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Glossary

 

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FAS: Foreign Agricultural Service

A U.S. Department of Agriculture bureau with programs related to market development, international trade agreements and negotiations, and the collection of statistics and market information. It also administers the USDA's export credit guarantee and food aid programs, and helps increase income and food availability in developing nations. 

 

FAS: Free Alongside Ship

Title and risk pass to buyer, including payment of all transportation and insurance cost, once delivered alongside ship at the named ocean port of shipment by the seller; the export clearance obligation rests with the seller; used for sea or inland waterway transportation, shipments are not containerized, ocean vessel port-to-port.

 

FCA: Free Carrier

Title and risk pass to buyer, including transportation and insurance cost, when the seller delivers goods unloaded at the seller's dock or a named place cleared for export to the international carrier or agent, not loaded; seller is obligated to load the goods on the buyer's collecting vehicle; it is the buyer's obligation to receive the seller's arriving vehicle unloaded; used for any mode of transportation.

 

FCO

Formal Cooperative Officer

 

FCPA: Foreign Corrupt Practices Act

Act making it unlawful for persons or companies subject to U.S. jurisdiction to offer, pay, or promise to pay money or anything of value to any foreign official for the purpose of obtaining or retaining business. It is also unlawful to make a payment to any person while knowing that all or a portion of the payment will be offered, given, or promised, directly or indirectly, to any foreign official for the purposes of assisting the company in obtaining or retaining business. "Knowing" includes the concepts of "conscious disregard" and "willful blindness." The FCPA also covers foreign persons or companies that commit acts in furtherance of such bribery in the territory of the United States. U.S. persons or companies, or covered foreign persons or companies, should consult an attorney when confronted with FCPA issues. 

 

FE

Iron

 

FFRDLC 

Fully Funded Revolving Documentary Letter of Credit

 

FFSBLC

Fully Funded Standby Documentary Letter of Credit

 

FIS

Free In Store

 

Financial Document

(1) Document relating to payment. (2) The bill of exchange is the financial document most commonly used in collections and letters of credit. (3) Promissory notes are sometimes used in collections.

 

Fixed Forward Contract

Currency bought or sold at a given future date.

 

Floating

The free determination of rates based on supply and demand; for example, for exchange rates and/or interest rates.

 

FOB: Free On Board

Title and risk pass to buyer, including payment of all transportation and insurance cost, once delivered on board the ship at the named ocean port of shipment by the seller; used for sea or inland waterway transportation where it is important that the goods pass the ship's rail, ocean vessel port-to-port.

 

FOR

Free on Rail

 

Force Majeure

A common clause in a contract excusing a party from fulfilling its obligation because of events beyond its control, such as earthquakes, floods or war.

 

Foreign Currency Account

An account maintained by a bank in foreign currency and payable in that currency.

 

Foreign Currency Drafts

These are special foreign currency denominated bank cheques which customers can buy at any branch and send to their clients to pay off debts.

 

Foreign Drafts

Usually used to make payments – checks drawn on foreign banks in a wide variety of foreign currencies.

 

Foreign Exchange (FOREX)

The process of trading the currency of one country for that of another.

 

Foreign Exchange Contract

A mutually binding agreement between two counterparties to exchange a specific amount of one currency in exchange for a specific amount of another currency at a specific exchange rate, and on a specific date. FX may be bought or sold for delivery at a future time (up to one year for hard currencies, sometimes up to 3 to 5 years).

 

Foreign Exchange Exposure

A situation in which a US Company, selling/purchasing in a currency other than US dollars, runs the risk of receiving a reduced dollar amount or paying an increased dollar amount due to a fluctuating exchange rate.

 

Foreign Freight Forwarder

An independent business that dispatches shipment for exporters for a fee. Usually it handles services connected with an export shipment; preparation of documents, booking cargo space, warehouse, pier delivery and export clearance.

 

Forward (Future) Exchange

An agreement to purchase or sell an amount of foreign currency at a future date at a predetermined price. Forward rates have nothing to do with what spot rates are expected to be in the future; the difference between the spot rate and the forward rate is the difference between the interest rates of the two currencies expressed as “forward points.” Forward exchange is most commonly used to hedge or cover fluctuation risk in the value of a foreign currency over time.

 

Forward Contract

Commitment to buy or sell a currency at a fixed rate for delivery on a specified future date.

 

Forward Transactions

Foreign exchange transactions settling between three business days and one year (and sometimes longer).

 

Forwarder

An independent business that dispatches shipment for exporters for a fee. Usually it handles services connected with an export shipment; preparation of documents, booking cargo space, warehouse, pier delivery and export clearance.

 

Forwarder's Bill of Lading

A receipt for merchandise to be shipped.

 

FOT

Free on Truck 

 

Free In

Pricing term that indicates that the charterer of a vessel is responsible for the cost of loading goods onto the vessel. 

Free In and Out 

Pricing term that indicates that the charterer of the vessel is responsible for the cost of loading and unloading goods from the vessel. 

 

Free Out

Pricing term that indicates that the charterer of the vessel is responsible for the cost of unloading goods from the vessel. 

 

Freight Forwarder

An independent business that dispatches shipment for exporters for a fee. Usually it handles services connected with an export shipment; preparation of documents, booking cargo space, warehouse, pier delivery and export clearance.

 

Freight Forwarder's Receipt

Transport document issued by the Freight Forwarder. Not a document of title.

 

FTZ: Foreign-Trade Zones

Domestic U.S. sites that are considered outside U.S. customs territory and are available for activities that might otherwise by carried on overseas for customs reasons. For export operations, the zones provide accelerated export status for purposes of excise tax rebates. For re-export activities, no customs duties, federal excise taxes, or state or local ad valorem taxes are charged on foreign goods moved into zones unless and until the goods or products made from them are moved into customs territory. Thus the use of zones can be profitable for operations involving foreign dutiable materials and components being assembled or produced in the United States for re-export. 

 

FX Options

Provides protection from adverse exchange rate moves while maintaining the opportunity.

 

 

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