Frequently Used Terms

ATA Carnet
ATA stands for the combined French and English words “Admission Temporair/Temporary Admission.” An ATA Carnet is an international customs document which may be used for the temporary duty-free admission of certain goods into a country in lieu of the usual customs documents required. The carnet serves as a guarantee against the payment of customs duties, which may become due on goods temporarily imported and not re-exported. Quota compliance may be required on certain types of merchandise. ATA textile carnets are subject to quota and visa requirements. The ATA Convention of 1961 authorized the ATA Carnet to replace the ECS (“Echantillons Commerciaux/Commercial Samples”) Carnet that was created by a 1956 convention sponsored by the Customs Cooperation Council. ATA Carnets are issued by National Chambers of Commerce affiliated with the Paris-based International Chamber of Commerce (ICC). These associations guarantee the payment of duties to local customs authorities should goods imported under cover of a foreign-issued carnet not be re-exported.

A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries (for display, demonstration, or similar purposes) without paying duties or posting bonds.

Customs declaration
An oral or written statement attesting to the correctness of description, quantity, value, etc., of merchandise.

A codification of international rules for the uniform interpretation of common contract clauses in export/import transactions involving goods. Developed and issued by the International Chamber of Commerce (ICC) in Paris.

The 2010 edition includes 11 terms instead of the 13 in the previous edition.

The following terms from Incoterms 2000 have been deleted from the list:

  • DAF
  • DES
  • DEQ
  • DDU

Two new terms have been added to the list:

  • DAT – replaces Incoterms 2000 rule DEQ
  • DAP – replaces Incoterms 2000 rules DAF, DES and DDU

Whilst Incoterms 2000 had four categories, Incoterms® 2010 only has two categories.

The Incoterms® 2010 are arranged in two categories as follows:

Rules for Any Mode of Transport

  • EXW – Ex Works
  • FCA – Free Carrier
  • CPT – Carriage Paid To
  • CIP – Carriage and Insurance Paid
  • DAT – Delivered At Terminal
  • DAP – Delivered At Place
  • DDP – Delivered Duty Paid

Rules for Sea and Inland Waterway Transport Only

  • FAS – Free Alongside Ship
  • FOB – Free On Board
  • CFR – Cost and Freight
  • CIF – Cost, Insurance and Freight

In addition to the 11 rules, Incoterms® 2010 includes:

  • Extensive guidance notes and illustrative graphics to help users efficiently choose the right rule for each transaction;
  • New classifications to help choosing the most suitable rule in relation to the mode of transport;
  • Advice for the use of electronic procedures;
  • Information on security-related clearances for shipments;
  • Advice for the use of Incoterms® 2010 in domestic trade.
  • Used in international and domestic contracts for the sale of goods, Incoterms help parties avoid misunderstandings by clearly identifying the obligations of the buyer and seller.

Featuring the two new rules, the Incoterms® 2010 edition reflects advances in international trade over the last decade, and is an essential tool for trade. Used in both international and domestic contracts for the sale of goods, the rules simplify the drafting of such contracts and help avoid misunderstandings by clearly setting out certain obligations of buyers and sellers

The new Incoterms® 2010 are in use from 1st January 2011.

Made easy E-Guide to Incoterms
Commercial invoice
A document identifying the seller and buyer of goods or services, identifying numbers such as invoice number, date, shipping date, mode of transport, delivery and payment terms, and a complete listing and description of the goods or services being sold including prices, discounts and quantities. A commercial invoice is often used by the government to determine the true (transaction) value of goods for the assessment of customs duties and also to prepare consular documentation. Governments using the commercial invoice to control imports often specify its form, content, number of copies, language to be used, and other characteristics. Customs require that a commercial invoice provide the following information:

  • The port of entry
  • If merchandise is sold or agreed to be sold, the time, place and names of buyer and seller; if consigned, the time and origin of shipment, and names of shipper and receiver
  • Detailed description of the merchandise, including the name by which each items is known, the grade or quality, and the marks, numbers, and symbols under which sold by the seller or manufacturer to the trade in the country of exportation, together with the marks and numbers of the packages in which the merchandise is packed
  • The quantities in weights and measures
  • If sold or agreed to be sold, the purchase price of each item in the currency of the sale
  • If consigned, the value for each item, in the currency in which the transactions are usually made or, in the absence of such value, the price in such currency that the manufacturer, seller, shipper, or owner would have received, or was willing to receive, for such merchandise if sold in the ordinary course of trade and in the usual wholesale quantities in the country of exportation
  • The kind of currency
  • All charges upon the merchandise, itemized by the name and amount including freight, insurance, commission, cases, containers, coverings, and cost of packing; and, if not included above, all charges, costs, and expenses incurred in bringing the merchandise from alongside the carrier at the first port of entry. The cost of packing, cases, containers, and inland freight to the port of exportation need not be itemized by amount if included in the invoice price and so identified. Where the required information does not appear on the invoice as originally prepared, it shall be shown on an attachment to the invoice
    All rebates, drawbacks, and bounties, separately itemized, allowed upon the exportation of the merchandise
  • The country of origin
  • All goods or services furnished for the production of the merchandise not included in the invoice price. The invoice and all attachments must be in the English language

Customs bonded warehouse

A bonded warehouse where goods remain until duty has been collected from the importer. Goods under bond are also kept here.

A statement of the kinds, quantities and values of goods imported together with duties due, if any, and declared before a customs officer or other designated officer. The process of, and documentation required for securing the release of imported merchandise from Customs.

Entry documents
The documents required to secure the release of imported merchandise. Within five working days of the date of arrival of a shipment at a Port of entry, entry documents must be filed at a location specified by the district/area director, unless an extension is granted. These documents consist of:

Entry Manifest, Customs Form 7533; or Application and Special Permit for Immediate Delivery, Customs Form 3461, or other form of merchandise release required by the district director.
Evidence of right to make entry.
Commercial invoice or a pro-forma invoice when the commercial invoice cannot be produced.
Packing lists if appropriate.
Other documents necessary to determine merchandise admissibility.
If the goods are to be released from Customs custody on entry documents, an entry summary for consumption must be filed and estimated duties deposited at the port of entry within 10 working days of the time the goods are entered and released.

Entry for consumption
The process of effecting entry of goods into the (specific country for use in the (specific country). The entry of merchandise is a two-part process consisting of:

Filing the documents necessary to determine whether merchandise may be released from Customs custody.
Filing the documents which contain information for duty assessment and statistical purposes.
In certain instances, such as the entry of merchandise subject to quotas, all documents must be filed and accepted by Customs prior to the release of the goods.

Entry for warehouse
A type of Customs entry where the release of goods (and payment of duty) is postponed by having them placed in a Customs bonded warehouse, where they may remain for up to five years from the date of importation. At any time during that period the goods may be re-exported without the payment of duty, or they may be withdrawn for consumption upon the payment of duty at the rate of duty in effect on the date of withdrawal. If the goods are destroyed under Customs’ supervision, no duty is payable.

Exporter Identification Number (EIN)
An identification number required on the Shipper’s Export Declaration for all export shipments.

International Chamber of Commerce
A non-governmental organization serving as a policy advocate for world business. Members in 110 countries comprise tens of thousands of companies and businesses organizations. The ICC aims to facilitate world trade, investment, and an international free market economy through consultation with other inter-governmental organizations.

Power of attorney
A written legal document by which one person (principal) authorizes another person (agent) to perform stated acts on the principal’s behalf. For example: to enter into contracts, to sign documents, to sign checks, and spend money, etc.

A principal may execute a special power of attorney authorizing an agent to sign a specific contract or a general power of attorney authorizing the agent to sign all contracts for the principal. Importers often give a limited power of attorney to their customs broker to conduct business with U.S. Customs on their behalf.

Tip: When you set up a power of attorney, make sure that it is broad enough in its language to cover the types of situations likely to arise, but not so broad that it gives more power to that individual than you intend. Power of attorney falls under “agency” law, which varies from country to country. Before giving someone power of attorney in a foreign country, be sure you understand what the local legal ramifications are.

Errors and omissions excepted.