Trade and commerce have existed since ancient times and will continue to exist in the future. Although the trends and processes of doing this work have undergone changes over time, but trade of goods has always been one of the most important human needs and more than anything else, it has undergone many changes and transformations in human history. Therefore, doing this requires having the necessary skills in some areas and issues, one of the most important of which is mastering foreign business terms. Terms that have been the same for all societies and accepted by all countries, merchants and businessmen of the world.

Each of these words has a specific meaning in foreign trade, and mastering them is necessary for all activists in this field, and they are used both in business correspondence and in business negotiations with foreign parties. Therefore, mastering them is one of the obligations of foreign trade, and not mastering them will cause problems for new traders and bring them regret.

Important terms of foreign trade include customs declaration of goods, insurance certificate, declaration of origin, commercial list, proforma invoice, legal weight of goods, commercial profit, bill of lading, manifest, bill of lading, strip and Incoterms.

Customs declaration of goods (World Customs Organization)

This term is related to the time when the importer or exporter intends to export or import his goods and needs clearance. Here, the person must enter his product and its characteristics in the relevant form so that the customs authorities can check it. In fact, the exporter or importer will introduce it in his own language in order to clear the goods. All goods must have a customs declaration to enter or leave the country, and this document is considered a legal requirement for the individual. This means that the responsibility for the declaration and the details included in it will be on the individual.

Insurance Certificate

An insurance certificate is a document that shows that an insurance policy has been issued for the said product. It is usually necessary to insure goods in trade and commerce, and this is done by insurance companies inside or outside the country. Insurance certificate is a document that is usually not transferable.

Declaration of Origin

Declaration of origin is another important foreign trade term. In fact, the declaration of origin is a document in which the origin of the desired product is explained. This document can be a product invoice or any other document. The declaration of origin is written by the person who produced the goods or the person who exports them.

Commercial Invoice

The commercial list is a sheet in which the specifications of the goods are written and will be issued by the seller to the name of the buyer. In fact, based on this document, the cost of the desired item will be charged to the buyer’s account. The business list should contain some important information such as buyer and seller details, product weight, product characteristics, price, payment terms and some other things.

Proforma Invoice

Pre-invoice is one of the most important terms in foreign trade. The pre-invoice is actually considered a preliminary document or agreement, and after the buyer and the seller reach an initial agreement regarding the transaction, the seller issues the pre-invoice in the name of the buyer. By using this pre-invoice, the buyer can make preparations to register the goods order in his country.

Legal weight of goods (Declaration of gross weight)

Legal weight becomes important when the import duties of goods are determined based on their weight. According to the customs law, the legal weight of the goods is equal to the gross weight (weight with the container) from which the weight of the container has been subtracted, and it is usually the case that the weight of the containers is completely specified and determined in the customs. Therefore, they can be easily reduced. The legal weight will be the basis for the payment of duties and customs duties.

Commercial Profit

Commercial interest is an amount that is taken in addition to customs duties and taxes when importing some goods. This work is based on the approval of the Board of Ministers and is mostly done in order to support domestic production. The amount of commercial profit is variable and can change every year. Therefore, it is not a fixed number. In addition, commercial profit is not taken from all goods and is related to some specific goods. Also, commercial profit has nothing to do with export goods.

TIR Carnet

This foreign trade term is related to land transportation of goods. If a product is sent from the destination to the origin by land, it must pass through some other countries on the way. Carne Tir makes the formalities and customs matters related to the countries between the two countries to be removed. This will make the process of trading goods by land very easy.

Manifest

Manifest is another business term that many people confuse with bill of lading. Manifest refers to a collection of different loads carried by a vehicle. No matter who it belongs to. Usually by any vehicle such as ship, train, plane and truck, a set of loads may be carried and not all of them belong to one person. Manifest contains some information such as recipient, sender, product characteristics, shipping document and some other information.

Bill of lading or shipping documents

The bill of lading, also known as shipping documents, refers to a document that is usually issued by the carrier. The bill of lading often contains important information such as the details of the carrier, the details of the recipient, the cost of transport, the type of means of transport, the port of loading and unloading. Having a bill of lading plays a big role in receiving damages from insurance companies. Bills of lading are issued in different types, including sea, air, rail, truck and other bills of lading.

strip

Striping is an operation in which the desired goods are loaded and transferred to a truck or vehicle after reaching the destination, which is actually the unloading operation. The owner of the goods or his representative must be present in the strip along with the transfer list. Unloading operations are usually done by forklifts through workers. .

Staffing

Stuffing is another important foreign trade term and it is an operation in which the desired product is transferred from the truck to the container. Staffing will usually be a photo strip.

Incoterms

The discussion of Incoterms is one of the main and most important topics in foreign trade terms. This term is a combination of three Latin words (International Commercial Terms) which means international commercial terms.

A product goes through various stages from the beginning of production to reaching the hands of the buyer and it may reach the hands of the buyer in different ways. Incoterms terms are international and include different modes of delivery of goods from the producer to the buyer. In each of these situations, it includes responsibilities and costs for the parties.

In different cases of goods delivery, both buyer and seller may assume different responsibilities and costs. Incoterms has considered different words and terms for each of these situations. The International Chamber of Commerce is responsible for developing Incoterms and reviews it every ten years. Currently, its latest version is Incoterms 2020, which has been newly compiled. This version has undergone changes compared to the 2010 version.

In fact, in Incoterms, how to deliver the goods from the manufacturer or exporter to the buyer and how to deliver from the factory door to the buyer’s desired location, and in the commercial contract and related documents, how to deliver the goods is fully described. Therefore, with this work, any personal interpretation and analysis is replaced and both parties can refer to a single document.

Important terms of foreign trade