Glossary

The vocabulary of international trade.

Every term below appears in a real document you will be asked to sign, produce or pay against. This is what they mean.

Incoterms

Incoterms 2020: Eleven standardised trade terms published by the International Chamber of Commerce that define how costs, risks and responsibilities are divided between buyer and seller.
EXWEx Works: The seller makes the goods available at their own premises; the buyer carries all costs and risks from that point, including export clearance.
FOBFree On Board: The seller delivers the goods on board the vessel at the named port of shipment, and risk passes to the buyer once the goods are loaded.
CIFCost, Insurance and Freight: The seller pays cost, insurance and freight to the named destination port, but risk still passes to the buyer at the port of loading.
DAPDelivered At Place: The seller delivers the goods ready for unloading at the named destination; the buyer remains responsible for import clearance and duties.
DDPDelivered Duty Paid: The seller carries all costs and risks to the named destination, including import duties, taxes and customs formalities. It requires real customs capability in the destination country.

HS CodeHarmonized System Code: An internationally standardised numerical classification for traded goods, used by customs authorities to determine duty rates, taxes and regulatory requirements.
Preferential Origin: Origin status that qualifies goods for a reduced or zero duty rate under a trade agreement or customs union, as distinct from non-preferential origin used for statistics and labelling.
Customs Value: The value of goods determined for customs purposes, generally based on the price actually paid or payable and adjusted for freight and insurance depending on the valuation method.
Anti-Dumping Duty: An additional import duty applied to goods found to be sold below fair market value, intended to protect domestic industry from unfairly priced imports.

Certificate of OriginCoO: A document certifying where goods were produced or substantially transformed, used to determine duty rates and eligibility for preferential trade treatment.
Carnet ATA: An international customs document allowing temporary duty-free import of goods such as samples, exhibition items or professional equipment without a full declaration.
Pre-Shipment InspectionPSI: Independent verification of quantity, quality or conformity carried out before shipment, required by some destination countries prior to customs clearance.
Certificate of ConformityCoC: A document confirming that a product meets the technical, safety or quality standards required by the destination market's regulator.
Bill of LadingB/L: A document issued by a sea carrier that serves as receipt for the goods, evidence of the contract of carriage and, in negotiable form, a document of title.
Air WaybillAWB: A non-negotiable transport document for air freight that acts as a receipt and contract of carriage but, unlike a bill of lading, does not convey title.

Bonded Warehouse: A customs-controlled facility where imported goods can be stored, and sometimes processed, with duties and taxes suspended until release for domestic sale or re-export.
Demurrage: A charge levied by the shipping line when a container stays at the port terminal beyond the free time allowed, usually caused by delayed clearance or paperwork.
Detention: A charge for keeping a container outside the terminal, for example at the consignee's premises, beyond the free time before returning it to the carrier.
Free Zone: A designated area, usually at a port or airport, where goods can be imported, stored, processed and re-exported without incurring standard customs duties until they enter the domestic market.
Re-Export: The export of previously imported goods, typically from a free zone or bonded facility, without those goods having entered the domestic market or incurred domestic duty.

Letter of CreditL/C: A bank-issued payment undertaking that pays the seller once compliant shipping documents are presented, used to manage counterparty risk on both sides.
Dual-Use Goods: Items, software or technology usable for both civilian and military purposes, subject to export control and often requiring a licence before shipment.
Denied Party Screening: Checking counterparties, end users and destinations against government sanctions and restricted-party lists before proceeding with a transaction.
Landed Cost: The total cost of a product once it reaches the buyer's destination, including goods, freight, insurance, duties, taxes and handling.

KOTA TRADING DIRECT DESK

Ask the trade desk in the corner of this page, or send it to us directly. If it comes up often enough, it gets added here.