Whether in import or export, often the terms used in foreign trade look like a real letrinhas soup. With that in mind, we’ve developed simple, objective content to help you understand Comex nomenclatures.
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Why are there so many nomenclatures in Comex?
The search for standardization is the justification for so many nomenclatures.
Without a standard, foreign trade operations would be even riskier, as usually a commodity needs to go through different customs until it reaches its destination.
For this reason, we cannot fail to mention that most of the terms used come from the English language. After all, we are talking about international trade and it would make no sense that the nomenclature of Comex was translated at all times.
In general, import and export activities are interdisciplinary and include three major areas: international logistics, customs legislation and exchange closing. We’ll cover more about each of these areas below.
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Comex nomenclatures in international logistics
Understanding the details of the transport mode is essential to ensure the organization of the shipment, since the cargo can be transported on board a ship or an aircraft.
However, the most important international logistics processes are those involving deadlines and estimates. This is because a foreign trade operation is based on the expectation of arrival of the commodity at the agreed destination in trading.
Therefore, we consider that understanding the terms below are essential for the satisfaction of all parties involved.
- Lead Time: It is the total waiting time from the closing of the sale to the delivery of the goods at the final destination. It includes the time of manufacture, transit and nationalization of the goods;
- ETS: Estimated Time of Shipping;
- ETA: Estimated Time of Arrival;
- Door-to-door: Term widely used by cargo agents. It refers to a method of shipment consisting of the collection of the goods at the exporter’s door and delivery at the importer’s door, without interveners. That is, it concentrates the coordination of shipment with only one logistics company;
- FCL (Full Container Load): Means that the goods will be shipped exclusively within a shipping container, so the cost of shipping will involve paying for an entire container;
- LCL (Less than a Container Load, in Portuguese “less than a container load”): In practice, the container’s interior space will be shared among other companies and the amount to be paid for international shipping will be proportional to the space occupied by the load. However, it is not all types of merchandise that can be sent in a shared way, since often this practice can mean risks of breakdown. The maritime cargo consolidator is responsible for conducting the entire operation of an LCL shipment.
Comex nomenclatures in customs legislation
In Brazil, the standardization of import and export activities comply with the rules of the Customs Regulation (RA).
In this sense, it is important that you are fully aware that the Customs Regulation has the function of administering and supervising all customs activities, as well as ensuring the taxation of import and export operations.
Below we will cover the three most popular acronyms from the PERSPECTIVE of AR.
- RADAR: The Registration and Tracking of the Performance of Customs Actors, better known as RADAR, is the system that includes information about importers, exporters and customs brokers, among other actors inserted in foreign trade activities in Brazil. For a company to operate in foreign trade, the qualification in RADAR is necessary, that is, it is a prerequisite for Brazilian companies that wish to export or import;
- DU-E: The Single Export Declaration is an electronic document that includes the characteristic information of an export operation;
- DUIMP: The Single Import Declaration refers to the formal document of an import, in electronic format. If you want to know more details about this subject, click here.
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Comex nomenclatures at exchange close
Payments in foreign trade are made through exchange closing, that is, it is through it that the importer pays the exporter. For compliance purposes of this important step in import or export, it is necessary to be in accordance with the most used terms, which are:
- BACEN: The Central Bank of Brazil is the institution with the highest authority in the financial context of the country and therefore assumes control of foreign currencies that are traded in a foreign trade operation.
- PTAX: This acronym refers to the exchange rate between Real and U.S. dollar. According to the Central Bank, its composition consists of the average rates that were reported by all financial institutions authorized to operate in the Brazilian foreign exchange market during a given period.
- LC: These initials refer to the term Letter of Credit, in Portuguese “letter of credit”. LC is an extremely reliable payment modality because it involves three or more banking institutions that ensure the operation through guarantees. In addition, it is regulated by the International Chamber of Commerce (ICC).
Top 5 terms you can’t forget
To finish the subject on the nomenclatures of Comex, we decided to summarize here five terms that you, as a professional, mention every day and need to know the real meaning.
Incoterms®
These are rules that guide the execution and responsibility of payment of the many operational tasks involved in an international logistics operation.
In total there are eleven rules regulated by the International Chamber of Commerce (ICC) that were created to delimit the responsibilities assumed by each of the parties in an international negotiation.
Incoterms® are declared in invoice and in the boarding knowledge and therefore the complete understanding about them is the theoretical basis for any foreign trade professional.
Invoice
Is the Business Invoice for an international business transaction. This is one of the most important documents of its foreign trade process, because in addition to indicating data from the importer and exporter, Invoice includes the data of the goods, quantity, form of payment, Incoterms®, as well as origin and final destination.
Deadline
The translation of that word means timeframe. Every foreign trade professional needs to have a good relationship with deadlines, since the processes are interdependent, that is, the loss of a deadline will negatively impact on other areas and subsequent steps.
AWB
This acronym stands for Air Waybill and can be translated into air boarding knowledge. AWB has an identification number to ensure its authenticity and is one of the most important documents for an international logistics operation, as it synthesizes the freight contract between the airline and the cargo owner.
BL
BL stands for Bill of Lading, i.e. maritime bill of lading. Its function is similar to The AWB, however it is issued by the shipping company. Usually bl is issued with three original routes and three other non-negotiable copies. The loss of the original route of this document may be synonymous with injury, since its presentation allows the withdrawal of the goods.
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