor August. to lb. ...de|ivey be effetedon 25th' quantityof goods whih he has ln delivered parts as and when h txr-9 What kind of ordr do you think eah of needsthem. p|a? mayb

28

ommria| nglish

ll' Fromenouirv sa!sontrat to

29

5. Mr. ltz.lohmmed owns Wrhousein London and is a whols|er hp|othing, of whihhe thn sI|s marto kt tradrs. |iks get th goods as hplys possi. e to bIe,nd knows that most manufturers offer disount if goods re orderdin lrgequntitis, 6. Mr. Grahm mnufturs mhlns soeifition. to H nedssom prtsto omplt mhin whih h is urrent|y building' Howevr, is a brtworriedas the ustom. he r needsth mahin 4 weeks,tim,nd this won,t be in possib|e h doesn,tgt the parts by rtain if date' 7. M Vintneris n x|usive retaiIr fin wins.veryyar, of h liksto hav just on bott|of ah nw wine to tr before deiding whthror not to stok it in his shop. Ms.Johnson' 8. RentIy the ownr of bookshop, orderd 20 opiesof nw ookrybook' h book so|dso we|| tht sh has deided order nothr0 opis. to 9. Mr, Wtherf is th owner of sho shop.Reently ield h established ontat with an xportrin ttaly and was so stisfid with the xution his iritiI of ordthat h hs oded extlythe same gin.

I make t}rbuyr n nn-bi,lrdi*g f{.."

\Z

Sdler

..'alrd t.ltntrt is olriudIrvhtl I trfirr

$j/

Bu.r

Sales ontrat
The sales ontrat is the legally binding agreemnt reahed b the seller and the buyr (the aties to the ontrat). It an be made orally o in writing' although it is usual for the ntrat to be dawn up in writing to prevent disputes. There are three ways to onlude a sales ontrat: l.. This is the most normal way of onluding a sales ontrato beause most offers are non.binding. As non-binding offers an be hanged or rvithdrawn at an time, a sales ontrat does not exist until the seller onfirms the order, making any hanges impossible.

2. Sellers tend to mak firm offers when trading in goods where th pries flutuate a lot. They set a fixed prie and if the buyer doesn't pla an order r.vithin the period of time where.this prie is valid, the offer expires. The seller an then make another offer with new pries to keep up with the pries on the market.
I mke tlt bue arr
ttnllrditilral (binling) ffer. ..

-*'/'t'

is ...alrd th otrtra:t ,}rrlrI plae arr nIrri'tl rder within th prid of tirrr stted in the ffer.

ommeril Eng|ish

to || ['romenquirv slesontrat

3. In this ase, if the buer is not interested in th goods' he is expted to return them within a ertain period of time, otherwise he will have to pay for them.
I srrd *ame goods t th buer in tlre lrp tlrat h will be intrrested... '..altd the rntrat is nlule{l wlren l brry tlre gds.

'h buer's liabilities are: . To aept delivry of the goods (this prevents him hanging his mind after the goods have been sent). . To pay for the goods within the time agreed. lf one party doesn't fulfil its liabilities, the ontrat l broken (this is alled breah of ontat). Itr this t:the other party (the injured part) an laim r:ompensation.
to fulfil liability title doumnt of titl breah of ontrat injured party ompensation IoIl oao paBo orro ol{ye' a IIpaBo o0TeIlo apIIIeII tooopa opa.aBIIIa opoa oa

^\

nr
sales contrat party to a ontrat

ooop y-poa) ooapBala opoI{a to onlude a contrat a)T ooop unonditional eyour' eooopor

lf take |? so, of 9. xerise Did a breah ontrt how?lf not,why not?

l A mil ord ompanysent some goods to M. Wi|Iiams. of Howevr,he refusdto pt de|ivry them s thy hd not been ordrd. from a ompnyseIl2' Mr. Abraham ordered20 teIevisions h goods.Howver, hd to returnon of th ing e|etrial beausit didn,twork. tIvisions 3' Mr. Watson refusedto pay th f u||priefor a ustomisd mtth xat|y it beuse didn,t he mahine had ordered, h speifiations hd given' to of 4. Mr. Adams sent f ree smp| wine glasses potnthe Unfortunat|y, pakgeburstopn trlnew ustomer. were broken. in the post and the g|sses Howver, 5' Mr. Wright sent some spare parts to n airlin. into finniaI of stff strikesbrought the arrIin sries ws on|ypid six months |tr. nd diffiu|ties his invoie

After a sales ontrat has been onluded, the seller and buyer hav to fulfil ertain liabilities (that means there are ertain things they have to do). The seller's liabilities are: . To deliver the goods on time and in prfet ondition. . To ensure that the title to the goods is transferred to the buyer - in other words, the seller has to make sure that the buyer beomes the owner of the goods. This is normally done by passing a speial doument, the doument of title, to th buyer.

ontrat m m r i ngI i s i ' || l r()menoulrvto 5a|es I

Complaints and adjustments If the seller auses a breah of ontrat, or if there is else something Wrong rvith the exeution of the order, the buyer an make a omplaint. Here ar some of the things a buyer an omplain about: . The goods are of inferio quality. . The goods are damaged. . The goods lvere lost in transit. . The prie is inorret. . There was a delay in delivery. . The goods were shortshipped (the weight was too low or the quantit too small). . Th wrong goods were deliveed. . The goods do not math the sample.
xeution omplaint infrior damaged in transit delay in delivey shortshipped sample IoIle peTe}I; pealvla ec: aeTBer, oxo opeer y ap)a oa eooaer opae

I f the seller is late in delivering the goods, the llttyer an send one or more reminders and tell the llller that he will withdraw from the ontrat if goods are not delivered by a ertain date, the |,lrl l'lrral deadline. It an be that the buyer reserved tlr ight to anel th order if delivery was late. llr this ase, h an anel his order without sendilrg any reminders |l. <:anhappen that the buer suffers a loss if the gtxlds are delivred late ._ he may lse business, for t'xltmple. In this ase, he an laim damages from l,lrrleller; that means, he att start legal proeedings l'llt'ompensation. However, if th delay is aused by l.lttltrs beyond the seller's ontrol, for example floods, r.rtrthquakes' war et., the sellr is not liabl for an t'the buyer's losses. justified adjustlent reminder deadline to resev the right to anel to suffer a loss to laim damages
oooarrt opaa (o)-aIoae pa po oTaB a oo pao
oTIeIIT oI{e yl poa BotvleeII

If the omplaint is justified, the sellr has to make an adjustment, i.e. he has to offr the buyer som form of ompensation. There are four possibilities: I.. The seller invites the buer to RETURN the goods at the selle's epense. 2. The seller REPI"AS the faulty goods at his own epense. 3. In some ases' the goods an be RPAIRD by the seller or at the sller's expense. 4. The buyer keps the goods, but the seller offers him a pie REDUTION.

you expet wou|d LxrisloWhatkindof djustment in eahse?

l Ytlttordrdtwo hests of best qulityeylon t. Ho. W('vr, you find that the quaIity infrior when it rrivs, is Irl tht of the samp|e. .lYtttI ordered 50 |dies,drsss size 40. Howver, ln the rltl..,.,t's d|ivred size 42. Nvertheless, qualityis re th wi|lsell just as well. ';.'.'.l.ltldyou thinkths dresses

nglish ommeria|

Il lrr;m nquiry s|es to ontrat

Howevr, when dinnrsevies. . You orderd20 por|ain pking,quite to r|ess they riveou find tht du lot of the pieesre broken. 4. You ordered40 pairsof hndmdlthershos.Whn yOUse that the stithing on of the shos on they rrive, is brokn. within to 5. You odrd6 wshingmhins, be dIiverd 14 dys.Howevr, wks |tthy stilIhven,trrivd' 6

rminder overdue hiddn,ovrt deferment

IIaoMaIIe popoelrr; aoar prr;oceI oTpoa

Questions for revision

l. What is the differene between a general and rt speifi enquiry? Desribe using examples. 2. What is the differene between a soliited and an rrnsoliited offer? Desribe using examples. 3. What is an offer without engagement and when is lt used? In the ase of an offer without engagement, how is the sales ontrat onluded? 4. What is a firm offer and when is it used? In the ase of a firm offer, how is the sales ontrat on. luded? . What is tlre differene between a trial order and nn initial order? (l. What is th diffeene between a repeat order and follow-up order? 7. What is the differene between a standing order ltttd merhandise on all? ti. What do ou understand b breah of ontrat? (live some examples. t). Desribe the reasons a buer may have to make lt lmplaint. What kind of ompensation would you, lr tlre buyer, offer in eah ase? l(). What an ou' as the seller, do if the buyer fails l l'rrlfil his liability of paying on time?

Rrninders
If the buyer fails to fulfil his obligation of paying on time, it is ustomary to send three reminders: beoms Pyment ovrdue I
Y

S l | r ndsf irs t r m i n d e r. h i s m y b e a h i dden s t or G ove r t r e m i n d r;h t m a n s i t m y b e i n |udd to i n n of f e r o r s a | s| tt th e b u y e

tt

tl

Buy r requests d eferm e n t

It th b u r d o sn , t a ns wer ,

of py me ntor mke s a prt- paym nI

ls seono rm|n0er snI

Buyr e qu st s fe r m n t d of pa yme ntor make s a pa rt - ym l l t

l f t h b u y e r d o sn,t ansW r , t h e s e l | rs e n d s thir d r mind e wi t h a f i n a l dedlin f o p y m n t n d s t t eshis intentio n t o t a k |e g a I ti o n if paymnt a i s n ,tm d b th i s dt

the se|l l f t h e r i s s t i I ln o rep|y, e r t k sI 9 | ti o n aginstth a buyr

I I

lII.Terms of paymentfor domesti trde

5 5 5 5
l.

5 5

withordr) Wo (ash oD (ashon Delivry) on Payment invoi Purhase) 'P'(Hir tems open-ount Lasing for Qustions rvision

Wlllrtt deiding on the terms of payment, the seller nrrrlbrryer have to agree on: . When to pay (for example in advan' on delivery) . How to pay (for example ash, heque, transfer) . How muh to pay (whether the seller is prepared |,rlgant any disounts). 'ypes of disount: l. I]ULK (QUANTITY) DISOUNT: granted when the lrrryerorders a large quantity. ..If ou order more than 250 units, we'll give you 10% disount.'' 2. ARLY PAYMENT DISCOUNT: granted when the lltlyer pays within a ertain period of tim. ..If ou pay within 7 days, ou an dedut 5% from the prie.''

:|. AstI DISOUNT: granted whn the buyer pays

r .lt h. ..[f you pay ash, we'll give ol 2o/o off .,,
IIpoaB yep,rBa ooBa Ia Ia a Ilpeoay I(a IIp oIIaTe IIaIII1!!

to grant to ddut bulk disount earl pamnt disount t:ashdisount

,l'ltt. ltlrnts of payment desribed here are all partiuIrrr.lv sttitable for domesti trade.

ommeil nqlish

ermsof pvmentfor domesti trade |||.

39

Wo (Cash with Order)

The buyer sends payment

with his order.

This is fvul'ahte f rrr' br*rtse tJtere is rtrrisk f m rrt gtting nrent f th gls, As p*nr*rrt tn* arit. slrr tirrr befr tlre gds ar snt *ut- it ttls rntr*I fltt rvs}rk bh tlr mnry. Titi is nt s fvuabl for ntt:, brtsif tli selle is lrlreliab}, l might y f*r tlr gods arrl lrt grt t}rltr.Arrrl. if I h;.rv rttr-n t tlre gls fr try reasl}! t hr,r tmake su that I grt nry ne}r }rrrk'

ash with order favourable unrliable to dispose of

oIIJIaa p alae peIIoTTer aer a (o); ra

COD (Cash on Delivery)

The buyer pas the ompany whih delivers the goods (for example the post offie or the arie) at the time they are delivred. The payment is then transferred to the seller. Hr tr:, the rik f rn nt being il is minirlr*l. .llnl evett if the buer refttss t pt dlivry arrt1 a, l drr.t lg t}rgtls. }Ire I n* lng rrrrr th risk of rrt riing gl. I'vr *id f. h tain dislv{'nt.ge nr is f tht ] dn't }rvthe hane t itrs*t tlr g*ds lr etitrg f ths.

SIlr

Beause this term of payment arries a ertain risk for the buyer, he will generally onl agree to it in ertain situations: . If he is doing business for the first time with a reputable ompan. . If the seller gives him a disount. . If he plaes a speial, expensive order (for example a mahine made to speifiation, where the seller would have problems to dispose of the goods elsewhere), the seller may ask for a part-pament to be sent with the order.

()mpanies whih don't know anything about the fitltttrial standing of their ustorers (e.g. mail order r:mpanies) prefer to use this term of payment.

40 ash on delivery arrier mail order ompany

nglis|i ommri|

l | | | ( ' l l nso f o Vm ent o r do m es t i r d f t

ollaa IIp IIoTae; <(Io aTy>> epeo oIoIIa ol![all; oNIaIfl oIoI{o TopoB

t,llt.wrdshe pays the balane (the remaining amount) irr weekl or montlrly instalments. Tiiis ternr of 111161 rries tin rish fr me; tit buyr nra nt be *ble t kop up the and if 1rreturrrs th gotls, I :ll trratnent, ltrge esell tlrm as ne\y.

Payment

on invoie

The buyer reeives an invoie on or after delivery, whih desribes the goods delivered, the amount to be paid and the priod within whih the invoie must be paid (e.g. L4 days).

lris tnl f piltnnt is far,urabl f rrrtrcrrrrsI arr int tlre gds brfre nying fr tlrm as rrell as h*ving tim t,o ;ty.

payment on invoie hire purhase down payment balane instalment interst

oaa o IIoI{IILI ceTa papoIty oya epr 3llo; peoaa oao B3Ilo poeIITI

H.P. (Hir Purhase) This trm of payment is offered by retailers on expensive produts suh as ars, large eletrial items et. The ustomer makes a down payment of about 1o-2o% of the prie and takes the goods away. Af-

open.aount

terms

With reliable ustomers who plae regular orders, tlr seller might agree to open-aountterms. Here tlrrl buyer doesn't have to pa for every deliver sepnrlttely. Instead, he reeives a statement of aount

nglish Commeril

lIl.ermsof pymentfor domesti trd

ever month or quarter whih states the total amount he owes the buye. He is then epeted to settle a minimum amount of his debt (10% of the total amount, for example).
A witlr !{-'' tr rrr'lrthe risk f th tirrer rit being bl i ktr u t}r ;rymelrts" At least it's nrre netri.rtltfr: nr* if I }y irv* -endart irtvtli;eoil rnrrtlr or orl evsr thr nrntjrs.

opn-aount trms statement of aount to ow to settl debt to rtain

yo. opIoo eTa BIa o ev r .olrwr paaBa' aIaT o oTa; oxpa

Leasing Leasing is different to the other terms of payment, beause the title of the goods does not hange hands. It is generally used for larger objets suh as buildings, land and mahiner. A lease is an agreement between the owner of the objet (the lessor) and the person who wants to use it (the leaseholde or lessee), whih gives the leaseholder permission to use the objet for a fixed period,
I.,nsitlg is g;1rvr* fr nrt: t t}rtr rgttla itttn frrlr trr opert}. Livgr a irrg ril' Thr tain risk fr nr }rer is ilrat tlt lslrr-ll tl .t ir a1rl t* kp tlp his paynrents,

# \r

LInlike II..' I all l1,pfit frm this terlr f 1layrrtif I plae rgular *rdrr. }l*tvrr.r, the arlvantags fr ffe Bg th sr*.

Do you remember what ..title'' meals, with regard to sales ontrats? Pament on invoie, hire purhase and open-aount terms an all be risk for the seller, as he is dependent on the buer's ability and readiness to pay. For this reason, he retains the titl of the goods until they hav been ompletely paid for. That means the buer can use the goods but the remain the property of the seller until the buyer has made full pament. This ensures that the seller an get the goods bak if the buer doesn't pa for them.

\ \/

Thrr rks lasir r g, c& f iu .rild lgs turd q r.l t il I tlrr }1. ** *tiht ler aff t. d.

ommeriaI ngIish

l||. ermsof paymntfor domesti trd

usuall several ears. In return, the leaseholder pas rent to the lessor, and is responsible for the objet leased (he has to arrange insurane and arry out repairs, for example). When the lease expires, th leaseholdr may be able to xtend it or even to buy the objet leased at a redued prie. In the ase of items suh as tehnial equipment, he may be abl to return the objet and take out a lease on a newer lrrodel.
lease lssor leaseholder,lsse rent to expire to xtnd apIra; ooBop ape.I apoa apIl,aop apeIIIIa aTa ea poa

Questions for revision 1. Compare CWo and CoD. 2. tI.P. and open-aountterms both rquire the buyer to pa in instalments. What is the differene between these two terms? 3. How is leasing different from th other terms of payment desribed above? 4. Whih of the terms of payment lesribed above is
most favourable for the seller and why? . Whih of the terms of payment desribed abov is most favourable for the buyer and why?

rrs-l.Whih terms of pymntmight you offer th e s e u s t o m rs ?

,]' A ustomr omSlnto your musishop and wnts pino his son. However,h isn,t real|yhpp bout buying fo in the pino outright, ase his son deideshe doesn't|ike pIay lng aftr ll. it A an 2. You reiv nquiryf rom a nW Ustomr. business of ssoiat yous mentionstht h hs hrd tht this dif is Ustomer in finani| fiu|ties. with your firm for has been doing busrness . he Ustomr However,h |ong tim nd has Iwyspaid promptIy. a p|aes months. one odervryfew on|y You most|ydo businss ompny.' 4. You own a mi|-order who order littlnd often. with orivte ustomers ustomrwnts to buy n up.to-dtemodl of 5. A privte (olDlltr that he n start his own business. so

lV. Money matters and PaYment

5 5 5 5
and banking Banks hqus of Bi|ls xhang for Qustions rvision

Banks

and banking

When it omes to dealing with money, the banks provide a variety of servies essential to trade and to the eonomy of a ountry. There are two main types of bank: 1. Central banks Tlrese are the institutions whih ontrol the banking of the entire ountry; they work together with the government to ontrol the ountry's eonomy. The entral bank of the United Kingdom is the Bank of ngland, in the UsA it is the Fderal Reserve System, in single.urrny urope the uropean Central Bank, et. The entral bank has a number of diffrent funtions: a) To issue banknotes and oins, th ountry's urreny. These notes and oins are legal tender in the ountry where they are produed; this means that traders in that ountry may not refuse them when they are offered as payment. b) To look after the ountr's gold reserves. ) To make sure that the ountr's urreny keeps its value. d) To at as bankers for the government and the other banks. r) To keep inflation under ontrol. Inflation happens when there is a lot more money (in the form of banknotes and redit) available than there are goods for sale (in other words, when demand for the goods exeeds supply). When this happens, pries inrease sharply and often. T stop it, the

4A

ommeril nglish

|V.Money mattersnd pyment

entral bank needs to take mon out of irula. tion, for example by inreasing interest rates (this makes borrowing more expensive and means that fewer peopl will appl for redit), and b inreasing the amount of money whih all banks have to deposit with the entral bank.
ntral bank urren legal tender inflation supply and dmand irulation intrest rate epa}lI (aoaI) a aIoa aooe llaero pTBo peIle IIpo opar poeIla TaBa

aount, but it is possible to transfer money to it from a urrent aount. .Investment aount. oney paid into this type of aount earns more interest, but th ustomer has to inform the bank in advane when he wants to witlrdraw his money. If it is a fied.term aount, he may not be able to withdraw the money for a ertain period agreed with the bank (for example, five years). This tpe of aount ma be used for larger, longterm savings.
ommerial bank bank aount urrent aount transation to transfer rnoney t<ldraw a hque ovrdraft to withdraw money deposit aount savings investmnt aount fixed-trm aount
oeI&Iepe oa ao ey u (aoa) oepa epeBo eII
BIIIIaT IIppaxo I I aT e e e I{

2. Commerial banks Thes are the publi or private banks whih people us for their everday mone matters. If ou have a bank aount for example, it will be at a ommerial bank. There are thre basi tpes of bank aount: . Current aount. This type of aount is used for everyday tansations suh as paying bills, transferring money and drawing heques. You an have an overdraft on this typ of aourrt (that means ou an withdraw more money than you have in the aount, although ou will have to pay interest for this servie), but you don't usually reeive interest on the mone you pay in. . Deposit aount. This type of aount may be used for short-term, small savings; the money paid in earns a small amount of interest. It is not possible to draw heques or have an overdraft on this tpe of

eo3TIII

pre
IIeToI

pour ue

eris What kindof bnk aountdo vou thinkeah 1.

of thes peopl might hav opend? whih he won,t b J,l0,000, 1. A twelv-year.o|d inherits hild abl to touh untilh,s]8' ,,for eme. An elderlyWomankeeps$200 in her handbag genis',. is persuded pay it into bank aountfor to Sh saftv. 3. An 18.year-old beginswork nd nedsn ountso tht his wages n be pid t the end of the month. amountof mony 4' A oup|e withyounghildren winsa Iarge in th |ottery.

ommeria| ngIish

lV. Money mttersnd pyment

5. A studentnedsa bank ountfor h grnt. 6. A tenager Wantsto sv moneyto buy motor-bike' Another funtion of the ommerial banks is to provide redit, in th form of: . overdrafts. where the ustomer an take out more money than he has in his aount up to a ertain limit agreed with the bank. He has to pay the mone bak whenever requested by the bank, and he also has to pay a relatively high rate of interest whenever he is overdrawn. For this reason. an overdraft is not the best option for long-term borrowing. . A loan is heaper if a large amount of money has to be borrowed over a longer period. It is usuall taketr out for one item suh as a ar or a house. and is repaid in monthl instalments along with a fixed rate of intrst. A loan used to buy a house or land is alld a mortgag. . Cdit ards suh as Visa or Amerian xpress are used to buy goods without needing to pay for them immdiately. The ustomer reeives a monthly statemnt and an either pay the entire amount in full (in whih ase no interest has to be paid) or in monthl instalments (plus a fixed rate of interest).
redit loan mortgage rdit ard I(pT ya aa; oTea peTIIa apToa

is 2. .Jenny a studentwhos inomon|y just meets her expenses.ln the winter months her heatingnd Ietriity bi||s higher, are nd withoutreditsh wouldn,tlwysb b|to py them. ' Adam Wantsto buy ar, but on|yhas enoughsavings to buy an old one. He wouid rathermak us of his bnk,s redit fi|ities buy nWr model whih hopefuIIy to wou|dn,t nd repairing oftn. so 4. Mrs. Brown hs her own ompany.She travels |ot on and Iikes mak us of her bnk,s business to reditfi|itls to spradher epnses oVa Iongerperiod. 5. M. Priehs to py th rnt for his prtment th first on dy of every month' Howvr,he on|y reeives s|ary his on th third dy of th month.Without his bank,srdit failities, wouldn,ta|waysb b|eto pay th rnt' he other ommerial bank servies inlude: . Standing ode failities, whre the same amount of money is transferrd from one aount to another at regular intervals. For eampl, somebody might set up a standing order to pay the rent autmatially ever month. . Diret debit failities, where a varing amount of mone is transferred from one aount to another at regular intervals. For eample, somebody might set up diret debit failities to pay his telephone bill automatiall every month. . Advising their ustomers on making investments, for example in gold, propert or shares. . Safe failities for their ustomers to lok up valuable artiles suh as jewellery or important douments. . Providing foreign urreny and traveller's heques. . Paying out ash (for example from ash dispensers) and aepting ash deposits. . Providing heques and arrying out heque transations.

xris2. What kind of redit did h of thse bank Ustomers ask for? 1. Mr. and Mrs. Grrington soIdthir old hous and bought nd a new one.Howevr, the nw houswas muh largr s moe Xpensive, thy ndd editto py the diffren.

s2
standingorder diret debit invstmnt property shars saf ash dispenser dposit

ommeril nglish

lV Mone mttersnd payment

ooI{tIIaa plvloe eeoae Be; Bo}eIIe I{e MyBo; oBro a aoa aTeE(: B3I{o

drawer drawee paee to debit drawn n

paa; o' oaBIIIee e TpaaT; o' a oopoe BITaBJI e paTa l]oyaTe IIo ey eeoa IIIa a

Cheques A heque is a ustorner'swritten order to his bank to pay a ertain amount to a ertain person or organisa. tion whn requested. As we already knorv, a heque an only be drawn on a urrent aount; furthermore' heques aren't legal tender - that means sellers are not obliged to aept heques as payment. They are generally only used for domesti trade. Parties to a heque

Cheques are supplied by the drawee (the bank) and filled in by the drawer. Here is an example of a heque drawn on a British bank:

(a)
\\ ".'.,,
. 1-ltol. . l1
\

(b)
' \
r n

()

(d)
\/

r NatWest
lr fr in cn a !7 9 fl

I V

(e)
-r.sl-ro-t

.lr n .' lr h r \ t 6 t oh st l

li5?.so l ; *!.s}.a..."_d]sq

^,"'.r:n \^,J -t. ,.'

^.

. \. ^

o. nfd'l

--

.^,.!f,''',{1 at" fa? -so *" , ,a^.r*t^ " a.Lc{,o. ,'" \

* ' " " f f - sL

i..: :1 _
oof

#._*-

_|i

rir
(d)

t lt t (i)

lAO0lA2A sl". ?0]?|: o, '. *'o*'. o.

(i)

(h)

(s)

1\ t\

(r)

I am th DRAWR. I write the heque and give it to the paee. The money is debitd from m urrnt aount.

The drawer's bank is the DRAWEE. Inthis as, th heque is drawn on the NatWest bank.

I am th PAY. I get the money, ither in ash from m bank or paiddiretly into my bank aount.

(a) The paee's name (b) The amount whih the payee is to reeive, written in words () The drawe's nam (d) The bank ode (e) The date on rvhih the heque was drawn (f) he amount whih the payee is to reeive, written in numbers (g) The drawer's signature (h) he drawer's bank aount number (i) The heque number

54

ommeril nq|ish

|V.Money mttrsand ayment

55

(j) The heque stub (also alled the ounterfoil). When the drawer has written the heque, he tears out the main part and gives it to the paee. He keeps the hequestub as a reord of the heques he has written.
bank ode signature heque stub, ounterfoil Types of heque 1. The heque shown above is an order heque. on it is written: ..Pay r. x. Y. Zapp oR ORDER.'' This means that this heque is only paable to Mr. X. Y. Zapp. To get the money, he has to prove that he is . Y. Zapp and sign the bak of the heque in front of the ashier at his bank. However, if x.Y. Zapp owes someone lse money, he might deide to negotiate the heque, that means to pass it on to another person as pament. To do this, he has to make either a blank. full or restritiv endorsement. (a) This is a blank endorsement: ao o o. opeIol

(b) This is a full endorsment:

?a l|/illtan Sntt or ordr

'r. . Zl

The person ngotiating the heque writes the name of the new payee and the words "or order", then signs it. This means that only the new payee' in this ase William Smith, an get the mone. However, the words ..or order'' mean that William Smith an negotiate the heque again himself if he wants to. () This is a restritive endorsement:

?a| t/iujab'Snltl, a /(07 to otdr

-r.

g. Z/

The person negotiating the heque writes the name ,.and rrot to order'', of the new paee and the words then signs it. This means that only the new payee (in this ase William Smith) an get the mone. The words .,and not to orde'' mean that the new payee annot negotiate the heque a seond time.
order hequ payable to to negotiate blank ndorsement full ndorsemnt restritive endorsement opepr ue o.}I(aoae; pTaIo de.. epea; epTy 6laor .oaMeII or II,oaNIe opaul
11.oaNIII

.Y. . Za/
The person negotiating the heque just signs his name on the bak of the heque. However, this is quite risky - anyone holding a blank endorsed order heque an get the money.

56

ommeri| nqlish

lV. Money mattersand payment

57

2. A heque with the words ..Pa ... or bearer'' is alled - not surprisingly - a bearer heque. Any. body holding (bearing) a bearer heque an get the money; it doesn't have to be endorsed. 3. The heque shown above is a rossed heque rossed beause it has 2 lines drawn aross the middle of it. This means that it annot be ashed. it an only be paid into the payee's bank aount. The proedure is as follows:

4. The pay's aount is reditd and the drawer's aount is debited.

Giry)
\.-J

r .ar

1r

G1l
\,

\\,--{F
\-'l"'

ffi /r
4/

1. Th drawr (right) draws the hque and givs it to th payee(left).

The problem with rossed heques is that the payee only gets his money if the heque is overed - that means' if the drawer has enough money in his aount. For this reason' the payee might ask for a marked heque; this is a heque marked with a guarantee that the payee will reeive his mney. 4. If these two lines are not present, the heque is an pen heque.An open heque doesn't have to be paid into a bank aount; the payee an present it to the bank and reeive ash in return. Dishonoured heques

G\
\2

2. The ayee fills out a pay. ing-in slip and givs it and th heque to his bank.

l\/

3. Th payee's bank presnts the heque to the drawer's bank.

In ertain irumstanes, the bank an rfuse to honour a heque (they an refuse to pay out the amount tated on it). This an happen in the following situations: . If the drawer doesn't have enough money in his bank aount to over the heque. . If the drawer has stopped the heque (that means if he has instruted his bank not to honour it). He an do this if he suspets the heque ma have been lost or stolen, but has to pa a fee for this servie. . If it ls suspeted that the heque has been forged. . If an essential part of the heque is missing, uh as the drawer's signature or the date.

58

ommril nqlish

lV. Mone mttrsnd pymnt

59

. If the heque is stale (out of date). The payee has to present the heque to his bank within a ertain period of time from the date it was drawn (6 months in the U). If he doesn't do this, the hequ automatially beomes invalid.
barer heque rossed heque paying-in slip overed marked heque open hequ to honour a heque forged invalid a peBe <IlpeepyI) e
a, IIeIl aIIoIIe{I y4I p a

(b)

I{ A'{ LGIIIDI.AN BAl( BA.l|cA}R sR' olr{BAY 1651 ?

2 ]t }4. 5 oo

()

oprr; oeeer eI apae oar oprr ue

oIIaT I oIlae oeIrI; I{; IIpIl elt

e.er

ari

(d)

k.J",l 'p

xeris3. Look at ah of the heques b|ow and nswer th questions for ah one. 1. Who is th drawr? 2. Who is the drw? . Who is th pay? 4. ls it a brror n ordr heque?|f th pyee Wantsto ngotite does h hav to ndorsit or dos h just it. hve to hnd it ovr to the new py? 5. |sthe hequopen or rossed? an it be ashedor does it hveto b paid lnto bank aount? (a)
3o g l Ba h z.tkiolrrPrl.wA .( 't h ]-1....a1

,L,o''

B"^

Bills of xhang
A bill of ehange is an unonditional order from one person to another to pay a ertain amount at a ertain time. The money an be paid either to the person who gave the unonditional order or to a third party. Bills of exhange an be usd for either domesti or foreign trade. The parties to a bill of exhange A payment transation made by bill of exhange ge. nerally proeeds as follorvs:

ommi| ngtish

|V.Money mattersnd pament

61

1. The drawer makes out the bill of ehange and sends it to the drawee (the person who has to pay it). He may send two opies (the first and seond of exhange) in ase one gets lost. 2. The drawee has to aept one of the bills by signing the front of it. If two opies are sent, the opy whih the drawee doesn't sign automatiall beomes invalid. A bill of exhange whih hasn't yet been aepted is alled a draft; an aeptd bill of ehange is alled an aeptane. 3. Th drawee then snds the aepted bill of exhange to the paee' who may be the d'rawer or a third party. At maturity (tire date on whih the bill of exhange has to be paid), the paee presents the bill for payment and gets his money. The payee an also negotiate th bill of exhange, but has to endorse it first (blank, full or restritive endorsement). l draw rh bill
f hangtl.

bill of exhange first/seond to apt draft aeptan matuit of exhange

ao Be; paTa epr/opo a3e4p eeJI p ( oae) IIaTeEIIoeOpeIIe aII aa' po BIIIaI

Types of bill of ehange Eah bill of exhngebelongs to a ertain ategory, depending on th time at whih it matures (has to be paid). 1. A sight bill inludes tlre words ..Pay at sight''. The drawee has t pay as soon as the draft is preented (as soon as he sees it). 2. Time bills ar payable at a fixed or determinabl future time. There are two types of time bill: (a) A term bill is paable a ertain number of days after it is presented to the drawee, e.8. ..Pa at 90 days afte sight'' (b) A date bill is payable a ertain number of days after it was drawn, e.g. "Pay at 60 days".
sight bill time bill term bill date bill Bee oIIa o IIpBeII Bee o poolu oIIaI Bee oao Ter ya3aIIIIoo poa Be aallo ao oIIaI

J,pa th bill f e:hrrg.

}r*wr

Paee

,..ff

e"{

3'd part'

and n4. be|ow Exrise Lookat the billsof xhng for swerth questions eahon. 1.Whois thdrawer? 2.Whois thedrawee?

ommerial nqlish

lV. Mone mttersand pyment

63

. Who is the payee? 4' What kindof bi|| exhnqe lt? Whn wi|| haveto be of is it oaid?
(a) jFDU89,I67 Drwn undr rdit numbr of UN|VRSAL BANK,NWARK dted29th. NJ ]une2000 Dte 25th. 2000 July For USD20,000 At 60 daysftrsight Py this firstof xhnge to th orderof oURSLVS th sumof twnty thousnd do|lrs U5 for value reived. o UnivrsI Bank For and on beha|fof Nwark, NJ AB orportion Washington, D Dated London, 2th' Jan.2002 For UR2,500.00 At sight pay this so| of exhng to the order of ourslvs urotwo thousnd hundrd fiv only vIuereivd, ord ]62 no. To Vrrt GmbH Hlborn GIasswors Huptstr. 19 21Upminstr Rod 70120 Stuttgrt London 4 8DF G r mny n g | n d xhange for A$ 8,600.00 Sydney.2"d. 2000 Jun At 90 days py this first of exhange (sond samdatndtnorunpaid) of to the order of johnson o.,271 Albert & |\4lbourn Sydny Road, ight thousand hundrd six Austra|jn do|lrs VIue reeived To Mihl Jons 121 l mo g aR o a d G n Adelid Gog Johnson 271M|bourn Rod Sydn

Disounting

a bill of exhange

If the paee needs his money before the bili of exhange reahes maturity, he an have it disounted. This means he an take it to a bank whih will pa him its value minus interest and bank fes (the disount). The amount deduted depends on the length of time before the bill reahes maturity and on how high the risk is that the drawe won't pay. In turn, the bank ma be able to have the bill of exhange redisounted at the entral bank. However, the entral bank only redisounts a limited number of bills, depending on how high the inflation rate is (if inflatirr is high, fewer bills will be redisounted in order to prevnt more money going into irulation). Protesting a bill of exhange A protest is a formal written notie that a bill of exhange has been dishonoured, and is needed before the paee an go to ourt to reover the money. If the drawee doesn't pay the bill of exhange when it is presented to him at maturity, it will be presented to him again within two working days, this time by a notar publi. If the drawe still doesn't pa, the notar stamps and signs the bill as a reord of the dishonour. Suh as dishonour is a serious matter; it ma be published in trade journals and at the Chamber of Cmmere, in whih ase the drawee will lose his good reputation.

(b)

64

ommeril English

lV. Mony mttersand aymnt

65

to disount a bill to rdisount protst to dishonour notar publi reputation

IIpI{ Bee oorvt epeyeT BeI( opoToalre; poe oTata oIIJIae oapy (oyapet) eya

10. Using your own words, desribe the different types of bill of exhange. 11. What are the advantages and disadvantages of disounting a bill of exhange for the paee? 12. How safe do you think making payments by bill of exhange is when ompared to paying by heque?

Questions fo revision 1. What role does the entral bank pla in the eonomy of a ountry? 2. Whih funtions of the ommrial banks do you think are the most important for private ustomrs? And for businss ustomers? 3. Using our own words, explain the differene between an ovrdraft and a loan. 4. Using our own words, eplain the differene between standing order and diret debit failities. 5. Whih kirrd of heque is the safst, and why? Whih kind of heque is the least safe? 6. In whih situation is a hequeor a bill of exhange endorsed? Compare the three types of endorsement. 7 . W h at d o yo u unders tand by "dis hono ur ing a heque''? In whih situations may a heque be dishonoured? 8. Who are the partis to a hque? And to a bill of exhange? 9. What is a draft, and what happens to it?

V. erms of payment for foreign trade

5 5

(AD) shaginst doumnts (D/A) Douments against ptan Lttrof rdit for Qustions rvision

Whn doing business with ompanies abroad, it is not always possible to use the terms of payment us. tonrary in domesti trade. This is beause the seller needs to hav more ontrol ver payment. If ompan A in England sells goods t ompan B in the same ountry, it is relatively easy to reover the debt if ompany B doesn't pay. Company A just sends three reminders to ompan B, and if this doesn't work, they an start legal proedings. Howevr, if ompan A exports goods to ompany C in China (for example) and ompany C doesn't pay, this wa of reovering the debt isn't pratial. Therefre' ompan A has to make sur that the Chinese ompany only gets the goods if they pay in China. In order to do this, both ompanies work in lose ollaboration with their banks and arrirs. The three terms of pament ommonly used in foreign trade are: . Cash against douments (CAD) . Douments against aeptance (D/A) . Letter of redit (L/C)

Cash against douments (CAD) This term of payment is also known as douments against payment (D/P). The buer needs the trans. port douments before he an take possession of the goods he has purhased, but is only given them after paying a sight bill drawn by the seller.

ngIish ommri|

V. rmsof pVmntfor forigntrde

69

A CAD payment transation is effeted as follows:

%
6'1\NY

G RlANy

1. The seller sends th goods to the arrier (ship owner' airlin t.).

. The buyr pas th sight bill and rives th transport douments in rturn. He an thn tak the transport doumnts to ollet his goods from th arrier in his ountry.

LLlNG

.r. I

PN

2. Th arrier gives th nssary transprt doumnts to the sllr and trarrsportsthe goods to th buyer's untry.

3. Th seller ollts any othr transport douments whih ma be nessaryand gives them to his bank (the rmitting bank) together with a SIGHT DRAFT.

6. The ollting bank sends the payment to the remitting bank. The amount is redited to the seller.

oLL|N6

/t|l
BNl{

1 I
ANK

4. The remitti ng bank sends the transport douments and the draft to the buyer's bank (the ollet. ing bank). The buyer is notifid when thev arriv.

This means that if the buyer doesn't pay, he doesn't gt the goods. This minimises the risk for the seller, beause if th buer doesn't pa, the seller an ask th olleting bank to find another buer. In theory this minimiss the loss for the seller, but may be a problem if he is exporting perishabl $oods, for example. CAD holds a ertain risk for the buyer, beaus he doesn't have the hane to examine the goods before he has paid for thm. However, this risk an be minimised by asking the seller to arrange examination of

nglish ommeria|

V. ermsof pymntfor forigntrd

71

the goods b an inspetion ompany before the are dispathed. The inspetion ompany will then seal th goods and issue an inspetion ertifiate, whih has to be sent to the olleting bank with the transport douments and the sight draft. ash against douments (AD) dournents against paymnt (D/P) transport douments remitting bank olleting bank erishable goods to dispath to seal to issue
oaa o oye
'oIIToB oyNIeIII IIoe ollal TpaopTIIa oll\{ea'f aaa a-ae a.oaeJI ItopoopT oTIIpaBT; oeaIBa BIaBa ToBap oTpy}Ia

2. Th arrier givs th nessar shipping doumnts to the sllr nd transports the goods to th buyer's ountr.

-\

The sllr ollets 3. th other shipping doumnts and gives them to his bank (the rmitting bank) together with a TIME DRAFT.

FN

)fi
I
'\3S

L RlllN BAIlI/

Douments against aptane (D/A) This term of payment is vry similar to CAD. However, instead of sending a sight draft to his bank, the seller sends a time draft. In order to get the transport douments, the buyer only has to aept the draft. At maturity, he goes bak to his bank and pays for the goods. A D/A transation is therefore effted as follows:

4. Th rmitting bank snds the douments and draft to the olleting bank (the buyr's bank). The buer is notified to whn they arrive.

oLL|

1 . T h e s e l l r sends the goods to the arrier.

5. The buyer goes to his bank and aepts the time draft. In return, he is given th transprt douments and an ollt his goods.

72

ommeria| nq|ish

V. Termsof paymentfor f oreigntrde

oLLtt{

6. At maturity, the buyer goes bak to his bank and pays th bill of ehange. The mone is sent from th ollting bank the remit. ting bank and rdited to the sellr's aount.

opening/issuing bank advising bank bnefiiary doumntary rdit

a- a, poo BIIIa o ape'TBy eap' Iloya o apeI.rBy oelrapI aIpB

Types of letter of redit

Obviously this is more favourable for the buyer than CAD, as he an take possession of the goods before paying. However, D/ carries a onsiderable risk for the seller: if the buyer fails to honour the bill of exhange, the seller probabl won't be able to reover th goods (two or three months may elapse between the time the draft is aepted and the time it matures, in whih time the buer may for example have sold the goods on). Moreover, taking legal ation to reover the money is far more diffiult on an international basis.

Letter of redit A letter of redit is a promise made by the buyer's bank (the opening or issuing bank) to send a ertain sum of money to the seller's bank (the advising bank), to be redited to the seller, known as the benefiiary, provided he fulfils his part of the sales ontrat. It is also known as a doumentary redit.
doumentsagainst aptan (D/A) oyeIIIoIIp}ITIo; Ilpeaa IIpaBa oeo oe IIov ea oaTe apeTB

1. A revoable letter of rdit an be anelled or hanged without the seller's agreement. As this doesn't offer the seller muh ontrol over pament' this type of letter of redit is rarely used. 2. ,\nirrevable letter of redit an be anelled or hanged, but only with the agreement of all parties. All letters of redit are irrevoable unless expressl stated otherwise. 3. A onfimed letter of redit is always irrevable. If the seller feels that the risk of not reeiving pay. ment is still too high, for exampl beause the buyer's ountr's eonom is unstabl, h an arrange for a bank in his own ountr to onfirm the letter of redit (this bank is then known as the onfirming bank; it an be the same bank as the advising bank). This means that the seller will reeive his money from the onfirming bank, regardless of whether r not his invoi is paid in the buyer's ountry.
revoable irrvoabl onfirmed unstable onfirming bank oro orr oBep}I{er (ap) eour, ear a, oBep}I(aro aIpTI{B

letter of redit (L/)

74

ommeria| nq|ish

V' Termsof pamntfor foreigntrade

Payment by letter of redit is effeted' as follows: 5. The sller hks that all the terms and onditions ar orretly listd in the L/C.

1. Buyer and sller agree on all terms and onditions o f th e s a ] s o n t r at.

2. The buyer fills out an appliation form to open a lttr of redit at his bank.

6. The sellr ollets all the nessar transport douments.

'*N 9 *) ,V
l

3 . T h e o p e n i n g (buyr 's) b a n k p e n s th letter o f redit and sends it to the advising (sller's) bank. If a p p ro p ri a t e , t h o pening bank also asks the onfirm. ing bank to onfirm the L/C .

7. Th sellr givs the transport doumnts and a sight or time draft to his bank. He an get his rnone now if the L/C is onfirmed.

w
Jlt

eB

,l t t,
4. The advising bank tells (advises) the sller that the letter of rdit has been opened.

8. The advising bank heks that all th douments ar orret and sends them to the opening bank.

lffi

76

ommri| nglish

V. ermsof pymntfor foriqntrad

77

9. The opning bank heks th douments again and sends the paymnt to th advising bank.

ROYAL BANK ng|and London. AppIint o' Shahlmport Road 176Stpny S27HLU K London Refreneno. HtD59765

LERo REDI Benefiiary Ta Rj ah o mpan y Ro 65 Gandhi d Indi Bomby 297645. Advisingbank Bank Ang lo- lnd ian Bldgs. Governor's lndt Bomby 27645.

Datnd ple Dt and ple of expiry of issue 1999, Bomby London 21 Ju| 20 June1999.
Amount (5vntv -TlV rup nousn0 sl s./5.UUU redit avilablwith by Bombay ngotition Bank, Ang|o-lndin hrin bnand nmd th ginst douments drwn Roy| on draftat 60 dayssight fiiry,s London. UK Bnk,

t
NG oPNl 8Nl{ \ \

DVl5lN6 BNk

ranshipmnt [ ]A I lo w ed[x ] No t allowed shipment Parti| [ ]AIlowd [] Not lIowed

10. The buyer pays (sight draft) or aepts th draft (tile draft) and gets the shipping doutnntsin rturn. With tlrs, he an ollet the goods from th arrier in his ountrv.

I l

2. Who ls the s||er? 3' Whih is th openingbank? 4' Whih is the advising bnk? 5. What kind of lttrof reditis it? 6. Wht kindof draft wilIb tthd the trnspot to dou. mnts?

.l. Exeis Look t th letter of rdit blow nd nswr the oustions^ '1.Who is the buyer?

l.

]
I

to Not |terthn Shipment/dispath tor trnsporttion 6 July1 9 9 9 Londn f rom Bombv Doumentsto b presentd inditing numbr L/ invoi 6 opis in ]. ommril bankof mdout to ordrof issuing set brlls 2' Ful| of Ian of |ding prpaid notifying thts applint indiating L/ also and L/ markd numbr of . rtifiat origin list 4' Paking These doumentsto be presntedwithin ..'.'days of the issueof th trnsportdoumentsbut within the va|idityof the rdit. for |nstrutions dvisingbnk of P|eseadvise benefiiries the openingof this redit.adding your onfirmtion' Method of reimbursement you to w At mturity wilIrimburs aordlng oUrtnstruttons DoumentsshouIdbe forwrded to us by air mi|. Jans "4dtso for ROYAL BANK

ommeri| ngIish

Questions

for revision btween

1. xplain the diffrenes and similarities CAD and D/A.

Vl. Terms of delivery (lnoterms)

5 5 5 5 5 EXW (ex works) for |notrms shipping transport for |notrms mu|timodal payment duty of ovring lnotrms for Questions revision

2. What are the advantages and disadvantages of CAD for the buyer? 3. What are the advantages and disadvantages D/' for the sellr? of

4. Using our own words, desribe the proess of paying by letter of redit. 5. Whih of the various terms of payment for foreign trade do you think is the safest for all parties, and why?

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(|noterms) VI.erms of delivry

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When goods are sent from a seller to a buyer, eah party has to know exatly whih of the osts and risks of transportation he has to bear. In order to avoid disagreements, the sales ontrat usually stipulates one of the thirten terms of deliver drawn up by the Chamber of Commere. These are known as inoterms (Intrnational Commerial Terms). They determine whih party is to bear the various osts involved in transportation and the point t whih the risks are to pass from the seller to the buyer (known as th passing of risk).

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RF sl{l.1N 1. The ost of transporting the goods from the seller's fator or warehouse to th ort of shipment, from rvhih the are to be shipped abroad. 2. The ost of loading the goods onto the ship at the port of shipment. 3. Freight osts - the harge made for arrying the goods on the ship. 4. The insurane osts inurred while the goods are being transported. 5. The ost of unloading the goods when the ship reahes the pot of destination in the importing ountr. 6. The ost of transporting the goods from the port of destination to the buer's warehouse.

xw (e works)
This inoterm rersnts the maximum obligation for the buyer: the seller has the glods ready for ol. letion at his fatory, and the buyer has to over all osts and bear all risks until they reah his warehouse. It an be used for all forms of transport.
passing of risk ex works fatory warehouse epeo' IIpaa pa pao-ao ao; apa a

Inoterms for shiping

When goods ar to be sent by ship, the following osts have to be paid:

82 port of shipment to load freight insurane to unload port of destination

ommerial nqIish

(ln(otrms) Vl. Termsof delrvery

op opa oTpydaT pa; p paxoBa; TpaxoBalle papy}a op aIIaeII

CFR (Cost and Freight) The seller pays for the transportation of the goods to the port of shipment, loading osts and freight. That means the buer pas for insurane, unloading and for the goods to be transported from the port of destination to his warehouse. The passing of risk is the same as for FoB (when th goods pass the ship's rail at th port of shipment). CIF (Cost, Insurane and Freight) The seller pays for the transportation to the port of shipment, loading osts, freight and insurane. That means the buer pays the unloading osts and for the goods to be transported from the port of destination to his warehouse The passing of risk is the same as for FOB and CFR (when the goods pass the ship's rail at the port of shipment). DES (Delivered ex ShiP) The seller and th buer share the osts exatly as desribed under CIF" The differene is in the passing of risk; this ours after the ship has arived at the port of destination but BEFORE the gods are unloaded.

FAS (Free Alongside Ship) The seller pays for transportation of the goods to the port of shipment. The buyer pays for everthing else (loading, freight, insurane, unloading and transportation from the port
of destination warehouse). to his

The passing of risk o. urs when the goods have been delivered to the quay at the prt of shipment.

FOB (Free on Board) The seller pays for the transportation of the goods to the port of shipment and the loading osts. The buyer pas for everything else (freight, insurane' unloading and transportation from the port of
destination house). to his ware-

The passing of risk ours when the goods have passed the ship's rail at the port of shipment.

ommi| nqlish

(|noterms) VI.ermsof deIrvery

85

DES (Delivered Quay) The seller pays for the gods to be transportd to the port f shipment, loading, freight, insurane and unloading. Gs The buyer onl has to pay for \ \

to I pid for the goods to be transported th doks and loded onto th ship. | lso gred to py th ost of the goods arossthe Atlnti. rrying h importeronIy hd to pay for th goods to b trnsI to portedf rom Rotterdm hiswrehouse. prdfor vrythinge|s.

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the goods to be transported from the port of destination to

his warhouse.

Inoterms for multimodal transport

The next three inoterms an be used for all frms of transport inluding multimodal (for example road + * air, train + ship). The osts and responsibilities to be shared are slightl different fror the shipping inotrms:

The passing of risk ours after the goods have bn unloaded at the prt of destination.
Free Alongside Ship qua Fr on Board ship's ail Cost and Fright Cost, Insurane and Fright Dlivrd ex Ship Delivered ex Quay pao Bo opa ya pa pao op a, o pa yIIa; ep ToNIo pa ToI{IvIo'TpaxoBae pax oTaBa a op opa oaBa llpay

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1. The goods are delivered to the first arrier. 2. organisation of transportation to th buer's warehouse and payrent of the osts inurred. ..arriage'') the harge B. Freight osts (here alled made for arring the goods. 4. organisation and pament of insuane for the journey. FCA (Free Carrier) The seller dlivers the goods to the first arrier (this is the point at whih the passing of risk ours). The buyer arranges and pays for transportation, freight and insurane.

I paid fo th goods to b transportd the doks at to Harwih. Afterwrds thy bem the buyer,s rsponsibiIity' 2. I mad the goods radyfor oI|tion, the buyehd but to do everything |se' ' I paid a||the osts invo|ved gettingth goods to Spain, in but |ft th osts of un|oading th impotr' to 4' I paidalIthe ostsinvo|vd gettingth goods}o exio, in but the buyetook ovr the riskf rom th time th goods were loadedonto the shipin London. 5' I pidf or th goodsto b transported Dovrnd loadd to onto the ship,but that Was l|'

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xerise | m a British ]. Xporte. What Werethe ino. temsher?

ommri| nqlish

(|notrms) VI.erm5of deIiver

CPT (Carriage Paid To * named destination) The seller delivers the goods to the first arrier (at whih point the passing of risk ours) and pays freight harges. The buer arranges and pas for transportation insurane. and

risks until the goods reahed a named point at the frontier. The buyer pas all sts and bears all risks involved in transporting the goods from the frontier to his warehous. He also pays duty.

CIP (Carriage and Insurane Paid to * named destination) The seller delivers the goods to the first arrier (passing of risk), pays freight harges and arranges and pays for insurane. The buyer only has to arrange and pay for transportation.
multimodal transport F'ree Carrier Carriage Paid To Carriag and Insur. ane Paid to paoppoao. IlvIBa}I paEIIopTa ool IIepeBo epeBora oIIaeIIa o epeoa Tpaxoa oIIaeIII o

DDU (Dliverd Duty Unpaid) The seller pays all transportation osts and bears all risks involved in getting the goods to the buer's warehouse. The buyer only has to pa duty.

Inoterms oveing payment of duty The last three inoterms are used in the ase of transportation through a bode (although not within the uropean Union) where duty has to be paid. They an be used for any form of transport. DAF (Delivered at Frontir) This inoterm is most ommonly used for overland transport. The seller overs all osts and bears all

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DDP (Delivered Duty Paid) The seller pays all osts and bears all risks to get the goods to the buyer's warehouse, inluding paying

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duty. This inotrm onstitutesthe seller,s maimut obligation.

(lnoterms) V|.ermsof delivery

Groups of terms The thirteen inoterms an be divided into four groups aording to the first letter of eah: . .' terms (EW): the passing point of ost and risk is when the goods leave the seller's premiss. . .F' terms (F'A' FAs, FoB): the buer pays the freight (arriage) osts. . .C' terms (CFR, IF, PT, CIP): the seller pays the arriage osts ..D' trms (DAF' DDP, DDU, Ds' DEQ): the passing point of ost and risk is on arrival in the buyer's ountry.

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duty border, frontier Delivered at Frontier Dliverd Dut Unpaid Delivered Duty paid

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Questions fo revision
1. Using our own words, explain the differenes and similarities betrven: . CIF and DES . DES and DEQ . DDP and DDU . FAS and FOB . CRF and CIF . CP and CIP 2. Arrange the interms in order beginning with the most favourable for the seller and ending with the least favourable. 3. For rryhihinoterms does the buyer have to pay insurane? 4. For whih inoterms does the seller have to pa freight? 5. Why do you think speial inoterms are neessary for shipping?

oaa oTaIa olua

erlse 2. Whih inoterm Was Usd in ah as A, P, lP, DAF, DDU, DDP? ,1. When we importd-shirts from the US, we on|y hd to organ|se trnsportation the ompnyin New York did verything e|se. 2. We offered ou ustomerin Brzrl very fvourbl terms of dlivery; on|yhad to py duty. h ^ l rrangd . for the goods to b snt s far as the bordr; ftr tht, it ws up to the importerto do verytr.rlng .i;' 4. We didn,thav to lift finger - th exporterdid everything I 5 W hd to arrang lnSUrn wel|s py|ng transport s to th lst lod of goods w imported. 6. I sent th importrthe nssry informtion about the rriag hrges h had to py, nd he ognised lnsurane and tansporttion himse|f.

Vll. Transportation
5 5 5 5 5
Domsti onshipping and Rodtrnsport Railway transport Air trnsport for Questions rvtsin

A good transport sstem is needed if goods are to be traded effiiently. A onsigner (someone who dispathes goods) an hoose to send his onsignment (the goods) to the onsignee (the person who reeives the goods) by: . Water, whih overs both domesti (national) and oean (international) shipping . Land, by road or by rail . Air. When hoosing the most suitable form of transport, the onsignor has to onsider: . What kind of goods are to be sent - perishable goods have to be transported more quikly than nonperishable goods, for example. . The plae of destination - not all destinations an be reahed by all forms of transport. . The ost of eah form of transport, how fast it is and how safe. The onsignor may have to deide whether speed is more important than safety, for eample. Types of argo When goods are being transported, the are alled ..argo'' or ..freight''. Cargo an be divided into three ategories: . Geneal argo - goods sent paked in boxes, ases' hests and other ontainers. . Bulk argo - large quantities of itms suh as sand, grain and oal when sent unpaked.

ommeriI nqlish

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. Bulky argo - large individual items stlh as ars whih have to be sent unpaked.
onsrgnor onsignment onsigne general argo bulk argo bulky argo py3oopaBT p; Irap oapa polloa erarr py; opI py aro py poo py

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ransporttion Vl|.

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Domesti shipping suh as Domesti shipping runs on inland waterways rivers'lakesandanals.oneimor tantservierofeder servie, vided by domesti shipping is the to tlre whih brings goods along inland waterwas loaded diretinternational quays where they an be abroad. ly onto oean-ging ships for transportation with This saves onsiderable time and effort ompared rail and transporting gools t th port b road or then ringing them to the qua for loading.

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Dmesti and oean shipping

Whn sending goods by ship, the arrier is the shipping line. Like all other forms of transport, shipping has rtain advantages and disadvantages for the onsignor and onsignee:

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It is th heapst form of transport ovr longer distances. The ports of a ountry may b aessible ven whn foreigners arn't allowed into th ountrv itself.

It is the slowest means of transport. It may be subjet to delays nd wather onditions. Th ntwork of inland wa. trways is rlatively limitd. It may be neessar to transport the goods a long distae to reah a port. tively high.

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Unlimited distanes an be ovred (e.g. betwen Th insurane osts are rlaontinents). Larg quantities an be transportd.

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The transport doument used speifiali for domesthe ti shipping is the rive bill of lading (also alled inland waterwaYs bill of lading)'

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94

ommril ngIish

VlI.rnsorttion

95

shipping line feder servie iver bill of lading

II lvlop}x IIepeBooI y}fia .oa alaa peIIIx IIepeBo3o

Advantages

and disadvantages of road transport:

oean shipping The goods are transported on the open sea or oean. There are several types of sea-goingl ship whih arry argo: . Liners sail on fixed routes and keep to a shedule. They mainl transport general argo. . Tramps take any argo they an get and sail to any port required. Th do not follow a shedule or any fixed route. . Coasters travel from one port to another along the oast of a ountry. They are not used for international shipping. The transport doument used speifially shipping is the oean bill of lading.
linr tramp oaster oean bill of lading

It is very fast over short distans. The extensive road network means that most destinations an be reahed. It is relatively seur - even valuable items suh as ash reserves an be transported by speialist ompanies Door-to-door transPortation minimises the need for handling - goods onlY have to be loaded and unloaded on.

Only small quantities an b transported. Ther is a relativel high risk of aidents and delays through traffi jams. It is expensive and time-onsuming over longer distanes; interontinental transportation is virtuallY impossible.

for oean

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Another advantage of sending goods by road (although it is also possible with other means of transport) is the opportunit of using a grouped onsignment servie. If a trader only has a small quantity of argo to send, he an ollaborate with other sellers with small onsignments all going to the same destinaC $r"r.e*

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Road transport
Goods rvhih need areful handling, suh as fruit, are often sent by road, as the only need to be loaded and unloaded one. Normall they ae sent as general argo. The arrier responsible for transporting goods by road is the haulage ompany.

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VIl.Trnsportation

tion. The various part onsignments are then sent together as one whole onsignment, whih redues the transport osts for everybod involved. one of the people who organises grouped onsignments is the forwading agent. He is th intermedi. ary between the buer, seller and arriers:

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RailwaY transPort If goods are transported b train, the arrier is the railway ompany. The prie of railwa transport depends on how fast the goods are to travel: the slow goods train is heaper than the passenge tain, and the express train is the fastest nd most expensive of all.

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other servies rvhih he provides are delivering goods from the seller to the arrier, tansporting goods with his own lorries, arranging speial pakaging and providing storage spae for goods whih are to be dispathed at a later date. The transport douments essential to road transport are the international onsignment note (CR) if a haulage ompany is used, and the Forwading Agent's Certifiate of Reeipt (FR) for transportation by a forwarding agent.
haulage omany groupedonsignment forwarding agent intermediar onsignrnnt not Forwarding Agnt's Crtifiate of Reipt oftra aeIx IIep03o optooare eTop opeIiIt pyoBa IraJIaa a peII{ llopolvl

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Virtuall all typs of argo an be transported. Virtually any distan an be covrd. Large quantitis n be transportd.

Th railways ma be affted by strikes. Ther is a rlativel high risk of thft.

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.he transport doument needed for railway trans. port is the ail onsignment note.
railwa Ompany goods train passenger train xpress train rail onsignment not
o}raII }t(ee3l{oopo)tt ItIx epeo3oK oapr oe o aa}Ip oe3.pe IIaa.I{a Ilepo3o reeo opoo

Air transport
L

Air transport is hosen when the goods are valuabl, fragi1e or urgently needed.The arrier is the airline.
4 - 1066

98

ommeril nglisi

Advantages

and disadvantages:

I le

Vll. rnsporttion

99

5. A argo of timber (wood) from Germany to Eng. land via Rotterdam. 6. A onsignment of diamonds from Cape Town to Cairo. ?. A large onsignment of oal from Sheffield to Leeds (both in th north of ngland). 8. A argo of bananas from the Caribbean t Dublin. 9. A larg onsignment of lorries from London to Warsaw. 10. A small onsignment of heese from Srlitzerland to the USA.

Air transport is fast. It is a sur form f transport, whih rneansthat insurne osts are low. .l'hris no limita. tion as to distane.

It is relatively xpensiv. It is subjet to delays and strikes. It is not pratial for short distans. It rnay be neessary t send th gods som distane to reah the argo terminal of an airport.

The transport doument neessar wlren goods ar dispathed by air is the air waybilt.
airlin airwabill aBaJIIItIvt aapyoaIIaIa.a

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Questions for revision

Whih form or forms of transport would ou hoose for the following onsignments, and why? What kind of argo is involved in eah ase? 1. A large onsignment of ars from Hambug Dresden. to

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2. A small onsignment of flour fronr Wales to London. 3. A small nsignment of hina from London to Mosow. 4. An urgently needed onsignment of tea from Bombay to Boston.

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Vlll. Export douments

5 5 5 5 5 5 5 5
Theoanbillof ldino Air wybi|l ommerial invoie Po-forma invoie ustoms invoi onsular invoi rtifit origin of for Qustions revision

In the last hapter we mentiond some of the most essential transport douments, inluding the bill of lading and the air wabill. We will now look at these and some othes in mor detail. Th oean bill of lading

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As we know, this doument is issued when goods are sent b sea. There are normall three oiginals.

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A bill of lading serves a number of purposes: . It is evidenethat the shipping line has reeived the goods (it's the shipping line's reeipt). . It is evidene of the ontrat between the ex. porter (shipper) and the shipping line. . It dumentsthe shipping line's promise to hand ove the goods to the holder of the B/L at the port of destination. . It is a doument of title - evidene of ownership of the goods.

A bill of lading an also be negotiable, whih means it an be transferrd to a third party along with ownership of the goods, provided it is endorsed. How is a bill of lading issued?

1. The xporter gives the goods to the forwarding agent for transportation to the port of shipmnt. He also hands over a shipping note (in the ase of goods whih aren't dangerous; other''vise h hands over a dangrous goods note or DGN). The shipping note provides the port autho-

104

nglish ommeri|

V| | l .x po r tdo um nt s

r05
oen Bi|Iof Lading
Negotib|e

7. The shipper then arrangs for th bill of lading to b sent to the importr or , t h e i m p o rt r ' s b ank, dep n d i n g o n t h e tr ms o f payment. on he has the bill of lading, the importr an ollet his goods frorn the port in his ountry. shipper shipping note dangerous goods note tallyman Mate's Reeipt lan dirty opaBTe yBeotvlell o opye yBeo}lIle o opy oaoo py3a opop Iypalra paa vl, B IIop pr, IIe B ope

Exportr Grayson rmis Ltd. 2 Pottrs Lne Stfford 4D ST] GRA BR|A I N onsignee B/L no. to ordr D19762

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No. of origin|s Vessel SS Unsinkable SaiIing dt 22 Mrh2000 EA 4 Aorrl 2000

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Port of loading arwih, GB Port of dishrg H o usto n. US Freight [x]Prpaid [ ] o|lt

.l. xerise B|ow is an xmp|e of bil|of lding. Look at it and nswer the questions. ,l' Who is the shippr? 2. Who is the arrir? . Who is to reeivethe goods? 4. an this bi|I ladingbe trnsferred a thidprty? of to 5. Whr is th port of shipmnt? 6. on whih date are the goods to Ieavethe port of shipment? 7. Where is the port of destintion? B. on whih day wi|lth ship probab|y arriveat the port of destintion? 9. Who is the py the freighthrges- the exporteror the rmoorter? .l0. |s this bi|| |ading of |anor dirty?

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No. okaoes l Partiu|ars qoods of Wiqht Quntity ,]5 15pakgs Stttordshtr 00 | srvIs l 0|nner 1200KGN/ 00 Total: goodordrand Aptd th rrir fromth Xporter pprnt in by (un|ess o{ ondition otherwis notdhrin) tot| th numbr quntity of indiated bov, stted th xby ontinrs othrpakgs units or or portr ompris goodsspifid subjet l| to to th bovfor rrige to th termshrof fromthe p|a ptn portof loading th of or pla portof dIivry, or whihvr pp|iab|. ln aepting BilI this of its Lding mrhnt the agrees b boundby a|| onditions, to exptions printd stampd th f rontor bak whther writtn, or on or provisions, hron. () HR originI |NW|TNss whreof Bs/L hvbnsignd, not othrwise of sttedherein, to oneof whihbing aompIishd othrs th b void. /kru:lch, 20 Jla'h 2000 |4ah snid| for of vss| Siqned the Mster th bov PI dtof issu nd

ommerr| nglish

V|l|.xportdouments

Types of bill of lading We have already seen that a bill of lading an be lean (when the goods appear to be in good order when loaded onto the ship) or dirty (when some of the goods are damaged or missing). If the bill of lading is dirty, the onsignee an refuse to take delivery of the goods. Furthermore, if the bill of lading is an essential part of a method of payment (for example the letter of redit), the bank may refuse it. However, there are also various other types of bill of lading: 1. The reeived bill of lading: This kind ot /I is issued when the goods have been inspeted but haven't yet been loaded onto the ship. Suh a b/l may for example be neessary when the ship has been delaed and hasn't et reahed the port where the goods are waiting. In ontrast to the reeived b/l, this bill of lading is issued for goods whih have already been loaded onto a ship. Banks ma insist on on-board bills of lading as being safer than the reeived version. This kind ot /| can'\ be negoonsignee only the tiated. stated on th b/l an take delivery of the goods. This b/l an be negotiated by endorsement. Banks onl usually aept order bills of lading.

5. The through bill of lading:

This kind ot /I is used when the goods are to be transported b more than one arrier. The b/l is valid for the whole journey and prevents eah individua] arrier having to issue its own transport doument.
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6. The ontaine bill of lading:

u B/L This is used for the transportagoods tion of ontainerised paked in standard-sized (goods whih are then ontainers sealed and not opened until they reah their destination. These ontainers do not have to be inspeted by the ustoms authorities when rossing borders). Suh a b/l also overs the road and/or rail transport neessar to get the goods to and from the ports of shiprent and destination. This /I is used for grouped onsignments. The bill of lading lists the forwarding agent rvho arranged the grouped onsignment as the shipper, and the forwarder in the importing

2. The on-board bill of lading:

3. The straight bill of lading:

7. The groupage bill of lading:

4. The order bill of lading:

108

ommeriai ng|ish

VlIl' xportdoumnts
7

109

ountry as the onsignee. The forwarding agent then issues a horrse bill of lading to eah of the exporters whose goods are inluded in the grouped onsignment. The house b/l then serves as the olletion doument for the importer. reeived b/l on-board b/l straight b/l order b/l through b/l ntainer b/l ontainrised goods ustoms authorities groupag b/l hous b/l
aaI{a a IIpoBpe}IIII' Iro Ir lloprer py IIaa'Ira IIa y3' IIprIr a op ya
MIIa opeplla oa IIaa.IIa lla}aa I{aI(aIIa

Goods shipped and waiting to dpart

Container to be sent from London to Paris via Dover and Calais

Part-loads shipped b red's Forwarding Ageny

Ai wabill
Unlike the bill of lading, the air waybill isn't a doument of title and an't be negotiated. However, the exporter has a right of disposal to the goods, whih means that on presenting his opy of the air wabill, he an stop the goods during their journey, have the goods delivered to a different onsignee from the onsignee mentioned on the air wabill, or have the onsignment returnd. This is useful if the eporter disovers after dispathing the goods that the on. signee may not be able to pay for them. The air waybill is made up of thre originals and several opies: . original 1 is marked ..For arrier'' and is kept by the airline one it has been signed by the onsignor or his agent. . original 2 is marked ..For onsignee'' and travels with the goods. . Original 3 is marked "For shipper" and is returned to the exporter one it has been signed by the airline. xerise Look at the air wybi|| 3. shown blow nd n. qustions. swer the 1. Who is the onsignor? 2. Who is th rrier?

a a a a p o o 3 oBapoB oeepe py B oeepe Tao}I]I T opa IIaa aaIla I{ypeII

2. Exerise What kindsof b/| are these?

Consignee P. Smith or ordr ,,
Bulk argo to be sent from London to Copenhagen via Hamburg Consignee P. Smith Case no. 5 missing

Goods in Kiel awaiting shipment

Goods reived in apparent good ordr

110

ng|ish ommerial

V| | l . po r tdo um ent s x

the . Who is to reeive goods? Whih airportre th goods to Ievfrom? 4. t? 5. Whih irportwill the goods rrtve of? onsist onsignmnt 6. Wht does the

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7. Whois to pay'n.

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The ommerial invoie is the seller's formal rquest for payment. Along rryith the transport doumnt, it is probably the most important paper needed in an export transation, as it is also an essential ompnent of ertain methods of pament (for example the letter of redit) and indispensable for ustoms purposes. Several opies are mad. The ommerial invoie serves the following purposes: . It is a reord of the transation between the seller and the buyer, listing details of the goods, how muh they ost and how they are to be transported . It is the basis on whih the ustoms authorities assess how muh duty or ta is to be paid . It is used to onfirm the value of the goods for insurane purposs.

food produts |o| 5 ses,

Pro-forma

invoie

Unlike the ommerial invie, the pro-forma invoie is not a request for payment. Instead, it is a.,sample'' invoie, whih may for example be issued: . When the buyer has requested a quotation . When th seller sends the buyer goods on ap. proval . If the goods are to be sold by an agent, in whih ase the agent will need a pro-forma invoie in ordr to be able to fix his own pries.

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112

nglish ommeri|

V| | |x po r tdo um ent s .

113

right of disposal ommerial invoie tax pro.fomainvoi on approval agent

paBo paop}rIr (oeo) opol v.aypa ao lpeBapere otl&olue aIl; peTaTe

1. The porter bus th relevant forms from the onsulate of the importing ountry loatd in his own ountry.

RUvl4}l oN5UL

Customs invoie Some ountries may require the exporter to provid a ustoms invoie, a speial invoie for the ustoms authorities of the importing ountr. This invoie is vr sirilar to the ommerial invoie, but requires additional information suh as the domesti valu and export prie of the goods. With this informa. tion, the ustornsauthoritis an deide whether the goods are admissible (whether the an be allowed into the ountry) and how muh duty is to be paid. A ustoms invoie may be required in the following situations: . Wher the value of the onsignment is relatively high . Where speifi types of goods are being imported . If the importer requires preferential teatment by the ustoms authorities, for example a lower rate of duty. Consula invoie Cetain ountris, notabl those in South Ameriao ma insist on a onsular invoie as evidenethat the goods being imported are not over.pried. A onsular invoie is issud as follorvs:

2. The exporter fills out these forms. This is no asy task, s there may be up to 6 opies, and the all have to be prfet - if anything has ben addd or rossd orrt. th forms will b rjeted. 3. The exporter takes a ollnrial invoi for the goods to be exported to tlr Chamber of Cornmere. Here th invoi is stamped on th revrs sid to onfirm the origin of the goods (where the ome frm). 4. The exporter then takes ll thes forms - plus any others whih may be required - bak the to onsulate. 5. Here th onsular invie is legalised by the onsul. This means that the eport. er has to swer to the auray of the douments.

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114

ngIrsh ommeri|

Vll|.xportdoumnts

115

Certifiate

of origin

The etifiate of origin is issued by the Chamber of Commere as proof of where the goods were produed. There are two reasons why a ertifiate of origin might be neessary: . When there is a trade agreement between the exporting and importing ountries. In this ase, if it an b proved that the goods were made in the xporting ountry, duty is harged at a lower rate or possibl not harged at all. . For politial reasons, to prove that importers aren't importing goods from ountries with whih trading relatins are not desired.
ustoms invoie admissibl preferential treatment onsular invoie ovr-pried origin to legalise ertifiate of origin a[olella aaa paspelelrI ( oy) peepear pe)lvl oyJI o (o.e) aBIIIIeHI{I poxolrtel{ aoa epa IIpoxoEt/eIrfl

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xerise4. Look t the invoi b|ow and nswer th following qustions. .l. Wht kindof invoi it, and what purposdos it sve? is 2. Who is the seIlr? . Who is the buyr? 4. ow nd when ar th goods to b snt to nad? 5. Wht kindof goods r involved, wheredo thy om nd f om? 6. How is pymntto b md?

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Questions for vision 1. What is a Mate's Reeipt?What is the differene betwen lean and a dirty Mate's Reeipt? a
2. Desribe the differenes and similarities between: . The reeived and on-board bills of lading

116

ommeril nglrsh

. The ordr and straight bills of lading . Th through and ontainer bills of lading . The bill of lading and the air waybill. 3. In whih ases would you issue a pro-forma invoie rather than a ommerial invoie? 4. Whih different purposes do the ustoms and onsular invoies and the ertifiate of origin serve?

lX. Customsand duty

5 5 5 5 yps duty of a|u|ting duty produr ustoms for Qustions rVision

l. ustomsand duty

Ever ountry has to ensure that the proportion of imports to exports has a positive effet on its eonomy. Too many heap imports an damage a ountry's eonomy' as sales of the ountry's home-rodued goods will suffr. Too man expensive exports an also be harmful beause few people will buy them. Therefore, eah ountry has the right t impose duty on imported goods in order to ontrol pries and protet its eonom.

is known as dumping. This, of ourse' would be a threat to the Italian shoe industry. To prvent this, the Italian government would impose protetive duty on South Amerian shoes, whih would inrease the rie so muh that they would no longer be able to ompete with Italian shoes. 2. Preferential duty: Preferential duty is a lower rate of dut impsed on ountries with whom there is a trade agreement. Suh agreements may be bilateral (between two ountries, suh as Germany and Israel) or multilatral (betweenthree or more ountries). Groups of ountries whih have multilateral trade agreements inlude NAFTA (the North Amerian Free Trade Assoiation, made up of Canada, the US and exio) and ASAN (the Assoiation of Southeast Asian Nations, made up of Brunei, Indonesia' alaysia, the Philippines, Singapore and Thailand). This lower rate of dut is imposed to nourage importers to trade with the preferred ountries rather than with non-member nations. xise duty The purpse of eis duty is to raise mon for the government. It is imposed on ertain home-produed produts suh as luxury goods, igarettes, oil and aloho1.
home.produed goods to impose duty export duty import duty prtetiv duty oTeeTeI{IIIe ToapI oaa oto opTlra oIIII{a Nlopa ola; IIao I{a MopT poeoI{a oIIIIIa

Types of duty Export dut Export dut is sometimes imposed on goods when they leave the ountry (for exanlple on oil exports from Russia). However, this kind of dut is not ommonly imposed beausein many ases it would make the goods too expensive for the world market. Import duty This kind of dut is imposd on goods when they are brought into a ountry. There are two types of import dut: 1. Protetive duty: Protetive duty is imposed to prevent home produers losing business beause of heaper foreign imports. Importers in ltaly, for ample, may try to import shoes from South Ameria as they are heaper than Italian shoes; this proess

120 dumping prferential

ommril nolrsh \tIIIl peepeaa oIIIa opooeoaIIIeI{r opo ooop ar op pooIII pe/eI

lx ustoms duty and

Compound duty Compound duty, also known as mixed dut, is alulated using a ombination of ad valorem and speifi fators; both the quantity or weight and the value of the goods are taken into onsideration. This kind of duty is imposed on goods where the pries flutuate, in order to prevent the amount of duty falling below a ertain minimum. For eample, duty may be impsed on tea at a rat of 70o/.of the value (ad valorem duty). However, if the prie of tea falls, steps must be taken to prevent the duty falling below a rate of $20 per 100 kg (speifi duty). If this happens, speifi dut will be harged in addition to the ad valorem duty to keep the duty imposed at the minimum required.
ad valorem duty speifi(fixed)dut ompound (mixd) duty oIIIa ad valorem eeaoIIIJII{a MIIIaIla oIIIIIa

duty tradagreement bilatral mu]tilatral exise duty luxur goods

,l' xeris What kind of duty do you think Ws imposed in h se? .l. An eportrrn Switzrlnd sent a onsignmnt hse of to n importr Swdn' in 2. An importr Japanwntd to buy heap amrsfrom in iwan' 3. A group of Amrin tourists bought quntity of'expensiveperfume whi|eon holidvin Fran. 4 A Grmn tobo ompny imported igars from ub.

An |ndian ompny te srnt lrgquntlty tea to of E n q ln d. Calulating duty

Duty is alulated in several Was: Ad valorem duty Ad valorem dut is harged as a perentage of the value of the goods, i.e. the more expensivethe goods, the higher the dut. Speifi dut Spifi duty, also known as fied duty, is alulated as a fied sum of money pr unit of quantity or weight, e.g. 5 nts per kilo, 10 dollars per 1000 units t.

Customs produr If the goods being imported or exportd ar dutyfree (if no duty has to be paid on them), the have to be delared to the ustoms authorities but rvill be immediatel leared for further transportation. However, if the goods are dutiable (if dut has to be paid on them), they will proeed through ustoms in one of the ways desribed here: 1. The goods are transported to the ustoms offie at the border, the duty is alulated and the importer pays it (or the eporter, depending on the trms of

ommeri| nglish

|' Ustomsnd duty

12

delivery). The goods are then released for further transportation to their destination.
B npel

been paid. This means the dut doesn't have to be paid until the goods are needed (fr example when the importer finds a buyer). In this ase, the importr proeeds as follows:

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2. In the ase of ontainerised goods, the ontainer is sealed by the ustoms authorities at the plae of departure, then transported to the ustoms offie at the plae of destination. Her the ontainer is opend, the duty is alulated and the importer pays it. This eliminates the need for the goods to be inspeted at ever border they ross.
Custs
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a) The ilnportr has his r goodsbrought to th bondt \.,\ ed warehouse for storage. k/ \

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b) I n r tur r r , th w aeho usman gives the importer a bond warrant as a reipt for the gods. Th bond warrant is a negotiable doument.

BORDTR

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duty-free to delare goods to lar goods through ustoms dutiable

eorr eappoBaT ToBap pooT aIotey oIty oaaer or

3. The third possibilit is for the importer to store the goods in a bonded warehouse, a speial ware. hous where goods an be stored until the dutv has

) Th importr tris to find buyers for the goods while the are in bond.

124

ommeril ngIish

lX. Customsand duty

125 a\[o}IdeIIIII a ae/pao c|<JIaa ToBapa oyII o xpaeIr IIa JIa

d) Should the potential bur ned to se samples of th goods whil th ar i n b o n d . t h i s n e dn't be a p r o b l e m . T h e i mpo r ter goes to the warehouseman and obtains either a smpling orde, whih enabls hirn to take away sampls of th goods in bond; or an i n s p e ti o n o rd e r, w hih nable lrim to take the po. tential ustomer to inspet th goods. ) one the importr has found a buyer, he dorss the bond warrant and hands it ovr to th buer. If he has found several buyers, ah of them reives a dlivry ordr .whih serves t h e s a m e p u rp o s as the bond warrant. f) The bur takes th bond warrant (or delivry ordr) bak to the bonded Warhouse and pays th duty on t h e g o o d s . I n r tur n, he reeivs a ustoms permit whih means the goods an b released from bond. g) The buer then takes the ustoms permit and bond wrrant to the warehouseman, who hands ovr th goods in rturn.

bonded warehouse warehouseman bond warrant in bond sampling order inspetion order dlivry order ustoms prmit

Ir Tao,{eo axo ae ; epaao}Itrrr opp I{a Iloye opao

eorrr opep
paop)rdel{e o BIa oBapa o I(aa aIo)tIllloe papeIII}Ie

Questions for revision 1. Using your own words, desrib the different tpes of duty. What purposes do they serve? 2. How an dut be alulated? Why do you think it is neessary to have more than one way of alulat. ing duty? 3. What is a bonded warehouse, and what purpose does it serve? 4. A bond warrant is a doument of title. What does this mean? 5. Explain the differene between a sampling order and an inspetion order. Give some eamples of goods for whih eah one would be appropriate.

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X. Marine lnsurane
5 5 5 5 Prinipls insurn of Types insuran of poliy ypesof |oss for Qustins revision

arine insurane is the oldest form of insurane. Bak in the Middle Ages, ships were the most im. prtant form of transport, and thir argo ras ften very valuable. Sometimes traders would even risk thir whol apital with just one slripment. So somebody ame up with the idea of forming a group to spread the risk - and marine insurane uras born. Very generally, marine insurane works as follows:
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The ship and argo owners (the insured) eah pa a perentage of the value of their goods (the pre. mium) into a fund administered b the insurane ompany (the insurer). Should one of the insured then suffer a loss, he an laim ompensation from the insurer for the loss; this means he will reeive money from the fund to the value of the loss he suffred.

128

ommeril ng|ish

X. Mrinelnsuane

insured premium insurer to suffer a loss to laim ompensation

3apaoBar axoa pM; axoo B3IIo paxoBae oIIeT yr peoa BoMeeII

quirements are fulfilled is drawn up.

when the insurane poliy

Utmost good faith (uberrimae fidei) Whn somone fills out a form appling to take out insurane, he is obliged to tll the truth about the value and ondition of the goods to be insured, and also to mntion anything whih might inrease the risk of the goods being stolen or damaged. The ..utmost god insurer apts the appliation in faith'' that all the details supplied by the insurd are orret, and fixes the level of the premium aordingl. For his part, the insurer is obliged to deal fairl with the insured, for exarnple by making all the onditions of the insuran poliy lar to him. Insurable interest It is essential that the insured has an insurabl in. terest in the goods to be insured: this means he has to suffer a finanial loss if the goods are stolen or damaged. Generally this means that you an take out insurane for our own property, but not for someone else's. Indemnit The idea of indemnity is that if th insured suffers a loss, he has to be paid suffiient ompensation to bring him bak to the same finanial ondition as he was in before the loss - not more and not less (this doesn't apply to life or personal aident insurane). This prevents people ovr-insuring their goods in the hope of making a profit.
5 - l0(rtl6

Some of the risks against whih it is possible to take out insurane inlud: . So-alled Ats of God suh as fire, floods, earthquakes et. . Loss of the goods through being washed ovrboard . Damageto the goods,e.g. by breaking, bending et. . Damage to the goods b vemin suh a,srats and nli . Loss of the ship on whih the goods are being trarrsprtd,.g. b sinking r ollision with another ship . Loss of the gods through theft or non-delivry Standard insurane poliies generall do not over politial risks suh as war and strikes. However, it may be possible to obtain insurane over of these risks by pying an extra or higher premium.
At of God vermin over xo ee BpeTe : IIoI{pITe

Priniples

of insurane

F,or insurane to funtion properly, the insurer and insured have to make sure that ertain basi re-

1 0

om me rt| Fn lrl.

. MrineInsurn

11

Subrogation one th insurer has ompensated the insured for his loss, he has the right to reover the amount in question from tlre party respnsible for the loss (for example, if the insurer an prove that the ship was not seaworthy, he an take legal steps against the ship owner).
insurance poli utmost good faith insurablinterest indemnity subrogation seaworthy paxoo o' paxoa lIooe oepe paoo Irepe apall o yro epexo IIpaB paoBa Tpaxoy or aBa

insurane poli is ready. The following tpes of over are available: . Hull poliies over the ship itself, but not the goods being arried. . Cago poliies over the goods arried on board the ship, but nt the ship itself. Voyage poli This tpe of poliy overs the ship and/or argo for one voage only. This kind of poliy ray speify a date limit within whih the ship is expeted to have arrived at the port of destination. It is used b people or ompanis who onl have to ship goods oasionally. Time poliy This is the type of poliy used most often. It overs all shipments made within a ertain period of time. The premium is paid in advane and then adjusted at the end of the period of insurane, depending on the number and value of shipments made. The insured has the responsibility of filling out an insurane ertifiate for eah shipment, so that an aurate reord an be pre. sented at the end of the period of insurane. Floating poliy

xeris1. Wht is wrong here? 1. Mr. Smith,s insurn ompanyrefusdto py him when his houswas brokeninto,s they found out fom polie rordstht it had alradyben brokninto twie befor h took out insurane. Whv? 2. Mary,s mother |ent Mry some pensive jewl|ery. Ho. WVr, when Mary app|ied hveit overd hr housto by holdinsurne poIiy, insurne the ompanyrfused. Why? . Mr. Adms wnted to insure the goods in his wrhouie for $200,000,whih was the priat whih he ouIdse|| thm.Howvr, insuran th ompnyto|d him tht thy ou|donly insurthe goods for $12O,00O. Whv?

Types of insurane poliy Written evidene of the insurane ontrat is provided in the insurane poliy. If insurane is needed at short notie, the insurer an provide the insured with a over note to fulfil this funtion until the
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X' MrrnInsurane

.l3

With a floating poliy, the insured and insurer agree in advane on a ertain sum at whih the goods are to be insured. The insured an then make as man shipments as he wants until this value has been reahed, at whih point the poliy expires. Mixed poliy This is a ombination of the voyage and time poli. ies. The ship and/or argo is overed for all voages between two named pots for a ertain period of time (for example for all voyages from Liverpool to New York over a period of one year).
over note hull poliy argo poli voyage poli time poliy floating poliy mixed poliy BpelvlIloe paxoBoe BeeBo o paxoa Ira IIo paxoal{I{ pya IIo paxoall Ira epeoy o lra po eI{epaJIIIril oc eruar o

Types of loss As far as marine insurane is nerned, insurers distinguish between total loss and partial loss. 1. TOTAL LOSS: (a) Atual Total Lss (ATL)
An atual total loss is said to have ourred when the ship and argo have sunk and annot be reovered. If the ship disappears after leaving th port or if it is long overdue, this is also onsidered to b an atual total loss. If the ship then turns up after a laim for ATL has ben settled, it automatially beomes the propert of the insurers.

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xris Whttypeof tnsurane poliy you use Z. Would in ehsituation? youranswer! Justify
]' A ustomerin Sri Lnkp|aed tria|oder' 2. A ompny in nd rivda standingordr from a ompanyin Boston. 3. A arpetimporter |t|y in often p|aes orderswith a ompany in Moroo.owver.s slesflutut,the size nd value of th orderstends to vry nd is not alwaysprditbl. 4. An exporterin -Jpan ws offred a on-yarontratto goodsto vrious suppIy branhes n Amerian of orporatron. 5' A famiIymigrting rom ng|nd AustraIi f to snt most goods by ship. of theirhousehold

(b) Construtive Ttal Loss (CTL)

A onstrtttive total loss ours 'rhen the ship or goods are so badly damaged ttrat tlre ost of rpairing them would be greater than their market value. It also ours when a ship sinks and is left bause th ost of

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ommeri| nq|ish

X' Mrinlnsuran

reovery Would be too high or the risk to human life too great. 2. PARTIAL LOSS: (a) Partiular average
Partiular average ours when the objet insured is lost or damaged beause of an aident, suh as a fire or flood on board the ship. The loss is borne by the person to whom the objet be. longed. (b) General average General average ours when the objet insured is sarified. in order to prevent a total loss; for eample, goods may be thrown overboard in order to stop a ship sinking. The loss is borne by all parties - both the ship owner and the argo owners. xeris3. What type of |oss ws this? 1. A ship disppard while siling throughth Brmudriangre. 2. A shiprrylng hepgeneraI argosankloseto th oast of Frn. . wo boxs of goods wer lost overbords a esu|t of bd wther. 4. | 1912, the supposed|y unsinkab| itnr an ieberg hit nd sank in the At|nti.

ughtfir,nd th rw thrw orl 5. A ship rrying brrls into the 5ato prvntan xploston. th bals boarded ship nd stole prt of th argo. 6. Pirts atual total loss (ATL)
onstrutive total loss (CTL)

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Questions for rvision

1. Desribe some of the risks whih an be overed are by insurane. Why do ou think politial risks insuran? not usually overed by marine of 2. Using your own words, explain the priniples insurane. Wh are these priniples neessar? poliy, 3. What is the differene between a time a floating poli and a mixed poliy? Give some prefer examples of situations where the insured ma to hoose one over the others. give some 4. Desribe th two types of total loss and examples. 5. Give some xamples of partiular average.

it is 6. What is general average? Wh do ou think fairer for the loss to be borne by all parties?

Xl. Businessorganisations 5 5 5
he private setor hepub|i setor for Qustions revision

Business organisations belong to either the private or the publi setor. Th pivate seto onsists of ompanies belonging to private individuals, and the publi setor of ompanies owned by the government of the ountry. The private setor There are various types of business organisation whih operate in the private setor: 1. Sole traders A business run by a sole trader has just one owner, who is entirely responsible for all the ompany's busi. ness affairs. This type of organisation has ertain advantages and disadvantages:

The sole trader doesn't have to onsult anyone else when making deisions. The profits do not have to be shared with anyone else.

A sol trader has to bear 100 % f th risks inurred by his ompan. Fo this rason' he may have more diffiultis raising apital. A sole tradr has unlimited liability for his ompan' whih means that if he goes bankupt, h may lose both his ompany and his personal property.

18

ommeria| nglish

orqnisations X|. Businss

19

private setor publi setor sole trader apital rrn]imited liability

aIrI eop oy/apTeliI eop aTIII IIpIIpIIlvIae aa; o; peBa Heopaea

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bankrupt 2. Partnerships

apo

. Limited or speial artnership, onsisting of at least one general partner with unlirnited liability and at least on limited partner whose liabilit is limited to the apital he has invested. The limited partners do not run the risk of losing their personal property if the ompany gos bankrupt, but neither do they have an say in how the business is run.
partnership ative partner sleping partner general (ordinary) partnership limited (speial) patnership general partner limited partner
ToBapeBo; ar ar IIapEepTo

A business run by a partnership has two or more owners. When entering into a partnership, an agreement is drawn up defining the rights, responsibilities and liabilities of eah partner, suh as how the profits ar to be distributed and what part eah partner is to pla in managing the ompan. The partners may be ativ, meaning that they are atively involved in the ompany's business; or sleeing, whih means they invest money in the ompany and reeive a share of the profits, but do not onerr.rthemselves with the ompany's business affairs.

aTLI yaII

otvrall llopao oTBeTBeIIoTI Itolua opaeo oTeTTeoI (ooo)

ar aprrep apep opaveo

oBeBI{IloTIo

3. Joint-stok ompanies From a legal point of view, a joint-stok ompany ounts as a separate peson, whih means that its shareholders (owners) and diretos (the people hosen by the shareholders to run the ompany) only have limited liabilit. The shareholders eah reeive one dividend (part of the profit) per share. There are two types of joint-stok ompany: (a) Publi limited ompany (pl)

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Slpl *t

There are two types of partnership: . Gneral or odinary partnership, where all partners have unlimited liability.

The apital for this tpe of ompany is raised from members of the publi. For this reason' a pl an be listed on the stok exhange, although it doesn't have to be. Before it an start doing business, a pl needs to have a minimum amount of share apital (in Eng.

ng|ish ommril

|.Business oronistions

141

land for example, it needs to issue at least f50,000 worth of shares). (b) Private limited ompany (Ltd.) There are many more private limited ompanies than publi limited ompanies. The shares of a private limited ompan are held by speiall hosen persons or ompanies, whih means it an't be listed on the stok exhange. However unlike publi limited ompanis, private limited ompanies don't need a minimum amount of share apital - it's theoretially possible for a private limited ompan to har,e just one share held b one person.
joint.stok ompany sharholder dirtor dividend publi limited ompany stok xhange share apital private ]iited ompan
ao}Iepa ,peTop B.e. oTpIa oluall oparreo oeteIIoTIo pra aoepr aa aa oNIaII opalreo oTBeTBeII}loIo IoIa

private setor. This has both positiv and negative aspets:

As firms ative in these privatised industries may find themselves in ompetition with other firms, it is in their interest to make tlre servies provided more effiient, whih benefits the ustomer. The money raised an b used to redue taxes.

As firms in the private setor are mainl interested in making a profit, privatisation may make ertain servies more expensive for the ustomer. Neessary servies may not be provided beausethey aren't profitable.

aIIoIep; Bae,e aia

(Ltd.)

Th publi setor
As we know, firms in the publi setor are owned by the gover]lment, one exarple being the post offie. However, in ertain ountries, notably ilr Britain, there is a trend towards ivatisation r selling ertain government-owtred organlsations suh as the railway and telephone ompanies bak to th

Companies in the publi setor have ertain similarities to publi limited ompanies. However, there are a few important differenes: . While publi limited ompanies are owned b the publi, publi setor ompanies are owned by the govenment. . The hairman of a pl is hosen by the shareholders, whereas the hairman of a publi setor ompan is hosen by the government. . A pl obtains apital by selling shares, a publi setor ompany by selling stoks. . The profits earned by a pl go to the sharehold. ers, the profits earned by a publi setor ompany go bak to the government. . Where the main objective of a pl is to make the largest possible profit, publi setor ompanies are reated primarily to provide the publi with essential servies.

ommrrl nglish

privatisation stoks

IIpa3a (oyaper) errIe ya

xeris Wht kind of businssorgnistionmight ah ]. of thes b - so| trader, a partnrship, a pub|ior privtelimitedompny or pub|i setor ompany? ,1. A sma|| ornershop. 2' firm of so|iitors. (BB) in Britin' . h British Brodasting oportion 4. A |rgeommeril bnk. 5. A publishing house.

Xll. The stok exhange

5 5 5
Shares -intrst rrtis Fixd sU for Qustions rVision

Qustions for revision

would you prefer to do business as a sole trader, or would you go into partnership? Why?

1. If you wereto start a small businesssuh as a shop,

2. Using our own words, explain the two types of joint-stok ompan. What do ou think are the advantages and disadvantages of eah? Mention some examples of joint-stok ompanies in your ountry. 3. Give some examples of publi setor organisations in our ountry. What effet do think privatisation would have on these organisations and on the servies the provide?

 l I 'T he s t o kex ha ng

145

Types of share There are a number of different types of share:

ordinav slraes T'irese are

As we saw in the last hapter, shares sold b publi limited ompanies an be listed on the stok ehange. The stok exhange is the etrt of tli apital mar. ket, where large quantities of apital are raised for ompanies and the governmelrt. This apital is raised in two ways: . By selling shares to investors, whih means that the investors beome part-owners of the pubii lirited omany in question. . B obtaining loans from investors, in t}re form of government stoks and debentures. These shares and loans ar olltivl known aS seurities. Th stok exhange itself doesn't own an seurities; it is simply the market where seurities are bought and sold.
apital markt govrnnrent stoks debenture surities pIo }aIlaa oyapTBeI I{III OyIa .ooBoeoaeo;
o0aII

th most ommon shares, also known as equities. The ordinary shareholders bear the largest part of the risk, but the eturns an be muh higher than with other forms of investment. Ordinary shareholders are entitled to one vote per share, whi]r gives thm more sa in the running of the ompany; but the amount of dividend they reeive (1f any) is determind by the onrpany depending on how muh profit has been made. These shares have a fixed dividend whih must be paid before the ordinary shareholders an reeiv their dividend, whih guarantees a return on investrnent as long as the ompany is making a profit. However, if the ompany doesn't make a profit, the preferene shareholder will not be paid his dividend either. Unlike the ordinary shareholder, the preferene shareholder is not ntitled to vote in ompan matters. This is a speial lass of preferene share whih offers a safer retnrn on investment. This is beause if th olrrpan annot pay the dividend one ear, the outstarrding amount is arried over

Prefeene shares

III ya

Shars
The stok exhange itself isn't open to ordinary in. vestors; instead, tlre have to buy shares via a stokboker. Many banks and finanial institutions offer this srvie in return for a ommission.

Cumulative preferene shares

ommeril ngIish

Xll. he stok ehange

to the following years. That means that rathr than losing his dividend in a year where the ompany runs at a loss. the shareholder an expet to reeiv it one or more years iater along with the dividend from the following years. Convertible peferene shares This is another type of preferene share whih pays a fixed rate rate of interest until a ertain time. onverted After this time, it is into an ordinary share on whih the holder reeives a dividend rather than intrest.
peo MaIp orr avII4(e poBaIIIIoo ea) pr ITpepoBaIII aI aolIeIIIe IIpBepoaIIIIIe a olIepTpyelvrIe pepoBaIII a

. Bulls buy shares expeting pries to rise.

. Bears sell shares expting pries to fall.

4dt*-'{
\id

"--*5"

i)
z{-\--*'

stokbroker ordinar shars, equities returns preferene shares umulativ preferene shares onvertible preferene shares

d
;'D 'l

. Stags buy newl issued shares in the expetation that pries will ise, then sell them on in the hope of making a quik profit.

Shar pries If shares in a partiular ompany beome more popular, the share prie will rise. This an happen when the eonomy is booming or the ompany's profits have inreased for whatever reason. People ative in buying and selling shares on the stok market are known as speulators and fall into three ategories:

What is a share index? The stok market of eah ountry has one or more share indies. A share inde is a representative group

't48

ngIish ommeriaI

l | . he s t o kex ha ng

149

of shares hosen as a barometer of the movement of the market as a whole. This is usful for investors wishing to see how well their shares are doing om. pared with the rest of the market. Examples of share indies inlude: . FsE 1oo: the 100 largest ompanies listed on the British stok exhange. . Dow Jones Industrial Avrage: onsists of 30leading industrial ompanies in the US. . NIEI 300: the top 300 shares on the Japanese stok market.
speulator bull bar stag share inde peo.ee'pe r }Iee oeII II a

the members' risks; they reeive a regular inotne from their investment and take preedene over the sharehol. ders if the ompany is liquidated - that means, debenture holders are paid before shareholders. This maks debentures a relatively safe form of investment. ost debentures are seured, registered and redeemable: Seured debentues If a ompan annot repa the loans or pay the interest, the holders of seured debentures (also known as mortgage debentures) are automatiall entitled to payment frotn the omDanv's assets. Holdrs of unseured dbentures (also known as naked debentues) are not automatiall repaid from the oipany's assets if the ompan is unable to pay in the usual way. The an of ourse go to ourt to reover their mone, but are not treated differently from the sharholders. An unseured debenture is basiall no mor than a promise to repay a loan. The holders of registered debentures register. are listed in a ompan These debentures an onl be transwith ertain ferred in aordane terns and onditions, and ever likewise be entered transfer must into the register. The ompany an refuse a transfer, in whih ase the person to whom the debenture was to be transferred an appeal against the deision.

Unseured debentures

Fied.interest seurities
As we have seen, another way of earning mone on the stok exhange is b making loans to larger om. panies or to the government in the form of fixedinterest seurities. Logially enough' holders of fixedintrest seurities are paid a fixed rate of interest, and suh seurities an be bought and sold like shares. Loans made to joint-stok ompanies in this wa are alled debentures; loans made to the government are alled government stoks. Debentures Unlike shareholders, debenture holders are not membrs of the ompany in question. They do not share

Registered debentures

nglish ommi|

| | . he s t o kx ha nge T

151

Bearer debentures

A bearer debenture is an unregistered debenture whih an be negotiated by just handing it over to the new holder. Redeemable debentures are repaid (redeemed) on a fixed date or within a ertain perid, often a| a higher prie than the issue prie, whih means some extra monev for the holder. There is no fixed date for the repayment of irredeemable debentures; the loan is only repaid when the ompany is liquidated. However. holders of irredeemable debentures may ask the ompany to re. dm them if it fails to kep up its interest payments. Convertible debentures an be ehanged for ordinar shares.
poa orvlaIIIo oeeerroe .ooo oaeo eoeeelloe .oooe oao eIIoe.oJIoBo oaeo ae oooe oaeo
IIa peBL1TeJI'

irrdeemabl debenture onvertibldebenture

epoooooe o03aeJIo oIIepTpeooooe oo3aBo

Redeemable debentures

Govrnment stoks In Britain, government stoks are known as gilt.edged seurities (gilts) bause they are suh a safe form of investment. Gilts are loans made to the government in order to finane its spending, and are repaid at a fixed futur date (at maturity). In the meantime, the gilt holder reeives interest on his loan' The interest reeived on gilts is known as the oupon. Gilts fall into three ategories depending on the date of maturity: . Shorts: Gilts to be redeemed in 7 ears or less . ediums: Gilts to b redeemed in a period of 7 to 15 years . Longs: Gilts to be redeemed mor thrr 15 vears from the date of issue. Tpes of gilt

Irredeemable debentures

Convertible debentures

to liquidate a ompany seured (mortgage) debenture unsured (naked) debenture registred dbentur appeal bearr debenture redeemable debenture

Index-linked

gilts

These are gilts rhere the oupon and the amount at whih the gilts are redeemed is linked to inflation. The oupon paid on these gilts varies depending on market onditions. When a onvertible gilt reahes maturity, the holder an deide whether he wants to have the gilt redeemed or to exhange it for a new gilt.

Floating

rate gilts

Convertible

gilts

,ooBoe oaeo, oaIIIaNIoe opeeer po

ommeri| nglish

l|.The stok exhnge

gilt-edged seurities apallpoBaI{IIIe (gilts) ya yoII; oxo o oupon

aa

eIe eIIIlvl III

6. What are the differenes and similarities between debentures and gilts? Whih is the safer form of investment and wh? 7. What is the differene betweenfloating rate gilts and indx-linked gilts?

shorts mediums longs index-linked gilts floating rate gilts convertible gilts

paTlopoIe

ya ya
ya

peIrepoIIIe IlIIIe
oopoHIe IIIIIe

eI{IIIe ya, yIa. I ypoBeI eIe ya aBaIotI lypolvl

ya

olrBepTpyeIvIIe eIe

Qustions for revision

1. What is the stok ehange and what is its funtion? Where is it loated in your ountry? 2. Whih type of share do you think offers the most advantages to the investor and why? 3. What do you understand b ..bulls'' and ..bears'' on th stok market? What fators do you think influene this type of behaviour?

4. What is the differene between shares and debentures? Whih do you think is the safer form of investment and why? 5. Whih is the safest type of debenture for the in. vestor and why?

Glossary
A

nglish to Russian
to aept - IIpII[a; aepoBa aeptane (bill of exhange) - aeIIT (ee) At of God - xoe ee ativ partner - aBIII apep atual total loss - a IIoa adjustment (of a omplaint) - ypeypoa (opo, oo); opaa admissible - papeel ( oy) ad valorem duty - oIIIIIa ad valorem (ae B rrpoeIIo ooIeII To1!!oToapa) advane order - peBapr 3aa3 to advertise - peJlapoa advertismnt - paa advising bank - a, poo BIa o apey agent - ae; IIpTaBTe airlin - aIaJIvIHfl' air waybill - aBapytoa IIaatIIa ambassador - oo to appal against - Iloaa aeI IIpo ATL - . atual total loss available - Ieloilcg' la availability - Etle B balane - aac bank aount - ao bank od - arro o bankrupt - apo bear (stok exhange) - (MeBe.> (pa); prreo ee' par I{a IIoEee bearer heque - eI IIa pee bearer debnture - oa' |la peflfl

156

EnqIish mmriI

GIossry

157

bnfiiary - ap; oa peT bilatra] - opo bill of exhange - Be' paa binding offr - Tepo peotelre blank endorsement - aor .oare bonded warehouse - Tao)fiellr a pae
ToBapoB bond warrant oIIIIII .o aI o xpaell oryIe Toapa a TaMo-

}ttItl1o a,e

bordr - paa breah of ontrat - apyell opaTa bulk argo - alllo p bulk disount - ooa .a bulk order - oor ara bulky rgo - poo py (pa); peo ebull (stok exhang) - <.I'> e' pa a oBItueII buer - oaT CAD - . ash against dorrmrrts apital - aa apital nrarket - pIIIo allaa to anl - oTeII; alllrypoa; IIpIraBaT e.
Te}II

argo - py py argo poliy - o TpaoBaII Carriage and Irrsurane Paid - rreeoa paxoal{e
oIIaeI

Carriage Paid To - epBoa oaea .o arrier - epeo; paopI{a olvIaII ash against douments - ollaa oe oyel{ oyeTo ash disount - a p ollae IIaItIlvIIul aslr dispensr - aoa ash on dlivery _ oaTa IIp oTa' ((} a'> ash with ordr - oaa p aae entral bank - IrpaI{l a rtifiat of origin - pa poxo}fie

F'R - . Cost and Fright hain of distribution - peaa Chamber of Commere - Topoa aaa heque - e hque stub _ opIIIo; (opro) aoII; a IF - . Cost, Insurane and Freight IP - . Carriage and lnsuran Paid irulation - opaee laim - peell; pIa}ra; aoa to laim - pe'flBJI peTe to laim damages - peoa Bo}IeIl yro lean bill of lading - a IIaaIIa to lear goods through - paao)Ir py; poo ustoms - a1vro}re}II oIy MR - . intrnational onsignment note oD - . ash on delivery olleting bank - a-ouae ommerial bank _ olvIepe a ommerial invoie - TopoBI ve-aTypa; Iolltpe o ommerial servies - olutvlepe yJI ommission - oM to ommission - IloIloluoBa; eaT aa; BBoT B eTe (ap., o oee)' aBa IIaaIo to ompensat - oepoBaT ompensation - olvtea to omplain - oaoa; IIoaBa raoy omplaint - raoa; ae; IIpeeII; peaa ompound duty - IvIIIIaEItaIIoIIIa to onclude a ontrat - aIoa oIlTpaI onfirmation - IloBeprrelre onfirmed - oTBeper onfirming bank - a, oBep.a ape onsignee - pytolloae; I{ol{aop onsignment - ap (oapa), py; oIrI{aoIIa opaBa ToBapa; aaI{a onsignor - pytooTllpaeJl onstrutive total loss - orrTpylTa oa mneJl

158

nglish ommrial

Glossary

159

onsul - oy onsular invoie - oycvi oc onsulate - oIlTBo onsumer - op onsumr servies - IIoTpeTeJIe y ontainer - oeep ontainer bill of lading - aa.a IIa poo oBapoB oepe ontainerised goods - oap (py) oeepax ontat - opa; .ooo' oaIIIIIe to onvert - oIIBeppoBaT onvertible debenture - olrBeppea oa onvrtibl gilt - oeppyere er ya onvertible preferene - oIrepTpeNIIe shares - ITpBepoBaIIIIIea ost - ToI4oT; paxo/ Cost and Fright - olvlo pax (yarara poao ToMo Toapa' ItIoaIo eo oaB B oIpel op) Cost, Insuran and Fright - ToMoT' paxoBa pa (yaraea poaBoNI oNIo oapa' BJIIoaIoa eo oaBy B op/eer op paxoae) oupon (stok hange) - yolr; olvlaI poer oxo o oavl' a<v|vl over (insurane) - opIe (paxooe) overd - opII, oeer ovr note - Bpeelroe paxooe BeeBo overt - prr PT - . Carriage Paid To redit - pe redit ard - peIla lapToa CTL - . onstrutive total loss umulative prferene shares - aoeIIIe IIpeoaIII a urrn - BaIa urrent aount - y e

ustomer - 3a3 ustoms - ao?t(Il ustoms invoi - aN[o}ItIlIa IIaaIla: ao)Ider o ustoms permit - aIoteoe papeell CWo - r. ash with order D D/A - . doumnts against aptane DAF - crvr.Delivred at Frontier damage - ope}/e damages - IloBpe}ee; yep dangerous goods not - yeorelr o ope oaIIoo py3a date bill - Bee yaalro taoi oaI DDP - . Delivrd Duty Paid DDU - . Dliverd Duty Unpaid deadline - (pa) po debentur -oooe oaeo; oa to debit - eoBa debt - o to dlare goods - elappoaT oBap to dedut - BIa' oI{NIa' yp)I(Ba to defr - ap}raT dferment - 3aep}a; opoa delay - aep?a Dliverd at Frontier - oaBa o palrr (p, ooauaro, uo oTBTeoT oTaBa papopalleT oIto a /oaBy to aloeo
<(paIIID TpaIII a3aIr)

Delivered Duty Paid oaella oTaBa oIIIa (yoe Inoterms, IIp ltooporvl oTeo poaBa 3aaI4Bae IIoe oo' a oBap ,oaelt ya3al{oe Meo B pae olyae; e pIt' Be paxoI o oTae pya (ao, oIIlI ..), oeBeIIo 3a IIop oTeplo oBapa' Ioa OIIIIiI poe IIIaTI' BIaBaeeeT poaB) Ie opTe' o oo luoella

160

ommeria| ng|ish

GIossrV

161

Delivred Duty Unpaid - oaIla.oTaa 3 oI. IrI (yoBe Inoterms, Ilp oopo oBeTeo poaa 3aaltBaeT oe oo' a oap oaBelt ya3aor NIo TpaIIe oa; Be pvlcl<' e paxoI o oae py3a' oeello 3a Ilopy oTplo oapa (a rvelle IIoIYIrtv| po BIa' BIIIaBaervrIx IIp ope) o oo loelta e pae) (yoe Deliverd x Quay } pay oTaa Ilroterlrls, p oToo oBeTeIIo poaBa 3aItaIIaT oe Too' a ToBap o pt opT paprttelr IIoooBII Boy; aar paoI ..), o oTaBe pya (ao, IIIJIIII oBI{IIoT 3a I]opy lloep ToBapa o aoo oea e IIpoaB) x

to disount a bill of xhange - pIIT ee oolvl to dishonour a hequ/bill of - oTaIa oaTe ea/B exhange - pra to disount a bill - IIp ee IroIlToIvI to dispath - opaB to dispose of - a (o); ra dividend - ,BeII doument of title - orMeII, aro paBo oBeIIo

ap, - ,oyNIeIrTI o IIpIragainst aeptane douments Io; Ilpeaa paBa oerroT oe Iloye doumentary redit ea oae douments against pament - oI(IeI IIoe oJIaTI domsti - oTeeBIlIIoo poBoTBa aBaIIoBI aer down payment - peollaa; against payment D/P - . douments draft - ae}itoe IIopyeIIe to draw (heque, bill of exhange) - IIa (ue, e) paaT; o' a }oopo IaII e drawe TpaTa drawr paaIIT; o' oIIaBIIIe e - eIIII dumping dutiable - oaaer orrro duty - oIIIIIa - orr; oro eoaar duty-fre

*,oyIelrapl

Dlivred

Ship oaeo opa (yoe II l{oopolvl oeIIoT Ilpoaa 3aaae' oia opa oapo a opy pr yaar op (oap e papylrell e oInoterms, oToe Bo3); Be paoI oBeTIIIto 3a opy luoIla poae) oaBa ordr _ 3aa3 o oae pyta' IIoTpIo oapa o oo

delivery deliver deliver demand deposit DQ to deposit

IIa oa;

opp

a I/ay

oBapa o .a time pott oTaB po

Ds - . Delivrd E Strip DGN - . dangrous goods note diret dbit - p1vtoeeeoae diretor _ peTop

- eolrpoBa; Ba.IBa aount - eoTr e . Dlivered x Qua

arly payment disount embassy - ooTBo

to endorse aII endorsement -

a 3a poITJIay
eaT IIpe.aoIIIo

opoaT;

dirty ate's Reeipt - IpaLIa'{ paIda o To' To p3 I{e ope disount - Ita

eo a epexo 6 - 10686

yae,

IlpeaoIta a (a .oae' Beee' ee T.II.' IIoBep)aIoIIpa o TofoIy oIyeIrT I pol\[ )

162

mmril Enqlish

GIossry

16

end-usr - oIleIII ooae; ItoIIeIrIopee to enquire - aIIpaIIIBa' aITpaB,I allpo enquir - apo quities - otoeIlIe a eviden - oaaeo' eBo' tIoT}ItIIe exise duty - ar op to exeute an order - IoI{ aat to expire - e'a xpir date - aa TeI poa export dut - IrropIla IIoIIIIla exporte - opep prss train - opoo oe; IIp to extend - po,eBa extrative industr - oraoa poNrtIIIeIIo (opa)

xW _ . Works

x Works - pao-ao (yoe Inoterms, p IoopoM oBeBeIIo IIpoaBa 3aaBae' I(oa oap oa3a a eo ae' Nlaa3e ..; Iia oyae o}fiaT e paxoI IIo BIBo oBapa o aa' epBoI(' aorterrllo obe ..) F fatory - ao; apa FAS - . Free Alongside Ship faulty - IIeITpar; eaeer favourable - aopr F.CA - . Free Carrier FCR - . Forwarding Agent's Certifiate of Reipt feder servie - yra oaB finished goods - oor oBap' poyl firm offer - TBepoe peo)I(ell firm ordr - epr 3aa3 first of exhange - epr eMIIp e fixed duty - poBaa oIIII{a fixed.interest seurities - errIIIe ya poarro oxoIroTIo

fixd.term aount - pour ue floating poliy - eIIaI o floating rate gilt - eEI{Ieya aaloM l(por to flutuate - oa FoB - wr. Fre on Bard follow-up ordr - oIo aa foreign - IIoTpaI, aperr; e.apor forged - arr, or forgery - N[oIeeBo forwarding agnt - eop Forwarding Agent's Crtifiate of Reeipt - a plvl. I e.TopoM fragile - xpy <pao Bo opa IIaD; Free Alongside Ship yoe Inoterms, p oopo oTeTBIto IIpoaa alaltBae' oa oap oooBeII IIop Ilop}tt a opa aaIrIIoM op; oo l\{oea c paxoI p' a a}Ie oeeltoT 3a op oTplo oapa e oIt. ae F're Carrier - oor peoI; pao-pa. opIlo /o r on Board - <.pao op a>, o; yo Inotrms, p oopo oTBeBIlIIo Ilpoaa aIaIIBaT B rvIoNIeII IIop3 oooIlltoo -

opy ToBapa a op fight - pax; py frontier - palla to fulfil - IIoII: I{oIl full endorsement - ,or IIoaNIeII G general average - oa aap general argo - erarrr py; opr py gneral nquiry - o alIpo general partner - ar Ilapep; elrepaIlI apep general partnership _ }OMIIaII IIeopaIIeIIo oTTTeI1oIo

164

ommeril nqlish

GIossry

165

gilts - . gilt-edgd seurities gilt-edged seurities - eullIe ya apalrpoBalro prro goods train - oapr o3 govrnmnt stoks - oapTBeIII eItI ya to grant - peoa grouage bill of lading - opa a,I(afl grouped onsignment - opr ooae; opr py3 haulage ompany - oNraII IIae}rIx epeBoo hiddn renrinder - pIoe aolvlal{e hire purhase _ olIla paoy home-produed goods - oap oeeIloo pooBa to honour a heque/bill of exhange - IIpIr /ee oIIaTe house bill of lading - Ilype IIaaIIa P - r. hire purhase hull poliy - o paxoBall yIIa I import dut - oIIIIIa a MIIop importr - IvlopTep to impose duty - oaa oro in bond - axovltlc a TaorrterrIloir a; IIeaaorer inotrms - epIIlI' opeee yolr IToTa NIoeIIepexota oTBeTTBeIIIrooT TopoIrI It o. poli' o peIe M}t(.yapoIl Illl oalelvI indemnity - apal{ o yro index-linked - yvraro ypoBelr industrial dispute - orrI IIpolvIIIIIeIIo inferior _ tlpll<(o aee); oxo, eaee inflation - initial order - epBoltaar aa

injured party - IIoTpIreIIIa(opaaIa' oltetua yI) opoa insption order - IIIIor opep instalment - B3IIo; Ba; IIae} insurable intest - paxoBo epe insurane - TpaxoBalle; paxoBla insured - apaxoar insurr - Tpaxoae' Tpaxort interest - poeTr (o alvl; a aa) interest rat - poellTlra aa interrnediary - opeIII( international onsignment not - Nle}rIlapoa py. 3oa aIaIIa invalid - lrTr invstment _ IIeT'I investmnt aount - IIBeor e invitation to tnder - oIIe elrepa irrdemable dbenture - epoIlo ooo oaeJrTo irrevoable - orr to issue - BIaaT (o ee); BIIIa (o ax) issu prie - BIIIya eIIa issuing bank - a-e J joint-stok ompan - aorrepa oaII to justify - ooora L labour osts _ pyoIe aTpaI lase - ape.a; ape,I 'ooBop leasholder - apraTop leasing - 3I{; ape}Ia to legalise - JIaoBa legal tender _ aooe aJttIIo peTo legal proedings _ yeoe papaeTo; pa}IoT. pelre ea B e lesse - apIraop

166

ommrr| nqlish

Glossary

167

lessor - apello,ae lettr of edit - ape.B liability - oTBeTTeIIo life insurane - paxoall )IIt limited partner - apep opal{rro oeBIIIIoI

N nakd debnture - oerleoe oooe oaTeBo naturl rsoures - IIppotlie pypI; oeIIIe oaeI negotiabl - IIo,a orIo; eooa.
I

limited

partnership

oeTo opalrelro oTe-

BeIIoTIo

limited stoks - opaller aa liner - aep t liquidate - vIPiB|4t|4poBaT to load - py loan - y.a; 3a longs - oopoIlIe Ie ya loss - yro; op luxury goods - peTI pooIII I mail order ompan - IIoIJIoa olvIaII; IdorIIaIl IIoIoo TopoJI; IoNIaII' 3al{4aloa. llpoiae oapo IIo Ioe manufatuing industry - poBoBo (a opa) marked heque - e apalre oar marine insurane - opoe paxoBa; paxoalre opx epeBo3o Mate's Ript - ypNIaI{a paa maturity - aa/po BIIIaTI mediums - peIIepoIIIe eIII ya merhandise on all - oBap o peoar mixed dut - MeIaIIa oItIIIa mixed poliy - Nlerrlar paxoo o mortgage - ao; oea mrtgage debentur - o6eIloe tooo oaeBo M/R - . Mate's Reeipt multilatal - ooopo multimodal - (p.) pelree paIII Bo

to negotiat - pooT epoopI; oyr,aT; epe. yya non-binding offr - p'o}fiIree oae notar pub]i - oyapcr oTap

oan bill of lading - aalIla Mopx epoo oean shipping - Moproe yooBo; Mopa .oaa offer - p,o)Iee;oepa offer without ngagement - peo}ItIle e oaeT on approval - oaoryIell; oe oop on-board bill of lading - aa.a a p, pI a op yIIa opn-aount terms - yoB olpIoo eTa open hque - oI(pIr opning bank - arr-e order - 3aa3; oep ordr bill of lading - opepTla IIaaIIa order hque - opepllr e ordinary partnrship - oa rreopaeo oBeBeoTIo ordinar shares - oroellIe aI origin - pxofitelre ovrboard - a op; a opTo overdraft - eppaxo to overdaw - peBI pe ( ae), oy oeppa ovrdue - popoer; aoar over-pried - aBIIIIer (o ee) to ow - r o}ItIIIrvI

168

ommerial nglish

Glossry

169

P paking - yraoa partial loss _ aTI{a e partiular avrage _ aIIa aap partnrship _ IapTlrepo; oeo; lolvla party (to ontrat' hequ et.) - Topoa (opaa, vea . . ) passnger train - aa}Ip oe passing of risk _ epexo pa payable - Iloefi(a oae; pTaro payee - oae (e) paying-in slip - a, aIIoIIeN(rp Blree y.
1\,1la e

pro-forma invoie - peBapeI ce property _ yeo; oeoT protetive duty - poTeolra Ilota protest _ opoeoBalre; po publi limited ompany - oTpIa ol\{all opatleo oelI1IoI publi setor - oy.apr eop publi servis - oeere (oyapTerrrIe)yrr quality - aeo quantity - Ioo quantity disount - oIIToa I{.IIa quay - pa quotation - paIl; pa- R rail onsignment note - ara.a fl epBoot }fie. e opoo railway ompany - rt(eeoopoIla I{odaII;oa }re3lroopo}IdliIx Ilpeo3o raw materials - IpeBI }IaepaI; Ipe reeived bill of lading - aaa a poper, o IIe llopyer py redeemable debenture - toooe oaeo. IIoaIao opeerr po to redisount _ epeyue (ee) registered debentur - Ieoe ooBo oaeo reminder - alloae rernitting bank _ a-aeJI to rnder - oaIa (o yyax' oo) rent - aeIrIIa aa to rnt - apeoaT to repair - peIollpoa repeat ordr * oopr/oopar aa to repla - aI{ reputation - peyTa to reserve the right - oa a oo pao

payment on invoie - ollaa o oyer oa perishable - opoop ToBap personal aident insurane - paxoBae o eaItoo ya'I to plae an order _ paIIIa aa pl - . publi limited ompany poliy _ (paxoo) o port of destination _ opT IIataeI port of shipment - opT oTpy preedene - eIIo; pe}ryeo preferene shares _ pBepoaIe a preferntial treatment _ peepear pe}Ivl; pe}Itrvl MaI{1\{aIIoo aopToa premium _ paxoBa p4; paoo 3IIo prie _ ea prie redution _ }Irr(eIIe eI{ privat limitd ompany - aI{a oIIa oaIIo oeI{oIo private stor - ar }tTop private servies - aIlI y privatisation - pBaa proedure - popa proessing industry _ epepaaIBaloa polvIIIIIelIo

.l7o

ommrlj ngJrsh

Glossry

restitive endorsement - opaer Iioae retailr - potIIIr opo to retain - oaT; oxpal{T to return goods - Bopaa ToBap revoable - oIo right of disposal - paBo paop,I}fielr; Ilpao oeI{o rivr bill of lading - aa.a peIIIx Ileeoo to sarifie - poaBa IIo a+el{o ee: e
I

s
safe - e salable - I]poIrr oa} sals ontrat - ooop yll-po/a}fi sample - opae sampling ordr - aa a oay opao savings - epee to sal - oaTIBaT seawortlry - or aBaII (o e,1 seond of exhang - opo Iep BeeJI seurd dbenture - oeeeltoe oooe oaBo suritis - eEIIIe ya s]lr - poa semi-finishd goods - oyapIa servie * yya; rra to sttle - paaBa; paIBa share apital - aoepr aIITa shaeholdr - aol{ep shae index _ Ire a shares _ a shipper - pyoopae shipment - py; ap ToBapa; opya; oTIIpaBa shipping - IIopya' IIpeBoIa yaa shipping line - Ll:vr' Iopx epeool{ shipping not - yBe.olvIJIeIIe ope o

ship's rail - pa yIra; eep shorts - paopoIrIe eIIIe ya to shortship - IreoIIoTa sight bill - BeI{e oIIaTe o peeIII signatur _ o.II to sink - yolryT sleeping partner - aBIlr apep sole tradr - arrr peIINIae soliited offer - oBeoe po)ree Io allpoy speial partner - apTep opaeo oTBeTBeoIo speifi duty _ eva IIoIIIJIa (pavIBaeT ea' tlI, oea, a e o oo) speifi enquiry - ear apo speulator - preo e; NIap; eyII stag (stok xhange) - (oe' (peo ee' par a IIoI ax) stal - Ilpopoel{l; yape standing oder - ooIIIlI aa statement of aount - BIIIa o ev stokbroker - peo poep stok exhange - pa stk market - ooa pra stoks - (oyapere) IIIe ya storage - paelle straight bill of lading - eIIIa IIaaI{a subrogation - epexot paB paxoBaeJl paxoB to suffer a loss - oe r supplier - ocaB to supply - floa T tallyman - opoJlep tnder - TeIIep term bill - Be oao eIte aaIIEIoo poa trms of dlivery - yoB oaB

112

ngIish ommri|

Glossry voag - pe; IIaBaI{e voyag poliy - IIo paxoBa IIa epo

173

trms of paymnt - yJIo oaI theft - opoBTo; xelre through bill of lading - Ioa IIaaIIa tim bill - ee o poo}t oJIaI tirne poliy - paxoo o IIa opeJler po title (to goods) - paBo oeo (a oap) total loss - oa e trade agreement - opoo oalee transation - paa; oepa transfer - eprBo () trial order - poI taa

w
warehouse - a warehousemalr - paoIl aa wholesaler - oor TopoB to withdraw (an offer) - oIBa' oTeII' aIIIIpoa (po}elr) to withdraw (money) - a (e)

U
unonditional - eyor; eooopr unfavourabl - aopr unlimited liability - eopaeItIIa oBeBeoT to un]oad - pap)ra unreliable - ea.err unseured dbntur - eoeeIll{oe oooe oo unsoliited offer - aBIIoe peJIoEteIIe (eae IIoaBo e allpoa o opoIII 3aa3a eIo a lloIx eo) unstable - eaI, yor urgent - pour utmost good faith - ooe ,oBepe (oooe paBo 3a}oa o paoBaIo' oopoe 3aIoae olvl' To o' )realoe apaxoBa, oao a opaoBII{ I opaIo' }oopa o}Ie B a aJloooore; paxoae' BoIo oep' oar I{eoT ayrrtIle oo' oo o paxyro)

v
valid - er; ro y valuable - errr vermin - Bpe.Te vote - oo

Glossry a-aeJIII{I rmitting olleting bank bank

175

Russian to nglish
A
aaor aBapyoBa aavlavl:,klfl' IIa?It airline agent down pament air waybill llaaa

a-yuae

al' peaB

ape - letter of redit a IIpeNI eopo - Frwarding Agent's Cer. tifiat of Reeipt ar apep - ativ partner a (e) - aeptane aepoBa - to aept ar op - xise duty aI - shars aoep - shareholder al(oepa oNIaII - joint-stok ompany a}ollepr aa - shar apital alrllypoBa (peoee) - to withdraw (an offr); to anl a - omplaint ape}Ia; ooBop ape.I - las apIl.aTop - leaseholder; lesse apella IraTa - rent apeltoa - to rent apelloa - lssor aa - balane a, oepalo ape _ onfirming bank a, p1' BIIIa o ape - advising bank ao lto, _ bank ode a e _ bank aount aoa - ash dispnsr

apo - bankrupt bank a-r - issuing bank; opning - irrvoable eorrrr or; eoopovr - unonditional eap - benefiiary eorr - duty-free irredemabl epouo ooBoe oaeBo bntur pra - exhange; stok exhange peo poep -- stokbroker preo e - spulator aopr - favourable aor oael{ - blank endorsement (pa) - bull <.It> r oIl - to ow

de-

B BaJIIa - urrn Bee - bill of exhange _ sight bill Be I oIIaTe I1o petBeI yaaIIIIoo poa - term bill Bee oao B Tee _ date bill Be aal{o ao oaTI time bill Be}eo poolvl oIIaI 3o - instalment BI{lIBa_ to deposit BypeII aaI{a - house bill of lading oBpaa oap - to return goods BopoBBo - theft pet - vrmin note Bpeeltoe TpaxoBoe eeo - ovr - seond of exhange opo eIIp Bee I,aBa() - to issue BIIIa o eTy - statement of aount. (heque, bill of BIIIIaT (ue, e) - to draw ehang)

176

mmeril nqiish

GIossry
olyelr o paIIII oapa Ila TaNIo}fieIIo1\,t I(JIa

177
-

lIIoI{'3aa3 .* to exeute an order BIIIya (a) - to issue Iyira ea - issue prie apall o yro - indemnity el{epaIrI apep - general partner eI{paIlI o - floating poliy oI{I IIaa (o e) - seaworthy oo (p oooBa) - vote oyapeI errIe ya - govrnment stoks oyapellI IIoTapy - notary publi oyaper eTop - publi setor oor oBap - finishd goods palra - border; frontier poo py - bulky argo py - shipment; argo py - to load yoopaTe - shipper; onsignor ytooae - onsignee aa eelr poa - expiry date ByTopo vi- bilateral .eeoa - to debit ea IIoa e - atual total loss el - valid eappoa oBa - to delar goods eNIII _ dumping IIo3I{Ie - deposit aount ellolrpoa - to deposit BIr - dividnd I,IpeTop - diretor oraroa IIpoIIIIeIIo (opa) - etrative industr .ooop _ ontrat; agrement .ooBop ItyII-poan - sales ontrat oaaTo - eviden

bond warrant oye' title alo paBo oeoT doument of

oyIellapr apetTI4B - doumentary redit oyMeIrI IIo pI{Io - doumnts against aeptan IIo oIIJtaI- douments against payment /oyivtelrI o - dbt ooBoe oaeBo' oalllae{oe ollpeeer po - redeemabl debnture oooe oao; oafl - dbentur oopoIlIe errI ya - longs oopoIll - long-term oTaa - delivry aoa - omplaint rttetoopo)Ila olvta -

railway ompany

3
a op; a opo - overboard aB - fator aIIIIeIII(o ee) - over-pried aep'ra - to defer; to dlay aep}ra - delay; dferment aa - order 3aa3 a oTa - dlivery order 3aa3 a oaBly opao - sampling oder 3aa3 - ustomer aIoaT opaT - to onlude a ontrat alooe IIaetIIoe pTBo - legal tender aJIo - mortgage 3a}4Il - to replae aIIpaIIIa - to enquir allpo - enquiry apyerrt - foreign apaxoar - insured

178

ommeria| nqlish

GIossry

179

elllia alaa _ straight bill of lading Meoe ooBoe oaeBo - registered debentur teror a - available IIopTep - importer Myo - property IIeTorrr e - investment aount IIBeT - investment ,I{a - share index II.oaMeI{- endorsment IIopoBaT - to endorse IIopaI - foreign eot opep - inspetion ordr - inflation oTa - mortgage oII - to fulfil Ta - to epire aIIa - apital aeo - quality oea - to flutuate oeBo - quantity olu - ommission otvlepee yy - ommerial servies olvrpe a _ ommrial bank oIepe loflc - ommerial invoie olvIaII ae[IIIx epeBool( - haulage ompan oillall lleopalleo oBeTTBeIIoI _ general partnership; ordinary partnership oIIa - ompensation ontIlIrpoa * to ompensat oIIBepTpoBa - to onvert ollBeppyea oa - onvertible debentur oI{BppyeNIIeIIpepoBaIrI{Ie a - onvertible preferene shares

vl

oIrBepTpeMI IIIIre ya - onvertibl gilt or ooae - end-user ItoIIaTop - onsignee oIlIlaoIIIIa oIlpaa ToBapa - onsignment opItTBIIa IIoI{a - onstrutiv total loss oIIy - onsul Itotlft l'oc - onsular invoie oItyTBo - onsulat oep - ontainr opa - ontrat, agreement ItoIIop - tallyman or IIpol\IItIeo industrial dispute opelol{ (vea) - hque stub paTopo}JIe eIIIe ya - shorts Ip. - redit p.I{a apoa - redit ard olr - oupon aep - linr eaoa - to legalise tI|i apr.a leasing ItBpoBa - to liquidate JIvrtIuI opx epeoo - shipping lin

lvr
MaIe - speulator (NIeBe) (pa) bear (stok exhange) e,I(IrapoIra pyoBa IIaI{aa - international onsignment not }Ie}yllapol ----international; foreign lvtllooTopo - multilatral l\{opItopaxoa - marine insuran Nlopoe yoxoTo - oean shipping MoIIIIlIeBo- forgery IIaIaIla l\(opIx Ilepoor oan bill of lading

180 IIaaIIa

ommril nqIish IIpeBo3o ,t(e3llo opoo rail on.

Glossar

181

I{aaI{a a py' pI a op yIIa - on.board bill of lading Ilaaa lra poBepItllI' o rre IIopyrer py reived bill of lading Ilaaa I{a poo oapo oepe - ontainer bill of lading IIaaIIa - bill; waybill; invoie; onsignmnt aoeI{Ie ppoalrI a - umulative preferen shars aJIvIIe- availability aotvlae - reminder apyee opaa - breah of ontrat aro py - bulk argo eaopr - unfavourable eer - invalid IIooaBa - shortshipment epaBI - faulty IleaeBer - faulty eIIaeIII - unreliable eoeelll{o oooe oaeTBo - nakd debentur: unsurd dbentur I{eopaIIeI{a oTeIIo - unlimitedoliabilit IlepaTa{o]ter- in bond ar, eyor - unstable Iloaeer - inferior

signment note alarra peIIIlTepeoo-

rivr bill of lading

o
oeeeoe oooe oaeBo - mortgage debenture; seured debentur oraoa - to omplain oaaer oruo - dutiable oaa oruo - to impose duty oJIa IIa peBe - barer debenture ooora - to justify opae - sample

opaee - irulation oa aap - general averag oeIe (oyapere) yrr - publi servis oeo opallo oeB}llto - limited partnership o allpo - gneral enquiry oe elrtepa - invitation to tender oroItIe a - equities; ordinary shars opaller arra - linrited stoks opaellr oalvt - rstritive endorsement oaIBaT (o yyax, o) - to render (oe) (peo e' pa IIa IIoIx ax) - stag ollpa (aoa) - transation oeaIaT - to seal oIIaTa IIo oyero vea-aTypI - payment on invoi oaTa o ay - ash on delivery oaTa oe IIoe oIyeToB - ash against douments oaa p arae - ash with order ollaa p oTa - ash on delivery opooa - rotest ooBa a - bulk disount; quantity disount oor 3aa3 - bulk order oot Topoe - wholesalr opep - order opeplra IIaIaIIa- order bill of lading opepr e - order heque oTa a oo paBo - to reserve th right oBeBeIIIoT - liability; responsibility oeeTBerrlroo poBoBa - domesti otIa - to withdraw oro - revoable o a I aT o I I aTe a/B Ite,{ - to d ishonour a hequ/bill

182

ommeria| nglish

GIossry o - slgnature oBep}reIt- onfirmation; vidn oBep}rfl - onfirmed oI(IT (paxoo) - over (insurane) oprr - overed olyae - btryer IIoa papoI(y - hir purhas oIIIe I(oaMIe - natural resours Ilo - poliy o paxoalt pya - argo poliy o paxoa IIa peBol('y - voage poliy tloc paxoaI .Ira- hull poliy oIIa re - total loss oIloe oepe - utmost good faith ot IIoaeII - full endorsement oyapaI - semi-finished goods oa (e) - paee oya peT - bnfiiary oeT r - to suffr a loss opaBl{a - amendment op IIaaeII - port of dstination opT oTpr - port of shipment oeylo aa - follow-up order oo - ambassador ooBo - mbass IIopeIIIt - intermediary oaB - to suppl IIoaBI{ - supplier IIooIIIII aa - standing order oIoIIa IoaII - mail ordr ompany IIopIIeIaTopoa - injured party opee - onsumer opee y - onsumer servis IIoIIIa - dut oIIIIIa ad va]orem - ad valorem duty IIoIIII{aIIa NIop - import duty pao paop)rel - right of disposal

18

oTpIa I{ofIaI opallIlo oeI{oIo publi limited opany oprr eI _ open heque oNIe - to withdraw; to anel oTIIpaa - shipment oTpa - to dispath oTpoa - defrment ap oapa - shipment apep opaeo oeBelloro - limited partner; speial partner apTlrepo - partnership aap oe. - passengr train at apTIIep - sleeping partner polraar aa - initial order epr 31vlp BIe - first of ehange ' epeBoIzr(e) - to transfer peoa axoBaII oaeIII - Carriage and Insuran Paid epeoa ollaea o - Carriage Paid To epeo - arrir epeaoIra IIa.II- ndorsement epepaarBala IIpol\[IIIIJIeo proessing in. dustry epepaxo - overdraft epeyya - to negotiate epeyeT (e) - to redisount epeot paB paxoBa It paxoly - subroga. tion pexo/ p}a - passing of risk ae( - instalment IIaetIIoe opel{e - draft ope?fie - damage oopr/roopar aa - repeat order opya' epeoa pa - shipping Iloaa aeIo - to appeal (against) IIoeIII- forged

184

ommerial nglish

Glssry IIoeIrI (o a; Ira aIIa) p1\4oe eoBae - dirt debit intrest

185

pao oo - right of disposal pao oeo (a oap) - titl (to goods) peIT pe - to ovrdraw pBaper 3aa3 - advane order pelBapTer e - pro-forlna invoie poelle - offer peo}Iee e oae - non-binding offer; offer without engagernent peNIeI pooIII - luxury goods peoaTa - down payment poca -. to grant pB pTI{LI- to laim pyBo -- advantag; preeden peII - mplaint peIIJ{; peaa; raoa - laim ppear pelv - preferential treatmnt pBaTa - privatisation pBepoaI{IIIe aI - preferen shares por t llpoilr - salable pIIlvIaT - to aept IIpIl BeeJI too - to disount a bill of exhange pIl ue/ee ollae - to honour a heque/bill of exhang ppoIrI ppI - natural resoures pa - quay IIpaIolc - payable; du pol 3aa3 - trial order poBo - to negotiate poae - sller poea - to extnd o3Boo (a opa) - manufaturing industry _ Ilpoxo?t{/e origin popoI{I{r - overdue poel{olla oIIIa - protetive duty popa - proedure poIrHa Taa - interest rate

P pao aa - warehouseman ap)ra - to unload pa 3aa3 - to plae an ordr papIIIeI ( o) - admissibl paIIaBa - to sttle paop}a - t dispose of paIBaT - to settle paao)ttT py - to lear goods through ustoms paelr - quotation pe - voyage peaa - advertisement peaIa - omplaint peapoa - to advertise peolrpoa - to repair peya - rputation pour opoBe - retailer pIllo allaa - apital market epere - savings opa llaa.a - groupage bill of lading opr py - general argo; groupd onsignment opr ooaMeII _ grouped onsignment ra - to dispose of oo,t epeoId - Free Carl.ier aa B JIyaaIo - to ommission e - safe epa poxo}tIl - ertifiate of origin e peaa - hain of distribution BoIIa llaaa - through bill of lading a - disount Ia 3a poIIaTy - arly payment disount a IIp oa aIIIlvI- ash disount a - warehouse

186

ommeria| nq!ish

GIossry

187

opoopT oap - perishables opoTo o3; pe - express train ItpIToe aoIlae - hiddn rminder plr - overt' hiddn ya - srvie y)a oTa - feeder servi MeIIIaafl oIIIIIa - ompound duty, mixed duty elar py - general argo erar paoo IIo - mixed poliy Il,IeIte eIII - prie redution a (e) - to withdraw (money) oeo - proprt oaIIIIl - agreemnt; ontrat aIII apo - spifi enquir eueIa oIIILIa- speifi duty po - demand peepoIe eIIIe ya - mediums po - dadlin cpo oa - delivry time povr - urgent pour e - fixd.term aount a; ae - loan xoe e - At of God ToNro - ost Totvro pax - Cost and Freight olvlo' paxoBa pa6 - Cost, Insurane and Freight opoa (opaa' ela ..) - party (to ontrat' heque et.) TpaxoBaII - insurane paxoa )tIl - life insurane paxoall o IIeaTIIoo ya - personal aident insuran paxoae - insurer paoa IIpeM - premium paxoBa - insurane

paxoo IrTep - insurabl interest paxoo o a opeer po - time poliy TpaxoB - insurer yeoe papaeBo - legal proeedings Ip - raw materials T a[oea aa - ustoms invoie aro}ieoepapeIee - ustoms permit aoIeI a, t xpaell oBapoB o yIIJIaI oIIIIII - bonded warehouse TaMo)I{ - ustoms TBpoe peoEeII - firm offr epr 3ala3 - firm order ey e - urrent aount elrep - tender Toap (py) orreepax - ontainerised goods Toap oeeBeIroo IIpoBoa - home-produed goods oBap o peoaIII - merhandise on all oapr ITo3. goods train Topoa aaa - Chamber of Commre opooe oJIaIeIIe- trade agreement opor ve-aypa - ommerial invoie paal - transation paaIIT - drawer paa - drawee paa _ bill of xhang peoa BoIeI{yro - to laim damages TpyoBIe apaI - labour osts

yro; oep - loss yBeoNIIIeo opy - shipping note eoIee o opye oaIloo pya goods note yep}BaT - to dedut

dangerous

188

ommeril ngIish

GIossry
aIIa oMIIa opalleo oeBIlIIo)

189
-

aoBra - paking yppoa (opo, oo) - adjustmnt (of a omplaint) yJIo oIIaI - trms of payment o oItpIoo eTa - open-aount terms yo oTaB - terms of delivery ya -- servie yToIIy - to sink yep - damage(s) apa _ fatory arr - forged eoe o - physial person poa oIIIa - fied duty ooa pra _ stok market pao-ao - x Works pao.paopoe o - Free Carrier pax - freight

private limited ompany ae yy - private sevies ar IIpepIIIvIae- sole trader ar eop - private setor eI - heque I a p _ bearer hequ } apae oar - marked heque cTa aJlaa - lan bill of lading I Iyp\aIIa paa - Mate's Reeipt Iypaa'r paa o o' o py3 lre op'I dirty ate's Reipt

eTop - forwarding agent opep - exportr opIta olIIIia- export duty IO IopoI?ro legal entity

xHe _ theft xpaelle - storage p - fragile ea - prie IIIIIea - stoks; seurities IIIIre a apallpoao pIIo dgd seurities eI{Ie ya aalolvl ypol4 - floating gilt er - valuable IITpaIII a - entral bank aIIa - partial loss aa'fl aap - partiular average

giltrat

o aope
Heather Ferlihia is a British-born gradate of Bir. minghanr Universit in ngland. After ears spent teahing in England and Germany, she beame Head of nglish at the International Business Shool in Germany, where she taught business subjets to seretaries, managers and undergraduats as well as examining for the Chamber of Commere. eep ep poa Beopa, ar )I(eaoII a pe yIIBepTe. oe eox eT peoaBall Ar, a 3aTe epa oIIa BotaBa oTeeIIeaoo IIdaMeyapoo e-roJII epa, e peoaBaa eoo olvlepe atcl< epeTape, eeIIoB IyIIoB' a Tarr peTaBa Heeyro Topoy aay a epaol{Ix tsaea.
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