International Trade Finance Terms from TEFO - F

F

Facilitation

1. Programs designed to expedite the flow of international commerce.
2. The act of freeing more or less completely from obstruction or hindrance.

Factor

1. An agent who receives merchandise under consignment or under a bailment contract, who sells it for the principal or in the factor's own name, and who is paid a commission for each sale.
2. A financing company which purchases accounts receivable under agreed conditions and at agreed discounts and thus makes funds immediately available to approved sellers.

Factor's Lien

The right of a factor to retain possession of designated assets of the principal until the factor receives full compensation from the principal.

Factorage

The commission or other compensation paid to a factor.

Fair Value

(USA) In dumping evaluations, it is the price at which the items being reviewed should have been sold in the home market in order to be considered as goods offered for export in the usual course of trade at fair market value and not guilty of being dumped.

FAS (Free Alongside Ship...named port of shipment)

The seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. The buyer has to bear all costs and risks of loss or of damage to the goods from that moment.

FCA (Free Carrier...named place)

The seller fulfils his obligation to deliver when he has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point.

FDA

Food And Drug Administration.

Federal Reserve System

(USA) The equivalent of the central bank of the USA and the coordinator of monetary policy.

Feeder Vessel

A vessel which is part of a cargo network in which the larger, faster vessels only call at the major ports at both ends of the area being covered, and the smaller ports are served by the smaller feeder vessels which transfer the cargo to and from the major port terminals and thus keep the larger vessels filled closer to capacity and spare them the expense and loss of time in loading and unloading in the subsidiary ports.

FEU

Forty foot equivalent units of shipping containers. (Two 20 ft containers = 1 FEU).

Financial Instrument

A document which has a monetary value or is evidence of a monetary transaction, such as drafts, bills of exchange, checks and promissory notes.

Financial Market

Market for the exchange of capital and credit in an economy.

First World Countries

"Western, industrialized, non-communist countries," was the previously accepted criteria, but in view of the emergence of Japan as an economic power and the rising status of Russia and China, "industrialized" is probably the only remaining valid criterium for a "First World Country" at this time.

Five Dragons

Term used to describe the emerging economies of Hong Kong, Singapore, South Korea, Taiwan, and Thailand.

Fixed Charges

1. Charges which do not increase or decrease with a change in volume.
2. Expenses that have to be borne whether any business is done or not.

Fixed Exchange

1. When Governments or their Central Banks administratively set the exchange rate for their currency.
2. An administratively set exchange rate where no rate fluctuations are permitted.

Fixing

The setting of a price by a known method at regular times. For example, the establishment of an official exchange rate, interest rate, or security or commodity price.

Flag

A reference to the country of registry of a vessel.

Flag of Convenience

The national flag flown by a ship that is registered in a country other than that of its owners. (Usually arranged in order to save taxes and operating expenses)

Flight of Capital

The movement of capital to another country to avoid loss.

Floating

Free determination of rates based on supply and demand, for example exchange rates or interest rates.

Flotsam

Floating debris or wreckage of a ship and its cargo.

FOB (Free On Board ... named port of shipment)

The seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. The buyer has to bear all costs and risks of loss or damage to the goods from that point.

Force Majeure

A condition of superior or irresistible force such as Acts of God, including earthquakes and floods, which cannot be avoided by the exercise of due care and is included in contracts to excuse parties from performance when such events occur.

Foreign Bond

An international bond usually denominated in the currency of the country where it is issued.

Foreign Commerce

Trade between individuals or legal entities in different countries.

Foreign Currency

The currency of any foreign country which is authorized by that country as the medium of circulation.

Foreign Exchange

Currency of countries exchangeable for other currencies according to their relative values based on supply and demand.

Foreign Exchange Contract

A contract for the sale or purchase of the currency of one country to be paid for with the currency of another country, specifying an amount, an exchange rate, and delivery date.

Foreign Exchange Rate

The rate or price of the currency of one country in terms of the currency of another.

Foreign Exports

1. (USA) Exports from the United States of foreign origin merchandise. (for the purposes of USA export statistics)
2. Exports by other countries..

Foreign Flag

The national identification of a carrier registered in a foreign country. A vessel flies the national flag of the country in which it is registered, and it may be registered in a country different from that of its owner.

Foreign Income

Income gained by residents of one country from another country.

Foreign Investment

The purchase of assets which are abroad.

Foreign Market Value

From the American point of view it is the price at which merchandise is sold at wholesale in the principal markets of the country from which it is exported.

Foreign Parent

The first foreign person or entity outside the United States in an affiliate's ownership chain that has direct investment in the affiliate.

Foreign Person

1. A person belonging to or under citizenship of another country.
2. Using the United States as an example, a person who resides outside of the United States or is subject to the jurisdiction of another country other than the United States is a "foreign person".

Foreign Remittances

The transfer of any funds across national boundaries.

Foreign Trade Zone Act (FTZA)

(USA) The act which established foreign trade zones in the USA.

Forward Foreign Exchange

An agreement to purchase or sell an amount of foreign currency at a future date at a predetermined price.

Foul Bill of Lading

A bill of lading issued with notations on it which limit the carrier's liability; for example, a notation that the goods were received damaged, or short, or improperly packaged.

Fractional Currency

Any currency that is smaller than a standard money unit.

Franco

Free from duties, transportation charges and other levies.

Free Domicile

"Free Domicile" is still a widely used pricing term to describe when the shipper pays all the applicable duties and all the transportation and other charges until delivered to the buyer's premises. The term is being replaced by Incoterm "DDP - Delivered Duty Paid ... named point of destination."

Free In and Out

A pricing term indicating that the vessel operator is responsible for the cost of loading and unloading.

Free List

A schedule of items in a customs tariff that are not subject to the payment of duties.

Free Market

A market in which there is unrestricted trading of goods with prices determined by supply and demand. Internationally, there is an unrestricted movement of goods in and out , and it is unhampered by the existence of tariffs or other trade barriers.

Free Port

An area where imported goods may be brought without payment of duties.

Free Time

1. The time allowed shippers and receivers to load or unload rail cars before demurrage or detention.
2. The time allowed consignees to take physical delivery of cargo before storage or demurrage is assessed.

Free Zone

An area within a country (a seaport, airport, warehouse or any designated area) regarded as being outside its customs territory where importers may bring goods of foreign origin without paying customs duties and taxes, pending their eventual processing, transshipment or re-exportation.

Free-Astray

A shipment or part of a shipment which has been dropped off at a wrong location by a carrier

Freight

1. All merchandise, goods, products, or commodities shipped by rail, air, road, or water, other than baggage, express mail, or regular mail.
2. The compensation paid for the transport of goods.

Freight Charge

The charge assessed for transporting cargo.

Freight Claim

1. A demand upon a carrier for the repayment of overcharge.
2. A demand upon a carrier for cargo loss or damage.

Freighter

A ship or airplane used primarily to carry cargo.

Fungibles

Goods that, for commercial purposes, are identical with other goods and interchangeable in all situations.

Futures Contract

A contract for the future delivery of a specified commodity, currency or security on a specific date at a rate determined in the present.