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MODELS & ACRONYMS

T&T establish a common language for international commerce, outlining the responsabilities of buyers and sellers troughout the trade process.

International trade involves a specific set of terms and acronyms that can seem overwhelming at first. But familiarizing yourself with these key phrases can significantly improve communication and streamline your transactions. This section provides explanations for commonly used acronyms.

  • General Terms:

    • ASWP (Any Safe World Port): Not an official incoterm, but used in quotes (e.g., CIF ASWP) to indicate the seller's price includes delivery to any safe port globally.

    • ATB (Authority To Board): Used for oil shipments, issued by the seller to allow the buyer to verify cargo details on the vessel.

    • ATL (Authority To Load): Permission for the buyer to load their vessel with the goods.

    • AWB (Air Way Bill): Similar to a Bill of Lading (BOL) but for air freight.

    • BCL (Bank Comfort Letter): Verifies a buyer's ability to meet payment requirements (not a guarantee).

    • BG (Bank Guarantee): A bank guarantees payment on behalf of the buyer.

    • BL (Bill of Lading): Receipt issued by the shipping company upon loading goods on a vessel, granting ownership rights to the buyer.

    • BPU (Bank Payment Undertaking): Bank commits to pay a specific amount under certain conditions.

    Incoterms (Delivery Responsibilities):

    • CFR (Cost and Freight): Seller pays for goods, loading, and freight to the named destination port (excluding unloading).

    • C&F, CNF (Cost and Freight): Obsolete terms, use CFR instead.

    • CIF (Cost, Insurance, and Freight): Similar to CFR but includes insurance to the destination port.

    • COO, CO, C/O (Certificate of Origin): Document verifying the origin (country) of the exported goods.

    • DDP (Delivered Duty Paid): Seller delivers the goods, all duties paid, to the named destination (including buyer's premises).

    • E&OE (Errors and Omissions Excepted): Disclaimer on invoices/quotations for potential errors.

    • EXW (Ex-Works): Buyer pays all transport costs from the seller's premises.

    • FAS (Free Alongside Ship): Seller pays costs to the loading port, buyer handles loading and shipment (seller clears goods for export).

    • FOB (Free on Board): Seller pays costs until goods are loaded on the ship (seller clears goods for export). Buyer responsible thereafter.

    • FCA (Free Carrier): Seller delivers cleared goods for export to the buyer's nominated carrier at the named place.

    Other Common Terms:

    • FCL (Full Container Load): Goods fill a container (no shared space with other buyers' goods).

    • FCO (Full Corporate Offer): Detailed seller proposal outlining specifications, price, and payment terms.

    • ICPO (Irrevocable Corporate Purchase Order): Buyer's firm commitment to purchase (various interpretations exist).

    • INCOTERMS (International Commercial Terms): Standardized terms published by the International Chamber of Commerce (ICC) to avoid misunderstandings in international trade.

    Letters of Credit (L/C):

    • L/C (Letter of Credit): Bank document guaranteeing payment to the seller upon meeting specified conditions.

      • CL/C (Confirmed Letter of Credit): Guaranteed by a first-class bank in addition to the issuing bank.

      • DL/C or DLC (Documentary Letter of Credit): Bank guarantees payment based on specific documents.

      • IL/C (Irrevocable Letter of Credit): Cannot be amended or cancelled without consent from all parties.

      • Revolving L/C: Replenishes funds automatically for multiple shipments under set terms.

      • SL/C or SBLC (Stand-by Letter of Credit): Bank guarantees payment if the buyer defaults.

      • RDLC (Revolving Documentary Letter of Credit): See Revolving L/C.

    • LCL (Less than a Container Load): Goods do not fill a full container, often consolidated with other shipments.

    • LOI (Letter of Intent): Buyer expresses interest in a transaction but is not a binding agreement.

    • PB (Performance Bond): Insurance guaranteeing contract fulfillment.

    • POF (Proof of Funds): Buyer's bank confirms sufficient funds are available for the transaction.

    • POP (Proof of Product): Often unreliable document claiming product existence (doesn't guarantee availability).

    • RDLC (Revolving Documentary Letter of Credit): See Revolving L/C.

    • RWA (Readiness, Willingness, and Availability): Indicates funds are available for a transaction.

    • SPA (Sales and Purchase Agreement): Legally binding contract outlining terms of the sale.

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