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Glossary of Trade Terms

Electronic Data Interchange
The computer-to-computer transmission of business messages (such as purchase orders, invoices, booking instructions, etc.) according to an agreed standard (such as EDIFACT).
A writing on the back of an instrument. It is a means of transference of liability/title of exchange, e.g. bill of lading etc., and the writing need not necessarily be on the back of the instrument to be operative.
An endorsement may be:
• In Blank: where the person to whom the instrument is payable merely signs (endorses) and delivers the instrument to another.
• Special: where the name of the transferee is specified.
• Restrictive: where further transfer of the bill is prohibited or which expresses a mere authority to deal with the bill as directed and not a transfer of ownership.
• Conditional: where the endorsement contains certain conditions.
• Without Recourse: an endorsement having the effect of negotiating a bill, but negating the liability of the endorser.
Estimated time of arrival.
Estimated time of departure.
Estimated time of sailing.
European Union.
A currency being used or traded outside the country which issued the currency.
European Currency Unit (ECU)
The ECU is the European Union’s accounting unit and is a popular private financial instrument. The ECU gives way to the EURO in the 1999-2002 period.
Exception Ratings
Rates set at a certain percentage above the general commodity rates because they apply to commodities that require special handling.
Exchange control (EC)
Government regulations covering the inflow and outflow of foreign exchange.
Exchange Rate/ Foreign Exchange Rate
The rate which would apply when changing the money of one country for that of another country.
Ex Factory
Warning! This is a non-standard trade term, a variation of the preferred formulation ‘EXW’.
Export Broker
An individual or firm that brings together buyers and sellers for a fee without taking part in actual sales transactions.
Export Credit Insurance
Special insurance coverage of exporters to protect against commercial and political risks for making an international sale. Export credit insurance is available from insurance underwriters as well as from government agencies. Examples of well known public export credit agencies include EXGO, HIH Winterheur and Trade Indemnity.
Export License
A government document granting the ‘Licensee’ the right to export a specified quantity of a commodity to a specified country. This license may be required in some countries for most or all exports and in other countries only under special circumstances.
Errors and Omissions Excepted: when appended to a signature on a shipping document, indicates a disclaimer of responsibility for spelling typographical or clerical errors.
Ex Works (also EXW)
A set of 13 internationally-standard trade terms (also known as delivery 2000 terms). Incoterms allows the parties to designate a point at which the costs and risks of transport are precisely divided between the seller and the buyer. Incoterms also allocate responsibility for customs clearance/duties between the parties. Since Incoterms are not law but are contractual standard terms, they do not apply to a given transaction unless the parties specifically incorporate them as by referring to Incoterms, e.g. $100/tonne Wellington Incoterms 2000 (in exceptional cases, Incoterms apply regardless of explicit mention in the contract, if there is a custom of trade or prior course of dealing which indicates reliance on Incoterms, or if the local law creates a presumption in favour of applicability of Incoterms). Incoterms are elements of the contract of sale, which may be derived from the seller’s tender or pro forma invoice. Thus, Incoterms only apply to the seller and buyer, one of whom assumes the role of shipper and enter into a contract of carriage. The contract of carriage should agree with the Incoterm in terms of allocation of transport costs and risks, but this depends on the shipper giving precise directions to the carrier to ship according to the constraints of the given Incoterm. For a definition of the 13 currently valid Incoterms, their standard abbreviations.