Part III. 1. Competition. This word is used to describe the environment in which production and distribution of goods are carried on

1. Competition. This word is used to describe the environment in which production and distribution of goods are carried on. Suppliers compete with each other to sell more. Competition among them acts as a spur to efficiency. It lowers prices for customers.

2. Letter of Credit. This is a document instructing a bank to pay the bearer a sum of money. It is a convenient means of settlement for goods bought from foreign suppliers. The buyer establishes credit in favour of the supplier at the bank. Payment involves two banks, one – the buyer’s and the other – the supplier’s in his country. A Confirmed or Irrevocable Letter of Credit cannot be cancelled by the buyer. It is confirmed for payment by the paying bank. An Unconfirmed or Revocable Letter of Credit can be cancelled at any time.

3. Bill of Lading. This is a document, usually prepared in triplicate, that lists and acknowledges receipt of goods for shipment. It will give the name of the ship and full details about the goods. It gives the right to the holder to take possession of the goods mentioned in it. One copy of the bill is retained by the exporter, another is handed to the Master of the Ship and the third is posted to the importer. If advance payment has not been made for the goods, the importer’s copy will be sent to him through the exporter’s bank. The importer will pay the bank and obtain the document. He will then be in a position to collect the goods when the ship arrives.

4. Invoice. This is a document used in business to give a summary of the details relating to a sale. It will list the goods bought and provides the details such as quantity, quality, price, discount, terms of delivery and terms of payment.

5. Customs duties. These are taxes on imported goods. In many countries a large part of the national revenue comes from customs duties. Taxes on goods produced within the country are called excise duties.

6. Import permit. This document is sometimes called an inward declaration. An importer is required to state the details of his import in it. A description of the goods, quantity, value etc. will be revealed. This information is used for compiling trade statistics. For exports an export permit (outward declaration) is required.

7. Licence. The import of certain goods is controlled by quotas. This measure is often taken to protect goods produced by local industries. Importers are issued licences, usually valid for one year, showing the quantity of goods they are permitted to import.

8. Port of call. It is a port a ship visits for a short time.