O SlideShare utiliza cookies para otimizar a funcionalidade e o desempenho do site, assim como para apresentar publicidade mais relevante aos nossos usuários. Se você continuar a navegar o site, você aceita o uso de cookies. Leia nosso Contrato do Usuário e nossa Política de Privacidade.
O SlideShare utiliza cookies para otimizar a funcionalidade e o desempenho do site, assim como para apresentar publicidade mais relevante aos nossos usuários. Se você continuar a utilizar o site, você aceita o uso de cookies. Leia nossa Política de Privacidade e nosso Contrato do Usuário para obter mais detalhes.
MIB 3.6 on 14 th August 2012
Inco terms 2010
processing of an
What is exporting?
Exporting is the process
of earning money by
products/services in a
• Exporting is the most popular way for many
companies to become international.
• Exporting is usually the first mode of foreign entry
used by companies.
• Selling to foreign markets involves numerous high
risks, arising from a lack of knowledge about and
unfamiliarity with foreign environments, which can
be heterogeneous, sophisticated, and turbulent.
• Furthermore, conducting market research across
national boundaries is more difficult, complex, and
subjective than its domestic counterpart.
• Exporting is merely a selling but when it is selling
at home, it does not bother you because you are
in personal contact with a buyer for which you do
not need to comply with several procedural
requirements including filling and exchanging of a
lot of documents.
• But the difference comes when you intend to sell
to some one who is thousands of miles away from
you, speaking different language, having different
customs, preferences, currency and import
Reason for Export
• Expand sales : this helps firms to earn
profits from the foreign market.
• Gain share in the global market: Learning
its competitors, analyze the strategies in
order to gain market share.
• Acquire stability : firms are no longer
controlled by domestic barriers
• Enhance competiveness:
Classification of Exports
• Good exports: when a product is
physically displaced from one place to
• Services Exports:
• Project Exports: exporter may take up
project contract at importers country.
E.g Metro …
• Deemed Exports:
Sales Contract for Export
Standard Conditions is
legally binding, whether or
not both parties are aware
of or understand, every
Generating Trade Enquiry
Web sites to identify export/import firms
Participation in trade fairs
Business promotion visits
Contact with marketing agents/brokers in
India and abroad
Trade enquiries through ITPO, EPCs,
Commodity Boards, Chambers of
Dispatch of company profile, product range and
Indicative quotation and samples, photo on
Buyer credibility check & situation analysis
Proforma invoice on receipt of firm enquiry / interest
Before Finalizing the Contract
• Credit Worthiness of the Customer
• Availability of the Steamer/Airlines and its
frequency to the place of projected
• Documentation requirement for the customer
and government of the importing country
While these are indicative, the requirements
will vary from country to country, product to
product and buyer to buyer.
The Export Order
• The export order can be procured
based on written communication,
verbal discussions & negotiations
when offer/bid acceptance is
finalized between exporter and
• In many cases the exporter sends the
pro-forma invoice to buyer giving
terms & conditions of proposed
Contents of Proforma Invoice (PI)
• Parties to the contract - Correct references of
• Description - a detailed description of product or
service with all the technical aspects, details of
packing, quantity, weight,
• Price - unit price, mode of payment
• Shipment requirements - the Incoterm, mode of
transport and the precise period of
• Validity of the offer – The date/time within
which the offer acceptance to be received
The Export Order contd
• After negotiations, buyer may accept
the offer. The buyer confirms the
acceptance of offer mentioned in the
proforma invoice by signing the
proforma invoice as token of
acceptance of the sellers’ offer
• A contract is then drawn giving details
of the terms agreed
May be defined as a sale and purchase agreement
between the exporter and the importer whereby they
bind themselves to certain obligations, fulfillment of
which is legally enforceable.
In most cases the terms are standardized and contain
specified heads in which the conditions are detailed
The contract defines the responsibilities of both the
parties. Ambiguity is avoided & all parties have uniform
understanding of terms & conditions
It is essential to scrutinize the terms carefully and in
detail to avoid any problems later
General Standard Conditions
• When the export contract is made quickly and
informally, often some of the conditions are
either assumed or clarified later
• This situation may lead to dispute or
misunderstanding. This can be avoided by using
the General Standard Conditions
• These are standardized contract terms that
permit the parties to refer to a pre established
set of rules that can be incorporated into their
• Once such General Standard Conditions have
been adopted, they are legally binding whether
or not both parties are aware of and understand
Written vs. Construed Contract
• All large export/import orders are
usually written and signed between the
buyer & the seller to avoid ambiguity
• There are sometimes situations when
the agreement takes place in piece
meal by e-mail, fax, etc but it is not
developed into an agreement putting
all terms & conditions in a single
A case model
In the case of Raffles Vs. Wichelhaus (1864) 159 Eng.Rep.
375, the seller agreed to sell cotton to the buyer.
Shipment was to made from Bombay on the ship
named Peerless. However, there were two ships
named "Peerless." One was to sail in October and
the other in December. Defendants intended to
accept the cotton on the ship that sailed in October
and refused to accept the cotton on the ship that
sailed in December. It was held by the court that
there was no binding or enforceable contract. The
rule of the Peerless case is that no contract arises
unless both parties have the same meaning in mind.
I.e., there must be agreement on the same thing.
–In such a case, the exporter/importer
can establish existence of a contract by
stitching together various pieces of
–The Indian Evidence Act recognizes
commercial & regulatory documents,
provided exporter can prove through
various communications he has
exchanged with the importer
–Such unwritten contract is referred to as
Broad Terms & Conditions in an Export Contract
• The name & address of
buyer & seller
• Description of the
• Quality & specifications
• Price per unit with
Specified incoterm &
• Packing, marking &
• Payment terms
• Force Majeure
• Some other issues, terms & conditions may be
included in the international sales contract, like:
– Requirement of import/export license in cases of
restricted items and provision to export/import
through canalizing agency in case of canalized
– Any amendments and supplements should become
an integral part of the contract from the date these
have been finalized
– The export order should fully comply with RBI norms
related to permitted currencies and methods of
The Conflict of Laws
• In export transactions two nations are involved.
Important to define which country’s law will apply
• Usually buyer/seller should agree on this at the time
of finalization of the contract
• A set of rules are developed by each country’s law.
The courts consider this while deciding the issue.
This commonly known as ‘conflict of laws’ situation
• Conflicts can be taken care of in advance by
incorporating some specific provisions with respect
to jurisdiction & applicability of law in the sales
Lodging of Claims
Contract should stipulate the number of
days after the goods are delivered to the
Buyer within which any claim relating to the
quality or quantity must be lodged by the
buyer with the seller.
The date of delivery of the goods will be
the one indicated in the transport
In case of deferred payment agreement,
any such claim should not entitle the buyer
Frustration of Contracts/Force Majeure
• Situations can develop beyond the
control of buyer or seller & insurer
• Examples are SRCC, Acts of God,
such as floods, tsunami, fire at
• Such a situation is called
‘Frustration of contracts’ or ‘Force
Frustration of Contracts/Force Majeure contd.
• Incorporation of this clause in the contract
allows the party concerned to terminate
the contract or take other remedial
measures provided for in the contract,
without any penalty
• Notice for invoking the Force Majeure
clause has to be given by the affected party
as per prescribed terms agreed between
Case Study #1
The United States District Court of Tennessee’s case “AMERICAN BOOK
COMPANY v. CONSOLIDATED GROUP OF COMPANIES, INC. and CHRIS HINN”
(2011) provides an illustrative example of how the state of Tennessee’s force
majeure law (defined in the previous section) was interpreted and enforced in a
case regarding the American Book Company’s (Plaintiff) argument that the
Defendant had to pay for delivered goods (books), regardless of the
Defendant’s argument that force majeure required them not to pay for the
In the case, the defendant argued that their defense (to not pay for the books)
was affirmed by force majeure. They submitted that the defense “was
implicated by an act of the United States government when it adopted a
regulation requiring that certain items to be used by children, including books,
be accompanied by a certificate from an independent party that they are free
from lead content”. They argued that the act of government had a direct effect
on the agreement entered into by the parties, and because the Plaintiff did not
deliver the goods with the necessary certificate, the Defendant was not
required to pay for the goods delivered.
The Court ultimately decided that the Defendants’ defense of a government
regulation being a force majeure event was unfounded and failed to meet the
standard of the State law. The Court contended that a government regulation is
not a “force of nature, uncontrolled or uninfluenced by the power of man and
without human intervention.” In addition, the Court said that they “[could not]
comprehend how the alleged government regulation was not anticipated such
that it could support the defense of force majeure.”
Case Study #2
The United States Court of Appeals’ case “TRINH v. CITIBANK, NA” (1988) provides
another perspective on force majeure applicability, but in a civil unrest case. In the case,
Citibank (Defendant) operated a branch bank in Saigon, South Vietnam, in which Trinh
(Plaintiff) had a savings account (with a contracted interest rate). The deposit agreement
governing the account had a force majeure clause that read as follows:
“Citibank does not accept responsibility for any loss or damage suffered or incurred by any
depositor resulting from government orders, laws … or from any other cause beyond its
In April 1975, Saigon’s viability was becoming threatened as the North Vietnamese forces
were closing in on the city. On April 24, 1975, on the eve of Saigon’s fall to the North
Vietnamese, Citibank closed its Saigon branch, and cash from the branch was turned over
to the National Bank of Vietnam. When the Plaintiff realized his interest deposits were
not made to his account, he contacted the home office of Citibank who claimed that they
were no longer responsible for paying interest on the account. Trinh then pursued
recovery charges against Citibank, and Citibank argued a force majeure defense.
The Court ruled that the deposit agreement with Trinh required Citibank to pay ongoing
interest to the account, as the force majeure clause did not relieve Citibank of its liability
on the deposit. The Court reasoned that Citibank’s decision to close its Saigon branch
was a matter of “voluntary choice” – not an act of God, act of government, or a
fortuitous cause beyond its control.
In summary, the Court concluded that Citibank’s home office was liable for deposits placed
in the foreign branch when the branch was “forced” to close in 1975 as a result of the
impending overthrow of Saigon by revolutionary forces.
Case Study #3
Throughout extensive amounts of research, one of the few cases in which the
Court upheld force majeure as an affirmative defense was in the United States
District Court’s case of “RAW MATERIALS INC vs. MANFRED FORBERICH GMBH &
CO” (2004). In the case, Raw Materials Inc. (Plaintiff) sued Forberich (Defendant)
on grounds of contract breach, in that the Defendant did not provide goods
(railroad rails) to the Plaintiff by the deadline expressed in the contract.
The Defendant argued a force majeure defense, asserting that “… its failure to
perform should be excused because it was prevented from shipping the rail by
the fact that the … port unexpectedly froze over …” before the goods could be
shipped. Since in a typical winter, the port does not freeze over until late January,
the Defendant argued that the event could not have been foreseen.
While the contract did not have a specific force majeure clause in it, the parties
agreed that their contract was governed under the Convention on Contracts for
the International Sale of Goods (CISG), which states:
“A party is not liable for failure to perform any of his obligations if he proves that
failure was due to an impediment beyond his control and that he could not
reasonably be expected to have taken the impediment into account at the time of
the conclusion of the contract or to have avoided or overcome its consequences”
The Court ruled that the severity of the winter in 2002 and the early onset of the
freezing of the port were “far from ordinary circumstances”, and thus the
Plaintiff’s request for damages was not entertained.
Methods of Dispute Settlement
• Many causes of dispute
– Most common clause relates to quality
– Other causes could be late shipment, failure
to ship, Refusal to ship because of change in
market conditions, Government regulations
restricting exports after the finalization of
• Two well recognized methods to settle
• Arbitration is particularly popular as a means of
dispute resolution in the commercial sphere.
• It is generally speedier, less formal and a
greater degree of privacy and confidentiality
can be observed and enjoyed by the parties.
• Unlike litigation in open court, arbitrators are,
as a rule, forbidden to disclose any information
whatsoever about arbitral proceedings and/or
results to a third party.
• Unwanted intrusion into the dispute
resolution process is generally avoided
and unnecessary publicity is much less
• In international trade, it is often easier
to enforce an arbitration award in a
foreign country than it is to enforce a
judgment of the court.
The Arbitration Clause
• An arbitral award is a determination on the
merits by an arbitration tribunal in an
arbitration, and is analogous to a judgment
in a court of law.
• Need to be a very non controversial and
acceptable by all parties
• The international arbitration can take place
in the exporter or importer’s country or at
any third neutral country
The Arbitration Clause contd.
Parties should stipulate in the arbitration clause
itself the law governing the contract, the number
of arbitrators and the place and language of the
For example, The ICC recommends that all parties
wishing to make reference to ICC arbitration in
their contracts use the following standard clause
"All disputes arising out of or in connection
with the present contract shall be finally settled
under the Rules of Arbitration of the
International Chamber of Commerce by one or
more arbitrators appointed in accordance with
the said Rules."
Enforcement of Arbitral Award
• The Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, also
known as the New York Convention, was
adopted by a United Nations diplomatic
conference on 10 June 1958 and entered into
force on 7 June 1959.
• The Convention requires courts of contracting
states to give effect to private agreements to
arbitrate and to recognize and enforce arbitration
awards made in other contracting states.
Enforcement of Arbitral Award contd.
• Though other international conventions apply to the cross-border
enforcement of arbitration awards, the New York Convention is
by far the most important.
• As of July 23, 2011 there are 146 signatories which have adopted
the New York Convention. India is a party to the New York
Convention by ratifying it on it on 13th July, 1961.
• For enforceability of foreign award in India, there has to be
further notification by the Central Government declaring that
country to be a territory to which the New York Convention
• About 40 countries have been notified so far by the Indian
government. The USA, UK, France, Germany, Japan and
Singapore are among the countries notified by India.
• Australia and Hong Kong are among the countries which have not
yet been notified.
• Understanding the Incoterms, also called
the terms of sale, is the first step in
responding to a trade lead or starting to
prepare a quote.
• An international rule for pricing terms
which represent different levels of
financial responsibility for the buyer and
seller in an export transaction.
The INCOTERMS establish
–the geographical location where the
buyer becomes responsible for the
–payment of shipping, handling,
insurance, inland freight, etc.
–the point where ownership of the
goods or the title for the goods changes
Organizations Involved in Export and
• The exporters
• The shipping agents at the port or airport of
• The railways(in some cases)in the exporter’s
• The road hauler(in some cases)in the exporter’s
• The port authority
• The shipping company(or sea freight)
• The airline(or air freight)
• The insurance company or brokers
• The exporter’s bank
• The importer’s bank
• The railways(in some cases)in the importer’s
• The road hauler(in some cases)in the importer’s
• The shipping agent at the port or airport of
• The importers
• IEC with DGFT
• Bank account
• Appointment of agents
• Export licenses
• Customs registration
• Registration with export promotion councils
• IPQC– In process quality control
• ISI, AGMARK
• ISO- 9000 & ISO – 14000
• SA- 8000
• Global compact
Customs procedure- export
• Person in charge of conveyance
• Bill of lading
• Export general manifest
• Shipping bill, packing list, ARE etc
• Stuffing/ examination/ sealing
• Self- sealing/ self- certification
• Importance of ICD/CFS
• Customs bonded warehouse
• Green channel for exporters
• New concept of Transaction
Central excise export procedure
• Exports are free of duty
• Bond clearances
• Rebate clearances
• ARE 1
• ARE 2
• Proof of export
• Sealing of container
Export promotion schemes
• Section 65 of customs Act- India.
• Advance authorization / DFIAS
• Export promotion capital goods
• occurs when a manufacturer or
exporter sells directly to an importer
or buyer located in a foreign market
• Export Department
• Export Sales Subsidiary
• Foreign Sales Branch
involves the use of independent middlemen to
market the firm’s products overseas.
• Combination Export Manager (CEM)
• Export Merchants
• Export Broker
• Export Commission House
• Trading Companies
• Piggyback Exporting
Processing export contract
SELECTION OF A PRODUCT:
You should have intimate knowledge about the
product and sources of supply. If you have
varied sources of supply, you will have no
problem in procurement and shipment. But if
you produce the product yourself at effective
cost and exercise quality control, then you can
become a successful exporter within shortest
• OPENING OF AN OFFICE: name, print letterheads,
install phone and fix a signboard on your business
• REGISTRATION FOR EXPORT:
SELECTION OF MARKET
• i. The economic position of the country
• ii. Size of the Market and whether it is
expanding or shrinking.
• iii. Market growth in a given product.
• iv. Unit price of the product. Whether it is
more or less than other countries.
• v. Import regime in the importing country.
• vi. Location of the market etc
QUOTING A PRICE
• What price to charge to remain competitive
• ii. While calculating prices one has to think about
all the cost including, packing, insurance, credit,
agent’s commission, duties, documentation fee,
marking charges, transportation charges, export
• iii. For securing good price one has also to check
up price of the same product abroad. If there is a
good mark up in price in foreign market, one
should not loose sight of it.
• EPB can help you get price information further its
trade offices posted abroad.
SIGNING OF A CONTRACT
• Name of exporter
• ii. Name of importer
• iii. Item of sale
• iv. Unit price
• v. Total quantity
• Terms of delivery (FOB, C&F, CIF etc.)
• Terms of payment
SIGNING OF A CONTRACT
viii. Mode of shipment (Sea, Air, Road)
ix. Currency in which transaction will be
x. Validity period of a contract & delivery
xi. Shipping marks if any.
xii. Arbitration clause.
TERMS OF DELIVERY
When the exporter is making an offer,
he quotes the price of his product. If
the offer is accepted then a contract
is signed between the buyer & the
seller. The contract includes terms
and conditions under which goods are
The buyer sitting in the overseas market
is normally not interested to receive
charge of goods at one's factory site but
he may be interested to get charge of
goods on FOB basis which means free
on Board at airport or seaport. It means
that charges of the consignment are
fully paid up to that point and the rest
of the freight is paid by the buyer.
FINANCING FOR EXPORT
The exporter should accept order, which he can
fulfill easily. He should have the necessary
finances or access to finances for effecting
shipment and the capacity to wait till the sale
proceeds are received. In this connection,
term of payment plays an important role, as it
should be timed to keep you solvent at the
time of need. For export pre-shipment and
post-shipment credits are available from the
Govt. on concessionaire rate. The exporter
can make use of it.
Mechanics of Exporting
• Terms of Shipment and Sale:
– INCOTERMS 2000 (International Commercial
– Terms of Shipment
• Ex-Works (EXW) at the point of origin
• Free Alongside Ship (FAS)
• Free on Board (FOB)
• Cost and Freight (CFR)
• Carriage Paid To (CPT)
• Cost, Insurance and Freight (CIF)
–Confirmed irrevocable letter of credit
–Unconfirmed irrevocable letter of
–Documents Against Payment (D/P)
–Documents Against Acceptance (D/A)
Done through a banker or
the firm’s treasury to
counter foreign risk in
the export transaction
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.
• Advising Bank is usually in the country of the
seller, whose primary function is to authenticate
the letter of credit and advise it to the seller,
Purchase and collection of Export Bills.
• Air Waybill: A no-negotiable instrument of
domestic and international air transport that
functions as a bill of lading, all information
described about domestic and international
• Anti-Dumping Laws: 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.
• 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 licenses can be issued.
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
Banker's Draft: A payment instrument used to
make international payments
Bill of Lading (B/L)
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.
A warehouse authorized by
customs authorities for
storage of goods on which
payment of duties is
deferred until the goods
Cash Against Documents (CAD)
• Payment for goods where a commission
house or other intermediary transfers title
documents to the buyer upon payment in
• Cash in Advance (CIA): 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
Certificate of Acceptance
• 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:
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 Product Origin
• A document required by certain foreign
countries for tariff purpose, certifying the
country of origin of specified goods.
• CHIPS (Clearing House Interbank Payments
System): Financial network through which
banks in the United States conduct their
Clean Bill of Lading
• A receipt for goods issued by a carrier that
indicates that the goods were received in
apparently good order and without damage.
• Clearance: The completion of customs entry
requirements that results in the release of goods
to the importer.
• Collection Order: In a collection, the document in
which the seller instructs the banks as to how the
collection is to be conducted.
• 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.
• Consignment: Delivery of merchandise from an
exporter (the consignor) to an agent (the
consignee) under agreement that the consignee
sells the merchandise of the account of the
consignor, while the consignor retains title to the
goods until the consignee sells them
• Correspondent Bank: A bank that, in its own
country, handles the business of a foreign
• Credit Risk Insurance: Insurance that covers
the risk of non-payment for delivered goods.
• Consular Statement: 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 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
Contingent Claim: 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.
• Cost and Freight(C&F): A pricing term that
indicates that the cost of the goods and
freight charges are included in the quoted
• Cover Note: Insurance document evidencing
that insurance cover for a consignment has
been taken out, but not giving full details
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.
• Cost And Freight (C & F):A pricing term indicating
that the cost of the goods and freight charges are
included in the quoted price.
• Charter Party: Written contract between the
owner of a vessel and a "chartered" who rents
use of the vessel or a part of its freight space.
• Cost and Insurance (C & I):A pricing term
indicating that the cost of the product and
insurance are included in the quoted price.
• Cost, Insurance, Freight: A pricing term
indicating that the cost of the goods, insurance,
and freight are included in the quoted price.
• Dock Receipt: A receipt issued by an ocean
carrier to acknowledge receipt of a shipment at
the carrier's dock or warehouse.
• Dock Statement: A receipt issued by an ocean
carrier to acknowledge the receipt of a
shipment at the carrier's dock or warehouse
• Duty Exemption/scheme Duty Free Import of
Inputs: Allows duty-free import of inputs for exports
under Advance Licence, Duty Entitlement Pass Book
(DEPB) and Duty Free Replenishment Certificate
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
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
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.
Documentary Against Acceptance
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.
Drawback: 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.
• Export Broker: 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 License: A general export license covers
the exportation of goods not restricted under the
terms of a validated export license. No formal
application or written authorization is needed to
ship exports under a general export license
• 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 .
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.
• 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
• Forward Contract: A commitment to
exchange a specified amount of one
currency for a specified amount of another
currency on a specified future date.
• Freight Forwarder: An independent
business that handles export shipment
on behalf of the shipper without vested
interest in the products. A freight
forwarder is a good source of
information and assistance on export
regulations and documentation.