Factor	An agent employed to sell in his own name (at an agreed commission) goods or merchandise belonging to his principal his acts being binding on the principal at the instance of third parties. Compare with Broker.
Factoring	Factoring is the discounting of a foreign account receivable that does not involve a draft. The exporter transfers title to its foreign accounts receivable to a factoring house (an organization that specializes in the financing of account receivable) for cash at a discount from the face value. Although factoring is often done without recourse to the exporter, the specific arrangements should be verified by the exporter. Factoring of foreign accounts receivables is less common than factoring of domestic receivables.
FAK (Freight all Kinds)	A uniform rate or tariff applicable irrespective of commodity. (FAD rates are the opposite of commodity rates or class rates).
FAPT	Foreign Asset Protection Trust
FAS	Free Alongside Ship. A pricing term indicating that the quoted price includes the cost of delivering the goods alongside a designated vessel.
FCA	"Free carrier" to named place. Replaces the former term "FOB named inland port" to designate the seller's responsibility for the cost of loading goods at the named shipping point. May be used for multimodal transport, container stations, and any mode of transport, including air.
FCC	Foreign Controlled Corporation
FCIA	Foreign Credit Insurance Association.
FCL	Where the load carried in a container equals one of the two operating maxima—in a weight or volume. The load in a container if the shipper was assured of a separate container exclusively for his cargo. A shipper packed container.
F.C.& S.	Free of Capture & Seizure - Clause excluding war risks from the Marine Policy; war risks can be covered by issuing a separate War Policy with an additional premium being charged.
Feeder Ship	Vessel used in short sea trade to serve ports at which deep-sea container ships do not call.
FI	Free In. A pricing term indicating that the charterer of a vessel is responsible for the cost of loading and unloading goods from the vessel.
Fixed Objects	Harbors, piers, buoys, etc., with which a ship might come into contact.
Flash Point	The temperature at which a liquid produces enough vapor to form an inflammable mixture with air.
Floating Policy	A form of cargo policy to cover many individual voyages. Seldom used today, having been replaced in practice by the open cover and open policy. Also see Open Policy.
Flotsam	Cargo cast or lost overboard and recoverable by reason of it remaining afloat.
FO	Free Out. A pricing term indicating that the charterer of a vessel is responsible for the cost of loading goods from the vessel.
FOB (F.O.B.)	"Free on board" at named port of export. A pricing term indicating that the quoted price for a good includes the cost of delivering the good onto a vessel provided by or for the purchaser in the U.S. port. The term "f.o.b." must be qualified by a name of location, such as shipping point, destination, name of a city, etc. The stated "f.o.b. point" is usually the location where the title to the goods passes from the seller to the buyer. The seller is liable for the risks of loss or damage to the goods up to the point where title passes to the buyer. The buyer is liable for such charges and risks after passing of title. Identification of which party is liable for transportation charges is a separate item.
F.O.B./F.A.S. Endorsement	If a merchant sells on F.O.B., F.A.S., C&F or similar terms, it is the buyer's responsibility to place the insurance.
Force Majeure	An occurrence outside human control (e.g. earthquake), a superior power. The title of a standard clause in marine contracts exempting the parties for nonfulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods, or war.
Forecastle	Raised part at the bow of the ship.
Foreign Exchange	The currency or credit instruments of a foreign country. Also, transactions involving purchase or sale of currencies.
Foreign Freight Forwarder	See Freight Forwarder.
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	See Free-trade Zone.
Foreign Corrupt Practice Act (FCPA)	The FCPA makes it unlawful for any person or firm (as well as persons acting on behalf of the firm) to offer, pay, or promise to pay (or authorize any such payment or promise) money or anything of value to any foreign official (or foreign political party or candidate for foreign political office) for the purpose of obtaining or retaining business.
Foreign Exchange	The currency or credit instruments of a foreign country. Also, transactions involving purchase or sale of currencies.
Foreign Exchange Certificate (FEC)	China's currency. The FEC is convertible into foreign currency at government controlled rates and was designed to be used for the purchase of imported goods.
Foreign Sales Corporations (FSC)	A FSC is a corporation set up in certain foreign countries or U.S. possessions to obtain a corporate tax exemption on a portion of its earnings generated by the sale or lease of export property. A corporation initially qualifies as a FSC by meeting six basic formation tests. A FSC (unless it is a small FSC) must also meet several foreign management tests throughout the year, If it complies with those requirements, it is entitled to an exemption on qualified transactions in which it performs the required foreign economic processes. The tax exemption can be as great as 15 percent on gross income from exporting, and the expenses can be kept low through the use of intermediaries who are familiar with and able to carry out the formal requirements.
Forfait Financing	Nonrecourse financing based on discounting of bills of exchange or promissory notes by a financing institution that absorbs the risk of collecting payment from the buyer without recourse to the supplier.
Forfaiting	Forfaiting is the selling, at a discount, of longer term accounts receivable or promissory notes of the foreign buyer. These instruments may also carry the guarantee of the foreign government. Both U.S. and European forfaiting houses, which purchase the instruments at a discount from the exporter, are active in the U.S. market. Because forfaiting may be done either with or without recourse to the exporter, the specific arrangements should be verified by the exporter.
Foul Bill of Lading	A receipt for goods issued by a carrier with an indication that the goods were damaged when received. Compare: Clean Bill of Lading.
Franchise	A percentage shown in a cargo policy that has to be attained before a partial loss claim is to be paid. However, once the franchise is attained the claim is paid in full.
Freeboard	This is the height between the deck line and the Plimsoll (or load) line.
Free Carrier (Port)	With multi-modal transport taking the same goods by sea, air and other modes, FOB principles (as above) again come into play. This time though, an exporter's obligations are met when the goods are handed over to the carrier named by the buyer and cleared for export at the specified place or port.
Free-Choice Clause	Clause in a countertrade contract that authorizes the primary supplier or its delegate to place orders for any products manufactured in the primary importer's country, without restrictions as to the sectors or companies that are entitled to receive these orders.
Free In and Out	Cargo to be loaded and discharged free to the vessel.
Free Port	An area such as a port city into which merchandise may legally be moved without payment of duties.
Freeing Port	An opening to allow water from the deck of a ship to flow over the side.
Free of Average	A policy term excluding partial loss claims.
Free of Capture and Seizure	The war risks exclusion clause that forms part of all marine insurance policies.
Free-on-board	Goods delivered on board the vessel free of extra charge to the purchaser.
Free-trade Zone	A port designated by the government of a country for duty-free entry of any nonprohibited goods. Merchandise may be stored, displayed, used for manufacturing, etc., within the zone and reexported without duties being paid. Duties are imposed on the merchandise (or items manufactured from the merchandise) only when the goods pass from the zone into an area of the country subject to the customs authority.
Free Trade Agreement	An agreement between countries to reduce and eventually eliminate tariff and nontariff barriers between them.
Freight	The money charged by the carrier for transporting goods.
Freight Abandonment	A term in a hull policy whereby the underwriter waives his right to freight earned or to be earned by a ship that is the subject of a total loss claim.
Freight Container	Article of transport equipment of a permanent character designed to facilitate the carriage of goods by one or more means of transport without intermediate re-handling of the goods themselves. This article shall be fitted with devices permitting its ready handling, be designed in order for easy filling and emptying and have an overall volume of 8 cu.m. (282 cu.ft.) or more. The term excludes vehicles and conventional packing.
Freight Contingency	The insurable interest of a consignee who has paid freight on goods when delivered over the ship's side but where the goods arc still subject to peril until they arrive at the final destination.
Freight Forwarder	Freight Forwarders, who are subject to regulations by the Interstate Commerce Commission, are defined by that commission as persons, other than carriers, who in the performance of contracts to transport property for the general public employ the services of rail, water, and other carriers. Freight Forwarders act on behalf of the shipper, and when retained for this purpose, attend to all the necessary details of shipping and documenting for the manufacturer or exporter, or vice versa, for the shipper and importer.
Freight Rate	The charge for transporting goods by water.
Frustration of Adventure	All circumstances whereby a ship or goods cannot reach the contemplated destination but remain undamaged and are not lost to the owner. This peril is normally excluded from policies covering war risks.
FSC	Foreign Sales Corporation
FSC (Fuel Surcharge)	Additional charge in a carrier's tariffs when the price of fuel increases.

   Copyright 2002, 2003, 2004, 2005, 2006, 2007, 2008 EnviroTech Financial, Inc. (714) 532-2731