Here are some important terms related to international trade -
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 requires 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.
ICC: International Chamber of Commerce
ICC 322: Uniform Rules for Collections
ICC 323: Standard Forms for Issuing Documentary Credits
ICC 420: Guide to the Prevention of International Trade Fraud.
ICC 460: Incoterms 1990.
ICC 500: Uniform Customs and Practice for Documentary Credits (1993 revision)
ICC 522: Uniform Customs and Practice for Documentary Credits
Import License: A permit issued by the importing country's authorities for goods that are subject to import licensing restrictions.
Import Line: Finance facilities for importers covering documentary credits (DC), bills receivables (BR), and import loans (LAI).
Incoterms: Shipping Terms
International Chamber of Commerce (ICC): The international body which promotes and facilitates world trade, and which codifies world trade practices in various publications
Inward BC: A bill received by the import department of the collecting bank (IBC).
Issuing Bank: The bank that opens a documentary credit at the request of its customer, the applicant.
Letter of Credit (L/C): Out of date term for documentary credit. Avoid using it, as it now has other meanings.
Letter of Hypothecation: Loan-holders for goods imported on a collection basis must provide a letter of hypothecation, which is a promise to hold goods as security.
Loan Against Imports (LAI): Loans granted to Imports customers for payment of bills, usually bills under our DC.
Marginal Deposit: Money held by the Bank to secure the opening of a DC. Normally no interest is paid on these deposits which are held in the Bank’s name whenever possible.
Master Credit: In back-to-back operations, the original export credit against which the second credit is opened
Maturity: Payment due date of a usance bill or promissory note.
Net Weight: The weight of the merchandise before any packaging.
Non-DC Bills: Bills not drawn under DC i.e. sent on a collection basis (D/P or D/A). Non DC bills are financed collections and DC bills are non-financed collections.
Non-Financed Bills: Bills sent on collection in which the remitting branch has no financial interest.
Outward BC: Bill received for collection by the (OBC) Remitting Bank, handled by the Exports Department.
Paying Bank: The bank that makes payment to the beneficiary of a payment DC after presentation to it of documents stipulated in the DC.
Perils of the Sea: These are accidents or casualties of the sea due to heavy or tempestuous weather
Power of Attorney: Authority given to one party to act for another
Presentation: The act of requesting the importer's payment/acceptance of an import bill
Presenting Bank: The bank that requests payment of a collection bill. This may be the collecting bank or its nominated branch
Principal: The initiator of a given transaction whose instructions are followed at all stages. In collection transactions the principal is generally the exporter. In other cases the principal may be the customer who opens a DC.
Promissory Note: A signed statement containing a written promise to pay a stated sum to specified person at a specified date or on demand.
Recourse; The right to claim a refund from another party who has handled a bill at an earlier stage.
Red Clause Credit: A credit with a clause, which authorizes the advising bank to make an advance payment to the beneficiary
Reimbursing Bank: The bank that the DC-issuing bank has named to pay the value of the DC to the negotiating or paying bank.
Remitting Bank: The exporter's bank, which remits the bill to the collecting bank.
Revolving Credit: A credit that is automatically reinstated each time a draw takes place or upon receipt of authorization from the DC-issuing bank.
Retirement: To pay or settle an outstanding bill or import loan. Example: payment to the bank by the importer.
Revocable Credit: Credit that may be amended or canceled without notice to the beneficiary.
Shipment Date; A bill of lading evidences that goods have been received on board. Therefore the date that is entered on the B/L is considered to be the shipment date for documentary credit purposes.
Self-Liquidating: A transaction is said to be self-liquidating when there is a known source of funds available for its settlement on the due date.
Standby Credit: Established as security for facilities granted at another branch or bank
Shipping Register: The register that lists all goods for which the imports department is handling documents, listed according to the ship carrying the goods.
Snags: Irregular bills, whether for import, or export.
Technical D/A: A D/P transaction in which the bank purchases bills but it does not control the goods.
Trade Financing General Agreement (TFGA): An agreement between the bank and all of its import and export customers that gives the bank recourse in all transactions.
Trade and Credit Information (TCI): The bank department that provides details of the creditworthiness and business background of traders and manufacturers.
Transferable Credit: Permits the beneficiary to transfer all or some of the rights and obligations of the credit to a second beneficiary or beneficiaries
Trust Receipt (T/R): A T/R is issued for a TFGA transaction and is based upon the terms of the TFGA.
Transit Interest: The amount of interest that is incurred on a DC from the date of negotiation to the date that the bank receives reimbursement.
Usance Bill: A bill of exchange, which allows the drawee to have a usance (period of credit or term).
Undertaking: A written promise to deliver a security within the time specified. An undertaking is usually synonymous with the actual delivery of the security.
Waive: A drawer can waive the right to collect BC and/or interest charges under circumstances as set forth in ICC 522, Uniform Rules for Collections.