NIBAF Foreign Trade flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Foreign Exchange Regulation Act, 1947

Pakistan's parent exchange-control statute; it empowers the State Bank to regulate dealings in foreign exchange and to issue Foreign Exchange Manual instructions binding on authorized dealers.

Import Policy Order

Government notification issued under the Imports and Exports (Control) Act, 1950 that lists prohibited, restricted and permissible imports together with the conditions attached to each category.

Incoterms 2020

Eleven ICC rules defining delivery point, risk transfer, cost allocation and clearance duties between buyer and seller; they do not cover payment, title or remedies for breach.

Customs Act, 1969

Pakistan's core customs statute governing classification under the Harmonized System, valuation, duty assessment, warehousing and clearance of imported and exported goods.

Document of title

A document, typically an order bill of lading, whose delivery transfers constructive possession of the goods and allows the lawful holder to claim them from the carrier.

D/P (documents against payment)

Collection basis in which the presenting bank releases shipping documents to the importer only after the importer pays the sight draft or the amount falling due.

Bill of entry

Goods declaration filed by the importer with Pakistan Customs through WeBOC or the Pakistan Single Window, stating value, classification and origin; it is assessed for duty before release.

Retirement of documents

Bank process of releasing import documents to the importer against payment or acceptance and endorsing the transport document so the importer can take delivery of the goods.

E-Form

Pakistan's exchange-control form completed for each export shipment, linking the exported goods, invoice value and overseas buyer to the later repatriation of proceeds.

Export bill negotiation

Bank's purchase or discount of export documents before maturity, generally with recourse to the exporter unless the bank has itself confirmed the credit.

Certificate of origin

Document certifying the country of manufacture of goods, used to claim tariff preferences under GSP or free trade agreements and often required by the credit.

Export Finance Scheme

State Bank of Pakistan refinance facility providing concessional funding to banks for pre-shipment and post-shipment loans to eligible exporters against export orders and bills.

Confirming bank

A bank that adds its own definite undertaking to pay a complying presentation under a credit, usually in the beneficiary's country, replacing issuing-bank risk with local risk.

Complying presentation

A presentation that is made in accordance with the credit terms, the applicable UCP 600 articles and international standard banking practice; only such a presentation must be honoured.

Five banking days

Maximum period following the day of presentation within which the issuing, confirming or nominated bank must examine documents and give a single notice of refusal.

Transferable credit

A credit expressly stated to be transferable, allowing the first beneficiary to make it available in whole or in part to one or more second beneficiaries under Article 38.

URC 522

ICC rules for documentary collections, setting out the duties of remitting, collecting and presenting banks and the handling of documents, protests and releases to the drawee.

URDG 758

ICC rules for demand guarantees and counter-guarantees requiring payment only against a complying demand presented before expiry, independent of the underlying contract.

Bid bond

Demand guarantee issued on behalf of a tenderer, usually for one to five percent of the tender value, payable if the tenderer withdraws or fails to sign the contract.

Forfaiting

Non-recourse purchase by a bank of medium- or long-term export receivables, usually evidenced by avalised bills of exchange or promissory notes of the overseas buyer.

MT700

SWIFT message type used by an issuing bank to open a documentary credit, carrying the credit terms, document requirements and the fields the advising bank must verify.

Nostro account

A foreign-currency account that a bank holds with a correspondent bank abroad, used to settle cross-border payments and hold working balances in that currency.

Raast

Pakistan's instant retail payment system operated by the State Bank, enabling person-to-person and merchant payments through an alias-based addressing scheme.

Forward contract

Agreement to buy or sell a fixed amount of foreign currency at a rate fixed now for settlement on a future date, used to hedge trade exposure.

Trade-based money laundering

Process of disguising criminal proceeds by misrepresenting the price, quantity or quality of goods in trade transactions so that value moves across borders.

Suspicious transaction report

Report filed by a financial institution with the Financial Monitoring Unit when a transaction appears linked to money laundering, terrorist financing or a predicate offence.

Layering

Second stage of money laundering in which the origin and ownership of criminal proceeds are obscured through a complex series of transactions and transfers.

Beneficial owner

Natural person who ultimately owns or controls a customer, or the person on whose behalf a transaction is conducted, and who must be identified under customer due diligence.

Expected loss

Product of probability of default, loss given default and exposure at default; it estimates average credit loss and drives pricing, provisioning and capital allocation.

Country risk

Risk of loss where a counterparty cannot pay because of events in its country, such as transfer restrictions, currency shortage, war, expropriation or political instability.

ICC(A) cover

Widest set of marine cargo insurance clauses, covering all risks of loss or damage to the goods except the express exclusions listed in the clauses.

Documentary risk

Risk that documents presented do not comply with the credit terms, causing refusal, delayed payment or loss of the bank's undertaking despite a sound underlying shipment.