Export Terms Explained
A plain-English guide to the key terms used in international freight, customs clearance, and shipping.
Export Declaration
A formal declaration submitted to HMRC (in the UK via the Customs Declaration Service) for goods leaving the country. Required for all commercial exports outside the UK. Specifies the commodity code, value, weight, destination, and exporter details. Usually submitted by a customs broker on behalf of the exporter.
Export Licence
A government-issued authorisation required to export certain controlled goods — including military equipment, dual-use technology, firearms, and some chemicals. Issued by the Export Control Joint Unit (ECJU) in the UK. Exporting controlled goods without a licence is a criminal offence.
EORI Number
Economic Operators Registration and Identification number — required for all UK businesses importing or exporting goods. UK EORI numbers begin with “GB”. Free to obtain from HMRC and typically takes 3–5 working days. Without one, your shipment cannot be cleared through customs.
Commodity Code (HS Code)
A standardised numerical code used to classify goods for customs purposes. Based on the World Customs Organisation’s Harmonised System (HS). UK export declarations use a 10-digit commodity code. The correct code determines any export restrictions, licensing requirements, and trade statistics.
Deferred Export
An arrangement where goods are placed in a customs warehouse or free zone and the export declaration is submitted at a later date. Useful when goods need to be stored, consolidated, or re-packed before export. No UK VAT is charged on goods in a customs warehouse.
ATA Carnet
An international customs document allowing temporary export of goods (such as trade show samples, professional equipment, or commercial samples) without paying import duty at the destination. Valid in over 80 countries. Issued by UK Chambers of Commerce. The goods must be re-imported to the UK within the carnet period.
Drawback
A refund of import duty paid on goods that are subsequently re-exported. In the UK, exporters can claim back duty paid on imported materials or components that have been incorporated into exported goods. Requires careful documentation and a claim submitted to HMRC within specified time limits.
Commercial Invoice
The primary document for an export shipment, issued by the seller to the buyer. Must accurately state: description of goods, quantity, unit price, total value, currency, Incoterms, country of origin, and both parties’ details. Used by destination customs to assess import duties — under-declaration is illegal and can result in seizure.
Packing List
The primary document for an export shipment, issued by the seller to the buyer. Must accurately state: description of goods, quantity, unit price, total value, currency, Incoterms, country of origin, and both parties’ details. Used by destination customs to assess import duties — under-declaration is illegal and can result in seizure.
Certificate of Origin (COO)
A document certifying that goods were manufactured in a specific country. Required by many import countries to determine the applicable duty rate under preferential trade agreements. UK exporters can obtain COOs from UK Chambers of Commerce. A UK-origin COO may qualify goods for reduced or zero duty under UK trade agreements.
EUR.1 / REX (Registered Exporter)
EUR.1 is a movement certificate used to claim preferential tariff treatment under certain UK trade agreements. REX (Registered Exporter) is a self-certification system where approved exporters declare origin directly on the commercial invoice. Both are used to prove goods qualify for reduced import duty at the destination country.
Proof of Export
Evidence that goods have physically left the UK, required to zero-rate the sale for UK VAT purposes. Typically consists of the export declaration (confirmed by HMRC), combined with the bill of lading or air waybill. Exporters must retain proof of export and can be audited by HMRC.
Incoterms
International Commercial Terms published by the ICC that define the responsibilities of buyers and sellers. For exports, the key question is: at what point does risk and cost transfer to the buyer? Common export Incoterms include EXW (buyer collects from your premises), FCA, FOB, CIF, and DDP.
EXW – Ex Works
The seller makes goods available at their premises. The buyer collects and arranges all freight, export clearance, and import clearance. Simplest for the seller but may require the buyer to handle UK export formalities — which can be complex for non-UK buyers.
FCA – Free Carrier
The seller delivers to a named carrier at a specified location and handles UK export clearance. Risk passes to the buyer once goods are with the carrier. Recommended for containerised shipments as it avoids the FOB loading-board ambiguity.
FOB – Free On Board
The seller loads goods on board the vessel at the named export port and handles export clearance. Risk and cost transfer to the buyer once on board. Widely used in UK exports to Asia — the buyer then arranges ocean freight and destination import clearance.
CIF – Cost, Insurance & Freight
The seller pays for freight and insurance to the named destination port, and handles UK export clearance. However, risk transfers to the buyer once goods are on board at origin. The buyer still handles destination customs and any import duty.
DDP – Delivered Duty Paid
Maximum obligation for the exporter — deliver to the buyer’s door with all freight, insurance, export and import customs, and import duty paid. Attractive to buyers as there are no hidden costs, but the exporter needs to be VAT/tax-registered in the destination country or appoint a fiscal representative.
Bill of Lading (B/L)
A shipping document issued by the ocean carrier when goods are loaded. For the exporter, it serves as proof that goods were shipped. An original negotiable B/L must be surrendered at destination to release cargo. Exporters should hold originals securely and only release them to buyers against payment or a letter of credit.
Air Waybill (AWB)
The transport document for air freight exports. Non-negotiable — it is a contract of carriage and receipt, but cannot transfer ownership of goods. The exporter retains a copy for proof of export and VAT purposes.
Letter of Credit (L/C)
A payment instrument issued by the buyer’s bank guaranteeing the seller will be paid once specified shipping documents (commercial invoice, B/L, COO, etc.) are presented. Reduces export payment risk but requires strict documentary compliance — any discrepancy can delay or prevent payment.
Documentary Collection
A payment mechanism where the exporter’s bank forwards shipping documents to the buyer’s bank, releasing them only upon payment (Documents against Payment, D/P) or acceptance of a bill of exchange (Documents against Acceptance, D/A). Less secure than a Letter of Credit but more commonly used for established trade relationships.
Rules of Origin
The criteria used to determine where a product was “made” for trade agreement purposes. To qualify for preferential duty rates at the destination country, goods must satisfy the origin rules set out in the relevant trade agreement — typically requiring a minimum level of UK transformation or value addition. Critical for exporters looking to benefit from the UK’s trade agreements with the EU, Japan, Australia, and others.
Freight Forwarder
A company that arranges export shipments on behalf of exporters — booking cargo space, preparing documentation, coordinating customs clearance, and managing the supply chain from origin to destination. ASA Logistics acts as freight forwarder for all export shipments, handling all documentation and compliance requirements.
Export Declaration
A formal declaration submitted to HMRC (in the UK via the Customs Declaration Service) for goods leaving the country. Required for all commercial exports outside the UK. Specifies the commodity code, value, weight, destination, and exporter details. Usually submitted by a customs broker on behalf of the exporter.
Export Licence
A government-issued authorisation required to export certain controlled goods — including military equipment, dual-use technology, firearms, and some chemicals. Issued by the Export Control Joint Unit (ECJU) in the UK. Exporting controlled goods without a licence is a criminal offence.
EORI Number
Economic Operators Registration and Identification number — required for all UK businesses importing or exporting goods. UK EORI numbers begin with “GB”. Free to obtain from HMRC and typically takes 3–5 working days. Without one, your shipment cannot be cleared through customs.
Commodity Code (HS Code)
A standardised numerical code used to classify goods for customs purposes. Based on the World Customs Organisation’s Harmonised System (HS). UK export declarations use a 10-digit commodity code. The correct code determines any export restrictions, licensing requirements, and trade statistics.
Deferred Export
An arrangement where goods are placed in a customs warehouse or free zone and the export declaration is submitted at a later date. Useful when goods need to be stored, consolidated, or re-packed before export. No UK VAT is charged on goods in a customs warehouse.
ATA Carnet
An international customs document allowing temporary export of goods (such as trade show samples, professional equipment, or commercial samples) without paying import duty at the destination. Valid in over 80 countries. Issued by UK Chambers of Commerce. The goods must be re-imported to the UK within the carnet period.
Drawback
A refund of import duty paid on goods that are subsequently re-exported. In the UK, exporters can claim back duty paid on imported materials or components that have been incorporated into exported goods. Requires careful documentation and a claim submitted to HMRC within specified time limits.
Commercial Invoice
The primary document for an export shipment, issued by the seller to the buyer. Must accurately state: description of goods, quantity, unit price, total value, currency, Incoterms, country of origin, and both parties’ details. Used by destination customs to assess import duties — under-declaration is illegal and can result in seizure.
Packing List
The primary document for an export shipment, issued by the seller to the buyer. Must accurately state: description of goods, quantity, unit price, total value, currency, Incoterms, country of origin, and both parties’ details. Used by destination customs to assess import duties — under-declaration is illegal and can result in seizure.
Certificate of Origin (COO)
A document certifying that goods were manufactured in a specific country. Required by many import countries to determine the applicable duty rate under preferential trade agreements. UK exporters can obtain COOs from UK Chambers of Commerce. A UK-origin COO may qualify goods for reduced or zero duty under UK trade agreements.
EUR.1 / REX (Registered Exporter)
EUR.1 is a movement certificate used to claim preferential tariff treatment under certain UK trade agreements. REX (Registered Exporter) is a self-certification system where approved exporters declare origin directly on the commercial invoice. Both are used to prove goods qualify for reduced import duty at the destination country.
Proof of Export
Evidence that goods have physically left the UK, required to zero-rate the sale for UK VAT purposes. Typically consists of the export declaration (confirmed by HMRC), combined with the bill of lading or air waybill. Exporters must retain proof of export and can be audited by HMRC.
Incoterms
International Commercial Terms published by the ICC that define the responsibilities of buyers and sellers. For exports, the key question is: at what point does risk and cost transfer to the buyer? Common export Incoterms include EXW (buyer collects from your premises), FCA, FOB, CIF, and DDP.
EXW – Ex Works
The seller makes goods available at their premises. The buyer collects and arranges all freight, export clearance, and import clearance. Simplest for the seller but may require the buyer to handle UK export formalities — which can be complex for non-UK buyers.
FCA – Free Carrier
The seller delivers to a named carrier at a specified location and handles UK export clearance. Risk passes to the buyer once goods are with the carrier. Recommended for containerised shipments as it avoids the FOB loading-board ambiguity.
FOB – Free On Board
The seller loads goods on board the vessel at the named export port and handles export clearance. Risk and cost transfer to the buyer once on board. Widely used in UK exports to Asia — the buyer then arranges ocean freight and destination import clearance.
CIF – Cost, Insurance & Freight
The seller pays for freight and insurance to the named destination port, and handles UK export clearance. However, risk transfers to the buyer once goods are on board at origin. The buyer still handles destination customs and any import duty.
DDP – Delivered Duty Paid
Maximum obligation for the exporter — deliver to the buyer’s door with all freight, insurance, export and import customs, and import duty paid. Attractive to buyers as there are no hidden costs, but the exporter needs to be VAT/tax-registered in the destination country or appoint a fiscal representative.
Bill of Lading (B/L)
A shipping document issued by the ocean carrier when goods are loaded. For the exporter, it serves as proof that goods were shipped. An original negotiable B/L must be surrendered at destination to release cargo. Exporters should hold originals securely and only release them to buyers against payment or a letter of credit.
Air Waybill (AWB)
The transport document for air freight exports. Non-negotiable — it is a contract of carriage and receipt, but cannot transfer ownership of goods. The exporter retains a copy for proof of export and VAT purposes.
Letter of Credit (L/C)
A payment instrument issued by the buyer’s bank guaranteeing the seller will be paid once specified shipping documents (commercial invoice, B/L, COO, etc.) are presented. Reduces export payment risk but requires strict documentary compliance — any discrepancy can delay or prevent payment.
Documentary Collection
A payment mechanism where the exporter’s bank forwards shipping documents to the buyer’s bank, releasing them only upon payment (Documents against Payment, D/P) or acceptance of a bill of exchange (Documents against Acceptance, D/A). Less secure than a Letter of Credit but more commonly used for established trade relationships.
Rules of Origin
The criteria used to determine where a product was “made” for trade agreement purposes. To qualify for preferential duty rates at the destination country, goods must satisfy the origin rules set out in the relevant trade agreement — typically requiring a minimum level of UK transformation or value addition. Critical for exporters looking to benefit from the UK’s trade agreements with the EU, Japan, Australia, and others.
Freight Forwarder
A company that arranges export shipments on behalf of exporters — booking cargo space, preparing documentation, coordinating customs clearance, and managing the supply chain from origin to destination. ASA Logistics acts as freight forwarder for all export shipments, handling all documentation and compliance requirements.
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