International
Trade Terms (Part
I)This month, we are including
important international trade terms to help in
your day-to-day business dealings. We will include
additional terms in Part II of a future
newsletter.
Acceptance: The
act of giving assurance in writing on the face of
a bill of exchange stating the payment of a bill
on the date of maturity.
Acceptance
Credit: A documentary credit, which
r
equires the beneficiary to draw a usance bill
for subsequent acceptance by the
issuing.
Accommodation
Bill: In the context of fraud, a bill drawn
without a genuine underlying commercial
transaction.
Accountee:
Another name for the applicant or opener of a
documentary credit.
Amendment: Any
changes to the term of a DC must be initiated by
the applicant and issued and advised to the
beneficiary.
Applicant: Any
party, usually the importer, who applies for a
documentary credit.
Back-to-Back
Credit: A credit issued on the security of
an existing credit ("the master credit").
Beneficiary: A
payee or recipient, usually of money or a party in
whose favor a documentary credit is established,
usually the exporter.
Bill for Collection
(BC): Document(s) or check(s) submitted
through a bank for collection of payment from the
drawee.
Bill of Exchange
(B/E): An unconditional order in writing,
addressed by one person to another, signed by the
person giving the order.
Bill of Lading
(B/L): A receipt for goods for shipment by
sea. It is a Document of Title.
Bill Receivable
(BR): Bills which are financed by the
receiving branch, whether drawn under a DC or not,
are treated as Bills Receivable by both the
remitting branch and the receiving
branches.
Carrier: Person
or company whose business is the conveyance of
goods e.g. shipping company.
Chaser: Reminder
sent by the collecting (or DC issuing) bank to the
importer, repeating a request for payment.
Clean
Collection: A draft with no documents
Collection attached - see "Collections -
Introduction".
Clean Import Loan
(CIL): A loan granted to an importer for
payment of import bills, without the Bank having
any claim to the goods.
Collection Bank:
The bank in the drawee's country that is
instructed to collect payment from the drawee.
Collection
Order: A form submitted by an exporter to
the remitting or negotiating bank, accompanied by
documents, and carrying the exporter's
instructions.
Consignment:
Shipment of goods.
Consignee: The
person or company/bank to whom the goods are
delivered - usually the importer or the Collecting
Bank.
Consignor: The
party who sends goods by ship, by land or
air.
Contingent
Liability: A liability that arises only
under specified conditions.
Deferred Payment Credit
(DPC): Using stipulated documents, a bank
can effect payment on a DC at a maturity date that
is specified or determinable in the credit
terms.
Demurrage: A
charge made by a shipping company or a port
authority for failure to load or remove goods
within the time allowed.
Discounting: An
accepted usance bill of exchange is sold at an
amount less than its face value.
Dishonor:
Non-payment or non-acceptance.
Documentary Credit
(DC): A conditional undertaking by a bank
to make payment, often abbreviated to "credit".
DC
Bills: Bills drawn under documentary
credits.
Documents Against
Acceptance (D/A): Instruction for
commercial documents to be released to the drawee
on acceptance of the bill of exchange.
Documents
Against Payment (D/P): Instruction for
documents to be released to the drawee only on
payment.
Documents of
Title: Documents that give their owner the
right to the goods, i.e. Bill of
Lading.
Due
Date: Maturity date for
payment
Expiration Date:
Latest date, usually in the country of the
beneficiary, on which negotiation/payment of a DC
can take place.
Export Line:
Financing for exporters.
Financed Bills:
Bills sent on collection in which the
remitting bank has a financial
interest.
Foreign Bill Purchased
(FBP): A bill remitted to a correspondent
bank in which the remitting bank is financing the
exporter
Forward Exchange Contract: Contract
between the bank and its customer to buy/sell a
fixed amount of foreign currency at a future date
at a specified rate.
Freight: Goods OR
the cost of transporting
goods.
(Excerpt of International trade
terms from:
http://www.economywatch.com/international-trade/terms.html)
