Glossary of Customs and Trade Terms

C

C&F	Obsolete, but heavily used, term of sale meaning ‘cargo and freight’ whereby Seller pays for cost of goods and freight charges up to destination port. In July, 1990 the International Chamber of Commerce replaced C&F with CFR
C&F	Cost and Freight
C&I/CI	Abbreviation for ‘Cost and Insurance.’ A price that includes the cost of the goods, the marine insurance and all transportation charges except the ocean freight to the named point of destination.
Cabotage	(1). Water transportation term applicable to shipments between ports of a nation; commonly refers to coast-wise or inter-coastal navigation or trade. Many nations, including the United States, have cabotage laws, which require national flag vessels to provide domestic interport service. (Marad) (2) Where cargo is carried on what is essentially a domestic flight and therefore not subject to international agreements that fix set rates. Cabotage rates are negotiable between shipper and airline and apply on flights within a country and to its overseas territories.
CAD/cash against documents	Method of payment for goods in which documents transferring title are given the buyer upon payment of cash to an intermediary acting for the seller, usually a commission house.
CAF	Abbreviation for ‘Currency Adjustment Factor.’ A charge, expressed as a percentage of a base rate that is applied to compensate ocean carriers of currency fluctuations. (Marad)
Cage	A secure area for storing high value or high tax goods at an air, sea cargo or freight forwarder bond/facility.
Cairns Group	A group of agricultural-exporting nations comprising Australia, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, New Zealand, the Philippines, Thailand and Uruguay, established to develop a common negotiating position for the Uruguay Round.
Cargo	Freight loaded into a vessel/aircraft.
Cargo manifest	A listing of the goods comprising the cargo (freight) carried in a means of transport or in a transport-unit. The Cargo manifest which gives the commercial particulars of the goods, such as transport document numbers, consignors, consignees, marks and numbers, number and kind of packages, descriptions and quantities of the goods, may be used in place of the Cargo declaration. (WCO)
Cargo tonnage	Most ocean freight is billed on the basis of weight or measurement tons (W/M). Weight tons can be expressed in short tons of 2000 pounds, long tons of 2240 pounds or metric tons of 1000 kilos (2204.62 pounds). Measurement tons are usually expressed as cargo measurement of 40 cubic feet (1.12 meters) or cubic meters (35.3 cubic feet.)
Carnet	See ‘ATA carnet’
Carrier	the person actually transporting goods or in charge of or responsible for the operation of the means of transport. (Annex A, Kyoto Convention)
Carrier, common	A publicly or privately owned firm or corporation that transports the goods of others over land, sea, or through the air, for a stated freight rate. By government regulation, a common carrier is required to carry all goods offered if accommodations are available and the established rate is paid.
Cartage	Usually refers to intra-city hauling on drays or trucks.
Cartel	An alliance or arrangement among industrial, commercial or state-controlled enterprises producing the same commodity, aimed at regulating the purchase, production or marketing of the commodity. A cartel agreement is often accompanied by output and investment quotas. When a cartel gains monopoly power, it will normally seek to maximize profits by raising prices and limiting supply.
Cash in Advance	A method of payment for goods in which the buyer pays the seller in advance of the shipment of goods. Usually employed when the goods are built to order, such as specialized machinery.
CER	Australia-New Zealand Closer Economic Relations Agreement. An agreement aimed at increasing trade links by liberalizing trans-Tasman trade, therefore allowing for more efficient use of each country's resources. Implemented on January 1, 1983, the CER has the ultimate goal of eliminating import quotas and tariffs by 1995 and eliminating import licensing requirements by 1999. The CER contains provisions to gradually reduce duties, quotas and licensing requirements. It also provides for the elimination of domestic export incentive schemes in Australia-New Zealand transactions, extension of government purchases between the two countries and harmonization of customs policies.
Certificate of origin	A specific document identifying the goods, in which the authority or body empowered to issue it certifies expressly that the goods to which the certificate relates originate in a specific country. This certificate may also include a declaration by the manufacturer, producer, supplier, exporter or other competent person. (WCO)
CFR (named port of destination)	Cost and Freight. The seller is responsible for clearing the goods for export, loading the goods onto the vessel at the port of export and paying overseas freight charges. The title, risk and insurance costs pass to the buyer once the goods are delivered on board the ship by the seller. Where the Customs Value is based on CIF, the cost of overseas insurance must be added to the CFR Value. CFR terms of trade are generally used for sea or inland waterway transportation.
CFS	Abbreviation for ‘Container Freight Station.’ A shipping dock where cargo is loaded (‘stuffed’) into or unloaded (‘stripped’) from containers. Generally, this involves less than container-load shipments, although small shipments destined to same consignee are often consolidated. Container reloading from/to rail or motor carrier equipment is a typical activity.
Chandler	Like a hotel at sea, a ship needs many supplies to operate and serve its crew-- groceries; paper products; engine parts; electronics; hardware; etc. A chandler sells these supplies to the ship’s agent. Originally, chandlers (candle makers) provided illumination to ships. Over time they expanded the variety of products they could provide to ships.
Charter Party	A written contract between the owner of a vessel and the person desiring to employ the vessel (charterer); sets forth the terms of the arrangement such as duration of agreement, freight rate and ports involved in the trip.
Cie	Compagnie. Used in France and Luxembourg to designate a business organisation.
CIF (named port of destination)	Abbreviation for ‘Cost, Insurance, Freight.’ (Named Port) Cost and Freight. The seller is responsible for clearing the goods for export, loading the goods onto the vessel at the port of export and paying overseas freight and insurance charges, with the buyer named as beneficiary in the insurance policy. The title & risk pass to the buyer once the goods are delivered on board the ship by the seller. CIF terms of trade are generally used for sea or inland waterway transportation.
CIF&C	Price includes commission as well as CIF.
CIF&E	Abbreviation for ‘Cost, Insurance, Freight And Exchange.
CIFI&E	Cost, Insurance, Freight, Interest and Exchange.
CIP (...named place of destination)	Carriage and Insurance Paid To (...named place of destination). The seller transports the goods to the port of export, clears Customs, and delivers them to the carrier. The seller pays transportation and insurance costs to the named place of destination. The title & risk pass to the buyer once the seller delivers the goods to the carrier. CIP terms of trade are used for all modes of transportation.
CITES	Convention on International Trade in Endangered Species
CKD	Abbreviation for ‘Completely Knocked Down.’ Parts and subassemblies being transported to an assembly plant.
Clearance (of goods)	The accomplishment of the Customs formalities necessary to allow goods to be exported, to enter home use or to be replaced under another Customs procedure. (WCO)
Clearance for home use	The Customs procedure which provides that imported goods enter into free circulation in the Customs territory upon the payment of any import duties and taxes chargeable and the accomplishment of all the necessary Customs formalities. (Annex B, Kyoto Convention)
client code	Unique number identifying an importer, exporter or manufacturer used by Customs on Customs’ declarations
COCOM	Coordinating Committee For Multilateral Export Controls. A committee consisting of representatives from all NATO countries (except Iceland) for coordinating policies restricting exports of products of potential strategic value to the former Soviet Union and certain other countries. Created in 1949, the committee not only reviewed military technology transfer for potential embargo, but also tried to anticipate the ‘end use’ of products manufactured for civilian purposes, such as computers and transistors. For reasons including the disintegration of the Soviet Union, and the goal of assisting economic and political reform in Russia and the New Independent States, the United States and its COCOM partners agreed in 1993 to end the Cold War regime effective March 31, 1994, and to work toward a new arrangement to enhance transparency and restraint in conventional weapons and sophisticated technologies to countries whose behaviour is cause for serious concern and to regions of potential instability. COCOM members agreed to maintain the existing lists as the basis for national export controls after March 31 while new control lists and arrangements were being finalized.
COD	Abbreviation for: Collect (cash) on Delivery. Carried on Docket (pricing).
Collect	Freight charges as shown on a B/L or air waybill that are payable at the destination.
Common law	Law that derives its force and authority from precedent, custom and usage rather than from statutes, particularly with reference to the laws of England and the United States.
Comparative advantage	A central concept in international trade theory which holds that a country or a region should specialize in the production and export of those goods and services that it can produce relatively more efficiently than other goods and services, and import those goods and services in which it has a comparative disadvantage. David Ricardo first propounded this theory in 1817 as a basis for increasing the economic welfare of a population through international trade. The comparative advantage theory normally favours specialized production in a country based on intensive utilization of those factors of production in which the country is relatively well endowed (such as raw materials, fertile land or skilled labour), and perhaps also the accumulation of physical capital and the pace of research.
Compensating products	Products obtained within a country or abroad, as appropriate, during or as a result of the manufacturing, processing or repair of goods temporarily admitted for inward processing or of goods temporarily exported for outward processing. (WCO)
Compliance improvement	The philosophy of seeking to continually improve the level of voluntary compliance with Customs laws.
Compliance management	The systematic application of procedures and practices that are designed to manage compliance with Customs laws.
Compound duty rate	A rate of duty incorporating both an ad valorem rate and a specific rate; e.g. 10% + $20/ton
Compromise settlement	an agreement under which the Customs, being so empowered, consent to waive proceedings in respect of a Customs offence subject to compliance with certain conditions by the person(s) implicated in that offence. (Annex H, Kyoto Convention)
Comptroller	The Chief Executive Officer of Customs
Conference	An association of ship owners operating in the same trade route who operate under collective conditions and agree on tariff rates.
Confirmed letter of credit	A letter of credit, issued by a foreign bank, whose validity has been confirmed by a domestic bank. An exporter with a confirmed letter of credit is assured of payment even if the foreign buyer or the foreign bank defaults.
Consequence of risk	The potential impact on Customs objectives in the event that a risk occurs.
Consignee	a person entitled to receive goods.
Consignor	a person entitled to send goods.
Consolidation	Cargo containing shipments of two or more shippers or suppliers. Container load shipments may be consolidated for one or more consignees.
Consolidator	A person or firm performing a consolidation service for others. The consolidator takes advantage of lower full carload (FCL) rates, and savings are passed on to shippers.
Consortium	An agreement or individuals or companies who join together for a common purpose.
Consul	A Government official residing in a foreign country who is responsible for representing his/her country and its nationals.
Consular documents	Forms signed by the Consul of a country to which the cargo is destined.
Consular Fee	The fees charge by the Consul for endorsing consular documents.
Consumption tax	An indirect tax levied as a value added tax on goods for consumption.
Container	An article of transport equipment (lift-van, movable tank or other similar structure): (i) fully or partially enclosed to constitute a compartment intended for containing goods, (ii) of a permanent character and accordingly strong enough to be suitable for repeated use, (iii) specially designed to facilitate the carriage of goods, by one or more modes of transport, without intermediate reloading, (iv) designed for ready handling, particularly when being transferred from one mode of transport to another, (v) designed to be easy to fill and to empty, and (vi) having an internal volume of one cubic metre or more. ‘Container’ shall include the accessories and equipment of the container, appropriate for the type concerned, provided that such accessories and equipment are carried with the container. The term ‘container’ shall not include vehicles, accessories or spare parts of vehicles, or packaging or pallets. ‘Demountable bodies’ shall be regarded as containers. (WCO)
Container Security Initiative (CSI)	The US Container Security Initiative was launched in January 2002 to prevent global containerised cargo from being exploited by terrorists. CSI is designed to enhance security of the sea cargo container, a vital link in global trade. CSI has four key elements: using automated information to identify and target high risk containers; pre-screening those containers identified as high risk before they arrive at US ports; using detection technology to quickly pre-screen high risk containers; using smarter, tamper proof containers. Initial objective is to implement CSI at ports that send large volumes of cargo containers to US in a way that will facilitate detection of potential security concerns at the earliest opportunity.
Container terminal	A specialized facility where ocean container vessels dock to discharge and load containers, equipped with cranes with a safe lifting capacity of 35-40 tons, with booms having an outreach of up to 120 feet in order to reach the outside cells of vessels. Most such cranes operate on rail tracks and have articulating rail trucks on each of their four legs, enabling them to traverse along the terminal and work various bays on the vessel and for more than one crane to work a single vessel simultaneously. Most terminals have direct rail access and container storage areas, and are served by highway carriers.
Contraband	Forbidden by law to be imported or exported.
Contracting Parties	Countries that are a party to a convention through signature, ratification or accession.
Convention	An international treaty, usually with a number of Contracting Parties.
Copyright	An exclusive right conferred by a government for a specified period to the creator of literary or artistic works such as books, maps, articles, drawings, charts, photographs, musical compositions, motion pictures, recordings or computer programs. The Uruguay Round accord on trade-related aspects of intellectual property (TRIPS) incorporates all substantive trade-related protection afforded under the Berne Convention for the Protection of Literary and Artistic Works, clarifying that computer programs are protected as literary works and compilation of databases as intellectual creation. Protection extends for the duration of the life of the author plus 50 years, and includes rights of translation, reproduction, public performance, broadcasting, adaptation and arrangement, and rental.
Countervailing duties	Specific duties imposed on imports to offset the benefits of subsidies to producers or exporters in the exporting country. GATT Article VI permits the use of such duties.
CPT (...named place of destination)	The seller clears the goods for export, delivers them to the carrier and is responsible for carriage costs to the named place of destination. The title, risk and insurance costs pass to the buyer once the goods are delivered to the carrier by the seller. Where the Customs Value is based on CIF, the cost of overseas insurance must be added to the CPT price. CPT terms of trade are used for all modes of transportation.
Crew member	A person assigned by an operator to duty on an aircraft during a flight duty period. (ICAO Annex 9)
CSI	See ‘Container Security Initiative’
Currency Adjustment Factor	See CAF
Customs	The Government Service which is responsible for the administration of Customs law and the collection of duties and taxes and which also has the responsibility for the application of other laws and regulations relating to the importation, exportation, movement or storage of goods. (Kyoto Convention)
Customs clearing agent/broker	A person who carries on the business of arranging for the Customs clearance of goods and who deals directly with the Customs for and on behalf of another person. (WCO)
Customs control	Measures applied by the Customs to ensure compliance with Customs law. (Kyoto Convention)
Customs declaration	Any statement or action, in any form prescribed or accepted by the Customs, giving information or particulars required by the Customs. (WCO)
Customs duties	The duties laid down in the Customs tariff to which goods are liable on entering or leaving the Customs territory. (Kyoto Convention)
Customs formalities	All the operations which must be carried out by the persons concerned and by the Customs in order to comply with the Customs law. (Kyoto Convention)
Customs law	The statutory and regulatory provisions relating to the importation, exportation, movement or storage of goods, the administration and enforcement of which are specifically charged to the Customs, and any regulations made by the Customs under their statutory powers. (Kyoto Convention)
Customs offence	Any breach, or attempted breach, of Customs law. (Annex H, Kyoto Convention)
Customs seal	An assembly consisting of a seal and a fastening which are joined together in a secure manner. Customs seals are affixed in connection with certain Customs procedures (Customs transit, in particular) generally to prevent or to draw attention to any unauthorized interference with the sealed items.
Customs Union	Entity formed by a Customs territory replacing two or more territories and having in its ultimate state the following characteristics : - a common Customs tariff and a common or harmonized Customs legislation for the application of that tariff; - the absence of any Customs duties and charges having equivalent effect in trade between the countries forming the Customs Union in products originating entirely in those countries or in products of other countries in respect of which import formalities have been complied with and Customs duties and charges having equivalent effect have been levied or guaranteed and if they have not benefited from a total or partial drawback of such duties and charges; - the elimination of restrictive regulations of commerce within the Customs Union. (WCO)
Customs warehouse	a designated place where imported goods are stored under Customs control without payment of import duties and taxes.
CY	Container Yard. The term CY means the location designated by the Carrier in the port terminal area for receiving, assembling, holding, storing and delivering containers, and where containers may be picked up by shippers or re-delivered by consignees. No container yard (CY) shall be a shipper's consignee's, or a forwarder's place of business, unless otherwise provided.
CY/CFS	The term CY/CFS means containers packed by shipper of Carrier's premises and delivered by shipper to Carrier's CY, all at shipper's risk and expense and unpacked by Carrier at the destination port CFS.
CY/CY	The term CY/CY means containers packed by shipper off Carrier's premises and delivered by shipper to Carrier's CY and unpacked by consignee off Carrier's premises, all at the risk and expense of cargo.