International trade glossary

The words of international trade, explained simply. Each term links to the lesson that covers it in depth.

Advance payment guarantee

A guarantee that allows the buyer to recover an advance paid to the seller if the seller fails to deliver. It is often requested in exchange for a down payment. Its amount should reduce as shipments are made, and it should only come into force once the advance has actually been received. Bank Guarantees in Trade: Bid, Performance and Advance Payment Cash in Advance and Partial Advance Payments in Export

Advance ruling (binding tariff information)

A written decision by customs, issued at a trader's request before importation, on the classification, origin or valuation method of specific goods. It is binding on customs for a set period and gives legal certainty for pricing and planning. The WTO Trade Facilitation Agreement encourages members to provide them. HS Codes Explained: How to Classify Your Products Correctly Customs Clearance for Export and Import: How It Works

Advising bank

The bank, usually in the seller's country, that receives a letter of credit from the issuing bank and passes it to the seller after checking that it is apparently authentic. Advising alone creates no obligation to pay. The advising bank often also acts as nominated or confirming bank, but only if the credit and its own agreement say so. Letters of Credit Explained: How a Documentary Credit Works

AfCFTA (African Continental Free Trade Area)

The free trade area created by the agreement signed in Kigali in March 2018 among African Union member states, which entered into force in 2019, with trading under it starting on 1 January 2021. It aims to remove duties on most goods traded between participating countries, phased in according to each country's tariff schedule, with rules of origin and certificates of its own. Algeria ratified the agreement in 2021. Before quoting a preference, check that both countries have published their schedules and that your product is covered; in French it is called the ZLECAf. Algeria's Trade Agreements: EU, GAFTA, AfCFTA and Others Free Trade Agreements and Preferential Duties: How to Benefit

Air waybill (AWB)

The transport document for air freight, issued by or for the airline, serving as a receipt for the goods and evidence of the contract of carriage. An air waybill is not a document of title: the goods are released to the consignee named on it. That is why, under documentary payments, the consignee is often the buyer's bank. Each AWB has a unique number made of the airline's three-digit prefix and a serial number; forwarders issue house air waybills under a master AWB. Air Waybill (AWB): Fields, MAWB vs HAWB and L/C Rules Transport Modes in International Trade: Sea, Air, Road, Rail

ALGEX (National Agency for the Promotion of Foreign Trade)

The Agence Nationale de Promotion du Commerce Extérieur, the Algerian public agency created in 2004 to promote non-hydrocarbon exports, under the ministry in charge of trade. It provided market information, export statistics and support for exporters. In September 2025, executive decrees published in the Official Journal dissolved ALGEX and transferred its missions and resources to a new public body, the Organisme algérien des exportations (Algerian Export Organisation), placed under the minister in charge of foreign trade. Check which body currently handles the service you need. Export Support in Algeria: Public Bodies, FSPE and Trade Fairs Exporting from Algeria: The Legal Framework and the Steps

Applicant

The party at whose request a letter of credit or guarantee is issued; under a letter of credit, usually the buyer. The applicant must reimburse the issuing bank and is the one who may waive discrepancies. It drafts the credit's terms, so the seller should agree them in advance, ideally in the sales contract. Letters of Credit Explained: How a Documentary Credit Works

Approved exporter

An exporter authorised by its customs administration to make out origin declarations on its own commercial documents instead of applying for an EUR.1 certificate for each shipment. Under the pan-Euro-Mediterranean rules, an approved exporter may declare the preferential origin on the invoice whatever the value of the consignment, while other exporters are limited to low-value shipments. The status is granted on application, after customs has checked that the exporter can prove the origin of its goods; its authorisation number appears on each declaration. Rules of Origin: Wholly Obtained, Processing and Cumulation Certificates of Origin in Algeria: CACI, EUR.1, GAFTA and AfCFTA

Approved intermediary bank (intermédiaire agréé)

In Algeria, a bank or financial institution authorised by the Banque d'Algérie to carry out foreign exchange and foreign trade operations on behalf of its customers. Only these banks may domicile import and export operations, execute international payments and monitor repatriation. The exporter's choice of domiciliation bank therefore matters for the speed and quality of service. Bank Domiciliation of Exports in Algeria: The Complete Guide Repatriating Export Proceeds in Algeria: Deadlines and Rules

Assist (customs valuation)

Goods or services the buyer supplies free of charge or at reduced cost for the production of the imported goods — moulds, tools, materials, designs — whose value is added to the price for customs valuation. The WTO Customs Valuation Agreement lists assists among the additions to the price actually paid, because they are part of what the goods cost to produce even though they do not appear on the invoice. Declare them, apportioned over the goods they served to make: leaving them out undervalues the goods and exposes the importer to adjustments and penalties. Customs Valuation: Transaction Value and What Is Added to It

ATA Carnet

An international customs document that allows the temporary duty-free import of goods, such as samples, exhibition goods and professional equipment, into participating countries for up to one year. It replaces national customs documents and guarantees at each border. Carnets are issued by national chambers of commerce within the ICC's World ATA Carnet Federation. The goods must be re-exported unchanged before the carnet expires. Special Customs Procedures: Transit, Bonded Warehouse, ATA Carnet Trade Fairs and B2B Export Marketing: A Practical Playbook

Authorized Economic Operator (AEO)

A status granted by customs to traders who meet criteria of compliance, record-keeping, financial solvency and security, based on the WCO SAFE Framework of Standards. AEOs benefit from fewer controls, priority treatment and simplified procedures. Mutual recognition agreements between countries extend some benefits to shipments abroad. Obtaining the status requires an audit and continuous compliance. Authorized Economic Operator (AEO): What It Is and Why It Helps

Aval

A bank's guarantee written on a bill of exchange or promissory note, by which it commits to pay at maturity if the drawee does not. An avalised bill is much easier to discount or sell without recourse, for example in forfaiting. It is widely used with documents-against-acceptance collections. Bill of Exchange (Draft) in Collections and Letters of Credit Trade Finance: Pre-Shipment and Post-Shipment Financing

Back-to-back letter of credit

A second, separate letter of credit that a trader asks its bank to issue in favour of its supplier, using the credit it received from its own buyer as support. Unlike a transfer, the two credits are independent undertakings, and the issuing bank of the second credit takes a risk on the trader. The terms must be closely aligned so that the supplier's documents can be used under the first credit. Banks treat it as a credit facility. Types of Letters of Credit: Confirmed, Standby, Transferable Trade Finance: Pre-Shipment and Post-Shipment Financing

Bank domiciliation (domiciliation bancaire)

In Algeria, the mandatory prior registration of an import or export operation of goods or services with an approved intermediary bank, which then follows the operation and its payment. Under Banque d'Algérie regulations, domiciliation must take place before the operation; for exports it is done on the basis of the contract or proforma invoice, and the domiciliation reference then appears on customs and banking documents. The bank monitors the repatriation of the proceeds. Rules and documents required change, so check the current requirements with your bank. Bank Domiciliation of Exports in Algeria: The Complete Guide Exporting from Algeria: The Legal Framework and the Steps Repatriating Export Proceeds in Algeria: Deadlines and Rules

Bank guarantee (demand guarantee)

A bank's independent undertaking to pay the beneficiary up to a set amount on presentation of a demand that meets the guarantee's terms. In trade it secures the obligations of one party: a bid bond, performance guarantee, advance payment guarantee or payment guarantee. Because it is independent of the underlying contract, the bank pays a compliant demand even if the parties dispute the facts. Check the expiry, amount reduction clauses and the governing rules, often URDG 758. Bank Guarantees in Trade: Bid, Performance and Advance Payment

BATNA (best alternative to a negotiated agreement)

What you will do if the negotiation fails — another buyer, another market, keeping the stock — which sets the point below which accepting a deal makes no sense. Knowing your BATNA, and estimating the other side's, tells you how much bargaining power each party has and where to set your walk-away price before the talks start. Improving your BATNA — by developing other buyers, for example — strengthens your position more than any argument at the table. Negotiating International Deals: BATNA, Concessions and Culture

Beneficiary

The party in whose favour a letter of credit or guarantee is issued, entitled to claim payment under it; under an export credit, the seller. The beneficiary's name and address on the documents must correspond to the credit. In a bank guarantee, the beneficiary is the party protected, often the buyer under a performance or advance payment guarantee. Letters of Credit Explained: How a Documentary Credit Works Bank Guarantees in Trade: Bid, Performance and Advance Payment

Bid bond (tender guarantee)

A guarantee that protects the organiser of a tender if the winning bidder withdraws its offer or refuses to sign the contract. It is usually a small percentage of the bid value and is replaced by a performance guarantee when the contract is awarded. Bank Guarantees in Trade: Bid, Performance and Advance Payment

Bill of exchange (draft)

A written, unconditional order by one party (the drawer) to another (the drawee) to pay a fixed sum to a named payee or to the bearer, at sight or at a future date. In trade, the exporter draws it on the buyer under a documentary collection, or on a bank under a letter of credit. A time bill accepted by the drawee becomes a firm commitment to pay at maturity, which can be discounted or guaranteed by an aval. Amounts in words and figures must agree, and the bill must match the collection instruction or the credit. Bill of Exchange (Draft) in Collections and Letters of Credit Documentary Collection: D/P and D/A Under URC 522 Explained Letters of Credit Explained: How a Documentary Credit Works

Bill of lading (B/L)

A document issued by or for a sea carrier that acts as a receipt for the goods, evidence of the contract of carriage and, when negotiable, a document of title to the goods. Whoever lawfully holds an original negotiable bill of lading can claim the goods at destination, which is why banks rely on it under letters of credit and documentary collections. It may be made out 'to order', to a named consignee or to the bearer, and is usually issued in a set of originals. Check the shipper, consignee, notify party, ports, description and on-board notation before the carrier issues it. Bill of Lading: Functions, Types, Endorsement and L/C Rules Letters of Credit Explained: How a Documentary Credit Works Documentary Collection: D/P and D/A Under URC 522 Explained

Bonded warehouse (customs warehouse)

A storage facility authorised by customs where imported goods can be held without paying duties and taxes until they are released for free circulation or re-exported. It improves cash flow and gives time to find buyers or decide on destinations. Goods are under customs supervision and only certain handling operations are allowed. Special Customs Procedures: Transit, Bonded Warehouse, ATA Carnet

Break-even price

The price at which revenue from a sale exactly covers all its costs, with no profit or loss. Knowing your break-even price per Incoterm tells you how far you can go in negotiation. Remember to include fixed costs allocated to exports, not only variable costs. Export Pricing: Cost Build-Up from EXW to FOB, CFR and DAP Negotiating International Deals: BATNA, Concessions and Culture

Bunker adjustment factor (BAF)

A surcharge added to ocean freight to reflect changes in the price of ship fuel (bunker). Carriers adjust it periodically, often monthly or quarterly, according to their own formulas. Low-sulphur fuel requirements have led to related surcharges with other names. Check whether a quote is fixed or subject to BAF changes at the time of shipment. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges

CACI (Algerian Chamber of Commerce and Industry)

The Chambre Algérienne de Commerce et d'Industrie, the national chamber of commerce of Algeria, which works with a network of regional chambers of commerce and industry. Exporters deal with it mainly for certificates of origin: it issues non-preferential certificates and is involved in certifying certain preferential certificates, such as those for the Greater Arab Free Trade Area, while the EUR.1 for the EU is issued by Algerian customs. It also organises business missions and fairs. Check with your regional chamber which certificates it handles and what documents it requires. Certificates of Origin in Algeria: CACI, EUR.1, GAFTA and AfCFTA Export Support in Algeria: Public Bodies, FSPE and Trade Fairs

CAGEX (Algerian export credit insurer)

The Compagnie Algérienne d'Assurance et de Garantie des Exportations, the Algerian insurer specialised in export credit insurance. It insures Algerian exporters against non-payment by foreign buyers for commercial and political reasons and provides information on buyers. Under current Banque d'Algérie rules, export payment terms beyond 120 days must be backed by export credit insurance from the authorised national body. Export Credit Insurance: How to Protect Your Receivables Export Support in Algeria: Public Bodies, FSPE and Trade Fairs

Cargo insurance (marine insurance)

Insurance covering goods against loss or damage during transport, by any mode, usually under the Institute Cargo Clauses. Carriers' liability is limited and often excluded for many events, so cargo insurance is the only reliable way to recover the value of lost goods. It can be taken per shipment or under an annual open policy. The Incoterm determines who should insure which part of the journey. Cargo Insurance: Institute Cargo Clauses A, B and C Explained Cargo Insurance Certificate and Policy: A Practical Guide

Carriage and Insurance Paid To (CIP)

Like CPT, but the seller must also buy cargo insurance covering the buyer's risk up to the named destination. Under Incoterms® 2020 the insurance under CIP must, by default, meet the broad cover of Institute Cargo Clauses (A), for at least 110% of the contract value and in the currency of the contract. Risk still passes when the goods are handed to the first carrier, which is why the insurance protects the buyer. The parties may agree a lower level of cover, but they must say so in the contract. CIP (Carriage and Insurance Paid To): Insurance, Risk, Costs Cargo Insurance: Institute Cargo Clauses A, B and C Explained Cargo Insurance Certificate and Policy: A Practical Guide

Carriage Paid To (CPT)

An Incoterm under which the seller contracts and pays for carriage to a named destination, but risk passes to the buyer when the goods are handed to the first carrier. CPT is a two-point rule: the place where risk passes (handover to the carrier in the seller's country) differs from the place up to which the seller pays freight (the named destination). The buyer should therefore insure the goods for the main transit. CPT suits containers, air freight and multimodal shipments better than CFR. CPT (Carriage Paid To): Who Pays, Who Bears the Risk CIP (Carriage and Insurance Paid To): Insurance, Risk, Costs Common Incoterm Mistakes and How to Avoid Them

Carrier

The party that undertakes, under a contract of carriage, to transport goods by sea, air, road, rail or a combination. It may be the operator of the ship, plane or truck, or a party contracting as carrier and subcontracting the actual transport. Its liability is defined by the transport document and the applicable convention, and is usually limited per kilogram or per package. Who Is Who in International Trade: The Actors of an Export Transport Modes in International Trade: Sea, Air, Road, Rail

Cash in advance (prepayment)

A payment method in which the buyer pays all or part of the price before the goods are shipped. It is the safest method for the seller and the riskiest for the buyer, so it is common with new buyers, custom-made goods or small orders. A partial advance, for example 30% at order and the balance against documents, is a frequent compromise. The buyer may ask for an advance payment guarantee in return. Cash in Advance and Partial Advance Payments in Export International Payment Methods Compared: Seller and Buyer Risk

Certificate of origin (C/O)

A document certifying the country in which goods were wholly obtained or underwent their last substantial transformation. Non-preferential certificates, usually issued by chambers of commerce, prove origin for import rules, statistics, quotas or anti-dumping measures. Preferential certificates or statements, such as the EUR.1 or a GAFTA certificate, allow the buyer to claim reduced duties under a trade agreement. The buyer's country and the agreement decide which form is required. Certificate of Origin: Non-Preferential, EUR.1 and Others Rules of Origin: Wholly Obtained, Processing and Cumulation Certificates of Origin in Algeria: CACI, EUR.1, GAFTA and AfCFTA

Chargeable weight

The weight on which freight is billed: the greater of the actual gross weight and the volumetric weight calculated from the dimensions of the shipment. In air freight, the volumetric weight is usually calculated at 1 cubic metre = 167 kg; road and express services use other ratios. Light, bulky goods are charged on volume, so compact packaging saves money. Transport Modes in International Trade: Sea, Air, Road, Rail Air Waybill (AWB): Fields, MAWB vs HAWB and L/C Rules

CISG (United Nations Convention on Contracts for the International Sale of Goods)

The 1980 Vienna Convention providing uniform rules on the formation of international sales contracts and the rights and obligations of buyers and sellers. It applies automatically to sales between parties in different contracting states unless the contract excludes it, and covers offer and acceptance, conformity of the goods, remedies and damages. It does not deal with the validity of the contract or transfer of ownership. Check whether both countries are contracting states. The CISG and Choice of Law in International Sales Contracts International Sales Contract: Key Clauses That Protect You

Clean bill of lading

A bill of lading that bears no clause or notation declaring a defect in the goods or their packaging. A notation such as 'cartons torn' or 'drums leaking' makes the document 'claused' or 'unclean'. Under UCP 600, banks accept only clean transport documents; the word 'clean' does not need to appear on the document itself. Damaged packaging noticed at loading can therefore block payment under a letter of credit. Bill of Lading: Functions, Types, Endorsement and L/C Rules Letter of Credit Discrepancies: Common Errors and Fixes

CMR consignment note

The road transport document used under the CMR Convention (Geneva, 1956), which governs the international carriage of goods by road between contracting states. It is issued in at least three originals: one for the sender, one that travels with the goods for the consignee and one kept by the carrier. It is not a document of title. The convention fixes the carrier's liability and its limits, and the time limits for claims, so loss and damage should be noted on the CMR at delivery. CMR Consignment Note: Road Transport Document Explained Transport Modes in International Trade: Sea, Air, Road, Rail

Cold chain

The unbroken sequence of temperature-controlled storage and transport that perishable goods need from production to the consumer. One break, for example a container left unplugged at a terminal or a long wait during inspection, can spoil a shipment. Temperature loggers and clear instructions to every party help prove where a problem occurred. Reefer Containers and the Cold Chain: Shipping Perishables Exporting Algerian Dates and Agri-Food: A Case Study

Collecting bank (presenting bank)

In a documentary collection, the bank in the buyer's country that presents the documents to the buyer and releases them against payment or acceptance. Under URC 522, it acts on the instructions it received and is not responsible if the buyer refuses to pay. It informs the remitting bank of payment, acceptance or refusal. Documentary Collection: D/P and D/A Under URC 522 Explained

Commercial agent

An independent intermediary who negotiates, and sometimes concludes, sales in the principal's name and on its behalf, in return for a commission. The agent does not buy the goods; the principal sells directly to the customers and bears the credit risk. In the EU, Directive 86/653/EEC protects agents and gives them a right to compensation or indemnity on termination, so the contract and the governing law matter. Agents vs Distributors: Choosing and Managing Partners Abroad

Commercial invoice

The seller's invoice to the buyer for the goods shipped, stating the parties, a description of the goods, quantities, unit and total prices, currency, Incoterm and payment terms. It is the central document of an export: customs on both sides use it to establish value and origin, banks check it under letters of credit and collections, and it supports the buyer's import declaration. Under a letter of credit, the description of the goods must correspond to the one in the credit. Errors in value, HS code or Incoterm can lead to delays, penalties or refused payments. Commercial Invoice for Export: Required Details and Errors Export Documents: What Each Trade Document Is For Letter of Credit Discrepancies: Common Errors and Fixes

Confirmed letter of credit

A letter of credit to which a second bank, usually in the seller's country, adds its own undertaking to pay against complying documents. Confirmation protects the seller against the issuing bank's default and against political or transfer risk in the buyer's country. The confirming bank charges a fee that reflects that risk. Some banks offer 'silent confirmation' at the seller's request without the issuing bank's authorisation; it is a separate arrangement outside UCP 600. Types of Letters of Credit: Confirmed, Standby, Transferable Letters of Credit Explained: How a Documentary Credit Works

Confirming bank

A bank that adds its own undertaking to a letter of credit, at the issuing bank's authorisation or request, to honour or negotiate a complying presentation. Its commitment is independent of and additional to the issuing bank's. The seller then has a payment promise from a bank in its own country or another country it trusts. Types of Letters of Credit: Confirmed, Standby, Transferable Letters of Credit Explained: How a Documentary Credit Works

Consignee

The party to whom the goods are sent and who is entitled to receive them at destination, as named on the transport document. On a negotiable bill of lading the consignee field may say 'to order' or 'to order of' a bank, so that title passes by endorsement. On air waybills, sea waybills and CMR notes the named consignee receives the goods directly, which is why a bank may be named as consignee to keep control. The consignee is not necessarily the buyer. Bill of Lading: Functions, Types, Endorsement and L/C Rules Air Waybill (AWB): Fields, MAWB vs HAWB and L/C Rules

Consolidation

Grouping several shippers' consignments into one container or one air shipment to obtain a better freight rate. The consolidator receives a master transport document from the carrier and issues house documents to each shipper. At destination the shipment is 'deconsolidated' and each consignment released to its consignee. FCL vs LCL Shipping: Full Container or Groupage? Freight Forwarders: Role, Quotes and Responsibilities

Cost and Freight (CFR)

A sea and inland waterway Incoterm under which the seller pays the freight to the named port of destination, while risk passes to the buyer once the goods are on board at the port of shipment. As with every C rule, the seller pays for carriage beyond the point where risk passes, so the buyer should insure the sea voyage. CFR suits bulk and conventional cargo; for containers CPT is the better match. The named place in a CFR term is the destination port. CFR (Cost and Freight): Seller Pays Freight, Buyer Takes Risk CIF (Cost, Insurance and Freight): Rules, Insurance and Risks CPT (Carriage Paid To): Who Pays, Who Bears the Risk

Cost, Insurance and Freight (CIF)

Like CFR, but the seller must also buy marine insurance for the buyer's benefit up to the port of destination. Under Incoterms® 2020 the minimum cover under CIF is Institute Cargo Clauses (C), for 110% of the contract value, unless the parties agree more; buyers of manufactured goods often ask for clauses (A). Risk passes on board at the port of shipment. CIF is also the basis of customs value in many countries, including the European Union, which is why import duties are often calculated on a CIF value. CIF (Cost, Insurance and Freight): Rules, Insurance and Risks Cargo Insurance: Institute Cargo Clauses A, B and C Explained Customs Valuation: Transaction Value and What Is Added to It

Country risk (political risk)

The risk that events in the buyer's country, such as currency transfer restrictions, war, sanctions or government decisions, prevent payment or delivery even if the buyer is willing to pay. It is covered by confirmed letters of credit and by political-risk cover in export credit insurance. Export credit agencies and insurers publish country ratings that are useful when choosing payment terms. Risks in International Trade and How to Manage Each One Export Credit Insurance: How to Protect Your Receivables

Credit note

A document issued by the seller that reduces the amount owed by the buyer, for example after a price correction, a return, a shortage or a volume rebate. It refers to the original invoice and states the reason and amount of the reduction. In international trade, credit notes can affect customs value and, in countries with exchange controls, the amount of proceeds to repatriate, so they should be documented and justified. Credit Notes and Debit Notes in Export: Correcting an Invoice Commercial Invoice for Export: Required Details and Errors

Cumulation of origin

A rule in trade agreements that allows materials originating in a partner country to be counted as if they originated in the exporting country. Bilateral cumulation involves the two parties of an agreement; diagonal cumulation extends it to several countries linked by agreements with identical origin rules, as in the pan-Euro-Mediterranean zone; full cumulation also counts processing done in partner countries. It helps manufacturers meet origin rules with imported inputs. Rules of Origin: Wholly Obtained, Processing and Cumulation Free Trade Agreements and Preferential Duties: How to Benefit

Currency adjustment factor (CAF)

A surcharge, usually a percentage of freight, that compensates the carrier for fluctuations between the currency of the freight rate and the currency of its costs. It is less common than BAF and is applied on certain trades only. It should appear separately in an itemised freight quote. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges

Currency risk (exchange-rate risk)

The risk that a movement in exchange rates reduces the value of a payment in foreign currency or raises the cost of a purchase. It arises as soon as a price is quoted in a currency other than your own. You can manage it through the choice of invoicing currency, forward contracts, options, matching receipts and payments in the same currency (natural hedging) or price-adjustment clauses. Managing Currency Risk in Export: Invoicing, Forwards, Hedging Risks in International Trade and How to Manage Each One

Customs broker

A licensed professional or company that prepares and lodges customs declarations and handles clearance on behalf of importers and exporters. The broker may act as direct representative, in your name, or indirect representative, in its own name; liability differs accordingly. Give accurate information on classification, value and origin: errors usually remain your responsibility. Customs Clearance for Export and Import: How It Works Who Is Who in International Trade: The Actors of an Export

Customs clearance

The process of completing customs formalities so that goods can leave a country (export) or enter free circulation (import). It involves lodging the declaration, presenting documents, possible inspection, paying duties and taxes and obtaining release. Clearance times depend on the risk channel assigned and the quality of documents. Customs Clearance for Export and Import: How It Works Algerian Customs Export Procedures and Documents

Customs declaration

The formal statement, today mostly electronic, by which a declarant places goods under a customs procedure such as export, import or transit, giving the information customs need. It includes the parties, HS code, value, origin, quantity, procedure and supporting documents. The declarant is legally responsible for its accuracy, even when a broker prepares it. The export declaration and its exit confirmation are also important proof of export for tax and banking purposes. Customs Clearance for Export and Import: How It Works Algerian Customs Export Procedures and Documents

Customs transit

A customs procedure under which goods move under customs control from one point to another, within a country or across countries, without paying duties at each point. A guarantee covers the duties at stake during the movement. International systems include TIR for road transport and common transit between the EU and partner countries. The procedure ends when the goods arrive at the office of destination. Special Customs Procedures: Transit, Bonded Warehouse, ATA Carnet

Customs value

The value of imported goods used to calculate ad valorem import duties, determined under the WTO Customs Valuation Agreement. The primary method is the transaction value: the price actually paid or payable, with certain adjustments such as commissions, royalties and assists. Countries differ on whether freight and insurance to the border are included: many, including the EU, use a CIF basis, while others such as the United States use FOB. Customs Valuation: Transaction Value and What Is Added to It Import Duties, VAT and Landed Cost: How to Calculate Them

Cut-off (closing time)

The deadline set by the carrier or terminal for delivering cargo, submitting documentation or the VGM for a given departure. There are usually separate cut-offs for cargo, documents, VGM and dangerous goods declarations. Missing one means the container waits for the next vessel, with storage costs and possibly a missed L/C date. Transit Times, Shipment Tracking and Handling Delays Freight Forwarders: Role, Quotes and Responsibilities

Dangerous goods (hazardous materials)

Substances and articles that can endanger health, safety or property during transport, classified by the UN into nine hazard classes. They must be classified, packed, marked, labelled and declared according to the rules of each mode: the IMDG Code by sea, the IATA Dangerous Goods Regulations by air and the ADR for road in Europe and neighbouring countries. Many everyday products, such as perfumes, batteries and paints, are dangerous goods. Undeclared dangerous goods can cause accidents and heavy penalties. Shipping Dangerous Goods: IMDG, IATA DGR and ADR Basics

Debit note

A document that increases the amount owed by its recipient, for example to charge additional freight, a price adjustment or costs agreed after the invoice. A seller uses it to claim an extra amount from the buyer; a buyer may also issue one to claim money back from a supplier. It refers to the original invoice and explains the charge. As with credit notes, keep customs and banking consequences in mind. Credit Notes and Debit Notes in Export: Correcting an Invoice Commercial Invoice for Export: Required Details and Errors

Deferred payment (usance credit)

A letter of credit or collection under which payment is due at a future date after presentation or shipment, rather than at sight. Under a deferred-payment credit the bank undertakes to pay at maturity without a bill of exchange; under an acceptance credit it accepts a draft. The seller can often obtain cash earlier by having the bank discount its obligation. Types of Letters of Credit: Confirmed, Standby, Transferable Trade Finance: Pre-Shipment and Post-Shipment Financing

Delivered at Place (DAP)

An Incoterm under which the seller bears all risks and costs of bringing the goods to a named place of destination, where they are delivered ready for unloading from the arriving means of transport. The buyer unloads and handles import clearance, duties and taxes. DAP is common for road shipments and door deliveries. Name the place as precisely as possible, because demurrage and storage costs caused by the buyer's delay in clearance or unloading are a frequent source of disputes. DAP (Delivered at Place): Seller's Risk to the Destination DPU (Delivered at Place Unloaded): The Rule That Replaced DAT DDP (Delivered Duty Paid): Maximum Seller Obligation Explained

Delivered at Place Unloaded (DPU)

The only Incoterm under which the seller must unload the goods at the named place of destination; risk passes once they are unloaded. DPU replaced DAT (Delivered at Terminal) in Incoterms® 2020, and the place no longer has to be a terminal. The seller should check that it can actually organise and insure unloading at the destination. Import clearance and duties remain with the buyer. DPU (Delivered at Place Unloaded): The Rule That Replaced DAT DAP (Delivered at Place): Seller's Risk to the Destination

Delivered Duty Paid (DDP)

The Incoterm with the most obligation for the seller: it delivers the goods at the named destination, cleared for import, with import duties and taxes paid. The seller must be able to act as importer of record in the buyer's country, or appoint someone who can, and must budget for duties and import VAT that it may not be able to recover. Many exporters underestimate these costs and the local formalities. If the buyer prefers to handle import VAT, DAP with a clear split of costs is often safer. DDP (Delivered Duty Paid): Maximum Seller Obligation Explained Import Duties, VAT and Landed Cost: How to Calculate Them Common Incoterm Mistakes and How to Avoid Them

Delivery order (D/O)

An instruction issued by the carrier or its agent at destination authorising the terminal or warehouse to release the cargo to a named party. The consignee usually receives it after surrendering an original bill of lading, or proving its identity under a sea waybill, and paying local charges. Delays in obtaining the delivery order lead to storage and demurrage costs. Bill of Lading: Functions, Types, Endorsement and L/C Rules Transit Times, Shipment Tracking and Handling Delays

Demand guarantee (first-demand guarantee)

A bank's undertaking to pay the beneficiary on its first complying demand, independently of the underlying contract and without the beneficiary having to prove a default. Demand guarantees — bid bonds, performance bonds, advance payment guarantees — are usually issued under the ICC Uniform Rules for Demand Guarantees (URDG 758). Because the bank pays against the demand and documents alone, the person who asked for the guarantee bears the risk of an unfair call and should negotiate its amount, expiry and wording carefully. Bank Guarantees in Trade: Bid, Performance and Advance Payment Types of Letters of Credit: Confirmed, Standby, Transferable

Demurrage

A charge levied by the shipping line when a container remains in the port terminal beyond the free time allowed; in chartering, a charge when a ship is kept beyond the agreed laytime. It accumulates per day and increases in steps, so delays in customs clearance or document release can cost more than the freight itself. Negotiate enough free time when booking and make sure the documents arrive before the ship. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges Transit Times, Shipment Tracking and Handling Delays

Detention

A charge levied by the shipping line when the shipper or consignee keeps a container outside the terminal beyond the free time, for example at a warehouse. Detention and demurrage are often combined into one tariff, and lines do not all use the terms in the same way. Return empty containers promptly and check the line's tariff for your port. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges

Discrepancy (L/C)

Any difference between the documents presented under a letter of credit and the terms of the credit, the applicable rules or other documents in the presentation. A discrepant presentation releases the banks from their obligation to pay. The issuing bank may ask the buyer whether it waives the discrepancies, but it must send a single notice of refusal listing all of them. Typical causes are late presentation, missing signatures, inconsistent descriptions, wrong dates and incomplete sets of documents. Letter of Credit Discrepancies: Common Errors and Fixes Letters of Credit Explained: How a Documentary Credit Works

Documentary collection

A payment method in which the seller's bank sends the shipping documents to the buyer's bank, which releases them only against payment (D/P) or acceptance of a bill of exchange (D/A). It costs less than a letter of credit but offers less security: no bank promises to pay, and the buyer can simply refuse the documents, leaving the goods unclaimed at destination. It suits buyers you know, in countries with stable payments. Collections are usually subject to URC 522. Documentary Collection: D/P and D/A Under URC 522 Explained International Payment Methods Compared: Seller and Buyer Risk

Documents against acceptance (D/A)

A documentary collection in which the documents are released to the buyer against its acceptance of a time bill of exchange, payable at a future date. The buyer gets the goods before paying, so the seller's security rests on the accepted bill. An aval by the buyer's bank, or export credit insurance, makes the arrangement much safer. An accepted bill can also be discounted to obtain cash before maturity. Documentary Collection: D/P and D/A Under URC 522 Explained Bill of Exchange (Draft) in Collections and Letters of Credit

Documents against payment (D/P)

A documentary collection in which the collecting bank releases the documents to the buyer only when the buyer pays the amount due. Also called 'cash against documents'. The seller keeps control of the goods through the bill of lading until payment, but if the buyer refuses to pay, the seller must find another buyer, store the goods or ship them back. It does not work well with air waybills or sea waybills, which are not documents of title. Documentary Collection: D/P and D/A Under URC 522 Explained

Dual-use goods

Goods, software and technology that can be used for both civilian and military purposes, such as certain chemicals, electronics, machine tools or encryption products. Their export usually requires a licence from the exporting country's authorities, based on control lists drawn from international regimes such as the Wassenaar Arrangement. Exporters must classify their products and check the end use and end user. Export Controls, Dual-Use Goods and Sanctions Screening Explained

Due diligence (buyer check)

Verifying a prospective buyer or partner before dealing with it: legal existence, ownership, financial standing, reputation and sanctions status. Sources include company registers, credit reports, bank references, trade references and sanctions lists. Many fraud cases, such as fake buyers or diverted payments, can be prevented by basic checks. How to Find International Buyers and Check Them Before You Ship Risks in International Trade and How to Manage Each One

Endorsement

The signature, usually on the back of an order bill of lading or a bill of exchange, by which the holder transfers its rights to another party. A bill of lading made out 'to order' or 'to order of shipper' must be endorsed by the shipper, either in blank or to a named party, before it can be transferred. Under a letter of credit, check exactly how the credit requires the bill to be consigned and endorsed: a missing endorsement is a classic discrepancy. Bill of Lading: Functions, Types, Endorsement and L/C Rules Bill of Exchange (Draft) in Collections and Letters of Credit

Estimated time of arrival (ETA)

The date and time a vessel, aircraft or truck is expected to arrive at its destination. ETAs change frequently with weather, congestion and schedule changes. Buyers plan clearance and storage on the ETA, so share updates as soon as you have them. Transit Times, Shipment Tracking and Handling Delays

Estimated time of departure (ETD)

The date and time a vessel, aircraft or truck is expected to leave the place of loading. Under a letter of credit, compare the ETD with the latest shipment date and the presentation period. A rolled booking, where cargo is left for a later vessel, can push shipment past these dates. Transit Times, Shipment Tracking and Handling Delays

EU-Algeria Association Agreement

The Euro-Mediterranean agreement signed by Algeria and the European Union in April 2002 and in force since 1 September 2005, which includes a free trade area for goods. The EU opened its market to Algerian industrial goods from the start, while Algeria dismantled its own duties on EU industrial goods over a transition period that ended in 2020; agricultural and fishery products are subject to specific concessions. Algerian goods that meet the agreement's rules of origin can enter the EU at reduced or zero duty with a EUR.1 issued by Algerian customs. Check the current concessions and any changes before relying on a preference. Algeria's Trade Agreements: EU, GAFTA, AfCFTA and Others Certificate of Origin: Non-Preferential, EUR.1 and Others Free Trade Agreements and Preferential Duties: How to Benefit

EUR.1 movement certificate

A preferential proof of origin used under the European Union's agreements with partner countries, issued or endorsed by the customs authorities of the exporting country. When presented at import, it allows the goods to benefit from the reduced or zero duty provided by the agreement, if they meet its rules of origin. Many agreements also allow an origin declaration on the invoice by approved exporters or for low-value consignments instead. For Algerian exports to the EU, the EUR.1 is issued by Algerian customs. Certificate of Origin: Non-Preferential, EUR.1 and Others Certificates of Origin in Algeria: CACI, EUR.1, GAFTA and AfCFTA Free Trade Agreements and Preferential Duties: How to Benefit

Ex Works (EXW)

The Incoterm with the least obligation for the seller: the goods are delivered when they are placed at the buyer's disposal at the seller's premises or another named place, not loaded and not cleared for export. The buyer bears all risks and costs from that point, including loading and export formalities. In practice EXW causes problems in international sales, because the buyer often cannot clear goods for export in the seller's country and the seller may lack the proof of export it needs for tax or exchange-control purposes. FCA at the seller's premises is usually a better choice. EXW (Ex Works): Meaning, Risks, Costs and When to Avoid It FCA (Free Carrier): Delivery, Risk and the On-Board B/L Option Common Incoterm Mistakes and How to Avoid Them

Exclusive distributor

An independent company that buys goods from the supplier and resells them in its own name, with the exclusive right to do so in a defined territory. Exclusivity should be balanced with minimum purchase targets and a clear term and termination clause. Competition law may restrict some clauses, such as bans on passive sales or resale price fixing. Agents vs Distributors: Choosing and Managing Partners Abroad

Export credit insurance

Insurance that protects an exporter against non-payment by foreign buyers for commercial reasons, such as insolvency or protracted default, and often for political reasons. It usually covers a large share of the loss, not 100%, and the insurer approves a credit limit for each buyer. It makes open account safer and can help obtain bank financing. In Algeria, CAGEX is the specialised export credit insurer. Export Credit Insurance: How to Protect Your Receivables Open Account Payment Terms: Selling on Credit Safely

Export licence

An authorisation from a government to export specific goods, required for controlled items such as dual-use goods, weapons, cultural property or products subject to quotas. Requirements depend on the product, the destination and the end user. Check whether a licence is needed before you sign the contract: processing can take weeks or months. Export Controls, Dual-Use Goods and Sanctions Screening Explained

Export price build-up

The method of calculating an export price by adding, step by step, the production cost, margin and every cost up to the Incoterm delivery point. Start from the ex-works cost and add packing, export clearance, pre-carriage, terminal charges, freight and insurance as the Incoterm requires. Include financing costs, bank fees and currency risk. A spreadsheet per Incoterm prevents forgotten costs. Export Pricing: Cost Build-Up from EXW to FOB, CFR and DAP Export Quotation: How to Write a Professional Offer

Factoring

The sale of short-term trade receivables to a factor, which advances cash and often manages collection, with or without recourse to the seller. Export factoring helps a seller on open account to get paid early and, under non-recourse factoring, to transfer the buyer's credit risk. Factors often work in pairs, with an import factor in the buyer's country. Fees depend on the risk, the volume and the payment terms. Trade Finance: Pre-Shipment and Post-Shipment Financing Open Account Payment Terms: Selling on Credit Safely

FEU (forty-foot equivalent unit)

A unit equal to one 40-foot container, or two TEU. Freight rates are often quoted per FEU. The 40-foot high cube, one foot taller than the standard 40-foot container, is widely used for light, bulky goods. Shipping Container Sizes, Types and Capacities Explained

Force majeure

A contract clause that releases a party from liability when an extraordinary event beyond its control, such as war, natural disaster or government action, prevents performance. Its effect depends on the wording and the applicable law, so list the relevant events and the notice and termination procedure. The ICC publishes a model force majeure clause that parties can adopt. International Sales Contract: Key Clauses That Protect You The CISG and Choice of Law in International Sales Contracts

Foreign currency account (exporter)

A bank account held in a convertible currency, into which an exporter's repatriated proceeds are credited, under the rules of the central bank. In Algeria, Banque d'Algérie rules govern who may open such accounts, what part of export proceeds may be kept in currency and how it may be used. These rules have been revised several times, so check the current conditions with your bank. Repatriating Export Proceeds in Algeria: Deadlines and Rules Bank Domiciliation of Exports in Algeria: The Complete Guide

Forfaiting

The purchase, without recourse to the exporter, of medium or long-term receivables, usually bills or promissory notes avalised or guaranteed by a bank. The exporter receives cash at a discount and is freed of credit, transfer and interest-rate risk. It is often used for capital goods or deferred-payment letters of credit. The exporter remains responsible for the validity of the underlying claim. Trade Finance: Pre-Shipment and Post-Shipment Financing

Forward exchange contract

An agreement with a bank to buy or sell an amount of foreign currency at a rate fixed today for delivery at a future date. Exporters use forwards to lock in the value of an expected payment and protect their margin against exchange-rate movements. The forward rate differs from the spot rate according to the interest-rate difference between the currencies. The contract must be honoured even if the buyer pays late, so align its date with realistic payment dates; availability depends on local exchange-control rules. Managing Currency Risk in Export: Invoicing, Forwards, Hedging

Free Alongside Ship (FAS)

A sea and inland waterway Incoterm under which the seller delivers the goods alongside the vessel nominated by the buyer at the named port of shipment, cleared for export. Risk passes when the goods are alongside the ship, for instance on the quay or on a barge. FAS is used mainly for bulk and break-bulk cargo such as grain, timber or heavy equipment. It is not suitable for containers, which are handed over at a terminal well before loading. FAS (Free Alongside Ship): Bulk and Heavy-Lift Cargo Explained FOB (Free On Board): Costs, Risks and Documents Explained

Free Carrier (FCA)

An Incoterm under which the seller clears the goods for export and delivers them to the carrier or another person nominated by the buyer, at a named place. Risk passes to the buyer at that point. If the named place is the seller's premises, delivery happens once the goods are loaded on the buyer's collecting vehicle; at any other place, they are delivered ready for unloading from the seller's vehicle. FCA works for every mode, including containers handed over at a terminal. Incoterms® 2020 lets the parties agree that the buyer will instruct its carrier to issue an on-board bill of lading to the seller, which helps under letters of credit. FCA (Free Carrier): Delivery, Risk and the On-Board B/L Option FOB (Free On Board): Costs, Risks and Documents Explained How to Choose the Right Incoterm: A Step-by-Step Method

Free On Board (FOB)

A sea and inland waterway Incoterm under which the seller clears the goods for export and delivers them on board the vessel nominated by the buyer at the named port of shipment. Risk passes when the goods are on board, and the buyer books and pays the main freight. FOB is still widely used for containers, but the ICC recommends FCA instead, since the seller otherwise remains at risk while the container waits at the terminal, outside its control. Always name the port: 'FOB Algiers, Incoterms® 2020'. FOB (Free On Board): Costs, Risks and Documents Explained FCA (Free Carrier): Delivery, Risk and the On-Board B/L Option Common Incoterm Mistakes and How to Avoid Them

Free time

The number of days a container may stay in the terminal or with the customer without demurrage or detention charges. Free time varies by line, port and container type, and is usually shorter for reefers. Extra free time can often be negotiated at booking for a fee or as part of the contract. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges Transit Times, Shipment Tracking and Handling Delays

Free trade agreement (FTA)

A treaty between two or more countries that removes or reduces customs duties on most trade between them, for goods meeting its rules of origin. Each FTA has its own tariff schedules, rules of origin and proofs of origin, so exporters must check each agreement separately. Benefits are claimed by the importer at clearance, but depend on the exporter's documents. Free Trade Agreements and Preferential Duties: How to Benefit Algeria's Trade Agreements: EU, GAFTA, AfCFTA and Others

Freight forwarder

A company that organises the transport of goods on behalf of a shipper or receiver: booking carriers, preparing documents, arranging customs clearance, insurance and storage. A forwarder may act as an agent or as a principal issuing its own transport documents; its liability differs depending on that role. Compare quotes on the same basis, checking which local charges are included. Freight Forwarders: Role, Quotes and Responsibilities Who Is Who in International Trade: The Actors of an Export

Full container load (FCL)

A shipment in which one shipper uses a whole container, packed and sealed for a single consignee. FCL is usually cheaper per unit than LCL once the cargo fills a large part of a container, and the goods are handled less. Freight is quoted per container, plus local charges. The shipper or its packer is responsible for proper stowage and securing. FCL vs LCL Shipping: Full Container or Groupage? Shipping Container Sizes, Types and Capacities Explained

GAFTA (Greater Arab Free Trade Area)

A free trade area among member states of the League of Arab States, established under an executive programme adopted in 1997, under which originating goods trade between members free of customs duties; Algeria has applied it since 1 January 2009. To benefit from it, goods must meet GAFTA's rules of origin and be accompanied by its certificate of origin; in Algeria, the CACI is involved in certifying these certificates. Some members maintain exception lists or restrictions, so check the product and destination. Do not confuse it with the Grain and Feed Trade Association, a London-based body whose standard contracts are also called GAFTA. Algeria's Trade Agreements: EU, GAFTA, AfCFTA and Others Certificates of Origin in Algeria: CACI, EUR.1, GAFTA and AfCFTA

General average (GA)

A principle of maritime law under which, when a sacrifice or expense is made to save a ship and its cargo from a common danger, all parties share the cost in proportion to their values. It is usually adjusted under the York-Antwerp Rules. After a declaration of general average, cargo is released only once the owner provides security, which a cargo insurer normally gives. Uninsured cargo owners must pay a deposit themselves, even if their goods were not damaged. Cargo Insurance: Institute Cargo Clauses A, B and C Explained

Generalised System of Preferences (GSP)

A unilateral scheme under which developed countries grant reduced or zero duties to imports from developing countries, without reciprocity. The EU, the United States, Japan and others have their own GSP schemes, with eligibility, product lists and origin rules that change over time. Check whether your country and product are currently eligible before quoting a duty advantage. Free Trade Agreements and Preferential Duties: How to Benefit Rules of Origin: Wholly Obtained, Processing and Cumulation

Governing law clause

A contract clause that states which country's law applies to the contract. Without it, the applicable law is determined by conflict-of-law rules, which can be unpredictable. Choose a law you or your adviser understand, and remember that the CISG may apply as part of the chosen law unless excluded. The CISG and Choice of Law in International Sales Contracts International Sales Contract: Key Clauses That Protect You

Gross margin

The difference between sales revenue and the direct cost of the goods sold, often expressed as a percentage of revenue. In exports, compute it after all shipment costs, such as freight, insurance, bank fees and currency differences, to see the real profitability of each deal. Margin as a percentage of price differs from markup as a percentage of cost. Shipment Profitability: Track Real Costs and Margin Variances Export Pricing: Cost Build-Up from EXW to FOB, CFR and DAP

Gross weight, net weight and tare

Net weight is the weight of the goods alone; gross weight adds all packaging; tare is the weight of the packaging or container itself. Packing lists, invoices and transport documents must show consistent weights. Customs may use net or gross weight for statistics and specific duties, and carriers charge on gross or chargeable weight. Packing List for Export: Weights, Volumes, Marks and Numbers Export Packaging, Pallets and Shipping Marks: A Practical Guide

Hague-Visby Rules

International rules governing the liability of sea carriers under bills of lading, based on the 1924 Hague Rules as amended in 1968 and 1979. They set the carrier's duties, the cases in which it is not liable, such as nautical fault or perils of the sea, and the limits of its liability per package or per kilogram. Other regimes include the Hamburg Rules; the Rotterdam Rules have not entered into force. The applicable regime depends on the countries and the contract. Bill of Lading: Functions, Types, Endorsement and L/C Rules Cargo Insurance: Institute Cargo Clauses A, B and C Explained

Health certificate (sanitary certificate)

An official certificate, issued by the competent veterinary or food safety authority of the exporting country, attesting that food or animal products meet the importing country's health requirements. It is required for products such as meat, dairy, fish, honey and some processed foods, often on a model agreed between the two countries. The establishment producing the goods may also need to be approved or listed by the importing country. Start this process early: approvals can take months. Phytosanitary, Health and Quality Certificates for Food Exports Exporting Algerian Dates and Agri-Food: A Case Study

House bill of lading (HB/L)

A bill of lading issued by a freight forwarder or NVOCC to its customer, while the shipping line issues a master bill of lading to the forwarder. House bills are common for groupage (LCL) shipments, where one master B/L covers the cargo of several shippers. A house bill is acceptable under a letter of credit only if it meets the transport-document rules of UCP 600, for instance being signed by the carrier or as agent for a named carrier, unless the credit allows otherwise. Know which document your buyer and bank need before shipping. Bill of Lading: Functions, Types, Endorsement and L/C Rules Freight Forwarders: Role, Quotes and Responsibilities FCL vs LCL Shipping: Full Container or Groupage?

HS code (Harmonized System code)

The numerical code that classifies a product under the World Customs Organization's Harmonized Commodity Description and Coding System, used by customs worldwide. The first six digits are common to all countries that use the HS; countries add further digits for their own tariffs and statistics. The code determines duty rates, rules of origin, controls and licensing, so a wrong code can mean back duties or penalties. The HS is revised about every five years; the current edition is HS 2022. HS Codes Explained: How to Classify Your Products Correctly Import Duties, VAT and Landed Cost: How to Calculate Them

IMDG Code (International Maritime Dangerous Goods Code)

The IMO's mandatory code for the carriage of dangerous goods by sea, applied under the SOLAS convention. It sets classification, packaging, marking, labelling, documentation, stowage and segregation rules. It is amended every two years. The shipper must provide a dangerous goods declaration and, for containers, a container packing certificate. Shipping Dangerous Goods: IMDG, IATA DGR and ADR Basics

Import duty (customs duty)

A tax charged by the importing country on goods entering its customs territory, usually as a percentage of the customs value or as a fixed amount per unit. The rate depends on the HS code, the origin and any trade agreement. Import duties are normally paid by the buyer, except under DDP. Anti-dumping, countervailing or safeguard duties can be added on certain products. Import Duties, VAT and Landed Cost: How to Calculate Them HS Codes Explained: How to Classify Your Products Correctly

Incoterms® rules

A set of eleven three-letter trade terms published by the International Chamber of Commerce (ICC) that define which tasks, costs and risks the seller and the buyer each take on when goods are delivered. The current version is Incoterms® 2020, in force since 1 January 2020. An Incoterm only works when it is written with a named place and the version, for example 'FCA Oran port, Incoterms® 2020'. The rules cover delivery, transfer of risk, carriage, insurance, export and import clearance and the related costs; they do not cover transfer of ownership, payment, the price or what happens if the contract is breached. Seven rules can be used for any mode of transport and four only for sea and inland waterway transport. Incoterms 2020 Explained: What They Cover and What They Don't How to Choose the Right Incoterm: A Step-by-Step Method Common Incoterm Mistakes and How to Avoid Them

Inspection certificate

A report issued by an independent inspection company or an authority confirming the quantity, quality, condition or conformity of goods before shipment. Buyers often require it under letters of credit to reduce the risk of receiving non-conforming goods, and some countries require pre-shipment inspection for imports. The credit should name the inspector and say what must be certified; vague wording invites discrepancies. Phytosanitary, Health and Quality Certificates for Food Exports Letters of Credit Explained: How a Documentary Credit Works

Institute Cargo Clauses (ICC A, B, C)

Standard cargo insurance clauses published in London, current version 2009, offering three levels of cover: A (all risks, subject to exclusions), B and C (named perils). Clauses (C) cover major casualties such as fire, sinking, stranding and general average; (B) add risks such as earthquake, water entry and loss overboard; (A) cover all risks except listed exclusions, such as insufficient packing, delay, inherent vice and, unless added, war and strikes. CIF requires at least (C), CIP at least (A), unless agreed otherwise. Cargo Insurance: Institute Cargo Clauses A, B and C Explained CIP (Carriage and Insurance Paid To): Insurance, Risk, Costs CIF (Cost, Insurance and Freight): Rules, Insurance and Risks

Insurance certificate

A document issued by an insurer or its agent showing that a specific shipment is covered under a cargo insurance policy, with the insured value, risks covered and where claims are payable. Under CIF and CIP the seller must provide the buyer with evidence of cover. Under a letter of credit, UCP 600 requires the insurance document to show cover effective no later than the date of shipment, in the currency of the credit and, unless the credit says otherwise, for at least 110% of the CIF or CIP value. Cover notes are not accepted. Cargo Insurance Certificate and Policy: A Practical Guide Cargo Insurance: Institute Cargo Clauses A, B and C Explained CIF (Cost, Insurance and Freight): Rules, Insurance and Risks

International arbitration

A private method of resolving disputes in which the parties submit their dispute to one or more arbitrators whose award is binding. It is often preferred to national courts in international contracts because awards are enforceable in the many countries party to the 1958 New York Convention, the procedure is confidential and the parties choose the arbitrators. The clause should name the institution or rules, the seat, the language and the number of arbitrators. The CISG and Choice of Law in International Sales Contracts International Sales Contract: Key Clauses That Protect You

International Chamber of Commerce (ICC)

The world business organisation, based in Paris, that publishes widely used private rules for trade, such as the Incoterms® rules, UCP 600, URC 522 and URDG 758. It also runs the ICC International Court of Arbitration. Its rules apply only when the parties incorporate them in their contract or banking instrument. Incoterms 2020 Explained: What They Cover and What They Don't Letters of Credit Explained: How a Documentary Credit Works

International sales contract

The agreement between seller and buyer that sets the goods, quantity, quality, price, Incoterm, delivery date, payment terms and the legal framework of the sale. Beyond the commercial terms, a good contract covers inspection and claims, force majeure, retention of title, limitation of liability, governing law and dispute resolution. Where both countries are parties to the CISG and the contract does not exclude it, the CISG often applies automatically. Documents such as the proforma invoice and order confirmation should be consistent with it. International Sales Contract: Key Clauses That Protect You The CISG and Choice of Law in International Sales Contracts

Inward processing

A customs procedure that allows imported materials to be processed into products for export with suspension or relief of import duties and taxes. It helps manufacturers using imported components remain competitive on export markets. It requires an authorisation and records proving that the imported materials were used in the exported goods. National names and rules vary. Special Customs Procedures: Transit, Bonded Warehouse, ATA Carnet

ISBP (International Standard Banking Practice)

An ICC publication that explains how the rules of UCP 600 are applied in practice when banks examine documents presented under a letter of credit. The current edition, ISBP 821, was published in 2023 and replaced ISBP 745. It covers details such as spelling mistakes, signatures, dates, descriptions of goods and each type of transport and insurance document. Exporters who prepare L/C documents should know its main points, since most discrepancies are judged against it. Letter of Credit Discrepancies: Common Errors and Fixes Letters of Credit Explained: How a Documentary Credit Works

ISP98 (International Standby Practices)

The ICC rules designed specifically for standby letters of credit, ICC Publication No. 590. They cover the presentation, examination and honour of demands under standbys, which UCP 600 handles less precisely because it was written for commercial credits. A standby can be issued under ISP98 or under UCP 600; the choice should be stated in the instrument. Types of Letters of Credit: Confirmed, Standby, Transferable Bank Guarantees in Trade: Bid, Performance and Advance Payment

ISPM 15

The international standard for wood packaging material, such as pallets and crates, adopted under the International Plant Protection Convention to prevent the spread of pests. The wood must be treated, for example by heat treatment (HT), and marked with the official IPPC stamp showing the country code, producer number and treatment. Non-compliant pallets can be refused, treated or destroyed at the importer's cost. Processed wood such as plywood is generally exempt. Export Packaging, Pallets and Shipping Marks: A Practical Guide

Issuing bank

The bank that issues a letter of credit at the request of its customer, the buyer, and is bound to honour a complying presentation. The seller's security depends on the issuing bank's creditworthiness and on the country it is in. If either is doubtful, ask for the credit to be confirmed by a bank you trust. Letters of Credit Explained: How a Documentary Credit Works Who Is Who in International Trade: The Actors of an Export

Landed cost

The total cost of goods delivered to the buyer's premises: the purchase price plus freight, insurance, duties, taxes, clearance, port charges and inland transport. Buyers compare suppliers on landed cost, not on the ex-works price. Calculating your buyer's landed cost helps you price competitively and choose the right Incoterm. Import Duties, VAT and Landed Cost: How to Calculate Them Export Pricing: Cost Build-Up from EXW to FOB, CFR and DAP

Latest shipment date

The last date on which goods may be shipped under a letter of credit, checked against the date of the transport document. Shipping one day late is a discrepancy. If production or the vessel is delayed, ask the buyer for an amendment extending the shipment and expiry dates before the deadline passes. Letter of Credit Discrepancies: Common Errors and Fixes Letters of Credit Explained: How a Documentary Credit Works

Legalisation (consular legalisation)

The certification, by an embassy or consulate of the importing country or another authority, that the signature and seal on a document are genuine. Some importing countries require invoices or certificates of origin to be legalised before shipment. The process can take time and incur fees, so check requirements early. Between countries that are parties to the Hague Apostille Convention, an apostille can replace legalisation for public documents. Export Documents: What Each Trade Document Is For Export Document Checklist by Incoterm, Mode and Payment

Less than container load (LCL, groupage)

A shipment too small to fill a container, consolidated with other shippers' cargo by a forwarder or NVOCC. Freight is charged per cubic metre or per tonne, whichever is higher, plus handling charges at both container freight stations. LCL suits small volumes but takes longer and involves more handling, so packaging must be robust. FCL vs LCL Shipping: Full Container or Groupage? Freight Forwarders: Role, Quotes and Responsibilities

Letter of credit (L/C, documentary credit)

An irrevocable undertaking by a bank, issued at the buyer's request, to pay the seller provided that the seller presents documents that comply with the terms of the credit. Most credits are subject to the ICC's UCP 600. Banks deal only with documents, not with the goods, so the seller is paid only if the documents match the credit and each other. Read the draft credit carefully on receipt and ask for amendments to any term you cannot meet before you ship. Letters of Credit Explained: How a Documentary Credit Works Types of Letters of Credit: Confirmed, Standby, Transferable Letter of Credit Discrepancies: Common Errors and Fixes

Letter of indemnity (LOI)

A written promise to compensate a carrier or bank for any loss it suffers by acting without the normal document, typically releasing cargo without an original bill of lading. When the originals arrive after the ship, the receiver may ask the carrier to deliver against a letter of indemnity, often countersigned by a bank. The carrier is exposed if the rightful holder of the bill later claims the goods, and the guarantor can be liable for a large amount. Use it with caution and with a clear expiry. Bill of Lading: Functions, Types, Endorsement and L/C Rules Transit Times, Shipment Tracking and Handling Delays

Master bill of lading (MB/L)

The bill of lading issued by the actual ocean carrier, usually to a freight forwarder or NVOCC, covering a container or a consolidated shipment. When a forwarder consolidates cargo, the master B/L names the forwarder or its agent as shipper and consignee, and each customer receives a house B/L. Release at destination then happens in two steps: the agent collects the cargo under the master B/L and releases it to each consignee under the house B/L. Bill of Lading: Functions, Types, Endorsement and L/C Rules Freight Forwarders: Role, Quotes and Responsibilities

Most-favoured-nation tariff (MFN)

The standard duty rate a WTO member applies to imports from other WTO members, without preference. Preferential rates under FTAs or GSP schemes are lower than MFN rates. Countries outside the WTO may apply MFN treatment through bilateral agreements or their own laws. Import Duties, VAT and Landed Cost: How to Calculate Them Free Trade Agreements and Preferential Duties: How to Benefit

Multimodal transport document

A transport document covering carriage by at least two different modes, for example truck plus ship, under one contract with a single operator. It is often issued as a 'combined transport' or 'multimodal' bill of lading, sometimes on the FIATA FBL form used by forwarders. UCP 600 has a separate article for documents covering at least two modes. Container shipments from an inland place under FCA or CPT often use this kind of document. Transport Modes in International Trade: Sea, Air, Road, Rail Bill of Lading: Functions, Types, Endorsement and L/C Rules

Named place (Incoterms)

The place written after the Incoterm code, which fixes where the goods are delivered or, for the C rules, the destination up to which the seller pays carriage. A vague place ('FOB Algeria', 'DAP Europe') leaves room for disputes over who pays which leg and when risk passes. Name a precise point: a port, a terminal, a warehouse address. Under C rules, it can also be wise to name the place of shipment, since that is where risk passes. Incoterms 2020 Explained: What They Cover and What They Don't Common Incoterm Mistakes and How to Avoid Them

Nominated bank

The bank with which a letter of credit is available for payment, acceptance, deferred payment or negotiation; if the credit is 'freely available', any bank. Presenting documents to the nominated bank in time counts as presentation under the credit. Unless it has confirmed the credit, a nominated bank is not obliged to pay, but it may choose to do so and then claim reimbursement from the issuing bank. Letters of Credit Explained: How a Documentary Credit Works

Non-preferential origin

The 'economic nationality' of goods, used for most-favoured-nation duties, trade statistics, labelling, anti-dumping duties, quotas and embargoes. It usually corresponds to the country of the last substantial transformation. It is proven by an ordinary certificate of origin, typically issued by a chamber of commerce, when the importing country requires one. Rules of Origin: Wholly Obtained, Processing and Cumulation Certificate of Origin: Non-Preferential, EUR.1 and Others

NVOCC (non-vessel operating common carrier)

A carrier that issues its own bills of lading and contracts with shippers as carrier, but does not operate the ships; it buys space from shipping lines. NVOCCs are common in LCL consolidation and on many trade lanes. Because the NVOCC is the contractual carrier, claims are made against it. The term is particularly used in US regulation. Freight Forwarders: Role, Quotes and Responsibilities Bill of Lading: Functions, Types, Endorsement and L/C Rules

Ocean freight (base rate)

The price charged by a shipping line for carrying cargo from the port of loading to the port of discharge, before surcharges and local charges. The total cost of a sea shipment includes the base rate, surcharges such as BAF, terminal handling charges at both ends, documentation fees and sometimes peak-season or congestion surcharges. Ask for an 'all-in' quote that lists what is and is not included. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges

On-board notation (shipped on board)

A statement on a bill of lading, dated and where required signed, confirming that the goods have been loaded on a named vessel. A 'received for shipment' bill shows only that the carrier has taken the goods; under UCP 600, a bill of lading presented under a credit must show shipment on board, either through pre-printed wording or an on-board notation. The date of the notation is treated as the date of shipment, which is checked against the latest shipment date of the credit. Bill of Lading: Functions, Types, Endorsement and L/C Rules Letter of Credit Discrepancies: Common Errors and Fixes

Open account

A payment method in which the seller ships the goods and sends the documents directly to the buyer, who pays on an agreed due date, for example 60 days after invoice. It is the most attractive term for the buyer and the most common in trade between established partners, but the seller bears the full credit risk. Export credit insurance, factoring or a standby letter of credit can reduce that risk. Some exchange-control rules limit the payment terms an exporter may grant. Open Account Payment Terms: Selling on Credit Safely Export Credit Insurance: How to Protect Your Receivables International Payment Methods Compared: Seller and Buyer Risk

Order confirmation (acknowledgement)

The seller's written acceptance of a purchase order, restating the agreed items, price, delivery date, Incoterm and payment terms. It is the moment to correct anything in the order that you cannot accept: a reply that changes material terms is legally a counter-offer, not an acceptance, under the CISG and most laws. Send it quickly and keep a record of the buyer's agreement to any change. Purchase Order and Order Confirmation in Export Sales The CISG and Choice of Law in International Sales Contracts

Origin declaration (invoice declaration)

A statement of preferential origin written by the exporter on the invoice or another commercial document, used instead of a certificate under some trade agreements. Agreements usually reserve it for approved exporters or for consignments below a value threshold, and prescribe the exact wording. The exporter must keep evidence of origin, because customs may verify the claim years later. The EU's GSP scheme and several recent agreements use registered-exporter statements on the same principle. Rules of Origin: Wholly Obtained, Processing and Cumulation Free Trade Agreements and Preferential Duties: How to Benefit

Packing list

A document listing the contents of each package in a shipment, with the number and type of packages, marks, net and gross weights and dimensions or volume. Forwarders use it to book space and prepare transport documents, customs use it to inspect the cargo, and the buyer uses it to check the delivery. It must be consistent with the commercial invoice and the bill of lading. It does not usually show prices. Packing List for Export: Weights, Volumes, Marks and Numbers Export Packaging, Pallets and Shipping Marks: A Practical Guide

Performance bond (performance guarantee)

A guarantee, usually 5 to 10% of the contract value, that compensates the buyer if the seller fails to perform the contract. It is common in public tenders, projects and large supply contracts. The seller's bank issues it and holds a counter-indemnity from the seller. Negotiate a clear expiry date and avoid 'extend or pay' situations. Bank Guarantees in Trade: Bid, Performance and Advance Payment

Phytosanitary certificate

An official certificate issued by the plant protection organisation of the exporting country stating that plants or plant products have been inspected and meet the importing country's plant health requirements. It follows the model of the International Plant Protection Convention (IPPC) and is required for fresh fruit, vegetables, seeds, cut flowers, grain and many other products. The importing country's requirements, such as freedom from specific pests or a treatment, must be checked before shipment. A growing number of countries exchange it electronically as an ePhyto. Phytosanitary, Health and Quality Certificates for Food Exports Exporting Algerian Dates and Agri-Food: A Case Study

Port of loading (POL) and port of discharge (POD)

The port where goods are loaded on the vessel for the main voyage, and the port where they are unloaded. Both appear on the bill of lading and must match the letter of credit. They may differ from the place of receipt and place of delivery when the carrier also handles inland transport. Bill of Lading: Functions, Types, Endorsement and L/C Rules Transport Modes in International Trade: Sea, Air, Road, Rail

Pre-shipment finance

Financing granted to an exporter before shipment to buy raw materials, produce and pack the goods for a confirmed order. Banks often grant it against a firm order, a letter of credit or an export contract. A red-clause letter of credit, under which the buyer's credit allows an advance before shipment, is a related technique. Trade Finance: Pre-Shipment and Post-Shipment Financing

Preferential origin

The origin status that allows goods to benefit from reduced or zero duty under a trade agreement or preference scheme, if they meet its specific rules. Meeting the rules is not enough: the importer must also present valid proof of origin and the goods must usually be transported directly between the parties. Exporters should keep supplier declarations and production records to justify each claim. Rules of Origin: Wholly Obtained, Processing and Cumulation Free Trade Agreements and Preferential Duties: How to Benefit

Proforma invoice

A preliminary invoice that the seller sends before shipment, describing the goods, price, Incoterm, payment and delivery terms of a proposed or agreed sale. It is not a demand for payment, but it is often used to obtain an import licence, open a letter of credit, pay an advance or, in some countries, domicile the operation with a bank. Its details should match the final commercial invoice, so draft it with the same care. State its validity period and the exact named place of the Incoterm. Proforma Invoice: What to Include and Why It Matters Export Quotation: How to Write a Professional Offer Commercial Invoice for Export: Required Details and Errors

Purchase order (PO)

A document sent by the buyer to the seller to order goods, stating the items, quantities, prices, delivery and payment terms. When the seller accepts it, usually through an order confirmation, it forms or completes the contract. Check the buyer's general purchase conditions, which may be printed on the order and conflict with your sales conditions. A PO number should be quoted on the invoice and other documents. Purchase Order and Order Confirmation in Export Sales International Sales Contract: Key Clauses That Protect You

Quotation (export offer)

A seller's priced proposal to a prospective buyer, stating the goods, price per unit, Incoterm and named place, payment terms, delivery time and validity. A clear quotation avoids most later disputes: say what the price includes, which version of the Incoterms applies, how long the offer is valid and any minimum order. Building the price separately for each Incoterm is the only safe way to quote EXW, FOB and CIF prices consistently. Export Quotation: How to Write a Professional Offer Export Pricing: Cost Build-Up from EXW to FOB, CFR and DAP Proforma Invoice: What to Include and Why It Matters

Reefer container

A refrigerated container with its own cooling unit that keeps cargo at a set temperature during transport. It is used for fruit, vegetables, dates, meat, fish, dairy and pharmaceuticals. The reefer maintains temperature but is not designed to cool down warm cargo, so goods should be pre-cooled. Set temperature, ventilation and humidity correctly in the booking, and check them on the bill of lading. Reefer Containers and the Cold Chain: Shipping Perishables Shipping Container Sizes, Types and Capacities Explained

Remitting bank

In a documentary collection, the seller's bank, which receives the documents and the collection instruction from the seller and sends them to the buyer's country. It follows the seller's instructions but does not guarantee payment. Clear instructions on release terms, protest and what to do if the buyer does not pay are essential. Documentary Collection: D/P and D/A Under URC 522 Explained

Repatriation of export proceeds

The obligation, under Algerian exchange-control rules, to bring the foreign-currency proceeds of an export back to Algeria, through the domiciliation bank, within a set deadline. Under Banque d'Algérie Regulation 26-02 of 23 July 2026, proceeds of non-hydrocarbon exports must be repatriated within 120 days of shipment for goods or completion for services; payment terms beyond 120 days, up to a maximum of 180 days, require prior export credit insurance with the authorised national body. Proceeds repatriated on time are credited to the exporter's foreign-currency account, while late proceeds are credited in dinars. These rules change, so confirm the current ones with your bank. Repatriating Export Proceeds in Algeria: Deadlines and Rules Bank Domiciliation of Exports in Algeria: The Complete Guide

Retention of title

A contract clause under which the seller remains owner of the goods until the buyer pays in full. Its effectiveness depends on the law of the country where the goods are located, and it can be lost once the goods are resold or processed. It is a useful complement to, not a replacement for, secure payment terms. International Sales Contract: Key Clauses That Protect You Open Account Payment Terms: Selling on Credit Safely

Revolving letter of credit

A letter of credit whose amount is automatically reinstated after each drawing or each period, for regular shipments under one contract. It saves the cost and time of opening a new credit for each shipment. It may be cumulative, where unused amounts carry forward, or non-cumulative. The credit must state clearly how and when reinstatement happens. Types of Letters of Credit: Confirmed, Standby, Transferable

Rules of origin

The criteria used to determine the country in which a product was made, for applying tariffs, preferences, quotas and trade measures. A product is either 'wholly obtained' in one country, like fruit grown there, or 'sufficiently processed' there, often measured by a change of tariff heading, a maximum share of non-originating materials or a specific process. Each trade agreement has its own list rules. Rules of Origin: Wholly Obtained, Processing and Cumulation Certificate of Origin: Non-Preferential, EUR.1 and Others

Sanctions screening

Checking buyers, banks, carriers, vessels, end users and destinations against the sanctions lists of the UN, the EU, the United States and other authorities. Banks screen every transaction and will block payments involving listed parties, even if your own country has no sanctions on them. Screen at the start of a deal and again before shipment, and keep a record. Export Controls, Dual-Use Goods and Sanctions Screening Explained How to Find International Buyers and Check Them Before You Ship

Sea waybill

A non-negotiable sea transport document that serves as a receipt and evidence of the contract of carriage, but not as a document of title. The named consignee can collect the goods by proving its identity, without presenting an original document, so cargo is released faster. It suits trusted relationships, open account and intra-group shipments. It gives the seller no control over the goods once shipped, so it is unsuitable when payment depends on the release of documents. Bill of Lading: Functions, Types, Endorsement and L/C Rules Open Account Payment Terms: Selling on Credit Safely

Shipper (consignor)

The party that hands the goods to the carrier and is named as shipper on the transport document, usually the seller or its agent. Under FOB or FCA, the seller should insist on appearing as shipper on the bill of lading if it needs the document for payment. The shipper is responsible for describing the goods correctly, including the verified gross mass of containers and dangerous goods declarations. Bill of Lading: Functions, Types, Endorsement and L/C Rules Who Is Who in International Trade: The Actors of an Export

Shipping marks

The identification marks painted or labelled on each package, such as the consignee's code, destination, package number and weight, plus handling symbols. They allow handlers, customs and the receiver to identify the packages and match them to the packing list and transport documents. Marks must be identical on all documents, including under letters of credit. Use standard handling symbols (this way up, fragile, keep dry) rather than words only. Export Packaging, Pallets and Shipping Marks: A Practical Guide Packing List for Export: Weights, Volumes, Marks and Numbers

Standby letter of credit (SBLC)

A letter of credit used as a guarantee: the beneficiary draws on it only if the applicant fails to pay or perform, usually against a simple demand and statement of default. It is often issued under the ICC's ISP98 rules, or under UCP 600. Sellers on open account use it to secure payment: if the buyer pays on time, the standby is never drawn. It functions much like a demand guarantee. Types of Letters of Credit: Confirmed, Standby, Transferable Bank Guarantees in Trade: Bid, Performance and Advance Payment Open Account Payment Terms: Selling on Credit Safely

SWIFT MT700

The standard SWIFT message type that banks use to issue a documentary credit. Each field has a number and tag, for example 31D for the date and place of expiry, 44C for the latest shipment date, 45A for the description of goods and 46A for the documents required. Related messages include MT707 for amendments and MT760 for guarantees. Learning to read these fields makes checking a credit much faster. Letters of Credit Explained: How a Documentary Credit Works Letter of Credit Discrepancies: Common Errors and Fixes

Temporary admission

A customs procedure that allows goods to enter a country for a limited time and purpose, with total or partial relief from duties and taxes, provided they are re-exported. It covers exhibition goods, professional equipment, samples and goods for testing. A guarantee is usually required, often provided by an ATA Carnet. Special Customs Procedures: Transit, Bonded Warehouse, ATA Carnet

Terminal handling charges (THC)

Charges for handling containers at the terminal, such as moving them between the stack and the vessel, billed at the port of loading and the port of discharge. Incoterms allocate them indirectly: the seller pays the costs up to the delivery point, and under C rules destination charges fall on the seller only if they are part of its contract of carriage. Disputes are frequent, so spell out who pays origin and destination THC in your quotation. Ocean Freight Costs Explained: Base Rate, BAF, THC, Surcharges Common Incoterm Mistakes and How to Avoid Them

TEU (twenty-foot equivalent unit)

The standard unit for counting container capacity and volumes, equal to one 20-foot container. A 40-foot container counts as two TEU. Ship sizes and port throughput are expressed in TEU. A 20-foot container holds roughly 33 cubic metres; its maximum payload depends on the specific container and on road weight limits. Shipping Container Sizes, Types and Capacities Explained

TIR carnet

The international customs transit document that lets goods travel by road across several countries in sealed vehicles or containers, with customs checks only at departure and destination. The TIR system, run under the UN TIR Convention with the IRU managing the guarantee chain, replaces national guarantees and inspections at each border by one guaranteed document. It speeds up long road journeys, provided the vehicle is approved for TIR, the seals are intact and the carnet is valid in every country crossed. Special Customs Procedures: Transit, Bonded Warehouse, ATA Carnet Transport Modes in International Trade: Sea, Air, Road, Rail

Trade finance

The range of financing, payment and risk-mitigation products that banks and other institutions provide to support international trade transactions. It includes letters of credit, collections, guarantees, pre-shipment and post-shipment finance, factoring, forfaiting and export credit insurance. Choosing the right combination depends on the buyer, the country, the amount and your cash-flow needs. Trade Finance: Pre-Shipment and Post-Shipment Financing International Payment Methods Compared: Seller and Buyer Risk

Transaction value

The price actually paid or payable for goods sold for export to the country of importation, adjusted as the WTO Valuation Agreement requires; the first and main method of customs valuation. It can be rejected if the buyer and seller are related and the relationship influenced the price, or if there are restrictions or conditions on the sale. In that case customs apply the secondary methods in order. Customs Valuation: Transaction Value and What Is Added to It

Transfer of risk

The moment, fixed by the Incoterm, at which the risk of loss of or damage to the goods passes from the seller to the buyer. It coincides with the delivery point: for example on board the vessel under FOB, CFR and CIF, at handover to the first carrier under FCA, CPT and CIP, and at destination under D rules. After that point, the buyer must pay even if the goods are lost, which is why the party at risk should insure. Incoterms 2020 Explained: What They Cover and What They Don't Cargo Insurance: Institute Cargo Clauses A, B and C Explained

Transferable letter of credit

A letter of credit expressly marked 'transferable', which allows the first beneficiary, often a trader, to have all or part of it made available to one or more second beneficiaries, typically its suppliers. Transfer is governed by article 38 of UCP 600: it is done by the transferring bank, may reduce the amount, unit price and dates, and the trader may substitute its own invoice. A transferred credit cannot be transferred again to a third beneficiary. No bank is obliged to transfer except to the extent it has expressly agreed. Types of Letters of Credit: Confirmed, Standby, Transferable

Transshipment

Unloading goods from one vessel or vehicle and reloading them onto another during transit to the final destination. Many routes involve transshipment at a hub port, which adds time and handling risk. A letter of credit may prohibit transshipment, but UCP 600 still allows it in many cases, for example for containers covered by a single bill of lading for the whole voyage. Transit Times, Shipment Tracking and Handling Delays Transport Modes in International Trade: Sea, Air, Road, Rail

UCP 600 (Uniform Customs and Practice for Documentary Credits)

The ICC's rules for documentary credits, ICC Publication No. 600, in force since 1 July 2007 and applied to the great majority of letters of credit worldwide. They apply when the credit expressly states it is subject to them. Key rules include: credits are irrevocable; banks examine documents only on their face, within a maximum of five banking days following presentation; and original transport documents must be presented within 21 calendar days after shipment unless the credit says otherwise, and never after expiry. Credits can modify or exclude individual articles. Letters of Credit Explained: How a Documentary Credit Works Letter of Credit Discrepancies: Common Errors and Fixes

URC 522 (Uniform Rules for Collections)

The ICC rules governing documentary and clean collections, ICC Publication No. 522, in force since 1 January 1996. They define the roles of the remitting and collecting banks and how documents are released against payment or acceptance. Banks act on the collection instruction but do not examine documents for content and have no obligation to pay. A collection is subject to URC 522 only if the instruction says so, which is almost always the case. Documentary Collection: D/P and D/A Under URC 522 Explained

URDG 758 (Uniform Rules for Demand Guarantees)

The ICC rules for demand guarantees and counter-guarantees, in force since 1 July 2010. They set out how a demand must be presented, what it must contain (including a statement of the applicant's breach), how quickly the guarantor must examine it and how the guarantee expires. A guarantee is subject to URDG 758 only if it says so. Many countries also apply their own law and practice to guarantees. Bank Guarantees in Trade: Bid, Performance and Advance Payment

Value added tax (VAT)

A consumption tax collected at each stage of the supply chain; exports are generally zero-rated or exempt, and imports are taxed at the border. Import VAT is usually calculated on the customs value plus duties and some costs, and businesses registered for VAT can generally recover it. Under DDP the seller pays import VAT and may be unable to recover it. Keep proof of export to justify the VAT exemption in your own country. Import Duties, VAT and Landed Cost: How to Calculate Them DDP (Delivered Duty Paid): Maximum Seller Obligation Explained

Verified gross mass (VGM)

The total weight of a packed container, which the shipper must provide to the carrier before loading under the IMO's SOLAS convention, in force since 1 July 2016. It can be obtained by weighing the packed container (method 1) or by weighing all the contents and adding the container's tare (method 2), where national authorities allow. A container without a VGM is not loaded. The shipper named on the bill of lading is responsible for it. Shipping Container Sizes, Types and Capacities Explained Export Packaging, Pallets and Shipping Marks: A Practical Guide

World Customs Organization (WCO)

The intergovernmental organisation, based in Brussels, that develops international customs standards, including the Harmonized System. It also maintains the Revised Kyoto Convention on customs procedures and the SAFE Framework on which AEO programmes are based. HS Codes Explained: How to Classify Your Products Correctly Authorized Economic Operator (AEO): What It Is and Why It Helps

World Trade Organization (WTO)

The intergovernmental organisation, based in Geneva, that administers the multilateral rules of international trade and settles trade disputes between members. Its agreements include the GATT, the Customs Valuation Agreement and the Trade Facilitation Agreement. Algeria is an observer: it applied to join the GATT in 1987 and has been negotiating its WTO accession since. What Is International Trade? How an Export Deal Really Works Customs Valuation: Transaction Value and What Is Added to It