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- Factoring - Factoring is the discounting of a foreign account
receivable that does not involve a draft. The exporter transfers
title to its foreign accounts receivable to a factoring house
for cash at a discount from the face value. Factoring is often
done without recourse to the exporter. Export factoring allows
an exporter to ship on "open account," by which goods
are shipped without guarantee of payment (that is, a letter of
credit). The factor assumes financial ability of the customer
to pay and handles collections on the receivables. See: Factoring
House. Forfaiting.
- Factoring Houses - Certain companies which purchase export
receivables (e.g., the invoices to foreign buyers) at a discounted
price, usually about two to four percent less than their face
value.
- Fair Value - The reference against which U.S. purchase prices
of imported merchandise are compared during an antidumping investigation.
Generally expressed as the weighted average of the exporter's
domestic market prices, or prices of exports to third countries
during the period of investigation. In some cases fair value is
the constructed value. Constructed value is used if there are
no, or virtually no, home market or third country sales or if
the number of such sales made at prices below the cost of production
is so great that remaining sales above the cost of production
provide an inadequate basis for comparison. See: Tariff Act of
1930.
- FAM Tour - Familiarization tour for travel agents or journalists
planned and executed by a destination or region, usually in cooperation
with an international airline.
- Fast Track - Fast track procedures for approval of trade agreements
were included by Congress in trade legislation in 1974, in 1979,
and again in the 1988 Trade Act. Fast track provides two guarantees
essential to the successful negotiation of trade agreements: (1)
a vote on implementing legislation within a fixed period of time,
and (2) a vote, up or down, with no amendments to that legislation.
Provisions in the Omnibus Trade and Competitiveness Act of 1988
include that the foreign country request negotiation of an FTA
and that the President give the Congress a 60-legislative-day
notice of intent to negotiate an FTA. During the 60-legislative-day
period, either committee can disapprove fast track authority by
a majority vote. Disapproval would likely end the possibility
of FTA negotiations. The 60-legislative-days can translate into
five to ten months of calendar time, depending on the Congressional
schedule. Formal negotiations would begin following this 60-day
Congressional consideration period.
- Feasibility Studies - See: Trade and Development Agency.
- Federacion Mundial de Instituciones Financieras de Desarollo
- See: World Federation of Development Financing Institutions.
- Federal Grain Inspection Service - FGIS certifies that grain
produced in the United States meets the official United States
Standards for Grain. As part of its responsibilities, FGIS works
with international traders. Before any grain can be exported from
the United States, it must first be certified by FGIS as having
met a specific standard. FGIS staff explain the national inspection
system, U.S. grain standards, and commodity inspection programs;
conduct briefings and tours; assess foreign inspection and weighing
techniques; and respond to inquiries about quality and quantity
of U.S. grain exports. FGIS agencies in eight states are delegated
authority to perform official export services at ports.
- Federal Maritime Commission - The FMC is an independent agencys
which regulates oceanborne transportation in the foreign commerce
and in the domestic offshore trade of the United States.
- Final Determination - The International Trade Administration
makes a final determination after the investigation of sales at
"less than fair value" and the receipt of comments from
interested parties. This determination usually is made within
75 days after the date a preliminary determination is made. However,
if the preliminary determination was affirmative, the exporters
who account for a significant proportion of the merchandise under
consideration may request, in writing, a postponement of this
determination. If the preliminary determination was negative,
the petitioner may likewise request a postponement. In neither
case can this postponement be more than 135 days after the date
of the preliminary determination. If the final determination is
affirmative and follows a negative preliminary determination,
the matter is referred to the International Trade Commission for
a determination of the injury caused or threatened by the sales
at less than fair value. (Had the preliminary determination been
affirmative, the ITC would have begun its investigation at that
time.) Not later than 45 days after the date the International
Trade Administration makes an affirmative final determination,
in a case where the preliminary determination also was affirmative,
the International Trade Commission must render its decision on
injury. Where the preliminary determination was negative, the
ITC must render a decision not later than 75 days after the affirmative
final determination. A negative final determination by the Assistant
Secretary for Import Administration terminates an antidumping
investigation. See: Tariff Act of 1930.
- Fines, Penalties, and Forfeitures System - The Fines, Penalties,
and Forfeitures System, FPFS, a part of Customs' Automated Commercial
System, is used to assess, control, and process penalties resulting
from violations of law or Customs regulations. FPFS provides retrieval
of case information for monitoring case status.
- Five-K Countries 5(k) Countries - Those countries as defined
under Section 5(k) of the Export Administration Act. Such countries
are eligible for some or all of the same treatment as CoCom countries
in relation to export control requirements if those countries
maintain comparable export control programs. See: Coordinating
Committee on Multilateral Export Controls.
- Flag of Convenience - A ship registered under the flag of a
nation which offers conveniences in the areas of taxes, crew,
and safety requirements.
- Fondo Financiero Para el Desarrollo de la Cuenca del Plata
- FONPLATA (English: Plata Basin Financial Development Fund) finances
prefeasibility and feasiblity studies, engineering designs, and
projects in its member countries (Argentina, Bolivia, Brazil,
Paraguay, and Uruguay). The Fund encourages cofinancing with international
development institutions to increase project impact. Loan financing
is available for infrastructure, industrial, livestock education,
and health projects. FONPLATA was established in 1976; headquarters
are in Sucre, Bolivia. The Fund is an outgrowth of the April 1969
Plata Basin Treaty (entered into force, August 1970) which sought
to coordinate development of the region, including navigation,
control of acquatic resources, and use of natural resources.
- Fondo para el Fomento de las Exportaciones de Productos Manufacturados
- FOMEX (the Export Fund), is a trust established by the Mexican
government to increase employment and to increase the balance
of payments and the international reserve levels. FOMEX uses loans
and loan guarantees to help exporters of manufactured goods and
services and importers who wish to substitute imports with nationally
produced goods.
- Food and Agricultural Organization - The FAO was established
in 1945, as a specialized agency of the United Nations to combat
hunger and malnutrition. The FAO serves as a coordinating body
between government representatives, scientific groups, and non-governmental
organizations to carry out development programs relating to food
and agriculture. Headquarters are in Rome, Italy.
- Food For Development - See: Food for Peace.
- Food for Peace - The "Food for Peace" program (also
known as "P.L. 480), originally established by the 1954 Agricultural
Trade and Development Act, is the primary means by which the U.S.
provides foreign food assistance. The three primary objectives
of the program are to: (a) expand U.S. agricultural exports, (b)
provide humanitarian relief, and (c) aid the economic development
of developing countries. Commodities are transferred in two ways:
- By government-to-government long-term concessional financing
or for local currencies in which priority is given to developing
countries which demonstrate the greatest need for food, are undertaking
measures to improve their food security and agricultural development,
and are potential commercial markets for U.S. agricultural commodities
-- Title I, administered by the Department of Agriculture; and
- Donations or grants, including: + Donations of food commodities
for distribution in meeting either emergency conditions or international
cooperative non-emergency assistance -- Title II, administered
by AID; and + Providing food assistance on a grant basis to least
developed countries through government-to-government agreements.
Proceeds derived from sales on the local market may be used to
support a variety of economic development and related activities
in the recipient countries -- Title III, administered by AID.
This assistance is sometimes known as "Food For Development."
See: Food for Progress Section 416
- Food For Progress - The "Food for Progress" program,
established by the 1985 Farm Bill, is carried out by the Department
of Agriculture, using the authority of either Public Law 480 or
Section 416 of the Agricultural Act of 1949. The program donates
surplus government-owned agricultural commodities or Title I (of
P.L. 480) funds to needy countries for development and agricultural
reform purposes. Food for Progress operates in a less restrictive
manner than either P.L. 480 or Section 416. See: Food for Peace
Section 416.
- Force Majeure - The title of a standard clause in marine contract
exempting the parties for non-fulfillment of their obligations
as a result of conditions beyond their control, such as earthquakes,
floods, or war.
- Foreign Access Zone - FAZ is a term adopted by Japan for its
form of free trade zone. FAZs are the outgrowth of Japan's effort
to improve its trade balance and to stimulate regional economic
areas. FAZs are intended to be established around airports and
seaports, with facilities (warehouses, cargo-sorting, distribution,
import processing, wholesale, design-in centers, exhibition halls)
on an international scale. The FAZ concept -- which emphasizes
imports rather than the processing and job creation -- extends
from the July 1992 Law on Extraordinary Measures for the Promotion
of Imports and the Facilitation of Foreign Direct Investment in
Japan. Passage of the law is linked to the Structural Impediments
Initiative (SII). See: Free Trade Zones Structural Impediments
Initiative.
- Foreign Affairs Administrative Support - The FAAS program is
the mechanism used by the Department of State (DOS) to define
the additional costs it incurs for providing services necessary
to support the overseas operations of agencies external to DOS.
Under FAAS, DOS funds core costs required for its own programs
while the supported agencies fund incremental costs of their service
requirements. These latter costs are shared through the application
of workload factors which measure agency participation in the
services.
- Foreign Affiliate - See: Affiliate.
- Foreign Affiliate of a Foreign Parent - A foreign affiliate
of a foreign parent is, with reference to a given U.S. affiliate,
any member of the affiliated foreign group owning the U.S. affiliate
that is not a foreign parent of the U.S. affiliate.
- Foreign Agricultural Service - The FAS, an agency of the U.S.
Department of Agriculture, collects foreign market information
regarding agricultural production and trade, develops foreign
markets for U.S. agricultural products, and represents U.S. agricultural
interests overseas and in multilateral fora. FAS maintains over
60 counselor and attache posts, located in U.S. embassies and
consulates, and about fifteen Agricultural Trade Offices (ATOs)
which provide market development and trade promotion services
in overseas locations. FAS also administers USDA's export credit
and concessional sales programs. FAS headquarters are located
in Washington, D.C.
- Foreign and Commonwealth Office - The FCO, equivalent to the
U.S. State Department, is Britain's Diplomatic Service, with posts
in about 170 countries. Among its functions, the FCO supports
overseas trade and export promotion services in cooperation with
Britain's Department of Trade and Industry.
- Foreign Assets Control - The Treasury Department's Office of
Foreign Assets Control, OFAC, administers sanctions programs involving
specific countries and restricts the involvement of U.S. persons
in third country strategic exports.
- Foreign Assistance Act of 1991 - This Act replaced the Support
for East European Democracy (SEED) Act. The Foreign Assistance
Act allows support to 26 countries, including all East European
nations and most of the Soviet republics, but not to the Soviet
Union itself.
- Foreign Availability - The Bureau of Export Administration
conducts reviews to determine the foreign availability of selected
commodities or technology subject to export control. The reviews
use four criteria to determine foreign availability: comparable
quality, availability-in-fact, foreign source, and adequacy of
available quantities that would render continuation of the U.S.
control ineffective in meeting its intended purpose. A positive
determination of foreign availability means that a non-U.S. origin
item of comparable quality may be obtained by one or more proscribed
countries in quantities sufficient to satisfy their needs so that
U.S. exports of such item would not make a significant contribution
to the military potential of such countries. A positive determination
may result in the decontrol of a U.S. product that has been under
export control, or the approval of an export license. However,
the control may be maintained if the President invokes the national
security override provision of the Act. Beginning with the 1977
amendments to the Export Administration Act, the Congress directed
that products with foreign availability be identified and decontrolled
unless essential to national security. In January 1983, a program
to assess the foreign availability of specific products was established
within the Office of Export Administration, now the Bureau of
Export Administration, or BXA. Further, 1985 amendments to the
Act directed that an Office of Foreign Availability be created.
- Foreign Bank Supervision Enhancement Act - The FBSEA, passed
in 1991, increased the Federal Reserve's supervisory powers over
foreign banks by: (a) requiring Federal Reserve review before
a foreign bank enters or expands in the United States; (b) tightening
the standards for entry and expansion that must be considered
by the Federal Reserve; (c) requiring Federal Reserve Board approval
of U.S. representative offices of foreign banks; and (d) requiring
that each U.S. office of a foreign bank be examined at least once
a year by the Federal Reserve. See: International Banking Act.
- Foreign Broadcast Information Service - FBIS and the Joint
Publication Research Service (JPRS) publish political, military,
economic, environmental, and sociological new, commentary, and
other information, and scientific and technical data reports.
All FBIS and JPRS information is obtained from foreign radio and
television broadcasts, news agency transmissions, newspapers,
books, and periodicals.
- Foreign Buyer Program - The Foreign Buyer Program, FBP, is
a joint industry-International Trade Administration program to
assist exporters in meeting qualified foreign purchasers for their
product or service at trade shows held in the United States. ITA
selects leading U.S. trade shows in industries with high export
potential. Each show selected for the FBP receives promotion through
overseas mailings, U.S. embassy and regional commercial newsletters,
and other promotional techniques. ITA trade specialists counsel
participating U.S. exhibitors.
- Foreign Claims Settlement Commission - The FCSC is authorized
to determine claims of United States nationals for loss of property
in specific foreign countries. These losses have occurred either
as a result of nationalization of property by foreign governments
or from damage and loss of property as a result of military operations
in specific conflicts. The Commission is an independent quasi-judicial
agency within the Justice Department.
- Foreign Corrupt Practices Act - The FCPA prohibits U.S. individuals,
companies and direct foreign subsidiaries of U.S. companies from
offering, promising, or paying anything of value to any foreign
government official in order to obtain or retain business.
- Foreign Direct Investment in the United States - Foreign direct
investment in the United States is the ownership or control, directly
or indirectly, by a single foreign person (an individual, or related
group of individuals, company, or government) of 10 percent or
more of the voting securities of an incorporated U.S. business
enterprise or an equivalent interest in an unincorporated U.S.
business enterprise, including real property. Such a business
is referred to as a U.S. affiliate of a foreign direct investor.
See: Committee on Foreign Investment in the United States Foreign
Person Portfolio Investment.
- Foreign Disclosure and Technical Information System - FORDTIS
is a classified information system that contains an automated
database of munition and dual-use export licenses. The system
is maintained by the Defense Department's Defense Technology Security
Administration. See: Defense Technology Security Administration
Export Control Automated Support System.
- Foreign Economic Trends - FETs are reports prepared by U.S.
embassies abroad to describe foreign country economic and commercial
trends and trade and investment climates. The reports describe
current economic conditions; provide updates on the principal
factors influencing developments and the possible impacts on American
exports; review newly announced foreign government policies as
well as consumption, investment, and foreign debt trends.
- Foreign Exchange Option - A foreign exchange option is an arrangement
in which a purchaser and a seller of foreign currencies agree
on a specific rate of exchange at a future date. The purchaser
may choose to exercise or pass up the option -- thus setting a
limit on unfavorable exchange rates. The seller is given a fee
for tendering the option. Purchasers may exercise the option at
any time -- in the European option, currency exchange is made
on the originally established date; in the American option, exchange
is made within a couple of days of the purchaser exercising the
option. See: Forward Exchange Rate.
- Foreign Exports - Exports of foreign merchandise (re-exports),
consist of commodities of foreign origin which have entered the
United States for consumption or into Customs bonded warehouses
or U.S. Foreign Trade Zones, and which, at the time of exportation,
are in substantially the same condition as when imported.
- Foreign Flag - A reference to a carrier not registered in the
United States that flies the American flag. The term applies to
air and sea transportation.
- Foreign Independent Tour - A foreign independent tour, FIT,
is a prepaid travel arrangement, tailored to meet a traveler's
specific wishes.
- Foreign Investment - See: Committee on Foreign Investment in
the United States Foreign Direct Investment in the United States
Net Foreign Investment.
- Foreign Investment Advisory Service - FIAS was established
in 1986 as a joint facility of the International Finance Corporation
and the Multilateral Investment Guarantee Agency to help developing
countries increase the inflow of foreign investment. The Service
provides advice at the request of member governments on formulating
a general framework of legal, accounting, and regulatory policies
and institutions and procedures to attract and assess investment
interest.
- Foreign Market Development Program - FMD (also known as the
Cooperator Program) is one of several Department of Agriculture
(USDA) programs designed to encourage development, maintenance
and expansion of commercial export markets for U.S. agricultural
commodities and products. Under FMD, USDA considers proposals
with preference given to activities promising early results and
lasting benefits in commercial export markets. Funds may be used
for trade servicing, consumer promotion, market research, and
to provide technical assistance to actual or potential foreign
purchasers. While agreements under the Cooperator Program may
extend from one to five years, types of activities and amounts
of funds are annually negotiated between the Foreign Agricultural
Service (FAS) and participants (cooperators) and authorized in
annual marketing plans. The marketing plans must set forth the
objectives and describe the specific project in detail. The amount
of funding provided by FAS varies, dependent upon circumstances
and whether the activities are characterized as generic or market
promotion.
- Foreign Market Research - See: Industry Subsector Analysis.
- Foreign Market Value - The price at which merchandise is sold,
or offered for sale, in the principal markets of the country from
which it is exported. If information on foreign home market sales
is not useful, the foreign market value is based on prices of
exports to third countries or constructed value. Adjustments for
quantities sold, circumstances of sales, and differences in the
merchandise can be made to those prices to ensure a proper comparison
with the prices of goods exported to the United States. See: Tariff
Act of 1930.
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