Glossary of Computer Terms (5C)
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Updated:04/26/2008 Copyright © 1996-2008 Skip Stein
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A…
About (banking)
In connection with letters of credit, "about" means a tolerance of plus/minus 10% regarding the letter of credit value, unit price or the quantity of the goods.
Acceptance Letter Of Credit (LOC) (banking)
A letter of credit which, in addition to other required documents, requires presentation of a term draft drawn on the bank nominated as the accepting bank under the letter of credit.
Account Party (banking)
The party that instructs a bank (issuing bank) to open a letter of credit. The account party is usually the buyer or importer.
Advance Against Collection (banking)
A short-term loan or credit extended to the seller (usually the exporter) by the seller's bank once a draft has been accepted by the buyer (generally the importer) of the seller's goods.
Advice (banking/letters of credit)
The forwarding of a letter of credit, or an amendment to a letter of credit to the sellers by the advising bank (seller's bank).
Advising Bank (banking)
The bank which receives a letter of credit or amendment to a letter of credit from the issuing bank (the buyer’s bank) and forwards it to the beneficiary (seller/exporter) of the credit.
After Date (banking)
A notation used on financial instruments (such as drafts or bills of exchange) to fix the maturity date as a fixed number of days past the date of drawing of the draft.
After Sight (banking)
A notation on a draft that indicates that payment is due a fixed number of days after the draft has been presented to the drawee.
Agency (law)
A relationship between one individual or legal entity (the agent) who represents, acts on behalf of, and binds another individual or legal entity (the principal) in accordance with the principal's request or instruction.
All Risk (insurance)
Extensive insurance coverage of cargo, including coverage due to internal causes such as fire, collision, pilferage etc., but usually excluding "special" risks such as those resulting from acts of war labor strikes and the perishing of goods, and from internal damage due to faulty packaging, decay or loss of market.
ATA Carnet (customs)
ATA stands for the combined French and English words "Admission Temporair/Temporary Admission." An ATA Carnet is an international customs document which may be used for the temporary duty-free admission of certain goods into a country in lieu of the usual customs documents required. The carnet serves as a guarantee against the payment of customs duties.
Aval (banking)
Payment of a bill of exchange, which is the responsibility of the drawee, can be either completely or partially guaranteed via an aval (joint and several guarantee), where the guarantor places his/her signature on the draft either alone or with corresponding explanation "per aval" or "as guarantor."
B…
Back-to-Back Letter of Credit (banking)
A new letter of credit opened in favor of another beneficiary on the basis of an already existing, non-transferable letter of credit.
Bank Acceptance (banking)
A bill of exchange drawn on or accepted by a bank to pay specific bills for one of its customers when the bill becomes due. The acceptance becomes a financial instrument which can be discounted for immediate payment.
Bearer Document (banking/finance/law)
A negotiable instrument, commercial paper, document of title, or security that is issued payable or transferable on demand to the individual who holds the instrument. A bearer document authorizes the payment of funds or the transfer of property to the bearer when the bearer presents the document to the person, such as a bank or a shipper, that is holding the funds or property.
Bill of Adventure (law)
A written certificate used if goods are shipped under the name of a merchant, shipmaster, or ship-owner. It certifies that the property and risk in the goods belong to a person other than the shipper and that the shipper is accountable to that other person.
Bill of Exchange (banking)
An unconditional order in writing, signed by a person (drawer) such as a buyer, and addressed to another person (drawee), typically a bank, ordering the drawee to pay a stated sum of money to yet another person (payee), often a sellers on demand or at a fixed or determinable future time.
Bill of Lading (shipping)
A document issued by a carrier to a shipper, signed by the captain, agent, or owner of a vessel, furnishing written evidence regarding receipt of the goods (cargo), the conditions on which transportation is made (contract of carriage), and the engagement to deliver goods at the prescribed port of destination.
Bordereau (insurance)
An insurance form, similar to a declaration, which provides for insurance coverage of multiple shipments within a prescribed reporting period, usually a month.
C…
Call Option (banking/finance/foreign exchange)
The right to buy a fixed amount of a commodity, security or currency from the option writer (option seller) at a predetermined rate and/or exercise price within a specified time limit.
Carriage and Insurance Paid To (CIP)
(Incoterms 2000) An international trade term of sale, in which, for the quoted price, the seller/exporter clears the goods for export, delivers them to the carrier, and is responsible for paying for carriage and insurance to the named port of destination. However, once the goods are delivered to the carrier, the buyer is responsible for all additional costs.
Certificate of Manufacture
A document (often notarized) in which a producer of goods certifies that the manufacturing has been completed and the goods are now at the disposal of the buyer.
Certificate of Origin (customs)
A document attesting to the country of origin of goods. A certificate of origin is often required by the customs authorities of a country as part of the entry process.
Clean Bill of Lading (shipping)
A bill of lading receipted by the carrier for goods received in “apparent good order and condition," without damages.
Collection Papers (banking)
All documents (invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment.
Commerce Control List (CCL) (U.S.)
All items - commodities, software, and technical data – subject to U. S. Bureau of Export Administration export controls.
Commercial Letter of Credit (banking)
An instrument by which a bank lends its credit to a customer to enable him to finance the purchase of goods. It authorizes the seller to draw drafts on the bank under the terms stated in the letter.
Commingling (U.S. Customs)
The packing or mingling of various articles subject to different rates of duty in such a way that the quantity or value of each class of articles cannot readily be ascertained by Customs. Commingled articles are subject to the highest rate of duty applicable to any part of the commingled lot.
Confirming Bank (banking)
In letter of credit transactions, the bank that assumes responsibility to the seller (usually exporter) for payment from the issuing bank (buyer's bank).
Contingency Insurance (insurance)
Also called difference in conditions insurance. Protects the interests of the insured in the event another party's insurance fails or falls short. Commonly used in both import and export situations.
Cost, Insurance and Freight (CIF)
(Incoterms 2000) An international trade term of sale in which, for the quoted price, the seller/exporter/manufacturer clears the goods for export and is responsible for delivering the goods past the ship's rail at the port of shipment (not destination). The seller is responsible for paying for the costs associated with transport of the goods to the named port of destination. However, once the goods pass the ship's rail at the port of shipment, the buyer assumes responsibility for risk of loss or damage as well as any additional transport costs.
D…
Date Draft (banking)
A draft which matures a specified number of days after the date it is issued, without regard to the date of acceptance.
Declared Value of Carriage (shipping/insurance)
The value of goods declared to the carrier by the shipper for the purposes of determining charges, or of establishing the limit of the carrier's liability for loss, damage, or delay.
Declared Value for Customs (U.S. Customs)
The selling price of a shipment or the replacement cost if the shipment is not for resale. The amount must be equal to or greater than the declared value.
Deferred Payment Letter of Credit (banking)
A letter of credit which enables the buyer to take possession of the title documents and the goods by agreeing to pay the issuing bank at a fixed time in the future.
Demurrage (shipping)
The extra charges a shipper pays for detaining a freight car or ship beyond time permitted for loading or unloading.
Discrepancies (banking/letter of credit)
The noncompliance of documents with the terms and conditions of a letter of credit. Information (or missing information or missing documents/papers, etc.) in the documents submitted under a letter of credit, which: (1) is not consistent with its terms and conditions; (2) is inconsistent with other documents submitted; (3) does not meet the requirements of the Uniform Customs and Practice for Documentary Credits (UCPDC).
Documentary Collection (banking)
A method of effecting payment for goods whereby the seller/exporter ships goods to the buyer, but instructs his bank to collect a certain sum from the buyer/importer in exchange for the transfer of title, shipping and other documentation.
Drawback-Refund of Duties (U.S. Customs)
The refund of all or part of customs duties, or domestic tax paid on imported merchandise which was subsequently either manufactured into a different article or re-exported.
E F G…
Entry Documents (customs)
The documents required to secure the release of imported merchandise.
Errors & Omissions Excepted (E&OE) (shipping)
A notation adjacent to a signature on a document signifying that the signor is disclaiming responsibility for typographical errors or unintentional omissions.
Ex Dock (trade term)
A term of sale where the buyer takes title to the goods only when they are unloaded on his/her dock.
Expiry Day (banking/foreign exchange)
In foreign exchange options business, the last day on which an option can be exercised.
Export Control (U.S. Customs)
To exercise control over exports for statistical and strategic purposes, Customs enforces export control laws for the U.S. Department of Commerce and other Federal agencies.
Export Declaration (U.S.)
A document required by the U.S. Department of Treasury for the export of goods from the United States.
Factoring
The discounting of an account receivable in order to receive immediate payment.
Force Majeure (shipping)
Any condition or set of circumstances, such as earthquakes, floods, or war, beyond the carrier's control that prevents the carrier from performing fulfillment of their obligations.
Forfaiting (trade/finance)
The selling, at a discount, of medium to longer-term accounts receivable or promissory notes of a foreign buyer for immediate payment.
Free on Board (FOB) (Incoterms 2ooo)
An international trade term of sale in which, for the quoted price, the seller/exporter/manufacturer clears the goods for export and is responsible for the costs and risks of delivering the goods past the ship's rail at the named port of shipment.
H I J…
In Bond (U.S. Customs)
A procedure under which goods are transported or warehoused under customs supervision until they are either formally entered into the customs territory of the United States and duties paid, or until they are exported from the United States.
Incoterms 2000
A codification of international rules for the uniform interpretation of common contract clauses in export/import transactions involving goods. Developed and issued by the International Chamber of Commerce (ICC) in Paris. The version which is currently valid is from 2000.
Initial Margin (finance/foreign exchange)
The amount of margin which has to be deposited with the clearinghouse both by the buyer and the seller through the respective broker and/or bank to establish a position in a futures contract.
In Trust (goods/documents) (banking)
In documentary collections, when a bank releases documents to allow the importer/buyer to inspect them prior to payment.
K L M N…
Lay Order (customs)
The period during which imported merchandise may remain at the place of unlading without some action for its disposition.
London Interbank Offered Rate (LIBOR) (banking/finance)
The interest rate at which banks in London are prepared to lend funds to first-class banks.
Material Contract Terms (law)
Terms that are necessary to the agreement. Clauses that describe the goods, fix the price, and set the delivery date are examples.
Merchant's Credit (banking)
A letter of credit issued by the buyer himself. Contains no commitment whatever on the part of a bank.
Mitigation of Damages (law/insurance)
A legal doctrine that charges a party who suffers contract damages with a duty to use reasonable diligence and ordinary care in attempting to minimize damages or avoid aggravating the injury.
Negotiable Bill of Lading (shipping)
Bill of lading transferred by endorsement. There are three possibilities: (1) to XY & Co. or their order; (2) to the order of XY & Co., and (3) to order, without the name of the party.
Notify Address (shipping)
Address mentioned in the transport document to which the carrier is to give notice when goods are due to arrive.
Notify Party (shipping)
Name and address of a party in the transport document (bill of lading or air waybill), usually the buyer or his agent, to be notified by the shipping company of the arrival of a shipment.
O P…
Original Documents (banking/finance)
Unless otherwise stated in the letter of credit, the requirement for an original document may also be satisfied by the presentation of documents produced or appearing to have been produced: 1) reprographically, 2) by automated or computerized systems, or 3) as carbon copies, and marked as "originals."
Out-of-the-Money (foreign exchange)
An option is out-of-the-money in the following cases: (1) Call option: market price less than the strike price. (2) Put option: market price greater that the strike price.
Outright (foreign exchange)
A forward purchase or sale of foreign exchange and forward resale of the same currency against domestic currency.
Overnight (foreign exchange)
Swap from settlement date until the following business day, i.e.; one day or three days over the weekend.
Packing Credit (banking)
A monetary advance granted by a bank in connection with shipments of storable goods guaranteed by the assignment of the payment expected later on under a documentary letter of credit.
Parol (law)
Oral expression. A parol contract, for example, is one that is verbal only and that has not been put into writing by the parties.
Performance Bond (insurance)
A bond which guarantees proper fulfillment of the terms of a contact.
Phytosanitary Inspection Certificate (U.S.)
A certificate issued by the U.S. Department of Agriculture, indicating that a U.S. export shipment has been inspected and is free from harmful pests and plant diseases.
Pro Forma
When coupled with the title of another document (pro forma invoice, pro forma manifest), it means an informal document presented in advance of the arrival or preparation of the required document in order to satisfy a requirement.
Project License (U.S.)
A license which authorizes large-scale exports of a wide variety of commodities and technical data for specified activities.
Protest (U.S. Customs)
The means by which an importer, consignee, or other designated party may challenge decisions (usually regarding the dutiable status of imported goods) made by Customs.
Put Option (banking/finance)
A contract which entities one party, at his option, to sell a specified amount of a commodity, security or foreign exchange to another party, at the price fixed in the contract.
Q R…
Red Clause (Letter of Credit) (banking)
A special clause included in a documentary letter of credit which allows the seller to obtain an unsecured advance from the correspondent bank to finance the manufacture or purchase of goods to be delivered under the documentary letter of credit.
Replevin (law)
A legal action for recovering property brought by the owner or party entitled to repossess the property against a party who has wrongfully kept it.
Requirement Contract (law)
An agreement by which a seller promises to supply all of the specified goods or services that a buyer needs over a certain time and at a fixed price, and the buyer agrees to purchase such goods or services exclusively from the seller during that time.
Reverse Swap (banking/trade)
A swap which offsets the interest rate or currency exposure on an existing swap.
Revocable Letter of Credit (banking)
A letter of credit which can be cancelled or altered by the drawee (buyer) after it has been issued by the drawee's bank. Due to their low level of security, these are extremely rare.
Revolving Letter of Credit (banking)
A letter of credit which is automatically restored to its full amount after the completion of each documentary exchange.
S…
Settlement Date (banking)
The date on which payment for a transaction must be made.
Severability Clause (law)
A contract term that provides that each portion of the agreement is independent of the others, allowing a court to invalidate a clause of the contract without voiding the entire agreement.
Shipper's Export Declaration (shipping)
Form required for all U.S. export shipments by mail valued at more than $500 and for non-mail shipments with declared value greater than $2,500.
Shipper's Letter of Instruction (shipping)
A form used by a shipper to authorize a carrier to issue a bill a lading or an air waybill in the shipper's behalf.
Shipper's Load and Count (shipping)
A clause in, or notation on, a transport document noting that the contents of a container were loaded and counted by the shipper and not checked or verified by the carrier.
Sight Draft (banking)
A financial instrument payable upon presentation or demand. A bill of exchange may be made payable upon presentation or demand, or within a particular period after demand is made.
Standby Letter of Credit (banking)
The standby letter of credit is very similar in nature to a guarantee. The beneficiary can claim payment in the event that the principal does not comply with its obligations to the beneficiary. Payment can usually be realized against presentation of a sight draft and written statement that the principal has failed to fulfill his obligations.
Stop Loss Order (foreign exchange)
An order to buy (on a short position) or to sell (on a long position) foreign exchange if the rate rises above or falls below a specific limit.
Storage Demurrage (shipping)
A charge made on property remaining on the dock past the prescribed "free-time period."
Straight Bill of Lading (shipping)
A nonnegotiable bill of lading that designates a consignee who is to receive the goods and that obligates the carrier to deliver the goods to that consignee only.
Strike Price (finance/foreign exchange)
Price at which the option buyer obtains the right to purchase (call option) or sell (put option) a security or currency.
Subrogation (insurance)
The right of the insurer, upon payment of a loss, to the benefit of any rights against third parties that may be held by the assured himself.
Surety (insurance)
A bond, guaranty, or other security that protects a person, corporation, or other legal entity in cases of another's default, improper performance, malfeasance of office, and others.
T…
Tare or Tare Weight (shipping)
The weight of a container and/or packing materials, but without the goods being shipped.
Temporary Importation Under Bond (TIB) (U.S. Customs)
Temporary admission into the United States under a conditional bond for articles not imported for sale or for sale on approval.
Through Bill of Lading (shipping)
A single bill of lading covering receipt of the cargo at the point of origin for delivery to the ultimate consignee, using two or more modes of transportation.
Transaction Value (U.S. Customs)
U.S. Customs officers are required by law to determine the value of imported merchandise as determined by U.S. Customs officers for statistical purposes as well as to determine the amount of import duty.
Transferable Letter of Credit (shipping)
A letter of credit where the beneficiary specified in the credit has the option of instructing his bank to transfer the credit fully or in pan option of instructing his bank to transfer the credit fully or in pan.
Transit Air Cargo Manifest (shipping-U.S.)
Procedures under which air cargo imports move through a gateway city to the city of final U.S. destination for the collection of duty and other import processing.
U V W X Y Z…
Uniform Customs and Practice (UCP) (banking)
Full name: Uniform Customs and Practice for Documentary Credits (UCPDC). The internationally recognized codification of rules unifying banking practice regarding documentary letters of credits.
Uniform Rules for Collections (URC) (banking)
The internationally recognized codification of rules unifying banking practice regarding collection operations for drafts, their payment or non-payment, protest and for documentary collections.
Waybill (shipping)
A document prepared by a transportation line at the point of a shipment, showing point or origin, destination, route, consignor, consignee, description of shipment and amount charged for the service, and forwarded with the shipment, or direct by mail, to the agent at the transfer point or waybill destination.
