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International Resource Center – Glossary of Terms

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Packing Credit
Common term, especially in Asia, for pre-export finance provided against a letter of credit.
Packing List
A document showing the number and kinds of items being shipped. Must be consistent with other documents (especially under a letter of credit).
Paying Bank
The bank nominated in the letter of credit to pay out against conforming documents without recourse.
Payment in Advance
The buyer delivers cash to the seller before the seller releases the goods. Also called cash in advance (CAD), it may not mean exactly the same as advance payment.
Pre-export Finance
U.S. banking term for a loan to an exporter to finance the accumulation of materials, the manufacture, assembly, production, packaging and transport of physical goods to fulfill an export order. Commonly guaranteed by Ex-Im or SBA Working Capital Guarantee programs.
Presentation Period
Time allowed after issue of transport document to present documents under the letter of credit.
Presenting Bank
Bank in a documentary collection process presenting export documents to the drawee for payment.
Pro-Forma Invoice
An invoice from seller to buyer outlining details of a proposed sale, containing sufficient information to enable the buyer to prepare a letter of credit application.




Recourse or Payment with Recourse
The paying party retains the right to the funds in the event that reimbursement (from another party) is not forthcoming.
Reimbursing Bank
The bank empowered by the issuing bank (i.e., with a bank balance) to charge the account of the issuing bank and pay to the bank collecting funds under a letter of credit.
Remitting Bank
Exporter's bank in a documentary collection process taking export documents and sending them to a correspondent in the country of the importer (the drawee in the collection process).
Adjective applied to a letter of credit which may be canceled or amended unilaterally by the issuing bank. Revocable letters of credit are rare, but may be used between friendly parties to observe the spirit of government regulations.
Revolving Letter of Credit
An irrevocable letter issued for a specific amount that renews itself for the same amount over a given period.


The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is an industry-owned co-operative providing secure, standardized messaging services and interface software to over 8,000 financial institutions in 207 countries and territories.
Sight Draft
A draft payable on demand upon presentation.
Spot Contract
Straightforward exchange of one currency for another at the current market price.
Spot Exchange
The purchase or sale of foreign currency for immediate delivery.
Standby Letter of Credit
Contingent (future) obligation of the issuing bank to make payment to the designated beneficiary if the bank's customer fails to perform as called for under the terms of a contract.
Steamship Guarantee
An indemnity letter issued by a bank to a steamship line requesting release of merchandise in the absence of original bills of lading.
Straight Bill of Lading
A non-negotiable bill of lading whereby the consignee named in the bill is the owner of the goods, e.g., it cannot be endorsed from one party to another.
Swap Contract
Agreement to purchase (or sell) a currency for delivery on one date and simultaneously sell (or purchase) the same currency for a particular fate in the future at a specified price.


Time and date for payment of a draft.
Through Bill of Lading
A bill of lading that covers transportation by more than one carrier on more than one mode of transport from the point of issue to the final destination.
Time Draft
A bill of exchange payable by the drawee at some future date. Sometimes called a usance draft.
Trade Acceptance
Time or a date draft that has been accepted by the buyer (the drawee) for payment at maturity.
Transport Document
A bill of lading, an air waybill, a truck receipt or any other document acting as a receipt of goods and a contract of carriage.
The transfer of goods from one transportation line to another or from one ship to another. Liability may pass from one carrier to the next, or it may be covered by a through bill of lading issued by the first carrier.
Twenty-foot Equivalent Unit (TEU)
A measurement of cargo based on a standard ocean shipment container, which is 20 feet in length.
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