ACP - The African, Caribbean and Pacific countries (ACP) group was formed when the first Lomé Convention was signed with the EU (then the EEC) in 1975. In 2002, it encompassed 78 states (48 African states, 16 Caribbean states, 14 Pacific states), which all have preferential trading relations with the EU.
Additional duty – includes the following:
- EA: Agricultural component
- ADSZ: Additional duties on sugar contents
- ADFM: additional duty on flour contents
- EAR: reduced agricultural component
- ADSZR: reduced additional duty on sugar contents
- ADFMR: reduced additional duty on flour contents
Ad Valorem duty – Duty levied as a percentage of value
Airworthiness tariff suspension – suspension of common customs tariff duties for parts, components and other goods intended for incorporation or use in civil aircraft and falling within Chapters 25 to 97 of the CCT, for which an airworthiness certificate has been issued by a party authorised by aviation authorities in the EU or a non-EU country.
Anti-dumping (AD) - Dumping is exporting at below national market cost to gain market share on the world market. Article VI of the 1994 GATT authorises anti-dumping duties to be levied on dumped goods equal to the difference between their export price and their normal value, if dumping causes injury to producers of competing products in the importing country.
Anti-dumping duty - Article VI of GATT allows countries to impose anti-dumping duties against dumped goods if dumping causes injury to producers of competing products in the importing country. The duties are equal to the difference between the export price of the offending goods and their normal value, if dumping causes damage.
Approved exporter - an exporter who has met certain conditions imposed by the customs authorities and who is allowed to make out invoice declarations. The customs authorities can also withdraw approval from exporters who abuse it. The approval procedures depend on national rules.
ATA carnet - Customs document used for the export, transit and temporary admission of goods for specific purposes, e.g. for displays, exhibitions and fairs, as professional equipment and as commercial samples.
Bilateral agreement - an agreement between two states that is legally binding only for these two states, with benefits typically not shared with other countries.
Bill of lading - Document representing the sea transport contract between the shipper and the carrier. It also constitutes proof of ownership of the goods.
Binding origin information (BOI) - written information issued by national customs authorities in EU countries on the preferential or non-preferential origin of specific goods to be imported or exported.
Binding tariff information (BTI) - written information issued by national customs authorities in EU countries on how goods are classified in the Combined Nomenclature or a nomenclature based on it, such as the TARIC (Art. 12 of the customs code).
Cariforum - Political organisation designed to promote the regional integration of the Caribbean countries in the ACP Group. In 2002, the members were Antigua and Barbuda, The Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago.
CE marking (logo) – must appear on any product covered by a European directive(s) on safety, public health or consumer protection. It confirms that the product meets the requirements in those directives. A product's conformity must be assessed before the marking may be used. Assessments are carried out by bodies certified by national authorities in the EU. Products bearing this marking may be sold without restriction in the European Economic Area.
Certificate of conformity – Some customers and importing countries require a certificate proving that the quality and conformity of the goods have been inspected by a specialised inspection company.
Certificate of origin - Document certifying the country of manufacture. Can be required by customs authorities. Different preferential arrangements require different specific proofs of origin. For example, the EU's preferential arrangements with certain countries require a movement certificate EUR.1 or EUR-MED, whereas under the generalised system of preferences (GSP), a certificate of origin Form A is required.
CFR "Cost and freight" (named port of destination) - the seller pays the sea freight costs as far as the named port. The cost of loading onto the ship and the export formalities are borne by the exporter.
Charterer - Person who manages transport of freight by land, air or sea.
CIF "Cost, insurance and freight" (named port of destination): Means the same as CFR (cost and freight); the seller must take out a maritime insurance policy against the risk of loss or damage to goods during transport. The exporter pays the insurance premium and the customs clearance for the goods, but they are transported at the importer's risk. The risk is transferred when the goods pass the ship's rail at the port of embarkation.
CIP "Carriage and insurance paid to" (named destination). The exporter selects the carrier and pays the freight costs to the named destination. When the first carrier takes possession of the goods, all risks of loss or damage – including any increase in shipping costs – are transferred from the seller to the buyer. CIP indicates that the seller is required to provide insurance and pay the related premium.
CITES - Convention on International Trade in Endangered Species (multilateral agreement on the environment)
Codex Alimentarius – FAO/WHO committee concerned with international food safety standards. The standards, directives and recommendations in the Codex are recognised as global references by the World Trade Organisation (WTO), in particular the agreement on sanitary and phytosanitary measures (SPS).
COM - European Commission
Combined nomenclature (CN) – list of goods descriptions, based on the harmonised system, which makes it possible to apply the Common Customs Tariff and other EU policies, as well as compile statistics on foreign trade.
COMEXT – Eurostat reference database on EU trade. Contains all statistics on trade in goods inside the EU between its member countries, and between the EU and its 250 trading partners worldwide.
Common Customs Tariff (CCT) - all EU rules fixing import and export duties and exemptions for specific goods, including agricultural, anti-dumping and preferential duties, tariff quotas and tariff suspensions.
Community transit - Customs procedure that allows goods to be moved from one point in the EU to another.
Consignment note – document accompanying goods that is drawn up by the shipper. It serves as proof that a contract for carriage has been concluded (and describes its content). It also serves as a receipt when goods are picked up from the shipper and delivered to the recipient.
Cotonou Agreement - Signed in 2000 to replace the Lomé Convention. Its main objective is to create a new framework for cooperation between the members of the African, Caribbean and Pacific group of countries (ACP) and the EU. Trade is central to the agreement. The new agreement changes the existing system to bring it into line with WTO rules and allow the ACP countries to play a full part in international trade. The Agreement provides for the negotiation of new trading arrangements [see EPA] to liberalise trade between the two parties, ending the previous system of non-reciprocal trade preferences.
CPT "Carriage paid to": the exporter pays for the goods to be transported to the named destination. The buyer is responsible for all risks of loss or damage, as well as any additional charges that may arise after the first carrier has taken possession of the goods. When the goods are delivered to the carrier, the responsibility for risk is transferred from the seller to the buyer.
Cumulation - a system allowing products originating in country A to be further processed or added to products originating in country B, as if they had originated in country B. The resulting product has the origin of country B. The system can only be applied between countries applying identical origin rules. An important point to remember is that in the case of cumulation, the working or processing carried out in each non-EU country on originating products does not have to be 'sufficient working or processing' as set out in the list rules. There are four types of cumulation: bilateral, diagonal, regional and full.
- Bilateral cumulation – an arrangement between two countries where a free trade agreement or autonomous arrangement contains a provision allowing them to cumulate origin. This is the basic type of cumulation and is common to all origin arrangements. Only originating products or materials can benefit from it.
- Diagonal cumulation – an arrangement between more than two countries with free trade agreements containing identical origin rules and provision for cumulation between them. As with bilateral cumulation, only originating products or materials can benefit from diagonal cumulation. Although more than two countries can be involved in the manufacture of a product, it will have the origin of the country where the last working or processing took place, provided this was more than a minimal operation. Diagonal cumulation operates between the EU and the countries of the "pan-Euro-Mediterranean cumulation zone".
- Regional cumulation - a form of diagonal cumulation, which exists only under the generalised system of preferences (GSP) and operates between members of a regional group of beneficiary countries (e.g. ASEAN).
- Full cumulation - the parties to an agreement may carry out working or processing on non-originating products in the area formed by them. Full cumulation means that all operations carried out in the participating countries are taken into account. While other forms of cumulation require that the goods be originating before being exported from one party to another for further working or processing, this is not the case with full cumulation. Full cumulation simply requires that all the working or processing in the list rules must be carried out on non-originating materials in order for the final product to obtain origin. Full cumulation is in operation between the EU and, for example, the countries of the EEA, the Maghreb, the EU's overseas countries and territories and the ACP.
Customs - The authorities responsible for collecting duties levied by a country on imports and exports.
Customs duty - Tax imposed on imports by the customs authority of a country, either as a percentage of the value or at a specific rate (e.g. $7 per 100 kg).
Customs value - Value of goods established in accordance with the customs rules for determining the level of ad valorem duties.
DAF "Delivered at frontier" (named place of delivery at a specific frontier) – used primarily for ground and rail carriage. The seller has met his obligations once the goods have been delivered, having cleared customs for export at the agreed location, at the specific frontier.
DDP "Delivered duty paid" – the seller (exporter) handles everything, including clearing the goods for import and paying any duties or taxes. The risks and costs are transferred when the goods are delivered to the buyer. In general, the seller is responsible for unloading.
DDU "Delivered duty unpaid" (named destination) – the seller's obligations have been met once the goods have been made available to the buyer at the named destination in the country of import. The exporter is liable for any costs and risks arising from the transport of the goods to that destination. The buyer is liable for any duties, taxes or other official charges required upon import.
DES "Delivered ex-ship" (named port of destination) – the seller has met his delivery obligations once the goods, which have not cleared customs for import, have been made available to the buyer on board the ship at the named port of destination.
DEQ "Delivered ex-quay" (agreed port of destination, duty paid) – the seller has met his delivery obligations once the goods, which have cleared customs for import, have been made available to the buyer on the quay (unloading wharf) at the agreed port of destination. This term may be used only if the seller was able to obtain an import licence.
Direct transport rule - Preferential arrangements contain rules on transporting preferential goods from one party's territory to the other. Direct transport ensures that the goods arriving in the country of import are the same as those that left the country of export. However, if for any reason the goods pass through or stop over in a country that is neither the beneficiary country nor an EU country, the conditions of direct transport are considered to have been met if the goods stay under customs supervision during that time.
Dumping - Selling goods in another country at a price lower than the price on the home market, or lower than the production and shipping costs.
EC – The European Community merges three former European Communities - for nuclear energy (EURATOM), coal and steel (ECSC) and the European Economic Community (EEC or Common Market).
EEC - European Economic Community
Economic Partnership Agreements (EPA) - the ACP countries and the EU have agreed to conclude economic integration agreements - new WTO-compatible trading arrangements that progressively remove barriers to trade between them and enhance cooperation in all areas related to trade. To this end, EPAs will be negotiated with ACP regions engaged in a regional economic integration process. EPAs are thus intended to consolidate regional integration initiatives within the ACP. They also provide an open, transparent and predictable framework for goods and services to circulate freely, thus making ACP countries more competitive and easing their transition towards full participation in a liberalising world economy, complementing any initiative taken in the multilateral context. The EPAs took effect on 1January 2008.
EMAA - The Euro-Mediterranean Association Agreement is a series of individual agreements between the EU and each of its Mediterranean partner countries, in relation to the Barcelona Declaration. They outline the strategic areas of cooperation for association policies and determine priorities for activities to achieve the goals of the Barcelona Declaration.
Erga Omnes - In general law, an act, decision or judgement that affects all parties, not just those directly concerned.
EU - European Union
EUR 25 – The EU before its most recent expansion (at which time it had 25 member countries) – i.e. until 31 December 2006.
EUR 27 - the EU since its most recent expansion (when Bulgaria and Romania joined), i.e. since 1 January 2001.
Euro (€) - the currency of the counties belonging to the eurozone, since January 1999.
Euromed - see EMAA
Eurostat – the EU's statistical office, responsible for providing the EU with European-level statistics. Different countries' statistics are made comparable by standardising methods under the European Statistical System (ESS).
Everything but arms (EBA) - a special scheme for the 50 least developed countries, granting zero duty on 9 800 products/types of product under the CCT, except arms and ammunition.
Excise duty - A tax on quantity, not value - for example N euros per hectolitre of alcohol sold. This is a duty paid to consume certain products. Generally levied on alcohol, tobacco, energy products (oil, gas, etc), vehicles and "luxury" products.
FCT – Free carrier – the seller's obligations are fulfilled once the duty-paid goods are delivered to the buyer's appointed carrier at the agreed place. The term can refer to all means of transport – air, rail, road, sea or a combination of these.
Flat-rate value - if application of the common customs tariff duty rate depends on the entry price of the imported consignment, the veracity of the price is checked using a flat-rate import value calculated by the Commission, by product and by origin, on the basis of the weighted average of prices for the product on member countries' representative import markets or on other markets, where appropriate.
FLB – Free alongside ship (in a named port) – risks and costs are transferred alongside the ship at the port of loading. The customs clearance formalities, costs and risks are borne by the buyer from then on.
FOB – Free on board (in a named port). The buyer controls the shipping, chooses the ship and pays the freight. The costs and risks are transferred at the ship's rail.
FOR (Free on rail) - the price of the goods includes transport (from the warehouse at the station of departure), plus loading in the train
Free - the consigner meets the sending costs. Also called "free delivery".
Freight – all goods taken over by a carrier under the terms of an agreement with the consigner.
GATT (General Agreement on Tariffs and Trade): this treaty was the precursor to the World Trade Organisation (WTO). It served as a framework for negotiations aiming to liberalise world trade and helped structure the multilateral trading system. GATT 1947 refers to the old version of the GATT; whereas GATT 1994 is the new version of the General Agreement, incorporated into the WTO, which governs trade in goods.
General tolerance rule - manufacturers can use non-originating materials up to a specific percentage value of the ex-works price. However, if the specific working or processing rule already allows the use of a percentage of non-originating materials, the tolerance cannot be used to exceed that amount. The maximum will always be that allowed by the specific rule. The percentage of the tolerance allowed varies from one preferential scheme to another.
Generalised system of preferences (GSP) - a system for unilaterally granting preferential tariffs to certain countries on a non-reciprocal basis. It was approved by GATT in 1971, allowing industrialised members to adopt one-way tariff preferences in favour of developing countries. The waiver was made more general and permanent in 1979 with adoption of the "enabling clause" allowing industrialised countries to implement measures extending "differential and more favourable treatment" to developing countries. The EU launched this preferential system in 1971 to help developing countries sell more of their products in industrialised countries and build up their own industry. GSP preferences are granted to exports of specific products from particular countries. The EU's GSP has a ten-year cycle.
GSP Plus – a special EU scheme to encourage sustainable development and government. It grants additional preferences to help vulnerable developing countries ratify and implement the international conventions on human rights, workers' rights, environmental protection and good government.
GMO – Genetically Modified Organism
Graduation - "Graduation" is used to exclude from the generalised system of preferences (GSP) products originating in a beneficiary country, when they reach a level of competitiveness on the EU market at which they no longer need the GSP to compete. Unlike the previous GSP which had GSP-specific "sectors", graduation is now based on the "sections" of the Common Customs Tariff (CCT). A section (i.e., a large group of products in a particular sector – the CCT has 21) from individual countries are “graduated” (excluded) from GSP when those products exceed 15% of EU imports under the GSP of the same products as an annual average over the last three years.
Harmonised system – An international nomenclature developed by the World Customs Organisation (arranged in six-digit codes), allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes.
Insurance certificate - If the seller insures the goods, the insurance certificate must specify the value of the goods and the insurance premium.
Internal taxes - VAT and other duties applicable to a given product in the EU country concerned.
Inward processing – Inward processing allows imported raw materials or semi-manufactured goods to be processed for re-export within the Community by Community manufacturers without a requirement that the manufacturers have to pay customs duty and VAT on the goods being used.
IPPC (International Plant Protection Convention) - an international agreement fixing international standards for plant health measures. These standards, directives and recommendations are recognised as global references by the World Trade Organisation (WTO), in particular the Agreement on Sanitary and Phytosanitary Measures (SPS).
Least developed countries - 49 countries (defined by the UN) deemed structurally handicapped in their development process and so more at risk than their peers of failing to come out of poverty and needing the most help to develop. One indicator proving these really are the world's poorest nations is their tiny share of world exports. With some 10% of the world’s population, they account for less than 0.5% of world exports. In 1980, their share was 0.8%. Sometimes referred to as LLDC, where LDC is used to mean ‘less developed countries’.
List rules - List of working or processing which must be done on non-originating materials in order for the product manufactured to obtain originating status.
Manifest – For maritime and air transport, the document listing the cargo on board the means of transport. The document may be used for customs purposes, subject to prior authorisation, when it contains the necessary particulars, in particular with regard to the customs status of the goods and their identification.
MERCOSUR – South American regional trade grouping comprising Argentina, Brazil, Paraguay and Uruguay. It has reduced tariffs on trade between those countries by up to 90%.
Minimal operations - Minimal operations are operations regarded as too minor to ever confer originating status, whether carried out individually or in combination. All preferential origin rules contain an article defining the working or processing which is insufficient to confer originating status. This applies even if the product satisfies the list rule. On the other hand, when determining origin within a cumulation system, any working or processing carried out must exceed the above-mentioned minimal operations but does not necessarily need to satisfy the relevant list rule for the arrangement.
Most-favoured-nation (MFN) – refers to the principle of not discriminating between one’s trading partners, i.e. all are granted "most-favoured-nation treatment". Under WTO rules, an advantage negotiated with one country must be extended to all trading partners who are WTO members. (DG TRADE Glossary)
MS - Member states (of the EU)
Offer– a country's proposal for further liberalisation.
Office international de epizooties – original name of the World Organisation for Animal Health, which deals with international standards concerning animal health.
OIE – World Organisation for Animal Health, an international organisation that seeks to improve animal health throughout the world. The standards, directives and recommendations set out by the OIE are recognised as global references by the World Trade Organisation (WTO), in particular the agreement on sanitary and phytosanitary measures (SPS). The OIE acronym is a carry-over of the historical name of the organisation, the "Office international des epizooties".
OJ – Official Journal (of the European Union)
Originating status - Products have originating status in a beneficiary country if they are either "wholly obtained" or "sufficiently worked or processed" there.
- "wholly obtained" - applies mainly to natural products from the beneficiary country and goods made entirely from them. This means a product cannot contain imported non-originating elements.
- "sufficiently worked or processed" - Non-originating materials or components must have undergone a certain minimum level of working – according to the specifications – in the beneficiary country.
Origin of goods – in international trade, the "origin" is the 'economic' nationality of the goods (not to be confused with "provenance"). A good's origin must be identified because that determines what duties, measures, equivalent taxes, quantitative restrictions and obligations apply. (See rules of origin)
Packing list – indicates how the goods for export are packed, identifies the contents of the boxes and gives the volume, weight and dimensions of each parcel in the consignment. Customs agents will request the list when goods are exported or imported, and operators and customers must be able to produce it.
Point of unloading – The location (point of delivery) where goods are unloaded or signed for.
Preferential tariff quotas - Tariff concessions (more favourable duty rates) granted on a quantity of goods fixed in advance, under various (i) agreements between the EU and other countries and (ii) autonomous preferential arrangements granted to certain countries.
Principle of territoriality - means that the working or processing must be carried out on the territory of the parties. Modern manufacturing processes mean it is not always possible to meet this requirement. It may be necessary to do some processing in a country not party to the preferential arrangement. Some arrangements allow such external working or processing provided it conforms to certain specified conditions. Failure to comply with the specified conditions will result in the returning product being treated as non-originating.
Proof of origin – Proof that the goods fulfil the origin requirements laid down (e.g. EUR.1, Form A, invoice declaration)
PSI – Preshipment inspection - the practice of employing specialised private companies to check shipment details of goods ordered overseas, such as price, quantity, quality, etc.
Quantitative restrictions - specific numerical limits on the quantity or value of goods that can be imported (or exported) during a specific period.
Quota - The quantity of goods of a specific kind that may be imported into a country without restriction or imposition of additional duties.
Rules of origin - Laws, regulations and administrative procedures that determine a product's country of origin, i.e. what country it is deemed to have been made in for tariff and other trade purposes. These rules can vary from country to country.
Sanitary and phytosanitary regulations (SPS) – designed to protect human, animal and plant life and health, and help ensure food is safe for consumption.
Single administrative document (SAD) – An administrative document used in the EU for trade with non EU-countries and for the movement of non-EU of goods within the EU. The SAD ensures openness in national administrative requirements, rationalises and reduces paperwork, minimises the amount of information asked for and standardises and harmonises data.
SPS – See Sanitary and Phytosanitary regulations
SSA - sub-Saharan Africa
Supplementary units (import) – when available, "supplementary units" is another way to express the amount of imports, depending on the type of goods, for example:
- "per litre" for wine
- "per item" for shirts, etc.
TARIC – integrated EU tariff, stored in a Commission database containing EU import and export measures applicable to specific goods, such as tariff suspensions, tariff quotas, tariff preferences, anti-dumping duties, quantitative restrictions, embargoes and export refunds.
Tariff line (TL in tables) – a product as defined in the lists of duty rates. Products may be subdivided; the product can be identified using the number of figures in the heading in the Harmonised System (HS).
Tariff preference – Notwithstanding the rules governing the multilateral trading system, developed countries may grant tariff preferences to developing economies without requiring reciprocity (under the Generalised system of preferences or on a category, regional or bilateral basis). In some cases, developing countries have become reliant on the advantageous market access associated with these preferences.
TIR carnet – Transit document serving both as a customs declaration and a guarantee in countries that are a contracting party to the TIR Convention.
UPOV - International Union for the Protection of New Varieties of Plants
Value-added tax (VAT) - indirect consumption tax. The rate is fixed by each of the EU's member countries.
VAT - see Value-added tax
Warehouse - Place for storing goods. Used in particular for receiving, preparing and dispatching goods.
WTO – World Trade Organization
- The following explanations should be considered as working definitions. Exact definitions can be found in the relevant regulations and legal texts.
- Care has been taken to ensure the accuracy of this information, but no responsibility can be accepted for any inadvertent errors or omissions.