International Trade Legal Dictionary

Dictionary of International Trade Legal Terms

More than 900 terms and definitions cover international trade, import and export concepts and much more. Further information about the legal terms provide a working knowledge of the terms. Indispensable for small business owners, international commerce specialists, attorneys, lawyers, law professionals, business and law students and the general readers seeking an inside understanding of international trade law.

The Dictionary:

AB (International Trade Legal Definition)
Appellate Body
ABSOLUTE ADVANTAGE(AB-AD) (International Trade Legal Definition)
An absolute advantage exists in condition of when a nation or other economic region of any country is able to produce a good or service more efficiently than a second (other) nation or its region.
ACCEPTANCE (International Trade Legal Definition)
Any agreement to purchase goods under specified terms. An agreement to purchase goods at a stated price and under stated terms.
ACCOUNTING TRANSLATION EXPOSURE (International Trade Legal Definition)
Changes in a organizations or corporation’s financial statements as a result of changes in currency values.
ACP (International Trade Legal Definition)
African, Caribbean, and Pacific countries.
ACQUISITION OF ASSETS (International Trade Legal Definition)
In an acquisition of assets, one firm acquires the assets of another company. None of the liabilities supporting that asset are transferred to the purchaser.
ACQUISITION OF STOCK (International Trade Legal Definition)
In an acquisition of stock, one firm buys an equity interest in another.
ACQUISITION PREMIUM (International Trade Legal Definition)
In a merger or acquisition, the difference between the purchase price and the reacquisition value of the target firm or company.
ACTIVE FUND MANAGEMENT (International Trade Legal Definition)
An investment approach that actively shifts funds either between asset classes (asset allocation) or between individual securities (security selection).
ACTIVE INCOME (International Trade Legal Definition)
In the U.S. tax code, income from an active business as opposed to passive investment income.
ACTIVITY-BASED-COST (ABC) (International Trade Legal Definition)
An accounting method that allocates costs to specific products based on breakdowns of cost drivers.
AD VALOREM (International Trade Legal Definition)
According to value
AD VALOREM TARIFF (International Trade Legal Definition)
A tariff assessed as a percentage of the value of an import.
ADB (International Trade Legal Definition)
Asia Development Bank, head quartered located in Manila, Philippines (ASIA).
ADJUSTED PRESENT VALUE(APV) (International Trade Legal Definition)
An APV is a valuation method that separately identifies the value of an unlevered project from the value of financing side effects.
ADVANCE AGAINST DOCUMENTS (International Trade Legal Definition)
A loan made on the security of the documents covering the shipment.
ADVANCE LICENCE (International Trade Legal Definition)
Advance Licence is granted for import of inputs without payment of customs duties. It is issued in accordance with the Policy and procedures in force and subject to fulfillment of time-bound export obligation. Such licences can be issu
ADVANCE PAYMENT (International Trade Legal Definition)
Advance Payment is a Trading method in which the buyer pays for the goods before they are sent out , method is used when buyer is of unknown credit worthiness. It is applicable in International or domestic trade.
ADVENTURE (International Trade Legal Definition)
Adventure also define for marine adventure.” It is a term of art in the marine insurance business. All insured cargo owners and every shipper on that vessel are part of the adventure.
ADVISING BANK (International Trade Legal Definition)
A bank, operating in the exporter’s country, that handles LETTERS OF CREDIT for a foreign bank by notifying the exporter that the credit has been opened in his or her favor.
ADVISORY CAPACITY (International Trade Legal Definition)
A term indicating that shipper’s agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented.
AEZS (International Trade Legal Definition)
Refers to a scheme of Agricultural Export Zones.
AFRICAN DEVELOPMENTAL BANK (ABD) (International Trade Legal Definition)
The ABD is one of four major regional developmental banks currently operating in the global economy; it is headquartered in Abidjan, Cote d’Ivoire.
AGENCY COSTS (International Trade Legal Definition)
The costs incurred to ensure that agents act in the best interest of the principal.
AGENT (International Trade Legal Definition)
Someone who represents business in domestic and overseas market. In corporate governance terminology, management is the agent of the principal stakeholders in a principal-agent relationship.
AGGREGATE DEMAND (International Trade Legal Definition)
The total demand of all potential buyers of a commodity or service. Includes all individuals and organizations that have the ability, willingness, and authority to purchase such products.
AIR WAYBILL (International Trade Legal Definition)
A BILL OF LADING that covers both domestic and international flights transporting goods to a specified destination.
ALL-IN COST (International Trade Legal Definition)
The percentage cost of a financing alternative, including any bank fees or placement fees.
ALLOCATION EFFICIENCY (International Trade Legal Definition)
The efficiency with which a market channels capital toward its most productive uses.
ALLOCATION RULES OF INCOME (International Trade Legal Definition)
In the U.S. tax code, these rules define how income and deductions are to be allocated between domestic-source and foreign-source income.
ALONGSIDE (International Trade Legal Definition)
A phrase referring to the side of a ship. Goods to be delivered “alongside” are to be placed on the dock or barge within reach of the transport ship’s tackle so that they can be loaded aboard the ship.
ALTERATION (International Trade Legal Definition)
A change in the boundaries of an activated zone or subzone.
ANDEAN PACT (International Trade Legal Definition)
A regional trade pact that includes Venezuela, Colombia, Ecuador, Peru, and Bolivia.
ANNUITY (International Trade Legal Definition)
A level stream of equal dollar payments that lasts for a fixed time. An example of an annuity is the coupon part of a bond with level annual payments.
ANNUITY FACTOR (International Trade Legal Definition)
The term used to calculate the present value of the stream of level payments for a fixed period.
ANTI-DUMPING LAWS (International Trade Legal Definition)
Laws that are enacted to prevent dumping-offering prices in the overseas market that is lower than that at which a product is sold in its home domestic market.
APEC (International Trade Legal Definition)
Asia-Pacific Economic Cooperation
APPLICANT (International Trade Legal Definition)
A corporation applying for the right to establish, operate and maintain a foreign-trade zone.
APPRECIATION (International Trade Legal Definition)
An increase in a currency value relative to another currency in a floating exchange rate system.
ARBITRAGE (International Trade Legal Definition)
The process of buying FOREIGN EXCHANGE, stocks, bonds and other commodities in one market and immediately selling them in another market at higher prices.
ARBITRAGE PRICING THEORY (APT) (International Trade Legal Definition)
An asset pricing model that assumes a linear relation between required return and systematic risk as measured by one or more factors according to Rj = mj + b1jF1 + … + bKjFK + ej.
ASIA-PACIFIC ECONOMIC COOPERATION (APEC) (International Trade Legal Definition)
APEC forum designed to promote economic growth, cooperation, and integration among member nations. The most prominent members are China, Japan, and Korea.
ASIAN DEVELOPMENT BANK (ABD) (International Trade Legal Definition)
One of four major regional development banks currently operating in the global economy; it is headquartered in Manila, Philippines.
ASIAN DOLLARS (International Trade Legal Definition)
U.S. dollars deposited in Asia and the Pacific Basin.
ASK “OFFER” RATES (International Trade Legal Definition)
The rate at which a market maker is willing to sell the quoted asset.
ASSET ALLOCATION POLICY (International Trade Legal Definition)
The target weights given to various asset classes in an investment portfolio.
ASSETS-IN-PLACE (International Trade Legal Definition)
Those assets in which the firm has already invested. (Compare to growth options.)
ASSOCIATION OF SOUTH EAST ASIAN NATIONS (ASEAN) (International Trade Legal Definition)
A loose or low economic and geopolitical affiliation that includes Singapore, Brunei, Malaysia, Thailand, the Philippines, Indonesia, and Vietnam. Future members are likely to include Myanmar (Burma), Laos, and Cambodia.
AT-THE-MONEY OPTION (International Trade Legal Definition)
An option with an exercise price that is equal to the current value of the underlying asset.
ATC (International Trade Legal Definition)
Agreement on Textiles and Clothing
ATTRIBUTIVE BASIS (International Trade Legal Definition)
Method of accounting for merchandise where direct identification of the goods with the shipment as admitted to the zone has been lost.Glossary of Export Import International Trade Terms Starting with-B
AUTARKY (International Trade Legal Definition)
In models of international trade, a situation in which there is no cross-border trade.
AVAL (International Trade Legal Definition)
A guarantee of the buyer’s credit provided by the guarantor, unless the buyer is of unquestioned financial standing. The aval is an endorsement note as opposed to a guarantee agreement.
AVALISATION (International Trade Legal Definition)
Payment undertaking given by a bank in respect of a bill of exchange drawn.
AVERAGE ACCOUNTING RETURN (AAR) (International Trade Legal Definition)
The average project earnings after taxes and depreciation divided by the average book value of the investment during its life.
BACKWARD INNOVATION (International Trade Legal Definition)
Building a more basic version of an existing product for a lesser-developed market.
BALANCE OF PAYMENTS (BOP) (International Trade Legal Definition)
The BOP is the annual financial record of Foreign Payments and Foreign Receivables. Or The BOP is the International Money Fund’s accounting system that tracks the flow of goods, services, and capital in and out of each country.
BALANCE OF TRADE (BOT) (International Trade Legal Definition)
The difference between a country’s total imports and exports.
BALANCE SHEET (International Trade Legal Definition)
A statement showing a firm’s accounting value on a particular date. It reflects the equation, Assets = Liabilities + Stockholders’ equity.
BANK FOR INTERNATIONAL SETTLEMENTS (BIS) (International Trade Legal Definition)
An international organization which promotes international monetary and financial cooperation among nations.
BANK-BASED CORPORATE GOVERNANCE SYSTEM (International Trade Legal Definition)
A system of corporate governance in which the supervisory board is dominated by bankers and other corporate insiders.
BANKER’S ACCEPTANCE (International Trade Legal Definition)
A time draft drawn on and accepted by a commercial bank.
BANKER’S DRAFT (International Trade Legal Definition)
A payment instrument used to make international payments.
BARGAIN PURCHASE OPTION (International Trade Legal Definition)
A lease provision allowing the lessee, to purchase the equipment for a price predetermined at lease inception, which is substantially lower than the expected fair market value at the date the option can be exercised.
BARTER (International Trade Legal Definition)
Trade in which goods or merchandise is exchanged directly for others import or export without use of money.
BASIC IRR (International Trade Legal Definition)
Accept the project if IRR is greater than the discount rate; reject the project if IRR is less than the discount rate.
BASIS (International Trade Legal Definition)
The simple difference between two nominal interest rates.
BASIS POINT (International Trade Legal Definition)
Equal to 1/100 of one percent.
BASIS RISK (International Trade Legal Definition)
The risk of unexpected change in the relationship between futures and spot prices.
BASIS SWAP (International Trade Legal Definition)
A floating-for-floating interest rate swap that pairs two floating rate instruments at different maturities (such as six-month LIBOR versus thirty-day U.S. T-bills).
BEARER BONDS (International Trade Legal Definition)
Bonds that can be redeemed by the holder. The convention in most West European countries is to issue bonds in registered form.
BENCHMARKING (International Trade Legal Definition)
A systematic procedure of comparing a company’s practices against the best practice and modifying actual knowledge to achieve superior performance.
BENEFICIARY (International Trade Legal Definition)
A party who receives a legal benefit Domestic or foreign Dealings.
BETA (International Trade Legal Definition)
A measure of an asset’s sensitivity to changes in the market portfolio (in the CAPM) or to a factor (in the APT). The beta of an asset j is computed as bj = rj,k (sj/sk), where k represents a market factor (such as returns to the market portfolio in the C
BID RATE (International Trade Legal Definition)
The rate at which a market maker is willing to buy the quoted asset.
BID-OFFER SPREAD (International Trade Legal Definition)
The difference between the interest rate at which the bank borrows money and lends money.
BILL OF LADING (B/L) (International Trade Legal Definition)
A document that establishes the terms and conditions of a contract between a shipper and a shipping company under which freight is to be moved between specified points for a specified charge. The B/L is Negotiable or Non-Negotiable forms.
BLANK ENDORSEMENT (International Trade Legal Definition)
The method whereby a bill of lading is made into a freely negotiable document of title.
BLANKET BOND (International Trade Legal Definition)
A bond that coves a group of people, articles or properties.
BLANKET CONTRACTS (International Trade Legal Definition)
A long-term contract in which the supplier promises to re-supply the buyers as needed at agreed-upon prices over the contracting time.
BLOCKED FUNDS (International Trade Legal Definition)
Cash flows generated by a foreign project that cannot be immediately repatriated to the parent firm because of capital flow restrictions imposed by the host government.
BOND EQUIVALENT YIELD (International Trade Legal Definition)
A bond quotation convention based on a 365-day year and semiannual coupons. (Contrast with effective annual yield.)
BONDED WAREHOUSE (International Trade Legal Definition)
A warehouse authorized by CUSTOMS authorities for storage of goods on which payment of DUTIES is deferred until the goods are removed.
BOOKING (International Trade Legal Definition)
An arrangement with a steamship company for the acceptance and carriage of freight.Glossary of Export Import Foreign Trade Terms Starting with-C
BREAK-EVEN POINT ANALYSIS (International Trade Legal Definition)
Analysis of the level of sales at which a project would make zero profit.
BRITTON WOODS AGREEMENT (International Trade Legal Definition)
An agreement made in 1944 year the end of World War II to promote exchange rate stability and facilitate the international flow of currencies. The world Bank and IMF(International Monetary funds ) come into the existence.
BRITTON WOODS CONFERENCE (International Trade Legal Definition)
An international conference held in 1944 at Britton Woods, New Hampshire, and established the International Monetary Fund and the World Bank.
BTP (International Trade Legal Definition)
BTP means Biotechnology Park as notified by Director General of Foreign Trade on the recommendation of the Department of Biotechnology
CAA (International Trade Legal Definition)
Clean Air Act (USA)
CALL OPTION (International Trade Legal Definition)
The right to buy the underlying currency at a specified price and on a specified date.
CAPITAL (FINANCIAL) STRUCTURE (International Trade Legal Definition)
The proportion of debt and equity and the particular forms of debt and equity chosen to finance the assets of the firm.
CAPITAL ACCOUNT (International Trade Legal Definition)
A measure of change in cross-border ownership of long-term financial assets, including financial securities and real estate.
CAPITAL ASSET PRICING MODEL (CAPM) (International Trade Legal Definition)
An asset pricing model that relates the required return on an asset to its systematic risk.
CAPITAL BUDGETING (International Trade Legal Definition)
Planning and managing expenditures for long-lived assets.
CAPITAL FORMATION (International Trade Legal Definition)
The process of increasing the amount of capital goods – also called capital stock – in a country.
CAPITAL GAIN (International Trade Legal Definition)
The positive change in the value of an asset, a negative capital gain is a capital loss.
CAPITAL MARKET LINE (International Trade Legal Definition)
The line between the risk-free asset and the market portfolio that represents the mean-variance efficient set of investment opportunities in the CAPM.
CAPITAL MARKETS (International Trade Legal Definition)
Markets for financial assets and liabilities with maturity greater than one year, including long-term government and corporate bonds, preferred stock, and common stock.
CAPITAL RATIONING (International Trade Legal Definition)
The case where funds are limited to a fixed dollar amount and must be allocated among the competing projects.
CAPITAL STRUCTURE (International Trade Legal Definition)
The mix of the various debt and equity capital maintained by a firm. Also called financial structure. The composition of a corporation’s securities used to finance its investment activities; the relative proportions of short-term debt, long-term debt, and
CAPITALISM (International Trade Legal Definition)
An economic system that is based on private ownership; economic development is proportionate to and dependent upon the accumulation and reinvestment of profits.
CARNET (International Trade Legal Definition)
A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds.
CARRIER (International Trade Legal Definition)
An individual or entity that transports persons or goods for compensation under the contract of carriage.
CARTEL (International Trade Legal Definition)
An agreement among, or an organization of, suppliers of a product.
CASH AGAINST DOCUMENTS (CAD) (International Trade Legal Definition)
Payment for goods where a commission house or other intermediary transfers title documents to the buyer upon payment in cash.
CASH COVER (International Trade Legal Definition)
In a letter of credit transaction, money deposited by the applicant with the issuing bank.
CASH FLOW (International Trade Legal Definition)
Cash generated by the firm and paid to creditors and shareholders. It can be classified as (1) cash flow from operations, (2) cash flow from changes in fixed assets, and (3) cash flow from changes in net working capital.
CASH IN ADVANCE (CIA) (International Trade Legal Definition)
Payment for goods in which the price is paid in full before the shipment is made. This type of payment is usually only made for very small shipments or when goods are made in order.
CASH WITH ORDER (C.W.O.) (International Trade Legal Definition)
Payment for goods in which the buyer pays when ordering and in which the transaction is binding on both parties.
CENTRALLY PLANNED ECONOMY (International Trade Legal Definition)
An economy in which the government, rather than free-market activity, controls the allocation of resources.
CERTIFICATE OF ACCEPTANCE (International Trade Legal Definition)
Term used in leasing. A document whereby the lessee acknowledges that the equipment to be leased has been delivered, is acceptable, and has been manufactured or constructed according to specifications.
CERTIFICATE OF ANALYSIS/CERTIFICATE OF INSPECTION (International Trade Legal Definition)
Documents that may be asked for by the importer and/or the authorities of the importing country, as evidence of quality or conformity to specifications.
CERTIFICATE OF INSPECTION (International Trade Legal Definition)
A document certifying that merchandise was in good condition immediately prior to its shipment.
CERTIFICATE OF MANUFACTURE (International Trade Legal Definition)
A statement that is usually notarised in which the producer of goods certifies that the goods have been produced and are now available to the buyer.
CERTIFICATE OF ORIGIN (International Trade Legal Definition)
Documents that may be asked for by the authorities of the importing country, as evidence of the country of manufacture of the goods.
CERTIFICATE OF PRODUCT ORIGIN (International Trade Legal Definition)
A document required by certain foreign countries for tariff purpose, certifying the country of origin of specified goods.
CHANGE IN NET WORKING CAPITAL (International Trade Legal Definition)
Difference between net working capital from one period to another.
CHARACTERISTIC LINE (International Trade Legal Definition)
The line relating the expected return on a security to different returns on the market.
CHARTER PARTY (International Trade Legal Definition)
Written contract between the owner of a vessel and a “chartered” who rents use of the vessel or a part of its freight space.
CHIPS (CLEARING HOUSE INTERBANK PAYMENTS SYSTEM) (International Trade Legal Definition)
Financial network through which banks in the United States conduct their financial transactions.
CITES (International Trade Legal Definition)
Convention on the International Trade in Endangered Species
CIVIL SOCIETY ORGANIZATIONS (CSOS) (International Trade Legal Definition)
Non-governmental and non-profit groups that work to improve society and the human condition.
CLEAN BILL OF LADING (International Trade Legal Definition)
A receipt for goods issued by a carrier that indicates that the goods were received in apparently good order and without damage.
CLEAN COLLECTION (International Trade Legal Definition)
Collection in which only the financial document is sent through the banks.
CLEAN DRAFT (International Trade Legal Definition)
A draft to which no documents have been attached.
CLEARANCE (International Trade Legal Definition)
The completion of customs entry requirements that results in the release of goods to the importer.
CLEARING (International Trade Legal Definition)
The settlement of a transaction, often involving exchange of payments and/or documentation.
CLOSED-END FUND (International Trade Legal Definition)
A mutual fund in which the amount of funds under management is fixed and ownership in the funds is bought and sold in the market like a depository receipt.
CODEX (International Trade Legal Definition)
Codex Alimentarius Commission (a world food standards body)
COLLECTION ORDER (International Trade Legal Definition)
In a collection, the document in which the seller instructs the banks as to how the collection is to be conducted.
COLLECTION PAPERS (International Trade Legal Definition)
All documents submitted to a buyer for the purpose of receiving payment for a shipment.
COMMAND ECONOMY (International Trade Legal Definition)
An economy based on government ownership and/or control of society’s resources; during the 20th century, the dominant form of command economy was communism.
COMMERCIAL ATTACHMENT (International Trade Legal Definition)
The commerce expert on the diplomatic staff of his/her country’s embassy or large consulate.
COMMERCIAL DOCUMENT (International Trade Legal Definition)
General term for documents describing various aspects of a transaction, e.g. commercial invoice, transport document, insurance document, certificate of origin, certificate of inspection etc.
COMMERCIAL INVOICE (International Trade Legal Definition)
An itemized list of goods shipped, usually among an exporter’s COLLECTION PAPERS.
COMMODITY PRICE RISK (International Trade Legal Definition)
The risk of unexpected changes in a commodity price, such as the price of oil.
COMMODITY SWAP (International Trade Legal Definition)
A swap in which the (often notional) principal amount on at least one side of the swap is a commodity such as oil or gold.
COMMON CARRIER (International Trade Legal Definition)
An individual, partnership, or corporation that transports persons or goods for compensation.
COMPARATIVE ADVANTAGE (International Trade Legal Definition)
A comparative advantage exists when a nation or economic region is able to produce a product at a lower opportunity cost compared to another nation or region.
COMPLIANT DOCUMENTS (International Trade Legal Definition)
Documents presented under a letter of credit that comply with all its terms and conditions. The banks are only obliged to pay the beneficiary if documents are totally compliant.
COMPOUND INTEREST (International Trade Legal Definition)
Interest that is earned both on the initial principal and on interest earned on the initial principal in previous periods. The interest earned in one period becomes in effect part of the principal in a following period.
COMPOUND VALUE (International Trade Legal Definition)
Value of a sum after investing it over one or more periods. Also called future value.
COMPOUNDING (International Trade Legal Definition)
Process of reinvesting each interest payment to earn more interest. Compounding is based on the idea that interest itself becomes principal and therefore also earns interest in subsequent periods.
CONFIRMATION OF LETTER OF CREDIT (International Trade Legal Definition)
A letter of credit, issued by a foreign bank, whose validity has been confirmed by a Nationalized Indian bank.
CONFIRMING BANK (International Trade Legal Definition)
Bank that adds its payment undertaking to a letter of credit.
CONSIGNEE (International Trade Legal Definition)
Party to whom goods are to be delivered.
CONSIGNMENT (International Trade Legal Definition)
Delivery of merchandise from an exporter (consignor) to an agent (consignee) under agreement that the agent sell the merchandise for the account of the exporter.
CONSOLIDATED INCOME (International Trade Legal Definition)
The sum of income across all of the multinational corporation’s domestic and foreign subsidiaries.
CONSOLIDATION (International Trade Legal Definition)
A form of corporate reorganization in which two firms pool their assets and liabilities to form a new company.
CONSTRUCTIVE TRANSFER (International Trade Legal Definition)
A legal fiction which permits acceptance of a Customs entry for merchandise in a zone before its physical transfer to the Customs territory.
CONSULAR INVOICE (International Trade Legal Definition)
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.
CONSULAR STATEMENT (International Trade Legal Definition)
A document required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of shipment. Certified by a consular official of the foreign country, it is used by the country’s officials
CONTINGENCY INSURANCE (International Trade Legal Definition)
Contingency insurance protects the exporter in any situation in which exporter responsibility relied on the buyer to insure, but sustained a loss because of inadequate coverage from that source. It will cover situations in which the FOB endorsement.
CONTINGENT CLAIM (International Trade Legal Definition)
Claim whose value is directly dependent on, or is contingent on, the value of its underlying assets. For example, the debt and equity securities issued by a firm derive their value from the total value of the firm.
CONTINUOUS COMPOUNDING (International Trade Legal Definition)
Interest compounded continuously, every instant, rather than at fixed intervals.
CONTINUOUS QUOTATION SYSTEM (International Trade Legal Definition)
A trading system in which buy and sell orders are matched with market makers as the orders arrive, ensuring liquidity in individual shares.
CONTRACT MANUFACTURING (International Trade Legal Definition)
A firm allowing another firm to manufacture a pre-specified product.
CONTRIBUTION MARGIN (International Trade Legal Definition)
Amount that each additional product, such as a jet engine, contributes to after-tax profit of the whole project: (Sales price – Variable cost) X (1 – T), where T is the corporate tax rate.
CONTROLLED FOREIGN CORPORATION (CFC) (International Trade Legal Definition)
In the U.S. tax code, a foreign corporation owned more than 50 percent either in terms of market value or voting power.
CONVERTIBLE BONDS (International Trade Legal Definition)
Bonds sold with a conversion feature that allows the holder to convert the bond into common stock on or prior to a conversion date and at a pre specified conversion price.
CONVERTIBLE CURRENCY (International Trade Legal Definition)
A currency that can be bought and sold for other currencies at will.
CONVEX TAX SCHEDULE (International Trade Legal Definition)
A tax schedule in which the effective tax rate is greater at high levels of taxable income than at low levels of taxable income. Such a schedule results in progressive taxation.
CORPORATE CULTURE (International Trade Legal Definition)
The set of values, beliefs, relationships between individuals and functions that guide the decisions of a company to achieve its objectives.
CORPORATE GOVERNANCE (International Trade Legal Definition)
The way in which major stakeholders exert control over the modern corporation.
CORPORATE SOCIAL RESPONSIBILITY (International Trade Legal Definition)
The responsibilities that corporations (including MNCs) have to workers and their families, to consumers, to investors, and to the natural environment.
CORPORATION (International Trade Legal Definition)
Form of business organization that is created as a distinct “legal person” composed of one or more actual individuals or legal entities. Primary advantages of a corporation include limited liability, ease of ownership, transfer, and perpetual succession.
CORPORATION (PRIVATE) (International Trade Legal Definition)
Any corporation which is organized for the purpose of establishing, operating and maintaining a foreign-trade zone and which is chartered under a special act of the State within which it is to operate such a zone.
CORPORATION (PUBLIC) (International Trade Legal Definition)
A State, political subdivision thereof, a municipality, a public agency of a State, political subdivision thereof, or municipality, or a corporate municipal instrumentality of one or more States.
CORRELATION (International Trade Legal Definition)
A measure of the co variability of two assets that is scaled for the standard deviations of the assets (rAB = sAB / sAsB such that -1 < rAB < +1).
CORRESPONDENT BANK (International Trade Legal Definition)
A bank that, in its own country, handles the business of a foreign bank.
CORRUPTION PERCEPTIONS INDEX (CPI) (International Trade Legal Definition)
A ranking of countries by level of corruption that is researched and published by Transparency International (TI), the world's leading non-governmental organization dedicated to fighting corruption.
COST AND FREIGHT (C & F) (International Trade Legal Definition)
A pricing term indicating that the cost of the goods and freight charges are included in the quoted price.
COST AND FREIGHT(C&F) (International Trade Legal Definition)
A pricing term that indicates that the cost of the goods and freight charges are included in the quoted price.
COST AND INSURANCE (C & I) (International Trade Legal Definition)
A pricing term indicating that the cost of the product and insurance are included in the quoted price.
COST OF EQUITY CAPITAL (International Trade Legal Definition)
The required return on the company's common stock in capital markets. It is also called the equity holders' required rate of return because it is what equity holders can expect to obtain in the capital market. It is a cost from the firm's perspective.
COST, INSURANCE, FREIGHT (International Trade Legal Definition)
A pricing term indicating that the cost of the goods, insurance, and freight are included in the quoted price.
COUNTER CREDIT (International Trade Legal Definition)
Another name for back-to-back letter of credit.
COUNTER TRADE (International Trade Legal Definition)
The sale of goods or services that are paid in whole or in part by the transfer of goods or services from a foreign country.
COUNTERVAILING DUTIES (International Trade Legal Definition)
Duties levied on an imported good that has been unfairly subsidized by a foreign government. Imposing duties on the good is meant to raise the product's price to a "fair market value".
COUNTRY RISK (International Trade Legal Definition)
The political and financial risks of conducting business in a particular foreign country.
COUPON (International Trade Legal Definition)
The stated interest on a debt instrument.
COUPON SWAP (International Trade Legal Definition)
A fixed-for-floating interest rate swap.
COVARIANCE (International Trade Legal Definition)
A measure of the co variability of two assets (sAB = sAsB rAB).
COVER NOTE (International Trade Legal Definition)
Insurance document evidencing that insurance cover for a consignment has been taken out, but not giving full details.
CREDIT RISK INSURANCE (International Trade Legal Definition)
Insurance designed to cover risks of nonpayment for delivered goods.
CROSS-HEDGE (International Trade Legal Definition)
A futures hedge using a currency that is different from, but closely related to, the currency of the underlying exposure.
CTD (International Trade Legal Definition)
WTO Committee on Trade and Development
CULTURE (International Trade Legal Definition)
Collective mental paradigms that a society imparts to individuals in the form of behavior patterns, shared values, norms and institutions.
CUMULATIVE TRANSLATION ADJUSTMENT (CTA) (International Trade Legal Definition)
An equity account under FAS #52 that accumulates gains or losses caused by translation accounting adjustments.
CURRENCY (FOREIGN EXCHANGE) RISK (International Trade Legal Definition)
The risk of unexpected changes in foreign currency exchange rates.
CURRENCY COUPON SWAP (International Trade Legal Definition)
A fixed-for-floating rate no amortizing currency swap traded primarily through international commercial banks.
CURRENCY CROSS-HEDGE (International Trade Legal Definition)
A hedge of currency risk using a currency that is correlated with the currency in which the underlying exposure is denominated.
CURRENCY OF REFERENCE (International Trade Legal Definition)
The currency that is being bought or sold. It is most convenient to place the currency of reference in the denominator of a foreign exchange quote.
CURRENCY OPTION (International Trade Legal Definition)
A contract giving the option holder the right to buy or sell an underlying currency at a specified price and on a specified date. The option writer (seller) holds the obligation to fulfill the other side of the contract.
CURRENCY SWAP (International Trade Legal Definition)
A contractual agreement to exchange a principal amount of two different currencies and, after a prearranged length of time, to give back the original principal. Interest payments in each currency are also typically swapped during the life of the agreement
CURRENT ACCOUNT (International Trade Legal Definition)
A measure of a country's international trade in goods and services.
CURRENT ACCOUNT BALANCE (International Trade Legal Definition)
A broad measure of import-export activity that includes services, travel and tourism, transportation, investment income and interest, gifts, and grants along with the trade balance on goods.
CUSTOM HOUSE AGENT (CHA) (International Trade Legal Definition)
An individual or firm licensed to enter and clear goods through Customs.Glossary of EXIM International Trade Terms Starting with-D
CUSTOM UNION (International Trade Legal Definition)
A form of regional economic integration group that eliminates tariffs among member nations and establishes common external tariffs.
CUSTOMHOUSE BROKER (International Trade Legal Definition)
A person or firm obtains the license from the treasury department of its Country when required, and help clients (importers) to enter and declare goods through customs.
CUSTOMS (International Trade Legal Definition)
The authorities designated to collect duties levied by a country on imports and exports.
CUSTOMS TERRITORY (International Trade Legal Definition)
Territory of the India in which the general tariff laws of the India apply.
DATE DRAFT (International Trade Legal Definition)
A draft that matures in a specified number of days after the date it is issued, without regard to the date of "ACCEPTANCE".
DEACTIVISATION (International Trade Legal Definition)
Voluntary discontinuation of the activation of an entire zone or subzone by the grantee or operator.
DEALING DESK OR TRADING DESK (International Trade Legal Definition)
The desk at an international bank that trades spot and forward foreign exchange.
DEBT CAPACITY (International Trade Legal Definition)
The amount of debt that a firm chooses to borrow to support a project.
DEBT-FOR-EQUITY SWAP (International Trade Legal Definition)
A swap agreement to exchange equity (debt) returns for debt (equity) returns over a prearranged length of time.
DECISION TREES (International Trade Legal Definition)
A graphical analysis of sequential decisions and the likely outcomes of those decisions.
DEEMED EXPORTS (International Trade Legal Definition)
Refers to those transactions in which the goods supplied do not leave the country and the payment for the goods is received by the supplier in India.
DEFAULT (International Trade Legal Definition)
An act or omission that will result in a claim for duties, taxes, charges or liquidated damages under the FTZ Operator's Bond
DEFERRED PAYMENT CREDIT (International Trade Legal Definition)
A type of letter of credit which provides for payment some time after presentation of the shipping documents by the exporter.
DEFERRED PAYMENTS CREDIT (International Trade Legal Definition)
Type of "LETTER OF CREDIT" providing for payment some time after presentation of shipping documents by exporter.
DELIVERABLE INSTRUMENT (International Trade Legal Definition)
The asset underlying a derivative security. For a currency option, the deliverable instrument is determined by the options exchange and is either spot currency or an equivalent value in futures contracts.
DELTA-CROSS-HEDGE (International Trade Legal Definition)
A futures hedge that has both currency and maturity mismatches with the underlying exposure.
DELTA-HEDGE (International Trade Legal Definition)
A futures hedge using a currency that matches the underlying exposure and a maturity date that is different from, but preferably close to, the maturity of the underlying exposure.
DEMAND MANAGEMENT (International Trade Legal Definition)
A business process with the intention to coordinate and influence all sources of demand for a firm's products.
DEPB (International Trade Legal Definition)
Refers to the Duty Entitlement Pass Book to neutralise the incidence of basic customs duty on the import content of export product. This is provided by way of grant of duty credit against the export product at specified rates. The DEPB Scheme
DEPOSITORY RECEIPT (International Trade Legal Definition)
A derivative security issued by a foreign borrower through a domestic trustee representing ownership in the deposit of foreign shares held by the trustee.
DEPRECIATION (International Trade Legal Definition)
A decrease in a currency value relative to another currency in a floating exchange rate system.
DERIVATIVE SECURITY (International Trade Legal Definition)
A financial security whose price is derived from the price of another asset.
DESTINATION CONTROL STATEMENT (International Trade Legal Definition)
Any of various statements that the U.S. Government requires to be displayed on export shipments and that specify the destinations for which export of the shipment has been authorized.
DEVALUATION (International Trade Legal Definition)
The official lowering of the value of one country's currency in terms of one or more foreign currencies.
DEVELOPED COUNTRIES (International Trade Legal Definition)
The richer, more industrialized countries in the world.
DEVELOPING COUNTRY (DCS) (International Trade Legal Definition)
A country that is in the process of becoming industrialized; the poorer nations of the world.
DFID (International Trade Legal Definition)
Department for International Development (UK)
DFRC (International Trade Legal Definition)
Refers to the Duty Free Replenishment Certificate Scheme which was introduced from 1/4/2000 replacing. Transferable Advance Licensing Scheme. The scheme is available to merchant exporters as well as to manufacturer exporters. However,
DGFT (International Trade Legal Definition)
Directorate General of Foreign Trade, which is headed by the Director General of Foreign Trade. The office of the DGFT is responsible for formulating and execution of Foreign Trade Policy, including licensing. Formerly (till 1991), was known as the Chief
DIFFERENCE CHECK (International Trade Legal Definition)
The difference in interest payments that is exchanged between two swap counter parties.
DIGITAL DIVIDE (International Trade Legal Definition)
The digital divide refers to the widening technological gap between the richer and the poorer countries of the world.
DIRECT COSTS OF FINANCIAL DISTRESS (International Trade Legal Definition)
Costs of financial distress that are directly incurred during bankruptcy or liquidation proceedings.
DIRECT EXPORTING (International Trade Legal Definition)
Marketer takes direct responsibility for its products abroad by selling them directly to foreign customers or through local representatives in foreign markets.
DIRECT FINANCING LEASE (International Trade Legal Definition)
A non-leveraged lease by a lesser in which the lease meets any of the definitional criteria of a capital lease, plus certain additional criteria.
DIRECT PRODUCT PROFITABILITY (International Trade Legal Definition)
Measuring the direct costs associated with handling a product from the warehouse until a customer buys from the retail store.
DIRECT TERMS (International Trade Legal Definition)
The price of a unit of foreign currency in domestic currency terms, such as INR 45.70/USD for a India resident. (Contrast with indirect quote.)
DISCOUNT (International Trade Legal Definition)
If a bond is selling below its face value, it is said to sell at a discount.
DISCOUNTED CASH FLOW (International Trade Legal Definition)
A valuation methodology that discounts expected future cash flows at a discount rate appropriate for the risk, currency, and maturity of the cash flows.
DISCOUNTED PAYBACK (International Trade Legal Definition)
The length of time needed to recoup the present value of an investment; sometimes used when investing in locations with high country risk.
DISCOUNTED PAYBACK PERIOD RULE (International Trade Legal Definition)
An investment decision rule in which the cash flows are discounted at an interest rate and the payback rule is applied on these discounted cash flows.
DISCOUNTING (International Trade Legal Definition)
Calculating the present value of a future amount. The process is the opposite of compounding.
DISCREPANCY – LETTER OF CREDIT (International Trade Legal Definition)
When documents presented do not conform to the letter of credit.
DISCRETIONARY RESERVES (International Trade Legal Definition)
Balance sheet accounts that are used in some countries to temporarily store earnings from the current year or the recent past.
DISCRIMINATORY PRICING (International Trade Legal Definition)
The practice that selling a product or service at different prices that do not reflect a proportional difference in costs.
DISPATCH (International Trade Legal Definition)
An amount paid by a vessel's operator to a charter if loading or unloading is completed in less time than stipulated in the charter party.
DISTRIBUTOR (International Trade Legal Definition)
A Foreign agent who sells for a supplier directly and maintains an inventory of the supplier's product.
DIVERSIFIABLE (UNIQUE) (UNSYSTEMATIC) RISK (International Trade Legal Definition)
A risk that specifically affects a single asset or a small group of assets. Also called unique or unsystematic risk.
DOC (International Trade Legal Definition)
Department of Commerce (USA)
DOCK RECEIPT (International Trade Legal Definition)
A receipt issued by an ocean carrier to acknowledge receipt of a shipment at the carrier's dock or warehouse.
DOCK STATEMENT (International Trade Legal Definition)
A receipt issued by an ocean carrier to acknowledge the receipt of a shipment at the carrier's dock or warehouse facilities.
DOCUMENTARY AGAINST ACCEPTANCE (D/A) (International Trade Legal Definition)
Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer only upon the buyer's acceptance of the attached draft.
DOMESTIC BONDS (International Trade Legal Definition)
Bonds issued and traded within the internal market of a single country and denominated in the currency of that country.
DOMESTIC LIQUIDITY (International Trade Legal Definition)
The aggregate of money supply, quasi-money or savings and time deposits, and deposit substitutes.
DRAFT (International Trade Legal Definition)
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 drawer at a fixed or determinable future date.
DRAFT (TRADE BILL, BILL OF EXCHANGE) (International Trade Legal Definition)
A means of payment whereby a drawer (the importer) instructs a drawee (either the importer or its commercial bank) to pay the payee (the exporter).
DRAWBACK (International Trade Legal Definition)
Articles manufactured or produced in the India with the use of imported components or raw materials and later exported are entitled to a refund of the duty charged on the imported products or components.
DRAWEE (International Trade Legal Definition)
The individual or firm on whom a draft is drawn and who owes the stated amount.
DRAWER (International Trade Legal Definition)
The individual or firm that issues or signs a draft and thus stands to receive payment of the stated amount from the drawee.
DSB (International Trade Legal Definition)
Dispute Settlement Body
DSP (International Trade Legal Definition)
Dispute Settlement Panel
DSU (International Trade Legal Definition)
Dispute Settlement Understanding
DUAL PRICING (International Trade Legal Definition)
The practice of selling identical products in different markets for different prices.
DUMPING (International Trade Legal Definition)
Exporting/Importing merchandise into a country below the costs incurred in production and shipment.
DUTY (International Trade Legal Definition)
A tax imposed on imports by the customs authority of a country.Glossary of Export Import Trade Terms Starting with-E
DUTY EXEMPTION/SCHEME DUTY FREE IMPORT OF INPUTS (International Trade Legal Definition)
Allows duty-free import of inputs for exports under Advance Licence, Duty Entitlement Pass Book (DEPB) and Duty Free Replenishment Certificate (DFRC) Scheme.
E-COMMERCE (International Trade Legal Definition)
Refers to electronic commerce. In the context of Foreign Trade Policy, e-commerce relates to electronic filing and processing of applications etc.
EARNINGS RESPONSE COEFFICIENT (International Trade Legal Definition)
The relation of stock returns to earnings surprises around the time of corporate earnings announcements.
ECLECTIC PARADIGM (International Trade Legal Definition)
A theory of the multinational firm that posits three types of advantage benefiting the multinational corporation: ownership-specific, location-specific, and market internalisation advantages.
ECONOMIC EXPOSURE (International Trade Legal Definition)
Change in the value of a corporation's assets or liabilities as a result of changes in currency values.
ECONOMIC FREEDOM (International Trade Legal Definition)
Economic freedom occurs when individuals and businesses make most of the economic decisions in an economy.
ECONOMIC INTEGRATION (International Trade Legal Definition)
The integration of commercial and financial activities among countries through the abolishment of economic discrimination.
ECONOMIC UNION (International Trade Legal Definition)
A group that combines the economic characteristics of a common market with some degree of harmonization of monetary and fiscal policies.
ECONOMIC VALUE ADDED (International Trade Legal Definition)
A method of performance evaluation that adjusts accounting performance with a charge reflecting investors' required return on investment.
ECONOMIES OF SCALE (International Trade Legal Definition)
Achieving lower average cost per unit through a larger scale of production.
ECONOMIES OF VERTICAL INTEGRATION (International Trade Legal Definition)
Achieving lower operating costs by bringing the entire production chain within the firm rather than contracting through the marketplace.
EFFECTIVE ANNUAL INTEREST RATE (International Trade Legal Definition)
the interest rate as if it were compounded once per time period rather than several times per period.
EFFECTIVE ANNUAL YIELD (International Trade Legal Definition)
Calculated as (1+i/n)n, where i is the stated annual interest rate and n is the number of compounding periods per year. (Contrast with bond equivalent yield and money market yield.)
EFFICIENT FRONTIER (International Trade Legal Definition)
The mean-variance efficient portion of the investment opportunity set.
EFFICIENT MARKET (International Trade Legal Definition)
A market in which prices reflect all relevant information.
EMBARGO (International Trade Legal Definition)
A type of economic sanction that totally disallows the imports of a specific product or all products from a specific country.
EMERGING MARKET (International Trade Legal Definition)
An emerging market has a very high growth rate, which yields enormous market potential. It is distinguished by the recent progress it has made in economic liberalization.
EMERGING STOCK MARKETS (International Trade Legal Definition)
The stock markets of emerging economies. These markets typically have higher expected returns than established markets but also higher risk.
EMPLOYMENT RATE (International Trade Legal Definition)
The ratio, in percent, of the number of employed persons to total labor force.
ENDOGENOUS UNCERTAINTY (International Trade Legal Definition)
Price or input cost uncertainty that is within the control of the firm, such as when the act of investing reveals information about price or input cost.
ENGAGEMENT (International Trade Legal Definition)
The assumption of payment responsibility in respect of a letter of credit, e.g.
EPCG (International Trade Legal Definition)
EPCG refers to the Export Promotion Capital Goods (EPCG) Scheme, which gives the manufacturer facility for import of capital goods for export production at concessional rate of duty (5 per cent) against certain level of export .
EPZS/EOUS (International Trade Legal Definition)
EPZs means Export Processing Zones which are special enclaves, separated from the Domestic Tariff Area (DTA), to provide an internationally competitive duty-free environment for export production. EOU means Export Oriented Units.
EQUITY-LINKED EUROBONDS (International Trade Legal Definition)
A Eurobond with a convertibility option or warrant attached. Eurobonds: Fixed rate Eurocurrency deposits and loans and Eurocurrencies with longer maturities than five years.
EROSION (International Trade Legal Definition)
Cash-flow amount transferred to a new project from customers and sales of other products of the firm.
EURO (International Trade Legal Definition)
The single currency of the European Economic and Monetary Union (EMU) introduced in January 1999. EMU members are Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, and Spain.
EUROBOND (International Trade Legal Definition)
A bond that is denominated in a currency other than that of the country of issue.
EUROCURRENCIES (International Trade Legal Definition)
Deposits and loans denominated in one currency and traded in a market outside the borders of the country issuing that currency (like : Eurodollars).
EUROCURRENCY MARKET (International Trade Legal Definition)
A money market for currencies held in the form of deposits in countries other than that where the currency is issued.
EURODOLLARS (International Trade Legal Definition)
Dollar-denominated deposits held in a country other than the United States.
EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT (EBRD) (International Trade Legal Definition)
One of four major regional development banks currently operating in the global economy.
EUROPEAN CURRENCY UNIT (ECU) (International Trade Legal Definition)
A trade-weighted basket of currencies in the European Exchange Rate Mechanism (ERM) of the European Union.
EUROPEAN EXCHANGE ATE MECHANISM (ERM) (International Trade Legal Definition)
The exchange rate system used by countries in the European Union in which exchange rates are pegged within bands around an ERM central value.
EUROPEAN MONETARY SYSTEM (EMS) (International Trade Legal Definition)
An exchange rate system based on cooperation between European Union central banks.
EUROPEAN OPTION (International Trade Legal Definition)
An option that can be exercised only at expiration. (Contrast with American option.)
EUROPEAN TERMS (International Trade Legal Definition)
A foreign exchange quotation that states the foreign currency price of one U.S. dollar. (Contrast with American terms.)
EUROPEAN UNION (EU) (International Trade Legal Definition)
An intergovernmental organization which coordinates foreign, economic, and judicial policy among its 25 member nations.
EXCHANGE PERMIT (International Trade Legal Definition)
A government permit sometimes required by the importer's government to enable the importer to convert his or her own country's currency into foreign currency with which to pay a seller in another country.
EXCHANGE RATE (International Trade Legal Definition)
The price of one currency in terms of another, i.e., the number of units of one currency that may be exchanged for one unit of another currency.
EXCHANGE RISK (International Trade Legal Definition)
The risk that losses may result from the changes in the relative values of different currencies.
EXERCISE PRICE (International Trade Legal Definition)
The price at which an option can be exercised (also called the striking price).
EXHIBITION (International Trade Legal Definition)
The showing of merchandise within a zone, usually to prospective buyers.
EXIM BANK (International Trade Legal Definition)
Export-Import Bank of the India. Provides guarantees of working capital loans for Indian exporters, guarantees the repayment of loans or makes loans to foreign purchasers of Indian goods and services.
EXIM POLICY (International Trade Legal Definition)
Refers to Export and Import (Exim) Policy. Exim Policy has got incorporated into the comprehensive Foreign Trade Policy, which was announced by the Commerce & Industry Minister on 31st August, 2004.
EXOGENOUS UNCERTAINTY (International Trade Legal Definition)
Price or input cost uncertainty that is outside the control of the firm.
EXPIRY DATE (International Trade Legal Definition)
The date when a letter of credit is no longer valid – i.e. the date beyond which it cannot be used.
EXPLICIT TAX (International Trade Legal Definition)
A tax that is explicitly collected by a government; includes income, withholding, property, sales, and value-added taxes and tariffs.
EXPORT (International Trade Legal Definition)
Any resource, intermediate good, or final good or service that producers in one country sell to buyers in another country.
EXPORT BROKER (International Trade Legal Definition)
An individual or firm that helps to locate and introduce buyers and seller in international business for a commission but does not take part in actual sales transaction.
EXPORT COMMISSION HOUSE (International Trade Legal Definition)
An organization which, for a commission, acts as a purchasing agent for a foreign buyer.
EXPORT LICENSE (International Trade Legal Definition)
A government document that permits the "Licensee" to engage in the export of designated goods to certain destinations.Glossary of Export Trade Terms Starting with-F
EXPORT MANAGEMENT COMPANY (International Trade Legal Definition)
A private firm that transacts export business on behalf of its client companies in return for a commission, salary, or retainer.
EXPORT RESTRAINTS (International Trade Legal Definition)
Quantitative restrictions imposed by exporting countries to limit exports to specified foreign markets, usually as a follow-up to formal or informal agreements reached with importing countries.
EXPORT SUBSIDIES (International Trade Legal Definition)
Any form of government payment that helps an exporter or manufacturing concern to lower its export costs.
EXPORT TRADING COMPANY (ETC) (International Trade Legal Definition)
A company that facilitates the export of goods and services. An ETC can either act as the export department for producers or take title to the product and export for its own account.
EXPROPRIATION (International Trade Legal Definition)
A specific type of political risk in which a government seizes foreign assets.
EXTERNAL MARKET (International Trade Legal Definition)
A market for financial securities that are placed outside the borders of the country issuing that currency.
EXTRATERRITORIALITY (International Trade Legal Definition)
A government practice which applies its laws outside its territorial boundaries.
FACE VALUE (International Trade Legal Definition)
The value of a bond that appears on its face. Also referred to as par value or principal.
FACTOR MODEL (International Trade Legal Definition)
A model that assumes a linear relation between an asset's expected return and one or more systematic risk factors.
FACTORING (International Trade Legal Definition)
Sale of an accounts receivable balance to buyers (factors) that are willing and able to bear the costs and risks of credit and collections.
FINANCIAL (CAPITAL) STRUCTURE (International Trade Legal Definition)
The proportion of debt and equity and the particular forms of debt and equity chosen to finance the assets of the firm.
FINANCIAL CONTAGION (International Trade Legal Definition)
The spread of a financial crisis from one country or region to other countries or regions.
FINANCIAL ENGINEERING (International Trade Legal Definition)
The process of innovation by which new financial products are created.
FINANCIAL INNOVATION (International Trade Legal Definition)
The process of designing new financial products, such as exotic currency options and swaps.
FINANCIAL MARKETS (International Trade Legal Definition)
Markets for financial assets and liabilities.
FINANCIAL POLICY (International Trade Legal Definition)
The corporation's choices regarding the debt-equity mix, currencies of denomination, maturity structure, method of financing investment projects, and hedging decisions with a goal of maximizing the value of the firm to some set of stakeholders.
FINANCIAL PRICE RISK (International Trade Legal Definition)
The risk of unexpected changes in a financial price, including currency (foreign exchange) risk, interest rate risk, and commodity price risk.
FINANCIAL RISK (International Trade Legal Definition)
Financial risk refers to unexpected events in a country's financial, economic, or business life.
FINANCIAL STRATEGY (International Trade Legal Definition)
The way in which the firm pursues its financial objectives.
FIRST IN-FIRST OUT (FIFO) (International Trade Legal Definition)
An accounting method based on an assumption regarding the flow of goods that older stock is disposed of first, in accordance with good merchandising policy.
FIRST-TO-MARKET ADVANTAGE (International Trade Legal Definition)
Also know as "first-mover advantage." The idea of first-mover advantage is that the initial occupant of a strategic position or niche (market segment) gains access to resources and capabilities that a follower cannot match.
FIXED COST (International Trade Legal Definition)
A cost that is fixed in total for a given period of time and for given volume levels. It is not dependent on the amount of goods or services produced during the period.
FIXED EXCHANGE RATE SYSTEM (International Trade Legal Definition)
An exchange rate system in which governments stand ready to buy and sell currency at official exchange rates.
FIXED FORWARD CONTRACT (International Trade Legal Definition)
Currency is bought or sold at a given future date.
FLOATING CURRENCY SYSTEM (International Trade Legal Definition)
An exchange rate system under which a government is not obligated to declare that its currency is convertible into a fixed amount of another currency.
FLOATING EXCHANGE RATE (International Trade Legal Definition)
An exchange rate system in which currency values are allowed to fluctuate according to supply and demand forces in the market without direct interference by government authorities.
FOB (International Trade Legal Definition)
Fob means Free on Board – i.e., when an exporter delivers goods "free on board", he pays all charges involved in getting them actually onto the ship.
FOB ENDORSEMENT (International Trade Legal Definition)
Used with FOB, FAS, C&F, or CFR (but not CIF) quotations, FOB sales endorsement to an open marine policy can cover transit risk from the point of origin until title transfers. In these instances, the exporter relies on the importer to insure.
FORCE MAJEURE (International Trade Legal Definition)
The title of a standard clause in marine contracts exempting the parties for no fulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods, or war.
FOREIGN -TRADE ZONES ACT (International Trade Legal Definition)
The Foreign-Trade Zones Act of June 18, 1934, (48 Stat. 998-1003; 19 U.S.C. 81a-81u) as amended.
FOREIGN AID (International Trade Legal Definition)
A grant of money, technical assistance, capital equipment, or other assistance typically extended by richer nations to poorer nations.
FOREIGN BONDS (International Trade Legal Definition)
Bonds that are issued in a domestic market by a foreign borrower, denominated in domestic currency, marketed to domestic residents, and regulated by the domestic authorities.
FOREIGN BRANCH (International Trade Legal Definition)
A foreign affiliate that is legally a part of the parent firm. In the U.S. tax code, foreign branch income is taxed as it is earned in the foreign country.
FOREIGN DEBT (International Trade Legal Definition)
Money owed by a nation to foreign investors, banks, or governments.
FOREIGN DIRECT INVESTMENT (FDI) (International Trade Legal Definition)
The act of building productive capacity directly in a foreign country.
FOREIGN EQUITY REQUIREMENTS (International Trade Legal Definition)
Investment rules that limit foreign ownership to a minority holding is a company.
FOREIGN EXCHANGE (International Trade Legal Definition)
The currency or credit instruments of a foreign country.
FOREIGN EXCHANGE (CURRENCY) RISK (International Trade Legal Definition)
The risk of unexpected changes in foreign currency exchange rates.
FOREIGN EXCHANGE BROKER (International Trade Legal Definition)
Brokers serving as matchmakers in the foreign exchange market that do not put their own money at risk.
FOREIGN EXCHANGE DEALER (International Trade Legal Definition)
A financial institution making a market in foreign exchange.
FOREIGN EXCHANGE MARKETS (International Trade Legal Definition)
Networks of commercial banks, investment banks, and other financial institutions that convert, buy, and sell currencies in the global economy.
FOREIGN FIRST (FOFI) (International Trade Legal Definition)
An accounting method based on an assumption regarding the flow of goods that foreign status merchandise is disposed of first.
FOREIGN SALES AGENT (International Trade Legal Definition)
An individual or firm that serves as the foreign representative of a domestic supplier and seeks sales abroad for the supplier.
FOREIGN TRADE ZONE (International Trade Legal Definition)
A physical area in which the government allows firms to delay or avoid paying tariffs on imports.
FOREIGN-SOURCE INCOME (International Trade Legal Definition)
Income earned from foreign operations.
FOREIGN-TRADE ZONE/FREE TRADE ZONE (International Trade Legal Definition)
A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, or used for manufacturing, etc., within the zone and re-exported without duties being paid.
FORFAITING (International Trade Legal Definition)
A form of factoring in which large, medium- to long-term receivables are sold to buyers (forfaiters) that are willing and able to bear the costs and risks of credit and collections.
FORWARD CONTRACT (International Trade Legal Definition)
A commitment to exchange a specified amount of one currency for a specified amount of another currency on a specified future date.
FORWARD DISCOUNT (International Trade Legal Definition)
A currency whose nominal value in the forward market is lower than in the spot market. (Contrast with forward premium.)
FORWARD MARKET (International Trade Legal Definition)
A market for forward contracts in which trades are made for future delivery according to an agreed-upon delivery date, exchange rate, and amount.
FORWARD PARITY (International Trade Legal Definition)
When the forward rate is an unbiased predictor of future spot exchange rates.
FORWARD PREMIUM (International Trade Legal Definition)
A currency whose nominal value in the forward market is higher than in the spot market. (Contrast with forward discount.)
FOUL BILL OF LADING (International Trade Legal Definition)
A receipt of goods issued by a carrier with an indication that the goods were damaged when received.
FRANCHISE AGREEMENT (International Trade Legal Definition)
An agreement in which a domestic company (the franchiser) licenses its trade name and or business system to an independent company (the franchisee) in a foreign market.
FRANCHISING (International Trade Legal Definition)
A parent company grants another independent entity the privilege to do business in a pre-specified manner, including manufacturing, selling products, marketing technology and other business approach.
FREE ALONGSIDE(F.A.S.) (International Trade Legal Definition)
A pricing term indicating that the quoted price includes the cost of delivering the goods alongside a designated vessel.
FREE CASH FLOW (International Trade Legal Definition)
Cash flow after all positive-NPV projects have been exhausted in the firm's main line of business.
FREE IN (F.I.) (International Trade Legal Definition)
A pricing term indicating that the charter of a vessel is responsible for the cost of loading and unloading goods from the vessel.
FREE PORT (International Trade Legal Definition)
An area such as a port city into which merchandise may be legally moved without payment of duties.
FREE TRADE AREA OF THE AMERICAS (FTAA) (International Trade Legal Definition)
A proposed hemispheric trade zone that would cover all of the countries in North, South, and Latin America. The FTAA is highly controversial.
FREE TRADE ZONE (International Trade Legal Definition)
An area designated by the government to which goods may be imported for processing and subsequent export on duty-free basis. Merchandise may be stored, used or manufactured in the zone and re-exported without duties being paid.
FREELY FLOATING EXCHANGE RATE SYSTEM (International Trade Legal Definition)
An exchange rate system in which currency values are allowed to fluctuate according to supply and demand forces in the market without direct interference by government authorities.
FREIGHT FORWARDER (International Trade Legal Definition)
An independent business which handles export shipments for compensation. Glossary of Import Trade Terms Starting with-G
FREIGHT SHIPPERS (FREIGHT FORWARDERS) (International Trade Legal Definition)
Agents used to coordinate the logistics of transportation.
FREQUENCY DISTRIBUTION (International Trade Legal Definition)
The organization of data to show how often certain values or ranges of values occur.
FTP (International Trade Legal Definition)
Refers to Foreign Trade Policy, announced by the Commerce & Industry Minister on 31st August, 2004. It is a 5-year Policy (September 2004 — March 2009), which takes effect from September 1, 2004.
FTWZ (International Trade Legal Definition)
Free Trade and Warehousing Zone, a new scheme announced in the Foreign Trade Policy 2004-2009.
FULL PAYOUT LEASE (International Trade Legal Definition)
A lease in which the lesser recovers, through the lease payments, all costs incurred in the lease plus an acceptable rate of return, without any reliance upon the leased equipment's future residual value.
FUNDAMENTAL ANALYSIS (International Trade Legal Definition)
A method of predicting exchange rates using the relationships of exchange rates to fundamental economic variables such as GNP growth, money supply, and trade balances.
FUTURE VALUE (International Trade Legal Definition)
Value of a sum after investing it over one or more periods. Also called compound value.
FUTURES COMMISSION MERCHANT (International Trade Legal Definition)
A brokerage house that is authorized by a futures exchange to trade with retail clients.
FUTURES CONTRACT (International Trade Legal Definition)
A commitment to exchange a specified amount of one currency for a specified amount of another currency at a specified time in the future. Futures contracts are periodically marked-to-market,
G-7 (International Trade Legal Definition)
A formal organization of seven highly industrialized democracies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
G-8 (International Trade Legal Definition)
The G-7 countries plus Russia.
GATT/GENERAL AGREEMENT ON TARIFFS AND TRADE (International Trade Legal Definition)
A multilateral treaty intended to help reduce trade barriers between the signatory countries and to promote trade through tariff concessions.
GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) (International Trade Legal Definition)
A post-World War II agreement designed to promote freer international trade among the nations of the world. The GATT was replaced by the World Trade Organization (WTO) in 1994.
GENERALIZED AUTOREGRESSIVE CONDITIONAL HETEROSKEDASTICITY (International Trade Legal Definition)
A time series model in which returns at each instant of time are normally distributed but volatility is a function of recent history of the series.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (International Trade Legal Definition)
A common set of accounting concepts, standards, and procedures by which financial statements are prepared.
GEOCENTRIC MULTINATIONAL (International Trade Legal Definition)
A multinational in which the subsidiaries are neither satellites nor independent city states, but parts of a whole whose focus is on worldwide objectives as well as local objectives, each part making its unique contribution with its unique competence.
GLOBAL BOND (International Trade Legal Definition)
A bond that trades in the Eurobond market as well as in one or more national bond markets.
GLOBAL ECONOMY (International Trade Legal Definition)
The international network of individuals, businesses, governments, and multilateral organizations which collectively make production and consumption decisions.
GLOBALIZATION (International Trade Legal Definition)
A global movement to increase the flow of goods, services, people, real capital, and money across national borders in order to create a more integrated and interdependent world economy.
GOLD EXCHANGE STANDARD (International Trade Legal Definition)
An exchange rate system used from 1925 to 1931 in which the United States and England were allowed to hold only gold reserves while other nations could hold gold, U.S. dollars, or pounds sterling as reserves.
GOLD STANDARD (International Trade Legal Definition)
An exchange rate system used prior to 1914 in which gold was used to settle national trade balances. Also called the classical gold standard.
GOODWILL (International Trade Legal Definition)
The accounting treatment of an intangible asset such as the takeover premium in a merger or acquisition.
GRADUALISM (International Trade Legal Definition)
A steady and calculated approach to transforming an economy from communism to capitalism.
GRANTEE (International Trade Legal Definition)
A corporation to which the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board.
GRAY-MARKET IMPORTS (International Trade Legal Definition)
Gray-market imports are parallel distribution of genuine goods by intermediaries other than authorized channel members.
GREENFIELD (International Trade Legal Definition)
A form of investment in which the firm designs and builds a new factory from scratch, starting with nothing but a
GREENMAIL (International Trade Legal Definition)
Buying shares on the open market in the hope that the target's business partners will buy back the shares at inflated prices.
GROSS DOMESTIC PRODUCT (GDP) (International Trade Legal Definition)
A measure of the market value of goods and services produced by a nation. Unlike Gross National Product, GDP excludes profits made by domestic firms overseas, as well as the share of reinvested earning in domestic firms' foreign-based operations.
GROSS WEIGHT (International Trade Legal Definition)
The full weight of a shipment, including goods and packaging.Glossary of Import Export Trade Terms Starting with-H
GROWING PERPETUITY (International Trade Legal Definition)
A constant stream of cash flows without end that is expected to rise indefinitely. For example, cash flows to the landlord of an apartment building might be expected to rise a certain percentage each year.
GROWTH OPTIONS (International Trade Legal Definition)
The positive-NPV opportunities in which the firm has not yet invested. The value of growth options reflects the time value of the firm's current investment in real assets as well as the option value of the firm's potential future investments.
GROWTH STOCKS (International Trade Legal Definition)
Stocks with high price/book or price/earnings ratios. Historically, growth stocks have had lower average returns than value stocks (stocks with low price/book or PE ratios) in a variety of countries.
GUIDELINE LEASE (International Trade Legal Definition)
A lease written under criteria established by the IRS to determine the availability of tax benefits to the lesser.
HARMONIZED TARIFF SCHEDULE (HTS) (International Trade Legal Definition)
A method of classification used by many countries to determine tariffs on imports.
HEAVILY INDEBTED POOR COUNTRIES (HIPC) INITIATIVE (International Trade Legal Definition)
The HIPC Inititiative is a major international response to the burdensome external debt held by the world's poorest, most indebted countries. It originated in 1996 as a joint undertaking of the World Bank and the International Monetary Fund (IMF).
HEDGE (International Trade Legal Definition)
A position or operation that offsets an underlying exposure. For example, a forward currency hedge uses a forward currency contract to offset the exposure of an underlying position in a foreign currency. Hedges reduce the total variability of the combined
HEDGE FUNDS (International Trade Legal Definition)
Private investment partnerships with a general manager and a small number of limited partners.
HEDGE PORTFOLIO (International Trade Legal Definition)
The country-specific hedge portfolio in the International Asset Pricing Model serves as a store of value (like the risk-free asset in the CAPM) as well as a hedge against the currency risk of the market portfolio.
HEDGE QUALITY (International Trade Legal Definition)
Measured by the r-square in a regression of spot rate changes on futures price changes.
HEDGE RATIO (International Trade Legal Definition)
The ratio of derivatives contracts to the underlying risk exposure.
HEDGING (International Trade Legal Definition)
Reducing the risk of a cash position by using the futures instruments to offset the price movement of the cash asset.
HIGH-WITHHOLDING-TAX INTEREST INCOME (International Trade Legal Definition)
In the U.S. tax code, interest income that has been subject to a foreign gross withholding tax of 5 percent or more.
HISTORICAL VOLATILITY (International Trade Legal Definition)
Volatility estimated from a historical time series.
HOLDING-PERIOD RETURN (International Trade Legal Definition)
The rate of return over a given period.
HOME ASSET BIAS (International Trade Legal Definition)
The tendency of investors to over invest in assets based in their own country.
HOMOGENEOUS EXPECTATIONS (International Trade Legal Definition)
Idea that all individuals have the same beliefs concerning future investments, profits, and dividends.
HYPERINFLATION (International Trade Legal Definition)
An extremely high rate of inflation, often exceeding several hundred or several thousand percent, that causes a country's money to become practically worthless.
HYSTERESIS (International Trade Legal Definition)
The behavior of firms that fail to enter markets that appear attractive and, once invested, persist in operating at a loss. This behavior is characteristic of situations with high entry and exit costs along with high uncertainty.Glossary of Import Export International Trade Terms Starting with-I
IMPLICIT TAX (International Trade Legal Definition)
Lower (higher) before-tax required returns on assets that are subject to lower (higher) tax rates.
IMPLIED VOLATILITY (International Trade Legal Definition)
The volatility that is implied by an option value given the other determinants of option value.
IMPORT (International Trade Legal Definition)
Any resource, intermediate good, or final good or service that buyers in one country purchase from sellers in another country.
IMPORT LICENSE (International Trade Legal Definition)
A document required and issued by some national governments authorizing the importation of goods into their individual countries.
IMPORT LICENSES (International Trade Legal Definition)
Licenses required by some countries to bring in a foreign-made good. In many cases, import licenses are also used by the issuing country to control the quantity of imported items.
IN-THE-MONEY OPTION (International Trade Legal Definition)
An option that has value if exercised immediately.
INCOME BASKETS (International Trade Legal Definition)
In the U.S. tax code, income is allocated to one of a number of separate income categories. Losses in one basket may not be used to offset gains in another basket.
INCOME STATEMENT (International Trade Legal Definition)
Financial report that summarizes a firm's performance over a specified time period.
INCREMENTAL IRR (International Trade Legal Definition)
IRR on the incremental investment from choosing a large project instead of a smaller project.
INDEMNITY CLAUSE (International Trade Legal Definition)
A clause in which the one party indemnifies the other. In leasing, generally a clause whereby the lessee indemnifies the lesser from loss of tax benefits.
INDEPENDENT PROJECT (International Trade Legal Definition)
A project whose acceptance or rejection is independent of the acceptance or rejection of other projects.
INDEX FUTURES (International Trade Legal Definition)
A futures contract that allows investors to buy or sell an index (such as a foreign stock index) in the futures market.
INDEX OPTIONS (International Trade Legal Definition)
A call or put option contract on an index (such as a foreign stock market index).
INDEX SWAP (International Trade Legal Definition)
A swap of a market index for some other asset (such as a stock-for-stock or debt-for-stock swap).
INDICATION PRICING SCHEDULE (International Trade Legal Definition)
A schedule of rates for an interest rate or currency swap.
INDIRECT COSTS OF FINANCIAL DISTRESS (International Trade Legal Definition)
Costs of financial distress that are indirectly incurred prior to formal bankruptcy or liquidation.
INDIRECT CUSTOMERS (International Trade Legal Definition)
The end-users (e.g., consumers) of the products and services purchased from the wholesalers, retailers, and consignees — the direct customers of the seller.
INDIRECT DIVERSIFICATION BENEFITS (International Trade Legal Definition)
Diversification benefits provided by the multinational corporation that are not available to investors through their portfolio investment.
INDIRECT EXPORTING (International Trade Legal Definition)
Export products to foreign markets by using an intermediary, usually export trading company based in the exporter's country.
INFLATION RATE (International Trade Legal Definition)
The general increase in the price level herein measured by the growth rate in the GNP Implicit Price Index or the general price deflator.
INFORMATIONAL EFFICIENCY (International Trade Legal Definition)
Whether or not market prices reflect information and thus the true (or intrinsic) value of the underlying asset.
INLAND BILL OF LADING (International Trade Legal Definition)
A bill of lading used in transporting goods overland to the exporter's international carrier.
INPUT OUTPUT NORMS (International Trade Legal Definition)
The norms which define the amount of input/inputs required to manufacture a unit of output.
INTEGRATED FINANCIAL MARKET (International Trade Legal Definition)
A market in which there are no barriers to financial flows and purchasing power parity holds across equivalent assets.
INTELLECTUAL PROPERTY (International Trade Legal Definition)
Material or communicable result in forms of discoveries, inventions, designs and literary and art works of scientific, humanistic, literary, and artistic endeavor. It includes, but is not limited to, works in the form of scientific discoveries and invention.
INTELLECTUAL PROPERTY RIGHTS (International Trade Legal Definition)
Patents, copyrights, and proprietary technologies and processes that are the basis of the multinational corporation's competitive advantage over local firms.
INTER-AMERICAN DEVELOPMENT BANK(IADM) (International Trade Legal Definition)
A regional development bank designed to promote sustainable economic development in the Western Hemisphere. Its headquarters are located in Washington, D.C.
INTERBANK SPREAD (International Trade Legal Definition)
The difference between a bank's offer and bid rates for deposits in the Eurocurrency market.
INTEREST RATE RISK (International Trade Legal Definition)
The risk of unexpected changes in an interest rate.
INTEREST RATE SWAP (International Trade Legal Definition)
An agreement to exchange interest payments for a specific period of time on a given principal amount. The most common interest rate swap is a fixed-for-floating coupon swap. The notional principal is typically not exchanged.
INTERMEDIATED MARKET (International Trade Legal Definition)
A financial market in which a financial institution (usually a commercial bank) stands between borrowers and savers.
INTERMODAL (International Trade Legal Definition)
The use of two or more modes of transportation to complete a cargo move; truck/rail/ship, or truck/air, for example.
INTERNAL MARKET (International Trade Legal Definition)
A market for financial securities denominated in the currency of a host country and placed within that country.
INTERNAL RATE OF RETURN (IRR) (International Trade Legal Definition)
A discount rate at which the net present value of an investment is zero. The IRR is a method of evaluating capital expenditure proposals.
INTERNATIONAL ASSET PRICING MODEL (IAPM) (International Trade Legal Definition)
The international version of the CAPM in which investors in each country share the same consumption basket and purchasing power parity holds.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (International Trade Legal Definition)
Also called the World Bank, an international organization created at Breton Woods in 1944 to help in the reconstruction and development of its member nations.
INTERNATIONAL BONDS (International Trade Legal Definition)
Bonds that are traded outside the country of the issuer. International bonds are either foreign bonds trading in a foreign national market or Eurobonds trading in the international market.
INTERNATIONAL CHAMBER OF COMMERCE (International Trade Legal Definition)
International non-governmental body concerned with promotion of trade and harmonization of trading practice. Responsible for drafting and publishing.
INTERNATIONAL MONETARY FUND (IMF) (International Trade Legal Definition)
An international organization designed to promote global economic stability and development. It compiles statistics on cross-border transactions and publishes a monthly summary of each country's balance of payments.
INTERNATIONAL MONETARY SYSTEM (International Trade Legal Definition)
The global network of governmental and commercial institutions within which currency exchange rates are determined.
INTRINSIC VALUE OF AN OPTION (International Trade Legal Definition)
The value of an option if exercised immediately.
INVESTMENT AGREEMENT (International Trade Legal Definition)
An agreement specifying the rights and responsibilities of a host government and a corporation in the structure and operation of an investment project
INVESTMENT OPPORTUNITY SET (International Trade Legal Definition)
The set of possible investments available to an individual or corporation.
INVESTMENT PHILOSOPHY (International Trade Legal Definition)
The investment approach-active or passive-pursued by an investment fund and its managers.
IRREVOCABLE LETTER OF CREDIT (International Trade Legal Definition)
A letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee.Glossary of Impex Trade Terms Starting with – J
ISO-9000 (International Trade Legal Definition)
Refers to international standards, laid down by the International Standards Organisation.
ITC(HS) (International Trade Legal Definition)
Refers to Indian Trade Classification (Harmonized System). It is a system of classification of products for the purposes of export and import.
JOINT VENTURE (International Trade Legal Definition)
An agreement of two or more companies to pool their resources to execute a well-defined mission. Resource commitments, responsibilities, and earnings are shared according to a predetermined contractual formula.
JUST IN TIME (JIT) (International Trade Legal Definition)
An organization-wide practice that keeps the inventory to the minimum and provides customers the right goods or service at the right time. Glossary of Export Import Foreign Trade Terms Starting with – K
KEIRETSU (International Trade Legal Definition)
Collaborative groups of vertically and horizontally integrated firms with extensive share cross-holdings and with a major Japanese bank or corporation at the center.Glossary of Export Import Trade Terms Starting with -L
KYOTO PROTOCOL (International Trade Legal Definition)
A multilateral environmental agreement; its goal is to control global warming by reducing greenhouse gases emitted into the Earth's atmosphere.
LANDED COST (International Trade Legal Definition)
The quoted or invoiced cost of a commodity, plus any inbound transportation charges.
LAW OF ONE PRICE (PURCHASING POWER PARITY) (International Trade Legal Definition)
The principle that equivalent assets sell for the same price. The law of one price is enforced in the currency markets by financial market arbitrage.
LEAD MANAGER (International Trade Legal Definition)
The lead investment bank in a syndicate selling a public securities offering.
LEADING AND LAGGING (International Trade Legal Definition)
Reduction of transaction exposure through timing of cash flows within the corporation.
LEASE (International Trade Legal Definition)
A contract in which one party conveys the use of an asset to another party for a specific period of time at a predetermined rate.
LEASE RATE (International Trade Legal Definition)
The periodic rental payment to a lesser for the use of assets. Others may define lease rate as the implicit interest rate in minimum lease payments.
LEAST-DEVELOPED COUNTRIES (LDCS) (International Trade Legal Definition)
The poorest of the developing countries. They are characterized by a low gross national product per capita, a reliance on subsistence agriculture, rapid population growth, inadequate infrastructure.
LETTER OF CREDIT (L/C) (International Trade Legal Definition)
A letter issued by an importer's bank guaranteeing payment upon presentation of specified trade documents (invoice, bill of lading, inspection and insurance certificates, etc.).
LETTER OF CREDIT(L/C) (International Trade Legal Definition)
A document, issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a specified sum of money under specified terms, usually the receipt by the bank of certain documents within a given time.
LEVERAGED LEASE (International Trade Legal Definition)
The lesser provides an equity portion (usually 20 to 40 percent) of the equipment cost and lenders provide the balance on a nonrecourse debt basis.
LIBERALIZATION (International Trade Legal Definition)
The process by which certain business activities become more market driven.
LICENSE AGREEMENT (International Trade Legal Definition)
A sales agreement in which a domestic company (the licensor) allows a foreign company (the licensee) to market its products in a foreign country in return for royalties, fees, or other forms of compensation.
LICENSING (International Trade Legal Definition)
A business arrangement in which the manufacturer of a product grants permission to some other group or individual to manufacture that product in return for specified royalties.Glossary of Export Trade Terms Starting with – M
LIMITED FLEXIBILITY EXCHANGE RATE SYSTEM (International Trade Legal Definition)
The International Monetary Fund's name for an exchange rate system with a managed float.
LIQUID MARKET (International Trade Legal Definition)
A market in which traders can buy or sell large quantities of an asset when they want and with low transactions costs.
LIQUIDITY (International Trade Legal Definition)
The ease with which an asset can be exchanged for another asset of equal value.
LOANABLE FUNDS (International Trade Legal Definition)
The pool of funds from which borrowers can attract capital; typically categorized by currency and maturity.
LOCATION-SPECIFIC ADVANTAGES (International Trade Legal Definition)
Advantages (natural and created) that are available only or primarily in a single location.
LONDON INTERBANK BID RATE (LIBID) (International Trade Legal Definition)
The bid rate that a Euro market bank is willing to pay to attract a deposit from another Euro market bank in London.
LONDON INTERBANK OFFER RATE (LIBOR) (International Trade Legal Definition)
The offer rate that a Euro market bank demands in order to place a deposit at (or, equivalently, make a loan to) another Euro market bank in London.
LONG POSITION (International Trade Legal Definition)
A position in which a particular asset (such as a spot or forward currency) has been purchased.
MACRO COUNTRY RISKS (International Trade Legal Definition)
Country (or political) risks that affect all foreign firms in a host country.
MANAGEMENT CONTRACT (International Trade Legal Definition)
An agreement by which one firm allows another to manage its foreign activities on behalf of it. The managing firm is forbidden to make capital investment or financing decisions.
MANAGERIAL FLEXIBILITY (International Trade Legal Definition)
Flexibility in the timing and scale of investment provided by a real investment option.
MANIFEST (International Trade Legal Definition)
Document that lists in detail al the bills of lading issued by a carrier of its agent or master, i.e., a detailed summary of the total cargo of a vessel.
MANIPULATION (International Trade Legal Definition)
Processing wherein merchandise is packed, unpacked, repacked, cleaned, sorted, graded or otherwise changed in condition but not manufactured.
MANUFACTURER (International Trade Legal Definition)
Generally, the production of articles for use from raw or prepared materials by substantially transforming such materials into new forms.
MAQUILADORAS (International Trade Legal Definition)
Duty-free assembly plants located mainly in the developing world. Maquiladoras are one type of foreign direct investment.
MARGIN ACCOUNT (International Trade Legal Definition)
An account maintained by an investor with a brokerage firm in which securities may be purchased by borrowing a portion of the purchase price from the brokerage, or may be sold short by borrowing the securities from the brokerage firm.
MARGIN REQUIREMENT (International Trade Legal Definition)
A performance bond paid upon purchase of a futures contract that ensures the exchange clearinghouse against loss.
MARINE INSURANCE (International Trade Legal Definition)
Insurance that compensates the owners of goods transported overseas in the event of loss that cannot be legally recovered from the carrier.
MARKET ACCESS (International Trade Legal Definition)
The extent to which a domestic industry can penetrate a related market in a foreign country. Access can be limited by tariffs or other non-trade barriers.
MARKET ECONOMY (International Trade Legal Definition)
An economy in which resource allocations, prices and other marketing decisions are primarily determined by the free market.
MARKET FAILURE (International Trade Legal Definition)
A failure of arms-length markets to efficiently complete the production of a good or service. In the eclectic paradigm, the multinational corporation's market internalization advantages take advantage of market failure.
MARKET INTERNALIZATION ADVANTAGES (International Trade Legal Definition)
Advantages that allow the multinational corporation to internalize or exploit the failure of an arms-length market to efficiently accomplish a task.
MARKET MAKER (International Trade Legal Definition)
A financial institution that quotes bid (buy) and offer (sell) prices.
MARKET MODEL (ONE-FACTOR MARKET MODEL) (International Trade Legal Definition)
The empirical version of the security market line: Rj = aj + bjRM + ej.
MARKET PORTFOLIO (International Trade Legal Definition)
A portfolio of all assets weighted according to their market values.
MARKET RISK PREMIUM (International Trade Legal Definition)
The risk premium on an average stock; (E[RM]-RF).
MARKET TIMING (International Trade Legal Definition)
An investment strategy of shifting among asset classes in an attempt to anticipate which asset classes) will appreciate or depreciate during the coming period.
MARKET-BASED CORPORATE GOVERNANCE SYSTEM (International Trade Legal Definition)
A system of corporate governance in which the supervisory board represents a dispersed set of largely equity shareholders.
MARKETING MIX (International Trade Legal Definition)
The set of marketing tools that the firm uses to pursue its marketing objectives in the target market. One of the most popular classifications of marketing mix tools is called the "4 P's" of marketing: product, price, place, and promotion.
MARKING (International Trade Legal Definition)
Letters, numbers, and other symbols on cargo packages to facilitate identification.
MARKING TO MARKET (International Trade Legal Definition)
The process by which changes in the value of futures contracts are settled daily.
MATURITY DATE (International Trade Legal Definition)
The date on which the last payment on a bond is due.
MEAN-VARIANCE EFFICIENT (International Trade Legal Definition)
An asset that has higher mean return at a given level of risk (or lower risk at a given level of return) than other assets.
MERCHANDISE (International Trade Legal Definition)
Includes goods, wares, and chattels of every description except Prohibited Merchandise, building materials, production equipment and supplies for use in operation of a zone.
MERCHANDISE, DOMESTIC (International Trade Legal Definition)
Merchandise which has been produced in the India and not exported therefrom.
MERCHANDISE, FOREIGN (International Trade Legal Definition)
Imported Merchandise which has not been properly released from Customs custody into the Customs territory of the India.
MERCHANDISE, FUNGIBLE (International Trade Legal Definition)
Merchandise which for commercial purposes is identical and interchangeable in all situations.
MERCHANDISE, MIXED STATUS (International Trade Legal Definition)
Foreign Merchandise which has been combined with Domestic Merchandise in the zone.
MERCHANDISE/OPERATIONS, PROHIBITED (International Trade Legal Definition)
Merchandise, the importation of which is prohibited by law on grounds of public policy or morals, or excluded by order of the Foreign-Trade Zones Board..
MERCHANDISE/OPERATIONS, RESTRICTED (International Trade Legal Definition)
Merchandise which may not be authorized for delivery from Customs custody without a special permit, or a waiver thereof by an agency of the Indian Government.Glossary of EXIM Trade Terms Starting with – N
MERCOSUR (International Trade Legal Definition)
The common market of the South, a customs union which includes Argentina, Brazil, Paraguay, and Uruguay in a regional trade pact that reduces tariffs on intrapact trade by up to 90 percent. Bolivia and Chile are associate members.
MERGER (International Trade Legal Definition)
A form of corporate acquisition in which one firm absorbs another and the assets and liabilities of the two firms are combined.
METHOD OF PAYMENT (International Trade Legal Definition)
The way in which a merger or acquisition is financed.
MICRO COUNTRY RISKS (International Trade Legal Definition)
Country risks that are specific to an industry, company, or project within a host country.
MICRO CREDIT (International Trade Legal Definition)
Small loans, perhaps $50 or $100, that are extended to small businesses to finance a business start-up or other business activity.
MIDDLE MARKET (International Trade Legal Definition)
A market segment generally represented by financing under $2 million. In leasing this sector is dominated by single investor leases.
MILLER AND MODIGLIANI'S IRRELEVANCE PROPOSITION (International Trade Legal Definition)
If financial markets are perfect, then corporate financial policy (including hedging policy) is irrelevant.
MIXED TARIFF (International Trade Legal Definition)
A combination of specific and ad valorem tariffs.
MONETARY ASSETS AND LIABILITIES(MAL) (International Trade Legal Definition)
Assets and liabilities with contractual payoffs.
MONEY MARKET HEDGE (International Trade Legal Definition)
A hedge that replicates a currency forward contract through the spot currency and Eurocurrency markets.
MONEY MARKET YIELD (International Trade Legal Definition)
A bond quotation convention based on a 360-day year and semiannual coupons. (Contrast with bond equivalent yield.)
MONEY MARKETS (International Trade Legal Definition)
Financial markets for debt securities that pay off in the short term (usually less than one year).
MONEY SUPPLY (International Trade Legal Definition)
The total amount of currency in circulation and peso deposits subject to check of the monetary system.
MONOPOLY (International Trade Legal Definition)
Exclusive control or possession by one group of the means of producing or selling goods or services.
MORE FLEXIBLE EXCHANGE RATE SYSTEM (International Trade Legal Definition)
The International Monetary Fund's name for a floating exchange rate system.
MOST FAVORED NATION (MFN) (International Trade Legal Definition)
A status granted to one country by another; the granting country then accords the recipient's imports and exports the most favorable treatment that it accords any country.
MULTILATERAL ENVIRONMENTAL AGREEMENTS (MEAS) (International Trade Legal Definition)
Environmental agreements negotiated by a number of countries.
MULTINATIONAL CORPORATION (International Trade Legal Definition)
A corporation with operations in more than one country.
MULTINATIONAL NETTING (International Trade Legal Definition)
Elimination of offsetting cash flows within the multinational corporation.
MUTUALLY EXCLUSIVE INVESTMENT DECISIONS (International Trade Legal Definition)
Investment decisions in which the acceptance of a project precludes the acceptance of one or more alternative projects.
NATIONAL TAX POLICY (International Trade Legal Definition)
The way in which a nation chooses to allocate the burdens of tax collections across its residents.
NATIONAL TREATMENT (International Trade Legal Definition)
A country accords no less favorable treatment to imported goods than it does to domestic goods.
NATIONALIZATION (International Trade Legal Definition)
A process whereby privately owned companies are brought under state ownership and control. (Contrast with privatization.)
NEGATIVE-NPV TIE-IN PROJECT (International Trade Legal Definition)
A negative (-) NPV infrastructure development project that a local government requires of a company pursuing a positive (+) NPV investment project elsewhere in the economy.
NET ASSET VALUE (International Trade Legal Definition)
The sum of the individual asset values in a closed-end mutual fund. Closed-end funds can sell at substantial premiums or discounts to their net asset values.
NET CURRENCY EXPOSURE (International Trade Legal Definition)
Exposure to foreign exchange risk after netting all intracompany cash flows.
NET EXPOSED ASSETS (International Trade Legal Definition)
Exposed assets less exposed liabilities. The term is used with market values or, in translation accounting, with book values.
NET MONETARY ASSETS (International Trade Legal Definition)
Monetary assets less monetary liabilities.
NET POSITION (International Trade Legal Definition)
A currency position after aggregating and canceling all offsetting transactions in each currency, maturity, and security.
NET PRESENT VALUE (NPV) (International Trade Legal Definition)
The present value of future cash returns, discounted at the appropriate market interest rate, minus the present value of the cost of the investment.
NET WORKING CAPITAL (International Trade Legal Definition)
Current assets minus current liabilities.
NEW PROTECTIONISM (International Trade Legal Definition)
Recent efforts to pressure national governments to exercise greater control over foreign trade and foreign direct investment.
NFE (International Trade Legal Definition)
Refers to Net Foreign Exchange. Net Foreign Exchange earning is calculated as a percentage of exports (NFEP).
NOMINAL CASH FLOW (International Trade Legal Definition)
A cash flow expressed in nominal terms if the actual dollars to be received (or paid out) are given.
NOMINAL INTEREST RATE (International Trade Legal Definition)
Interest rate unadjusted for inflation.
NON-GOVERNMENTAL ORGANIZATIONS (NGOS) (International Trade Legal Definition)
Special interest groups that operate in the global community.
NON-INTERMEDIATED DEBT MARKET (International Trade Legal Definition)
A financial market in which borrowers (governments and large corporations) appeal directly to savers for debt capital through the securities markets without using a financial institution as intermediary.
NON-MONETARY ASSETS AND LIABILITIES (International Trade Legal Definition)
Assets and Liabilities with non-contractual payoffs.
NON-PRIVILEGED FOREIGN (NPF) (International Trade Legal Definition)
Foreign Merchandise or non-tax-paid domestic merchandise upon which the duty and applicable taxes will be determined at the time of entry from the zone for consumption.Glossary of Export Business Trade Terms Starting with – O
NON-TARIFF BARRIER (International Trade Legal Definition)
An indirect measure used to discriminate against foreign manufacturers, for example, extensive inspection procedures for foreign imports that create barriers to entering the market.
NONCASH ITEM (International Trade Legal Definition)
Expense against revenue that does not directly affect cash flow, such as depreciation and deferred taxes.
NORMAL DISTRIBUTION (International Trade Legal Definition)
Symmetric bell-shaped frequency distribution that can be defined by its mean and standard deviation.
NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) (International Trade Legal Definition)
A regional trade pact among the United States, Canada, and Mexico.
NOTIONAL PRINCIPAL (International Trade Legal Definition)
In a swap agreement, a principal amount that is only notional and is not exchanged.
OCEAN BILL OF LADING (International Trade Legal Definition)
A bill of lading indicating that the exporter consigns a shipment to an int'l carrier for transportation to a specified foreign market.
OFFER (ASK) RATES (International Trade Legal Definition)
The rate at which a market maker is willing to sell the quoted asset.
OFFERING STATEMENT (International Trade Legal Definition)
In the United States, a shortened registration statement required by the Securities and Exchange Commission on debt issues with less than a nine-month maturity.
OFFICIAL SETTLEMENTS BALANCE (OVERALL BALANCE) (International Trade Legal Definition)
An overall measure of a country's private financial and economic transactions with the rest of the world.
OFFSHORE FINANCIAL CENTERS (OFCS) (International Trade Legal Definition)
The many types of financial institutions that operate without financial supervision by governments or other agencies.
OLIGOPOLY (International Trade Legal Definition)
A market dominated by so few sellers that action by any of them will impact both the price of the good and the competitors.
ON BOARD BILL OF LADING (International Trade Legal Definition)
A bill of lading in which a carrier certifies that goods have been placed on board a certain vessel.
OPEN ACCOUNT (International Trade Legal Definition)
A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment.
OPEN AND REFORM POLICY (International Trade Legal Definition)
An economic policy enacted by the Chinese government combining central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits.
OPEN INSURANCE POLICY (International Trade Legal Definition)
A marine insurance policy that applies to all shipments made by an exporter over a period of time rather than to one shipment only.
OPEN-END FUND (International Trade Legal Definition)
A mutual fund in which the amount of money under management grows/shrinks as investors buy/sell the fund.
OPERATING CASH FLOW (International Trade Legal Definition)
Earnings before interest and depreciation minus taxes. It measures the cash flow generated form operations, not counting capital spending or working capital requirements.
OPERATING EXPOSURE (International Trade Legal Definition)
Changes in the value of real (no monetary) assets or operating cash flows as a result of changes in currency values.
OPERATING LEVERAGE (International Trade Legal Definition)
The trade-off between fixed and variable costs in the operation of the firm.
OPERATIONAL EFFICIENCY (International Trade Legal Definition)
Market efficiency with respect to how large an influence transactions costs and other market frictions have on the operation of a market.
OPERATOR (International Trade Legal Definition)
A corporation, partnership, or person that operates a zone or sub zone under the terms of an agreement with the Grantee.
OPERATOR'S BOND (International Trade Legal Definition)
All zone operators must submit to Customs a bond to assure compliance with Customs regulations.
OPIC (International Trade Legal Definition)
Overseas Private Investment Corporation. A US agency that assists US companies protect their investment against risk in a particular country besides providing other services.
OPPORTUNITY COST (International Trade Legal Definition)
Most valuable alternative that is given up. The rate of return used in NPV computation is an opportunity interest rate.
OPPORTUNITY SET (International Trade Legal Definition)
The set of all possible investments.
ORDER BILL OF LADING (International Trade Legal Definition)
A negotiable bill of lading made out to the order of the shipper.Glossary of Import Business Trade Terms Starting with – P
ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) (International Trade Legal Definition)
A group of 30 countries that meets regularly to discuss global issues and make appropriate economic and social policies.
ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC) (International Trade Legal Definition)
A producer cartel that produces and sells oil.
OUT-OF-THE-MONEY OPTION (International Trade Legal Definition)
An option that has no value if exercised immediately.
OUTRIGHT QUOTE (International Trade Legal Definition)
A quote in which all of the digits of the bid and offer prices are quoted. (Contrast with points quote.)
OUTSOURCING (International Trade Legal Definition)
A situation in which a firm's functions are performed or provided by a person or group from outside the company.
OVERALL BALANCE (International Trade Legal Definition)
(See official settlements balance.)
OVERALL FTC LIMITATION (International Trade Legal Definition)
In the U.S. tax code, a limitation on the FTC equal to foreign-source income times U.S. tax on worldwide income divided by worldwide income.
OWNERSHIP-SPECIFIC ADVANTAGES (International Trade Legal Definition)
Property rights or intangible assets, including patents, trademarks, organizational and marketing expertise, production technology and management, and general organizational abilities, that form the basis for the multinational's advantage over local firms
PACKING LIST (International Trade Legal Definition)
A list showing the number and kinds of items being shipped, as well as other information needed for transportation purposes.
PARALLEL LOAN (International Trade Legal Definition)
A loan arrangement in which a company borrows in its home currency and then trades this debt for the foreign currency debt of a foreign counterpart.
PARTNERSHIP (International Trade Legal Definition)
Form of business organization in which two or more co-owners form a business. In a general partnership each partner is liable for the debts of the partnership. Limited partnership permits some partners to have limited liability.
PASSIVE INCOME (International Trade Legal Definition)
In the U.S. tax code, income (such as investment income) that does not come from active participation in a business.
PATENT (International Trade Legal Definition)
A government grant that gives inventors exclusive right of making, using, or selling the invention.
PAYBACK PERIOD RULE (International Trade Legal Definition)
An investment decision rule which states that all investment projects that have payback periods equal to or less than a particular cutoff period are accepted, and all those that pay off in more than the particular cutoff period are rejected.
PAYOFF PROFILE (International Trade Legal Definition)
A graph with the value of an underlying asset on the x-axis and the value of a position taken to hedge against risk exposure on the y-axis. Also used with changes in value. (Contrast with risk profile.)
PAYOUT RATIO (International Trade Legal Definition)
Proportion of net income paid out in cash dividends.
PEGGED EXCHANGE RATE SYSTEM (International Trade Legal Definition)
The International Monetary Fund's name for a fixed exchange rate system.
PENSION LIABILITIES (International Trade Legal Definition)
A recognition of future liabilities resulting from pension commitments made by the corporation. Accounting for pension liabilities varies widely by country.
PERFECT MARKET ASSUMPTIONS (International Trade Legal Definition)
A set of assumptions under which the law of one price holds. These assumptions include frictionless markets, rational investors, and equal access to market prices and information.
PERILS OF THE SEA (International Trade Legal Definition)
A marine insurance term used to designate heavy weather, stranding, lightning, collision, and seawater damage.
PERIODIC CALL AUCTION (International Trade Legal Definition)
A trading system in which stocks are auctioned at intervals throughout the day.
PERPETUITY (International Trade Legal Definition)
A constant stream of cash flows without end. A British consol is an example.
PHYTOSANITARY INSPECTION CERTIFICATE (International Trade Legal Definition)
A certificate, issued by the Indian Government Department of Agriculture to satisfy import regulations for foreign countries, indicating that a India shipment has been inspected and is free from harmful pests and plant diseases.
PHYTOSANITARY MEASURE (International Trade Legal Definition)
A piece of legislation, regulation, or procedure with the purpose of preventing the introduction or spread of pests. Phytosanitary procedures often include the performance of inspections, tests, surveillance, or other treatments.
POINTS QUOTE (International Trade Legal Definition)
An abbreviated form of the outright quote used by traders in the interbank market.
POLITICAL RISK (International Trade Legal Definition)
In export financing the risk of loss due to such causes as currency, inconvertibility, government action preventing entry of goods, expropriation or confiscation, war, etc.
PORTFOLIO (International Trade Legal Definition)
Combined holding of more than one stock, bond, real estate asset, or other asset by an investor.
POSTAL PARCEL RECEIPT (International Trade Legal Definition)
The postal authorities' signed acknowledgment of delivery to receiver of a shipment made by parcel post.
POWER DISTANCE (International Trade Legal Definition)
The extent to which a society accepts hierarchical differences.
PREDATORY PRICING (International Trade Legal Definition)
It is a form of price discrimination that requires selling below cost with the intention of destroying competition. However, predatory pricing is against law.
PREMIUM (International Trade Legal Definition)
If a bond is selling above its face value, it is said to sell at a premium.
PRESENT VALUE (International Trade Legal Definition)
The value of a future cash stream discounted at the appropriate market interest rate.
PRESENT VALUE FACTOR (International Trade Legal Definition)
Factor used to calculate an estimate of the present value of an amount to be received in a future period.
PRICE ELASTICITY OF DEMAND (International Trade Legal Definition)
The sensitivity of quantity sold to a percentage change in price; -%changeQ/%changeP.
PRICE UNCERTAINTY (International Trade Legal Definition)
Uncertainty regarding the future price of an asset.
PRIVATE EXPORT FUNDING CORPORATION(PEFCO) (International Trade Legal Definition)
Lends to foreign buyers to finance exports from U.S.
PRIVATE PLACEMENT (International Trade Legal Definition)
A securities issue privately placed with a small group of investors rather than through a public offering.
PRIVATIZATION (International Trade Legal Definition)
A process whereby publicly owned enterprises are sold to private investors. (Contrast with nationalization.)
PRIVILEGED FOREIGN (PF) (International Trade Legal Definition)
Foreign merchandise or non-tax paid domestic merchandise upon which the duty and applicable taxes have been determined at the time this status is approved.
PRODUCT CYCLE THEORY (International Trade Legal Definition)
Product cycle theory views the products of the successful firm as evolving through four stages: (1) infancy, (2) growth, (3) maturity, and (4) decline.
PRODUCT LIFE CYCLE (PLC) (International Trade Legal Definition)
The complete life of a product, from early planning through sales build-up, maximum sales, declining sales, and withdrawal of the product. Product life cycle lengths and types can vary depending on the type of product, the frequency of replacement.
PRODUCTION POSSIBILITIES SCHEDULE (International Trade Legal Definition)
The maximum amount of goods (for example, food and clothing) that a country is able to produce given its labor supply.
PRODUCTION SHARING (International Trade Legal Definition)
Production sharing occurs when a producer chooses to make a product in stages – and in different countries – so that the firm can employ the lowest-cost resources in the production process.
PROFITABILITY INDEX (International Trade Legal Definition)
A method used to evaluate projects. It is the ratio of the present value of expected future cash flows after initial investment divided by the amount of the initial investment.
PROFORMA INVOICE (International Trade Legal Definition)
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent their value and important specifications.
PROGRESSIVE TAXATION (International Trade Legal Definition)
A convex tax schedule that results in a higher effective tax rate on high income levels than on low-income levels.
PROJECT FINANCING (International Trade Legal Definition)
A way to raise nonrecourse financing for a specific project characterized by the following: (1) the project is a separate legal entity and relies heavily on debt financing and (2) the debt is contractually linked to the cash flow generated by the project.
PROMISSORY NOTE (International Trade Legal Definition)
Financial document in which the buyer agrees to make payment to the seller at a specified time.
PROPRIETARY KNOWLEDGE (International Trade Legal Definition)
Private or exclusive knowledge that cannot be legally used or duplicated by competitors.
PROSPECTUS (International Trade Legal Definition)
A brochure that describes a mutual fund's investment objectives, strategies, and position limits.
PROTECTIONISM (International Trade Legal Definition)
Protection of local industries through tariffs, quotas, and regulations that discriminate against foreign businesses.
PSYCHIC DISTANCE (International Trade Legal Definition)
The similarities or lack thereof between country markets. This concept takes into account geographic distance, cultural similarities, linguistic aspects, legal systems and methods of conducting business.
PUBLIC RELATIONS (International Trade Legal Definition)
A variety of programs designed to promote and/or protect a company's image or its individual products.
PUBLIC SECURITIES OFFERING (International Trade Legal Definition)
A securities issue placed with the public through an investment or commercial bank.
PURCHASING AGENT (International Trade Legal Definition)
An agent who purchases goods in his or her own country on behalf of foreign importers such as government agencies and large private concerns.Glossary of IMPEX Business Trade Terms Starting with – Q
PURCHASING POWER PARITY (PPP) (International Trade Legal Definition)
The principle that equivalent assets sell for the same price. Purchasing power parity is a measurement of a currency's value based on the buying power within its own domestic economy.
PURE DISCOUNT BOND (International Trade Legal Definition)
Bonds that pay no coupons and only pay back the face value at maturity. Also referred to as "bullets" and "zeros."
PUT OPTION (International Trade Legal Definition)
The right to sell the underlying asset at a specified price and on a specified date.
PUT-CALL PARITY (International Trade Legal Definition)
The relation of the value of a long call, a short put, the exercise price, and the forward price at expiration; CallTd/f – PutTd/f + Kd/f = FTd/f.
QRS (International Trade Legal Definition)
QRs mean Quantitative Restrictions. QRs refer to specific limits imposed by countries on the quantity or value of goods that can be imported or exported. QRs are non-tariff measures which are taken to regulate or prohibit international.
QUID PRO QUO (International Trade Legal Definition)
Latin for "this for that." An exchange of one thing for another.Glossary of International Trade Terms Starting with – R
QUOTA (International Trade Legal Definition)
The quantity of goods of a specific kind that a country permit to be imported without restriction or imposition of additional Duties.
QUOTATION (International Trade Legal Definition)
An offer to sell goods at a stated price and under specified conditions.
R-SQUARE (THE COEFFICIENT OF DETERMINATION) (International Trade Legal Definition)
The percent of the variation in a dependent variable (a y-variable) that is explained by variation in an independent variable (an x-variable).
RANDOM WALK (International Trade Legal Definition)
A process in which instantaneous changes in exchange rates are normally distributed with a zero mean and constant variance.
RE-INVOICING CENTERS (International Trade Legal Definition)
An offshore financial affiliate that is used to channel funds to and from the multinational's foreign operations.
REACTIVATION (International Trade Legal Definition)
A resumption of the activated status of an entire area that was previously deactivated without any change in the operator or the area boundaries.
REAL APPRECIATION/DEPRECIATION (International Trade Legal Definition)
A change in the purchasing power of a currency.
REAL CASH FLOW(RCF) (International Trade Legal Definition)
A cash flow is expressed in real terms if the current, or date 0, purchasing power of the cash flow is given.
REAL EXCHANGE RATE (RER) (International Trade Legal Definition)
A measure of the nominal exchange rate that has been adjusted for inflation differentials since an arbitrarily defined base period.
REAL INTEREST RATE (RIR) (International Trade Legal Definition)
Interest rate expressed in terms of real goods; that is, the nominal interest rate minus the expected inflation rate.
REAL OPTIONS (RO) (International Trade Legal Definition)
An option or option-like feature embedded in a real investment opportunity.
RECIPROCAL MARKETING AGREEMENT (International Trade Legal Definition)
A strategic alliance in which two companies agree to co market each other's products in their home market. Production rights may or may not be transferred.
RECOURSE (International Trade Legal Definition)
The right to demand return of money paid. In negotiation of a letter of credit, payment by the negotiating bank will normally be with recourse.
REGIONAL COMMISSIONER (International Trade Legal Definition)
The Regional Commissioner of Customs for the Customs Region in which the zone is located.
REGIONAL DEVELOPMENT BANKS (International Trade Legal Definition)
Banks that are owned and operated by member nations; they are designed to extend development loans and provide other assistance to member nations. The world's four regional development banks are the African Development Bank Group.
REGISTERED BONDS (RB) (International Trade Legal Definition)
Bonds for which each issuer maintains a record of the owners of its bonds. Countries requiring that bonds be issued in registered form include the United States and Japan. (Contrast with bearer bonds.)
REGISTRATION STATEMENT (RS) (International Trade Legal Definition)
In the United States, a statement filed with the Securities and Exchange Commission on securities issues that discloses relevant information to the public.
REMITTING BANK (International Trade Legal Definition)
Bank that sends the draft to overseas bank for collection.
REPATRIATION (International Trade Legal Definition)
The act of remitting cash flows from a foreign affiliate to the parent firm.
RESERVATION PRICE (International Trade Legal Definition)
The price below (above) which a seller (purchaser) is unwilling to go.
RESIDUAL VALUE (International Trade Legal Definition)
The value of an asset at the conclusion of a lease.
RESTRICTIVE ENDORSEMENT (International Trade Legal Definition)
Endorsement transferring title or right to a named party.
RETAIL TRADE (International Trade Legal Definition)
Generally, sales or offers to sell goods or services to individuals for personal use.
RETENTION RATIO (International Trade Legal Definition)
Retained earnings divided by net income.
RETURN ON EQUITY (ROE) (International Trade Legal Definition)
Net income after interest and taxes divided by average common stockholder's equity.
REVALUATION (International Trade Legal Definition)
An increase in a currency value relative to other currencies in a fixed exchange rate system.
REVOCABLE LETTER OF CREDIT (International Trade Legal Definition)
A letter of credit that can be canceled or altered by the drawee (buyer) after it has been issued by the drawee's bank.Glossary of Export International Trade Terms Starting with -S
RIGHT OF PRIORITY (ROP) (International Trade Legal Definition)
"The right of a patent holder of a patent issued in one country to intellectual property rights in a foreign market for one year, without filing for a local patent, even if someone from the foreign market files a local patent for the same process.
RIGHTS OF SET-OFF (International Trade Legal Definition)
An agreement defining each party's rights should one party default on its obligation. Rights of set-off were common in parallel loan arrangements.
RISK AVERSE (International Trade Legal Definition)
Seeking stability rather than risk.
RISK PREMIUM (International Trade Legal Definition)
The excess return on the risky asset that is the difference between expected return on risky assets and the return of risk-free assets.
RISK PROFILE (International Trade Legal Definition)
A graph with the value of an underlying asset on the x-axis and the value of a position exposed to risk in the underlying asset on the y-axis. Also used with changes in value. (Contrast with payoff profile.)
ROLL'S CRITIQUE (International Trade Legal Definition)
The CAPM holds by construction when performance is measured against a mean-variance efficient index. Otherwise, it holds not at all.
ROYALTY (International Trade Legal Definition)
Payment made for the use of a person or business's property based on an agreed percentage of the income arising from its use.
RULE #1 (International Trade Legal Definition)
Always keep track of your currency units.
RULE #2 (International Trade Legal Definition)
Always think of buying and selling the currency in the denominator of a foreign exchange quote.
RULES OF ORIGIN (International Trade Legal Definition)
Rules used to determine in what country a good will be considered as actually made for tariff and other trade purposes.
SBA (SMALL BUSINESS ADMINISTRATION) (International Trade Legal Definition)
An independent agency of the U.S. federal government that aids, counsels, assists, and protects the interests of small business concerns to preserve free competitive enterprise and to maintain and strengthen the overall economy of the nation.
SCENARIO ANALYSIS (International Trade Legal Definition)
A process of asking What if? using scenarios that capture key elements of possible future realities.
SCHEDULE – B (International Trade Legal Definition)
Refers to Schedule B, Statistical Classification of Domestic and Foreign Commodities Exported from the India.
SECURITY MARKET LINE (SML) (International Trade Legal Definition)
In the CAPM, the relation between required return and systematic risk (or beta): Rj – RF + bj (E[RM] – RF).
SECURITY SELECTION (International Trade Legal Definition)
An investment strategy that attempts to identify individual securities that are under priced relative to other securities in a particular market or industry.
SEEKING STABILITY RATHER THAN RISK (International Trade Legal Definition)
An element of the Paris Convention for the Protection of Industrial Property that gives an inventor 12 months from the date of the first application filed in a Paris Convention country in which to file in other Paris Convention countries.
SEGMENTED MARKET (International Trade Legal Definition)
A market that is partially or wholly isolated from other markets by one or more market imperfections.
SEMI-STRONG FORM EFFICIENT MARKET (International Trade Legal Definition)
A market in which prices fully reflect all publicly available information.
SENSITIVITY ANALYSIS (SA) (International Trade Legal Definition)
Analysis of the effect on the project when there is some change in critical variables such as sales and costs.
SEPARATION PRINCIPLE (International Trade Legal Definition)
The principle that portfolio choice can be separated into two independent tasks: (1) determination of the optimal risky portfolio, which is purely technical problem, and (2) the personal choice of the best mix of the risky portfolio.
SEPC (International Trade Legal Definition)
An exclusive Services Export Promotion Council announced in the Foreign Trade Policy to map opportunities for key services in key markets.
SET-OF-CONTRACTS PERSPECTIVE (International Trade Legal Definition)
A view of the corporation as the nexus of a set of legal contracts linking the various stakeholders. Important contracts include those with customers, suppliers, labor, management, debt, and equity.
SEZS (International Trade Legal Definition)
SEZs means Special Economic Zones In principle approvals have already been given for setting up of 26 new SEZs (state government/private sector) at Nanguneri (Tamil Nadu), Paradeep (Orissa), Gopalpur (Orissa), Kulpi (West Bengal), Bhadohi (U
SHARPE INDEX (International Trade Legal Definition)
A measure of risk-adjusted investment performance in excess return per unit of total risk: SI = (RP – RF)/(sP).
SHIP'S MANIFEST (International Trade Legal Definition)
An instrument in writing, signed by the captain of a ship, that lists the individual shipments constituting the ship's cargo.
SHIPPER (International Trade Legal Definition)
Usually the supplier or owner of commodities shipped.
SHORT POSITION (International Trade Legal Definition)
A position in which a particular asset (such as a spot or forward currency) has been sold.
SHORT SELLING (International Trade Legal Definition)
Selling an asset that you do not own, or taking a short position.
SIDE EFFECT (International Trade Legal Definition)
Any aspect of an investment project that can be valued separately from the project itself.
SIGHT DRAFT (International Trade Legal Definition)
A draft that is payable upon presentation to the drawee.
SIGNALING (International Trade Legal Definition)
The use of observable managerial actions in the marketplace as an indication of management's beliefs concerning the prospects of the company.
SIMPLE INTEREST (International Trade Legal Definition)
Interest calculated by considering only the original principal amount.
SMOOT HAWLEY ACT (International Trade Legal Definition)
Passed in 1930, this protectionist act increased import duties to the highest rate ever imposed by the United States, resulting in the downfall of the world trade system.
SOCIAL CAPITAL (International Trade Legal Definition)
Physical or real capital that is owned by the public sector rather than by private firms.
SOGO SOSHA (International Trade Legal Definition)
A term referring to general trading companies that import and export merchandise.
SOLE PROPRIETORSHIP (International Trade Legal Definition)
A business owned by a single individual. The sole proprietorship pays no corporate income tax but has unlimited liability for business debts and obligations.
SPECIAL DRAWING RIGHT (SDR) (International Trade Legal Definition)
An international reserve created by the International Monetary Fund and allocated to member countries to supplement foreign exchange reserves.
SPECIFIC TARIFF (International Trade Legal Definition)
A tariff assessed at a specific amount per unit of weight.
SPOT EXCHANGE (International Trade Legal Definition)
The purchase or sale of foreign exchange for immediate delivery.
SPOT EXCHANGE-RATE (International Trade Legal Definition)
Exchange-rate today for settlement in two days.
SPOT MARKET (International Trade Legal Definition)
A market in which trades are made for immediate delivery (within two business days for most spot currencies).
STABILIZATION POLICIES (International Trade Legal Definition)
Government policies designed to promote economic growth, steady employment, and stable prices.
STAKEHOLDERS (International Trade Legal Definition)
Those with an interest in the firm. A narrow definition includes the corporation's debt and equity holders. A broader definition includes labor, management, and perhaps other interested parties, such as customers, suppliers, and society at large.
STAMP TAX (International Trade Legal Definition)
A tax on a financial transaction.
STANDARD DEVIATION (International Trade Legal Definition)
The positive square root of the variance. This is the standard statistical measure of the spread of a sample.
STANDARD INDUSTRIAL CLASSIFICATION (SIC) (International Trade Legal Definition)
A standard numerical code system used by the U.S. Government to classify products and services.
STANDARD INTERNATIONAL TRADE CLASSIFICATION (SITC) (International Trade Legal Definition)
A standard numerical code system developed by the U.N. to classify commodities used in international trade.
STATED ANNUAL INTEREST RATE (International Trade Legal Definition)
The interest rate expressed as a percentage per annum, by which interest payment is determined.
STATIONARY TIME SERIES (International Trade Legal Definition)
A time series in which the process generating returns is identical at every instant of time.
STEAMSHIP CONFERENCE (International Trade Legal Definition)
A group of steamship operators that operate under mutually agreed upon freight rates.
STOCK INDEX FUTURES (International Trade Legal Definition)
A futures contract on a stock index.
STOCK INDEX SWAP (International Trade Legal Definition)
A swap involving a stock index. The other asset involved in a stock index swap can be another stock index (a stock-for-stock swap), a debt index (a debt-for-stock swap), or any other financial asset or financial price index.
STOCK MARKET (International Trade Legal Definition)
An institution that facilitates the buying and selling of stocks.
STPS (International Trade Legal Definition)
STP means Software Technology Parks
STRAIGHT BILL OF LADING (International Trade Legal Definition)
A nonnegotiable bill of lading in which the goods are consigned directly to a named consignee.
STRATEGIC ALLIANCE (International Trade Legal Definition)
A collaborative agreement between two companies designed to achieve some strategic goal. Strategic alliances include international licensing agreements, management contracts, and joint ventures as special cases.
STRIKING PRICE (International Trade Legal Definition)
The price at which an option can be exercised (also called the exercise price).
SUBPART F INCOME (International Trade Legal Definition)
In the U.S. tax code, income from foreign subsidiaries owned more than 10 percent and controlled foreign corporations that is taxed on a pro rata basis as it is earned.
SUBSIDIARY (International Trade Legal Definition)
Any organization controlled by another with more than 50 percent of its whose voting capital held by the latter.
SUBSIDIZED FINANCING (International Trade Legal Definition)
Financing that is provided by a host government and that is issued at a below-market interest rate.
SUBSIDY (International Trade Legal Definition)
Monetary assistance granted by the government to an individual or other entity in support of an activity that is regarded as being in the public interest.
SUBSISTENCE AGRICULTURE (International Trade Legal Definition)
Small-scale agriculture designed to meet the consumption needs of individual households.
SUBZONE (International Trade Legal Definition)
A special purpose zone established as part of a zone project for a limited purpose, that cannot be accommodated within an existing zone.Glossary of Import International Trade Terms Starting with – T
SUNK COST (International Trade Legal Definition)
A cost that has already occurred and cannot be removed. Because sunk costs are in the past, such costs should be ignored when deciding whether to accept or reject a project.
SUNK COSTS (International Trade Legal Definition)
Expenditures that are at least partially lost once an investment is made.
SUPERVISORY BOARD (International Trade Legal Definition)
The board of directors that represents stakeholders in the governance of the corporation.
SWAP (International Trade Legal Definition)
An agreement to exchange two liabilities (or assets) and, after a prearranged length of time, to reexchange the liabilities (or assets).
SWAP BOOK (International Trade Legal Definition)
A swap bank's portfolio of swaps, usually arranged by currency and by maturity.
SWAPTION (International Trade Legal Definition)
A swap with one or more options attached.
SWIFT (SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TRANSACTIONS) (International Trade Legal Definition)
Network through which international banks conduct their financial transactions.
SWITCHING OPTIONS (International Trade Legal Definition)
A sequence of options in which exercise of one option creates one or more additional options. Investment-disinvestments, entry-exit, expansion-contraction, and suspension-reactivation decisions are examples of switching options.
SYNDICATE (International Trade Legal Definition)
The selling group of investment banks in a public securities offering.
SYNERGY (International Trade Legal Definition)
In an acquisition or merger, when the value of the combination is greater than the sum of the individual parts: Synergy = VAT – (VA + VT).
SYNTHETIC FORWARD POSITION (International Trade Legal Definition)
A forward position constructed through borrowing in one currency, lending in another currency, and offsetting these transactions in the spot exchange market.
SYSTEMATIC RISK (International Trade Legal Definition)
Risk that is common to all assets and cannot be diversified away (measured by beta).
TANGIBILITY (International Trade Legal Definition)
Tangible assets are real assets that can be used as collateral to secure debt.
TARE WEIGHT (International Trade Legal Definition)
The weight of a container and packing materials without the weight of the goods it contains.
TARIFF-QUOTA (International Trade Legal Definition)
A tariff that is set at a lower rate until a specified quantity (the quota) of goods has been imported, at which point the tariff increases for additional imports.
TARIFFS (International Trade Legal Definition)
Taxes on imported goods and services, levied by governments to raise revenues and create barriers to trade.
TAX ARBITRAGE (International Trade Legal Definition)
Arbitrage using a difference in tax rates or tax systems as the basis for profit.
TAX CLIENTELES (International Trade Legal Definition)
Clienteles of investors with specific preferences for debt or equity that are driven by differences in investors' personal tax rates.
TAX HAVEN (International Trade Legal Definition)
A country or region imposing low or no taxes on foreign source income.
TAX HOLIDAY (International Trade Legal Definition)
A reduced tax rate provided by a government as an inducement to foreign direct investment.
TAX NEUTRALITY (International Trade Legal Definition)
Taxes that do not interfere with the natural flow of capital toward its most productive use.
TAX PREFERENCE ITEMS (International Trade Legal Definition)
Items such as tax-loss carry forwards and carry backs and investment tax credits that shield corporate taxable income from taxes.
TAX-HAVEN AFFILIATE (International Trade Legal Definition)
A wholly owned affiliate that is in a low-tax jurisdiction and that is used to channel funds to and from the multinational's foreign operations. (The tax benefits of tax-haven affiliates were largely removed in the United States by the Tax Reform Act of 1
TECHNICAL ANALYSIS (International Trade Legal Definition)
Any method of forecasting future exchange rates based on the history of exchange rates.
TENOR (International Trade Legal Definition)
Designation of a payment as being due at sight, a given number of days after sight, or a given number of days after date.
TERRITORIAL TAX SYSTEM (International Trade Legal Definition)
A tax system that taxes domestic income but not foreign income. This tax regime is found in Hong Kong, France, Belgium, and the Netherlands.
THE FOREIGN TRADE DATA BANK (International Trade Legal Definition)
Is the Indian Government's most comprehensive source of Foreign Trade Data and export promotion information. Types of information on the FTDB include: International Market Research, Export Opportunities; Indices of Foreign and Domestic companies.
THROUGH BILL OF LADING (International Trade Legal Definition)
A single bill of lading covering both the domestic and international carriage of an export shipment.
TIME DRAFT (International Trade Legal Definition)
A draft that is payable on a specified future dare.
TIME VALUE OF AN OPTION (International Trade Legal Definition)
The difference between the value of an option and the option's intrinsic value.
TIMING OPTION (International Trade Legal Definition)
The ability of the firm to postpone investment (or disinvestments) and to reconsider the decision at a future date.
TOTAL CASH FLOW (International Trade Legal Definition)
Total cash inflow minus total cash outflow.
TOTAL QUALITY MANAGEMENT (TQM) (International Trade Legal Definition)
An organization-wide approach to continuously improving the overall quality of its process, products, and service.
TOTAL RISK (International Trade Legal Definition)
The sum of systematic and unsystematic risk (measured by the standard deviation or variance of return).
TRADE ACCEPTANCE (International Trade Legal Definition)
A time draft that is drawn on and accepted by an importer.
TRADE BALANCE (International Trade Legal Definition)
A country's net balance (exports minus imports) on merchandise trade.
TRADE BARRIER (International Trade Legal Definition)
A governmental policy, action, or practice that intentionally interrupts the free flow of goods or services between countries.
TRADE DEFICIT (International Trade Legal Definition)
A trade deficit occurs when the value of a country's exports is less than the value of its imports.
TRADE SURPLUS (International Trade Legal Definition)
A trade surplus occurs when the value of a country's exports is greater than the value of its imports.
TRADE-IN ALLOWANCE (International Trade Legal Definition)
Price discount granted for a new item by turning in an old item at the time of purchase.
TRADEMARK (International Trade Legal Definition)
A registration process under which a name, logo, or characteristic can be identified as exclusive.
TRADING DESK (DEALING DESK) (International Trade Legal Definition)
The desk at an international bank that trades spot and forward foreign exchange.
TRAMP STEAMER (International Trade Legal Definition)
A ship not operating on regular routes or schedules.
TRANSACTION EXPOSURE (International Trade Legal Definition)
Changes in the value of contractual (monetary) cash flows as a result of changes in currency values.
TRANSACTION STATEMENT (International Trade Legal Definition)
A document that delineates the terms and conditions agreed upon between the importer and exporter.
TRANSFER (International Trade Legal Definition)
To take merchandise with zone status from a zone for consumption, transportation, exportation, warehousing, cartage or lighter age, vessel supplies and equipment, admission to another zone, and like purposes.
TRANSFER PRICES (International Trade Legal Definition)
Prices on intercompany sales
TRANSFER PRICING (International Trade Legal Definition)
The price one unit of a company charges to another unit of the same company for goods or services exchanged between the two.
TRANSLATION (ACCOUNTING) EXPOSURE (International Trade Legal Definition)
Changes in a corporation's financial statements as a result of changes in currency values.
TRUST RECEIPT (International Trade Legal Definition)
Release of merchandise by a bank to a buyer in which the bank retains title to the merchandise.Glossary of Export Import Foreign Trade Terms Starting with – U
TRUSTEE (International Trade Legal Definition)
A bank or trust company that holds title to or a security interest in leased property for the benefit of the lessee, lesser, and/or creditors of the lesser.
TURNKEY CONTRACT (International Trade Legal Definition)
An agreement in which a contractor is responsible for setting up a facility from start to finish for another firm.
UNBIASED EXPECTATIONS HYPOTHESIS (International Trade Legal Definition)
The hypothesis that forward exchange rates are unbiased predictors of future spot rates.
UNCERTAINTY AVOIDANCE (International Trade Legal Definition)
The extent to which a society tolerates uncertainty and ambiguity.
UNEMPLOYMENT RATE (International Trade Legal Definition)
The ratio of the total number of unemployed persons to the total number of persons in the labor force.
UNIQUE IDENTIFIER NUMBER(UIN) (International Trade Legal Definition)
This inventory method controls merchandise in a zone by unique numbers and/or letters that identify merchandise admitted to a zone.
UNLEVERED BETA (SYSTEMATIC BUSINESS RISK) (International Trade Legal Definition)
The beta (or systematic risk) of a project as if it were financed with 100 percent equity.
UNLEVERED COST OF EQUITY (International Trade Legal Definition)
The discount rate appropriate for an investment assuming it is financed with 100 percent equity.
UNSUSTAINABLE DEBT (International Trade Legal Definition)
A financial condition in which a country is unable to service its foreign (external) debt without decimating its economy.
UNSYSTEMATIC RISK (International Trade Legal Definition)
Risk that is specific to a particular security or country and that can be eliminated through diversification.
USER (International Trade Legal Definition)
A person or firm using a zone for storage, handling or processing of merchandise.Glossary of Import Export Trade Terms Starting with – V
USURY (International Trade Legal Definition)
The practice of charging or paying exorbitant interest on a loan or other transaction. Note: in Islamic societies, charging or receiving any amount of interest is considered usury.
VALIDATED EXPORT LICENCE (International Trade Legal Definition)
A required document issued by the Indian Government authorizing the export of specific commodities.Glossary of EXIM Terms Starting with – W
VALUE ADDITION (International Trade Legal Definition)
Value addition refers to the increment added in the process of manufacture of a particular item, which also becomes part of its price.
VALUE CHAIN (International Trade Legal Definition)
A value-added process in a firm to transform raw materials and other inputs to finished goods, which creates value to customers.
VALUE DATE (International Trade Legal Definition)
Date on which a foreign exchange contract is executed, i.e. seller delivers.
VALUE STOCKS (International Trade Legal Definition)
Stocks with low price/book ratios or price/earnings ratios. Historically, value stocks have enjoyed higher average returns than growth stocks (stocks with high price/book or PE ratios) in a variety of countries.
VALUE-ADDED TAX (VAT) (International Trade Legal Definition)
A sales tax collected at each stage of production in proportion to the value added during that stage.
VARIABLE COSTS (International Trade Legal Definition)
A cost that varies directly with volume and is zero when production is zero.
VENTURE CAPITAL (International Trade Legal Definition)
An investment in a start-up business that is perceived to have excellent growth prospects but that does not have access to capital markets.
VIRTUAL CORPORATION (International Trade Legal Definition)
Partnerships so close those two partners become a single firm for all operational purposes.
VKUJ (International Trade Legal Definition)
Vishesh Krishi Upaj Yojana, a new scheme introduced in the Foreign Trade Policy (2004-2009) as part of the package for agriculture.
VOLUNTARY EXPORT RESTRAINT (VER) (International Trade Legal Definition)
One country promises another country to limit its imports; this is often done when the promising country fears increased tariffs or quotas if it does not self-regulate.
WAREHOUSE RECEIPT (International Trade Legal Definition)
A receipt issued by a warehouse listing goods received for storage.
WAREHOUSE-TO-WAREHOUSE (International Trade Legal Definition)
An insurance policy that covers goods over the entire journey from the seller's to the buyer's premises.
WARRANT (International Trade Legal Definition)
An option issued by a company that allows the holder to purchase equity from the company at a predetermined price prior to an expiration date. Warrants are frequently attached to Eurobonds.
WEAK FORM EFFICIENT MARKET (International Trade Legal Definition)
A market in which prices fully reflect the information in past prices.
WEIGHT NOTE (International Trade Legal Definition)
Document issued by either the exporter or a third party declaring the weight of goods in a consignment.
WEIGHTED AVERAGE COST OF CAPITAL (WACC) (International Trade Legal Definition)
A discount rate that reflects the after-tax required returns on debt and equity capital.
WHARF AGE (International Trade Legal Definition)
A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.
WHARFAGE CHARGE (International Trade Legal Definition)
A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.
WITHHOLDING TAX (International Trade Legal Definition)
A tax on dividend or interest income that is withheld for payment of taxes in a host country. Payment is typically withheld by the financial institution distributing the payment.
WITHOUT RESERVE (International Trade Legal Definition)
A term indicating that a shipper's agent or representative is empowered to make definitive decisions and adjustments abroad without approval of the group or individual represented.Glossary of Export Trade Terms Starting withY – Words and Definitions
WORKING CAPITAL (International Trade Legal Definition)
An accounting term that indicates the difference between current assets and current liabilities.
WORLD BANK (International Trade Legal Definition)
One of the "Big Three" international organizations designed to oversee economic relations among the countries of the world. Its goal is to improve the quality of life for people in the poorer regions of the world by promoting sustainable economic development.
WORLD TRADE ORGANIZATION (WTO) (International Trade Legal Definition)
The WTO is a multilateral organization that promotes free and fair trade among the nations of the world. It was created in 1994 by 121 nations at the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). The WTO is responsible for implementation.
WORLDWIDE TAX SYSTEM (International Trade Legal Definition)
A tax system that taxes worldwide income as it is repatriated to the parent company. Used in Japan, the United Kingdom, and the United States.
YIELD TO MATURITY (International Trade Legal Definition)
The discount rate that equates the present value of interest payments and redemption value with the present price of the bond.Glossary of International Trade Export Import Terms Starting with – Z
ZAIBATSU (International Trade Legal Definition)
Large family-owned conglomerates that controlled much of the economy of Japan prior to World War II.
ZEITGEIST (International Trade Legal Definition)
The spirit of the time; the general intellectual state and outlook of an era or generation.
ZONE LOT NUMBER (ZLN) (International Trade Legal Definition)
A collection of merchandise maintained under an inventory control method based on specific identification of merchandise admitted to a zone by lot and lot number.
ZONE PROJECT (International Trade Legal Definition)
All of the zone and subzone sites under a single grantee, normally in a single port of entry.
ZONE RESTRICTED (ZR) (International Trade Legal Definition)
Merchandise admitted to a zone for the sole purpose of exportation or destruction.
ZONE SITE (International Trade Legal Definition)
The physical location of a zone or subzone.
ZONE STATUS (International Trade Legal Definition)
The status of merchandise admitted to a Foreign-Trade Zone, i.e., domestic (D), non-privileged foreign (NPF), privileged foreign (PF), or zone restricted (ZR) status.