Getting Familiar with Import and Export

Getting Familiar with Import and Export

As the world becomes more and more technologically advanced, international trade becomes more and more rewarding, both in terms of profit and personal satisfaction. 96 percent of exporters are non-corporates, who take the lion’s share of the EXIM market. It is critical to learn about the terms related to import and export to better understand and maximize international trade opportunities.

EMC (Export Management Company) 

An EMC handles export operations for a domestic company that wants to sell its product overseas through import and export but doesn’t know how (and perhaps doesn’t want to know how). In some cases, the EMC even takes title to the goods, in essence becoming its own distributor. EMCs usually specialize by product, foreign market or both, and–unless they’ve taken title–are paid by commission, salary, or retainer plus commission.

While an EMC has merchandise to sell and is using its energies to seek out buyers, an ETC attacks the other side of the trading coin. It identifies what foreign buyers want to spend their money on and then hunts down domestic sources willing to export. An ETC usually takes title to the goods and sometimes works on a commission basis.

ACP: African, Caribbean, and Pacific countries.

An Ad valorem tariff is assessed as a percentage of the value of an import.

Adventure: It is a term of art in the marine insurance business. All insured cargo owners and every shipper on that vessel are part of the adventure.

Advising Bank: An advising bank is usually in the country of the seller, whose primary function is to authenticate the letter of credit and advise it to the seller, and purchase and collect export bills.

Agent: A person who represents businesses in both domestic and international markets. In corporate governance terminology, management is the agent of the principal stakeholders in a principal-agent relationship.

Air Waybill: A non-negotiable instrument of domestic and international air transport that functions as a bill of lading in import and export.

Anti-Dumping Laws:  Laws that are enacted to prevent dumping-offering prices in the overseas market that is lower than that at which a product is sold in its home domestic market.

APEC (Asia-Pacific Economic Cooperation) APEC forum designed to promote economic growth, cooperation, and integration among member nations. The most prominent members are China, Japan, and Korea.

Asian Development Bank (ABD): One of four major regional development banks currently operating in the global economy; it is headquartered in Manila, Philippines.

Association of South East Asian Nations (ASEAN): A loose or low economic and geopolitical affiliation that includes Singapore, Brunei, Malaysia, Thailand, the Philippines, Indonesia, and Vietnam. Future members are likely to include Myanmar (Burma), Laos, and Cambodia.

ATC: Agreement on Textiles and Clothing.

Autarky: In models of international trade, a situation in which there is no cross-border trade.

Aval: A guarantee of the buyer’s credit provided by the guarantor, unless the buyer is of unquestioned financial standing. The Aval is an endorsement note as opposed to a guarantee agreement.

Avalisation: Payment undertaking given by a bank in respect of a bill of exchange drawn.

AEZs: Refers to a scheme of Agricultural Export Zones.

Ad Valorem: According to value

Advance Against Documents: A loan made on the security of the documents covering the shipment.

Advising Bank: A bank, operating in the exporter’s country that handles LETTERS OF CREDIT for a foreign bank by notifying the exporter that the credit has been opened in his or her favor.

Alongside: a phrase referring to the side of a ship. Goods to be delivered “alongside” are to be placed on the dock or barge within reach of the transport ship’s tackle so that they can be loaded aboard the ship.

Alteration: A change in the boundaries of an activated zone or subzone.

The Balance of Trade (BOT) is the difference between a country’s total imports and exports.

An international organization that promotes global monetary and financial cooperation.

Barter: Trade in which goods or merchandise are exchanged directly for others’ import or export without the use of money.

A Bill of Lading (B/L) is a document that establishes the terms and conditions of a contract between a shipper and a shipping company under which freight is to be moved between specified points for a specified charge. The B/L is available in two versions: negotiable and non-negotiable.

The method whereby a bill of lading is made into a freely negotiable document of title.

Bonded Warehouse: A warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.

Cash in Advance (CIA): Payment for goods in which the price is paid in full before the shipment is made. This type of payment is usually only made for very small shipments or when goods are made to order.

Certificate of Analysis/Certificate of Inspection: Documents that may be asked for by the importer and/or the authorities of the importing country as evidence of quality or conformity to specifications.

Documents that may be asked for by the authorities of the importing country as evidence of the country of manufacture of the goods.

A Clean Bill of Lading is a receipt for goods issued by a carrier that indicates that the goods were received in apparently good order and without damage.

Clearance: The completion of customs entry requirements that results in the release of goods to the importer.

Cost and Freight (C & F):A pricing term indicating that the cost of goods as well as freight charges are included in the quoted price.

Duties imposed on imported goods that have been unfairly subsidized by a foreign government. Imposing duties on the product is meant to raise the product’s price to a “fair market value.”

WTO Committee on Trade and Development (CTD)

Currency (Foreign Exchange) Risk: The risk of unexpected changes in foreign currency exchange rates.

Customhouse Broker: A person or firm obtains a license from the treasury department of their country when required and helps clients (importers) to enter and declare goods through customs.

Customs: The government agency in charge of collecting duties levied by a country on imports and exports.

A carnet is a customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds.
A Certificate of Inspection: A document certifying that merchandise was in good condition immediately prior to its shipment.

Cost and Freight (C & F): A pricing term that indicates that the cost of the goods as well as the freight charges are included in the quoted price.

Charter Party: A written contract between the owner of a vessel and a “charterer” who rents use of the vessel or a part of its freight space.

Cost, Insurance, and Freight: A pricing term indicating that the price quoted includes the cost of the goods, insurance, and freight.

Confirmation of Letter of Credit: A letter of credit, issued by a foreign bank, whose validity has been confirmed by a nationalized Indian bank.

Credit Risk Insurance: Insurance designed to protect against the risk of nonpayment for goods delivered.

Customs Territory: Indian territory where the general tariff laws of India apply.

A Custom House Agent (CHA) is a person or company who is authorized to enter and clear goods through Customs during the import and export.

Deferred Payment Credit: A type of LC that provides payment after the presentation of the shipping documents by the exporter.

A marketer takes direct responsibility for its products abroad by selling them directly to foreign customers or through local representatives in foreign markets.

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

Dispute Settlement Body/Panel/Understanding

Duty is a tax imposed on imports by the customs authorities of a country.

Economic Dumping means the selling of goods or merchandise in another country at a price below the price at which the same merchandise is sold in the home market.

DGFT: Directorate General of Foreign Trade (India).

Deemed Exports: Refers to those transactions in which the goods supplied do not leave the country and the payment for the goods is received by the supplier in India.

An embargo is an economic sanction against a country that totally disallows the imports of a specific product or all products from a specific country.

The Euro is the single currency of the European Economic and Monetary Union (EMU), introduced in January 1999. EMU members are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.

Exim Bank: Export-Import Bank of India. provides guarantees of working capital loans for Indian exporters, guarantees the repayment of loans or makes loans to foreign purchasers of Indian goods and services.

Expiry Date: The date when a letter of credit is no longer valid.

An export is any resource, intermediate good, or final good or service that producers in one country sell to buyers in another country.

A foreign or domestic company that acts as a sales agent and distributor for domestic exporters in international markets.

An individual or firm that helps to locate and introduce buyers and sellers in import and export for a commission but does not take part in the actual sales transaction.

A General Export License: A general export license covers the exportation of goods not restricted under the terms of a validated export license. No formal application or written authorization is needed to ship exports under a general export license.

Any form of government payment that helps an exporter or manufacturing concern lower its export costs.

An Export Trading Company (ETC) is a company that facilitates the export of goods and services.

Expropriation: a specific type of political risk in which a government seizes foreign assets.

Refers to the Import and Export Policy (Exim). Policy has been incorporated into the comprehensive Foreign Trade Policy, which was announced by the Commerce & Industry Minister on August 31st, 2004.

EPZs/EOUs: EPZs mean Export Processing Zones, which are special enclaves, separated from the Domestic Tariff Area (DTA), to provide an internationally competitive duty-free environment for export production.

EOU means Export Oriented Units.

Electronic commerce is referred to as e-commerce. In the context of Foreign Trade Policy, e-commerce relates to electronic filing and processing of applications, etc.

Financial Price Risk: The risk of a financial price changing unexpectedly, including currency (foreign exchange) risk, interest rate risk, and commodity price risk.

Force Majeure: The title of a standard clause in marine contracts exempting the parties from non-fulfillment of their obligations as a result of conditions beyond their control, such as acts of God or war.

Foreign Direct Investment (FDI): the act of directly constructing productive capacity in a foreign country.A free port is a location, such as a port city, where goods can be legally moved without paying duties.

A Free Trade Zone is an area designated by the government to which goods may be imported for processing and subsequent export on a duty-free basis. Merchandise may be stored, used, or manufactured in the zone and re-exported without duties being paid.

Freight Forwarder: An independent business that handles shipments in import and export on behalf of the shipper without a vested interest in the products. A freight forwarder can provide information and assistance with export regulations and documentation.

A new scheme announced in the Foreign Trade Policy 2004–2009 is the FTWZ (Free Trade and Warehousing Zone).

FoB: Fob means “Free on Board”; i.e., when an exporter delivers goods “free on board,” he pays all charges involved in getting them onto the ship.

A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, or used for manufacturing, etc., within the zone and re-exported without duties being paid.

A Foul Bill of Lading is a receipt of goods issued by a carrier with an indication that the goods were damaged when received.

A free port is a location, such as a port city, where goods can be legally moved without paying duties.

Gradualism is a steady and calculated approach to transforming an economy from communism to capitalism.

Gross Domestic Product (GDP): A measure of the market value of a country’s goods and services.

A multilateral treaty designed to help signatory countries reduce trade barriers and promote trade through tariff concessions.

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

A Harmonized Tariff Schedule (HTS) is a method of classification used by many countries to determine tariffs on imports.

Import:any resource, intermediate good, or final good or service purchased by buyers in one country from sellers in another.

Import Licenses: Some countries require licenses to bring in foreign-made goods. In many cases, import licenses are also used by the issuing country to control the quantity of imported items.

Intermodal transportation is the use of two or more modes of transportation to complete a cargo move.

International Chamber of Commerce: An international non-governmental organization that promotes trade and harmonises trading practices. for drafting and publishing.

ISO-9000 refers to international standards laid down by the International Standards Organization.

Landed Cost: The quoted or invoiced cost of a commodity, plus any inbound transportation charges.

A Letter of Credit (L/C): A letter issued by an importer’s bank guaranteeing payment upon presentation of specified trade documents.

Marine Insurance: Insurance that compensates the owners of goods transported overseas in the event of a loss that cannot be legally recovered from the carrier.

Marking: Letters, numbers, and other symbols on cargo packages to facilitate identification.

NFE stands for Net Foreign Exchange. Net foreign exchange earnings are calculated as a percentage of exports (NFEP).

An ocean bill of lading: It is a bill of lading indicating international carrier for transportation of consignment.

On Board Bill of Lading: A bill of lading in which a carrier certifies that goods have been placed on vessel.

An order bill of lading is a negotiable bill of lading made out to the order of the shipper.

Packing List: A document that lists the contents of a shipment of goods. be called for on a letter of credit.

Political Risk: The risk that a sovereign host government will unexpectedly change the rules of businesses’ operation. Political risk includes both macro and micro risks.

A proforma invoice is an invoice provided by a supplier prior to the shipment of merchandise. It is to inform the buyer of the kinds, quantities, value, and specifications of goods.

Phytosanitary Inspection Certificate: A certificate issued by the Indian Government Department of Agriculture to foreign countries. To satisfy import regulations, indicating that shipmen is free of harmful pests and plant diseases.

Revocable Letter of Credit: A letter of credit that can be canceled by the (buyer).

Shipper: The supplier or owner of the commodities being shipped.

Subsidy: Monetary assistance granted by the government to an entity in support of an activity for the public interest.

SEPC: An exclusive Services Export Promotion Council was announced in the Foreign Trade Policy to map opportunities in key markets.

Ship’s Manifest: An instrument in writing, signed by the captain of a ship, that lists the individual shipments.

Straight Bill of Lading: A nonnegotiable bill of lading in which the goods are consigned directly to a named consignee.

A trade deficit occurs when the value of a country’s exports is less than the value of its imports.

A trade surplus occurs when the value of a country’s exports is greater than the value of its imports.

Tare Weight: The weight of a container and packing materials without the weight of the goods it contains.

A single bill of lading that covers both the domestic and international carriage of an export shipment.

One country promises another country that it will limit its imports; its done when the promising country fears higher tariffs. 

The Indian government’s required document authorising the export of specific commodities.

A warehouse receipt is a receipt issued by a warehouse listing the goods received.

Warehouse-to-Warehouse: An insurance policy that covers goods over the entire journey from the seller’s to the buyer’s premises.

Weight Note: A document that the exporter or a third party declaring the weight of goods in a consignment issues.

A wharfage charge is a charge assessed by a pier or dock owner for handling incoming or outgoing cargo.

The World Trade Organization (WTO) is a diplomatic body which is partly a supranational institution, which became operational in 1995. World Trade Organization Agreement(WTO) created it on 1 January 1994. It was developed by USA  for the Trade-Related Aspects of Intellectual Property Rights (TRIPs Agreement) . The WTO is responsible for implementation.

Surely, the Import and Export business is complex, but with our “SMART” inclusive services, technology integration, global network and data, we, at EximAnything Ecart Pvt Ltd, make your export-import business a breeze.

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