How to Import into the US

Entry Summary Selectivity System

The Entry Summary Selectivity System, a part of Customs’ Automated Commercial System, provides an automated review of entry data to determine whether team or routine review is required. Selectivity criteria include an assessment of risk by importer, tariff number, country of origin, manufacturer, and value. Summaries with Census warnings, as well as quota, antidumping and countervailing duty entry summaries are selected for team review. A random sample of routine review summaries is also automatically selected for team review.

Escape Clause

The escape clause, which can be invoked under GATT Article XIX, allows countries to temporarily violate their GATT obligations to the degree and time necessary to protect a domestic industry from serious injury. Countries taking such actions, however, must consult with affected contracting parties to determine appropriate compensation for the violation of GATT rights, or be subject to retaliatory trade actions. Section 201 of the Trade Act of 1974 requires the U.S. International Trade Commission to investigate complaints filed by domestic industries or workers claiming that they are injured by rapidly rising imports. Section 203 of the Act provides that if the ensuing investigation establishes that the complaint is valid, relief may be granted in the form of adjustment assistance, which may be training, technical, and financial assistance, or temporary import restrictions in the form of tariffs, quotas, and/or marketing agreements. Import restrictions imposed under the escape clause authority are limited in duration. They may last no longer than five years but can be extended by the President for a three-year period.

Eurodollars

U.S. dollars placed on deposit in banks outside the United States (primarily in Europe).

European Bank for Reconstruction and Development

The EBRD provides assistance through direct loans. The loans are designed to facilitate the development of market-oriented economies to promote private and entrepreneurial initiatives. The EBRD began financing operations in June 1991. EBRD headquarters are in London.

European Commission

One of the five major institutions of the European Community, the Commission is responsible for ensuring the implementation of the Treaty of Rome and Community rules and obligations; submission of proposals to the Council of Ministers; execution of the Council’s decisions, reconciliation of disagreements among Council members; administration of EC policies, such as the Common Agricultural Policy and coal and steel policies; taking necessary legal action against firms or member governments; and representing the Community in trade negotiations with non- member countries.

European Community

A regional organization created in 1958 providing for gradual elimination of intraregional customs duties and other trade barriers, applying a common external tariff against other countries, and providing for gradual adoption of other integrating measures, including a Common Agricultural Policy and guarantees of free movement of labor and capital. The original 6 members were Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands. Denmark, Ireland, and the United Kingdom became members in 1973, Greece acceded in 1981, and Spain and Portugal in 1986.

European Free Trade Association

A regional organization established in December 1959 by the Stockholm Convention as an alternative to the Common Market, EFTA was designed to provide a free trade area for industrial products among member countries. Unlike the EC, however, EFTA members did not set up a common external tariff and did not include agricultural trade. The original members were the United Kingdom, Austria, Denmark, Norway, Portugal, Sweden, and Switzerland. The United Kingdom, Denmark, and Portugal left EFTA when theyjoined the EC. EFTA currently has seven members: Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland-Austria and Sweden have applied for BC membership.

Ex – “From.”

When used in pricing terms such as “Ex Factory” or “Ex Dock,” it signifies that the price quoted applies only at the point of origin (in the two examples, at the seller’s factory or a dock at the import point). In practice, this kind of quotation indicates that the seller agrees to place the goods at the disposal of the buyer at the specified place within a fixed period of time.

Exchange Rate

The price of one currency expressed in terms of another, i.e., the number of units of one currency that may be exchanged for one unit of another currency. Influences on exchange rates include differences between interest rates and other asset yields between countries; investor expectations about future changes in a currency’s value; investors’ views on the on the overall quantity of dollar-denominated assets in circulation; arbitrage; and central bank exchange rate support.

Export

To send or transport goods out of a country for sale in another country. In international sales, the exporter is usually the seller or the seller’s agent. Compare: Import.

Export Administration Act

The BAA of 1979, as amended, authorizes the President to control exports of U.S. goods and technology to all foreign destinations, as necessary for the purpose of national security, foreign policy, and short supply. As the basic export administration statute, the EAA is the first big revision of export control law since enactment of the Export Control Act of 1949. The EAA is not a permanent legislation; it must be reauthorized-usually every three years. There have been reauthorizations of the BAA in 1982, 1985 (the Export Administration Amendments Act), and 1988 (Omnibus Amendments of 1988) which have changed provisions of the basic Act. The Export Administration Act of 1990 was pocket vetoed by the President, charging that provisions involved micro management.

Export Administration Amendments Act. See: Export Administration Act

Export Administration Regulations

The Export Administration Regulations provide specific instructions on the use and types of licenses required and the types of commodities and technical data under control.

Export Administration Review Board

The BARB is a cabinet-level export licensing dispute resolution group. The BARB was originally established in June 1970 under Executive Order 11533. Under Executive Order 12755 of March 1991, BARB membership includes Commerce (as chair), State, Defense, and Energy, and Arms Control and Disarmament Agency and, as non-voting members, the Joint Chiefs of Staff and the Central Intelligence agency. The BARB is final review body to resolve differences among agency views on the granting of an export license. [Preceding the BARB review are: (a) Operating Committees and (b) the Advisory Committee on Export Policy.] National Security Directive 53 requires escalation of disputes regarding an export license to the Advisory Committee on Bxport Policy (ACBP) not later than 100 days from the filing date of the applicant’s application. Any cases not resolved at the ACBP level must be escalated to the EARB within 35 days of the date of the ACEP meeting. Cases not resolved by the BARB must be escalated to the President for resolution.

Export Assistance Center

An Export Assistance Center (BAC) system was established by the state of Texas to link agencies, associations, and local governments in efforts to increase exports by assisting current and prospective exporters. The US&FCS has been considering using the Texas model to develop similar export assistance networks.

Export Broker

An individual or firm that brings together buyers and sellers for a fee, but does not take part in actual sales transactions.

Export Commodity Classification Number. See: Export Control Classification Number

Export Contact List Service

The ECLS is an ITA service that provides mailing lists of prospective overseas customers from ITA’s file of foreign firms (the Foreign Trader’s Index). The BCLS identifies manufacturers, distributors, retailers, service firms, and government agencies. A summary of the information on the company includes contact information, product and service interests, and other data.

Export Control Automated Support System

ECASS was implemented by the Commerce Department in 1985 to automate a paper-based system. The system currently provides:

electronic submission of application forms directly by exporters;

optical character recognition of applications submitted on paper;

paperless workstations for all licensing officers to review the application, route it to other officers, branches, or external agencies, and to enter their final action along with riders and conditions;

automated audit of all licenses issued; and

real time management reporting on Licensing Officer workloads, average- processing times, counts and times by license type, destination country, commodity code, and other data.

Export Control Classification Number

Every product has an export control classification number (formerly: export commodity classification number) within the Commerce Control List. The BCCN consists of a five-character number that identifies categories, product groups, strategic level of control, and country groups.

Export Credit Enhanced Leverage

The export credit enhanced leverage, EXCEL, the World Bank developed program in 1990 in conjunction with a working group of the International Union of Credit and Investment Insurers (the Berne Union). The objective of EXCEL is to provide export credits at consensus rates for private sector borrowers in highly indebted countries, which would previously have been too great a risk for most agencies to cover.

Export Declaration

Also known as the Shipper’s Export Declaration (S ED), this form includes complete particulars on an individual shipment and is required by Commerce to control exports and act as a source document for export statistics.

Export Development Corporation

EDC is Canada’s official export credit agency, responsible for providing export credit insurance, loans, guarantees, and other financial services to promote Canadian export trade.

Export Development Office

Export Development Office (EDO5) in seven cities (Tokyo, Sydney, Seoul, Milan, London, Mexico City, and Sao Paulo) provide services to U.S. exporters, including market research to identify specific marketing opportunities and products with the greatest sales potential; and to organize export promotion events. EDOs are staffed by U.S. and Foreign Commercial Service officers. When not in use for trade exhibitions, EDOs with exhibit and conference facilities are made available to individual firms or associations.

Export Information Codes

These codes are used by AES to distinguish between shipments requiring complete information from those requiring either limited or no information. Also, AES will allow exporters the option of reporting shipments for which an SED is not required. For a list of Export Information Codes with detailed information relating to these requirements, call the Foreign Trade Division, Customs Systems Requirements Branch, (301) 457-2207.

Export-Import Bank of the United States

Eximbank was chartered in 1934 as an independent agency to finance the export of U.S. goods and services. Eximbank offers four major export finance support programs: loans, guarantees, working capital guarantees, and insurance. Eximbank undertakes some of the risk associated with financing the production and sale of American-made goods; provides financing to overseas customers for American goods when lenders are not prepared to finance the transactions; and enhances a U.S. exporter’s ability to match foreign government subsidies by helping lenders meet lower rates, or by giving financing incentives directly to foreign buyers.

Export Legal Assistance Network

The Bxport Legal Assistance Network, ELAN, sponsored by SBA, is a nationwide group of attorneys with experience in international trade who provide free initial consultations to small businesses on export-related matters. Telephone (202) 778-3080.

Export License

A government document authorizing exports of specific goods in specific quantities to a particular destination. This document may be required in some countries for most or all exports and in other countries only under special circumstances.

Export License Voice Information System

ELVIS is a BXA 24-hour on-line service which allows exporters to obtain recorded information on such topics as commodity classifications, emergency handling procedures, and seminars as well as to order information (202) 482-4811.

Delivered at Frontier (Named place)

A term used primarily for movement of shipments between contiguous countries. The Seller is to deliver the goods, cleared for export, assuming all risks and costs up to the named place at the frontier. The Buyer assumes all costs and risks at the named place at the frontier including import clearance.

Delivered Duty Paid (Named place of destination)

In this situation, the Seller is to deliver the goods assuming all costs and risks to the named place of destination (including duties and import clearance). The Buyer is to take delivery of the goods at the named place of destination upon clearance of the goods.

Delivered Duty Unpaid (Named place of destination)

The Seller is to deliver the goods assuming all costs and risks to the named place of destination (excluding duty and import clearance). The Buyer is to take delivery of the goods at the named place of destination and to assume all risks and costs (including import clearance and duties).

Delivered Ex Quay, Duty Paid (Named port of destination)

The Seller is to deliver the goods, cleared for import, assuming all costs and risks on the quay at the named port of destination including offloading and import clearance, duty paid. The Buyer is to take delivery of the goods and assume all costs and risks upon clearance of the goods.

Delivered Ex Ship (Named port of destination)

The Seller is to deliver the goods, uncleared for import, on board the vessel assuming all costs and risks up to the named port of destination. The Buyer is to take delivery of the goods at the named port of destination and arrange for offloading, import clearance and delivery to destination.

Delivery Instructions

Provides specific information to the inland carrier concerning the arrangement made by the forwarder to deliver the merchandise to the particular pier or steamship line. Not to be confused with Delivery Order which is used for import cargo.

Demurrage

Penalty for excess time taken for loading or unloading a vessel. Demurrage refers only to situations in which the charter or shipper, rather than the vessel’s operator, is a fault.

Deposit of Estimated Duties

This refers to antidumping duties which must be deposited upon entry of merchandise which is the subject of an antidumping duty order for each manufacturer, producer or exporter equal to the amount by which the foreign market value exceeds the United States price of the merchandise.

Direct Investment

Direct Investment is defined in the international Monetary Fund’s Balance of Payments Manual as “investment that is made to acquire a long lasting interest in an enterprise operating in an economy other than that of the investor, the investor’s purpose being to have an effective voice in the management of the enterprise.” In the United States, direct investment is defined for statistical purposes as the ownership or control, directly or indirectly, by one person of 10 percent or more of the voting securities of an incorporated business enterprise, or an equivalent interest in an unincorporated business enterprise. Direct investment transactions are not limited to transactions in voting securities. The percentage ownership of voting securities is used to determine if direct investment exists, but once it is determined that it does, all parent-affiliate transactions, including those not involving voting securities, are recorded under direct investment. See: Foreign Direct Investment in the United States

Destination Control Statement

Any of various statements which the U.S. Government requires to be displayed on export shipments (controlled), and which specify the destinations for which export of the shipment has been authorized.

Devaluation

The official lowering of the value of one country’s currency in terms of one or more foreign currencies. Thus, if the U.S. dollar is devalued in relation to the French franc, one dollar will “buy” lower francs than before.

Disclosure Meeting

An informal meeting in which the ITA discloses to parties to the proceeding the methodology used in determining the results of an antidumping investigation or administrative review.

Dismissal of Petition

A determination made by the International Trade Administration that the petition does not properly allege the basis on which antidumping duties may be imposed, does not contain information deemed reasonably available to the petitioner supporting the allegations, or is not filed by an appropriate interested party.

Dispatch

An amount paid by a vessel’s operator to a charterer if loading or unloading is completed in less time than stipulated in the charter party.

Distribution license

The distributipn license is a bulk license that allows the holder to make multiple exports of authorized commodities to foreign cosignees who are approved in advance by the Bureau of Export Administration. The procedure also authorizes approved foreign cosignees to reexport among themselves and to certain approved countries.

Distributor

A foreign intermediary who sells directly for a supplier and maintains an inventory of the supplier’s products.

District Export Councils (DEC)

DECs serve as a voluntary auxiliary of US&FCS district offices to support export expansion activities. There are 51 DECs with 1800 members that help with workshops and also provide counseling to less experienced exporters.

Diversionary Dumping

This occurs when foreign producers sell to a third country market at a less than fair value and the product is then further processed and shipped to another country.

Dock Receipt

A receipt issued by an ocean carrier to acknowledge receipt of a shipment at the carrier’s dock or warehouse facilities. Also see: Warehouse Receipt.

Documents Against Acceptance (DIA)

Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer (or drawee) only upon the buyer’s acceptance of the attached draft.

Documents Against Payment (D/P)

Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer (or drawee) only upon the buyer’s payment of the attached draft.

Domestic Exports

Exports of domestic merchandise include commodities that are grown, produced, or manufactured in the United States. Also commodities of foreign origin that have been changed in the United States, including U.S. Foreign Trade Zones, from the form in which they were imported, or which have been enhanced in value by further manufacture in the United States.

Domestic International Sales Corporation

The predecessor of the Foreign Sales Corporation that took on a new definition as a result of the 1984 Tax Reform Act. DISCs can now provide a tax deferral on up to S 10 million of exports so long as the funds remain in export-related investments.

Domicile

The place where a draft acceptance is made payable.

Downstream Dumping

This occurs when foreign producers sell at below cost to a producer in its domestic market and the product is then further processed and shipped to another country.

Draft (or Bill of Exchange)

An unconditional order in writing from one person (the drawer) to another (the drawee), directing the drawee to pay a specified amount to a named payee at a fixed or determinable future date.

Drawback

A refund of duties paid on imported goods which is provided at the time of their reexportation.

Drawback System

The Drawback System, a part of Customs’ Automated Commercial System, provides the means for processing and tracking drawback claims.

Drawee

The individual or firm on whom a draft is drawn and who owes the indicated amount. Compare: Drawer. Also see: Draft.

Drawer

The individual or firm that issues or signs a draft, and thus, stands to receive payment of the indicated amount from the drawee. Compare: Drawee. Also see: Draft.

Dual Pricing

The selling of identical products in different markets for different prices. This often reflects dumping practices.

Dumping

Importing merchandise into a country (e.g., the United States) at low prices that are detrimental to local producers of the same kind of merchandise.

Dumping Margin

The amount by which the imported merchandise is sold in the United States below the home market or third country price or the constructed value (that is, less than its “fair value”). For example, if the U.S. “purchase price” is $200 and the fair value is $220, the dumping margin is $20. This margin is expressed as a percentage of the United States price. In this example, the margin is 10 percent. o Duty A tax imposed on imports by the customs authority of a country. Duties are generally based on the value of the goods (ad valorem duties), some other factor such as weight or quantity (specific duties), or a combination of value and other factors (compound duties).

The Eastern Europe Business Information Center

The Eastern Europe Business Information Center (EEBIC) is a Department of Commerce facility that was opened in January 1990 to provide information on trade and investment opportunities in Eastern Europe.

Economic Bulletin Board

The EBB is a personal computer-based economic bulletin board operated by the U.S. Department of Commerce in Washington, D.C. The EBB is an online source for trade leads and statistical releases from the Bureau of Economic Analysis, the Census Bureau, the International Trade Administration, the Bureau of Labor Statistics, the Federal Reserve Board, Department of the Treasury, and other Federal agencies.

Economic Officers

Embassy officials who analyze and report on macroeconomic trends and trade policies and their implications for U.S. policies and programs. Economic officers represent U.S. interests and arrange and participate in economic and commercial negotiations. See: Commercial Officers; Foreign Service

Economic Policy Council

The EPC was established by Executive Order in 1985 to address major trade policy issues in a single forum as a means of reducing tensions between different groups, such as the Trade Policy Committee and the Senior Interagency Group. The Council was modified in the Omnibus Trade and Competitiveness Act of 1988. Membership includes the Treasury, (chair pro tem), State, Agriculture, Commerce, Labor, Transportation, the 0MB, the U.S. Trade Representative, the Council of Economic Advisers, and the Assistant to the President for Science and Technology.

Electronic Data Interchange for Administration, Commerce, and Transportation

EDIFACT is an international syntax used in the interchange of electronic data. Customs uses
EDIFACT to interchange data with the importing trade community.

Electronic License Application and Information Network

ELAiNE is a BXA 24-hour on-line service that allows exporters to submit license applications.

EMC See: Export Management Company.

Enabling Clause

Part I of the General Agreement on Tariffs and Trade (GATT) framework which permits developed country members to give a more favorable treatment to developing countries and special treatment to the least developed countries, notwithstanding the most-favored-nation provisions of the GATT.

End-Use Codes

The HTSA and Schedule B classifications are summarized into six principal “end-use” categories and further subdivided into about 140 broad commodity groupings. The concept of end-use demand was developed for balance of payments purposes by the Bureau of Economic Analysis.

End-user

The person abroad that receives and ultimately uses the exported or reexported items. The end- user is not a forwarding agent or intermediary, but may be the purchaser or ultimate consignee.

Enforced Compliance. See: Compliance Strategy.

Enhanced Proliferation Control Initiative

EPCI is a series of measures to tighten export controls on goods and technologies useful in the production of chemical and missile weapons systems. EPCI allows Commerce greater authority to deny exports of low level goods and technologies to nation of proliferation concern.

Enterprise for the Americas Initiative

The EAT, which was launched in June 1990, is intended to develop a new economic relationship of the U.S. with Latin America. The EAT has trade investment, debt, and environment aspects. With regard to trade, the EM involves an effort to move towards free trade agreements with markets in Latin America and the Caribbean, particularly with groups of countries that have associated for purposes of trade liberalization. To begin the process of creating a hemispheric free trade system, the U.S. seeks to enter into “framework” agreements on trade and investment with interested countries or groups of countries. These agreements set up intergovernmental councils to discuss and, where appropriate, to negotiate the removal of trade and investment barriers.

Entrepot

An intermediary storage facility where goods are kept temporarily for distribution within a country for reexport.

Entry Summary System

An entry is the minimum amount of documentation needed to secure the release of imported merchandise. The Entry Summary System, a part of Customs’ Automated Commercial System, contains data on release, summary rejection, collection liquidation, and extension or suspension.

Consular Declaration

A formal statement, made to the consul of a foreign country, describing goods to be shipped.

Consular Invoice

A document, required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official of the foreign country, it is used by the country’s customs officials to verify the value, quantity, and nature of the shipment.

Consular Officers

These are U.S. embassy officials who extend to U.S. citizens and their property abroad the protection of the U.S. Government. They maintain lists of local attorneys, act as liaison with police and other officials and have the authority to notarize documents.

Container

A uniform, sealed, reusable metal “box” in which merchandise is shipped by vessel, truck, or rail. Standard lengths include 10, 20, 30, and 40 feet (40 foot lengths are generally able to hold about 40,000 pounds). Containers of 45 and 48 feet are also used, as well as containers for shipment by air.

Contracting Parties

Contracting parties are the signatory countries to the GATT. These countries have accepted the specified obligations and privileges of the GATT agreement.

Conventional Arms Transfer

The transfer of non-nuclear weapons, aircraft, equipment, and military services from supplier states to recipient states. U.S. arms are transferred by grants as in the Military Assistance Program (MAP); by private commercial sales; and by government-to-government sales under Foreign Military Sales (FMS). MAP provides defense articles and defense services to eligible foreign governments on a grant basis. FMS provides credits and loan repayment guarantees to enable eligible foreign governments to purchase defense articles and defense services.

Convention on Contracts for the International Sale of Goods

The UN Convention on Contracts for the International Sale of Goods, CISG, became the law of the United States in January 1988. CISG establishes uniform legal rules governing formation of international sales contracts and the right and obligations of the buyer and seller. The CISG applies automatically to all contracts for the sale of all goods between traders from two different countries that have both ratified the CISG, unless the parties to the contract expressly exclude all or part of the CISG or expressly stipulate a law other than the CISG.

Coordinating Committee on Multilateral Export Controls

CoCom is an informal organization that cooperatively restricts strategic exports to controlled countries. CoCom controls three lists: (a) the international industrial list (synonymous with the “dual-use” or “core” list), (b) the international munitions list, and (c) the atomic energy list. The 17 CoCom members are: Australia, Belgium, Canada, Denmark, France, the Federal Republic of Germany, Greece, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Spain, Turkey, the United Kingdom, and the United States.

Core List

East-West controls are based largely on CoCom’s core list, which replaced the old industrial list in September 1991. The core list includes items in ten categories: (1) materials, (2) materials processing, (3) electronics, (4) computers, (5) telecommunications and cryptography, (6) sensors, (7) avionics and navigation, (8) marine technology, (9) propulsion systems and transportation equipment, and (10) miscellaneous.

Cost and Freight (C&F)

Under this term, the Seller quotes a price for the goods that includes the cost of transportation to the named point of debarkation. The Seller must pay the costs and freight necessary to bring the goods to the named port of destination. The Seller must obtain the export license and pay export taxes and fees, and must furnish the Buyer a clean on-board bill of lading. The cost of insurance is left to the Buyer’s account. The risk of loss or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the Seller to the Buyer when the goods pass the ship’s rail in the port of shipment. (Typically used for ocean shipments only. CPT, or carriage paid to, is a term used for shipment by modes other than water). Also, a method of import valuation that includes insurance and freight charges with the merchandise values.

Cost and Insurance (C & I)

A pricing term indicating that these costs are included in the quoted price.

Cost, Insurance and Freight (CIF)

Under this term, the seller quotes a price for the goods (including insurance), all transportation, and miscellaneous charges to the point of debarkation for the vessel. (Typically used for ocean shipments only. CIP, or carriage and insurance paid to, is a term used for shipment by modes other than water.)

Cost, Insurance, Freight, and (Currency) Exchange

A pricing term indicating that these costs are included in the quoted price.

Cost of Production

A term used to refer to the cost of materials, fabrication and/or other processing employed in producing the merchandise sold in a home market or to a third country together with appropriate allocations of general administrative and selling expenses. COP is based on the producer’s actual experience and does not include any mandatory minimum general expense or profit as in “constructed value.”

Costs of Manufacture

In the context of dumping investigations, the cost of manufacture, COM, is equal to the sum of the materials, labor and both direct and indirect factory overhead expenses required to produce the merchandise under investigation.

Counterpurchase. See: Countertrade

Countertrade

Countertrade is an umbrella term for several sorts of trade in which the seller is required to accept goods or other instruments or trade, in partial or whole payment for its products. Forms include barter, buyback or compensation, counter-purchase, offset requirements, swap, switch, or triangular trade, evidence or clearing accounts. In counterpurchase (one of the most common forms of countertrade), exporters agree to purchase a quantity of goods from a country in exchange for that country’s purchase of the exporter’s product. The goods being sold by each party are typically unrelated but are equivalent in value. In offset, the exporter agrees to use goods and services from the buyer’s country in the product being sold. Offsets may be direct or indirect, depending on whether the goods and services are integral parts of the product. In a direct offset, a U.S. manufacturer selling a product uses a component that is made in the purchasing country. In an indirect offset, the exporter would buy products that are peripheral to the manufacture of its product.

Countervailing Duty

An extra duty imposed by the Secretary of the Treasury to offset export grants, bounties, or subsidies paid to foreign suppliers in certain countries by the governments of those countries as an incentive to exports.

Country of Export Destination

Country of destination for exports is the country where the goods are to be consumed, further processed, or manufactured, as known to the shipper at the time of exportation. If the shipper does not know the country of ultimate destination, the shipment is credited to the last country in which the shipper knows that the merchandise will be shipped in the same form as when exported.

Country Groups

For export control purposes, the Bureau of Export Administration of the U.S. Commerce Department separates countries into seven groups designated by the symbols: Q, 5, T, V. W, Y, Z. See: Export Control Classification Number

Country of Origin

Country of origin is the country where the merchandise was grown, mixed, or manufactured, in accordance with U.S. Customs Regulations. In instances where the country of origin cannot be determined, transactions are credited to the country of shipment. Certain foreign trade reports show country subcodes to indicate special tariff treatment afforded some imported articles.

Credit Risk Insurance

Insurance designed to cover risks of nonpayment for delivered goods. Compare: Marine Insurance.

Critical Circumstances

A determination made by the Assistant Secretary for Import Administration as to whether there is a reasonable basis to believe or suspect that there is a history of dumping in the United States or elsewhere of the merchandise under consideration. Of concern also is whether the importer knew or should have known that the exporter was selling this merchandise at a less than fair value and there have been massive imports of this merchandise over a relatively short period. This determination is made if an allegation of critical circumstances is received from the petitioner. o Current Account. See: Balance of Payments.

Customs

The authorities designated to collect duties levied by a country on imports and exports. The term also applies to the procedures involved in such collection.

Customs Bonded Warehouse(s)

Authorized by Customs for storage or manufacturing of goods on which payment of duties is deferred until the goods are removed into Customs Territory. These goods are not subject to duties if reshipped to foreign ports.

Customs Cooperation Council Nomenclature

A customs tariff nomenclature formerly used by many countries, including most European nations, but not the United States. It has been superseded by the Harmonized System Nomenclature to which most major trading nations, including the U.S., adhere.

Customs Form 214 (CF-214)

The U.S. Customs document used by the foreign trade zones to officially admit merchandise into aFTZ.

Customs Form 7501 (CF-7501)

The U.S. Customs document used by the importer or Customs Broker to officially admit merchandise into United States commerce.

Customs House Broker

An individual or firm licensed to enter and clear goods through Customs.

Customs Import Value

This is the U.S. Customs Service appraisal value of merchandise. Methodologically, the Customs value is similar to FAS value since it is based on the value of the product in the foreign country of origin, and excludes charges incurred in bringing the merchandise to the United States (import duties, ocean freight, insurance, and so forth). It differs in that the U.S. Customs Service, not the importer or the exporter, has the final authority to determine the value of the good.

Customs Union

An agreement between two or more countries to remove trade barriers with each other to establish common tariff and non-tariff policies with respect to imports from countries outside of the agreement. The European Community is the most well known example.

Date Draft

A draft that matures a specified number of days after the date it is issued, without regard to the date of Acceptance (Definition 2). Compare: Sight Draft, Time Draft.

Defense Memoranda of Understanding

Defense MOU’s are defense cooperation agreements. The MOU’s are signed by DOD with allied nations and are related to research, development, or production of defense equipment or reciprocal procurement of defense items.

Defense Technology Security Administration

DTSA is the DOD organization that reviews applications for the export of items that are subject to the dual-use license controls of the Commerce Department. DTSA has about 130 to 140 staff, is located in the Office of the Secretary, and administers the DOD technology security policy so that the U.S. is not technologically surprised on the battlefield. DTSA looks at dual-use, foreign policy, proliferation, and munitions controls and reviews applications to export dual-use commodities and munitions. Items subject to proliferation controls are reviewed by the Deputy for Non-Proliferation Policy, International Security Affairs (ISA), and Defense. ISA does not have the same independence within Defense that ACDA has within State. Thus, while DTSA and ISA may offer different views with their respective Operating Committees, these differences will be resolved before a dispute comes before the ACEP.

Defense Trade Controls, Office of (ODTC)

ODTC (formerly the Office of Munitions Control, OMC) at the Department of State administers licenses for the export of items that are exclusively, or primarily, of munitions significance. These items are listed in the International Traffic in Arms Regulations (ITAR) and the U.S. Munitions List. In circumstances in which an item may be considered dual-use or subject to the ITAR, the State Department has the option to assert the jurisdiction. In some cases, jurisdictions are made after an item has been subject to a dual-use license application sent to the Commerce Department. Commerce is never involved in State’s process, unless there are matters involving dual-use or issues involving jurisdiction.

Defense Trade Working Group

The Defense Trade Working Group (DTWG), consisting of officials from Commerce, Defense, State and USTR, was established in FY 1990 to coordinate agency policies and resources in areas concerned with defense expenditures. The group works with industry to identify ways to target industry needs and increase the success of industry export efforts by minimizing government impediments, streamlining procedures, and improving the availability of market information. The DTWG includes three subgroups:

The Defense Export Market Opportunity Subgroup, chaired by Commerce, which helps implement Administration defense export policy and enhances U.S. Government support for U.S. defense exporters;

The European Defense Cooperation Subgroup, chaired by State, which coordinates interagency input to U.S.-NATO International Staff for the NATO Council on National Armaments Directors (CNAD) study on defense trade; and;

Technology Transfer/Third Country Reexport Subgroup, chaired by Defense, which works with industry to define a more proactive technology transfer regime that could be implemented within the limits of U.S. national security and industrial competitiveness interest.

Clean Bill of Lading

A receipt for goods issued by a carrier with an indication that the goods were received in “apparent good order and condition,” without damages or other irregularities. Compare: Foul Bill of Lading.

Clean Draft

A draft to which no documents have been attached.

CoCom. See: Coordinating Committee on Multilateral Export Controls.

Collection Papers

All documents (invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment.

Collections System

The Collections System, a part of Customs’ Automated Commercial System, controls and accounts for the billions of dollars in payments collected by Customs each year and the millions in refunds processed each year. Daily statements are prepared for the automated brokers who select this service. The Collections System permits electronic payments of the related duties and taxes through the Automated Clearinghouse capability. Automated collections also meet the needs of the importing community through acceptance of electronic funds transfers for deferred tax bills and receipt of electronic payments from lockbox operations for Customs bills and fees.

Commerce Business Daily

CBD is the Commerce Department’s daily newspaper which lists government procurement invitations and contract awards, including foreign business opportunities and foreign government procurements.

Commerce Control List

On August 29, 1991, the Bureau of Export Administration published the new Commerce Control List (CCL) which replaced the former Commodity Control List, effective September 1, 1991. The CCL includes all items – commodities, software, and technical data – subject to BXA export controls and incorporates not only the national security controlled items agreed to by CoCom (the “core” list), but also items controlled for foreign policy and other reasons. The list adopts a totally new method of categorizing commodities and is divided into 10 general categories: (1) materials, (2) materials processing, (3) electronics, (4) computers, (5) telecommunications and cryptography, (6) sensors, (7) avionics and navigation, (8) marine technology, (9) propulsion systems and transportation equipment, and (10) miscellaneous.

Commercial Information Management System

The Commercial Information Management System, CIMS, is a PC-based system used by International Trade Administration staff in export counseling. CIMS is a trade-related application using National Trade Data Bank CD-ROMs to disseminate market research and international economics data to US&FCS domestic offices and overseas posts. The system includes data on American and foreign traders and supports local collection and update of information on business contacts.

Commercial Invoice

The commercial invoice is a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods for the assessment of customs duties and are also used to prepare consular documentation. Governments using the commercial invoice to control imports often specify its form, content, number of copies, language to be used, and other characteristics. An itemized list of goods shipped, usually included among an exporter’s COLLECTION PAPERS.

Commercial Officers

Commercial officers are embassy officials who assist U.S. business through arranging appointments with local business and government officials, providing counsel on local trade regulations, laws, and customs; identifying importers, buyers, agents, distributors, and joint venture partners for U.S. firms; and other business assistance. At large posts, International Trade Administration staff performs these functions. At smaller posts, commercial interests are represented by State’s economic officers. See: Economic Officers; Foreign Service

Commission Agent. See: Purchasing Agent.

Committee on Trade and Development

The CTD was established in 1965 to consider how the General Agreement on Tariffs and Trade (GATT) can aid the economic development of Less Developed Country (LDC) contracting parties (that is, LDC members). See: Commerce Control List

Commodity Credit Corporation

The CCC is a government corporation controlled by the Department of Agriculture that provides financing and stability to the marketing and exporting of agricultural commodities.

Common Carrier

An individual, partnership, or corporation that transports persons or goods for compensation.

Comparison Shopping Service

The comparison shopping service, CSS, is a fee-based International Trade Administration service that provides firms, with key marketing, pricing, and foreign representation information about their specific products. Overseas staff conduct on-site interviews to provide data in nine marketing areas about the product, such as sales potential in the market, comparable products, distribution chani~els, going price, competitive factors and qualified purchasers.

Compliance Strategy

• Informed Compliance- A shared responsibility wherein the Customs Service and Bureau of the Census effectively communicate their requirements to the trade, and the
  people and businesses subject to those requirements conduct their regulated activities in conformance with U.S. laws and regulations.

• Enforced Compliance- Focuses enforced compliance efforts such as: outbound manifest audits, physical verification of export cargo ladened aboard selected vessels,
  compliance examinations of export cargo, detention of export cargo delivered without proper documentation, and “advisory notices”.

Composite Theoretical Performance

Computer hardware export license requirements are evaluated according to the Composite Theoretical Performance (CTP), which replaced the former Processing Data Rate (PDR) parameter. CTP is measured in Million Theoretical Operations Per Second (MTOPS). CTP was developed by the U.S. as a new parameter, and was adopted by CoCom during the Core List negotiations, because PDR was not applicable to certain computer architectures such as vector processors, massively parallel processors, and array processors. CTP is designed to measure all of these architectures as well as signal processing equipment.

COMPRO

COMPRO (Commercial Procedure) is an on-line trade data retrieval system maintained by the International Trade Administration for the government trade community (ITA, UTSR, ITC, and other executive branch agencies). COMPRO includes:

U.S. foreign trade data (detailed U.S. merchandise trade statistics compiled by Census)

U}.~ trade data(trade statistics of 170 countries)

International Monetary Fund and World Bank databases (international finance, direction of trade, and developing country debt). COMPRO contains gateways to: (a) LAPSTAT, a product of the Bureau of Labor Statistics and (b) OBADATA, the Economics and Statistics Administration’s industrial statistics.

Confirmed Letter of Credit

A letter of credit, issued by a foreign bank, whose validity has been confirmed by an American bank. An exporter whose payment terms are a confirmed letter of credit is assured of payment even if the foreign buyer or the foreign bank defaults

Confirming

Confirming is a financial service in which an independent company confirms an export order in the seller’s country and makes payment for the goods in the currency of that country. Among the items eligible for confirmation are the goods; inland, air, and ocean transportation costs; forwarding fees; custom brokerage fees; and duties. Confirming permits the entire export transaction from plant to end-user to be fully coordinated and paid for over time.

Consignee

The person or firm named in a freight contract to whom goods have been consigned or turned over.

Consignment

Delivery of merchandise from an exporter (the consignor) to an agent (the consignee) under agreement that the agent sells the merchandise for the account of the exporter. The consignor retains title to the goods until sold. The consignee sells the goods for commission and remits the net proceeds to the consignor.

Constructed Value

A means of determining fair or foreign market value when sales of such or similar merchandise do not exist or, for various reasons, cannot be used for comparison purposes. The “constructed value” consists of the cost of materials and fabrication or other processing employed in producing the merchandise, general expenses of not less than 10 percent of material and fabrication costs, and profit of not less than 8 percent of the sum of the production costs and general expenses. To this amount is added the cost of packing for exportation to the United States.

Bill of Lading

A document that establishes the terms of a contract between a shipper and a transportation company under which freight is to be moved between specified points for a specified charge. Usually prepared by the forwarder on forms issued by the carrier, it serves as a document of title, a contract of carriage, and a receipt for goods. Also see: Air Waybill, Inland Bill of Lading, Ocean Bill of Lading, Through Bill of Lading. Bills of Lading are contracts between the owner of the goods and the carrier. There are two types. A straight bill of lading is nonnegotiable. A negotiable or shipper’s order bill of lading can be bought, sold, or traded while goods are in transit and is used for letter-of-credit transactions. The customer usually needs the original or a copy as proof of ownership to take possession of the goods.

Biological Agents

Several classes of biological agents have been identified according to their degree of pathogenic hazard, and are unilaterally controlled by the United States. Applications to export certain biological agents are referred to the Department of State and the intelligence community on a case-by-case basis.

Bond System

The Bond System, a part of Customs’ Automated Commercial System, provides information on bond coverage. A Customs bond is a contract between a principal, usually an importer, and a surety that is obtained to insure performance of an obligation imposed by law or regulation. The bond covers potential loss of duties, taxes, and penalties for specific types of transactions. Customs is the contract beneficiary.

Bonded Warehouse

A warehouse authorized by Customs authorities for storage of goods on which payment of duties is deferred until the goods are removed. The U.S. Customs Service authorizes bonded warehouses for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. The goods are not subject to duties if reshipped to foreign points.

Booking

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

Brussels Tariff Nomenclature

A once widely used international tariff classification system which preceded the Customs Cooperation Council Nomenclature (CCCN) and the Harmonized System Nomenclature. See: Nomenclature of The Customs Cooperation Council.

Business Executive Enforcement Team

The Business Executive Enforcement Team, BEET, provides a channel for private sector executives to discuss export control enforcement matters with the Bureau of Export Administration.

Buying Agent. See: Purchasing Agent.

C Terms (CFR, CIF, CPT, and CIP)

Seller fulfills the contract in the country of shipment or dispatch. Risk or loss, damage to the goods and additional cost after delivery to the carHer fall upon the Buyer.

Capital Account See: Balance of Payments

Cargo Selectivity System

The Cargo Selectivity System, a part of Customs’ Automated Commercial System, specifies the type of examination (intensive or general) to be conducted for imported merchandise. The type of examination is based on database selectivity criteria such as assessments or risk by filer, consignee, tariff number, country of origin, and manufacturer/shipper. A first time consignee is always selected for an intensive examination. An alert is also generated in cargo selectivity the first time a consignee files an entry in a port with a particular tariff number, country of origin, or manufacturer/shipper.

Caribbean Basin Economic Recovery Act

The CBERA affords non-reciprocal tariff preferences to developing countries in the Caribbean Basin area to aid their economic development and to diversify and expand their production and exports. The CBERA applies to merchandise entered, or withdrawn from warehouse for consumption, on or after January 1, 1984. This tariff preference program has no expiration date.

Caribbean Basin Initiative

The CBI is an inter-American program to increase economic aid and trade preferences for twenty- eight states of the Caribbean region. The Caribbean Basin Economic Recovery Act of 1983 provided for twelve years of duty-free treatment of most goods produced in the Caribbean region. The initiative was extended permanently (CBI II), by the Customs and Trade Act of August 1990. The 23 countries include Antigua and Barbuda, the Bahamas, Barbados, Belize, the British Virgin Islands, Costa Rica, Dominica, the Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Honduras, Jamaica, Montserrat, the Netherlands Antilles, Nicaragua, Panama, St. Christopher-Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago. The following countries may be eligible for CBI benefits but have not formally requested designation: Anguilla, Cayman Islands, Surname, and the Turks and Caicos Islands.

Caribbean Common Market

The Caribbean Common Market, CARICOM, is composed of 13 English speaking Caribbean nations. Members include Antigua and Barbuda, the Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent/Grenadines, and Trinidad and Tobago.

Carnet

A Customs document permitting the holder to carry or send sample merchandise temporarily into certain foreign countries (for display, demonstration, or similar purposes) without paying duties or posting bonds. SED is required when exporting merchandise under a carnet. The camet number should be written in the “Description” area of the SED as: “merchandise moving under carnet number___________.” Since the Foreign Principle Party in Interest enlists the services of the forwarding agent to expedite the movement of the cargo the forwarding agent will be the U.S. Principle Party in Interest on the SED.

Carriage & Insurance Paid To (Named place of destination)

The Seller has the same obligation as under CPT but with the addition that the Seller has to procure cargo insurance against the Buyer’s risk of loss or damage to the goods during the carriage. The Buyer has the same obligations as under CPT.

Carriage Paid To

Carriage paid to (CPT) and carriage and insurance paid to (CIP) a named place of destination. Appropriate where the Seller is relieved of obligation to provide a bill of lading or other transport document as ownership of the goods. The Seller and Buyer have agreed to replace paper transport document with an equivalent electronic data interchange (EDI) message. Used in place of CFR and CIF, respectively for shipment by modes other than water. The Seller pays the freight for the carriage of the goods to the named destination. Seller also must obtain the export license and pay export taxes and fees. The Buyer assumes the risk of loss and damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier. An organization of independent producers formed to regulate the production, pricing, or marketing practices of its members in order to limit competition and maximize their market power.

Cash Against Documents (C.A.D.)

Payment for goods in which a commission house or other intermediary transfers title documents to the buyer upon payment in cash.

Cash in Advance (C.I.A.)

Payment for goods in which the price is paid in full before shipment is made. This method is usually used only for small purchases or when the goods are built to order.

Cash With Other (C.W.O.)

Payment for goods in which the buyer pays when ordering and in which the transaction is binding on both parties.

Category Groups

Groupings of controlled products. See: Export Control Classification Number.

Census Interface System

The Census Interface System, a part of Customs’ Automated Commercial System, includes edits and validations provided by the Bureau of the Census to allow for the accurate and timely collection and submission of entry summary data. Census Interface is accomplished through Automated Broker Interface entry summary transmissions.

Certificate of Inspection

A document certifying that merchandise (such as perishable goods) was in good condition immediately prior to shipment. Pre-shipment inspection is a requirement for importation of goods into many developing countries.

Certificate of Manufacture

A document (often notarized) in which a producer of goods certifies that the manufacturing has been completed and the goods are now at the disposal of the buyer.

Certificate of Origin

Certain nations require a signed statement as to the origin of the export item. Such certificates are usually obtained through a semiofficial organization such as a local chamber of commerce. A certificate may be required even though the commercial invoice contains the information.

Certified Trade Fair Program

The Department of Commerce Certified Trade Fair Program is designed to encourage private organizations to recruit new-to-market and new-to-export U.S. firms to exhibit in trade fairs overseas. To receive certification, the organization must demonstrate: (1) the fair is a leading international trade event for an industry and (2) the fair organizer is capable of recruiting U.S. exhibitors and assisting them with freight forwarding, customs clearance, exhibit design and setup, public relations, and overall show promotion. The show organizer must agree to assist new-to-export exhibitors as well as small businesses interested in exporting. In addition to the services the organizer provides, the Department of Commerce will:

assign a Washington coordinator;

operate a business information office, which provides meeting space, translators, hospitality, and assistance from U.S. exhibitors and foreign customers;

help contact buyers, agents, distributors, and other business leads and provide marketing assistance;

provide a press release on certification.

Chamber of Commerce

An association of business people organized to promote local business interests.

Charter Party

A written contract, usually on a special form, between the owner of a vessel and a “charterer” who rents use of the vessel or a part of its freight space. The contract generally includes the freight rates and the ports involved in the transportation.

Chemical Biological Weapons

The Department of Commerce maintains foreign policy export controls on certain chemical precursors useful in chemical warfare. Through the Australia Group, AG, the United States cooperates with other nations in controlling chemical weapons proliferation. The AG developed a Core List of nine chemicals (not to be confused with the CoCom “Core List”) considered essential to curbing the development of chemical weapons. The AG also developed a Warning List which identifies 41 precursors which are useful for chemical weapons development. In addition, the AG provides the forum in which the member countries share information concerning the activities of non-member countries where the proliferation of these weapons is of concern, including entities that are seeking chemical precursors and related items. The United States controls all 50 chemical precursors designated by the AG as useful in chemical weapons production. The nine core list chemicals are controlled worldwide, except to the members of the AG and NATO. The remaining 41 chemicals are controlled to selected countries. The U.S. also maintains unilateral controls on certain biological organisms and requires an individual validated license to all destinations except Canada. Commerce regulations are designed in the form of a “negative” list. The list identifies those organisms that have been determined to be of no or minimal level of hazard. Any organism that is not included on the list is controlled. The Department of Commerce requires individual validated licenses for the export of Class 2, 3, and 4 organisms to all destinations except Canada. (The higher the class, the greater the toxicity.) License applications are referred to the State Department for review and recommendation. Approval or denial is determined by analysis of the application and intelligence input.

“Class or Kind” of Merchandise

A term used in defining the scope of an antidumping investigation. Included in the “class or kind” of merchandise is merchandise sold in the home market which is “such or similar” to the petitioned product. “Such or similar” merchandise is that merchandise which is identical to or like the petitioned product in physical characteristics.

Automated Commercial System

The Customs Service’s Automated Commercial System, ACS, is a joint public-private sector computerized data processing and telecommunications system linking customhouses, members of the import trade community, and other government agencies with the Customs computer. Trade users file import data electronically, receive needed information on cargo status, and query Customs files to prepare submissions. Duties, taxes, and fees may be paid by electronic statement, through a Treasury-approved clearinghouse bank. ACS contains the import data used by Census to prepare U.S. foreign trade statistics. ACS began operating in February 1984 and includes: (a) the Automated Broker Interface; (b) the Census Interface System; (c) the Automated Manifest Systems; (d) the Bond System; (e) the In-Bond System; (f) the Cargo Selectivity System; (g) the Line Release System; (h) the Collections System; (i) the Security System; (j) the Quota System; (k) the Entry Summary Selectivity System; (1) the Entry Summary System; (m) the Automated Information Exchange; (n) the Antidumping/Countervailing Duty System; (o) the Firms system; (p) the Liquidation System; (q) the Drawback System; (r) the Fines, Penalties, and Forfeitures System; and (s) the Protest System.

Automated Export System

The Automated Export System (AES) replaces the 30-year-old Automated Export Reporting Program. It is a cooperative effort by the Census Bureau and the Customs Service. It will almost completely replace paper as the method of reporting Shipper’s Export Declaration information.

Automated Foreign Trade Zone Program

The only approved direct electronic reporting program allowed to transmit statistical data on goods admitted into a Foreign Trade Zone (FTZ) directly to the U.S. Census Bureau.

Automated Information Exchange

AlES, a part of Customs’ Automated Commercial System, allows for exchange of classification and value information between field units and headquarters.

Automated Manifest Systems

AMS, a part of Customs’ Automated Commercial System (ACS) controls imported merchandise from the time a carrier’s cargo manifest is electronically transmitted to Customs until control is relinquished to another segment of the ACS.

Balance of Payments

The balance of payments is a statistical summary of international transactions. These transactions are defined as the transfer of ownership of something that has an economic value measurable in monetary terms from residents of one country to residents of another. The transfer may involve: (a) goods, that consist of tangible and visible commodities or products; (b) services, that consist of intangible economic outputs, that usually must be produced, transferred, and consumed at the same time and in the same place; (c) income or investments, and (d) financial claims on, and liabilities to, the rest of the world, including changes in a country’s reserve assets held by the central monetary authorities. Generally, a transaction is the exchange of one asset for another – or one asset for several assets – but it may also involve a gift, which is the provision by one party of something of economic value to another party without something of economic value being received in return. International transactions are recorded in the balance of payments on the basis of the double entry principle used in business accounting, in which each transaction gives rise to two offsetting entries of equal value so that, in principle, the resulting credit and debit entries always balance. Transactions are generally valued at market prices and are, to the extent possible, recorded when a change of ownership occurs. Transactions in goods, services, income, and unilateral transfers constitute the current account, and transactions in financial assets and liabilities constitute the capital account. The International Monetary Fund, which strives for international comparability, defines the balance of payments as “a statistical statement for a given period showing (1) transactions in goods, services, and income between an economy and the rest of the world, (2) changes of ownership and other changes in that economy’s monetary fold, special drawing rights (SDRs), and claims on and liabilities to the rest of the world, and (3) unrequited transfers and counterpart entries that are needed to balance, in the accounting sense, any entries for the foregoing transactions and changes which are not mutually offsetting.” The U.S. balance of payments presentation does not contain a specific number that indicates an overall “balance,” although partial balances are published. In an accounting sense, an overall balance is not possible, because, the net sum of credit and debit entries in the balance of payments accounts is conceptually zero, in accordance with the principles of double-entry accounting. If the entries do not balance exactly, the net amount of missing credits or debits is entered as a statistical discrepancy in order to bring the two parts of the statement into equilibrium. The six balances that are currently published quarterly are:

the balance on merchandise trade, which measures the net transfer of merchandise exports and imports (which differs in some ways from the trade balance published monthly by the Bureau of the Census).

the balance on services, which measures the net transfer of services, such as travel, other transportation, and business, professional, and other technical services (this balance was redefined in 1990 to exclude investment income);

the balance on investment income, which measures the net transfer income on direct and portfolio investments; 0 the balance on goods, services, and income, which measures the net transfer of merchandise plus services and income on direct and portfolio investment (this balance is equivalent to the pre-1990 balance on goods and services; it is also conceptually comparable to net exports of goods and services included in GNP);

the balance on unilateral transfers (net), which measures the net value of gifts, contributions, government grants to foreign countries, and other unrequited transfers;

the balance on current account (widely used for analysis and forecasting) which measures transactions in goods, services, income, and unilateral transfers between residents and nonresidents.

Balance on –

–

Current account; –

Goods, services, and income; –

Investment income; –

Merchandise trade; –

Services; –

Unilateral transfers See: Balance of Payments.

Banker’s Acceptance

A banker’s acceptance is a draft drawn on and accepted by the importer’s bank. Depending on the bank’s creditworthiness, the acceptance becomes a financial instrument that can be discounted.

Bank Affiliate Export Trading Company

An Export Trading Company partially or wholly owned by a banking institution as provided under the U.S. Export Trading Company Act.

Banker’s Bank

A bank that is established by mutual consent by independent and unaffiliated banks to provide a clearinghouse for financial transactions.

Banker’s Draft

Draft payable on demand and drawn by or on behalf of the bank itself; it is regarded as cash and cannot be returned unpaid.

Bank Guarantee

An assurance, obtained from a bank by a foreign purchaser, that the bank will pay an exporter up to a given amount for goods shipped if the foreign purchaser defaults. See: Letter of Credit.

Bank Holding Company

Any company which directly or indirectly owns or controls, with power to vote, more than five percent of voting shares of each of one or more other banks.

Bank Release

Negotiable time draft drawn on and accepted by a bank which adds its credit to that of an importer of merchandise.

Barratry

Negligence or fraud on the part of a ship’s officers or crew resulting in injury or loss to the ship’s owners.

Barter

Trade in which merchandise is exchanged directly for other merchandise or services without use of money. Barter is an important means of trade with countries using currency that is not readily convertible.

Bilateral Investment Treaty

A bilateral investment treaty, BIT, ensures U.S. investments abroad of national or most favored nation treatment; prohibits the imposition of performance requirements; and allows the American investor to engage top management in a foreign country without regard to nationality. BITs ensure the right to make investment-related transfers, and guarantee that expropriation takes place only in accordance with accepted international law. BITs also guarantee access by an investing party to impartial and binding international arbitration for dispute settlement.

After Date

A phrase indicating that the date of maturity of a draft or other negotiable instrument is fixed by the date on which it was drawn. The date of maturity does not, therefore, depend on acceptance by the drawee. Compare: After Sight, At Sight.

After Sight

A phrase indicating that payment on a draft or other negotiable instrument is due a specified number of days after presentation of the draft to the drawee or payee. Compare: After Date, At Sight.

Agency for International Development

AID was created in 1961 to administer foreign economic assistance programs of the U.S. Government. AID has field missions and representatives in approximately 70 developing countries in Africa, Latin America, the Caribbean, and the Near East.

Agent/Distributor Service

The AgentiDistributor Service (ADS), is an International Trade Administration (ITA) fee-based service, which locates foreign import agents and distributors. ADS provides a custom search overseas for interested and qualified foreign representatives on behalf of a U.S. exporter. Officers abroad conduct the search and prepare a report identifying up to six foreign prospects that have examined the U.S. firm’s product literature and have expressed interest in representing the U.S. firm’s products.

Air Waybill

A bill of lading, which covers both domestic and international flights transporting goods to a specified destination. Technically, it is a non-negotiable instrument of air transport that serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed therein and obligates itself to cany the consignment to the airport of destination according to specified conditions. Compare: Inland Bill of Lading, Ocean Bill of Lading, Through Bill of Lading.

Alongside

A phrase referring to the side of a ship. Goods to be delivered “alongside” are to be placed on the dock or lighter within reach of the transport ship’s tackle so that they can be loaded aboard the ship. Goods are delivered to the port of embarkation, but without loading fees.

Alternate Consignee. See: Intermediate Consignee

American Business Initiative

The ABI, or American Business and Private Sector Development Initiative for Eastern Europe, emphasizes the export of American telecommunications, energy, environment, housing, and agriculture products and services to Eastern European countries.

American Traders Index

The American Traders Index (ATI), is the U.S. and Foreign Commercial Service headquarters compilation of individual US&FCS domestic client files, for use by overseas posts to generate mailing lists.

Antidiversion Clause. See: Destination Control Statement.

Antidumping

Antidumping, is a reference to the system of laws to remedy dumping, is defined as a converse of dumping. See: Dumping

Antidumping/Countervailing Duty System

The Antidumping/Countervailing Duty System, a part of Customs’ Automated Commercial System, contains a case reference database and a statistical reporting system to capture data for International Trade Commission reports on antidumping and countervailing duties assessed and paid.

Applicant

The person who applies for an export or reexport license, and who has the authority of a principal party in interest to determine and control the export or reexport of items.

Arbitrage

The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at higher prices. See: hedging.

Assessment

The imposition of antidumping duties on imported merchandise.

Automated Broker Interface

ABI, a part of Customs’ Automated Commercial System, permits transmission of data pertaining to merchandise being imported into the U.S. Qualified participants include brokers, importers, carriers, port authorities, and independent data processing companies referred to as service centers.

Automated Clearinghouse

The Automated Clearinghouse (ACH) is a feature of the Automated Broker Interface which is a part of Customs Automated Commercial System. The ACH combines elements of bank lock box arrangements with electronic funds transfer services to replace cash or check for payment of estimated duties, taxes, and fee on imported merchandise.

Absorption

Absorption includes investment and consumption purchases by households, businesses, and governments, both domestic and imported. When absorption exceeds production, the excess is the country’s current account deficit.

Acceptance

This term has several related meanings.

A time draft (or bill of exchange) which the drawee (the Payer) has accepted and is unconditionally obligated to pay at maturity. The draft must be presented first for acceptance (the drawee then becomes the “acceptor”), and then for payment. The word “accepted” and the date and place of payment must be written on the face of the draft.

The drawee’s act in receiving a draft and thus entering into the obligation to pay its value at maturity.

(Broadly speaking) Any agreement to purchase goods under specified terms.

Accession

Accession is the process by which a country becomes a member of an international agreement, such as the General Agreement on Tariffs and Trade (GATT) or the European Community (EC). Accession to the GATT involves negotiations to determine the specific obligations a nonmember country must undertake before it will be entitled to full GATT membership benefits.

Administrative Exception Notes

CoCom controls exports at three levels, depending on the item and the proposed destination. At the lowest level, “national discretion” (also called “administrative exception”), a member nation may approve the export on its own, but CoCom must be notified after the fact. Administrative exception notes are appended to list categories describing commodities that can be approved solely at national discretion.

Administrative Notes. See: Administrative Exception Notes.

Administrative Protective Order

An Administrative Protective Order (APO), is used to protect proprietary data that is obtained during an administrative proceeding. Within Commerce, APO is most frequently used in connection with Antidumping and Countervailing Duty investigations to prohibit opposing counsel from releasing data. The term is also applied in connection with civil enforcement of export control laws to protect against the disclosure of information provided by companies being investigated for violations.

Ad Valorem

Literally: according to value. Any charge, tax, or duty that is applied as a percentage of value. See: Duty

Advanced Technology Products

About 500 of some 22,000 commodity classification codes used in reporting U.S. merchandise trade are identified as “advanced technology” codes and they meet the following criteria:

The code contains products whose technology is from a recognized high technology field (e.g., biotechnology);

These products represent leading edge technology in that field; and

Such products constitute a significant part of all items covered in the selected classification code.

Advisory Capacity

A term indicating that a shipper’s agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented. Compare: Without Reserve.

Advisory Committee on Export Policy

The Advisory Committee on Export Policy (ACEP), is an interagency dispute resolution body that operates at the Assistant Secretary level. ACEP is chaired by Commerce; membership includes the Departments of Defense, Energy, and State, the Arms Control and Disarmament Agency, and the intelligence community. Disputes not resolved by the ACEP must be addressed by the cabinet-level Export Administration Review Board withinspecific timeframes set forth under National Security Directive 53.

Advisory Committee on Trade Policy and Negotiations

The ACTPN is a group (membership of 45; two-year terms) appointed by the President to provide advice on matters of trade policy and related issues, including trade agreements. The 1974 Trade Act requires the ACTPN’s establishment and broad representation of key economic sectors affected by trade. Below the ACTPN are seven policy committees: SPAC (Services Policy Advisory Committee), INPAC (Investment), IGPAC (Intergovernmental), IPAC (Industry), APAC (Agriculture), LAC (Labor), and DPAC (Defense). Below the policy committees are sectoral, technical, and functional advisory committees. See: Industry Consultations Program.

Advisory Notes. See: Administrative Exception Notes.

Affiliate

An affiliate is a business enterprise located in one country that is directly or indirectly owned or controlled by a person of another country. Ownership may extend to 10 percent or more of its voting securities for an incorporated business enterprise or an equivalent interest for an unincorporated business enterprise, including a branch. For outward investment, the affiliate is referred to as a “foreign affiliate”; for inward investment, it is referred to as a “U.S. affiliate.”

Affreightment (Contract of)

An agreement between a steamship line (or similar carrier) and an importer or exporter in which cargo space is reserved on a vessel for a specified time and at a specified price. The importer/exporter is obligated to make payment whether or not the shipment is made.

BUFFALO, NY- U.S. Customs and Border Protection (CBP) Officers apprehended two Guyanese nationals as they attempted to enter the United States illegally as stowaways aboard an inbound commercial truck. CBP Officers using gamma-imaging technology discovered the two individuals hiding in a container of Styrofoam trays. On March 29, 2006, at 12:30 a.m., Mootilan Ramphal, a Trinidadian national with Landed Immigrant Status in Canada, applied for entry into the United States at the Peace Bridge Port of Entry. Ramphal presented a manifest and invoice for Styrofoam trays and window hardware. CBP officers selected the shipment for a secondary enforcement exam. During the course of the inspection, CBP officers utilized the Vehicle and Cargo Inspection System (VACIS), a passive, non-intrusive inspection (NII) device employing gamma-ray technology to produce a high-resolution image of the conveyance’s contents (see photo below). The scan produced anomalies consistent with that of stowaways in the nose of the container. A physical inspection of the container resulted in the discovery of two Guyanese nationals commingled within the legitimate freight. Both individuals were taken into custody without incident.

The two individuals were identified as Bramhadaut Prashad and Debra Appadu, both Guyanese nationals without proper documentation to enter or remain in the United States. Both subjects were arrested on federal charges of illegal entry and conspiracy. Ramphal was arrested on federal charges of alien smuggling. “All three individuals were turned over to agents from Immigration and Customs Enforcement for further investigation and prosecution by the United States Attorney’s office,” stated James Engleman, director, Field Operations for CBP Buffalo Field Office.

NII systems use advanced imaging and density-detecting technologies in the evaluation of the contents of trucks, containers, cargo, and passenger vehicles to determine the possible presence of many types of contraband. CBP in the Port of Buffalo, as well as many ports throughout the United States, utilize a wide variety of non-intrusive inspection systems. In addition to the mobile VACIS units, CBP Officers utilize rail gamma-imaging systems, radiation portal monitors and personal radiation detectors. “These technologically advanced tools assist CBP officers in executing their primary mission of ensuring terrorists and weapons of terror do not enter the United States,” stated Engleman.

US Import quotas are strict and are heavily enforced by US Customs. They are a major source of import fines, penalties, and delays for importers who do not understand the quota process and who fail to consider the regulations on the items they are importing. Commodities imported in excess of the current quota often must be re-exported or destroyed at the importer’s expense, or placed in costly warehouses to await the opening of the next quota period. Importers who understand how to work with quota restrictions will be better prepared when it comes time to import their products.

What is an Import Quota?

Import quotas limit the amount of any particular commodity allowed into the United States in a given time period, normally a year. Quota restrictions are generally the result of US political policy, or are designed to benefit manufacturers and suppliers in the United States. Quotas are normally established by Congress or by Presidential proclamation and are provided for in the Harmonized Tariff Schedule.

Types of Quota

There are two types of import quotas, absolute quota and tariff-rate quota. Both place restrictions on certain types of commodities and are enforced by US Customs at the port of entry.

Absolute Quota

Absolute quotas limit the total quantity of goods that may enter the United States within a given time period. Once the absolute quota limit is reached for a commodity, no more will be allowed entry until the next quota period. Absolute quotas are often filled as soon as they are opened or shortly thereafter, so it is important to monitor the quota time periods closely. Any items imported in excess of the absolute quota may be warehoused in a foreign trade zone or bonded warehouse until the opening of the next quota period, or may be destroyed or re-exported.

Tariff-Rate Quota

Tariff-rate quotas do not limit the overall quantity available for import, but instead apply a favorable duty amount to commodities imported within the quota period, and a higher duty rate once the quota has been filled. Tariff-rate quotas differ from absolute quotas in that they affect the duty amount of the items being imported, and not the total quantity. It is important to note that as the tariff-rate quota begins to fill Customs will often request payment of duties at the higher duty rate.

Commodities Restricted

Although incomplete, this list contains many types of commodities that are restricted for import via the quota system.

Textiles

Textiles are a highly regulated quota commodity. Textiles include things like clothing, linens, and other items manufactured from wool, cotton, silk, vegetable and man-made fibers. Quota information on specific types of textiles can be obtained from the Office of Textiles and Apparel.

Monitoring Quotas

The following are weekly commodity status reports for tariff-rate quotas issued by US Customs:

Commodity Status Report for Tariff Rate Quotas
Thu, 24 May 2007 17:36:07 EDT

Quota Weekly Commodity Status Report
Mon, 05 Nov 2007 00:00:00 EST

Quota Weekly Commodity Status Report
Mon, 29 Oct 2007 00:00:00 EDT

Quota Weekly Commodity Status Report
Mon, 22 Oct 2007 00:00:00 EDT

Quota Weekly Commodity Status Report
Mon, 15 Oct 2007 00:00:00 EDT