Tuesday, February 23, 2010

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 letter S.

A surcharge is an additional charge added to the usual or customary freight. Some of the most common surcharges include the following:

BAF - Bunker Adjustment Factor: A fuel surcharge expressed as a percentage added or subtracted from the freight amount, reflecting the movement in the market place price for bunkers.

CAF - Currency Adjustment Factor: A fee applied to the shipping costs to compensate for exchange rate fluctuations.

Congestion Surcharge: An extra charge for waiting periods at the port.

Hazardous Cargo Surcharge: A charge applied to hazardous materials shipped with the carrier.

Peak Season Surcharge: An additional fee usually charged to ocean cargo during the end of 3rd qtr and 4th qtr because the demand to move freight is so high due to holiday inventory requirements. However,
PSS may be charged to and from other parts of the world based on high demands during a particular time.

CBP recognizes the term “sale,” to be defined as: the transfer of property from one party to another for consideration. To conclude that a sale for exportation occurred, CBP must conclude that a sale first occurred. In determining whether a bona fide sale has taken place between a potential buyer and seller of imported merchandise, no single factor is determinative. The determination is made by review of the entire situation, with the result in each case governed by the facts and circumstances of the case itself.

Several factors may indicate whether a bona fide sale existed between a potential seller and buyer. In determining whether property or ownership has been transferred, CBP considers whether the:

·alleged buyer has assumed the risk of loss and
·acquired title to the imported merchandise,
·buyer paid for the goods,
·payments are linked to specific importations of merchandise, and
·roles of the parties and circumstances of the transaction indicate that the parties are functioning as seller and buyer.

System for Tracking Export License Applications – STELA
STELA is the online tool that allows users to check the status of export/re-export license applications and classification requests by entering a BIS assigned application control number (ACN). The user can retrieve the same status information currently communicated on the phone-based system. The phone system will be phased out soon.

In about six weeks, we will have completed the alphabet twice and it might be a good idea to start another trade topic for Tuesday. If we end the series on trade terms, what topic or topics would you like to see take its place. Please send your suggestions to

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