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.
SBLC
Standby Letter of Credit. An independent undertaking that commonly supports payment or performance obligations.
MT760
A SWIFT Category 7 message used to issue a demand guarantee or standby letter of credit.
MT767
A SWIFT message used for amendments to a guarantee or standby undertaking.
ISP98
International Standby Practices 1998. ICC rules designed specifically for standby letters of credit when expressly incorporated.
Demand
A beneficiary's presentation asking for payment under a standby according to its terms.
Demand guarantee
An independent guarantee payable against a complying demand. MT760 covers both demand guarantees and standby letters of credit.
Financial standby
A standby mainly supporting a payment obligation.
Performance standby
A standby mainly supporting performance of a non-money or contractual obligation.
Direct-pay standby
A standby structured to make payment directly, rather than serving only as a backup after default.
Automatic extension
A mechanism that extends a standby's expiry unless a valid non-extension notice is given.
Non-extension notice
A notice that stops an automatically extending standby from renewing for another period.
Evergreen
A market label often used for an automatically extending standby. The exact extension and non-extension wording matters more than the label.
Undertaking amount
The maximum currency and amount stated for the standby or guarantee undertaking.
Issuer
The bank or financial institution that issues the standby undertaking.
Obligor
The party whose obligation is supported. In some structures it may differ from the applicant.
Transfer of drawing rights
A transfer of the right to draw under a transferable standby. It is different from assignment of proceeds.
Bank Payment Undertaking (BPU)
A bank undertaking to make payment under stated conditions. The term can be used in different markets; it is not a dedicated SWIFT MT message type.
Bank Payment Obligation (BPO)
A historical electronic bank-to-bank trade-payment concept associated with ICC URBPO and data matching. Do not confuse BPO with BPU.
RMA
Relationship Management Application. A SWIFT control used by financial institutions to manage which counterparties are permitted to send certain message traffic; it is not proof that a commercial deal is genuine.
MT759
Ancillary Trade Structured Message used for structured trade-related information in situations within its scope. It is not itself an LC, SBLC or guarantee.
MT799
A free-format SWIFT Category 7 message. Its narrative may contain bank-to-bank information, but the message type alone is not an SBLC, guarantee, BPU or proof of funds.
URDG 758
ICC Uniform Rules for Demand Guarantees. They govern a demand guarantee or counter-guarantee when applicable under their terms and the undertaking indicates it is subject to them.
URC 522
ICC Uniform Rules for Collections, commonly used for documentary and clean collections when incorporated in the collection instruction.
Documents against Payment (D/P)
A collection instruction under which documents are generally released against payment according to the collection terms.
Documents against Acceptance (D/A)
A collection instruction under which documents are generally released against acceptance of a time draft according to the collection terms; payment is due later.
Bank Draft / Banker’s Draft
A bank-issued payment instrument. Names and legal details vary by jurisdiction; do not confuse it with a trade draft or bill of exchange drawn under an LC.
Bill of Exchange
A written order by a drawer directing a drawee to pay a specified sum to the named party or order, subject to the applicable law and instrument terms.
Banker’s Acceptance
A time draft accepted by a bank, creating a bank acceptance obligation according to the applicable structure and law.
Promissory Note
A written promise by the maker to pay a specified amount according to the note terms, subject to applicable law.
Forfaiting
Purchase of eligible medium- or longer-term receivables, commonly without recourse to the seller under the agreed structure, subject to financier acceptance and documentation.
Factoring
Receivables-finance arrangement in which a factor purchases or finances receivables and may also provide collection or credit services. Recourse terms vary.
Counter-guarantee
An undertaking issued in favour of another guarantor to support that guarantor’s issuance of a local guarantee.
Pre-advice
A preliminary communication that an instrument is expected or intended to be issued. Its legal effect and required form depend on the product, rules, wording and bank procedure.
Proof of Funds (POF)
Evidence intended to show availability of funds. The phrase is broad; its form, reliability and purpose must be verified rather than assumed from a document label.
RWA
“Ready, willing and able,” a phrase commonly found in market procedures. It is not by itself a universal SWIFT instrument or ICC-defined banking product.
BCL
“Bank Comfort Letter,” a broad market term. The exact legal effect depends on the issuing bank’s actual wording; the label alone does not create a payment undertaking.
ISO 20022
A financial messaging standard using structured data. It is now the standard language for cross-border payment instructions on SWIFT after the 2025 end of MT/ISO coexistence for those payment flows.