Trade Glossary
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A
- Abandonment transfer of the insured goods to the insurer
- When a constructive total loss of the insured subject matter occurs, the insured unconditionally transfers all of its rights in the subject matter to the insurer and is entitled to claim the full sum insured.
- Acceptance contract concluded on the seller's offer
- The importer unconditionally accepts an offer first made by the exporter.
- (P/O : Purchase Order)
- Accepting Bank bank that accepts time drafts
- A bank that accepts time drafts drawn under a usance letter of credit (usance L/C).
- Acknowledging order acknowledgment
- The importer places an order first and the exporter accepts it.
- (Sales Note = Sales Contract)
- Actual Total Loss actual destruction or irrecoverable loss of the insured goods
- Ad Valorem Duties duty based on the value of the goods
- A customs duty for which the price of the imported or exported goods is the taxable base. Most Korean duty rates are set on an ad valorem basis.
- Additional Clause additional covered risks
- TPND ; Theft, Pilferage Non-Delivery (cover for theft, pilferage and non-delivery)
- RFWD ; Rain and/or Fresh Water Damage (cover for rain and fresh water damage)
- COOC ; Contact with Oil and/or Other Cargo(cover for contact with oil or other cargo)
- JWOB ; Jettison ; Washing Over-Board (cover for jettison and washing overboard)
- Denting ; Bending (cover for denting and bending)
- S & H ; Sweat & Heating (cover for sweat and heating damage)
- Leakage/Shortage (cover for leakage and weight shortage), etc.
- Advising Bank bank that advises the credit
- Also called a Notifying Bank or Transmitting Bank; the bank that advises the letter of credit to the beneficiary.
- Airway Bills transport document for air cargo
- Master AWB air waybill issued by the airline
- House AWB air waybill issued by a consolidator for consolidated cargo
- All Risks
- A/R (all risks cover) → I.C.C (A)
- Amicable Settlement settlement of a dispute by mutual agreement
- Applicant for the credit party that applies for the letter of credit
- The party that applies for the letter of credit; this is the importer.
- Arbitration resolution of a dispute by an arbitrator
- Arbitration Clause clause referring disputes to arbitration
- Disputes arising from a trade sales contract are usually better settled by arbitration than by litigation: it is more practical, cheaper and faster.
- Automatic Approval Item (A/A Item) item whose import or export is automatically approved
B
- Back to Back Credit credit used in countertrade, opened simultaneously with a counter credit
- Escrow Credit credit whose proceeds are held in escrow
- Bareboat Charter charter of a bare ship
- The charterer takes full responsibility for the master, crew, equipment and supplies in addition to the vessel itself. (Sub-Charter : re-chartering)
- Beneficiary exporter who is paid under the credit
- The beneficiary of the letter of credit, which is the exporter.
- Berth Term
- Liner Term ; the shipowner bears the cost of both loading (In) and discharging (Out).
- This is the standard term for general cargo carried by liner (Liner) service.
- Bill of Exchange or Draft written order to pay a sum of money
- Bill of Lading document of title for goods shipped by sea
- Blank Endorsement, Endorsed in Blank endorsement without naming an endorsee
- The endorser simply signs without naming the endorsee.
- Bona Fide Holder holder in good faith
- A holder who acquired an instrument in circulation without knowing of any defect in it, treating it as complete and regular on its face.
- Bonded Area (customs-controlled zone where goods are held without paying duty), Bonded Transportation (movement of goods under customs bond)
- Bulk Cargo cargo shipped loose, without packaging
- Cargo carried without packaging, mostly raw materials; it makes up most tramp cargo. The opposite is general cargo (General Cargo).
- Buyer's Market market favoring buyers
- A market with an oversupply of goods, in which sales can be made largely on the buyer's terms. The opposite is a seller's market (Seller's Market).
- Buying Office purchasing agent
- A business that, on behalf of a foreign importer, purchases export goods in Korea.
- Under the former Foreign Trade Act, this was classed as a "Class B trade agency" and registered with the Korea Export Item Purchasers Association. The current Foreign Trade Act draws no such distinction and treats anyone acting on behalf of a foreign importer or exporter as a "trader" (Article 2, Subparagraph 3 of the Foreign Trade Act).
C
- Cable Credit letter of credit opened by telecommunication
- A Short Cable Credit (Preliminary Advice) merely notifies that a credit has been opened (Non-negotiable). It lets the exporter begin preparing the shipment (the words "Details to follow" are inserted), and the original credit (Mail Confirmation) must be sent later.
- Carnet Temporary Admission ATA Carnet system
- A document used among ATA Convention member countries for the temporary import, export or bonded transit of goods in place of complex customs documents (e.g., declarations, invoices, approvals) or security deposits, simplifying and easing customs procedures.
- Cargo Insurance insurance for goods in transit
- Insurance that compensates for loss of or damage to cargo in transit.
- Cash Against Documents (CAD) cash paid in exchange for shipping documents
- A payment method in which transport documents such as the bill of lading (Bill of Lading) and other supporting documents are presented to the importer, or to the importer's agent or bank, and cash is paid in exchange for the documents.
- Cash on Delivery (COD) payment on delivery of the goods
- A payment method in which the importer pays cash in exchange for the goods when they arrive at the destination.
- Certificate of Origin (C/O) document certifying where the goods were made
- Charter hire of a vessel
- Hiring a vessel together with its crew. Chartered vessels are also called tramp ships (Tramper) because they sail on irregular schedules; bulk cargo large enough to fill a chartered vessel is carried this way.
- Charterer party that charters the vessel
- Charterage fee paid to charter a vessel
- Charter Party B/L bill of lading issued under a charter party
- A bill of lading issued under the charter party (Charter Party) concluded between a cargo owner and a shipping company when the cargo owner charters a tramp vessel for a particular route or period to carry bulk cargo. Unless the letter of credit states otherwise, banks will reject it.
- Check Price
- In Korea, Check Price refers collectively to a Floor Price, which prevents export prices from being too low, and a Ceiling Price, which prevents import prices from being too high.
- Claim trade dispute
- Clean B/L bill of lading with no notation of defects
- Clean L/C credit payable without shipping documents (unsecured credit)
- Commercial Invoice seller's invoice for the goods
- Conciliation, Mediation settlement of a dispute through a third-party mediator
- Confirmed L/C credit bearing a second bank's confirmation
- Confirming Bank bank that adds its confirmation to the credit
- When a third bank other than the issuing bank adds its undertaking to pay, accept or negotiate drafts drawn under the credit, or guarantees that the issuing bank will do so, this is called confirming the credit, and the bank that confirms it is the confirming bank.
- Consignee party to whom the goods are shipped
- Constructive Total Loss loss treated as total although the goods are not completely destroyed
- A case where the insured subject matter has not actually been destroyed, but the damage is so severe that it has lost its original usefulness (Utility), or the cost of salvage would exceed its market value after salvage, so that it is deemed equivalent to a total loss.
- Correspondent Bank foreign bank that handles transactions for a bank
- Cover Note provisional insurance document
- A document issued by an insurance broker (Insurance Broker) to the policyholder as proof that a contract exists.
- Credit Inquiry credit check
- A check on the creditworthiness of a prospective business partner, made through a Bank Reference or a Trade Reference.
- Combined Transport Documents (CTD) multimodal transport document
- A document issued by a combined transport operator (Combined Transport Operator ; CTO) who takes responsibility for the entire journey when goods are carried from the place of receipt to the destination by at least two different modes of transport (sea, land, air).
- Conditional Offer offer subject to confirmation
- Issued for goods with volatile prices or when an offer is sent by mail. This is not really an offer but only an invitation to offer, because even if the other party accepts, no contract is formed unless the offeror confirms.
- Container Freight Station (CFS) facility for consolidating small shipments
- A facility mainly for loading and distributing LCL cargo.
- Container yard (C.Y) area where containers are received and stored
- A facility within 10 miles of a port where containers are received, delivered and stored.
- Counter Offer counteroffer
- An offer in which the buyer modifies the price, quantity, shipment date or other terms of the seller's firm offer. In practice, a contract is usually concluded after several counteroffers between seller and buyer.
- Customary Quick Despatch (C.Q.D) loading and discharging as fast as the port's custom allows
- Laytime under which loading and discharging are not limited to a fixed period but are to be done as quickly as possible according to the port's customary methods and capacity. Because of this, it easily leads to disputes. It is a type of Unfixed Laydays.
D
- Dead Freight freight paid for unused cargo space
- Freight that the charterer must pay for the shortfall when it does not actually ship the contracted quantity of cargo.
- Deferred Payment payment some time after delivery
- The buyer takes delivery of the goods and pays after a set period (e.g., Sales on Credit or Sales on Consignment, where the seller cannot draw a documentary draft on the goods).
- Delivery Order (D/O) order to release the cargo
- Debit Note notice of an amount charged to the other party
- A notice that a small amount owed in an export transaction, such as a charge for paid samples, has been entered as a debit to the other party's account. The other party usually remits the amount in foreign currency upon receiving the debit note.
- Demand Draft (D/D) bank draft remittance
- Demurrage charge for exceeding laytime
- A charge paid by the cargo owner to the shipowner as compensation for lost time when loading or discharging is not completed within the agreed laytime and the vessel must stay in port beyond that period.
- Despatch Money reward for finishing ahead of laytime
- A payment from the shipowner to the cargo owner for the time saved when loading or discharging is completed before the agreed laytime ends. It is usually half the demurrage rate.
- Depositary Correspondent Bank correspondent bank holding a deposit account
- Directory
- A directory listing the names, cable codes, main offices, addresses and product lines of leading traders, manufacturers, shipping companies, marine insurers, banks and others in each country. Copies are kept at the Korea International Trade Association, the Korea Chamber of Commerce and Industry and similar organizations.
- Dirty or foul B/L bill of lading noting defects
- Dock Receipt (D/R) receipt issued at the dock for cargo
- Document against Acceptance (D/A) documents released against acceptance of the draft
- After shipping the goods, the exporter draws a documentary usance bill (Documentary usance bill) on the importer as drawee (Drawee) and asks its bank to collect. The exporter's bank sends the draft and documents to the importer's bank for collection; the importer's bank obtains the importer's acceptance of the draft, releases the documents, collects payment on the maturity date, and remits it to the remitting bank to settle the transaction.
- Document against Payment (D/P) documents released against payment
- After shipping the goods, the exporter draws a documentary sight bill (Documentary sight bill) on the importer as drawee (Drawee) and asks its bank to collect. The exporter's bank sends the draft and documents to the importer's bank for collection; the importer's bank collects payment from the importer, releases the documents, and remits the payment to the remitting bank to settle the transaction.
- Documentary L/C credit requiring shipping documents
- Drawer party that draws the bill of exchange
- Drawee party on whom the bill of exchange is drawn
E
- Electronic Data Interchange (EDI) paperless computer-to-computer trade documents
- A system that replaces conventional business documents with standard formats so that companies can trade computer-to-computer.
- Estimated time of Departure (ETD) scheduled date a vessel or flight leaves port
- Estimated time of Arrival (ETA) scheduled date a vessel or flight reaches its destination
- Exchange Commission interest charge for negotiating a draft
- Sight draft buying rate = T/T Buying Rate - exchange commission rate x mailing days/360 x book value
- Exclusive Contract agreement granting sole trading rights
- A contract that restricts sales to specific trading firms specializing in imports and exports; an exclusive contract is drawn up and exchanged in this case as well. (franchise)
- Expected Profit, Imaginary Profit expected profit added to the insured value
- In cargo insurance, the sum insured (Insured Amount) is usually the insured value (Insured Value) plus 10%; this term refers to that added 10%.
- Expiry Date (E/D) last date for presenting documents under the credit
- Export Declaration declaring goods to customs for export
- Declaring goods to be exported to the head of the customs office. Goods whose export declaration has been accepted must be loaded onto a means of transport within 30 days from the date of acceptance (Article 251(1) of the Customs Act).
- Export Inspection pre-shipment check of export goods
- Goods are inspected before being loaded into containers to confirm that they match the goods described in the letter of credit. Exports to Southeast Asia must be inspected by S.G.S.
- Export License (E/L) government approval to export
- Export Packing export packaging
- Outer Box
- Inner Box
- Unitary Packing (e.g., packing for ceramics)
- Assorted Packing
- Solid Packing
- Export Permit customs certificate that an export declaration has been accepted
F
- FIATA FBL
- A multimodal transport bill of lading established by FIATA (Int'l Federation of Freight Forwarders Associations).
- Under earlier versions of the Uniform Customs and Practice for Documentary Credits, the FIATA FBL was specifically recognized as acceptable to banks among transport documents issued by freight forwarders (forwarder). The current UCP 600 allows transport documents issued by parties other than carriers to be accepted if they meet the transport document articles (Articles 19–24) (Article 14(l)), and no longer singles out the FIATA FBL. Korea joined as a full member in 1979 through the Korea Freight Forwarders Association (now the Korea International Freight Forwarders Association, KIFFA).
- Firm Offer offer binding for a set acceptance period
- An offer in which the offeror sets a period for acceptance and requires acceptance and a reply within that period. If the offeree accepts within the period, the offeror must perform.
- Fixture Note note confirming the vessel booking or the charter agreement
- Forwarder's Cargo Receipt (FCR) forwarder's document acknowledging receipt of goods
- Cargo receipts in various forms issued by a forwarder as needed under a contract of carriage.
- FCR : Forwarding Agents Certificate of Receipt
- A cargo receipt established by FIATA; it is a non-negotiable document and is acceptable only if the letter of credit expressly allows it.
- Freight charge for carrying goods
- US: covers land and sea freight. UK: sea = freight, land = carriage.
- Freight Collect freight payable at destination
- Under export contracts such as FAS, FOB and FCA, the importer bears the freight, so the importer (consignee) or its agent pays after the cargo arrives at the destination.
- Freight Prepaid freight paid at origin
- Under export contracts such as CFR, CIF, CPT and CIP, the exporter bears the freight, so it is normally prepaid at the place of shipment.
- Full Container Load (FCL) cargo filling a whole container
- A quantity of cargo that fills one container. In practice, Japanese buyers often ask for L.C.L cargo to be handled as FCL.
G
- Gross Weight (total weight including packing), Net Weight (weight of the goods alone)
- General L/C (credit open to negotiation by any bank), Special or Restricted L/C (credit restricted to a named bank)
- Generalized System of Preferences C/O (G.S.P. C/O) certificate of origin for GSP preferential duties
H
- Harmonized Commodity Description and Coding System (H.S) international commodity classification system
I
- Import License (I/L) government approval to import
- Incoterms international rules for the interpretation of trade terms
- International Rules for the Interpretation of Trade Terms. A set of International Chamber of Commerce (ICC) rules defining the obligations of buyer and seller (transfer of risk, allocation of costs, etc.) under each trade term. The current edition is Incoterms 2020.
- Infringement Clause clause on intellectual property claims
- A disclaimer covering infringement (Infringement) of industrial property rights and the like. It should always be included in contracts for exports to the United States and other developed countries.
- Inland Storage Extension (ISE) extended cover for inland storage
- A condition that extends cover beyond the period stated in the cargo insurance policy (exports: 60 days after discharge from the vessel; imports: 10 days after entry into a bonded warehouse) to protect goods such as logs stored for long periods in intermediate warehouses or bonded areas against fire and other risks. Rates vary by extension period, such as 30, 60 or 90 days.
- Inland Transit Extension (ITE) extended cover for inland transit
- A condition covering risks during inland transport of goods such as high-tech equipment. In Korea, even when imported cargo is insured under the ITE clause, the insurer's liability ends at most 10 days after the cargo enters a bonded warehouse or bonded storage area not owned by the consignee. (10-day transit clause)
- Inquiry first letter asking about goods or terms
- A letter asking about any matter related to the purchase or sale of goods. Most trade transactions begin with an inquiry.
- Institute Cargo Clause (I.C.C) standard London marine cargo insurance terms
- Insurable Interest stake that makes cargo insurable
- If cargo is lost through a marine peril, the cargo owner or consignee suffers a loss; the interest of these parties that is protected by the insurer under the insurance contract is the insurable interest.
- Insurance Premium price paid for insurance cover
- Insurance Terms parties and documents in cargo insurance
- Insurance Policy or Certificate
- Insurer, Assurer, Underwriter → in Korea, an insurance company
- Assured, Insured → the party entitled to receive insurance proceeds if a marine accident occurs on a CIF export, i.e., the importer.
- Policy Holder or Applicant → depends on whether the Seller or the Buyer takes out the insurance: the exporter under a CIF export contract, the importer under an F.O.B export contract.
- Intercession, Recommendation intercession by a third party to help settle a dispute
- Irrevocable L/C (credit that cannot be canceled without all parties' consent), Revocable L/C (credit that can be canceled)
- Issuing Bank or Opening Bank or Establishing Bank bank that issues the letter of credit
L
- Laydays, Laytimes time allowed for loading and discharging
- The period during which the charterer may keep the vessel at the port of loading or discharge to completely load or discharge the full contracted cargo.
- Less than Container Load (LCL) small shipment sharing a container
- Small shipments that do not fill a container (FCL); the carrier consolidates such cargo into a single container.
- Letter of Credit bank's undertaking to pay the exporter against complying documents
- Letter of Guarantee (L/G) guarantee for release of import cargo
- A guarantee jointly issued by the importer and the issuing bank, submitted to the shipping company in place of the original bill of lading so that the importer can take delivery of goods that have arrived before the transport documents.
M
- Mail Credit letter of credit opened by mail
- Mail Transfer (M/T) remittance sent by mail
- Manifest (M/F) list of all cargo on board
- A statement of the cargo prepared by the shipping company or its agent from copies of the bills of lading after loading is complete. The branch or agent at the port of discharge needs it for unloading, and it must be submitted to customs for import cargo.
- Marine Insurance Act (MIA) UK statute of 1906 that underlies marine insurance practice
- Market Claim
- A claim that uses a minor fault, one causing the buyer little or no loss and not normally worth a claim, as a pretext for a price reduction. Such claims are sometimes abused by unscrupulous buyers when market prices fall after the deal is made. In short, it is a buyer's demand to cut the import price disguised as a claim.
- Mate's Receipt (M/R) ship's receipt for cargo loaded
- Export of conventional (break-bulk) cargo : S/R → S/O → M/R → B/L
- Import of conventional (break-bulk) cargo : B/L (L/G) → D/O → import clearance
- Minimum Freight lowest charge per shipment
- On liner services, cargo under 1 ton is charged freight for a minimum of 1 ton.
N
- Negotiating Bank bank that buys the exporter's draft
- A bank that purchases (negotiates) a draft when it is presented with documents complying with the terms of the letter of credit.
- Negative List System
- A control method under the export/import notice that lists only the items whose import or export is restricted or prohibited.
- Non-depositary Correspondent Bank correspondent bank without a deposit account
- Non-Tariff Barrier (NTB) trade restriction other than tariffs
- Means of trade restriction other than tariffs, which are an indirect trade control (e.g., quantitative restrictions, foreign exchange controls).
O
- Ocean or Marine B/L (bill of lading for international ocean carriage) and Local B/L (bill of lading for domestic coastal carriage)
- An ocean bill of lading is issued for international carriage beyond a country's territorial waters, such as Incheon to London or New York. Almost all bills of lading used in Korean trade are of this type. A local bill of lading is issued for domestic sea carriage, such as between Incheon and Busan or Gunsan.
- Offer Agent agent issuing offers for a foreign exporter
- A business that, on behalf of a foreign exporter, issues sales offers in Korea.
- Under the former Foreign Trade Act, this was classed as a "Class A trade agency" and registered with the Association of Foreign Trading Agents of Korea (AFTAK). The current Foreign Trade Act draws no such distinction and treats anyone acting on behalf of a foreign importer or exporter as a "trader" (Article 2, Subparagraph 3 of the Foreign Trade Act).
- Offer subject to Prior Sale offer valid only while stock lasts
- Used mainly when offering surplus stock to customers; a contract is formed only on condition that the goods have not yet been sold and remain in stock. It may also be expressed as Offer subject to being Unsold.
- Official Invoice invoice in a form required by the importing country
- Customs Invoice : Required by some countries so that customs at the place of import can (1) determine the customs value, (2) check for dumping, (3) administer quotas and (4) compile import statistics.
- Consular Invoice : Issued by the importing country's consulate in the exporting country and required to prevent capital flight through overvaluation (Over Value) and duty evasion through undervaluation (Under Value).
- Open Account or Account Current or Running Account settlement by periodic netting of balances
- A settlement method used when trade is frequent: payments are offset in the books and only the net balance is settled at the end of a set period (every 6 months or 1 year). (In Korea it is used between the head offices and branches of large trading companies.)
P
- Packing List list of the contents of each package
- Partial Loss of Average damage to only part of the insured goods
- A loss affecting only part of the insured subject matter.
- Particular Average Loss ; P/A : an average loss borne solely by the party that suffered it.
- General Average Loss ; G/A : when the insured subject matter meets a marine peril, a loss incurred by sacrificing part of the ship or cargo, for example by jettisoning it under the master's responsibility, to save the common venture.
- Average Adjuster (expert who calculates general average)
- General Average Contribution (each party's share of general average)
- Statement of General Average (general average adjustment statement)
- York-Antwerp Rules (1974 and other editions; the latest is the 2016 edition) : rules for adjusting and settling general average
- Payee party to whom the bill of exchange is payable
- Paying Bank bank designated to pay under the credit
- A credit that does not allow negotiation of export drafts by a negotiating bank and instead provides that a specific bank (a branch, or the issuing bank's correspondent in the exporting country) pays the beneficiary against the documentary draft is called a straight credit (Straight L/C). The bank entrusted with payment under such a credit is the paying bank.
- Payment in Advance or Cash with Order payment before shipment
- In Korea this is also called simple remittance; remittances are made by T/T (telegraphic transfer), M/T (mail transfer) and similar methods.
- Positive List System
- A control method under the export/import notice that lists only the items whose import or export is permitted.
- Progressive Payment or Installment payment payment in stages
- A payment term under which the buyer pays one third of the price on ordering, one third after shipment and the balance after the goods arrive.
- Proforma Invoice preliminary invoice used as a quotation
Q
- Quality Terms how the quality of goods is agreed
- Sales by Sample : as per your sample No. 8
- Sales by Trade Mark or Brand : Y.K.K, Parker, etc.
- Sales by Specifications
- Sales by Grade or Type : BBS, JIS, ASTM, etc.
- Sales by Standard
- Shipped quality terms (quality determined at shipment) : FOB, CFR, CIF, T.Q, etc.
- Landed quality terms (quality determined on landing) : R.T, etc. (DES and DEQ, formerly cited as examples, were dropped from Incoterms in 2010)
- T.Q (Tale Quale) : the buyer bears changes in quality during transit (grain trade)
- R.T (Rye Terms) : the seller bears changes in quality during transit
- Quantity Terms how the quantity of goods is agreed
- Weight Cargo (cargo charged by weight)
- Measurement Cargo (cargo charged by volume)
- Minimum Quantity Acceptable
- Maximum Quantity Acceptable
- More or less Clause (clause allowing a tolerance in quantity) : MOL
- Certificate of weight and/or Measurement
R
- Received B/L bill of lading issued on receipt of the goods, before loading
- Port B/L : issued when the designated vessel is in port but the cargo has not yet been loaded
- Custody B/L (issued while the cargo is held in custody)
- Red Clause L/C or Packing L/C credit allowing advance payment to the beneficiary
- Restricted Item item subject to restricted approval
- Revenue Ton or Freight Ton unit for charging freight by weight or volume
- Liner freight tariffs (freight tariff) charge freight on the basis of either the measurement ton (Measurement Ton) or the weight ton (Weight Ton); the revenue ton is whichever of the two yields the higher freight, which favors the carrier.
- Revolving L/C revolving credit
- A credit whose amount is automatically renewed for repeated use over a set period.
- Running Laydays
- A method in which every day elapsed from the start to the end of loading or discharging counts as laytime, regardless of holidays or weather.
- Right of Subrogation insurer's right to step into the insured's position
- When the insurer has paid the insured following abandonment, the insurer's right to step into the insured's ownership of the damaged subject matter and its right of recourse against the party that caused the damage.
S
- Sailing Schedule timetable of vessel departures and arrivals
- Seaworthiness fitness of a vessel for the voyage
- Settling Bank bank that settles third-country currency payments
- When the currency of a letter of credit is neither the importing nor the exporting country's currency but that of a third country, the issuing bank's depositary correspondent bank in that third country becomes the settling bank.
- Shipment Terms how the time of shipment is agreed
- Prompt Shipment, Immediate Shipment, As soon as Shipment, etc. (immediate shipment) : interpretations of these terms vary by country and by expert, so they often lead to claims and should be used with care.
- June Shipment (shipment within a single month), May-July or Shipment during May and June (shipment over consecutive months)
- Shipment (Delivery) : within 30 days after receipt of your L/C (shipment within a specified period)
- Shipment on or about : includes the period from 5 days before to 5 days after the specified date.
- Partial Shipment
- Transshipment
- Delayed Shipment
- Force Majeure, Embargo, hostilities, blockade, Requisition of vessels, etc.
- Shipped or On Board B/L bill of lading issued after the goods are loaded on board
- Shipper or Consignor party that sends the goods
- Shipping Advice, Notice of Shipment notice of shipment sent to the buyer
- Shipping marks identifying marks on packages
- The specific symbols, destination, numbers and other markings written on the outer packaging of a shipment.
- Shipping Conference or Freight Conference cartel of shipping lines setting common rates
- Non-Conference or Outsider (carrier outside the conference)
- Conference Certificate : a certificate from a shipping line proving that it is a member of a shipping conference
- Dual Rate System (contract rate system)
- Deferred Rebate System (deferred freight rebate system)
- Fidelity Commission System (loyalty commission system)
- Shipping Invoice invoice issued for the goods shipped
- Shipping Order (S/O) carrier's instruction to the ship to load the cargo
- Shipping Request (S/R) request for shipping space
- Short Form B/L bill of lading with abbreviated terms
- A bill of lading that omits the lengthy terms and conditions to simplify issuance. Unless the letter of credit states otherwise, banks accept it.
- Sight L/C (credit payable at sight) and Usance L/C (credit payable at a future date)
- Special Instructions or Conditions special conditions in a letter of credit
- Special conditions are requirements reflecting the importing country, the goods and the type of transaction, and are generally inserted by the importer without the exporter's prior consent.
- Specific Duties duty based on quantity
- A customs duty for which the quantity of the imported goods (weight, length, number of units, etc.) is the taxable base. Most Korean customs duties are ad valorem; specific duties apply only to certain items. Under the Liquor Tax Act, specific duties apply to spirits (ethyl alcohol), takju (unrefined rice wine) and beer (Article 8(1) of the Liquor Tax Act).
- Compound Duty ; a duty that combines ad valorem and specific duties on the same item.
- Stand-by Credit standby letter of credit
- Used for financing or guarantee purposes rather than for the sale of goods.
- Bid Bond (international tender guarantee)
- Performance Bond (contract performance guarantee)
- Stale B/L bill of lading presented too late
- Stevedorage cost of loading and unloading in the ship
- The parties must clearly agree in each contract on who bears the cost of loading and discharging cargo.
- Straight B/L (bill of lading consigned to a named party) and Order B/L (bill of lading made out to order)
- Stuffing
- Also called Vanning; the work of loading cargo into a container.
T
- Telegraphic Transfer (T/T) remittance sent by wire
- The exchange rate applied when a draft is settled by telegraphic transfer. Because the transfer is completed within one day, no interest for mailing time is involved, so it is the pure exchange rate.
- T/T Buying Rate
- T/T Selling Rate
- Tenor payment term of a bill of exchange
- at 30 days after sight : the due date is fixed from the day the draft is presented to the buyer
- at 30 days after date : the due date is fixed from the date the draft is issued
- at 30 days after B/L date (due date fixed from the B/L date)
- Date of Maturity : Due Date
- Tenor of Draft terms on which a draft falls due
- Time Charter hire of a vessel for a period
- A contract under which the charterer (Charterer) hires from the shipowner (Operator), for a set period, a vessel fitted with cargo-handling equipment and crewed for long ocean voyages. Besides the charter hire (Charterage), the charterer bears fuel, port dues, operating costs and the like.
- Tomas Credit
- A credit conditioned on the beneficiary issuing a guarantee or standby credit promising to open an import credit in favor of the applicant or other counterparty.
- Total Loss loss of the entire insured cargo
- A case where marine-insured cargo is entirely destroyed by an insured peril and loses its market value.
- Transaction as principal to principal transaction between principals
- A party that trades for its own account and at its own risk (for account and risk), bearing the rights and obligations arising from the transaction itself.
- Transferable L/C transferable letter of credit
- A credit that authorizes the beneficiary to transfer all or part of the credit amount to a third party. It may be transferred only once, but if partial shipments are allowed, it may be transferred in parts.
- Total Transfer
- Partial Transfer
- First Beneficiary (transferor of the credit)
- Second Beneficiary (transferee of the credit)
- Trans-Siberian Railroad rail land bridge from the Far East to Europe
- TSR (Trans-Siberian Railway transport) : An international multimodal service in which cargo from the Far East bound for Europe and the Middle East is collected and shipped by sea, via Japan or directly, to the Russian ports of Nakhodka (Nakhodka) and Vostochny (Vostochny). Russian carriers and NVOCCs (Non-Vessel Operating Common Carrier) from Korea, Japan and Europe then jointly carry it by rail across Siberia to areas near the Middle East or to the borders of Eastern Europe, from where it is forwarded by rail, container ship or truck to Eastern and Western Europe, Scandinavia, the Mediterranean, Iran, Afghanistan and other destinations.
- NVOCC (Non-Vessel Operating Common Carrier) : An NVOCC publishes freight tariffs and advertises, promotes and collects cargo on that basis; provides interstate and commercial ocean transportation in the United States as defined by law; bears legal liability for the carriage of the goods; and, whether or not it owns or controls any means of transport, arranges ocean carriers and performs carriage in its own name.
- Through B/L bill of lading covering the entire through journey
- Trust Receipt (T/R) release of import cargo under trust
- A system that lets the importer dispose of import cargo before paying the draft while the issuing bank keeps its security interest in the goods. When the issuing bank releases cargo to the importer under a T/R, possession passes from the bank to the importer, but third parties acting in good faith without knowledge of this are protected. Because the issuing bank cannot assert the T/R against such third parties, banks must handle T/Rs with care.
U
- Uniform Customs and Practice for Documentary Credits (U.C.P) ICC rules for documentary credits
- International rules for letter of credit transactions established by the International Chamber of Commerce (ICC). The current version is UCP 600, revised in 2007.
V
- Voluntary Export Restraint (VER) exporting country's agreed cap on exports
- An arrangement in which the importing country asks the exporting country to limit exports of a particular item to a set quantity. In substance it works like a quota.
- Voyage Charter, Trip Charter hire of a vessel for a voyage
- A contract of carriage between a charterer and a shipowner for transporting cargo from one or more ports to another port. Freight is normally set per ton according to the quantity of cargo.
W
- Waiver certificate that no national-flag vessel serves the route
- A certificate allowing use of a foreign vessel because no Korean-flag vessel serves the route. It was formerly issued by the chairman of the Korea Shipowners' Association (KSA), but the waiver system was abolished in July 1994 (for liner services), and the designated cargo system that required the use of Korean-flag vessels was fully abolished in 1998.
- Waiver of Claim giving up the right to make a claim
- War, Strikes, Riots and Civil Commotions (W/SRCC) extra cover for war and strike risks
- These risks are not covered even under A/R or ICC(A), so they must be insured by special agreement for an additional premium.
- Weather Working Days (W.W.D)
- A method in which only working days with weather good enough for loading and discharging count as laytime, and periods when cargo cannot be handled because of rain or other bad weather (Bad Weather) are excluded.
- SHEX (Sundays and Holidays Excepted) ; Sundays and holidays are normally not counted as laytime even if cargo is worked.
- SHEX UU (Sundays and Holidays Excepted Unless Used) ; Sundays and holidays are counted as laytime if cargo is worked.
- Wharfage charge for using the wharf
- With Average (W/A) with particular average cover
- I.C.C (B)
- Franchise Clause (clause exempting the insurer from small losses)
- W.A. 3% : The insurer is not liable for losses below 3% of the insured amount. That is, if W.A. 3% is agreed and a 10% loss occurs, the full 10% is paid, not 7%. The franchise clause was abolished in the new Institute clauses.
- WAIOP (With Average Irrespective of Percentage) : There is no franchise, and the insurer pays even very small losses.
If you have questions about terms or trade conditions in a contract or letter of credit, tell us about the goods and the transaction. We will explain them in practical terms.
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