International Trade Finance Terms from TEFO - B

B

Back Haul

The return of a carrier to the original point or area from which its journey began. If a carrier can obtain cargo to carry on the back haul route, that cargo may often obtain a favorable freight rate because otherwise the carrier would have to return empty.

Back Order

That portion of an order that cannot be delivered at the scheduled time, but will be delivered at a later date when available.

Bad Faith

The intent to mislead or deceive. It does not include misleading by an honest, inadvertent or uncalled-for misstatement.

Bagged Cargo

Goods shipped in sacks.

Bailment

A delivery of goods or personal property by one person (the bailor) to another (the bailee) on an express or implied contract for a particular purpose related to the goods while in possession of the bailee, who has a duty to redeliver them to the bailor.

Balance Of Payments

A statement summarizing all the economic and financial transactions between companies, banks, private households and public authorities of one nation with those of the other nations of the world over a specific time period. It includes merchandise trade payments, payments and receipts on account of shipping services, tourist services, financial services, government expenditures, short and long term capital movements, interest and dividends, gold movements, etc.

Balance of Trade

The difference in value between a country's total imports and exports over a specific time period.

Balanced Economy

A condition of national finances in which imports and exports are equal.

Bale

A large bundle or package of compressed and bound goods, usually with an outer covering, often of burlap.

Bale Cargo

Cargo shipped in bales.

Ballast

Heavy material or water placed in the lower holds of a ship or in strategically placed tanks along the sides to improve its stability.

Bank Acceptance

A draft drawn on and accepted by a bank.

Bank Delivery Order to an Airline

A letter addressed to an air carrier from a bank who is shown as consignee on an airwaybill instructing the carrier to release a shipment. Often airlines will accept as a delivery order a bank's endorsement on the airwaybill, although an airwaybill is a non-negotiable document.

Bank Draft

A form of check drawn by a bank against its account in another bank.

Bank Guarantee

An indemnity letter in which the bank commits itself to pay a certain sum if a third party fails to perform or if any other form of default occurs. One use is when a bank wants a carrier to release a shipment which it has financed but the original bills of lading are not yet available for surrender to the carrier.

Bank Holding Company

(USA) Any company which directly controls, with power to vote, more than five percent of voting shares of two or more banks (as defined by the Bank Holding Company Act .

Bank Holiday

A day on which banks are closed.

Bank Note

A promissory note having the appearance of currency, issued by a bank or banker authorized to do so, payable to bearer on demand, and intended to circulate as money.

Bank Release

A document issued by a bank who is the consignee of a shipment authorizing a carrier to deliver a shipment.

Banker's Bank

A bank that is established by mutual consent by independent and unaffiliated banks to provide a clearinghouse for financial transactions.

Banker's Draft

A draft payable on demand and drawn by, or on behalf of, a bank upon itself or upon another bank, sometimes a foreign bank, where it maintains an account or a relationship.

Bankers Acceptance

A draft calling for payment at a future date on which the drawee is a bank, and the bank has agreed to pay by signing "accepted" on the draft.

Bankruptcy

The condition of a legal entity that does not have the financial means to pay their incurred debts as they come due. In the U.S. this status is established through legal procedures involving a petition by the bankrupt or by its creditors.

Bareboat Charter

The charter of a vessel where the charter party has the right to use his own master and crew on the vessel. Pays all operating expenses.

Barge

A flat bottomed cargo vessel primarily used on rivers and canals. Usually it is towed or pushed but it may be self-propelled.

Barratry

1. In maritime law the intentional misconduct of the ship's master or crew; includes theft, intentional casting away of vessel, or breach of trust.
2. The offense of frequently stirring up quarrels and suits, either at law or otherwise.

Barter

Trade of goods or services without the use of money.

Basing Point

A location which is used to set the selling price of goods and the freight rates to all points. A price is set at a given location chosen as the ex-factory basing point with freight to the place of delivery added to create a delivered price. Then like goods, wherever they may be sold from, are charged freight to their destination as if they were shipped from the same location (the basing point).

Basing Rate

A freight rate which is used for the sole purpose of determining other freight rates. For an explanation of how this works, see 'Basing Point'.

Basket of Currencies

A composite unit consisting of weighted amounts of the currencies of a group of designated nations.

Battens

1.The protruding fixtures on the inside walls of a vessel's hold which are used to keep the cargo away or to fasten it in place.
2. Similar structural parts to the above in truck bodies, containers and rail cars.

Bearer

The person in possession of a negotiable instrument, document of title, or security marked "payable to bearer", or the person in possession of one of these documents endorsed in blank.

Beggar-Thy-Neighbor Policy

A course of action through which a country tries to reduce unemployment and increase domestic output by raising tariffs and instituting non-tariff barriers that impede imports, and thus improve its own position at the expense of its trading partners.

Belly Pits or Holds

Compartments beneath the cabin of an aircraft used for the transport of cargo or baggage.

Beneficiary

1. In the case of a letter of credit, the individual or company who is entitled to draw or demand payment under its terms.
2. In the case of insurance, the person entitled to take the proceeds.
3. The person for whose benefit a contract, or trust, or will is executed or enforced.

Berth

The place beside a docking area where a ship is secured and cargo can be loaded or unloaded.

Bid Bond

A type of indemnity bond. A surety guarantee often required to be established by a bidder to guarantee fulfillment of his offer if accepted.

Bilateral Investment Treaty

A treaty between two countries with the goal of ensuring that investments made by either of them in the other receive treatment equal to that afforded their domestic entities or any third country entities.

Bilateral Trade

The commerce between two countries.

Bill

1. A "Bill of Exchange" or "Draft" (same thing).
2. A written statement of contract terms.3 .The word "Bill" has many other international trade connotations - "Invoice" etc.

Bill of Credit

A written authority from one person to another, empowering the recipient of the document to receive money from the correspondents of the issuer abroad . (The usual issuer is a bank)

Bill of Exchange

Draft or Bill.

Bill of Health

An official certificate (Pratique) issued by the authorities upon the departure of a vessel or airplane showing the state of health at the place of departure, and of the passengers and crew.

Bill of Lading

A document issued by a carrier which is evidence of receipt of the goods, and is a contract of carriage. It describes the goods, the details of the intended voyage, and it specifies the conditions of transportation. If issued in negotiable form, i.e. "to order", it becomes documentary evidence of title to the goods.

Bill of Sale

A written document by which a party legally transfers ownership of goods to another party.

Bill-To Party

The party designated on purchase order, invoice, or bill of lading as the one to whom the bill should be sent for payment.

Billed Weight

The designated weight shown on the freight bill which is used to calculate the freight charges.

Billing Third Party

The transference of transportation charges to a party other than the shipper or consignee.

Biological Agents

A complex substance of organic origin which can treat or cause disease.

Black Market

Buying or selling of products that violate government restrictions.

Blanket Rate

In insurance, a rate of premium applied across the board when there is more than one kind of property which is the subject of insurance.

Blockade

Prevention of commercial exchange by physically preventing carriers from entering a port or nation.

Bona Fide

In or with good faith, honesty, and sincerity.

Bond

1. A written undertaking to perform or refrain from performing specified acts, usually guaranteed by a third party.
2. A security evidencing debt, specifying the date payment is due and usually specifying a rate of interest and its dates of periodic payment.

Bond of Indemnity

A bond to indemnify and save harmless the party to whom the bond is issued against some anticipated loss.

Bond System

(USA) An automated electronic system, part of the Automated Customs System, whose purpose is to control and track indemnity bonds issued to Customs to secure compliance with various laws.

Bonded

(USA) This term refers to goods which are held, stored or transported under circumstances where applicable duty or taxes have not yet been definitely determined or paid, and admissibility has not yet been arranged. Bonds must be posted by those who are responsible for the goods during this period (the carriers, warehouses, and/or importers) to indemnify the government if the goods are released improperly.

Bonded Terminal

(USA) A terminal approved by Customs for temporary storage of imported goods until Customs duties are paid or goods released. Bonds must be posted by the terminal operator to indemnify the government if the goods are released improperly.

Bonded Warehouse

(USA) An approved private warehouse used for the storage of goods until duties or taxes are paid and the goods are properly released by Customs. Bonds must be posted by the warehouse proprietor and by the importer to indemnify the government if the goods are released improperly.

Booking

The making of arrangements for a shipment with the representatives of a vessel or airline.

Bounties

A compensation paid to persons to induce certain actions. In this class are government payments to producers or exporters to strengthen their competitive position.

Box

1. Term referring to a trailer, semi-trailer, or container used in transportation.
2. A type of package of wood, cardboard, metal, plastic or other material.

Box Car

A closed railroad freight car.

Boycott

A concerted refusal to deal commercially with a person, firm, or country.

Breakage

1. A monetary allowance that a manufacturer allots for compensation to a buyer for breakage to goods (usually fragile) while in shipment.
2. A fractional amount due either party in a transaction, for example in computing interest.
3. In marine insurance, "breakage" refers to breakage of fragile goods such as glass and china.

Breakbulk

1. A breakbulk ship is one which transports cargo which is packed in cases, bales, cartons, drums, carboys etc., and this cargo is carried in the ship's cargo holds rather than in containers (although some loaded containers may be carried).
2. 'to breakbulk' is to unload packaged cargo from a 'breakbulk ship' or from a container and to distribute it.

Breakbulk Cargo

Cargo that is shipped in packing units such as cartons, cases, crates, bales, or drums, but not containerized.

Broker

One that acts as an agent for others, as in negotiating contracts, purchases, or sales in return for a fee or commission.

Bulk Cargo

Cargo that is made up of an unpacked commodity; examples include grain, oil, and ore.

Bulk Carrier

A vessel designed for the shipment of bulk cargo.

Bulk Freight

Cargo not in packages or containers.

Bulk Sale

The transfer or sale of substantially all of an inventory of an enterprise in a single transaction not in the usual course of business.

Bulk Solids

Dry cargo shipped loose, such as grain, ore, etc.

Bunker Adjustment Factor

An adjustment in shipping charges to offset price fluctuations in the cost of bunker fuel.

Bunker Fuel

The fuel used to power a ship.

Bunker(s)

1. A compartment (hold) of a ship for storage of fuel.
2. The fuel for a vessel

Bureau Of Alcohol, Tobacco And Firearms

The Bureau of Alcohol, Tobacco and Firearms (ATF) is a law enforcement organization within the United States Department of Treasury with unique responsibilities dedicated to reducing violent crime, collecting revenue, and protecting the public. ATF enforces the Federal laws and regulations relating to alcohol, tobacco, firearms, explosives and arson by working directly and in cooperation with others.

Bureau of Industry and Security

A U.S. government agency responsible for control of exports for reasons of national security, foreign policy and short supply.

Buy American Acts

U.S. federal and state government statutes that give a preference in government contracts to U.S. produced goods.