International trade deals can require many documents that officially represent million-dollar shipments on paper.
Mandatory trade documents must be filled out correctly and completely. Otherwise, customs authorities in the exporting or importing country have the authority to detain, delay and even dispose of poorly documented shipments.
Unfortunately, more than 25 different terms can be used throughout these detailed trade documents to refer to the 4 parties commonly involved in an international trade shipment.
Types of Trade Documents
Trade documentation falls into 3 major categories: commercial, financial and transportation.
Commercial documents include:
- Invoice (commercial and customs versions are sometimes used for the same shipment)
- Cargo control document
- Weight certificate (especially for commodity shipments valued by weight)
- Certificate of origin (especially for shipments involving free trade areas including NAFTA)
- Insurance certificate (must match value declared for shipment)
- Packing list (importer can define packing requirements for shipment)
- Export declaration (B3 for Canada customs)
- Import declaration (B13A for Canada customs).
Financial documents include a bill of exchange (banker or trader guarantees payment), letter of credit (revocable or irrevocable) and a draft which resembles a check drawn on a letter of credit.
The most important transportation document is the original Bill of Lading (BOL). The BOL is the only international trade document that can be used to transfer title from exporter to importer. Other transportation documents are the air waybill and trucker waybill. The waybills include contact information about the exporter and importer as well as for the transportation company that makes the shipment delivery. Waybills often replace the cargo control document (listed under commercial documents above).
Parties to an International Trade Sale
Four parties are typically involved in trade transactions, namely the:
- Exporter
- Exporter’s bank
- Importer
- Importer’s bank.
The checklists of terms are grouped below for each of the major parties commonly involved in a trade deal.
Terms for Exporter
Readers may know that the exporter is sometimes referred to as the seller, shipper or the vendor in trade documentation. Few people realize that exporters are also called drawers. This is because shippers are responsible for filling out (or drawing) most documents used in the trade process.
Below are 8 synonyms used for exporter in international trade documents.
- Beneficiary
- Drawer
- Payee
- Principal (particularly on the certificate of origin)
- Seller
- Sender
- Shipper
- Vendor.
Terms for Exporter’s Bank
The following 4 synonyms refer to the exporter’s bank.
- Advising bank
- Confirming bank
- Drawer’s bank
- Remitting bank.
Terms for Importer
There are 7 synonyms commonly used for importer in international trade documents.
- Applicant
- Buyer
- Consignee
- Drawee
- Notified party
- Payer
- Receiver.
Terms for Importer’s Bank
The following 6 examples of occupational vocabulary refer to the importer’s bank.
- Collecting bank
- Consignee (when importer’s bank takes title to delivered goods)
- Drawee’s bank
- Issuing bank
- Opening bank
- Presenting bank.
Given how many documents involved in an international trade deal, the more direct plain language approach is to use only 4 terms throughout. There is less chance for miscommunication when one limits document language to exporter, exporter’s bank, importer and importer’s bank.
Using those terms consistently will also reduce costs incurred to translate complex trade documents into another language such as French, Portuguese or Chinese.
Sources for this Article
This article presents independent insights and comments based on a review of Dr. Harmeet Singh Kohli’s analysis titled International Trade – A Simple View to a Complex Process (Global Training Center, Inc).
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