BTS Commerce International key terms

Standard international trade rules published by the ICC that define which party arranges and pays for transport, insurance, customs clearance and risk transfer between seller and buyer. Each three-letter rule fixes the point where risk passes.

The precise moment when responsibility for loss or damage to goods moves from seller to buyer under the agreed Incoterm, independently of who pays the freight. It determines who bears the cost of an incident in transit.

Cost, Insurance and Freight: the seller pays carriage to the named destination port and takes out minimum marine insurance for the buyer, but risk passes when goods are loaded on the vessel at origin.

Free On Board: the seller delivers goods on board the vessel nominated by the buyer at the named port of shipment and clears export. Risk passes at that loading point; the buyer pays main carriage and import duties.

Delivered At Place: the seller bears all costs and risks until goods arrive at the named destination ready for unloading, but the buyer handles import clearance and duties. Often used for road and multimodal shipments.

Delivered Duty Paid: the seller delivers goods cleared for import at the named destination, paying duties and taxes. It places maximum obligation on the exporter and is the mirror image of EXW.

Ex Works: the seller merely makes goods available at its own premises; the buyer bears all loading, carriage, export clearance and risk. It gives the exporter the minimum obligation and is unsuitable when export documents are needed.

Bill of lading: a maritime transport document that acts as receipt of goods, evidence of the carriage contract and, when issued to order, a negotiable document of title enabling the holder to claim the goods.

Irrevocable documentary credit by which a bank commits to pay the exporter against compliant documents. It secures payment in high-risk markets but requires strict conformity between shipped documents and credit terms.

Collection arrangement in which the exporter's bank forwards transport and commercial documents to the buyer's bank, releasing them against payment or acceptance. Cheaper than a credit but carrying no bank payment guarantee.

Customs clearance: the set of declarations and controls by which goods are entered into or out of a customs territory, including classification, valuation, origin and payment of duties and VAT.

Assignment of goods to a code in the harmonised system nomenclature, which determines duty rates, licensing and controls. Misclassification creates duty adjustments, penalties and delayed release of goods.

Status granted to goods meeting rules of origin under a trade agreement, allowing reduced or zero duty. It must be evidenced by a proof of origin and differs from non-preferential origin used for statistics and quotas.

Treaty between countries removing or reducing tariffs and barriers on most trade between them, often with rules of origin, services and investment chapters. It shapes sourcing decisions and market access strategy.

Integration stage where member states abolish internal tariffs and adopt a common external tariff and common customs policy, as in the EU. Goods circulate freely once union clearance is granted.

Single market combining free movement of goods, services, capital and persons with harmonised rules and mutual recognition. Firms gain scale but face common technical standards and competition rules.

Measure other than a customs duty that restricts imports, such as technical standards, sanitary rules, quotas, licensing or labelling requirements. These often cost exporters more than tariffs.

World Trade Organization: forum of member states administering trade rules, binding dispute settlement and trade policy review, based on principles of non-discrimination, transparency and progressive liberalisation.

WTO principle requiring a member granting an advantage to one trading partner to extend it to all members, subject to exceptions such as free trade areas and preferential schemes for developing countries.

Rule that goods lawfully produced and marketed in one member state may move and be sold in others without further barriers, subject to limited derogations justified on grounds such as health or environment.

Structured research combining desk and field sources to size a foreign market, identify segments, competitors, prices, distribution channels and access conditions, and to support a market-entry decision.

Screening of candidate countries using criteria such as size, growth, tariff and regulatory barriers, logistics costs, competition intensity and fit with the firm's offer, to rank priority targets.

Continuous monitoring of markets, competitors, regulations, customers and technologies, feeding decisions on offers, prices and partners. It relies on trade data, tenders, fairs and digital sources.

Systematic search for new qualified prospects through targeting, databases, trade fairs, digital campaigns and cold contact, measured by conversion rates and cost per acquired customer.

Assessment of a lead against criteria such as need, budget, decision authority, timeline and creditworthiness, to decide whether to invest sales effort and which offer to propose.

Visual and quantitative view of opportunities by stage of the sales cycle, with expected value and closing date, used to forecast revenue and prioritise follow-up actions.

Share of prospects or quotes that become orders over a given period. It links prospecting effort to revenue and helps diagnose weaknesses in targeting, offer or negotiation.

Total sales and marketing spend divided by the number of new customers won in the period. Compared with customer lifetime value, it shows whether a prospecting channel is economically sustainable.

Outstanding receivables owed by customers at a given date, often analysed by age and by country. It drives credit limits, payment terms and the choice of payment security instruments.

Exposure to loss from currency movements between quotation, invoicing and settlement. It is managed by invoicing in the home currency, forward contracts, options or natural hedging of receipts and payments.

Financial technique neutralising currency exposure, typically a forward sale or purchase, a currency option or a swap, matched in amount and maturity to the underlying commercial flow.

Policy covering goods against loss or damage during carriage, with cover levels, deductibles and Incoterm-dependent allocation of premium between seller and buyer. Marine cargo clauses are the reference.

Price charged for carrying goods, determined by weight or volume, mode, route, fuel surcharges and seasonality. It is a major landed-cost component and a lever in Incoterm and route choices.

Full landed cost of imported goods: purchase price, freight, insurance, duties, taxes, handling, bank charges and internal logistics. It is the basis for pricing and margin decisions.

Customs value on which duties are calculated, normally the transaction value adjusted for freight, insurance and certain assists. Understatement or error triggers reassessment and penalties.

Difference between sales revenue and the purchase cost of goods sold, before operating expenses. In export it must absorb freight, duties, agent commissions and currency effects.

Quoted price built from cost of goods, logistics, duties, risk and margin, stated with its Incoterm, currency and validity period so the buyer knows exactly what is included.

Margin expressed as a percentage of selling price rather than purchase cost, useful for comparing profitability across markets, channels and product ranges with different cost structures.

Agreement between parties in different states covering goods, price, delivery, payment, transfer of risk, warranties and dispute resolution, often referring to the UN Convention on Contracts for the International Sale of Goods.

Contract clause submitting future disputes to arbitration rather than to national courts, naming the institution, seat, language and number of arbitrators. It gives enforceability under the New York Convention.

Event outside a party's control, unforeseeable and irresistible, that excuses non-performance. In international contracts it must be defined and notified, since national definitions differ widely.

National law chosen by the parties or designated by conflict rules to govern a contract. It determines interpretation, remedies and limitation periods, and is distinct from the dispute forum.

Independent intermediary who negotiates or concludes sales on behalf of a principal in a defined territory, remunerated by commission, and generally protected by mandatory indemnity rules on termination.

Independent buyer who purchases goods in its own name and resells them at its own risk in a territory, earning a margin. Unlike an agent, it does not bind the supplier.

Intermediary acting in its own name but on behalf of a principal, often handling transport, customs or sales, and paid a commission. It may bear liability toward third parties.

Freight forwarder organising multimodal carriage, customs formalities and documentation for shippers, sometimes acting as principal carrier. It is a key operational partner in export logistics.

Structured set of channels and partners, such as agents, distributors, subsidiaries, e-commerce or retail, through which goods reach foreign end users and which determines control, cost and coverage.

Agreement granting a reseller the right to market products in a territory, setting exclusivity, minimum purchases, pricing, brand use, reporting and termination terms, within competition law limits.

Analysis of competitors' offers, prices, positioning, channels and strengths in a target market, used to differentiate an offer and anticipate competitive reactions during negotiation.

Structured set of arguments linking customer needs to product benefits and proof, adapted to cultural expectations and decision criteria of the foreign buyer, and supporting objection handling.

Managing differences in communication style, hierarchy, time perception, risk aversion and decision process between parties from different cultures, to build trust and reach a workable agreement.

Document recording the points agreed in principle before a full contract, such as scope, price, exclusivity and timetable. Its binding force depends on drafting and on the chosen applicable law.

Range of settlement methods from open account and documentary collection to documentary credit, escrow and guarantees, each trading off cost, security for seller and convenience for buyer.

Set of documents supporting a shipment, such as commercial invoice, packing list, certificate of origin and transport document, whose consistency is essential for customs and for payment release.

Mandatory or voluntary specification on safety, quality, labelling or performance, often differing by country. Certification and testing costs can block market access even where tariffs are low.

Organised follow-up of customers across the life cycle, using shared data on contacts, orders, claims and satisfaction, to retain accounts and increase share of wallet.