International Trade Business Terms
Incoterms: Incoterms (International Commercial Terms) is a set of three-letter trade terms developed by the International Chamber of Commerce (ICC) and published in the Incoterms 2020 rules. The Incoterms rules are accepted by governments, legal authorities, and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove the need for costly and time-consuming negotiations and to minimize the risks of miscommunication.
Export Licensing: Export licensing is the authorization granted by a government to a company or an individual to export goods or services to a foreign country. It is designed to protect security and economic interests, as well as promote foreign policy objectives.
Export Declaration: An export declaration is a document required by some countries when goods are exported. It is generally made up of two copies and details the goods, such as description, quantity, country of origin, etc., that are being exported.
Freight Forwarder: A freight forwarder is a company that specializes in arranging the export of goods. Freight forwarders manage the logistics of moving goods from one country to another and act as an intermediary between shippers and carriers. They are responsible for compiling export declarations, arranging for shipments, and customs clearance.
Bill of Lading: A bill of lading is a document used in international trade as a receipt for goods being transported from one party to another. It is also a contract between the shipper and the carrier outlining the details of the goods, such as description, quantity, and destination.
Packing List: A packing list is a document that outlines the contents of a shipment of goods. It is used as a way to provide details of the goods being shipped, such as quantity, size, pieces, and weight.
Letter of Credit: A letter of credit is a document used in international trade to guarantee payment from a buyer to a seller. It is issued by a bank on behalf of the buyer and is only triggered when the seller delivers the goods or services to the buyer and follows the terms of the letter of credit.
Certificate of Origin: A certificate of origin is a document used in international trade to certify the country in which a product was manufactured. It is issued by a chamber of commerce or other official body and is used by customs officials to verify the goods’ country of origin.
Inspection Certificate: An inspection certificate is a document issued by an independent company or organization that examines and inspects products to confirm their quality or compliance with specific regulations.
Fumigation Certificate: A fumigation certificate is a document issued by a fumigation service provider that confirms that a shipment of goods has been fumigated according to the relevant standards. Fumigation is required when shipping goods across international borders and varies depending on the country of origin and destination.
Customs Bonds: A customs bond is a type of insurance policy that covers the costs of any penalties or duties that may be levied by the customs service of a country due to non-compliance with customs regulations. A customs bond is typically required when importing or exporting goods to a foreign country.
Shipping Documents: Shipping documents are documents that accompany goods during the process of export or import. These documents generally include a bill of lading, invoices, packing lists, certificates of origin, and inspection certificates.
Foreign Exchange: Foreign exchange is the exchange of one currency for another. It is critical for international trade as companies must often convert currencies in order to conduct transactions.
Export Financing: Export financing is a term used to describe the various methods used to finance exports. It can include government programs, bank loans, credit insurance, and export credit agencies.
Anti-Dumping Duty: An anti-dumping duty is a tariff imposed on foreign products determined to be sold at less than their fair value in the foreign market. It is designed to protect domestic companies from foreign competition.
