Glossary

C.I.F. Duty Paid

The seller includes the estimated duty in the final price to the buyer in addition to C.I.F.

C.I.F. & E:

Price quoted includes currency exchange in addition to C.I.F.

Cabotage

Where cargo is carried on what is essentially a domestic flight and therefore not subject to international agreements that fix set rates. Cabotage rates are negotiable between shipper and airline and apply on flights within a country and to its overseas territories.

CAD

See Cash Against Documents..

CAFTA

The Central American Free Trade Agreement (otherwise known as DR-CAFTA) is a pending agreement that has been negotiated between the United States, five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and possibly the Dominican Republic. In order for countries to official join the trade agreement, CAFTA will need to be ratified in each country's legislature. Like the North American Free Trade Agreement, CAFTA will do more than just eliminate tariffs and trade barriers between those countries.

Capesize

Capesize ships are cargo ships too large to traverse either the Suez Canal or Panama Canal (i.e., larger than both panamax and suezmax vessels). To travel between oceans, such vessels must round the Cape of Good Hope (South Africa) and Cape Horn (South America). Capesize vessels are typically above 150,000 deadweight tons, and ships in this class include VLCC and ULCC supertankers (see below) and bulk carriers transporting coal, ore, and other commodity raw materials. The term is most commonly used to describe bulk carriers rather than tankers, however. Source

Cargo

The goods/commodities carried or moved by various modes of of transportation such as sea- and airfreight..

Cargo receipt

This refers to the receipt issued by a consolidator of cargo for shipment by seafreight..

Cargo sweat

Condensation on the surface of the cargo: Condensation can form on the cargo as a result of climatic conditions. Cargo sweat can always occur when the temperature of the cargo is lower than or equal to the dew point. It can also occur during transportation from temperate latitudes, e.g. from northern-hemisphere winter to the tropics.

Caribbean Community And Common Market (Caricom)

It facilitates economic cooperation through the Caribbean Single Market and Economy, and coordinates foreign policy among the independent States in Caribbean. Related organizations are the Caribbean Investment Corporation and the Caribbean Monetary Fund.

Carnet

A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds.

Carrier

Person or company undertaking for hire the conveyance of goods e.g. shipping company

Case Of Need

Agent nominated by a principal, to whom the collecting bank may refer in specified circumstances concerning collections - see the sections on Collections

Cash Against Documents (CAD)

A method of payment for goods in which an intermediary acting for the seller transfers title documents to the buyer upon payment in cash..

Cash In Advance (CIA)

This is a method of payment for goods paid in full by the buyer (importer) to the seller (exporter) before shipment is made. This method is usually used only for small purchases or when the goods are built to order.

Cash With Order (CWO)

A payment method for goods by which cash is paid at the time of order and the transaction then becomes binding for both the buyer and seller.

Certificate Of Analysis

A certificate demanded by some countries as proof of the quality and composition of food products or pharmaceuticals. The analysis may be made by a private or government health agency. The certificate must be legalised by a foreign mission of the country concerned, as is the case with such similar certificates as the phytosanitary certificate.

Certificate Of Inspection

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

Certificate Of Manufacture

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

Certificate of Origin

This is a statement by the exporter with the backing of a Chamber of Commerce and sometimes an embassy. The document states from which country the goods emanate.

CFR

Cost and freight. A pricing term indicating that the cost of the goods and freight charges are included in the quoted price; the buyer arranges for and pays insurance.

Chapter 11

Is a chapter in the North American Free Trade Agreement (NAFTA) that deals with foreign direct investment. This chapter has become very controversial because of a provision that established a member country system of private arbitration for foreign investors to bring injury claims against governments. These so called "investor-state" cases are litigated in special international arbitration bodies, which are closed to public participation, observation and input. Written to protect foreign investors from governments seizing their property, corporations have stretched NAFTA's Chapter 11 to undermine government decisions made to protect public health, the environment and local communities. [This should not be confused with Chapter 11 of the US bankruptcy code.]

Chargable kilo

This is a rate that is applied to goods where volume exceeds six cubic metres to the tonne..

Charter

A charter refers to any non-scheduled service where a shipper contracts for the ad hoc hire of an ship or aircraft from an shipping line or airline.

Charter Party

A written contract, usually on a special form, between the owner of a vessel and the "charterer" who rents use of the vessel or a part of its freight space. The contract generally includes the freight rates and the ports involved in the transportation.

Charter Party Bill of Lading

A bill of lading issued under a charter party. It is generally not acceptable by banks under letters of credit unless so authorised in the credit.

Chaser

Reminder sent by the collecting (or DC issuing) bank to the importer, repeating a request for payment - see Handling Import Collections.

C&I

The quoted price includes cost of goods and insurance.

CIA

See Cash in Advance..

CIF (Cost, insurance, freight)

A pricing term indicating that the cost of the goods, insurance, and freight are included in the quoted price.

Civil Society

This term refers to all of the organizations which are not public or for-profit institutions

CKD

See Completely Knocked Down..

Classification

This is a customs term and is used to describe the assigning of the correct definition and category of imported merchandise within the Harmonised Tariff Schedule of the country in question. Classification is used as precursor to determining the import duties applicable to the goods concerned. At times the process of the correct classification of products can be highly complicated and it is not uncommon for importers and or exporters to resort to litigation with the customs authorities to ensure that the correct duty be applied by them (customs) to a given item..

Class rates

A class of goods or commodities is a large grouping of various items under one general heading. All items in the group make up a class. The freight rates that apply to all items in the class are called class rates.

Claused Bill of Lading

A bill of lading which has exemptions to the receipt of merchandise in "apparent good order" noted.

Clean

Used to describe a draft/cheque with no shipping documents - see Collections Introduction.

Clean Bill Of Lading .

A receipt for goods issued by a carrier that indicates that the goods were received in "apparent good order and condition", without damages or other irregularities.

Clean Bill Purchased

A collection bill purchased with no shipping Purchase documents - see Financing Export Collections.

Clean Bill Receivable (CBR)

BR (Bill Receivable) with no shipping documents. The term is more often used for non-trade bills such as travellers cheques.

Clean Collection .

A draft with no documents

Clean Draft

A draft to which no documents have been attached.

Clean Import Loan (Cil)

A loan granted to an importer for payment of import bills, without the Bank having any claim to the goods.

Cocom Coordinating Committee on Multilateral Export Controls

A committee of all NATO countries (except Iceland) plus Japan to coordinate and control exports of member countries, especially in high-technology equipment.

Codes Of Conduct

Represent voluntary guidelines for treatment of workers and business behavior. In some cases the acceptance of inspections by independent agencies is a key factor of the guidelines.

Collection

An exporter draws a bill of exchange on a customer abroad and gives the bill to his or her bank to collect funds. The importer must be willing to pay. The bank charges a fee to collect payment, but is not liable should the importer refuse to release the funds.

Collection Bank

Bank in the drawee country that is instructed to collect payment from the drawee - see Collections Introduction.

Collection Order .

Form submitted, with documents, to the Remitting/Negotiating Bank by an exporter with his instructions

Collective Papers

All documents (commercial invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment.

Combi

An aircraft with pallet or container capacity on its main deck as well as in its belly holds.

Combination Vessels

A mix between a container and break-bulk vessel. It can be either self sustaining or non-self sustaining.

Combined Nomenclature

Used in the European Union,

The codes and the descriptions of goods established on the basis of the combined nomenclature are replaced by those established on the basis of the nomenclatures of the Common Customs Tariff and the Nimexe. It is established on the basis of the harmonized system. The combined nomenclature comprises : (a) the harmonized system nomenclature; (b) Community subdivisions to that nomenclature, referred to as 'CN subheadings' in those cases where a corresponding rate of duty is specified; (c) preliminary provisions, additional section or chapter notes and footnotes relating to CN subheadings.

Each CN subheading has an eight digit code number : (a) the first six digits are the code numbers relating to the headings and subheadings of the harmonized system nomenclature; (b) the seventh and eighth digits identify the CN subheadings

The European Commission established an integrated tariff, of the European Communities, referred to as the TARIC, based on the combined nomenclature.

Commercial Attaché

The commerce expert on the diplomatic staff of his/her country's embassy or large consulate.

Commercial Invoice

This document contains a full itemosed description of goods, along with packing marks, weights, insurance details and information regarding transportation routes. Some countries require Chamber of Commerce confirmation of the invoice's contents; others require all information provided to be given in their own official language.

Commission Agent

See Purchasing agent.

Common Carrier

An individual, partnership, firm, or corporation that transports persons or goods for payment.

Comparative Advantage

A component of free market theory that states that if each nation made just those things which it could produce cheaper relative to a foreign country and then trade with other nations to get that which they could produce relatively cheaper, wealth would expand and everyone would benefit.

Completely Knocked Down (CKD)

This is a term often referred to in exports and international trade when goods are imported into a country in unassembled (i.e. in 'compeletly knocked down') form and then reassembled in that country usually to facilitate packing and shipping as may be the case with large machines, but also to save on import duties as the component parts being imported may attract a lower duty that the assembled item. This is sometimes refered to as just 'knocked down' (KD) form and the difference is that in the case of CKD goods the items are broken down into their most basic parts (i.e. 'completely' knocked down), while with KD goods, they may be shipped in partly assembled form with only minor assembly required..

Conditional Free

Merchandise free of duty under certain conditions, if the conditions can be satisfied.

Conditionality

Countries must adopt specified economic policies as a condition for receiving a loan from multilateral financial institutions such as the International Monetary Fund or the World Bank. One example of conditionality is Structural Adjustment Programs which include stringent austerity measures that in many cases have had devastating effects on struggling economies.

CIF (Cost, insurance, freight)

A pricing term indicating that the cost of the goods, insurance, and freight are included in the quoted price.

Conference

A group of vessel operators joined together for the purpose of establishing freight rates.

Confirmed Letter Of Credit

A letter of credit, issued by a foreign bank, the validity of which has been confirmed by a domestic (South Africa) bank. An exporter whose payment terms are a confirmed letter of credit is assured of payment by the local bank even if the foreign buyer or the foreign bank defaults. See Letter of credit.

Confirming

Act of a bank other than the issuing bank assuming the liability for payment, acceptance or negotiation of correctly presented documents under a DC - see Confirmation of DCs.

Confiscation

The taking and holding of private property by a government or an agency acting for a government. Compensation may or may not be given to the owner of the property.

Consignee

The person/company/bank to whom the goods are delivered - usually the importer or the Collecting Bank - see Handling Import Collections.

Consignee marks

A symbol laced on packages for identification purposes; generally consisting of a triangle, square, circle, diamond, cross, with letters and/or numbers as well as port of discharge.

Consignment

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

Consolidated shipment

An arrangement whereby various shippers pool their boxed goods on the same shipment, sharing the total weight charge for the shipment.

Consolidator

An agent which brings together a number of shipments for one destination to qualify for preferential airline or shipping rates.

Consignor

Also called shipper, is the person/company who sends goods by ship, by land or air. Consolidated Where your exported goods are consolidated or grouped with others, usually in a container, in order to obtain the benefits of cheaper shipping rates. Constructive Transfer A legal fiction which permits acceptance of a Customs entry for merchandise in a zone before its physical transfer to the Customs territory.

Constructive Transfer

A legal fiction which permits acceptance of a Customs entry for merchandise in a zone before its physical transfer to the Customs territory.

Consul

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

Consular Declaration

A formal statement describing goods to be shipped, made out to the consul of the country of destination. Approval from the consul must be obtained prior to shipment.

Consular Invoice

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

Container

The term container means a single rigid, non-disposable dry cargo, insulated, temperature controlled flatrack, vehicle rack portable liquid tank, or open top container without wheels or bogies attached, having not less than 350 cubic feet capacity, having a closure or permanently hinged door that allows ready access to the cargo (closure or permanently hinged door not applicable to flatrack vehicle rack or portable liquid tank). All types of containers will have constructions, fittings and fastenings able to withstand without permanent distortion, all the stresses that may be applied in normal service use of continuous transportation. All containers must bear manufacturer's specifications.

Container (air cargo)

Many types of air cargo containers are offered: The containers are designed in various sizes and irregular shapes to conform to the inside dimensions of a specific aircraft.

Container (sea cargo)

Designed to be moved inland on its own chassis and can be loaded at the shippers plant for shipment overseas. Basic types of containers are; dry van, open top, half high, hi cube, flat rock, tank container, refrigerated container, insulated container, tilting container. Average outside dimensions are generally 20, 35, and 40 feet in length, 8 feet wide and 8 feet high standard.

Containerisation

Containerisation involves the unitizing of cargo through the use of standard metal containers and is used by both shipping lines and air cargo lines. Containers provide cargo protection from weather, damage, and theft, and have helped reduce logistical costs and increase the grow of trade..

Container Ship

Ocean going ship designed to carry containers both internally and on deck. Some are self sustaining.

Container Yard (CY)

The term CY means the location designated by Carrier in the port terminal area for receiving, assembling, holding, storing and delivering containers, and where containers may be picked up by shippers or re-delivered by consignees. No container yard (CY) shall be a shipper's, consignee's, NVOCC's, or a forwarder's place of business, unless otherwise provided.

Contingent Liability

A liability that arises only under specified conditions, e.g. when a bank opens a DC it incurs an obligation to make a future payment on condition that the terms are fully met.

Conventional Tariff

A tariff established in the agreements resulting from tariff negotiations under the GATT (see GATT).

Convertible Currency

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

Corporation, Private

Any corporation which is organized for the purpose of establishing, operating and maintaining a foreign-trade zone and which is chartered under a special act of the State within which it is to operate such a zone.

Corporation, Public

A State, political subdivision thereof, a municipality, a public agency of a State, political subdivision thereof, or municipality, or a corporate municipal instrumentality of one or more States.

Correspondent Bank

A bank that, in its own country, handles the business of a foreign bank.

Cost And Freight (C & F)

A pricing term indicating that the cost of the goods and freight charges are included in the quoted price.

Cost And Insurance (C & I)

A pricing term indicating that the cost of the product and insurance are included in the quoted price.

Cost, Insurance And Freight (C.I.F) .

Same as C&F except that seller also provides insurance up to the named destination. Cost, Insurance, Freight A pricing term indicating that the cost of the goods, insurance, and freight are included in the quoted price.

Cost, Insurance And Freight & Commission (C.I.F & C)

Same as C.I.F and price includes commission as well.

Countertrade

The sale of goods or services that are paid in whole or in part by the transfer of goods or services from a foreign country. Countertrade The sale of goods or services that are paid for in whole or in part by the transfer of goods or services from a foreign country.

Countervailing duties

These are special and additional duties that are imposed on imported merchandise when it has been determined that a foreign government has been subsidising the production of the merchandise being imported and where the practice is harming a domestic industry. These duties are intended to offset the benefits of the subsidies being paid by the foreign country to its domestic producers/exporters of the goods concerned..

Country of Origin

The physical stamp, wording, or marking on an article or merchandise that shows in what country the article or merchandise was produced.

CPT (Carriage Paid To) And CIP (Carriage And Insurance Paid To)

Pricing terms indicating that carriage, or carriage and insurance, are paid to the named place of destination. They apply in place of CFR and CIF, respectively, for shipment by modes other than water.

Credit Risk Insurance

Insurance which protects the seller against loss due to default on the part of the buyer.

Customhouse Brokers

A person or firm, licensed by the U.S. Treasury Department, engaged in clearing goods through U.S. Customs. A brokers duties include preparing the entry form and filing it, advising the importer on duties to be paid;, advancing duties and other costs, and arranging for delivery to the brokers client, the trucking firm or other carrier.

Customs

The authorities designated to collect duties levied by a country on imports and exports.

Customs Bonded Warehous

An authorised warehouse in the importing country where imported goods may be stored for a certain period of time without the payment of duty or taxes until such time as they are removed from the warehouse.

Customs broker

The importer's agent that transacts custom formalities on the importer's behalf. The customs broker may need to be licensed by the customs service in the importing country in order to enter and clear goods through Customs..

Customs Tariff

Charges imposed by the government of the importing country on imported (and sometimes exported) goods.

Customs Territory

Territory of the U.S. in which the general tariff laws of the U.S. apply.

Customs Union

An agreement between two or more countries in which they arrange to abolish tariffs and other import restrictions on each other's goods and establish a common tariff for the imports of all other countries.

CWO

See Cash with Order..

CY

See Container Yard..

CY/CFS

The term CY/CFS means containers packed by shipper of carrier's premises and delivered by shipper to Carrier's CY, all at shipper's risk and expense and unpacked by Carrier at the destination port CFS.

CY/CY

The term CY/CY means containers packed by shipper off Carrier's premises and delivered by shipper to Carrier's CY and accepted by consignee a t Carrier's CY and unpacked by consignee off Carrier's premises, all at the risk and expense of cargo.