Ad valorem:  Literally: according to value.  Any tax that is applied as a percentage of value.

Advisory capacity:  A term indicating that a shipper’s agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented.

Air waybill:  A bill of lading that covers both domestic and international flights transporting goods to a specified destination.  This is a nonnegotiable instrument of air transport that serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed and obligates itself to carry the consignment to the airport of destination according to specified conditions.

Arbitrage:  The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another at higher prices.

Balance of Trade:  The difference between a country’s total imports and exports.  If exports exceed imports, a favorable balance of trade exists; if not, a trade deficit is said to exist.

Barter:  Trade in which merchandise is exchanged directly for other merchandise without use of money.  Common with countries using currency that is not readily convertible.

Bill of Lading:  A document that establishes the terms of a contract between a shipper and a transportation company under which freight is to be moved between specified points for a specified charge.

Carnet:  A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries (for display, demonstration, or similar purposes) without paying duties or posting bonds.

Cash against documents (CAD): Payment for goods in which a bank, commission house, or other intermediary, transfers title documents to the buyer upon payment in cash.

Cash in advance (CIA):  Payment for goods in which the price is paid in full before shipment is made.  Most common with small purchases, initial purchases, or when the goods are built to order.

Cash with order (CWO):  Payment for goods in which the buyer pays when ordering and in which the inspection is binding for both parties.

Certificate of inspection:  A document certifying that merchandise (such as perishable goods) was in good condition immediately prior to shipment.

Certificate of manufacture:  A statement (often notarized) in which a producer of goods certifies that manufacture has been completed and that the goods are now at the disposal of the buyer.

Certificate of origin:  A document, required by certain foreign countries for tariff purposes, certifying the country of origin of specified goods.

Clean bill of lading:  A receipt for goods issued by a carrier that indicates that the goods were received in “apparent good order and condition” without damages or other irregularity.

Collection papers:  All documents submitted by the buyer for the purpose of receiving payment for a shipment.

Commercial attaché:  The commerce expert on the diplomatic staff of his or her country’s embassy or large consulate.

Commercial invoice:  A priced list of goods shipped, identifying seller and buyer, and including sales and payment terms.

Common carrier:  An individual, partnership, pr corporation that transports persons or goods for compensation.

Consignment:  Delivery of merchandise from an exporter (the consigner) to an agent (the consignee) under agreement that the agent sell the merchandise for the account of the exporter.  The consignor retains title to the goods until the consignee has sold them.  The consignee sells the goods for commission and remits the net proceeds to the consignor.

Consular declaration:  A formal statement, made to the consul of a foreign country, describing goods to be shipped.

Consular invoice:  A document, required by some foreign countries, describing a shipment of goods and showing information such as the seller, buyer, and value of the shipment.  Certified by a consular official of the foreign country, it is used by the country’s customs officials to verify the value, quantity, and nature of the shipment.

Convertible currency:  A currency that can be bought and sold for other currencies at will.

Counter trade:  The sale of goods or services that are paid for in whole or in part by the transfer of goods or services rather than money.

Countervailing duty:  A duty imposed to counter unfairly subsidized products.

Credit risk insurance:  Insurance designed to cover risks of nonpayment.

Customs broker:  An individual or firm licensed to enter and clear goods through customs.

Customs:  The authorities designated to collect duties levied by a country on imports and exports. The term also applies to the procedures involved in such collection. 

Devaluation:  The official lowering of the value of one country’s currency in terms of one or more foreign currencies.

Distributor:  A foreign company or person who purchases directly from a supplier and maintains an inventory of the supplier’s products.

Dock receipt:  A receipt issued by an ocean carrier to acknowledge receipt of a shipment at the carrier’s dock or warehouse facilities.

Draft (or Bill of exchange):  An unconditional order in writing from one person (the drawer) to another (the drawee), directing the drawee to pay a specified amount to a named drawer at a fixed or determinable date.

Drawback:  Articles manufactured or produced in the United States with the use of imported components or raw materials and later exported are entitled to a refund of up to 99% of the duty charged on the imported components.  The refund of the duty is known as a drawback.

Drawee:  The individual or firm on whom a draft is drawn and who owes the stated amount.

Drawer:  The individual or firm that issues or signs a draft and this stands to receive payment of a stated amount from a drawee.

Dumping:  Selling merchandise in another country at a price below the price at which the same merchandise is sold in the home market or selling such merchandise below the costs incurred in production and shipment.

Duty:  A tax imposed on imports by the customs authority of a country.  Duties are generally based on the value of goods (ad valorem duties), some other factor such as weight or quantity (specified duties), or a combination of value and other factors (compound duties).

Ex:  Literally, From.  When used in pricing terms such as “ex works” it signifies that the price quoted applies only at the point of origin (at the seller’s factory).

Exchange permit:  A permit sometimes required by the importer’s government to enable the import firm to convert its own currency into foreign currency with which to pay a seller in another country.

Exchange rate:  The price of one currency in terms of another, that is, the number of units of one currency that may be exchanged for one unit of another currency.

Ex-Im Bank:  Export-Import bank of the United States.  The official export credit agency for the U.S. Government.

Export license:  A required document issued by the U.S. Government authorizing the export of specific commodities.  This license is for a specific transaction or time period in which the export is to take place.

Export Management Company (EMC):  A private firm that serves as the export department for several producers of goods or services, either by taking title or by soliciting and transacting export business on behalf of its clients in return for a commission, salary, or retainer plus commission.

Export Trading Company (ETC):  A firm similar or identical to Export Management Company.

Force majeure:  The title of a standard clause I marine contracts exempting the parties for nonfulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods and war.

Foreign Corrupt Practices Act:  In general, FCPA prohibits American companies from making corrupt payments to foreign officials for the purpose of obtaining or keeping business.

Foreign exchange:  The currency or credit instruments of a foreign country.  Also, this refers to transactions involving purchase or sales of currencies.

Foreign sales agent:  An individual or firm that serves as the foreign representative of a domestic supplier and seeks sales abroad for the supplier.

Free-trade zone:  An area designated by the government of a country for duty-free entry of any nonprohibited goods.  Merchandise may be stored, displayed, used in manufacturing, etc., within the zone and reexported without duties being paid.  Duties are imposed on the merchandise only when the goods pass from the zone into an area of the country subject to the customs authority.

Freight forwarder:  An independent business that handles export shipments for compensation.  (A Freight Forwarder is among the best sources of information and assistance on U.S. export regulations and documentation, shipping methods, freight costs, and foreign import regulations.)

GATT:  General Agreement on Tariffs and Trade now called the World Trade Organization (WTO).  A multilateral treaty intended to help reduce trade barriers between signatory countries and to promote trade through trade concessions.

Gross weight:  The full weight of a shipment, including goods and packaging.   Compare to Tare Weight.

Harmonized system:  Worldwide classification system in which the same 6-digit number is assigned to a food regardless of its origin or the language in which it is described.

Import license:  A document required and issued by some national governments authorizing the importation of goods into their individual countries.

Incoterms:  Terms of international sales issued by the International Chamber of Commerce.

Licensing:  A business arrangement in which the manufacturer of a product (or a firm with proprietary rights over certain technology, trademarks, etc.) grants permission to some other group or individual to manufacture that product (or make use of that proprietary material) in return for specified royalties or other payment