Glossary on Trade Financing Terms - F

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F

Face value:

The value indicated on the face of a financial asset, e.g. a US$100 Treasury Bill has a face value of US$100.

Français: Valeur faciale
Español: Valor nominal

An accounting method whereby the value of output is measured on the basis of the cost of the factors employed in its production, rather than with reference to its market price. The production factors considered in the measurement usually include land, labour, capital and enterprise. Some textbooks, however, consider only the first three factors.

Français: Facteur coût
Español: Costo de los factores

Factoring:

A technique which allows businesses (including trading companies) to discount Accounts receivable or other assets to obtain cash. In factoring, the accounts receivable or other assets are sold at a discount on a daily, weekly or monthly basis to a factoring house. Such an organization will assume title to the receivables or assets and will also bear all commercial and political risks connected with the transaction, without the right of recourse to the exporter in the event of default of the foreign buyer. In practice, the factoring house purchases the trade credits of its client and handles the collection on the receivables on its own behalf. Factoring may thus be a convenient option for firms without an effective collection department or which often discount their receivables. Factoring houses usually require that they handle a large percentage of an exporter's business. They tend to work with short-term receivables (up to 180 days), linked mostly to sales of consumer goods. In general, factoring of foreign accounts receivable is less common than with domestic receivables. Compare it with Forfaiting.

Français: Affacturage
Español: Factorización, descuento de facturas, gestión de deudas con descuento, factoring

Factoring houses:

These are companies specialised in the purchase of receivables at a discounted price, usually about 2-4 % lower than their face value.

Français: Sociétés d'affacturage
Español: Empresa de factorización

Factors of production:

These are the elements which determine a country's output of goods and services. They consist of land, labour, capital and enterprise, although some textbooks only consider the first three. Variations in the availability of these factors and in the efficiency of their utilization influence a country's economic growth.

Français: Facteurs de production
Español: Factores de producción

F.A.S.:

See Free Alongside Ship.

Français: F.A.S.
Español: F.A.S.

Federal funds:

USA mandatory reserve assets deposited by US commercial banks at their district Federal Reserve Banks.

Français: Fonds fédéraux
Español: Fondos federales

Federal funds market:

This is the market within which several hundred US banks borrow or lend Federal funds, allowing banks temporarily short of reserves at the Federal Reserve Banks to borrow from banks which have excess reserves.

Français: Marché des fonds fédéraux
Español: Mercado de fondos federales

Federal funds rate:

The rate at which US banks will lend each other their surplus of reserves held with the Federal Reserve Banks. The Fed Funds rate, as it is called, often indicates the direction in which U.S. interest rates will move.

Français: Taux des fonds fédéraux
Español: Tasa de los fondos federales, tipo de los fondos federales

Federal Reserve System:

Usually referred to as the Fed, this is the Central Bank of the United States. It is governed by the Federal Reserve Board located in Washington, D.C. and includes 12 district Federal Reserve Banks.

Français: Système de la Réserve Fédérale
Español: Sistema de la Reserva Federal

Fees:

Additional charges to be paid to lenders. Sometimes referred to as Management fee, Negotiation fee or Agency fee.

Français: Honoraires, Commissions
Español: Honorarios, derechos

F.I.:

See Free In.

Français: F.I.
Español: F.I.

FIFO:

See First in, first out.

Français: FIFO
Español: FIFO

Fiduciary deposits:

A speciality of Swiss banking whereby the depositor’s funds are lent directly to a corporate borrower, while the risks remain with the depositor. This technique benefits the bank, as the deposits remain off its balance sheets while the transaction yields a profit. It is also advantageous for the depositor in terms of higher interest rates on lending.

Français: Dépôts fiduciaires
Español: Depósito fiduciario, depósito sin garantía

Final delivery:

A term indicating the date on which the final delivery is carried out.

Français: Livraison finale
Español: Entrega final

Final dividend:

The dividend paid out by a corporation at the end of the year (annual dividend) after quarterly, bi-annual or other interim dividends have been distributed during the year.

Français: Dividende final
Español: Dividendo complementario

Final maturity:

The due date for the final repayment of the principal.

Français: Echéance finale
Español: Vencimiento final

Finance bill:

A form of bill of Exchange issued without any direct connection to an actual business transaction. It usually offers less security to the bank compared with a bill linked to a specific commercial transaction. Finance bills frequently take the form of banker's acceptances and treasury bills issued by public authorities.

Français: Effet financier
Español: Letra de cambio financiera

Financed portion:

The portion of the total contract value or invoice after deduction of the down payments. It serves as the basis for the calculation of the guarantee/insurance coverage, the risk retention and the guarantee/insurance fees.

Français: Part financée
Español: Porción financiada

Financial engineering:

the process of creating, combining or dividing different financial instruments in order to achieve a specific financial objective within certain tax and legal constraints.

Français: Ingénierie financière
Español: Técnicas financieras

Financial Futures:

See futures.

Français: Contrats financiers à terme
Español: Financial futures

Financial loan; medium-term financing:

A bank loan granted to domestic or foreign borrowers for a fixed amount and a fixed term, without linking the use of the loan to a specific commercial transaction. Compare with Export financing credit.

Français: Prêt financier, Financement à moyen terme
Español: Crédito financiero

Financial markets:

A general term indicating the wide array of markets where people buy and sell money and financial instruments. Financial markets include markets in currencies, bonds, Treasury bills, equities, financial futures, options, bank deposits, commercial paper, etc.

Français: Marchés financiers
Español: Mercado financiero

Financial Times (FT) index:

London's stock exchange indicator. The index is published daily in the Financial Times newspaper. The main FT index is the "industrial ordinary", which covers the movements in the shares of the thirty largest industrial companies. A more widely based index has been developed by the Financial Times and the London Stock Exchange which is known as the Footsie, standing for FT-SE. See also Dow Jones Index and Nikkei Index.

Français: Indice du Financial Times
Español: Indice del Financial Times

Financing:

Obtaining or supplying money or credit for an investment or trade purpose.

Français: Financement
Español: Financiación, financiamiento

Financing of month-end closing:

This refers to borrowing in order to bridge temporary liquidity shortages at the end of the month.

Français: Financement de bouclement de fin de mois
Español: Financiación para el cierre mensual

F.I.O.:

See Free In and Out.

Français: F.I.O.
Español: Franco de gastos de carga y descarga

First in, first out (FIFO):

An accounting method for evaluating a company's inventories (stocks). As the term indicates, FIFO assumes that stocked items are used, or sold from stock, in the order in which they arrived. The LIFO method (Last in, first out) assumes that the newest items are used or are sold first. Using the FIFO method stocks are valued at their original cost while LIFO values all stocks at current price. As a result, FIFO tends to show a lower level of profits than LIFO because it excludes the gains from stock appreciation.

Français: 1er entré -1er sorti (FIFO)
Español: (Método de) Primera entrada, primera salida; primero en entrar, primero en salir; PEPS; salida en el orden de adquisición; salida en el orden de entrada

First loss:

In case of damage, this is the amount which has to be borne by the insured and absorbed before any percentage refund payment is calculated. Also called a deductible.

Français: 1ère Perte/Franchise
Español: Primer riesgo

First of exchange:

The original of a draft drawn in original and duplicate.

Français: Premier de l'effet
Español: Primera de cambio

Fixed advance:

This a loan which must be repaid at an agreed due date (as a rule in 6 weeks, 3 months or 6 months) or when called. It is listed in the bank’s balance sheet under the fixed loans and advances heading.

Français: Avance fixe
Español: Préstamo fijo

Fixed assets:

A term indicating tangible assets such as real estate, buildings, land, plant and machinery, bought by the firm for long-term use rather than for resale or immediate consumption. Increasingly, fixed assets include intangible assets such as patents, trademarks and customer recognition. Fixed assets are retained in the business for long periods and a portion of their original cost will be written off annually against profits for amortization to reflect their diminishing value over time. In the firm’s balance sheet fixed assets are therefore usually shown at cost, less depreciation charged to date. It should however be noted that certain fixed assets, such as property, tend to appreciate in value. The figures on the balance sheet thus need to be periodically revalued to keep in line with market values.

Français: Immobilisations
Español: Activos fijos

Fixed charge:

A security or collateral given by a borrower to a lender, in the form of a claim on specific assets of the borrower should he fail to pay. If the borrower goes bankrupt, only these specific assets may be taken over by the lender. Compare with Floating charge.

Français: Droit de gage fixe, limité
Español: Cargo fijo

Fixed costs:

Costs which are fixed in total for a given period of time and for given production levels, such as factory rents or staff on contracts. They cannot be altered in the short-term and are therefore a constraint on the immediate flexibility of the firm.

Français: Coûts fixes
Español: Costos fijos, gastos fijos

Fixed-date bill:

A bill of Exchange which becomes due and payable at a specified date after the issue date. Also known as after-sight bill, it is frequently employed in international transactions.

Français: Effet à date fixe
Español: Letra con fecha fija

Fixed exchange rate:

A currency’s exchange rate which is officially kept fixed at a specified level over time or is allowed to float within a permitted margin of fluctuation. The fixed level of the exchange rate is ensured by the Central Bank through purchases and sales of foreign reserves on the foreign exchange markets.

Français: Taux de change fixe
Español: Tipo de cambio fijo

Fixed exchange rate system:

A system where the exchange rates of the participating currencies are tied to (i.e. fixed in terms of) some common standard, such as gold, another country’s currency, a basket of currencies, etc. Limited fluctuations from such common standards may be allowed, leading to an adjustable peg-rate system. Examples of fixed exchange rate systems include the Bretton Woods agreement (1945-1973), whereby the U.S. tied the dollar to gold, with other countries pegging their currencies to the dollar. The European Monetary System is another example, within which the participants' currencies were allowed to float within a fluctuation margin fixed around the relative ECU rate.

Français: Système de taux de change fixe
Español: Sistema de tipo de cambio fijo

Fixed-interest financial securities:

Any financial security which has a predetermined fixed interest rate attached to its par value (such as Treasury bills, bonds, debentures, notes and preference shares etc.). The borrower of a fixed-interest financial security must pay interest at the set rate for its entire maturity. For example, a debenture with a par value of £100 at 5% will pay out a fixed rate of interest of £5 per annum until maturity.

Français: Titres financiers à taux d'intérêt fixe
Español: Valor de renta fija

Fixed price:

Usually used in the same sense as lump sum, but referring to goods rather than services. It is a fixed sum, agreed at the signature of the contract, to be paid to the seller for the goods traded.

Français: Prix fixe
Español: Precio fijo

Fixed rate loan/lending:

A term loan for which the interest rate has been set at an agreed fixed rate for the entire life of the loan.

Français: Prêt à taux fixe / financement
Español: Préstamo con tipo de interés fijo

Flat:

(1) In bond trading, a flat price refers to the price of a security traded without accrued interest.

(2) The underwriter's position if all securities are sold.

(3) A position on the foreign exchange markets where buying commitments are equal to selling commitments (squared position).

Français: Flat
Español: Fijo, uniforme

Flight capital:

A term used for capital transferred to another country in violation of capital export control laws. See also Hot money.

Français: Evasion de capital
Español: Fuga de capitales

Flight to quality:

A process whereby investors move towards safer government bonds during periods of economic uncertainty.

Français: Refuge dans la qualité
Español: Desplazamiento hacia las emisiones de mayor calidad

Float:

(1) The issue of a security (equity or loan stock). The term may also refer to the number of shares actively tradable in the market, excluding shares held by major stakeholders who have a binding agreement not to sell.

(2) Flexible foreign exchange rates, with no intervention by the authorities in the foreign exchange market (see also clean floating)

Français: Flotter/Emettre
Español: Float

Floating charge:

A security/collateral for a loan given by the borrower as a guarantee against his company’s assets. The lender will register a floating charge on the total assets of the borrower, without listing them. This allows a certain flexibility e.g. over stocks or plant/machinery which needs to be replaced.

Compare with Fixed charge.

Français: Droit de gage global
Español: Cargo flotante

Floating debt:

Short-term, non-funded and non-consolidated debt of a public authority. Opposite: consolidated (funded) debt.

Français: Dette flottante
Español: Deuda flotante

Floating (flexible) exchange rate:

The situation when a currency value is determined by trading on the foreign exchange markets and is allowed to move or "float" freely, without any, or minimal, Central Bank intervention. It is sometimes referred to as clean float, as opposed to a dirty float when the Central Bank intervenes to restrict exchange rate fluctuations. Opposite: Fixed exchange rates.

Français: Taux de change flottant (flexible)
Español: Tipo de cambio flotante, tipo de cambio flexible

Floating rate:

An interest rate based on a variable interest rate benchmark, such as a specific-maturity Treasury bill yield. A fixed margin is usually added to such a benchmark.

Français: Taux variable
Español: Tipo flotante, tasa flotante, tipo variable

Floating Rate Note (FRN):

A short-term bond issued (typically on the Euromarkets) with a variable (floating) coupon or interest rate, which varies in line with a reference short-term market interest rate (usually, the LIBOR or prime rate). Adjustments to the bond’s rates are made at intervals of three or six months to account for changes in the reference rate, and interest is usually paid twice a year to the note holder. Popular with international banks, FRNs contrast with conventional bonds on which the coupon rate is fixed until maturity. Borrowers prefer FRNs if they expect a fall in market interests rates, or if they have already issued a lot of fixed-rate debt and wish to diversify their debts. See also Capped FRNs.

Français: Obligation à taux variable
Español: Bono de interés flotante, bono de interés variable

Floor:

(1) The place where trading in a stock exchange actually takes place

(2) The minimum rate of interest on a floating rate note.

Français: Corbeille ou Plancher
Español: Bono con interés flotante mínimo

Floored FRN/Floor:

A Floating rate note with a minimum interest rate.

Français: FRN à taux minimum
Español: Floored FRN

F.O.:

See Free Out.

Français: F.O.
Español: F.O.

F.O.B.:

See Free on Board.

Français: F.A.B.
Español: F.O.B.

Footsie (FT-SE 100 stock index):

Introduced in 1994 by the Financial Times and the London Stock Exchange, it is a computerised financial index of 100 major British companies.

Français: Footsie Indice FT-SE des 100 actions
Español: Indice de la bolsa de Londres y del Financial Times

Force majeure:

A standard clause (for example in marine contracts) which exempts the parties for non-fulfilment of their obligations as a result of conditions beyond their control, such as earthquakes, floods, war or other events over which none of the parties has control or influence. (Act of God).

Français: Force majeure
Español: Cláusula de fuerza mayor

Forced sale of collaterals:

The forced sale of the assets pledged as security for a loan if the credit utilised exceeds the value of the pledged collaterals, or if the borrower has defaulted in repaying the principal or paying the due interest.

Français: Vente forcée des actifs mis en gage
Español: Venta forzada de garantías

Foreign assets:

Credit balances or claims towards foreign debtors. Foreign assets may for instance take the form of loans granted by the banks to customers abroad, holdings in foreign enterprises, direct investments abroad, foreign real estate etc. Opposite: Foreign liabilities.

Français: Actifs étrangers
Español: Activos en el exterior, activos exteriores

Foreign bond:

A bond issued and sold outside the country of the borrower in the currency of the country of issue. For example, a Swiss franc bond issued by an American company and sold in Switzerland. Opposite: Domestic bond.

Français: Obligation étrangère
Español: Bono extranjero, obligación extranjera

Foreign content:

The share of a product which may be attributed to foreign goods or services (i.e. not completely produced with domestic inputs). Foreign content requirements are, for example, frequently imposed in the public procurement sector. Foreign content may also play a role in the provision of export credit support, as the Export Credit Agency may restrict its support of foreign content to a percentage of the total contract, or in proportion to the domestic content of the contract.

Français: Contenu étranger
Español: Contenido extranjero

Foreign Credit Insurance Association (FCIA):

An agency of the Export-Import Bank (Eximbank) of the United States offering comprehensive insurance cover against political and commercial risks on export receivables. FCIA was founded in 1961 as a partnership between a group of private insurance companies and Eximbank. While the FCIA directly underwrites commercial credit risks, Eximbank is responsible for the political risks and may underwrite or reinsure the commercial risk. FCIA acts as an agent responsible for the marketing and daily administration of the programme.

Français: Association de l'assurance de crédit étranger
Español: Asociación de Seguros a Créditos en el Extranjero

Foreign currency account:

An account denominated in another country’s currency.

Français: Compte en monnaie étrangère
Español: Cuenta en divisas

Foreign currency option:

An option which gives the right to buy or sell a specified amount of foreign currency at a specified price within a specified period of time.

Français: Option en monnaie étrangère
Español: Opción en divisas

Foreign currency swap:

A swap operation whereby a currency is traded against another currency, with the agreement that the transaction will be reversed at some specified future date.

Français: Swap en monnaie étrangère
Español: Swap en divisas

Foreign direct investment (FDI):

The purchase of foreign physical assets such as real estate, plant and equipment, involving the acquisition of a certain degree of management control. FDIs are defined by the International Monetary Fund as "investments made to acquire a lasting interest in an enterprise operating in an economy other than of the investor, the investor's purpose being to have an effective voice in the management of the enterprise". The element of management control is what differentiates FDIs from mere portfolio investments.

Français: Investissement étranger direct
Español: Inversión extranjera directa, IED, inversión directa extranjera

Foreign draft:

A draft drawn by a bank or another drawer on a bank or another drawee in a foreign country. The draft may be denominated in any currency.

Français: Traite étrangère
Español: Giro extranjero

Foreign exchange:

A general term indicating foreign currencies. A country earns foreign exchange by exporting goods and services.

Français: Devises
Español: Divisas

Foreign exchange contract:

A contract between a bank and its client to purchase or sell foreign exchange at a fixed rate with delivery at a specific time. It allows the client to protect himself from adverse fluctuations in foreign exchange rates.

Français: Contrat de devises
Español: Contrato en divisas

Foreign exchange controls:

Various forms of control imposed by government authorities on the purchase/sale of foreign currencies by residents, or on the purchase/sale of domestic currency by non-residents.

Français: Contrôle des devises
Español: Control de cambio

Foreign investment:

The purchase of assets (foreign direct investment) or securities (portfolio investment) abroad by a company or individual.

Français: Investissement étranger
Español: Inversión extranjera

Foreign leasing:

A leasing contract whereby the lessor is an entity domestic to the lessee’s country but owned by an entity located outside the lessee’s country.

Français: Crédit-Bail étranger
Español: Arrendamiento en divisas

Foreign liabilities:

Financial obligations towards foreign creditors, for example debts towards a bank located abroad. Opposite: Foreign assets.

Français: Dettes étrangères
Español: Pasivos exteriores, pasivos en el exterior, deudas en cuenta extranjera, pasivos externos

Foreign market value:

The price at which merchandise is sold, or is offered for sale, on the main foreign markets of the country of export.

Français: Valeur marchande étrangère
Español: Valor en el mercado extranjero

Foreign Sales Agent:

An individual or a firm acting as the foreign representative of a domestic supplier for its sales abroad.

Français: Agent de vente étranger
Español: Agente de ventas en el exterior

Foreign Sales Corporation (FSC):

A corporation which may be established by a US exporter to shelter some of his income from taxation. Special tax treatment is granted if the FSC fulfils certain conditions, such as being a foreign corporation, maintaining an office outside US territory and having at least one director resident outside of the United States.

Français: Société de ventes à l’étranger
Español: Sociedad de venta al exterior

Foreign Trade Organizations (FTO):

Agencies organized along product lines, responsible for handling foreign sales and purchases in most centrally planned economies.

Français: Organisations de commerce extérieur
Español: Organización de comercio exterior

Foreign trade zones (FTZ):

Special physical sites where firms are allowed by the government to delay or avoid paying tariffs on imports. Domestic goods for export may be considered exported for excise tax rebates and drawback purposes upon entering the FTZ zone. See also Export Processing Zones.

Français: Zones de commerce avec l'étranger (FTZ)
Español: Zona franca

Forex:

Abbreviation for Foreign exchange.

Français: Forex
Español: Forex

Forfaiting:

A form of non-recourse export financing, whereby the exporter sells the forfaiter its export receivables at a Discount, in exchange for cash. Usually the receivables are guaranteed by a bank in the importer’s country, and sometimes also by the Central Bank or the government of the importer’s country. Forfaiters typically work with Bills of exchange or Promissory notes, i.e. unconditional and negotiable debt instruments. Under this technique, the forfaiting company carries all the risks, with no right of recourse against the exporter in case of the failure of the importer to make due payment. The exporter is enabled to extend credit terms to importers and will incorporate the discount into the selling price. The main characteristics of forfaiting are:

Forfaiters work on the basis of single transactions.
Forfaiters generally work with medium-term receivables (180 days to seven years)
Forfaiters usually work with capital goods, commodities and large projects.

It should be noted that, as forfaiters usually require a bank guarantee, they are generally willing to work with receivables from developing countries. Compare with Factoring.

Français: Escompte sans recours
Español: Descuento de bonos a plazo medio; descuento de pagarés a plazo medio

Formation of capital coverage:

A financing technique used by insurance companies and pension funds, whereby the contributions of the insured parties are accumulated to form the capital required for the payment of insurance benefits.

Français: Constitution de capital de couverture
Español: Formación de cobertura de capital

Forward contract:

A contract to deliver an asset (such as foreign currency, security, commodity, etc) at a specified future date and at a specified price. Unlike futures, forward contracts are not standardized and are not traded on organized exchanges.

Français: Contrat à terme
Español: Contrato de futuros, contrato a término, contrato a plazo

Forward dollars:

The price of US dollars, for delivery at a fixed future date (e.g. in 3 months).

Français: Dollars à terme
Español: Dólar a futuro

Forward (exchange rate) market:

A market where traders, dealers and market makers purchase and sell foreign currencies for delivery or acceptance beyond the spot date. Market expectations determine whether a currency forward rate stands at a premium (higher) or at a discount (lower) in relation to its spot rate.

Français: Marché des changes à terme
Español: Mercado de futuro

Forward rate:

A contractually-established exchange rate between a foreign exchange trader and the client for delivery of foreign currency at a specific date in the future. It is the price applicable for a future transaction or on the future markets. Opposite: Spot rate.

Français: Taux à terme
Español: Tipo de interés futuro, tasa de interés futura

Forwarder's receipt:

The certificate issued by a forwarding agent confirming the receipt of goods for shipment. It is not a security but it is often necessary for the execution of a documentary credit.

Français: Récépissé du transporteur
Español: Recibo de la agencia de transporte

Foul Bill of Lading:

A receipt issued by a carrier indicating that the goods were damaged when received. Compare with Clean Bill of Lading.

Français: Connaissement avec réserve
Español: Conocimiento de embarque sucio

F.P.A.:

Free of Particular Average.

Français: F.P.A.
Español: Libre de avería particular, libre de avería simple

Fractional reserve:

The reserve held by banks as a precautionary measure. The sums devoted to reserves are generally much lower than the amounts loaned and re-loaned to borrowers.

Français: Réserve partielle
Español: Reserva fraccionaria

Franchising:

A sales and distribution method whereby one party (the franchisor) gives an independent party (the franchisee) the authorisation to distribute his products or services under an established name. This is not a branch of the franchisor's business, but a separate business under the original trademark and business concept. The franchisor provides continual assistance to the operation of the franchisee network in order to ensure that their activities conform to the agreed standards.

Français: Franchisage
Español: Franquicia

Free (of charge):

See Freight prepaid.

Français: Libre de frais
Español: Free of charge

Free Alongside Ship (F.A.S.):

A term commonly used in international trade contracts indicating that the quoted price by the seller includes insurance and charges for delivery of the goods alongside a designated vessel at the port of departure. The seller bears the costs of unloading and wharfage, whilst loading, ocean transportation and insurance costs are left to the buyer. F.A.S. is also a reference for export and import valuation.

Français: Franco long du bateau
Español: Franco al costado del buque (FAS)

Free carrier:

This indicates that the seller’s obligations are fulfilled upon delivery of the goods, cleared for export, to the carrier named by the buyer at an agreed shipping place. If no precise place is indicated by the buyer, the seller may select from a stipulated range of places where the carrier should take the goods into his charge. This term may be used for any mode of transport, including rail, air and multimodal transport. When, according to commercial practice, the seller provides assistance to organise the transport of the goods by a carrier, he may act at the buyer's risk and expense.

Français: Franco transporteur
Español: Franco transportista

Free in:

A pricing term indicating that the charterer of a vessel is responsible for the cost of loading the merchandise onto the vessel.

Français: Free in
Español: Franco de gastos de carga

Free in and out:

A pricing term indicating that the charterer of a vessel is responsible for the costs of loading and unloading goods from the vessel.

Français: Free in and out
Español: Franco de gastos de carga y descarga

Free of Particular Average (F.P.A.):

A clause used in marine insurance relating to the recoverability of partial and total losses from perils of the sea. The American and English coverage vary as follows:

(1) American Conditions (FPAAC). The underwriter does not assume responsibility for partial losses unless caused by sinking, stranding, burning or collision with another vessel.

(2) English Conditions (FPAEC). The underwriter assumes responsibility for partial losses if the vessel is sunk, stranded, burned, on fire or in collision, even though such an event did not actually cause the damage suffered by the goods.

Compare with All Risks Coverage and With Average.

Français: Libre d’avarie particulière
Español: Libre de avería particular, libre de avería simple

Free on Board (F.O.B.):

Under this term, the price of the good quoted by a seller includes transport, insurance and loading costs incurred until the merchandise is loaded on board the ship. The seller fulfils his obligations when the goods are boarded (i.e. have passed over the ship’s rail) at the named port of shipment. The buyer has to bear all costs and risks of loss or damage arising from the point of loading. The term FOB can only be used for sea or inland waterway transport. When the ship’s rail serves no practical purpose, such as in the case of roll-on/roll-off container traffic, the Free Carrier term is more appropriate. FOB values also serve as a reference for import and export valuation

Français: Franco à bord (F.A.B.)
Español: Franco a bordo (F.O.B.)

Free on rail/free on truck:

Contractual terms used when the goods are to be carried by rail ("trucks" refers to the railway wagons).

Français: Franco sur rail / Franco sur wagon
Español: Franco en vagón

Free out:

A pricing term indicating that the quoted price is inclusive of the costs of unloading the goods from the vessel.

Français: Free out
Español: Franco de gastos de descarga

Free port:

An area of the port where merchandise may legally be unloaded and stored duty-free, pending re-export or sale within that country.

Français: Port franc
Español: Puerto franco

Free Trade Area (FTA):

A regional trade agreement integration whereby tariffs on trade between member states are abolished, but participants maintain their own external tariffs towards imports from countries outside the area. Compare to Custom Union.

Français: Zone de libre échange
Español: Zona de libre comercio, zona franca

Freight/Carriage... paid to:

A contractual term indicating that it is the seller who pays the freight for the carriage of goods to the named destination. Any additional costs and the risk of loss or damage to the goods are transferred from the seller to the buyer when the goods are delivered into the custody of the first carrier, and not at the ship's rail. The term may be used for all modes of transport.

Français: Fret, transport...payé à
Español: Flete pagado hasta, porte pagado hasta

Freight/Carriage… and insurance paid to:

A term indicating that, in addition to the "Freight/Carriage... paid to" obligations, the seller also has to undertake transport insurance against the risk of loss or damage to the goods during carriage. It is thus the seller’s responsibility to establish a contract with the insurer and to pay the relevant premium.

Français: Fret/Transport ...et assurance payés à
Español: Flete y seguro pagado hasta, porte y seguro pagado hasta

Freight collect:

A term used on shipping documents and in price quotations indicating that the buyer or consignee must pay all shipping charges.

Français: Port avancé
Español: Flete debido, porte debido

Freight Forwarder:

An independent service company which specialises in the handling of export shipments on behalf of the exporter, remunerated on a fee basis. The forwarder provides services to facilitate the expedition of the shipment to its overseas destination, such as preparing the shipping documentation, counselling the exporter when applying for trade financing, booking and arranging space for shipments, arranging cargo insurance, advising the shipper on overseas requirements on marking and labelling, etc.

Français: Transitaire
Español: Agente de transportes, agente expedidor

Freight prepaid:

A term used in price quotations showing that the seller has paid the costs of freight from one named point to a second named point, but that the title to the shipment passes to the buyer at the first named point.

Français: Fret payé d’avance
Español: Flete pagado por anticipado

FRN:

Abbreviation for Floating rate note.

Français: FRN
Español: FRN

Front end costs:

Commission fees or other payments, taken at the outset of a loan or other financial operation.

Français: Frais payés au début
Español: Costos iniciales

Front end finance:

In international trade transactions, a commercial loan provided to the buyer, under which separate credit facilities are provided to finance down payment and/or other direct payments not covered under buyer credit or supplier credit financing.

Français: Financement au début
Español: Financiación suplementaria, financiación sin garantía, financiación sin asegurar

Full convertibility:

A situation in which both residents and non-residents can purchase unlimited amounts of any currency.

Français: Convertibilité totale
Español: Convertibilidad total

Full service bank:

A bank operating in all banking sectors. See also: Mortgage bank.

Français: Service bancaire complet
Español: Banco múltiple, multibanco

Full set:

Term used in a documentary credit transaction for a bill of lading which has been drawn up in three original copies.

Français: Jeu complet
Español: Conjunto completo

Functional currency:

The currency of reference when converting a group’s financial statements expressed in different foreign currencies. It is typically the currency of the country where the firm has its base or core operations.

Français: Monnaie de référence
Español: Moneda funcional

Funds:

(1) Cash or other assets easily convertible into cash which have been set aside or reserved for a particular purpose, such as the pension fund of a company.

(2) Abbreviation for investment funds.

Français: Fonds
Español: Fondos

Futures; Future transactions:

A type of derivative, represented by contracts for the sale or purchase of an agreed quantity of a specified asset, for delivery at a specified future date and at a predetermined price. The assets underlying a futures contract may be represented by commodities, foreign exchange, shares and other securities. When commodities are used in futures trading they are not intended to be delivered physically (although this is not ruled out) but entail the settlement of price differences. Trade in financial futures is standardised and takes place on specialized markets such as the Chicago Board Options Exchange (CBOE), the New York Futures Exchange (NYFE) and MATIF. Compare with forward contract. See also option.

Français: Opérations à terme
Español: Futuros, futuros financieros, operaciones a término

Futures market or forward exchange market:

A market where commodities (rubber, tin, etc.), foreign currencies and securities are bought and sold for delivery at some future point in time, as opposed to the spot market which provides for immediate delivery. Unlike the spot market, where commodities are traded in the physical sense, on the futures market it is only the contracts which are bought and sold. While traders in commodities, or financial assets whose price fluctuates greatly over time, may engage on the forward/futures market in order to minimize risk and future uncertainty (i.e. hedge against adverse price movements), dealers and speculators do so hoping to earn profits from correctly anticipating price movements. e.g. a producer of chocolate may buy a future on a given amount of cocoa at today's price, plus a percentage risk premium, for delivery in two months' time. Even if cocoa prices rise steeply, the manufacturer will still able to buy at the contract price and can therefore plan his raw materials accordingly. Similarly, cocoa growers can contract to sell the commodity at an agreed current price for delivery in the near future in order to protect themselves from adverse price changes.

Français: Marché à terme
Español: Mercado de futuros

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