INCO CODES
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Ad Valorem ("according to the value"): A fixed percentage of the value of
goods that is used to calculate customs duties and taxes. Advance Against Documents: Load made on the security of the
documents covering the shipment. Advising Bank: A bank that receives a letter of credit from an
issuing bank, verifies its authenticity, and forwards the original letter of
credit to the exporter without obligation to pay. Advisory Capacity: A term indicating that a shipper's agent or
representative is not empowered to make definite decisions or adjustment
without the approval of the group or individual represented. Air Waybill: A bill of landing that covers both international
and domestic flights transporting goods to a specified destination. This is a
non-negotiable documents of air transport that serves as a receipt for the
shipper, indicating that the carrier has accepted the goods listed and
obligates itself to carry the consignment to the airport of destination
according to specified conditions. Alongside: A phrase referring to the side of a ship. Goods to
be delivered "alongside" are to be placed on the dock or barge
within reach of the transport ship's tackle so that they can be loaded abroad
the ship. Assignment: The transfer of the rights, duties,
responsibilities and/or benefits of an agreement, contract, or financial
instrument to third party. Assignment of Proceeds: A stipulation within a letter of
credit in which some or all of the proceeds are assigned from the original
beneficiary to one or more additional beneficiaries. Barter: Trade in which merchandise is exchanged directly
for other merchandise without use of money. Barter is an important means of
trade with countries using currency that is not readily convertible. Beneficiary: A firm or person on whom a letter of credit has
been drawn. The beneficiary is usually the seller or exporter. Bill of Landing: A document that establishes the terms of a
contract between a shipper and a transportation company under which freight
is to be moved between specified points for a specified charge. Usually
prepared by the shipper on forms issued by the carrier, it serves as a
document of title, contract of carriage, and a receipt for goods. Also see Air Waybill and Ocean Bill of Lading. Bonded Warehouse: A warehouse storage area or manufacturing facility
in which imported goods may be stored or processed without payment of customs
duties. Brussels Tariff Nomenclature Number (BTN): The customs tariff number used by
most European nations. The United States does not use the BTN, but a similar
system known as the Harmonize Tariff Schedule. Carner: A customs document permitting the holder to carry
or send merchandise temporarily into certain foreign countries (for display,
demonstration, or similar purpose) without paying duties or posting bonds. Cash in Advance (C.I.A.): Payment for goods in which the price
is paid in full before shipment is made. This method is usually used only for
small purchases or when the goods are built to order. Cash Against Documents (CAD): Payment for goods in which a
commission house, or other intermediary, transfers title documents to the
buyer upon payment in cash. Certificate of Inspection: A document certifying that the goods
were in apparent good condition immediately prior to shipment. Certificate of Manufacture: A statement in which a producer
specifies where his goods were manufactured, certifies that manufacturing has
been completed, and confirms that the goods are at the buyer's disposal. Certificate of Origin: A statement signed by the exporter,
or his agent, and attested to by a local Chamber of Commerce, indicating that
the goods being shipped, or a major percentage of them, originated and were
produced in the exporter's country. CIF (cost, insurance and freight): Seller is responsible for inland
freight, ocean/air freight, and marine/air insurance to the port of final
entry in the buyer's country. The buyer is responsible for inland
transportation to his or her location. Commercial Risk: Risk carried by the exporter (unless insurance is
secured) that the foreign buyer may not be able to pay for goods delivered on
an open account basis. Confirmed Letter of Credit: A letter of credit, issued by a
foreign bank, with validity confirmed by a U.S. bank. An exporter who
requires a confirmed letter of credit from the buyer is assured of payment by
the U.S. bank even if the foreign buyer or the foreign bank defaults. Consignee: Person or firm to whom goods are shipped under a
bill of landing. Consular Declaration: A formal statement, made to the
consul of a foreign country, describing goods to be shipped. Consular Invoice: A document, required by some foreign countries,
describing a shipment of goods and showing information such as the consignor,
consignee, and value of the shipment. Certified by consular official of the
foreign, it is used by the country's customs official to verify the value, quantity,
and nature of the shipment. Coordinating Committee for Export Controls (COCOM): An informal group of 15 western
countries established to prevent the export of certain strategic products to
potentially hostile nations. Correspondent Bank: A bank that, in its own country,
handles the business of a foreign bank. Credit Risk Insurance: Insurance designed to cover risks of
nonpayment for delivered goods. Customhouse Broker: An individual or firm licensed to
enter and clear goods through Customs. Deferred Payment Credit: Type of letter of credit providing
for payment some time after presentation of shipping documents by exporter. Destination Control Statement: Any of various statements that the
U.S. government requires to be displayed on export shipments and that specify
the destination for which export of the shipment has been authorized. Documents Against Acceptance (D/A): Instructions given by a shipper to a
bank indicating that documents transferring title goods should be delivered
to the buyer (or drawee) only upon the buyer's acceptance of the attached
draft. Draft (or Bill of Exchange): An unconditional order in writing
from one person (the drawer) to another (the drawee), directing the Drawee to
pay a specified amount to a named Drawer at a fixed or determinable future
date. Drawback: A U.S. customs law that permits an American
exporter to recover duties paid on imported foreign raw materials or
components included in products that are subsequently exported out of the
United States. "Ex": Signifies that the quoted price applies only at the
indicated point of origin (e.g. "price ex factory" means that the
quoted price is for the goods available at the factory gate of the seller). FOB (free on board): Seller is responsible for inland
freight and all other costs until the cargo has been loaded on the
vessel/aircraft. Buyer is responsible for ocean/air freight and marine/air
insurance. Foul Bill of Landing: A receipt for goods issued by a
carrier with an indication that the goods were damaged when received. Free Trade Zone: A port designated by the government of a country
for duty-free entry of any non-prohibited goods. Merchandise may be stored,
displayed, used for manufacturing, within the zone and re-exported without
duties being paid. Duties are imposed on the merchandise (or items
manufactured from the merchandise) only when the goods pass from the zone
into an area of the country subject to the Customs Authority. ISO: International Standards Organization also referred
to as the International Organizational for Standardization. Incoterms: A codification of terms used in foreign trade
contracts that is maintained by the International Chamber of Commerce. Incremental Cost to Export: The additional costs incurred while
manufacturing and preparing a product for export ( e.g., product
modifications, special export packaging and export administration costs.) This
does not include the costs to manufacture a standard domestic product, export
crating and transportation to the foreign market. Irrevocable Letter of Credit: A letter of credit with a fixed
expiration date that carries the irrevocable obligation of the issuing bank
to pay the exporter when all of the terms and conditions of the letter of
credit have been met. MFN (Most Favored Nation): Designation for countries which
receive preferential tariff rates. This is no longer the best tariff
structure available. Non-Tariff Barriers (NTB): Economic, political, administrative
or legal impediments to trade other than duties, taxes and import quotas. Ocean Bill of Lading: A receipt for cargo in transit, and a
contract between the exporter and an ocean carrier for transportation and
delivery of goods to a specified party at a specified foreign destination. Issued
after the vessel has sailed and the cargo has been entered in the ship's
manifest. Original Equipment Manufacturers (OEM accounts): Customers who incorporate the
exporter's product into their own merchandise for resale under their own
brand names. Pre-Advice: Preliminary advice that a letter of credit has been
established in the form of a brief authenticated wire message. It is not an
operative instrument and is usually followed by the actual letter of credit. Price Quotation/Proforma Invoice: An invoice prepared by the seller in
advance of shipment that documents the cost of goods sold, freight,
insurance, and other related charges. It is often used by the buyer to secure
a letter of credit, an import license or a foreign currency allocation. Sanitary and Health Certificate: A statement signed by a health
organization official certifying the degree of purity, cleanliness, or
spoilage of goods, and the health of live animals. Schedule B Commodity Number: An export identification number that
must appear on the "Shippers Export Declaration Form" (SED). Transferable Letter of Credit: A letter of credit that allows all
or a portion of the proceeds to be transferred from the original beneficiary
to one or more additional beneficiaries. Turnkey Project: Capital construction projects in which the supplier
(contractor) designs and builds the physical plant, trains the local
personnel on how to manage and operate the facility and presents the buyer
with a self-sustaining project (all the buyer has to do is "turn the
Key"). VAT (Value-Added Tax): A sales or consumption tax which the
end user pays. Typically, this is a "hidden" tax, added to the list
price of the goods in question.
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