Export Import Shipping Glossary of International Trade Terms and Shipping Terms.

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Glossary of International Export Import Trade Terms and Shipping Terms.

Glossary of Export Import International Trade and Shipping Terms

A B C D E F G H I J K L M N O P Q R S T U V W Y Z

Words Descriptions

Glossary of Export Import Trade Terms Starting with-AAppellate Body

Absolute Advantage(AB-AD)An absolute advantage exists in condition of when a nation or other economic region ofany country is able to produce a good or service more efficiently than a second (other)nation or its region.

Accounting Translation ExposureChanges in a organizations or corporation’s financial statements as a result of changesin currency values.

ACP African, Caribbean, and Pacific countries.

Acquisition of AssetsIn an acquisition of assets, one firm acquires the assets of another company. None ofthe liabilities supporting that asset are transferred to the purchaser.

Acquisition of Stock In an acquisition of stock, one firm buys an equity interest in another.

Acquisition PremiumIn a merger or acquisition, the difference between the purchase price and thereacquisition value of the target firm or company.

Active Fund ManagementAn investment approach that actively shifts funds either between asset classes (asset

allocation) or between individual securities (security selection).Active Income

In the U.S. tax code, income from an active business as opposed to passive investmentincome.

Activity-Based-Cost (ABC)An accounting method that allocates costs to specific products based on breakdowns ofcost drivers.

Ad valorem Tariff A tariff a ssessed as a percentage of the value of an import.ADB Asia Development Bank, head quartered located in Manila, Philippines (ASIA).

Adjusted Present Value(APV)An APV is a valuation method that separately identifies the value of an unleveredproject from the va lue of financing side effects.

Advance PaymentAdvance Payment is a Trading method in which the buyer pays for the goods beforethey are sent out , method is used when buyer is of unknown credit worthiness. It i sapplicable in International or domestic trade.

AdventureAdventure also define for marine adventure." It is a term of art in the marineinsurance business. All insured cargo owners and every shipper on that vessel are partof the adventure.

Advising BankAdvising Bank is usually in the country of the seller, whose primary function is toauthenticate the letter of credit and adv ise it to the seller, Purchase and collection ofExport Bills.

Advisory Capacity Used to indicate that a shipper's agent or representative is not empowered to makedefinitive changes or adjustments without approval of the group or individualrepresented.

African Developmental Bank (ABD)The ABD is one of four major regional developmental banks currently operating in theglobal economy; it is headquartered in Abidjan, Cote d'Ivoire.

Agency Costs The costs incurred to ensure that agents act in the best interest of the principal.

AgentSomeone who represents business in domestic and overseas market. In corporategovernance terminology, management is the agent of the principal stakeholders in aprincipal-agent relationship.

Aggregate DemandThe total demand of all potential buyers of a commodity or service. Includes allindividuals and organizations that have the ability, willingness, and authority topurchase such products.

Air WaybillA no-negotiable instrument of domestic and international air transport that functionsas a bill of lading, all information described about domestic and international trade.

All-in CostThe percentage cost of a financing alternative, including any bank fees or placementfees.

Allocation Rules of IncomeIn the U.S. tax code, these rules define how income and deductions are to be al locatedbetween domestic-source and foreign-source income.

Allocation efficiency The efficiency with which a market channels capital toward its most productive uses.Andean Pact A regional trade pact that includes Venezuela, Colombia, Ecuador, Peru, and Boliv ia.

AnnuityA level stream of equal dollar payments that lasts for a fixed time. An example of anannuity is the coupon part of a bond with level annual payments.

Annuity FactorThe term used to calculate the present value of the stream of level payments for afixed period.

Anti-Dumping LawsLaws that are enacted to prevent dumping-offering prices in the overseas market thatis lower than that at which a product is sold in its home domestic market.

APEC Asia-Pacific Economic Cooperation

AppreciationAn increase in a currency value relative to another currency in a floating exchangerate system.

ArbitrageThe process of purchasing and selling foreign exchange, stocks, bonds and othercommodities in several markets intending to make profit from the difference in price.

Arbitrage Pricing Theory (APT)An asset pricing model that assumes a linear relation between required return andsystematic risk as measured by one or more factors according to Rj = mj + b1jF1 + ... +bKjFK + ej.

Asia-Pacific Economic Cooperation(APEC)

APEC forum designed to promote economic growth, cooperation, and integrationamong member nations. The most prominent members are China, Japan, and Korea.

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Asian Development Bank (ABD)One of four major regional development banks currently operating in the globaleconomy; it is headquartered in Manila, Philippines.

Ask "offer" Rates The rate at which a market maker is willing to sell the quoted asset.

Asset Allocation Policy The target weights given to various asset classes in an investment portfolio.Assets-in-Place Those assets in which the fi rm has already invested. (Compare to growth opt ions.)

Association of South East AsianNations (ASEAN)

A loose or low economic and geopolitical affiliation that includes Singapore, Brunei,Malaysia, Thailand, the Philippines, Indonesia, and Vietnam. Future members are likelyto include Myanmar (Burma), Laos, and Cambodia.

At-the-Money OptionAn option with an exercise price that is equal to the current value of the underlyingasset.

ATC Agreement on Textiles and Clothing

Autarky In models of international trade, a situation in which there is no cross-border trade.

Aval

A guarantee of the buyer's credit prov ided by the guarantor, unless the buyer is of

unquestioned financial standing. The aval is an endorsement note as opposed to aguarantee agreement.

Avalisation Payment undertaking given by a bank in respect of a bill of exchange drawn.

Average Accounting Return (AAR)The average project earnings after taxes and depreciation divided by the average bookvalue of the investment during its life.

AEZs Refers to a scheme of Agricultural Export Zones.

Advance LicenceAdvance Licence is granted for import of inputs without payment of customs duties. Itis issued in accordance with the Policy and procedures in force and subject tofulfillment of time-bound export obligation. Such licences can be issu

AcceptanceAny agreement to purchase goods under specified terms. An agreement to purchasegoods at a stated price and under stated terms.

Ad Valorem According to valueAdvance Against Documents A loan made on the security of the documents covering the shipment.

Advising BankA bank, operating in the exporter's country, that handles LETTERS OF CREDIT for aforeign bank by notifying the exporter that the credit has been opened in his or herfavor.

Advisory CapacityA term indicating that shipper's agent or representative is not empowered to makedefinitive decisions or adjustments without approval of the group or individual

represented.Air Waybill

A BILL OF LADING that covers both domestic and international flights transportinggoods to a specified destination.

AlongsideA phrase referring to the side of a ship. Goods to be delivered "alongside" are to beplaced on the dock or barge within reach of the transport ship's tackle so that they canbe loaded aboard the ship.

Alteration A change in the boundaries of an activated zone or subzone.

ApplicantA corporation applying for the right to establish, operate and maintain a foreign-tradezone.

ArbitrageThe process of buying FOREIGN EXCHANGE, stocks, bonds and other commodities in onemarket and immediately selling them in another market at higher prices.

Asian Dollars U.S. dollars deposited in Asia and the Pacific Basin.

Attributive BasisMethod of accounting for merchandise where direct identification of the goods withthe shipment as admitted to the zone has been lost.

Glossary of Export Import International Trade Terms Starting with-BBackward Innovation Building a more basic version of an existing product for a lesser-developed market.

Balance of Payments (BOP)The BOP is the annual financial record of Foreign Payments and Foreign Receivables. OrThe BOP is the International Money Fund’s accounting system that tracks the flow of

goods, services, and capital in and out of each country.Balance of Trade (BOT) The difference between a country’s total imports and exports.

Balance SheetA statement showing a firm's accounting value on a particular date. It reflects theequation, Assets = Liabilities + Stockholders' equity.

Bank for International Settlements(BIS)

An international organization which promotes international monetary and financialcooperation among nations.

Bank-based Corporate GovernanceSystem

A system of corporate governance in which the supervisory board is dominated bybankers and other corporate insiders.

Banker's Draft A payment instrument used to make international payments.

Banker’s Acceptance A time draft drawn on and accepted by a commercia l bank.Basis The simple difference between two nominal interest rates.

Bargain Purchase OptionA lease provision allowing the lessee, to purchase the equipment for a pricepredetermined at lease inception, which is substantially lower than the expected fairmarket value at the date the option can be exercised.

BarterTrade in which goods or merchandise is exchanged directly for others import or exportwithout use of money.

Basic IRRAccept the project if IRR is greater than the discount rate; reject the project if IRR isless than the discount rate.

Basis Point Equal to 1/100 of one percent.Basis Risk The risk of unexpected change in the relationship between futures and spot prices.

Basis SwapA floating-for-floating interest rate swap that pairs two floating rate instruments atdifferent maturities (such as six-month LIBOR versus thirty-day U.S. T-bills).

Bearer BondsBonds that can be redeemed by the holder. The convention in most West Europeancountries is to issue bonds in registered form.

BenchmarkingA systematic procedure of comparing a company’s practices against the best practiceand modifying actual knowledge to achieve superior performance.

Beneficiary A party who receives a legal benefit Domestic or foreign Dealings.

BetaA measure of an asset’s sensitivity to changes in the market portfolio (in the CAPM) orto a factor (in the APT). The beta of an asset j is computed as bj = rj,k (sj/sk), where krepresents a market factor (such as returns to the market portfolio in the C

Bid rate The rate at which a market maker is willing to buy the quoted asset.

Bid-offer SpreadThe difference between the interest rate at which the bank borrows money and lendsmoney.


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Bill of Lading (B/L)A document that establishes the terms and conditions of a contract between a shipperand a shipping company under which freight is to be mov ed between specified pointsfor a specified charge. The B/L is Negotiable or Non-Negotiable forms.

Blank Endorsement The method whereby a bill of lading is made into a freely negotiable document of title.Blanket Bond A bond that coves a group of people, articles or properties.

Blanket ContractsA long-term contract in which the supplier promises to re-supply the buyers as neededat agreed-upon prices over the contracting time.

Blocked FundsCash flows generated by a foreign project that cannot be immediately repatriated tothe parent firm because of capital flow restrictions imposed by the host government.

Bond Equivalent YieldA bond quotation convention based on a 365-day year and semiannual coupons.(Contrast with effective annual yield.)

Bonded WarehouseA warehouse authorized by customs authorities for storage of goods on which paymentof duties is deferred until the goods are removed.

Bonded Warehouse - a warehouse authorized for storage of good on which payment of duty is deferreduntil the goods are removed from the warehouse.Break-Even Point Analysis Analysis of the level of sales at which a project would make zero profit.

Britton Woods AgreementAn agreement made in 1944 year the end of World War II to promote exchange ratestability and facilitate the international flow of currencies. The world Bank andIMF(International Monetary funds ) come into the existence.

Britton Woods ConferenceAn international conference held in 1944 at Britton Woods, New Hampshire, andestablished the International Monetary Fund and the World Bank.

BTPBTP means Biotechnology Park as notified by Director General of Foreign Trade on therecommendation of the Department of Biotechnology

Bonded WarehouseA warehouse authorized by CUSTOMS authorities for storage of goods on whichpayment of DUTIES is deferred until the goods are removed.

Booking An arrangement with a steamship company for the acceptance and carriage of freight.

Glossary of Export Import Foreign Trade Terms Starting with-CCAA Clean Air Act (USA)Call Option The right to buy the underlying currency at a specified price and on a specified date.

Capital (Financial) StructureThe proportion of debt and equity and the particular forms of debt and equity chosento finance the assets of the firm.

Capital Account A measure of change in cross-border ownership of long-term financial assets, includingfinancial securities and real estate.

Capital Asset Pricing Model (CAPM)An asset pricing model that relates the required return on an asset to its systematicrisk.

Capital Budgeting Planning and managing expenditures for long-lived assets.

Capital FormationThe process of increasing the amount of capital goods - also called capital stock - in acountry.

Capital Gain The positive change in the value of an asset, a negative capital gain is a capital loss.

Capital Market LineThe line between the risk-free asset and the market portfolio that represents themean-variance efficient set of investment opportunities in the CAPM.

Capital MarketsMarkets for financial assets and liabilities with maturity greater than one year,including long-term government and corporate bonds, preferred stock, and commonstock.

Capital RationingThe case where funds are limited to a fixed dollar amount and must be allocatedamong the competing projects.

Capital StructureThe mix of the various debt and equity capital maintained by a firm. Also calledfinancial structure. The composition of a corporation's securities used to finance itsinvestment activities; the relative proportions of short-term debt, long-term debt, and

Capitalism An economic system that is based on private ownership; economic development isproportionate to and dependent upon the accumulation and reinvestment of profits.

CarrierAn individual or entity that transports persons or goods for compensation under thecontract of carriage.

Cartel An agreement among, or an organization of, suppliers of a product.

Cash Against Documents (CAD)Payment for goods where a commission house or other intermediary transfers titledocuments to the buyer upon payment in cash.

Cash CoverIn a letter of credit transaction, money deposited by the applicant with the issuingbank.

Cash FlowCash generated by the firm and paid to creditors and shareholders. It can be classifiedas (1) cash flow from operations, (2) cash flow from changes in fixed assets, and (3)cash flow from changes in net working capital.

Cash in Advance (CIA)Payment for goods in which the price i s paid in full before the shipment is made. Thistype of payment is usually only made for very small shipments or when goods are madein order.

Centrally Planned EconomyAn economy in which the government, rather than free-market activity, controls theallocation of resources.

Certificate of Acceptance

Term used in leasing. A document whereby the lessee acknowledges that the

equipment to be leased has been delivered, is acceptable, and has been manufacturedor constructed according to specifications.Certificate of Analysis/certificate ofInspection

Documents that may be asked for by the importer and/or the authorities of theimporting country, as evidence of quality or conformity to specifications.

Certificate of ManufactureA statement that is usually notarised in which the producer of goods certifies that thegoods have been produced and are now avai lable to the buyer.

Certificate of OriginDocuments that may be asked for by the authorities of the importing country, asevidence of the country of manufacture of the goods.

Certificate of Product OriginA document required by certain foreign countries for tariff purpose, certifying thecountry of origin of specified goods.

Change in Net Working Capital Difference between net working capital from one period to another.Characteristic Line The line relating the expected return on a security to different returns on the market.CHIPS (Clearing House InterbankPayments System)

Financial network through which banks in the United States conduct their financialtransactions.

CITES Convention on the International Trade in Endangered Species

Civil Society Organizations (CSOs)Non-governmental and non-profit groups that work to improve society and the humancondition.


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Clean Bill of LadingA receipt for goods issued by a carrier that indicates that the goods were received inapparently good order and without damage.

Clean Collection Collection in which only the financia l document i s sent through the banks.

ClearanceThe completion of customs entry requirements that results in the release of goods tothe importer.

ClearingThe settlement of a transaction, often involving exchange of payments and/ordocumentation.

Closed-End FundA mutual fund in which the amount of funds under management is fixed and ownershipin the funds is bought and sold in the market like a depository receipt.

Codex Codex Alimentarius Commission (a world food standards body)

Collection OrderIn a collection, the document in which the seller instructs the banks as to how thecollection is to be conducted.

Command EconomyAn economy based on government ownership and/or control of society's resources;

during the 20th century, the dominant form of command economy was communism.

Commercial DocumentGeneral term for documents describing various aspects of a transaction, e.g.commercial invoice, transport document, insurance document, certificate of origin,certificate of inspection etc.

Commodity Price Risk The risk of unexpected changes in a commodity price, such as the price of oil.

Commodity SwapA swap in which the (often notional) principal amount on at least one side of the swapis a commodity such as oil or gold.

Common Carrier An organization that transports persons or goods for a fee.

Comparative AdvantageA comparative advantage exists when a nation or economic region is able to produce aproduct at a lower opportunity cost compared to another nation or region.

Compliant DocumentsDocuments presented under a letter of credit that comply with all its terms andconditions. The banks are only obliged to pay the beneficiary if documents are totallycompliant.

Compound InterestInterest that is earned both on the initial principal and on interest earned on the initialprincipal in previous periods. The interest earned in one period becomes in effect partof the principal in a following period.

Compound Value Value of a sum after investing it over one or more periods. Also ca lled future value.

Compounding

Process of reinvesting each interest payment to earn more interest. Compounding is

based on the idea that interest itself becomes principal and therefore also earnsinterest in subsequent periods.Confirming Bank Bank that adds its payment undertaking to a letter of credit.Consignee Party to whom goods are to be delivered.

ConsignmentDelivery of merchandise from an exporter (the consignor) to an agent (the consignee)under agreement that the consignee sells the merchandise of the account of theconsignor, while the consignor retains title to the goods until the consignee sells them.

Consolidated IncomeThe sum of income across all of the multinational corporation’s domestic and foreignsubsidiaries.

ConsolidationA form of corporate reorganization in which two firms pool their assets and liabilitiesto form a new company.

Corporate Governance The way in which major stakeholders exert control over the modern corporation.

Correspondent Bank A bank that, in its own country, handles the business of a foreign bank.Country Risk The political and financial risks of conducting business in a particular foreign country.Coupon Swap A fixed-for-floating interest rate swap.Credit Risk Insurance Insurance that covers the risk of non-payment for delivered goods.

Consular StatementA document required by some foreign countries, describing a shipment of goods andshowing information such as the consignor, consignee, and value of shipment. Certified

by a consular official of the foreign country, it is used by the country's officials

Contingency InsuranceContingency insurance protects the exporter in any si tuation in which exporterresponsibility relied on the buyer to insure, but sustained a loss because of inadequatecoverage from that source. It will cover situations in which the FOB endorsement.

Contingent ClaimClaim whose value is directly dependent on, or is contingent on, the value of itsunderlying assets. For example, the debt and equity securities issued by a firm derivetheir value from the total value of the firm.

Continuous Compounding Interest compounded continuously, every instant, rather than at fixed intervals.

Continuous Quotation SystemA trading system in which buy and sell orders are matched with market makers as theorders arrive, ensuring liquidity in individual shares.

Contract Manufacturing A firm allowing another firm to manufacture a pre-specified product.

Contribution MarginAmount that each additional product, such as a jet engine, contributes to after-taxprofit of the whole project: (Sales price - Variable cost) X (1 - T), where T is thecorporate tax rate.

Controlled Foreign Corporation(CFC)

In the U.S. tax code, a foreign corporation owned more than 50 percent either in termsof market value or voting power.

Convertible BondsBonds sold with a conversion feature that allows the holder to convert the bond intocommon stock on or prior to a conversion date and at a pre specified conversion price.

Convertible Currency A currency that can be traded for other currencies at wi ll.

Convex Tax ScheduleA tax schedule in which the effective tax rate is greater at high levels of taxableincome than at low levels of taxable income. Such a schedule results in progressivetaxation.

Corporate CultureThe set of values, beliefs, relationships between individuals and functions that guidethe decisions of a company to achieve its objectives.

Corporate Social ResponsibilityThe responsibilities that corporations (including MNCs) have to workers and theirfamilies, to consumers, to investors, and to the natural environment.

CorporationForm of business organization that is created as a distinct "legal person" composed ofone or more actual individuals or legal entities. Primary advantages of a corporationinclude limited l iability, ease of ownership, transfer, and perpetual succession.

CorrelationA measure of the co variability of two assets that is scaled for the standard deviationsof the assets (rAB = sAB / sAsB such that -1 < rAB < +1).

Corruption Perceptions Index (CPI)A ranking of countries by level of corruption that is researched and published byTransparency International (TI), the world's leading non-governmental organizationdedicated to fighting corruption.

Cost and Freight(C&F)A pricing term that indicates that the cost of the goods and freight charges areincluded in the quoted price.


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Counter Credit Another name for back-to-back letter of credit.

Counter TradeThe sale of goods or services that are paid for in whole or part by the transfer of goodsor services from a foreign country.

Coupon The stated interest on a debt instrument.Covariance A measure of the co variability of two assets (sAB = sAsB rAB).

Cover NoteInsurance document evidencing that insurance cover for a consignment has been takenout, but not giving full details.

Cross-HedgeA futures hedge using a currency that is d ifferent from, but closely related to, thecurrency of the underlying exposure.

Cost of Equity CapitalThe required return on the company's common stock in capital markets. It is alsocalled the equity holders' required rate of return because it is what equity holders canexpect to obtain in the capital market. It is a cost from the firm's perspective.

Countervailing Duties

Duties levied on an imported good that has been unfairly subsidized by a foreign

government. Imposing duties on the good is meant to raise the product's price to a "fairmarket value".CTD WTO Committee on Trade and Development

CultureCollective mental paradigms that a society imparts to individuals in the form ofbehavior patterns, shared values, norms and institutions.

Cumulative Translation Adjustment(CTA)

An equity account under FAS #52 that accumulates gains or losses caused by translationaccounting adjustments.

Currency (Foreign Exchange) Risk The risk of unexpected changes in foreign currency exchange rates.

Currency Coupon SwapA fixed-for-floating rate no amortizing currency swap traded primarily throughinternational commercial banks.

Currency Cross-HedgeA hedge of currency risk using a currency that is correlated with the currency in whichthe underlying exposure is denominated.

Currency of ReferenceThe currency that is being bought or sold. It is most convenient to place the currencyof reference in the denominator of a foreign exchange quote.

Currency OptionA contract giving the option holder the right to buy or sell an underlying currency at aspecified price and on a specified date. The option writer (seller) holds the obligationto fulfill the other side of the contract.

Currency Swap

A contractual agreement to exchange a principal amount of two different currencies

and, after a prearranged length of time, to give back the original principal. Interestpayments in each currency are also typically swapped during the life of the agreementCurrent Account A measure of a country’s international trade in goods and serv ices.

Current Account BalanceA broad measure of import-export activity that includes services, travel and tourism,transportation, investment income and interest, gifts, and grants along with the tradebalance on goods.

Custom UnionA form of regional economic integration group that eliminates tariffs among membernations and establishes common external tariffs.

Customhouse BrokerA person or firm obtains the license from the treasury department of its Country whenrequired, and help clients (importers) to enter and declare goods through customs.

CustomsThe authorities designated to collect duties levied by a country on imports andexports.

CarnetA customs document permitting the holder to carry or send merchandise temporarilyinto certain foreign countries without paying duties or posting bonds.

Cash with Order (C.W.O.)Payment for goods in which the buyer pays when ordering and in which the transactionis binding on both parties.

Certificate of InspectionA document certifying that merchandise was in good condition immediately prior to itsshipment.

Cost And Freight (C & F) A pricing term indicating that the cost of the goods and freight charges are included inthe quoted price.

Charter PartyWritten contract between the owner of a vessel and a "chartered" who rents use of thevessel or a part of its freight space.

Cost and Insurance (C & I)A pricing term indicating that the cost of the product and insurance are included in thequoted price.

Cost, Insurance, FreightA pricing term indicating that the cost of the goods, insurance, and freight are includedin the quoted price.

Clean Draft A draft to which no documents have been attached.

Collection PapersAll documents submitted to a buyer for the purpose of receiving payment for ashipment.

Commercial AttachmentThe commerce expert on the diplomatic staff of his/her country's embassy or largeconsulate.

Commercial Invoice An itemized list of goods shipped, usually among an exporter's COLLECTION PAPERS.

Common CarrierAn individual, partnership, or corporation that transports persons or goods forcompensation.

Confirmation of Letter of CreditA letter of credit, issued by a foreign bank, whose validity has been confirmed by aNationalized Indian bank.

Consignment Delivery of merchandise from an exporter (consignor) to an agent (consignee) underagreement that the agent sell the merchandise for the account of the exporter.

Constructive TransferA legal fiction which permits acceptance of a Customs entry for merchandise in a zonebefore its physical transfer to the Customs territory.

Consular InvoiceA document, required by some foreign countries, describing a shipment of goods andshowing information such as the consignor, consignee, and value of the shipment.

Convertible Currency A currency that can be bought and sold for other currencies at will.

Corporation (Private)Any corporation which is organized for the purpose of establishing, operating andmaintaining a foreign-trade zone and which is chartered under a special act of theState within which it is to operate such a zone.

Corporation (Public)A State, political subdivision thereof, a municipality, a public agency of a State,political subdivision thereof, or municipality, or a corporate municipal instrumentalityof one or more States.

Correspondent Bank A bank that, in its own country, handles the business of a foreign bank.

Counter TradeThe sale of goods or services that are paid in whole or in part by the transfer of goodsor services from a foreign country.

Credit Risk Insurance Insurance designed to cover risks of nonpayment for delivered goods.


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Customs Terri tory Terri tory of the India in which the general tari ff laws of the India apply.Custom House Agent (CHA) An individual or firm licensed to enter and clear goods through Customs.

Glossary of EXIM International Trade Terms Starting with-DDealing Desk or Trading Desk The desk at an international bank that trades spot and forward foreign exchange.Debt capacity The amount of debt that a firm chooses to borrow to support a project.

Debt-for-Equity SwapA swap agreement to exchange equity (debt) returns for debt (equity) returns over aprearranged length of time.

Decision Trees A graphica l analysis of sequential decisions and the like ly outcomes of those decisions.

Deferred Payment CreditA type of letter of credit which provides for payment some time after presentation ofthe shipping documents by the exporter.

DevaluationThe official lowering of the value of one country's currency in terms of one or moreforeign currencies.

Developing Country (DCs)

A country that is in the process of becoming industrialized; the poorer nations of the

world.

Deliverable InstrumentThe asset underlying a derivative security. For a currency option, the deliverableinstrument is determined by the options exchange and is either spot currency or anequivalent value in futures contracts.

Delta-Cross-HedgeA futures hedge that has both currency and maturity mismatches with the underlyingexposure.

Delta-HedgeA futures hedge using a currency that matches the underlying exposure and a maturitydate that is different from, but preferably close to, the maturity of the underlyingexposure.

Demand ManagementA business process with the intention to coordinate and influence all sources of demandfor a firm’s products.

Depository ReceiptA derivative security issued by a foreign borrower through a domestic trusteerepresenting ownership in the deposit of foreign shares held by the trustee.

DepreciationA decrease in a currency value relative to another currency in a floating exchange ratesystem.

Derivative Security A financial security whose price is derived from the price of another asset.

DevaluationA decrease in a currency value relative to another currency in a fixed exchange ratesystem.

Developed Countr ies The richer, more industrialized countries in the world.DFID Department for International Development (UK)

Difference CheckThe difference in interest payments that is exchanged between two swap counterparties.

Digital DivideThe digital divide refers to the widening technological gap between the richer and thepoorer countries of the world.

Direct Costs of Financial DistressCosts of financial distress that are directly incurred during bankruptcy or liquidationproceedings.

Direct ExportingMarketer takes direct responsibility for its products abroad by selling them directly toforeign customers or through local representatives in foreign markets.

Direct Financing LeaseA non-leveraged lease by a lesser in which the lease meets any of the definitionalcriteria of a capital lease, plus certain additional criteria.

Direct Product ProfitabilityMeasuring the direct costs associated with handling a product from the warehouse untila customer buys from the retail store.

Direct TermsThe price of a unit of foreign currency in domestic currency terms, such as INR45.70/USD for a India resident. (Contrast with indirect quote.)

Discount If a bond is selling below its face value, it is said to sell at a discount.

Discounted Cash Flow

A valuation methodology that discounts expected future cash flows at a discount rate

appropriate for the ri sk, currency, and maturity of the cash flows.

Discounted PaybackThe length of time needed to recoup the present value of an investment; sometimesused when investing in locations with high country risk.

Discounted Payback Period RuleAn investment decision rule in which the cash flows are discounted at an interest rateand the payback rule is applied on these discounted cash flows.

DiscountingCalculating the present value of a future amount. The process is the opposite ofcompounding.

Discretionary ReservesBalance sheet accounts that are used in some countries to temporarily store earningsfrom the current year or the recent past.

Discriminatory PricingThe practice that selling a product or service at different prices that do not reflect aproportional difference in costs.

DispatchAn amount paid by a vessel's operator to a charter if loading or unloading is completedin less time than stipulated in the charter party.

DistributorA Foreign agent who sells for a supplier directly and maintains an inventory of thesupplier’s product.

Diversifiable (unique) (unsystematic)risk

A risk that specifically affects a single asset or a small group of assets. Also calledunique or unsystematic risk.

Doc Department of Commerce (USA)

Dock Receipt A receipt issued by an ocean carrier to acknowledge receipt of a shipment at thecarrier's dock or warehouse.

Dock StatementA receipt issued by an ocean carrier to acknowledge the receipt of a shipment at thecarrier's dock or warehouse facilities.

Domestic BondsBonds issued and traded within the internal market of a single country anddenominated in the currency of that country.

Domestic LiquidityThe aggregate of money supply, quasi-money or savings and time deposits, and depositsubstitutes.

Draft (trade bill, bill of exchange)A means of payment whereby a drawer (the importer) instructs a drawee (either theimporter or its commercial bank) to pay the payee (the exporter).

DSB Dispute Settlement Body

DSP Dispute Settlement PanelDSU Dispute Settlement Understanding

Dual Pricing The practice of selling identical products in different markets for different prices.

DumpingSelling goods or merchandise in another country at a price below the price at whichthe same merchandise is sold in the home market or selling such merchandise belowthe costs incurred in production and shipment. Dumping is an illegal trade practice.


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Duty A tax imposed on imports by the customs authority of a country.

DGFTDirectorate General of Foreign Trade, which is headed by the Director General ofForeign Trade. The office of the DGFT is responsible for formulating and execution ofForeign Trade Policy, including licensing. Formerly (till 1991), was known as the Chief

Duty Exemption/scheme Duty FreeImport of Inputs

Allows duty-free import of inputs for exports under Advance Licence, Duty EntitlementPass Book (DEPB) and Duty Free Replenishment Certificate (DFRC) Scheme.

DEPBRefers to the Duty Entitlement Pass Book to neutralise the incidence of basic customsduty on the import content of export product. This is provided by way of grant of dutycredit against the export product at specified rates. The DEPB Scheme

DFRCRefers to the Duty Free Replenishment Certificate Scheme which was introduced from1/4/2000 replacing. Transferable Advance Licensing Scheme. The scheme is ava ilableto merchant exporters as well as to manufacturer exporters. However,

Deemed ExportsRefers to those transactions in which the goods supplied do not leave the country and

the payment for the goods is received by the supplier in India.Date Draft

A draft that matures in a specified number of days a fter the date it is issued, withoutregard to the date of "ACCEPTANCE".

DeactivisationVoluntary discontinuation of the activation of an entire zone or subzone by the granteeor operator.

DefaultAn act or omission that will result in a claim for duties, taxes, charges or liquidateddamages under the FTZ Operator's Bond

Deferred Payments CreditType of "LETTER OF CREDIT" providing for payment some time after presentation ofshipping documents by exporter.

Destination Control StatementAny of various statements that the U.S. Government requires to be displayed on exportshipments and that specify the destinations for which export of the shipment has beenauthorized.

DevaluationThe official lowering of the value of one country's currency in terms of one or moreforeign currencies.

Discrepancy - Letter of Credit When documents presented do not conform to the letter of credit.

Documentary Against Acceptance(D/A)

Instructions given by a shipper to a bank indicating that documents transferring title togoods should be delivered to the buyer only upon the buyer's acceptance of theattached draft.

DraftAn unconditional order in writing from one person (the drawer) to another (thedrawee), directing the drawee to pay a specified amount to a named drawer at a fixedor determinable future date.

DrawbackArticles manufactured or produced in the India with the use of imported components orraw materials and later exported are entitled to a refund of the duty charged on theimported products or components.

Drawee The individual or firm on whom a draft is drawn and who owes the stated amount.

DrawerThe individual or firm that issues or signs a draft and thus stands to receive payment ofthe stated amount from the drawee.

DumpingExporting/Importing merchandise into a country below the costs incurred in productionand shipment.

Duty A tax imposed on imports by the customs authority of a country.

Glossary of Export Import Trade Terms Starting with-E

Earnings Response CoefficientThe relation of stock returns to earnings surprises around the time of corporateearnings announcements.

Eclectic ParadigmA theory of the multinational firm that posits three types of advantage benefiting themultinational corporation: ownership-specific, location-specific, and marketinternalisation advantages.

Economic ExposureChange in the value of a corporation’s assets or liabilities as a result of changes incurrency values.

Economic FreedomEconomic freedom occurs when individuals and businesses make most of the economicdecisions in an economy.

Economic IntegrationThe integration of commercial and financial activities among countries through theabolishment of economic discrimination.

Economic UnionA group that combines the economic characteristics of a common market with somedegree of harmonization of monetary and fiscal policies.

Economic Value AddedA method of performance evaluation that adjusts accounting performance with acharge reflecting investors’ required return on investment.

Economies of Scale Achiev ing lower average cost per unit through a la rger sca le of production.

Economies of Vertical IntegrationAchieving lower operating costs by bringing the entire production chain within the firmrather than contracting through the marketplace.

Effective Annual Interest Ratethe interest rate as if it were compounded once per time period rather than severaltimes per period.

Effective Annual YieldCalculated as (1+i/n)n, where i is the stated annual interest rate and n is the numberof compounding periods per year. (Contrast with bond equivalent yield and moneymarket yield.)

Efficient Front ier The mean-variance efficient portion of the investment opportunity set.

Efficient Market A market in which prices reflect all relev ant information.

EmbargoA type of economic sanction that totally disallows the imports of a specific product orall products from a specific country.

Emerging MarketAn emerging market has a very high growth rate, which yields enormous marketpotential. It is distinguished by the recent progress it has made in economicliberalization.

Emerging Stock MarketsThe stock markets of emerging economies. These markets typically have higherexpected returns than established markets but also higher r isk.

Employment Rate The rat io, in percent, of the number of employed persons to total labor force.

Endogenous UncertaintyPrice or input cost uncertainty that is within the control of the firm, such as when theact of investing reveals information about price or input cost.

Engagement The assumption of payment responsibility in respect of a letter of credit, e.g.

Equity-Linked EurobondsA Eurobond with a convertibility option or warrant attached. Eurobonds: Fixed rateEurocurrency deposits and loans and Eurocurrencies with longer maturities than fiveyears.

ErosionCash-flow amount transferred to a new project from customers and sales of otherproducts of the firm.


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EuroThe single currency of the European Economic and Monetary Union (EMU) introduced inJanuary 1999. EMU members are Austria, Belgium, Finland, France, Germany, Ireland,Italy, Luxembourg, Netherlands, Portugal, and Spa in.

Eurobond A bond that is denominated in a currency other than that of the country of issue.

EurocurrenciesDeposits and loans denominated in one currency and traded in a market outside theborders of the country issuing that currency (like : Eurodollars).

Eurocurrency MarketA money market for currencies held in the form of deposits in countries other than thatwhere the currency is issued.

Eurodollars Dollar-denominated deposits held in a country other than the United States.European Bank for Reconstructionand Development (EBRD)

One of four major regional development banks currently operating in the globaleconomy.

European Currency Unit (ECU)A trade-weighted basket of currencies in the European Exchange Rate Mechanism(ERM) of the European Union.

European Exchange ate Mechanism(ERM) The exchange rate system used by countries in the European Union in which exchangerates are pegged within bands around an ERM central value.European Monetary System (EMS) An exchange rate system based on cooperation between European Union central banks.

European Option An option that can be exercised only at expiration. (Contrast with American opt ion.)

European TermsA foreign exchange quotation that states the foreign currency price of one U.S. dollar.(Contrast with American terms.)

European Union (EU)An intergovernmental organization which coordinates foreign, economic, and judicialpolicy among its 25 member nations.

Exchange RateThe price of one currency in terms of another, i.e. the number of units of one currencythat may be exchanged for one unit of another currency.

Exchange RiskThe risk that losses may result from the changes in the relative values of differentcurrencies.

Exercise Price The price at which an option can be exercised (also called the striking price).

Exim BankExport-Import Bank of the India. Provides guarantees of working capital loans forIndian exporters, guarantees the repayment of loans or makes loans to foreignpurchasers of Indian goods and services.

Exogenous Uncertainty Price or input cost uncertainty that is outside the control of the firm.

Expiry DateThe date when a letter of credit is no longer valid - i.e. the date beyond which it

cannot be used.Explicit Tax

A tax that is explicitly collected by a government; includes income, withholding,property, sales, and value-added taxes and tariffs.

ExportAny resource, intermediate good, or final good or service that producers in one countrysell to buyers in another country.

Export Management CompanyA foreign or domestic company that acts as a sales agent and distributor for domesticexporters in international markets.

Export Management CompanyA private firm that transacts export business on behalf of its client companies in returnfor a commission, salary, or retainer.

Export BrokerAn individual or firm that helps to locate and introduce buyers and seller ininternational business for a commission but does not take part in actual salestransaction.

Export LicenseA general export license covers the exportation of goods not restricted under the termsof a validated export license. No formal application or written authorization is neededto ship exports under a general export license.

Export RestraintsQuantitative restrictions imposed by exporting countries to limit exports to specifiedforeign markets, usually as a follow-up to formal or informal agreements reached withimporting countries.

Export Subsidies Any form of government payment that helps an exporter or manufacturing concern tolower its export costs.

Export Trading Company (ETC)A company that facilitates the export of goods and services. An ETC can either act asthe export department for producers or take title to the product and export for its ownaccount.

Expropriation A specific type of political risk in which a government seizes foreign assets.

External MarketA market for financial securities that are placed outside the borders of the countryissuing that currency.

Extraterritoriality A government practice which applies its laws outside its territorial boundaries.

Exim PolicyRefers to Export and Import (Exim) Policy. Exim Policy has got incorporated into thecomprehensive Foreign Trade Policy, which was announced by the Commerce &Industry Minister on 31st August, 2004.

EPZs/EOUsEPZs means Export Processing Zones which are special enclaves, separated from theDomestic Tariff Area (DTA), to provide an internationally competitive duty-freeenvironment for export production. EOU means Export Oriented Units.

E-CommerceRefers to electronic commerce. In the context of Foreign Trade Policy, e-commercerelates to electronic filing and processing of applications etc.

EPCGEPCG refers to the Export Promotion Capital Goods (EPCG) Scheme, which gives themanufacturer facility for import of capital goods for export production at concessionalrate of duty (5 per cent) against certain level of export .

Exchange PermitA government permit sometimes required by the importer's government to enable theimporter to convert his or her own country's currency into foreign currency with whichto pay a seller in another country.

Exchange RateThe price of one currency in terms of another, i.e., the number of units of one currencythat may be exchanged for one unit of another currency.

Exhibition The showing of merchandise within a zone, usually to prospective buyers.

Export Commission HouseAn organization which, for a commission, acts as a purchasing agent for a foreignbuyer.

Export LicenseA government document that permits the "Licensee" to engage in the export ofdesignated goods to certain destinations.

Glossary of Export Trade Terms Starting with-FFace Value The value of a bond that appears on its face. Also referred to as par value or principal.

Factor ModelA model that assumes a linear relation between an asset’s expected return and one ormore systematic risk factors.

FactoringSale of an accounts receivable balance to buyers (factors) that are willing and able tobear the costs and risks of credit and collections.


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Financial (Capital) StructureThe proportion of debt and equity and the particular forms of debt and equity chosento finance the assets of the firm.

Financial ContagionThe spread of a financial crisis from one country or region to other countries orregions.

Financial Engineering The process of innovation by which new financial products are created.

Financial InnovationThe process of designing new financial products, such as exotic currency options andswaps.

Financial Markets Markets for financial assets and liabilities.

Financial Price RiskThe risk of unexpected changes in a financial price, including currency (foreignexchange) risk, interest rate risk, and commodity price risk.

Financial RiskFinancial risk refers to unexpected events in a country’s financial, economic, orbusiness life.

Financial Strategy The way in which the firm pursues its financial objectives.

Fixed Cost A cost that is fixed in total for a given period of time and for given volume levels. It isnot dependent on the amount of goods or services produced during the period.

Financial PolicyThe corporation’s choices regarding the debt-equity mix, currencies of denomination,maturity structure, method of financing investment projects, and hedging decisionswith a goal of maximizing the value of the firm to some set of stakeholders.

First-to-Market AdvantageAlso know as "first-mover advantage." The idea of first-mover advantage is that theinitial occupant of a strategic position or niche (market segment) gains access toresources and capabilities that a follower cannot match.

Fixed Exchange Rate SystemAn exchange rate system in which governments stand ready to buy and sell currency atofficial exchange rates.

Fixed Forward Contract Currency is bought or sold at a given future date.

Floating Currency SystemAn exchange rate system under which a government is not obligated to declare that itscurrency is convertible into a fixed amount of another currency.

Floating Exchange RateAn exchange rate system in which currency values are allowed to fluctuate accordingto supply and demand forces in the market without direct interference by governmentauthorities.

FoB EndorsementUsed with FOB, FAS, C&F, or CFR (but not CIF) quotations, FOB sales endorsement to anopen marine policy can cover transit risk from the point of origin until title transfers.

In these instances, the exporter relies on the importer to insure.

Force MajeureThe title of a standard clause in marine contracts exempting the parties fornon-fulfillment of their obligations as a result of conditions beyond their control, suchas Acts of God, war.

Foreign AidA grant of money, technical assistance, capital equipment, or other assistance typicallyextended by richer nations to poorer nations.

Foreign BondsBonds that are issued in a domestic market by a foreign borrower, denominated indomestic currency, marketed to domestic residents, and regulated by the domesticauthorities.

Foreign BranchA foreign affiliate that is legally a part of the parent firm. In the U.S. tax code, foreignbranch income is taxed as it is earned in the foreign country.

Foreign Debt Money owed by a nation to foreign investors, banks, or governments.

Foreign Direct investment (FDI) The act of building productive capacity directly in a foreign country.Foreign Equity Requirements Investment rules that limit foreign ownership to a minority holding is a company.

Foreign ExchangeCurrency of another country, or a financial instrument that facil itates payment fromone currency to another.

Foreign Exchange (Currency) Risk The risk of unexpected changes in foreign currency exchange rates.

Foreign Exchange BrokerBrokers serving as matchmakers in the foreign exchange market that do not put their

own money at risk.Foreign Exchange Dealer A financial institution making a market in foreign exchange.

Foreign Exchange MarketsNetworks of commercial banks, investment banks, and other financial institutions thatconvert, buy, and sell currencies in the global economy.

Foreign Trade ZoneA physical area in which the government allows firms to delay or avoid paying tariffson imports.

Foreign-Source Income Income earned from foreign operations.

ForfaitingA form of factoring in which large, medium- to long-term receivables are sold to buyers(forfaiters) that are willing and able to bear the costs and risks of credit andcollections.

Forward ContractA commitment to exchange a specified amount of one currency for a specified amountof another currency on a specified future date.

Forward DiscountA currency whose nominal value in the forward market is lower than in the spotmarket. (Contrast with forward premium.)

Forward MarketA market for forward contracts in which trades are made for future delivery accordingto an agreed-upon delivery date, exchange rate, and amount.

Forward Parity When the forward rate is an unbiased predictor of future spot exchange rates.

Forward PremiumA currency whose nominal value in the forward market is higher than in the spot

market. (Contrast with forward discount.)

Franchise AgreementAn agreement in which a domestic company (the franchiser) licenses its trade nameand or business system to an independent company (the franchisee) in a foreignmarket.

FranchisingA parent company grants another independent entity the privilege to do business in apre-specified manner, including manufacturing, selling products, marketing technologyand other business approach.

Free Cash FlowCash flow after all positive-NPV projects have been exhausted in the firm’s main line ofbusiness.

Free PortAn area such as a port city into which merchandise may legally be moved withoutpayment of duties.

Free Trade Area of the Americas(FTAA)

A proposed hemispheric trade zone that would cover all of the countries in North,South, and Latin America. The FTAA is highly controversial.

Free Trade ZoneAn area designated by the government to which goods may be imported for processingand subsequent export on duty-free basis. Merchandise may be stored, used ormanufactured in the zone and re-exported without duties being paid.


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Freely Floating Exchange RateSystem

An exchange rate system in which currency values are allowed to fluctuate accordingto supply and demand forces in the market without direct interference by governmentauthorities.

Freight ForwarderAn independent business that handles export shipment on behalf of the shipper withoutvested interest in the products. A freight forwarder is a good source of information andassistance on export regulations and documentation.

Freight Shippers (FreightForwarders)

Agents used to coordinate the logistics of transportation.

Frequency Distribution The organization of data to show how often certain values or ranges of values occur.

Full Payout LeaseA lease in which the lesser recovers, through the lease payments, all costs incurred inthe lease plus an acceptable rate of return, without any reliance upon the leasedequipment's future residual value.

Fundamental Analysis

A method of predicting exchange rates using the relationships of exchange rates to

fundamental economic variables such as GNP growth, money supply, and tradebalances.

Future ValueValue of a sum after investing it over one or more periods. Also called compoundvalue.

Futures Commission Merchant A brokerage house that is authorized by a futures exchange to trade with retail clients.

Futures ContractA commitment to exchange a specified amount of one currency for a specified amountof another currency at a specified time in the future. Futures contracts areperiodically marked-to-market,

FTPRefers to Foreign Trade Policy, announced by the Commerce & Industry M inister on 31stAugust, 2004. It is a 5-year Policy (September 2004 -- March 2009), which takes effectfrom September 1, 2004.

FTWZFree Trade and Warehousing Zone, a new scheme announced in the Foreign TradePolicy 2004-2009.

FoBFob means Free on Board - i.e., when an exporter delivers goods "free on board", hepays all charges involved in getting them actually onto the ship.

First in-First Out (FIFO)An accounting method based on an assumption regarding the flow of goods that olderstock is disposed of first, in accordance with good merchandising policy.

Force MajeureThe title of a standard clause in marine contracts exempting the parties for nofulfillment of their obligations as a result of conditions beyond their control, such as

earthquakes, floods, or war.Foreign Exchange The currency or credit instruments of a foreign country.

Foreign First (FOFI)An accounting method based on an assumption regarding the flow of goods that foreignstatus merchandise is disposed of first.

Foreign Sales AgentAn individual or firm that serves as the foreign representative of a domestic supplierand seeks sales abroad for the supplier.

Foreign-Trade Zone/Free Trade ZoneA port designated by the government of a country for duty-free entry of anynon-prohibited goods. Merchandise may be stored, displayed, or used formanufacturing, etc., within the zone and re-exported without duties being paid.

Foreign -Trade Zones ActThe Foreign-Trade Zones Act of June 18, 1934, (48 Stat. 998-1003; 19 U.S.C. 81a-81u) asamended.

Foul Bill of LadingA receipt of goods issued by a carrier with an indication that the goods were damagedwhen received.

Free Alongside(F.A.S.)A pricing term indicating that the quoted price includes the cost of delivering thegoods alongside a designated vessel.

Free in (F.I.)A pricing term indicating that the charter of a vessel is responsible for the cost ofloading and unloading goods from the vessel.

Free Port

An area such as a port city into which merchandise may be legally moved without

payment of duties.Freight Forwarder An independent business which handles export shipments for compensation.

Glossary of Import Trade Terms Starting with-G

G-7A formal organization of seven highly industrialized democracies: Canada, France,Germany, Italy, Japan, the United Kingdom, and the United States.

G-8 The G-7 countries plus Russia.Generally Accepted AccountingPrinciples (GAAP)

A common set of accounting concepts, standards, and procedures by which financialstatements are prepared.

General Agreement on Tariffs andTrade (GATT)

A post-World War II agreement designed to promote freer international trade amongthe nations of the world. The GATT was replaced by the World Trade Organization(WTO) in 1994.

Generalized Autoregressiveconditional Heteroskedasticity

A time series model in which returns at each instant of time are normally distributedbut volatility is a function of recent history of the series.

Geocentric MultinationalA multinational in which the subsidiaries are neither satellites nor independent citystates, but parts of a whole whose focus is on worldwide objectives as well as localobjectives, each part making its unique contribution with its unique competence.

Global BondA bond that trades in the Eurobond market as well as in one or more national bondmarkets.

Global Economy The international network of individuals, businesses, governments, and multilateralorganizations which collectively make production and consumption decisions.

GlobalizationA global movement to increase the flow of goods, services, people, real capital, andmoney across national borders in order to create a more integrated andinterdependent world economy.

Gold Exchange StandardAn exchange rate system used from 1925 to 1931 in which the United States andEngland were allowed to hold only gold reserves while other nations could hold gold,U.S. dollars, or pounds sterling as reserves.

Gold StandardAn exchange rate system used prior to 1914 in which gold was used to settle nationaltrade balances. Also called the classical gold standard.

GoodwillThe accounting treatment of an intangible asset such as the takeover premium in amerger or acquisition.

GradualismA steady and calculated approach to transforming an economy from communism tocapitalism.

Gray-Market ImportsGray-market imports are parallel distribution of genuine goods by intermediaries otherthan authorized channel members.


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GreenfieldA form of investment in which the firm designs and builds a new factory from scratch,starting with nothing but a

GreenmailBuying shares on the open market in the hope that the target’s business partners willbuy back the shares at inflated prices.

Gross Domestic Product (GDP)A measure of the market value of goods and services produced by a nation. UnlikeGross National Product, GDP excludes profits made by domestic firms overseas, as wellas the share of reinvested earning in domestic firms' foreign-based operations.

Growing PerpetuityA constant stream of cash flows without end that is expected to ri se indefinitely. Forexample, cash flows to the landlord of an apartment building might be expected to risea certain percentage each year.

Growth OptionsThe positive-NPV opportunities in which the firm has not yet invested. The value ofgrowth options reflects the time value of the firm’s current investment in real assets aswell as the option v alue of the firm’s potential future investments.

Growth Stocks Stocks with high price/book or price/earnings ratios. Historically, growth stocks havehad lower average returns than value stocks (stocks with low price/book or PE ratios)in a variety of countries.

Guideline LeaseA lease written under criteria established by the IRS to determine the availability oftax benefits to the lesser.

GATT/General Agreement on TariffsAnd Trade

A multilateral treaty intended to help reduce trade barriers between the signatorycountries and to promote trade through tariff concessions.

GranteeA corporation to which the privilege of establishing, operating, and maintaining aforeign-trade zone has been granted by the Foreign-Trade Zones Board.

Gross Weight The full weight of a shipment, including goods and packaging.

Glossary of Import Export Trade Terms Starting with-HHarmonized Tariff Schedule (HTS) A method of classification used by many countries to determine tariffs on imports.Hedge Qual ity Measured by the r-square in a regression of spot rate changes on futures price changes.Hedge Ratio The ratio of derivatives contracts to the underlying risk exposure.

HedgingReducing the risk of a cash position by using the futures instruments to offset the pricemovement of the cash asset.

High-Withholding-Tax InterestIncome

In the U.S. tax code, interest income that has been subject to a foreign grosswithholding tax of 5 percent or more.

Heavily Indebted Poor Countries(HIPC) Initiative

The HIPC Inititiative is a major international response to the burdensome externaldebt held by the world's poorest, most indebted countries. It originated in 1996 as ajoint undertaking of the World Bank and the International Monetary Fund (IMF).

Hedge

A position or operation that offsets an underlying exposure. For example, a forwardcurrency hedge uses a forward currency contract to offset the exposure of anunderlying position in a foreign currency. Hedges reduce the total variability of thecombined

Hedge FundsPrivate investment partnerships with a general manager and a small number of limitedpartners.

Hedge PortfolioThe country-specific hedge portfolio in the International Asset Pricing Model serves asa store of value (like the risk-free asset in the CAPM) as well as a hedge against thecurrency risk of the market portfolio.

Historical Volatility Volatility estimated from a historical time series.Holding-Period Return The rate of return over a given period.

Home Asset Bias The tendency of investors to over invest in assets based in their own country.

Homogeneous ExpectationsIdea that all individuals have the same beliefs concerning future investments, profits,and dividends.

HyperinflationAn extremely high rate of inflation, often exceeding several hundred or severalthousand percent, that causes a country's money to become practically worthless.

HysteresisThe behavior of firms that fail to enter markets that appear attractive and, onceinvested, persist in operating at a loss. This behavior is characteristic of situationswith high entry and exit costs along with high uncertainty.

Glossary of Import Export International Trade Terms Starting with-I

Implicit TaxLower (higher) before-tax required returns on assets that are subject to lower (higher)tax rates.

Implied VolatilityThe volatility that is implied by an option value given the other determinants of optionvalue.

ImportAny resource, intermediate good, or final good or service that buyers in one countrypurchase from sellers in another country.

Import LicensesLicenses required by some countries to bring in a foreign-made good. In many cases,import licenses are also used by the issuing country to control the quantity of importeditems.

In-the-Money Option An option tha t has value if exercised immediately.

Income BasketsIn the U.S. tax code, income is allocated to one of a number of separate incomecategories. Losses in one basket may not be used to offset gains in another basket.

Income Statement Financial report that summarizes a firm's performance over a specified time period.

Incremental IRR IRR on the incremental investment from choosing a large project instead of a smallerproject.

Indemnity ClauseA clause in which the one party indemnifies the other. In leasing, generally a clausewhereby the lessee indemnifies the lesser from loss of tax benefits.

Independent ProjectA project whose acceptance or rejection is independent of the acceptance or rejectionof other projects.

Index futuresA futures contract that allows investors to buy or sell an index (such as a foreign stockindex) in the futures market.

Index options A call or put option contract on an index (such as a foreign stock market index).

Index swapA swap of a market index for some other asset (such as a stock-for-stock ordebt-for-stock swap).

Indication pricing schedule A schedule of rates for an interest rate or currency swap.

Indirect Costs of Financial DistressCosts of financial distress that are indirectly incurred prior to formal bankruptcy orliquidation.

Indirect CustomersThe end-users (e.g., consumers) of the products and services purchased from thewholesalers, retailers, and consignees -- the direct customers of the seller.


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Indirect Diversification BenefitsDiversification benefits provided by the multinational corporation that are notavailable to investors through their portfolio investment.

Indirect ExportingExport products to foreign markets by using an intermediary, usually export tradingcompany based in the exporter’s country.

Inflation RateThe general increase in the price level herein measured by the growth rate in the GNPImplicit Price Index or the general price deflator.

Informational EfficiencyWhether or not market prices reflect information and thus the true (or intrinsic) valueof the underlying asset.

Integrated Financial MarketA market in which there are no barriers to financial flows and purchasing power parityholds across equivalent assets.

Intellectual Property

Material or communicable result in forms of discoveries, inventions, designs andliterary and art works of scientific, humanistic, literary, and artistic endeavor. Itincludes, but is not limited to, works in the form of scientific discoveries and

invention.Intellectual Property Rights

Patents, copyrights, and proprietary technologies and processes that are the basis ofthe multinational corporation’s competitive advantage over local firms.

Inter-American DevelopmentBank(IADM)

A regional development bank designed to promote sustainable economic developmentin the Western Hemisphere. Its headquarters are located in Washington, D.C.

Interbank SpreadThe difference between a bank’s offer and bid rates for deposits in the Eurocurrencymarket.

Interest Rate Risk The risk of unexpected changes in an interest rate.

Interest Rate SwapAn agreement to exchange interest payments for a specific period of time on a givenprincipal amount. The most common interest rate swap is a fixed-for-floating couponswap. The notional principal is typically not exchanged.

Intermediated MarketA financial market in which a financial institution (usually a commercial bank) standsbetween borrowers and savers.

IntermodalThe use of two or more modes of transportation to complete a cargo move; truck/rail/ship, or truck/air, for example.

Internal MarketA market for financial securities denominated in the currency of a host country andplaced within that country.

Internal Rate of Return (IRR)A discount rate at which the net present value of an investment is zero. The IRR is amethod of evaluating capital expenditure proposals.

International Asset Pricing Model(IAPM)

The international version of the CAPM in which investors in each country share thesame consumption basket and purchasing power parity holds.

International Monetary SystemThe global network of governmental and commercial institutions within which currencyexchange rates are determined.

Intrinsic Value of an Option The value of an option if exercised immediately.International Bank forReconstruction and Development

Also called the World Bank, an international organization created at Breton Woods in1944 to help in the reconstruction and development of its member nations.

International BondsBonds that are traded outside the country of the issuer. International bonds are eitherforeign bonds trading in a foreign national market or Eurobonds trading in theinternational market.

International Chamber of CommerceInternational non-governmental body concerned with promotion of trade andharmonization of trading practice. Responsible for drafting and publishing.

International Monetary Fund (IMF)An international organization designed to promote global economic stability anddevelopment. It compiles statistics on cross-border transactions and publishes amonthly summary o f each country’s balance of payments.

Investment AgreementAn agreement specifying the rights and responsibilities of a host government and acorporation in the structure and operation of an investment project

Investment Opportunity Set The set of possible investments available to an individual or corporation.

Investment PhilosophyThe investment approach-active or passive-pursued by an investment fund and itsmanagers.

Input Output NormsThe norms which define the amount of input/inputs required to manufacture a unit ofoutput.

ISO-9000Refers to international standards, laid down by the International StandardsOrganisation.

ITC(HS)Refers to Indian Trade Classification (Harmonized System). It is a system ofclassification of products for the purposes of export and import.

Import LicenseA document required and issued by some national governments authorizing theimportation of goods into their individual countries.

Inland Bill of LadingA bill of lading used in transporting goods overland to the exporter's internationalcarrier.

Irrevocable Letter of creditA letter of credit in which the specified payment is guaranteed by the bank if all termsand conditions are met by the drawee.

Glossary of Impex Trade Terms Starting with - J

Joint VentureAn agreement of two or more companies to pool their resources to execute awell-defined mission. Resource commitments, responsibilities, and earnings are sharedaccording to a predetermined contractual formula.

Just In Time (JIT) An organization-wide practice that keeps the inventory to the minimum and providescustomers the right goods or service at the right time.

Glossary of Export Import Foreign Trade Terms Starting with - K

Kyoto ProtocolA multilateral environmental agreement; its goal is to control global warming byreducing greenhouse gases emitted into the Earth's atmosphere.

KeiretsuCollaborative groups of vertically and horizontally integrated firms with extensiveshare cross-holdings and with a major Japanese bank or corporation at the center.

Glossary of Export Import Trade Terms Starting with -L

LeaseA contract in which one party conveys the use of an asset to another party for aspecific period of time at a predetermined rate.

Landed Cost The quoted or invoiced cost of a commodity, plus any inbound transportation cha rges.Law of one Price (Purchasing PowerParity)

The principle that equivalent assets sell for the same price. The law of one price isenforced in the currency markets by financial market arbitrage.

Lead Manager The lead investment bank in a syndicate selling a public securities offering.Leading and Lagging Reduction of transaction exposure through timing of cash flows within the corporation.


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Lease RateThe periodic rental payment to a lesser for the use of assets. Others may define leaserate as the implicit interest rate in minimum lease payments.

Least-Developed Countries (LDCs)The poorest of the developing countries. They are characterized by a low grossnational product per capita, a reliance on subsistence agriculture, rapid populationgrowth, inadequate infrastructure.

Letter of Credit (L/C)A letter issued by an importer’s bank guaranteeing payment upon presentation ofspecified trade documents (invoice, bill of lading, inspection and insurancecertificates, etc.).

Leveraged LeaseThe lesser prov ides an equity portion (usually 20 to 40 percent) of the equipment costand lenders provide the balance on a nonrecourse debt basis.

Liberalization The process by which certain business activ ities become more market driven.

Location-Specific AdvantagesAdvantages (natural and created) that are available only or primarily in a singlelocation.

London Interbank Bid Rate (LIBID) The bid rate that a Euro market bank is willing to pay to attract a deposit fromanother Euro market bank in London.

Long PositionA position in which a particular asset (such as a spot or forward currency) has beenpurchased.

License AgreementA sales agreement in which a domestic company (the licensor) allows a foreigncompany (the licensee) to market its products in a foreign country in return forroyalties, fees, or other forms of compensation.

LicensingOne firm gives another firm a permission, which allows the latter to engage in anactivity otherwise legally forbidden to it. Such activities usually involve the transfer ofintellectual and proprietary knowledge in return for royalty as revenue.

Limited Flexibility Exchange RateSystem

The International Monetary Fund’s name for an exchange rate system with a managedfloat.

Liquid MarketA market in which traders can buy or sell large quantities of an asset when they wantand with low transactions costs.

Liquidity The ease with which an asset can be exchanged for another asset of equal value.

Loanable FundsThe pool of funds from which borrowers can attract capital; typically categorized bycurrency and maturity.

London Interbank Offer Rate (LIBOR)The offer rate that a Euro market bank demands in order to place a deposit at (or,equivalently, make a loan to) another Euro market bank in London.

Letter of Credit(L/C)A document, issued by a bank per instructions by a buyer of goods, authorizing theseller to draw a specified sum of money under specified terms, usually the receipt bythe bank of certain documents within a given time.

LicensingA business arrangement in which the manufacturer of a product grants permission tosome other group or individual to manufacture that product in return for specifiedroyalties.

Glossary of Export Trade Terms Starting with - M

ManifestDocument that lists in detail al the bills of lading issued by a carrier of its agent ormaster, i.e., a detailed summary of the total cargo of a vessel.

Macro Country Risks Country (or polit ical) risks that affect all foreign firms in a host country.

Management ContractAn agreement by which one firm allows another to manage its foreign activities onbehalf of it. The managing firm is forbidden to make capital investment or financingdecisions.

Managerial Flexibility Flexibility in the timing and scale of investment provided by a real investment option.

MaquiladorasDuty-free assembly plants located mainly in the developing world. Maquiladoras areone type of foreign direct investment.

Margin AccountAn account maintained by an investor with a brokerage firm in which securities may bepurchased by borrowing a portion of the purchase price from the brokerage, or may besold short by borrowing the securities from the brokerage firm.

Margin RequirementA performance bond paid upon purchase of a futures contract that ensures theexchange clearinghouse against loss.

Market AccessThe extent to which a domestic industry can penetrate a related market in a foreigncountry. Access can be limited by tariffs or other non-trade barr iers.

Market EconomyAn economy in which resource allocations, prices and other marketing decisions areprimarily determined by the free market.

Market FailureA failure of arms-length markets to efficiently complete the production of a good orservice. In the eclectic paradigm, the multinational corporation’s marketinternalization advantages take advantage of market failure.

Market Internalization AdvantagesAdvantages that allow the multinational corporation to internalize or exploit thefailure of an arms-length market to efficiently accomplish a task.

Market Maker A financial institution that quotes bid (buy) and offer (sell) prices.Market Model (One-Factor MarketModel)

The empirical version of the security market line: Rj = aj + bjRM + ej.

Market Portfolio A portfolio of all assets weighted according to their market values.Market Risk Premium The risk premium on an average stock; (E[RM]-RF).

Market TimingAn investment strategy of shifting among asset classes in an attempt to anticipatewhich asset classes) will appreciate or depreciate during the coming period.

Market-Based Corporate GovernanceSystem

A system of corporate governance in which the supervisory board represents adispersed set of largely equity shareholders.

Multilateral EnvironmentalAgreements (MEAs)

Environmental agreements negotiated by a number of countries.

Marketing MixThe set of marketing tools that the firm uses to pursue its marketing objectives in thetarget market. One of the most popular classifications of marketing mix tools is calledthe "4 P's" of marketing: product, price, place, and promotion.

Marking to Market The process by which changes in the value of futures contracts are settled daily.

Maturity Date The date on which the last payment on a bond is due.

Mean-Variance EfficientAn asset that has higher mean return at a given level of risk (or lower risk at a givenlevel of return) than other assets.

MercosurThe common market of the South, a customs union which includes Argentina, Brazil,Paraguay, and Uruguay in a regional trade pact that reduces tariffs on intrapact tradeby up to 90 percent. Bolivia and Chile are associate members.

MergerA form of corporate acquisition in which one firm absorbs another and the assets andliabilities of the two firms are combined.


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Method of Payment The way in which a merger or acquisition is financed.

Micro Country RisksCountry risks that are specific to an industry, company, or project within a hostcountry.

Micro CreditSmall loans, perhaps $50 or $100, that are extended to small businesses to finance abusiness start-up or other business activity.

Middle MarketA market segment generally represented by financing under $2 million. In leasing thissector is dominated by single investor leases.

Miller and Modigliani’s IrrelevanceProposition

If financial markets are perfect, then corporate financial policy (including hedgingpolicy) is irrelevant.

Mixed Tariff A combination of specific and ad valorem tariffs.Monetary Assets and Liabilities(MAL) Assets and liabilities with contractual payoffs.

Money Market HedgeA hedge that replicates a currency forward contract through the spot currency andEurocurrency markets.

Money Market Yield A bond quotation convention based on a 360-day year and semiannual coupons.(Contrast with bond equivalent yield.)

Money MarketsFinancial markets for debt securities that pay off in the short term (usually less thanone year).

Money SupplyThe total amount of currency in circulation and peso deposits subject to check of themonetary system.

MonopolyExclusive control or possession by one group of the means of producing or selling goodsor services.

More Flexible Exchange Rate System The International Monetary Fund’s name for a floating exchange rate system.

Most Favored Nation (MFN)A status granted to one country by another; the granting country then accords therecipient's imports and exports the most favorable treatment that it accords anycountry.

Multinational Corporation A corporation with operations in more than one country.Multinational Netting Elimination of offsetting cash flows within the multinational corporation.Mutually Exclusive InvestmentDecisions

Investment decisions in which the acceptance of a project precludes the acceptance ofone or more alternative projects.

ManipulationProcessing wherein merchandise is packed, unpacked, repacked, cleaned, sorted,graded or otherwise changed in condition but not manufactured.

Manufacturer Generally, the production of articles for use from raw or prepared materials bysubstantially transforming such materials into new forms.

Marine InsuranceInsurance that compensates the owners of goods transported overseas in the event ofloss that cannot be legally recovered from the carrier.

Marking Letters, numbers, and other symbols on cargo packages to facilitate identification.

MerchandiseIncludes goods, wares, and chattels of every description except ProhibitedMerchandise, building materials, production equipment and supplies for use inoperation of a zone.

Merchandise, Domestic Merchandise which has been produced in the India and not exported therefrom.

Merchandise, ForeignImported Merchandise which has not been properly released from Customs custody intothe Customs territory of the India.

Merchandise, FungibleMerchandise which for commercial purposes is identical and interchangeable in allsituations.

Merchandise, Mixed Status Foreign Merchandise which has been combined with Domestic Merchandise in the zone.

Merchandise/Operations, ProhibitedMerchandise, the importation of which is prohibited by law on grounds of public policyor morals, or excluded by order of the Foreign-Trade Zones Board..

Merchandise/Operations, RestrictedMerchandise which may not be authorized for delivery from Customs custody without aspecial permit, or a waiver thereof by an agency of the Indian Government.

Glossary of EXIM Trade Terms Starting with - NNet Currency Exposure Exposure to foreign exchange risk after netting all intracompany cash flows.

National Tax PolicyThe way in which a nation chooses to allocate the burdens of tax collections across itsresidents.

National TreatmentA country accords no less favorable treatment to imported goods than it does todomestic goods.

NationalizationA process whereby privately owned companies are brought under state ownership andcontrol. (Contrast with privatization.)

Negative-NPV Tie-in ProjectA negative (-) NPV infrastructure development project that a local governmentrequires of a company pursuing a positive (+) NPV investment project elsewhere in theeconomy.

Net Asset ValueThe sum of the indiv idual asset values in a closed-end mutual fund. Closed-end fundscan sell at substantial premiums or discounts to their net asset values.

Net Exposed AssetsExposed assets less exposed liabilities. The term is used with market values or, intranslation accounting, with book values.

Net Monetary Assets Monetary assets less monetary liabilities.

Net PositionA currency position after aggregating and canceling all offsetting transactions in eachcurrency, maturity, and security.

Net Present Value (NPV) The present value of future cash returns, discounted at the appropriate marketinterest rate, minus the present value of the cost of the investment.

Net Working Capital Current assets minus current liabilities.

New ProtectionismRecent efforts to pressure national governments to exercise greater control overforeign trade and foreign direct investment.

Nominal Cash FlowA cash flow expressed in nominal terms if the actual dollars to be received (or paidout) are given.

Nominal Interest Rate Interest rate unadjusted for inflation.Non-Governmental Organizations(NGOs)

Special interest groups that operate in the global community.

Non-Tariff BarrierAn indirect measure used to discriminate against foreign manufacturers, for example,extensive inspection procedures for foreign imports that create barriers to entering themarket.

Noncash ItemExpense against revenue that does not di rectly affect cash flow, such as depreciationand deferred taxes.


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Non-Intermediated Debt MarketA financial market in which borrowers (governments and large corporations) appealdirectly to savers for debt capital through the securities markets without using afinancial institution as intermediary.

Non-Monetary Assets and Liabilities Assets and Liabilities with non-contractual payoffs.

Normal DistributionSymmetric bell-shaped frequency distribution that can be defined by its mean andstandard deviation.

North American Free TradeAgreement (NAFTA)

A regional trade pact among the United States, Canada, and Mexico.

Notional Principal In a swap agreement, a principal amount that is only notional and is not exchanged.

NFERefers to Net Foreign Exchange. Net Foreign Exchange earning is calculated as apercentage of exports (NFEP).

Non-Privileged Foreign (NPF)Foreign Merchandise or non-tax-paid domestic merchandise upon which the duty andapplicable taxes will be determined at the time of entry from the zone for

consumption.Glossary of Export Business Trade Terms Starting with - OOffer (Ask) Rates The rate at which a market maker is willing to sell the quoted asset.

Offering StatementIn the United States, a shortened registration statement required by the Securities andExchange Commission on debt issues with less than a nine-month maturi ty.

Official Settlements Balance(Overall Balance)

An overall measure of a country’s private financial and economic transactions with therest of the world.

Offshore Financial Centers (OFCs)The many types of financial institutions that operate without financial supervision bygovernments or other agencies.

OligopolyA market dominated by so few sellers that action by any of them will impact both theprice of the good and the competitors.

Open AccountThe seller delivers the goods to the buyer and then bills the buyer according to theterms of trade.

Open and Reform Policy

An economic policy enacted by the Chinese government combining central planningwith market-oriented reforms to increase productivity, living standards, andtechnological quality without exacerbating inflation, unemployment, and budgetdeficits.

Open-end FundA mutual fund in which the amount of money under management grows/shrinks as

investors buy/sell the fund.

Operating Cash FlowEarnings before interest and depreciation minus taxes. It measures the cash flowgenerated form operations, not counting capital spending or working capitalrequirements.

Operating ExposureChanges in the value of real (no monetary) assets or operating cash flows as a result ofchanges in currency values.

Operating Leverage The trade-off between fixed and variable costs in the operation of the firm.

Operational EfficiencyMarket efficiency with respect to how large an influence transactions costs and othermarket frictions have on the operation of a market.

OPICOverseas Private Investment Corporation. A US agency that assists US companiesprotect their investment against risk in a particular country besides providing otherservices.

Opportunity CostMost valuable alternative that is given up. The rate of return used in NPV computationis an opportunity interest rate.

Opportunity Set The set of all possible investments.Organization for EconomicCooperation and Development(OECD)

A group of 30 countries that meets regularly to discuss global issues and makeappropriate economic and social policies.

Organization of Petroleum ExportingCountries (OPEC) A producer cartel that produces and sells oil.

Out-of-the-Money Option An option that has no value if exercised immediately.

Outright QuoteA quote in which all of the digits of the bid and offer prices are quoted. (Contrast withpoints quote.)

OutsourcingA situation in which a firm's functions are performed or provided by a person or groupfrom outside the company.

Overall Balance (See official settlements balance.)

Overall FTC limitationIn the U.S. tax code, a limitation on the FTC equal to foreign-source income times U.S.tax on worldwide income divided by worldwide income.

Ownership-Specific Advantages

Property rights or intangible assets, including patents, trademarks, organizational andmarketing expertise, production technology and management, and generalorganizational abilities, that form the basis for the multinational’s advantage overlocal firms

Ocean Bill of LadingA bill of lading indicating that the exporter consigns a shipment to an int'l carrier fortransportation to a specified foreign market.

On Board Bill of LadingA bill of lading in which a carrier certifies that goods have been placed on board acertain vessel.

Open AccountA trade arrangement in which goods are shipped to a foreign buyer without guaranteeof payment.

Open Insurance PolicyA marine insurance policy that applies to all shipments made by an exporter over aperiod of time rather than to one shipment only.

OperatorA corporation, partnership, or person that operates a zone or sub zone under the termsof an agreement with the Grantee.

Operator's BondAll zone operators must submit to Customs a bond to assure compliance with Customsregulations.

Order Bi ll of Lading A negotiable bi ll of lading made out to the order of the shipper.

Glossary of Import Business Trade Terms Starting with - P

Packing ListDocument listing the contents of a consignment of goods. May be called for on a letterof credit.

Parallel LoanA loan arrangement in which a company borrows in its home currency and then tradesthis debt for the foreign currency debt of a foreign counterpart.

PartnershipForm of business organization in which two or more co-owners form a business. In ageneral partnership each partner is liable for the debts of the partnership. Limitedpartnership permits some partners to have limited liability.


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Passive IncomeIn the U.S. tax code, income (such as investment income) that does not come fromactive participation in a business.

PatentA government grant that gives inventors exclusive right of making, using, or selling theinvention.

Payback Period RuleAn investment decision rule which states that all investment projects that havepayback periods equal to or less than a particular cutoff period are accepted, and allthose that pay off in more than the particular cutoff period are rejected.

Payoff ProfileA graph with the value of an underlying asset on the x-axis and the value of a positiontaken to hedge against risk exposure on the y-axis. Also used with changes in value.(Contrast with risk profile.)

Payout Ratio Proportion of net income paid out in cash dividends.Pegged Exchange Rate System The International Monetary Fund’s name for a fixed exchange rate system.

Pension LiabilitiesA recognition of future liabilities resulting from pension commitments made by the

corporation. Accounting for pension liabilities varies widely by country.

Perfect Market AssumptionsA set of assumptions under which the law of one price holds. These assumptions includefrictionless markets, rational investors, and equal access to market prices andinformation.

Periodic Call Auction A trading system in which stocks are auctioned at intervals throughout the day.Perpetuity A constant stream of cash flows without end. A British consol is an example.

PortfolioCombined holding of more than one stock, bond, real estate asset, or other asset by aninvestor.

Predatory PricingIt is a form of price discrimination that requires selling below cost with the intention ofdestroying competition. However, predatory pricing is against law.

Phytosanitary MeasureA piece of legislation, regulation, or procedure with the purpose of preventing theintroduction or spread of pests. Phytosanitary procedures often include theperformance of inspections, tests, surveillance, or other treatments.

Points Quote An abbrev iated form of the outright quote used by traders in the interbank market.

Political RiskThe risk that a sovereign host government will unexpectedly change the rules of thegame under which businesses operate. Political risk includes both macro and microrisks.

Power Distance The extent to which a society accepts hierarchical differences.

Premium If a bond is selling above its face value, it is said to sell at a premium.Present Value The value of a future cash stream discounted at the appropriate market interest rate.

Present Value FactorFactor used to calculate an estimate of the present value of an amount to be receivedin a future period.

Price Elasticity of Demand The sensitivity of quantity sold to a percentage change in price; -%changeQ/%changeP.Price Uncertainty Uncertainty regarding the future price of an asset.

Private PlacementA securities issue privately placed with a small group of investors rather than through apublic offering.

PrivatizationA process whereby publicly owned enterprises are sold to private investors. (Contrastwith nationalization.)

Proforma InvoiceAn invoice provided by a supplier prior to the shipment of merchandise, informing thebuyer of the kinds and quantities of goods to be sent their value and importantspecifications.

Product Cycle TheoryProduct cycle theory views the products of the successful firm as evolving through fourstages: (1) infancy, (2) growth, (3) maturity, and (4) decline.

Product Life Cycle (PLC)The complete life of a product, from early planning through sales build-up, maximumsales, declining sales, and withdrawal of the product. Product life cycle lengths andtypes can vary depending on the type of product, the frequency of replacement.

Production Possibilities Schedule The maximum amount of goods (for example, food and clothing) that a country is ableto produce given i ts labor supply.

Production SharingProduction sharing occurs when a producer chooses to make a product in stages - andin different countries - so that the firm can employ the lowest-cost resources in theproduction process.

Profitability IndexA method used to evaluate projects. It is the ratio of the present value of expectedfuture cash flows after initial investment divided by the amount of the initialinvestment.

Progressive TaxationA convex tax schedule that results in a higher effective tax rate on high income levelsthan on low-income levels.

Project FinancingA way to raise nonrecourse financing for a specific project characterized by thefollowing: (1) the project is a separate legal entity and relies heavily on debt financingand (2) the debt is contractually linked to the cash flow generated by the project.

Promissory NoteFinancial document in which the buyer agrees to make payment to the seller at aspecified time.

Proprietary KnowledgePrivate or exclusive knowledge that cannot be legally used or duplicated bycompetitors.

ProspectusA brochure that describes a mutual fund’s investment objectives, strategies, andposition limits.

ProtectionismProtection of local industries through tariffs, quotas, and regulations that discriminateagainst foreign businesses.

Public Securities Offering A securities issue placed with the public through an investment or commercial bank.

Pure Discount BondBonds that pay no coupons and only pay back the face va lue at maturity. Also referredto as "bullets" and "zeros."

Psychic DistanceThe similarities or lack thereof between country markets. This concept takes intoaccount geographic distance, cultural similarities, linguistic aspects, legal systems andmethods of conducting business.

Public RelationsA variety of programs designed to promote and/or protect a company's image or itsindividual products.

Purchasing Power Parity (PPP)The principle that equivalent assets sell for the same price. Purchasing power parity isa measurement of a currency's value based on the buying power within its owndomestic economy.

Put Option The right to sell the underlying asset at a specified price and on a specified date.

Put-Call ParityThe relation of the value of a long call, a short put, the exercise price, and theforward price at expiration; CallTd/f - PutTd/f + Kd/f = FTd/f.


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Packing ListA list showing the number and kinds of items being shipped, as well as otherinformation needed for transportation purposes.

Postal Parcel ReceiptThe postal authorities' signed acknowledgment of delivery to receiver of a shipmentmade by parcel post.

Private Export FundingCorporation(PEFCO)

Lends to foreign buyers to finance exports from U.S.

Perils of the SeaA marine insurance term used to designate heavy weather, stranding, lightning,collision, and seawater damage.

Phytosanitary Inspection CertificateA certificate, issued by the Indian Government Department of Agriculture to satisfyimport regulations for foreign countries, indicating that a India shipment has beeninspected and is free from harmful pests and plant diseases.

Political RiskIn export financing the risk of loss due to such causes as currency, inconvertibility,government action preventing entry of goods, expropriation or confiscation, war, etc.

Privileged Foreign (PF) Foreign merchandise or non-tax paid domestic merchandise upon which the duty andapplicable taxes have been determined at the time this status is approved.

Purchasing AgentAn agent who purchases goods in his or her own country on behalf of foreign importerssuch as government agencies and large private concerns.

Glossary of IMPEX Business Trade Terms Starting with - Q

QRsQRs mean Quantitative Restrictions. QRs refer to specific limits imposed by countrieson the quantity or value of goods that can be imported or exported. QRs are non-tariffmeasures which are taken to regulate or prohibit international.

QuotaThe quantity of goods of a specific kind that a country permit to be imported withoutrestriction or imposition of additional Duties.

Quotation An offer to sell goods at a stated price and under specified conditions.Quid Pro Quo Latin for "this for that." An exchange of one thing for another.

Glossary of International Trade Terms Starting with - RR-Square (the Coefficient ofDetermination)

The percent of the variation in a dependent variable (a y-variable) that is explained byvariation in an independent variable (an x-variable).

Random WalkA process in which instantaneous changes in exchange rates are normally distributedwith a zero mean and constant variance.

Re-Invoicing CentersAn offshore financial affiliate that is used to channel funds to and from the

multinational’s foreign operations.Real Appreciation/Depreciation A change in the purchasing power of a currency.

Real Cash Flow(RCF)A cash flow is expressed in real terms if the current, or date 0, purchasing power of thecash flow is given.

Real Exchange Rate (RER)A measure of the nominal exchange rate that has been adjusted for inflationdifferentials since an arbitrarily defined base period.

Real Interest Rate (RIR)Interest rate expressed in terms of real goods; that is, the nominal interest rate minusthe expected inflation rate.

Rea l Options (RO) An option or option-l ike feature embedded in a rea l investment opportunity.

Reciprocal Marketing AgreementA strategic alliance in which two companies agree to co market each other’s productsin their home market. Production rights may or may not be transferred.

RecourseThe right to demand return of money paid. In negotiation of a letter of credit,payment by the negotiating bank will normally be with recourse.

Regional Development BanksBanks that are owned and operated by member nations; they are designed to extenddevelopment loans and provide other assistance to member nations. The world's fourregional development banks are the African Development Bank Group.

Registered Bonds (RB)Bonds for which each issuer maintains a record of the owners of its bonds. Countriesrequiring that bonds be issued in registered form include the United States and Japan.

(Contrast with bearer bonds.)Registration Statement (RS)

In the United States, a statement filed with the Securities and Exchange Commissionon securities issues that discloses relevant information to the public.

Repatriation The act of remitting cash flows from a foreign affiliate to the parent firm.Reservation Pr ice The price below (above) which a seller (purchaser) is unwi ll ing to go.

Residual Value The value of an asset at the conclusion of a lease.Restrictive Endorsement Endorsement transferring title or right to a named party.Retention Ratio Retained earnings divided by net income.

Return on Equity (ROE) Net income after interest and taxes divided by average common stockholder's equity.

RevaluationAn increase in a currency value relative to other currencies in a fixed exchange ratesystem.

Right of Priority (ROP)"The right of a patent holder of a patent issued in one country to intellectual propertyrights in a foreign market for one year, without filing for a local patent, even ifsomeone from the foreign market files a local patent for the same process.

Rights of Set-OffAn agreement defining each party’s rights should one party default on its obligation.Rights of set-off were common in parallel loan arrangements.

Risk Averse Seeking stability rather than risk.

Risk PremiumThe excess return on the risky asset that is the difference between expected return on

risky assets and the return of r isk-free assets.

Risk ProfileA graph with the value of an underlying asset on the x-axis and the value of a positionexposed to risk in the underlying asset on the y-axis. Also used with changes in v alue.(Contrast with payoff profile.)

Roll’s CritiqueThe CAPM holds by construction when performance is measured against amean-variance efficient index. Otherwise, it holds not at all.

RoyaltyPayment made for the use of a person or business’s property based on an agreedpercentage of the income arising from its use.

Rule #1 Always keep track of your currency units.

Rule #2Always think of buying and selling the currency in the denominator of a foreignexchange quote.

Rules of OriginRules used to determine in what country a good will be considered as actually made fortariff and other trade purposes.

ReactivationA resumption of the activated status of an entire area that was previously deactivatedwithout any change in the operator or the area boundaries.

Regional CommissionerThe Regional Commissioner of Customs for the Customs Region in which the zone islocated.


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Remitting Bank Bank that sends the draft to overseas bank for collection.Retail Trade Generally, sales or offers to sell goods or serv ices to indiv iduals for personal use.

Revocable Letter of CreditA letter of credit that can be canceled or altered by the drawee (buyer) after it hasbeen issued by the drawee's bank.

Glossary of Export International Trade Terms Starting with -S

SBA (Small Business Administration)An independent agency of the U.S. federal government that a ids, counsels, assists, andprotects the interests of small business concerns to preserve free competitiveenterprise and to maintain and strengthen the overall economy of the nation.

Scenario AnalysisA process of asking What i f? using scenarios that capture key elements of possiblefuture realities.

Security Market Line (SML)In the CAPM, the relation between required return and systematic risk (or beta): Rj -RF + bj (E[RM] - RF).

Security SelectionAn investment strategy that attempts to identify individual securities that are under

priced relative to other securities in a particular market or industry.

Seeking Stability Rather than RiskAn element of the Paris Convention for the Protection of Industrial Property that givesan inventor 12 months from the date of the first application filed in a Paris Conventioncountry in which to file in other Paris Convention countries.

Segmented MarketA market that is partially or wholly isolated from other markets by one or more marketimperfections.

Semi-Strong form Efficient Market A market in which prices fully reflect all publicly available information.

Sensitivity Analysis (SA)Analysis of the effect on the project when there is some change in critical variablessuch as sales and costs.

Separation PrincipleThe principle that portfolio choice can be separated into two independent tasks: (1)determination of the optimal risky portfolio, which is purely technical problem, and (2)the personal choice of the best mix of the risky portfolio.

Set-of-Contracts PerspectiveA view of the corporation as the nexus of a set of legal contracts linking the variousstakeholders. Important contracts include those with customers, suppliers, labor,management, debt, and equity.

Sharpe IndexA measure of risk-adjusted investment performance in excess return per unit of totalrisk: SI = (RP - RF)/(sP).

Shipper Usually the supplier or owner of commodities shipped.

Short Position A position in which a particular asset (such as a spot or forward currency) has beensold.Short Selling Selling an asset that you do not own, or taking a short position.

Side EffectAny aspect of an investment project that can be valued separately from the projectitself.

Sight Draft A draft that is payable on demand.

SignalingThe use of observable managerial actions in the marketplace as an indication ofmanagement’s beliefs concerning the prospects of the company.

Simple Interest Interest calculated by considering only the original pr incipal amount.

Smoot Hawley ActPassed in 1930, this protectionist act increased import duties to the highest rate everimposed by the United States, resulting in the downfall of the world trade system.

Social Capital Physical or real capital that is owned by the public sector rather than by private firms.Sogo Sosha A term referring to general trading companies that import and export merchandise.

Sole ProprietorshipA business owned by a single individual. The sole proprietorship pays no corporateincome tax but has unlimited liability for business debts and obligations.

Special Drawing Right (SDR)An international reserve created by the International Monetary Fund and allocated tomember countries to supplement foreign exchange reserves.

Specific Tariff A tariff assessed at a specific amount per unit of weight.

Spot Exchange-Rate Exchange-rate today for settlement in two days.

Spot MarketA market in which trades are made for immediate delivery (within two business daysfor most spot currencies).

Stabilization PoliciesGovernment policies designed to promote economic growth, steady employment, andstable prices.

StakeholdersThose with an interest in the firm. A narrow definition includes the corporation’s debtand equity holders. A broader definition includes labor, management, and perhapsother interested parties, such as customers, suppliers, and society at large.

Stamp Tax A tax on a financial transaction.

Standard DeviationThe positive square root of the variance. This is the standard statistical measure of thespread of a sample.

Standard Industrial Classification(SIC)

A standard numerical code system used by the U.S. government to classify productsand services.

Stated Annual Interest RateThe interest rate expressed as a percentage per annum, by which interest payment isdetermined.

Stationary Time SeriesA time series in which the process generating returns is identical at every instant oftime.

Stock Index Futures A futures contract on a stock index.

Stock Index SwapA swap involving a stock index. The other asset involved in a stock index swap can beanother stock index (a stock-for-stock swap), a debt index (a debt-for-stock swap), orany other financial asset or financial price index.

Stock Market An institution that facilitates the buying and selling of stocks.

Strategic AllianceA collaborative agreement between two companies designed to achieve some strategicgoal. Strategic alliances include international licensing agreements, managementcontracts, and joint ventures as special cases.

Striking Price The price at which an option can be exercised (also called the exercise price).

Subpart F IncomeIn the U.S. tax code, income from foreign subsidiaries owned more than 10 percent andcontrolled foreign corporations that is taxed on a pro rata basis as it is earned.

SubsidiaryAny organization controlled by another with more than 50 percent of its whose votingcapital held by the latter.

Subsidized FinancingFinancing that is provided by a host government and that is issued at a below-marketinterest rate.

SubsidyMonetary assistance granted by the government to an individual or other entity insupport of an activity that is regarded as being in the public interest.


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Subsistence AgricultureSmall-scale agriculture designed to meet the consumption needs of individualhouseholds.

Sunk CostA cost that has already occurred and cannot be removed. Because sunk costs are in thepast, such costs should be ignored when deciding whether to accept or reject aproject.

Sunk Costs Expenditures that are at least partially lost once an inv estment is made.

Supervisory BoardThe board of directors that represents stakeholders in the governance of thecorporation.

SwapAn agreement to exchange two liabilities (or assets) and, after a prearranged length oftime, to reexchange the liabilities (or assets).

Swap Book A swap bank’s portfolio of swaps, usually arranged by currency and by maturity.

Swaption A swap with one or more options attached.SWIFT (Society for Worldwide

Interbank Financial Transactions)Network through which international banks conduct their financial transactions.

Switching OptionsA sequence of options in which exercise of one option creates one or more additionaloptions. Investment-disinvestments, entry-exit, expansion-contraction, and suspension-reactivation decisions are examples of switching options.

Syndicate The selling group of investment banks in a public securities offering.

SynergyIn an acquisition or merger, when the value of the combination is greater than the sumof the indiv idual parts: Synergy = VAT - (VA + VT).

Synthetic Forward PositionA forward position constructed through borrowing in one currency, lending in anothercurrency, and offsetting these transactions in the spot exchange market.

Systematic Risk Risk that i s common to a ll assets and cannot be diversi fied away (measured by beta).

SEZsSEZs means Special Economic Zones In principle approvals have already been given forsetting up of 26 new SEZs (state government/private sector) at Nanguneri (TamilNadu), Paradeep (Orissa), Gopalpur (Orissa), Kulpi (West Bengal), Bhadohi (U

STPs STP means Software Technology Parks

SEPCAn exclusive Services Export Promotion Council announced in the Foreign Trade Policyto map opportunities for key services in key markets.

Schedule - BRefers to Schedule B, Statistical Classification of Domestic and Foreign CommoditiesExported from the India.

Ship's Manifest An instrument in writing, signed by the captain of a ship, that lists the individualshipments constituting the ship's cargo.Sight Draft A draft that is payable upon presentation to the drawee.Spot Exchange The purchase or sale of foreign exchange for immediate deliv ery.

Standard Industrial Classification(SIC)

A standard numerical code system used by the U.S. Government to classify productsand services.

Standard International TradeClassification (SITC)

A standard numerical code system developed by the U.N. to classify commodities usedin international trade.

Steamship Conference A group of steamship operators that operate under mutually agreed upon freight rates.

Straight Bill of LadingA nonnegotiable bill of lading in which the goods are consigned directly to a namedconsignee.

SubzoneA special purpose zone established as part of a zone project for a limited purpose, thatcannot be accommodated within an existing zone.

Glossary of Import International Trade Terms Starting with - TTangibility Tangible assets are real assets that can be used as collateral to secure debt.

Tare WeightThe weight of a container and packing materials that excludes the weight of the goodsit contains.

Tariff-Quota

A tariff that is set at a lower rate until a specified quantity (the quota) of goods has

been imported, at which point the tariff increases for additional imports.

TariffsTaxes on imported goods and services, levied by governments to raise revenues andcreate barriers to trade.

Tax Arbitrage Arbitrage using a difference in tax rates or tax systems as the basis for profit.

Tax ClientelesClienteles of investors with specific preferences for debt or equity that are driven bydifferences in investors’ personal tax rates.

Tax Haven A country or region imposing low or no taxes on foreign source income.

Tax HolidayA reduced tax rate provided by a government as an inducement to foreign directinvestment.

Tax NeutralityTaxes that do not interfere with the natural flow of capital toward its most productiveuse.

Tax Preference ItemsItems such as tax-loss carry forwards and carry backs and investment tax credits thatshield corporate taxable income from taxes.

Tax-Haven Affiliate

A wholly owned affiliate that is in a low-tax jurisdiction and that is used to channelfunds to and from the multinational’s foreign operations. (The tax benefits oftax-haven affiliates were largely removed in the United States by the Tax Reform Actof 1

Technical Analysi sAny method of forecasting future exchange rates based on the history of exchange

rates.Territorial Tax System

A tax system that taxes domestic income but not foreign income. This tax regime isfound in Hong Kong, France, Belgium, and the Netherlands.

Time Draft A draft that is payable on a specified future dare.Time Value of an Option The difference between the value of an option and the option’s intrinsic value.

The Foreign Trade Data BankIs the Indian Government's most comprehensive source of Foreign Trade Data andexport promotion information. Types of information on the FTDB include: InternationalMarket Research, Export Opportunities; Indices of Foreign and Domestic companies.

Timing OptionThe ability of the firm to postpone investment (or disinvestments) and to reconsiderthe decision at a future date.

Total Cash Flow Total cash inflow minus total cash outflow.

Total Quality Management (TQM)An organization-wide approach to continuously improving the overall quality of itsprocess, products, and service.

Total RiskThe sum of systematic and unsystematic risk (measured by the standard deviation orvariance of return).

Trade Acceptance A time draft that is drawn on and accepted by an importer.

Trade Balance A country’s net balance (exports minus imports) on merchandise trade.


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Trade BarrierA governmental policy, action, or practice that intentionally interrupts the free flow ofgoods or services between countries.

Trade DeficitA trade deficit occurs when the value of a country's exports is less than the value of itsimports.

Trade SurplusA trade surplus occurs when the value of a country's exports is greater than the valueof its imports.

Trade-in Al lowancePrice discount granted for a new item by turning in an old item at the time ofpurchase.

TrademarkA registration process under which a name, logo, or characteristic can be identified asexclusive.

Trading Desk (Dealing Desk) The desk at an international bank that trades spot and forward foreign exchange.

Transaction ExposureChanges in the value of contractual (monetary) cash flows as a result of changes incurrency values.

Transaction Statement A document that clearly outlines the terms and conditions agreed upon between animporter and an exporter.Transfer Prices Prices on intercompany sales

Transfer PricingThe price one unit of a company charges to another unit of the same company forgoods or serv ices exchanged between the two.

Translation (Accounting) ExposureChanges in a corporation’s financial statements as a result of changes in currencyvalues.

TrusteeA bank or trust company that holds title to or a security interest in leased property forthe benefit of the lessee, lesser, and/or creditors of the lesser.

Turnkey ContractAn agreement in which a contractor is responsible for setting up a facility from start tofinish for another firm.

Tare WeightThe weight of a container and packing materials without the weight of the goods itcontains.

TenorDesignation of a payment as being due at sight, a given number of days after sight, or agiven number of days after date.

Through Bill of LadingA single bill of lading covering both the domestic and international carriage of anexport shipment.

Tramp Steamer A ship not operating on regular routes or schedules.

Transaction Statement A document that delineates the terms and conditions agreed upon between theimporter and exporter.

TransferTo take merchandise with zone status from a zone for consumption, transportation,exportation, warehousing, cartage or lighter age, vessel supplies and equipment,admission to another zone, and like purposes.

Trust ReceiptRelease of merchandise by a bank to a buyer in which the bank retains title to themerchandise.

Glossary of Export Import Foreign Trade Terms Starting with - U

Unbiased Expectations HypothesisThe hypothesis that forward exchange rates are unbiased predictors of future spotrates.

Uncertainty Avoidance The extent to which a society tolerates uncertainty and ambiguity.

Unemployment RateThe ratio of the total number of unemployed persons to the total number of persons inthe labor force.

Unlevered Beta (Systematic BusinessRisk)

The beta (or systematic risk) of a project as if it were financed with 100 percent equity.

Unlevered Cost of EquityThe discount rate appropriate for an investment assuming it is financed with 100percent equity.

Unsustainable DebtA financial condition in which a country is unable to service its foreign (external) debt

without decimating its economy.Unsystematic Risk

Risk that is specific to a particular security or country and that can be eliminatedthrough diversification.

UsuryThe practice of charging or paying exorbitant interest on a loan or other transaction.Note: in Islamic societies, charging or receiving any amount of interest is consideredusury.

Unique Identifier Number(UIN)This inventory method controls merchandise in a zone by unique numbers and/orletters that identify merchandise admitted to a zone.

User A person or firm using a zone for storage, handling or processing of merchandise.

Glossary of Import Export Trade Terms Starting with - V

Value ChainA value-added process in a firm to transform raw materials and other inputs to finishedgoods, which creates value to customers.

Value Date Date on which a foreign exchange contract is executed, i.e. seller delivers.

Value StocksStocks with low price/book ratios or price/earnings ratios. Historically, value stockshave enjoyed higher average returns than growth stocks (stocks with high price/bookor PE ratios) in a variety of countries.

Value-Added Tax (VAT)A sales tax collected at each stage of production in proportion to the value addedduring that stage.

Variable Costs A cost that varies directly with volume and is zero when production is zero.Venture Capital

An investment in a start-up business that is perceived to have excellent growthprospects but that does not have access to capital markets.

Virtual CorporationPartnerships so close those two partners become a single firm for all operationalpurposes.

Voluntary Export Restraint (VER)One country promises another country to limit its imports; this is often done when thepromising country fears increased tariffs or quotas if it does not self-regulate.

Value AdditionValue addition refers to the increment added in the process of manufacture of aparticular item, which also becomes part of its price.

VKUJVishesh Krishi Upaj Yojana, a new scheme introduced in the Foreign Trade Policy(2004-2009) as part of the package for agr iculture.

Validated Export LicenceA required document issued by the Indian Government authorizing the export ofspecific commodities.

Glossary of EXIM Terms Starting with - WWarehouse Receipt A receipt issued by a warehouse listing the goods received.

Warehouse-to-WarehouseAn insurance policy that covers goods over the entire journey from the seller's to thebuyer's premises.


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WarrantAn option issued by a company that allows the holder to purchase equity from thecompany at a predetermined price prior to an expiration date. Warrants are frequentlyattached to Eurobonds.

Weak form Efficient Market A market in which prices fully reflect the information in past prices.

Weight NoteDocument issued by either the exporter or a third party declaring the weight of goodsin a consignment.

Weighted Average Cost of Capital(WACC)

A discount rate that reflects the after-tax required returns on debt and equity capital.

Wharfage Charge A charge assessed by a pier or dock owner for handl ing incoming or outgoing cargo.

Withholding TaxA tax on dividend or interest income that is withheld for payment of taxes in a hostcountry. Payment is typically withheld by the financial institution distributing thepayment.

Working CapitalAn accounting term that indicates the difference between current assets and current

liabilities.

World Bank

One of the "Big Three" international organizations designed to oversee economicrelations among the countries of the world. Its goal is to improve the quality of life forpeople in the poorer regions of the world by promoting sustainable economicdevelopment.

World Trade Organization (WTO)

The WTO is a multilateral organization that promotes free and fair trade among thenations of the world. It was created in 1994 by 121 nations at the Uruguay Round of theGeneral Agreement on Tariffs and Trade (GATT). The WTO is responsible forimplementation.

Worldwide Tax SystemA tax system that taxes worldwide income as it is repatriated to the parent company.Used in Japan, the United Kingdom, and the United States.

Warehouse Receipt A receipt issued by a warehouse l isting goods received for storage.Wharf age A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.

Without ReserveA term indicating that a shipper's agent or representative is empowered to makedefinitive decisions and adjustments abroad without approval of the group orindividual represented.

Glossary of Export Trade Terms Starting withY - Words and Definitions

Yield to MaturityThe discount rate that equates the present va lue of interest payments and redemptionvalue with the present price of the bond.

Glossary of International Trade Export Import Terms Starting with - Z

ZaibatsuLarge family-owned conglomerates that controlled much of the economy of Japan priorto World War II.

ZeitgeistThe spirit of the time; the general intellectual state and outlook of an era orgeneration.

Zone Lot Number (ZLN)A collection of merchandise maintained under an inventory control method based onspecific identification of merchandise admitted to a zone by lot and lot number.

Zone ProjectAll of the zone and subzone sites under a single grantee, normally in a single port ofentry.

Zone Restricted (ZR) Merchandise admitted to a zone for the sole purpose of exportation or destruction.Zone Site The physical location of a zone or subzone.

Zone StatusThe status of merchandise admitted to a Foreign-Trade Zone, i.e., domestic (D),non-privileged foreign (NPF), privileged foreign (PF), or zone restricted (ZR) status.

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Export Import Shipping Glossary of International Trade Terms and Shipping Terms.

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