Export Trade Glossary

Key terms and abbreviations used in international trade and Sri Lanka export sourcing — explained clearly for global buyers.

Shipping & Incoterms

Term	Definition
FOB	Free On Board. The seller delivers goods on board the vessel at the named port. Risk transfers to buyer once goods are on board. Most common Incoterm in Sri Lanka export contracts.
CIF	Cost, Insurance & Freight. Seller pays cost, freight, and insurance to the destination port. Buyer assumes risk once goods are on board at origin.
DDP	Delivered Duty Paid. Seller is responsible for all costs including import duties and taxes at destination. Maximum obligation on the seller side.
EXW	Ex Works. Buyer collects goods at seller's premises and bears all costs and risks from that point. Minimum obligation for the seller.
FCL	Full Container Load. One container exclusively for a single buyer's shipment. Standard for larger orders. 20ft FCL (~25–28 CBM) and 40ft FCL (~55–58 CBM).
LCL	Less than Container Load. Smaller shipments consolidated with others into one container. Higher per-unit cost but suitable for samples or small orders.
B/L	Bill of Lading. A legal document issued by the carrier to the shipper — serves as a contract of carriage, receipt of goods, and title document for the cargo.
POL / POD	Port of Loading / Port of Discharge. POL is the port where cargo is loaded onto the vessel (e.g., Colombo). POD is the destination port (e.g., Hamburg, Los Angeles).
ETD / ETA	Estimated Time of Departure / Estimated Time of Arrival. Scheduled departure and arrival dates for a shipment.

Trade Finance

Term	Definition
L/C	Letter of Credit. A bank document guaranteeing payment to the seller provided specified conditions (documents) are met. Reduces counterparty risk for both parties in international trade.
TT / T/T	Telegraphic Transfer / Wire Transfer. Direct bank transfer of payment. Common arrangement: 30% deposit, 70% balance before shipment, or 100% payment against scan of B/L.
D/P	Documents Against Payment. Seller presents shipping documents to buyer's bank; buyer pays to receive documents needed to claim cargo.
D/A	Documents Against Acceptance. Buyer receives documents by accepting a bill of exchange (promise to pay at a future date).

Quality & Testing

Term	Definition
AQL	Acceptable Quality Level. Statistical sampling standard (ISO 2859-1) specifying maximum number of defects per sample. AQL 1.5 = stricter; AQL 4.0 = more permissive. Used to accept or reject shipments.
COA	Certificate of Analysis. A document from a lab or manufacturer confirming that a product meets its specified requirements. Critical for food, pharma, and chemical products.
QC / QA	Quality Control / Quality Assurance. QC is inspection of finished goods; QA is the systematic process managing quality throughout production.
DRC	Dry Rubber Content. The percentage of solid rubber in natural rubber latex or compound. 60% DRC is standard for centrifuged latex; 93%+ for sheets.
Iodine Value	A measure of adsorptive capacity in activated carbon — expressed in mg/g. Higher iodine value = better adsorption performance. Premium Sri Lankan activated carbon achieves 1000–1200 mg/g.

Manufacturing

Term	Definition
MOQ	Minimum Order Quantity. The smallest quantity a supplier will accept per order, style, or colour. Sri Lanka MOQs vary widely — from 300 pcs (apparel) to 1 FCL (commodity goods).
OEM	Original Equipment Manufacturer. The factory produces goods to the buyer's exact specifications, design, and branding. Factory has no say in the product design.
ODM	Original Design Manufacturer. The factory designs and develops the product, which the buyer brands and sells. Sri Lanka's leading apparel manufacturers offer full ODM services.
CMT	Cut, Make, Trim. A manufacturing arrangement where the buyer supplies all fabric and trims, and the factory only does cutting, sewing, and finishing. Buyer has more material cost control.
Lead Time	The total time from order placement to goods ready for shipment. Sri Lanka apparel lead times: 45–90 days (first order), 30–60 days (repeat). Food/commodity: 2–4 weeks typically.
PP Sample	Pre-Production Sample. A sample made before full production begins, to get buyer approval on all details — fabric, colour, construction, trims — before committing to the full run.

Certifications & Compliance

Term	Definition
GSP+	Generalised Scheme of Preferences Plus. EU trade preference granting duty-free access for qualifying developing countries including Sri Lanka, conditional on compliance with 27 international conventions.
REACH	EU regulation on Registration, Evaluation, Authorisation, and Restriction of Chemicals. Products entering the EU must comply with REACH substance restriction lists.
MRL	Maximum Residue Level. The highest legally permissible level of pesticide residue in food. EU MRL compliance is required for spices, tea, and agricultural products exported to Europe.
GI	Geographical Indication. A sign indicating a product originates from a specific place whose geographic origin confers specific quality or reputation. Ceylon Tea and Ceylon Cinnamon are GI protected.

Customs & Tariffs

Term	Definition
HS Code	Harmonised System Code. A 6–10 digit international code classifying goods for customs purposes. The first 6 digits are globally standardised; additional digits vary by country. Used to determine tariffs and trade statistics.
MFN	Most Favoured Nation. The standard (non-preferential) tariff rate applied between WTO member countries. GSP+ preferential rates are lower than MFN rates.
COO	Certificate of Origin. A document certifying that goods originate from a specific country. Required for claiming GSP+ tariff preferences in the EU.
EUR.1	A movement certificate used to claim preferential tariff treatment under the EU GSP+ scheme. Issued by Sri Lanka Customs or authorised bodies.

Food & Agriculture

Term	Definition
GAC / PAC	Granular / Powdered Activated Carbon. The two primary physical forms. GAC used in water filters; PAC used in food processing and wastewater treatment.
VCO	Virgin Coconut Oil. Cold-pressed or expeller-pressed coconut oil extracted from fresh coconut meat without chemical refining. Distinguished from RBD (refined, bleached, deodorised) oil.
RSS	Ribbed Smoked Sheet. A grade of natural rubber processed by coagulating latex into sheets, which are then dried in smokehouses. Graded RSS 1 (premium) to RSS 5.
Piperine	The alkaloid compound responsible for black pepper's pungency. High piperine content (5–6%+ in Sri Lankan pepper) is associated with premium quality and is valued in functional food and supplement applications.
BOP / BOPF	Broken Orange Pekoe / Broken Orange Pekoe Fannings. Standard tea grades produced in Sri Lanka. BOP refers to medium-sized broken leaf; BOPF is a smaller, faster-brewing grade used primarily for teabags.