Carrier

Party responsible for transport of goods (shipping line, airline, road haulage company etc.)

Case of need

In a collection, party in the buyer's country who is designated by the seller to advise and/or give instructions in the event of problems or disputes. The collection order will specify whether the case of need is authorised to instruct the bank.

Cash cover

In a letter of credit transaction, money deposited by the applicant with the Issuing bank, e.g. when existing credit facilities are fully utilised.

Certificate of analysis/certificate of inspection

Documents that may be asked for by the importer and/or the authorities of the importing country, as evidence of quality or conformity to specifications.

Certificate of origin

Documents that may be asked for by the authorities of the importing country, as evidence of the country of manufacture of the goods and hence qualification for preferential tariffs etc.

Charter party bill of lading

Bill of lading issued by the charterer or hirer of a vessel. Unpopular with banks, because situations can arise when the owner of the vessel has a claim on the goods.

Clean collection

Collection in which only the financial document (bill of exchange) is sent through the banks.

(Commercial documents are sent direct to buyer or may accompany the goods).

Collecting bank

Bank in the buyer's country that participates in a collection. The collecting bank may or may not also be the presenting bank, who presents documents to the buyer and claims payment.

Collection

Trading method in which the banking system acts on behalf of the seller, presenting documents to the buyer and only releasing them upon payment (or upon acceptance of a term bill).

Collection order

In a collection, the document in which the seller instructs the banks as to how the collection is to be conducted.

Combined transport bill of lading

Transport document, widely used for containerised shipments, covering more than one transport mode - for example, rail and sea. Has the same general characteristics as a marine Bill of Lading.

Commercial document

General term for documents describing various aspects of a transaction, e.g. commercial invoice, transport document, insurance document, certificate of origin, certificate of inspection etc.

Commercial invoice

Document drawn up by the seller that summarises the commercial transaction (goods supplied, price, means of shipment and so on).

Commitment fee

Various meanings:

• Fee charged by a forfaiter for reserving funds to a forfaiting transaction
• Fee charged by a negotiating bank for waiving recourse to the beneficiary in the event of non-payment by the Issuing bank.

Compliant documents

Documents presented under a letter of credit that comply with all its terms and conditions. The banks are only obliged to pay the beneficiary if documents are compliant.

Confirmed letter of credit

Letter of credit in which a bank (usually) in the seller's country adds its own payment undertaking to that of the Issuing bank. Protects against country risk and bank risk as well as customer credit risk.

Confirming bank

Bank who adds its payment undertaking to a letter of credit. See confirmed letter of credit.

Consignee

Party to whom goods are to be delivered.

NB some transport documents such as bills of lading may be made out consigned 'to order'.

Constructive control

The ability to retain control over goods despatched to the buyer. Usually maintained through transport documents. Where there is credit risk, constructive control is important to the seller. Constructive control may also be important to a bank who has financed a transaction.

Consular invoice

Commercial invoice prepared in the seller's country by the consulate of the buyer's country. Helps the government of the buyer's country control and regulate imports.

Correspondent bank

Overseas bank with whom a bank account has relationships (nostro-vostro accounts) and arrangements for authentication of communications.

Carriage and Insurance paid (CIP)

Incoterms 2010 rule for all transport modes.

Seller:

• delivers goods to carrier
• pays for transport of goods and cargo insurance to named destination

Risk transfers to buyer when goods have been taken in charge by carrier

Carriage Paid To (CPT)

Incoterms 2010 rule for all transport modes.

Seller:

• delivers goods to carrier
• pays for transport of goods to named destination

However exporter does not pay for cargo insurance

Risk transfers to buyer when goods have been taken in charge by carrier

Cost and Freight (CFR)

Incoterms 2010 rule - for sea and inland waterway only

Seller:

• delivers goods to carrier
• pays transport costs to named destination

However seller does not pay for insurance.

Risk transfers to buyer when goods have been loaded on board vessel

Cost, Insurance and Freight (CIF)

Incoterms 2010 rule - for sea and inland waterway only.

Seller:

• delivers goods to carrier
• pays transport costs and insurance to named destination.

Risk transfers to buyer when goods have been loaded on board vessel

Counter credit

Another name for back-to-back letter of credit.

Country risk

Risk that economic or political instability in the buyer's country will interfere with the buyer's ability to pay for goods supplied.

Cover note

Insurance document evidencing that insurance cover for a consignment has been taken out, but not giving full details.

Currency option

Foreign exchange transaction in which a party buys the right (but not the obligation) to buy or sell a given amount of foreign currency at a given exchange rate at either:

• a given future date

or

• at any point within a future time period.