(shipping/insurance) (a) The act of refusing delivery of a shipment so badly damaged in transit that it is worthless. (b) Damage to a vessel that is so severe that it is considered a constructive total loss. See constructive total loss.

abbrochment

(law) The purchase at wholesale of all merchandise that is intended to be sold in a particular retail market for the purpose of controlling that market.

absolute advantage

(economics) An advantage of one nation or area over another in the costs of manufacturing an item in terms of used resources.

absorption

(economics) Investment and consumption purchases by households, businesses and governments, both domestic and imported. When absorption exceeds production, the excess is the country's current account deficit. See current account.

(shipping) The assumption by one carrier of the special charges of another carrier generally without increasing charges to the shipper.

about

(banking) In connection with letters of credit, "about" means a tolerance of plus/minus 10% regarding the letter of credit value, unit price or the quantity of the goods, depending on the context in which the tolerance is mentioned.

accelerated tariff elimination

(customs) The gradual reduction of import duties over time. Accelerated tariff elimination is often a feature of free trade agreements. The North American Free Trade Agreement (NAFTA) is an example of a trade agreement with accelerated tariff elimination.

acceptance

(law) (a) An unconditional assent to an offer. (b) An assent to an offer conditioned on only minor changes that do not affect any material terms of the offer. See counteroffer; offer.

(shipping) Receipt by the consignee of a shipment thus terminating the common carrier liability.

(banking) A time draft (bill of exchange) on the face of which the drawee has written "accepted" over his signature. The date and place payable are also indicated. The person accepting the draft is known as the acceptor. Note: The drawee's signature alone is a valid acceptance and is usually made across the left margin of the bill of exchange. See bill of exchange; bank acceptance.

acceptance letter of credit

(banking) A letter of credit which, in addition to other required documents, requires presentation of a term draft drawn on the bank nominated as the accepting bank under the letter of credit. See acceptance; bank acceptance; letter of credit.

accepted draft

(banking) A bill of exchange accepted by the drawee (acceptor) by putting his signature (acceptance) on its face. In doing so, he commits himself to pay the bill upon presentation at maturity. See acceptance; bank acceptance; bill of exchange.

accepting bank

(banking) A bank who by signing a time draft accepts responsibility to pay when the draft becomes due. In this case the bank is the drawee (party asked to pay the draft), but only becomes the acceptor (party accepting responsibility to pay) upon acceptance (signing the draft). See acceptance; bill of exchange.

acceptor

(banking) The party that signs a draft or obligation, thereby agreeing to pay the stated sum at maturity. See acceptance; bill of exchange.

accession

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

accessions

(law) (a) Goods that are affixed to and become part of other goods. Examples include semiconductors that are inserted into computers, parts that are added onto vehicles, and dials that are used in watches. (b) A nation's acceptance of a treaty already made between other countries. See also accession.

accessorial charges

(shipping) Charges made for additional, special, or supplemental services, normally over and above the line haul services.

accessorial services

(shipping) Services performed by a shipping line or airline in addition to the normal transportation service. Common accessorial services include advancement of charges, pickup, delivery, C.O.D. service, signature service and storage.

accommodation

(law) An action by one individual or legal entity (the accommodation party) that is taken as a favor, without any consideration, for another individual or legal entity (the accommodated party). An accommodation note or paper is a commercial instrument of debt that is issued by or for an accommodated party (who is expected to pay the debt) and that contains the name of the accommodation party. A person may make an accommodation, for example, to help another party raise money or obtain credit. An accommodation party is usually treated like a surety, who is responsible for the performance of the accommodated party. The distinction between an accommodation and a surety is that an accommodation is made without consideration, that is, it is freely given. See surety.

accord and satisfaction

(law) A means of discharging a contract or cause of action by which the parties agree (the accord) to alter their obligations and then perform (the satisfaction) the new obligations. A seller who cannot, for example, obtain red fabric dye according to contract specifications and threatens to breach the contract may enter into an accord and satisfaction with the buyer to provide blue-dyed fabric for a slightly lower price.

account number

(shipping) An identifying number issued by a carrier's accounting office to identify a shipper and/or consignee. The number helps ensure accurate invoicing procedures and customer traffic activity.

account party

(banking) The party that instructs a bank (issuing bank) to open a letter of credit. The account party is usually the buyer or importer. See letter of credit.

accounts payable

(accounting) A current liability representing the amount owed by an individual or a business to a creditor(s) for merchandise or services purchased on an open account or short-term credit. See also accounts receivable.

accounts receivable

(accounting) Money owed a business enterprise for merchandise or services bought on open account. See also accounts payable.

accrual of obligation

(law) The time at which an obligation matures or vests, requiring the obligor to perform. In a contract between a buyer and seller, for example, the seller's obligation to deliver goods may accrue when the buyer tenders payment in full. Alternatively, if the contract specifies a date for delivery of the goods, the seller's obligation accrues at that date, even if the buyer tenders payment before or after that date.

acquisition

The purchase of complete or majority ownership in a business enterprise, usually by another business enterprise.

Act of God

An act of nature beyond man's control such as lightning, flood, earthquake or hurricane. Many shipping and other performance contracts include a "force majeure" clause which excuses a party who breaches the contract due to acts of God. See force majeure.

action ex contractu

(law) A legal action for breach of a promise stated in an express or implied contract.

action ex delicto

(law) (a) A legal action for a breach of a duty that is not stated in a contract but arises from the contract. A seller of goods, for example, who represents that the goods can be used for a certain purpose has a duty to furnish goods that can be so used, even if that duty is not stated in the contract. If the seller fails to provide such goods, the seller breaches that duty and the buyer has an action ex delicto based on the seller's fraudulent representation. (b) A legal action that arises from a wrongful act, such as fraud.

added-value tax

See value-added tax.

address of record

(law) The official or primary location for an individual, company, or other organization.

adhesion contract

(law) Contract with standard, often printed, terms for sale of goods and services offered to consumers who usually cannot negotiate any of the terms and cannot acquire the product unless they agree to the terms.

adjustment

(general) The refund or replacement of lost or damaged goods by either the seller or by an insurance carrier.

(insurance) The settlement of an insurance claim.

(U.S. government) The negative impact of increased import competition to U.S. businesses. See adjustment assistance.

adjustment assistance

(U.S.) Financial, training and reemployment technical assistance to workers, and technical assistance to firms and industries, to help them cope with adjustment difficulties arising from increased import competition. The objective of the assistance is usually to help an industry to become more competitive in the same line of production, or to move into other economic activities. The aid to workers can take the form of training (to qualify the affected individuals for employment in new or expanding industries), relocation allowances (to help them move from areas characterized by high unemployment to areas where employment may be available) or unemployment compensation (to tide them over while they are searching for new jobs). The aid to firms can take the form of technical assistance through Trade Adjustment Assistance Centers located throughout the United States. Industry-wide technical assistance also is available through the Trade Adjustment Assistance program. The benefits of increased trade to an importing country generally exceed the costs of adjustment, but the benefits are widely shared and the adjustment costs are sometimes narrowly--and some would say unfairly--concentrated on a few domestic producers and communities. Adjustment assistance can also be designed to facilitate structural shifts of resources from less productive to more productive industries, contributing further to greater economic efficiency and improved standards of living. See Trade Adjustment Assistance Centers.

Administrative Exception Notes (AEN)

A listing of strategic commodities that member nations of the Coordinating Committee on Multilateral Export Controls (CoCom) may approve for export on their own, but must notify CoCom after the fact. CoCom is an informal organization of 17 nations that cooperatively restrict strategic exports to controlled countries. CoCom controls exports at three levels, depending on the item and the proposed destination. At the lowest level, "national discretion" (also called "administrative exception"), a member nation may approve the export on its own, but CoCom must be notified after the fact. Administrative exception notes are appended to list categories describing commodities that can be approved solely at national discretion.

See Coordinating Committee on Multilateral Export Controls.

administrative notes

See Administrative Exception Notes.

Administrative Protective Order (APO)

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

admiralty

(law/shipping) Any civil or criminal issue having to do with maritime law.

admiralty court

(law/shipping) A court of law that has jurisdiction over maritime legal issues. These generally include ocean shipping, collisions of vessels, charters, contracts and damage to cargo.

admission temporaire

(customs) The free entry of goods normally dutiable. See ATA Carnet.

Admission Temporaire/Temporary Admission Carnet

See ATA Carnet.

ad valorem

Literally: according to value.

(general) Any charge, tax, or duty that is applied as a percentage of value.

(taxation) A tax calculated on the value of the property subject to the tax.

(shipping) A freight rate set at a certain percentage of the declared value of an article.

(U.S. Customs) Ad valorem duty. A duty assessed as a percentage rate or value of the imported merchandise. For example 5% ad valorem. See specific rate of duty; compound rate of duty; tariff.

advance against collection

(banking) A short term loan or credit extended to the seller (usually the exporter) by the seller's bank once a draft has been accepted by the buyer (generally the importer) of the seller's goods. Once the buyer pays, the loan is paid off. If the buyer does not pay the draft, the seller must still make good on the loan. See bill of exchange.

advance arrangements

(shipping) The shipment of certain classes of commodities--examples: gold, precious gems, furs, live animals, human remains and oversized shipments--require arrangements in advance with carriers.

Advanced Technology Products (ATP)

(U.S.) About 500 of some 22,000 commodity classification codes used in reporting U.S. merchandise trade are identified as "advanced technology" codes and they meet the following criteria: (1) The code contains products whose technology is from a recognized high technology field (e.g., biotechnology); (2) These products represent leading edge technology in that field; and (3) Such products constitute a significant part of all items covered in the selected classification code.

advancement of charges

(shipping) A service under which a shipping line or airline, in some instances, pays incidental charges arising before or after a shipment or airhaul. Examples include cartage and warehousing costs. These charges can be in advance for the convenience of either the shipper or the receiver.

advice

(banking) The term "advice" connotes several types of forms used on the banking field. Generally speaking, an advice is a form of letter that relates or acknowledges a certain activity or result with regard to a customer's relations with a bank. Examples include credit advice, debit advice, advice of payment and advice of execution. In commercial transactions, information on a business transaction such as shipment of goods.

(banking/letters of credit) The forwarding of a letter of credit, or an amendment to a letter of credit to the seller, or beneficiary of the credit, by the advising bank (seller's bank).

See issuance; letter of credit; amendment.

advice of fate

(banking) A bank's notification of the status of a collection which is still outstanding.

advised credit

(banking) A letter of credit whose terms and conditions have been confirmed by a bank. See letter of credit; confirmed letter of credit.

advising bank

(banking) The bank (also referred to as the seller's or exporter's bank) which receives a letter of credit or amendment to a letter of credit from the issuing bank (the buyer's bank) and forwards it to the beneficiary (seller/exporter) of the credit. See letter of credit; confirming bank; issuing bank.

Advisory Committee on Export Policy

(U.S. government) The ACEP is an interagency dispute resolution body that operates at the Assistant Secretary level. ACEP is chaired by the U.S. Department of Commerce; membership includes the Departments of Defense, Energy and State, the Arms Control and Disarmament Agency, and the intelligence community. Disputes not resolved by the ACEP must be addressed by the cabinet-level Export Administration Review Board within specific time frames set forth under National Security Directive #53. See National Security Directive #53; Export Administration Review Board.

Advisory Committee on Trade Policy and Negotiations

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

See Industry Consultations Program.

advisory notes

See Administrative Exception Notes.

affiliate

A business enterprise located in one country which is directly or indirectly owned or controlled by a person of another country.

(U.S.) A business enterprise located in one country which is directly or indirectly owned or controlled by a person of another country to the extent of 10 percent or more of its voting securities for an incorporated business enterprise, or an equivalent interest for an unincorporated business enterprise, including a branch. For outward investment, the affiliate is referred to as a "foreign affiliate"; for inward investment, it is referred to as a "U.S. affiliate." See direct (foreign) investment; foreign direct investment in the United States; affiliated foreign group.

affiliated foreign group

(U.S.) An affiliated foreign group means (a) the foreign parent, (b) any foreign person, proceeding up the foreign parent's ownership chain, which owns more than 50 percent of the person below it up to and including that person which is not owned more than 50 percent by another foreign person and (c) any foreign person, proceeding down the ownership chain(s) of each of these members, which is owned more than 50 percent by the person above it. See direct (foreign) investment; foreign direct investment in the United States; affiliate; foreign-owned affiliate in the U.S.

affreightment

(shipping) The hiring or chartering of all or part of a vessel for the transport of goods.

affreightment contract

(shipping/law) A contract with a shipowner to hire all or part of a ship for transporting goods.

afghani

The currency of Afghanistan. 1 Af = 100 puls.

afloat

(shipping) Refers to a shipment of cargo which is currently onboard a vessel between ports (as opposed to on land).

African, Caribbean and Pacific Countries (ACP)

Developing countries which are designated beneficiaries under the Lome Convention. See Lome Convention.

African Development Bank (AfDB)

The AfDB, established in 1963, provides financing through direct loans to African member states to cover the foreign exchange costs incurred in Bank-approved development projects in those countries. Fifty-one African countries are members and ordinarily receive loans. The Republic of South Africa is currently the only African country not a member. Address: African Development Bank, Rue Joseph Anoma, 01 BP 1387, Abidjan 01, Cote d'Ivoire; Tel: [225] 20-44-44; Telex: 23717; Fax: [225] 20-40-06; http://www.afdb.org.

African Development Foundation

An independent, nonprofit U.S. government corporation established to provide financial assistance to grass-roots organizations in Africa. ADF became operational in 1984. Address: African Development Foundation, 1400 Eye Street NW, 10th Floor, Washington, DC 20005; Tel: (202) 673-3916; http://www.adf.org.

aft

(shipping) Direction toward the stern of the vessel (ship or aircraft).

after date

(banking) A notation used on financial instruments (such as drafts or bills of exchange) to fix the maturity date as a fixed number of days past the date of drawing of the draft. For example, if a draft stipulates "60 days after date," it means that the draft is due (payable) 60 days after the date it was drawn. This has the effect of fixing the date of maturity of the draft, independent of the date of acceptance of the draft. See acceptance; drawee; bill of exchange.

after sight

(banking) A notation on a draft that indicates that payment is due a fixed number of days after the draft has been presented to the drawee. For example, "30 days after sight" means that the drawee has 30 days from the date of presentation of the draft to make payment. See acceptance; drawee; bill of exchange.

agency

(law) A relationship between one individual or legal entity (the agent) who represents, acts on behalf of, and binds another individual or legal entity (the principal) in accordance with the principal's request or instruction. In some countries, agency is more narrowly defined as a relationship created only by a written agreement or a power of attorney, entered into by a principal and a person who is designated to act for the principal within the limits of the written document creating the agency. See agent; principal; power of attorney.

(a) An express agency is established by a written or oral agreement between the parties. An express agency is created, for example, when a seller orally contracts with a sales representative to sell products or when a company makes a written power of attorney to authorize a person to act on its behalf. (b) An implied agency arises as a result of the conduct of the parties. If a seller's assistant, for example, sometimes deals with customers, a court may determine from that conduct that an implied agency exists between the seller and the assistant. (c) An agency by estoppel is imposed by law when an agent acts without authority, but the principal leads a third person to conclude reasonably that the agent had authority and to rely on that conclusion. If a seller, for example, informs a buyer that the seller's representative is authorized to negotiate any contract terms for the seller, a court may decide that an agency by estoppel existed, that the contract should be enforced, and that the seller cannot avoid performing the contract by claiming that the representative in fact had no authority. (d) An agency del credere arises when a principal entrusts goods, documents, or securities to an agent who has broad authority to collect from a buyer and who may be liable for ensuring that the buyer is solvent. A sales representative, for example, who is given goods and who is authorized to receive payment from buyers is an agent del credere. (e) An exclusive agency is an arrangement with an agent under which the principal agrees not to sell property to a purchaser found by another agent. If a seller of green and red shoes, for example, gives a sales representative an exclusive agency to sell the green shoes in a particular country, the seller is not permitted to sell those shoes through any other representative in the same country. The seller may, however, authorize other agents to sell red shoes in that country. (f) A universal agency authorizes the agent to do every transaction that a principal can legally delegate. A principal who will be traveling for some time may, for example, give an agent authority to deal with all business and personal transactions for the principal during that absence. (g) A general agency authorizes an agent to do all acts related to the principal's business, which may include negotiating contracts, establishing credit, advertising, arranging for shipping and setting up overseas offices and outlets. (h) A special agency gives an agent limited powers to conduct one transaction or a specific series of transactions. A contract with a representative to secure the sale of certain components to a particular factory creates a special agency.See agent; principal; power of attorney.

agency by estoppel

See agency.

agency del credere

See agency.

Agency for International Development

(U.S. government) A unit of the United States International Development Cooperation Agency. AID administers U.S. foreign economic and humanitarian assistance programs in the developing world, Central and Eastern Europe, and the Commonwealth of Independent States. Among the economic programs are those that foster employment growth, and that promote use of clean and efficient energy and environmental technologies. Maintains economic, social and demographic statistics for many developing countries. AID has field missions and representatives in approximately 70 developing countries in Africa, Latin America, the Caribbean and the Near East. Address: Agency for International Development, Ronald Reagan Building, 1300 Pennsylvania Avenue, NW; Washington D.C. 20523; Tel: (202) 712-0000; www.info.usaid.gov. See Center for Trade and Investment Services; International Development Cooperation Agency.

agent

(law) An individual or legal entity authorized to act on behalf of another individual or legal entity (the principal). An agent's authorized actions will bind the principal. A sales representative, for example, is an agent of the seller. See agency; principal; power of attorney.

agent ad litem

(shipping/law) An agent who acts on behalf of a principal in prosecuting or defending a lawsuit.

agent bank

(banking) (a) Bank acting for a foreign bank. (b) Bank handling administration of a loan in a syndicated credit.

Agent/Distributor Service (ADS)

(U.S. government) An International Trade Administration (ITA) fee-based service which locates foreign import agents and distributors for U.S. exporters. ADS provides a custom search overseas for interested and qualified foreign representatives on behalf of a U.S. exporter. Officers abroad conduct the search and prepare a report identifying up to six foreign prospects that have examined the U.S. firm's product literature and have expressed interest in representing the U.S. firm's products. Contact the nearest Department of Commerce District Office or call (800) USA-TRADE. See United States Department of Commerce.

aggregated shipments

(shipping) Numerous shipments from different shippers to one consignee that are consolidated and treated as a single consignment.

agreed valuation

(shipping) The value of a shipment agreed upon by the shipper and carrier to secure a specific rate and/or liability.

agriculture export connections

(U.S. government) The U.S. Foreign Agriculture Service through AgExport Connections (formerly Agriculture Information and Marketing Services) provides services designed to help U.S. exporters of agricultural products make direct contact with foreign buyers. Services include: Trade Leads--compiled by overseas offices and retrievable from the Economic Bulletin Board; Buyer Alert--publication for U.S. exporters to advertise their products; and Foreign Buyer Lists. Contact: Trade Assistance and Promotions Office, USDA, Foreign Agriculture Service, 1400 Independence Avenue, SW Stop 1052, Washington D.C. 20250-1052 USA; Tel: (202) 720-7420; Fax: (202) 720-9728; http://www.fas.usda.gov.

airbill

See air waybill.

air cargo

(shipping) Any property (freight, mail, express) carried or to be carried in an aircraft. Does not include passenger baggage.

aircraft pallet

(shipping) The use of a platform or pallet (in air freight usually from 3/4" to 2" thick) upon which a unitized shipment rests or on which goods are assembled and secured before being loaded as a unit onto an aircraft. Most carriers offer container discounts for palletized loads.

Palletization results in more efficient use of space aboard freighter aircraft and better cargo handling, particularly when used as part of mechanized systems employing such other advances as pallet loaders and pallet transporters. The pallet loader is a device employing one or more vertical lift platforms for the mechanical loading or unloading of palletized freight at planeside.

The pallet transporter is a vehicle for the movement of loaded pallets between the aircraft and the freight terminal or truck dock. Sometimes the functions of both the pallet loader and pallet transporter are combined into a single vehicle. See also pallet.

air express

(shipping) A term used to describe expedited handling of air freight service. See priority air freight; air freight.

air freight

(shipping) A service providing for the air transport of goods. The volume of air freight has been increasing significantly due to: (1) decreased shipping time, (2) greater inventory control for just-in-time manufacturing and stocking, (3) generally superior condition of goods upon arrival, and (4) for certain commodities, lower shipping costs.

air freight forwarder

(shipping) A freight forwarder for shipments by air. Air freight forwarders serve a dual role. The air freight forwarders are, to the shipper, an indirect carrier because they receive freight from various shippers under one tariff, usually consolidating the goods into a larger unit, which is then tendered to an airline. To the airlines, the air freight forwarder is a shipper. An air freight forwarder is ordinarily classed as an indirect air carrier; however, many air freight forwarders operate their own aircraft. See freight forwarder.

airmail

(shipping) The term "airmail" as a class of mail, is used only in international postal service. Within the United States, the U.S. Postal Service moves all first class mail, priority mail, and express mail by air where doing so will expedite delivery.

air parcel post

(shipping) A term commonly used for priority mail which consists of first class mail weighing more than 13 ounces. Priority mail is another economical and expedited service for the shipping of parcels by air.

Airport Mail Facility (AMF)

(shipping) A U.S. Postal Service facility located on or adjacent to an airport. AMFs are primarily engaged in the dispatch, receipt, and transfer of mail directly with air carriers.

air waybill (airbill)

(shipping) A shipping document used by the airlines for air freight. It is a contract for carriage that includes carrier conditions of carriage including such items as limits of liability and claims procedures. The air waybill also contains shipping instructions to airlines, a description of the commodity and applicable transportation charges. Air waybills are used by many truckers as through documents for coordinated air/truck service.

Air waybills are not negotiable. The airline industry has adopted a standard formatted air waybill that accommodates both domestic and international traffic. The standard document was designed to enhance the application of modern computerized systems to air freight processing for both the carrier and the shipper. See bill of lading; negotiable.

airworthiness certification

(shipping) Documentation to show that an aircraft or components comply with all the airworthiness requirements related to its use as laid down by the regulatory authorities for the country in which the aircraft is registered.

Aksjeselskap (A/S)

(Norway) Designation for a joint stock company with limited personal liability to shareholders. See Business Entities Appendix.

Aktiebolag (AB)

(Finland, Sweden) Designation for a joint stock company with limited personal liability to shareholders. See Business Entities Appendix.

Aktiengesellschaft (AG)

(Austria, Germany, Switzerland, Liechtenstein) Designation for a joint stock company with limited personal liability to shareholders. See Business Entities Appendix.

Aktieselskab (A/S)

(Denmark) Designation for a joint stock company with limited personal liability to shareholders.

Alcohol, Tobacco and Firearms (ATF)

See Bureau of Alcohol, Tobacco and Firearms.

alienable

(law) The capacity to be transferred or conveyed. Interests in real or personal property, for example, are alienable.

aliquot

(law) A fractional share. A court, for example, may award damages aliquot against several parties who breached a contract, meaning that each must pay a proportionate share of the damages. Aliquot liability differs from joint and several liability, in that the latter refers to whether the breaching parties may be sued and held liable together or individually. See joint and several liability.

all-cargo aircraft

(shipping) An aircraft for the carriage of cargo only, rather than the combination of passengers and cargo. The all-cargo aircraft will carry cargo in bulk or container in the main deck as well as in the lower deck of the aircraft. It may include a scheduled and/or nonscheduled service.

all risk

(insurance) Extensive insurance coverage of cargo, including coverage due to external causes such as fire, collision, pilferage etc., but usually excluding "special" risks such as those resulting from acts of war, labor strikes and the perishing of goods, and from internal damage due to faulty packaging, decay or loss of market.

All risk insurance covers only physical loss or damage from external cause(s) and specifically affirms the exclusion of war risks and strikes and riots unless covered by endorsement. These losses are excluded, either by expressed exclusions, conditions or warranties written into the policy or by implied conditions or warranties that are read into every marine policy by legal interpretation.

An "all risks" policy may expressly exclude certain types of damage such as marring and scratching of unboxed automobiles or bending and twisting entirely or unless amounting to a specified percentage or amount.

Also, certain perils such as war and strikes, riots and civil commotions are commonly excluded, but these perils can be and usually are reinstated, at least in part, by special endorsement or by a separate policy.

The "all risk" clause is a logical extension of the broader forms of "with average" coverage. The all risk clause generally reads:

"To cover against all risks of physical loss or damage from any external cause irrespective of percentage, but excluding, nevertheless, the risk of war, strikes, riots, seizure, detention and other risks excluded by the F.C.&S. (Free of Capture and Seizure) Warranty and the S.R.&C.C. (Strikes, Riots and Civil Commotion) Warranty in this policy, excepting to the extent that such risk are specifically covered by endorsement."

(air shipments) All risk insurance of air shipments usually excludes loss due to cold or changes in atmospheric pressure. See average; with average; free of particular average; inherent vice, war risk; strikes, riots and civil commotion.

allowance

An amount paid or credited by a seller as a refund or reimbursement due to any one of a number of causes including: faulty packaging, shipment of goods which do not meet buyer's specifications, a late shipment, etc.

alongside

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

alternative tariff

(shipping) A tariff containing two or more rates from and to the same points, on the same goods, with authority to use the one which produces the lowest charge.

amendment

(law/general) An addition, deletion, or change in a legal document.

(banking/letters of credit) A change in the terms and conditions of a letter of credit (e.g., extension of the letter of credit's validity period, shipping deadline, etc.), usually to meet the needs of the seller. The seller requests an amendment of the buyer who, if he agrees, instructs his bank (the issuing bank) to issue the amendment. The issuing bank informs the seller's bank (the advising bank) who then notifies the seller of the amendment. In the case of irrevocable letters of credit, amendments may only be made with the agreement of all parties to the transaction. See letter of credit.

American Arbitration Association

A private not-for-profit organization formed in 1926 to encourage the use of arbitration in the settlement of disputes. Address: American Arbitration Association, 1633 Broadway, New York NY 10019; Tel: (212) 944-2230; Fax: (212) 382-2606; http://www.adr.org. See arbitration.

American Association of Exporters and Importers

(U.S.) A trade association which advises members of legislation regarding importing and exporting, and fights against protectionism. Also hosts seminars and conferences for importers and exporters. Address: American Association of Exporters and Importers, 11 W. 42nd St., 30th Floor, New York, NY 10036; Tel: (212) 944-2230; Fax: (212) 382-2606; http://www.aaei.org.

American Institute in Taiwan

A non-profit corporation that represents U.S. interests in Taiwan in lieu of an embassy. In 1979, the United States terminated formal diplomatic relations with Taiwan when it recognized the People's Republic of China as the sole legal government of China. The AIT was authorized to continue commercial, cultural and other relations between the U.S. and Taiwan. Address: American Institute in Taiwan, 7, Lane 134, Section 3, Hsin Yi Road, Taipei, 106, Taiwan; Tel: (2) 709-2000; Telex: 78523890 USTRADE; Fax: (2) 701-4216; http://ait.org.tw/.

American National Standards

A set of product standards established by the American National Standards Institute (ANSI). See American National Standards Institute. See also International Standards Organization.

American National Standards Institute (ANSI)

An organization that develops and publishes a set of voluntary product standards called the American National Standards. In addition to product standards, ANSI publishes a guide to unit-load and transportation package sizes for containers. ANSI is also an influential member of the ISO (International Standards Organization). Address: American National Standards Institute, 11 West 42nd Street, New York, NY 10036; Tel: (212) 642-4900. See also International Standards Organization; http://web.ansi.org/default_js.htm.

American option

(banking/foreign exchange) A foreign exchange option containing a provision to the effect that it can be exercised at any time between the date of writing and the expiration date. See also European option.

American Traders Index (ATI)

A compilation of individual U.S. & Foreign Commercial Service (US&FCS) domestic client files, for use by overseas posts to generate mailing lists. See United States and Foreign Commercial Service.

amidships

(shipping) At or in the middle of a vessel. Because a ship's movement is less in the middle of the vessel, shippers will sometimes specify that fragile freight be placed amidships.

amortization

(banking) (a) The gradual extinguishment of any amount over a period of time (e.g., the retirement of a debt). (b) A reduction of the book value of a fixed asset.

analysis certificate

See certificate of analysis.

ancillary equipment

(shipping) Equipment used to build up a palletized load or to convey a unit load device outside an aircraft. See aircraft pallet.

Andean Group

An alliance of Latin American countries formed in 1969 to promote regional economic integration among medium-sized countries. Members include Bolivia, Colombia, Ecuador, Peru and Venezuela. Address: Andean Group, Avenida Paseo de la Republica 3895, Casilla Postal 18-1177, Lima 18, Peru; Tel: (14) 41-4212; Telex: 20104 PE; Fax: (14) 42-0911.

Andean Trade Initiative (ATI)

(U.S.) A U.S. government initiative providing for assistance for alternative economic development to the drug producing countries of Bolivia, Colombia, Ecuador and Peru. The (U.S.) Andean Trade Preference Act of 1991 proposes the designation of ten years of duty-free treatment for most goods produced in one or a combination of these four countries. Currently, none of the four ATI countries has received formal designation as a beneficiary.

Animal and Plant Health Inspection Service (APHIS)

(U.S. government) A U.S. government agency attached to the U.S. Department of Agriculture which has the responsibility of inspecting and certifying animals, plants and related products for import to or export from the United States. APHIS is also responsible for the inspection of animal and plant product processing facilities both in the United States and in countries that export to the United States. Address: Animal and Plant Health Inspection Service, Federal Building, 6505 Belcrest Road, Hyattsville, MD 20782; Tel: (301) 436-7885. See also phytosanitary inspection certificate.

animal containers

(shipping) The use of air freight as a means of transporting household pets led to the development of special containers designed to provide adequate protection and air circulation. Such containers may be purchased or rented from many air carriers.

annual basis

(accounting) Statistical shifting of data that are for a period less than 12 months in order to estimate the full results for an entire year. To be accurate the processing should consider the effect of the seasonal variation.

antidumping

(customs) Antidumping, as a reference to the system of laws to remedy dumping, is defined as the converse of dumping. See dumping; antidumping duties; General Agreement on Tariffs and Trade; Antidumping Act of 1974.

Antidumping Act of 1974

(U.S. law) Legislation designed to prevent the sales of goods at a lower price than exists in the goods' country or origin. The U.S. Treasury Department determines whether imported products are being sold at a "less than fair value" in the United States. Should it be determined that the domestic industry is harmed by the imports, extra duties can be imposed. See countervailing duties; dumping.

Antidumping/Countervailing Duty System

(U.S. Customs) A part of the U.S. Customs' Automated Commercial System, containing a case reference database and a statistical reporting system to capture data for International Trade Commission reports on antidumping and countervailing duties assessed and paid.

See dumping; countervailing duties.

antidumping duties

(customs) Duties assessed on imported merchandise of a class or kind that is sold at a price less than the fair market value. Fair market value of merchandise is defined as the price at which it is normally sold in the manufacturer's home market. See dumping; countervailing duties.

antidumping petition

(customs) A claim filed on behalf of a U.S. industry alleging that imported merchandise is being sold in the United States at "less than fair value," and that sales of such merchandise is causing or threatening injury to, or retarding the establishment of a U.S. industry. See dumping; countervailing duties.

any quantity

(shipping) A cargo rating that applies to an article regardless of weight (i.e., in any quantity).

apparent good order and condition

(shipping) A statement, on a bill of lading or other shipping document, indicating that the shipment is available for shipment or delivery with no apparent damage.

appraiser, customs

(U.S. Customs) An individual authorized by the U.S. Customs Service (Department of Treasury) to examine and determine the value of imported merchandise.

appreciation

(foreign exchange) An increase in the value of the currency of one nation in relation to the currency of another nation.

approval basis

(banking/letters of credit) If documents containing discrepancies are presented to the nominated bank under a letter of credit, the bank can forward the documents to the issuing bank for approval, with the beneficiary's agreement. Because of the risk of loss in transit and delays resulting in interest loss, however, it is recommended that the beneficiary first try to correct the documents; but, if that is not possible, the beneficiary asks the nominated bank to contact the issuing bank for authorization to accept the discrepancies.

approximately

See about.

appurtenance

(law) An accessory that is connected to primary property, and that is adapted to be used with that property, and that generally is intended to be permanently affixed to that property. Appurtenances to a ship, for example, may include cranes attached to the ship for loading and unloading cargo. An easement for access to land is considered an appurtenance to that land. Industrial machinery that is affixed to a factory facility is an appurtenance to the building.

apron

(shipping) The area of an airport where aircraft are parked for loading and unloading of cargo or passengers.

Arab League

A regional alliance established in March 1945 which aims to improve relations among Arab nations. Headquarters are located in Cairo, Egypt. Members include: Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen. Address: Arab League, Arab League Building, Tahrir Square, Cairo, Egypt; Tel: [20] (2) 575-0511; Telex: 92111; Fax: [20] (2) 577-5626.

Arab Maghreb Union (AMU)

A regional alliance established in February 1989 with the goal of joining the Gulf Cooperation Council and other states in a common market. AMU members include: Algeria, Morocco, Tunisia, Libya and Mauritania. Address: Union du Maghreb Arabe, c/o Office du President, Tunis, Tunisia.

arbiter

See arbitration.

arbitrage

(banking/finance/foreign exchange) The simultaneous buying and selling (or borrowing and lending) of identical securities, currencies, or commodities in two or more markets in order to take advantage of price differentials. See also hedging.

arbitrage, space

(banking/finance/foreign exchange) The simultaneous buying and selling (or borrowing and lending) of identical securities, currencies, or commodities in two or more locations in order to take advantage of price differentials.

arbitrage, time

(banking/finance/foreign exchange) The simultaneous buying and selling (or borrowing and lending) of identical securities, currencies, or options at different maturity dates in order to take advantage of price differentials.

arbitrageur

(finance) A person systematically engaged in arbitrage dealing.

arbitration

(law) The resolution of a dispute between two parties through a voluntary or contractually required hearing and determination by an impartial third party. The impartial third party is called the arbiter or arbitrator and is chosen by a higher or disinterested body, or by the two parties in dispute. In the United States, the main arbitration body is the American Arbitration Association, 140 West 51st Street, New York, NY 10020; Tel: (212) 484-4000. Internationally, the main arbitration body is the International Chamber of Commerce (ICC), 38 Cours Albert 1 er , 75008 Paris, France; Tel: (1) 49-53-28-28; Fax: (1) 49-53- 29-42. For the U.S. representative of the ICC, contact: U.S. Council for International Business, 1212 Avenue of the Americas, New York, NY 10036; Tel: (212) 354-4480. See arbitration clause; American Arbitration Association; International Chamber of Commerce.

arbitration clause

(law) A contract clause included in many international contracts stating for example:

"Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof." See arbitration; American Arbitration Association; International Chamber of Commerce.

Arms Control and Disarmament Agency

(U.S.) An independent agency within the U.S. State Department which reviews dual-use license applications from a non-proliferation perspective--anything that could impact on the proliferation of missiles, chemical and biological weapons, and nuclear weapons. The agency was created in 1961, has about 200-to-250 staff and has a fairly substantial and growing technology transfer and export control function. The Director is the principal arms control adviser to the Secretary of State, the President and the (NSC) on: conventional arms transfer; commercial sales of munitions; nuclear, missile, chemical and biological warfare; East-West military munitions issues; Coordinating Committee on Multilateral Export Controls (CoCom); and negotiating Memorandums of Understanding (MOUs) with the third world on strategic trade. See United States Department of State.

arrival notice

(shipping) A notice furnished to consignee and shipping broker alerting them to the projected arrival of freight and availability of freight for pickup.

arrivals

(customs) Imported goods which have been placed in a bonded warehouse for which duty has not been paid.

articles of extraordinary value (AEV)

(shipping) Commodities identified as high value items, requiring special care in shipping.

Asian Development Bank (ADB)

The ADB was formed in 1966 to foster economic growth and cooperation in Asia and to help accelerate economic development of members. Address: Asian Development Bank, PO Box 789, Manila Central Post Office, 0980 Manila, Philippines; Tel: [63] (2) 632-4444; Fax: [63] (2) 636-2444; http://www.adb.org.

Asia Pacific Economic Cooperation (APEC)

An informal grouping of Asia Pacific countries that provides a forum for ministerial level discussion of a broad range of economic issues. APEC includes the six ASEAN countries (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand), plus: Australia, Canada, China, Hong Kong, Japan, South Korea, Taiwan and the United States. The Secretariat is located in Singapore. Address: 438 Alexandra Road, #14-00, Alexandra Point, Singapore 119958; Tel: [65] 276-1880; Fax: [65] 276-1775; http://www1.apecsec.org.sg/.

as is

(law) A term indicating that goods offered for sale are without warranty or guarantee. The purchaser has no recourse to the vendor for quality of the goods.

ask(ed) price; market price

(finance) The price at which a security or commodity is quoted or offered for sale.

assailing thieves

(insurance) A reference to an insurance policy clause covering the forcible taking rather than the clandestine theft or mere pilferage of goods.

assembly service

(shipping) A service under which an airline assembles shipments from many shippers and transports them as one shipment to one receiver.

assessment

(customs) The imposition of antidumping duties on imported merchandise. See dumping; antidumping duties; countervailing duties.

assign

(law) To transfer or make over to another party.

assignee

(law) One to whom a right or property is transferred. See also assignor; assignment.

assignment

(law/shipping/banking) The transfer of rights, title, interest and benefits of a contract or financial instrument to a third party.

(banking/letters of credit) The beneficiary of a letter of credit is entitled to assign his/her claims to any of the proceeds that he/she may be entitled to, or portions thereof, to a third party. Usually the beneficiary informs the issuing or advising bank that his/her claims or particle claims under the letter of credit were assigned and asks the bank to advise the assignee (third party) that it has acknowledged the assignment. The validity of the assignment is not dependent on bank approval. In contrast, the transfer requires the agreement of the nominated bank. An assignment is possible regardless of whether the letter of credit is transferable. See letter of credit.

assignment of proceeds

See assignment.

assignor

(law) One by whom a right or property is transferred. See also assignee; assignment.

assist

(U.S. Customs) Any of a number of items that an importer provides directly or indirectly, free of charge, or at a reduced cost, for use in the production or sale of merchandise for export to the United States.

Assists are computed as part of the transaction value upon which duty is charged, when the duty rate is a percentage of the value of the merchandise.

Examples of assists are: materials, components, parts and similar items incorporated in the imported merchandise; tools, dies, molds and similar items used in producing the imported merchandise; engineering, development, artwork, design work and plans and sketches that are undertaken outside the United States. Engineering is not treated as an assist if the service or work is: (1) performed by a person domiciled within the United States, (2) performed while that person is acting as an employee or agent of the buyer of the imported merchandise, and (3) incidental to other engineering, development, artwork, design work, or plans or sketches undertaken within the United States. See valuation; transaction value; deductive value; computed value.

Association of Southeast Asian Nations (ASEAN)

ASEAN was established in 1967 to promote political, economic and social cooperation among its six member countries: Indonesia, Malaysia, Philippines, Singapore, Thailand and Brunei. Address: Association of Southeast Asian Nations, Jalan Sisingamangaraja, PO Box 2072, Jakarta, Indonesia; Tel: [62] (21) 712-272.

assumpsit

(law) An assumption or undertaking by one person (the promisor) to perform an act for, or to pay a sum to, another person (the promisee), often without express agreement from the promisee to perform an act or remit consideration in return. An assumpsit is created, for example, when one person employs another without any written agreement as to compensation. In such an arrangement, the law will imply a duty to pay reasonable wages. An assumpsit also arises when one person receives money that belongs to another, in which event the law implies a duty to remit the sum to the owner.

(a) An express assumpsit is one in which the promisor states the assumption in distinct and definite language. A person who agrees to work for another on certain tasks for a specified time has made an express assumpsit.

(b) An implied assumpsit is one in which a promise is inferred by law from the conduct of a party or the circumstances of the case. If, without any express statement, a person begins working for another who knows and does not object to that work, a court may find that an implied assumpsit has arisen.

(c) An action in assumpsit is a court action to recover damages for breach of an oral or other informal contract. A seller who delivers goods to a buyer based on an oral contract and who does not receive payment may recover the proceeds in an action in assumpsit.

assurance

(insurance) British term for insurance.

assurance of performance

(law) A declaration intended to induce one contracting party to have full confidence in the other's performance. Pledges and sureties are forms of assurances.

assured

(insurance) The individual, company or entity which is insured.

astern

(shipping) (a) Behind a ship or aircraft, (b) Towards the back of a ship or aircraft, (c) Backwards, as in the movement of a ship.

ATA Carnet

(customs) ATA stands for the combined French and English words "Admission Temporair/Temporary Admission." An ATA Carnet is an international customs document which may be used for the temporary duty-free admission of certain goods into a country in lieu of the usual customs documents required. The carnet serves as a guarantee against the payment of customs duties which may become due on goods temporarily imported and not re-exported. Quota compliance may be required on certain types of merchandise. ATA textile carnets are subject to quota and visa requirements.

The ATA Convention of 1961 authorized the ATA Carnet to replace the ECS ("Echantillons Commerciaux/Commercial Samples") Carnet that was created by a 1956 convention sponsored by the Customs Cooperation Council.

ATA Carnets are issued by National Chambers of Commerce affiliated with the Paris-based International Chamber of Commerce (ICC). These associations guarantee the payment of duties to local customs authorities should goods imported under cover of a foreign-issued carnet not be re-exported.

The issuing and guaranteeing organization in the United States is: U.S. Council, International Chamber of Commerce, 1212 Avenue of the Americas, New York, NY 10036; Tel: (212) 354-4480.

Additional information can be obtained from The Roanoke Companies, agents for the U.S. Council for International Business. Address: The Roanoke Companies, 1930 Thoreau Drive, Suite 101, Schaumburg, IL 60173; Tel: (800) ROANOKE, (847) 490-5940.

See also International Chamber of Commerce; carnet.

athwartships

(shipping) Across a vessel from side to side.

at sight

(banking) Terms of a financial instrument which is payable upon presentation or demand. A bill of exchange may be made payable, for example, at sight or after sight, which (respectively) means it is payable upon presentation or demand, or within a particular period after demand is made. See bill of exchange.

attachment

(law) Legal process for seizing property before a judgment to secure the payment of damages if awarded. A party who sues for damages for breach of contract may request, for example, that the court issue an order freezing all transfers of specific property owned by the breaching party pending resolution of the dispute.

attendant accompanying shipments

(shipping) Sometimes attendants accompany cargo shipments as when grooms or veterinarians accompany race horses or other live animals. This service requires advance arrangements with a shipping company or airline.

at-the-money

(foreign exchange/finance) A call or put option is at-the-money when the price of the underlying instrument is equivalent or very near to the strike price. See option; call option; put option.

attorn

(law) To agree to turn over or transfer money or goods to an individual or legal entity other than the party who was to originally receive them. A company that has bought out another legal entity may seek an attornment from a supplier who had an outstanding contract with the former entity, and if the supplier attorns, the company can obtain goods on the same terms as were agreed to with the former entity.

attorney-in-fact

(law) A person authorized to transact business generally or to perform a designated task of a nonlegal nature on behalf of another individual or legal entity. An attorney-in-fact is a type of agent. In many countries, this authority must be conferred by a written power of attorney. If a company buys goods from a foreign firm, for example, and agrees to place sufficient funds for the purchase in an escrow account, the buyer may authorize an attorney-in-fact in that foreign country to disburse the escrow funds on receiving verification from the buyer that the goods are satisfactory. A business enterprise may also authorize an attorney-in-fact to testify to facts on the company's behalf in arbitration or legal proceedings held in a foreign country. See agent; agency; power of attorney.

Australia Group (AG)

An informal forum through which 20 industrialized nations cooperate to curb proliferation of chemical and biological weapons through a supply approach. The AG's first meeting, held at the Australian Embassy in Paris in June 1986, was attended by Australia, Canada, Japan, New Zealand, the United States, and the ten member nations of the European Community. Membership has expanded to include Norway, Portugal, Spain, Switzerland, Austria, and representatives of the European Commission, the European Community's executive arm.

austral

The currency of Argentina. 1A=100 centavos.

audit

(general) A formal examination of records or documents--usually financial documents.

(shipping) The formal examination of freight bills to determine their accuracy.

authentication

(law) The act of certifying that a written document is genuine, credible, and reliable. An authentication is performed by an authorized person who attests that the document is in proper legal form and is executed by a person identified as having authority to do so. In many countries, persons authorized to authenticate documents include consulate officials, notaries public, and judicial officers.

Automated Broker Interface (ABI)

(U.S. Customs) ABI, a part of U.S. Customs' Automated Commercial System, permits transmission of data pertaining to merchandise being imported into the U.S. directly to U.S. Customs. Qualified participants include customs brokers, importers, carriers, port authorities, and independent data processing companies referred to as service centers. To use ABI, send a letter of intent to the District Director of Customs or to your nearest district Custom's Office. See Automated Commercial System.

Automated Clearinghouse (ACH)

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

Automated Commercial System

(U.S. Customs) The ACS is a joint public-private sector computerized data processing and telecommunications system linking customhouses, members of the import trade community, and other government agencies with the Customs computer.

Trade users file import data electronically, receive needed information on cargo status, and query Customs files to prepare submissions. Duties, taxes, and fees may be paid by electronic statement, through a Treasury-approved clearinghouse bank. ACS contains the import data used by Census to prepare U.S. foreign trade statistics. ACS began operating in February 1984 and includes: (1) the Automated Broker Interface, (2) the Census Interface System, (3) the Automated Manifest Systems, (4) the Bond System, (5) the In-Bond System, (6) the Cargo Selectivity System, (7) the Line Release System, (8) the Collections System, (9) the Security System, (10) the Quota System, (11) the Entry Summary Selectivity System, (12) the Entry Summary System, (13) the Automated Information Exchange, (14) the Antidumping/Countervailing Duty System, (15) the Firms system, (16) the Liquidation System, (17) the Drawback System, (18) the Fines, Penalties, and Forfeitures System, and (19) the Protest System. See United States Customs Service.

Automated Information Exchange

(U.S. Customs) AIES, a part of Customs' Automated Commercial System, allows for exchange of classification and value information between field units and headquarters.

See Automated Commercial System.

Automated Manifest Systems (AMS)

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

Auto Parts Advisory Committee

(U.S.) Established by an amendment to the Trade Act to set up an advisory committee to the U.S. Department of Commerce for dealing with U.S.-Japan trade issues involving the auto parts industry. Address: Auto Parts Advisory Committee, Chairman, Robert Cole, V.P. of Governmental Affairs, Kaifer Chemical Corporation, 655 15th Street, NW Suite 200, Washington D.C. 2005; Tel: (202) 638-2020.

availability

(banking/letters of credit) In letters of credit, refers to the availability of documents in exchange for payment of the amount stated in the letter of credit. Availability options are:

(1) By sight payment: payment on receipt of the documents by the issuing bank or the bank nominated in the letter of credit.

(2) By deferred payment: payment after a period specified in the letter of credit, often calculated as number of days after the date of presentation of the documents or after the shipping date.

(3) By acceptance: acceptance of a draft (to be presented together with other documents) by the issuing bank or by the bank nominated in the letter of credit, and the payment thereof at maturity.

(4) By negotiation: meaning the giving of value by the nominated bank to the beneficiary for the documents presented, subject to receipt of cover from the issuing bank.

See letter of credit; bill of exchange; negotiation.

aval

(banking) Payment of a bill of exchange, which is the responsibility of the drawee, can be either completely or partially guaranteed via an aval (joint and several guarantee), where the guarantor places his/her signature on the draft either alone or with corresponding explanation "per aval" or "as guarantor." If other information is lacking, the guarantor commits him/herself on behalf of the issuer. See bill of exchange.

average

(insurance) A loss to a shipment of goods that is less than a total loss. It comes from the French word avarie, which means "damage to ship or cargo," (and ultimately from the Arabic word awarijah, which means "merchandise damaged by sea water").

(a) A particular average is an insurance loss that affects specific interests only.

(b) A general average is an insurance loss that affects all cargo interests on board the vessel as well as the ship herself.

See also particular average; general average; with average; free of particular average; deductible average.

avoidance of contract

(law) The legal cancellation of a contract because an event occurs that makes performance of the contract terms impossible or inequitable and that releases the parties from their obligations. See commercial frustration; commercial impracticability; force majeure.

avoirdupois

(measure) (a) French for "having weight." (b) A system of weight measurement based on the pound of 16 ounces and the ounce of 16 drams. Refer to Weights and Measures in the Appendix.