Export and Import Terminology - E - L

E

EFTA: European Free Trade Association. Members are Iceland, Norway, Liechtenstein and Switzerland.

Eurodollars: US dollars deposited in Europe.

Export Cargo Shipping Instruction (ECSI): issued by exporters to the freight forwarder or carrier, telling them what the goods are, the terms and conditions for movement of the goods and cost allocation.

Export Credits Guarantee Department (ECGD): the UK Government's official export credit agency. It helps UK manufacturers and investors trade overseas by providing them with insurance and backing for finance to protect against non-payment.

Export invoice: part of the documentation needed if you ship your goods abroad. It should contain a full description of your goods, their price, weight and country of origin.

Export house: intermediary organisation between an exporter and a buyer.

Export licence: government document legally required for the export of certain goods such as pharmaceuticals, chemicals and munitions. It's the exporter's responsibility to obtain a licence if necessary.

Export packing list: this is attached to the outside of the package to be shipped and specifies the weight, volume and type of cargo.

Export preferences: preferential rates of duty charged on certain goods exported from the your country, in effect allowing the buyer to benefit from a lower or zero rate of Customs duty.

EXW: ex work. This is an Incoterm (see Incoterms). The seller makes the goods available to the buyer at their own premises or another named place. The buyer assumes all the costs and risks of clearing the goods for export and loading and transporting the goods.

F

FAS: free alongside ship. This is an Incoterm (see Incoterms). The seller clears the goods for export. Delivery takes place when the goods are placed alongside the relevant ship at a named port. From this point the buyer bears all costs and risks.

FCA: free carrier. This is an Incoterm (see Incoterms). The seller is responsible for clearing the goods for export and delivering them to a specified place. This could be the seller's premises or those of a carrier or freight forwarder. The place of delivery determines who is responsible for loading or unloading the goods. Once the goods are delivered the buyer bears all costs and risks.

FOB: free on board. This is an Incoterm (see Incoterms). The seller clears the goods for export and delivers when the goods are passed over the ship's rail at the specified port. From this point on the buyer bears all costs and risks.

Foreign and Commonwealth Office (FCO): government department responsible for foreign affairs in UK.

Foreign-currency accounts: it may be more convenient for you to set up foreign-currency bank accounts if you frequently issue foreign-currency invoices. In particular, a euro bank account gives you flexibility in trading with businesses in eurozone countries.

Foreign-exchange risk: you're particularly at risk if you hold or receive a foreign currency which is volatile or very weak. Some currencies present extra difficulties - for example, there may be exchange controls requiring government approval before you can exchange a particular currency.

Forwarding agent: most smaller importers use a forwarding agent to handle customs clearance for goods.

Forward foreign exchange contract: exporters can hedge against the risk of adverse exchange rate movements by using a forward foreign exchange contract. You agree to sell the bank a particular foreign currency at a fixed future date for a price that is set now.

Free circulation: goods are in free circulation in the EU if they originate from an EU country or have already been imported, all customs charges paid, into an EU country.

Free trade zone: port designated by a country's government for duty-free entry of non-prohibited goods.

Freight forwarder: if you want to send goods overseas you'll normally need the services of a freight forwarder. The forwarder quotes for freight costs and other charges, prepares most of the freighting and customs documents, arranges marine insurance and attends to other freighting details.

G

Groupage: this allows exporters of small consignments to gain the benefits of containerisation. A freight forwarder undertakes to group together different exporters' consignments to fill a whole container for a particular destination.

H

HM Revenue & Customs (HMRC): UK government department with responsibility for collecting VAT and other taxes and customs duties. It's also charged with preventing illegal imports of drugs, alcohol and tobacco smuggling and VAT and duties fraud.

I

Import licence: some countries may require import licences for certain or all goods. As an exporter it's normally your customer's responsibility to comply with import procedures, but it's a good idea to check they're doing so.

Import paperwork: goods in free circulation within the EU generally require minimal documentation. But if your imports exceed £225,000 you must provide Intrastat (see Intrastat) declarations to HMRC for statistical purposes. And some goods need special documentation.

Goods imported from outside the EU require a range of import documentation and may also need an import licence.

Incoterms (International Commercial Terms): agreed rules which set out the delivery terms for goods which are traded internationally.

They allow the buyer and seller to agree responsibilities for the carriage of the goods, customs clearance and a division of costs and risks. The current version of Incoterms, agreed in 2000, contains 13 terms. They are grouped into categories covering various modes of transport.

Inspection certificate: sometimes required by the importer's country to confirm that the shipped goods meet its national specifications.

Insurance policy: should cover goods for at least their full value (110 per cent is common), and include details of quantity and route. Where necessary, it should also provide for time extensions and transhipments.

Intrastat: system for collecting statistics on the physical trade in goods (ie the actual movement of goods) between the member states of the European Union (EU). Businesses which import or export goods worth more than a fixed threshold must complete Intrastat supplementary declarations.

Inward processing relief (IPR): if you intend to re-export goods you've imported after processing them, you can apply for inward processing relief. This means VAT and duty only become payable if you decide to sell your goods in the UK or if you fail to meet the conditions of the scheme.

L

Letter of credit: banking mechanism that allows importers to offer secure terms to exporters. (See Documentary credits).

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