International Trade and Customs Compliance
Expert-defined terms from the Level 2 Certificate in International Supply Chain Logistics course at Stanmore School of Business. Free to read, free to share, paired with a globally recognised certification pathway.
International Trade and Customs Compliance Glossary #
International Trade and Customs Compliance Glossary
1 #
ATA Carnet
- Explanation: An ATA Carnet is an international customs document that al… #
It simplifies customs procedures and is commonly used for trade shows, exhibitions, and temporary work projects.
2 #
Bill of Lading
- Explanation: A Bill of Lading is a legal document issued by a carrier t… #
It serves as a contract of carriage and a receipt for the goods. It includes details such as the type and quantity of goods, the destination, and the terms of the shipment.
3 #
Certificate of Origin
- Explanation: A Certificate of Origin is a document that certifies the c… #
It is used to determine the eligibility of goods for preferential tariff treatment under trade agreements. Customs authorities require this document to verify the origin of goods.
4 #
Compliance Audit
- Explanation: A Compliance Audit is a systematic review of an organizati… #
It helps identify areas of non-compliance and implement corrective actions to mitigate risks.
5 #
Customs Broker
- Explanation: A Customs Broker is a licensed professional who assists im… #
They are experts in customs regulations and procedures and help ensure compliance with customs laws while expediting the clearance process.
6 #
Duty Drawback
- Explanation: Duty Drawback is a refund of duties paid on imported goods… #
It aims to promote exports by reducing the cost of imported inputs, making domestic products more competitive in international markets.
7 #
Export Controls
- Explanation: Export Controls are regulations that restrict the export o… #
They aim to safeguard national security, prevent proliferation of weapons of mass destruction, and protect human rights.
8 #
Free Trade Agreement
- Explanation: A Free Trade Agreement is a pact between two or more count… #
It aims to create a level playing field for businesses and boost economic growth by expanding market access.
9 #
Harmonized System (HS) Code
- Explanation: The Harmonized System (HS) Code is an international nomenc… #
It consists of a six-digit code that categorizes goods based on their nature, composition, and intended use. It is used for customs purposes to determine duties and taxes.
10 #
Incoterms
- Explanation: Incoterms are a set of standardized international trade te… #
They specify the respective roles in the transportation and delivery of goods, as well as the allocation of risks and costs between parties.
11 #
Import License
- Explanation: An Import License is a permit issued by the government tha… #
It is required for goods subject to import controls, such as restricted items, controlled substances, or strategic goods. Failure to obtain the necessary import license can result in penalties or seizure of goods.
12 #
Letter of Credit (LC)
- Explanation: A Letter of Credit is a financial instrument issued by a b… #
It provides assurance to the seller that they will receive payment for the goods shipped, while offering protection to the buyer by ensuring that payment is only made upon fulfillment of specified terms and conditions.
13. Non #
Tariff Barrier
- Explanation: Non-Tariff Barriers are restrictions other than tariffs th… #
They can be used by governments to protect domestic industries, safeguard public health, or ensure product quality, but they can also create barriers to trade and increase costs for importers and exporters.
14 #
Preferential Trade Agreement
- Explanation: A Preferential Trade Agreement is a pact between countries… #
It aims to promote economic cooperation, boost trade volumes, and strengthen bilateral or regional ties between signatory nations.
15 #
Quota
- Explanation: A Quota is a quantitative restriction imposed by a governm… #
It aims to control the supply of goods, protect domestic industries from foreign competition, and manage trade balances. Quotas can be absolute (limiting the quantity of imports) or tariff-rate (imposing a lower tariff on a specified quantity of imports).
16 #
Rules of Origin
- Explanation: Rules of Origin are criteria used to determine the nationa… #
They establish the country of origin of goods based on factors such as where they were produced, processed, or substantially transformed. Understanding and complying with rules of origin is essential for claiming preferential tariff treatment under trade agreements.
17 #
Sanitary and Phytosanitary Measures (SPS)
- Explanation: Sanitary and Phytosanitary Measures are regulations implem… #
They cover areas such as food safety, animal welfare, and plant health, and aim to ensure the quality and safety of products traded internationally.
18 #
Tariff Classification
- Explanation: Tariff Classification is the process of assigning a specif… #
It involves determining the correct Harmonized System (HS) Code that accurately describes the nature, composition, and intended use of the goods. Proper tariff classification is essential for calculating duties, taxes, and other trade-related obligations.
19 #
Trade Compliance
- Explanation: Trade Compliance refers to the adherence to laws, regulati… #
It encompasses various aspects such as customs compliance, export controls, trade documentation, and risk management to ensure that companies operate within legal boundaries and maintain ethical business practices.
20 #
Value Added Tax (VAT)
- Explanation: Value Added Tax is a consumption tax imposed on the value… #
It is a type of indirect tax collected by businesses on behalf of the government and is based on the increase in value of goods or services as they move through the production process. VAT rates and regulations vary by country and can impact the cost of goods in international trade transactions.
21 #
World Trade Organization (WTO)
- Explanation: The World Trade Organization is an international organizat… #
It provides a forum for negotiating trade agreements, enforcing trade rules, and addressing trade-related issues to promote a fair and open international trading system.