Acronyms and Abbreviations Used in International Trade A

AAR - Against All Risks

Somewhat misleading name for an insurance policy which, while providing the broadest form of insurance cover, generally excludes losses due to bad packaging, delay, inherent vice, loss of market, etc. Such policies do not name the risks covered but only list the exclusions; all unnamed risks are automatically covered. The term 'All risks' is now being phased out. In marine insurance, for example, the term 'institute cargo clauses (All Risks)' has been replaced with the new term 'institute cargo clauses (A, B, and C)'. Also called all peril insurance. A/C Account

Bank account or credit account with frequent or regular transactions. A/N - Arrival Notice

Notice sent by a carrier or agent to the consignee (and to the notify party, if any) to inform about the arrival of the shipment and number of packages, description of goods, their weight, and collection charges (if any). Also called arrival notice. A/P - Authority Purchase ; Authority to Pay

Document used in Japan and other Far Eastern countries, through which an importer's bank notifies a seller that the bank will accept bills of exchange drawn on the importer up to a specified limit. A/R - All Risk

Insurance policy that covers losses from all causes not specifically excluded in the policy. ASAP - As Soon As Possible

To accomplish promptly or as soon as time permits. "Frankie needed his car returned to him ASAP, so that he could get to work on time." "Despite my busy schedule, my boss needed the paperwork ASAP because this project was a priority for the company." A/V - Ad Valorem

Method for charging a duty, fee, or tax according to the value of goods and services, instead of by a fixed rate, or by weight or quantity. Latin for, [according] to the value. AWB ; A/B - Airway Bill

Type of bill of lading that serves as a (1) receipt of goods by an airline (carrier) and (2) as a contract of carriage between the shipper and the carrier. It includes (a) conditions of carriage that define (among other terms and conditions) the carrier's limits of liability and claims procedures, (b) a description of the goods, and (c) applicable charges. The airline industry has adopted a standard format for AWB which is used throughout the world for both domestic and international traffic. Unlike a bill of lading, an AWB is a non-negotiable instrument, does not specify on which flight the shipment will be sent, or when it will reach its destination. See also forwarder's air waybill. Also called airbill or air consignment note. B

B/B - Bid Bond

Written guaranty from a third party guarantor (usually a bank or an insurance company) submitted to a principal (client or customer) by a contractor (bidder) with a bid. Bid bond ensures that on acceptance of bid by the customer the contractor will proceed with the contract and will replace the bid bond with a performance-bond. Otherwise, the guarantor will pay the customer the difference between the contractor's bid and the next highest bidder. This difference is called liquidated damages which cannot exceed the amount of the bid bond. Unlike a fidelity bond, a bid bond is not an insurance policy, and (if cashed by the principal) the payment amount is recovered by the guarantor from the contractor. Also called bid guaranty or bid surety. BBS - British Standard Specification

A specification of grades, qualities, sizes, etc., of materials, components, etc., published by the British Standards Institution. B/E - Bill of Exchange

A written order directing that a specified sum of money be paid to a specified person. B/L - Bill of Lading

A document issued by a carrier to a shipper, listing and acknowledging receipt of goods for transport and specifying terms of delivery. BT - Berth Term

Place in a harbor beside a quay, pier, or wharf, where a boat can be moored for loading and discharging cargo or passengers. BTN - Brussels Tariff Nomenclature

Pre-1976 name of Customs Cooperation Council Nomenclature (CCCN), the standardized system for classification of imported goods for statistical and duty determination purposes. In 1989 CCCN too was superceded, by the harmonized commodity description and coding system. BW - Bonded Warehouse

The U.S. Customs Service authorizes bonded warehouses for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. The goods are not subject to duties if reshipped to foreign points. C

CAD - Cash Against Documents

A transaction in which the buyer assumes the title for the goods being purchased upon paying the sale price in cash. CBM - Cubic Meter

Equals 106 cubic centimeters, 35.31 cubic feet, 1.30 cubic yard, 1000 liters, 264.17 US gallons, or 220 imperial gallons. CCC - The Customs Cooperation Council

Pre-1989 version of harmonized commodity description and coding system. C&F - Cost, Freight and Commission

Term of sale signifying that the price invoiced or quoted by a seller for a shipment does not include insurance charges, but includes all expenses up to a named port of destination. In comparison, carriage paid to (CPT) terms include all transport charges (but not insurance) up to a named place (usually the buyer's warehouse) of destination. CFS - Container Freight Station

Port facility for loading and unloading containerized cargo to and from ships. Also called container terminal. CFT - Cubic Ton

A Cubic ton is a measure of volume (compare fluid ounce). It is no longer used in the United Kingdom but seems to be still in use in the USA. C/I - Commercial Invoice ; Consular Invoice ; Certificate of Insurance ; Certificate Inspection

Document required by customs to determine true value of the imported goods, for assessment of duties and taxes. A commercial invoice (in addition to other information), must identify the buyer and seller, and clearly indicate the (1) date and terms of sale, (2) quantity, weight and/or volume of the shipment, (3) type of packaging, (4) complete description of goods, (5) unit value and total value, and (6) insurance, shipping and other charges (as applicable).

C & I - Cost and InsuranceCIF - Cost, Insurance and Freight

Term of sale signifying that the price invoiced or quoted by a seller includes insurance and all other charges up to the named port of destination. In comparison, carriage and insurance paid to (CIP) terms include insurance and all charges up to a named place in the country of destination (usually the buyer's warehouse). See also cost and freight (C&F). CIF - Cost, Insurance, Freight

Term of sale signifying that the price invoiced or quoted by a seller includes insurance and all other charges up to the named port of destination. In comparison, carriage and insurance paid to (CIP) terms include insurance and all charges up to a named place in the country of destination (usually the buyer's warehouse). CIP - Carriage and Insurance Paid to ~

[Named port of destination] Term of sale signifying that the price invoiced or quoted by a seller includes all costs up to a named port-of-destination. By comparison, 'cost, insurance, and freight (CIF)' term includes all costs only up to a named port-of-destination. CISG(Vienna Convention) - United Nations Convention on Contracts for the International Sale of Goods

UN-sponsored convention that establishes uniform-rules for drafting international sales contracts, and sets the legal rights and obligations of the seller and the buyer under such contracts. CISG rules apply automatically to the sales contracts between the countries who have ratified the convention. CL - Carload Lots ; Credit Line

A loan or collection of loans taken on by a corporation. These loans can be many different types, depending upon the needs of the company, and can vary from letters of credit to term loans, and can be committed or uncommitted. CLP - Container Load Plan

A list of items loaded in a specific container and where appropriate their sequence of loading.

C/O : CO - Certificate of Origin

Document that certifies a shipment's country of origin. It is used between members of a trading block or where special privileges are granted to goods produced in certain countries. Certificate of origin is commonly issued by a trade promotion office, or a chamber of commerce in the exporting country. Also called declaration of origin. COD - Cash on Delivery

Payment method in which ordered goods are carried to the buyer's place but are handed over only upon full payment. Also called collect on delivery. CP - Charter Party ; Certificate Posting

Hire or lease contract between the owner of a vessel (aircraft or ship), and the hirer or lessee (charterer). Under a charterparty, a vessel is rented (in full or in part) for one or more voyages (voyage charter) or for a fixed period (time charter). Normally, the vessel owner retains rights of possession and control while the chartrer has the right to choose the ports of call. Also called charter agreement or charter contract, and written also as charter party. CPT - Carriage Paid to ~

Term of sale signifying that the price invoiced or quoted by a seller does not include insurance cost, but includes all other charges up to a named place of destination (usually the buyer's warehouse). In comparison, cost and freight (C&F) terms include transport charges only up to a named port of destination. CR - Courier Receipt

Official document issued by a port, shed, warehouse or shipping terminal operator to acknowledge receipt of items listed in it under customary or specified terms and conditions. CRF - Clean Report of Findings

A report issued by an inspection firm, specifying that the price has been verified and the goods have been inspected before shipment, and that both of these comply with the buyers specifications.

C/S - Cargo Selectivity

The Cargo Selectivity System, a part of Customs' Automated Commercial System, specifies the type of examination (intensive or general) to be conducted for imported merchandise. The type of examination is based on database selectivity criteria such as assessments of risk by filer, consignee, tariff number, country of origin, and manufacturer/shipper. A first time consignee is always selected for an intensive examination. An alert is also generated in cargo selectivity the first time a consignee files an entry in a port with a particular tariff number, country of origin, or manufacturer/shipper. CTD - Combined Transport Document

When goods are transported using more than one mode of transport, the issuer of the Collection takes responsibility for the whole of the journey through a combined transport document. CTL - Constructive Total Loss

In insurance, not an 'actual total loss' but a situation where (1) the actual total loss appears unavoidable (as in case of perishable goods), or (2) a partial loss has occurred to an extent that the property is beyond economical repair (cost of restoring it exceeds its insured value). In CTL cases, the insured may (if terms of the insurance policy permit) abandon the property by giving a 'notice of abandonment' to the insurer who then assumes all rights to the property. CWO - Cash With Order

Payment method in which an order is not processed until full payment is received in advance. Also called cash with order. CY - Container Yard

Port facility at which containers are accepted for loading onboard ships, and off-loaded containers are delivered to the consignees. Also called Marshalling yard. D

D/A - Document Against Acceptance

Arrangement under documentary collection in which an exporter instructs the presenting bank to hand over shipping and title documents (see document of title) to the importer only if the importer accepts the accompanying bill of exchange or draft by signing it. DAF - Delivery at Frontier

The Seller's obligations end when the goods have arrived at the Frontier but before entering the Customs process at the Country named in the contract. D/D ; DD - Document Draft ; Demand Draft

In international trading, a bill of exchange or commercial draft that is presented for payment with the required documents such as a clean bill of lading, certificate of insurance, certificate of origin. Also called documentary bill. dd ; D/d - days after date

Date following another date by a certain number of days, and by which a payer bank will honor a draft drawn against a letter of credit (L/C). A L/C marked 'Ninety days date,' for example, means the draft will be honored ninety days after the date specified in the L/C. DDP - Delivered Duty Paid

Term of sale signifying that the price invoiced or quoted by a seller includes all charges freight, insurance, other associated charges, and duties (and taxes such as VAT, unless expressly exempted) up to the destination named by the buyer, irrespective of the mode of transport. In some cases the seller may also arrange an import license if it is required.

DDU - Delivered Duty Unpaid

Term of sale signifying that the price invoiced or quoted by a seller includes all charges freight, insurance, other associated charges except import duties (and specified taxes, if any) up to the destination named by the buyer, irrespective of the mode of transport. DEQ - Delivered Ex Quay

A form of international trade contract that specifies that the party selling the good must deliver it to a specific wharf or quay at a shipping port. The DEQ contract will indicate if any applicable duties are paid by the seller (duty paid) or the buyer (duty unpaid). Unlike the delivery ex ship contract, the goods must actually be unloaded onto the wharf. DES - Delivered Ex Ship

Transaction in which the seller fulfills its obligations by delivering the goods aboard a ship at a specified port in the importing country. DEM - Demurrage

Penalty for exceeding free time (usually 72 hours) allowed for taking delivery of a shipment from the shipping or transporting company's warehouse. DL - Dead Load

Weight of a structure (such as a bridge or building) itself. See also live load. D/M - Dispatch Money

When so agreed in the charter-party, this is paid by the shipowner to the charterer as a result of the vessel completing loading or discharging before the stipulated time. D/O ; DO - Delivery Order

In freight-prepaid shipments, written directions from a consignor (or shipper) of a shipment to a carrier or freight forwarder to release the shipment to the named delivery party. D/P - Document against Payment

Arrangement under documentary collection in which an exporter instructs the presenting bank to hand over shipping and title documents (see document of title) to the importer only if the importer fully pays the accompanying bill of exchange or draft. Also called cash against documents. DP - Duty Paid

Sales tax on the goods imported is charged on the duty paid value of the goods. D/R - Dock Receipt

Document issued by a shipping company to acknowledge that goods have been received for shipment. Dock receipt transfers the accountability for the safe custody of the cargo from the shipper to the carrier, and serves as the basis for preparing the bill of lading. D/W - Dock Warrant

A dock-warrant is a certificate given to the owner of goods warehoused at a dock, or orders for goods kept in the warehouses connected with a dock. They are granted by the proper officer at the dock to the importer in favour of any one that he may name. These warrants are held to be negotiable, so that they may pass from one holder to another, the property of them being always vested in the holder. E

EC - European Community

Economic and political alliance designed to foster trade and cooperation among its member countries. The European Community was created by the Maastricht Treaty in 1993, and is one of the three pillars of the European Union. Prior to 1993, this was known as the European Economic Community, which was formed after World War II.

ECU - European Currency Unit

A composite monetary unit consisting of a basket of European Community currencies that served as the predecessor to the Euro. While it was being used, the purpose of the ECU was to provide investment opportunities that weren't specific to one currency, allowing investors a way to diversify. ED - Export Declaration

Customs form completed and submitted by an exporter at the port of export, it is meant to serve two major purposes: (1) to provide information on amount, nature, and value of exports to the statistical office for compilation of foreign trade data, and (2) to serves as an export control document. In some cases, an export license and/or a certificate of origin is also required to be attached. E/D - Expiry DateEDI - Electronic Data Interchange

Date on which an agreement, appropriation, contract, facility, offer, right, etc., ceases to be effective or operative. EFTA - European Free Trade Association

International organization whose purpose is to remove barriers to trade in industrial goods among its members. The EFTA's current members are Iceland, Liechteinstein, Norway, and Switzerland. Each country in the EFTA maintains its own commercial policy toward countries outside the group. EIR - Equipment Interchange Receipt

A document transferring a container from one carrier to another, or to/from a terminal. E/L - Export License

Export control document issued by a government agency to monitor the export of sensitive technologies (such as advanced computer chips, encryption-decryption software), prohibited materials (drugs, genetically-modified plants), dangerous materials (explosives, radioactive substances), strategic materials (uranium, advanced alloys), or goods in short supply in the home market (foodstuffs, raw materials).

E/P - Export Permit

Some goods, and some destinations of goods, require that an exporter first receive a Federal export permit from the Department of Foreign Affairs and International Trade (DFAIT) before the goods are exported. Escrow A/C - Escrow Account

Account to which an accountholder makes monthly or other periodic deposits, and authorizes the bank to withdraw funds to pay for certain fixed obligations such as taxes, rent, insurance premium. ETA / ETD - Expected Time Arrival / Expected Time Departure

Date and time at which an air or ship journey is expected to arrive at named city or port. Also called expected time of arrival. EXIM - Export -Import Bank

Government or semi-government agency which commonly provides insurance cover to exporters against losses from non-payment by the importers, as a means to promote the country's foreign trade. Other services offered by EXIM banks may include (1) marine insurance, (2) post-shipment discounting of invoices, (3) pre-shipment advances against confirmed orders, and (4) help in finding new markets. EXW - Ex Works

Term of sale signifying that the price invoiced or quoted by a seller includes charges only up to the seller's factory or premises. All charges from there on are to be borne by the buyer. F

FAQ - Fair Average Quality

A contractual term used in the grain trade, regarding determination of quality of goods shipped. Upon discharge at destination, an average sample is drawn from the vessel, which is compared with the FAQ standard of the country of origin for the month during which bill of lading was issued. If there is a deficienty in the quality of the goods delivered as against the FAQ standard, amounting to at least l/27o of contract price, buyer is entitled to allowance for such difference. The FAQ standard is established by the London Corn Trade Association based on samples received, drawn by representatives of buyers and bill of lading holders, from vessels at discharge. If no FAQ standard exists, then the quality standard is to be determined by LCTA arbitrators. FAS - Free Alongside Ship

Term of sale signifying that the price invoiced or quoted by a seller includes all charges only up to the ship at the port of departure. The buyer is responsible for loading and all subsequent charges. FCA - Free Carrier

Term of sale signifying that the price invoiced or quoted by a seller includes charges only up to placing the goods into the custody of the carrier at a place named by the buyer. FCL - Full Container Load

Standard (twenty or forty-foot) container that is stuffed (loaded) and un-stuffed (stripped) under the risk and account of the shipper or consignee. In general, a FCL container attracts lower freight rates than an equivalent weight of loose (break bulk) cargo. Also called full trailer load (FTL). FCR - Forwarder's Cargo Receipt

A non-negotiable document issued by a forwarder which will satisfy the legal requirements of a letter of credit. Since a forwarder is not an NVOCC it cannot issue actual bills of lading. The FCR is legally binding upon the forwarder and is an industry standard. FEU - Forty Feet Equivalent Units

Ocean-freight term meaning containerized cargo equal to one forty-foot (40 x 8 x 8 feet) or two twentyfoot (20 x 8 x 8 feet) containers. One FEU equals about 25 metric tons or 72 cubic meters. FIO - Free In and Out

Freight rate that includes carriage and the cost of discharging (offloading) as per the custom of the port. FILO rate excludes the cost of loading and (where required) the cost of stowage and lashing. FOA - FOB Airport

Term of sale under which the price invoiced or quoted by a seller includes all charges up to placing the goods on board a ship at the port of departure specified by the buyer. Also called collect freight, freight collect, or freight forward. FOB - Free on Board

A shipping term which indicates that the supplier pays the shipping costs (and usually also the insurance costs) from the point of manufacture to a specified destination, at which point the buyer takes responsibility. FOR - Free on Rail

Pricing term indicating that the seller will put the goods on a railroad car (called 'truck' in the US) at a named loading point without any extra charge. Also called free on truck. FPA - Free from Particular Average

Marine insurance provision which limits the liability of an insurance company to only those losses that exceed a specified percentage of the value of the goods. It is similar to the deductible clause included in other types of insurance, but is not applicable where a cover for total loss is in force. FPA conditions are applied where the goods are extremely susceptible to damage, or are rendered almost worthless from exposure to water or heat. However, its usage differs in the UK (where it applies to partial loss caused directly or indirectly by mishaps such as burning, collision, sinking, or stranding of the ship) from its usage in the US (where it applies only to loss caused directly by such mishaps). FPA conditions have now largely been replaced by the world-wide standard 'Institute Cargo Clause C.' See also with particular average. FPAAC - Free from Particular Average American Conditions

An ocean marine policy provision that eliminates coverage for partial loss to cargo unless caused by stranding, sinking, fire, or collision. G

G/A - General Average

Marine insurance provision under which damages or expenses incurred by shippers (whose cargo is exposed to a common danger) are shared among them in proportion to the value of their exposed cargo. Such damages or expenses occur by direct harm to the ship and/or to the cargo, or in a course of action to prevent initial or additional harm to them. General-average, like particular-average, is independent of the insurance cover bought for the cargo. Instead, it arises out of the contract between the cargo owner and the ship owner. Now largely replaced by relevant institute cargo clause. GATT - General Agreement on Tariff & Trade

UN agency for promotion of free trade between signatory countries (called contracting parties). Formed in 1947 in Geneva, its objective was to counter the devastating effect of protectionist measures (such as the US Smoot-Hawley tariff that raised import duties from 39 percent to 53 percent) supposedly intended to mitigate impact of the great depression. GATT instituted a rule-based multilateral trading system for trade in both goods and services through a series of negotiations (called 'rounds'). It succeeded in achieving reduction in the average tariff on manufactured goods from 40 percent to about 5 percent in the industrialized nations, and in obtaining varying degrees of promised reductions from less developed nations. Its approach was based on two non-discriminatory principles, the (1) Most favored nation and national treatment, and (2) Reciprocity. It worked to eliminate all non-tariff barriers and import quotas, and advocated use of countervailing duties to fight dumping and to negate the effects of subsidies. On January 1, 1995, after the culmination of Uruguay Round, GATT was replaced by World Trade Organization (WTO). GMQ - Good Merchantable Quality

An implied condition respecting the state of goods sold in the course of business. Such goods should be as fit for their ordinary purpose as it is reasonable to expect, taking into account any description applied to them, the price (if relevant), and all the other relevant circumstances. The condition does not apply with regard to defects specifically drawn to the buyer's attention or defects that should have been noticed in an examination of the goods before the contract was made.

GSP - Generalized System of Preference

Non-reciprocal concessions under which developed countries allow duty-free or low-duty entry to imports from selected developing countries up to a certain limit or quota. Also called generalized preferential tariff (GPT). H

HAWB - House Airway Bill

Alternative term for forwarder's air waybill HS - Harmonized Commodity Description and Coding System

Six-digit coding for identification and classification of imported and exported goods, for the purpose of compiling trade statistics and determining customs tariff. Called harmonized system (HS) for short, it divides goods into about 5,000 groups and sub-groups and is in use in most countries since January 1, 1989. US tariff system is a modified form of HD that employs a ten-digit code. I

IATA - International Air Transport Association

Private organization promoting cooperation among the world's scheduled airlines to ensure safe, secure, reliable, and economical air services. Through IATA, local airlines have combined their individual ticketing and reservation networks into a global system that overcomes differences in currencies, customs, languages, and laws. Founded in Hague in 1919 as International Air Traffic Association, it was given the current name in 1945 in Havana and now includes 280 airlines from 130 countries which handle over 95 percent of the world's scheduled air traffic. IATA accredits the travel agents all over the world, except the US where a local organization (Airline Reporting Corporation) provides accreditation. IATA's headquarters are in Montreal, Canada and the executive offices are in Geneva, Switzerland. Not

to be confused with International Civil Aviation Organization (ICAO) which is a governmental organization. IBRD - International Bank for Reconstruction and Development

Original name of the World Bank. I/C - Import Certificate ; Inspection Certificate

Required usually for import of industrial equipment, meat products, and perishable merchandise, it certifies that the item meets the required specifications and was in good condition and correct quantity when it left the port of departure. Also called inspection certificate or inspection report. ICC - International Chamber of Commerce

Paris-based trade association of the world's chambers of commerce. Established in 1919, it promotes "an open international trade and investment system and the market economy," publishes INCOTERMS, and provides arbitration services through its International Court of Arbitration (world's leading arbitral institution). Individual firms, however, may not join ICC directly but access its services through their local chamber of commerce. ICC - Institute Cargo Clause

Set of terms for cargo insurance policies voluntarily adopted as standard terms by many international marine insurance organizations, including the Institute Of London Underwriters and the American Institute Of Marine Underwriters. Widest insurance cover is provided under 'Institute Cargo Clause A', a more restrictive cover under 'Institute Cargo Clause B', and the most restrictive cover under 'Institute Cargo Clause C.' These clauses have replaced the older 'All Risks,' 'With Average,' and 'Free Of Particular Average' clauses. Also called American Institute cargo clauses. ICD - Inland Container Depot

Storage area for empty shipping containers. See also container freight station (CFS). ID - Import Declaration

Customs entry for imports, made and submitted by an importer or by an agent or broker on the importer's behalf. I/L - Import License

Permit that allows an importer to bring in a specified quantity of certain goods during a specified period (usually one year). Import licenses are employed (1) as means of restricting outflow of foreign currency to improve a country's balance of payments position; (2) to control entry of dangerous items such as explosives, firearms, and certain substances; or (3) to protect the domestic industry from foreign competition. IOP - Irrespective of Percentage

When shown in a policy this means that particular average is not subject to the franchise expressed in the standard S.G. policy form. I/P - Insurance Policy

Formal contract-document issued by an insurance company to an insured. It (1) puts an indemnity cover into effect, (2) serves as a legal evidence of the insurance agreement, (3) sets out the exact terms on which the indemnity cover has been provided, and (4) states associated information such as the (a) specific risks and perils covered, (b) duration of coverage, (c) amount of premium, (d) mode of premium payment, and (e) deductibles, if any. IQ - Import Quota

Means of restricting the quantity of imports through import licenses, either of a certain item or from a certain country. See also import restrictions. ISO - International Standardization OrganizationITO - International Trade Organization

Popular name for International Organization For Standardization (IOS), a voluntary, non-treaty federation of standards setting bodies of some 130 countries. Founded in 1946-47 in Geneva as a UN agency, it promotes development of standardization and related activities to facilitate international trade in goods and services, and cooperation on economic, intellectual, scientific, and technological aspects. ISO covers standardization in all fields including computers and data communications, but excluding electrical and electronic engineering (governed by the International Electrotechnical

Commission or IEC) and telecommunications (governed by International Telecommunications Union's Telecommunications Standards Sector or ITU-TSS). See also ISO 9000 Series and ISO 14000 Series. L

L/A - Letter of Authority

Letters of authorization permit certain functions or actions. Letters of appointment assign responsibility and authority to designated personnel to control a specific function. The supply officer must maintain, in the supply office, a current file of all such letters applicable to operating the supply department. LAFTA - Latin American Free Trade Association

Organization aiming to create a common market in Latin America; to promote trade it applies tariff reductions preferentially on the basis of the different stages of economic development that individual member countries have reached. Formed in 1980 to replace the Latin American Free Trade Association (formed in 1961), it has 11 members: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela. Its headquarters are in Bogot, Colombia. L/C - Letter of Credit

A binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be tranferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the shipment of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability. LCL - Less than Container Load

Shipping term for cargo that is insufficient either in quantity or in weight to qualify for the freight rates applied to a standard shipping container. L/G - Letter of Guarantee

Document used mainly in the Far East (China, Japan, Korea, Singapore, Taiwan, among others) whereby an importer obligates itself to accept and pay a bill of exchange on its presentment at a certain bank. The objective of this letter is to secure that bank's acceptance of an exporter's draft, for payment through its correspondent bank (where the draft will be presented). L/I - Letter of Indemnity

Written undertaking by a third party (such as a bank or insurance company), on behalf of one of the parties (the first party) to a transaction or contract, to cover the other party (the second party) against specific loss or damage arising out the action (or a failure to act) of the first party. Also called indemnity bond. L/T - Long Ton

Imperial ton of 2,240 pounds, now largely superseded by the metric ton or tonne of 1,000 kilograms (2,204.68 pounds). A long ton is nearly the weight of one million dollars in new one-dollar notes. Also called gross ton or imperial ton. M

M/F - Manifest

Transport document that serves as a tally-sheet, and gives a detailed summary of all bills of lading (or air waybills) issued by a carrier (or its agent) for a particular voyage of a particular vessel or vehicle. For cargo carrying vessels or vehicles, a manifest lists its consignor, consignee, number, origin, destination, value, and other such information primarily for use by the customs authorities. Where the vessel or vehicle carries passengers, it lists their names, port of embarkation, port of disembarkation, etc., primarily for use by the immigration authorities. MFN - Most Favoured Nation Clause

Non-discriminatory trade policy commitment offered by one country to another on a reciprocal basis. Both countries apply that lowest import-duty and quota-restrictions on imports from each other which they apply on the similar imports from any other country. Under Article I of the General Agreement On Tariffs And Trade (GATT) and its successor World Trade Organization (WTO), all signatory states must

extend this treatment to one another. common markets, customs unions, and free trade areas, however, are exempt from MFN provisions. MIP - Marine Insurance Policy

Coverage against loss of or damage to a ship; and in-transit cargo loss or damage over waterways, land, and air. M/R ; MR - Mate's Receipt

Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel. It is not a document of title and is issued as an interim measure until a proper bill of lading can be issued. M/T - Mail Transfer, Metric Ton, Measurement TonMTD - Multi-transport Document

U sed for land or sea shipments. It equals: (1) 40 cubic feet (1.12 cubic meters), or (2) 1 cubic meter (35.3 cubic feet). N

NTB - Non-Tariff Barrier

Measures other than high import duties (tariff) employed to restrict imports. Two such measures are (1) direct price influencers, such as export subsidies or drawbacks, exchange rate manipulations, methods of imports valuation, customs surcharges, lengthy customs procedures, establishment of minimum import prices, unreasonable standards and inspection procedures, and (2) indirect price influencers, such as import licensing and import. NTBs, with certain exceptions, are breach of GATT (now WTO) rules but, nevertheless, their overall use has been on the increase since the Tokyo round of multilateral trade negotiations (September 1973 to April 1979) where they were first discussed. No specific definition of NTBs exists, and they are also called non tariff measures. O

OEM - Original Equipment Manufacturing

Producer or manufacturer of a complete end product (such as a car engine, cooling unit, or a circuit board) or a sub-assembly (such as a carburetor, compressor, or a chip) used in an end product. OP - Open Policy

A cargo policy with no expiration date that provides automatic coverage of cargo to or from an Assured in a specified trade at agreed rates, terms, and conditions. Usually consists of separate Marine and War policies. P

PA - Power of Attorney

Written legal authority given by one party (the principal) to another (the agent or attorney-in-fact) to act on the principal's behalf. It may be a (1) General power Of attorney that authorizes the agent to act generally on behalf of the principal, or (2) Special power of attorney that is limited to a specific act or situation. Decisions made and actions taken by an attorney in fact (within the scope of his or her authority) are legally binding on the principal. A power of attorney can remain in force only so long as the principal is alive and does not become disabled or incapacitated. Although it is often conferred on the principal's attorney, one does not need to be an attorney at law to be an attorney-in-fact. PA - Particular Average

Marine insurance provision under which damages or expenses incurred by a shipper (whose cargo is exposed to a danger) are borne by that shipper only. Such damages or expenses occur by direct harm to the ship and/or cargo, or in a course of action to prevent initial or additional harm to them. Particular average, like general-average is independent of the insurance cover bought for the cargo. Instead, it arises out of the contract between the cargo-owner and the ship-owner. Now largely replaced by the relevant institute cargo clause. See also free of particular average. P/L - Packing List ; Paperless

Itemized list of articles usually included in each shipping package, giving the quantity, description, and weight of the contents. Prepared by the shipper and sent to the consignee for accurate tallying of the delivered goods. Also called bill of parcels, packing slip, or unpacking note. PSI - Pre-Shipment Inspection

Critical appraisal involving examination, measurement, testing, gauging, and comparison of materials or items. An inspection determines if the material or item is in proper quantity and condition, and if it conforms to the applicable or specified requirements. Inspection is generally divided into three categories: (1) Receiving inspection, (2) In-process inspection, and (3) Final inspection. In quality control (which is guided by the principle that "Quality cannot be inspected into a product") the role of inspection is to verify and validate the variance data; it does not involve separating the good from the bad. Q

QC - Quality Control

Steps taken to make sure that a company's products or services are of sufficiently high quality. also called quality assurance. R

RORO Traffic - Roll on-Roll Off Traffic

Ship designed to carry rolling-stock cargo which does not require cranes to be loaded or off-loaded but is driven on and off the ship's decks. See also Lift-On, Lift-Off. S

SDR - Special Drawing Rights

A measure of a country's reserve assets in the international monetary system. SDRs were created by the International Monetary Fund in 1969, originally to be used as a replacement for gold and silver. Today they are commonly used for a number of accounting purposes. The value of an SDR is determined by the exchange rate of the currencies contained in the SDR. also called paper gold. SF - Square Feet, Super Foot

One square-foot of one-inch thick lumber (12 x 12 x 1 inch). Used as a unit of lumber volume it equals one-twelfth of a cubic foot or 2.36 liters. Also called board measure, foot board measure (FBM), or superfoot. See also cord. SITC - Standard International Trade Classification

UN code used solely by international organizations for reporting world-wide trade statistics. S/N - Shipping Note

Directs a carrier in preparing shipping documents for the subject shipment, and provides for the necessary declarations. Also called shipping note. S/O - Shipping Order

nventory control document that is used to identify what should be shipped from the warehouse and to whom and where it should be shipped. The shipping order usually accompanies the shipment, so that the recipient can verify that the items listed were received. The shipping order can then be used to prepare an invoice or, in the case of a collect on delivery (cod) order, can serve as the invoice. The information included on a shipping order is typically an order number and date, shipping and receipt dates, a customer purchase order number, special shipping instructions such as "UPS" or "overnight," the buyer's name and address, the shipping address (if different), and a list of the items ordered, shipped, and/or back-ordered, including quantity and warehouse storage location. The shipping order may also include a space for the recipient's signature. SR & CCC - Strikes, Riots, and Civil Commotions Clause

Exemption in ocean marine policy for losses caused by strikes, riots, and civil commotion. S/T - Short Ton

A unit of weight of exactly 2,000 pounds, or 907.18 kilograms. In the United States, a short ton is referred to as simply a ton. In other countries, the term short ton is used to differentiate from the long ton (typically 2,240 pounds) or the metric ton (2,204 pounds). SWIFT - Society Worldwide Interbank Financial Telecommunication

An industry owned co-operative supplying secure messaging services and interface software to financial institutions. SWIFT encompasses over 7,000 financial institutions in 192 countries. T

T/C - Travelers Check

Check issued by a financial institution which functions as cash but is protected against loss or theft. Traveler's checks are useful when traveling, especially in case of overseas travel when not all credit and debit cards carried by a person will be accepted. A charge or commission is usually incurred when a person exchanges cash for traveler's checks, though some issuers provide them free of charge. TEU - Twenty Feet Equivalent Unit

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

A charge made for certain handling services performed at terminals. TL - Total Loss

Destruction of an asset or property to the extent that nothing of value is left, and the item cannot be repaired or rebuilt to its pre-destruction state. Some types of insurance policies pay the maximum covered amount only in case of total loss. TLO - Total Loss Only Insurance

Marine insurance policy that pays damages only if the vessel or the cargo is totally destroyed. Since total loss only very occurs, TLO policies are usually cheaper than regular policies TQ - Tale Quale(French) (=of condition on arrival)

In foreign exchange dealings a tale quale or tel quel rate is a net rate. It includes commission, brokerage, or in short, every charge, so that the rate is the total rate or price, to which there can be no addition. TR - Trust Receipt

Asset based financing: Method used for funding purchase of inventories of consumer durables (appliances, automobiles), construction equipment, etc. In this arrangement the bank holds the title and the borrower can sell the goods (and thus repay the loan) but is obligated to keep them separate from the other inventory. TS L/C - Transferable L/C

Irrevocable L/C with two (and only two) successive beneficiaries. In this arrangement, the first beneficiary (an intermediary or importer's foreign representative) can assign part or whole of the L/C amount to a second beneficiary (the supplier or manufacturer). To be transferable, the L/C must be so marked by the issuing bank on the instructions of the buyer or importer (the account-party). On the instructions of the first beneficiary the advising bank can transfer it to the second beneficiary but not any further. Used extensively in the Far East (China, Japan, Korea, Singapore, Taiwan, among others). See also back to back letter of credit. TT - Telegraphic Transfer

Largely obsolete method of transferring funds through a telegraph or telex link. Also called wire transfer, it has been replaced by secure cable and wireless telecommunications networks. T.T.B. - Telegraphic Transfer

Largely obsolete method of transferring funds through a telegraph or telex link. Also called wire transfer, it has been replaced by secure cable and wireless telecommunications networks. U

UCC - Uniform Commercial Code

International trade: Documentation standards defined by the International Chamber Of Commerce (ICC) in 1933 and revised periodically thereafter. These standards are followed by practically every organization involved in foreign trade and (when not in contravention of local laws) are binding on all parties using letters of credit. Also called uniform customs and practice for documentary credit (UCP). UNCITRAL - UN Commission on International Trade Law

Established by the United Nations General Assembly by its Resolution 2205 (XXI) of 17 December 1966 "to promote the progressive harmonization and unification of international trade law. V

VAT - Value Added Tax

A consumption tax which is levied at each stage of production based on the value added to the product at that stage. W

WA - With AverageWAIOP - With Average Irrespective of Percentage

Marine insurance provision under which the insured cargo is covered for partial damage from seawater or loss from breakage, leakage, theft, etc. This cover, however, comes into force only when the damage or loss exceeds a certain percentage (usually 3 percent) of the cargo's value. See also particular average. WA 3PCT - With Average 3percent

An ocean marine policy provision that eliminates coverage for partial loss of below deck cargo amounting to less than 3 percent of insured value. Partial losses amounting to 3 percent or more of insured value are covered in full. WTCA - World Trade Center Association

ounded in 1970, is a not-for-profit, non-political association dedicated to the establishment and effective operation of World Trade Centers (WTCs) as instruments for trade expansion representing 316 members in 91 countries. The WTCA is an unofficial umbrella trade association that unites corporations and government agencies in international trade. WWO - Weather Working Days

Working days on which the weather permits work to be carried out. This often refers to the days allowed in a charter for loading or unloading a ship.