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Glossary of Terms

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[A]

Acceptance - This term has several related meanings:

(1) A time draft (or bill of exchange) that the drawee has accepted and is unconditionally obligated to pay at maturity. The draft must be presented first for acceptance - the drawee becomes the "acceptor" - then for payment. The word "accepted" and the date and place of payment must be written on the face of the draft.
(2) The drawee's act in receiving a draft and thus entering into the obligation to pay its value at maturity.
(3) Broadly speaking, any agreement to purchase goods under specified terms. An agreement to purchase goods at a stated price and under stated terms.

Ad Valorem - According to value. See Duty.

AECA - Arms Export Control Act

Air Waybill - A bill of lading that used only for air transport and is non-negotiable.

Arbitrage - The process of buying foreign exchange, stocks, bonds, and other commodities in one market and immediately selling them in another market at higher prices.

Automated Export System (AES) – The automated Export System (AES) is the Department of Commerce, Bureau of Census, Electronic filing of export information. The AES shall serve as the primary system for collection of export data for the Department of State. In accordance with this subchapter U.S. exporters are required to report export information using AES for all hardware exports. Exports of technical data and defense services shall be reported directly to the Directorate of Defense Trade Controls (DDTC). Also, request for special reporting may be made by DDTC on a case-by-case basis, (e.g., compliance, enforcement, congressional mandates). (As Per ITAR 120.30)
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[B]

Balance of Trade - The difference between a country's total imports and exports. If exports exceed imports, a favorable balance of trade exists; if not, a trade deficit is said to exist.

Bill of Lading - A document that establishes the terms of a contract between a shipper and a transportation company under which freight is to be moved between specified points for a specified fee. Usually prepared by the shipper on documents issued by the carrier, it serves as a document of title, a contract of carriage, and receipt for goods.

Bonded Warehouse - A building authorized by customs authorities for the storage of goods without payment of duties until removal.
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[C]

Certificate of Origin - A document certifying the country of origin of specified goods.

Classification - The categorization of merchandised based on the Harmonized Tariff Schedule of the United States (HTSUSA) which affects the duty rate when imported.

Commercial Invoice - An itemized list of goods shipped, usually included among an exporter's collection papers.

Customs - The authorities designated to collect duties levied by a country on imports and exports. The term also applies to the procedures involved in such collection.
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[D]

Defense Article – Defense article means any item or technical data designated in ITAR 121.1 (USML). This policy described in ITAR 120.3 is applicable to designations of additional items. This term includes technical data recorded or stored in any physical form, models, mockups or other items that reveal technical data directly relating to items designated in ITAR 121.1 of this subchapter. It does not include basic marketing information on function or purpose or general system descriptions. (ITAR 120.6)

Defense Service – (a) Defense service means:

1) The furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles;

2) The furnishing to foreign persons of any technical data controlled under this subchapter (see ITAR 120.10), whether in the United States or abroad; or

3) Military training of foreign units and forces, regular and irregular, including formal or informal instruction of foreign persons in the United States or abroad or by correspondence courses, technical, educational, or information publications and media of all kinds, training aid, orientation, training exercise, and military advice. (see also ITAR 124.1)

Directorate of Defense Trade Controls (DDTC) –Directorate of Defense Trade Controls, Bureau of Political Military Affairs, Department of State, Washington, DC 20522-0112. (As Per ITAR 120.12)

Distribution Agreement (DA) – An agreement (e.g., a contract) to establish a warehouse or distribution point abroad for defense articles exported from the United States for subsequent distribution to entities in an approved sales territory. (As Per ITAR 120.23)

Drawback - Articles manufactured or produced in the United States with the use of imported components or raw materials and later exported are entitled to a refund of up to 99 percent of the duty charged on the imported components. The refund of duty is known as a drawback.

Dumping - Selling merchandise in another country at a price below the price at which the same merchandise is sold in the home market or selling such merchandise below the costs incurred in production and shipment.

Duty - A tax imposed on imports by the customs authority of a country.
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[E]

Empowered Official (E/O) – (a) Empowered official means a U.S. person who:

1. Is directly employed by the applicant or a subsidiary in a position having authority for policy or management within the applicant organization; and

2. Is legally empowered in writing by the applicant to sign license applications or other requests for approval on behalf of the applicant; and

3. Understands the provisions and requirements of the various export control statutes and regulations, and the criminal liability, civil liability and administrative penalties for violating the Arms Export Control Act and the International Traffic in Arms Regulations; and

4. Has the independent authority to:

(i) Enquire into any aspect of a proposed export or temporary import by the applicant, and

(ii) Verify the legality of the transaction and the accuracy of the information to be submitted; and

(iii) Refuse to sign any license application or other request for approval without prejudice or other adverse recourse. (As Per ITAR 120.25)

Entry - The documentation required to be filed with customs to secure the release of imported products from customs custody.

Export - (a) Export means;

1) Sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data; or

2) Transferring registration, control or ownership to a foreign person of any aircraft, vessel, or satellite covered by the U.S. Munitions List, whether in the United Sates or abroad; or

3) Disclosing (including oral or visual disclosure) or transferring in the United States any defense article to an embassy, any agency or subdivision of a foreign government (e.g., diplomatic missions); or

4)Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad; or

5) Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad.

6) A launch vehicle or payload shall not, by reason of the launching of such vehicle, be considered an export for proposes of this subchapter. However, for certain limited purposes (see ITAR 126.1 of this subchapter), the controls of this subchapter may apply to any sale, transfer or proposal to sell or transfer defense articles or defense services. (As Per ITAR 120.17)

Export Control Commodity Number (ECCN) – The commodity classification numbers used in supplement No. 1 to Part 774 of the Export Administration Regulations. The Export Control Commodity Number consists of a set of digits and a letter. The first digit identifies the general category within the entry falls (e.g., 3A001). The letter immediately following this first digit identifies under which of the five groups* the item is listed (e.g., 3A001). The second digit differentiates individual entries by identifying the type of controls associated with the items contained in the entry (e.g., 3A001). The code letter is the key to documentation requirements and indicates the country group level of control for CCl entries. (EAR, Supplement No. 1 to Part 738)

Export Control Documents – For purposes of the ITAR, “export or in transit control documents” include the following:

  • An application for a permanent export or an in transit license and supporting documents

  • Shippers export declaration

  • Invoice

  • Declaration of destination

  • Delivery verification

  • Application for temporary export

  • Application for registration

  • Purchase order

  • Foreign import certificate

  • Bill-of-lading

  • Air waybill

  • Non-Transfer And Use Certificate [DSP-83}

  • Any other document used in the regulation or control of a defense article, defense service or technical data for which a license or approval is required by the ITAR (ITAR, 127.2(b))

Export Administration Regulations (EAR)

Export License - A government document that permits the licensee to export designated goods to certain destinations. See General export license and Individually validated export license.
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[F]

Foreign Person – Foreign person means any natural person who is not a lawful permanent resident as defined by 8 U.S.C. 1101(a)(20) or who is not a protected individual as defined by 8 U.S.C. 1324b(a)(3). It also means any foreign corporation, business association, partnership, trust, society or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments and any agency or subdivision of foreign governments (e.g., diplomatic missions). (As Per ITAR 120.16)

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, used for manufacturing, etc., within the zone and re-exported without duties being paid. Duties are imposed on the merchandise (or items manufacture d from the merchandise) only when the goods pass from the zone into an area of the country subject to the customs authority.

Freight Forwarder - An independent business that handles export shipments for compensation. (A freight forwarder is among the best sources of information and assistance on export regulations and documentation, shipping methods, and foreign import regulations.)
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[G]

[H]

Harmonized System - A multipurpose international goods classification system designed to be used by manufacturers, transporters, exporters, importers, customs and others in classifying under a single commodity code goods moving in international trade.
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[I]

Inland Bill of Lading - A bill of lading used in transporting goods overland to the exporter's international carrier. Although a through bill of lading can sometimes be used, it is usually necessary to prepare both an inland bill of lading and an ocean bill of lading for export shipments. Compare Air waybill, Ocean bill of lading, and Through bill of lading.
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[J][K]

[L]

Letter of Credit (L/C) - A document, issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a specified sum of money under specified terms, usually the receipt by the bank of certain documents within a given time.

License –License means a document bearing the word “license” issued by the Directorate of Defense Trade Controls or its authorized designee which permits the export or temporary import of a specific defense article or defense service controlled by this subchapter. (As Per ITAR 120.20)
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[M]

Manufacturing License Agreement (MLA) –An agreement (e.g., contract) whereby a U.S. person grants a foreign person an authorization to manufacture defense articles abroad and which involves or contemplates:

1) The export of technical data (as defined in ITAR 120.10) or defense articles or the performance of a defense service; or

2) The use by the foreign person of technical data or defense articles previously exported by the U.S. person. (See part 124 of this subchapter). (As Per ITAR 120.21)

Marking (or Marks) - Letters, numbers, and other symbols placed on cargo packages to facilitate identification.

Major Defense Equipment – Pursuant to section 47(6) of the Arms Export Control Act (22 U.S.C. 2794(6) note), major defense equipment means any item of significant military equipment (as defined in ITAR 120.7) on the U.S. Munitions List having a nonrecurring research and development cost of more than $50,000,000 or a total production cost of more than $200,000,000. (As Per ITAR 120.8)

Missile Technology Control Regime (MTCR) – (a) For purposes of this subchapter, Missile Technology Control Regime (MTCR) means the policy statement between the United States, the United Kingdom, the Federal Republic of Germany, France, Italy, Canada, and Japan, announced on April 16, 1987, to restrict sensitive missile-relevant transfers based on the MTCR Annex, and any Amendments thereto;

(b) The term MTCR Annex means the Guidelines and Equipment and Technology Annex of the MTCR, and any amendments thereto;

(c) List of all items on the MTCR Annex. Section 71 (a) of the Arms Export Control Act (22 U.S.C. ITAR 2797) refers to the establishment as part of the U.S. Munitions List of a list of all items on the MTCR Annex, the export of which is not controlled under section 6(1) of the Export Administration Act of 1979 (50 U.S.C. app. 2405(1)), as amended. In accordance with this provision, the list of MTCR Annex items shall constitute all items on the U.S. Munitions List in ITAR 121.16. (As Per ITAR 120.29)
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[N]

[O]

On Board Bill of Lading - A bill of lading in which a carrier certifies that goods have been placed on board a certain vessel.
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[P]

Person – Person means a natural person as well as a corporation, business association, partnership, society, trust, or any other entity, organization or group, including governmental entities. If a provision in this subchapter does not refer exclusively to a foreign person (ITAR 120.16) or U.S. person (ITAR 120.15), then it refers to both. (As Per ITAR 120.14)

Public Domain – (a) Public domain means information which is published and which is generally accessible or available to the public:
(1) Through sales at newsstands and bookstores;

(2) Through subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information;

(3) Through second class mailing privileges granted by the U.S. Government;

(4) At libraries open to the public or from which the public can obtain documents;

(5) Through patents available at any patent office;

(6) Through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public, in the United States;

(7) Through public release (i.e., unlimited distribution) in any form (e.g., not necessarily in published form) after approval by the cognizant U.S. government department or agency (see also § 125.4(b)(13) of this subchapter);

(8) Through fundamental research in science and engineering at accredited institutions of higher learning in the U.S. where the resulting information is ordinarily published and shared broadly in the scientific community. Fundamental research is defined to mean basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community, as distinguished from research the results of which are restricted for proprietary reasons or specific U.S. Government access and dissemination controls. University research will not be considered fundamental research if:

(i) The University or its researchers accept other restrictions on publication of scientific and technical information resulting from the project or activity, or

(ii) The research is funded by the U.S. Government and specific access and dissemination controls protecting information resulting from the research are applicable.
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[Q]

Quota - The quantity of goods of a specific kind that a country permits to be imported without restriction or imposition of additional duties.
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[R]

[S]

Shipper's Export Declaration - A form required for all shipments by the U.S. Treasury Department and prepared by a shipper, indicating the value, weight, destination, and other basic information about an export shipment.

Significant Military Equipment – (a) Significant military equipment means article for which special export controls are warranted because of their capacity for substantial military utility or capability.
(b) Significant military equipment includes:

(1)Items in ITAR 121.1 of this subchapter which are preceded by an asterisk; and
(2) All classified articles enumerated in ITAR 121.1 of this the ITAR.
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[T]

Technical Assistance Agreement (TAA) – An agreement (e.g., contract) for the performance of a defense service(s) or the disclosure of technical data, as opposed to an agreement granting a right or license to manufacture defense articles. Assembly of defense articles is included under this section, provided production rights or manufacture know-how are not conveyed. Should such rights be transferred, ITAR 120.21 is applicable. (As Per ITAR 120.22)

Technical Data – (a) Technical data means, for purposes of ITAR:

1) Information, other than software as defined in ITAR 120.10 (a)(4), which is required for the design, development, production.

2) Manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs. Plans. Instructions or documentation.

3) Classified information relating to defense articles and defense services;

4) Information covered by an invention secrecy order;

5) Software as defined in ITAR 121.8(f) of this subchapter directly related to defense articles;
This definition does not include information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the public domain as defined in ITAR 120.11. it also does not include basic marketing information on function or purpose or general system descriptions of defense articles. (ITAR 120.10)

Technology Control Plan (TCP) – A plan to control access by foreign persons assigned to, or employed by, cleared contractor facilities. The TCP shall contain procedures to control access for all export-controlled information.
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[U]

U.S. Criminal Statutes – (a) For purposes of this subchapter, the phrase U.S. criminal statues means:

(1) Section 38 of the Arms Export Control Act (22 U.S.C. 2778);

(2) Section 11 of the Export Administration Act of 1979 (50 U.S.C. app 2410);

(3) Sections 793, 794, or 798 of title 18, United States Code (relating to espionage involving defense or classified information) or ITAR 2339A of such title (relating to providing material support to terrorists);

(4) Section 16 of the trading with the Enemy Act (50 U.S.C. app. 16);

(5) Section 206 of the International Emergency Economic Powers Act (relating to foreign assets controls; 50 U.S.C. 1705);

(6) Section 30A of the Securities Exchange Act of 1934 (15 U.S.C. 78dd-1) or section 104 of the Foreign Corrupt Practices Act (15 U.S>C. 78dd-2);

(7) Chapter 105 of title 18, United States Code (relating to sabotage);

(8) Section 4(b) of the Internal Security Act of 1950 (relating to communication of classified information; 50 U.S.C 783(b) [sic]);

(9) Sections 57, 92, 101, 104, 222, 224, 225, or 226 of the Atomic Energy Act of 1954 (42 U.S.C. 2007, 2122, 2131, 2134, 2272, 2274, 2275, and 2276);

(10) Section 601 of the National Security Act of 1947 (relating to intelligence identities protection; 50 U.S.C. 421);

(11) Section 603(b) or (c) of the Comprehensive Anti-Apartheid Act of 1989 (22 U.S.C. 5113 (b) and (c)); and

(12) Section 371 of title 18, United States Code (when it involves conspiracy to violate any of the above statutes).

(13) Sections 3, 4, 5, and 6 of the Prevention of Terrorist Access to Destructive Weapons Act of 2004, relating to missile systems designed to destroy aircraft (18 U.S.C. 2332g), prohibitions governing atomic weapons (42 U.S.C. 2122), radiological dispersal services (18 U.S.C. 2332h), and variola virus (18 U.S.C. 175b); (As Per ITAR 120.27)

Ultimate Consignee – The ultimate consignee is the person located abroad who is the true party in interest in actually receiving the export for the designed end-use. (EAR, 772.3(b)(2)).

U.S. Munitions List (USML) – Those articles, services and related technical data designated as defense articles and defense services pursuant to sections 38 and 47(7) of the Arms Export Control Act (22 U.S.C. 2778 and 2794(7)). Such designations are made by the Department of State with the concurrence of the Department of Defense. (ITAR, 121.1 and 120.2)

U.S. Person – U.S. person means a person (as defined in ITAR 120.14 of this part) who is a lawful permanent resident as defined by 8 U.S.C. 1101(a)(20) or who is a protected individual as defined by 8 U.S.C. 1324b(a)(3). It also means any corporation, business association, partnership, society, trust, or any other entity, organization or group that is incorporated to do business in the United States. It also includes any governmental (federal, state or local) entity. It does not include any foreign person as defined in ITAR 120.16. (As Per ITAR 120.15)

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