Acceptance
A bank action relating to a draft payable at a future date when the structure calls for acceptance.
Plain English
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Advising bank
The bank that advises the credit at the request of the issuing bank.
Amendment
A formal change to an issued LC.
Applicant
The party on whose request the credit is issued. Usually the buyer.
Applicant bank
The bank connected to the applicant side when identified in the message.
Assignment of proceeds
A transfer of the right to receive proceeds. It is different from transferring the credit itself.
Availability
How and with which bank the credit can be used, for example by sight payment, deferred payment, acceptance or negotiation.
Beneficiary
The party in whose favour the credit is issued. Usually the seller.
Bill of exchange / Draft
A written payment order used in some LC structures.
Bill of lading (B/L)
A common sea-transport document.
Charter party B/L
A bill of lading issued under a charter-party transport arrangement.
Clean transport document
A transport document without a clause expressly declaring a defective condition of goods or packaging.
Complying presentation
A presentation that meets the credit, the applicable UCP rules and relevant standard banking practice.
Confirmation
An additional undertaking added by a confirming bank.
Confirming bank
A bank that adds confirmation to a credit on the issuing bank's authorisation or request.
Credit
In UCP language, a documentary credit.
Deferred payment
Payment due at a future maturity without necessarily using a draft.
Discrepancy
A problem or difference between the presented documents and what the LC and applicable rules require.
Documentary Credit / LC
A bank undertaking structured around presentation of documents.
Drawee
The party on whom a draft is drawn when drafts are used.
Expiry date
The last date for presentation under the credit, subject to the stated place and rules.
Financeability
How suitable a credit and transaction may be for financing by a bank or financier.
Honour
A UCP term covering the stated payment undertaking, depending on whether the credit is available by sight payment, deferred payment or acceptance.
ICC
International Chamber of Commerce, publisher of UCP 600.
Irrevocable
A credit that cannot be cancelled or changed unilaterally outside the applicable amendment rules.
ISBP
International Standard Banking Practice, ICC guidance used with UCP for document examination practice.
Issuing bank
The bank that issues the credit at the request of the applicant or on its own behalf.
KYC
Know Your Customer. Bank checks to understand and verify customers and transaction parties.
Latest shipment date
The last date on which shipment may take place under the credit.
MT700
A SWIFT message type used to issue a documentary credit.
MT701
A related SWIFT continuation message used when documentary-credit information needs continuation.
MT707
A SWIFT message used for amendments to a documentary credit.
Negotiation
A UCP concept involving purchase by a nominated bank of drafts and/or documents under a complying presentation, by advancing or agreeing to advance funds.
Nominated bank
The bank with which the credit is available, or any bank when the credit is available with any bank.
Partial shipment
Shipment in more than one lot when permitted by the credit and rules.
Presentation
Delivery of documents under the credit to the issuing bank or nominated bank as applicable.
Presentation period
The allowed period for presenting documents, often counted from a transport-document date and subject to expiry.
Reimbursement
The bank-to-bank arrangement for obtaining funds when the credit structure uses a reimbursing bank.
Sight payment
Payment without a future usance period once the relevant complying process is met.
SWIFT
A secure financial messaging network used by banks and other financial institutions.
Tenor
The time until payment is due, for example 60 days after sight.
Tolerance
An allowed variation in amount, quantity or unit price when the credit or applicable rules permit it.
Transferable credit
A credit that specifically states it is transferable and can be transferred under the relevant UCP mechanism.
Transshipment
Movement of goods from one means of transport to another during the journey.
UCP 600
ICC's Uniform Customs and Practice for Documentary Credits, 2007 Revision.
Usance
Payment due later after a stated period.
Waiver
Acceptance of a discrepancy by the applicant/issuing side in the relevant process; it should not be assumed in advance.