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Customs Terms


Ad-valorem Duty - It is a duty fixed as a percentage of the value of goods.

Anti-dumping Duties - It is an additional duties which are imposed on imported goods when these goods are sold to the importing country at a lower price than what it is charged in the home market.

Authorised Consignee - It is a term for a person authorised to receive goods under a transit procedure either at his premises or at any other specified place without presenting them and the transit declaration at the office of destination.

Authorised Consignor - A term for a person being authorised to carry out transit operations without presenting the goods and also the transit declaration at the office of departure.

Bonded Warehouse - It is a secure storage area where the goods with pending payment of taxes or duties are stored.

C&F - It stands for "Cost and Freight." It is is used in some of the international sales contracts when the cost of goods and freight is included in the selling price, excluding the cost of insurance.

CIF - It stands for "Cost, insurance, freight." It is the price, which includes the cost of material together with the transport and insurance costs.

Clearing Agreements - [check Countertrade]

Commodity - In broad definition it refers to any article, which is exchanged in trade. Commonly the term is used to refer to the raw materials, including minerals like tin, copper and manganese, and bulk-produced agricultural products such as tea, coffee and rubber.

Common External Tariff (CET or sometimes CXT) - It is a tariff rate, which is uniformly applied by a common market or the customs union, like the European Community, to imports from countries outside the union. [also check Customs Union]

Consular Invoice - It is a detailed statement of goods shipped certified by the consulate of a country. It is required by certain foreign governments that want a tighter control over imports.

Consumption Tax - [check Excise Tax]

Convertibility - It is the characteristic of a currency to be legally exchanged by its holder for other currencies through banks in the issuing country. [also check Currency]

Cost and Freight - [check C&F]

Cost, Insurance and Freight - [check CIF]

Countertrade - It is the sale of goods or services, which is paid by the transfer of goods or services either in whole or in part from a foreign country.

Currency - It is a term for the circulating media of exchange in a country. Before World War I, it meant only to coins and paper money, but as the use of credit instruments expanded, checks, postal money orders and prepaid travelers' checks are also said to be currency.

Customs - The government authorities responsible for the administration of Customs law of a country and the collection of duties and taxes.

Customs Area - It is a geographical area applying a particular tariff schedule on goods entering or leaving the area.

Customs Duty - [check Tariff]

Customs Harmonization - It is an international effort to increase the uniformity of customs nomenclatures and procedures in cooperating countries. Discussions and action are usually coordinated by the Customs Cooperation Council (CCC) to further these efforts.

Customs Union - It is a term for the group of nations eliminating their tariffs and other barriers that impede trade with each other abreast of maintaining a common external tariff on goods imported from outside the union.

Customs Warehouse - [check Bonded Warehouse]

CXT - [check Common External Tariff]

Differential Export Tax - It is a multi-tier export tax, which is generally structured in such a way so that the tax on exports of a raw material exceeds the tax (if any) on exports of processed goods made from the raw material, hence creating an incentive to process the raw material domestically.

Double-Column Tariff - It is a tariff schedule, which lists two duty rates for some or all the commodities. Within these arrangements, the imports may be taxed at a higher or lower rate, depending upon the trade and other relations of the importing country with the exporting one. Few of the British Commonwealth countries maintain a double-column tariff, which provides preferential tariff treatment to other members of the Commonwealth.

Downstream Dumping - It is also known as "input dumping." It is the exporting of an end product, which contains an input that has been purchased at less than the normal value.

Drawback - It is the refund of duty and taxes by a government, either in full or in part, when the goods imported are re-exported or else used in the manufacturing of export goods.

Dumping - It is a term used when the selling of merchandise is done in another country at lower price than the home market or sometimes even below the costs incurred in production and shipment.

Duty - [check Tariff]

Exchange Controls - It is the restrictions imposed by a country on the convertibility of a currency, or on the movement of funds in that currency.

Exchange Rate - It is the price or the rate at which one currency is exchanged for another currency, either for gold or for Special Drawing Rights (SDR's).

Excise Tax - Also known as 'Consumption Tax,' it is a tax levied on certain goods produced within or imported into a country.

Exports - It is the physical movement of goods out of a country.

Foreign Exchange - It is the exchange of one country's currency for another according to their relative values based on supply and demand.

Foreign Exchange Controls - [check Exchange Controls]

Foreign Trade Zone - [check Free Zone]

Free List - It is a list of goods, which are not subject to import duties or import licensing required in a particular country.

Free Port - [check Free Zone]

Free Trade - It is trade among countries without barriers like tariffs or quotas.

Free Trade Zone - [check Free Zone]

Free Zone - It is an area within a country, which is considered as being outside its customs territory. It can be a seaport, airport, warehouse or any designated area. Importers bring goods of foreign origin into such area without paying customs duties and taxes. Sometimes free zones are also known as "free ports," "free warehouses," "free trade zones" and "foreign trade zones."

GATT - It stands for General Agreement on Tariffs and Trade. It is a term for multilateral treaty intended to assist in reducing the trade barriers between signatory countries and also to promote trade through tariff concessions.

General Agreement on Tariffs and Trade - [check GATT]

General Tariff - It is a tariff applied to imports from countries without enjoying preferential or most-favoured-nation tariff treatment.

Harmonization - It is the process of making procedures or measures applied by different countries more compatible, especially those affecting the international trade. It helps in making the tariff structures more uniform.

Incoterms - It is the model terms to govern international sales contracts. It has been promulgated by the International Chamber of Commerce in Paris.

Input Dumping - [check Downstream Dumping]

Insurance - It is an agreement or a contract between the insured and the insurer. The insured pays a premium to the insurer, in return the insurer promises to compensate the insured if he suffers losses through fire, theft, accident (for automobiles) and other specified areas.

Levy - It is a term to assess or impose tariff on merchandise imported.

Licensing - It is a formal application required by a country for a special permit, known as "license," as a prior condition for the import or export of certain goods.

Market Access - It is the ability of penetration in a related market in foreign country by domestic providers of goods and services. The accessibility of the foreign market depends upon the existence and extent of trade barriers.

Medium of Exchange - It is a documentary instrument, which is used, in commercial transactions between the buyer and seller to measure the value of the goods exchanged. Value of such instruments is generally expressed in terms of a national currency.

National Tariff Rate - It is the rate of duty being charged on the gross value of a given product.

Non-Tariff Barriers (NTBs) - It is the government measures, excluding tariffs that restrict imports.

Packaging, Labeling and Marking Regulations - It is the importing countries requirement or regulation that the imported goods be packaged, labeled or marked following the particular prescribed guidelines.

Patent - It is a set of exclusive rights from the government to a person for a fixed period of time to make or sell his or her invention. It excludes others from making, using or selling the invention for that span of time after which it passes into the public domain.

Port of Entry - It is a port through which foreign goods are admitted into the receiving country.

Progressive Tariff - [check Tariff Escalation]

QRs - [check Quantitative Restrictions]

Quantitative Restrictions (QRs) - It is the explicit limit or quotas on the physical amount of specified commodities which can be imported or exported during a particular time period, generally measured by volume but sometimes even by value.

Quotas - [check Quantitative Restrictions, Tariff Quota]

Request List - It is a list that is submitted by a country to a trading partner in the initial stage of trade negotiations, identifying the concessions it seeks through the negotiations.

Restraints - [check Non-Tariff Barriers, Tariffs]

Retaliation - It is the suspension of concessions or any other obligations under a trade agreement, or the imposition of other barriers to trade officially in response to the violation of a trade agreement.

Sales Tax - It is the tax levied at one or more stages in the process of distribution on the exchange of goods.

SDRs - [check Special Drawing Rights]

Single-Column Tariff - It is a tariff schedule listing only one duty rate for each imported product.

Special Drawing Rights (SDRs) - It is a supplemental international monetary reserve asset created by the International Monetary Fund (IMF) in 1969. It is available by the IMF to the governments and can be used in transactions between the IMF and member governments.

Specific Duty - [check Specific Tariff]

Specific Tariff - It is a customs duty stipulated as a money amount per physical unit of import.

Subsidy - It is an economic benefit that is granted by a government to the producers of goods in order to strengthen their competitive position.

Tariff - It is a duty or tax that is levied upon goods transported from one customs area to another for protective or revenue purpose.

Tariff Escalation - It is a situation in customs tariff where the tariff on raw materials are non-existent or is relatively low, tariffs on semi-processed goods are moderate, and on manufactured goods it is relatively high.

Tariff Harmonization - [check Harmonization]

Tariff Quota - It is the application of a reduced or nil duty rates for a specified quantity of imported goods, or for goods imported during a given span of time.

Tariff Schedules - It is a comprehensive list of tariff, which a country applies to imported goods. [also check Single-Column Tariff, Tariff]

Technical Barriers to Trade - [check Non-Tariff Barriers]

Terms of Trade - It is the ratio of price of exports to the price of imports of a country.

Trade Agreement - It is a treaty between two countries or more for a specified terms of commerce. It usually involves mutually beneficial concessions.

Trademark - It is words, names, marks, symbols or any combination of these, used to identify the ownership of a product or service that is officially registered and legally reserved for the exclusive use of that owner.

Transit Zone - It is the area that surrounds a port of entry in a coastal country to serve as a storage and distribution center for the convenience of a neighbouring country that lacks adequate port facilities or access to the sea.

Valuation - It is the estimated worth of a thing.

Variable Levy - It is a duty, which increases or decreases with the fluctuation of domestic or world price, ensuring that the price of the imported goods after payment of duty will be equal to a predetermined "gate" price.

Visible Trade - It is a term for imports, exports and re-exports of merchandise.

Waiver - It is a term for the formal exemption of a right or claim.