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International Resource Center – Glossary of Terms

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F

FAS (Free Alongside Ship)
Title and risk pass to buyer, including payment of all transportation and insurance cost, once delivered alongside ship at the named ocean port of shipment by the seller; the export clearance obligation rests with the seller; used for sea or inland waterway transportation, shipments are not containerized, ocean vessel port-to-port.
 
FCA (Free Carrier)
Title and risk pass to buyer, including transportation and insurance cost, when the seller delivers goods unloaded at the seller's dock or a named place cleared for export to the international carrier or agent, not loaded; seller is obligated to load the goods on the buyer's collecting vehicle; it is the buyer's obligation to receive the seller's arriving vehicle unloaded; used for any mode of transportation.
 
FOB (Free On Board)
Title and risk pass to buyer, including payment of all transportation and insurance cost, once delivered on board the ship at the named ocean port of shipment by the seller; used for sea or inland waterway transportation where it is important that the goods pass the ship's rail, ocean vessel port-to-port.
 
FX Options
Provides protection from adverse exchange rate moves while maintaining the opportunity.
 
Force Majeure
A common clause in a contract excusing a party from fulfilling its obligation because of events beyond its control, such as earthquakes, floods or war.
 
Foreign Currency Account
An account maintained by a bank in foreign currency and payable in that currency.
 
Foreign Drafts
Usually used to make payments – checks drawn on foreign banks in a wide variety of foreign currencies.
 
Forward Contract
Commitment to buy or sell a currency at a fixed rate for delivery on a specified future date.
 
Forwarder's Bill of Lading
A receipt for merchandise to be shipped.
 
Freight Forwarder
Company that books shipment of goods and may provide other services, such as booking cargo, space, trucking, warehousing, pier delivery, export clearance and document preparations; often is an agent for the shipper.
 
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G

Guarantees
Commitment functionally similar to standby letters of credit, often used outside the United States.
 
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H

Harmonized Code
An international goods classification system for describing cargo in international trade under a single commodity-coding scheme that assigns identification numbers to specific products and ensures all parties use a consistent classification for purposes of documentation, statistical control and duty assessment.
 
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I

IBAN
International Bank Account Number – the domestic account number standard for all retail and commercial banking accounts in the European Union and certain other European countries.
 
Import Documentary Collections
Alternative to a letter of credit, payment is made on a collection basis after the necessary documents and drafts have been received by the intermediary bank.
 
Import Letter of Credit
Issued on behalf of the importer/buyer, it's a letter issued by a bank authorizing the seller to draw a stated amount of money from the issuing bank; guarantees payment to seller if seller complies with all terms of the letter of credit.
 
Import License
Document required and issued by some national governments authorizing the importation of goods.
 
Incoterms
International Chamber of Commerce Terms of Sale. Internationally accepted commercial transportation terms. (See CFR, CIF, CIP, CPT, DAF, DDP, DDU, DEQ, DES, EXW, FAS, FCA, FOB)
 
International Chamber of Commerce (ICC)
A non-governmental organization serving worldwide business with 123 country members representing tens of thousands of business organizations and companies and promoting world trade and investment based on free and fair competition.
 
International Wire Transfers
Method for paying or receiving funds internationally.
 
Irrevocable
A written document that cannot be revoked or have any of its conditions changed without specific agreement (usually in written form) from each party. When applied to a letter of credit, the parties who must agree are the issuing bank, confirming bank (if any), beneficiary and account party.
 
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