Cabotage
Government restrictions reserving domestic
transportation (between points within the
country) to domestically registered carrier´s. Many countries have cabotage laws that require
domestic owned vessels
to perform domestic
interport water transportation service.
Call option
A contract which entitles one party (exporter or importer), at his option, to buy a specific amount of currency to another party
(usually a bank), at a price fixed in the contract, within a specified time
limit.
Calvo doctrine
A legal principle that jurisdiction in international investment dis- putes lies with the
country in which the investment is located; thus, a foreign investor has no recourse beyond
the host country´s local courts.
Capacity to contract
A person´s competency, as defined by
law, to make a contract. Capacity to contract
is typically determined by whether a person has attained majority
age and is mentally capable
of understanding the contract terms.
Capital account
The long and short capital imports and exports of a country in the balance
of payment.
Captain´s protest
A document prepared by the captain of a vessel on arrival at port, showing unusual conditions
encountered during voyage. Generally, a captain´s protest
is prepared to relieve the shipowner of any liability for any loss to cargo, thus requiring
cargo owners to look to insurance companies for reimbursement.
Car seal
Metal strip and lead fastener
used for locking
freight car or truck doors. Seals are numbered for record purposes.
Cargo
Merchandise hauled
by transportation lines.
Cargo agent
An agent appointed by an airline or shipping line to solicit and process
international air and ocean freight for shipment. Cargo agents are paid
commissions by the airline or the shipping line.
Cargo insurance
Insurance placed on goods during transportation.
Cargo insurance certificate
A document indicating the type and amount of insur- ance coverage in force on a particular shipment. Used to assure the consignee that insurance
is provided to cover loss of or damage to the cargo while in transit.
Cargo manifest
A list of a ship´s cargo but without a listing of charges.
Carriage contract
An agreement between
a carrier and another party for transporta- tion. The other party will normally
be the seller (or seller´s agent) with freight prepaid shipments, or the buyer (or buyer´s agent) for freight collect shipments.
Carrier
An individual or
legal entity that is the business of transporting passengers or goods for hire. Shipping lines, airlines, trucking companies and railroad compa- nies are all carriers.
Carrier liability limit
The maximum amount of money for which a
carrier is legally liable for loss or damage to cargo. This is surprisingly low. For example, under the Warsaw Convention it is 17 euros per kilo for airfreight shipments.
Cartage
Transport of goods by truck to or from
a main carrier (i.e. vessel or aircraft) or bonded warehouse
or free trade zone within the local port or airport commercial
zone, usually under the supervision of customs authorities.
Cartel
An organization of independent producers
formed to regulate
the produc- tion, pricing or marketing practices of its
members in order to limit competition and maximize their market power.
Cartment
Customs
form permitting in bond cargo to be moved from one location
to another under customs control, within the same customs district. Usually in motor carrier´s possession while draying cargo.
Cash against documents (CAD).
Payment terms used in bank
collections that require the drawee to pay before receiving certain documents. Typically,
the drawer will send these documents to the drawee´s bank with instructions that it secure payment before
releasing them. Also called payment
at sight.
Cash in advance (CAI).
Payment term in which the exporter receives payment before shipment of the goods. This minimizes the exporter´s risk and financial costs, since there is no collection risk and no interest cost or receivables.
Cash on delivery (COD)
A payment term under which
payment for the shipped
goods is to be made to the carrier at time of delivery. This practice is not recommended
in foreign trade because of differing methods of operation employed by carriers in different countries
and because the carrier nor the consignee may have access to foreign
exchange.
Cash with order (CWO)
A payment term whereby the buyer remits the money at the time the order is placed.
Under this term, the buyer is actually
extending credit to the seller. Also called payment
in advance.
Casualty
An adverse chance event, such as the disappearance of, or damage, to goods in transit
Caveat emptor
Expression that means “let the buyer beware”. The buyer accepts the goods “as is” and the risk they may be defective or unsuitable. The buyer purchases at their own risk.
CCC Mark
The China Compulsory Certificate Mark, commonly known as a CCC Mark, is a compulsory safety mark for many products imported, sold or used in the chinese market.
CE Mark
The CE Mark Conformité Européene signifies that a product meets specific
European Union conformity assessment regulations. The mark does not endorse the
quality or durability of a product, only that it satisfies mandatory technical requirements.
CEO
The Chief Executive Officer (CEO) is the highest-ranking manager in a cor- poration. He or she is in charge of growth, financial operations, and goal setting for an organization.
Certificate of analysis
A document attesting that specific goods
have undergone specified testing
with specified results.
In international trade,
is usually the result
of an agreement between the seller and the buyer,
or a requirement of one of their governments.
Certificate of conformity
Some countries
(specially Eastern countries, such as Rus- sia, Belarus, Kazakhstan
or Moldova
and Romania)
require a certificate of conformity.
The certificate of conformity confirms that the goods comply with standards issued by the importing country.
Certificate of free sale
. Government certification that products such as food, drugs, medicine or cosmetics are approved for unrestricted sale in the country in which they originate,
or from which they are exported.
Certificate of health
Some countries require
a health or sanitary certificate when animals, animal products, fish, plants, and food products are skilled. These certificates
confirm that the goods are free from disease or pests (insects), and that products have been prepared
in such a way that they reach prescribed standards.
Certificate of inspection
A document certifying that merchandise (such as
perishable goods) was in good condition
at the time of inspection, usually immediately prior to shipment. Pre-shipment inspection is requirement
for importation of goods into many developing countries.
Certificate of manufacture
A document in which a producer certifies that the manu- facturing
has been completed and that the referenced goods are now at the disposal
of the buyer.
Certificate of Origin
A document attesting
to the country of origin of the goods.
A certificate of origin is often required
by customs authorities of a country
as part of the entry process. Such certificates are
usually through an official organization in the country of origin such as the local chamber of commerce or a consular
office.
Certification of Origin Form A
This certificate is a type of Certificate of Origin that allows imports
from the countries included in the GSP (General
System of Preferences) - developing countries - to qualify for the elimination or reduction of tariffs as this system gives preferential treatment.
Certificate of radioactivity
Some countries require, especially for food products, a certificate proving that they do not contain radioactive substances, before accepting the import and selling of such products in its territory.
Certificate of weight
A document attesting that a particular shipment is of a certain
weight.
Certified invoice
Some countries
require certified invoices, particularly when goods are being shipped against a letter of credit. These are invoices that are certified by a Chamber of Commerce before goods are dispatched.
CFR Cost and Freight
In Incoterms CFR the seller must pay the costs and freight necessary to bring
the goods to named port of destination but the risk of loss and
damage to the goods, as well as any additional costs due to events occurring after the goods have been delivered
from seller to the buyer when goods are on board in the
port
of shipment.
CFS Container Freight Station
A facility where freight shipments are
consolidated
or de-consolidated and staged between transport legs. A CFS is typically located in proximity to an ocean,
port, or airport,
where cargo containers are transported to and
from.
CFS/CFS
The term CFS/CFS refers to cargo delivered at origin in less-than-container
load quantities to a CFS Container freight
Station to be loaded into containers and to be unloaded from the container at
destination CFS.
CFS Charge
The charge assessed
for services performed at the origin or destination for loading or unloading of cargo into/from containers at a CFS Container Freight Station.
CFS Receiving Services
The service performed at the loading port in receiving and packing cargo into containers
from CFS Container Freight Station to CY Container
Yard.
Chaebols
Korean industrial conglomerates characterized by strong family control, authoritarian management and centralized decision-making. The chaebol structure can encompass a single large company or several groups
of companies.
Chargé d´affaires
A subordinate diplomat who takes charge in the absence of the
ambassador.
Chargeable Weight
Rate for airfreight goods where dimensional weight factor ex- ceeds the actual weight of the cargo.
Charges collect
The total transportation charges which may include pickup and/
or delivery charges which are entered on the bill of lading
to be collected from the consignee. Equivalent terms are freight collected and charges forward.
Charter party
A contract
under which a charterer agrees to hire the use of a ship
from
a shipowner. The charterer in some cases will be empowered to issue his or her
own bills of lading, known as charter party bill of lading, subject to the conditions
of the original
charter party contract.
Charter party bill of lading
A bill of lading issued by a charter party. Charter party bills of lading are not acceptable by banks under letters of credit unless they are spe- cifically authorized in the credit.
Checker
A carrier-designated person who is responsible for examining cargo being handed over shipment, for signs of damage or loss. Also called wharfinger.
Chock
A piece of wood or other material placed at the side of cargo to prevent rolling or moving
sideways.
CIETAC
The China
International and Economic Trade Arbitration
Commission is a major arbitration institution in China.
CIETAC headquarters are in Beijing,
and also has sub-commissions in Shenzhen, Shanghai
and Tianjin.
CIF Cost, Insurance and Freight
In this Incoterms, the seller has the same obliga- tions as under CFR but with the addition hat he has to
procure marine insurance against the buyer´s risk or loss or damage to the goods during the carriage.
CIM Transport document
An internationally standardized freight document
issued in rail transport. CIM stands for “Convention Internationale concernant le transport des Marchandises par chemin de fer”.
CIP Carriage and Insurance Paid to
In Incoterms CIP, the seller
has the same obligations as under CPT (Carriage
Paid to) terms, but with the addition that the seller has to procure
cargo insurance against the buyer´s risk of loss, or damage the
goods during the carriage.
The seller contracts for insurance and pays the insurance
premium.
Circumvention
Getting around commitments in the World Trade Organization (WTO) such as commitments to limit agricultural export subsidies. Includes: avoiding
quotas and other restrictions by altering the country of origin of a product; measures
taken by exporters to evade anti-dumping or countervailing duties.
CISG
The United Nations Convention on Contract for
the International Sale of Goods. known as Vienna Convention, is a 1980 international treaty signed by most
leading trading
nations that amounts to a virtual commercial code for international
sale of goods transactions, but exclude contracts for services.
CITES
The Convention on International Trade
in Endangered
Species of Wild Fauna
and Flora, is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals
and plants does not threaten their
survival.
Civil Law
A body of law created
by statutes and other enactments of legislatures and by rules and regulations adopted to give effect to those statutes and enactments.
Claimant
A party presenting a demand for compensation, such as against a carrier
or insurer.
Claused bill of lading
A bill of lading that contains notations or remarks as to defects in the goods or packaging. Also called foul or dirty bill of lading.
Clean bill of exchange
A bill of exchange having no other documents, such as bill
Clean bill of lading
A bill of lading indicating that goods were received in apparent good order and condition. A clean bill is one in
which contains no notations of defect, damage or loss. and is signed by the
carrier or its authorized representative.
Clean collection
1. A letter of instructions to a presenting bank accompanied by a draft and often invoices, but not accompanied by
any document restricting possession or ownership of the relevant goods. This is the opposite ofo documentary collection.
2. A letter of instructions accompanied by a cheque drawn on a bank located outside
the clearing range of the payee´s country´s
banking system.
Clean draft
A draft to which no documentation has been attached.
Clean float
A system in which
exchange rates are determined by market forces rather
than by government
intervention or restrictions.
Clean letter of credit
A letter of credit against which the beneficiary of the credit may draw a bill of exchange without presentation of documents.
Clean on board bill of lading
A document evidencing cargo laden aboard a vessel
with no exceptions as to cargo condition or quantity.
Clean receipt
A receipt containing no damage or
shortage notations.
Clean report of findings
A document issued by a pre-shipment inspection agency engaged by importer´s country, indicating that the relative shipment conforms to the criteria established by the government. Typically, pre-shipments inspections cover price verification
and physical inspection of the goods to determine that they conform in quantity, quality, and kind to importation approval.
Clean transport document
A receipt for goods without
any adverse notation
in- dicating damage or shortage, issued by a carrier. Goods covered by clean transport
documents are said to be received in apparent good order and condition. Transport document bearing adverse notations are called variously claused, unclean or foul, and are the opposite of clean transport documents.
Clearance
The complementation of customs entry formalities resulting in the release
of goods from customs custody to the importer.
CMR Transport document
This document, also know as CMR consignment note, constitutes
a proof of the contract of carriage by road, determines the scope and
responsibility for the operation performed and identifies the parties involved
and the goods being transported.
Co-branding
A form of cooperation between two or more brands with significant
customer recognition, in which all the participants´ brand names are retained. The products are often complimentary, in the way that one product can be used or con- sumed jointly with the other. The motive for co-branding is the expectation of syner-
gies that create value for participants, above the value they would expect to generate
on their own.
COFACE country risk
Country risk classification provided by the French company
COFACE (Compagnie Française
d’Assurance pour le Commerce Extérieur), world
leader in export insurance that is very useful to know the country risk and the business climate in 160 countries. It offers a classification of 7 levels of risk from very low to very high (A1, A2, A3, A4, B, C, D).
Collateral
An interest in property given by a debtor to a creditor
in order for the
creditor to secure payment of the debt. For example, an applicant for a letter of credit might pledge the goods for which the credit is opened as security
to the issuing bank.
Collect charges
In shipping, the transportation practice
under which the receiver
of the goods pays charges.
Collecting bank
Any bank, other than the remitting bank, that is involved in processing a collection. In collection terminology the remitting bank is the bank to
which the drawer has entrusted the handling of a collection, usually the drawer´s bank of account.
Collection
A set of documents including a letter or completed form indicating the drawer´s instructions (called a collection letter), and often accompanied by a draft or
drafts, invoices, packing
lists, and other documents as agreed by the drawer
and drawee.
Collection fee
The charges banks impose for handling collections.
Collection letter
A letter or form that conveys the drawer´s instructions to the presenting bank. While there are many variations, collection letters
identify the drawer, drawee, and any case-of-need party; typically contain a series of boxes that apply to various instructional points.
Collusion
A secret agreement or cooperation between two or more parties to cheat or deceive
others by illegal,
fraudulent, or deceitful means.
Combined Nomenclature (CN)
The Combined Nomenclature (CN) is a method
used
for the European Union for designating goods and merchandise which was established to meet, at one and the same time, the requirements both of the Common
Customs Tarif and of the external trade statistics of the Community.
Combined transport
Consignment sent by means of various modes of transport, such as by rail and by ocean.
Combined transport document (CTD)
A
transport document indicating more than one mode of transportation.
Comfort letter
A letter from an
independent auditor included in a preliminary prospectus stating that, while a full audit has not been undertaken, the auditor has done revised the documents sufficiently to assure that financial statement information in the preliminary prospectus is correctly prepared to the best of the auditors´s knowledge.
Commercial agency
A relationship
between one individual or legal
entity (the agent) who represents, acts on behalf
of, and binds
another individual or legal entity
(the principal) in accordance with the principal´s request or instructions.
Commercial counsellor
The commercial expert on the diplomatic staff of a country´s
embassy or large consulate. Also called commercial attaché.
Commercial counterfeiting
The production or marketing of goods
with the intent
of defrauding the purchase by falsely conveying directly or indirectly, that the goods are
produced by a known or reputable manufacturer.
Commercial in confidence
A classification that identifies information that, if dis- closed, may result in damage to a party’s commercial interests, intellectual property or trade secrets.
Commercial invoice
The document recording a transaction between the seller and the buyer.
Commercial presence
In international
marketing forms of entry strategies, having an office,
branch, or subsidiary in a foreign
country.
Commercial risk
The possibility
of non-payment
caused by such buyer-related prob- lems as insolvency or bankruptcy, as opposed to problems encountered by the buyer´s
country.
Commercial sensitive information
Information that, if disclosed, could
prejudice a supplier’s
commercial interests e.g. trade secrets, profit margins or new ideas. This type of information is protected through
Confidentiality Agreements.
Commercial treaty
An agreement between
two or more countries setting forth con- ditions under which business between or among the countries may be transacted. It may outline tariff privileges, terms on which property may be owned, the manner in which claims may be settled,
etc.
Commercial value
The actual price at which a product
is sold either to unrelated parties or to related
parties at arm´s length. This is the opposite of no commercial value, a statement
that should be shown on invoices covering shipments of samples
that are being furnished without charge and are not intended for resale.
Commission
Compensation given by
a principal to a party (usually an agent, inter- mediary, or sales
representative) representing it. Sales commission, a percentage of the selling price (usually
without including transportations costs), is the most commonly
way to pay sales services in foreign
trade.
Commission agent
An international agent who is paid a percentage of the sales he or she generates. The Agent offers products to potential clients in an assigned terri- tory (usually a country), strictly in accordance with the sale conditions indicated to it by the Principal.
Commission sales agreement
A type or contract, whereby a person or company acts as a sales agent on behalf of the exporting company (principal), introducing its prod- ucts to potential buyers in the external market, in exchange for a commission based on the value of the business deals arranged and paid to the principal.
Commissioning
The process used to test equipment to verify that it functions
ac- cording to its specifications.
Common carrier
In some jurisdictions, a legal term referring to carriers who offer transport
services to the general consumer or business public. In contrast, for example,
to carriers who may work as employees,
sub-contractors or agents of the manufacturer
or shipper.
Commodity
Broadly speaking, any article exchanged
in trade, but commonly used to refer to raw materials
and bulk-produced agricultural products such as cereals,
coffee or tea.
Common external tariff
A uniform tariff rate adopted by a customs union or com-mon market such as the European Community
to imports from countries outside the union. For example, the European Common Market is based on the principle of a free internal
trade area with a common external tariff (Tarif Exterieur Commun, in French)
applied to products imported from non-member countries. Free trade areas do not necessarily have common external
tariffs.
Common Law
The body of law derived from usages, customs, and judicial decisions, as distinguished from statutes.
Common market
A common market (as opposed to a free trade area) has a common external tariff and may allow for labour mobility and common economic
policies among the participating nations.
Comparative advantage
A central concept in international trade which holds that a country or region should specialize in the production and export of those goods and services that it can produce relatively more efficiently that others goods or services, and import those
goods and services in which it has a comparative disadvantage.
Compatible cargo
A term used for cargo that may safely travel together.
Compact palletization
System developed to store homogeneous
products, with great quantity
of pallets per reference. It permits the top use of the available space both for i surface
and height. This type of installation is constituted by a set of shelves
that form interior aisles of load, with rails of support
for the pallets.
Compensatory trade
A form of countertrade where any combination of goods and services are bartered.
Compensation deal
A type of
countertrade that involves the exports of goods in one direction.
Competitive intelligence
Competitive
intelligence is the gathering of publicly-avail- able information about an enterprise’s competitors and the use of that information to gain a business
advantage.
Compulsory licensing
For patents, when the authorities license companies or individuals other
than the patent
owner to use the rights
of the patent - to make, use, sell or import a product under
patent (i.e. a patented product
or a product made by a patented process) - without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided
certain procedures and conditions are fulfilled. See
patent.
Compound duty
A combination of both a specific rate of duty and an ad valorem rate of duty.
For example 0.5 cents per unit plus 8 per cent ad valorem. Whereas specific duties are based on factors such as weight or quantity, ad valorem duties are based on the value
of the goods.
Comtrade
Database of the United Nations
with exports and imports statistics by countries and tariff
codes. The search route to be used for obtaining the trade statistics is: data availability - by reporter
-choose the country
and year in the first column - check
box “I have read Readme First” - Continue - in quick filter select the tariff
code (4 to 6 figures)- search - select option HS 2002 - apply.
Concealed damage
In shipping
damage to the contents of a package
which is in good
order externally.
Confidential information
A classification that identifies sensitive information that,
if disclosed, could damage the person or organization it relates to. In a business relationship, confidential information is protected through Confidentiality Agreements.
Confidentiality agreement
A type of contract used to protect
sensitive technical or commercial
information from disclosure to others. Such agreement is often used when a company or individual has a secret process or a new product that it wants another company to evaluate as a precursor to a comprehensive manufacturing license
agreement or technology transfer agreement; or, perhaps one Party wants to evaluate
another’s existing commercial product
for a new and different application.
Confirmed letter of credit
A letter of credit that contains a guarantee on the part of both the issuing and de advising banks of payment to the seller so long as the seller´s documentation is in order and the terms of the letter of credit are met.
Confirming
A financial service in which an independent company confirms an ex- port order in the seller´s
country and makes payment for the goods in the currency
of
that country.
Confirming bank
In a letter of credit transaction, the bank that assumes responsi- bility to the seller
(usually the exporter) for payment from the issuing bank (buyer´s bank) so long as the terms and conditions of the letter of credit have been met by the seller/exporter.
Confirming house
A trading company that represents the interests of foreign buyers. Confirming houses typically
negotiate purchases on behalf of
their overseas principals, place their
domestic orders in the suppliers´countries, arrange
for export handling and transportation to the buyer, and locally pay the suppliers.
Conflict of laws
Differences between the laws of different countries or other jurisdic- tions that become significant in determining which law will apply when individuals o legal entities have acquired rights, included
obligations, suffered damages, or made contracts in two or more jurisdictions.
Congestion surcharge
An additional charge added to
the base
rate ocean freight cost, reflecting
the additional expenses that the ship lines incur when calling at congested ports.
Consignee
In export transactions, the intended receiver
of a cargo shipment. The named person or legal entity having
the right to claim the merchandise from the carrier at destination, and is generally recognized as the legal owner
for customs purposes.
Consignee marks
A symbol placed on packages for export, generally consisting of a square, triangle, diamond, circle, cross, etc., with design letters and/or numbers for the
purpose of identification.
Consignment
Shipment of one or more pieces of property, accepted by a carrier for one shipper at one time, receipt for in one lot, and moving on one bill of lading. The exporter retains title of goods until the importer
sells them.
Consignment contract
A contract by which a seller (consignor) delivers goods to an
individual or entity (consignee) that will sell them. For goods sold, the consignee
will remit the price to the consignor less a commission. Goods not sold may be returned
to the consignor.
Consignor
The person or firm that ships goods, or gives goods to another (consignee) for care.
Consolidated container
A shipping container containing cargo from a number of shippers
at a centrally located point of origin by a freight consolidator, and transporting them as a single
shipment to a destination point.
Consolidation of cargo
often results in reduced shipping rates.
Consolidated shipment
A method of shipping whereby an agent (freight forwarder or consolidator) combines individual consignments from various shippers into one shipment made to a destination agent, for the benefit of preferential rates.
Consolidation
Combining cargo from more than one shipper and/or
to more than one consignee for shipment together, usually in a single shipping container. On arrival, the container is unloaded, and each
individual shipment may be claimed by its appropriate consignee.
Consolidator
A company that provides consolidation services. Freight forwarders perform the functions of a consolidator.
Consular declaration
A formal statement, made in the country
of export by the consul of an importing country, describing goods to be shipped to the importing country.
Consular documentation
Documents and forms that have been presented to
a consulate, usually of the buyer´s
country and usually
in the country from which
a shipment originates. While each country requiring consulate documentations establishes its own fee schedule and
procedures, commercial invoices, certificates or origin and/or copies
of transport documents
are commonly used.
Consular invoice
An invoice covering a shipment of goods certified by the consul of the country for which the merchandise is destined. The invoice is used by customs officials of the country to verify the value, quantity, and nature of the merchandise imported to determine the import duty.
Consular visa
Any one of several
official endorsements by a consul of a country. A consular visa can
be issued
for travel,
consular invoices, certificates of origin,
shipping documents and other legal
documents.
Container
A single, non-disposable structure to be filled with smaller objects
to facilitate transportation. Containers are used extensively in waterborne, air and rail transport,
and come in a variety of container specifications for vessel transport.
Container freight station (CFS)
1. At ports of
shipment, designated areas for delivery of less-than-container load cargo for container loading. 2. At arrival ports, secure locations for container unloading
and cargo delivery.
Container handling charge
It refers to over cost for handling of containers at the
terminals.
Container manifest
Document showing contents
and loading sequence
of a container.
Container number
An up to seven-digit number
(six plus a check digit)
used to identify
the size and type of container; usually preceded by a four-letter alpha (letter)
code prefix designating container ownership.
Container rental surcharge
An additional fee for the use of a carrier´s container, usually charged only for destinations with little outward cargo volume or high risk of loss or damage to the container.
Container terminal
An area designated for the
stowage of cargoes in container.
Usu- ally accessible
by truck, railroad and marine transportation. In this area, containers
are picked up dropped off, maintained, and housed.
Container vessel
An ocean going vessel designed specifically to easily handle the loading, stowage
and off-loading of ocean freight
containers. Containers may be
stowed either below deck or on deck.
Container yard (CY)
Carrier-designated
location at port areas for receiving, storing and delivering loaded containers, as well as for empty
container pickup.
Containerizable cargo
Cargo that will fit into a container and result in an economical shipment.
Contingency insurance
Insurance coverage taken out by a party to an international transaction to insure against insurance coverage taken by the counterparty. The contingent insurer pays its beneficiary and attempts to collect from primary insurer.
Contract guarantee
An agreement by a third party to be responsible for the perfor- mance of a contracting party. There are three major types of contract guarantee: tender bonds, performance guarantees, and repayment guarantees.
Contract manufacturing
Contract manufacturing in international markets is used in situations when one company arranges for another company in a different country to manufacture its products; this is also known as international subcontracting or international outsourcing.
Contracting parties
1. Parties that have entered a contract
with each other. 2. Countries that are members of the World Trade Organization (WTO) and therefore have accepted the specified obligations and privileges.
Contractual joint venture
Agreement in which
two parties come together for a
particular business project and sign a contract outlining the terms under which they will work together.
The parties do not set up a separate legal entity for the project but
work together in partnership, sharing the profits or losses of the venture on the terms set out in the joint venture contract.
Convertibility
Ease of exchanging one currency
for that of another nation
or for gold.
Convertible currency
A currency of a nation that may be exchanged
for that of another nation without restrictions. Countries with convertible currencies typically
have sizable exchange reserves so that their currencies are generally considered to low risk. Also called hard currency.
Copyright
A set of exclusive rights
granted to the author or creator of an original work, including the right
to copy, distribute, and adapt the work. In international
business copyrights are transmitted and sold through
license agreements.
Correspondent bank
A bank that performs certain operations on behalf of another
bank, usually in a different country. Correspondent banks
hold deposits with each
other, and accept and collect
items on a reciprocal basis. It is through networks
of correspondent banks that trade banks are able to service
and support international business transactions.
Counterfeit
Unauthorized representation of a
registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to
deceiving the purchaser into believing that he/she is buying the original goods.
Counteroffer
A reply to an offer that adds to, limits, or modifies materially the terms of the offer. A seller, for example, who accepts a buyer´s offer, but informs the buyer that the goods
will be of a different colour has made a counteroffer.
Counterparty
The opposite party to a transaction. Sellers are the counterparties of buyers
and vice versa.
Counterpurchase
An arrangement whereby exporters agree to purchase a quantity
of goods from a country
in exchange for the country´s purchase of the exporter´s
product. The goods being sold by each party are typically unrelated but may be of
equivalent value. This is one if the most common
forms of countertrade.
Countertrade
All foreign trade
transactions resulting from exporter´s commitments to take products from the importers or from their respective countries in full or part payment for their exports.
Countervailing duties
Special customs duties imposed o imports to offset the ben-
efits of subsidies
to producers or exporters in the exporting country. Article VI of the General
Agreement on Tariff and Trade (GATT) - now World Trade Organization
(WTO) - permits the use of such duties if the importing country can
prove that the subsidy would cause injury to domestic industry. Also known as countervailing
measures.
Country of departure
The nation from which a ship or shipment has or is scheduled
to depart.
Country of destination
The nation in which exported goods are to be used or con- sumed,
as known to the shipper at the time of export.
Country of origin
The nation in which
referenced goods were grown, manufactured or produced, or for some customs valuation criteria, substantially transformed.
Country risk
The possibility of non-payment caused by such buyer-country related problems as political instability, war, arbitrary government action and exchange in- convertibility, as opposed to problems that could be encountered by the buyer such as insolvency or bankruptcy.
Courtage
French term for brokerage or brokerage fee.
Cover note
Document issued by insurance company or insurance brokers instead of insurance policies or insurance certificates, which serves as proof of usual insurance notifications and represents cover approval.
CPT Carriage Paid to
In Incoterms CPT the delivery
of goods occurs
when the seller makes them available
to the carrier that he has hired to perform international
transport, although the seller also manages and assumes the costs of international
transport to the place of destination. Therefore, the point where the risk of transport
is transferred (when the goods are delivered
to the carrier in the seller´s country)
is different from the point till the seller bears the costs of transport.
Credit risk insurance
Insurance designed
to cover
risks of nonpayment for delivered
goods.
Cross-culture business
Cross culture is a
vital issue in international business, as the success of international trade depends upon the smooth interaction of employees from different cultures and regions. Some of the considerations in
cross-cultural business include concerns about the differences that are caused
by culture, beliefs,
law, and language.
Crossed check
A check that bears on its face two parallel transverse lines and that cannot be `presented for cash A bank that accepts the check may pay the proceeds only to another bank, which will credit the money to the account of the payee
of the check.
Cultural differences
Despite the
globalization of markets cultural diversity clearly continues. Cultural differences often pose major difficulties in international negotiations and marketing management.
Currency
The circulating media
of exchange in a country. Includes money and such financial instruments as checks.
Currency adjustment factor (CAD)
An additional charge added to the base-rate ocean freight costs, which is raised or lowered to reflect changes in the exchange rate of currency in which
the freight costs are billed.
Currency future
A contract for the future
delivery of a commodity, currency, or security on a specific date. In contrast to forward contracts, future contracts are for standard
quantities and for standard periods and are primarily traded on an exchange.
Currency option
The contractually agreed right to buy (call option) or to sell (put option) a specific amount of foreign currency at a predetermined price on a specific date (European option) or up to a future date
(American option).
Current account
The part of a country´s balance of payments that records current (as opposed to
capital) transactions, including visible trade (income and expenditures for services), profits earned from foreign operations, interests and transfer payments.
Current balance
The value of all exports (goods plus services) less all imports of a country over a specific period
of time, equal
to the sum of the trade (visible) and invisible balances plus net receipts of interests, profits and dividends from abroad.
Customs
A government authority designated to regulate
flow of goods
to/from a country and to collect
duties levied by a country
on imports and exports. The term
also applies to the procedures involved in such activities.
Customs area
A geographic area, usually identical to one or several contiguous na- tional political jurisdictions, applying a particular tariff schedule on goods entering or leaving the area.
Customs bonded warehouse
A government warehouse where goods remain until duty has been collected from the importer.
Customs broker
Licensed agent or broker (licensing may not be required in all
countries) whose function is to handle the process of clearing goods through customs
for importers.
Customs classification
The particular category
in tariff nomenclature in which a products is classified for duty purposes. Almost all major trading nations classified
imported goods according to the Harmonized System.
Customs clearance
The act of complying with the import regulations of an importing country.
Generally governments require some sort of import declaration. Depending on the country and the product,
additional supporting documentation such as origin certificates, consulate documentation and product relates
health and safety certificates
may also be required.
Customs duty
Tax levied by the government on goods
crossing the customs border, usually a tax imposed on imports. Duties, or tariffs, are either based on the value of the goods (ad valorem duties), some other factors
such as weight or quantity (specific duties) or a combination of value and other factors
(combined duties).
Customs entry
An import declaration made for the purpose of obtaining customs
clearance by the importer
or a customs broker authorized to represent the importer.
Depending on the country and the product,
additional supporting documentation such as origin certificates, consular documentation and product related
health and safety certification may also be required.
Customs invoice
A invoice made out on a special form prescribed by the customs authorities of the importing
country. Used only in a few countries, usually former British
territories (Canada). It serves as a seller´s commercial invoice.
Customs union
An association between two or more countries to eliminate tariffs and other import restrictions on each other´s
goods and establish
a common tariff on
the goods from all other countries. As in the free trade area, goods and
services are freely traded among members.
Customs valuation
The amount of money required
to be shown on the customs
entry according to the importing country´s regulations. Since many products are as- sessed duty on ad valorem basis, the correct customs value is necessary
to determine the correct duty obligation.
Cut-off time
The latest time cargo may be delivered to a terminal
for loading to a
scheduled train or ship.