The Business Dictionary For International Commerce

Welcome to the Business Dictionary that can help you quickly learn the meaning for some of the most frequently used words and phrases in international trade and commerce.  The terms within this Business Dictionary may easily be located by simply clicking on the first letter 'links' located at the top and bottom of the two column glossary.

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Term Definition
Sales Agreement A written document (a contract) by which a seller agrees to convey property to a buyer for a stipulated price under specified conditions.
Sales Tax A tax placed by a state or municipality on items at the time of their sale, usually a percentage of the purchase price.
Salvage 1. Compensation paid for the rescue of a ship, its cargo or passengers from the perils of the sea;

2. or, the act of saving a ship or its cargo from possible loss;

3. or, property saved from a wreck or fire.
Samurai Bond Bond issued on the Japanese market in yen for non-Japanese borrowers.
Sanction 1. A punitive act taken by one or more nations against another nation which has violated a treaty or international law.

2. A proviso in a law to secure its enforcement by imposing a penalty for its violation or offering a reward for its observance.
Seal A mark or sign that is used to attest the execution of an instrument, contract, or other document.
Seaworthiness The fitness or safety of a vessel for its intended use.
Secured Guaranteed as to payment by the pledge of something valuable as security or collateral.
Security 1. Property pledged as collateral to a debt.

2. Protection; assurance; indemnification.

3. A document that indicates evidence of indebtedness or of equity interest - including notes, bonds, debentures, stocks, certificate of interest, etc. which may be traded on an exchange.
Seizure The act of taking possession of property.
Seller's Market Exists when goods are in short supply compared to the demand, at which point the economic forces of business tend to cause goods to be priced at the vendor's estimate of value.
Selling Rate Rate at which a bank is willing to sell foreign exchange or to lend money.
Service A Loan To pay interest due on a loan.
Settlement Date The date on which payment for a transaction must be made.
Shared Foreign Sales Corporation (USA) A foreign sales corporation formed to make export sales and earn favorable tax treatment thereon. A Shared Foreign Sales Corporation requires more than one and less than 25 unrelated exporters.
Ship's Manifest A list of the individual shipments constituting the ship's cargo.
Ship's Papers The documents a ship must carry to meet the safety, health, immigration, commercial and customs requirements of a port of call or of international law.
Ship's Stores The food, medical supplies, spare parts and other provisions carried for the day-to-day running of a vessel.
Shipment 1. Delivery of cargo to a carrier for transportation.

2. The transportation of goods.

3. The property which is the subject of transportation.
Shipped On Deck Goods shipped on the deck of a vessel. The bill of lading covering goods shipped on deck must be annotated to that effect.
Shipper 1. One who transports goods for a charge. In normal usage, such a person would be called a carrier, but carriers are also called "shippers"

2. One who tenders goods to a carrier for transportation.

3. The sender of goods to be transported as distinct from the receiver or the consignee.
Shipping Order Instructions from a shipper to a carrier for the transportation of goods.
Short Form Bill of Lading A bill of lading on which the detailed conditions of transportation are not listed in full, but instead there is a statement which declares them to be incorporated by reference, and states the place where they are available.
Short of Exchange The position of a foreign exchange trader who has sold more foreign currency of a particular country than he has in possession to cover sales.
Short Weight Any shipment found to weigh less than the documents indicate, be it a bill of lading, a dock receipt, a warehouse receipt, an inspection certificate, or a weight tally.
Shortage A deficiency in quantity shipped, stored, or received.
Sling A contrivance into which freight is placed to be hoisted into or out of a ship.
Slip A vessel's berth between two piers.
Small Package Service A specialized service to guarantee the delivery of small parcels within specified express time limits.
Smuggling Moving goods across a customs frontier in a clandestine manner, evading customs control. It may be goods on which duty and taxes have been avoided, or it may be goods which are not permitted to be imported or exported.
Soft Currency The currency of a country that is not readily accepted by other countries and is not readily converted into currencies which are readily acceptable (hard currencies).
Soft Loan A loan made with easy or generous terms such as low or no interest and long payback.
Sovereign Credit A direct borrowing or a borrowing guaranteed by the government of a sovereign state.
Sovereign Risk 1. The risk to a lender that the government of a sovereign state may default on its financial obligations.

2. Also, the risk to a lender that unfavorable changes in the borrowers overall currency exchange position might imperil the payment of a loan.

3. Also the risk to a lender that unfavorable political events in the country of the debtor might imperil repayment.
Special Rates Rates that apply to cargo traffic under special conditions and usually to and from a limited number of points.
Specific Commodity Rate With reference to freight rates, it is a favorable freight rate usually applicable to certain classes of commodities which move in large volume shipments.
Specific Rate of Duty A specified amount of duty per unit of weight or other quantity.
Spot Cash Immediate cash payment on a transaction.
Spot Exchange The purchase and sale of foreign exchange for delivery and payment at the time of the transaction.
Spot Exchange Rate The price of one currency expressed in terms of another currency at a given moment in time.
Spot Market The market for a commodity or foreign exchange available for immediate delivery.
Spot Operations Foreign exchange dealings and commodity trading in which settlement of the mutual delivery and payment commitment is made immediately.
Spot Price The selling of goods or commodities for immediate delivery.
Spot Rate The rate (price per unit) for purchase or sale of a commodity or foreign exchange for immediate delivery.
Spotting The placing (or parking) of a container in the place where required, to be loaded or unloaded, or held for further action.
Standby Commitment A bank commitment to loan money up to a specified amount for a specific period, to be used only in a certain contingency.
Standby Letter of Credit A letter of credit which a bank issues on behalf of its customer to serve as a guarantee to the beneficiary of the letter of credit that the bank's customer will perform a specified contract with the beneficiary. If the customer defaults, the beneficiary may draw funds against the letter of credit as penalties or as payments, whichever the terms of the credit provide.
Steamship (or steamer) Vessels powered by steam engines. However, the term is often used to describe powered vessels in general, and companies who operate ocean going cargo vessels are often called "steamship companies" despite the fact that the use of steam power for ocean going vessels is obsolete, the modern standard being diesel engines fueled by oil.
Steamship Indemnity A contract of indemnity issued by a bank to an ocean carrier indemnifying the carrier for any loss incurred for release of goods without surrender of the original bill of lading properly endorsed.
Stevedore 1. A person having charge of the loading and unloading of ships in port.

2. Sometimes used to indicate those laborers who actually perform the physical work of loading and unloading a ship (usually called longshoremen.)
Storage The keeping of goods in a warehouse or other repository.
Storage Demurrage A storage charge made on property remaining on the dock or terminal past the permitted "free-time period".
Storage in Transit The stopping of freight traffic at a point located between the point of origin and destination to be stored and reforwarded at a later date.
Store-Door Delivery The movement of goods to the consignee's place of business, customarily applied to movement by truck.
Stowage The arranging and packing of cargo in a vessel for shipment.
Stowage Instructions Specific instructions given by the shipper or his agent concerning the way in which cargo is to be handled or stowed. It may refer to the location in the hold, whether a particular side is to be on top, the kind of other cargo it may not be near, the number of pieces which may be stacked, what implements may not be used to move it, such as "use no hooks" on bales, etc.
Stowplan A diagram showing where cargo has been placed in a vessel (also known as a stowage plan.)
Straight Bill of Lading A nonnegotiable bill of lading that designates a consignee who is to receive the goods and obligates the carrier to deliver the goods to that consignee only.
Strike Clause An insurance clause which may be included in policies to cover against losses as a result of strikes, riots and civil commotions.
Stripping The unloading of cargo from a container or truck; (also called devanning.)
Stuffing The loading of cargo into a container.
Subsidiary Any organization more than 50 percent of whose voting stock is owned by another firm.
Subsidy A grant paid by a government to producers or exporters of goods to strengthen their competitive position.
Supply Access Assurances sought by importing countries that they will, in the future, have fair and equitable access at reasonable prices to supplies of raw materials and other essential imports.
Surcharge A charge or tax above the usual or customary charge.
Surety A bond or other security that protects a person, corporation, or other legal entity in case of another's default in the payment of a given obligation, improper performance of a given contract, malfeasance of office, etc. The one who undertakes to be the surety is primarily liable in case of the default.
Survey 1. To examine and report on the condition of a vessel for purposes of establishing seaworthiness, value, or dimensions.

2. To examine and report on the condition of goods or a structure.

3. To examine and report on the condition of goods or property after a casualty to determine the extent of the loss and the probable cause. (Often to support an insurance claim, - although there may be a claim without insurance being involved.)

4. The reports described above, generally conducted by an independent third party, called "a surveyor."
Sushi Bond Eurodollar bonds issued by Japanese corporations on the Japanese market for Japanese investors.
Swap (transactions) A kind of financial transaction which has many variations, usually highly complex. They generally involve a simultaneous exchange of assets (the swap) by counterparties for other different assets of comparable value. The assets may be commodities or they may be financial instruments involving interest rates, cash flows, foreign exchange, debts or equities. In addition to financial profits, the swaps have many purposes such as limiting risks, overcoming restrictions in certain markets, or balancing portfolios.
Switch Arrangements A form of countertrade in which the seller sells on credit and then transfers the credit to a third party at a discount. Or, in another type of switch, the rights to purchase certain goods, resulting from a countertrade operation, are sold to a third party at a discount.
Tare Weight The weight of a container and/or packing materials, but without the goods being shipped. The gross weight of a shipment less the net weight of the goods being shipped. (In other words, the weight of the packing.)
Tariff 1. A comprehensive list or "schedule" of merchandise with applicable duty rates to be paid or charged for each listed article; together with governing rules and regulations.  (A "customs" Tariff.)

2. A schedule of rates and charges applied by a business, especially a common carrier, together with a description of the services offered and the rules and regulations applicable.
Tariff Anomaly In a customs tariff, a tariff anomaly exists when the tariff on raw materials or semi-manufactured goods is higher than the tariff on the finished product.
Tariff Escalation In a customs tariff, a situation in which duties on raw materials are nonexistent or very low; duties on semi-processed goods are moderate; and duties on manufactured goods are relatively high.
Tariff Rate Quotas (Customs) Application of a higher duty rate to imported goods after a specified quantity of the item has entered the country at a lower prevailing rate.
Tariff Schedule (Customs) A comprehensive list of the goods which may be imported into a country, and the import duties applicable to each product.
Tariff War (Customs) When one nation increases the tariffs on goods imported from, or exported to another country, and that country then follows by raising tariffs itself in a retaliatory manner.
Tax Haven A nation offering low tax rates and other incentives for individuals and businesses of other countries to locate there.
Temporary Importation (Admission Temporaire) A customs procedure under which certain goods can be brought into a customs territory temporarily, conditionally relieved from the payment of import duties and taxes; such goods must be imported for a permitted purpose and must be intended for exportation within the permitted period.
Tender 1. A small vessel which serves a larger vessel in a port for the purpose of supplying provisions and carrying passengers to and from ship to shore.

2. An offer of money. An offer to supply something. An offer to present something.

3. To satisfy a claim, an unconditional offer to perform coupled with a manifest ability to carry out the offer.

4. A car connected behind a steam railroad locomotive to carry coal and water. (Almost obsolete).
Tenor The term fixed for the payment of a draft or debt.
Terminal An facility which is used by a rail, ship, air, or truck line as a place for receiving and delivering cargo; loading; unloading; transferring; temporarily storing; recoopering; and similarly handling freight; and repairing and servicing equipment..
Terminal Charge A charge made for services performed at transportation terminals.
Terms of Trade The ratio of the index of export prices to the index of import prices. (Note the difference from "Trade Terms"
Third World Countries Developing countries, especially in Asia, Africa, and Latin America.
Through Bill of Lading A single bill of lading covering receipt of cargo at a point of origin for delivery to an ultimate consignee, usually involving multiple carriers and multiple modes of transport.
Through Rate A shipping rate applicable to transportation from point of origin to destination where multiple carriers and multiple modes of transport may be involved.
Tied Loan A loan made by a government that requires a foreign borrower to spend the proceeds in the lender's country.
To Order A term on a financial instrument or title document indicating that it is negotiable and transferable.
Tracer A request upon a transportation line to trace a shipment for the purpose of locating its whereabouts, expediting its movement or establishing delivery.
Tracking A carrier's system of recording movements of shipments from origin to destination.
Trade Acceptance A draft drawn by the seller of goods upon the buyer who agrees to pay by signing "accepted" on the draft.
Trade Deficit A nation's excess of imports over exports over a period of time.
Trade Name The name under which an organization conducts business, or by which the business or its goods and services are identified.
Trade Promotion Encouragement of the progress, growth, or acceptance of trade. (Note: Some would define it solely as the encouragement of exports.)`
Trade Surplus A nation's excess of exports over imports over a period of time.
Trade Terms The setting of responsibilities of the buyer and seller in a sale including sale price, the payment of costs such as shipping, insurance, and customs; the arranging of the performance of these activities; and the determination of when title passes. (Note the difference from "Terms of Trade")
Trailer A vehicle without motor power designed to be drawn by another vehicle.
Tramp Line A transportation line operating tramp steamers in waterborne commerce.
Tramp Steamer A vessel which does not operate under any regular schedule from one port to another, but calls at any port where cargo may be obtained and charges a negotiated amount of freight. Usually they transport breakbulk or bulk cargo.
Trans-Ship 1. To transfer goods from one transportation line to another, or from one ship to another, or from one airline to another in order to complete a delivery .

2. To ship to one country, and then to re-export to another. (Sometimes the second exporting country may be incorrectly represented as the country of origin.)
Transaction Value (USA) The price actually paid or payable for merchandise imported.
Transfer Of Technology The movement of modern or scientific methods of production or distribution from one enterprise or country to another.
Transfers (mail, wire, cable) A transfer is the remittance of a sum of money to a party in another place. This may be accomplished by mailing cash or drafts or using the services of a commercial bank or a wire transfer company for a fee.
Transit Zone An area in a port of entry in a coastal country that is established as a storage and distribution center for the convenience of a neighboring country which lacks adequate port facilities or access to the sea.
Transmittal Letter In international commerce, a letter from the shipper or their agent transmitting documents relative to a shipment. Usually there will be included a list of the documents enclosed and details covering the transportation of the shipment such as the name of the carrier, date of departure etc.
Transparency The extent to which laws, regulations, agreements, and practices affecting international trade are open, clear, measurable, and verifiable.
Transport Documents All types of documents evidencing acceptance, receipt and shipment of goods.
Transportation and Exportation Entry (USA) Customs entry used when merchandise arrives in the U.S. and is moved in bond to another U.S. port for re-export to a foreign country.
Traveler One who passes from place to place, whether for pleasure, instruction, business or health.
Traveler's Checks A check designed for business travelers and tourists, issued by a financial institution of sufficient importance that it will be readily accepted or cashed by businesses and banks. For safety it is often designed to be countersigned twice by the traveler in order to be valid, once at issuance and once upon being cashed.
Triangular Trade Trade between three countries which creates a more favorable flow of trade for each than would exist between only two of them dealing directly with each other.
Tropical Products Agricultural goods grown in tropical zones, tea, spices, bananas, and tropical hardwoods etc,
Trust Receipt A written declaration by a customer to a bank that ownership in goods released by the bank is retained by the bank, and that the client has received the goods in trust only. Such a trust receipt may be is given by the customer to the bank to induce the bank to issue a letter of indemnity to a carrier to release a shipment.
Turnkey A term for a method of construction whereby the contractor assumes total responsibility from design through completion of the product and release to the client in a stage so complete that the buyer need only to turn the key to open the door and walk into a facility that is ready to operate.
Turnkey Contract An agreement under which a contractor agrees to complete a product so that it is ready for use when delivered to the other contracting party.
Two-tier Market An exchange rate regime employed in some countries with managed currency exchange rates where the more favorable rates are maintained for selected activities..
Tying Arrangement A condition that a seller imposes on a buyer, requiring that if the buyer desires to purchase one product (tying product), the buyer must also agree to purchase another product (tied product), which the buyer may or may not want. The laws of some countries prohibit certain tying arrangements, for example in the U.S. the Clayton and the Sherman anti-trust Acts.
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