Terms used in international trade business such as Forward contract,Forwarding agent,Foul bill of lading,Franchising ,Free Carrier etc.
This post explains about terms used in international trade business such as Forfaiting,Forward contract,Forwarding agent,Foul bill of lading,Franchising ,Free Carrier ,Free In and Out,Free On Board,Free on Rail etc.These terms used in international business are arranged in alphabetical order and you may add more information about terms used in export business at the end of this article, if you wish.
Terms used in international trade business
Forex:Foreign Exchange
Forfaiting - Form of supplier credit in which an exporter surrenders possession of export receivables, which are usually guaranteed by a bank in the importer's country, by selling them at a discount to a "forfaiter" in exchange for cash. These instruments may also carry the guarantee of the foreign government. In a typical forfaiting transaction, an exporter approaches a forfaiter before completing a transaction's structure. Once the forfaiter commits to the deal and sets the discount rate, the exporter can incorporate the discount into the selling price. Forfaiters usually work with bills of exchange or promissory notes, which are unconditional and easily transferable debt instruments that can be sold on the secondary market. Three primary differences between export factoring and forfaiting are:- Factors usually want access to a large percentage of an exporter's business, while most forfaiters will work on a one-shot basis; -Forfaiters generally work with medium and long-term receivables (180 days to seven years), while factors work with short-term receivables (up to 180 days). Payment terms usually reflect the type of product involved: forfaiters usually work with capital goods, commodities, and large projects; factors work mostly with consumer goods. - Most factors do not have strong capabilities in developing regions of the world where legal and financial frameworks are inadequate and credit information is not readily available through affiliate factors. However, since forfaiters usually require a bank guarantee, most are willing to work with receivables from these countries.
Forward contract:An agreement to convert ("buy" or "sell") a set amount of a foreign currency on a future, or "forward ", date at a specified exchange rate. Forward window and non-
delivery forward contracts are types of forward contracts.
Forward foreign exchange contract: exporters can hedge against the risk of adverse exchange rate movements by using a forward foreign exchange contract. You agree to sell the bank a particular foreign currency at a fixed future date for a price that is set now.
Forward option contract: Currency must be bought or sold within a given period of time.
Forward rate - Price of a foreign currency which is bought or sold for delivery and payment at a fixed future time, usually 30, 60, or 90 days.
Forwarding agent: most smaller importers use a forwarding agent to handle customs clearance for goods coming into the UK from outside the EU.
FOT - Free on truck. No longer a valid Incoterm. The suitable term from Incoterms® 2010 is FCA.
Foul bill of lading - A receipt for goods issued by a carrier with an indication that the goods were damaged when received. Compare Clean bill of lading.
FP:Floating Policy/Fully Paid
FPA - See Free of Particular Average.
FPAA:Free From Particular Average Absolutely
FP-C:Flash Point Celsius
Fpil:Full Premium if Lost
FR:Free Circulation (EU)
FR:Freight Release
FRA:Forward Rate Agreement
Franchising - System based on the licensing of the right to duplicate a successful business format or industrial process.
Franco (French; European shipping) - Non-standard term meaning “free delivered”: shipper pays all charges to a particular point.
FREE ALONGSIDE (F.A.S.) (or free alongside steamer): The seller must deliver the goods to a pier and place them within reach of the ships loading equipment. The buyer arranges ship space and informs the seller when and where the goods are to be placed.
Free Alongside Ship - FAS (named port of export); Under Incoterms® FAS, the seller bears obligations, risk and costs for delivery of the goods alongside a vessel at the port of departure. The costs and risk of loading, unloading, ocean transportation, and insurance are borne by the buyer. This Incoterm rule may be used only for ocean and inland waterway transport.
Free Carrier - FCA (named place); Under Incoterm FCA, the seller is responsible to make the goods available to the buyer at a named place within the seller’s country. Once delivery by the seller to the named place has been completed, the buyer bears all further obligations, risks, and costs in taking the goods to whatever final destination of the buyer’s choosing. FCA is applied to all modes of transport.
Free Carrier (FCA): this is also an Incoterm that may be used for any mode of transport. It is very common for containerized shipments. Under this term, exporter and importer have the following rights:1.Exporter:delivers to a named place provides export licence pays export duties2.Importer:pays all costs from named place (insurance, import duties, taxes)
Free circulation: goods are in free circulation in the EU if they originate from an EU country or have already been imported, all customs charges paid, into an EU country.
Free In (FI) - Pricing term indicating that the charterer of a vessel is responsible for the cost of loading goods onto the vessel.
Free In and Out (FIO) - Pricing term indicating that the charterer of a vessel is responsible for the cost of loading and unloading goods from the vessel.
FREE OF CAPTURE AND SEIZURE (F.C. & S.): An insurance clause providing that loss is not insured if due to capture, seizure, confiscation and like actions, whether legal or not, or from such acts as piracy, civil war, rebellion and civil strife.
Free of Particular Average (FPA) - Title of a clause used in marine insurance, indicating that partial loss or damage to a foreign shipment is not covered. (Note: Loss resulting from certain conditions, such as the sinking or burning of the ship, may be specifically exempted from the effect of the clause. Compare WPA.
Free On Board - FOB (named port); Under Incoterm® FOB, the seller bears obligations, risk and cost to deliver the goods to a named port of export in the seller’s country. Once the goods have been loaded aboard a vessel arranged for by the buyer, all further obligations, risk and cost are for the account of the buyer. FOB is applicable only to ocean or inland waterway modes of transport.
Free on Rail:A foreign exchange instrument that enables your business to fix the exchange rate for the payment or receipt of foreign currency in the future
Free out (FO) - Pricing term indicating that the quoted prices include the cost of unloading the goods from the vessel.
Free port - An area such as a port city into which merchandise may legally be moved without payment of duties.
Free Sale:See "Certificate of Free Sale."
Free time - Storage time allowed at carriers' facility without penalties being assessed.
Free trade agreement (FTA) - Arrangement which establishes unimpeded exchange and flow of goods and services between trading partners regardless of national borders. An FTA does not (as opposed to a common market) address labor mobility across borders, common currencies or uniform standards or other common policies such as taxes. Member countries of a free trade area apply their individual tariff rates to countries outside the free trade area.
The above details describes about terms called in international trade business such as Forfaiting,Forward contract,Forwarding agent,Foul bill of lading,Franchising ,Free Carrier ,Free In and Out,Free On Board,Free on Rail etc.These phrases may help importers and exporters on their day to day export import business activities. The readers can also add more information about terms used in international business trade below this post.Terms used in international trade business such Force majeure,Foreign assets control,Foreign Direct Investment ,Foreign exchange trading
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