Glossary

The U.S. electronic export-declaration system; AES filings (EEI) are required for most U.S. exports above $2,500 per Schedule B and are submitted via ACE.

AI systems that take initiative — perceive, plan, act, verify — rather than respond to one-off prompts. Distinct from generative AI, which produces a single output per query.

Software that takes actions inside commerce workflows on behalf of humans, with guardrails. In B2B trade, includes buyer qualification, invoicing, collections, and reconciliation.

Software that perceives a context, plans a course of action, calls tools, and verifies outcomes — without step-by-step human prompts. In trade, agents file customs entries, screen buyers, chase invoices, and reconcile payments.

The set of pre-transaction and ongoing checks that financial institutions run to detect money laundering and terrorist financing risk in customer relationships and payments.

Synonym for reverse factoring: a buyer-led SCF programme where a third-party funder pays approved supplier invoices early at the buyer's credit rate.

A WCO-defined trusted-trader status that grants reduced inspections, simplified procedures, and priority treatment in customs. Equivalent programs include the EU AEO, US C-TPAT, and Mexico OEA.

An 8 or 11 character code identifying a specific financial institution for international wire transfers.

The carrier's document for sea freight. Acts simultaneously as a receipt for goods, a contract of carriage, and — when issued in negotiable form — a document of title that controls release of the cargo.

A voluntary CBP security program that grants importers and brokers reduced inspections in exchange for verified supply-chain standards.

Matching incoming payments to the open invoices they're paying. The bottleneck step in receivables: until cash is applied, DSO doesn't drop and the buyer's account isn't actually clear.

An Incoterms 2020 rule where the seller pays freight to the destination port but risk transfers when goods load onto the vessel.

Incoterm for sea/inland-waterway transport only. Seller pays cost, freight, and minimum marine insurance to the named destination port. Risk transfers when goods are loaded at origin.

An Incoterms 2020 sea-and-inland-waterway rule where the seller pays cost, insurance, and freight to the named port of destination, with risk transferring on board.

Incoterms 2020 rule where the seller pays carriage and insurance to a named destination, with risk transferring at first carrier.

1980 UN treaty governing international B2B sale-of-goods contracts. Applies automatically when both parties are in CISG states unless explicitly excluded — a default many SMEs don't realise governs their PO terms.

The chain of bilateral bank-to-bank relationships that moves money across borders. Each cross-border wire passes through one or more correspondents, each deducting fees and applying its own compliance checks.

Incoterm where the seller pays freight to a named destination but risk transfers when goods reach the first carrier.

A licensed agent who clears goods through customs on behalf of importers or exporters, handling tariff classification, valuation, and regulatory filings.

An Incoterms 2020 rule where the seller delivers goods to a named destination, ready for unloading, with risk passing at that point.

Legacy Incoterms 2010 rule where the seller delivers unloaded at a named terminal; replaced in Incoterms 2020 by DPU (Delivered at Place Unloaded).

See DSO. Average number of days between invoice issuance and cash receipt.

Incoterm placing maximum obligation on the seller, who delivers goods cleared for import at the buyer's named destination.

The pre-transaction process of checking counterparties against government lists of sanctioned, debarred, or otherwise restricted persons and entities.

An electronic version of a paper-based negotiable instrument — bill of lading, promissory note, bill of exchange — with the same legal effect under MLETR-aligned national law.

A trade-finance instrument where banks act as agents to deliver shipping documents against either payment (D/P) or acceptance of a bill of exchange (D/A).

The formal name for a letter of credit. The instrument's full title in UCP 600 is 'documentary credit'; 'L/C' is the operator shorthand.

A documentary-collection variant where the collecting bank releases shipping documents to the importer only upon receipt of the agreed payment.

Average number of days between invoice issuance and cash receipt. The single most-watched working-capital metric in cross-border B2B; cross-border DSO averages ~67 days vs. ~34 days domestic.

A buyer-funded version of supply-chain finance: the supplier offers an early-payment discount and the buyer chooses, per invoice, whether to take it. No third-party funder is involved.

A digital, legally equivalent replacement for the paper bill of lading, transferable between parties on a verifiable platform under MLETR-aligned legislation.

A unique customs identification number required for any business importing to or exporting from the EU.

Regulation (EU) 2024/1689 — the first horizontal AI regulation. Sorts AI systems by risk: prohibited, high-risk, limited-risk, minimal. Trade-AI deployments touching customs or sanctions are likely high-risk.

The ICC supplement to UCP 600 that governs the electronic presentation of documents under documentary credits, currently at version 2.1.

The ability to articulate, in human-auditable form, why an AI system produced a given output. For regulated trade decisions, explainability is the difference between a defensible decision and a fineable one.

Incoterm where the seller's only obligation is making goods available at their premises; buyer handles all transport and export clearance.

FATF standard requiring originator and beneficiary data to accompany cross-border wire transfers above USD/EUR 1,000.

An Incoterms 2020 rule where the seller delivers goods to a carrier nominated by the buyer at a named place.

Incoterm for sea/inland-waterway transport only. Seller delivers goods on board the vessel at origin port. Risk and cost transfer to buyer once goods cross the ship's rail.

An Incoterms 2020 sea-and-inland-waterway rule where the seller delivers goods on board the vessel nominated by the buyer at the named port of shipment.

International convention governing the carrier's responsibilities under a bill of lading. Sets out package limitations of liability, due diligence requirements, and exceptions for the carrier.

The WCO's six-digit international classification for traded goods. Every product crossing a customs border is classified under an HS code that drives duty rates, restrictions, and statistical reporting.

Under the EU AI Act, an AI system whose intended use or context makes it high-risk under Annex III. High-risk systems carry conformity-assessment, documentation, oversight, and post-market monitoring obligations.

See HS Code Classification. The day-to-day act of selecting the correct Harmonized System code for a product.

The act of assigning the correct Harmonized System code to a product. Determines duty rate, FTA eligibility, export-control treatment, and statistical reporting.

An AI system design where a human reviews, approves, or overrides agent decisions at defined points. The default control mechanism for high-stakes trade decisions where full autonomy isn't yet defensible.

A standardized account identifier up to 34 characters used to route cross-border payments accurately.

An industry-led program housed at ICC that maps and promotes interoperable standards for digital trade documents.

U.S. CBP rule requiring importers and ocean carriers to electronically file ten data elements 24 hours before cargo is loaded onto a vessel destined for the United States.

Standardized three-letter trade terms from the International Chamber of Commerce (ICC) that assign costs, risks, and obligations between buyer and seller.

The XML-based global standard for financial messaging that replaces SWIFT MT. Carries 9,000 characters of structured remittance data versus 140 in legacy MT — the foundation for automated reconciliation.

KYB is the due diligence process for verifying a corporate entity's identity, ownership structure, and risk profile before onboarding.

The regulated process by which financial institutions verify the identity of individual customers and assess their risk profile before opening accounts or transacting.

A bank-issued promise to pay the seller on presentation of compliant documents. The most formal trade-finance instrument, governed by ICC's UCP 600.

The midpoint between the bid and ask price for a currency pair on the interbank market. The benchmark used in transaction cost analysis to measure FX spread paid versus the 'true' market rate.

UNCITRAL model law enabling electronic documents like bills of lading to have the same legal effect as paper originals.

An open protocol for connecting AI agents to data sources and tools. MCP servers expose ERP, customs, and banking systems as standard, agent-callable tools — the API layer underneath agent-driven trade operations.

The discipline — codified by OCC SR 11-7, EBA, and BIS guidance — of identifying, measuring, monitoring, and controlling the risk of using statistical or AI models to make decisions. Standard in finance; applicable to trade-AI.

The legacy SWIFT FIN message used for single customer credit transfers — the workhorse format for cross-border bank-to-bank wire payments.

A carrier that issues its own bills of lading and assumes carrier liability without operating its own vessels. Buys space on ocean carriers wholesale, resells to shippers retail.

U.S. Treasury bureau that administers economic and trade sanctions programs.

An independent third-party inspection of goods before shipment, verifying quantity, quality, and compliance with the contract or destination-country requirements.

Buyer-led supply chain finance: the buyer approves an invoice, a third-party funder pays the supplier early at the buyer's credit rate, and the buyer settles with the funder at maturity. Also called approved payables finance.

Checking parties (buyers, suppliers, banks, vessels, intermediaries) and goods (dual-use, controlled) against OFAC, EU, UK, UN and national sanctions lists before transacting. Mandatory; failure carries criminal exposure.

OFAC's master list of individuals, entities, and vessels with whom US persons are prohibited from transacting.

A eurozone payment integration allowing EUR transfers across 36 countries under standardized rules and pricing.

A single electronic interface where traders submit all import/export filings — customs, sanitary, security — to one government endpoint that distributes data to the relevant agencies. Required by WTO TFA Article 10.4.

A blockchain-issued token whose value tracks a reference asset, almost always the US dollar. Compliant USD stablecoins (USDC, PYUSD) settle on public chains in seconds at a fraction of correspondent-bank cost.

Umbrella term for techniques that finance the working capital trapped between a buyer's payable and a supplier's receivable. In B2B usage, almost always shorthand for reverse factoring.

The Society for Worldwide Interbank Financial Telecommunication — the cooperative that operates the dominant global messaging network for cross-border financial transactions.

SWIFT's tracking layer for cross-border wires. Every payment carries a UETR that lets sender, receiver, and intermediaries see status, fees deducted, and FX applied — same as a parcel tracking number.

The legacy SWIFT FIN message format for single customer credit transfers; same instrument as MT103, often referenced with the SWIFT prefix in operational documentation.

WTO multilateral agreement, in force 2017, that commits members to simplify, harmonise, and digitise customs procedures. Mandates publication of fees, advance rulings, single-window processing, and risk-based controls.

Comparing executed FX rates against the mid-market rate at the time of trade to measure the spread actually paid. Standard practice for large corporates; adopted by ~23% of mid-market companies.

The price actually paid or payable for the goods, plus prescribed adjustments. The primary method of customs valuation under WTO Valuation Agreement Article 1, used in ~93% of declarations globally.

A factoring or receivables sale that legally transfers ownership of the receivable from seller to funder, removing it from the seller's balance sheet. The opposite of a recourse loan secured by receivables.

The natural person who ultimately owns or controls a legal entity, identified through ownership chains and control rights for AML and sanctions compliance.

ICC's Uniform Customs and Practice for Documentary Credits, version 600. The international rulebook that governs how letters of credit are issued, presented, examined, and paid.

A 36-character UUID that identifies a SWIFT payment end-to-end, across every correspondent bank in the chain. Mandatory on all customer credit transfers since 2018; the parcel-tracking number for cross-border wires.

The European Union's overarching customs framework, in force since 2016, governing the movement of goods into and out of the EU customs territory.

ICC Publication 522 standardizes documentary collection procedures, defining bank duties when handling D/P and D/A transactions.

A standardized data specification from the World Customs Organization that defines how cross-border trade information is structured for electronic customs declarations.

An electronic, bank-initiated funds transfer between accounts, settled through a domestic clearing system or, for cross-border payments, the SWIFT correspondent network.

A WTO treaty requiring members to streamline customs procedures, reduce clearance times, and implement single window systems.