Glossary: Documentary credits

TermExplanation
AboutUsed in connection with amount or quantity, it means +/- 10%
AcceptanceAn accepted draft
AdviseTo forward a documentary credit or an amendment to a documentary credit to the beneficiary
Advising bankThe bank (other than the issuing bank) that forwards the documentary credit to the beneficiary
Air waybill (AWB)Air transport document
ApplicantThe party on whose behalf a documentary credit is issued
ApproximatelySee About above
At sightPayment on a sight basis (no credit time)
Available withThe bank where the documents must be presented
BeneficiaryThe party in whose favour the documentary credit is issued
Bill of ladingSea transport document
Clean bill of ladingTransport document without markings regarding damage of goods or packaging
CMR waybillOverland transport document
ConfirmationThis means that a bank takes on a payment obligation together with the issuing bank
ConsigneeRecipient
ConsignorSender
Deferred paymentAlternative to payment at sight
DiscountingBuying the outstanding debt with a deferred payment
Documentary creditAn undertaking (also called a letter of credit) by the issuing bank to make payment to a named beneficiary, usually the seller of merchandise, against delivery of documents specified in the credit
Expiry date/placeIndicates when and where the documentary credit expires for presentation of documents
For account ofThe documentary credit's order giver; see Applicant above
In favour ofThe documentary credit's beneficiary; see Beneficiary above
IncotermsDelivery conditions; see also Incoterms 2000
IrrevocableDocumentary credit which cannot be cancelled without the acceptance of the beneficiary and any confirming bank
Letter of creditThe American expression for documentary credit
MultimodalUsed in the expression "multimodal transport" about transport, in which more than one means of transport are used
n.n.Non-negotiable
NegotiableUsed in documentary credits as an alternative to the word "payable" and meaning payable in a bank other than the issuing bank; also used about original copies of a bill of lading
NegotiateTo pay against drafts and/or documents with recourse
Notify partyIn a transport document, the party to be advised of the arrival of goods
Presentation periodIndicates the deadline for the presentation of documents under the documentary credit
ReimbursementPayment between the issuing and paying banks
RevocableDocumentary credit which the issuing bank can cancel at any time up to the presentation of documents
RevolvingDocumentary credit where the amount is re-established - under special conditions - after the documentary credit has been used
TenorThe period of deferred payment
TransferableDocumentary credit where the beneficiary is allowed to transfer its rights under the documentary credit, wholly or in part, to one or more subcontractors
UCP 600The international rules for documentary credits: Uniform Customs and Practice for Documentary Credits, ICC Publication No. 600
Usance creditDocumentary credit with deferred payment; see Deferred Payment above

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