Trade words, in plain language

Cross-border trade runs on about thirty words, and most of them are never explained to the person who has to act on them. Landed cost is the true total of getting goods to your door - the price of the goods plus freight, insurance, customs duty, import VAT, clearing and handling - and it is the only number worth comparing between two suppliers, because two quotes at the same price per tonne can differ by a fifth on arrival. An HS code is the Harmonized System classification every customs authority on earth uses; its first two digits are the chapter, the first four the heading, and the six-digit subheading is what a customs officer reads to set your duty. Rules of origin decide whether goods actually count as African: either wholly obtained in one country, or sufficiently transformed there, which is usually proven by a change of tariff heading or a minimum share of local value added. A certificate of origin is the document that states it, and under AfCFTA it is what removes customs duty - it does not remove import VAT, which is usually the larger of the two numbers and is assessed on the customs value regardless. A phytosanitary certificate is issued by the exporting country's plant-protection authority before loading, never after, and certifies the consignment is free of pests and disease; without it, plant products are refused entry. The aflatoxin ceiling is where African exports most often fail: the European Union limit is roughly a fifth of the ECOWAS one, so a groundnut or maize lot that is legal at home can be rejected at the border. A bill of lading is simultaneously a receipt for the goods, the contract of carriage, and - when issued to order - a document of title, which is why the original is worth what the cargo is worth. Demurrage is what the shipping line charges when a container sits at the port beyond its free days, and it is the single most common unbudgeted cost in African corridors. Pre-shipment inspection is an independent check before the goods leave, and it is the cheapest insurance in the trade: an inspection costs a fraction of a rejected container. PAPSS, the Pan-African Payment and Settlement System, lets two African businesses settle in their own currencies instead of routing through dollars, corridor by corridor. Incoterms - EXW, FOB, CIF, DDP - are not shipping methods but a division of who pays and who carries the risk at each leg. And an importer of record is the party legally answerable to customs in the destination country, which is a liability, not a formality.

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