Understanding the Language of International Trade
- OUS Academy in Switzerland
- 2 days ago
- 3 min read
A Practical Glossary for Exporters Between Kenya and the Arab World
Trade between Kenya and the Arab world offers strong opportunities for businesses to grow and generate revenue. However, successful exporting requires more than identifying buyers and transporting goods across borders. It also requires understanding and using the correct language of international trade.
As an inspection-focused organization working closely with exporters, importers, logistics providers, and regulators, we regularly observe delays and problems caused by misunderstandings of key trade terms. This glossary explains the most important international trade terms in clear and simple language that every exporter should understand.
Key Trade Documents and Terms
Bill of Lading (B/L)
The Bill of Lading is one of the most important documents in international trade. It serves three essential functions at the same time:
Proof that the carrier has received the goods
A contract for transportation
A title document that may be required to collect the goods at their destination
Errors in the Bill of Lading are one of the most common reasons for shipment delays and delivery issues.
Certificate of Origin (CO)
The Certificate of Origin shows where the goods were manufactured or produced. Many Arab markets require this document to apply correct customs duties, preferential tariffs, or trade agreements. It is usually issued or endorsed by a chamber of commerce.
Commercial Invoice
The Commercial Invoice is the main document used by customs authorities to calculate taxes and duties. It includes details about the seller and buyer, the goods, their value, the currency used, and the terms of sale. Any mismatch between the invoice and the actual shipment can result in inspections, penalties, or fines.
Packing List
A Packing List provides detailed information about how the goods are packed, including the number of packages, their weight, dimensions, and type of packaging. Although it usually does not include pricing, customs officers and inspectors rely on it for physical checks of shipments.
Incoterms®
Incoterms® define the responsibilities of buyers and sellers in international trade, including who pays for shipping, insurance, and customs clearance. Common examples include EXW, FOB, CIF, and DDP. Choosing the wrong Incoterm can expose exporters to unexpected costs and legal risks.
Certificate of Inspection
An Inspection Certificate confirms that an independent inspection body has examined the goods and verified that they meet agreed specifications, standards, or regulatory requirements. In many Arab countries, certain products must be inspected before export.
Conformity Assessment
Conformity Assessment is the process of verifying that a product meets the technical, safety, or regulatory requirements of the importing country. This may involve product testing, document review, factory audits, or certification checks.
Harmonized System (HS) Code
The HS Code is used worldwide by customs authorities to classify products. Correct classification is essential, as it determines applicable customs duties, import restrictions, and required certifications.
Customs Clearance
Customs clearance is the formal process of declaring goods to customs authorities, submitting required documents, and paying applicable taxes and duties. Delays often occur when documents are incomplete, inconsistent, or incorrect.
Letter of Credit (L/C)
A Letter of Credit is issued by a bank on behalf of the buyer and guarantees payment to the seller once the required documents are presented. It reduces payment risk but requires strict compliance with documentation terms.
Pre-Shipment Inspection (PSI)
Pre-Shipment Inspection takes place before goods leave the exporting country. It verifies quantity, quality, labeling, and packaging compliance with contractual and legal requirements, reducing the risk of rejection at the destination.
Free Trade Zone (FTZ)
A Free Trade Zone is a designated area where goods can be imported, stored, processed, or re-exported with reduced or zero customs duties. Many exporters in the Arab region use FTZs as regional distribution hubs.
Transshipment
Transshipment occurs when goods are unloaded in one country and then transferred to another vessel or mode of transport before reaching their final destination. Proper documentation is essential to avoid customs issues.
Demurrage and Detention
Demurrage refers to fees charged when containers remain at the port beyond the allowed free time. Detention applies when containers are kept outside the port longer than permitted. These costs can increase quickly if customs clearance is delayed.
Why Trade Terms Matter
Through our inspection and compliance work, we consistently see that exporters who understand trade terminology face fewer problems, clear customs faster, and maintain stronger relationships with buyers. Knowledge of trade terms is not just operationally useful—it provides a real competitive advantage.
As trade between Kenya and Arab countries continues to expand, exporters who invest in compliance, accurate documentation, and proper understanding of trade terms will be better positioned to compete, grow, and succeed in global markets.
Comments