Appunti Totale Business Language

Installment Rata Comply Adempire

Avoidance Rescissione Charge Addebitare

Breach Violazione Rely on Rivalersi

Binding Vincolante Terminate Recedere

Liability Responsabilità Set out Stabilire

Issue Emettere Invoice Fattura

Expire Scadere Bill of Lading Polizza carico

Provide Fornire Packing List Distinta imballo

Fail Non riuscire a

Arrange Organizzare

Incoterms

They are a series of pre-defined commercial terms widely used in International Commercial

Transactions, they identify costs, control and liability. They are set to standardize the language in

commercial transaction. There are 11 different terms and they are revised periodically. The subjects

involved are: seller, shipper, customs, buyer, insurance

EXW – Ex Works

Maximum obligation on the buyer, the seller makes the goods available at his premises, buyer have

all risks

FCA – Free Carrier

The sellers delivers the goods cleared for export, at the carrier or another person nominated by the

buyer.

FAS – Free Alongside Ship

The seller delivers when the goods are placed alongside the buyer’s vessel at the named port of

shipment. The buyer has to bear all cost and risk of loss of or damage to the goods from that

moment. The seller have to clear the goods for export.

FOB – Free on Board

The seller pays for delivery of goods to the vessel including loading, the seller must also arrange for

export clearance. Risk passes from the seller to the buyer the goods are loaded abroad the vessel,

the buyer arranges for the vessel. The buyer pays cost of marine freight transportation, insurance,

unloading and transportation cost from the arrival port to destination.

CPT – Carriage Paid To

The seller pays for the carriage of the goods up to the named place of destination. Risk transfer to

buyer upon handing goods over to the first carrier at the place of shipment in the country of export.

The shipper is responsible for origin costs including export clearance and freight costs to carriage to

named place.

CFR – Cost and Freight

The seller pays for the carriage of the goods up to the named port of destination. Risk transfers to

buyer when the goods have been loaded on board the ship in the country of Export. The shipper is

responsible for origin costs including export clearance and freight costs for carriage to named port

but is not responsible for delivery to the final destination or insurance.

CIF – Cost, Insurance and Freight

Is similar to CFR, the seller required to obtain insurance for the goods while in transit to the named

port of destination. CIF requires the seller to insure the goods for 110% of their value under at least

the minimum cover, the policy should be in the same currency as the contract.

CIP – Carriage and Insurance Paid to

Is similar to CPT, the seller is required to obtain insurance for the goods while in transit. CIP

requires the seller to insure the goods for the 110% of their value under at least the minimum cover,

the policy should be in the same currency as the contract.

DAT – Delivered at Terminal

The seller covers all the costs of transport and assumes all the risk until destination port or terminal

(Port, Airport or inland freight interchange). Import duty and taxes are to be borne by the buyer.

DAP – Delivered at Place

Used for any transport mode, seller is responsible for arranging carriage and for delivering the

goods, duties are not paid by the seller, the seller bears all risks involved in bringing he goods to the

named place.

DDP – Delivered Duty Paid

Seller is responsible for delivering the goods to the named place in the country of the buyer, and

pays all costs including import duties and taxes. Maximum obligations on the seller. The seller is

not responsible for unloading, whit the delivery at named place risks and responsibilities are

transferred to the buyer. Transportation & Delivery Terms

* Bill of lading (ocean or airway) a contract prepared by the carrier or the freight forwarder whit

the owner of the goods. The foreign buyer needs this document to take possession of the goods.

* Certificate of origin a document that certifies the country where the product was made

* Commercial invoice a document prepared by the exporter, required by the foreign buyer, to prove

ownership and arrange for payment to the exporter.

* Customs declaration a document that accompanies exported goods bearing information of them.

* Customs invoice a document used to clear goods through customs in the importing country by

providing documentary evidence of the value of goods.

* Dock Receipt a receipt issued by an ocean carrier to acknowledge receipt of a shipment at the

carrier’s dock

* Export permit a legal document for the export of goods

Freight forwarder a service company that handles all aspects of export shipping for a fee

* Insurance certificate a document prepared by the exporter to provide evidence that insurance

against loss or damage has been obtained for the goods

* Packing list a document prepared by the exporter showing the quantity and type of merchandise

being shipped

* Pro forma invoice an invoice prepared by the exporter prior to shipping the goods

* Warehouse receipt a receipt identifying the commodities deposited in a recognized warehouse. A

non-negotiable warehouse receipt specifies to whom the deposited goods will be delivered or

released. A negotiable receipt states that the commodities will be released to the bearer of the

receipt.

Area control list a list of countries to which any export requires an export permit

Consular invoice a statement issued by a foreign consul in the exporting nation describing the

goods purchased

Landed cost the cost of the exported product at the port in the foreign market

Quotation an offer by the exporter to sell the goods at a stated price

Financial & Insurance Terms

Cash in advance a foreign customer pays an exporter prior to actually receiving the exporter’s

products

Consignment delivery of merchandise to the buyer or distributor, whereby the latter agrees to sell it

and only then pay the exporter

Open Account an arrangement in which goods are shipped to the foreign buyer before the exporter

receives payment.

Document of title a document that provides evidence of entitlement to ownership goods carrier’s

bill of landing

Documentary credit the exporter is entitled to receive payment on sight upon presenting the drat to

the bank

Draft a written, unconditional order of payment from one party to another

Documentary collection the exporter ships the goods to the foreign buyer without a confirmed

letter of credit or any other form of payment guarantee.

Letter of credit an instrument issued by a bank on behalf of an importer that guarantees an exporter

payment for goods or services, provided the terms of the credit are met.

All risk this is the most comprehensive type of transportation insurance, providing protection

against all physical or damage. Legal Terms

Arbitration the process of resolving a dispute or a grievance outside of the court systems by

presenting it to an impartial third party or panel for a decision that may or may not be binding.

Contract a written or oral agreement which the law will enforce

Intellectual property a collective term used to refer to new ideas, protected by copyright, patents

and trademarks

Copyright protection granted to the authors and creators of recordings

Patent a right that entitles the patent holder, to prevent all others for a set period of time, from

using, making or selling subject matter of the patent

Trademark a word, logo, shape or design, or type of lettering which reflects the goodwill or

customers recognition that companies have in a particular product

Methods of Payment in International Trade

There are five primary methods of payment for international transactions. During or before contract

negotiations, you should consider which method is mutually desirable for you and your customer.

Payment risk chart

Most secure More secure None Less Secure Least Secure

Cash in Letters of Documentary Open

Exporter Consignment

advance credit collections account

Open Documentary Letters of Cash in

Importer Consignment account collections credit advance

International trade presents a spectrum of risk over the timing of payments. Exporters want to

receive payment as soon as possible, preferably as soon as an order is placed. Importers want to

receive the goods as soon as possible but to delay payment as possible.

Cash in advance

1)

Whit cash in advance, an exporter can avoid credit risk because payment is received before the

ownership of the goods is transferred. Wire transfers and credit cards are the most common used by

exporters, whit the internet, escrow services are becoming another option for small export

transaction. This is the least attractive option for the buyer, because it creates unfavourable cash

flow.

This payment can use when the importer is new customer, his creditworthiness is doubtful, the

political and commercial risks of the importer’s home country are very high, the exporter’s product

is unique, the exporter operates an internet based business where the accepted of credit card

payments is a must to remain competitive.

Letters of credit / Documentary Credit

2)

Are one of the most secure instruments available to international traders, a letter of credit protects

the buyer since no payment obligation to pay arises until the goods have been shipped as promised.

The document may not be changed or cancelled unless the importer, banks and exporter agree. A

letter of credit is a contractual agreement whereby the issuing bank, acting a behalf of its customer

(buyer), promises to make payment to the exporter against the receipt of stipulated documents.

Documentary collections / Cash against documents

3)

Funds are received from the importer and remitted to the exporter via the banks involved in the

collection in exchange for those documents. Is similar to Letter of credit but in this transaction the

exporter entrust the collection of the payment for sale to its bank (remitting bank) which sends the

documents that its buyer needs to the importer’s bank (collecting bank). Documentary collections

involve using a draft that requires the importer to pay the face amount at sight or on a specified

date. The importer is not obligated to pay for goods before shipment.

Open account

4)

The goods are shipped and delivered before payment is due, which in international sales is typically

in 30, 60 or 90 days. This is one of the most advantageous option for the importer in terms of cash

flow and cost, but it’s consequentially one of the highest risk option for the exporter. Exporter uses

this when the importing country is commercially and politically secure, exporters can seek extra

protection using export credit insurance.

Consignment

5)

Is a variation of open account: the payment is sent to the exporter only after the goods have been

sold by the foreign di