BUSINESS TERMS


Free Glossary Of Business Terms

Welcome to your online glossary of Business Terms that can help you quickly learn the meaning for some of the most frequently used words and phrases in international trade and commerce.  The business terms are arranged in alphabetic order and may be easily 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
E Note: One Half of the "E" listings are on the page with words starting with C and D
               
Easement A right to use another person's property.
Edge Act Corporations Banks that are subsidiaries either to bank holding companies or other banks established to engage in foreign business transactions.
Electronic Commerce A system of integrated communications, data management, and security services that allow business applications within different organizations to automatically interchange information.
Electronic Data Interchange (EDI) Electronic transmission of data and information according to particular protocols .
Electronic Funds Transfer System of transferring funds from one account to another by electronic means.
Electronic Meat Health Certificate (USA) A demonstration project that illustrates the electronic transmission of fresh meat health certificates.
Electronic Visa Information System (ELVIS) (USA) An electronic data system via which participating foreign governments transmit electronically to the U. S. Government details of shipments of quota controlled textile goods they have made to the U.S.
Embargo A government prohibition of exports or imports with respect to specific products or specific foreign countries.
En Route In transit (referring to goods, passengers, or vessels).
Entrepot An intermediary storage facility (often in an intermediate country) where goods are kept temporarily for distribution.
Entrepot Trade The import and export of goods which receive no further processing but are distributed from the entrepot facility which is chosen for its location and lack of restrictions on trade,
Entry 1.That documentation required to be filed with the appropriate customs officer to secure the release of imported merchandise from customs custody.

2. The act of filing that documentation.
Entry Documents The documents required to complete customs entry to secure the release of imported merchandise.
Entry Summary (USA) Documentation which is necessary to enable US Customs to collect duties, collect statistics, and determine whether other requirements of law or regulations are met upon importation. In the US, the importer must classify the goods, determine their customs value, and calculate duties, taxes and fees.
Entry Summary System (USA) An Automated Customs System module that automates the entry processing cycle.
Environmental Protection Agency (EPA) (USA) An independent agency in the executive branch whose mandate is to control and abate pollution in the areas of air, water, solid waste, pesticides, radiation, and toxic substances.
Equalization In transportation, a money allowance given the customer if the transport company picks up the goods at origin points or delivers them to destination points other than those named on the bill of lading.
Escape Clause 1. A provision in a bilateral or multilateral commercial agreement permitting a signatory nation to change their obligations when imports threaten serious harm to the producers of competitive domestic goods.

2. A provision in a contract or other document permitting parties to avoid liability for nonperformance under certain conditions.
ETA The expected date and time of arrival of a carrier.
ETD The expected date and time of departure of a carrier.
Eurobond A bond issued in a Euro-currency, usually Euro-dollars
Ex Factory This term is still widely used but it is being replaced by the Incoterm EXW - Ex Works. It is a sale term where the title to goods passes to the buyer when they leave the vendor's dock and consequently at that point the liability for loss or damage and the expenses of shipment also pass from vendor to buyer.
Exchange Rate The price of one currency expressed in terms of another.
Excise Tax Taxes on the manufacture, sale, or consumption of goods, or upon licenses to pursue certain occupations, or upon corporate privileges. In current usage it covers various license fees imposed by government and practically every internal revenue tax from any source except the income tax.
Exculpatory Clause 1. A contractual clause that releases one party from liability in case of wrong doing by the other party involved.

2. A contractual clause which excuses a trustee from liability where he executes a power in good faith.
Expiry Date The "End", specifically: the cessation; termination by lapse of time as the expiration of a lease, insurance policy, or statute. Coming to a close or termination. The expiry date is the date on which these events occur. It is the last date that options or warrants can be executed.
Export To send or transport goods abroad out of a customs territory; to sever them from the mass of things belonging to one country with the intention of uniting them to the mass of things belonging to a foreign country.
Export Broker A firm that specializes in bringing foreign buyers and domestic sellers together for a fee but usually does not participate in the actual business transaction.
Export Control The establishment of procedures for the governmental control of exports for statistical or strategic purposes.
Export Declaration (USA) The Shipper's Export Declaration is a required customs document for exportation of goods from the United States which provides statistics and facilitates control where applicable.
Export Draft A documentary order in the form of a draft drawn on the importing party to pay the seller for the exported goods.
Export Duty A tax imposed by some nations on their exports.
Export License A license issued to exporters by governments to permit them to export certain goods to certain countries. Such goods may be of strategic importance, or simply in short supply, or are controlled to comply with foreign agreements.
Export Management Company A private firm that serves as the export department for several manufacturers and handles the exporting aspect of the business for a commission or fee.
Export Merchant A company that buys domestic and foreign products and sells to foreign purchasers. Usually an export merchant is able to compete because of specialized knowledge of the products in which they deal, detailed knowledge of foreign markets, and expertise in international trading techniques.
Export Processing Zone Industrial parks designated by a government to provide tax and other incentives to export firms.
Export Quotas Specified maximums which a nation places on the value or volume of certain of its exports.
Export Restraints Restrictions which a nation places upon its exports, often to avoid more burdensome restrictions being applied by the importing nations.
Export Statistics The statistics that cover the exports from one country to other countries.
Export Subsidies Government payments to induce exportation by domestic producers.
Export Trading Company A corporation organized for the principal purpose of exporting goods and services.
Exporter An individual or company that ships goods from one country to another in the course of trade.
Exporter Identification Number (USA) An identification number assigned to exporters of goods from the United States which is required to be shown on the Shipper's Export Declaration for all shipments from the USA..
External Value The purchasing power of a currency abroad, converted using the exchange rate.
Extradition The surrender by one state or country to another of an individual accused or convicted of an offense within the jurisdiction of the other.
EXW (Ex Works ...named place) The seller fulfils his obligation to deliver when he has made the goods available at his premises (i.e. works, factory, warehouse, etc.) to the buyer. In particular, he is not responsible for loading the goods on the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination.
F     
Facilitation 1. Programs designed to expedite the flow of international commerce.

2. The act of freeing more or less completely from obstruction or hindrance.
Factor An agent who receives merchandise under consignment or under a bailment contract, who sells it for the principal or in the factor's own name, and who is paid a commission for each sale.
Factoring Services Financing companies which purchase accounts receivable under agreed conditions and at agreed discounts and thus makes funds immediately available to approved sellers.
Factor's Lien The right of a factor to retain possession of designated assets of the principal until the factor receives full compensation from the principal.
Factorage The commission or other compensation paid to a factor.
Fair Value (USA) In dumping evaluations, it is the price at which the items being reviewed should have been sold in the home market in order to be considered as goods offered for export in the usual course of trade at fair market value and not guilty of being dumped.
FAS (Free Alongside Ship...named port of shipment) The seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. The buyer has to bear all costs and risks of loss or of damage to the goods from that moment.
FCA (Free Carrier...named place) The seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point.
FDA Food And Drug Administration.
Federal Reserve System (USA) The equivalent of the central bank of the USA and the coordinator of monetary policy.
Feeder Vessel A vessel which is part of a cargo network in which the larger, faster vessels only call at the major ports at both ends of the area being covered, and the smaller ports are served by the smaller feeder vessels which transfer the cargo to and from the major port terminals and thus keep the larger vessels filled closer to capacity and spare them the expense and loss of time in loading and unloading in the subsidiary ports.
FEU Forty foot equivalent units of shipping containers. (Two 20 ft containers = 1 FEU).
Financial Instrument A document which has a monetary value or is evidence of a monetary transaction, such as drafts, bills of exchange, checks and promissory notes.
Financial Market Market for the exchange of capital and credit in an economy.
First World Countries "Western, industrialized, non-communist countries," was the previously accepted criteria, but in view of the emergence of Japan as an economic power and the rising status of Russia and China, "industrialized" is probably the only remaining valid criterium for a "First World Country" at this time.
Five Dragons Term used to describe the emerging economies of Hong Kong, Singapore, South Korea, Taiwan, and Thailand.
Fixed Charges 1. Charges which do not increase or decrease with a change in volume.

2. Expenses that have to be borne whether any business is done or not.
Fixed Exchange 1. When Governments or their Central Banks administratively set the exchange rate for their currency.

2. An administratively set exchange rate where no rate fluctuations are permitted.
Fixing The setting of a price by a known method at regular times. For example, the establishment of an official exchange rate, interest rate, or security or commodity price.
Flag A reference to the country of registry of a vessel.
Flag of Convenience The national flag flown by a ship that is registered in a country other than that of its owners. (Usually arranged in order to save taxes and operating expenses)
Flight of Capital The movement of capital to another country to avoid loss.
Floating Free determination of rates based on supply and demand, for example exchange rates or interest rates.
Flotsam Floating debris or wreckage of a ship and its cargo.
FOB (Free On Board ... named port of shipment) The seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. The buyer has to bear all costs and risks of loss or damage to the goods from that point.
Force Majeure A condition of superior or irresistible force such as Acts of God, including earthquakes and floods, which cannot be avoided by the exercise of due care and is included in contracts to excuse parties from performance when such events occur.
Foreign Bond An international bond usually denominated in the currency of the country where it is issued.
Foreign Commerce Trade between individuals or legal entities in different countries.
Foreign Currency The currency of any foreign country which is authorized by that country as the medium of circulation.
Foreign Exchange Currency of countries exchangeable for other currencies according to their relative values based on supply and demand.
Foreign Exchange Contract A contract for the sale or purchase of the currency of one country to be paid for with the currency of another country, specifying an amount, an exchange rate, and delivery date.
Foreign Exchange Rate The rate or price of the currency of one country in terms of the currency of another.
Foreign Exports 1. (USA) Exports from the United States of foreign origin merchandise. (for the purposes of USA export statistics)

2. Exports by other countries..
Foreign Flag The national identification of a carrier registered in a foreign country. A vessel flies the national flag of the country in which it is registered, and it may be registered in a country different from that of its owner.
Foreign Income Income gained by residents of one country from another country.
Foreign Investment The purchase of assets which are abroad.
Foreign Market Value From the American point of view it is the price at which merchandise is sold at wholesale in the principal markets of the country from which it is exported.
Foreign Parent The first foreign person or entity outside the United States in an affiliate's ownership chain that has direct investment in the affiliate.
Foreign Person 1. A person belonging to or under citizenship of another country.

2. Using the United States as an example, a person who resides outside of the United States or is subject to the jurisdiction of another country other than the United States is a "foreign person".
Foreign Remittances The transfer of any funds across national boundaries.
Foreign Trade Zone Act (FTZA) (USA) The act which established foreign trade zones in the USA.
Forward Foreign Exchange An agreement to purchase or sell an amount of foreign currency at a future date at a predetermined price.
Foul Bill of Lading A bill of lading issued with notations on it which limit the carrier's liability; for example, a notation that the goods were received damaged, or short, or improperly packaged.
Fractional Currency Any currency that is smaller than a standard money unit.
Franco Free from duties, transportation charges and other levies.
Free Domicile "Free Domicile" is still a widely used pricing term to describe when the shipper pays all the applicable duties and all the transportation and other charges until delivered to the buyer's premises. The term is being replaced by Incoterm "DDP - Delivered Duty Paid ... named point of destination."
Free In and Out A pricing term indicating that the vessel operator is responsible for the cost of loading and unloading.
Free List A schedule of items in a customs tariff that are not subject to the payment of duties.
Free Market A market in which there is unrestricted trading of goods with prices determined by supply and demand. Internationally, there is an unrestricted movement of goods in and out , and it is unhampered by the existence of tariffs or other trade barriers.
Free Port An area where imported goods may be brought without payment of duties.
Free Time 1. The time allowed shippers and receivers to load or unload rail cars before demurrage or detention.

2. The time allowed consignees to take physical delivery of cargo before storage or demurrage is assessed.
Free Trade Zone An area within a country (a seaport, airport, warehouse or any designated area) regarded as being outside its customs territory where importers may bring goods of foreign origin without paying customs duties and taxes, pending their eventual processing, transshipment or re-exportation.
Free-Astray A shipment or part of a shipment which has been dropped off at a wrong location by a carrier
Freight 1. All merchandise, goods, products, or commodities shipped by rail, air, road, or water, other than baggage, express mail, or regular mail.

2. The compensation paid for the transport of goods.
Freight Charge The charge assessed for transporting cargo.
Freight Claim 1. A demand upon a carrier for the repayment of overcharge.

2. A demand upon a carrier for cargo loss or damage.
Freighter A ship or airplane used primarily to carry cargo.
Fungibles Goods that, for commercial purposes, are identical with other goods and interchangeable in all situations.
Futures Contract A contract for the future delivery of a specified commodity, currency or security on a specific date at a rate determined in the present.
G     
Gang Maritime: A group of longshoremen under a supervisor who are assigned to load or unload a portion of a vessel.
Gangway 1. The opening through which a ship is boarded.

2. A platform connecting quarterdeck and forecastle of a ship.
Gantry Crane A specialized crane which travels on a structure which can span a wide area and raises and lowers cargo. Some of them span the deck of a vessel.
Gateway 1. A major airport or seaport;

2. or the port where customs clearance takes place;

3. or a point at which freight moving from one territory to another is interchanged between transportation lines.
Geisha Bond Bond issued on the Japanese market in currencies other than yen.
General Agreement On Tariffs And Trade (GATT) Both a multilateral trade agreement aimed at expanding international trade and the organization which oversees the agreement. The main goals of GATT are to liberalize world trade and place it on a secure basis thereby contributing to economic growth and development and the welfare of the world's people. The organization, GATT, has been succeeded by the World Trade Organization (WTO).
General Average 1. loss that affects all cargo interests on board a vessel as well as the ship herself.

2. An internationally accepted rule of the sea which says when a peril threatens the survival of the ship, there may be sacrificed (thrown overboard) any cargo or supplies or ships' furnishings, and any expense incurred necessary to save the ship. If the vessel is saved, all cargo owners, ship owner, and owners of the freight revenue share pro rata in the loss.
General Cargo Rate The rate a carrier charges for the transportation of cargo which does not qualify for a lower special class or commodity rate in the carrier's tariff.
General Cargo Vessels A vessel designed to handle breakbulk cargo such as bags, cartons, cases, crates and drums, either individually or in unitized or palletized loads.
General Commodity Rate In a maritime tariff, a freight rate applicable to all commodities except those for which specific rates have been filed.
General Imports The total physical arrivals of merchandise into one country from foreign countries during a period of time..
General Liability Unlimited responsibility for an obligation, such as payment of debts of a business.
General Order (USA) The customs requirement that goods not cleared within a specific number of days after arrival of the carrier must be taken into custody of customs and deposited in a warehouse at the risk and expense of the consignee.
General Order Warehouse (USA) A bonded warehouse authorized by customs to store goods sent to General Order.
General Partnership A partnership where all partners have joint ownership. They share the profit, losses and management equally and each has personal liability for all the debts.
General Tariff A tariff that applies to countries that do not enjoy either preferential or most favored nation tariff treatment.
Generalized System Of Preferences (GSP) A program providing for free rates of duty for merchandise from beneficiary developing independent countries and territories to encourage their economic growth.
Global Bond A bond that can be traded in any United States capital market and in the Euromarket with special arrangements made for transferability between the markets.
Global Quota A quota set by a nation on the total imports of a product from all countries.
Gold Exchange Standard A monetary system adopted by some countries which did not have enough gold to go onto the gold standard so they deposited their gold with one of the leading gold standard countries and made their currency more or less freely convertible to the currency of that country.
Gold Reserves Gold retained by a nation or its central banks contributing to the nation's creditworthiness in the issuance of bonds and currency, although there may be no commitment by it to exchange gold for its currency.
Gold Standard A monetary system whereby every form of currency issued by a country is convertible on demand into its legal equivalent in gold or gold coin
Gondola Car An open railway car with sides and ends, used principally for hauling coal, sand, etc.
Goods Merchandise; supplies; raw materials; wares; commodities; products. The meaning may vary in various situations but for purposes of a contract for storage or transportation, or with reference to collateral for security, it means all things treated as movable.
Grantee 1. One to whom a grant is made; a grant being the giving or permitting as a right or privilege, an authority, a power, a license, or a property.

2. (USA) As to foreign trade zones in the US, a corporation to which the privilege of establishing, operating, and maintaining a foreign trade zone has been granted by the Foreign Trade Zone Board.
Green Card A popular name for an identity card (visa) issued by the U.S. Immigration and Naturalization Service entitling a foreign national to enter and reside in the United States as a permanent resident.
Grid Fixed margin within which exchange rates are allowed to fluctuate.
Gross 1. 12 dozen or 144 articles.

2. Total (as in "Gross Weight".)
Gross Domestic Product A measure of the market value of all goods and services produced within the boundaries of a nation. It excludes income from external enterprises or investments.
Gross National Product A measure of the market value of all goods and services produced within the boundaries of a nation plus receipts from foreign business activities and investments beyond the national boundaries.
Gross Weight The total weight of a package or a shipment, including goods and packaging.
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