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 B’s.

Break bulk Cargo
Break bulk cargo consists of goods that are shipped and not containerized, such as vehicles and large machinery.

Binding Ruling
A binding ruling is a written decision by CBP in response to a written request for a ruling by an importer or other party pertaining to classification, valuation or marking of merchandise.

Back-To-Back Letter of Credit
A back-to-back credit is created when an exporter holding an irrevocable Letter of Credit persuades the buyer's bank (the advising bank) to open a second credit in favor of the merchandise supplier. The two credits finance the same shipment and are identical in all respects, except that the supplier becomes the Beneficiary of the back-to-back credit. Also, the amount of the second credit is less than the original export credit to make up for the import agent's commission. Banks are reluctant to issue these letters of credit because of the increased risk with multiple parties.

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 X, Y and Z.

Zip Code
The zip code is a numerical code, established by the U.S. Postal Service, used for the purpose of routing mail and to identify delivery zones. Some foreign countries have a similar system. Carriers often apply this code in the same manner in the handling of freight and the determination of freight charges.


Zone Restricted Status
Zone-restricted status is for merchandise taken into a FTZ for the sole purpose of exporting it, destroying it, or storing it. If material is granted this status, it cannot be returned to the territory of the United States without FTZ Board approval (which is not frequently given). It is considered as exported material; and once given, the status cannot be abandoned. If merchandise is transferred from a bonded warehouse to a zone, it is given zone-restricted status.


Ok, we really had to dig for something on these last few letters of the alphabet, so if anyone has a good term related to exports for X, Y or Z, please feel free to share it with us. For now, we decided to use the term “you” which is defined in 15 CFR 772.1 - Definitions of terms as used in the Export Administration Regulations.

You

When used in the regulations, “you” is considered to include any person, including a natural person, including a citizen of the United States or any foreign country; any firm; any government, government agency, government department, or government commission; any labor union; any fraternal or social organization; and any other association or organization whether or not organized for profit.

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 K’s.

Known Shipper
Cargo offered for transport on board a passenger airliner must come from a Known Shipper. A Known Shipper is an individual or business that has an established reputation in the shipping community and is offering their own goods for transportation. To become a Known Shipper, the party must usually complete a form provided by the carrier and agree to furnish additional documentation if requested. The rules of this program are administered by the Transportation Security Administration (TSA), who is responsible for the oversight of all transportation security, including truck, rail and ocean, as well as air

Knitted
Cloth made by looping together yarn or thread by means of special needles and fastened together closely and firmly; cloth made by looping together yarn or thread. Knitting can also be done by machines.

Knowledge
When referring to a participant in a transaction that is subject to the EAR, knowledge of a fact or circumstance relating to the transaction includes not only positive knowledge that the fact or circumstance exists or is substantially certain to occur, but also an awareness that the existence or future occurrence of the fact or circumstance in question is more likely than not. Such awareness is inferred from evidence of the conscious disregard of facts known to a person and is also inferred from a person’s willful avoidance of facts. Note: The term may also include “know,” “reason to know,” or “reason to believe.” (15 CFR 772.1)

Trade Terms Tuesday

General Average
General average is a maritime principle that allows a vessel owner to recover from shippers that have cargo on board the vessel for expenditures incurred to repair the vessel due to extraordinary events such as fires and collisions. Under the general average provision, the owners of any cargo on board a vessel that is damaged must share pro rata in general average to repair any damage done to the vessel. General average originated in the late 1600’s when the risk of sailing long distances was higher so the risks of the voyage were shared by all who had an interest in the safe and profitable journey of the ship.


General Order
Merchandise which has not been released by CBP after a certain period is considered to be “general order” when it is taken into the custody of the port director and deposited in the public stores, or a general order warehouse. Imported merchandise subject to entry requirements must be released within 15 calendar days after the arrival of the vessel, aircraft or other conveyance (19 CFR 141.5, 19 CFR 127). In the case of merchandise moved in bond, merchandise must be released within 15 calendar days after arrival at the in bond destination. Merchandise not cleared within the allotted time may be at risk for being placed in General Order Storage by CBP. The owner of the merchandise has 6 months from date of importation to claim the merchandise, make an entry and pay any charges due. After the expiration of the 6-month period, CBP may sell the merchandise at public auction.


GBS
GBS is an exception to an export license requirement found in 15 CFR 740 of the EAR. Each License Exception is designated by a three-letter symbol used for export clearance purposes. GBS is the three-letter symbol for the exception for Shipments to Country Group B Countries. (15 CFR 740.4) License Exception GBS authorizes exports and reexports to Country Group B (see Supplement No. 1 to part 740) of those commodities where the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR) indicates a license requirement to the ultimate destination for national security reasons only.

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 E’s.

Export
An export is defined as any item that is sent from the United States to a foreign destination. “Items” include commodities, software or technology, clothing, building materials, circuit boards, automotive parts, blue prints, design plans, retail software packages, and technical information. Items can be sent by regular mail or hand-carried on an airplane. Items may be sent via facsimile to a foreign destination, software can be uploaded to, or downloaded from, an Internet site, or technology can be transmitted via e-mail or during a telephone conversation. Regardless of the method used for the transfer, the transaction is considered an export for export control purposes.

Explanatory Notes
Issued by the World Customs Organization (WCO), the Explanatory Notes provide detailed information, chapter-by-chapter; heading-by-heading, of what is included in and excluded from various sections, chapters, and headings in the HTSUS. Explanatory Notes are not part of the legal system; however, they do represent the views of classification experts.

Express Courier
An express carrier Transportation carrier, usually an airline, offers expedited delivery of small packages and documents and provides CBP clearance through the use of hubs, onsite CBP officials, and special entry processes.

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 C’s.


Commerce Control List (CCL)
Included in the Export Administration Regulations, the Commerce Control List identifies all dual-use commodities, software, and technologies subject to the export licensing process as well as the conditions under which those commodities, technologies, and software may be exported.

Carnet
A carnet is a customs document that allows the holder to carry or send goods into certain foreign countries temporarily without paying duties or posting bonds. A carnet serves as both the entry document and a CBP bond.

Currency Adjustment Factor (CAF)
The CAF is an ancillary freight surcharge or adjustment imposed by a carrier to offset foreign currency fluctuations. The CAF is usually a percentage of a published rate. While freight rates are normally fixed for a specified period, the CAF is subject to daily revisions based on the fluctuation of currency.

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 B’s.


Bureau of Industry & Security (BIS)
As part of the Department of Commerce, the Bureau of Industry & Security (BIS) has oversight for regulation of exports and issues of national security and technology. In addition to evaluating and issuing licenses for export and re-exports of goods and technology, the agency strives to protect the national security and stop proliferation of weapons of mass destruction. Activities include enforcing export regulations (EAR), anti-boycott and public safety laws, providing ECCN assistance, determining commodity jurisdiction and issuing licenses for certain goods.


Buying Commission
A buying commission is a component of valuation and consists of any monies paid to the buyer’s agent, who is controlled by, or works on behalf of the buyer. The most important distinction between buying and selling commissions is the amount of control exercised by the importer over the agent. The more control a buyer has over a "buying agent," the more likely it is CBP will find that a bona fide buying agency relationship exists.


Backhaul

The backhaul is the portion of a transportation trip that returns the carrier’s equipment to the origin point. The backhaul can contain a full, partial, or empty load. An empty backhaul is called deadheading.

Trade Terms Tuesday

Welcome to Trade Terms Tuesday! Each Tuesday the blog will feature three trade-related terms. In order to reach out to our diverse readership, we will provide one for exports, one for imports and one for logistics/transportation. This week, we start with the A’s. Even though we have three different terms this week, the terms are somewhat related because they all represent an electronic process.


Automated Export System (AES)
The Automated Export System (AES) is the electronic method used to transmit the required export information and manifest information directly to Customs & Border Protection. Prior to AES, the declaration was submitted using the paper, Shipper’s Export Declaration (SED). AES was designed to assure compliance with and enforcement of laws relating to exporting, improve trade statistics, reduce duplicate reporting to multiple agencies, and improve customer service. Penalties may be imposed for incorrect submissions.


Automated Commercial Environment (ACE)
The Automated Commercial Environment (ACE) is the new account-based processing system designed to consolidate and automate border processing to enhance border security and foster our Nation's economic security. ACE supports account-based import processing. Customs and the trade are able to use ACE to facilitate processing and analysis of entry activities in the aggregate rather than on a transaction-by-transaction basis. ACE reduces labor-intensive efforts and improves compliance efforts for both brokers and importers. ACE improves communication between CBP and the trade community, allows the trade to access their own trade data, and allows for sharing information with other government agencies.


Automated Manifest System (AMS)
The Automated Manifest System is an electronic cargo control and release notification system for air, sea, rail and truck carriers. AMS is used for cargo inventory control and cargo release notification. AMS interfaces with Customs Cargo Selectivity and the In Bond System, which expedites the flow of cargo and entry processing and provides participants with electronic authorization to move cargo. AMS also reduces the need for paper documents and expedites the processing of manifest and waybill data, thus allowing cargo to move from one point to another in less time. The National In Bond System, incorporated within AMS, provides a means of tracking and transporting merchandise from one port to another within the United States.