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ABOUT In connection with letters of credit,“about” means a tolerance of plus/minus 10 percent regarding the documentary credit value, unit price or the quantity of the goods, depending on the context in which the tolerance is mentioned. 

ACCEPTANCE LETTER OF CREDIT A letter of credit that, 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. ACCEPTED DRAFT A bill of exchange accepted by the drawee (acceptor) by putting his signature (acceptance) on its face. In doing so, he commits himself to pay the bill upon presentation at maturity. ACCEPTING BANK A bank that by signing a time draft accepts responsibility to pay when the draft becomes due. In this case the bank is the drawee (party asked to pay the draft) but only becomes the acceptor (party accepting responsibility to pay) upon acceptance (signing the draft). 

See ACCEPTANCE; BILL OF EXCHANGE. ACCEPTOR The party that signs a draft or obligation, thereby agreeing to pay the stated sum at maturity. 

See ACCEPTANCE; BILL OF EXCHANGE. ACCOUNT PARTY The party that instructs a bank (issuing bank) to open a letter of credit. The account party is usually the buyer or importer. 

See LETTER OF CREDIT. ADVANCE AGAINST COLLECTION 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. Once the buyer pays, the loan is paid off. If the buyer does not pay the draft, the seller must still make good on the loan. 

See BILL OF EXCHANGE. ADVICE (banking/letters of credit) The forwarding of a letter of credit, or an amendment to a letter of credit to the seller, or beneficiary of the credit, by the advising bank (typically the seller’s bank). The term “advice” connotes several types of forms used on the banking field. Generally speaking, an advice is a form of letter that relates or acknowledges a certain activity or result with regard to a customer’s relations with a bank. Examples include credit advice, debit advice, advice of payment, and advice of execution. In commercial transactions, information on a business transaction such as shipment of goods.

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