Tuesday, November 24, 2009

Trade Terms Tuesday

Welcome to Trade Terms Tuesday! Each Tuesday, we will share three trade-related terms. In order to reach out to our diverse readership, we will try to provide one for exports, one for imports and one for logistics/transportation. This week, we continue with the F’s.

Free on Board (FOB)
The Incoterm Free on Board means the seller completes his obligations when the goods have been cleared for export and have passed over the ship’s rail. The buyer is responsible for all costs and risks of loss or damage to the goods from that point. The FOB term requires the seller to clear the goods for export. This term should only be used on ocean shipments; however, it is often used for other modes of transportation.

Foreign Trade Zone (FTZ)
Foreign Trade Zones are special commercial and industrial areas, in or near ports of entry where foreign and domestic merchandise, including raw materials, components and finished goods, may be brought in without being subject to payment of customs duties. Merchandise brought into these zones may be stored, sold, exhibited, repacked, assembled, sorted, graded, cleaned or otherwise manipulated prior to re-export or entry into the customs territory.

Foreign Person
A foreign person is any person resident outside the United States or subject to the jurisdiction of a country other than the United States. A "person" is any individual, branch, partnership, association, associated group, estate, trust, corporation or other organization. Specifically, a foreign person is:

· A foreign person is any natural person who is not a lawful permanent resident of the U.S.
· Foreign corporations, business associations, partnerships, trusts, societies or any other entity or group that is not incorporated or organized to do business in the United States is treated as a foreign person.
· International organizations, foreign governments and any agency or subdivision of a foreign government are treated as foreign persons.

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