Category Archives: Ex-Im Terminology
Acceptance – This term has several related meanings: (1) A time draft (or bill of exchange) that the drawee has accepted and is unconditionally obligated to pay at maturity. The draft must be presented first for acceptance – the drawee becomes the “acceptor” – then for payment. The word “accepted” and the date and place of payment must be written on the face of the draft. (2) The drawee’s act in receiving a draft and thus entering into the obligation to pay its value at maturity. (3) Broadly speaking, any agreement to purchase goods under specified terms. An agreement to purchase goods at a stated price and under stated terms.
Advance against documents – A loan made on the security of the documents covering the shipment.
Advising bank – A bank, operating in the exporter’s country, that handles letters of credit for a foreign bank by notifying the export firm that the credit has been opened in its favor. The advising bank fully informs the exporter of the conditions of the letter of credit without necessarily bearing responsibility for payment.
Advisory capacity – A term indicating that a shipper’s agent or representative is not empowered to make definitive decisions or adjustments without approval of the group or individual represented. Compare Without reserve.