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SME Glossary
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Glossary of Export Import Trade Terms Starting with - F
Words   Description
"FAS"- Free Alongside Ship FAS- Free Alongside ship: Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

In FAS has price includes all the costs incurred in delivering the goods alongside the vessel at the port or nominated place of the buyer but there is not applicable charges to the seller for loading the goods on board of vessel and no ocean freight charges and marine insurance.

Seller: The responsibility of the seller are fulfilled when the goods are placed cleared along the ship.

Buyer: Buyer or Importer bear all the expenses and risks of loss or damage of transit goods which are delivered along the ship.
"FCA"- Free Carrier named point "FCA"- Free Carrier named point: Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier. 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.

Seller : The Seller's responsibility is to deliver the goods into the custody of the transporters at defined points. It is important for the chosen place of delivery to have an impact on the obligations of loading and unloading the goods.

Buyer : The Buyer nominates the means of transport or shipping mode and pays the shipment charges.

The seller and the buyer agree upon the place for delivery of goods. If the buyer nominates a person other than a carrier or transporter to receive the goods, the seller is deemed to fulfill his obligation to deliver the goods when they are delivered to that person.
"FOB" - Free On Board The FOB (Free on Board) price is inclusive of Ex-Works price, packing charges, transportation charges upto the place of shipment., Seller also responsible for o clear customs dues, quality inspection charges, weight measurement charges and other export related dues. It is important that the shipment term in the Bill of Lading must carry the wording "Shipped on Board' it must bear with signature of transporter or carrier or his authorized representative with the date on which goods were "Boarded".

Seller: Seller responsible for clear customs dues, quality inspection charges, weight measurement charges and other export related dues. It is important that the shipment term in the Bill of Lading must carry the wording "Shipped on Board' it must bear with signature of transporter or carrier or his authorized representative with the date on which goods were "Boarded".

Buyer: The buyer indicates the ship and pays freight, transfer expenses and risks is done when the goods passes or forwarding to the buyers warehouse by rail or ship.
FOB Endorsement Used with FOB, FAS, C&F, or CFR (but not CIF) quotations, FOB sales endorsement to an open marine policy can cover transit risk from the point of origin until title transfers. In these instances, the exporter relies on the importer to insure.
FTP Refers to Foreign Trade Policy, announced by the Commerce & Industry Minister on 31st August, 2004. It is a 5-year Policy (September 2004 -- March 2009), which takes effect from September 1, 2004.
FTWZ Free Trade and Warehousing Zone, a new scheme announced in the Foreign Trade Policy 2004-2009.
Face Value The value of a bond that appears on its face. Also referred to as par value or principal.
Factor Model A model that assumes a linear relation between an asset's expected return and one or more systematic risk factors.
Factoring Sale of an accounts receivable balance to buyers (factors) that are willing and able to bear the costs and risks of credit and collections.
Financial (Capital) Structure The proportion of debt and equity and the particular forms of debt and equity chosen to finance the assets of the firm.
Financial Contagion The spread of a financial crisis from one country or region to other countries or regions.
Financial Engineering The process of innovation by which new financial products are created.
Financial Innovation The process of designing new financial products, such as exotic currency options and swaps.
Financial Markets Markets for financial assets and liabilities.
Financial Policy The corporation's choices regarding the debt-equity mix, currencies of denomination, maturity structure, method of financing investment projects, and hedging decisions with a goal of maximizing the value of the firm to some set of stakeholders.
Financial Price Risk The risk of unexpected changes in a financial price, including currency (foreign exchange) risk, interest rate risk, and commodity price risk.
Financial Risk Financial risk refers to unexpected events in a country's financial, economic, or business life.
Financial Strategy The way in which the firm pursues its financial objectives.
First in-First Out (FIFO) An accounting method based on an assumption regarding the flow of goods that older stock is disposed of first, in accordance with good merchandising policy.
First-to-Market Advantage Also know as "first-mover advantage." The idea of first-mover advantage is that the initial occupant of a strategic position or niche (market segment) gains access to resources and capabilities that a follower cannot match.
Fixed Cost A cost that is fixed in total for a given period of time and for given volume levels. It is not dependent on the amount of goods or services produced during the period.
Fixed Exchange Rate System An exchange rate system in which governments stand ready to buy and sell currency at official exchange rates.
Fixed Forward Contract Currency is bought or sold at a given future date.
Floating Currency System An exchange rate system under which a government is not obligated to declare that its currency is convertible into a fixed amount of another currency.
Floating Exchange Rate An exchange rate system in which currency values are allowed to fluctuate according to supply and demand forces in the market without direct interference by government authorities.
Fob Fob means Free on Board - i.e., when an exporter delivers goods "free on board", he pays all charges involved in getting them actually onto the ship.
Force Majeure The title of a standard clause in marine contracts exempting the parties for no fulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods, or war.
Foreign -Trade Zones Act The Foreign-Trade Zones Act of June 18, 1934, (48 Stat. 998-1003; 19 U.S.C. 81a-81u) as amended.
Foreign Aid A grant of money, technical assistance, capital equipment, or other assistance typically extended by richer nations to poorer nations.
Foreign Bonds Bonds that are issued in a domestic market by a foreign borrower, denominated in domestic currency, marketed to domestic residents, and regulated by the domestic authorities.
Foreign Branch A foreign affiliate that is legally a part of the parent firm. In the U.S. tax code, foreign branch income is taxed as it is earned in the foreign country.
Foreign Debt Money owed by a nation to foreign investors, banks, or governments.
Foreign Direct investment (FDI) The act of building productive capacity directly in a foreign country.
Foreign Equity Requirements Investment rules that limit foreign ownership to a minority holding is a company.
Foreign Exchange The currency or credit instruments of a foreign country.
Foreign Exchange (Currency) Risk he risk of unexpected changes in foreign currency exchange rates.
Foreign Exchange Broker Brokers serving as matchmakers in the foreign exchange market that do not put their own money at risk.
Foreign Exchange Dealer A financial institution making a market in foreign exchange.
Foreign Exchange Markets Networks of commercial banks, investment banks, and other financial institutions that convert, buy, and sell currencies in the global economy.
Foreign First (FOFI) An accounting method based on an assumption regarding the flow of goods that foreign status merchandise is disposed of first.
Foreign Sales Agent An individual or firm that serves as the foreign representative of a domestic supplier and seeks sales abroad for the supplier.
Foreign Trade Zone A physical area in which the government allows firms to delay or avoid paying tariffs on imports.
Foreign-Source Income Income earned from foreign operations.
Foreign-Trade Zone/Free Trade Zone A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, or used for manufacturing, etc., within the zone and re-exported without duties being paid.
Forfaiting A form of factoring in which large, medium- to long-term receivables are sold to buyers (forfaiters) that are willing and able to bear the costs and risks of credit and collections.
Forward Contract A commitment to exchange a specified amount of one currency for a specified amount of another currency on a specified future date.
Forward Discount A currency whose nominal value in the forward market is lower than in the spot market. (Contrast with forward premium.)
Forward Market A market for forward contracts in which trades are made for future delivery according to an agreed-upon delivery date, exchange rate, and amount.
Forward Parity When the forward rate is an unbiased predictor of future spot exchange rates.
Forward Premium A currency whose nominal value in the forward market is higher than in the spot market. (Contrast with forward discount.)
Foul Bill of Lading A receipt of goods issued by a carrier with an indication that the goods were damaged when received.
Franchise Agreement An agreement in which a domestic company (the franchiser) licenses its trade name and or business system to an independent company (the franchisee) in a foreign market.
Franchising A parent company grants another independent entity the privilege to do business in a pre-specified manner, including manufacturing, selling products, marketing technology and other business approach.
Free Alongside(F.A.S.) A pricing term indicating that the quoted price includes the cost of delivering the goods alongside a designated vessel.
Free Cash Flow Cash flow after all positive-NPV projects have been exhausted in the firm's main line of business.
Free Port An area such as a port city into which merchandise may legally be moved without payment of duties.
Free Trade Area of the Americas (FTAA) A proposed hemispheric trade zone that would cover all of the countries in North, South, and Latin America. The FTAA is highly controversial.
Free Trade Zone An area designated by the government to which goods may be imported for processing and subsequent export on duty-free basis. Merchandise may be stored, used or manufactured in the zone and re-exported without duties being paid.
Freely Floating Exchange Rate System An exchange rate system in which currency values are allowed to fluctuate according to supply and demand forces in the market without direct interference by government authorities.
Freight Forwarder An independent business that handles export shipment on behalf of the shipper without vested interest in the products. A freight forwarder is a good source of information and assistance on export regulations and documentation.
Freight Shippers (Freight Forwarders) Agents used to coordinate the logistics of transportation.
Frequency Distribution The organization of data to show how often certain values or ranges of values occur.
Full Payout Lease A lease in which the lesser recovers, through the lease payments, all costs incurred in the lease plus an acceptable rate of return, without any reliance upon the leased equipment's future residual value.
Fundamental Analysis A method of predicting exchange rates using the relationships of exchange rates to fundamental economic variables such as GNP growth, money supply, and trade balances.
Future Value Value of a sum after investing it over one or more periods. Also called compound value.
Futures Commission Merchant A brokerage house that is authorized by a futures exchange to trade with retail clients.
Futures Contract A commitment to exchange a specified amount of one currency for a specified amount of another currency at a specified time in the future. Futures contracts are periodically marked-to-market.
 
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  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 16 Dec, 2018
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Is counterfeiting a major threat to SMEs?
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