Ingles
Legal
International
Trade: Glosary Terms
N.E.S.O.I.: N.E.S.O.I.
is an acronym which means not elsewhere specified or indicated.
Intermediate consignee: An
"intermediate consignee" is a party who effects delivery of
merchandise to an ultimate consignee.
Ultimate consignee: An ultimate consignee
is the true party in interest, receiving goods for the designated end
use.
Maquiladora: A "maquiladora"
is a Mexican in-bond processing operation which allows foreign manufacturers
to ship components into Mexico on a duty-free basis for assembly and subsequent
re-export.
NOM: A NOM is an acronym for "norma
official mexicana" which is a mandatory Mexican standard that applies
to a particular product or range of products. A product which is subject
to a NOM cannot be imported into Mexico unless it is certified as being
in compliance with the relevant NOM.
CE mark: A CE mark
is a marking which is placed on a product to indicate that the product
underwent assessment procedures and was found to be in compliance with
the European standards that apply to such product. The designation "CE"
is French for "Conformite Europeen".
INCOTERMS: Developed by the International
Chamber of Commerce (ICC), INCOTERMS are a codification of rules for the
interpretation of sales terms used in export \ import transactions.
INCOTERMS 2000: is
a collection of 13 internationally used terms of sale. They are as follows:
Ex works (ExW-...named place)
Free Carrier (FCA-...named place)
Free Alongside Ship (FAS-...named port of shipment)
Free on Board (FOB-...named port of shipment)
Cost and Freight (CFR-...named port of destination)
Cost, Insurance and Freight (CIF-...named port of destination)
Carriage Paid To (CPT-...named place of destination)
Carriage and Insurance Paid to (CIP-...named place of destination)
Delivered at Frontier (DAF-...named place)
Delivered Ex Ship (DES-...named port of destination)
Delivered Ex Quay (DEQ...named port of destination)
Delivered Duty Unpaid (DDU...named place of destination)
Delivered Duty Paid (DDP...named place of destination)
Distribuitor: A distributor is a party
who purchases goods for inventory and re-sale.
Sales representative: A sale representative
or sales agent is a party who sells another party's products in return
for a commission.
The Harmonized System: The Harmonized
System is a commodity classification system that was developed by the
Customs Cooperation Council, an international Customs organization in
Brussels, for use on a world-wide basis.
Pro forma invoice: A pro forma invoice
is a sales quotation drafted in the form of an invoice.
Commercial invoice: A commercial invoice
is a bill prepared by the seller for submission to the buyer which details
items bought and amounts owed.
Title documents: Title documents transfer
title to or at least possession of goods from a seller to a buyer. In
an export transaction the title documents are comprised of the main carriage
transportation documents or bills of lading, such as ocean bills of lading
and air waybills.
Bill of lading: A bill of lading (B\L)
is a contract for transportation and a receipt for cargo that a common
carrier gives to a seller when a carrier transports goods on behalf of
a seller. Bills of lading used on international shipments include ocean
bills of lading for cargo transported by ocean and air waybills for cargo
transported by air. Ocean bills of lading can be either negotiable (order
of) or non-negotiable (straight). Air waybills can only be non-negotiable
(straight). The form of a bill of lading or an air waybill instructs the
carrier on how to handle or disburse the goods that the carrier is transporting
when the carrier reaches its destination. If the bill of lading is in
negotiable form, i.e. "order of the shipper", the carrier will
hold the goods until it receives an original bill of lading that has been
endorsed by the shipper (seller). If the bill of lading is in non-negotiable
or straight form and consigned to the buyer, the carrier will release
the goods to the buyer on the buyer's identification of itself as the
buyer. If on the other hand, the bill of lading is in non-negotiable or
straight form and consigned to a third party, such as the buyer's bank,
the carrier will release the goods as instructed by the third party consignee
in a "release" (steamship guarantee or airway release) issued
by the third party consignee to the carrier.
Carrier releases: Carrier releases
encompass steamship guarantees and airway releases. These documents act
to give a buyer direct and immediate access to product that a seller has
shipped, without regard to the structure of the title documents underlying
a shipment.
Clean bill of lading: A clean bill
of lading is a bill of lading that is issued by a carrier when a shipment
is received in good order.
House bill \ house waybill: A house
bill \ house waybill is a bill of lading prepared and issued by a consolidator.
Master bill \ master waybill: A bill
of lading prepared by a consolidator, issued by a carrier, showing the
consolidator as the shipper and the break-bulk agent, or "deconsolidator"
as consignee.
Consolidation: The combining of at
least two individual shipments into one. Each shipment in a consolidation
is covered by the consolidator's house bill. "The consolidated shipment
is then sent to a break-bulk agent under a carrier's master bill.
NVOCC: NVOCC is a
Non Vessel-Operating Common Carrier or a carrier that issues bills of
lading for carriage of goods on vessels neither owned or operated by him.
Often, a NVOCC is a consolidator.
Draft: A Draft of Bill of Exchange
is a negotiable instrument that is payable to the seller and drawn on
the issuing bank and/or the buyer. Drafts can be either "sight drafts"
where the bank pays the full amount of the draft upon the seller's presentation,
or "time drafts" where the bank's obligation at the time of
presentation is merely to accept the draft for payment at a later date.
Consular document: A Consular Document
shows that the goods satisfy the relevant regulatory requirements of the
importing country.
Insurance certificate: An Insurance
Certificate shows that the Beneficiary obtained insurance for transportation
of the goods.
Inspection certificate: An Inspection
Certificate shows that the goods have passed a quality inspection prior
to shipping. Either an independent third party or an agent of the buyer
can perform the inspection. However, if it is an agent of the buyer, the
seller should recognize that the buyer may block payment under the Credit
until any dispute regarding the conformity of the goods is resolved.
Certificate of origin: A document
that certifies the country of origin of goods.
A.T.A. carnet: A carnet, also referred
to as an "ATA Carnet" is a standardized international customs
document used to obtain duty-free temporary admission of certain goods
into the territories of those nations that have signed an international
agreement for that purpose.
The carnet is valid for one
year, during which the businessperson may make as many trips
as desired. Also, if the goods listed on the carnet are returned to the
United States within the one-year period, the carnet serves as the customs
control document and no entry or duty payments will be applied.
Duty drawback: Drawback
is a refund or remission (up to 99%, in some cases) of a customs duty
paid on imported goods, that are then exported overseas.
Apostille: An apostille is an authentication
of official U.S. document for use in foreign jurisidictions.
Authentication: An "authentication"
is a governmental act by which a designated public official certifies
to the genuineness of the signature and seal and the position of the official
who has executed, issued, or certified a copy of a document.
Transshipment: Transshipment is Customs
procedure under which goods are transferred under Customs control from
the importing means of transport to the exporting means of transport within
the area of on Customs office which is the office of both importation
and exportation.
Demurrage: Charges assessed at pier
for failure of consignee to claim cargo/container within a specified time
limit.
Cargo policy: An insurance policy
with no expiration date that provides automatic coverage of cargo to or
from an assured at agreed rates, terms, and conditions.
SR & CC clause: A standard clause
in a marine insurance policy that excludes liability for losses due to
civil unrest or labor disturbances.
All risk insurance: A broad form of
insurance coverage which protects against all risks of physical loss or
damage from external causes. However it does not cover all risks, such
as inadequate packing, preshipment condition, inherent vice, or loss due
to delay.
General average: The time-worn principle
that calls for all parties to a sea voyage to share in the losses resulting
in a voluntary and successful sacrifice of part of the ship or its cargo
in order to save the whole venture from impending peril.
Convertible currency: Currency that
can be easily exchanged, bought and sold for other currencies.
Foreign exchange contract: A contract
for the sale or purchase of foreign exchange specifying an exchange rate
and delivery date.
Foreign exchange rate: The price of
one currency in terms of another.
Forward contract for foreign exchange: Purchase
or sale of a specific quantity of a currency at a predetermined rate with
delivery and settlement at a specified future date.
Option for foreign exchange: A contractually
agreed upon to right to buy (call option) or sell (put option) a specific
amount of an underlying instrument at a predetermined price on a specific
date (European option) or up to a future date (American option).
Explanatory Notes: The explanatory
notes to the Harmonized Tariff Schedule serve as an official reference
guide to interpret language used in tariff classifications. The explanatory
notes must be referred to in order to determine how a part or sub-component
is defined for tariff purposes.
Importation: Importation
is the act of bringing or causing any goods to be brought into a Customs
Territory.
Importation embargoes: The U.S. government
has placed trade embargoes on certain countries. These embargoes prohibit
U.S. importers from entering into import transactions with embargoed countries.
Currently, the U.S. maintains trade embargoes against Cuba, Iran, Iraq,
Libya, North Korea, and Sudan.
US Internation embargoes: Certain
products may not be imported into the U.S. (prohibited imports) while
other products are subject to import restrictions or limitations such
as licensing requirements and quotas.
Importing licences: Generally licenses
are not required to import products into the U.S. There are certain exceptions
to this general rule however. As a result importers should always check
with U.S. Customs before attempting to bring a new product type into the
country.
Quota: A quota is a limitation on
the quantity of goods that may be imported into a country from all countries
or from specific countries during a prescribed time period. There are
quantitative quotas and tariff-rate quotas.
Quantitative quota: A quantitative
quota (also referred to as an absolute quota) is any pre-set quantity
of given goods authorized for importation, during a specified period,
beyond which no additional quantity of these goods can be imported.
Tariff-rate quota: A tariff-rate quota
is any pre-set value or quantity of given goods authorized for importation,
during a specified period with a reduction of the Customs duties. Once
a tariff-rate quota is met, additional quantity of the goods subject to
the tariff rate quota can still be imported, but higher Customs duties
must be paid.
Foreign trade zone: A Foreign Trade
Zone is an area in the United States that is not considered "in the
U.S. Customs Territory" for certain legal purposes. Duty is not paid
when goods are put into a Foreign Trade Zone, but rather when they are
taken out and "entered for consumption" in the United States.
Bonded warehouse: A bonded warehouse
is a warehouse that carries a special Customs bond and that is used to
legally defer duty payment. There are specific types or "classes"
of warehouses, and what can be done to the goods while in the warehouse
is limited by the "class". Included among bonded warehouse classes
are:
(a) Class 1- These are warehouses owned or leased by the government;
(b) Class 2 - An importer can establish this type of warehouse for his/her
own merchandise. It is exclusively for storage, however; no processing
of the goods is allowed;
(c) Class 3 - These "public bonded warehouses" are for the storage
of anyone's imported goods; and
(d) Class 4-These are bonded yards or sheds for storage of heavy or bulky
items; stables, corrals and pens for livestock; and large tanks for storing
bulk liquids.
Free zone
A free zone is a part of the territory of a country where any goods introduced
are generally regarded, insofar as import duties and taxes are concerned,
as being outside the Customs Territory and are not subject to the usual
Customs control.
Customs Territory
Customs Territory is the territory in which the Customs law of a country
applies in full. As a rule, the Customs territory of a country corresponds
to its national territory including land, sea and air space. However,
certain portions of the national territory may be excluded, e.g. free
zones or the waters between the coastline and the country's territorial
boundary at sea
Custom broker
A Customs broker is a person licensed by the Customs Service to transact
Customs business on behalf of an importer for a fee. A Customs Broker
can:
-Prepare the import "entry" for an importer;
-Pay duty and fees and complete the entry process; and
-Deliver cargo to the importer or arrange for transport.
Import entry
An import entry is the process of clearing an import shipment through
Customs. This involves preparing the requisite import entry documentation,
classifying the imported product, assigning a value to the imported product
and paying all Customs duties and fees owed on the imported product.
Classifying an imported product involves the categorization of the imported
product according to the Harmonized Tariff Schedule of the U.S. (HTSUS).
Harmonized Tariff Schedule of the U.S.
The Harmonized Tariff Schedule of the United States (HTSUS) is a system
of tariff classification in use in the United States. The HTSUS comprises
part of a uniform system of tariff classification used by major trading
partners throughout the world. Goods are classified for the purpose of
calculating the appropriate import duties.
Valuing an imported product
Valuing an imported product (also referred to as appraising an imported
product) involves assigning a value to a product for duty and calculation
purposes. The value most commonly used in appraising imported goods is
the transaction value of the imported goods, i.e., the total price actually
paid or payable for the merchandise when sold for exportation to the U.S.
plus amounts for the following if not included on the price:
-packing costs
-sales commissions
-royalties and license fees
-assists
Assist
An assist is something the importer sends to the seller or manufacturer
in the foreign country, free or at a reduced cost, to use in making the
goods that are being imported.
Related party transaction
A related party transaction is a transaction where the seller and the
buyer are:
(1) Officers or directors of one another's business;
(2) Legally recognized partners in business;
(3) Employer and employee;
(4) Parties owning/controlling or controlled by another party; and/or
(5) Members of the same family.
Duties on an imported product
After an imported product has been classified and valued, the duties on
the imported product can be determined by multiplying the value of the
imported product by the tariff rate in the HTSUS that applies to products
with the same classification as the imported product.
Tariff rate in the HTSUS applied to an imported
product
An importer makes the determination by knowing the country of origin on
the imported product and by knowing if the country of origin qualifies
for the General Duty Rate or for the Special Duty rate on HTSUS.
Countries to which the General Duty Rate in the
HTSUS are applied
The General Duty Rate in the HTSUS applies to those countries that have
been granted "normal trade relations" status. Normal trade relation
status was previously referred to as "most favored nation" status.
This is a non-discriminatory trade and policy commitment on the part of
one country to extend to another country the lowest tariff rates it applies
to any other country.
Countries to which the Special Duty Rate in the
HTSUS are applied
The special duty rate in the HTSUS applies to those countries that the
U.S. has designated as beneficiary developing countries and made eligible
for Generalized System of Preferences Treatment.
Generalized System of Preferences (GSP)
This is a program providing for duty-free entry of eligible merchandise
into the United States from 117 countries and 26 nonindependent countries
and territories.
Origin marking requirements
The U.S. Customs laws require each imported article produced abroad to
be marked in a conspicuous place as legibly, indelibly, and permanently
as the nature of the article permits, with the English name of the country
of origin, to indicate to the ultimate purchaser in the U.S. the name
of the country in which the article was manufactured or produced.
Liquidation
Liquidation is the point at which the Customs Service's ascertainment
of the rate of duty and amount of duty becomes final for most purposes.
32. What is a temporary import admission?
Temporary import admission is a customs procedure under which certain
goods are brought into a Customs territory conditionally relieved from
payment of import duties and taxes; such goods must, however be imported
for a specific purpose and must be intended for reexportation within a
specified period and without having undergone any change except normal
depreciation due to the use made of the goods.
Drawback
Drawback is a refund or remission of a customs duty paid on imported goods,
particularly those goods used in products produced in the US that are
then exported overseas. The three most common types of drawback are "same
condition", " manufacturing", and "non-conforming
merchandise".
Same condition" drawback
In the "same condition" category, substitution is permitted,
but the goods being exported from the U.S. must be exported in the same
condition as the goods that were imported into the U.S.
Manufacturing" drawback
In the "manufacturing" category, an importer can import a part,
use it in the manufacture of a machine, export the machine and get a refund
of the duty paid on the imported part. Manufacturing drawback also allows
for substitution, i.e., it is not necessary that the exported item be
the exact item that was imported.
Non-conforming" drawback
Non-conforming drawback is a refund of the duty paid on imported goods
that do not conform to the importer's sample goods or to the importer's
specifications.
Antidumping duties
Antidumping duties (ADs) are assessed on imported merchandise of a class
or a kind that is sold to purchasers in the U.S. at a price less than
the fair market value. Fair market value of merchandise is the price at
which it is normally sold in the manufacturer's home market.
Countervailing duties
Countervailing duties (CVDs) are assessed to counter the effects of subsidies
provided by foreign governments to goods exported to the U.S. These subsidies
cause the price of such goods to be artificially low, which causes economic
"injury" to U.S. manufacturers.
Mod Act
The Mod Act is the Customs Modernization Act that was passed in December
of 1993 to amend the Tariff Act of 1930. The main purpose of the Mod Act
is to streamline and automate the U.S. Customs Service, improve compliance
with trade laws and provide safeguards, uniformity and "due process"
to importers. The Mod Act officially introduces the controversial concepts
of "informed compliance" and "reasonable care".
Informed compliance
The Customs Service defines "informed compliance" as "a
shared responsibility wherein the Customs Service effectively communicates
its requirements to the trade, and the people and businesses subject to
those requirements conduct their regulated activities in conformance with
U.S. laws and regulations.
Reasonable care
The term "reasonable care" is not officially defined in the
Mod Act. Customs has, however, published a reasonable care checklist to
assist importers in the exercise of reasonable care.
Copies of their import records in power of importers
Importers should retain copies of their import records for a period of
5 years from the date of import entry. Records that must be kept include,
but are not limited to, commercial invoices, packing lists, certificates
of origin, declarations of foreign manufacturers, and any additional documents
required for the particular entry, either in paper form or as electrically-generated
or machine readable material.
Prior disclosure
It is a disclosure by an importer to Customs of a violation or a mistake.
To be valid, a prior disclosure must be made before or without knowledge
of the commencement of a formal investigation.
Customs Form 28 (CF28)
CF28 is a formal request for information issued by a Customs Import Specialist.
Importers who receive a CF28 should respond specifically and without delay
(generally within 30 days of the date on the CF28) to the information
requested.
Protest
A protest is the means by which an importer, consignee, or other designated
party may challenge decisions made by a District Director of Customs.
The importer files a protest and an application for further review on
Customs Form 19 within 90 days after liquidation. If the Customs Service
denies a protest, an importer has the right to litigate the matter by
filing a summons with the U.S. Court of International Trade within 180
days after denial of the protest.
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