GLOSSARY |
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Packing list
Document listing the contents of a consignment of goods.
May be called for on a letter of credit.
Payee
Party to whom payment is due.
Paying bank
In a letter of credit, bank that is nominated to make payment to the beneficiary upon presentation of complying documents.
Political risk
Risk that political instability in the buyer's country will interfere with a buyer's ability to meet payment obligations.
Postal receipt
Transport document issued by a postal authority. Not a document of title.
Pour aval
Written on a bill of exchange when it is avalised by a bank.
Presentation
In a collection, presentation of documents by a bank to a buyer for payment or acceptance. In a letter of credit, presentation of documents by a seller to a bank for payment, acceptance or negotiation.
Presentation period
On a letter of credit, number of days allowed between shipment of goods and presentation of documents to a bank.
Presenting bank
In a collection, bank that presents documents to a buyer for payment or acceptance.
Prime letter of credit
In a back-to-back letter of credit transaction, the original letter of credit that is offered as security for another letter of credit (second letter of credit).
Principal
Party who instigates a collection, i.e. the seller.
In a collection, all banks act for the principal.
Promissory note
Financial document in which the buyer agrees to make payment to the seller at a specified time.
Protest
Legal procedure that may be administered by a notary public, evidencing non-payment or non-acceptance of a bill of exchange. Useful in support of a subsequent civil action against the defaulter.
In a collection, the presenting bank may be instructed to arrange for this.