One Stop Shop

As eCommerce is riddled with new terms and acronyms and Trade & Trade Finance can be similarly opaque, we thought that 2 comprehensive Glossaries could be of assistance.


This symbol represents a tag for categorisation on Twitter. See "hashtag".


This error occurs if your content management system is poorly developed. It says that the file was not found. However, the correct form of that error would be a 404.

301 Redirect

This is the most search engine friendly method for redirecting web pages or entire websites, which is referred as Moved Permanently.


The equivalent to the 301 Redirect, basically the old URL is redirected to a new one.

404 Error

This error refers to “Page not found error”, which means the server couldn’t find the requested page.

Abandonment Rate

See "Bounce Rate".

Absolute Unique Visitor

See "Unique Visitor"

A/B Testing

This is testing a new technique (A) of online marketing (whether it be PPC or SEO) against a control (B) to see if the new technique is more effective.


That part of a message intended to speed the reader's response or visit: a present, a discount, an opportunity to try the product, a game or contest, etc. – all generally with a time limit.

Accidental Click

Accidental clicks are clicks which occur by mistake or clumsiness. On mobile devices, accidental clicks are often called "fat fingers" clicks. According to different studies, accidentals click are estimated from 20 to 40%. Unintentional clicks are usually detected and measured by observing post click behaviours.


Refers to the point in time when a visitor to a website becomes a qualified lead or customer.

Acquisition Cost

See "Cost-Per-Acquisition"


See "Automatic Content Recognition"


See "Microsoft adCenter"


A bookmarking service that gives a code people can use on their websites so when people visit they can share your content.


Google AdSense is a pay-per-click advertisement application which is available to bloggers and Web publishers as a way to generate revenue from the traffic on their sites. The owner of the site selects which ads they will host, and AdSense pays the owner each time an ad is clicked.

Advanced Encryption Standard (AES)

The Advanced Encryption Standard (AES) is an encryption algorithm used by U.S. government agencies to secure materials. It is predicted that AES will soon be used in the private sector with commercial transactions.


The pay-per-click search-engine marketing program provided by Google. These ads mainly work on a keyword based and are sold on a cost per click basis; comparable to an auction with the maximum bid or the click through rate.

Affiliate Marketing

Affiliates promote and sell products or services, which are actually owned by another website or business for a certain fee.


An Internet-based tool or application which collects and curates content (often provided via RSS feeds) from many different websites and displays it in one central location.


A widely used application for blogging platforms, such as WordPress, that functions as a filter for trapping link spam, comment spam and other forms of undesirable user-generated content.


Alerts are usually sent to an individual via email. Email alerts can be set up for various search terms, events or website actions e.g. whenever a company/product name appears on the Internet in newly published content.

Alexa Internet

This is a search site focused on marketing and webmaster communities, which measures website traffic for free. A website and toolbar that tracks the number of hits to a particular website and ranks them based on this amount.


An algorithm is used by search engines to identify which pages would be the most relevant for the given search command.

ALT Attribute

A line of text used to describe the content associated with a non-text based file, typically an image.


Information resulting from the systematic analysis of data or statistics. In digital marketing, analytics is the information resulting from systematic analysis of data gathered from marketing activity such as email marketing, landing page A/B testing, or Google Adwords purchases.

Anchor Text

The non-URL text that is displayed in a hyperlink e.g. Insert Anchor Text


See "Application Programming Interface"


Short for application, an app performs a function on your mobile phone or computer.

Application Programming Interface

A document interface that allows software applications to interact with other applications e.g. the Twitter API.

At tag(@)

The @ symbol is used in email, but it is now also being used to tag users in messages on social networking websites. Both Twitter and Facebook use the @ tag.


Determining which part of a marketing campaign had the greatest effect on the consumer.


A group of people identified by a brand for ad targeting purposes. Facebook and Twitter, as examples, offer Custom Audiences and Tailored Audiences, respectively. Some audiences are also known as "segments," groups of people that share the same characteristics or took the same online actions.


This factor shows how trustworthy a site is for a particular search query, which helps your domain or page to rank better in the search engine.

Automatic Content Recognition

The process is used to recognise audio content on radio or TV content. In both cases, the recognition is based on audio content through audio fingerprinting. In digital marketing context the first use was to give radio listeners the possibility to buy online music or merchandise tied to the broadcasted song. Nowadays, it is the main usage to tie in real time TV programs and commercials to online content and to develop interactivity.


An image that represents an account on social networks and forums.

Average Order Amount

The amount of all orders divided by the total number of orders; used in digital marketing to help calculate the necessary reach, along with CTR and conversion rate.


Business to Business


Business to Consumers


Business to Government

Back Link

See "Inbound Link"


Removal from a search index when a page and/or entire website is deemed inappropriate for a given engine’s results, usually on a temporary basis until the offending site corrects itself.

Banner Ad

These advertising units are images that advertisers place on known publishers’ websites in order to attract or re-attract their target audience. A banner ad is, strictly speaking, a long rectangular image displayed on a webpage or other type of content (mobile application, digital game, etc.) for advertising purposes. The typical banner ad is clickable and redirects users to the advertiser’s website.


An established level of normalcy; in digital marketing, for example, the normal or regular number of unique visitors per day to a website.


An online design portfolio-based community recently acquired by Adobe, developers of industry-standard design software such as Photoshop and Illustrator.

Behavioral Email

An email generated when a known user performs a certain action – such as completing a video – on a website, and the owner of the website then contacts the known user regarding that video as a follow up to the user’s behaviour.

Bid Management Services

Services designed to get the most value for each search term (pay-per-click).


A free URL shortening application. They also provide analytics on your links.

Black Hat SEO

This type of Search Engine Optimisation is against the guidelines of the search engine, such as the Google Webmaster Guidelines. Counter to that best practice SEO is referred to as White hat SEO.


A relatively new search engine that aims to better Google. It claims to be spam-free, and it also contains functionality that makes SEO easier.


A “blip” can refer to a music or video clip which a user has posted via the popular media hosting sites, and


Short for weB LOG, a blog is a website that is maintained by one user, or a group of users, where the users post updates. This kind of website presents their visitors content in usually reversed order. That content can be time relevant, but doesn’t need to be. Moreover, as a user you are able to share that content on social networks or leave a comment on the post. Some are used as online diaries, but others may be corporate. A company that maintains a blog gives it a personable front for the potential clients, and it also maintains an interesting online presence that can be used for SEO.


A person who writes a blog. Reasons for being a professional blogger are many: delivering timely commentary; showcasing expertise; engaging with audiences and fellow bloggers; and building personal brands. Some professional bloggers generate levels of esteem and prestige equivalent to that of journalists, an occupation which has also found value in blogging for the above reasons.

Blogger (1)

A person who writes a blog. Reasons for being a professional blogger are many: delivering timely commentary; showcasing expertise; engaging with audiences and fellow bloggers; and building personal brands. Some professional bloggers generate levels of esteem and prestige equivalent to that of journalists, an occupation which has also found value in blogging for the above reasons.

Blogger (2)

Blogger is a free blog platform by Google. You are able to publish sites on a subdomain ( or to your own domain.


From the term “web log”, in which a user actively updates a visible section of a website in order to inform or attract users and customer on a regular basis.


A term given to the sum of all blogs on the internet.


A traditional method for bloggers to list all the other blogs they have read.


The act of saving a website address for future reference.


(Sometimes called a crawler, robot, spider or WebCrawler). A program that visits web sites and reads through the pages, in order to gather data and to create entries for the search engine.

Bounce Rate

This rate is the percentage of visitors of a website, who have left the site after only viewing one single page. This metric helps you to understand the quality of the content, such as a high bounce rate can be due to irrelevant content or low attractiveness of the site.


A business’s brand is the sum total of all its users’ and customers’ opinion of that business; a business can choose to intentionally shape its brand or allow the market forces to shape its brand.

Branded Keywords

All keywords associated with a brand belong to this category. These keywords have the highest value and a high conversion rate.

Breadcrumb Nav

This refers to a horizontal navigation bar, where the user knows where he is and how to get back to the beginning.

Broken Link

See "404 Error". This is a non-functional link, which doesn’t lead the user to the desired location. There are a couple of reasons for this error, such as the website is currently offline, or due to a move of the page’s location. These links usually serve pages with the “404 error” message.


This is the main software application to use the internet. The most popular browsers are Google Chrome, Microsoft Internet Explorer, Mozilla Firefox and Safari.

Business model

An entity’s business model defines how the business creates its product or service, delivers the product or service to the intended audience, and then collects payment for the service or product from the intended audience.


This is basically a copy of a web page, which is stored by the search engine.


A campaign is made up of marketing messages with a specific aim. A campaign may aim to raise awareness, raise funds or increase the sales of a product.


If there are multiple versions of similar pages, the canonical rel tag tells the WebCrawler that the page linked is the definitive version. Each non-canonical page must link to the canonical version with this link.


CAPTCHA is an acronym standing for Completely Automated Public Turing Test To Tell Computers and Humans Apart. Captchas are used to prevent bots to register fake accounts at scale for different free online services - webmail accounts, social media accounts, forum & comment profiles, etc. A traditional captcha requires people to type in a set of distorted letters and numbers appearing in an image and difficult for a bot to decipher. From a marketing standpoint, a captcha is often a strong deterrent or obstacle for real users.


A means to organise content on a site, especially blogs. One typical way to store both current and archival blog posts is by an alphabetical list of topical categories.


A delivery mechanism; in digital marketing, a business’s message is delivered via one or more marketing channel such as email, social media, blogging, advertisements, etc.


Groups of friends on Google + network. Circles can be categorised into colleagues, family etc. You can share certain information with certain groups if you wish.

Click & Collect

Click and collect is the process by which the consumer orders online (click) and collects his merchandise at a local store.

Click Fraud

Click fraud is illegal and refer to people, who click on PPC adverts, in order to increase the profit of the company. This means increasing the payable number of click-throughs to the advertiser.

Click Through Rate

The percentage of the targeted audience that is exposed to the marketer’s message that click on the link provided in the message and land on the marketer’s web property. The percentage of people who actually click on a link (e.g. in an email message or sponsored ad) after seeing it.


This black hat SEO tactic tries to show the search engines different content compared to the human users. This could lead to a ban of the site by the search engine. However, there are some legitimate situations, where you can use cloaking, such as changing the user experience based on the location.


In reference to Web 2.0, this concept states that shared contributions of large numbers of individuals, using social media tools, is a main driver of quality content on the Internet.

Collective Intelligence

The idea that a community or group of individuals is more efficiently capable of higher thought processes than an individual. Social-media applications of this concept include online communities which provide user-created informative content, such as Wikipedia.


Blogs and other Content Management Systems allow readers to leave any kind of comments or feedback.

Completely Automated Public Turing Test To Tell Computers and Humans Apart

See "Captcha"

Conceptual Links

These sorts of links aren’t just focused on the anchor text. The search engine tries to understand the link beyond the words basically, such as the words near to the link. More advanced search engines do try to find out the concept links rather than the anchor text.


Congoo is a news-sharing social network that offers free subscription content across hundreds of broad and niche topics.


A term used on LinkedIn to describe the people you are associated with.


The importance of continuing with a course of action, such as blogging, in a regular frequency in order to repeatedly expose the intended audience to the marketer’s message.


Any text, image, video, audio, app or other material published on the Internet for audience consumption.

Content Gating

This is the practice of requiring some kind of sign up information on a webform for giving access to specific web content. Most common forms of content used for content gating strategies are viewable or downloadable contents like ebooks, whitepapers and webinars.

Content Management System

This tool helps you edit and add content and information to your website; such as Wordpress without any coding skills or understanding.

Contextual Advertising

This form of advertising is related to the content of the page.

Contextual Link Inventory

An extension of search engines where they place targeted links on websites they deem to have similar audiences.


A desired action taken by a website visitor, such as making a purchase, registering for an event, subscribing to an e-newsletter, completing a lead-generation form, downloading a file, etc.

Conversion Cost

See "Cost-Per-Acquisition"

Conversion Rate

This is the percentage of users who converted. The percentage of unique visitors to a website that are “converted” into customers, users, or leads.

Conversion Rate Optimisation

The conversion rate is how many people go from just browsing to making a purchase, or becoming a customer.


A small data file, which is placed on a visitor’s computer by a web server, in order to track them. Cookies are used to help websites to improve use experience and help tracking conversions.


Represents the ratio of the total cost of a pay-per-click campaign to the total number of leads or customers; often called “CPA” or “Conversion Cost.”


A method of paying for targeted traffic. For a fee, sites like Google or Facebook direct traffic to your site. You agree to pay a set amount for every click.


This is the cost-per-thousand views of an advertisement. Often, advertisers agree to pay a certain amount for every 1,000 customers who see their ad, regardless of conversion rates or click-throughs.


See "Cost-Per-Acquisition"


See "Cost-Per-Click"


See "Cost-Per-Thousand"

Crawl Depth

This shows how deeply a website has been crawled and indexed.


(Sometimes called a bot, robot, spider or WebCrawler). A program that visits web sites and reads through the pages, in order to gather data and to create entries for the search engine.

Crawl Frequency

How frequently the website has been crawled.


See "Conversion Rate Optimisation"


Involving multiple screens—those of laptops, tablets, phones, desktop computers or TVs. Marketers are trying to understand when their messages reach consumers on different devices throughout the day, identifying users accurately as they switch screens. Cross-device data lets marketers avoid repeating messages to the same person on different screens more than they want to.


Corporate Social Responsibility, the ethical behaviour of a company while serving to improve the welfare of their employees as well as the local community.


See "Click Through Rate"


Registering domains related to big trademarks or brands, in order to get money by representing these brands and trademarks.


Any area of administrative control for operating applications, especially social media settings, blogging software, and user profiles for websites that offer multiple customisation options.

Data Management Platform

The systems that brands use to make sense of any information they can find about consumers and the marketplace. Brands upload first-party data (consumer emails, sales figures, etc.) to a DMP and combine it with other data sets to make better decisions for their marketing.


Limiting or shutting down ad campaigns at certain times of the day in Google Adwords. Moreover, you could change ad bidding prices or increase the activity at other times. In the end it’s all about maximisation of profits in the campaign.

Deep Link

Deeplinking means making a link that points to an internal page within the website. Therefore, many high authority websites start deeplinking within their site, in order to get visitors directly to the product or service.

A popular social bookmarking site which allows members to share, store and organise their favourite online content.


See Ban.


When the good or service provided by a business is provided to and accepted by the user or customer; in digital marketing, also the receipt of a message from the marketer to a group or individual in the target audience.

Demand-Side Platform

A demand-side platform is one of three key technologies used in the buying and selling ecosystem. This software allows marketers and agencies to buy digital ads in an automated fashion. A DSP is often coupled with a data management platform (see "DMP") for additional help reaching key audiences. They plug into ad exchanges and ad-supply platforms known as Sell-Side Platforms.


Data that can accurately identify a consumer for targeting ads, such as a visitor's login information for a website. Other deterministic data points are credit cards, phone numbers and addresses. (See also Probablistic.)


An online news website which has a unique algorithm. The site lets its readers submit articles and also allows people to vote whether or not they liked the article. The articles with the highest number of votes appear at the top of the page while the less popular stories move down the page.

Digital Marketing Calendar

A tool that provides for time-based structure and discipline for the digital marketer in planning, assigning, creating, and delivering content to the marketer’s target audience.

Digital Marketing Funnel

A visualisation of the calculations that starts with the total universe of targeted audiences, then measures those who click on a link from marketing content, the click through rate , the conversion rate, total conversions, order amount, and revenue.


Sites which have a categorised list of websites targeted on specific niche topics.

Display Ad

See "Banner Ad"


The means by which a product or service is delivered to its end user or customer.


See "Open Directory Project"


See "Data Management Platform"


See "Domain Name Service"


Most commonly the website name or the URL is called website domain.

Domain Name Service

This is a name service which allows letters (and numbers) that constitute domain names to be used to identify computers instead of numerical IP addresses.

Domain Name System

See "Domain Name Service"

Doorway Page

A low-content page traditionally created expressly for the purpose of ranking on a search engine. These pages are purely focused and designed to achieve higher ranking for a specific search query.


A community for designers to upload snapshots of their work.


See "Demand-Side Platform"

Dynamic Content

This refers to content on another website or page, which is obviously identical or nearly a duplicate. This leads to a lower trust ranking by the search engine of the website, because there is no unique content on your website. This type of content changes over time or uses a dynamic language (PHP) to render the page. Although the search engine are indexing more and more dynamic content, but the best way is to rewrite the URL, in order to give the content a static look.

Earned Content

Content not created by the marketer, but rather created and shared by fans of the marketer’s message to the fan’s social and other digital connections.

Editorial Link

Editorial means quality and the search engine basically counts a link as a vote of quality. Hence, a link from sites without any editorial control, such as link farms, will automatically lose rankings. Otherwise sites with a strong editorial guideline will definitely receive more trust!


In digital marketing, the term for user interaction with a particular piece of shared content: Likes, shares, comments on Facebook; RTs, replies, favourites on Twitter, and link clicks on all social media.


A piece of writing posted to a blog, microblog, wiki, or other easy-access Web publishing platform.

Entry Page

The first page of the website a user lands on.

External Link

A link which points to another domain or related resource.

Facebook Ads

The program operated by Facebook that enables paying customers to use hyper-targeting via Facebook profile tags and traits to reach a certain specific audience via advertisements placed in the users’ timeline.


This little Favorites Icon is located next to the URL in the web browser.


Feeds are used to deliver users a updates of new blog entries or similar things via notifications on RSS or XML feeds. However, feeds can also refer to product feeds in the Google merchant centre or feeds on PPC.

Filter Bubble

Search engines attempt to pre-empt what you want when you are searching. Geo-Targeting is one example of this, but the search engine will also try to guess what you want, and tailor your results, by your past search history.


Refers to a form of video software developed by Adobe Macromedia that creates vector-based graphic animations that occupy small file sizes.

Flash Mob

A large group of people organise to get together at a specific time and place to surprise the public. They will put on a performance that is random and pointless for a brief time and then they will disperse as if nothing has happened.


A social network based on picture sharing. Users can store and share photos here.


The act of choosing to see the tweets of someone on Twitter. Your following are all those people that have chosen to view your tweets.


An online discussion board. People post about whatever topic they wish to generate an online discussion.


A social network for users to share their location with friends who are within a close proximity.


See iFrames.


In digital marketing, how often a task is performed; e.g. the frequency of a blog post or twitter update.


Links tend to decrease in their power over time. A backlink may do better for your website today than it will in a year if it remains unchanged. Therefore it is necessary to always get new, fresh, links and content.

Gated Content

This refers to web content only accessible behind a webform or for registered users. Popular gated content are ebooks and webinars. Gated content is used for lead generation strategies.

Gateway Page

See "Doorway Page"


The practice of search engines displaying results dependant on where you are.


A little application with specific functions, such as a hit counter or an IP address display, which can work perfectly for link baiting.


The world’s leading search engine.


This offers the benefit of merging all other Google services under one social networking site.

Google Adwords

The program operated by Google that enables paying customers to use hyper-targeting via Google Search Engine Results Page to reach a certain specific audience via advertisements placed at the top and right sides of the search results.

Google Analytics

A free, browser based tool that allows users to track many different statistics concerning an owned website.

Google Base

A free database created by Google for useful internal information.

Google Bomb

This allows webmasters to change the search results for a specific search query, such as having entering the search query - miserable failure - and getting results on George Bush on the first page.

Google Bot

The Google bot or so-called Google spider is a search bot software, which is designed to view webpages and take all results to the central database, where Google starts scoring or ranking websites.

Google Bowling

This is used to kick competitors out of the search results or lower their site rank by linking a great amount of low quality and dodgy links to their website.

Google Checkout

This is Google’s payment service providing a quick and secure checkout process with one single login.

Google Dance

This out-of-date term was used to describe discrepancies in the SERPs due to the constant updates of Google and their algorithm.

Google Grants

Google offers up to $10,000 in free PPC advertising for eligible charities.

Google Juice

This term is used as a slang term for the Google PageRank.

Google Keyword Planning Tool

A free tool provided by Google within the Google Adwords interface that helps users find and plan which keywords to target with their advertising campaigns.

Google Sitelinks

These sitelinks appear on the bottom of the top website on the search result. These links are numerous deep links with relevant content within your sitemap.

Google Sitemaps

Webmasters use this program to help Google index their contents.

Google Trends

A tool helps you to see changes in search volumes for particular search queries over a period of time.

Graphical Search Inventory

Images and banner ads that are tied to particular search terms on a search engine. They are then displayed to the user after a related search term is entered.

Graphical User Interface

A user interface that allows users to interact with electronic devices through graphical icons and visual indicators such as secondary notation, instead of text-based user interfaces, typed command labels or text navigation.


Micro-communities within a social networking site for individuals who share a particular interest.


See "Graphical User Interface"


A video service provided by Google + which allows up to 10 people to talk at one time.


A way to hide personal information when it's shared between ad-tech partners e.g. if a brand asks a publisher to target ads to its customer email list, the emails can be masked.


A symbol (#) placed directly in front of a word or words to tag a post on Twitter. It is often used to group tweets by popular categories of interest and to help users follow discussion topics.

Header Bidding

Where publishers offer ad inventory to multiple ad exchanges at the same time.

Header Tags

These page elements represent different levels of headings in HTML. From the largest (H1) to the smallest (H6), these define the titles/headings and sub-headings of Web copy. For SEO and reader benefits, headers should contain keywords wherever possible.


Saying a website got X many hits is saying how many people visited that website.

Home Page

This is the main page of your website, which presents your brand and sets up the navigation through the whole site.

H-Tags (H1, H2, etc.)

See "Header Tags"


See "HyperText Markup Language"


This is a well trusted page with a great amount of high quality and relevant content, which link to other related pages within the community.


Text that is highlighted and takes you to a certain destination. They are used to reference other content or to navigate you through a website.

HyperText Markup Language

This refers to the text-based language which is used to create websites.

Hypertext Preprocessor

Hypertext Preprocessor is basically an open source server scripting language, which is mainly used to render web pages or including any interactive elements to it.


These HTML tag devices allow 2 or more websites to be displayed simultaneously on the same page. Facebook now allows companies to create customised tabs for its fan pages using iFrames.


See "Instant Messaging"


An impression is simply someone seeing an advert. They may not click on it or buy anything.

Inbound Link

A link from another website directed to yours. Related marketing areas that focus on inbound links include link popularity, social media and online PR, all of which explore ways to collect quality links from other websites.


The actual collection of data and websites obtained by a search engine. An index is a list or database of web pages found for one specific user search query.


Someone who is an expert in a certain field and, or has a large following. Influencers therefore hold a lot of power in communicating their opinions to their following, perhaps affecting their opinions and behaviour.


A photo sharing social network which differs from others as it runs as a mobile application. The application allows users to take photographs which they can then apply filters to. Your photos are automatically shared on Instagram and then you have the option to share them on other social networks.

Instant Messaging

Texts that are delivered in real-time. This can occur one-to-one or in group messages.

Internal Link

This type of link points from one page to another on the same site.


An ad that pops up while a user is clicking to a new page online. An interstitial can take over the home page on a website or occupy the whole screen when someone clicks on a link in an app and opens the mobile web. Most of these types of ads have been flagged by companies like Google as too disruptive of the user experience, and websites that use them face penalties in search rankings.

IP Address

This series of numbers and periods represents the unique numeric address for each Internet user.


Java is a powerful programming language which is independent of platforms, meaning it can run on multiple computers and operating systems.


JavaScript is a relatively simple scripting language which can be seamlessly integrated with HTML and is used on many websites. JavaScript is less complex and consequently, less powerful than Java. This programming language can be easily embedded into HTML and offer several dynamic features.


A social shopping network where members create their own shopping lists and find, suggest and share products and reviews.


This is the word or phrase, which users enter into search engine. Hence, it is useful to target keywords, which are more likely to be searched. It is important to have your business’ website associated with relevant keywords so that it will appear when these words are searched for.

Keyword Cannibalisation

This basically describes the repeated use of the same keyword across different web pages within the same site. However, this technique makes it more difficult for search bots to determine which page will be the most relevant for that keyword.

Keyword Density

The proportion of keywords to the total number of words in the face copy of a website. This measure gives the percentage of a keyword that appears within a page.

Keyword Proximity

The relative placement of keywords in prominent areas of a Web page, including the distance between keywords in the visible text.

Keyword Research

This research is required, in order to discover all relevant and high quality keywords and phrases to target in your campaign.


The terms that a user enters into a search engine. They can also signify the terms a website is targeting to rank highly as part of an SEO marketing campaign.

Keyword Stemming

The practice adopted by search engines to group search results not only by exact keyword matches, but also by variations of keywords in semantic groups, such as singular-plural, related suffixes, and synonyms.

Keyword Stuffing

Excessively high keyword density. A webpage has a section that is hidden from users, but contains all the words relevant to the page. Keyword stuffing is a black hat technique whereby this section is abused and filled with a high amount of irrelevant keywords, in the hope that it will be associated with these words and found when these words are searched for.


A measure of social influence, Klout connects your social accounts and provides each user with a Klout score. The higher your score is the more influencer you have in the social world. The Klout score is out of 100.


Key Performance Indicators.

Landing Page

A stand-alone Web page that a user “lands” on, commonly after visiting a paid search-engine listing or following a link in an email newsletter. This kind of page often is designed with a very specific purpose (i.e. conversion goals) for visitors. While this could simply be the homepage, often it is more helpful to the customer (and therefore your profits) if they are taken to a page that is specific to their search terms.

Lifetime Customer Value

The total sum of all revenue estimated over the lifetime of a repeat customer; often used as a metric in evaluating the pricing and value of a SaaS business.


An action made by a Facebook user that represents approval.

Like Button

A little graphic button encouraging linking between a website and a social media profile. The “Like” is Facebook’s own version, Google has a “+1” button.


By using a hypertext, clicking on that link can get you from the current web page to another page of another site or the same site.

Link Bait

A webpage with really interesting content that people will share with others. They may share it through email, or over Facebook or Twitter, or even social news and bookmarking sites like Reddit or Digg.

Link Building

It describes the process of building high quality links to your site. It may involve generating more interesting or newsworthy content, creating a blog, asking clients to link, plus many other techniques. One of the main goals of SEO to build many good links to a website.

Link Bursts

Link bursts are a rapid increase in inbound links to your site e.g. a popular and time relevant article can receive a huge amount of links.

Link Churn

This rate shows the loss of links on your site.

Link Condom

This technique is used to avoid possible link juice passing from bad quality sites or untrustworthy and spammy content.

Link Development

See "Link Building"


A corporate social network used to connect professionals.

Link Equity

This measurement shows how strong your site is looking at the quality and authority of the inbound links.

Link Exchange

Directories have this scheme to allow links to sites with no or low quality and at the same time not adding any value to themselves.

Link Farm

This can be either a website or a group of sites, which link to each other. A website exclusively devoted to listing a very large number of links without groupings, categories, or structure. These sites are largely discredited by major search engines, and your site’s engagement with one can potentially lead to ranking penalties.

Link Hoarding

This method tries to keep your link popularity to a maximum by not linking to many low quality sites.

Link Juice

The quality of inbound links and outbound links between two sites.

Link Popularity

A measurement of the number and quality of sites that link to a given site, especially as catalogued in a search-engine index. This measurement shows the value and popularity of a site, based mainly on the amount and quality of inbound links.

Link Rot

The percentage of website links, which are broken. Reasons for those broken links can be either that the website went offline; the webmaster changed the domain’s CMS; linking to content which was only available temporarily; or moving a page’s location.

Link Spam

In SEO, spam refers to manipulative techniques to increase the rankings of a page in the search engine using Black Hat SEO techniques; some people try to create vast amounts of links to a website in an attempt to increase its apparent popularity.

Link Text

See "Anchor Text"


A listing is a website’s presence in a search engine or directory, and is not necessarily indicative of its search-engine positioning.

Local Marketing

The term local marketing can have two different meanings in the marketing field. In its most common usage, local marketing refers to all the marketing actions used to reach a local population. It is used by retailers and physical stores networks who want to reach consumers in their catchment areas. The most frequently used techniques in the context of local marketing are: (i) Local advertising (ii) Unaddressed admail / door-to-door leaflets (iii) Direct marketing (iv) Local SEO and (v) Mobile marketing. N.B. In a different perspective and in the context of a multinational marketing policy, the term local marketing can designate marketing actions which are specific and appropriate to the scale and distinctiveness of a given country.

Long Tail

These are keywords at least longer than two words and low-volume keywords, which don’t get typed often in Google. Long tail keywords are more precise and specific, which gives them a higher value. Therefore a large percentage of all searches are basically long tail searches.


People who are not the exact ones a brand wants to target with an ad, but look and act like them in certain ways, suggesting an openness to the brand's sales pitch and product. Brands seek lookalikes, for example, for their most loyal customers, whom they already know how to reach.


“Malicious software“ is any software used to disrupt computer or mobile operations, gather sensitive information, gain access to private computer systems, or display unwanted advertising.


Mashups are basically quick and easy content to produce for any web page, which can be a way of link baiting e.g. tool collection pages can be mashups.


An idea, joke or concept that people share. Meme’s can be images or videos or text. Typically a meme comes in the form of an image with supportive text.


Explanatory notes and other technical details for statistical tables (literally, a set of data that describes and gives information about other data).

Meta Description

This HTML tag within the section describes the content of the page with one or two sentences. Although the Meta description isn’t visible on the page, it is still of greater advantage to have unique and precise Meta title and description tags.

Meta-Description Tag

A tag on a Web page located in the heading source code containing a basic description of the page. It helps search engines categorise the page.

Meta Keywords

This tag highlights the specific keywords or phrases which you want to target on that page.

Meta-Keywords Tag

In the past, this tag allowed page authors to insert a massive list of keywords related (and occasionally unrelated) to a page in order to game search-engine results.

Meta-Search Engine

A search engine that does not compile its own independent results, but rather pulls data from two or more search engines, such as

Meta Tags

Meta descriptions and meta keywords are usually referred to as meta tags.


Also called meta-data, this information found in HTML page headers. Still used today despite widely perceived diminishing relevance to search-engine rankings, the most common are the “title,” “description,” and “keyword” tags.


This is the official measurement in most of the analytics programs.


Is similar to blog but with a strict limit to what can be posted e.g. Twitter.

Microsoft adCenter

The pay-per-click search-engine advertising program provided by Microsoft in conjunction with its Bing search engine, now also populating Yahoo! search results.

Mirror Site

Duplicate copy of a website already in existence, used to increase response time for high-volume sites; basically an identical site on a different address.

Natural Listings

See "Organic Listings"

Natural Search Results

These are all the results, which aren’t sponsored or paid.


The navigation helps web users to see where they currently are on the site and how they get to other pages of the site.

Negative Keyword

The opposite of a keyword: if a user searches using a negative keyword, your results will not show. This is useful if a link is easily confused with something else.

Neighbourhood / Link Neighbourhood

Search engines evaluate the trustworthiness of a website based on how many links point to that website. But links from trustworthy sites are better than links from untrustworthy, and potentially spammy, websites.

News Feed

The hub of everyone’s posts. For Facebook, the news feed is made up of friend’s posts. On Twitter, it is known as Timeline as is made up of tweets of those you follow. The news feed is constantly refreshed with the latest posts.


A hosting service with a set of community-building tools that allows anyone to create a social network.


“Nofollow” is an append which is coded into the HTML markup of a hyperlink. It is used to prevent a search engine from indexing a link to a particular Web page. Some strategic uses of external “nofollow” are associated with link popularity management e.g. for site owners that do not want to give full “follow” credit to links posted by users in their forums or blog comments. This command prevents a link of passing any link juice/ authority, which is a form of link condom. The tag is within the section: rel=”nofollow”.


This command prevents the page to be indexed by the search engine. Moreover, it is also a form of link condom.


See "Online to Offline"

Online to Offline

This refers to the process of finding consumers online and bring them into physical stores.

OODA loop

Observe. Orient. Decide. Act. A teaching tool originating from military training that promotes the use of a constant cycle of learning; in digital marketing, used to instil the use of hypothesising, experimentation, data capture and measurement, and then re-stating a new revised hypothesis based on information gathered in previous experiments.

Open Directory Project

This continually expanding directory is run by volunteers. It claims to be the largest (and is one of the most famous) of the human-edited directories.

Open-Source Software

Computer software with a special license that allows users in the general public to edit and improve the source code. Famously exemplified in the Firefox Web browser and Wikipedia encyclopaedia, it is an example of the kind of collaboration that is encouraged under the Web 2.0 ethos.

Organic Link

These types of links are considered to add value for users. That’s why many webmasters publish high quality articles or posts on their blogs.

Organic Listings

These are search-engine results that have not been purchased. They are calculated solely by an engine’s algorithm and are based on the merits of the listed pages. Typically, most search engines will display several sponsored ads related to search terms before displaying the non-paid listings.

Organic Search Result

See "Natural Search Results"

Outbound Link

If a link on your website points to another website. Any link on a Web page to an external Web page.

Owned Content

Content created or curated by the marketer in order to promote the marketer’s message to the target audience. Owned content typically consists of blog posts and social media posts and images, and includes any message that proceeds out of the marketer’s company and into the target audience; such as email signatures.


See "Peer-to-Peer"


It is named after Larry Page, a co-founder of Google and not webpages. The measurement is believed to be influenced chiefly by the number and quality of inbound and outbound links associated with a given page. Updated infrequently, this is usually seen accompanied by a number i.e. ‘PR6’. A score of 10 is the highest, and unattainable by all but the most popular websites on the web.

Pages Per Visit

The average number of pages viewed by a single visitor during a given time period.


See "Impression"

Page Views

The number of times a web page or set of web pages are viewed during a given time period.

Paid Content

This is content pushed out by the marketer via any paid means such as Facebook ads, Google Adwords, Twitter Ads, or banner (display) ads.

Paid Inclusion

This method involves charging a certain fee for including a link on a website. Google tries to avoid most of the paid links, although some of them can have a relevant exposure.

Paid Listings

Listings sold to advertisers for a fee. Also known as “paid placement.” See “pay-per-click.”

Paid Placement

See "Pay-Per-Click"

Partial/Exact Match Anchor Text

The anchor text is the text that the user clicks on for a link. It is also what a WebCrawler uses to decide what the linked page is about.


A paid-search system nearly identical to (and essentially synonymous with) pay-per-click.


While Search Engine Optimisation improves a websites standing in the unpaid section of a search engine, paid results are also found on search engines. On Google, they are above, and to the right, of the main (unpaid) results.


See "Portable Document Format"


Refers to any type of interaction between two or more people within a specific social network. Most viral media by definition get their popularity via such P2P sharing. The term is also widely associated with file-sharing networks for music and movies; though it is not exclusive to that realm.


Search engines can penalise or permanently ban you from ranking in the results, due to spammy actions.


Google Penguin is the latest version of its PageRank WebCrawler which improves its spam detection. It is better at detecting cloaking, keyword stuffing and duplicate pages.


The ideal compilation of all the traits of the “perfect” user or customer for a marketer’s product or service.

Personally Identifiable information

This is any data that can be directly connected to a consumer and reveals who they are. Many ad-tech companies and platforms take measures to avoid sharing any PII from their users.


See "Hypertext Preprocessor"


See "Personally Identifiable information"


Images that are chosen from websites or within the Pinterest community. These images are then placed onto image boards.


A social network for people to create image boards.

Pixel Tag

Code that brands put on their ads before placing them online so they can track performance and view who sees the ad. Pixels also help brands track who visits their websites and target those consumers with ads later. Pixels are sometimes blamed for slowing down the web and cause some privacy concerns.


Framework that runs software and presents content.


A series of audio or video content which can be downloaded and listened to/viewed offline (or a particular episode in that series).

Poison Words

Poison words are words that are known to decrease your pages’ rankings if the search engine finds them in the title, description or URL.

Pop-Up Ad

A form of advertisement which automatically opens (or “pops up” in) a new window in a browser to display an ad. Also seen in the form of “pop-under” ads, a slightly less intrusive version. Many browser-based and stand-alone software programs exist to block these ads.

Portable Document Format

This is a type of file for viewing documents, created by Adobe. PDFs are especially suitable for print-out viewing, so the format is a good choice for sharing high-value collateral like white papers and guides.


See "Ranking"


See "Pay-Per-Click"


See "PageRank"


The accuracy the search engine shows a relevant list of results for one search query e.g. if 10 of the 50 results actually match the search query, the precision would be around 30%.

Privacy Notice

Privacy notices refer to different forms of messages displayed on a website to give visitors information about data collection and cookie usage during their visit. Visibility of privacy notices varies according to different national legal frameworks (e.g. UK cookie law imposes a cookie notice). Some privacy notices are also sometimes made mandatory for members of professional associations.

Private Marketplace

An exclusive auction that is invite-only. The publisher makes inventory available to only select brands, who then buy through real-time bidding. It's different from programmatic direct, because it's still an auction-based system.


Using data points to guess who the consumer is on the other side of the screen. Knowing where a person is, what time it is and the device in use help, but not with nearly 100% confidence. This type of data is considered less accurate than deterministic (see "Deterministic"), though many say a blend of the two yields the most accurate results.


A profile is a personal page within a social network created by a user for sharing with others on the network. The profile provides basic biographical information and often links to the profiles of the user’s friends/connections.

Programmatic Direct

When a publisher sells ad inventory directly to an advertiser for a set price, not through an auction. It gives the advertiser assurances over where ads run, and the publisher price stability. The ads are still served programmatically.

Programmatic Guaranteed

See "Programmatic Direct"

Proprietary Method

Many SEO service agencies use this term, which promises top ten rankings with unique methods.

Quality Link

A quality link counts more than a low quality link from a poor authority website.


See "Search Term"


The rank of a website’s listing(s) in search-engine results pages. The higher a rank for a specific keyword, the more generally visible a page is to search-engine users.

Rapid Inclusion

The indexing of websites in search engines and directories based on a per-page fee. As opposed to free submissions, where indexes are updated every few weeks (or less frequently), rapid indexing occurs every 48-72 hours.

Reciprocal Link

A link to a website that is reciprocated in the form of a backlink, often prearranged by sites with mutually benefitting audiences. If abused e.g. two sites with no topical relation decide to link to each other (and many other sites) exclusively for the sake of linking, penalties from search engines could result.


A social news site that is made up of users who share and leave comments on stories.


This warning alerts the browsers and the search engines that a page has been moved to another location. There are several methods to do this: 301 redirects or 302 redirects.


This is the source; where the user came from.

Regional Long Tail

This type of keyword includes a city or region, which is useful for companies offering services around the country.


The process of signing up to participate in an online forum, community or social-media network. At a minimum, this act usually involves sharing a name and email address in order to set up a username and password.


Google can lift a penalty for a site and ask for reinclusion. However, in order to get re-indexed on the search index, it severely depends on the brand’s reputation of the site and the severity of the penalty,


Part of the code for a link may include a ‘rel’ signifier, which is short for relation. It tells a WebCrawler something about the link, and is used to fine tune certain aspects of SEO.


The action a Pinterest user takes when pinning an image from someone’s board onto one of their own.

Results Page

See "Search Engine Results Page"


The technology, driven by web browser cookies, that enables a marketer to continually put a digital message in front of a user who has visited that marketer’s web property.

Return on Investment

Return on Investment e.g. if you put money into an ad campaign, a return on investment is any net revenue generated above that initial investment.


An action on tweets for users to share that tweet with their following. The action resends the message with the original users name tag.


(Sometimes called a bot, crawler, spider or WebCrawler). A program that visits web sites and reads through the pages, in order to gather data and to create entries for the search engine.


A small text file included on a website that directs a search engine to include/exclude specific pages from its index. It can be submitted manually to search engines to ensure the latest version is followed regardless of the “crawl cycle.”


See "Return on Investment"


Really Simple Syndication, delivers content enabling readers to stay up-to-date with any blogs or sites they read without them having to visit each individual site.

RSS Feed

Users subscribe to news feeds to get all the latest information in one place. See "RSS Reader"

RSS Reader

Taking all the information from subscribed news sites and blogs, the reader puts all this information in one easy-to-digest place. It is displayed in a format that is constantly refreshed to get up-to-date information.

Sales Cycle

The time required for a sales conversion to be completed after the prospect initially becomes aware of the marketer’s brand or product.


Entering into a dialogue with scammers, simply to waste their time and resources. Whilst you are doing this, you will be helping to keep the scammers away from real potential victims and screwing around with the minds of deserving thieves.


Copying content from a site using automated bots.


This sort of malware installs itself without the computer owner even knowing. It focuses on ads and violates privacy.

Search Engine

A website that allows users to search the Web for specific information by entering keywords. Can include paid or organic listings of websites and sometimes specific images, products, videos, music, place entries or other enhanced results. A search engine mainly consists of a spider, index algorithm and a search results. Therefore, the program/spider searches a group of documents for relevant results, in order to match the user’s search query.

Search-Engine Marketing

This refers to the broad range of search-marketing activities including Search-Engine Optimisation.

Search-Engine Optimisation

The process of using website analysis and copy/design/structural adjustments to ensure both the highest possible positioning on desired search-engine results pages and the best experience for a given site’s users.

Search-Engine Referral

This statistic represents a visitor who arrives at a website after clicking through a search-engine results listing.

Search Engine Results Page

The Page that is displayed after a query is entered on a search engine.

Search Engine Spam

This form of spam misleads search engine results and delivers pages with inappropriate or irrelevant results.

Search Index

See "Index"

Search Term

The precise word or phrase(s) entered into a search engine by a user.


A business cycle driven by calendar-based events during the year.

Second Life

A 3-D virtual world entirely built and owned by its residents.


See "Audience"


See "Search-Engine Marketing"


See "Search-Engine Optimisation"

SEO Service Agency

An agency offering Search Engine Optimisation services.

SEO Spam

In the context of SEO, “spam” can be any Web page that a search engine views as harming the credibility of its results. Examples of these can include doorway pages, link farms, keyword stuffing, cloaking and other duplicitous or otherwise user-hostile practices. The standards for what constitutes SEO spam varies by search engine and current algorithm factors.

Sequential Messaging

Hitting a consumer with one message, then a different one and then another to guide them toward buying or taking some other action. Sequential messaging, also known as sequential targeting, often requires cross-device capabilities to accurately reach the same consumer across screens when they visit different digital properties.

Sequential Targeting

See "Sequential Messaging"


See "Search Engine Results Page"


The computer that hosts the files (e.g. web sites) and sends them to the internet.

Server Log

This shows traffic trends and sources of your website from the files on the server.


An action made by internet users to pass on any form of information (whether a photo, video, article etc.) to their friends, followers and connections.


One feature of social networking sites is that users can share links. If your website has a really interesting page, a user may want to share it with all their friends. Most social networking sites have features that make this process very easy.

Shopping Search

A specialised type of search or dedicated search engine that indexes groups of products, prices and reviews for side-by-side comparison, especially helpful for shopping online.


A blackhat SEO technique to steal another website’s traffic using malware or cybersquatting.


This page gives users another possibility of accessing all the different pages on the website. Moreover, it shows the navigation and helps immensely the site usability for all users. XML sitemaps are used to help search spiders find all the pages on the website.


A video chat programme that is free to use. You can also use it for texting and leaving video and voice messages to other users.


A popular presentation- and document-sharing social network, especially useful for B2B marketing.


See "Social Media Monitoring"


See "Social Media Optimisation"


See "Social Media Policy"

Social Media

Refers to all online tools and places that are available for users to generate content and communicate through the Internet. These media include blogs, social networks, file-hosting sites and bookmarking sites, among others. These types of websites allow users to create their own content, such as in social bookmarks, social news or social networking sites.

Social Media Monitoring

The act of pro-actively monitoring and tracking applicable social media activity.

Social Media Optimisation

The act of driving traffic through social media channels to reach a certain goal.

Social Media Policy

A written document that outlines how employees should talk about work on social media as well as advising them on how to best use social media sites. This is written for the protection of the company and clarifies what employees can and cannot say.

Social Network

A site or community on the Internet where members can interact with one another and share content. This term is more or less used interchangeably with “social media” in reference to Internet marketing.


In email marketing, this refers to any message that is deemed by users or email providers to be an unsolicited commercial offer. Also called “junk mail.” “Spam” may also refer to links or comments that are left on blogs, forums and message boards designed exclusively to steer users to a site for commercial gain. For guidance on what is and what is not permissible see


This black hat technique tries to modify a page dishonestly with spammy techniques, in order to receive a higher ranking in the SERP.


An adjective meaning “of poor quality, consisting mostly of spam”.


A niche social-bookmarking website for online marketers.


(Sometimes called a bot, crawler, robot, spider or WebCrawler). A program that visits web sites and reads through the pages, in order to gather data and to create entries for the search engine.

Spider Trap

This method is used to trap the spider in an endless loop of automatically generated links, in order to avoid automated scraping.

Splash Page

These pages have a very poor usability and don’t have any SEO focused content to index. However, they are more graphical and animated designed, in order to grab the attention from page viewers.


This machine generated blog mostly consists of stolen or broken links and content.


A popular UGC site that allows members to create easy-to-build, single-page websites (called “lenses”) featuring whatever topic they choose. Typically, marketers use these pages to aggregate other content from across the Web under a common theme.

SSP (Sell-Side Platform)

While marketers use DSPs to buy digital ads, publishers use SSPs to sell them. Publishers use SSPs to offer inventory to ad exchanges, networks, trading desks etc. They also use SSPs to set the terms of the auctions and manage private auctions, known as private marketplaces, where select advertisers are invited to participate. An SSP gives them control over who can advertise and the types of ads that run.

Static Page

These pages are more spider friendly and easy to index, because there is no dynamic content generated.


In general, stemming involves taking the root words and leaving out plurals or gerunds of the particular keyword (running - run). In a search prospective, the search engine will include sites with “running” as well as with “run” as the search query. Hence, the search engine favours stemming, which results in more diversity of the used word and focuses more on exact matches for search queries.


Basically this factor shows how much time was spent at your site over a given time period. Hence, if the bounce rate is high, improving the ‘stickiness’ of a site will reduce the bounce rate.

Stop Words

The words that are removed from the search query, such as: ‘a’, ‘to’ or ‘and’.

Style Sheet

A design template used for defining the layout of multiple pages within a website, most commonly seen in the form of “CSS” (cascading style sheets).


The process of registering a site with a search engine or Web directory. It does not guarantee inclusion, but can lead to it being reviewed or crawled. It offers no guarantee of ranking. The process can be done manually or by using commercial software packages.


The process of opting in to an email newsletter or adding an RSS feed to an aggregator (e.g. for reading blog updates).

Supplemental Results

Pages with a low PageRank still ranked in the search index, because they are relevant to the search query.


A keyword (often in a string) which is attached to a: web page, blog post, tweet (see “hashtag”), social bookmark or media file. Tags help categorise content by subject.


A leading blog search engine that aggregates blog content and scores blogs’ popularity or influence.

Term Frequency

This metric shows you how often a keyword appears on a page.

Text Link

This is a normal HTML link without any special coding or and pictures involved.

Text Link Ad

Text links which are transformed into ads.


A stream of conversations, for example, a list of comments on a blog post or exchange of emails on the same subject.

Time On Site

The average time that a website visitor remains active on a particular website.

Title Tag

A form of meta-data used by search engines to categorise Web pages by title. Search-engine algorithms traditionally value title tags to determine and categorise page content.


Many browsers have toolbars, which includes pop-up blockers, spellcheckers and autofill. However, more importantly it also helps search engines track relevant usage data.

Total Reach

The total exposure (measured in web users or “eyeballs”) of an advertisement or piece of content.


You are automatically notified if a website mentions your site on another website. Many blogging software programs have this notification system installed.

Trading Desk

Advertisement agency trading desks often buy large pools of digital media and re-sell it to clients; theoretically getting a better price buying in bulk.

Transactional Email

Automated email driven by a certain type of transaction on a web property; for example, an order or email subscription confirmation.


An event or topic that is popular and is widely discussed online.


Someone who has the intention to get an emotional response from others online. They generally post controversial, provocative & irrelevant messages for their own amusement. Their views do not necessarily reflect the ones they post about.

Trust Rank

This metric takes the trustworthiness of a website you are linking from into account.


A microblogging platform and social network that allows users to post images, text, video’s, links and quotes.


A “tweet” is the special name for an entry made on the microblogging site, Twitter. Up to 140 characters long, tweets can consist of random status updates, news, commentary, or anything an individual wants to communicate to followers at that moment, including personal messages to other users or groups and links to external content (articles, photos, videos).


See "Tweetup"


A take-off on “meet-up,” a Tweetup is a meeting organised for friends, fans and/or strangers on Twitter. It can be used in marketing for consumer engagement and brand awareness by building and educating large communities of people.


Twitter is a microblogging platform which allows users to create profiles, share short updates on a timeline, and engage with other users, much like a social-networking site. Users can post short messages, known as tweets (up to 140 characters) for anyone who is following them to see.

Twitter Ads

The program operated by Twitter that enables paying customers to use hyper-targeting via Twitter users’ profile data to reach a certain specific audience via advertisements placed in the users’ timeline.


See "Unsolicited Bulk Email"


See "Unsolicited Commercial Email"


See "User-Generated Content"

Uniform Resource Locator

See "URL"

Unique Visitor

Also known as “absolute unique visitor,” this statistic represents visitors to a website that are counted once in a given time period despite the possibility of having made multiple visits. Determined by cookies, unique visitors are distinguished from regular visitor counts which would classify two or more visits from the same user as multiple visitors.

Universal Resource Locator

See "URL"

Unsolicited Bulk Email

See "Spam"

Unsolicited Commercial Email

See "Spam"


This string of letters and numbers separated by periods and slashes is unique for every Internet page. A page’s address must be written in this form in order to be found on the World Wide Web.


It measures the user- experience on a website, when performing desired actions.

User-Generated Content

User-Generated Content is term given to all user-created data such as blogs, comments, reviews, podcasts and more for use on that website. Wikis (and Wikipedia) are examples.

User Sitemap

A page containing structured links to every other important page on a particular website grouped by topic or navigational hierarchy. These pages are equally useful for people and search-engine spiders alike, as they provide a categorised look at every page on a website at a glance (with hyperlinks).


Certain bits of information are said to ‘go viral’. This means they spread from person to person very quickly, much like a virus.

Viral Marketing

To quickly pass on the marketing message to customers, viral marketing is used widely in the World Wide Web using all the channels available including: social media, YouTube, email, blogging, or even word of mouth.

Virtual Server

You can host multiple top level domains from a single computer on this virtual server.


Much like a blog, but documented using video instead of written content.

Voice Over Internet Protocol

See "VOIP"


An acronym for “Voice Over Internet Protocol.” This technology allows a user to make phone calls (with potential video) via a computer with an Internet connection or a wireless-enabled mobile device. The most famous example of a VOIP provider is Skype.

Walled Garden

If several pages are linked to each other, but don’t link to other pages, you can call it a walled garden. However, if these pages appear in the sitemap, the search engine can still index them. Beware; the page rank for those pages will be very low though.

Web 2.0

This complex term covers many dimensions of the contemporary Web, including quick user access to streaming video, audio, images and other popular content. It can be generally used to describe interactive, community-driven content, namely blogs, file-hosting, UGC, and social-networking sites. Web 2.0 is also a philosophy that the Internet should be used more as a public-access platform and less as a vehicle for traditional, one-way publishing. Related concepts include collaboration, crowdsourcing and the use of open-source software.


A “virtual” meeting of attendees where audio and visual content (including computer screens or live video feeds) can be shared freely over the Internet. Webconferencing takes advantage of a number of different social tools, including VOIP and instant messaging.


(Sometimes called a bot, crawler, robot or spider). A program that visits web sites and reads through the pages, in order to gather data and to create entries for the search engine.


A Web-based seminar containing audio and video, often in the form of a slide deck.


A UGC website that combines aspects of wikis, blogs, forums and social networks, allowing any user to create and share online content.

White Hat SEO

This SEO method follows best practice guidelines and SEO strategies. This is the opposite approach to Black Hat SEO.


Refers to any page or collection of pages on the Internet or an intranet that can be easily edited by the public or a select group of registered visitors. Wikis are examples of collaboration. See “Wikipedia,” the most famous example of a wiki, below.


A free, open-source, multilingual encyclopedia consisting of heavily edited user-generated content on topics of nearly every sort. The largest encyclopedia in the world, Wikipedia is administered by the Wikimedia Foundation, a non-profit group. One defining characteristic of Wikipedia is its insistence on not publishing original research, but rather being an authoritative clearinghouse of citations of other material already published on the Web.


An open source CMS which is used for blog publication. There are currently over 70 million WordPress sites in the world.

XML Sitemap

An XML file for search engines containing a list of URLs on a particular domain. This file can be used to supplement regular indexing, where a bot/crawler goes out and visits each page of a site by itself.

Yahoo! Answers

An online question-and-answer community where anyone can ask a question on any topic and get immediate answers from real people, which are in turn rated or voted on. These types of communities are popular, and multiple websites follow a similar model of using the “wisdom of crowds” for answers.


It is also currently the largest search engine after Google (incidentally, also owned by Google). Users can view, upload and comment on video content for no charge, though companies can pay for sponsored promotion of videos or to have enhanced branding and design capabilities on their profile pages, known as “channels.”

YouTube Channel

A YouTube channel is a dedicated space on YouTube where a brand can promote relevant videos and gain subscribers. For a brand, a YouTube channel has many benefits: (i) all brand videos can be grouped together (ii) the channel is promoted on related brand searches (iii) the brand can gain channel subscribers which are alerted of new videos (iv) the graphic capabilities of a channel are more brand immersive and (v) the brand can create play lists.


Accompanying Administrative Document.


The refusal of merchandise by the designated consignee.

ABA Number

American Bankers Association number. Refers to the ABA Routing number. This is an identification number which is assigned to each financial institution and branch office of that institution.


See "Asset-Based Lending"


A Documentary Credit term meaning plus or minus 10% of whatever follows. (Also approximately, approx. and circa.)


The cancellation of the part of a contract that has not yet been performed e.g. during the performance of a contract war is declared and no further goods can be delivered. The buyer must pay for the goods delivered but the contract is abrogated for remaining deliveries.

Absolute Advantage

An absolute advantage exists when a nation or economic region is able to produce a good or service more efficiently (using the same amount of resources) than a second nation or region.

Accelerated Tariff Elimination

An increased rate of reduction of import duties at a faster rate than what was originally planned or decided upon.


An undertaking by the drawee (who then becomes the “acceptor”) of a Bill of Exchange to pay to the person presenting the bill (called the holder in due course) the face value of the bill on the due date.

Acceptance Bank

A Bank that promises to pay a bill of exchange in return for a fee.

Acceptance Credit

A documentary credit, which requires, amongst the documents stipulated, provision of a term bill of exchange. The bill is then generally accepted by the bank on which it is drawn or discounted.

Acceptance Date

The date on which a bill of exchange was signed. For bills of exchange drawn at “X”Days from sight”, the acceptance dates begins the time period toward maturity.

Acceptance Draft

A sight draft, documents against acceptance. See "Sight Bill"

Acceptance Letter of Credit

A Documentary Credit which requires the provision of a term bill of exchange.


The person who accepts a Bill of Exchange drawn on him/her. Until he accepts it, he is called the drawee. By accepting the bill, the acceptor undertakes to pay the person presenting the bill, the face value of the bill.


Goods that are affixed to and become part of other goods e.g. semiconductors that are used in computers.

Accessorial Charges

In shipping, charges made for additional, special or supplementary services, normally and above the line haul e.g. congestion surcharges, currency adjustments and terminal handling charges. – These can also be called “surcharges”.

Accompanied Transport

Transportation of a fully roadworthy vehicle by another means of transportation (e.g. a train or ferry boat), accompanied by its driver.

Accord and Satisfaction

A discharge of a contract or cause of action following an agreement (accord) between the parties to alter their obligations and to perform new obligations (the satisfaction).

Accounts Payable

A current liability representing the amount owed by an individual or a business to a creditor for merchandise or services purchased on open account or short-term credit.

Accounts Receivable

Money owed a business for merchandise or services bought on open account. Accounts receivable arise from the business practice of providing customer merchandise or a service with the expectation of receiving payment per specified terms. The terms are included on the seller’s invoice to the buyer with no written evidence of debt executed between seller and buyer.

Accounts Receivable Financing

A short-term financing technique for working capital purposes, loans to a company are collateralised by a security interest in a company's account receivables. Account receivables serve as collateral, and loans are made on a percentage of eligible assets pledged.


Automated Clearing House.


Confirmation of receipt of a purchase order. Also a confirmation sent by a bank confirming receipt of a collection.


The ACP (African, Caribbean and Pacific) countries signed an agreement of association with the European Community on 15th December 1989 at Lomé. The ACP States comprise 69 countries. Under the Agreement, certain types of products are exempted from customs duties and enjoy preferential tariffs.

Action Plan

Planning your operations for the coming months or year in terms of your goals and previous results.

Active Customers

Customers who have made a recent purchase (although the definition of “recent” depends of the type of product or services sold).

Active Income

In the U.S. tax code, income from an active business as opposed to passive investment income.

Act of God

An extraordinary and unexpected natural event, accidents of a nature beyond human control and without the possibility of prevention such as flood, lightning or hurricane usually quoted as ‘force majeure’.


Actual Weight.

Adhesion Contract

A contract with standard, often printed terms of sale of goods or services offered to consumers who usually cannot negotiate any of the terms and cannot acquire the product unless they agree to the terms e.g. most software.

Adjusted Present Value

A valuation method that separately identifies the value of an unlevered project from the value of financing side effects.

Ad Valorem

In proportion to the value: A phrase applied to certain freight or customs duties levied on goods, property, etc. set as a percentage of their value.

Ad Valorem Duty

A duty assessed as a percentage rate of the value of the imported merchandise.

Advance (Advance Bill)

Money (bill) paid (written) before the goods have been sent off.

Advance Clause Credit

These documentary credits incorporate a clause which authorises the advising bank to make an immediate payment to the beneficiary (exporter) of an amount up to the total of the credit, or some lessor nominated amount.

Advance Compensation

A forward purchase.

Advance in Export Currency

Bank financing of cash flow for exporters who grant their foreign buyers a term payment. If the foreign currency advance is granted in the billing currency of the commercial contract, it also serves as a means of covering exchange risks.

Advance in Import Currency

Bank financing of cash flow for importer, allowing them to pay foreign sellers in cash. If the foreign currency advance is granted in the billing currency of the commercial contract, it also serves as a means of covering exchange risks.

Advance Payment

Payment or part-payment to a supplier before goods or services are delivered.

Advance Payment Guarantee/Bond

A guarantee or bond provided by a bank to the buyer. The guarantee/bond undertakes to return to the buyer on behalf of the supplier, usually on demand, down payments or progress payments made if the supplier fails to complete the contract.

Advice of Fate

A request for advice of status of payment/non payment (acceptance/non-acceptance) of a Bill of Exchange.

Advice of Shipment

An advice sent to a local or foreign buyer advising that shipment has gone forward and contains details of packing, routing etc. – may also include a copy of the invoice and a copy of the bill of lading.

Advising Bank

The bank that notifies the exporter of the opening of a documentary credit in their favour. The advising bank, usually located in the exporter’s country, fully informs the exporter of the conditions of the documentary credit without obligation on its part.

Advisory Capacity

This term indicates that an agent or representative is not empowered to make definite decisions or adjustments without approval of the principal represented. The opposite is “without reserve”.


See "Authorised Economic Operator"


A statement sworn under oath before an authorised official e.g. a notary or commissioner of oaths.

Affiliate Company

A company that is less than 50% owned by a parent company.


A contract between a shipper and a carrier, setting forth their respective transportation obligations. The same as a “charter”.


A shipment of cargo that is currently on board a vessel between ports; as opposed to on land.

African, Caribbean, and Pacific Countries

The African, Caribbean and Pacific Group of States (ACP) is an organization created by the Georgetown Agreement in 1975. It is composed of 79 African, Caribbean and Pacific States. All 79 states are signatories to the Cotonou Agreement (a partnership agreement between the ACP and the European Union).

African Developmental Bank Group

The ABD Group is 1 of 4 major regional developmental banks currently operating in the global economy; it is headquartered in Abidjan, Cote d'Ivoire.

African Union

(AU) The African Union is an organization for regional, social and economic cooperation. It consists of 53 member nations in Africa and was derived from the OAU (Organisation of African Unity). Its goal is to unify Africa and promote peace, security, and stability on the continent through social and economic cooperation.


Africa Investment Promotion Agency Network

After Date

Payment of a negotiable instrument, such as a bank draft, becomes due a specified number of days after presentation of the draft.

After-Sales Service

A service provided by the supplier of a product after it has been sold, with a view of keeping it in good (working) order.

After Sight

In banking, a notation on a bill of exchange that indicates that the payment is due a fixed number of days after the bill has been presented to the drawee..


The work carried out by an agent acting on behalf of the principal.

Agency Costs

The costs incurred to ensure that agents and managers act in the best interest of the principal. For example, reward to managers as a percentage of profit.


A list of topics to be covered during a negotiation session.


An agent is an independent person or legal entity that acts on behalf of another (the “principal”).

Agent Bank

A bank acting for a foreign bank.

Aggregate Demand

The total demand of all potential buyers of a commodity or service. Includes all individuals and organizations that have the ability, willingness, and authority to purchase such products.


The price increase over and above the market price of the traded goods and attributable to the extra costs involved in countertrading.


African Growth and Opportunity Act

Air Container

Container adapted to the standards for air navigation.

Aircraft Pallet

A platform or pallet upon which a unitised shipment rests or on which goods are assembled and secured before being loaded as a unit onto an aircraft.

Air Freight

The air transport of goods.

Air Freight Consolidator

A company that obtain a low rates from air carriers in return for volume. They then consolidate small shipments to create the volume contracted.

Air Freight Forwarder

A freight forwarder for shipments by air.

Airport to Airport

The main carriage transportation movement from departure airport on the export’s side to the arrival airport on the importer’s side.

Air Shipping Weight

Represents the gross weight in kilograms of shipments made by air, including the weight of moisture content, wrappings, crates, boxes, and containers (other than cargo vans and similar substantial outer containers).

Air Value

The value of goods that enter or leave the country by air.

Airway Bill

An airway bill of lading is a contract of transport usually issued in triplicate by the shipping agent for an air shipment.

Air Waybill / Air Consignment Note

Document which acknowledges receipt by an air transport company of goods dispatched by air and includes conditions, limitations of liability, shipping instructions, description of commodity, and applicable transportation charges and. Normally completed in triplicate with a copy each for the Consignor, Consignee and the Carrier. An Air Waybill is not a document of title to goods in the same manner as a Bill of Lading.

Allocation-of-Income Rules

In the U.S. tax code, these rules define how income and deductions are to be allocated between domestic-source and foreign-source income.

All Other Perils & Misfortunes

Phrase in Cargo policy meaning perils of the same nature as those described specifically in the Perils clause.


An amount paid or credited by a seller as a refund or reimbursement due to any one of a number of causes e.g. faulty packaging, shipment of goods which do not meet the buyer’s specifications, late shipment, damaged goods etc.

All Risks

The broadest type of standard marine insurance coverage generally available and offered by The International Underwriting Association of London ”A” Clauses.

All Risks Clause

An insurance provision which provides additional coverage to an Open Cargo Policy, usually for an additional premium. Contrary to its name, the clause does not protect against all risks. The more common perils it does cover are theft, pilferage, non-delivery, fresh water damage, contact with other cargo, breakage, and leakage. Inherent vice, loss of market, and losses caused by delay are not covered.


Refers to the side a vessel: goods to be delivered “alongside” are to be placed on the dock or lighter within the reach of the transport ship’s tackle so that they can be loaded aboard the vessel.

Alternative Dispute Resolution

A general term for a variety of dispute resolution mechanisms that may be used as alternatives to traditional litigation before government courts or tribunals e.g. conciliation, mediation, negotiation and arbitration.

Alternative Tariff

A tariff that has two or more rates for the same product, trading to and from the same points, with the authority to use one that produces the lowest charge.


Air mail.

Amber Box

Domestic support for agriculture that is considered to distort trade and therefore subject to reduction commitments. Technically calculated as “Aggregate Measurement of Support” (AMS).


An addition, deletion or change in a legal document – including changes to Documentary Credits. Any amendment must be agreed, usually in writing, by all parties to the document.

American Pallet

A type of pallet used in North America.

American Shares

Shares of a foreign corporation issued directly to U.S. investors through a transfer agent in accordance with SEC regulations.

American Terms

A foreign exchange quotation that states the U.S. dollar price per foreign currency unit (contrast with European terms).


See "Anti-Money Laundering"

Andean Community

The Andean Community or Comunidad Andina de Naciones in Spanish (CAN) is made up of Bolivia, Colombia, Ecuador and Peru. It is a series of bodies and institutions that work to bring Andean subregional integration, promote external projection, and reinforce the actions connected with the process.


A document attached to a contract or agreement. May also be called “Exhibit” or “Schedule”.


Analysis of variance.

Anti-Boycott Regulations

Laws created to urge companies to not participate in foreign boycotts.

Anti-Dumping Duties

Customs duties imposed on imports from specific countries in addition to the normal or preferential duty; such duties can be introduced where the export price is below the normal value, provided such imports cause or threaten to cause material injury to Community producers of like products

Antidumping Law

Laws enacted to remedy dumping (defined as the sale of goods to a foreign market at less than fair value). Usually, antidumping duty is an additional tax to normal import duty to raise its cost price value.

Anti-Money Laundering

The procedures and policies adopted by banks and financial institutions to avoid being inadvertently caught up in money laundering activities.


A term used for government regulations designed to prevent one or a small number of parties acting in collusion to restrain trade against the public interest.


Advance Pricing Arrangement

Apparent Damage

This statement on a bill of lading or other transport document and is the opposite to “apparent good order and condition”.

Apparent Good Order and Condition

A stated or implied agreement from a carrier, a carrier’s agent or other bailee that the referenced goods are free of obvious damage or shortage at the time they were delivered to the carrier. The resulting documentation is then “clean” not bearing “foul” notation.

Appellate Body (AB)

The Appellate Body is a World Trade Organization (WTO) entity, which was established in 1995 under Article 7 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). Its purpose is to hear appeals and reports issued by panels in disputes between WTO members. It is composed of a standing body of 7 people and has the power to uphold, modify, or reverse the legal findings and conclusions of a panel. These rulings must be accepted by the parties of the dispute. The Appellate Body has its seat in Geneva, Switzerland.


The buyer who applies for a documentary credit.


In a documentary credit, instructions from the applicant to the issuing bank to open it.

Application to Qualify

An application by a supplier to be included on an agency’s pre-qualified suppliers list. Usually, the supplier must prove it has the capability and capacity to deliver specific types of goods, services, or works to be included on the list.

Applied tariff / Applied rates

Duties that are actually charged on imports. These can be below the bound rates.


The determination of the dutiable value of imported merchandise by a customs official; following the procedures outlined in their country’s tariffs.

Approved Exporter

A person who has been authorised to use the local clearance procedure for exports, i.e. he places the goods under the procedure by entry in his records and notifies the customs authorities of the removal of the goods from his premises in the manner specified in the authorisation.


See "All Risks"

Arab Maghreb Union

A regional alliance seeking economic and political unity in Northern Africa. Members are Algeria, Libya, Mauritania, Morocco, and Tunisia.


The simultaneous buying and selling of the same commodity or currency in two or more markets in order to take advantage of price differentials.


Dispute resolution in which a neutral third party (arbitrator) makes a decision after a hearing in which both disputing parties had an opportunity to be heard. Can be voluntary or contractually required. Should be quicker and cheaper than formal litigation.

Arbitration Clause

A clause in a contract stating that the parties agree to refer any dispute to arbitration – with details of where the arbitration should take place.

Arrival Notice

Written notice sent by a carrier to a nominated party advising of the arrival of the vessel and/or a certain shipment

Article of Extraordinary Value

Commodities identified as high value items, requiring special care in shipping.


As soon as possible.

ASEAN Free Trade Area

A multilateral agreement on trade, including agricultural trade, between Association of Southeast Asian Nations (ASEAN) member countries, phasing out tariffs and revising other trade rules over the 15-year period of implementation of the Common Effective Preferential Tariff (CEPT) Scheme. The agreement was signed in January 1992.

As Freighted

An explanatory note to a freight surcharge explaining that it is to be calculated in the same manner as the freight itself.

Asian Development Bank

The Asian Development Bank (ADB) is a multilateral development financial institution owned by 67 members (48 from the region and 19 from other parts of the globe). Its goal is to improve the welfare of the people in Asia and the Pacific. ADB is headquartered in Manila, Philippines. It is one of four major development banks around the world.

Asia-Pacific Economic Cooperation

A forum designed to promote economic growth, cooperation, and integration among member nations. APEC has also worked to reduce tariffs and other trade barriers across the Asia-Pacific region. Its vision is based on the "Bogor Goals" adopted in the 1994 meeting in Bogor, Indonesia. There are 21 member economies including: Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam.

As Is

A contract term by which the buyer agrees to take the goods in the condition they are in without any guarantees or warranties to quality or condition.

Assailing Thieves

Forcible taking of property but not sneak thievery.

Assembly Operations

An operation which simply assembles products and does not manufacture any of the elements used in the final product.

Asset-Based Lending

A specialised form of secured lending whereby a company uses its current assets [accounts receivable and inventory] as collateral for a loan. The loan is structured so that the amount of credit is limited in relation to the value of the collateral. The product is differentiated from other types of lending secured by accounts receivable and inventory by the Lender’s use of controls over the borrower’s cash receipts and disbursements and the quality of collateral.


A financing institution or individual or company designated by an insured exporter to receive all or part of the policy proceeds. The assignment must be acknowledged by the insured. An assignee has no greater rights than the insured under a policy.


Transfer of interest and benefits of a financial instrument (e.g. an insurance policy, documentary credit, bill of exchange etc.) to a third party.


A documentary credit beneficiary who formally pledges all or part of the Documentary Credit procedures to one or more third parties; often by executing an assignment of proceeds document at a bank.


A customs term for types of help given to a seller or a buyer e.g. production tooling, design work etc.

Association Agreement

An agreement between the European Community and one or more third countries creating mutual rights and obligations

Association of Southeast Asian Nations

ASEAN - An organization founded in 1967 for the purpose of promoting regional stability, economic development, and cultural exchange in southeastern Asia. Membership includes Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

ATA Carnet

“Admission Temporaire/Temporary Admission”. An ATA carnet is an international customs document instituted in 1961 by the Brussels Convention. The Convention allows an exporter to transit his goods temporarily through several successive countries without having to make a customs declaration at each frontier; also for temporary admission of goods for specific purpose, e.g. for displays, exhibitions and fairs as professional equipment and as commercial samples. The system is administrated by the IBCC.


Automatic Teller Machine, cashpoint.


Autonomous Trade Measures.


An ATR is a certificate for the movement of goods within the framework of EC/Turkey relations. This document allows exporters to benefit from the free movement or preferential systems. The ATR document has to be stamped by the customs authorities of the exporting state.

ATR Declaration

Exporters of the European Union with customers in Turkey require an ATR1 declaration instead of an EUR 1 movement certificate.

At Sight

A terms that designates payment upon demand. Under a Documentary Credit or draft it means payment is to be made upon presentation of certain documents.


The legal process for seizing property before a judgment to secure the payment of damages if awarded.


A person authorised to transact business generally or to perform a designated task of a non-legal nature on behalf of another individual or legal entity.


Loss of customers.

At Warehouse

The price of goods which includes delivery and loading.


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


The act of certifying that a written document is genuine, credible and reliable; often by: consulate officials, notaries and other judicial officers.

Authorised Consignee

A person who has been authorised to receive at his premises or at any other specified place goods under a transit procedure without presenting them and the transit declaration at the office of destination.

Authorised Consignor

A person who has been authorised to carry out transit operations without presenting the goods and the transit declaration at the office of departure.

Authorised Economic Operator

Defined by the WCO SAFE Framework of Standards as a party involved in the international movement of goods, in whatever function, that has been approved by, or on behalf of, a national Customs administration as complying with WCO or equivalent supply chain security standards. AEOs include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors.

Authority to Pay

A document comparable to a revocable letter of credit but under whose terms the authority to pay the seller stems from the buyer rather than from a bank.


Automatic Digital Network


The date by which a set of documents has to, or will, be delivered to the forfaiter ready for discounting.


An unconditional, irrevocable, divisible and freely transferable guarantee of an individual or a financial institution on a financial instrument which in effect makes the guarantor the primary obligor in the eyes of all subsequent holders of the financial instrument.

Avalising Bank

A bank in an importer’s country which adds its aval to notes or bills in a forfaiting transaction.


An institution or person acting as a guarantor.


An insurance term for a loss or damage incident that is less than total. A particular average is a loss that affects specific interests only. A general average is a loss that affects all cargo interests on board the vessel as well as the vessel itself.

Average Agreement

Document signed by cargo owners by terms of which they agree to pay any General Average contribution properly due so that cargo may be released after a General Average loss has occurred.

Average Clauses

Clauses in Cargo policy that determine the amount of Particular Average loss recovery.

Average Irrespective Of Percentage

Broadest "with average" clause. Losses by insured perils are paid regardless of percentage.

Average Life

An evaluation of the average time an asset will be outstanding given a specific repayment system.

Avoidance of Contract

The legal cancellation of a contract because an event occurs that makes performance of the contract impossible or inequitable and that releases the parties from their obligations e.g. force majeure.


See "Airway Bill"


See "Business to Business"


See "Business to Consumer"


See "Business to Government"

Back to Back (or Head and Counter) Credit

A documentary credit (counter) taken out by an importer to allow purchase of goods required to meet a sale covered under an original (head) credit. Under this type of arrangement, the first credit can be offered in support of security to the importers bank. As applicant for the second credit (counter), the importer is responsible for reimbursing the bank for payment made under it, regardless of whether or not he is paid as a seller under the original credit.

Back to Back (or Head and Counter) Letter of Credit

A documentary credit (counter) taken out by an importer to allow purchase of goods required to meet a sale covered under an original (head) credit. Under this type of arrangement, the first credit can be offered in support of security to the importers bank. As applicant for the second credit (counter), the importer is responsible for reimbursing the bank for payment made under it, regardless of whether or not he is paid as a seller under the original credit.


BAF and CAF are two kinds of adjustment that either increase or decrease the basic freight. BAF (Bunker Adjustment Factor) is a rectification that depends on fuel price trends. CAF (Currency Adjustment Factor) is a rectification that depends on the exchange rate trends of the currency in which the tariff has been established.


A person or party to whom goods are delivered for a purpose, such as custody or repair, without transfer of ownership.

Balanced Economy

In national finances, it is when exports are equal to imports.

Balance of Payments

The International Monetary Fund’s accounting system that tracks the flow of goods, services, and capital in and out of each country.

Balance of Trade

The difference between a country’s total imports and exports over a set period.

Baltic Exchange (The)

An international exchange for freight and shipping in London.

Bangkok Agreement

A preferential trade agreement among developing countries of Asia and the Pacific. Members include; People's Republic of Bangladesh, India, Cambodia, The Philippines, Republic of Korea, Sri Lanka and Thailand.

Bank-based Corporate Governance System

A system of corporate governance in which the supervisory board is dominated by bankers and other corporate insiders.

Banker’s Acceptance

A Bill of Exchange accepted by a bank usually for the purpose of financing a sale of goods to or by the bank’s customer. The bill may be drawn by an exporter on the importer’s bank and be sold on the open market at a discount.

Banker's Draft

A payment instrument used to make international payments.

Bank for International Settlements

An international organization, which promotes international monetary and financial cooperation among nations by fostering the cooperation of world central banks.

Bank Release

A document issued by a bank, after it has been paid or given an acceptance, giving authority to a person to take delivery of the goods.

Bar Code

Code made up of black vertical lines that represent numbers, used for identifying various objects and products.

Bareboat Charter

A bareboat charter or demise charter is an arrangement for the chartering or hiring of a ship or boat, whereby no crew or provisions are included as part of the agreement; instead, the people who rent the vessel from the owner are responsible for taking care of such things.


Fraudulent, criminal, or wrongful act by ship's captain or crew which causes loss or damage to the ship or cargo.


Goods and/or services are exchanged against other goods and/or services of equivalent value. No money changes hands between the buyer and seller. (See Countertrade).


Base for levying a tax.

Basel Convention

An international treaty concerned with restricting the movement of hazardous wastes between countries, especially from developed to underdeveloped countries.

Basis Point

One hundredth of one percentage point (0.01%). 100 basis points = 1%.


Barrels per day


A person who holds a cheque, money order, promissory note, or shares which are payable to “bearer”.

Bearer Document

Bearer instrument is a document that entitles the holder of the document rights of ownership or title to the underlying property, such as shares or bonds or payment.


A continuous and systematic evaluation of the products, services and methods of competitors and/or companies considered to be the best performers.


The person (for example, the exporter) in whose favour the credit is issued.

Berne Union

The Berne Union is the leading association for export credit and investment insurance worldwide, working for cooperation and stability in cross-border trade and providing a forum for professional exchange among its members.


Business (Bank) Identifier Code. A standard 8- or 11-digit string used under the auspices of the International Organisation for Standardisation and administered by SWIFT.

Bid (Buying) Rate

Exchange rate at which foreign exchange dealers are prepared to buy foreign exchange in the market from other dealers, and at which potential sellers are therefore able to sell foreign exchange to those dealers.

Bid / Tender Bond

A bond provided by a bank to the buyer promising compensation, usually on demand, in the event that a supplier declines to enter into a contract in conformity with the bid he has put forward.

Bilateral Clearing Account

A trading agreement between two countries, neither of which has a hard currency, in which transactions are entered in clearing units instead of a fixed currency.

Bilateral Investment Treaty

A treaty between two countries to ensure that investments between the two countries receive the same treatment as domestic or other international investments.

Bilateral Trade Agreement

A commercial agreement between two countries, often detailing what specific quantities of what specific goods can be exchanged.

Billing Currency

The choice of payment (billing) currency (local or foreign) should take into account commercial considerations (complexity and exchange risk for buyers in case of local currency), and the economic viability of the operation (exchange risk involved for sellers who invoice in foreign currency).

Bill of Exchange

An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of, a specified person, or to bearer

Bill of Lading

A document issued on behalf of the carrier which evidences a contract of carriage by sea. The document has the following functions: (1) A receipt for goods, signed by a duly authorised person on behalf of the carriers (2) A document of title to the goods described therein and (3) Evidence of the terms and condition of carriage agreed upon between the two parties.

Bill of Lading Date

A specific date a bill of lading is issued

Bill of Lading Guarantee

A letter usually from an importer to the shipping company in which the importer undertakes to indemnify the shipping company against the consequences of delivering goods without production of a Bill of Lading. The importers letter of undertaking usually requires the prior endorsement or guarantee by his bankers before it is acceptable to the shipping company who will then release the goods.

Binding Origin Information

Written information issued by the customs authorities of the EU Member States on the preferential or non-preferential origin of specific goods to be imported or exported (Art. 12 CC)

Binding Tariff Information

Written information issued by the customs authorities of the EU Member States on the classification of goods in the combined nomenclature or a nomenclature derived therefrom, such as the TARIC (Art. 12 CC)


Bilateral investment treaties.

Blank Endorsement

An endorsement in blank specifies no endorsee and a bill so endorsed becomes payable to bearer and may be negotiated by delivery. When a bill has been endorsed in blank, any holder may convert the blank endorsement into a special endorsement by writing above the endorser’s signature a direction to pay the bill to the order of himself, or some other person.

Blanket Assignment

An agreement giving the lender a security interest in all of assets owned by the borrower. As used by some lenders, the term is meant as a catch-all security interest covering every anticipated type of asset owned by the borrower. To perfect the lender’s security interest in the borrower’s personal property, the lender must file a financing statement describing the collateral in all of its locations. To perfect the Lender’s security interest in all real or titled property, the Lender must specify the assets in the appropriate documents and must file the documents in the proper jurisdiction. If the assets are already encumbered and the borrower has limited equity in them, the Lender may not expend the resources to perfect its security interest in the borrower’s real and titled property.

Blanket Rate

A rate that is applied broadly over different articles or entities.


The act of seizing commercial exchange with a particular country, common during wartime.

Blocked Funds

Cash flows generated by a foreign project that cannot be immediately repatriated to the parent firm because of capital flow restrictions imposed by the host government.


Sales resistance on the part of the client that encourages them not to follow up with your offer. It is important to identify and destroy these blocks in your communication.

Blue Box

Amber Box types of support, but with constraints on production or other conditions designed to reduce the distortion. Currently not limited.


Bankleitzahl. The German and Austrian system for numbering banks uniquely, similar to Sort Codes in the UK, BSB in Australia etc.

Board Member

Individual or corporate body, appointed from among the shareholders. As members of the Board of Directors, the task of the board members is to manage the company collectively. They are invested with wide-ranging powers to act on behalf of the company.

Bogor Goals

The Bogor Goals were created by the Asia-Pacific Economic Cooperation (APEC) in Bogor, Indonesia in 1994, with the intention of increasing economic unity among Asian Pacific nations by increasing trade. The goals are to have free trade and investment in developed nations by 2010 and in developing nations by 2020.


See "Binding Origin Information"

Boilerplate Clause

A boilerplate clause is a legal English term that is used in conjunction with contract law. Boilerplate clauses are standard contractual terms that are routinely included in many contracts


Bolero is a neutral secure platform enabling paperless trading between buyers, sellers, and their logistics service and bank partners.

Bonded Exchange

Foreign exchange that cannot be freely converted into other currencies.

Bonded Goods

Goods held in store under customs control after removal from wharf or airport pending payment of import duty. Goods are said to be “in bond” and may be re-exported from bond without payment of duty. Insurance may be taken out over the goods held in bond; this is referred to as “Bonding and Insurance”.

Bonded Warehouse

A building authorized by customs authorities for the storage of goods without payment of duties until removal.

Bond Warrant

The document of title to goods being held in bond storage.


Balance of payments


In agriculture, a category of domestic support. Green box: supports considered not to distort trade and therefore permitted with no limits. Blue box: permitted supports linked to production, but subject to production limits, and therefore minimally trade-distorting. Amber box: supports considered to distort trade and therefore subject to reduction commitments.


Business Prototype.

Brand, Business, or Product Image

Subjective image of a business, brand, or product, in terms of certain signals transmitted to the public.

Breach of Contract

Cancellation is brought about when the execution of the Contract is interrupted for a 6-month period following the occurrence of a claim-generating event as mentioned in the policy.

Break Clause

A break clause is a clause in a contract that allows a person to end the contract early.

Bretton Woods Agreement

An agreement made near the end of World War II to promote exchange rate stability and facilitate the international flow of currencies. The conference established the International Monetary Fund and the World Bank.


Brazil, Russia, India, China, and South Africa

Bridge Financing

Interim financing replaced by an ECA-backed or pre-export finance solution.


An individual or firm who acts as agent for others in purchasing and selling.

Brussels Tariff Nomenclature

See "Nomenclature of the Customs Cooperation Council"


Bank State Branch. A six digit code used to identify, uniquely, Australian bank branches.


Border tax adjustment


See "Binding Tariff Information"

B to B

See "Business to Business"

B to C

See "Business to Consumer"

B to G

See "Business to Government"

Bureau of Industry and Security

An agency of the United States Department of Commerce that is in charge of dealing with both the advancement of national security and regulating the export of technologies.

Business Assets

All tangible movable assets (equipment, machinery, etc.) and intangible assets (customers, goodwill, corporate name, sign, lease right, licences and authorisations, etc.). It is important to note that this never includes the building(s) in which the business is run.

Business to Business

Indicates a company to company business relationship.

Business to Business

Indicates a company to company business relationship.

Business to Consumer

Indicates a company to individual business relationship.

Business to Government

Indicates a company to government business relationship.


An agreement to buy products that will eventually be produced by the capital equipment supplied under the export sales agreement.

Buyer Credit

A financing arrangement under which a lending bank in the supplier’s country lends directly to the buyer or to a bank in the buyer’s country to enable the buyer to make payments due to the supplier under a contract.

Buying Agent

An agent who buys in this country for foreign importers, especially for such large foreign users as mines, railroads, governments, and public utilities. Synonymous with "purchasing agent."

Buying Group

Body that centralises purchases in order to obtain the best possible prices.


Transport of goods between two ports or places located in the same country.


See "Cash Against Documents"


Compound average growth rate


A demand for payment under a loan or guarantee.

Calvo Doctrine

The Calvo Doctrine is a foreign policy doctrine which holds that jurisdiction in international investment disputes lies with the country in which the investment is located.


Common Agricultural Policy — The EU’s comprehensive system of production targets and marketing mechanisms designed to manage agricultural trade within the EU and with the rest of the world.

Capital Account

A measure of change in cross-border ownership of long-term financial assets, including financial securities and real estate.

Capital Formation

The process of increasing the amount of capital goods, also called capital stock, in a country.


An economic system that is based on private ownership; economic development is proportionate to and dependent upon the accumulation and reinvestment of profits.

Capital Markets

Markets for financial assets and liabilities with maturity greater than one year, i.e. long-term loanable funds, including long-term government and corporate bonds, preferred stock, and common stock.


Goods being transported.

Cargo Agent

An agent appointed by an airline or shipping line to solicit and process international air and ocean freight for shipments. Cargo agents are paid commissions by the airline or shipping line.

Cargo War Risk Policy

A separate Cargo policy covering cargo while waterborne only (except at transshipping point, which may be on land or water). Insures against war risks.

Caribbean Community and Common Market

CARICOM consists of Antigua & Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent & The Grenadines, Suriname, and Trinidad & Tobago. Its purpose is to provide a continued economic linkage after the dissolution of the West Indies Federation for English-speaking countries in the Caribbean.

Carnet CPD

The CPD is an international customs document which covers the temporary admission of motor vehicles (private and commercial road motor vehicles) in countries where required.

Carriage And Insurance Paid To

The seller delivers the goods into the custody of the carrier and pays for the costs of carriage to the agreed destination. He also arranges insurance of the goods at his own cost. The goods travel at the buyer’s risk. The CIP term requires the seller/exporter to clear the goods for export

Carriage Forward

A condition of sale pursuant to which the cost of transporting goods is paid by the receiver.

Carriage Paid To

The seller delivers the goods into the custody of the carrier and pays for the costs of carriage to the agreed destination. The goods travel at the buyer’s risk.


An individual or entity that transports persons or goods for compensation under the contract of carriage.

Carry Forward

When an exporting country uses part of the following year’s quota during the current year.

Carry Over

When an exporting country utilizes the previous year’s unutilized quota.


The delivery of goods over a short distance.


An agreement among, or an organization of, suppliers of a product to limit production in order to minimize competition and maximize market power.

Case of Need

The drawer of a bill, and any endorser, may insert therein the name of a party to whom the holder may resort in case of need, i.e. in case the bill is dishonoured by non-acceptance or non-payment. Such a party is called the referee in case of need.

Cash Against Documents

Transactions where documents are sent to a third party, such as a bank or agent, with instructions not to release the documents, so that the importer/buyer is unable to take possession until the third party has received payment.

Cash In Advance

The seller/exporter requires payment from the buyer/importer prior to shipment of goods or services.

Cash On Delivery

Cash On Delivery is a system of payment where the carrier collects the amount due and ensures its repatriation. This system is to be used only if the exporter is sure that the buyer will accept the goods and that there are no exchange controls which could prevent repatriation.

Cash Price

The price a seller will accept if payment is made immediately.

Cash With Order

The seller/exporter requires payment from the buyer/importer upon confirmation of the order – and prior to shipment.

Category I Countries

Category I refers to relatively developed countries and is the Consensus classification based on GNP per capita income.

Category II Countries

Category II refers to intermediate income countries and is the Consensus classification based on GNP per capita income.

Category III Countries

Category III refers to relatively under-developed countries and is the Consensus classification based on GNP per capita income.


Convention on Biological Diversity


EU Common Consolidated Base Taxation


EU Community Customs Code


EU Customs Code Implementing Provisions


See "Customs Clearance Outwards"


See "Common Customs Tariffs"


Central and Eastern Europe Countries.


The Economic and Monetary Community of Central Africa.

CE Mark

A manufacturer places a CE Mark on their product establishing that they take sole responsibility for the product and that it meets the essential requirements and that the conformity assessments of their product has been fulfilled.

Central African Economic and Monetary Community

The Central African Economic and Monetary Community is comprised of six Central African countries: Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon. CEMAC was established to promote cooperation and exchange among its members.

Central American Common Market

An association of five Central American nations that was formed to facilitate regional economic development through free trade and economic integration. Established by the General Treaty on Central American Economic Integration signed by Guatemala, Honduras, El Salvador, and Nicaragua in December 1960, its membership expanded to include Costa Rica in July 1962.

Central Bank

The sole institution of a nation that has the authority to issue banknotes and set monetary and credit policies. It manages the rate of exchange of the nation's currency and determines the internal and external monetary stability of the currency.

Central European Free Trade Agreement

A trade agreement between non-EU countries in Central and South-Eastern Europe.

Centralised Account

This is a current account opened in the books of a foreign bank wherein all settlements, transfers or cheques are centralised in the country in which the foreign bank is located.

Centrally Planned Economy

An economy in which the government, rather than free-market activity, controls the allocation of resources.


Chief Executive Officer

Certificate of Acceptance

Term used in leasing. A document whereby the lessee acknowledges that the equipment to be leased has been delivered, is acceptable, and has been manufactured or constructed according to specifications.

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.

Certificate of Conformity

A document certified by a competent authority that the supplied good or service meets the required specifications. Also called certificate of conformance or certificate of compliance.

Certificate of Free Sale

A certificate, required by some foreign governments, stating that the goods for export, if products under the jurisdiction of the U.S. Federal Food and Drug Administration, are acceptable for sale in the United States, i.e., that the products are sold freely, without restriction. FDA will issue shippers a "letter of comment" to satisfy foreign requests or regulations.

Certificate of Inspection

A document certifying the quality, quantity and/or price of a given shipment of goods. May involve the buyer stipulating an independent inspection agency.

Certificate Of Insurance Or Special Policy

A document prepared by the insured, the producer, or the insurance company to provide evidence of insurance to the buyer or bank for an export/import shipment. The certificate contains an abstract of the more important conditions in the policy.

Certificate of Loss

It is a means by which the damage or average surveyor establishes the nature and scale of damages and losses, in a written report.

Certificate of Manufacture

A statement by a producer, sometimes notarized, which certifies that manufacture has been completed and that the goods are at the disposal of the buyer.

Certificate of Origin

This certificate proves the origin of the goods. It is usually issued by a Chamber of Commerce. A certificate of origin is often required for export or import purposes, as goods of a certain origin enjoy the advantages of a preferential system.

Certificate of Product Origin

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


See "Common External Tariff"

C & F

See "Cost And Freight"


Controlled Foreign Company


Chief financial officer


(Cost and Freight) and C.I.F. (Cost, Insurance, and Freight) indicate that the seller will deliver the goods onto a vessel and pay all the normal charges to get the cargo to the named seaport. The buyer assumes all risks from the time the cargo is placed onto the vessel at the seaport of loading. C.I.F. also indicates that the seller arranges for insurance as an automatic condition of the contract.


See "Cost And Freight"

Chamber of Commerce

An association of businessmen whose purpose is to promote commercial and industrial interests in the community.


An amount of money that is owed to the factor and is deducted or Charged-Back from the reserve or availability of the line due to an agreed upon non-payment by debtor clause in the Factors contract.


In Maritime law, this is a contract by which a ship owner undertakes, in return for a fee, to make a ship available to a charterer for transportation of goods or persons.

Charter Party

A contract under which a charterer agrees to rent/hire the use of a ship or part of a ship from a ship owner. The charterer will, in some cases, be empowered to issue their own Bills of Lading, known as Charter Party Bills of Lading, subject to the conditions of the original charter party contract.


See "Customs Handling of Import and Export Freight"


See "Cash In Advance"


See "Cost, Insurance and Freight"


International Convention for the transportation of goods by railway.


Committee of International Organisations of Tax Administrations


See "Carriage And Insurance Paid To"


See "Commercial Interest Reference Rate"


Commonwealth of Independent States


Convention on International Trade in Endangered Species. A multilateral environmental agreement.

Civil Society Organizations (CSOs)

Non-governmental and non-profit groups that work to improve society and the human condition.


Right of a person (the creditor) to claim something from someone (debtor), usually an amount of money.

Claim Generating Event

Situation or event mentioned in the policy which, by causing the non-payment of the debt or cancellation of the contract, can bring the guarantee into play.

Claiming Bank

The bank entitled to claim reimbursement of sums it has paid in respect of a payment, deferred payment, acceptance or negotiation that it has carried out under the credit.

Clean Bill Of Lading

A bill of lading acknowledged by the carrier for goods received “in apparent good condition” without damages or other irregularities. Client; with no notations of defect, damage or loss and signed by the carrier or its authorised representative or agent.

Clean Bills

Bills of Exchange (drafts, cheques etc.) drawn payable overseas and which are not accompanied by commercial documents.

Clean Collection

A collection comprising financial documents only, not goods.

Clean Draft

Draft (bill of exchange) that is not accompanied by documents

Clean Letter of Credit

Documentary Credit that calls for presentation of nothing more than a draft to trigger payment. The term is sometimes used (incorrectly) to mean “standby letter of credit”.


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


Administrative procedure which constitutes the final stage of a customs or accounting transaction and whereby it is possible to check, by comparing the documents, whether the formalities have been accomplished correctly.

Clearing House Interbank Payments System (CHIPS)

Financial network through which banks in the United States conduct their financial transactions.

Closer Trade Relations Trade Agreement

An accord between Australia and New Zealand designed to facilitate the exchange of goods between the two countries. It was signed on January 1, 1983.


The CMR Convention (full title Convention on the Contract for the International Carriage of Goods by Road) is a United Nations convention. It relates to various legal issues concerning transportation of cargo by road covering the rights and obligations of parties involved in road transport: the shipper, carrier and addressee. Based on the CMR, the International Road Transport Union (IRU) developed a standard CMR waybill. The CMR waybill is prepared in three languages. On the back is the text again in three languages. This aids the waybill in being accepted and recognised throughout Europe. Checked by customs and police, a transport document must be present when the shipment is transported. As of the 27th of May 2008, according to an additional protocol to the CMR-convention, it is also possible to use an updated electronic consignment note – eCMR. As of February 2017, several solutions are available.


See "Combined Nomenclature"


See "Certificate of Origin"


See "Cash On Delivery"

Codex Alimentarius

FAO/WHO commission that deals with international standards on food safety.

Codex Alimentarius Commission

An organization created in 1963 by the Food and Agriculture Organization and the World Health Organization to develop food standards, guidelines and related texts such as codes of practice under the Joint FAO/WHO Food Standards Program.


Loans made by a financial institution, such as an export credit agency or a commercial bank, in association with the World Bank or other multilateral development banks.

Collecting Bank

The bank in the buyer’s (drawee’s) country where the collection order and documents are directed.

Collecting Order

The set of instructions given to the remitting bank by the principal in a transaction. The remitting bank relays the collecting order to the collecting bank.


The process of presenting a negotiable instrument to the maker for payment.

Collection By Draft

The seller bears the risk until he/she is paid. If for some reason, the buyer does not accept the shipment, the seller has the problem of disposing of the goods. By arranging the insurance, the seller can minimize the risk of loss.

Collection of a Bill

Where an exporter hands a Bill of Exchange, which may be accompanied by documents, to his bank, together with instructions as to the manner in which they are to be made available to the importer through a bank in the buyer’s country.

Collection Papers

The documents submitted, usually with a draft or against a letter of credit, for payment of an export shipment.

Collectivist Society

A society in which people feel more comfortable thinking and acting in groups.


An agreement (usually secret) among mostly oligopolistic competing firms in an industry to control the market, raise the market price, and otherwise act like a monopoly.

Combined Nomenclature

A systematic list of goods descriptions based on the Harmonised System, serving for the purposes of the EU Common Customs Tariff, external trade statistics, and other Community policies (Art. 1 Reg. [EEC] No 2658/87, OJ 1987 No L 256, p.1)

Combined Transport

Intermodal transport where the main leg is by rail, navigable waters or sea and where the initial and/or final legs of the journey take place by road over the shortest possible distance.

Command Economy

An economy based on government ownership and/or control of society's resources; during the 20th century, the dominant form of command economy was communism.

Commercial Attache

The commercial expert on the diplomatic staff of his country's embassy or large consulate in a foreign country.

Commercial Bank

A bank whose primary function is to accept demand deposits (which can be withdrawn upon depositories' demand), and grant short-term and long-term loans.

Commercial Court

This is a non-criminal specialised jurisdiction of the first degree with judges and a court clerk. The "lay magistrates" (tradesmen acting as judges) have a voluntary mandate and are responsible for judging disputes between partners, traders or those relating to commercial laws.

Commercial Credit

A letter of credit that assures the seller that buyer will pay for the goods being sold. Such letter is usually issued by a bank upon client's request.

Commercial Document

General term for documents describing various aspects of a transaction, e.g. commercial invoice, transport document, insurance document, certificate of origin, certificate of inspection, etc.

Commercial Interest Reference Rate

A market rate for the currency concerned plus a margin, set under the Consensus to establish fixed interest rates which are officially supported.

Commercial Invoice

The basic document of international trade containing a record of the transaction between the seller (exporter) and buyer (importer) containing the: description of goods, price, discounts, quantities and delivery and payment terms.

Commercial Letter Of Credit

See "Documentary Credit"

Commercial Loading Document

A document that establishes the terms of a contract between a shipper and a transportation company under which freight is to be moved between points for a specific charge. It is usually prepared by the shipper or the shipper's agent or the carrier and serves as a contract of carriage. Examples of commercial loading documents include the air waybill, ocean bill of lading, truck bill and rail bill of lading.

Commercial Policy Measures

Non-tariff measures established in the framework of the EU’s common commercial policy, such as: (i) import or export surveillance or safeguard measures (ii) quantitative import or export restrictions and (iii) import or export prohibitions (Art. 1 (7) CCIP). Some measures apply to all goods entering or leaving the EC customs territory, others only to release for free circulation or export (Arts 509, 808 CCIP).

Commercial Risk

The possibility of non-payment arising from commercial causes such as bankruptcy, insolvency, protracted default and/or failure to accept goods that have been shipped according to the supply contract.


Method of packing a shipment in which various goods subject to differing duties are grouped together. Because of this, the value of each type of item is difficult to determine.

Commission Agent

See "Foreign Sales Representative"


The date on which the plant or equipment supplied is deemed contractually to have been completed according to specification.

Commission Representative

See "Foreign Sales Representative."

Commitment Fee

A fee, payable usually on a semi-annual or quarterly basis, by the buyer to reserve the availability of a loan. The fee is payable on the undrawn balances.


An economic good such as a product of agriculture, mining, or a customised or mass produced article that is readily exchanged within the market.

Commodity Price Risk

The risk of unexpected changes in a commodity price, such as the price of oil.

Commodity Swap

A swap in which the (often notional) principal amount on at least one side of the swap is a commodity such as oil or gold.

Common Carrier

An organization that transports persons or goods for a fee.

Common Customs Tariffs

The EU Common Customs Tariff is a codification which determines import and export duties and duty exemptions with regard to specific goods, including agricultural, anti-dumping and preferential duties, tariff quotas and tariff suspensions at Community level.

Common External Tariff

The EU Common External Tariff is a full tariff applicable to imported goods.

Common Law

The body of law based on customs, usages, and court decisions rather than statutory laws.

Common Market

A common market is a group of countries that have common external tariffs against non-member nations. It may also allow labor mobility as well as common economic policies. For example, the European Union (EU).

Common Market for Eastern and Southern Africa

An organization of states that intends to promote the development of the resources of its members, COMESA forms a major trading block of 19 nations: Burundi, Comoros, D.R. Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe.

Common Transit

Customs procedure for the carriage of goods between the Community and the EFTA countries and between the EFTA countries themselves.


An association of independent states that promotes cooperation, consultation, and mutual assistance among members. However, such association has no treaty or constitution. For example, the British Commonwealth.

Commonwealth of Independent States

(CIS) An association of former Soviet republics that was established in December 1991 by Russia, Ukraine, and Belarus to help ease the dissolution of the Soviet Union and coordinate inter republican affairs. Other members include Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

Community Customs Code

The provisions of EU Council Regulation (EEC) No 2913/92 and subsequent amendments.

Community Goods

This expression refers to goods: either obtained entirely from the European Community's customs jurisdiction, with no input of goods imported from countries or territories outside the Community's customs jurisdiction, or imported from countries or territories outside the Community's customs jurisdiction but found in a free zone.

Community Transit

Customs procedure that allows goods to be moved from one point in the European Community to another.

Comparative Advantage

A comparative advantage exists when a nation or economic region is able to produce a product at a lower opportunity cost compared to another nation or region. The rule of economics that states that each country should specialize in producing those goods that it is able to produce relatively most efficiently.

Compensating Products

Products resulting from processing under the inward or outward processing procedure. Main compensating products are those for the production of which the arrangements were authorised, whilst secondary compensating products are necessary by-products of the processing operation (Art. 496 (k, l) CCIP)


A single agreement under which the exporter agrees to supply goods and services in exchange for goods and services of an equivalent value supplied by the importer, which the exporter must then sell to finance his original sale.

Compensatory Trade

The sale of goods or services that is paid for by bartering other goods or services.

Complementary Imports

The imports of goods or services that the importing country does not possess or produce.

Compliance Certifications

The Borrower’s statement certifying its adherence to the terms of the loan agreement during the stated period. The company’s principal financial officer usually completes the certificate. If the Borrower is in compliance with the terms of the loan agreement [no event of default has occurred], the principal financial officer will attest accordingly. Supporting data is usually required to document the assertion.

Compliant Documents

Documents presented under a letter of credit that comply with all its terms and conditions. The banks are only obliged to pay the beneficiary if documents are totally compliant.

Component/Part Identifier

(CPID) Used to Identify Components and Parts e.g. Automobile parts

Comprehensive Coverage

Export credit insurance or guarantee which covers both commercial and political risks.

Compulsory Licensing

For patents: when the authorities license companies or individuals other than the patent owner to use the rights of the patent — to make, use, sell or import a product under patent (i.e. a patented product or a product made by a patented process) — without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided certain procedures and conditions are fulfilled.


A grant or licence by a government or relevant authority of certain land, premises or other public property, or the right to use or commercially exploit such assets for a specified time.

Conference Line

A member of a steamship conference. See "Steamship Conference"

Confirmed Documentary Credit

Where the exporter’s bank (often the advising bank) adds its guarantee to the documentary credit to that of the issuing bank. This undertaking is provided upon payment of a confirmation fee.

Confirmed Letter of Credit

See "Confirmed Documentary Credit"


The practice by advising banks of adding their separate undertakings to those of issuing banks and assuming liability under documentary letters of credit.

Confirming Bank

A bank which adds its own independent payment undertaking to that of the issuing bank. The confirming bank is normally in the beneficiary’s country. The confirmation protects the beneficiary against the issuing bank defaulting, and political risk with regard to the country in which the issuing bank is situated.


An arrangement between OECD (see OECD) member countries which sets the guidelines, including maximum repayment terms and minimum interest rates, for officially supported export credits.


Individual or company to whom cargo is shipped or consigned.


This is a method of financing trade. When goods are shipped on a consignment basis, related shipping documents are dispatched either directly to the importer or through his bank, which will be instructed to deliver them, free of payment, against a simple form of receipt undertaking payment when the merchandise is sold, or within a specified time. Payment is usually made when the goods are sold, or within a specified time thereafter, and title to the goods remains with the exporter until they are sold by the consignee.


A consignor is an individual entity, partnership or a company that ships its goods to another party to be taken care of. A consignor is usually an exporter.

Consolidated Income

The sum of income across all of the multinational corporation’s domestic and foreign subsidiaries.


A form of corporate reorganization in which two firms pool their assets and liabilities to form a new company. The term can also be used for shipping, in which a freight consolidator combines shipments of cargo that are less than truckload (LTL) in order to reduce shipping rates.

Consolidation (Consolidated Shipment)

Shipment for which an agent (forwarding agent or other) consolidates several individual shipments to make a single shipment in order to benefit from preferential prices.

Constructive Delivery

The process of handing an applicant the documents in a documentary credit.


A government official residing in a foreign country who is charged with the representation of the interests of his country and its nationals.

Consular Invoice

A specifically printed invoice which is completed by the exporter and presented to the Consul of the country of import for stamping and signature.

Consular Statement

A document required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of shipment. Certified by a consular official of the foreign country, it is used by the country's officials to verify the value, quantity, and nature of the shipment.


The diplomatic building located in a foreign country that represents the commercial interests of the home country.

Consumer Price Indexes

(CPI) A program that produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services.


A uniform, reusable metal "box" in which goods are shipped by vessel, truck, or rail as defined in the International Convention for Safe Containers, as amended (TIAS 9037; 29 U.S.T. 3709).

Containerised Shipments

Shipments transported in any van-type container. Containerised import shipments are identified by the reported method of transportation code, and therefore all shipments are either identified as containerised or non-containerised.

Container Security Initiative

(CSI) The Container Security Initiative was launched in 2002 by the U.S. Bureau of Customs and Border Protection to increase the security of cargo containers shipped to the United States.

Contingency Insurance

Contingency insurance protects the exporter in any situation in which exporter responsibility relied on the buyer to insure, but sustained a loss because of inadequate coverage from that source. It will cover situations in which the FOB endorsement would have otherwise served had that been in force.

Continuous Quotation System

A trading system in which buy and sell orders are matched with market makers as the orders arrive, ensuring liquidity in individual shares.


Contra-Accounts arise when a borrower has both accounts receivable and accounts payable with the same entity because the party is both a customer and a supplier of the Borrower.

Contracts for the International Sale of Goods

(CISG) Contracts for the International Sale of Goods establish rules for international sales contracts and also establish legal rights and obligations for both the buyer and seller.

Control Copy T5

Declaration and undertaking used to cover goods imported into, exported from or moving within the customs territory of the European Community that are subject to proof of compliance with the conditions provided for or prescribed by a Community rule for their use and/or destination.

Controlled Foreign Corporation

(CFC) In the U.S. tax code, a foreign corporation owned more than 50 percent either in terms of market value or voting power.

Convention on the International Trade in Endangered Species (CITES)

An international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten their survival.

Convertible Currency

Currency that can be easily exchanged, bought/sold for other currency.

Convex Tax Schedule

A tax schedule in which the effective tax rate is greater at high levels of taxable income than at low levels of taxable income. Such a schedule results in progressive taxation.

Cooperation Council for the Arab States of the Gulf

(GCC) The Cooperation Council for the Arab States of the Gulf (GCC) was established on May 25, 1981. It joined the 6 states of the United Arab Emirates, Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, Qatar and Kuwait. The framework's focus is on achieving a state of unity in all fields among its member states. It also stresses a furthering of relations and cooperation among member states and provides a platform to address security and economic development challenges.

Copenhagen Criteria

The rules and regulations that all applicant countries to the European Union must meet, and to which all EU member nations must maintain.


A copyright grants the exclusive legal right to sell, produce, publish or distribute an individual or organizations original work.

Corporate Culture

The set of values, beliefs, relationships between individuals and functions that guide the decisions of a company to achieve its objectives.

Corporate Governance

The way in which major stakeholders exert control over the modern corporation.

Corporate Social Responsibility

(CSR) The responsibilities that corporations (including MNCs) have to workers and their families, to consumers, to investors, and to the natural environment.


Form of business organization that is created as a distinct "legal person" composed of one or more actual individuals or legal entities. Primary advantages of a corporation include limited liability, ease of ownership, transfer, and perpetual succession.

Correspondent Bank

Formal relationships which is established between an overseas bank and a domestic bank to facilitate international banking transactions.

Corruption Perception Index

(The CPI) A ranking of countries and territories based on how corrupt their public sector is perceived to be. It is a composite index, a combination of polls, drawing on corruption-related data collected by a variety of reputable institutions. The CPI reflects the views of observers from around the world, including experts living and working in the countries/territories evaluated.

Cost And Freight

The seller delivers the goods to the ship. Full risk and responsibility pass to the buyer when the goods cross the ship’s rail. The seller pays for the contract of carriage to the agreed port of destination.

Cost Insurance And Freight

The seller delivers the goods to the ship. All risks and responsibility in the goods pass to the buyer when the goods cross the ship’s rail. The seller pays for the contract of carriage to the port of destination and takes out transferable cargo insurance at his own cost.


Convention concerning International Carriage by Rail.

Cottage Industry

An industry comprised of a labor force that produces goods for sale at home, often with their own equipment.

Counter Credit

A variation of back-to-back credit in which a second bank (usually that of the original beneficiary) issues a separate documentary letter of credit in favour of the second beneficiary.


Unauthorized representation of a registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to deceiving the purchaser into believing that he/she is buying the original goods.


An exporter’s irrevocable commitment to repay the bank if a bond is called.

Counter Purchase

Two separate agreements under which the buyer agrees to buy and pay for goods and the seller agrees to buy and pay for goods of a (usually) equal value.


Includes barter, buy-back, counter purchase, offset requirements, and swaps relating to exporters commitments to take products from the importers or from their respective countries in full or part payment for their exports.

Countervailing Duties

European customs duties imposed on imports from specific countries in addition to the normal or preferential duty; such duties can be introduced where a subsidy is granted by the export country, provided such imports cause or threaten to cause material injury to Community producers of like products (Art. VI GATT and Reg. [EC] No 2026/97, OJ 1997 No L 288, p. 1).

Countervailing measures

Action taken by the importing country, usually in the form of increased duties to offset subsidies given to producers or exporters in the exporting country.

Country of Origin

The country in which a product or commodity is manufactured or produced.

Country Risk

The political and financial risks of conducting business in a particular foreign country.


A European term for brokerage fee.

CPD Carnet

Document facilitating transit and temporary importation of means of transport by serving both as a customs declaration and authorisation as well as guarantee in countries that are a contracting party to the Istanbul Convention (OJ 1993 No L 130 p. 12).


See "Component/Part Identifier"


See "Carriage Paid To"

Credit Applicant

The bank’s customer who requests the issue of the credit. For example, in the case of an export sale, the importer.

Credit Bureaus

An agency that collects and sells informational on individuals credit.

Credit Insurance

Insurance provided in exchange for a premium covering the loss incurred by a supplier in the case of non-payment by the supplier’s customer, due to the customer’s legal or de facto insolvency or simple failure to honour its commitments (default), or for political reasons or as a result of force majeure.

Credit Limit

Determines the maximum amount that the creditor is willing to extend to the debtor.

Credit Risk

Risk that the insured will be unable to recover all or part of the receivable due to the occurrence of a cause of loss.

Credit Risk Insurance

Insurance that covers the risk of nonpayment for delivered goods.

Creeping Nationalization

The succession of small but important changes in a firm's condition or standing that bring it slowly under national control.

Cross Default

The right to declare a loan in default if an event of default occurs in another loan.

Cross Rate

In calculating a spot or future price between two currencies, reference to their respective quotations in a third currency determines the cross rate.


Committee on Regional Trade Agreements.


The WTO Committee on Trade and Development.


The WTO Committee on Trade and Environment.


Council for Trade in Goods — oversees WTO agreements on goods, including the ATC.

Ctl (Constructive Total Loss)

An instance in which the cost of recovering and/or repairing damaged goods would, when recovered or repaired, exceed the insured value.

Cultural Relativism

The belief that no country is superior to another when comparing the systems of morality, law, politics, etc.


Collective mental paradigms that a society imparts to individuals in the form of behavior patterns, shared values, norms and institutions.


Rules allowing components and processing in certain partner countries to be considered for the acquisition or maintenance of preferential origin

Currency Coupon Swap

A fixed-for-floating rate nonamortizing currency swap traded primarily through international commercial banks.

Currency Cross-hedge

A hedge of currency risk using a currency that is correlated with the currency in which the underlying exposure is denominated.

Currency of Reference

The currency that is being bought or sold. It is most convenient to place the currency of reference in the denominator of a foreign exchange quote.

Currency Option

A Foreign Currency Option gives the holder the right but not the obligation, to buy or sell a currency on or before a future date, at a specified price in return for a premium.

Currency Option Contracts

Currency option contracts provide the contract holder the right to buy or sell currency at a set exchange rate for a specific period of time.

Currency Risk

The risk of unexpected changes in foreign currency exchange rates. Also known as foreign exchange risk.

Currency Swap

A transaction in which the two counterparties’ exchange specific amounts of two different currencies at the outset and repays over time according to a predetermined rule which reflects interest rates and possibly amortisation of principal. The payment flows in currency swaps, (in which payments are based on fixed interest rates in each currency) are generally like those of spot and forward currency transactions.

Current Account

A measure of a country’s international trade in goods and services.

Current Account Balance

A broad measure of import-export activity that includes services, travel and tourism, transportation, investment income and interest, gifts, and grants along with the trade balance on goods.

Current Rate Method

A translation accounting method, such as FAS #52 in the United States, that translates monetary and real assets and monetary liabilities at current exchange rates. FSA #52 places any imbalance into an equity account called the “cumulative translation adjustment.”

Customhouse Broker

A person or firm obtains the license from the treasury department of its Country when required, and help clients (importers) to enter and declare goods through customs.


The agency or procedure for collecting duties imposed by a country on imports or exports.

Customs Agent

A customs agent is an authorised customs clearance professional. A forwarding agent can also act as a customs agent.

Customs Bond

Customs or excise document in which a bonder undertakes to fulfil the obligations relating to the specific rules applicable to goods.

Customs Broker

Licensed agent or broker whose function is to handle the process of clearing goods through customs for importers.

Customs Classification

The customs classification is also called the-HS code. The classification is a codification with 12 digits that determine the customs duty rate applicable to the product type.

Customs Clearance Outwards

This document is a simplified export form which is used for the purpose of simplified procedures.

Customs Code

European Council Regulation 2913/92/EEC.

Customs Code Committee

The Committee assisting the European Commission in the elaboration of implementing provisions to: (i) the Community Customs Code (ii) duty relief on account of special circumstances (iii) the Combined nomenclature and explanatory notes thereto and (iv) any other Council regulation referring to this Committee.

Customs Controls

Acts performed by the customs authorities of the European Member States with a view to ensuring that the customs rules and other applicable trade provisions are observed, such as examining goods, documents or accounts, or carrying out inquiries (Arts 4 (14), 13, 68, 78 (2) CC).

Customs Debt

The obligation on a person to pay import or export duties under the provisions of the European Community Customs Code and the Common Customs Tariff.

Customs Declaration

The act whereby a person indicates the wish to place goods under one of the customs procedures provided for by the European Community Customs Code (Arts 4 (17), 59 - 78 CC)

Customs Guarantee

A guarantee providing cover against possible customs duties. It is often used when goods are imported into the country on a temporary basis. If the goods are not re-exported within the prescribed time limit the customs authorities can claim under the guarantee for the customs duties which subsequently become payable.

Customs Handling of Import and Export Freight

The Customs Handling of Import and Export Freight (CHIEF) system records the declaration to Customs of goods by land, air and sea. It allows importers, exporters and freight forwarders to complete customs information electronically, and automatically checks for entry errors. CHIEF connects with five European Community System Providers (CSPs); these are independent trade systems that directly serve hundreds of carriers, transit sheds and freight forwarders. CSPs record and track the movement of goods within ports and airports, enabling them to operate more efficiently.

Customs House

Place where all or some customs formalities (submission of customs declarations etc.) are performed.

Customs Procedure

The Community Customs Code provides for 8 customs procedures: release for free circulation, transit, customs warehousing, inward processing, processing under customs control, temporary importation, outward processing, and exportation (Art. 4 (16) CC)

Customs Procedures

The European Community Customs Code provides for 8 customs procedures: release for free circulation, transit, customs warehousing, inward processing, processing under customs control, temporary importation, outward processing, and exportation (Art. 4 (16) CC)

Customs Trade Partnership Against Terrorism

(C-TPAT) A partnership between the United States government and the private sector to extend U.S. border security by extending U.S. border protection to the origin of incoming cargo.

Customs Union

The merger of two or more customs territories such that (i) customs duties and non-tariff barriers are eliminated between the members of the union for substantially all trade and (ii) a common customs tariff and common rules for non-tariff barriers are introduced for substantially all trade with non-member countries.

Customs Value

The value of goods established according to the customs rules for the levying of ad-valorem duties.

Customs Warehousing

EU customs procedure allowing the storage of (Art. 98 (1) CC) (i) non-Community goods without subjecting them to import duties or commercial policy measures and (ii) Community goods with a view to applying measures normally requiring the export of such goods.


See "Cash With Order"


Calendar year.


See "Documents Against Acceptance"


See "Delivered At Frontier"


Loss or damage to transported goods.

Days Of Grace

Referred to in forfaiting, days of grace reflect the delay normally experienced in the transmission of payments applicable to the country risk involved. To calculate net proceeds this grace period is added to the actual number of days until the respective debt instrument matures.


See "Delivered Duty Paid"




See "Delivered Duty Unpaid"


Form of partnership based on the contractual franchising of a brand. The franchise contract essentially involves the hiring out of a trade name and the guarantee of territorial exclusivity for the dealer.

Debit Note

A document that informs a customer of money owed to a company for goods or services supplied.


Any person liable for payment of a customs debt

Debtor Default

Default means that the debtor is unable to honour his obligations or backs out of honouring them for no legitimate reason.

Debtor Nation

A nation that owes less in foreign currency than it owes other nations.

Deck Cargo

Goods shipped on the deck of a ship rather than in its holds. Due to the additional risks involved with deck cargo, traders often stipulate that cargo may not be carried on deck


Natural or legal person who effects a customs entry: - in his name and on his own behalf (own account declarant); - in his name and on behalf of an economic operator, importer and/or exporter (indirect representation declarant); - in the name of and on behalf of an economic operator, importer and/or exporter (direct representation declarant).


Form filled out by assured and sent to the insurance company when reporting individual shipments coming within the terms of an Open policy.

Declaration of Value

(D.V.1) A form accompanying the customs declaration where it is necessary to establish the customs value (Art. 178, Annexes 28, 29 CCIP)

Declaration of Value (D.V.1)

A form accompanying the customs declaration where it is necessary to establish the customs value (Art. 178, Annexes 28, 29 CCIP)

Deferral Principle

Parent companies are not taxed on the income of a foreign subsidiary until they actually receive a dividend amount from that subsidiary.

Deferred Letters Of Credit

A documentary credit providing for payment at a determinable future date following the presentation of documents which do not include a draft.

Deferred Payment

The credit sum is payable at a stipulated period of time after presentation of documents.

Deferred Payment Credit

A type of letter of credit which provides for payment some time after presentation of the shipping documents by the exporter.

Del Credere Agent

A person who sells goods for another and who agrees to pay for them if the customer fails to do so.

Delivered At Frontier

The seller/exporter fulfils its obligation to deliver when the goods have been made available, cleared for export, at the named point and place at the frontier, but before the customs border of the adjoining country. The term “frontier” may be used for any frontier including that of the country of export. Therefore, it is of vital importance that the frontier in question be defined precisely by always naming the point and place in the term. The term is primarily intended to be used when goods are to be carried by rail or road, but it may be used for any mode of transport.

Delivered Duty Paid

The seller fulfils his delivery obligation when the goods have been made available at the agreed place in the country of import. The seller bears all risks and costs in the goods up to that point. The agreed point of delivery may, for example, be the buyer’s warehouse or factory. Whilst the EXW term represents the minimum obligation for the seller, DDP represents the maximum obligation.

Delivered Duty Unpaid

The seller fulfils his obligation to deliver when the goods have been made available at the agreed place in the country of import. The risk in the goods passes to the buyer at that point and he is responsible for clearing the goods through customs.

Delivered Ex-Quay (Duty Paid)

The seller fulfils his obligation to deliver when he has made the goods available to the buyer on the quay or wharf at the named port of destination cleared for import.

Delivered Ex-Ship

The seller fulfils his delivery obligation when the goods have been made available to the buyer on board the ship at the agreed port of destination. The risk in the goods passes to the buyer at that moment and the buyer is responsible for clearing the goods through customs.


FIB or CIF delivery of goods. (See FIB and CIF.)

Delivery Note

A document detailing the goods sent to a customer together with the goods. The customer signs the delivery note to acknowledge receipt of the goods.

Delivery Period

The period during which goods are delivered, usually lasting between signature of the contract and delivery of the final items.

Delivery Point

See "Specific Delivery Point"

Demand Management

A business process with the intention to coordinate and influence all sources of demand for a firm’s products.

De Minimis

Minimal amounts of domestic support that are allowed even though they distort trade — up to 5% of the value of production for developed countries, 10% for developing.


A form of rent charged on undeclared goods by, for example, ship owners or port authorities. Also charged by container owners on boxes delayed.

Department for International Development

(DFID) UK Government Department responsible for promoting development and the reduction of poverty.

Department of Commerce

(DOC) US Government Department focused on advancing economic growth and jobs and opportunities for the American people.

Depository Receipt

A derivative security issued by a foreign borrower through a domestic trustee representing ownership in the deposit of foreign shares held by the trustee.


Delivered Ex Quay indicates that the seller must deliver the goods onto the quay (dock or wharf), having cleared the goods for import and paid all taxes, duties, etc. applicable to that clearance.


See "Delivered Ex-Ship"

Despatch - Dispatch

The sending of goods to their destination.


The foreign location to which a shipment is consigned.


Customs treatment of European Community goods subject to end-use controls and non-Community goods in order to avoid payment of import duties (Arts 82, 182 CC)


Process in which a landed container is unsealed (usually in the presence of customs) and all its contents are taken out. Also called stripping or unstuffing of container.

Developed Countries

The richer, more industrialized countries in the world.

Developing Country

A country that is in the process of becoming industrialized. A developing country typically lacks industrialization, infrastructure, high literacy rate and advanced living standards.


A vessel's going to some other point or taking some course other than that described in the Bill of Lading.


Duty-free and quota-free.

Digital Divide

The digital divide refers to the widening technological gap between the richer and the poorer countries of the world.

Direct Collections

A method of obtaining payment for goods where the exporter/seller ships the goods to the buyer/importer but sends the collection directly to the importer/buyer designating payment through a specific financial institution.

Direct Exporting

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

Direct Payment

Payments due from the buyer to the supplier in cash during the contractual period, which are not eligible for financing under a buyer or supplier credit financing.


The commission paid to a third party to market countertrade goods.


See "Domestic International Sales Corporation"

Discount (Financial)

A deduction from the face value of commercial paper such as bills of exchange, in consideration of receipt of cash by the seller before maturity date.


Buying accepted term bills of exchange at a discount to allow for loss of interest on the funds until the bills mature.

Discount Rate

The rate by which the future value of a negotiable instrument is discounted. The discount rate is generally calculated as either a discount-to-yield or straight discount.


This expresses the discount rates as a true interest cost, usually on a yearly basis. Maturities over 180 days are mostly subject to semi-annual compounding. The discount-to-yield calculation is the yield a present value will achieve as it reaches its future value (face value) at maturity.


When documents presented do not agree with the terms of the credit or with each other.

Discrepancy-Letter of Credit

When documents presented do not conform to the terms of the letter of credit, it is referred to as a "discrepancy."

Discretionary Reserves

Balance sheet accounts that are used in some countries to temporarily store earnings from the current year or the recent past.

Discriminatory Pricing

The practice that selling a product or service at different prices that do not reflect a proportional difference in costs.


The refusal to pay or accept a bill of exchange.

Dispute Settlement Body

(DSB) Dispute Settlement Body is a part of the World Trade Organization (WTO) that settles trade disputes between governments.

Dispute Settlement Panel

(DSP) The World Trade Organizations Dispute Tenement Body forms different Dispute Settlement Panels to resolve conflicting issues among its members.

Dispute Settlement Understanding

(DSU) The Dispute Settlement Understanding (DSU) of the World Trade Organization (WTO) was one of the key outcomes of the Uruguay Round of multilateral trade negotiations.


An agent who sells directly for a supplier and maintains an inventory of the supplier's products.

Diversionary Dumping

The sale of foreign products at less than fair value to a 3rd country where the products are further processed and sold to another country.


ICC Rules for Documentary Credit Dispute Resolution Expertise. Rules for disputes related to documentary credits.

Dock Receipt

A receipt issued by an ocean carrier or its agent, acknowledging that a shipment has been delivered and received at the dock or warehouse of the carrier.

Documentary Collections

A method of obtaining payment for goods or services where the exporter/seller ships the goods to the buyer/importer but instructs his/her bank to collect payment in exchange for the documents involved in the shipment (invoice, bill of lading, etc.]. Banks act only in a fiduciary capacity and do not make any commitment to pay the exporter/seller themselves. Documentary collections are subject to the UCC. There are two types of documentary collections: (i) Documents against payment; and (ii) Documents against acceptance.

Documentary Credit

(Also called a Letter of Credit). Banking technique which gives a guarantee to the exporter that he will be paid for the sale and to the importer that he will receive the goods as agreed in the commercial contract. It is a commitment by the importer's (or the buyer's) bank following a request made by him and on his behalf to pay a certain amount, determined by the commercial contract, to the exporter (or seller) against documents conform to the instructions of the Documentary of Credit.

Documentary Draft

A draft to which documents are attached.

Documentary Draft Collections

In a documentary draft collection, documents are entrusted to a bank for delivery only after the seller’s collection instructions are met. Normally, these documents include the commercial invoice, the bill of lading, and any paperwork needed by the buyer to clear customs in his country. The bank acts only as a collection agent and does not assume any liability for payment.


See "Shipping Documents"

Document of Title

An instrument that enables the holder to deal with the property described in it as if he were the owner e.g. Bill of Lading.

Documents Against Acceptance

Term for documentary collection instructions requesting the presenting bank to deliver documents only upon acceptance of the draft (bill of exchange) by the drawee/buyer.

Documents Against Payment

A sight draft to which title documents are attached. The documents are surrendered to the importer/buyer after he/she has paid the accompanying draft.

Documents Against Trust Receipt

This is a type of short-term import loan to provide the buyer with financing to settle goods imported under Letter of Credit where title of goods is held by the bank. Under a TR arrangement, the Bank retains title to the goods but allows the buyer to take possession of the goods on trust for resale by releasing the transport documents to the buyer.

Domestic Bonds

Bonds issued and traded within the internal market of a single country and denominated in the currency of that country.

Domestic International Sales Corporation

In the U.S. tax code, a specialized sales corporation whose income is lumped into the same income basket as a foreign sales corporation.

Domestic Liquidity

The aggregate of money supply, quasi-money or savings and time deposits, and deposit substitutes.

Dominican Republic-Central America-United States Free Trade Agreement

(CAFTA-DR) A comprehensive trade agreement between Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States to facilitate trade and investment and promote regional integration.

Down Payment

(Sometimes referred to as an initial direct payment.) The payment due from the buyer to the supplier in cash before entry into force or effectiveness of the contract. (Usually ineligible for export credit agency support.)

Downstream Dumping

A type of dumping in which the primary producer first sells its product to another domestic producer at below fair value or cost. The second producer then furthur processes the product and exports it to another country at a lower than normal cost.


See "Documents Against Payment"


DP signifies "delivery permit". A DP is a document issued by customs and authorising importers to take delivery of the goods.


See "Bill of Exchange"


One of the two variants of the inward processing procedure under which the import duties are paid at release for free circulation and refunded when the processed products or the goods in the unaltered state are re-exported. Many free-trade agreements don't allow drawback if a preferential proof of origin is issued.

Drawdown Period

The period during which the financing is available to be drawn.


The individual or entity on whom a Bill of Exchange is drawn.


The party that issues or signs a bill of exchange and stands to receive payment from the drawee.


The charge made for hauling freight, carts, drays, or trucks.

Drop Shipment

A shipment of goods from a manufacturer directly to the ultimate consignee, avoiding shipment to the foreign buyer.


Dispute Settlement Body — when the WTO General Council meets to settle trade disputes.


Daylight Savings Time


Dispute Settlement Understanding, the WTO agreement that covers dispute settlement — in full, the Understanding on Rules and Procedures Governing the Settlement of Disputes.


Double Taxation Agreement/Double Taxation Convention

Dual Pricing

The practice of selling identical products in different markets for different prices.

Due Date

The date on which a bill of exchange or other instrument becomes due and payable.

Due Diligence

Background check and research conducted by the factor to assess validity of a prospective factoring client and that client's customers.


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, that is, selling the product at less than fair value. Dumping is an illegal trade practice.

Dumping Margin

The difference between the fair value of a product and the amount for which it is available in the case of dumping.

Dun and Bradstreet Number

The DUNS Number is a unique 9-digit identification sequence that provides identifiers to single business entities while linking corporate family structures together.


Materials placed around cargo to prevent shifting or damage while in transit.


See "Dun and Bradstreet Number"


A charge imposed on the import of goods. Duties are generally based on the value of the goods (ad valorem duties), some other factor, such as weight or quantity (specific duties), or a combination of value and other factors (compound duties).

Duty Drawback Programs

A duty drawback program allows for the exporters of goods to obtain refunds on duties on materials made from imported goods.

Duty Relief

EU Duty relief is provided for: (i) outward processing (Art. 145 CC) (ii) special circumstances as defined in Reg. (EC) No 1186/2009 (Art. 184 CC) (iii) returned goods (Arts 185-187 CC) and (iv) products of sea-fishing (Art. 188).


Deadweight ton


Electronic Administrative Accompanying Document.


East African Community

East African Community

The East African Community (EAC) is a regional organization composed of the Republics of Kenya, Uganda, the United Republic of Tanzania, Republic of Rwanda and Republic of Burundi. The EAC provides a forum for cooperation on a broad range of topics including: trade, science and technology, wildlife management, investments and industrial development, and foreign affairs.

East African Cooperation

The Commission for East African Cooperation (EAC), which comprised of Kenya, Uganda and Tanzania, was first formed in 1967 as the East African Community, but collapsed in 1977.


Effective Average Tax Rate.


Everything But Arms

EBA Step 2

STEP2 is the first pan-European automated clearing house (PE-ACH) for bulk payments in euro.


European Binding Tariff Information.


European Community.


See "Export Credit Agency"


Excise Contact Group.


European Customs Inventory of Chemical Substances.


European Court of Justice.

Eclectic Paradigm

A theory of the multinational firm that posits three types of advantages benefiting the multinational corporation: ownership-specific, location-specific, and market internalization advantages.


See CMR. An eCMR is the electronic version of a CMR.


See "Electronic Confirmation Matching System"


European Council of Economics and Finance Ministers.

Economic Community of West African States

(ECOWAS) A regional group consisting of sixteen West African nations. It is a free trade area for agricultural products and raw materials, and a preferential trade area for various industrial products.

Economic Cooperation Organization

(ECO) An intergovernmental regional organization established in 1985 by Iran, Pakistan and Turkey for the purpose of promoting economic, technical and cultural cooperation among the Member States. In 1993 the ECO included seven new members: Islamic Republic of Afghanistan, Republic of Azerbaijan, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Turkmenistan and Republic of Uzbekistan.

Economic Exposure

Change in the value of a corporation’s assets or liabilities as a result of changes in currency values.

Economic Freedom

Economic freedom occurs when individuals and businesses make most of the economic decisions in an economy.

Economic Integration

The integration of commercial and financial activities among countries through the abolishment of economic discrimination.

Economic Integration Levels

An economic arrangement between different regions which eliminate trade barriers and coordinate monetary and fiscal policies.

Economic Risk

The likelihood that events, including economic mismanagement, will cause drastic changes in a country's business environment that adversely affect the profit and other goals of a particular business enterprise.

Economic Union

A group that combines the economic characteristics of a common market with some degree of harmonization of macroeconomic policies, such as monetary and fiscal policies.

Economies of Scale

Achieving lower average cost per unit through a larger scale of production. This is achieved by spreading fixed cost over a greater amount of production.

Economies of Vertical Integration

Achieving lower operating costs by bringing the entire production chain within the firm rather than contracting through the marketplace.


EMCS Computerisation Project.


See "Electronic Data Interchange"


European Economic Area.


European Economic Interest Grouping.


Export Enhancement Programme — programme of US export subsidies given generally to compete with subsidized agricultural exports from the EU on certain export markets.


Exclusive Economic Zone

Effective Exchange Rate

Spot exchange rates that are actually paid or received by the general public, including taxes on any transactions as well as bank commissions.

Efficient Market

A market in which prices reflect all relevant information.


Economist Intelligence Unit

Electronic Confirmation Matching System

electronic Confirmation Matching, eCM, live since 2004, is the established standard for confirmation matching in the European energy trading industry.

Electronic Customs Decision

Decision 70/2008/EC of the European Parliament and the Council of 15 January 2008 on a paperless environment for customs and trade (OJ L 23, 26.01.2008, p. 21). This Decision provided a further significant step forward in linking national customs Information and Communication Technology systems, benefiting both customs and trade. By meeting the needs of modern logistics, a pan-European electronic customs shall increase the competitiveness of companies doing business in Europe, reduce compliance costs and improve security at the EU borders. The Decision itself sets out the basic framework (objectives, strategy and coordination mechanism for the electronic customs systems) and major deadlines for electronic customs projects. It also defines the Community and national components of the systems and the related responsibilities and tasks as well as establishes monitoring and reporting framework for the electronic customs initiative.

Electronic Data Interchange

Under the conditions and in the manner which they determine, the customs authorities may provide that customs formalities are carried out by exchanging EDI standard messages; this includes the replacement of the handwritten signature by other means and a waiver from presenting written documents when the declaration is lodged

Eligible Collateral

A defined term in the loan agreement that controls what collateral can be included in the borrowing base.


A type of economic sanction that totally disallows the imports of a specific product or all products from a specific country, typically placed in a time of war.


Export Management Company.


Excise Movement and Control System.

Emerging Market

An emerging market is a country that has similar attributes of a developed country, but does not yet encompass all aspects of a developed country. Emerging markets are attractive to investors as they provide a higher risk and return than developed countries and the markets are experiencing rapid growth and industrialization. Different from an emerging economy as emerging markets are not constrained to any political boundaries.

Emerging Stock Markets

The stock markets of emerging economies. These markets typically have higher expected returns than established markets but also higher risk.


Effective Marginal Tax Rate.


An endorsement is written on the back of an instrument (e.g. Bill of Exchange). It is a means of transference of liability/title of Bill of Exchange, Bill of Lading etc. and the writing need not necessarily be on the back of the instrument to be operative. An endorsement may be: [a] In Blank: where the person to whom the instrument is payable merely signs (endorses) and delivers the instrument to another [b] Special: where the name of the transferee is specified [c] Restrictive: where further transfer of the bill is prohibited or which expresses a mere authority to deal with the bill as directed and not a transfer of ownership thereof [d] Conditional: where the endorsement contains certain conditions [e] Without Recourse: an endorsement having the effect of negotiating a bill but negating the liability of the endorser.

End User

The person abroad that receives and ultimately uses the exported or re-exported items.

Enquiry Point

An official or office in a member government designated to deal with enquiries from other WTO members and the public on a subject such as technical barriers to trade or sanitary/phytosanitary measures.

Entry Summary Declaration

The summary declaration referred to in Article 36a of the Code to be lodged for goods brought into the customs territory of the Community


Export processing zone

Equipment Bonds

Sometimes under projects such as construction contracts the buyer or employer buys and delivers the necessary equipment instead of making the contractor an advance cash payment. The issuance of equipment bonds may cover the transaction.

Equity-linked Eurobonds

A Eurobond with a convertibility option or warrant attached.


In sanitary-phytosanitary measures (SPS): governments recognizing other countries’ measures as acceptable even if they are different from their own, so long as an equivalent level of protection is provided.


See "European Standards Committee"

Escape Clause

A condition in a contract that frees the parties from carrying out the terms of the contract in some specified circumstances.

Escrow Account

A bank account set up in hard currency in the joint names of the buyer and seller and in which the various monies involved in the countertrade agreement (usually a forward purchase) are held in trust.


Excise System Specification.


Environmentally-sound technology.


Environmentally-sound technology and products.


Export Trading Company.


The belief that one ethnic group or culture is inherently more superior.


European Union


EU Corporate Income Tax


A 12-article supplement to the UCP containing rules for electronic presentation of documents under a letter of credit.


Euro Interbank Offered Rate is the rate at which euro interbank offers money within the euro zone are offered by one prime bank to another prime bank.


The single currency of the European Economic and Monetary Union (EMU) was introduced in January 1999 and became the official currency of EMU member countries on January 1, 2002. EMU members are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, and Spain.


A bond that is denominated in a currency other than that of the country of issue.


Deposits and loans denominated in one currency and traded in a market outside the borders of the country issuing that currency (e.g., Eurodollars).

Eurocurrency Market

A money market for currencies held in the form of deposits in countries other than that where the currency is issued.


Dollar-denominated deposits held in a country other than the United States.

European Article Number

(EAN) A standard international numbering code system that is used primarily in retail applications. It is also compatible with the U.S. UPC (Universal Product Code).

European Bank for Reconstruction and Development

The first international financial institution of the post Cold War period. It was established in 1991 in response to major changes in the political and economic climate in central and eastern Europe. The EBRD helps 29 countries from central Europe to central Asia with financing projects.

European Central Bank

(ECB) The central bank for the European Union (EU). It sets monetary policy for member countries.

European Committee for Standardization

An organization composed of the national standards organizations of 33 European countries. The European Committee for Standardization, or CEN, seeks to promote the European economy in the global market by providing an efficient and standardized infrastructure for trade.

European Economic Area

An agreement, entered into force on 1 January 1994, which links Iceland, Norway and Liechtenstein to the European Union Internal Market.

European Free Trade Association

The European Free Trade Association (EFTA) is an international organization established in 1960. It is composed by Iceland, Liechtenstein, Norway and Switzerland promoting free trade and economic integration. There are 3 main branches of the EFTA: the EFTA Secretariat, Surveillance Authority and EFTA Court. Its function is to create a free trade area among its Member States.

European Monetary System

(EMS) An exchange rate system based on cooperation between European Union central banks.

European Standards Committee

The European Union body responsible for setting European standards. The ESC enables companies to bring their products in line with European standards (EC trademark). It is composed of 160 European organisations.

European Union

(EU) An intergovernmental organization which coordinates foreign, economic, and judicial policy among its 27 member nations.

Evergreen Letter of Credit

A standby letter of credit with an initial expiration date but containing a clause that states that it will be automatically extended for additional periods unless the issuing bank provides notice to the beneficiary stating that they elect not to allow further extensions.

Evidence Accounts

A record of all imports and exports by the parties involved in an agreement that over a fixed period of time a specific ratio of sales to purchase must be achieved.


Demanding or imposing various fees from a position of authority.

Ex Ante

Before a measure is applied.

Exchange Controls

Restrictions that are applied by a country’s monetary authority, or central bank, to limit the convertibility of the local currency into other specific foreign currencies.

Exchange Permit

A governmental permit sometimes required of an importer to enable him to convert his own country's currency into a foreign currency with which to pay a seller in another country.

Exchange Rate

The price of one currency in terms of another, i.e. the number of units of one currency that may be exchanged for one unit of another currency.

Exchange Regulations/Restrictions

Restrictions imposed by an importing country to protect its foreign exchange reserves. See "Exchange Permit."

Exchange Risk

Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a financial risk that exists when a financial transaction is denominated in a currency other than that of the base currency of the company.

Excise Tax

A domestic tax assessed on the manufacture, sale, or use of a commodity within a country. Usually refundable if the product is exported.


In intellectual property protection, the principle that once a product has been sold on a market, the intellectual property owner no longer has any rights over it. (A debate among WTO member governments is whether this applies to products put on the market under compulsory licences.) Countries’ laws vary as to whether the right continues to be exhausted if the product is imported from one market into another, which affects the owner’s rights over trade in the protected product.


The Export-Import Bank of the U.S. in Washington.

Expatriate Manager

A national of one country appointed to a management position in another country.

Expiration Date

The final date upon which the presentation of documents and drawing of drafts under a letter of credit may be made.

Ex (Point of Origin)

A pricing term under which the seller's only responsibility is to clear the goods for export and make them available to the buyer at an agreed upon location (factory, warehouse, ship, etc.). The buyer then bears the full cost and risk involved in transporting the goods to his desired location. Other terms used are "Ex Works," Ex Ship," and "Ex Quay."


To send an item, a service, an idea or a person from one country to another to be sold.

Export Administration Regulations

EAR carry both civil and criminal penalties. The EAR are available by subscription from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20401 (tel no: 202-275 2091).

Export Broker

One who brings together the exporter and importer for a fee and then withdraws from the transaction.

Export Control

Governmental control of exports for statistical or strategic and short supply or national security purposes, and/or for foreign policy purposes.

Export Credit

The provision by government or privately-owned companies of financial help to exporters designed to encourage the export of capital goods and/or services; supported under the OECD Consensus. The different types of export credit are the so-called administered credits, purely secured credit and open credit (simple bank credit). These different types of credit can be divided into two groups: buyer's credit, which is a form of credit granted to the buyer to allow him to settle his debt in cash; and supplier credit, which is a discount on the debt held by the buyer who has granted a term of payment to his buyer.

Export Credit Agency

The organisation which provides official support to facilitate exports from its country. Its main function is to provide insurance against the commercial and political risk of non-payment for the exports. Commercial risk cover includes eventualities such as the buyer going into liquidation. Political risk cover includes the eventuality of war, or a change in the importing government’s foreign exchange controls which might prevent the importer from effecting payment. Some export credit agencies provide insurance cover only; others provide both insurance and medium- and long-term finance for capital goods.

Export Credit Insurance

Insurance coverage for sellers/exporters, when they have a sale on other than L/C or CIA terms, to protect against commercial [nonpayment] and political [war, insurrection, confiscation] non-payment in an international sale.

Export Declaration

A control document that lists information on an export including amount, nature, and value.

Export Duties

Charges payable upon the exports of goods.


The person on whose behalf the export declaration is made and who is the owner of the goods or has a similar right of disposal over them (Art. 788 CCIP). Under other Regulations it is the person who is partner of the export contract, the holder of an export licence or who is entitled to export refunds

Exporter Identification Number

An identification number required on the Shipper’s Export Declaration for all export shipments. US corporations may use their federal Employer Identification Number issued by the IRS.

Export Finance

See "Export Credit"

Export Finance Lease

Sometimes referred to as full payment leases. Such leases are written on a net basis with taxes, insurance and maintenance paid for by the lessee. The lease may include an option for the lessee to buy the item at the conclusion of the lease term at a nominal value of the equipment.

Export Financing Interest

In the U.S. tax code, interest income derived from goods manufactured in the United States and sold outside the United States as long as not more than 50 percent of the value is imported into the United States.

Export-Import Bank of the United States (Ex-Im Bank)

The official export credit agency of the United States with the mission of assisting financial export of U.S. goods and services to international markets. Ex-Im Bank enables U.S. companies — large and small — to turn export opportunities into real sales that help to maintain and create U.S. jobs and contribute to a stronger national economy.

Export Licence

The licence is an administrative document to control external trade, authorising the export of certain products.

Export Management Company

A private business which serves as the export department for several manufacturers, soliciting and transacting export business on behalf of its clients in return for a commission or salary.

Export Merchant

A producer or merchant who sells directly to a foreign purchaser without going through an intermediate such as an export broker.

Export Operating Lease

A lease which exchanges the right to use property over a specific limited time period in return for a series of rental payments. The owner or lessor pays any taxes, any insurance and any maintenance charges but also retains the tax benefit of any depreciation and any investment tax credits.

Export Restraints

Quantitative restrictions imposed by exporting countries to limit exports to specified foreign markets, usually as a follow-up to formal or informal agreements reached with importing countries.

Export Subsidies

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

Export Trading Company

A business unit operated principally for the purpose of exporting goods and services or of providing export related services to other companies. An export trading company can import, barter and arrange sales between third countries as well as export.

Ex post

After a measure is applied.


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

Expropriation Risk

Risk of loss of an investment due to expropriation, nationalisation, or confiscation by a foreign government. This risk is typically covered by political risk insurance.

Ex Quay

The price for goods where the seller pays for all costs up to delivery to a named port, including unloading onto the quay and onto road or rail vehicle.

External Market

A market for financial securities that are placed outside the borders of the country issuing that currency.


A government practice which applies its laws outside its territorial boundaries.

E.X.W. Ex Works

Indicates that the buyer is responsible for cargo when it's available at the seller's factory.

Ex Works

The price where the buyer pays for transporting the goods away from the factory.


Fiscalis 2007.


Formulary Apportionment.


An individual or firm that purchases another individual or firm’s account receivables at less than the receivables value and collects the full value. This is an arrangement in which a company shortens its cash cycle by selling its accounts receivable with or without recourse to a third party known as a “factor”.


The purchase from a company of some or all of its trade receivables with or without recourse to the company itself in the event that the receivables are unpaid. The service may also involve administration of the sales ledger for the company.

Factors Commission

The fee the Factor charges for funding the clients A/R.

Factors Reserve

A deposit maintained by the factor, to guard against disputes between the client and the customer, and to guard against bad debt losses due to customer non-payment. This is the money retained by the factor when the advance is sent to the client. The Reserve is sent to the client after the customer has paid the factor the money due on the invoice.

Factors Reserve Release

The amount of money released from the Factors Reserve once payment has been received and credited. The Reserve Release may be less any charge-back or fees associated with the services.

Factor Verification

Process by which the factor verifies that the product or service provided by the client was received and accepted by the customer, and that the customer intends to pay the factor the money due under the invoice. This process takes place before the factor sends the advance to the client.

Fair Trade Laws

Fair trade laws establish the minimum resale price for a product set by the manufacturer.


See "Free Alongside Ship"

Fast Moving Consumer Goods

Cheap daily items bought and consumed quickly.

Fast Moving Consumer Goods

Cheap daily items bought and consumed quickly.

Fast Track Negotiating

Authority provided by the U.S. Congress to the Executive Branch to negotiate amendment-proof trade agreements.


Querying the status of a collection in relation to the exporter’s instructions to the remitting bank.


See "Free Carrier"


Foreign Credit Insurance Association.


A Forwarder's Certificate Receipt is a document issued by a forwarding agent, which testifies that the goods have been taken over from the seller and thereby advising that the exporter has placed the goods at the disposal of the buyer.


Foreign direct investment.


Foreign entrepreneur


See "Forward Exchange Contract"

Federal Trade Commission

(FTC) A U.S. agency, which ensures that consumers are protected in the marketplace against unfair methods of competitions.


Ship that brings freight from medium sized ports to ports served by large capacity ships.


Functional Excise System Specification


Fridays, Holidays Excluded (maritime charters)


Fridays and Holidays are Included in calculating the laytime for vessel chartering.

Final Delivery

The date on which final delivery is effected.

Final Maturity

The date on which the final repayment of principal is due.

Financial Contagion

The spread of a financial crisis from one country or region to other countries or regions.

Financial Innovation

The process of designing new financial products, such as exotic currency options and swaps.

Financial Market

The market for the exchange of credit and capital in an economy. It consists of the money market and the capital market.

Financial Price Risk

The risk of unexpected changes in a financial price, including currency (foreign exchange) risk, interest rate risk, and commodity price risk.

Financial Risk

Financial risk refers to unexpected events in a country’s financial, economic, or business life.

Financial Service Income

In the U.S. tax code, income derived from financial services such as banking, insurance, leasing, financial service management fees, and swap income.

First-to-market Advantage

Also known as "first-mover advantage." The idea of first-mover advantage is that the initial occupant of a strategic position or niche (market segment) gains access to resources and capabilities that a follower cannot match.

Fixed Exchange Rate System

An exchange rate system in which governments stand ready to buy and sell currency at official exchange rates. Fluctuations of this currency are not possible.

Fixed Forward Contract

Currency is bought or sold at a given future date.

Fixed Price

A fixed sum agreed at the outset of a contract, payable by the buyer for a specified task (also referred to as lump sum).

Fixed Rate

An interest rate fixed throughout a set period of the loan financing.

Flags of Convenience

The term flag of convenience describes the business practice of registering a merchant ship in a sovereign state different from that of the ship owner's, and flying that state's civil ensign on the ship. Ships are registered under flags of convenience to reduce operating costs or avoid the regulations of the owner's country.

Flight of Capital

The movement of capital from one place to another in order to avoid loss or increase gain.

Floating Currency System

An exchange rate system under which a government is not obligated to declare that its currency is convertible into a fixed amount of another currency.

Floating Exchange Rate

An exchange rate system in which currency values are allowed to fluctuate according to supply and demand forces in the market without direct interference by government authorities.

Floating Policy

See "Open Policy"

Floating Rate

An interest rate usually consisting of a variable market rate plus a fixed margin.


See "Fast Moving Consumer Goods"


See "Free On Board"


See "Flags of Convenience"


See "Free On Rail"

Force Majeure

Events over which none of the parties to a transaction has control or influence (acts of God) providing a reason to disclaim all responsibility in case of damage to or loss of goods e.g. a natural disaster or war.

Foreign Aid

A grant of money, technical assistance, capital equipment, or other assistance typically extended by richer nations to poorer nations.

Foreign Base Company Income

In the U.S. tax code, a category of Subpart F income that includes foreign holding company income and foreign base company sales and service income.

Foreign Bonds

Bonds that are issued in a domestic market by a foreign borrower, denominated in domestic currency, marketed to domestic residents, and regulated by the domestic authorities.

Foreign Bottom

An ocean vessel built or registered in a foreign country.

Foreign Branch

A foreign affiliate that is legally a part of the parent firm. In the U.S. tax code, foreign branch income is taxed as it is earned in the foreign country.

Foreign Corrupt Practices Act

A federal law created in 1977 that prohibits companies from bribing foreign government officials and political figures in order to create business.

Foreign Debt

Money owed by a nation to foreign investors, banks, or governments.

Foreign Direct Investment

(FDI) The act of building productive capacity directly in a foreign country.

Foreign Equity Requirements

Investment rules that limit foreign ownership to a minority holding in a company.

Foreign Exchange

Currency of another country, or a financial instrument that facilitates payment from one currency to another.

Foreign Exchange Broker

Brokers serving as matchmakers in the foreign exchange market that do not put their own money at risk.

Foreign Exchange Dealer

A financial institution making a market in foreign exchange.

Foreign Exchange Markets

Networks of commercial banks, investment banks, and other financial institutions that convert, buy, and sell currencies in the global economy.

Foreign Exchange Rate

The price of one nation's currency in terms of another nation's currency. The foreign exchange rate is specified as the amount of one currency that can be traded per unit of another.

Foreign Exchange Risk

The risk of unexpected changes in foreign currency exchange rates. Also known as currency risk.

Foreign Remittances

The transfer across national boundaries of any kind of funds.

Foreign Sales Corporation

(FSC) In the U.S. tax code, a specialized sales corporation whose income is lumped into the same income basket as that of a domestic international sales corporation.

Foreign Sales Representative

A representative or agent residing in a foreign country who acts as a salesman for a U.S. manufacturer, usually for a commission. Sometimes referred to as a "sales agent" or "commission agent." See "Representative."

Foreign-source Income

Income earned from foreign operations.

Foreign Tax Credit

(FTC) In the U.S. tax code, a credit against domestic U.S. income taxes up to the amount of foreign taxes paid on foreign-source income.

Foreign Trade Zone

Specially licensed commercial and industrial areas in or near ports of entry where foreign and domestic goods, including raw materials, components, and finished goods, may be brought in without being subject to payment of customs duties.  Goods brought into these zones may be stored, sold, exhibited, repacked, assembled, sorted, graded, cleaned, manufactured, or otherwise manipulated prior to re-export or entry into the country's customs territory.


The purchase (without recourse to any previous holder of the debt instrument) of negotiable trade instruments resulting from the export of goods and services.


FOR and FOT mean "Free on Rail" and "Free on Truck." These terms are synonymous since the word "truck" relates to the railway wagons. They should only be used when the goods are to be carried by rail.

Forward Exchange Contract

Technique to hedge against exchange risks, which allows the bank to guarantee to its client the rate at which it will sell him foreign currency (futures buying) or buy it from him (futures sale), at a future date.

Forwarding Agent (Forwarder)

A Forwarding Agent is one specialising in arrangements covering the physical movement of goods from departure to arrival at destination.

Forward Purchase

A compensation agreement under which the buyer’s goods are delivered to the exporter in advance to enable him to raise the foreign exchange to pay for his own sale.


See "Free On Truck"

Foul Bill of Lading

A receipt issued by a carrier to the exporter making use of its services which, to reduce the carrier's liability, notes that the goods were in some way damaged, short in quantity, or improperly packaged.

FPAAC (Free Of Particular Average, American Conditions)

Average clause that limits recovery of partial losses under the Perils clause to those losses directly resulting from fire, stranding, sinking, or collision of the vessel.

FPAEC (Free Of Particular Average, English Conditions)

Same as FPAAC except that partial losses under the Perils clause are fully recover-able if the vessel has been stranded, sunk, burned, been on fire, or in collision, without requiring that the damage actually be caused by one of these perils.


The FPPI is the party shown on the transportation document to whom final delivery or end-use of the goods will be made. This party may be the ultimate consignee. Generally the FPPI is the foreign buyer of the goods that are purchased or obtained for export.

Franchise Agreement

An agreement in which a domestic company (the franchiser) licenses its trade name and/or business system to an independent company (the franchisee) in a foreign market.

Franchised Trade

Franchised trade involves forming groups of traders in order to increase their individual purchasing capacity and to strengthen their position between upstream wholesalers and downstream consumer associations. There are three main forms of franchised trade: groups of retailers, voluntary retail buying chains and franchises.


It defines a form of long-term contractual co-operation between two legally independent entities (the franchiser and the franchisee) with a view to marketing goods, services or techniques. The franchiser pledges to help the franchisee in the technical, commercial or accounting fields. In return, the franchisee pays an entry fee and royalties on an annual basis. He is also obliged to comply with quality standards laid down by the franchiser and to participate in promotional operations organised by the latter.


A term in an export sales contract to show that goods will be delivered free of transport costs to a place specified by the buyer.

Free Alongside Ship

The seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the buyer to clear the goods for export.

Free Carrier

“Free Carrier” means that the seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point.

Free Carrier (...named place)

The seller must clear the goods for export, and deliver them to a carrier at a specific point determined by the buyer. The buyer then bears all costs and risks of transporting the goods to the desired destination. Also see "Named Point and "Specific Delivery Point."

Freely Available Letter of Credit

Documentary credit that indicates it is “available with any bank by negotiation”. By including this wording, the issuing bank authorises the beneficiary to present documents to the bank of his choice for examination and collection of payment.

Freely Floating Exchange Rate System

An exchange rate system in which currency values are allowed to fluctuate according to supply and demand forces in the market without direct interference by government authorities.

Free Market

The type of market in which goods and services cross borders freely, unrestrained by tariffs or any other sort of barrier to trade.

Free On Board

The seller fulfils his obligation to deliver when the goods have passed over the ship’s rail at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. The buyer bears full responsibility from that moment onwards.

Free on Board Endorsement

Used with FOB (Free on Board), FAS, C&F, or CFR (but not CIF) quotations, FOB sales endorsement to an open marine policy can cover transit risk from the point of origin until title transfers. In these instances, the exporter relies on the importer to insure.

Free On Rail

A condition of sale where the seller pays to deliver the goods to a railway station and ensures that they are loaded onto wagons ready for transportation.

Free On Truck

A condition of sale where the seller pays to deliver the goods to a specified transport depot and ensures that they are loaded onto trucks or lorries ready for transportation.


Port where goods can be stocked without payment of any taxes and charges till they have crossed the border.

Free Port

An area generally encompassing a port and its surrounding locality into which goods may enter duty-free or subject only to minimal revenue tariffs.

Free Sale

See "Certificate of Free Sale"

Free Trade

A situation where there are no restrictions (tariffs) on the import and export of goods.

Free Trade Agreement

An agreement between countries removing tariffs on the importing and exporting of goods between the countries and territories concerned.

Free Trade Area of the Americas

A proposed hemispheric trade zone that would cover all of the countries in North, South, and Latin America. The FTAA is highly controversial.

Free Trade Zone

(FTAA) A part of the territory of a state, or premises, where any goods introduced are generally regarded, in so far as import duties and taxes are concerned, as being exempted (Kyoto Convention.)


A term for cargo or the cost of shipping.

Freight Carriage (and insurance paid to)

Like "Freight or Carriage paid to..." but with the addition that the seller has to procure transport insurance against the risk of loss of or damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium.

Freight Carriage (paid to)

Like C&F "Freight Carriage paid to..." means that the seller pays the freight for the carriage of the goods to the named destination. However, the risk of loss of or damage to the goods, as well as the risk of any cost increases, is transferred from the seller to the buyer when the goods have been delivered into the custody of the first carrier and not at the ship's rail.

Freight Forwarder

An independent business which handles export shipments for compensation. They often assemble and consolidates small shipments into a single lot and assume, in some cases, full responsibility for transportation of the goods from point of receipt to point of destination

Freight Forwarders

Shipping cargo from other firms and assuming full responsibility for the shipment.

Freight Shippers

Agents used to coordinate the logistics of transportation. Also known as freight forwarders.

Front End Finance (Down payment Financing)

A commercial loan under which separate credit facilities are provided to finance the down payment and/or other direct payments not covered under a buyer or supplier credit financing.

Frontier Market

A frontier market is a country in a subset of emerging markets that are smaller and less developed. There are many opportunities and risks for investors in frontier markets. Opportunities include higher potential growth, low correlation, and diversification. The risks however involve currency fluctuations, lack of regulation, and volatile commodities.

Fronting Loan

A loan between a parent company and foreign subsidiary that is channeled through a financial intermediary.


See "Free Trade Agreement"


See "Foreign Trade Zone"


Fiscal year.


A formal organization of 7 highly industrialized democracies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.


Group of seven leading industrial countries: Canada, France, Germany, Italy, Japan, United Kingdom, United States.


G7 plus Russia.


The WTO’s General Agreement on Trade in Services.


See "Global Coupon Number"


See "Gross Domestic Product"


See "Global Document Type Identifier"

General Agreement on Tariffs and Trade

(GATT) The General Agreements on Tariffs and Trade is a multilateral trade treaty among governments, embodying rights and obligations. The detailed rules set out in the Agreement constitute a code which the parties to the Agreement have agreed upon to govern their trading relationships.

General Average

Damages of this kind are specific to sea and inland waterway transport and are caused by an event that would jeopardise the ship and its cargo if the captain were not to take any initiative in the common interest (e.g. part of the cargo is sacrificed to avoid a shipwreck). In such a scenario, the extraordinary expenses incurred and the value of the goods sacrificed will be paid for by all those who benefit from the action.

Generalised System of Preferences

The GSP constitutes the tariff-related preferences for some developing countries. These tariffs translate into exemptions or reductions in customs duties.

Generalized System of Preferences

(GSP) A program of tariff preferences for designed to encourage the economic growth of certain developing countries. In accordance with the Generalized System of Preferences (GSP), developed countries let the manufactured and semi-manufactured goods of eligible developing countries enter with either no duty or a lower rate than is applied to other countries.

General License (Export)

Government authorization to export without specific documentary approval.

Generally Accepted Accounting Principles

(GAAP) A common set of accounting concepts, standards, and procedures by which financial statements are prepared.

General System of Trade Preferences among Developing Countries

(GSTP) An agreement established in 1988 as a framework for the exchange of trade preferences among developing countries in order to promote intra-developing-country trade.

General Terms of Sale

The General Terms of Sale help to legally identify the conditions of the sale.


Copies of a patented drug, or of a drug whose patent has expired (sometimes also related to trademarks).

Geocentric Multinational

A multinational in which the subsidiaries are neither satellites nor independent city states, but parts of a whole whose focus is on worldwide objectives as well as local objectives, each part making its unique contribution with its unique competence.

Geographical Indications

Place names (or words associated with a place) used to identify products (for example, “Champagne”, “Tequila” or “Roquefort”) which have a particular quality, reputation or other characteristic because they come from that place.


See "Global Individual Asset Identifier"


See "Global Identification Number for Consignment"


See "The Global Location Number"

Global Bond

A bond that trades in the Eurobond market as well as in one or more national bond markets.

Global Coupon Number

(GCN) Used to Identify Coupons e.g. Digital coupons

Global Document Type Identifier

(GDTI) Used to Identify Documents e.g. Tax demands, shipment forms, driving licences

Global Economy

The international network of individuals, businesses, governments, and multilateral organizations which collectively make production and consumption decisions.

Global Identification Number for Consignment

(GINC) Used to Identify Consignments e.g. Logistics units transported together in an ocean container

Global Individual Asset Identifier

(GIAI) Used to Identify Assets e.g. Medical, manufacturing, transport and IT equipment

Globality (Principle of)

Obligation to subject the exporter's entire turnover or a group of contracts and risks to insurance.


A global movement to increase the flow of goods, services, people, real capital, and money across national borders in order to create a more integrated and interdependent world economy.

Global Location Number

(GLN) Used to Identify Parties and locations e.g. Companies, warehouses, factories, stores.

Global Quota

An import quota set by a nation which specifies the allowed quantity of a product from all countries.

Global Returnable Asset Identifier

(GRAI) Used to Identify Returnable assets e.g. Pallet cases, crates, totes

Global Service Relation Number

(GSRN) Used to Identify Service provider and recipient relationships e.g. Loyalty scheme members, doctors at a hospital, library members

Global Shipment Identification Number

(GSIN) Used to Identify Shipments e.g. Logistics units delivered to a customer together

Global Trade Item Number

(GTIN) Used to Identify products and services e.g. Can of soup, chocolate bar, music album


Greenwich Mean Time.


Gross National Income


See "Gross National Product"

Gold Exchange Standard

An exchange rate system used from 1925 to 1931 in which the United States and England were allowed to hold only gold reserves while other nations could hold gold, U.S. dollars, or pounds sterling as reserves.

Gold Standard

An exchange rate system used prior to 1914 in which gold was used to settle national trade balances. Also called the “classical gold standard.”


Government Procurement Agreement

Grace Period

The period during which no repayments of principal (or principal and interest) are due from borrowers to lenders.


A steady and calculated approach to transforming an economy from communism to capitalism.


The point at which a developing country's eligibility for Generalized System of Preferences (GSP) is terminated for the reason of sufficient economic progression.


See "Global Returnable Asset Identifier"

Gray-market Imports

Gray-market imports are parallel distribution of genuine goods by intermediaries other than authorized channel members.

Green Box

Domestic support for agriculture that is allowed without limits because it does not distort trade, or at most causes minimal distortion.

Green Clause

A form of credit where the goods awaiting shipment are required to be stored in the advising bank’s name.


A Greenfield Investment is the investment in a manufacturing plant, office, or other physical company-related structure or group of structures in an area where no previous facilities exist.


See "Guarantee Reference Number"

Gross Domestic Product

GDP is the total value of everything produced by all the people and companies in the country. It does not matter if they are citizens or foreign-owned companies. If they are located within the country's boundaries, the government counts their production as GDP.

Gross National Income

(GNI) Previously known as Gross National Product, Gross National Income comprises the total value of goods and services produced within a country (i.e. its Gross Domestic Product), together with its income received from other countries (notably interest and dividends), less similar payments made to other countries. For example, if a British-owned company operating in another country sends some of their incomes (profits) back to UK, UK’s GNI is enhanced. Similarly, a British production unit of a US company sending profit to the US will affect the British GNI but will not reduce it since it is not included in the first place.

Gross National Product

(GNP) Total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens who are working abroad, minus income of non-residents located in that country. It is essentially the measurement of the value of all goods and services produced by a country's citizens regardless of their location. Its difference with Gross Domestic Product (GDP) is that GDP measures the total production within a country regardless of the citizenship of the producer.

Gross Weight

Total weight of goods, packing, and container, ready for shipment.


Gross Register Ton.


See "Global Shipment Identification Number"


Global System for Mobile cellular communications.


See "Generalised System of Preferences"


See "Global Service Relation Number"


See "Global Trade Item Number"


Undertaking by a bank or other party not otherwise directly participating in a contract, added to the undertaking of the party being guaranteed. There are two very different categories of guarantees: (i) A “demand guarantee” (or “independent guarantee”) is payable for a stated amount immediately upon presentation of documents specified in the guarantee, without inquiry as to the veracity of the documents or into compliance with the underlying contract. (ii) 2. An “accessory guarantee” is where the guarantor joins with the guaranteed party and agrees to fulfil that party’s obligations if necessary, effectively co-signing the contract. Under an accessory guarantee the guarantor also acquires rights under the contract and may require actual evidence of default and resort to terms in the contract to dispute claims against the guarantee.

Guaranteed Proportion

Percentage up to which the insurer covers a risk.

Guaranteeing Association

A company or organisation authorised by European Customs to issue TIR carnets

Guarantee Reference Number

Each NCTS guarantee will be referenced by an unique Guarantee Reference Number (GRN) which will be used for validation. The GRN is allocated by the office of guarantee to identify each single guarantee.

Gulf Cooperation Council

(GCC) A council created in 1981 and composed of Saudi Arabia, Bahrain, Oman, Qatar, Kuwait, and the United Arab Emirates. It is a forum to coordinate and integrate economic policies between these six countries, which account for about 40% of oil in the international market.


Global Value Chains


Gross World Product.

HAD (Custom Agent's Fee)

It represents the fee paid to the custom agent for its clearing activities.

Hague Rules

International Convention for the Unification of Certain Rules relating to Bills of Lading – Brussels Convention of 1924 – a set of rules for international transport contained in an international treaty first published in 1924 and subsequently implemented by most trading nations.

Hague-Visby Rules

Set of rules amending the Hague rules, published in 1968, which have not been implemented by as many countries as their predecessor Hague Rules.

Hand Baggage

Luggage brought into the cabin of the plane by the traveller.

Handling Charges

The forwarder's fee to his shipper client.

Hard Currencies

There is no official definition, but this term refers to those currencies in which there is general investor confidence as regards stability and negotiability.

Harmonised System

The Harmonised System (HS) is an international classification system administered by the World Customs Organisation. The 2-, 4-, and 6-digit HS headings and subheadings are the basis for the 10-digit statistical classification systems used in the United States. The HS is revised approximately every five years.

Harmonized Tariff Schedule

(HTS) A method of classification used by many countries to determine tariffs on imports.

Heavily Indebted Poor Countries Initiative

A major international response to the burdensome external debt held by the world's poorest, most indebted countries. It originated in 1996 as a joint undertaking of the World Bank and the International Monetary Fund (IMF). Also known as the HIPC Initiative.

Hedge Portfolio

The country-specific hedge portfolio in the International Asset Pricing Model serves as a store of value (like the risk-free asset in the CAPM) as well as a hedge against the currency risk of the market portfolio.


Reducing or mitigating risk, for example protecting against adverse foreign-exchange movement.

Hedging Tools

Hedging tools are used to reduce the risk of financial loss on an investment.



High Context Culture

A culture in which communication is often implicit and relationships are paramount.

High Cube Container

Container that respects ISO standards in length and width but has an unconventional height (9'6" i.e. 2.90m instead of 8' - 2.44m). At the moment, only 40' containers come into this category.

High-withholding-tax Interest Income

In the U.S. tax code, interest income that has been subject to a foreign gross withholding tax of five percent or more.


The payee or endorsee of a Bill of Exchange or Promissory Note who is in possession of it, or the bearer thereof.

Holder in Due Course

A holder who takes a bill, complete and regular on the face of it, under the following conditions: (a) that he becomes the holder of it before it was overdue, and without notice that it has been previously dishonoured, if such was the case, and; (b) that he took the bill in good faith and for value, and that at the time the bill was negotiated to him, he had no notice of any defect in the title of the person who negotiated it.

Home Asset Bias

The tendency of investors to overinvest in assets based in their own country.

Homogeneous Expectations

Idea that all individuals have the same beliefs concerning future investments, profits, and dividends.

Horizontal Foreign Direct Investment

Foreign direct investment in the same industry abroad as a firm operates in at home.

House Air Waybill

A transport document issued by an air freight consolidator.

House Bill of Lading

A Bill of Lading issued by a freight forwarder; often covers a consignment of parcels from various shippers that have been grouped or consolidated by the forwarder.


See "Harmonised System"


Nodal Point for collection, dispatch and redistribution in an entire geographical area.


An extremely high rate of inflation, often exceeding several hundred or several thousand percent, that causes a country's money to become practically worthless.


The behavior of firms that fail to enter markets that appear attractive and, once invested, persist in operating at a loss. This behavior is characteristic of situations with high entry and exit costs along with high uncertainty.


Internet Assigned Numbers Authority


International Accounting Standards.


International Bank Account Number. The number consists first of a two-digit country identifier, followed by two check digits, then up to 30 characters representing the local account. The number of characters varies from country to country, but is fixed for each country. When used electronically there are no spaces in IBANs, but the convention on paper is to separate into groups of four with any odd digits in the last group.


See "Interest During Construction"


See "Interest Economic Grouping"


International Financial Reporting Standards.


Islamic leasing. An ijara or lease financing involves the Islamic investor (or a special purpose vehicle) purchasing an asset and leasing it to the lessee for a rent that is either agreed in advance or adjusted regularly throughout the lease period, by consent, by reference to an “expert” or, in some cases, by reference to an interest-based index.


International Monetary Fund

Implicit Tax

Lower (higher) before-tax required returns on assets that are subject to lower (higher) tax rates.


To bring in goods, services, ideas or people from one country into another.

Import Duties

Customs duties payable on importation


The individual, firm or legal entity that, in the course of trade, brings articles of trade from a foreign source into a domestic market.

Import Licence

The licence is an administrative document to control external trade, authorising the import of certain products.

Inactive Customers

Customers whose last purchase was not made recently (the definition of “recent” depends of the type of product or services sold).

In Bond

A term applied to the status of merchandise admitted provisionally into a country without payment of duties. See "Bonded Warehouse."

Inchmaree Clause

(So-called for a famous legal decision involving a vessel of that name.) Covers losses resulting from a latent defect in the vessel's hull or machinery and losses resulting from errors in navigation or management of the vessel by the master or crew.

Income Baskets

In the U.S. tax code, income is allocated to one of a number of separate income categories. Losses in one basket may not be used to offset gains in another basket.


The inability to exchange the currency of one country for the currency of another.


Abbreviation of INternational COmmercial TERMS. These are international definitions for a common understanding of the clauses in international Trade. They have been fixed by the International Chamber of Commerce, which first published them in 1936.

Inco Terms

Indicate whether the buyer or the seller carries the risk, responsibility, liability, or costs at specific points during a transaction.


Trade terms used worldwide to specify seller and buyer obligations in shipments against international sales contracts. Proposed, updated and copyrighted by the International Chamber of Commerce (ICC), they serve as global standards for uniform interpretation of common contract clauses in international trade.

Indemnifiable Loss

Debit balance of the loss account, which is used to calculate the indemnity.


A form of contract when a person (who thereby becomes primarily liable), undertakes to compensate another for loss he may suffer as a result of a transaction with a third party.

Indirect Diversification Benefits

Diversification benefits provided by the multinational corporation that are not available to investors through their portfolio investment.

Indirect Exporting

Export products to foreign markets by using an intermediary, usually export trading company based in the exporter’s country.

Indirect Terms

The price of a unit of domestic currency in foreign currency terms such as DM1.5272/$ for a U.S. resident (contrast with direct terms).


The belief that an individual and their goals and achievements are more important than a groups.

Infant Industry Argument

The infant industry argument is a rationale for the “temporary protection” of a new industry or firm in order to help it become established domestically and later become competitive worldwide. These protections consist of tariff and non-tariff barriers to imports, preventing global competition from entering the market.

Inflation Rate

The general increase in the price level herein measured by the growth rate in the GNP Implicit Price Index or the general price deflator.

Inherent Vice

Defects or characteristics of a product that could lead to deterioration without outside influence. An insurance term. See "All Risk Clause."

Inland Freight

The cost to ship goods between points inland and the seaport, airport, or land border port of export, other than baggage, express mail, or regular mail.


When companies based abroad invest in the United States and create jobs for Americans.

Instalment Letter of Credit

Documentary credit calling for multiple shipments within specified date ranges.

Institute Clauses

Standard international transport insurance clauses published by the Institute of London Underwriters. The Institute Cargo Clauses are 3 sets of clauses providing different levels of protection. The “A” clauses correspond to the general notion which is commonly referred to as “all risks” coverage, while clauses “B” and “C” indicate a lower level of coverage and a greater number of exclusions.


A formal legal document in writing e.g. bill of exchange.

Insurance Certificate

A document issued by an insurance company, usually to order of shipper, under a marine policy and in cover of a particular shipment of merchandise.

Insurance Premium

The amount paid to an insurance company for coverage under an insurance policy.

Insured Value

Usually computed by adding the invoice cost, guaranteed freight, other costs, and insurance premium plus a percentage, commonly 10%. This usually represents landed value.

Integrated Financial Market

A market in which there are no barriers to financial flows and purchasing power parity holds across equivalent assets.

Intellectual Property Rights

Ownership of ideas, including literary and artistic works (protected by copyright), inventions (protected by patents), signs for distinguishing goods of an enterprise (protected by trademarks) and other elements of industrial property.

Inter-American Development Bank

A regional development bank designed to promote sustainable economic development in the Western Hemisphere. Its headquarters are located in Washington, D.C.

Interest During Construction

An arrangement whereby a fixed rate loan is officially supported so that the lenders receive an agreed margin over the cost of the lending.

Interest Economic Grouping

Grouping of natural or legal persons having a unique legal status, distinct from a company or an association. Its purpose is to facilitate the carrying out of an economic activity run together by its members, by pooling certain aspects of this activity: sales counter, import or export services, research laboratory, etc. The grouping is a legal entity and has to be registered.

Interest Rate

The rate at which interest is payable on any obligation.

Interest Rate Risk

The risk of unexpected changes in an interest rate.

Interest Rate Swap

An agreement to exchange interest payments for a specific period of time on a given principal amount. The most common interest rate swap is a fixed-for-floating coupon swap. The notional principal is typically not exchanged.

Intermediate Consignee

The person or entity in the foreign country who acts as an agent for the principal party in interest with the purpose of effecting delivery of items to the ultimate consignee. The intermediate consignee may be a bank, forwarding agent, or other person who acts as an agent for a principal party in interest.

Intermediated Market

A financial market in which a financial institution (usually a commercial bank) that stands between borrowers and savers.


The use of two or more modes of transportation to complete a cargo move; truck/rail/ship, or truck/air, for example.

Intermodal Transport

Carriage of goods using various modes of transport but in the same containers, without a break in load. The container may be a road vehicle or an intermodal unit of transport.

Internal Market

A market for financial securities denominated in the currency of a host country and placed within that country.

International Accounting Standards Board

(IASB) The International Accounting Standards Board (IASB) is an independent, privately funded organization that sets international accounting standards. The IASB is committed to developing a single set of high quality, understandable and enforceable global accounting standards that require transparent and comparable information in general purpose financial statements.

International Asset Pricing Model

(IAPM) The international version of the Capital Asset Pricing Model in which investors in each country share the same consumption basket and purchasing power parity holds.

International Bank for Reconstruction and Development

Also called the World Bank, an international organization created at Breton Woods in 1944 to help in the reconstruction and development of its member nations.

International Bank Guarantee

A guarantee is a commitment given by a bank to pay a sum of money in accordance with the terms and conditions set out in the operation guarantee text.

International Bonds

Bonds that are traded outside the country of the issuer. International bonds are either foreign bonds trading in a foreign national market or Eurobonds trading in the international market.

International Chamber of Commerce

(ICC) International non-governmental body concerned with promotion of trade and harmonization of trading practice. Responsible for drafting and publishing.

International Energy Agency (IEA)

An autonomous agency linked with the Organization for Economic Cooperation and Development (OECD). It is the authoritative source for energy statistics worldwide and an energy policy advisor for 28 member countries. It was founded during the oil crisis of 1973-74 and was initially focused on coordinating efforts between member countries in times of oil supply emergencies. Since then it has expanded its role to encompass climate change policies, market reform, energy technology collaboration, and outreach to the rest of the world.

International Joint Venture

An international joint venture is when two or more partners agree to control and own a business overseas.

International Labour Organization

(ILO) The International Labour Organization is the UN specialized agency which seeks the promotion of social justice and internationally recognized human and labour rights. The ILO formulates international labour standards in the form of conventions and recommendations setting minimum standards of basic labour rights.

International Monetary Fund

(IMF) An international organization designed to promote global economic stability and development. It compiles statistics on cross-border transactions and publishes a monthly summary of each country’s balance of payments.

International Monetary System

The global network of governmental and commercial institutions within which currency exchange rates are determined.

International Organization for Standardization

ISO is a worldwide federation of national standardization bodies of more than 159 countries. Established as a non-government organization in 1947, it develops international standards and publishes them. All branches other than electrical engineering standards are within the scope of ISO.

International Standby Practices

These are the international standards of practice for demand guarantees and standby letters of credit established for bankers by the International Chamber of Commerce. The term “standby” is used to include both letters of credit and guarantees, but it must be kept in mind that the ISP, like all ICC publications, only applies to letters of credit and guarantees that say they are subject to it.

International Strategy

Attempting to create value by transferring core competencies to foreign markets where indigenous competitors lack those competencies.

International Trade Administration

(ITA) The International Trade Administration works to improve the global business environment as well as strengthen the competitiveness of the U.S. business industry through investment and fair trade through enforcement of trade laws and agreements.


The efforts undertaken by a country or its central bank to affect the price of the country’s currency on the exchange market. This can be done either through the government buying or selling large quantities of the currency to affect total supply, or by the central bank changing interest rates to affect the cash flow into the country.

Intra-EU Flight

The movement of an aircraft between two EU airports, without any stopovers, which does not start from or end at a non-EU airport.

Intra-EU Traveller

Traveller that takes an Intra-EU flight.


Intrastat is the system for collecting information and producing statistics on the trade in goods between countries of the European Union (EU). It began operation on 1 January 1993, when it replaced customs declarations as the source of trade statistics within the EU.

Investment Agreement

An agreement specifying the rights and responsibilities of a host government and a corporation in the structure and operation of an investment project.

Invisible Barriers to Trade

Government regulations that do not directly restrict trade but have a hindering effect on through the use of excessive and obscure requirements on goods before they can be sold, especially imported goods. While known to local business people, foreign investors are not aware of these conditions, making them “invisible.” Labeling requirements or other sorts of measurement or sanitary standards would be an example of this.


A document, which includes, inter alia, an itemised list of goods shipped or servers rendered, with an account of all of costs involved as well as payment and trade terms.

Invoice Date

The date the invoice is issued.

Inward Processing

A European procedure allowing the import of goods for the purposes of processing and re-exporting them (Art. 114 CC). The import duties are: (i) either suspended, together with commercial policy measures (suspension system) or (ii) initially paid and refunded at re-export (drawback system).


An abbreviation for "I owe you" – See "Promissory Note"


Intellectual Property


Investment Promotion Agency


Intellectual Property Rights


Applied to letters of credit. An irrevocable letter of credit is one which cannot be altered or canceled once it has been negotiated between the buyer and his bank.

Irrevocable Letter of Credit

Documentary credit that cannot be amended or cancelled without agreement of both the beneficiary and the issuing bank. Any documentary credit subject to the UCP600, the ISP, or to US law is irrevocable unless it specifies otherwise.


International Standard Industrial Classification

Islamic Finance

Islamic finance is based on the principle that money must never spontaneously generate money. Instead, capital must be fecundated by labour, material or intellectual activity, or be invested in a wealth creating activity. Interest is replaced by a return obtained from wealth-generating activities. Islamic banking is regulated by Sharia Law.

ISO 9000

International Organization Standardization (ISO) guidelines for quality in manufacturing and service industries.


Internet Service Provider.

Issuing Bank

The bank which issues a documentary credit. It may also be referred to as an opening bank. The issuing bank is obligated to pay if documents are presented to them that comply with the letter’s requirements.


Information Technology


Investment and Technology Promotion Offices


Intermodal Transport Unit.


The way of somehow getting things done in Brazil; the jeito can help conquer seemingly insurmountable tasks (Portuguese).


Voluntary dumping either of cargo or of ship's material or stores overboard, to protect other property from a common danger.

Joint Venture

A commercial or industrial enterprise in which principals of one company share control and ownership with principals of another.


EU Joint Transfer Pricing Forum


See "Forward Purchase"


Joint venture

Kanban System

An inventory control system for tracking the flow of in-process materials through the various operations of a just-in-time production process. Kanban means “card” or “ticket” in Japanese.


Collaborative groups of vertically and horizontally integrated firms with extensive share cross-holdings and with a major Japanese bank or corporation at the center.



Know Your Customer

The rules created by banks and financial institutions to fulfil their obligations to properly identify customers as part of the fight against money laundering.

Know Your Customer’s Customer

The rules created by banks and financial institutions to fulfil their obligations to properly identify customers and payments chains as part of the fight against money laundering.

Know Your Vendor

The rules created by banks and financial institutions to fulfil their obligations to properly identify and risk assess their suppliers (vendors).




See "Know Your Customer"


See Know Your Customer’s Customer.

Kyoto Protocol

A multilateral environmental agreement; its goal is to control global warming by reducing greenhouse gases emitted into the Earth's atmosphere.


See "Know Your Vendor"


A term associated with the free enterprise economic system which calls for minimal government intervention or regulation, except in maintenance of this economic freedom.

Land Container

Container that meets the standards set by the International Railways Union (IRU) for optimal use mainly in the case of a combination of road and rail carriage.

Landed Cost

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

Landed Value

Wholesale market value at destination on final day of discharge.

Large Capacity Container

Container that respects ISO standards in length and width but has an unconventional height (9'6" i.e. 2.90m instead of 8' - 2.44m). At the moment, only 40' containers come into this category.

Latin American Integration Association

(LAIA) A trade integration association of Latin American countries dedicated to the improvement of member economic well-being through free trade.

Law of One Price

The principle that equivalent assets sell for the same price. The law of one price is enforced in the currency markets by financial market arbitrage. Also known as purchasing price parity (PPP).

Law of the Sea

United Nations Convention on the Law of the Sea.


Letter of Credit. See "Documentary Credit"


See "Documentary Credit"


Less Developed Country.

Leading and Lagging

Reduction of transaction exposure through timing of cash flows within the corporation.

Least Developed Country

(LDC) A country, according to United Nations, characterized as having low gross national income per capita, a weakness in human resources, and economic vulnerability. Note: Many sources prefer LLDC to denote Least Developed Countries and LDC for Less Developed Countries.

Legal Entity

A "legal entity" has the same attributes as an individual (natural person): a name (registered name), address (corporate address), duration, nationality, etc. and also rights and obligations that are independent of the members that form it.

Legal Redress

Legal process applicable to traders, artisans, farmers and private law corporations defaulting on payments, in order to bail out the company, continue its business, keep its employees on and clear its liabilities.

Legal Weight

The weight of goods plus any immediate wrappings which are sold along with the goods; e.g., the weight of a tin can together with its contents. See "Net Weight."

Letter of Credit

See "Documentary Credit"

Letter of Intent

A document describing the preliminary understanding between parties intending to join together in some sort of action or engage in a contract.

Letters of Indemnity

Letters of indemnity, or guarantees, are sometimes issued by banks when bills of lading or other transport documents go missing on goods shipments. Typically, such guarantees are issued for between 100% and 200% of the value of the goods.


The process by which certain business activities become more market driven.


See "London Interbank Offered Rate"


See "Exchange License" See "Export License" See "Import License" See "Validated License"

License Agreement

A sales agreement in which a domestic company (the licensor) allows a foreign company (the licensee) to market its products in a foreign country in return for royalties, fees, or other forms of compensation.


One firm gives another firm a permission, which allows the latter to engage in an activity otherwise legally forbidden to it. Such activities usually involve the transfer of intellectual and proprietary knowledge in return for royalty as revenue.


A legal right granted by the authority of a court to control or to enforce a charge against another’s property until some legal claim is paid or otherwise satisfied.

Limited Flexibility Exchange Rate System

The International Monetary Fund’s name for an exchange rate system with a managed float.

Line of Credit

A buyer credit arrangement set up to finance multiple contracts subsequently entered into and nominated to the lender by the buyer and accepted by the lender as eligible for finance under the line.

Liquidation Value

The most likely price an asset will bring if it is sold without reasonable market exposure and when the seller is under duress.

List Price

The manufacturer's recommended retail price for an item.


Least Developed Country.

Loading List

An administrative or commercial document that may be used in place of a SAD-BIS when more than one item is being carried under transit.

Loading Track

Track on which the loading, unloading and transhipment of ITUs (Intermodal Transport Unit) is carried out. The transhipment can be from wagon to wagon or from wagon to road vehicles and vice-versa.

Loading Unit

Container or swap body.

Loan Guarantees And Guarantees For Legal Proceedings

Bank loans are often made conditional on security provided by the borrower or a third party. A bank guarantee is one of the means by which the lender can obtain assurance that the loan will be repaid. Bank guarantee instruments are also issued in respect of legal procedures, for example: legal costs guarantees and distraint guarantees.

Local Content Requirement

A requirement that some specific fraction of a good be produced domestically.

Local Costs

Those expenses incurred in the buyer’s country which are provided by the supplier. The export credit agencies do not usually finance or guarantee these costs but may do so up to 15% of the export value.

Location-specific Advantages

Advantages (natural and created) that are available only or primarily in a single location.

Lodgement Instructions

The written instructions from a customer which constitutes the bank’s authority to act in respect of collection of proceeds on customer’s behalf.


Any activities for the purpose of transporting a given quantity of a product at the lowest cost to a destination when and as needed.

Lombard Rate

The rate of interest changed by the Bundesbank, Germany’s central bank, to loans backed by moveable, easily-sold assets.

London Interbank Bid Rate

(LIBID) The bid rate that a Euromarket bank is willing to pay to attract a deposit from another Euromarket bank in London.

London Interbank Offered Rate

The rates of interest on deposits traded between banks in London. These rates are commonly quoted on a one-month, three-month, six-month and twelve-month basis.

Long Term

Usually any credit period over five years.

Loss Account

Enables the definition of the indemnifiable loss, including: (i) for non-payment claims: as a debit the unpaid amount of the claim and as a credit any sum collected in connection with the insured claim, in particular following the realisation of securities or resale of recovered goods and (ii) for cancellation claims: as a debit the amount of the costs incurred in implementing the contract from the time of its conclusion and as a credit all amounts collected with regard to the insured contract.

Low Context Culture

A culture in which communication is direct and the transfer of facts and information is what is paramount.


Large transnational corporation

Lump of Labor Fallacy

The fallacious argument which, working on the assumption that there is only a fixed amount of work in the world, says that an increasing population will inevitably lead to increasing unemployment. This argument is often used by governments as reasoning behind reducing the workweek to reduce unemployment.

Lump Sum

A fixed amount agreed at the outset of a contract, payable by the buyer for a specified task.


Merger and Acquisition

Maastricht Treaty

The treaty, formally known as the Treaty on European Union, signed in 1992, that led to the unification of many European countries. The treaty changed the name of the European Community (EC) to the European Union (EU) and led to the creation of a monetary union with a European Central bank, political and military integration, common foreign policy, and common citizenship among member countries.

Macro Country Risks

Country (or political) risks that affect all foreign firms in a host country.

Madrid Agreement

Treaty, administered by the World Intellectual Property Organization (WIPO), for the repression of false or deceptive indications of source on goods.

Madrid Protocol

Provides a vehicle for applying for protection in multiple countries that are signatories to the protocol by filing one application and paying one fee in one national currency. For information on the Madrid Protocol and how to file, visit

Madrid System

Allows for a trademark holder to have their trademark protected in several countries.


Morocco, Algeria and Tunisia


In intellectual property, refers to the requirement of the TRIPS Agreement applying to WTO members which do not yet provide product patent protection for pharmaceuticals and for agricultural chemicals. Since 1 January 1995, when the WTO agreements entered into force, these countries have to establish a means by which applications of patents for these products can be filed. (An additional requirement says they must also put in place a system for granting “exclusive marketing rights” for the products whose patent applications have been filed.)

Mail-Order Sale

Mail-order selling is a type of distribution where there is no physical contact between the seller and the buyer. The products are sold through a printed or soft-copy catalogue and sent by mail.

Maintenance Bond

A bond issued to support a maintenance contract to assure the buyer that the supplier will meet his obligations under the maintenance contract.


Marine (or air) transport document which lists all the goods loaded at a port (or airport) to be sent to another port (or airport).A list of all the cargo or passengers carried by a ship or aircraft.

Manufacturing Period

The period during which goods are manufactured, usually lasting between signature of the contract and shipment of the final terms.


Mutual Agreement Procedure.


Duty-free assembly plants located mainly in the developing world. Maquiladoras are one type of foreign direct investment.

Marine Extension Clause

Cargo policy clause that continues coverage on goods during deviation, delay, re-shipment, and transshipment, or any other variation in normal transit beyond the assured's control.

Marine Insurance

Insurance covering international transport of goods. Marine insurance can be provided either in terms of a specific policy or certificate or by open cover under which the insurer covers an indefinite number of future shipments and declares each shipment to the insurer as they are made.

Marine Surveyor

Specialist who determines the nature, extent and cause of loss and/or damage.

Maritime Container

Container conforming to the standards set by the International Standards Organisation for use in cellular marine transport.

Market Access

The extent to which a domestic industry can penetrate a related market in a foreign country. Access can be limited by tariffs or other non-trade barriers.

Market-based Corporate Governance System

A system of corporate governance in which the supervisory board represents a dispersed set of largely equity shareholders.

Market Economy

An economy in which resource allocations, prices and other marketing decisions are primarily determined by the free market.

Market Failure

A failure of arms-length markets to efficiently complete the production of a good or service. In the eclectic paradigm, the multinational corporation’s market internalization advantages take advantage of market failure.

Market Internalization Advantages

Advantages that allow the multinational corporation to internalize or exploit the failure of an arms-length market to efficiently accomplish a task.

Market Maker

A financial institution that quotes bid (buy) and offer (sell) prices.


A set of letters, numbers and/or geometric symbols, generally followed by the name of the port of destination, placed on packages for export for identification purposes.

Master's Protest

Sworn statement by captain describing any unusual happening during the voyage.


The ability of one export credit agency to match the credit terms and conditions of another, under the arrangement on guidelines for officially supported export credits.

Matchmaker Program

A service organized by the United States International Trade Administration, this program aids firms that are new to exporting or new to the market to meet prescreened business prospects in foreign markets who are interested in their products or services.


The date on which a bill of exchange, promissory note or other debt instrument becomes due for payment.

Maturity Date

The date upon which a draft or acceptance becomes due for payment. Most-Favored-Nation Status: All countries having this designation receive equal treatment with respect to customs and tariffs.


Multilateral environmental agreement.

Mean Commissioning

Usually the date on which 50% of the buy value of the units to be commissioned, and thereupon to be handed over to the buyer for use, are commissioned.

Mean Delivery

Usually the date by which 50% by value of goods to be delivered or the services to be rendered have been delivered or rendered.

Medium Term

Usually any credit period between two and five years.

Melanesian Spearhead Group

(MSG) A regional trade treaty involving the states of Vanuatu, Solomon Islands, Papua New Guinea and Fiji created to foster and accelerate economic development through trade relations and provide a political framework for regular consultation and review on the status of the Agreement.


Middle East and North Africa


An economic philosophy advocating that countries should simultaneously encourage exports and discourage imports.


The “common market of the South,” a customs union which includes Argentina, Brazil, Paraguay and Uruguay. The organization mandates the lowering of tariffs and other trade barriers in hopes of eventually eliminating restrictions on the movement of capitol, labor, goods and services.

Method of Payment

Terms stating the acceptable forms of remittance for a given sales transaction. The party selling the product or service declares the acceptable method of payment.


The Most-Favoured Nation clause forms part of the first principle of the World Trade Organisation and is one of "non-discrimination". This clause aims at putting an end to the advantages granted to a country as compared to the others. This clause obviously applies to the signatories of the treaty.



Micro Country Risks

Country risks that are specific to an industry, company, or project within a host country.


Small loans, perhaps $50 or $100, that are extended to small businesses or individuals to finance a business start-up or other business activity.

Middle Man

A person or organisation that buys goods from the producer and sells them to the customer, with a profit.

Middle Market

A market segment generally represented by financing under $2 million. In leasing, this sector is dominated by single investor leases.

Miller and Modigliani’s Irrelevance Proposition

Theory that if financial markets are perfect, then corporate financial policy (including hedging policy) is irrelevant.

Mixed Credit

Export financing that includes a combination of export credit agency credit and concessional financing. Under the OECD if the subsidy element (concessional) is greater than 35% the entire loan is considered aid. This is also referred to as tied aid.

Mixed Economy

An economy in which certain sectors of the economy are left to private ownership and free market mechanisms, while other sectors have significant government ownership and government planning.

Mixed Tariff

A combination of specific and ad valorem tariffs.

Modernised Customs Code

Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 (Official Journal L 145, 04.06.2008, p.1.). This Regulation lays down the general rules and procedures applicable to goods brought into or out of the customs territory of the Community. This new code aims to facilitate trade by simplifying and computerising customs procedures and ensuring the interoperability between the IT systems of the 28 customs administrations, while ensuring a high level of safety and security at the external borders. It will become applicable and thus replace the Community Customs Code (see the Community Customs Code) as soon as the relevant implementing provisions are adopted (on 24 June 2013 at the latest). In the meantime, the current Community Customs Code remains applicable.

Modes of Delivery

How international trade in services is supplied and consumed. Mode 1: cross border supply; mode 2: consumption abroad; mode 3: foreign commercial presence; and mode 4: movement of natural persons.

Money Supply

The total amount of currency in circulation and peso deposits subject to check of the monetary system.


Exclusive control or possession by one group of the means of producing or selling goods or services.

Montreal Protocol

A multilateral environmental agreement dealing with the depletion of the earth’s ozone layer.

More Flexible Exchange Rate System

The International Monetary Fund’s name for a floating exchange rate system.

Most Favored Nation (MFN)

A status granted to one country by another; the granting country then accords the recipient's imports and exports the most favorable treatment that it accords any country.

Movement Reference Number

The European MRN is a unique number that is automatically allocated by the customs office that accepts the declaration. It contains 18 digits and is composed of following elements: (i) Identifier of the Member States from which the movement originates (ii) Last two digits of the year of formal acceptance of export movement (YY) (iii) Unique identifier for the export movement per year and country

Movement Reference Number

The European MRN is a unique number that is automatically allocated by the customs office that accepts the declaration. It contains 18 digits and is composed of following elements: (i) Identifier of the Member States from which the movement originates (ii) Last two digits of the year of formal acceptance of export movement (YY) (iii) Unique identifier for the export movement per year and country


See "Movement Reference Number"


Manufacturer's recommended price.


Micro, Small and Medium Enterprise

Multidomestic strategy

A strategy emphasizing the need to be responsive to the unique conditions prevailing in different national markets.

Multilateral Development Bank

See "Multilateral Lending Agency"

Multilateral Environmntal Agreements

(MEAs) Environmental agreements negotiated by a number of countries.

Multilateral Investment Guarantee Agency

One of the five institutions comprising the World Bank Group; MIGA’s purpose is to help encourage equity investment and other kinds of direct investment flow into developing countries.

Multilateral Lending Agency

Financial institution jointly owned by a group of countries designed to promote international and regional economic cooperation. These lending agencies are designed to help develop productive facilities and to further social and economic growth in member countries. Examples are the Asian Development Bank (ADB), the Inter-American Development Bank, the International Finance Corporation (IFC), and the European Bank for Reconstruction and Development (EBRD).


Transportation using more than one mode. In the GATS negotiations, essentially door-to-door services that include international shipping.

Multimodal Terminals

Installation for exchange of intermodal transport units from one mode to another where other technical and commercial operations linked to combined transport can also be carried out.

Multimodal Transport

Carriage of goods by at least two different modes of transport.

Multimodal Transport Document

Transport document covering shipment of goods by more than one means of transportation but including an ocean leg. The two major forms of multimodal transport document are the combined transport document and the through bill of lading. Under the former, the carrier signing the transport document (the “contractual carrier”) frequently subcontracts the various legs to other carriers (the “actual carriers”), but still takes responsibility for delivery of the goods to the “place of delivery” and for any damage that might occur during carriage. Under the latter, the carrier takes responsibility for the goods only up to a specified point (still called the “place of delivery”) and then passes responsibility to a second carrier for “on-carriage” to the “final destination”.

Multinational Corporation

(MNC) A corporation with operations in more than one country.

Multinational Netting

Elimination of offsetting cash flows within the multinational corporation.


An expression used to describe the provision of goods or services from a number of different countries.


A type of Islamic finance, Murabaha deals are more usually found in trade finance, typically involving the purchase and sale of commodities to generate a profit, which is a substitute for interest payments on a commercial loan. Under the terms of a Murabaha agreement, the buyer the financier to purchase commodities under a deferred payment arrangement. The financier then sells the commodities to release funds, which are then made available to the buyer. The buyer then reimburses the financier the cost of the commodities it purchased on an instalment basis, which includes an agreed mark-up. The mark-up is the bank's profit and is used as a substitute for the charging of interest. This type of structure is Shariah-compliant because the bank takes the title to the commodities, and therefore taking real risk to itself and the buyer through the buying and selling of commodities.

Mutually Exclusive Investment Decisions

Investment decisions in which the acceptance of a project precludes the acceptance of one or more alternative projects.

Named Point

See "Specific Delivery Point"


A process whereby privately owned companies are brought under state ownership and control (contrast with privatization).

National Tax Policy

The way in which a nation chooses to allocate the burdens of tax collections across its residents.

National Trade Data Bank

The U.S. Government's most comprehensive source of international trade data and export promotion information. Types of information on the NTDB include: international market research, export opportunities; indices of foreign and domestic companies; how-to market guides; reports on demographic, political, and socio-economic conditions for hundreds of countries; and much more.

National Treatment

The principle of giving others the same treatment as one’s own nationals. GATT Article 3 requires that imports be treated no less favourably than the same or similar domestically-produced goods once they have passed customs. GATS Article 17 and TRIPS Article 3 also deal with national treatment for services and intellectual property protection.

Natural Advantage

Theory in economics that certain countries have a competitive advantage in certain products due to their access to specific natural resources, their climactic conditions, or their transportation system.

Natural Persons

People, as distinct from juridical persons such as companies and organizations.


See "Non-Circumvention\Non-Disclosure Agreements"


See "New Computerised Transit System"


No Commercial Value.


Non-Disclosure Agreement.

Negative-NPV Tie-in Project

A negative net present value infrastructure development project that a local government requires of a company pursuing a positive-NPV investment project elsewhere in the economy.




A quality belonging to a document of being able to transfer ownership of money, goods, or other items of value specified in the document by endorsement and/or delivery of the document. Cheques, drafts, promissory notes, bonds, stock certificates, bills of lading, and warehouse receipts are examples of documents often issued in negotiable form.

Negotiable Bill of Lading

Bill of lading transferred by endorsement.

Negotiable Instrument

A negotiable instrument is one which, by the custom of trade, passes from hand to hand by delivery so as to give a bona fide holder for value, a good title to the instrument notwithstanding that the transferor may have had defective title. The characteristics of negotiable instruments are: (a) The title of them passes by mere delivery, or where necessary by endorsement followed by delivery (b) No notice of such transfer need be given to the party liable on the instrument and (c) A holder in due course can sue in his own name (Bills of Exchange, Cheques and Promissory Notes are three kinds of negotiable instruments.)

Negotiating Bank

A bank buying the documents which obtains the right to deal with the documents any way it must to ensure repayment.


Under a Documentary Credit, the process whereby a bank gives value for the exporter/supplier’s draft or documents. Negotiation generally includes checking the documents to ensure they meet the terms and conditions of the Documentary Credit; the documents conform to each other and are compatible with the UCP; and each individual document appears to be properly prepared.

Negotiation Fee (Management Fee)

Additional amounts payable to lenders. A once-only fee payable on establishment of the finance.

Net Position

A currency position after aggregating and canceling all offsetting transactions in each currency, maturity, and security.

Net Weight

Weight of the goods alone without any immediate wrappings; e.g., the weight of the contents of a tin can without the weight of the can. See "Legal Weight."

New Computerised Transit System

Electronic data interchange system which was introduced as the transit declaration and is due to replace the traditional paper procedure in the European Community as well as in the EFTA countries (Iceland, Norway, Switzerland).

Newly Industrializing Countries

(NIC) A group of former developing countries who, due to high levels of economic growth, have grown rapidly in recent years.

New Protectionism

Recent efforts to pressure national governments to exercise greater control over foreign trade and foreign direct investment.


(NTE) The name of the circumstances of a company that either engages in export activities for the first time, engages in exportation for first time in twenty-four months, or has only exported to because of prior unsolicited orders. Export assistance is available to companies with this classification.


(NTM) The name of the circumstances under which a company exports to a foreign market in which it has either never exported to, has not exported to for the past twenty-four months, or has only exported to because of prior unsolicited orders. Assistance is available to companies with this classification.


Non-Governmental Organisation.


Newly Industrialising Country.


Newly Industrialising Economy.


Nautical mile.

Nomenclature of the Customs Cooperation Council

This was known as the "Brussels Classification Nomenclature" prior to January 1, 1975. It is the customs tariff adhered to by most European countries and many other countries throughout the world, but not by the United States.

Nominal Cash Flow

A cash flow expressed in nominal terms if the actual dollars to be received (or paid out) are given.

Nominal Interest Rate

Interest rate unadjusted for inflation.

Nominated Bank

A bank designated by the issuing bank to which the beneficiary presents its documents and from which it obtains payment of the credit sum. Depending on the terms of the credit, this may be the issuing bank, the advising bank or some other bank.

Non-Circumvention\Non-Disclosure Agreements

A type of contract sometimes requested by international brokers or middlemen in order to prevent buyers from dealing directly with suppliers.

Nonconvertible Currency

A currency is not convertible when both residents and nonresidents are prohibited from converting their holdings of that currency into another currency.

Non-governmental Organizations

(NGOs) Legally constituted, special interest groups created by natural or legal persons with no participation or representation of any government.

Non-Guaranteed Proportion

Portion not covered by an insurance policy; for which the insured party has to assume exclusive responsibility.

Nonintermediated Debt Market

A financial market in which borrowers (governments and large corporations) appeal directly to savers for debt capital through the securities markets without using a financial institution as intermediary.

Non-market Economy

An economy in which the government, through the use of central planning, makes most economic decisions to control economic activity.

Non-Monetary Transaction

This is a technique available to the exporter when his buyer does not want to or is not in a position to financially settle his dues. The settlement is made in the form of the provision of products or services of a value equivalent to that of the goods exported. The different kinds of non-monetary transactions include barter, counter purchase, buy back, clearing and offset contracts.


Non-payment occurs when there is a failure to recover the sums due under the Contract within the waiting period.

Non-Tariff Barriers

Entire set of non-tariff restrictive measures implemented by a country seeking to protect its market from foreign competition. The most common examples are quotas, technical or health standards or any enactment favouring domestic companies.

Non-Vessel Operating Common Carrier

A freight forwarder that acts as common carrier but does not operate the vessels by which ocean transportation is provided, and is a shipper in relation to the involved ocean common carrier.

Nordic Council

A regional alliance established in 1952 between Norway, Sweden, Finland, Denmark, and Iceland that is dedicated to cooperation among the Nordic countries. This has led to a common labor market, social security, and free movement of citizens across borders.

Normal Trade Relations

(NTR) New name for Most Favored Nation (MFN) trading status, in which the country which grants this status accords the recipient's imports and exports the most favorable treatment that it accords any country.

North American Free Trade Agreement

(NAFTA) A regional trade pact among the United States, Canada, and Mexico.

North-south Divide

A socio-economic and political division that exists between wealthy developed countries, known collectively as "the North", and poorer developing countries, or "the South."

Nostro Account

A bank account held by a local bank with its foreign correspondent bank, in the currency of that foreign country.

Notification Letter

A form sent to the client's customer by the factor, confirming that the client's invoice does exist and that the customer will remit the payment due under that invoice to the factor.

Notification of Arrival

The operator of the active means of transport entering the customs territory of the European Community or his representative shall notify the customs authorities of the first customs office of entry of the arrival of the means of transport. This notification of arrival shall contain the particulars necessary for the identification of the entry summary declarations lodged in respect of all goods carried on that means of transport. (Art. 184g CCIP).


A minute or memorandum made by a Notary Public on a Bill of Exchange which has been dishonoured. The Bills of Exchange Act instructs that noting be done within 48 hours of dishonour. It consists of his initials, his charges and the date.


Non-Sufficient Funds. The "reason for return" of a cheque or payment order (such as direct debit) where there are insufficient funds in the debited account to cover the payment.


Non-tariff barriers, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc.


Non-tariff measures, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc.

Nuisance Tariff

Tariff so low that it costs the government more to collect it than the revenue it generates. Sometimes, a tariff that does not have any protective effect — some countries defend this as necessary in order to raise revenues.

Nullification and Impairment

Damage to a country’s benefits and expectations from its WTO membership through another country’s change in its trade regime or failure to carry out its WTO obligations.

Nullification and Impairment

Damage to a country’s benefits and expectations from its WTO membership through another country’s change in its trade regime or failure to carry out its WTO obligations.


See "Non-Vessel Operating Common Carrier"


A buyer obligated to pay (debtor).

Ocean Bill Of Lading

A receipt for the cargo and a contract for transportation between a shipper and the ocean carrier.


See "Overseas Countries and Territories"


Official Development Assistance


Contact Group for Southern Ports (Barcelona, Koper, Leixoes, Marseille, Piraeus, Trieste).


Organisation for Economic Co-operation and Development


Used by export credit agencies to describe importing countries to which they will no longer extend insurance cover.

Offered (Selling) Rate

Exchange rate at which dealers are prepared to sell foreign exchanges in the market and at which potential buyers are therefore able to buy foreign exchanges from those dealers.

Offering Statement

In the United States, a shortened registration statement required by the Securities and Exchange Commission on debt issues with less than a 9-month maturity.

Office for Harmonisation of the Internal Market (Trade Marks & Designs)

The OHIM is the official authority carrying out the procedures for the Community trademarks since 1996 and for the Community registered design from 2003. These intellectual property rights are valid in all the countries of the EU.

Official Settlements Balance

An overall measure of a country’s private financial and economic transactions with the rest of the world. Also known as overall balance.


To balance something or compensate for something. Offset agreements are usually practised by governments and cover military and important civil procurements; e.g. a Government awards business to a company in another country, and in return for the contract, the price paid is offset by the company producing the product in the buying country.

Offshore Financial Centers

(OFCs) Offer little or no government interference in legitimate business and financial activities. In many cases, OFCs also offer very low or zero tax rates, and provide excellent communication facilities.


Official Journal of the European Union


A market dominated by so few sellers that action by any of them will impact both the price of the good and the competitors.


Orderly marketing arrangement. Bilateral arrangements whereby an exporting country (government or industry) agrees to reduce or restrict exports without the importing country having to make use of quotas, tariffs or other import controls.

On Board

On Board signifies "embarked". The words "on board" signify that the goods have been placed properly on board the aircraft or ship. This marking is almost indispensable for documentary credit.

On Board

On Board signifies "embarked". The words "on board" signify that the goods have been placed properly on board the aircraft or ship. This marking is almost indispensable for documentary credit.

On Board Bill of Lading

A bill of lading in which a carrier acknowledges that goods have been placed on board a certain vessel.


Other Official Flows.

Open Account

The seller/exporter supplies terms of payment to the buyer and ships the merchandise prior to receiving payment. The account is then settled periodically, say monthly, by the buyer sending a bank draft, or arranging through his bank a telegraphic remittance in favour of his overseas party.

Open and Reform Policy

An economic policy enacted by the Chinese government combining central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits, with the goal of moving from a centrally-planned economy to a market-based one.

Open Cargo Policy

Synonymous with "Floating Policy." An insurance policy which binds the insurer automatically to protect with insurance all shipments made by the insured from the moment the shipment leaves the initial shipping point until delivered at destination. The insuring conditions include clauses naming such risks insured against as "perils of the sea," fire, jettison, forcible theft, and barratry. See >'Perils of the Sea," "Barratry," "All Risks Clause."

Open Door Policy

A system of importing goods with no or very few restrictions or import duties.

Operational Efficiency

Market efficiency with respect to how large an influence transactions costs and other market frictions have on the operation of a market.

Order Bill of Lading

A bill of lading, negotiable, made out to the order of the shipper.

Orderly Marketing Agreements

Agreements between two or more governments to hold back the growth of trade for certain products by limiting exports and imposing import quotas.

Organization for Economic Cooperation and Development (OECD)

A group of 30 countries that meets regularly to discuss global issues and make appropriate economic and social policies.

Organization of American States

(OAS) A regional organization created in 1948 promoting the economic and social development of Latin America. Members include the U.S., Mexico, most of South and Central America, and most of the Caribbean nations.

Organization of Petroleum Exporting Countries

(OPEC) An organization of countries formed in 1961 to agree on a common policy for the production and sale of petroleum.

Origin of Goods

Origin is the "economic" nationality of goods in international trade. It is necessary to determine the origin of goods as any duties and/or equivalent charges or any customs restrictions or obligations applicable to them will depend on their origin.


A situation in which a firm's functions are performed or provided by a person or group from outside the company.

Outward Processing

A customs procedure allowing the export of Community goods for processing abroad and the re-import of the processed products under total or partial duty relief (Arts 145 - 160 CC)

Overall FTC Limitation

In the U.S. tax code, a limitation on the FTC equal to foreign-source income times U.S. tax on worldwide income divided by worldwide income.

Overdue (Bill of Exchange)

A Bill of Exchange is said to be overdue when the time for its payment has passed, or if it is a bill payable on demand when it appears to have been in circulation for an unreasonable length of time.


Ship with one of its parameters exceeding 295 m (length), 32.25 m (external width) or 13.5 m (maximum draught). These ships cannot navigate through the Panama canal.

Overseas Countries and Territories

Countries and territories dependent on a European Member State and not belonging to the EC customs territory; they are listed in Annex II EC Treaty and benefit from preferences on importation into the EC customs territory (Art. 299 (3) EC Treaty)

Overseas Private Investment Corporation

(OPIC) A U.S. agency that assists U.S. businesses invest overseas and promotes economic development in new and emerging markets.

Ownership-specific Advantages

Property rights or intangible assets, including patents, trademarks, organizational and marketing expertise, production technology and management, and general organizational abilities, that form the basis for the multinational’s advantage over local firms.


Material used to wrap, contain and protect products.

Packing List

A list which shows number and kinds of packages being shipped, totals of gross, legal, and net weights of the packages, and marks and numbers on the packages. The list may be requested by an importer or may be required by an importing country to facilitate the clearance of goods through customs.


Generally in wood, a pallet allows for easier handling of goods. The standard dimensions are: 100 mm x 1200 mm (ISO) and 800 mm x 1200 mm (CEN).


Ship whose parameters permit navigation through the Panama canal: maximum length 295 m, maximum external width 32.25 m and maximum draught 13.5 m.

Pan-Arab Free Trade Area

(PAN-ARAB) An agreement to preserve the economic interests of Arab States, as well as develop economic and trade relations among Arab States and the outside world.

Papua New Guinea-Australia Trade and Commercial Relations Agreement (PATCRA)

Established in 1977, an agreement between Papua New Guinea and Australia formalizing the traditional trading relationship by which substantially all the trade between the two countries is free of duty and other restrictive regulations of commerce.

Parallel Imports

When a product made legally (i.e. not pirated) abroad is imported without the permission of the intellectual property right-holder (e.g. the trademark or patent owner). Some countries allow this, others do not.

Parallel Loan

A loan arrangement in which a company borrows in its home currency and then trades this debt for the foreign currency debt of a foreign counterpart.

Parallel Trading

See "Counter Purchase"

Pari Passu

Credit facilities in which two or more lenders are accorded equal treatment under a loan agreement. Most frequently applied to collateral, but may also refer to loan structure, documentation, maturity or any other substantive condition.

Paris Club

Meeting of public-sector creditors in Paris to negotiate the rescheduling of sovereign debts.

Paris Convention

Treaty, administered by the World Intellectual Property Organization (WIPO), for the protection of industrial intellectual property, i.e. patents, utility models, industrial designs, etc.

Particular Average

Damage of this kind, in the sphere of transport, concerns the goods themselves. It may be in the form of losses, missing items, damage suffered during transport or during handling prior to or after carriage of goods.


Form of business organization in which two or more co-owners form a business. In a general partnership each partner is liable for the debts of the partnership. Limited partnership permits some partners to have limited liability.


A payment of part of a larger sum to be paid later.

Passive Income

In the U.S. tax code, income (such as investment income) that does not come from active participation in a business.


A patent grants the sole right for a specific individual or organization to make, use or sell some invention as authorized by the government.


A person to whom money is paid or is to be paid, especially the person to whom a cheque is made payable.

Payment Guarantee

A guarantee is a commitment given by a bank to pay a sum of money in accordance with the terms and conditions set out in the operation guarantee text.

Payment Methods

(1) Sight payment: The credit is payable immediately against presentation of documents. (2) Negotiation: The credit sum is available immediately against presentation of documents and negotiation (purchase) by the bank of (normally) a bill of exchange (draft) drawn up by the beneficiary.


A person who pays a debt or who is obliged to pay a debt by some written instrument.


Permanent Court of Arbitration


Patent Co-Operation Treaty.

Pegged Exchange Rate System

The International Monetary Fund’s name for a fixed exchange rate system.


See Private Electronic Market


Pan-European Public Procurement On-Line.

Perfect Market Assumptions

A set of assumptions under which the law of one price holds. These assumptions include frictionless markets, rational investors, and equal access to market prices and information.

Performance Bond / Guarantee

A bond provided by a bank or an insurance company on behalf of a contractor in favour of the buyer promising compensation, usually on demand for bank bonds, in the event that the goods supplied/services performed do not meet the agreed contractual specifications.

Peril Point

The limit beyond which the reduction of tariff protection in a given industry would cause it serious injury.

Perils of the Sea

A marine insurance term used to designate heavy weather, stranding, lightning, collision, and sea water damage.


Any natural person, corporation partnership or other legal entity of any kind, domestic or foreign.


Passive Foreign Investment Company

Phytosanitary Inspection Certificate

This certificate is issued by an official department of agriculture and attests that the plants and plant products are free from parasites or toxic substances.

Phytosanitary Inspection Certificate

This certificate is issued by an official department of agriculture and attests that the plants and plant products are free from parasites or toxic substances.


Combination of rail and road transport.


The assigning of export marketing and distribution functions by one manufacturer to another.


Unauthorized copying of materials protected by intellectual property rights (such as copyright, trademarks, patents, geographical indications, etc) for commercial purposes and unauthorized commercial dealing in copied materials.

Point / Pip

The last decimal place of an exchange rate quotation.

Points Quote

An abbreviated form of the outright quote used by traders in the interbank market.


Insurance contract (credit insurance or investment insurance) concluded between the exporter and the Credit Insurer.

Political Risk

Risk that execution of a contract will be prevented by political causes such as political violence, expropriation or currency inconvertibility. Political risk also covers default by a public-sector buyer.

Polycentric Staffing

A staffing policy in a multinational enterprise in which host-country nationals are recruited to manage subsidiaries in their own country, while parent-country nationals occupy key positions at corporate headquarters.

Port Marks

See "Marks"

Post-shipment Finance

Finance required for the period of time after goods have been shipped before payment is received by the exporter.

Power Distance

The extent to which a society accepts hierarchical differences.

Power of Attorney

The authority to act for another person in specified or all legal or financial matters.


Per procurationem, on behalf of or with the authority of someone else.


Purchasing Power Parity.

Predatory Pricing

Practice of temporarily selling below survival costs or giving goods away to undermine or eliminate the existing competition. Predatory pricing is an abuse of dominant position, and is illegal in several countries.

Pre-Export Finance

Financing that takes place before the product is ready for export. For example, an edible oil exporter might receive pre-export finance to enable it to buy seeds which it will eventually use to make the oil. This term is most often used in relation to the petroleum sector.


The amount or amounts paid by the insured as consideration for covering the risks.


Paying for goods at the time the order is placed and prior to receipt of the goods. When prepaying, the importer carries all the risk. They are placing implicit faith in the supplier to fulfil the terms of the contract.


The act of presenting a Bill of Exchange for acceptance and payment.

Presenting Bank

In a collection transaction, the bank that contacts the drawee, generally the buyer of goods, for acceptance and/or payment.

Pre-Shipment Finance

Financing of goods whilst in the manufacturing/collation stage.

Pre-Shipment Risk

Event causing loss which occurs after contract signature but before shipment of the goods.


Political Risk Insurance

Price Discrimination

The practice of charging different prices for the same product in different markets.

Price Elasticity of Demand

The sensitivity of quantity sold to a percentage change in price.

Pricing Constraints

Pricing constraints limit the prices a company may set for their goods or services.

Pricing Controls

Pricing controls establish and maintain the maximum price levels goods or services can have, especially during times of inflation or war.


The party (exporter) entrusting the handling of a collection to a bank.

Principal (Value)

Contract value (does not include interest).

Private Electronic Market

A private electronic market uses the Internet to connect a limited number or pre-qualified buyers or sellers in one market. PEMs are a hybrid between perfectly open markets (e.g. exchanges where there is no pre-existing relationship between buyer and seller - similar to eBay) and closed contract negotiations (such as a sealed bid tender, where there is no visibility between competitors and hence no response to competition). The core idea of PEMs is to create competition among buyers/sellers while allowing buyers/sellers to adjust all those aspects of the deal that are typically only dealt with in a negotiation.


A process whereby publicly owned enterprises are sold to private investors (contrast with nationalization).

Processing Operations

This term covers (Art. 114 (2) (c) CC): (i) the working of goods, including assembling them or fitting them to other goods (ii) the processing of goods (iii) the repair of goods, including restoring them and putting them in order (iv) the use of certain goods which are not be found in the processed products, but which allow or facilitate their production, excluding fuel, energy, lubricants, equipment and tools (Art. 538 CCIP).

Processing Under Customs Control

A procedure allowing goods to be imported under suspension of import duties and commercial policy measures for the purposes of (Art. 130 CC): (i) processing and (ii) subsequent release for free circulation at a more favourable import duty.

Production Possibilities Schedule

The maximum amount of goods (for example, food and clothing) that a country is able to produce given its labor supply.

Production Sharing

Production sharing occurs when a producer chooses to make a product in stages and in different countries so that the firm can employ the lowest-cost resources in the production process.


Requirement that the investor export to certain countries or region.

Pro Forma Invoice

A sample invoice provided by an exporter prior to a sale or shipment of merchandise, informing the buyer of the price, description and quantities of goods offered.

Progressive Taxation

A convex tax schedule that results in a higher effective tax rate on high income levels than on low-income levels.

Progress Payment

Payments due from the buyer to the supplier during the contractual period, which might be financed under a buyer or supplier credit financing.

Promissory Note

An unconditional order in writing, made by one person to another, signed by the maker engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to bearer.

Proof of Origin

Proof that the goods fulfil the origin requirements laid down (e.g. EUR.1, Form A, invoice declaration)

Proportion of Compensation

Proportion between the total amount of the debt at the time of indemnification and the actual amount indemnified


Protection of local industries through tariffs, quotas, and regulations that discriminate against foreign businesses.


A legal document showing that a bill of exchange was presented to the drawee for acceptance/payment and was refused.

Protocol relating to Trade Negotiations among Developing Countries

An agreement negotiated under GATT auspices in 1973, providing for reciprocal tariff and other trade concessions among developing countries.

Proven Default Bond

A bond issued by a surety or insurance company which is a commitment to perform under a contract and/or pay a sum of money. There must be firm proof of the contract being defaulted on.


Pre-shipment inspection — the practice of employing specialized private companies to check shipment details of goods ordered overseas — i.e. price, quantity, quality, etc.


Phasing and Scope Specification.

Psychic Distance

The similarities or lack thereof between country markets. This concept takes into account geographic distance, cultural similarities, linguistic aspects, legal systems and methods of conducting business.

Purchase Order Financing

In this type of trade financing, money is advanced against a purchase order for finished goods or value added products to finance the manufacturing of the item. Once the goods ship to the customer and invoiced the transaction is closed out when the factoring company buys the invoice.

Purchasing Agent

Someone who buys goods in his or her country on behalf of foreign buyers.

Purchasing Power Parity

(PPP) The principle that equivalent assets sell for the same price. Purchasing power parity is a measurement of a currency's value based on the buying power within its own domestic economy.

Pure Cover Bond

A bond issued by a surety or insurance company which is a commitment to perform under a contract and/or pay a sum of money. There must be firm proof of the contract being defaulted on.

Pure Cover Loan

A loan where the interest rate is not officially supported, but where insurance/guarantees are provided to the lenders covering principal plus interest.


Quantitative restrictions — specific limits on the quantity or value of goods that can be imported (or exported) during a specific time period.


Canada, EU, Japan and the United States.

Qualified Acceptance

Is one which in express terms varies the effect of the bill of exchange as drawn, and may be: (a) Conditional: one which makes payment by the acceptor dependent on the fulfilment of a condition (b) Partial: an acceptance to pay part of the amount only for which the bill is drawn (c) Local: an acceptance to pay only at a particular or specified place (d) Qualified as to Time: a bill drawn for two months accepted payable in three months and (e) Acceptance by Some Drawees Only: the holder may refuse to take a qualified acceptance and if they do not obtain an unqualified acceptance, they may treat the bill as dishonoured.

Quantitive Restrictions

(QR) Restrictions on trade, generally in the form of quotas, that limit the quantity o a good or service that can be imported or exported. Another form of quantity restriction is a VER, or Voluntary Export Restraint.


The period during which an arriving vessel, including its equipment, cargo, crew or passengers, suspected to carry or carrying a contagious disease is detained in strict isolation to prevent the spread of such a disease


Part of a wharf which is intended for the mooring of vessels.

Quid Pro Quo

An equal exchange that a person or firm makes with another person or firm.


The quantity of goods of a specific kind that a country permits to be imported without restriction or imposition of additional duties.


An offer to sell goods at a stated price and under stated terms.

Rate of Exchange

The basis upon which money of one country will be exchanged for that of another. Rates of exchange are established and quoted for foreign currencies on the basis of the demand, supply, and stability of the individual currencies. See "Exchange."


Research and development


Registration, Evaluation, Authorisation and Restriction of Chemicals

Real Appreciation/Depreciation

A change in the purchasing power of a currency.

Real Exchange Rate

A measure of the nominal exchange rate that has been adjusted for inflation differentials since an arbitrarily defined base period.


The coordinated revaluation and devaluation of the currencies of several countries.


Money owed to a business for merchandise or services sold on open account. Receivables are a key factor in analysing a company’s liquidity.

Reciprocal Marketing Agreement

A strategic alliance in which two companies agree to comarket each other’s products in their home market. Production rights may or may not be transferred.


In shipping, it is the change in either the name of the consignee, the place of delivery, or relinquishment of the shipment by the carrier at the point of origin.


The right of a holder of a Bill of Exchange to demand payment from a person rather than the acceptor. Bills may be endorsed “without recourse” in which case the endorser does not become liable to any holder.

Red Clause Credit

Documentary credit provision, which allows the beneficiary (seller), to draw partial advance payments under the credit. This provision had historically been written/typed in red ink, hence the “red clause”.

Regional Development Banks

(RDBs) Banks that are owned and operated by member nations; they are designed to extend development loans and provide other assistance to member nations. The world's four regional development banks are the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank.

Regional Value Content

(RVC) A rule that requires a product to be made up of a certain percentage of originating content.

Registration Statement

In the United States, a statement filed with the Securities and Exchange Commission on securities issues that discloses relevant information to the public.

Reimbursement Authorisation

The authorisation or request to reimburse provided by the issuing bank to the reimbursing bank.

Reimbursement Undertaking

An independent undertaking to reimburse provided by the reimbursing bank in favour of the claiming bank in accordance with a request to that effect by the issuing bank.

Reimbursing bank

In a documentary credit transaction, the bank with which the issuing bank maintains an account and that is authorised by the issuing bank to charge that account to pay claims received from the negotiating bank for documents that have been presented.

Re-invoicing Centers

An offshore financial affiliate that is used to channel funds to and from the multinational’s foreign operations.


The forwarding of funds from one party to another as payment for goods or services.

Remittance – Documents Against Payment

An advance facility which provides for negotiation or purchases of bills of exchange (sight) drawn outside documentary credits and where accompanying documents are to be released on payment of the bill overseas.

Remitting Bank

Under documentary collections the bank to which the principal (exporter) has entrusted the handling of a collection.


The act of remitting cash flows from a foreign affiliate to the parent firm.

Reservation Price

The price below (above) which a seller (purchaser) is unwilling to go.

Residual Risk

The proportion or percentage of the financed amount (principal plus interest), which is not insured/guaranteed by an export credit agency.

Restrictive Endorsement

Endorsement transferring title or right to a named party.

Retention Bond

A guarantee to a buyer that, if problems occur in a contract subsequent to its completion, retention funds will be callable.

Retention of Title

A legal arrangement under which a seller of goods delivers these goods “on consignment” into someone’s custody but ownership remains with the seller until he is paid. In many countries, retention of title allows the seller to repossess the goods whenever desired and to establish a claim against the custodian if the goods are sold or used without being paid for

Retire (a Bill of Exchange)

To pay, or take up before maturity, usually under rebate and thus withdraw (or retire) a bill from circulation. If a bill is retired by the acceptor, the bill is discharged in the same way as upon payment at maturity.


Applied to letters of credit. A revocable letter of credit is one which can be altered or canceled by the buyer after he has opened it through his bank. See "Irrevocable."

Revocable Letter of Credit

A documentary credit that can be amended or cancelled at any time without notice to or consent of the beneficiary. A letter of credit that is subject to the UCP600, the ISP, or to US law is revocable only if it clearly specifies so.

Revolving Credit

A credit where the amount of available drawings is reinstated automatically after a stated period of time.


The Islamic finance term for interest.


(Ro-Ro) This technique helps a vehicle to enter/exit a ship on its own or, in case of a land route, a train.

Roll-On-Roll-Off (Ro-Ro)

This technique helps a vehicle to enter/exit a ship on its own or, in case of a land route, a train.


The extension of a maturing foreign exchange transaction or the extension of a maturing currency deposit/loan.

Rome Convention

Treaty, administered by the World Intellectual Property Organization (WIPO), United Nations Educational, Scientific and Cultural Organization (UNESCO) and International Labour Organization (ILO), for the protection of the works of performers, broadcasting organizations and producers of phonograms.

Royalty Payment

The share of the product or profit paid by a licensee to his licenser. See "Licensing."


Regional trade agreement.

Rules of Origin

Laws, regulations and administrative procedures which determine a product’s country of origin. A decision by a customs authority on origin can determine whether a shipment falls within a quota limitation, qualifies for a tariff preference or is affected by an anti-dumping duty. These rules can vary from country to country.


South Africa


See Single Administrative Document.


Form used to supplement the copies of the SAD when more than one item is being declared.

Sales Agent

See "Foreign Sales Representative"

Sales Representative

See "Foreign Sales Representative"

Sanitary and Phytosanitary Measures

(SPS) Measures dealing with food safety and animal and plant health: (i) Sanitary: for human and animal health and (ii) Phytosanitary: for plants and plant products.

Sanitary Certificate

A certificate which attests to the purity or absence of disease or pests in the shipment of food products, plants, seeds, and live animals.


A European Cooperative Society (Societas Cooperativa Europaea)

Scenario Analysis

A process of asking “What if?” using scenarios that capture key elements of possible future realities.

Schedule B

Refers to "Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the United States." A seven-digit Schedule B number must be entered on the shipper's U.S. Export Declaration for every commodity shipped.


subsidies and countervailing measures


See "Sight Bill"


A European Company (Societas Europaea)

Sea Waybill

Transport document for marine shipments serving as evidence of contract of carriage and as a receipt for the goods. It is not a document of title.

Section 201

Also known as the “escape clause” of the U.S. Trade act of 1971, section 201 is a provision that permits imports to be restricted in a certain industry, for a limited time, if those imports have caused injury to U.S. firms.

Section 301

In U.S. trade law, section 301 is a provision that allows private parties to seek compensation through the U.S. government if they have experienced injury to their business because of the illegal or unfair actions of foreign governments.


The transformation of the loan asset into a liquid security which is then distributed to investors via the capital markets.


Amount that might be requested by the customs authorities to ensure payment of customs debt.


System of Exchange of Excise Data.

Segmented Market

A market that is partially or wholly isolated from other markets by one or more market imperfections.


A principal in the transaction, usually the manufacturer, producer, wholesaler, or distributor of the goods, that receives the monetary benefit or other consideration for the exported goods.

Seller's Market

Exists when the demand for a good outweighs the supply, and so the economic forces of business cause the goods to be priced at or closer to the vendor's estimate of their value.

Semi-strong Form Efficient Market

A market in which prices fully reflect all publicly available information.

Sensitive goods

A range of goods for which the Community guaranteeing associations have withdrawn the TIR guarantee

Serial Shipping Container Code

(SSCC) Used to Identify Logistics units e.g. Unit loads on pallets, roll cages, parcels

Settlement of Disputes

A declaration made by the United Nations (UN) stating that any water-based international disagreement must be settled in a peaceful and diplomatic manner.


Islamic law.



Shipment Date

The date the goods are considered en route to their destination.


Consignor, exporter, or seller (who may be the same or different parties) named in shipping documents as the party responsible for initiating a shipment, and who may also bear the freight cost.

Shipper's Export Declaration

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 Schedule B identification number.

Shipping Documents

Documents that include but are not limited to commercial invoices, export shipping instructions, packing lists, bill of ladings and air waybills. Others may include: (i) Certificate of origin (ii) Certificate of quality (iii) Veterinary certificate (iv) Consular invoice (v) Weight certificate (vi) Inspection certificate (vii) Packing lists.

Shipping Weight

The shipping weight is the weight in kilograms, which includes the weight of the commodity, as well as the weight of normal packaging, such as boxes, crates, barrels, etc. For containerised cargo in lift vans, cargo vans, or similar substantial outer containers, the weight of such containers is not included in the shipping weight.

Ship's Manifest

A true list in writing of the individual shipments comprising the cargo of a vessel, signed by the captain.

Short Term

Usually any credit period up to two years.

Short-Term Realisation of Receivables from Overseas

Short-term Realisation of Receivables from Overseas is a short-term financing technique for exporters who grant their foreign buyers a certain term of payment. The realisation of the invoice is possible up to 100% of its value.


See "Standard Industrial Classification"

Sight Bill

A Bill of Exchange payable at sight is treated as being payable by the drawee on presentation or on demand. A Bill of Exchange payable at sight is treated as being payable by the drawee on presentation or on demand.

Silent Confirmation

Term used for a bank’s commitment to negotiate (i.e. purchase) documents under a letter of credit at a future date, without recourse. A silent confirmation is not a confirmation in the true sense, and will not use the word “confirm”, but is rather an equivalent form of protection for the beneficiary. The bank will require that the letter of credit be negotiable by the bank in order to be able to establish holder-in-due-course rights equivalent to those of a confirming bank.

Simplified Network Application Process Redesign

(SNAP-R) The Department of Commerce's Bureau of Industry and Securities online system which allows users to submit export license applications and commodity classification requests.

Single Administrative Document

This is a standardised multi-copy form which is used throughout the European Community and EFTA countries for the control of imports, exports and goods in transit.


See "Standard International Trade Classification"

Small and Medium-Sized Enterprise

The European definition is a maximum of 500 employees, a turnover not exceeding 40 million euros, and with less than 25% holding by one or more non SME enterprises - with the exception of investment or venture capital companies. Usually these SME identification tests do not apply to research organisations or consultants.

Small Business Administration

(SBA) An independent agency of the U.S. federal government that aids, counsels, assists, and protects the interests of small business concerns to preserve free competitive enterprise and to maintain and strengthen the overall economy of the nation.

Small Business Development Center

(SBDC) An U.S. organization set up to assist small business owners by providing management and technical resources to help start and run their businesses.


See "Small and Medium-Sized Enterprise"

Smoot Hawley Act

Passed in 1930, this protectionist act increased import duties to the highest rate ever imposed by the United States, resulting in the downfall of the world trade system.

Social Capital

Physical or real capital that is owned by the public sector rather than by private firms.

Society for Worldwide Interbank Financial Transactions

(SWIFT) Network through which international banks conduct their financial transactions.

Soft Currency

A currency which is not readily accepted in exchange for other currencies or convertible to gold.

Soft Loan

A loan made at a concessional rate and term.

Sogo Shosha

A Japanese international general trading firm with integrated and coordinated services and production, such as Mitsubishi, and characterized by intercorporate shareholding and diversification to minimize risk, intra-group executives, and a presidential council.

Sola Draft

A single Bill of Exchange as distinguished from one in a set, the latter being marked as “First of Exchange” and the former “Sola of Exchange”.

Sole Proprietorship

A business owned by a single individual. The sole proprietorship pays no corporate income tax but has unlimited liability for business debts and obligations.

South Asian Association for Regional Cooperation

The South Asian Association for Regional Cooperation (SAARC) was established on December 8, 1985 as a economic and political organization for Southern Asia. Its members states consist of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

South Asian Preferential Trade Arrangement

An organization promoting and sustaining mutual trade and economic cooperation among Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka through the exchange of concessions in respect to tariffs, para-tariffs, non-tariff barriers and direct trade measures.

Southern African Customs Union

Established in 1910, the SACU is the oldest customs union in the world and is composed of South Africa, Swaziland, Botswana, Namibia, and Lesotho. The countries engage in the free exchange of goods across their borders, and a share a common external tariff and excise duties, as well as the revenues generated by them.

Southern African Development Community

The Southern African Development Community (SADC) was first established in 1992. It is the successor to the Southern African Development Coordination Conference (SADCC). The Member States are Angola, Botswana, the Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.

Southern Cone

The geographic region including Argentina, Brazil, Chile, Paraguay, and Uruguay.

South Pacific Regional Trade and Economic Cooperation Agreement

(SPARTECA) A non-reciprocal arrangement under which Australia and New Zealand offer preferential trade access to the developing nation members of the South Pacific Forum.

Sovereign Buyer

A buyer that is owned by a national government and carries the full faith and credit backing of that government when entering into sales and credit agreements.


South Pacific Regional Trade and Economic Cooperation Agreement


See "Special Purpose Corporation"

Special Drawing Right

(SDR) An international reserve created by the International Monetary Fund and allocated to member countries to supplement foreign exchange reserves.

Special Purpose Corporation

See "Special Purpose Vehicle"

Special Purpose Vehicle

An independent corporation with nominal capital which is a party to an export or project financing for purposes of holding title as a nominee or acting as a conduit of funds.

Specific Delivery Point

A point in sales quotations which designates specifically where and within what geographical locale the goods will be delivered at the expense and responsibility of the seller; e.g., F.A.S. named vessel at named port of export.

Specific Tariff

A tariff assessed at a specific amount per unit of weight.

Spot Exchange-rate

Price that is quoted for immediate (spot) settlement. Spot settlement is normally one to two business days from trade date.

Spot Market

A market in which trades are made for immediate delivery or delivery in the very near future.


Sanitary and Phytosanitary


See "Special Purpose Vehicle"


Sub-Saharan Africa


See "Serial Shipping Container Code"

Stabilization Policies

Government policies designed to promote economic growth, steady employment, and stable prices.

Stamp Tax

A tax placed on a legal document upon transfer.

Standard Industrial Classification

(SIC) A numerical system developed by the U.S. Government for the classification of commercial services and industrial products. Also classifies establishments by type of activity.

Standard International Trade Classification

(SITC) A numerical system developed by the United Nations to classify commodities used in international trade as an aid to reporting trade statistics.

Standby Letter of Credit

A form of guarantee such as a demand guarantee. Used as security for a contingent event i.e. an importer failing to honour the exporter’s invoices under open account – the importer claims against the standby letter of credit.


Standards and Trade Development Facility

Steamship Conference

A group of vessel operators joined together for the purpose of establishing freight rates. A shipper may receive reduced rates if the shipper enters into a contract to ship on vessels of Conference members only.


Small transnational corporation

Stocking Distributor

A distributor who maintains an inventory of goods of a manufacturer.

Straight Bill of Lading

A bill of lading, non-negotiable, in which the goods are consigned directly to a named consignee.

Straight Discount

This expresses the discount rate as a percentage discounted from the face value given the life of the specific maturity or maturities. A straight discount does not represent a true interest cost.

Structural Impediments Initiative

A 1990 agreement between the United States and Japan aimed at trying to decrease non-tariff barriers restricting imports into Japan.

Subpart F Income

In the U.S. tax code, income from foreign subsidiaries owned more than 10 percent and controlled foreign corporations that is taxed on a pro rata basis as it is earned.


Legal mechanism by which the Credit Insurer, having indemnified the exporter, holds the exporters rights and shares and can rightfully exercise them against the debtor.


A company controlled by a holding company (usually a via a minimum 51% shareholding). A wholly owned subsidiary is 100% owned by a holding company.

Subsidized Financing

Financing that is provided by a host government and that is issued at a below-market interest rate.


There are two general types of subsidies: export and domestic. An export subsidy is a benefit conferred on a firm by the government that is contingent on exports. A domestic subsidy is a benefit not directly linked to exports.

Subsistence Agriculture

Small-scale agriculture designed to meet the consumption needs of individual households.


An Islamic bond financing. A sukuk (which works in a broadly similar way to a conventional securitisation) is a bond or certificate that provides an investor with ownership or part-ownership in the underlying asset, usufruct, or service. The nature of the underlying asset and terms of the sukuk must be agreed on the subscription date. The sukuk represents the beneficial ownership of the underlying assets and therefore entitles its holder to receive a pro rata share of profits generated by the asset (not a fixed return tied to their face value). A Sukuk can also be issued in tradable form and listed on applicable investment exchanges.

Supplier Credit

A financing arrangement under which the supplier agrees to accept deferred payment terms from the buyer, and funds itself by discounting or selling the bills of exchange or promissory notes so created with a bank in its own country.


Swift is the Society for Worldwide Interbank Financial Telecommunication, a member-owned cooperative through which the financial world conducts its business operations with speed, certainty and confidence.


In textiles and clothing, when an exporting country transfers part of a quota from one product to another restrained product.

Swing (1)

Swing is the term used to describe the amount of imbalance which may arise on a bilateral clearing account.

Swing (2)

In textiles and clothing, when an exporting country transfers part of a quota from one product to another restrained product.

Switch Trading

This is when a third party buys the imbalance that has arisen on a bilateral clearing account in hard currency but at a discounted rate.


See "Shipping Weight"


In an acquisition or merger, when the value of the combination is greater than the sum of the individual parts: Synergy = VAT (VA + VT).

Synthetic Forward Position

A forward position constructed through borrowing in one currency, lending in another currency, and offsetting these transactions in the spot exchange market.


See "Transit Accompanying Document"

Take-And-Pay Contract

A contract that requires the buyer to take and pay for the goods or services only if delivered.

Take-Or-Pay Contract

A contract with an unconditional obligation on the buyer to pay even if no goods or services are delivered or provided by the seller.


Real assets that can be used as collateral to secure debt.

Tare, Dead Weight

Weight of the ITU (Intermodal Transport Unit) or of the vehicle without any load.

Tare Weight

The weight of a container and packing materials that excludes the weight of the goods it contains.

Targeted Registered Offerings

Securities issues sold to “targeted” foreign financial institutions according to U.S. SEC guidelines. These foreign institutions then maintain a secondary market in the foreign market.


Integrated tariff of the EC. The TARIC classification is a 10-digit codification, which serves to integrate Community regulatory measures such as preferential tariffs, tariff quotas and anti-dumping duties, quantitative restrictions, embargoes etc. The common customs tariff is based on the TARIC.


A schedule or system of duties imposed by a government on goods imported or exported; the rate of duty imposed in a tariff.

Tariff Anomaly

The state of having a tariff on raw materials or semi-processed products be higher than the tariff on the corresponding finished product.

Tariff Category

This is the designation of goods in terms of customs tariffs.

Tariff Engineering

The act of manufacturing something in order to get preferable duty treatment.

Tariff Escalation

Higher import duties on semi-processed products than on raw materials, and higher still on finished products. This practice protects domestic processing industries and discourages the development of processing activity in the countries where raw materials originate.


Procedures relating to the agricultural market-access provision in which all non-tariff measures are converted into tariffs.


A tariff that is set at a lower rate until a specified quantity (the quota) of goods has been imported, at which point the tariff increases for additional imports.

Tariff Quota

When quantities inside a quota are charged lower import duty rates, than those outside (which can be high).


Taxes on imported goods and services, levied by governments to raise revenues and create barriers to trade.

Tax Arbitrage

Attempting to profit by exploiting the differences in tax rates or tax systems.

Tax Haven

A country or region imposing low or no taxes on foreign source income.

Tax Haven Affiliate

A wholly owned affiliate that is in a low-tax jurisdiction and that is used to channel funds to and from the multinational’s foreign operations. The tax benefits of tax-haven affiliates were largely removed in the United States by the Tax Reform Act of 1986.

Tax Holiday

A reduced tax rate provided by a government as an inducement to foreign direct investment.

Tax Identification Number

Most EU countries use Tax Identification Numbers (TINs) to identify taxpayers and facilitate the administration of their national tax affairs. TINs are also useful for identifying taxpayers who invest in other EU countries and are more reliable than other identifiers such as name and address. Financial institutions have to record the name and address of their account holders and, if there is one, the Tax Identification Number allocated by the EU country of residence for tax purposes. They must report the TIN, together with other personal and income details every year to the tax authorities of the country where they are established as part of their obligations under the Savings Directive. TIN specifications (structure, syntax, etc.) are set by the national authorities. Some countries even have a different TIN structure for different categories of individuals (e.g. nationals and foreign residents).

Tax Neutrality

Taxes that do not interfere with the natural flow of capital toward its most productive use.

Tax Treaty

An agreement specifying what items of income will be taxed by the authorities of the country where the income is earned.


Technical Barriers to Trade


Transit Computerisation Project.


Trade by Enterprise Characteristics

Technical Analysis

Any method of forecasting future exchange rates based on the history of exchange rates.

Technical Barriers to Trade (TBT)

Regulations, standards, testing and certification procedures, which could obstruct trade. The WTO’s TBT Agreement aims to ensure that these do not create unnecessary obstacles.

Tender Bond / Guarantee

A guarantee provided by a company responding to an international invitation to submit bids or tenders. The tender bond is required to discourage frivolous bids and ensures that the winning bidder will execute the contract.

Tender To Contract Period

The period of time between submission of a tender and signature of a contract.

Tenor (of a Bill of Exchange)

The period for which a bill is drawn e.g. sight, 30 days after date etc.

Terminal / Warehouse

Place of transhipment from one means of transport to another.

Terms Of Sale

The following are brief descriptions of the more common Terms of Sale (fully defined in the "American Foreign Trade Definitions 1941"), setting forth the obligations of the seller and buyer.

Terms Or Methods Of Payment

If the insured is not paid for any reason, he/she must dispose of the goods and, therefore, still has an insurable interest. Following are the more common Terms or Methods of Payment:

Territorial Tax System

A tax system that taxes domestic income but not foreign income. This tax regime is found in Hong Kong, France, Belgium, and the Netherlands.


Technical Excise System Specification.


TEU (Twenty feet Equivalent Unit) A standard unit based on a ISO container of 20 feet length (6.10 m), used as a statistical measure of traffic flows or capacities. One standard 40' ISO Series 1 container equals 2 TEUs


Total Factor Productivity


Charges corresponding to the handling services provided during loading/unloading operations at ports and airport terminals.

The Office of Foreign Assets Control

(OFAC) The US Department of the Treasury which administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.

Through Bill of Lading

A Bill of Lading issued to cover transport by at least two successive modes of transport.

Tied Loan

A loan issued by a government requiring the borrower to spend the funds in the lending country.

Tiered Formula

A formula where higher tariffs have steeper cuts than lower tariffs — products with higher tariffs are put in a higher category or tier, which has a steeper cut than lower tiers. Also used for cutting domestic support.

Time Draft

A Bill of Exchange that demands payment at a specified future date rather than immediately upon presentation [also known as a usance draft].


See "Tax Identification Number"


International Road Transport (Transport International Routier): a European arrangement for using international documents for sending goods by road.

TIR Carnet

A book with tear-off slips used for an international road transit operation; Document facilitating transit by serving both as a customs declaration and as a guarantee in countries that are a contracting party to the TIR Convention (OJ 1978 No L 252, p. 1)

TIR Carnet Holder

The company authorised by Customs to use TIR carnets.

TIR Convention

The Customs Convention on the International Transport of Goods Under Cover of TIR Carnets, 1975.

TIR Guarantee

The amount of the security covering the duties and taxes at risk.


Transnational corporation


In a tolling deal the customer provides the raw material (for example, steel ingots) and hires the capacity of the factory to turn it into the final product (for example, steel tubes). The final product is then supplied to the customer, who pays in cash. Throughout the process, the customer retains ownership of the raw material.


Trans-Pacific Partnership

Track Gauge

Distance between the inside faces of the rails of a railway track. It is normally 1.435 m large. Other gauges are generally used in some European countries: for instance, 1.676 m in Spain & Portugal, 1.524 m in the Russian Federation.

Trade Acceptance

A time draft that is drawn on and accepted by an importer.

Trade Balance

A country’s net balance (exports minus imports) on merchandise trade.

Trade-Balancing Measure

Requirement that the investor use earnings from exports to pay for imports.

Trade Barrier

A governmental policy, action, or practice that intentionally interrupts the free flow of goods or services between countries.

Trade Deficit

Occurs when the value of a country's exports is less than the value of its imports.

Trade Finance

A bank term for financing export sales which includes, inter alia, Letters of Credit, drafts, forfeiting, factoring, structuring, preexport, post-export, and receivables.


A symbol or words that are legally registered to a company or product.


A trader is an enterprise whose function consists of purchasing on his own account and reselling in his own name, with a margin he decides upon himself.

Trade Surplus

A situation in which a country's exports exceed its imports. It represents a net inflow of domestic currency from foreign markets, and is the opposite of a trade deficit, which would represent a net outflow.

Trade Terms

The terms of a sale, which include price, responsibility for shipping, insurance and responsibility for customs duties.


Any vehicle without a motor intended to be connected to a motorised vehicle, with the exception of trailer trucks.

Transaction Exposure

Changes in the value of contractual (monetary) cash flows as a result of changes in currency values.

Transaction Risk

Transaction risk is the current and prospective risk to earnings or capital arising from fraud, error and the inability to deliver products or services, maintain a competitive position and manage information. Transaction risk encompasses: product development and delivery, transaction processing, systems development, computing systems, complexity of products and services and the internal control environment.

Transaction Statement

A document that clearly outlines the terms and conditions agreed upon between an importer and an exporter.

Transferable Credit

A credit which allows the beneficiary to transfer part, or all, of the credit rights to a third party, or parties, if part shipments are allowed.

Transferable Letters Of Credit

A Documentary Credit, which enables the beneficiary [exporter/supplier] to transfer portions of the credit to another party.

Transfer Prices

Prices on intracompany sales

Transfer Pricing

The price one unit of a company charges to another unit of the same company for goods or services exchanged between the two.

Transfer Risk

The risk or inability to convert local currency into the currency in which debt is denominated and/or the ability to transfer the funds to the country of the lender/exporter. Also known as conversion risk.


Customs regulation which allows, subject to certain guarantees, the movement of goods with suspension of duties, taxes and other economic, fiscal or customs' measures.

Transit Accompanying Document

The TAD accompanies the goods where a transit declaration is processed at an office of departure by the NCTS. Copies A and B of the TAD replace copies No 4 and No 5 of the SAD. The TAD corresponds to the specimen and notes in Appendix III, Annexes D3 and D4 Convention/Annex 45a IPC.

Transit Certificate

Attestation of payment of toll showing proof of the trips made by a truck on the highway and enabling transport companies to benefit from a more favourable axle tax system.

Transit Credit

This is where a bank in a third country acts as an intermediary between the issuing bank and the advisory bank.

Transiting Goods

Shipments of goods moving through a third country en route from the exporting country to the importing country, where the third country is not the country of ultimate destination.

Translation Exposure

Changes in a corporation’s financial statements as a result of changes in currency values. Also known as accounting exposure.

Transnational Corporation

An enterprise comprising entities in more than one country which operate under a system of decision-making that permits coherent policies and a common strategy.

Trans-Pacific Strategic Economic Partnership

A multilateral free trade agreement which currently includes Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the United States.


Degree to which trade policies and practices, and the process by which they are established, are open and predictable.

Transportation Bonds

These cover advance payments made by the employer to the contractor for the specific purpose of importing capital goods or materials. Normally they operate from the moment the materials arrive in the port or airport of destination until delivery on site.


The transfer of merchandise from the country of origin to an intermediary country prior to shipment to the country of ultimate destination.

Treaty of Rome

Treaty, signed in 1957, which inaugurated the European Economic Community, establishing a common market in a variety of products between member states.


Trade-related investment measures.

Tripartite Agreement

An agreement among three parties. For example, the Germany, Italy and Japan Tripartite Pact, signed in 1940, specified the parties that would control Europe and Greater Asia.


Trade-Related Aspects of Intellectual Property Rights.

TT Club

Through Transport Club – London based mutual, which provides insurance services to over two thirds of the world’s container fleet plus port and terminal operators.

Turnkey Project

A project in which a firm agrees to set up an operating plan for a foreign client and hand over the "key" when the plant is fully operational.

Twist Lock

Standardised fastening piece to lock an ITU (Intermodal Transport Unit) onto a ship or the vehicle transporting it.


See "Uniform Commercial Code"


Undertakings for Investment in Transferable Securities.


See "Uniform Customs and Practice for Documentary Credits"




United Kingdom

Ultimate Consignee

The person, party, or designee that is located abroad and actually receives the export shipment. This party may be the end user or the FPPI.

Unaccompanied Transport

Transportation of a fully roadworthy means of transport by another means of transport (e.g. a train or ferry boat), without the presence of the driver

Uncertainty Avoidance

The extent to which a society tolerates uncertainty and ambiguity.


United Nations Conference on Trade and Development

Unfair Calling Insurance

Insurance coverage to protect principals who have issued demand guarantees, bonds or standby letters of credit against unfair or abusive call of the bond/guarantee.


United Nations Industrial Development Organization

Uniform Commercial Code

The Uniform Commercial Code (UCC), a comprehensive code addressing most aspects of commercial law, is generally viewed as one of the most important developments in American law. The UCC text and draft revisions are written by experts in commercial law and submitted as drafts for approval to the National Conference of Commissioners on Uniform State Laws (referred to as the Uniform Law Commissioners), in collaboration with the American Law Institute. The UCC is a model code, so it does not have legal effect in a jurisdiction unless UCC provisions are enacted by the individual state legislatures as statutes. See

Uniform Customs and Practice for Documentary Credits

International standards of letter of credit practice established for bankers by the International Chamber of Commerce. Historically, the UCP has been revised about every 10 years to keep up with changing practice, the current revision, UCP600, having been given an effective date of 1 July 2007. Although the UCP defines rights and obligations of the various parties in a letter of credit transaction, it is not law and any given letter of credit is subject to the UCP only to the extent indicated in the letter of credit itself. It is observed by most trading nations.

Uniform Rules for Collections

(URC) The internationally recognized standards on collection developed by the International Chamber of Commerce.

United Nations Code for Trade and Transport Locations

The "United Nations Code for Trade and Transport Locations" is commonly more known as "UN/LOCODE". Although managed and maintained by the UNECE, it is the product of a wide collaboration in the framework of the joint trade facilitation effort undertaken within the United Nations.

United Nations Conference on Trade and Development

UNCTAD was established in 1964 with the goal of promoting sustainable development while integrating developing countries into the world economy. It works to achieve this goal by acting as a forum for intergovernmental deliberations with an aim at consensus building; conducting research, policy analysis, and data collection; and by providing technical assistance tailored to the specific needs of different developing countries.

United Nations Industrial Development Organization

UNIDO helps developing countries and countries with economies in transition in their fight against marginalization in today's globalized world. It mobilizes knowledge, skills, information, and technology to promote productive employment, a competitive economy, and a sound environment.

Unit of Quantity

The unit of measure that merchandise is counted either in numbers or weight such as yards, meters, pieces or numbers.


The physical removal of cargo from an aircraft, truck, rail, or vessel.


See "United Nations Code for Trade and Transport Locations"

Unsustainable Debt

A financial condition in which a country is unable to service its foreign (external) debt without decimating its economy.


The Uniform Rules and Usage are the texts drawn up by the International Chamber of Commerce for the correct usage of banking techniques in international trade. They have a legal standing in this field and reference is to be made to them in case of litigation. The most commonly known URU relates to documentary credit, URU 500, applicable since January 1, 1994.


The time allowed for payment of an international obligation. A usance credit is credit available against time drafts.

Usance Letter Of Credit

A deferred letter of credit without bills or notes issued under it.

U.S. Standard Master

A single business form with combined stencil which includes space for information required on many different export forms. Use of this form eliminates multiple typing.


The practice of charging or paying exorbitant interest on a loan or other transaction. Note: in Islamic societies, charging, or receiving any amount of interest is considered usury.


Coordinated Universal Time.




See "Vente à Distance - Distance Selling"

Validated License

A government document authorizing the export of commodities within the limitations set forth in the document.

Validity Date

The date on which a bond or guarantee expires.

Valuation Clause

Provides basis for determining insured value of a shipment under the Open Cargo policy.

Value Added Tax

(VAT) A sales tax collected at each stage of production in proportion to the value added during that stage.

Value Date

The date on which foreign exchanges bought and sold have to be delivered and the prices payable for them in local currency have to be paid.

Variable Levy

Customs duty rate which varies in response to domestic price criterion.


See "Value Added Tax"

Vehicle Currency

A currency that plays a central role in the foreign exchange market (e.g., the U.S. dollar ad Japanese Yen).

Vente à Distance - Distance Selling

Collection of sales methods where the client can choose, order, and pay for articles from his or her home (by Internet, Minitel, catalogues, etc.)

Vente Par Correspondence - Mail Order Selling

Sales method where neither the buyer nor the seller meet. The entire transaction, from the order to the payment is done by mail.


Voluntary export restraint. Bilateral arrangements whereby an exporting country (government or industry) agrees to reduce or restrict exports without the importing country having to make use of quotas, tariffs or other import controls.

Very Large Capacity Container

Container that does not comply with ISO standards in length, width or height. The dimensions are variable and can sometimes be as long as 45' (13.72m), 48' (14.64m) or 53' (16.10m).



Vienna Convention 1980

United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980) (CISG) aims provide a modern, uniform and fair regime for contracts for the international sale of goods.


VAT Information Exchange System.

Voluntary Export Restraint

(VER) A quota on trade imposed from the exporting country's side, instead of the importer's; usually imposed at the request of the importing country's government.

Vostro Account

A bank account held by a foreign correspondent of the local bank with that bank, in the local currency.


See "Vente Par Correspondence - Mail Order Selling"


Voluntary restraint arrangement. Bilateral arrangements whereby an exporting country (government or industry) agrees to reduce or restrict exports without the importing country having to make use of quotas, tariffs or other import controls.


Very Small Aperture Terminal

Waiting period

Period between the maturity date of the unpaid debt and the date when the policyholder can make the claim.


The act of intentionally relinquishing or abandoning a known right, claim, or privilege; also: the legal instrument evidencing such an act.


A large building where goods are kept.

Warehouse Receipts

Warehouse receipts provide evidence that specified physical assets of a creditor are being held in storage. They may be used as a form of guarantee in countertrade operations.

Warehouse to Warehouse

Insurance coverage of international cargo from exporter’s warehouse to importer’s warehouse

War Risk

Insurance against loss or damage to property as a result of war risks.

Washington Convention

CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora; designed to protect endangered plants and animals.

Washington Treaty

Treaty for the protection of intellectual property in respect of lay-out designs of integrated circuits.


A non-negotiable transport document, issued for either ocean transport (sea waybill) or air transport (air waybill).


World Customs Organisation a multilateral body located in Brussels through which participating countries seek to simplify and rationalize customs procedures.

Weak Form Efficient Market

A market in which prices fully reflect the information in past prices.

Weight Note

A document issued by either the exporter or a third party declaring the weight of goods in a consignment.

West African Economic and Monetary Union

(UEMOA) A regional alliance of Francophone West African countries dedicated to promoting economic integration among the seven member countries. The country members are Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, and Togo. They all share a common currency and have a central bank to oversee it.


Charge assessed by carrier for the handling of incoming or outgoing ocean cargo.


An organisation that buys large quantities of goods from manufacturers and sells them to retailers who sell directly to the public. The wholesaler buys in order to resell to traders, retailers or companies.


World Intellectual Property Organisation.


Official deed or private agreement or a decision by a court of law withdrawing a replevin, cancelling a mortgage or an objection and conferring once again the authorisation in respect of the goods or right that had been suspended.

Withholding Tax

A tax on dividend or interest income that is withheld for payment of taxes in a host country. Payment is typically withheld by the financial institution distributing the payment.

Without Recourse

The purchase and discounting of trade documentation issued by an exporter under, and in full compliance with the terms of a documentary credit with the negotiating bank’s sole recourse to the documentary credit issuer.

World Bank

An international organization created at Breton Woods in 1944 to help in the reconstruction and development of its member nations. Its goal is to improve the quality of life for people in the poorer regions of the world by promoting sustainable economic development. See also International Bank for Reconstruction and Development.

World Customs Organization

An international organization whose function is the facilitation of trade between member states through the simplification and standardization of customs practices. The WCO was established in 1952 as the Customs Co-operation Council. This name was then changed in 1994 to the World Customs Organization. Today WCO provides regulations and standards to 176 Customs administrations worldwide.

World Intellectual Property Organization

An international organization focused on the protection of intellectual property. The WIPO administers 24 international treaties and is one of 16 specialized agencies of the United Nations. 184 nations are part of the WIPO and its headquarters is in Geneva, Switzerland.

World Trade Organization

A multilateral organization that promotes free and fair trade among the nations of the world. It was created in 1994 by 121 nations at the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). The WTO is responsible for implementation and administration of the trade agreement.

Worldwide Tax System

A tax system that taxes worldwide income as it is repatriated to the parent company. It is utilized in Japan, the United Kingdom, and the United States.

WTO Committee on Trade and Development

(CTD) A forum for discussion on a broad range of issues relating to the trade of developing countries.


Large family-owned conglomerates that controlled much of the economy of Japan prior to World War II. The four most historically significant zaibatsus, the Big Four, are Mitsubishi, Mitsui, Yasuda, and Sumitomo whose roots date back to the Japanese Edo period.


An investigating authority usually calculates the dumping margin by getting the average of the differences between the export prices and the home market prices of the product in question. When it chooses to disregard or put a value of zero on instances when the export price is higher than the home market price, the practice is called “zeroing”. Critics claim this practice artificially inflates dumping margins.