MAIN TERMS
OF INTERNATIONAL NEGOTIATIONS
ASWP
Any Safe World Port
Any Safe Harbor in the World
This is not an official Incoterm, but it is often used in quotes from vendors such as "CIF ASWP", and is widely accepted.
BG – Bank Guarantee
It is a financial instrument issued by a bank on behalf of its customers for the benefit of the other party with whom the bank's customer has a financial obligation. In the event that the bank's customer fails to pay a contract, the beneficiary of the bank guarantee can resort to the bank guarantee and receive this payment.
Bill of Lading (B/L)
(Bill of lading)
It is a contract that defines the conditions for transporting a shipment. This contract is established by the carrier and delivered to the exporter when the shipment is received and placed on board the vessel. It is an essential document as it proves that the product was indeed shipped, and that the carrier has assumed responsibility for ensuring delivery to the buyer.
BCL – Bank Comfort Letter
Bank Attestation of Financial Capacity – It is a letter issued by the buyer's bank to the seller. This letter indicates that the buyer has sufficient funds to cover the cost of the order. A BCL is one of the first pieces of documentation a potential buyer must provide a seller to negotiate a deal. It does not, however, constitute a payment agreement for the seller, nor does it make the bank liable in any way.
CIF – Cost Insured Freight
(Insured Cost Freight)
It means that the seller is responsible for the cost of transport as well as its insurance, until the product arrives at the port of destination.
Commodities Exchange
This is an association that governs the trading rules of a jurisdiction. Being familiar with commodity exchange guidelines in the jurisdictions in which you are doing business is always advisable.
DC - DRAFT CONTRACT
A draft contract is an initial contract, which is drawn up and sent from the seller to the buyer. The buyer has the opportunity to make changes and send it back to the seller for consideration. This process continues until both parties are satisfied with the terms of the contract.
Escrow Account -
Guarantee Account
Escrow is a garantia provided for in a contract or commercial agreement that is held under the responsibility of a third party until the provisions of that agreement are fulfilled by both parties involved in the business.
Normally, this guarantee is made in the form of a cash deposit in an account created specifically for this - uma escrow account, which in Portuguese could be translated as “conta-caução” or “guarantee account” .
FCO - Full corporate offer
(complete commercial proposal)
It is issued by the seller when the preliminary stages of negotiation have been completed, such as issuing a letter of intent by the buyer, and performing a “soft probe” on their accounts by the buyer. from the seller. An FCO is a document that defines the terms of the sale.
FOB
Free On Board - If the terms of a trade are FOB the seller is required to have the product delivered to a port of the buyer's choice, on board a ship that is also of the buyer's choice.
Formal (FINAL) CONTRACT
When the negotiation phase of the draft contract is complete and both parties are satisfied, then a formal contract is drawn up and signed by both parties.
ICPO WITH BANKING COORDINATES
This is an ICPO that includes the company's bank details so the seller can soft probe their accounts to make sure there are enough funds to cover the cost of the purchase.
Irrevocable Letter of Credit
Irrevocable Letter of Credit - It is a document issued by the buyer's bank to the seller, which guarantees payment upon presentation of the stipulated documentation. As an irrevocable document, it cannot be cancelled, and the buyer's bank is legally obligated to make payment at the time the beneficiary meets the conditions set out in the letter of credit.
JOINT VENTURE
Joint venture is a strategic model of commercial partnership or alliance between companies aiming from a simple collaboration for commercial and/or technological purposes to the merger of companies into a single company, not implying in loss of identity and individuality as a legal entity of the participants.
LC-LOC - Letter of credit
Letters of credit are documents issued by the buyer's bank to the seller, which guarantee payment to the beneficiary of the letter of credit (the seller), provided that the terms and conditions set out in the letter of credit are met. This usually means submitting stipulated documentation to a bank within a set time frame.
POF - PROOF OF FUNDS
Proof of Funds refers to a document that demonstrates a company's ability to pay for a specific transaction. A bank statement, security statement or escrow statement usually qualifies as proof of funds.
BP - PERFORMANCE BOND
This is a type of bank guarantee issued from the seller to the buyer. It guarantees that the seller will comply with the terms of the contract. Usually issued in the amount of cinco percent of the total contract amount, a security deposit can be triggered by the buyer in the event that the seller breaches the contract and does not provide the product stipulated in the contract.
PRIME BANK
The 25 best Banks in the World. These are preferred (or in most cases, even mandatory) trusted banks in the trade of goods.
RWA - ready, willing and able
(Ready, available and fit)
This is a document that is issued by the buyer's bank. The bank confirms that its customer has sufficient funds in its account and is willing and able to undertake the contract.
SBLSC - STANDBY LETTER OF CREDIT
A standby letter of credit is a letter of credit that acts as a guarantee from the buyer's bank that there are sufficient funds in place to cover all shipping charges. Standby letters of credit are not normally used. If a seller wishes to have payment guaranteed by the buyer's bank, a regular letter of credit is used.
SKR
Safe Keeping Receipt's, or SKR's, are bank instruments that are on the rise as collateral for alternative financing. An SKR is a financial instrument that is issued by a safe deposit facility, bank or warehouse. In storage, assets or other valuables are in a safe, secure area.
Soft Probe
It is a confirmation method used by banks so that a seller can assess a buyer's creditworthiness. Such inquiry is not registered in the buyer's bank record and nothing more than confirmation or not of balance availability is passed on to the seller.
SWIFT - SOCIETY FOR WORLDWIDE INTER BANK FINANCIAL TELECOMMUNICATION
This is a globalized service that is responsible for facilitating communication between banks. Most payments are made via SWIFT.