B/A To the Top

Abbreviation for “Bankers’ Acceptance.”

BACK FREIGHT

Merchandise refused at the port of unloading and shipped back to the port of export.

BACK HAUL

To haul a shipment back over part of a route which it has traveled.

BACK LETTER

A letter of indemnity provided by a shipper to a steamship line to secure issuance of a clean bill of lading where one might not be issued otherwise.

BACK SPREAD

In arbitrage, the less-than-customary margin between purchase and sale price.

BACK TO BACK LETTER OF CREDIT

Back to back credits are generally used when the seller need funds to purchase merchandise from his supplier but does not qualify for an unsecured bank credit. A seller who has had a letter of credit opened in his favor asks the advising bank to open a second credit in favor of his supplier against assignment of proceeds from the first credit. The seller becomes the account party for the second credit and is obligated to reimburse the bank.

BACKWASH EFFECT

An adverse economic condition which arises from excess emphasis upon export expansion.

BAD ORDER

A railcar awaiting repair.

BAI CERTIFICATE

Issued by the Bureau of Animal Industry of the U.S. Department of Agriculture certifying veterinary inspection.

BAILEE

The temporary possession of property belonging to another person. A steamship carrier is bailee for the exporter’s merchandise.

BAILEE RECEIPT

A document used in import financing evidencing title to merchandise.

BAILMENT

A contract by which one person (bailor) entrust personal property to an other person (bailee) for some specific purpose and for a limited time. All contracts for the carriage of goods are bailments.

BAILOR

A person who, for a specified purpose and for a limited time, entrust personal property to another.

BAKSHEESH

A payment or gift to a business associate or government official in the Middle East as an inducement to complete a business deal. The recipient regards this as a token of esteem and friendship and not as a bribe.

BALANCE OF PAYMENT

The sum owed to or by a country as the result of its international transaction during a given time period.

BALANCE OF TRADE

The balance between a country’s import and export.

BALE CARGO

Merchandise wrapped in burlap, or a similar packing material, that is packed for export.

BALESPACE

The internal cargo carrying capacity of a vessel, expressed in cubic feet.

BALLAST

Heavy material carried by a ship when partially or completely empty so as to stabilize the vessel in water.

BALLAST BONUS

Extra compensation paid by charterers to the owner of a vessel to position the ship close to or at the port of loading.

BALLOON FREIGHT

Light, bulky articles.

BALLOON PAYMENT

Much larger payments made at the end of loan then payment made earlier in the loan.

BANANA REPUBLIC

Countries that are largely dependent upon banana exports as a source of foreign exchange such as Latin American countries.

BANCOR

A proposed exchange to be issued by a International Clearing Union operating essentially as a world central bank. The plan was modified and some of its provisions adapted at the Bretton Woods Conference.

BANKABLE BILL

A bill of exchange or similar instrument that may be discounted at a bank.

BANK DRAFT To the Top

A written order drawn by one bank against funds deposited to its account in another bank, payable to the order of specific payee, for a specific sum of money, and payable on demand. In international trade, a U.S based bank draws its draft on its account with a foreign correspondent bank.

BANK ENDORSEMENT

An endorsement stamped on the back, by hand or by endorsing machines, of items passing through the bank. Banks either endorse or identify all items taken in through the teller’s window or deposited through the mail except “On Us” checks cashed, or items coming into the bank from clearing house exchanges or in cash letters.

BANK FOR INTERNATIONAL SETTLEMENTS (B.I.S)

A financial institution owned and controlled by the central banks of twenty four European and non-European central banks. The main function of the bank is to hold deposits and make loans to member central banks. The B.I.S. serves as an important forum for central bankers and international banking experts. The B.I.S. operates with a staff of three hundred all based in Basel, Switzerland.

BANK PAPER

A bill of exchange that has been accepted or endorsed by a bank.

BANK-POST REMITTANCE

A remittance sent by a commercial bank to the foreign maker of a matured bill of exchange.

BANK-TO-BANK REIMBURSEMENT

The bank acts as a clearinghouse for a letter of credit transaction between two local banks who do not have correspondent relationships with one another. The draft is drawn on one of the local banks.

BANK WIRE

A private wire service offered by financial institutions which speeds and facilitates the transfer of funds and the reporting of security transactions, quotations, the payment, non-payment of items, and credit information on individuals and organizations.

BANKERS’ ACCEPTANCE (B/A)

A time draft drawn on a bank and “accepted” by it, thereby obligating the bank to pay the face value to whomever presents it at maturity.

BANKER’S ACCEPTANCE FINANCING

When a time draft must be paid, on a letter of credit, financing can be arranged with a U.S. bank. Drafts, representing transactions defined by the Federal Reserve Bank, having been “accepted” by a U.S. bank, can be sold in an open market. The rate of the financing is set for the life of the acceptance at the time the draft is placed in the market. Many importers find this type of financing to be less expensive than many alternative methods. All requests for acceptance financing should be prearranged with your bank.

BANKER’S BILL

A bill of exchange drawn by a bank on a foreign bank.

BAR DRAFT

The distance between the water’s surface and an underlying bar. This is important in determining whether a given ship may pass over the bar.

BARGE

A flat-bottomed boat used chiefly in inland waters.

BARRATRY

The action of officer or crews of a ship in willfully destroying or injuring a ship or its cargo.

BARREL BARK

A unit of cargo measurement equal to five cubic feet.

BARTER

Exchange of commodities using the value of the merchandise as compensation instead of money. This scheme is generally used by countries having blocked currencies.

BASEL AGREEMENT

An agreement among members of the European Economic Community for the purpose of narrowing the margins of fluctuation among community currencies.

BASEL CLUB

A group of bankers in the industrialized nations who have regular meetings in Basel, Switzerland, at the Bank for International Settlements.

BASEL CONCORDAT

An unofficial, voluntary agreement among the banks of major trading nations, relative to bank oversight and international banking practice.

BASE RATE

A rate used only for the purpose of constructing other rates.

BASE PERIOD

A given period of time, usually one year, that is used as the standard against which to measure activities in other years.

BASIS POINT

A unit of measure equal to one-hundredth of a percent, used in expressing rates of interest on loans.

BEAM

The width of the vessel

BEARER To the Top

The person in possession of a negotiable instrument or document of title drawn to order of bearer or endorsed in blank.

BEGGER-THY-NEIGHBOR POLICY

A course of action through which a country tries to reduce unemployment and increase domestic output by raising tariffs and instituting non-tariff barriers that impede imports, or by accomplishing the same objective through competitive devaluation.

BELGIUM-LUXEMBOURG ECONOMIC UNION (BLEU)

The union of Belgium and Luxembourg into a single customs unit with common tariff and excise tax schedules, freedom from internal tariff barriers, a joint trade system, mutual acceptance of local currencies, division of customs, and excise receipts on the basis of population, common exchange controls, a single balance of payments, and combined foreign trade statistics.

BENEFICIARY

In banking terms beneficiary refers to the person in whose favor a draft is issued or a letter of credit opened.

BENELUX ECONOMIC UNION

Cooperative economic and trade effort on the part of Belgium, the Netherlands, and Luxembourg.

BERNEUNION

Established in 1934 in Berne, Switzerland, the Union d’Assureurs des Credits Internationeaux now has 36 members from 28 countries and provides for free exchange of ideas and information and “international acceptance of sound principles of export credit insurance, and the establishment and maintenance of discipline in the terms of international trade.”

BERTH

The place beside a pier, quay or wharf where a vessel can be loaded or discharged.

BERTH LINER SERVICE

Regular scheduled steamship line with regular published schedules (port of call) from and to defined trade areas.

BERTH OR LINER TERMS

A phraseology covering assessment of ocean freight rates usually implying that loading and discharging expenses will be for ship owner’s account, and generally apply from the end of ship’s tackle in port of loading to the end of ship’s tackle in port of discharge.

BILATERALISM

This is the name given to any situation in which any two countries consciously seek to balance their trade with one another rather than seeking to balance their overall trade with the world as a whole. Such a trade policy was a common feature of trade in eastern bloc countries.

BID BOND

Bond provided by a supplier when bidding on major tender. It is normally about 5% of the bid contract price. It will compensate the buyer in the event the supplier fails to fulfill tender terms and/or sign a contract after having been declared the successful bidder.

BIG EIGHT

The eight countries in which the preponderance of the world’s trade is transacted. Dollar, French franc, Swiss franc, Pound sterling, Deutschmark, Canadian dollar, Yen, Lira.

BILATERAL AGREEMENT

A treaty, understanding, or protocol between two nations.

BILLED WEIGHT

The weight on which charges are assessed. It may exceed the actual weight.

BILL DISCOUNTED

A promissory note or bill of exchange from which the bank deducts its interest in advance.

BILLING

The preparing of a freight bill or the prepared freight bill.

BILLING PARTICIPANT

An Air Traffic term denoting a non-CASS (Cargo Accounts Settlement System) airline or a non-Part Participant, which submits to the Settlement Office Air Waybill data, in an electronically readable form of transactions made on its behalf by agents.

BILL OF CREDIT

A letter requesting or directing the addressee to extend credit to a person or persons stipulated in the letter. The person issuing the letter serves as a guarantor for any credit issued.

BILL OF EXCHANGE (or Draft)

An unconditional order in writing addressed by one person to another, signed by the person giving it, and requiring the addressed to pay on demand or at fixed or determinable future time a certain sum in money to the order of a specified person.

BILL OF LADING (Ocean)

A document, issued by a carrier to a shipper, that serves a threefold purpose. 1) A receipt for the goods delivered to the carrier for shipment; 2) A definition of the contract of carriage of the goods from the port of shipment to the port of destination listed in the bill of lading 3) Evidence of title to the relative goods.

(A) CLEAN

A bill of lading with no noted irregularities, by the transportation company, in packing or general condition of all or any part of the shipment.

(B) FORWARDER’S

A bill of lading issued by a forwarder to a shipper as a receipt for merchandise that the forwarder will consolidate with cargo obtained from other exporters and ship to his agent at the port of destination. Forwarders bill has no standing for banking purposes unless specifically allowed in the letter of credit.

(C) INLAND

A bill of lading used in transporting goods overland to the exporter’s international carrier.

(D) ON BOARD

A bill of lading acknowledging that the relative goods have been received on board for shipment on a specified vessel.

(E) ORDER

A bill lading issued to the order of a specific party. Endorsement is required to effect its negotiation. The Steamship company signs two to four copies specifying the number signed. In financing the shipment, the bank requires a full set of all signed negotiable copies. The other functions of the order bill of lading involves a receipt to the shipper as evidence of ownership, and a document required in the financing of the shipment.

(F) RECEIVED FOR SHIPMENT

A bill of lading indicating that the merchandise has been received by the steamship line to be stored until shipment can take place.

(G) STRAIGHT

A bill of lading in which the goods are consigned directly to the consignee. Therefore, not negotiable.

(H) THROUGH

A bill of lading that covers transportation by more than one carrier from the point of issue to the final destination.

(I) UNDER DECK

A bill of lading showing that the goods shipped have been stowed below the deck of the Vessel.

BILLS OF LADING ACT

An act of congress relating to the preparation and negotiability of bills of lading.

BILL OF SALE

A contract for the sale of goods.

BILL OF SUFFERANCE

A written authorization given by customs to coastal vessels allowing the movement of goods in bond.

BINDER

Temporary insurance coverage pending the later issuance of an insurance policy or certificate.

BLACK LIST

A list containing names of those who have been protested against for non-payment/non-acceptance of a draft under a documentary collection, or names of those gone bankrupt.

BLANKET BOND

A bond covering a group of persons, articles or properties.

BLANKET POLICY

A marine insurance policy covering frequent and spaced shipment of similar merchandise, issued for a specific period of time. The merchant must complete a certificate of insurance for each separate shipment.

BLANKET RATE

(a) A rate applicable from and/or to a group of points. (b) A special rate applicable on several different articles in a single shipment.

BLANKET TARIFF SUPPLEMENT To the Top

A single publication containing additions to or changes in two or more tariffs.

BLANKET WAYBILL

A waybill covering two or more consignments of freight.

BLANKS

An article not ready for direct use having the approximate shape or outline of the finished article or part and which can only be used for completion into the finished article or part.

BLOCKADE

Closing off of a country’s ocean port by the naval forces of another country.

BLOCK ACCOUNT

Money held in a bank which cannot be released or transferred without permission from the government.

BLOCK EXCHANGE

Exchange which cannot be freely converted into other currencies.

BLOCKING AND BRACING

Supports used to prevent shipments from shifting during transportation.

BLUE BOOK

Book issued by HM Government on recommendations for dangerous cargo packing/shipment by sea transport.

BONA FIDE PURCHASER (HOLDER)

An individual who purchased a negotiable instrument in good faith.

BONDED FREIGHT

Freight moving under a bond: (a) to the U.S. Customs, (b) to the Internal Revenue Service, and to be delivered only under stated conditions.

BONDED MERCHANDISE

Merchandise stored in a bonded warehouse prior to entry through customs.

BONDED WAREHOUSE

A building authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.

BOND OF INDEMNITY

An agreement made with a transportation line relieving it from liability for which it would otherwise be liable.

BOOKING

Arrangements with steamship companies for the acceptance and carriage of freight.

BOOKING NUMBER

A number assigned to a contract of affreightment used as an identifying reference on bills and correspondence.

BORDER TAX ADJUSTMENT

A refund or rebate of indirect taxes on merchandise, such as sales or value added to taxes, when the goods are exported. These rebates are authorized under the General Agreement On Tariff and Trade; rebates of direct taxes, however, is not permitted under the Agreement.

BORDEREAUX

A printed form used to report several transactions; used especially in conjunction with marine insurance policies. The bordereaux lists many individual shipments under an open policy, all of which are reported periodically to the insurer.

BOTTLENECK INFLATION

A dramatic increase in pricing due to an often unexpected increase in demand or decrease in supply.

BOTTOM

Synonymous with vessel; e.g. foreign flag ships may be called foreign bottoms.

BOTTOMRY

A contract whereby the owner or master of ships borrows for the use of the vessel, pledging the ship (or bottom) as collateral. It is stipulated that the loan shall be forgiven if the vessel is lost during the tenor of the load or another stipulated period.

BOUND RATES

Most-favored-nation tariff rates resulting from GATT (General Agreement on Tariffs and Trade) negotiations. May represent a reduced rate or a commitment not to raise an existing rate. A bound rate may not be increased without GATT concurrence or adequate compensation to affected trading partners.

BOUNTIES OF GRANTS

Payments by governments to producers of goods, often to strengthen their competitive position.

BOW

The front of a vessel.

BOYCOTT

Refusal to trade with a country. Obstructing the commerce of that country.

BOX CAR

A closed freight car.

BREAK-BULK CARGO To the Top

Cargo which is shipped as a unit. (Palletized cargo, boxed cargo, large machinery, trucks and pre-slung cargo).

BREAK-BULK VESSEL

Designed to handle palletized, pre-slung, boxed and unitized cargo. Holds can be at the open bay or between deck type. Between deck means the hold can be converted from multi levels to open bay. This type of vessel is usually self sustaining.

BREAK-EVEN WEIGHT

In air freight terms break-even weight is the weight at which it is cheaper to charge the lower rate for the next higher weightbreak times the minimum weight indicated, than to charge the higher rate for the actual weight of the shipment.

BRETTON WOODS CONFERENCE

Meeting held at Bretton Woods, New Hampshire, in 1944 to set up a system for cooperation in international trade and payments and to devise an international monetary system. Sought to achieve stable exchange rates and free convertibility of currencies. Established the IMF and World Bank.

BROKER

A person or firm that establishes a connection between a buyer and a seller. Brokers operate in many fields; insurance, steamship transport, securities, drafts, and other phases of foreign trade. Not only do brokers bring buyers and sellers together, but they help to negotiate and close contracts of agreements between them.

BROKERAGE LICENSE

Authority granted by Interstate Commerce Commission to persons to engage in the business of arranging for transportation of person or property in interstate commerce.

BRUSSELS NOMENCLATURE

Kennedy Round

A standardized system, established in 1950, for classifying commodities for customs purposes. The EEC common external tariff and the tariff of other major trading nations, except the United States, are based on the nomenclature. The United States tariff schedule (HTSUS) contains about 5,000 items as compared to 2,800 in the Brussels Nomenclature.

BTN

Bi-lateral Trade Negotiation, meaning a negotiation taking place between only two parties.

BUILDING

When used as a noun it is a vessel under construction or already afloat. A newly launched vessel is to be a new building.

BULK CARGO

Selected commodities that are normally shipped in large quantities such as ores, petroleum, asphalt, grain, gypsum, molasses, bauxite and phosphate rock.

BULK STOWAGE

A commodity shipped loose, without packing, inside a conveyance.

BULL RINGS

Metal rings recessed into the floor of a container or trailer to permit lashing of cargo.

BUNKER

The fuel oil burned by a ship.

BUNKER SURCHARGE

A charge imposed by steamship carrier, in addition to the basic freight, to offset the impact of sudden and transitory increase in the use of fuel. Usually based on a percentage of the basic freight.

BURDEN OF PROOF

Substantiating disputed facts which are at issue in a proceeding.

BUREAU OF ECONOMIC AND BUSINESS AFFAIRS

A section within the Department of State for formulating and implementing policies regarding foreign economic matters, trade promotion and business services, and coordinating regional economic policy with other bureaus and agencies. It is also responsible for international trade and finance and transportation issues including aviation, commodities, and energy issues.

BUREAU OF EXPORT ADMINISTRATION (BXA)

BXA is the Department of Commerce’s new agency for directing U.S. export control policy. The bureau monitors export licensing, technology and policy analysis and foreign availability determinations, investigates breaches of U.S. export control laws and administers anti-boycott provisions of the Export Administration Act.

BUY AMERICAN ACT

A 1933 act of Congress which provides that Federal agencies and certain contractors to the Federal government are obligated to buy articles of American manufacture unless American goods cannot be procured at reasonable cost in relation to foreign equivalents.

BUY-BACK

An agreement by which the seller of capital equipment agrees either to accept a certain portion of the output of his customer as payment for the original equipment, or to buy a certain portion of that output, as a condition of the sale.

BUYING AGENT

An individual who purchases goods in his or her own country on behalf of foreign importers such as government agencies and large private concerns.

BUYER CREDIT

Financial arrangement in which a bank and/or an Export Credit Agency makes a loan directly to the overseas purchaser. Generally the proceeds can only be used to purchase specific imports. Disbursements may go directly to the supplier or to reimburse the buyer for payments already made to the supplier.

BUYER’S OPTION CONTRACT

Where the buyer has the right to settle a forward contract at his or option any time within a specified period.

BUYING DISCOUNT RATE (BDR)

The rate at which the accepting bank discounts its Bankers’ Acceptances, representing the interest charge for the advance of funds; varies according to market conditions and other factors; is set on a daily basis by the accepting bank’s Treasury Department.

BUYING RATE To the Top

The rate at which a dealer will buy a foreign currency.