Glossary of terms

Glossary of terms

For your convenience , a short glossary of commonly used terms.

Sales bill- This is a sales bill or a purchase bill of goods. On the basis of this bill the import tax bill is calculated

Goods- Merchandise for import or export

Transit- Merchandise that is transferred to its destination through a third country

IATA- International Air Transport Association

Declaration- A sheet of paper which comprises all lists of merchandise on a ship or on a plane. The list comprises the names of the senders and the receivers of the merchandise, and the entire contents of the merchandise.

Purchase Tax- A tax levied on imported merchandise and on merchandise manufactured within the country. This tax is only levied on certain kinds of merchandise.

VAT- A tax levied on the added value of the goods. On every phase of the improvement of goods process there is a tax. The tax is levied on imported goods and on goods manufactured domestically. Goods, such as fresh produce is not liable to tax.

Business code- A code which is given to all imported goods at the time of their arrival to the port.

Brussels Terminology- Terminology and categorization of all merchandise as they are defined in Brussels, which is the capital of the European market.

Licensing warehouse- Or bonded warehouse, is the warehouse the customs department, where merchandise is stored before the payment of import tax. These warehouses are usually privately owned.

Sender- Works in the global freight business. The sender accumulates unifies shipments and sends them to their destination, whether it be by sea or by air.

Freight terminal- A terminal which is supposed to receive cargo for import or export. These terminals are mostly privately owned by companies. The terminal is under the supervision of customs.

Storekeeping- The payment for the time of storage of the merchandise. The payment is for the days that go beyond the days of exemption, that are pre-defined.

Container- This is a big container for merchandise at sea or in the air. The containers have pre-set measurements and are designed for shipping, both in ships and in airplanes. The sea-born containers are also suitable for shipping in trucks. There are refrigerated containers, containers that have an open top and containers in with surplus capacity and containers for special needs.

Classification of goods

Every piece of merchandise has its own number, the attachment of a number to a piece of merchandise is called classification. The classification is a special expertise which customs brokers and customs officials are proficient in, even though they don’t always agree on it, as the classification determines the level of taxation.

Portage- A payment made for portage, the demounting of the ship and the loading of the truck.

Customs agent- or a customs broker. This is a free profession where you represent importers and exporters towards customs. The customs broker is licensed, and he acquired this license after having undergone tests within a certain time period. The customs broekr is supposed to represent the customs department towards the importer as well as representing the importer towards the customs department, and it is all according to the laws pertaining to customs.

The Customs Directive- The collection of laws which the customs worker works under

Customs item- An item in the customs fee according to which the merchandise is defined, the import tax is levied and the legality of the import is determined.

Licensing official- A customs brokerage official that underwent tests and was found to be fit for work towards customs officials

Customs Deposit- A sum of money which is deposited with the customs department until a piece of evidence can be found, which is deemed to be missing at the clearing of the merchandise

Customs Injunction- An injunction of the Minister of the Treasury, on the basis of the Customs Directive, designed to execute the laws of customs. The customs fee is an injunction by the Minister of the Treasury.

Free Customs Injunction- This is an injunction of the Minister of Economy, which enables the import of merchandise to Israel, without the need for import licenses. The injunction also specifies which conditions pertain to import.

Customs license- This is a personal tax assessment for the sake of paying import tax.

Importing license- This is a license which needs to be acquired before importing merchandise. There is merchandise which necessitates an importing license.

Customs fee- A customs fee for importing taxation on imported merchandise.

Certificate of Origin- A necessary certificate for receiving customs discounts which have trade treaties with Israel

The standard does not apply- An certificates of approval of the Israeli Standards Institute of certain merchandise that do not have any applicable patents and that are fit to be cleared from customs.
EXW = EX WORKS 
Sale on the gate of the factory

FCA = FREE CARRIER 

The delivery of goods takes place when they are transferred to a shipper in a certain location, for example FREE CARRIER MUNCHEN.

FAS = FREE ALONGSIDE SHIP
The delivery of goods takes place after the execution of the customs procedure in export, on the platform of the port of export.

FOB=FREE ON BOARD
The delivery of goods takes place after the loading of the ship at the port of export.

CFR= COST AND FREIGHT
The seller is responsible for the costs of shipping by sea, until the arrival of the merchandise at the port of destination, as agreed upon between the parties. This does not include expenses pertaining to demounting and clearing the goods.

CIF=COST INSURANCE &FREIGHT
The sale of goods includes expenses on shipping by sea, and insurance coverage until arrival at the port of destination.

CPT=CARRIAGE PAID TO 

The seller is responsible for the costs of shipping by sea, air or land, until the agreed upon point of delivery at the port of destination.

DAF=DELIVERED AT FRONTIER

The delivery of goods to at an agreed upon point on the border

DES=DELIVERED EX SHIP

The delivery of goods unto the deck of a ship in the port

DEQ= DELIVERED EX QUAY 

The delivery of goods on the platform at the port of destination.
DDU=DELIVERED DUTY UNPAID 

The delivery of goods to the land of destination, not including payments to customs or taxes at the port of destination.

DDP= DELIVERED DUTY PAID

The delivery of goods to the land of destination, not including payments to customs or taxes at the port of destination.

Common terms and abbreviations

CLEAN BILL OF LADING

The declaration of the shipper on the bill of lading that ensures that the goods were received in a proper and complete shape externally.

LCL=LESS CONTAINER LOAD

The shipper receives the goods from the seller, transfers them for the sake of unifying to the warehouse, the cargo is then delivered to the port of destination after having emptied the container and clearing it in customs.

FCL=FULL CONTAINER LOAD

The shipper receives the contained goods from the seller in a closed container, whereby the container is then delivered to the receiver in the port of destination, after having settled the customs payments.


BAF 

Levies on gas, an addition to the costs of shipping, and is calculated according to tons or cubic meter.

Congestion 

Levies on congestion

W/R 

Levies issued by a state of war, and is calculated according to tons or cubic meters.

ETA
Estimate time for arrival

ETD
Estimate time for Departure

ETA
Estimate time for arrival

RFS
Received for shipping

OVER HIGHT
Cargo which is too high

TEU

A unit which is equivalent to the capacity of a container (40″/20″)

B/L

Bill of lading

FB/L

A sender’s bill of lading

AWB

Air way bill

1:6 RATIO

A customary ratio of capacity and weight in air freight

C/O

An American certificate of origin which enables tax exemption

EUR-1

A certificate of origin for the common market, EFTA, , which enables tax exemption

IATA

International Air Transport Association

DEMMURAGE

Charges paid due to postponing the possession of a container

TRANSHIPMENT
Transhipment

DANGEROUS GOODS
Cargo which is defined as dangerous.

Incoterms

Commercial terms

Commercial terminology

EXW – Ex Works (named place of delivery…)

In using this term the seller terminates his responsibilities in a business deal upon placing the goods at the point where one usually issue goods in the factory/warehouse of the seller, in the country of export. The delivery of the goods does not include the procedure of customs clearing for export, and does not include loading the goods on the vehicle which collects them. The insurance, responsibility for expenses and other things is transferred from seller to buyer, with the placement of the goods, within the agreed upon time, in the warehouse of the seller. One can use this term in all different kinds of international shipping. In a sale under the EXW terms the expenses and the responsibility of the seller are minimal.

FCA – Free Carrier (named place of delivery…)

In using this term the seller terminates his responsibilities upon delivering the goods to the possession of an international shipper (pre-defined by the buyer) in the country of export after having completed the customs procedures of export. One can use this term in all different kinds of international shipping.

FAS – Free Alongside Ship (named port of shipment…)

In using this term the seller terminates his responsibilities upon delivering the goods, after having completed the customs procedures of export and placing the goods on the platform of the port of country of export. From this platform the goods will be loaded onto the deck of a ship. One can only use this term in shipping by sea.

FOB – Free on Board (named port of shipment…)

Counts as one of the most famous Incoterms. The seller terminates his responsibilities upon transferring the goods to the railing of the ship in the port of departure. One can only use this term in shipping by sea when the two parties agree that the delivery of the goods to the buyer will take place beyond the railing of the ship in the port of departure. .

CFR – Cost and Freight (named port of shipment…)

In using this term the seller pays for the shipping of the goods to the port of arrival, which has been agreed upon between the parties, without clearing them from customs, in the port of arrival. One can only use this term in shipping by sea when the two parties agree that the delivery of the goods to the buyer will take place beyond the railing of the ship in the port of departure.

CIF – Cost, Insurance and Freight (named place of destination…)

This term is very similar to the previous one, the CRF. But in using this term the seller has another commitment and this is paying for insurance at sea, as against the risk that the buyer will suffer injuries as a consequence of the cargo’s disappearance or damages to it while shipping at sea. Usually this is only minimal insurance coverage and should the buyer be interested in additional coverage, he has to inform he seller of this. This terms is also only for use in shipping by sea, when the two parties agree that the delivery of the goods to the buyer will take place beyond the railing of the ship in the port of departure.

CPT – Carriage paid to (named place of destination…)

This term is similar to CFR but the insurance is not transferred from seller to buyer with the goods passing the side of the ship in the port of departure but rather with their transferal to the possession of an international shipper (pre-defined by the seller who’s paying for the shipping). The seller should pay for the shipping of the goods by sea/air/land and/or a combination of these until an agreed upon point of delivery in the country of destination, before the goods have been cleared from customs. One can use this term in all different kinds of international shipping.

CIP – Carriage and Insurance Paid to (named place of destination…)

The term CIP is very similar to the term CPT, but in using the term the seller has an additional commitment and that is paying for insurance at sea, as against the risk that the buyer will suffer damages as a consequence of the cargo’s disappearance or damages to it during international shipping. Usually this is only minimal insurance coverage and should the buyer be interested in additional coverage, he has to inform he seller of this. One can use this term in all different kinds of international shipping.

DAT – Delivered at Terminal (named terminal at port or place of destination…)

This is a new term in commercial terms that has been in effect since January 2011. This term underscores the fact that the seller fulfilled all his commitments when he placed the cargo to the use of the buyer in an agreed upon port (including warehouses under the supervision of customs, sea ports and train stations). After having demounted the shipping containers the customs import tax shall be paid by the buyer. The responsibility for security is upon the seller until the delivery of the cargo to the agreed upon point of destination.

DAP – Delivered at Place (named place of destination…)

This is a new term in commercial terms and underscores the fact that the seller fulfilled all his commitments when he placed the cargo to the use of the buyer upon the means of shipping (without demounting) in an agreed upon destination. The import taxes shall be paid by the seller while the responsibility for security is upon the seller until the delivery of the cargo to the agreed upon point of destination.

DDP – Delivered Duty Paid (named place of destination…)

In using this term the seller fulfilled all his commitments when he delivered the goods, to the buyer at the agreed upon point of delivery in the country of destination. This includes paying customs and/or taxes, not including payment for demounting the shipment containers at the house of the buyer. The seller has the responsibility for clearing the imported goods, on his own expense, from customs. This term can be used for all kinds of shipping.

These are a few commercial terms that have been annulled and are no longer in effect:

DAF – Delivered At Frontier (named place of delivery)

DES – Delivered Ex Ship (named port of delivery)

DEQ – Delivered Ex Quay (named port of delivery)

DDU – Delivered Duty Unpaid (named place of destination)