Glossary

A B C D E F G I L M N O P R S T U V W

 

A

Acceptance
Refers to the commitment by an Importer, evidenced by their accepting a Bill of Exchange drawn on them by an Exporter, to pay for goods at a fixed date in the future.

Acceptance Credit
A Letter of Credit which includes a term bill of exchange in its required documentation. The bill will be accepted by the bank or financial institution on which it is drawn, usually the issuing bank, advising bank or financial institution and the proceeds paid to the beneficiary at maturity.

Accepted Draft
A bill of exchange accepted by the drawee (acceptor) by putting his signature (acceptance) on it’s face. In doing so, he commits himself to pay the bill upon presentation at maturity.

Accepting Bank
A bank that by signing a time draft accepts responsibility to pay when the draft becomes due. In this case the bank is the drawee (party asked to pay the draft) but only becomes the acceptor (party accepting the responsibility to pay) upon acceptance (signing the draft).

Acceptor
The party that signs a draft or obligation, thereby agreeing to pay the stated sum at maturity.

Account Party
The party that instructs the bank or financial institution (issuing bank) to open a letter of credit. The account party is usually the importer.

Advance Against Collection
A short term loan or credit extended to the seller (usually the exporter) by the seller’s bank once a draft has been accepted by the buyer (generally the importer) of the seller’s goods. Once the buyer pays the loan is paid off. If the buyer does not pay the draft, the seller must make good on the loan.

Advance Payment
Trading method in which the buyer pays for the goods before they are dispatched. Used where the buyer is of unknown creditworthiness and is unable to obtain a letter of credit. (Also used as a matter of convenience for small orders).

Advance Payment Guarantee
A guarantee issued by a bank, financial institution, or issuer of the guarantee on behalf of a seller to a buyer, in relation to any advance payment that is made by the buyer to the seller to allow the contract to commence. If the contract is not completed the buyer can claim reimbursement of the advance payment under the guarantee.

Advice
The forwarding of a letter of credit, or an amendment to a letter of credit to the seller, or beneficiary of the credit, by the advising bank or financial institution(typically the seller’s bank or financial institution).

The term advice “connotes” several types of forms used in the banking field. In general terms an advice is a form of letter that acknowledges a certain action or result in regards to a customer’s relation to the bank or financial institution. Examples include credit advice, debit advice, advice of payment, and advice of execution. In commercial transactions, information pertaining to a business activity such as the delivery of goods.

Advice of Fate
A bank or financial institution's notification of the status of a collection that is still outstanding.

Advised Credit
A letter of credit whose terms and conditions have been forwarded by a bank, financial institution or issuer of the Letter of Credit.

Advising Bank
A bank, financial institution or issuer of the Letter of Credit  normally located in the country of residence of an Exporter, used by an Importer's bank or financial institution to validate the authenticity of a Letter of Credit before the Letter of Credit is passed to the Exporter.

After Date
A notation used on financial instruments (such as drafts or bills of exchange) to fix the maturity date as a fixed number of days past the drawing of the draft. For example, if a draft stipulates “90 days after date” it means that the draft is due (payable) 90 days after the date it is drawn. This has the effect of fixing the date of the maturity of the draft, independent of the date of the acceptance of the draft.

After Sight
A notation on a draft that indicates that payment is due a fixed number of days after the draft has been presented to the drawee. An example of which is “30 days after sight” which means that the drawee has thirty days from the presentation of the draft to make payment.

Agent Bank
A bank or financial institution acting for a foreign bank or a bank handling administration of loan in a syndicated credit.

Air Waybill
Transport document used in air freight. Serves as a receipt for the goods and evidence of carriage contract.
An air waybill is used by many truckers as a thorough document for co-ordinated air/truck service.
Airway bills are not negotiable. The airline industry has adopted a standard formatted waybill that accommodates both domestic and international traffic. The standard document was designed to enhance the application of modern computerised systems to air freight processing for both the carrier and the shipper.
An air waybill is not a document of title and so is not needed by the consignee in order to claim the goods from the carrier.

All Risks Insurance
Extensive insurance coverage of cargo including coverage due to external causes (risks set out in Institute of London Underwriters Cargo Clauses A.) such as fire, collision, pilferage, etc., but usually excluding such “special” risks such as those resulting from acts of war, labour strikes, perishing perishable goods, and from internal damage due to faulty packing, decay, or loss of market.

Amendment
A change in the terms to a Letter of Credit that is already issued. Such changes can only be made with the agreement of all parties to the Letter of Credit.

Applicant
The Importer who applies to an issuing bank or financial institution for a Letter of Credit or a Guarantee/Bond.

Approval Basis
If documents containing discrepancies are presented to the nominated bank or financial institution under a letter of credit, the bank or financial institution can forward the documents to the issuing bank or financial institution for approval, with the beneficiary’s agreement. Due of the risk of loss in transit and delay’s resulting in interest loss, however, it is recommended that the beneficiary first try to correct the document; but, if that is not possible, the beneficiary asks the nominated bank or financial institution to contact the issuing bank  or financial institution for authorisation to accept the discrepancies. Issuing banks or financial institutions charge a fee to accept discrepant documents if they will in fact accept them.

Arrival notice
A notice furnished to the consignee and shipping broker alerting them to the projected arrival of freight and it’s availability for pick up.

Assignment
The transfer of rights, title, interest, and benefits of a contract or financial instrument to a third party.

The beneficiary of a letter of credit is entitled to assign his claims to any of the proceeds that he may be entitled to, or portions thereof, to a third party. Usually the beneficiary informs the issuing bank or financial institution that his claims under the letter of credit were assigned and asks the bank or financial institution to advise the assignee (third party) that it has acknowledged the assignment. The validity of assignment is not dependent on bank or financial institution approval. In contrast, the transfer requires the agreement of the nominated (beneficiary) bank or financial institution. An assignment is possible regardless of whether the letter of credit is transferable.

At Sight
Terms of a financial instrument that is payable upon presentation or demand. A bill of exchange may be made payable, for example, at sight or after sight, which (respectively) means it is either payable upon presentation or demand or within a particular period after the demand is made.

Availability
A term used in Letters of Credit to indicate the bank  or financial institution nominated by the issuing bank  or financial institution to pay, accept, incur a deferred payment, or negotiate the Letter of Credit on their behalf. Sellers should ensure the Letters of Credit are available with one of their relationship banks or financial institutions.

Avalize
The process by which a third party (usually a bank or financial institution) guarantees the undertaking of the drawee to meet their responsibility under a Bill of Exchange. The words "Per Aval" and the signature of the avalizing (guarantor) party must be written on the Bill.

B

Bank
A Bank may be a person, firm or a company. A banking company means a company or organisation which is in the business of banking.

Beneficiary
The Exporter in a Letter of Credit, or the party authorised to claim from a bank, financial institution or issuer of the Letter of Credit under a Guarantee/Bond.

Bid Bond/Guarantee
A guarantee issued by a bank or financial institution on behalf of a seller to a buyer to support the sellers bid or tender for a contract. If the sellers bid is accepted, and they fail to sign a contract, the buyer can claim compensation under the guarantee.

Bill of exchange
This is an unconditional order in writing drawn up by the seller asking the buyer to pay a specific amount of money immediately or at a future date.

C

CAD (cash against documents) or D/P (documents against payment)
This is a collection where a bank or financial institution is asked to release shipping documents to a buyer when they have been paid the collection amount. See collections for a full explanation.

Carrier
company hired for the conveyance of goods e.g. shipping company

CFR (C & F or cost and freight)
This is an INCO term and explains what the price quoted represents and the responsibility of the buyer and seller in relation to arranging for the various costs associated(e.g. insurance, freight, duties) with the shipment. It can be used in sea, road or air transport.

CIF (cost, insurance and freight)
This is an INCO term and explains what the price quoted represents and the responsibility of the buyer and seller in relation to arranging for the various costs associated(e.g. insurance, freight, duties) with the shipment. It is normally used in sea or air shipments.

CIP (cost, insurance and carriage to point of destination)
This is an INCO term and explains what the price quoted represents and the responsibility of the buyer and seller in relation to arranging for the various costs associated (e.g. insurance, freight, duties) with the shipment. It is normally used for road transport but can also be used for a combination of transport methods when the goods are to be delivered by the seller to the buyer's premises.

Collection
This is where a seller sends documents relating to a shipment through his or her bank or financial institution to the buyer's bank or financial institution asking that they are released when a payment is made (CAD or D/P) or a bill of exchange is accepted (D/A).

Collection letter
This is the covering form or letter sent by a bank, financial institution or issuer of the Letter of Credit or seller requesting that the enclosed shipping documents and/or bill of exchange be released to a buyer against acceptance or payment.

Confirmed letters of credit
This is where a bank or financial institution other than the issuing bank, financial institution or issuer of the Letter of Credit also guarantees payment under the letter of credit. It normally is used if a seller finds the issuing bank, financial institution or issuer of the Letter of Credit an unacceptable risk and asks his or her own bank , financial institution or another acceptable bank or financial institution to guarantee (confirm) the letter of credit. See letters of credit for a full explanation.

Confirming Bank
See Confirmed Letters of Credit

Consignee
The party on a transport document to whom the goods are addressed for delivery

Consignor
The party on a transport document on whose behalf the goods are being shipped

Credit Risk
The risk that a buyer or seller will not complete a deal due to their inability to meet their obligations, or a deterioration in their financial position.

D

D/A (documents against acceptance)
This refers to shipping documents which are presented to a bank or financial institution on a collection basis to be passed to the buyer when he or she accepts a bill of exchange. The bank or financial institution holds the bill of exchange until it ends (maturity) when they ask the buyer to pay the seller. See collections for a full explanation.

D/P (documents against payment) or CAD (cash against documents)
This refers to shipping documents which are presented to a bank or financial institution on a collection basis to be passed to the buyer (drawee) when payment is made.

Debtor Insurance/Export Credit Insurance
This is an insurance policy purchased by a seller to provide protection against non-payment by a buyer due to insolvency or political/economic turmoil in the buyers country.

Deferred Payment Credit
A Letter of Credit payable at a future determinable date in which a term Bill of Exchange is not required to evidence the maturity date. (see Acceptance Credit).

Discounting
The purchase of accepted term Bills of Exchange at a discount to allow for the funding of the advance from the discount date until the maturity date of the bills.

Discrepancy
Where documents presented by an Exporter under a Letter of Credit do not comply with the terms of the Letter of Credit or are inconsistent with other documents presented

Dishonour
The refusal to pay or accept a Bill of Exchange.

Documentary Collection
See D/P and D/A.

Documentary credit (letter of credit)
See letters of credit for a full explanation

Documents of Title
Documents that confer the status of ownership upon the holder of the document e.g. the holder of a correctly endorsed bill of lading has effective ownership of the goods

Draft
This can refer to a bank cheque (as opposed to a customer cheque) or it can refer to a bill of exchange.

Drawee
The party to which a Bill of Exchange is addressed for payment or acceptance. Usually, the Importer in an international trade transaction. In a Letter of Credit transaction it may be the issuing or advising bank or financial institution.

Drawer
The party that issues a Bill of Exchange. Usually, the Exporter in an international trade transaction.

E

Endorsement
Signing on the back of a document so as to assign a right or benefit to another party.
Endorsement by the seller may be necessary for:

  • Transport documents
  • Insurance documents
  • Bills of exchange

Engagement
The assumption of payment responsibility in respect of a letter of credit, e.g. when an Advising bank or financial institution agrees to add its confirmation to a credit.

eUCP
Supplement to Uniform Customs and Practice for Documentary Credits which governs electronic presentation of data under Letters of Credit

Evergreen clause
Clause in a standby letter of credit to the effect that it remains in effect indefinitely – the letter of credit only expires upon receipt of advice to that effect from the Issuer. The clause may include a notice period – for example, expiry date is ninety days after advice.

Ex works
This is an INCO term and explains what the price quoted represents and the responsibility of the buyer and seller in relation to arranging for the various costs associated(e.g. insurance, freight, duties) with the shipment. It is normally used in road transport but can also be used for a combination of transport methods when the goods are to be collected by the buyer at the seller's premises. It usually covers the cost of the goods only.

Expiry Date (Guarantee)
The last day on which the beneficiary can present a valid claim to the bank, financial institution or issuer of the Guarantee.

Expiry Date (Letter of Credit)
The last day on which the seller can present documents to the advising bank, issuing bank, financial institution or issuer of the Letter of Credit.

Export Credit Insurance
See Debtor Insurance

F

Financial Documents
See Bill of Exchange and Promissory Note

Financial Institution
An establishment that focuses on dealing with financial transactions, such as investments, loans and deposits. Conventionally, financial institutions are composed of organisations such as banks, trust companies, insurance companies and investment dealers.

Financing
See Discounting

Fixed forward contract
Currency is bought or sold at a given future date.

FOB (free on board)
This is an INCO term and explains what the price quoted represents and the responsibility of the buyer and seller in relation to arranging for the various costs associated (e.g. insurance, freight, duties) with the shipment. It is normally used in sea shipments.

Foreign currency drafts
These are special foreign currency denominated bank cheques which customers can buy at any branch and send to their clients to pay off debts.

Forward Contract
A contract for the sale or purchase of a given amount of foreign currency at a future time at a rate of exchange that is fixed when the contract is made.

Forward option contract
Currency must be bought or sold within a given period of time.

Free Alongside Ship
Incoterm Exporter

  • Delivers goods alongside ship
  • Provides alongside receiptImporter
  • Pays freight charges and insurance
  • Pays for export license and taxes

Free Carrier (FCA)
Incoterm
May be used for any mode of transport. Common for containerised shipments.
Exporter

  • Delivers to a named place
  • Provides export license
  • Pays export duties

Importer - Pays all costs from named place (insurance, import duties, taxes)

Free on board (FOB)
Incoterm
Seller pays for loading onto vessel, but not for carriage or insurance.

Freight forwarder’s receipt
Transport document issued by Freight Forwarder. Not a document of title

G

Guarantee/Bond
See Advance Payment Guarantee, Bid Bond/Guarantee, Performance Bond/Guarantee.

Guaranteed Bill of Exchange
A Bill of Exchange is an unconditional order in writing, drawn up by the seller, asking the buyer to pay a specific amount of money at a future date. It becomes guaranteed if, after the buyer accepts the Bill, the buyers bank, financial institution or issuer of the Guarantee adds its guarantee that the bill will be paid at maturity.

I

INCO terms (international contract trade terms)
These are official trade shipping terms agreed by the International Chamber of Commerce, Paris.

Institute Cargo Clauses
Standard conditions of insurance cover for goods, established by the Institute of London Underwriters.
Referred to as clauses A, B and C.

Insurance certificate
Document giving details of insurance cover for a consignment.
The certificate will cross reference a master insurance policy and must be countersigned.

Insurance cover note
Insurance document evidencing that insurance cover for a consignment has been taken out, but not giving full details.

Insurance policy
Document setting out full details of insurance in force.
A policy MAY refer to a single consignment and be sent with other commercial documents. More commonly there is an open policy for all the shipper’s consignments. For each consignment an insurance certificate is issued, cross-referencing the policy.

International Chamber of Commerce
International non-governmental body concerned with promotion of trade and harmonisation of trading practice. Responsible for drafting and publishing:

  • Uniform Rules for Collections no. 322
  • Uniform Customs and Practices no. 500

Invoice
See Commercial invoice; Consular invoice

Inward collection
How a Collecting, Presenting bank or financial institution will refer to a collection.

Collection that has been received from an overseas bank or financial institution or exporter for presentation to a buyer in this country.

Inward letter of credit
How an Advising, Confirming bank or financial institution will refer to a letter of credit.
A letter of credit issued by an overseas bank or financial institution for advice to a seller in this country.

Irrevocable Letter of Credit
This is a letter of credit that cannot be changed or withdrawn or revoked without everyone involved agreeing (buyer, seller and bank or financial institution).

ISP98
International Standby Practices (ISP98) developed by the International Chamber of Commerce as the rules that govern the operation of Standby Letter of Credit transactions worldwide.

Issuing Bank
The bank, financial institution or issuer that issues a Letter of Credit on behalf of the Importer.

L

Latest Shipment Date
A date inserted in a Letter of Credit to compel the seller to ship the goods within a specific time period.

Letter of credit
This is an irreversible guarantee given by the buyer's bank, financial institution or issuer of the Letter of Credit to pay a specific amount of money immediately or on a future date to the seller when he or she presents specific documents before a certain date and under the International Chamber of Commerce rules. More about Letters of Credit

Letter of Credit available by acceptance
A Letter of Credit available at the counters of the issuing bank, nominated bank, financial institution or issuer of the Letter of Credit by acceptance of a Bill of Exchange payable to the seller at a determinable future date.

Letter of Credit available by deferred payment
A Letter of Credit available at the counters of the issuing bank, nominated bank, financial institution or issuer of the Letter of Credit by the granting of a commitment to pay the seller at a determinable future date. Used in countries where Bills of Exchange are not legally enforceable or where the use of Bills of Exchange attracts penal stamp taxes or duties.

Letter of Credit available by negotiation
A Letter of Credit available with the issuing bank, nominated bank, financial institution, or issuer of the Letter of Credit or, in the case of a freely negotiable Letter of Credit any bank, financial institution or issuer of the Letter of Credit that is authorised to negotiate the sellers Bill of Exchange and shipping documents. See Negotiation

Letter of Credit available by payment / at sight
A Letter of Credit available at the counters of the issuing bank, nominated bank, financial institution or issuer of the Letter of Credit by the granting of payment (including payment of sight Bills of Exchange) once the correct documentation is received from the seller.

M

Mail transfer
Payment instruction sent by airmail from one bank to another.

Marine Insurance
An insurance policy arranged by either the buyer or the seller to insure goods against damage in transit. The appropriate Incoterm will determine the responsibility of the buyer or seller to arrange the insurance.

Maturity Date
The date on which a Bill of Exchange or Letter of Credit becomes due for payment.

N

Negotiable Instrument
A negotiable instrument is any document, which permits one party to transfer their rights to a second party by endorsing and delivering the document to the second party. An instrument is only fully negotiable when the party transferring it receives value and the party receiving the document can obtain a stronger legal position than the party transferring the document. For example, a first party transfers their rights to the second party, who are unaware that the transaction is fraudulent and negotiates the instrument in good faith and for value. If the first party has transferred their rights against a third party, then the second party retains a valid claim against both the first and third parties. Examples of negotiable instruments in international trade are cheques, Bills of Exchange and promissory notes.

Negotiating bank
Bank, financial institution or issuer of the Letter of Credit  nominated on a letter of credit to negotiate the bill of exchange, i.e. check the documents, pay the seller and seek reimbursement from the Issuing bank or financial institution.

Negotiation
The process by which a negotiable instrument such as a Bill of exchange, Promissory Note or Cheque is transferred in good faith and for value. Negotiation only occurs when the transferring party receives value. In international trade this is normally an exchange of funds or a commitment to pay.

Nominated Bank
See Availability

Non-Recourse Discounting
The purchase from the seller of accepted term Bills of Exchange at a discount to allow for the funding of the advance from the discount date until the maturity date of the bills. When the discount is provided on a non-recourse basis the financing bank or financial institution has no recourse to the seller in the event of non-payment by the buyer or the buyers bank or financial institution.

Nostro-Vostro accounts
Accounts held by correspondent banks or financial institutions in each other’s currencies.
Each such account has a nostro view – our money held with you – and a vostro view – your money held with us.

Notify party
Party who is to be notified when goods arrive at their destination.

Noting (on a bill of exchange)
Noting is a preliminary form of protesting a Bill of Exchange - that is - an initial official statement that the bill of exchange or promissory note has not been paid.

O

Open account
This is a trading term between buyer and seller where a seller agrees to deliver goods to a buyer before a payment is made and without any form of guarantee of payment.

Opening bank
Another name for the Issuing bank, financial institution or issuer of the Letter of Credit.

Order
On a bill of exchange, ‘order’ or ‘to order’ means that the drawer directs payment to be made to another party (usually a bank).
On a bill of lading, ‘order’ or ‘to order’ assigns title to the goods to another party.
See Endorsement; Blank endorsement

Outward collection
How the remitting bank or financial institution refers to a collection.
Collection being sent overseas to collecting bank or financial institution(s) for presentation to buyer.
See Endorsement; Blank endorsement

Outward letter of credit
How the Issuing bank, financial institution or issuer of the Letter of Credit refers to a letter of credit.

P

Packing list
Document listing the contents of a consignment of goods.
May be called for on a letter of credit.

Partial shipment
This is when a load is sent in more than one consignment. In a letter of credit, the buyer can say whether this is allowed or not allowed.

Payee
Party to whom payment is due.

Paying bank
In a letter of credit, bank or financial institution that is nominated to make a payment to the beneficiary upon presentation of complying documents.

Performance Bond/Guarantee
A guarantee issued by a bank, financial institution or issuer of a performance bond/guarantee on behalf of a seller to a buyer, to support the sellers ability to perform under the contract. If the seller fails to perform in accordance with the contract the buyer can claim compensation under the guarantee.

Performance Risk
The risk that the buyer or seller will not complete the contract in accordance with their contractual obligations.

Period of Presentation
The number of days from the shipment date that the seller is allowed to present documents to the advising bank, issuing bank, financial institution of issuer of the the letter of credit under a Letter of Credit. It is normally 21 days, although it can be shorter.

Political risk
Risk that political instability in the buyer’s country will interfere with a buyer’s ability to meet payment obligations.

Postal receipt
Transport document issued by a postal authority. Not a document of title.

Pour aval
Written on a bill of exchange when it is avalised by a bank, financial institution or issuer of the Letter of Credit.

Presentation
In a collection, presentation of documents by a bank, financial institution or issuer of the Letter of Credit to a buyer for payment or acceptance. In a letter of credit, presentation of documents by a seller to a bank, financial institution or issuer of the Letter of Credit for payment, acceptance or negotiation.

Presentation period
On a letter of credit, number of days allowed between shipment of goods and presentation of documents to a bank, financial institution or issuer of the Letter of Credit.

Presenting bank
In a collection, bank or financial institution that presents documents to a buyer for payment or acceptance.

Prime letter of credit
In a back-to-back letter of credit transaction, the original letter of credit that is offered as security for another letter of credit (second letter of credit).

Principal
Party who instigates a collection, i.e. the seller. In a collection, all banks act for the principal.

Promissory Note
A signed undertaking from one party containing a promise to pay a stated sum to specified person or company at a specified future date

Protesting (a bill of exchange)
Protesting involves getting legal evidence that a bill of exchange or promissory note has not been paid.

R

Revolving Letter of Credit
A Letter of Credit in which the value of the Letter of Credit is automatically reinstated upon utilisation. A Letter of Credit may revolve by value, time or both. This type of Letter of Credit would be used where the seller is shipping goods on a regular basis to the buyer over an extended period.

S

Shipper
See Consignor

Silent Confirmation
In a normal confirmed Letter of Credit, the issuing bank, financial institution or issuer of the Letter of Credit will request the advising bank or financial institution to add its confirmation. A silent confirmation occurs when the issuing bank, financial institution or issuer of the Letter of Credit has not requested the advising bank or financial institution to add its confirmation but the bank or financial institution  does so at the request of the seller.

Standby Letter of Credit
A guarantee issued by a bank, financial institution or issuer of the Letter of Credit on behalf of a buyer that protects the seller against non-payment for goods shipped to the buyer. The buyer pays the seller directly for the goods and only if the buyer fails to pay does the seller claim under the Standby Letter of Credit.

SWIFT
This is an inter-bank communication system and stands for Society For Worldwide Interbank Financial Telecommunications. Every message is sent in a standard format. This allows the banks' and financial institutions computers to read the messages and to keep the information in their computer systems. This helps to get rid of human errors and reduces the length of time it takes to send messages between banks and financial institutions. Sample messages sent are shown below.

  • FM 103 - bank payment on behalf of a customer
  • FM 400 - bank payment in settlement of a collection
  • FM 700 - bank issuance of a letter of credit

T

Taking in charge
Receipt of goods by carrier from shipper.

Telegraphic transfer
Payment instruction sent from one bank or financial institution to another by electronic means, either SWIFT or telex.
The method of choice for urgent or high value payments.

Term bill
Bill of exchange on which payment is due at a future date.
Also known as a tenor bill.

Title document
Transport document in which the bearer has title to the goods, and so can claim them from the carrier at their destination.

To order
On a bill of exchange ‘order’ or ‘to order’ means that the drawer directs payment to be made to another party (usually a bank).
On a bill of lading, ‘order’ or ‘to order’ assigns title to the goods to another party.
See Blank endorsement; endorsement

Transferable Letter of Credit
A Transferable Letter of Credit allows the beneficiary to pass on the benefit of a Letter of Credit to one or more third parties. Normally used by companies that source rather than produce goods.

Transhipment
This is when a consignment is unloaded from one form of transport (lorry or ship) to another during the course of its journey from place of origin to place of destination. In a letter of credit, the buyer can say whether this is allowed or not allowed.

Transport document
Document given by the carrier to the shipper (seller), serving as:

  • Receipt for the goods
  • Evidence of a carriage contract

The transport document MAY also serve as a document of title.

U

Unconfirmed letter of credit
Letter of credit bearing the payment undertaking of a single bank or financial institution, the Issuing bank or financial institution.

Uniform Customs & Practices (PCP)
Uniform Customs and Practice for Documentary Credit developed by the International Chamber of Commerce as the rules that govern the operation of Letter of Credit transactions worldwide. ICC publication No.500 contains details of the rules currently in use.

Uniform Rules for Collections (URC)
Uniform Rules for Collections developed by the International Chamber of Commerce as the rules that govern the operation of collection transactions worldwide. ICC publication No.522 contains the details of the rules currently in use.

Usance letter of credit, usance bill
A letter of credit or bill of exchange where payment is due at some defined future date – the buyer is given a period of credit.
Also known as term or tenor letter of credit (or bill).

V

Validity Date
See Expiry Dates.

Vostro account
How a correspondent bank or financial insitution refers to fund it holds on behalf of an overseas correspondent.

W

Warehouse-to-warehouse
Insurance policy which covers goods over the entire journey from the seller’s to the buyer’s premises.

Warranty Bond/Guarantee
A guarantee issued by a bank, financial institution or issuer of a warranty bond/guarantee on behalf of the seller which secures any claims by the buyer on the seller due to possible defects in the goods during any agreed warranty period.

Weight note
Document issued by either the exporter or a third party declaring the weight of goods in a consignment. This must tally with the weight declared on the transport document and shown on the invoice.