Glossary of International Trade Terms

Click on the alphabet group
A-C   |  D-F  | G-L  | M-R  | S-Z

- G -

G-7(Group of Seven): Seven industrial countries - the US, Japan, Germany, France, The United Kingdom, Italy and Canada - whose leaders have met at annual economic summits since 1975 to coordinate economic policies.

GATT: The Generalized Agreement on tariffs and Trade, a multilateral treaty designed to help reduce trade barriers between the signatory countries and to promote trade through tariff concessions.

General export license: A type of export license for which individually validated export licenses are not required.  No individual authorization is needed to ship exports under a general export license.

Generalized System of Preferences (GSP): A. U.S. program that grants duty-free treatment, on a product-by-product basis, to developing countries.  This program is intended to help developing nations start selling to U.S. markets.

Gross Domestic Product (GDP) - A measure of the market value of goods and services produced by a nation.  Unlike Gross National Product, GDP excludes profits made by U.S. firms overseas, as well as the share of reinvested earning in U.S. firms' foreign-based operations.

Gross weight: The total weight of a shipment, including goods and packing.

Guideline Lease: A lease written under criteria established by the IRS to determine the availability of tax benefits to the lessor.

- H -

Harmonized Systems:  A globally developed schedule of tariff nomenclature arranged in six-digit codes so that all participating countries can classify traded goods on a common basis.  Beyond the six digit level, countries are free to introduce national distinctions for tariff and statistical purposes.  The U.S. adaptation of this system is the Harmonized Tariff Scheduled of the United States.

- I -

Import Licenses:  Licenses required by some countries to bring in a foreign-made good.  In many cases, import licenses are also used by the issuing country to control the quantity of imported items.

Incoterms: International commercial terms used nearly universally in letters of credit, international contracts and other documents.  These include who pays for carriage, loading, unloading, insurance, duties etc. The common Incoterms are  CIF, FOB, CFR, and Ex Works.  They are compiled and published by the International chamber of Commerce (212.206.1150).

Indeminity Clause:  A clause in which the one party indemnifies the other.  In leasing, generally a clause whereby the lessee indemnifies the lessor from loss of tax benefits.

Indenture of Trust: (Indenture) An agreement between the owner trustee and the indenture trustee: The owner trustee mortgages the equipment and assigns the lease and rental payments under the lease as security for amounts due to the lenders. Same as a security agreement or mortgage.

Inland bill of lading: A bill of lading used in transporting good overland to the exporter's international carrier. 

Institute Cargo Clauses: Standard conditions of insurance cover for goods, established by the Institute of London Underwriters.  This is also referred to as clauses A, B and C.

Insurance certificate:Document giving details of insurance cover for a consignment.
The certificate will cross-reference a master insurance policy and must be

Insurance cover note:- Insurance document evidencing that insurance cover for a consignment has been taken out, but not giving full details.

Insurance policy: Document setting out full details of insurance in force.  A policy MAY refer to a single consignment and be sent with the other commercial documents. More commonly there is an open policy for all the shipper's consignments. For each consignment an insurance certificate is issued, cross-referencing the policy.

Intellectual Property: Intangible items protected by patents, trademarks and copyrights, such as creative works and inventions.  There are international organizations that deal solely with intellectual property, and increased protection of intellectual property, and increased protection of intellectual properly rights is an issue of discussion in GATT, WTO and other talks.

Intermodal:The use of two or more modes of transportation to complete a cargo move; truck/rail/ship, or truck/air, for example.

International Chamber of Commerce: International non-governmental body concerned with promotion of trade and harmonisation of trading practice. Responsible for drafting and publishing:

Inward collection: How a Collecting or Presenting bank will refer to a collection.
The collection that has been received from an overseas bank or exporter for
presentation to a buyer in this country for payment.

Inward letter of credit: How an Advising or Confirming bank will refer to a letter of credit.  A letter of credit issued by an overseas bank for advice to a seller in this

Irrevocable Letter of Credit: A letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee.  The opposite of a revocable letter of credit, which can be canceled or altered by the drawee, or buyer, after it has been issued by the drawee's bank. Under UCP 500 all credits are irrevocable unless explicitly
stated to be revocable.

Issuing bank: Bank giving the primary payment undertaking for a letter of credit, acting on
behalf of a buyer.

- J -

Joint venture: An international business collaboration between foreign interests and private parties from the host country, in which two or more parties establish a new business enterprise to which each contributes and in which ownership and control are shared.

- L -

Lease: A contract in which one party conveys the use of an asset to another party for a specific period of time at a predetermined rate.

Lease Rate: (Rental Payment) The periodic rental payment to a lessor for the use of assets. Others may define lease rate as the implicit interest rate in minimum lease payments.

Lessee: The person gaining use of the property or equipment being leased.

Lessor: The party to a lease agreement who has legal or tax title to the equipment, grants the lessee the right to use the equipment for the lease term, and is entitled to the rentals.

Latest shipment date:  Date on a letter of credit by which the goods must have been shipped.  When the Letter of Credit is presented, this date will be checked against the date on the transport document.

Letter of Credit: A document issued by a bank per instructions from a buyer of goods, authorizing the seller to draw a specified amount of money under specified terms, usually the receipt by the bank of certain documents with a given time.

Leveraged Lease: In this type of lease, the lessor provides an equity portion (usually 20 to 40 percent) of the equipment cost and lenders provide the balance on a nonrecourse debt basis. The lessor receives the tax benefits of ownership.

Licensing: A business arrangement in which the manufacturer of a product (or a firm controlling a technology or product) grants permission to some other group, individual or corporation to manufacture that product in return for specified royalties or payments.

Local Content:  The percentage of a good that is made locally.


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