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Acceptance
1.Draft, payable at a fixed or determinable future date, upon the face of which the drawee has acknowledged in writing his
or her obligation to pay at maturity.
2.The act of giving a written undertaking on the face of a usance bill of exchange to pay a stated sum on the maturity date
indicated by the drawee of the bill, usually in exchange for documents of title to goods shipped on documents against
acceptance (D/A) terms.
Acceptance Credit
A documentary credit which requires the beneficiary to draw a usance bill for subsequent acceptance by the issuing bank or
the advising bank or any other bank as the credit stipulates.
Accommodation Bill
In the context of fraud, a bill drawn without a genuine underlying commercial transaction.
Account party
Party instructing the bank to open a Letter of Credit and on whose behalf the bank agrees to make payment. In most cases,
the account party is an importer or buyer, but alternately, may be a construction contractor or a supplier bidding on a
contract.
Advice of fate Notification of the status of a collection that is still outstanding.
Accountee
Another name for the applicant/opener of a documentary credit, ie the importer = the person for whose account the
transaction is made.
Advice of Fate
The collecting bank informs the remitting bank of non-payment/non-acceptance or (for D/A bills) of acceptance and the bill
maturity date.
Advising
Act of conveying the terms and conditions of a DC to the beneficiary. The advising bank is the issuing bank agent, usually
located in the beneficiary country. Advising also involves authentication ie advising bank should take reasonable care to
check the apparent authenticity of the credit (UCP 500 Art 7).
After date
When a draft bears this phrase, the time begins to run from its date. The date of maturity is therefore fixed and does not
depend on the date of acceptance of the draft.
After sight
When a draft bears this phrase, the time begins to run from the date of its acceptance.
Amendment
Change to terms of a Letter of Credit. Beneficiary has the right to refuse the amendment under an irrevocable Letter of
Credit.
Applicant
One who applies to his bank to issue a documentary credit; in the majority of credits issued the applicant is an importer of
goods.
Avalise
The act by a bank in guaranteeing payment of a bill of exchange or promissory note by endorsing the reverse with the words
good per aval and signed by the bank, or by the issuance of a separate guarantee.
- B -
Back-to-backLetter of Credit
Letter of credit issued for the account of a buyer who is already holding an L/C in his or her favor. The back-to-back L/C is
issued in favor of the supplier to cover the same shipment as stipulated in the credit already held by the buyer. Terms of both
L/Cs, except for the amount and expiration date, are so similar that the same doucments presented under the back-to-back
credit are subsequently applied against the credit in favor of the buyer. However, the buyer/beneficiary of the first credit
substitutes its draft and invoice for those presented by the supplier. See also 揕etters of Credit.?
Banker抯 acceptance
A non interest bearing time draft drawn on a bank and accepted by that bank that, in so doing, provides financing to either a
buyer or a seller of goods. When accepted by a bank, the draft carries the full faith and credit of the accepting bank. Normal
maturity is a period of up to 180 days. After the banker's acceptance is created it can be held to maturity by its owner, or
sold to others at discount reflective of prevailing lending rates and the accepting bank's creditworthiness. See also Eligible
Acceptance.
Beneficiary
Person in whose favor a draft is issued or a Letter of Credit is opened. The beneficiary is usually a seller or exporter, but can
also be a person awarding a contract for services to be performed.
Bill for Collection (BC)
Document(s) or cheque submitted through a bank for collection of payment from the drawee.
Bill of exchange (B/E)
Formal written order addressed by one person (drawer) to another (drawee), signed by the drawer, and directing the
drawee to pay on demand or at a fixed or determinable future time, a certain sum in money to the order of a specified person
(payee).
Bill of lading (B/L)
Document issued by a transportation company giving evidence of the movement of the goods from one location to another. It
is a receipt for the goods, or contract for their delivery, and in some forms represents title to the goods.
Bill Receivable (BR)
Bills which are financed by the receiving branch, whether drawn under a DC or not, are treated as BRs by both the remitting
and the receiving branches.
Blank Endorsed
When a bill of lading is made out to order or shipper order and the shipper has signed on the back of it, it is said to be blank
endorsed. The bill of lading then becomes a bearer instrument and the holder can present it to the shipping company to take
delivery of the goods.
- C -
Carrier
Person or company undertaking for hire the conveyance of goods, eg shipping company
Case of Need
Agent nominated by a principal, to whom the collecting bank may refer in specified circumstances concerning collections.
Chaser
Reminder sent by the collecting (or DC issuing) bank to the importer, repeating a request for payment.
Clean
Used to describe a draft/cheque with no shipping documents.
Used to describe a bill of lading without clauses that expressly declare a defective condition of the goods or the packing.
Clean Bill Purchased
A collection bill purchased with no shipping documents.
Clean Bill Receivable (CBR)
BR (Bill Receivable) with no shipping documents. The term is more often used for non-trade bills such as travellers cheques.
Clean collection
Collection in which a draft or other demand for payment is presented without additional documentation.
Clean credit
Letter of Credit payable against presentation of a draft only, without additional documentation.
Clean Import Loan (CIL)
A loan granted to an importer for payment of import bills, without the bank having any claim to the goods.
Collecting bank
Bank that acts as an agent for a remitting bank that wishes to have its collections handled. The collecting bank demands
payment from the buyer and handles the funds received as instructed; generally the funds are sent back to the remitting bank.
Collection Order
Form submitted, with documents, to the remitting/negotiating bank by an exporter with his instructions.
Confirming
Act of a bank other than the issuing bank assuming the liability for payment, acceptance or negotiation of correctly presented
documents under a DC.
Consigment
Shipment of goods.
Consignee
The person/company/bank to whom the goods are delivered - usually the importer or the collecting bank.
Consignor
Also called shipper, is the person/company who sends goods by ship, by land or air.
Contingent Liability
A liability that arises only under specified conditions, eg when a bank opens a DC it incurs an obligation to make a future
payment on condition that the terms are fully met.
Acceptance
1.Draft, payable at a fixed or determinable future date, upon the face of which the drawee has acknowledged in writing his
or her obligation to pay at maturity.
2.The act of giving a written undertaking on the face of a usance bill of exchange to pay a stated sum on the maturity date
indicated by the drawee of the bill, usually in exchange for documents of title to goods shipped on documents against
acceptance (D/A) terms.
Acceptance Credit
A documentary credit which requires the beneficiary to draw a usance bill for subsequent acceptance by the issuing bank or
the advising bank or any other bank as the credit stipulates.
Accommodation Bill
In the context of fraud, a bill drawn without a genuine underlying commercial transaction.
Account party
Party instructing the bank to open a Letter of Credit and on whose behalf the bank agrees to make payment. In most cases,
the account party is an importer or buyer, but alternately, may be a construction contractor or a supplier bidding on a
contract.
Advice of fate Notification of the status of a collection that is still outstanding.
Accountee
Another name for the applicant/opener of a documentary credit, ie the importer = the person for whose account the
transaction is made.
Advice of Fate
The collecting bank informs the remitting bank of non-payment/non-acceptance or (for D/A bills) of acceptance and the bill
maturity date.
Advising
Act of conveying the terms and conditions of a DC to the beneficiary. The advising bank is the issuing bank agent, usually
located in the beneficiary country. Advising also involves authentication ie advising bank should take reasonable care to
check the apparent authenticity of the credit (UCP 500 Art 7).
After date
When a draft bears this phrase, the time begins to run from its date. The date of maturity is therefore fixed and does not
depend on the date of acceptance of the draft.
After sight
When a draft bears this phrase, the time begins to run from the date of its acceptance.
Amendment
Change to terms of a Letter of Credit. Beneficiary has the right to refuse the amendment under an irrevocable Letter of
Credit.
Applicant
One who applies to his bank to issue a documentary credit; in the majority of credits issued the applicant is an importer of
goods.
Avalise
The act by a bank in guaranteeing payment of a bill of exchange or promissory note by endorsing the reverse with the words
good per aval and signed by the bank, or by the issuance of a separate guarantee.
- B -
Back-to-backLetter of Credit
Letter of credit issued for the account of a buyer who is already holding an L/C in his or her favor. The back-to-back L/C is
issued in favor of the supplier to cover the same shipment as stipulated in the credit already held by the buyer. Terms of both
L/Cs, except for the amount and expiration date, are so similar that the same doucments presented under the back-to-back
credit are subsequently applied against the credit in favor of the buyer. However, the buyer/beneficiary of the first credit
substitutes its draft and invoice for those presented by the supplier. See also 揕etters of Credit.?
Banker抯 acceptance
A non interest bearing time draft drawn on a bank and accepted by that bank that, in so doing, provides financing to either a
buyer or a seller of goods. When accepted by a bank, the draft carries the full faith and credit of the accepting bank. Normal
maturity is a period of up to 180 days. After the banker's acceptance is created it can be held to maturity by its owner, or
sold to others at discount reflective of prevailing lending rates and the accepting bank's creditworthiness. See also Eligible
Acceptance.
Beneficiary
Person in whose favor a draft is issued or a Letter of Credit is opened. The beneficiary is usually a seller or exporter, but can
also be a person awarding a contract for services to be performed.
Bill for Collection (BC)
Document(s) or cheque submitted through a bank for collection of payment from the drawee.
Bill of exchange (B/E)
Formal written order addressed by one person (drawer) to another (drawee), signed by the drawer, and directing the
drawee to pay on demand or at a fixed or determinable future time, a certain sum in money to the order of a specified person
(payee).
Bill of lading (B/L)
Document issued by a transportation company giving evidence of the movement of the goods from one location to another. It
is a receipt for the goods, or contract for their delivery, and in some forms represents title to the goods.
Bill Receivable (BR)
Bills which are financed by the receiving branch, whether drawn under a DC or not, are treated as BRs by both the remitting
and the receiving branches.
Blank Endorsed
When a bill of lading is made out to order or shipper order and the shipper has signed on the back of it, it is said to be blank
endorsed. The bill of lading then becomes a bearer instrument and the holder can present it to the shipping company to take
delivery of the goods.
- C -
Carrier
Person or company undertaking for hire the conveyance of goods, eg shipping company
Case of Need
Agent nominated by a principal, to whom the collecting bank may refer in specified circumstances concerning collections.
Chaser
Reminder sent by the collecting (or DC issuing) bank to the importer, repeating a request for payment.
Clean
Used to describe a draft/cheque with no shipping documents.
Used to describe a bill of lading without clauses that expressly declare a defective condition of the goods or the packing.
Clean Bill Purchased
A collection bill purchased with no shipping documents.
Clean Bill Receivable (CBR)
BR (Bill Receivable) with no shipping documents. The term is more often used for non-trade bills such as travellers cheques.
Clean collection
Collection in which a draft or other demand for payment is presented without additional documentation.
Clean credit
Letter of Credit payable against presentation of a draft only, without additional documentation.
Clean Import Loan (CIL)
A loan granted to an importer for payment of import bills, without the bank having any claim to the goods.
Collecting bank
Bank that acts as an agent for a remitting bank that wishes to have its collections handled. The collecting bank demands
payment from the buyer and handles the funds received as instructed; generally the funds are sent back to the remitting bank.
Collection Order
Form submitted, with documents, to the remitting/negotiating bank by an exporter with his instructions.
Confirming
Act of a bank other than the issuing bank assuming the liability for payment, acceptance or negotiation of correctly presented
documents under a DC.
Consigment
Shipment of goods.
Consignee
The person/company/bank to whom the goods are delivered - usually the importer or the collecting bank.
Consignor
Also called shipper, is the person/company who sends goods by ship, by land or air.
Contingent Liability
A liability that arises only under specified conditions, eg when a bank opens a DC it incurs an obligation to make a future
payment on condition that the terms are fully met.
| Glossary of International Finance and Banking |
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