AIB Tradefinance - Glossary of Terms Wed, 19 Jun 2013
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Acceptance
Refers to the commitment by an Importer, evidenced by their accepting a Bill of Exchange drawn on them by an Exporter, to pay for goods at a fixed date in the future.
Acceptance Credit
A Letter of Credit which includes a term bill of exchange in its required documentation. The bill will be accepted by the bank on which it is drawn, usually the issuing or advising bank, and the proceeds paid to the beneficiary at maturity.
Advance Payment Guarantee
A guarantee issued by a bank, on behalf of a seller to a buyer, in relation to any advance payment that is made by the buyer to the seller to allow the contract to commence. If the contract is not completed the buyer can claim reimbursement of the advance payment under the guarantee.
Advising Bank
A bank normally located in the country of residence of an Exporter, used by an Importer's bank to validate the authenticity of a Letter of Credit before the Letter of Credit is passed to the Exporter.
Amendment
A change in the terms to a Letter of Credit that is already issued. Such changes can only be made with the agreement of all parties to the Letter of Credit.
Applicant
The Importer who applies to an issuing bank for a Letter of Credit, or a Guarantee/Bond
Availability
A term used in Letters of Credit to indicate the bank nominated by the issuing bank to pay, accept, incur a deferred payment, or negotiate the Letter of Credit on their behalf. Sellers should ensure the Letters of Credit are available with one of their relationship banks
Avalize
The process by which a third party, usually a bank guarantees the undertaking of the drawee to meet their responsibility under a Bill of Exchange. The words "Per Aval" and the signature of the avalizing (guarantor) party must be written on the Bill.

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