Patent / 특허권
The recognition by an appropriate governmental agency of the ownership of an idea, process, development, etc. (See Copyright).
Pan-Arab Free Trade Area (PAN-ARAB) / 범아랍자유무역지대
An agreement to preserve the economic interests of Arab States, as well as develop economic and trade relations among Arab States and the outside world.
Papau New Guinea-Australia Trade and Commercial Relations Agreement (PATCRA)
Established in 1977, an agreement between Papua New Guinea and Australia formalizing the traditional trading relationship by which substantially all the trade between the two countries is free of duty and other restrictive regulations of commerce.
Parallel Loan / 상호 대출
A loan arrangement in which a company borrows in its home currency and then trades this debt for the foreign currency debt of a foreign counterpart.
Partnership / 동업
Form of business organization in which two or more co-owners form a business. In a general partnership each partner is liable for the debts of the partnership. Limited partnership permits some partners to have limited liability.
Passive Income /
In the U.S. tax code, income (such as investment income) that does not come from active participation in a business.
Pegged Exchange Rate System
The International Monetary Fund’s name for a fixed exchange rate system.
Perfect Market Assumptions
A set of assumptions under which the law of one price holds. These assumptions include frictionless markets, rational investors, and equal access to market prices and information.
Peril Point / 임계臨界 세율
The limit beyond which the reduction of tariff protection in a given industry would cause it serious injury.
관세를 줄여도 해당 국내 산업에 피해를 입히지 않는 한도
Points Quote
An abbreviated form of the outright quote used by traders in the interbank market.
Political Risk
The risk that a sovereign host government will unexpectedly change the rules of the game under which businesses operate. Political risk includes both macro and micro risks.
Polycentric Staffing
A staffing policy in a multinational enterprise in which host-country nationals are recruited to manage subsidiaries in their own country, while parent-country nationals occupy key positions at corporate headquarters.
Power Distance
The extent to which a society accepts hierarchical differences.
Predatory Pricing
Practice of temporarily selling below survival costs or giving goods away to undermine or eliminate the existing competition. Predatory pricing is an abuse of dominant position, and is illegal in several countries.
Price Discrimination
The practice of charging different prices for the same product in different markets.
Price Elasticity of Demand / 수요의 가격탄력성
The sensitivity of quantity sold to a percentage change in price; -%changeQ/%changeP.
Private Company / 유한회사
A company which does not have a listing on the Exchange and is debarred from offering its shares to the general public.
Private Trustee Company
A company incorporated in certain offshore jurisdictions, such as Bermuda, to act as a trustee for a limited class or group of trusts. Private trustee companies are not permitted to offer trustee services to the public generally.
Privatization / 사유화
A process whereby publicly owned enterprises are sold to private investors (contrast with nationalization).
Pro Forma Invoice
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and important specifications.
Production Possibilities Schedule
The maximum amount of goods (for example, food and clothing) that a country is able to produce given its labor supply.
Production Sharing
Production sharing occurs when a producer chooses to make a product in stages - and in different countries - so that the firm can employ the lowest-cost resources in the production process.
Progressive Taxation
A convex tax schedule that results in a higher effective tax rate on high income levels than on low-income levels.
Promissory Note
Financial document in which the buyer agrees to make payment to the seller at a specified time.
Protected Cell Company (PCC)
A protected cell company may be viewed as a doughnut, the centre of which is the ordinary share capital of the company around which clusters a number of cells, which are individually capitalised with preference capital. The company may contract for individual cells to carry out certain activities on behalf of the company. However, it should be noted that under the PCC Legislation a cell is capable of going bankrupt in certain circumstances, leaving the core share capital untouched. A PCC is similar to a divisionalised entity, save that each division or cell can go bankrupt without the entire company being placed in jeopardy.
Protectionism
Protection of local industries through tariffs, quotas, and regulations that discriminate against foreign businesses.
Protector
A person appointed by the settlor/grantor of a trust, who has limited powers to control the trustee and usually has the right to change trustees.
Protocol relating to Trade Negotiations among Developing Countries
An agreement negotiated under GATT auspices in 1973, providing for reciprocal tariff and other trade concessions among developing countries.
Proxy
A person empowered by a shareholder to vote on his behalf at meetings.
Psychic Distance
The similarities or lack thereof between country markets. This concept takes into account geographic distance, cultural similarities, linguistic aspects, legal systems and methods of conducting business.
Public Limited Company (Plc)
A public company limited by shares or by guarantee and having share capital, which may offer shares for purchase by the general public. Only Plcs may qualify for listing on the London Stock Exchange.
Purchasing Agent
Someone who buys goods in his or her country on behalf of foreign buyers.
Purchasing Power Parity (PPP)
The principle that equivalent assets sell for the same price. Purchasing power parity is a measurement of a currency's value based on the buying power within its own domestic economy.
Purpose Trust
A trust created for an express purpose without any individually ascertained or ascertainable beneficiaries. A purpose trust is typically used in circumstances where the trust would not be exclusively charitable but wholly philanthropic.
Quantitive Restrictions (QR)
Restrictions on trade, generally in the form of quotas, that limit the quantity o a good or service that can be imported or exported. Another form of quantity restriction is a VER, or Voluntary Export Restraint.
Quid Pro Quo
An equal exchange that a person or firm makes with another person or firm.
Quota
The quantity of goods of a specific kind that a country permits to be imported without restriction or imposition of additional duties.
Re-invoicing Centers
An offshore financial affiliate that is used to channel funds to and from the multinational’s foreign operations.
Real Appreciation/Depreciation
A change in the purchasing power of a currency.
Real Exchange Rate
A measure of the nominal exchange rate that has been adjusted for inflation differentials since an arbitrarily defined base period.
Realignment
The coordinated revaluation and devaluation of the currencies of several countries.
Reciprocal Marketing Agreement
A strategic alliance in which two companies agree to comarket each other’s products in their home market. Production rights may or may not be transferred.
Reconsignment
In shipping, it is the change in either the name of the consignee, the place of delivery, or relinquishment of the shipment by the carrier at the point of origin.
Re-domiciliation Corporations
Some offshore jurisdictions allow corporations incorporated in other jurisdictions to re-incorporate in their own at will.
Regional Development Banks (RDBs)
Banks that are owned and operated by member nations; they are designed to extend development loans and provide other assistance to member nations. The world's four regional development banks are the African Development Bank Group, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank.
Registration Statement
In the United States, a statement filed with the Securities and Exchange Commission on securities issues that discloses relevant information to the public.
Re-invoicing
Service offered to offshore trading companies so that legal title to trade goods passes to an offshore company at some intermediate point in a transaction.
Remittance
The forwarding of funds from one party to another as payment for goods or services.
Repatriation
The act of remitting cash flows from a foreign affiliate to the parent firm.
Reservation Price
The price below (above) which a seller (purchaser) is unwilling to go.
Resident Company
A bank, trust company or holding company permitted to deal only in local currency. Foreign currency transactions must be approved by the appropriate regulatory authority.
Restricted Bank and/or Trust License
Permits the holder to carry on business with certain specified persons whose names are usually listed in the licence.
Restrictive Endorsement
Endorsement transferring title or right to a named party.
Rules of Origin
Rules used to determine in what country a good will be considered as actually made for tariff and other trade purposes.
Scenario Analysis
A process of asking “What if?” using scenarios that capture key elements of possible future realities.
Section 201
Also known as the “escape clause” of the U.S. Trade act of 1971, section 201 is a provision that permits imports to be restricted in a certain industry, for a limited time, if those imports have caused injury to U.S. firms.
Section 301
In U.S. trade law, section 301 is a provision that allows private parties to seek compensation through the U.S. government if they have experienced injury to their business because of the illegal or unfair actions of foreign governments.
Securities
General name for all stocks and shares of all types. In common usage, stocks are fixed interest securities and shares are the rest, although strictly speaking the distinction is that stock is denominated in money terms.
Securitisation
This is a method by which entities can raise capital. It involves them converting some of their assets into securities rather than selling them, for example, a Bank could convert its loans into Mortgage Bonds and sell them as such.
Segmented Market
A market that is partially or wholly isolated from other markets by one or more market imperfections.
Seller's Market
Exists when the demand for a good outweighs the supply, and so the economic forces of business cause the goods to be priced at or closer to the vendor's estimate of their value.
Semi-strong Form Efficient Market
A market in which prices fully reflect all publicly available information.
Service Company
A company located in an offshore financial centre to provide management, invoicing and other services for client companies located in other countries. Initially used to advantage double taxation treaties. Service companies are now frequently used to facilitate flight capital outflow, and are often involved in money laundering schemes.
Settlement of Disputes
A declaration made by the United Nations (UN) stating that any water-based international disagreement must be settled in a peaceful and diplomatic manner.
Settlor
The Settlor is the person who establishes the Trust. He is the person who transfers money or other property to the Trustees for them to hold upon the terms of the Trust.
Shelf Company
Companies incorporated and held in stock for later use. This is often the fastest way to obtain offshore companies since they are fully formed and available instantly.
Shipper
Usually the supplier or owner of commodities shipped.
Small Business Administration (SBA)
An independent agency of the U.S. federal government that aids, counsels, assists, and protects the interests of small business concerns to preserve free competitive enterprise and to maintain and strengthen the overall economy of the nation.
Small Business Development Center (SBDC)
An U.S. organization set up to assist small business owners by providing management and technical resources to help start and run their businesses.
Smoot Hawley Act
Passed in 1930, this protectionist act increased import duties to the highest rate ever imposed by the United States, resulting in the downfall of the world trade system.
Social Capital
Physical or real capital that is owned by the public sector rather than by private firms.
Society for Worldwide Interbank Financial Transactions (SWIFT)
Network through which international banks conduct their financial transactions.
Soft Currency
A currency which is not readily accepted in exchange for other currencies or convertible to gold.
Soft Loan
A loan with generous terms such as lower than usual or no interest, and/or a long payback period.
Sogo Sosha
A term referring to general trading companies that import and export merchandise.
Sole Proprietorship
A business owned by a single individual. The sole proprietorship pays no corporate income tax but has unlimited liability for business debts and obligations.
South Asian Association for Regional Cooperation (SAARC)
The South Asian Association for Regional Cooperation (SAARC) was established on December 8, 1985 as a economic and political organization for Southern Asia. Its members states consist of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
South Asian Preferential Trade Arrangement (SAPTA)
An organization promoting and sustaining mutual trade and economic cooperation among Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka through the exchange of concessions in respect to tariffs, para-tariffs, non-tariff barriers and direct trade measures.
South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA)
A non-reciprocal arrangement under which Australia and New Zealand offer preferential trade access to the developing nation members of the South Pacific Forum.
Southern African Customs Union (SACU)
Established in 1910, the SACU is the oldest customs union in the world and is composed of South Africa, Swaziland, Botswana, Namibia, and Lesotho. The countries engage in the free exchange of goods across their borders, and a share a common external tariff and excise duties, as well as the revenues generated by them.
Southern African Customs Union (SACU)
A customs union among Botswana, Lesotho, Namibia, South Africa, and Swaziland focused on maintaining the free interchange of goods between member countries.
Southern African Development Community (SADC)
An inter-governmental organization focused on furthering socio-economic cooperation and integration as well as political and security cooperation among 15 South African states.
Southern African Development Community (SADC)
The Southern African Development Community (SADC) was first established in 1992. It is the successor to the Southern African Development Coordination Conference (SADCC). The Member States are Angola, Botswana, the Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe.
Southern Cone
The geographic region including Argentina, Brazil, Chile, Paraguay, and Uruguay.
Special Drawing Right (SDR)
An international reserve created by the International Monetary Fund and allocated to member countries to supplement foreign exchange reserves.
Specific Tariff
A tariff assessed at a specific amount per unit of weight.
Spot Exchange-rate
Price that is quoted for immediate (spot) settlement. Spot settlement is normally one to two business days from trade date.
Spot Market
A market in which trades are made for immediate delivery (within two business days for most spot currencies).
SRO (Self Regulating Organisation)
An organisation recognised by the SIB and responsible for monitoring the conduct of business and capital adequacy of investment firms.
Stabilization Policies
Government policies designed to promote economic growth, steady employment, and stable prices.
Stamp Duty
A UK tax currently levied on the purchase of shares.
Stamp Tax
Ad valorem tax or flat tax levied on certain legal transactions such as the transfer of a property.
Standard Industrial Classification (SIC)
A standard numerical code system used by the U.S. government to classify products and services.
Stiftung
The Stiftung is a private establishment and this legal form is unique to Liechtenstein. The entity is an autonomous fund with a legal personality. The capital is not divided into shares, and the economic benefits are usually vested in the holder of the "founder's" rights.
Structural Impediments Initiative
A 1990 agreement between the United States and Japan aimed at trying to decrease non-tariff barriers restricting imports into Japan.
Subpart F Income
In the U.S. tax code, income from foreign subsidiaries owned more than 10 percent and controlled foreign corporations that is taxed on a pro rata basis as it is earned.
Subsidiary
A firm controlled by another firm (called the parent) through the ownership of greater than 50 percent of its voting stock.
Subsidized Financing
Financing that is provided by a host government and that is issued at a below-market interest rate.
Subsidy
Monetary assistance granted by the government to an individual or other entity in support of an activity that is regarded as being in the public interest.
Subsistence Agriculture
Small-scale agriculture designed to meet the consumption needs of individual households.
Synergy
In an acquisition or merger, when the value of the combination is greater than the sum of the individual parts: Synergy = VAT - (VA + VT).
Synthetic Forward Position
A forward position constructed through borrowing in one currency, lending in another currency, and offsetting these transactions in the spot exchange market.
Tangible
Real assets that can be used as collateral to secure debt.
Tare Weight
The weight of a container and packing materials that excludes the weight of the goods it contains.
Targeted Registered Offerings
Securities issues sold to “targeted” foreign financial institutions according to U.S. SEC guidelines. These foreign institutions then maintain a secondary market in the foreign market.
Tariff Anomaly
The state of having a tariff on raw materials or semi-processed products be higher than the tariff on the corresponding finished product.
Tariff Escalation
A situation in which duties are low or non-existent for raw materials, moderate for semi-manufactured goods and relatively high for finished products.
Tariff-quota
A tariff that is set at a lower rate until a specified quantity (the quota) of goods has been imported, at which point the tariff increases for additional imports.
Tariffs / 관세
Taxes on imported goods and services, levied by governments to raise revenues and create barriers to trade.
Tax Arbitrage
Attempting to profit by exploiting the differences in tax rates or tax systems.
Tax Haven
A country or region imposing low or no taxes on foreign source income.
Tax Haven Affiliate
A wholly owned affiliate that is in a low-tax jurisdiction and that is used to channel funds to and from the multinational’s foreign operations. The tax benefits of tax-haven affiliates were largely removed in the United States by the Tax Reform Act of 1986.
Tax Holiday
A reduced tax rate provided by a government as an inducement to foreign direct investment.
Tax Neutrality
Taxes that do not interfere with the natural flow of capital toward its most productive use.
Tax Treaty
An agreement specifying what items of income will be taxed by the authorities of the country where the income is earned.
Technical Analysis
Any method of forecasting future exchange rates based on the history of exchange rates.
Territorial Tax System
A tax system that taxes domestic income but not foreign income. This tax regime is found in Hong Kong, France, Belgium, and the Netherlands.
Tied Loan
A loan issued by a government requiring the borrower to spend the funds in the lending country.
Trade Acceptance
A time draft that is drawn on and accepted by an importer.
Trade Balance
A country’s net balance (exports minus imports) on merchandise trade.
Trade Barrier
A governmental policy, action, or practice that intentionally interrupts the free flow of goods or services between countries.
Trade Deficit
Occurs when the value of a country's exports is less than the value of its imports.
Trade Surplus
Occurs when the value of a country's exports is greater than the value of its imports.
Trans-Pacific Strategic Economic Partnership
A multilateral free trade agreement which currently includes Brunei, Chile, New Zealand and Singapore.
Transaction Exposure
Changes in the value of contractual (monetary) cash flows as a result of changes in currency values.
Transaction Statement
A document that clearly outlines the terms and conditions agreed upon between an importer and an exporter.
Transfer Prices
Prices on intracompany sales
Transfer Pricing
The price one unit of a company charges to another unit of the same company for goods or services exchanged between the two.
Translation Exposure
Changes in a corporation’s financial statements as a result of changes in currency values. Also known as accounting exposure.
Transnational Corporation
An enterprise comprising entities in more than one country which operate under a system of decision-making that permits coherent policies and a common strategy.
Transparency / 투명도
The observed degree of clarity, openness, measurability, and verifiability in a law, regulation, agreement, or trade practice.
Treaty of Rome / 로마조약
Treaty, signed in 1957, which inaugurated the European Economic Community, establishing a common market in a variety of products between member states.
Tripartite Agreement
An agreement among three parties. For example, the Germany, Italy and Japan Tripartite Pact, signed in 1940, specified the parties that would control Europe and Greater Asia.
Trust
A trust is a common law legal structure used to legally separate the owner from his assets by handing over control to a third party, known as a trustee.
Turnkey Project
A project in which a firm agrees to set up an operating plan for a foreign client and hand over the "key" when the plant is fully operational.
Uncertainty Avoidance / 불확실성 회피
The extent to which a society tolerates uncertainty and ambiguity.
Uniform Commercial Code (UCC)
A standardized set of U.S. business laws that governs a wide range of commercial transactions including borrowing, contracts, and sales.
Union Economique et Monetaire Ouest Africaine (UEMOA)
UEMOA is composed of Benin, Burkina Faso, Cote d'Ivoire, Mali, Guinea-Bissau, Niger, Senegal, and Togo. Its purpose is to unite members through competition in an open market.
United Nations Conference on Trade and Development (UNCTAD)
UNCTAD was established in 1964 with the goal of promoting sustainable development while integrating developing countries into the world economy. It works to achieve this goal by acting as a forum for intergovernmental deliberations with an aim at consensus building; conducting research, policy analysis, and data collection; and by providing technical assistance tailored to the specific needs of different developing countries.
United Nations Industrial Development Organization (UNIDO)
UNIDO helps developing countries and countries with economies in transition in their fight against marginalization in today's globalized world. It mobilizes knowledge, skills, information, and technology to promote productive employment, a competitive economy, and a sound environment.
Unsustainable Debt
A financial condition in which a country is unable to service its foreign (external) debt without decimating its economy.
Usury / 고리대금
The practice of charging or paying exorbitant interest on a loan or other transaction. Note: in Islamic societies, charging, or receiving any amount of interest is considered usury.
Value-added Tax (VAT) / 부가가치세
A sales tax collected at each stage of production in proportion to the value added during that stage.
Vehicle Currency
A currency that plays a central role in the foreign exchange market (e.g., the U.S. dollar ad Japanese Yen).
Voluntary Export Restraint (VER)
A quota on trade imposed from the exporting country's side, instead of the importer's; usually imposed at the request of the importing country's government.
Weak Form Efficient Market
A market in which prices fully reflect the information in past prices.
Weight Note
A document issued by either the exporter or a third party declaring the weight of goods in a consignment.
West African Economic and Monetary Union (UEMOA)
A regional alliance of Francophone West African countries dedicated to promoting economic integration among the seven member countries. The country members are Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, and Togo. They all share a common currency and have a central bank to oversee it.
Wharfage Charge
A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.
Withholding Tax
A tax on dividend or interest income that is withheld for payment of taxes in a host country. Payment is typically withheld by the financial institution distributing the payment.
World Bank
An international organization created at Breton Woods in 1944 to help in the reconstruction and development of its member nations. Its goal is to improve the quality of life for people in the poorer regions of the world by promoting sustainable economic development. See also International Bank for Reconstruction and Development.
World Customs Organization (WCO)
An international organization whose function is the facilitation of trade between member states through the simplification and standardization of customs practices. The WCO was established in 1952 as the Customs Co-operation Council. This name was then changed in 1994 to the World Customs Organization. Today WCO provides regulations and standards to 176 Customs administrations worldwide.
World Intellectual Property Organization (WIPO)
An international organization focused on the protection of intellectual property. The WIPO administers 24 international treaties and is one of 16 specialized agencies of the Untied Nations. 184 nations are part of the WIPO and its headquarters is in Geneva, Switzerland.
World Trade Organization (WTO) / 세계무역기구
A multilateral organization that promotes free and fair trade among the nations of the world. It was created in 1994 by 121 nations at the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). The WTO is responsible for implementation and administration of the trade agreement.
Worldwide Tax System
A tax system that taxes worldwide income as it is repatriated to the parent company. It is utilized in Japan, the United Kingdom, and the United States.
WTO Committee on Trade and Development (CTD)
A forum for discussion on a broad range of issues relating to the trade of developing countries.
Zaibatsu
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