International Business Glossary I - Z
import - To bring foreign goods or services into a country.
import license - A license required and issued by some governments authorizing the entry of foreign goods into their countries.
import quota - A restricted amount of certain types of goods entering a country, usually maintained through licensing importers, assigning to each a quota, after determining the amount of goods or commodities allowed for that period. The license may also state the country from which the importer is allowed to buy, thus restricting free trade, but many times adopted by governments because of internal pressures from certain industries worried about competition.
in bond - A term applied to the status of merchandise admitted provisionally to a country without payment of duties—either for storage in a bonded warehouse or for transshipment to another point, where duties will eventually be imposed.
indent - A requisition for goods, stating conditions of the sale. Acceptance of an indent by a seller means his agreement to the conditions of the sale.
indirect exporting - Sale by the exporter to the buyer through an intermediary in the domestic market.
inland bill of lading - A bill of lading used in transporting goods overland to the exporter’s international carrier, where the ocean bill of lading becomes applicable. Although a through bill of lading can sometimes be used, it is usually necessary to prepare both an inland bill of lading and an ocean bill of lading for export shipment.
inland carrier - A transportation line which hauls export or import freight between ports of entry and inland destinations.
integrated carriers - Carriers that have both air and ground fleets. Since they usually handle thousands of small parcels an hour, they have more competitive prices and offer more diverse services than regular carriers.
intellectual property - The patents, trademarks, service marks, copyrights and trade secrets of a business are considered intellectual property.
Inter-‑American Development Bank (IDB) - The Inter-‑American Development Bank provides resources to finance Latin American development. The IDB also serves as administrator for special funds provided by several member and nonmember countries. The largest of these funds is the U.S. Social Progress Trust Fund.
International Chamber of Commerce (ICC) - Established in Paris in 1919, this is a non-governmental organization serving world business. The ICC has members in 110 countries that include companies, industrial associations, banking bodies and chambers of commerce. The ICC International Court of Arbitration was founded in 1923 to settle international business disputes; it is the leading international arbitration institution.
International Finance Corporation (IFC) - A separately organized member of the World Bank group, receiving its funds through stock subscriptions from member countries, revolving loans, and earnings. The IFC encourages the flow of capital into private investment in developing countries. It makes loans at commercial interest rates, usually as a lender of last resort when sufficient capital cannot be obtained from other sources on reasonable terms.
irrevocable letter of credit - A letter of credit which obligates the issuing bank to pay the exporter provided all the terms and conditions of the letter of credit have been met. None of the terms and conditions may be changed without the consent of all parties to the letter of credit (see letter of credit).
lay time - The time allowed a ship to load or unload. If this number of days is exceeded, demurrage is incurred.
legal weight - The weight of the goods plus any immediate wrappings which are sold along with the goods; e.g., the weight of a tin can as well as its contents (see net weight).
letter of credit (L/C) - A method of payment for goods by which the buyer establishes his/her credit with a local bank, clearly describing the goods to be purchased, the price, the documentation required and a limit for completion of the transaction. Upon receipt of documentation, the bank is either paid by the buyer or takes title to the goods themselves and then transfers funds to the seller. The bank will insist upon exact compliance with the terms of the sale, and will not pay if there are any discrepancies.
lighterage - The cost of loading or unloading a vessel by means of barges alongside.
liquidation - The final determination of the duties due.
maquiladora - The maquiladora (or “in-bond” industry) program allows foreign manufactures to ship components into Mexico duty-free for assembly and subsequent re-export.
marine insurance - Insurance which will compensate the owner of goods transported overseas in the event of loss which cannot be legally recovered from the carrier.
multiple exchange rates - A number of countries operate systems by which different exchange rates are used for different transactions.
NAFTA - The North American Free Trade Agreement, the largest free trade area in the world, 340 million people and $6 trillion in GDP, encompassing Canada, the United States and Mexico. This free trade pact was passed by the U.S. Congress in November 1993 and began implementation in January 1994. NAFTA follows the model of the U.S.-Canada Free Trade Agreement and will lower trade barriers among the three countries over the next 15 years to zero in most categories of goods and services.
net weight (actual) - The weight of the goods without any immediate wrappings; e.g., the weight of the contents of a tin can without the weight of the can (see legal weight).
non-‑tariff barriers - These are factors, other than tariffs, inhibiting international trade, meant to discourage imports. They may include requiring advance deposits in import payments, requiring excessive customs adherence and excessive administrative procedures.
Non‑-Vessel Operating Common Carrier (NVOCC) - A cargo consolidator of small shipments in ocean trade, generally soliciting business and arranging for or performing containerization functions at the port.
ocean bill of lading - A contract between an exporter and an international carrier for transportation of goods to a specified foreign port. Unlike an inland bill of lading, the ocean bill of lading is a collection document, an instrument of ownership which can be bought, sold or traded while the goods are being shipped. There are two types of ocean bills of lading used to transfer ownership.
straight (non‑negotiable): provides for delivery of goods to the person named in the bill of lading. The bill must be marked “non‑-negotiable.”
shipper’s order (negotiable): provides for delivery of goods to the person named in the bill of lading or anyone designated. The shipper’s order is used with draft or letter‑-of‑-credit shipments and enables the bank involved in the export transaction to take title to the goods if the buyer defaults. The bank does not release title to the goods to the buyer until payment is received. The bank does not release funds to the exporter until conditions of sale have been satisfied.
open account (O/A) - A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment, with 30-45 days accounts payable, for example. The buyer’s integrity must be unquestionable, or the buyer must have a history of payment practices with the seller.
Organization for Economic Cooperation & Development (OECD) - The Organization for Economic Cooperation and Development was established in 1961 by the industrialized “free market” nations of the world to promote the economic and social welfare of member nations and to stimulate efforts on behalf of developing nations.
Overseas Private Investment Corporation (OPIC) - A wholly owned government corporation designed to promote private U.S. investment in developing countries by providing political risk insurance and some financing, including project financing.
packing list - This document includes information that is needed for transport, as well as the number and kinds of items that are being shipped.
performance bond guarantee - If a company is undertaking a contract, it may be asked to give a performance bond for part of the value of the contract. If the customer considers the company’s performance under the terms of the contract has been unsatisfactory, payment of the bond can be demanded from the banker guaranteeing the bond. The bond is issued by the bank on behalf of the company, and therefore increases the bank’s potential exposure to the company.
piggyback arrangement - An arrangement whereby one company—sometimes a smaller one—uses the already established distribution channels of another company, which is effective when the two companies wish to sell complementary products.
political risk - Used in export financing, this term represents the risk of losses incurred by war, government prevention of merchandise entry, confiscation, currency inconvertibility, etc.
port of entry - A port where foreign goods are admitted into the receiving country.
President’s Export Council (PEC) - The President’s Export Council (PEC) advises the President on government policies and programs that affect U.S. trade performance; promote export exapansion; and provide a forum for discussing and resolving trade-related problems among the business, industrial, agricultural, labor and government sectors.
Private Export Funding Corporation (PEF0.CO) - A U.S. company owned by the Export-Import Bank and a number of U.S. commercial banks and industrial corporations. It works with Ex-Im Bank by purchasing foreign buyers’ medium. PEFCO funds itself by public issues of long-term secured notes, unsecured medium-term obligations, short-term notes sales, and by credit lines from the banks and from Ex-Im Bank.
pro forma invoice - An invoice prepared by an exporter before the shipment of merchandise informing the buyer of the kinds of goods to be sent, their value and important specifications such as size, quantity and weight.
quota - The quantity of goods which may be imported without restriction or additional duties or taxes.
quotation - An offer to sell goods at a stated price and under stated terms.
Schedule B - Refers to “Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States.”
Shipper’s Export Declaration (SED) - A form required by the U.S. Treasury Department and completed by a shipper showing the value, weight, consignee, destination, etc., of export shipments, as well as Harmonized Schedule B identification number.
sight draft - A draft payable upon presentation to the drawee. A sight draft is used when the seller wishes to retain control of the shipment, either for credit reasons or for the purpose of title retention. Money will be payable at sight of the completed documents.
Standard Industrial Classification (SIC) - A standard numerical code system used by the U.S. government to classify goods and services.
Standard International Trade Classification - A standard numerical code system developed by the United Nations and used in international trade to classify commodities, primarily designed for statistical and economic purposes.
standy letter of credit - A letter of credit issued to cover a particular contingency, such as foreign investors guaranteed payment for commercial paper (see letter of credit).
Strikes, Riots & Civil Commotions (S.R.& C.C.) - A term referring to an insurance clause excluding insurance of loss caused by labor disturbances, riots and civil commotions or any person engaged in such actions.
sue and labor clause - A provision in marine insurance obligating the insured to take necessary steps after a loss to prevent further loss and to act in the best interests of the insurer.
tare weight - The weight of packing and containers—without the goods to be shipped.
tariff - A tax on goods which a country imports. The rate at which imported goods are taxed. A tariff schedule usually refers to a list or schedule of articles of merchandise with the rate of duty to be paid to the government of importation.
tariff quotas - Setting a higher tariff rate on imported goods after a specified, controlled quantity of the item has entered the country at the usual tariff rate during a specified period.
technology transfer - This term is used to characterize “the transfer of knowledge generated and developed in one place to another, where it used to achieve some practical end.
through bill of lading - A single bill of lading covering both domestic and international passage of an export shipment.
trade mission - Generically, a trade mission is composed of individuals who are taken as a group to meet with prospective customers overseas.
Trade Promotion Coordinating Committee (TPCC) - The President established the TPCC in May 1990 to unify and streamline the government’s decentralized approach to export promotion.
trade show - A trade show is a stage-‑setting event in which firms present their products or services to prospective customers in a pre-formatted setting.
transit shipment - A term used of a shipment destined for an interior point or for a place best reached by reshipment from another port.
transportation and exportation entry - A form declaring goods entering the United States for the purpose of exportation through a U.S. port. Carriers and any warehouse must be bonded.
uniform customs and practice - Standardized code of practice issued by the International Chamber of Commerce in Paris covering Documentary Credits (see International Chamber of Commerce).
uniform rules - Standardized rules issued by the International Chamber of Commerce in Paris covering collections, Combined Transport Documents, and Contract Guarantees (see International Chamber of Commerce).
Uruguay Round - The most recent (1989‑-1994) round of trade talks of the member countries of the General Agreement on Tariffs and Trade (see GATT).
validated export license - A document issued by the U.S. Government authorizing the export of commodities for which written export authorization is required by law.
value added tax (VAT) - An indirect tax assessed on the increase in value of a good from raw material stage to final product for consumption. The tax is paid by those who increase the value of the items before they resell them. A system used by the European Community.
World Trade Organization (WTO) - This organization was the former General Agreement on Tariffs and Trade (GATT) and was created and named by the Uruguay Round in 1994.
warehouse entry - A form declaring goods imported and placed in a bonded warehouse. Duty payment may not be required until the goods are withdrawn by the importer.
wharfage - Charges assessed by docks for the handling of incoming or outgoing ocean merchandise.
without reserve - A shipping term indicating that a shipper’s agent or representative is empowered to make definitive decisions and adjustments abroad without approval of the group or individual represented.
World Bank - The World Bank assists the development of member nations by making loans when private capital is not available at reasonable terms to finance productive investments.
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