Glossary of Industry Terms

The Berne Union has compiled a glossary of terms relating to trade / export finance and export credit and political risk insurance. The definitions are collected from a variety of original sources (which are all linked for reference). Where multiple sources exist for a given defiendum, all sources are included. Where there is no suitable source we have provided an original definition.

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  Terminology Definition Source
  debt consolidation clause Debt consolidation means taking out a new loan to pay off a number of liabilities and consumer debts, generally unsecured ones. In effect, multiple debts are combined into a single, larger piece of debt, usually with more favorable payoff terms. Favorable payoff terms include a lower interest rate, lower monthly payment or both.
 Consumers can use debt consolidation as a tool to deal with student loan debt, credit card debt and other types of debt. 		Investopedia
    Debt consolidation: A payment plan which can include rescheduling as well as cancellation of a country’s debt or part thereof. ATRADIUS
  debt for equity swap, debt-equity swap A debt/equity swap is a transaction in which the obligations or debts of a company or individual are exchanged for something of value, equity. In the case of a publicly traded company, this generally entails an exchange of bonds for stock. The value of the stocks and bonds being exchanged is typically determined by the market at the time of the swap. Investopedia
  debt forgiveness Writing-off of a portion of one or more loans to a financially troubled firm by its lender(s). The objective is to help that firm in its debt restructuring so that it remains viable and is able to pay off the remaining part of the loan(s). Investopedia
  debt reduction Paris Club term referring to concessional debt relief through principal and/or moratorium interest reduction. Berne Union
  debt instrument It is a documented, binding obligation that provides funds to an entity in return for a promise from the entity to repay a lender or investor in accordance with terms of a contract. Debt instrument contracts include detailed provisions on the deal such as collateral involved, the rate of interest, the schedule for interest payments, and the timeframe to maturity if applicable. Investopedia
    A document that is enforceable debt promising timely payment. A debt instrument can be a bill of exhcnage, bonds, or certificates of deposit to name a few. thelawdictionary
  debt relief Debt relief is the reorganization of debt in any shape or form so as to provide the indebted party with a measure of relief, either fully or partially. Debt relief can take a number of forms: reducing the outstanding principal amount (again, either partly or fully), lowering the interest rate on loans due, and/or extending the term of the loan, among others.
 Creditors may only be willing to consider debt relief measures when the repercussions of debt default by the indebted party or parties are perceived as being so severe that debt mitigation is a better alternative. Debt relief may be extended to any highly-indebted party, from individuals and small businesses, to large companies, municipalities, and sovereign nations. 		Investopedia
    Any agreement to defer, reschedule, sell, convert or write off payment obligations. Berne Union
  debt swap A debt/equity swap is a transaction in which the obligations or debts of a company or individual are exchanged for something of value, equity. In the case of a publicly traded company, this generally entails an exchange of bonds for stock. The value of the stocks and bonds being exchanged is typically determined by the market at the time of the swap. Investopedia
  debtor A debtor is a company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower, and if the debt is in the form of securities – such as bonds – the debtor is referred to as an issuer. Legally, someone who files a voluntary petition to declare bankruptcy is also considered a debtor. Investopedia
  declaration of default A formal statement from a creditor (=someone owed money) that the debtor (=person owing money) has not done something they are obligated to do, such as making payment. translegal
  default interest, delay interest, late interest The additional interest that may be levied on obligations overdue beyond a specified time. OECD
    Interest which is payable for amounts paid after due date. Berne Union
  default, failure of the debtor to meet his obligations The failure of a buyer to make contractually due payments. HKEC
    Default is the failure to repay a debt including interest or principal on a loan or security. A default can occur when a borrower is unable to make timely payments, misses payments, or avoids or stops making payments. Individuals, businesses, and even countries can fall prey to default if they cannot keep up their debt obligations. Investopedia
  deferred interest Deferred interest is the amount of interest added to the principal balance of a loan when the contractual terms of the loan allow for a scheduled payment to be made that is less than the interest due. When a loan's principal balance increases because of deferred interest, it is known as negative amortization. For example, adjustable-rate mortgages, known as payment option ARMs, and fixed-rate mortgages with a deferrable interest feature, carry the risk of the monthly payments increasing substantially at some point over the term of the mortgage. Investopedia
  deficiency claim, notification of defects A deficiency claim is that portion of a claim secured by a lien on property that exceeds the value of the property. In this case, the creditor is granted a secured interest up to the value of its collateral, while any excess amount of its claim over the value of the collateral is classified as an unsecured claim. This unsecured portion of the claim is the deficiency claim. This is a particular problem for a secured creditor when the court assigns a low value to the creditor’s collateral, since this means that more of its claim is shifted into the unsecured claims classification. accountingtools
  del credere agent A del credere agency is a type of principal-agent relationship wherein the agent acts not only as a salesperson or broker for the principal, but also as a guarantor of credit extended to the buyer. If the buyer is unable to pay the bill after the transaction is completed, a del credere agent may become liable for the amount that was unable to be collected. Investopedia
  delivery period The period between date of order and delivery or shipment of goods. ICISA
    Average or normal time between placing an order and receiving the delivery. Also called delivery time. businessdictionary
  deprivation Forfeiture (law), deprivation or destruction of a right in consequence of the non-performance of some obligation or condition. wikipedia
  developing country A developing country (or a low and middle income country (LMIC), less developed country, less economically developed country (LEDC), or underdeveloped country) is a country with a less developed industrial base and a low Human Development Index (HDI) relative to other countries. A nation's GDP per capita compared with other nations can also be a reference point.  wikipedia
  development aid Development aid or development cooperation (also development assistance, technical assistance, international aid, overseas aid, official development assistance (ODA), or foreign aid) is financial aid given by governments and other agencies to support the economic, environmental, social, and political development of developing countries. It can be further defined as "aid expended in a manner that is anticipated to promote development, whether achieved through economic growth or other means". It is distinguished from humanitarian aid by focusing on alleviating poverty in the long term, rather than a short term response. wikipedia
  direct credit A direct credit is an electronic transfer of funds. The payment is initiated by the payer, which sends funds directly into the bank account of the payee. Settlement usually occurs within one or two business days. Direct credits are commonly used to make periodic compensation payments to employees. This approach may also be used with suppliers. accountingtools
  discounting of a bill If the drawer of the bill does not want to wait till the due date of the bill and is in need of money, he may sell his bill to a bank at a certain rate of discount. The bill will be endorsed by the drawer with a signed and dated order to pay the bank. The bank will become the holder and the owner of the bill. After getting the bill, the bank will pay cash to the drawer equal to the face value less interest or discount at an agreed rate for the number of days it has to run. This process is know as discounting of a bill of exchange. accountingexplanation
  discretionary limit, non-vetting limit A limit up to which an exporter could have payments outstanding under a short-term policy without the ECA’s prior approval. Berne Union
  dispute A disagreement between the policyholder and the buyer related to any obligations owed by either the policyholder or the buyer under the sales contract that may result in buyer’s refusal of payment or admittance of debt. HKEC
  distributor A merchant in the foreign country who purchases goods from the exporter (often at a discount) and resells them for a profit. The foreign distributor generally provides support and service for the product, relieving the exporter of these responsibilities. U.S. Commercial Service
  documentary (sight) draft Documentary Letter of Credit/Documentary Draft: Document used to protect the interests of both buyer and seller. A letter of credit requires that payment be made on the basis of the presentation of documents to a lender conveying the title and indicating that specific steps have been taken. Letters of credit and drafts may be paid immediately or at a later date. Drafts that are paid on presentation are called sight drafts. Drafts that are to be paid at a later date, often after the buyer receives the goods, are called time drafts or date drafts. U.S. Commercial Service
  documents against acceptance (D/A) Applies to a Collection where the commercial documents are released to the buyer against acceptance of a Bill of Exchange accompanying them. ITFA
  documents against payment (D/P) Applies to a Collection where the documents will be released to the buyer against payment. ITFA
  documents of title Formal commercial document (such as bill of sale, certificate of title, title deed) or shipping document (such as a bill of lading, dock receipt, warehouse receipt) that confers and/or proves ownership. A document of title enables its holder (possessor) to receive, retain, sell, or otherwise dispose of the document and the goods or property listed therein. businessdictionary
  down-payment A down payment is a type of payment made in cash during the onset of the purchase of an expensive good or service. The payment represents a percentage of the full purchase price; in some cases, it is not refundable if the deal falls through because of the purchaser. In most cases, the purchaser makes financing arrangements to cover the remaining amount owed to the seller. Investopedia
    An initial up-front partial payment for the purchase of expensive items such as a car or a house. It is usually paid in cash or equivalent at the time of finalizing the transaction.  wikipedia
  drawdown The act of borrowing under a loan agreement on a particular day. practicallaw
    1. Banking: Transfer of funds from one account to another on the instructions of an account holder.
2. Borrowing: To write checks on, or withdraw funds from, a loan facility. From the lender's perspective, it is a takedown. 		businessdictionary
    A drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund. A drawdown is usually quoted as the percentage between the peak and the subsequent trough.  Investopedia
  drawdown date A drawdown date is a date on which funds are borrowed under a loan agreement. practicallaw
  drawer Maker or writer of a bill of exchange (check, draft, letter of credit, etc.) who directs the drawee (such as a bank) to pay the stated amount to a third party (the payee). In documentary credit, the drawer is the beneficiary of a letter of credit. Also called writer. businessdictionary
  drawing period The specified time period after approval of a line of credit during which the borrower can draw on the credit line. investorwords
  due date, maturity date The date that payment is due by the buyer in accordance with the relevant sales contract. HKEC
    Date by which the buyer must pay their debt according to the sales contract or invoice. ICISA
  due diligence Due diligence is an investigation or audit of a potential investment or product to confirm all facts, that might include the review of financial records. Due diligence refers to the research done before entering into an agreement or a financial transaction with another party. Investopedia
  duty of disclosure The duty of every person seeking insurance or reinsurance to inform the insurer/reinsurer from whom a quotation for insurance/reinsurance is sought of every material fact. The duty arises when seeking new insurance/reinsurance, when seeking a variation of cover (but only as regards a change in risk where the carrier is the same as before) and at renewal (but only as regards a change in risk where the carrier is the same as before). The scope of the duty may be modified by the terms of a proposal form. Should a person seeking insurance/reinsurance fail to disclose a material fact then this may lead to the avoidance of the relevant insurance or reinsurance by the underwriter. The consequences of non-disclosure may be modified by the terms of the relevant insurance/reinsurance. Lloyd's of London Glossary
  duty to notify Obligation of the insured to notify the insurer of changes of insurable turnover as indicated on the applications form for the policy, adverse information or overdue accounts. ICISA
  effective date of contract In contract law, the effective date is the date that an agreement or transaction between or among signatories becomes binding.  Investopedia
  effectiveness, validity 1. General: Period for which an agreement, bid or offer, claim, document, etc., remains in force.
 2. Banking: Period for which a letter of credit remains effective and during which its beneficiary must meet all its requirements.
 3. Degree to which an instrument, selection process, statistical technique, or test measures what it is supposed to measure. 		businessdictionary
  electronic exchange of information (EEI) Electronic Export Information (EEI), formerly known as Shipper’s Export Declaration:
Document used to control exports and act as a source document for official U.S. export statistics. EEI is required for shipments when the value of the commodities, classified under any single Schedule B number, is more than $2,500. EEI must be prepared and submitted, regardless of value, for all shipments requiring an export license or destined for countries restricted by the Export Administration Regulations. 		U.S. Commercial Service
  endorsement An insurance policy document which varies or supplements the terms and conditions of the policy. HKEC
    Form added to an insurance policy, to modify its terms;
Signature on a negotiable instrument, such as a check;
Blank endorsement, a signature given without indicating the instrument's payee. 		wikipedia
    Written declaration on a negotiable instrument, whereby the endorser hands all rights to the document over to the endorsee. Berne Union
    A signature authorizing the legal transfer of a negotiable instrument between parties is an endorsement; Amendments to contracts or documents such as life insurance policies or driver's licenses. Investopedia
  endorsement (to a policy) An insurance endorsement is an amendment or addition to an existing insurance contract which changes the terms or scope of the original policy. Endorsements may also be referred to as riders. An insurance endorsement may be used to add, delete, exclude or otherwise alter coverage. An insurance endorsement may be issued mid-term, at the time of purchase, or at renewal. The insurance endorsement is a legally binding amendment to the insurance contract. thebalance
    A provision added to an insurance contract altering its scope or application. Berne Union
  endorsement/guarantee (of a bill), aval An unconditional, irrevocable, and freely assignable/transferable guarantee to pay on the due date, added to a Bill of Exchange or Promissory Note by writing the words ‘For Aval’ or ‘Per Aval’ or similar. Avals are normally only permitted in civil law countries and not in countries whose law on negotiable instruments stem from English law. ITFA
    An aval, or financial guarantee, is a bank guarantee that assumes the customer’s burden of debt and works much like a guarantee. If the customer is not able to settle their debt, the bank pays. Banks often demand collateral for guarantees. OEKB
    A guarantee by a third party (normally a bank) to assume the burden of a debt in the event of a default. An aval usually takes the form of an endorsement "per aval" and signature from the bank on the back of a bill of exchange or promissory note. This then puts the bank broadly into the position of an issuing bank under a letter of credit. The legal enforceability of an aval may vary from country to country but should always be checked in advance. Such bills and notes are widely used in forfaiting. NZECO
  endorser An endorser is a person who is authorized to sign a negotiable security in order to transfer ownership from one party to another or to approve the terms and conditions of a contract. Endorsing a check before it is cashed or deposited is the most common and widely known example, but an endorser is also required to complete such transactions as transferring a car title or trading a financial security. Investopedia
  enforcement, execution Application of a law or regulation, or carrying out of an executive or judicial order. businessdictionary
  environmental impact assessment
 (EIA) 		An Environmental Impact Statement (EIS) is a report addressing the potential effects on the environment of a proposed federal government project. The public may comment on an EIS while it is in its draft stage and the comments may be taken into consideration when the EIS is being finalized. Investopedia
  equator principles The Equator Principles (EPs) is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decision-making. Equator Principles
  escrow account A bank account set up to hold in trust funds in relation to a specific purpose. ITFA
    A financial instrument held by a third party on behalf of the other two parties in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled. Securities, funds and other assets can be held in escrow. NZECO
  event of default An event of default is a predefined circumstance that allows a lender to demand full repayment of an outstanding balance before it is due. In many agreements, the lender will include a contract provision covering events of default to protect itself in case it appears that the borrower will not be able to or does not intend to continue repaying the loan in the future. An event of default enables the lender to seize any collateral that has been pledged and sell it to recoup the loan. Investopedia
  exchange control Exchange controls are government-imposed limitations on the purchase and/or sale of currencies. These controls allow countries to better stabilize their economies by limiting in-flows and out-flows of currency, which can create exchange rate volatility. Not every nation may employ the measures, at least legimately; the 14th article of the International Monetary Fund's Articles of Agreement allows only countries with so-called transitional economies to employ exchange controls. Investopedia
  exchange risk The risk of fluctuations in the currency exchange rate which results in the monetary loss of a company. HKEC
    Fluctuation in the buyer’s currency against another currency, which may affect the buyer’s financial ability to pay its obligations. ICISA
    The losses that an international financial transaction may incur due to currency fluctuations. Also known as currency risk, FX risk and exchange-rate risk, it describes the possibility that an investment’s value may decrease due to changes in the relative value of the involved currencies. Investopedia
  exchange risk insurance Insurance to an exporter, who offers in foreign currency, against the risk that the exchange rate of the currency changes during the tender period. ATRADIUS
  exclusion/limitation of liability A limitation clause, also called a limitation of liability clause, is a stipulation in an agreement that helps ensure that a company is not held liable for more than they agreed to be responsible for. A legal provision included in a contract, which limits the level of exposure the company will face in the event of a claim or lawsuit filed against them. In the event it's enforced, the liability clause will essentially ‘cap' how much the company is required to pay in damages, should they be held responsible for failing to perform an item stipulated in the contract. upcounsel
  export credit insurance An insurance product whereby the insurer provides insurance against a commercial and political risk related to payment obligations in an export transaction. EUROPEAN COMMISSION
  exposure, outstandings The total amount underwritten by the insurer as cover on a buyer, a country or under a policy or all policies. ICISA
    The commitment plus the sum insured of insurance and guarantee commitments in principle (ICP). SERV
  expropriation The act of a government taking property away from its owner(s). ICISA
    A form of political risk implying expropriation, nationalisation, or seizure of investment or assets of the project. ATI
    Expropriation is the act of a government taking privately owned property against the wishes of the owners, ostensibly to be used for the benefit the overall public. Investopedia
  extension of due date, deferral of payment  Granting of a credit term longer than originally agreed upon in the sales contract. ICISA
  feasibility study A study made of a project to see whether it would be technically possible to carry out.A project considered feasible does not necessarily mean that it is viable. Berne Union
    A feasibility study is an analysis that takes all of a project's relevant factors into account—including economic, technical, legal, and scheduling considerations—to ascertain the likelihood of completing the project successfully. Project managers use feasibility studies to discern the pros and cons of undertaking a project before they invest a lot of time and money into it.
 Feasibility studies also can provide a company's management with crucial information that could prevent the company from entering blindly into risky businesses. 		Investopedia
  final acceptance Final Acceptance (FA) is an owner’s acceptance of the facility or project from the contractor after the entire work is completed, tested and inspected in accordance with the contract requirements. When the Final Acceptance is achieved, owner releases the Final Acceptance certificate to the contractor, and the plant is a permanently handed over to the owner. theprojectdefinition
  finance/financing charges In United States law, a finance charge is any fee representing the cost of credit, or the cost of borrowing. It is interest accrued on, and fees charged for, some forms of credit. It includes not only interest but other charges as well, such as financial transaction fees.
 In personal finance, a finance charge may be considered simply the dollar amount paid to borrow money, while interest is a percentage amount paid such as annual percentage rate (APR).  		wikipedia
  financial close Stage in a financial agreement where conditions have been satisfied or waived, documents executed, and draw-downs become permissible. businessdictionary
  financial credit Financial Credit means a Letter of Credit used directly or indirectly to cover a default in payment of any financial contractual obligation the Company and its Subsidiaries, including insurance-related obligations and payment obligations under specific contracts in respect of Indebtedness undertaken by the Company or any Subsidiary, and any Letter of Credit issued in favor of a bank or other surety who in connection therewith issues a guarantee or similar undertaking, performance bond, surety bond or other similar instrument that covers a default in payment of any such financial contractual obligations, that is classified as a financial standby Letter of Credit by the FRB or by the OCC. lawinsider
  financial lease A finance lease (also known as a capital lease or a sales lease) is a type of lease in which a finance company is typically the legal owner of the asset for the duration of the lease, while the lessee not only has operating control over the asset, but also has a some share of the economic risks and returns from the change in the valuation of the underlying asset. wikipedia
    Type of lease which is effectively a substitute for a contract of sale, as compared to an operational lease which is designed to produce earnings on a capital asset. Berne Union
  financing institution A financial institution(FI) is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange. Financial institutions encompass a broad range of business operations within the financial services sector including banks, trust companies, insurance companies, brokerage firms, and investment dealers. Virtually everyone living in a developed economy has an ongoing or at least periodic need for the services of financial institutions. Investopedia
  first (ship) mortgage A first mortgage is the primary lien on the property that secures the mortgage. A first mortgage is the primary loan that pays for the property and it has priority over all other liens or claims on a property in the event of default.
 A first mortgage is not the mortgage on a borrower’s first home; it is the original mortgage taken on any one property. (Also called First Lien). 		Investopedia
  fixed interest rate A fixed interest rate is an unchanging rate charged on a liability, such as a loan or mortgage. It might apply during the entire term of the loan or for just part of the term, but it remains the same throughout a set period. Mortgages can have multiple interest-rate options, including one that combines a fixed rate for some portion of the term and an adjustable rate for the balance. These are referred to as “hybrids.” Investopedia
  fixed price clause The fixed price leg of a swapis one that is based on an unchanging interest rate. A plain vanilla interest rate swap is an exchange of two streams of cash flows. Both streams are based on the same amount of notional principal, but one stream pays interest on that notional principal at a fixed rate (or fixed price) and one stream pays interest on the notional principal at a floating or variable rate. This is also known as a fixed-for-floating swap. The fixed price leg is that one which entails the fixed rate.
 A fixed-for-fixed swap can occur in an exchange between two currencies where both legs carry a fixed interest rate. 		Investopedia
  flat rate (premium) 1. A fixed rate not subject to any subsequent adjustment.
2. A reinsurance premium rate applicable to the entire premium income derived by the ceding company from the business ceded to the reinsurer (as distinguished from a rate applicable to excess limits). 		Guy Carpenter
  floating interest rate A floating interest rate is an interest rate that moves up and down with the rest of the market or along with an index. It can also be referred to as a variable interest rate because it can vary over the duration of the debt obligation. This contrasts with a fixed interest rate, in which the interest rate of a debt obligation stays constant for the duration of the loan's term. Investopedia
  force majeure Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations. Investopedia
  foreign exchange Foreign Exchange (forex or FX) is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro. Foreign exchange transactions can take place on the foreign exchange market, also known as the Forex Market.
 The forex market is the largest, most liquid market in the world, with trillions of dollars changing hands every day. There is no centralized location, rather the forex market is an electronic network of banks, brokers, institutions, and individual traders (mostly trading through brokers or banks). 		Investopedia
  foreign exchange market The foreign exchange market is an over-the-counter (OTC) marketplace that determines the exchange rate for global currencies. Participants are able to buy, sell, exchange and speculate on currencies. Foreign exchange markets are made up of banks, forex dealers, commercial companies, central banks, investment management firms, hedge funds, retail forex dealers and investors. Investopedia
  foreign exchange reserves Foreign exchange reserves are assets held on reserve by a central bank in foreign currencies. These reserves are used to back liabilities and influence monetary policy. It includes any foreign money held by a central bank, such as the U.S. Federal Reserve Bank. Investopedia
  foreign investment Foreign investment involves capital flows from one country to another, granting extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment. A modern trend leans toward globalization, where multinational firms have investments in a variety of countries. Investopedia
  forfaiting Forfaiting is the without recourse purchasing of future payment obligations, usually in the form of an instrument such a Letter of Credit or Bill of Exchange, at a discount or at face value in return for a financing charge. ITFA
    The cash purchase of an exporter's receivables (bills of exchange or promissory notes, or simply issued invoices, which the exporter is selling on an open account basis) at a discount. The forfeiter – the purchaser of the receivables – becomes the entity to whom the importer is obliged to pay its debt. By purchasing these receivables - which are usually guaranteed by the importer's bank - the forfaiter frees the exporter from credit and from the risk of not receiving payment from the importer who purchased the goods on credit. Unlike factoring, forfaiting is normally used for receivables against payments which are due over a longer term (90 days to up to 7 years). NZECO
    Forfaiting is a means of financing that enables exporters to receive immediate cash by selling their medium and long-term receivables—the amount an importer owes the exporter—at a discount through an intermediary. The exporter eliminates risk by making the sale without recourse. It has no liability regarding the importer's possible default on the receivables. Investopedia
  forfeiture (of rights) Forfeiture is the loss of any property without compensation as a result of defaulting on contractual obligations, or as a penalty for illegal conduct. Forfeiture, under the terms of a contract, refers to the requirement by the defaulting party to give up ownership of an asset, or cash flows from an asset, as compensation for the resulting losses to the other party. When mandated by law, as a punishment for illegal activity or prohibited activities, forfeiture proceedings may be either criminal or civil. The process of forfeiture often involves proceedings in a court of law. Investopedia
  forward contract A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging. Investopedia
  forward exchange cover A forward exchange contract is a special type of foreign currency transaction. Forward contracts are agreements between two parties to exchange two designated currencies at a specific time in the future. These contracts always take place on a date after the date that the spot contract settles and are used to protect the buyer from fluctuations in currency prices. Investopedia
    A forward exchange contract, commonly known as a FEC or forward cover, is a contract between a bank and its customer, whereby a rate of exchange is fixed immediately, for the buying and selling of one currency for another, for delivery at an agreed future date. Economic, technical and political factors can cause upheaval in the foreign exchange markets, resulting in volatile exchange rates that can hamper international trade. The forward exchange contract (FEC) is an effective hedging tool tantamount to an insurance policy, in that it protects traders and clients from unfavourable exchange rate fluctuations which might occur between the contract date and the payment date.
The exact value of the import and export order can be calculated on the day it is processed and thus, budgeting and costing are accurate. Both parties can make use of forward exchange contracts and this kind of instrument caters for a diverse range of commercial and financial transactions. 		0
  forward exchange market Forward rates are usually negotiated for delivery one month, three months, or one year after the date of the contract's creation. They usually differ from the spot rate and from each other. If one currency is expected to depreciate against a second, it is said the first currency is selling at a discount on the forward market. The term selling at a premium on the forward market is used for cases in which appreciation is expected. wikipedia
  forwarding agent, shipping agent A shipping agent is a person who deals with the transactions of a ship in every port that the ship visits or docks. In simple terms, it is a shipping agent who with a local expert acts as a representative of the owner of the ship and carries out all essential duties and obligations required by the crew of the ship.
 It is the ship agent who is entrusted with taking care of every need and requirement of the crew like getting local currency, getting the mail, any repairmen in case the ship requires major repairing, refilling the food and water containers and many other such duties. 		marineinsight
  framework agreement In the context of soft loans, framework agreements are agreements on financial cooperation with selected soft loan countries. The framework agreement is concluded between the government and the respective partner country.  OEKB
    In the context of negotiations, a framework agreement is an agreement between two parties that recognizes that the parties have not come to a final agreement on all matters relevant to the relationship between them, but have come to agreement on enough matters to move forward with the relationship, with further details to be agreed to in the future.
 In the context of procurement, a framework agreement is an agreement between one or more businesses or organisations, "the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged". 		wikipedia
  free alongside ship (FAS) A seller’s price for the goods, including the charge for delivery of the goods alongside at the named port of export. The seller handles the cost of wharfage, while the buyer is accountable for the costs of loading, ocean transportation, and insurance. It is the seller’s responsibility to clear the goods for export. U.S. Commercial Service
    An Incoterm which signifies that the exporter pays for transportation of the goods to the port of shipment, at which time title (ownership and risk) passes to the buyer. The buyer pays loading costs, freight, insurance, unloading costs and transportation from the port of destination to its factory. NZECO
    Free alongside (FAS) is a term used in international trade contracts that indicates that the seller must arrange for the goods purchased to be delivered next to a particular vessel in a particular port in order to be ready for transfer to a waiting ship.
 Free alongside is one of a number of internationally recognized commercial terms used by businesses engaged in trade. 		Investopedia
  free on board (FOB) An international commercial term (Incoterm) that means free on board and is used in international sales contracts. In an FOB contract, a buyer and a seller agree on a designated FOB point. The seller assumes the cost of having goods packaged and ready for shipment from the FOB point, whether it is the seller’s own place of business or some intermediate point. The buyer assumes the costs and risks from the FOB point, including inland transportation costs and risks in the exporting country, as well as all subsequent transportation costs, including the costs of loading the merchandise on a vessel. If the contract stipulates “FOB vessel,” the seller bears all transportation costs to the vessel named by the buyer, as well as the costs of loading the goods on that vessel. The same principle applies to the abbreviations FOR (free on rail) and FOT (free on truck). U.S. Commercial Service
    An Incoterm that represents an exporter's requirement to deliver the goods to the ship, airline or other agreed mode of transport, at which time title (ownership and risk) passes to the buyer. The exporter pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays freight, insurance, unloading costs and transportation from the port of destination to its factory. NZECO
    Contracts involving international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery, payment, when the risk of loss shifts from the seller to the buyer, and who pays the costs of freight and insurance. The most common international trade terms are Incoterms, which the International Chamber of Commerce (ICC) publishes, but firms that ship goods in the United States must also adhere to the Uniform Commercial Code (UCC). Since there is more than one set of rules, the parties to a contract must expressly indicate which governing laws they used for a shipment. Investopedia
  free on rail (FOR) Pricing term indicating that the seller will put the goods on a railroad car (called 'truck' in the US) at a named loading point without any extra charge. Also called free on truck. businessdictionary
  full payout lease, full payment lease Lease arrangement in which a seller or owner (the lessor) of the leased asset or property recovers the full cost (original cost plus profit margin, interest, and other charges) of the item. Lease period (term) for such leases is usually equal to the economic life of the asset. A capital lease is a full payout lease whereas an operating lease is not. businessdictionary
    (Type of lease which is effectively a substitute for a contract of sale, as compared to an operational lease which is designed to produce earnings on a capital asset) 0
  general conditions (of a policy) Contract conditions. These conditions also include the rights and responsibilities of the parties involved. businessdictionary
    The section of an insurance policy that identifies general requirements of an insured and the insurer on matters such as loss reporting and settlement, property valuation, other insurance, subrogation rights, and cancellation and nonrenewal. The policy conditions are usually stipulated in the coverage form of the insurance policy. IRMI
  goods in transit Goods in transit refers to merchandise and other types of inventory that have left the shipping dock of the seller, but not yet reached the receiving dock of the buyer. The concept is used to indicate whether the buyer or seller of goods has taken possession, and who is paying for transport. Ideally, either the seller or the buyer should record goods in transit in its accounting records. accountingtools
  governing/applicable law Applicable Law means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise. lawinsider
  government loan Government-backed offers loans programs through different departments that support individuals, communities and businesses according to their unique needs. These loans provide capital for those that might not qualify for a loan on the open market.
Government loans may or may not be funded by the government, but all government loans are secured—or guaranteed—by the government. When the government funds a loan, it provides the loan capital. This money originates from taxpayers.
When the government only secures a loan, it effectively cosigns with the borrower on funds provided by designated lenders like private banks or government-sponsored enterprises (GSEs). This means if the end-borrower defaults on loan repayment, the government has to repay the lender.  		Investopedia
    A government-backed loan is a loan subsidized by the government, which protects lenders against defaults on payments, thus making it a lot easier for lenders to offer potential borrowers lower interest rates. Wikipedia
  grace period A grace period is a set length of time after the due date during which payment may be made without penalty. A grace period, typically of 15 days, is commonly included in mortgage loan and insurance contracts. Investopedia
    (A period allowed after delivery or commissioning deferring the commencement of repayment beyond the normal six months maximum after the Berne Union starting point of credit) 0
  grant element The degree of concessionality of a loan is measured by its “grant element”. The grant element is defined as the difference between the loan’s nominal value (face value) and the sum of the discounted future debt-service payments to be made by the borrower (present value), expressed as a percentage of the loan’s face value. Whenever the interest rate charged for a loan is lower than the discount rate, the present value of the debt is smaller than its face value, with the difference reflecting the (positive) grant element of the loan. worldbank
  greenfield A green-field (also "greenfield") investment is a type of foreign direct investment (FDI) in which a parent company creates a subsidiary in a different country, building its operations from the ground up. Investopedia
  guarantee A document signed by the Guarantor in which such entity commits as Primary Obligor to pay the payment claim if the Obligor fails to make such payment on the due date. ITFA
  guarantee period, duration of the guarantee in civil law:
 (1) The period of time within which a buyer who has detected hidden deficiencies in a product (merchandise) may lay claims against the supplier (seller).
 (2) The period of time for which the producer guarantees the stability of the quality indexes of the article. 		thefreedictionary
  guarantor (third party) Person, bank or financial institution who gives a guarantee for the Obligor. ITFA
    An entity that guarantees repayment of a debt obligation under a contract or loan agreement. This can be a government, a bank, a parent company, or an individual. NZECO
    A guarantor is a person who guarantees to pay a borrower's debt in the event the borrower defaults on a loan obligation. A guarantor acts as co-signer because they pledge their own assets or services in case the original debtor cannot perform their obligations. Investopedia
  handling fee A handling fee is an amount charged to a customer on top of the order subtotal and shipping fees. It covers the cost of expenses related to fulfillment, such as warehouse storage cost, shipment cost, and packing cost. Handling fees are charged once per order but not to each individual product in an order. tradegecko
  hard currency Hard currency refers to money that is issued by a nation that is seen as politically and economically stable. Hard currencies are widely accepted around the world as a form of payment for goods and services and may be preferred over the domestic currency. Investopedia
  hedging A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security. Investopedia
  holder Holder is a term used to any person that has in his custody a promissory note, bill of exchange or cheque. It should be entitled in his own name. Holder means a person entitled in his own name to the possession of a negotiable instrument and to receive the amount due on it. wikipedia
  horizon of risk, risk period The manufacturing period plus the credit period. EUROPEAN COMMISSION
  import ban A ban on the importation of certain products from a certain country into the home country. collinsdictionary
  import licence An import license is a document issued by a national government authorizing the importation of certain goods into its territory. Import licenses are considered to be non-tariff barriers to trade when used as a way to discriminate against another country's goods in order to protect a domestic industry from foreign competition.
 Each license specifies the volume of imports allowed, and the total volume allowed should not exceed the quota. Licenses can be sold to importing companies at a competitive price, or simply a set fee. However, it is argued that this allocation method provides incentives for political lobbying and bribery. Governments may put certain restrictions on what is imported as well as the amount of imported goods and services. For example, if a business wishes to import agricultural products such as vegetables, then the government may be concerned about the impact of such importations of the local market and thus impose a restriction. 		wikipedia
  indemnification Indemnification is a type of agreement wherein one party agrees not to hold another party liable for legal causes of action in the future. Usually, only one party “indemnifies” the other party. It is somewhat similar to a liability waiver, but may be more specific. legalmatch
  indemnify, pay a claim To protect another person against loss or damage. businessdictionary
    To make compensation to an entity, person, or insured for incurred injury, loss, or damage. IRMI
  indemnity, claim paid Compensation to a party for a loss or damage that has already occurred, or to guarantee through a contractual clause to repay another party for loss or damage that might occur in the future. The concept of indemnity is based on a contractual agreement made between two parties in which one party (the indemnitor) agrees to pay for potential losses or damages caused by the other party (the indemnitee). IRMI
    Payment made as compensation to the insured party (or named loss payee) for an insured loss. Such payment is made after the claims waiting period, usually 180 days. ATI
  insolvency A judicial or administrative procedure whereby the assets and affairs of the buyer are made subject to control or supervision by the court or a person or body appointed by the court or by law, for the purpose of reorganisation or liquidation of the buyer or of the rescheduling, settlement or suspension of payment of its debts. ICISA
    Insolvency is a term for when an individual or organization can no longer meet its financial obligations to its lenders as debts become due. Before an insolvent company or person gets involved in insolvency proceedings, it will likely be involved in informal arrangements with creditors, such as setting up alternative payment arrangements. Insolvency can arise from poor cash management, a reduction in cash inflow, or an increase in expenses. Investopedia
  instrument of payment Any personalised device or personalised set of procedures agreed between the banking customer and the firm used by the banking customer to initiate an instruction or request by the banking customer to the firm to make a payment. fca
  insured Also known as Policyholder. The party that purchases the insurance policy and assumes rights and obligations under the policy. HKEC
  insured/covered amount Insured Amount means (i) for any Distribution Date, an amount equal to the excess, if any of (a) the Scheduled Payments (as such term is defined in the Policy) for such Distribution Date minus (b) sum, without duplication and in each case to the extent available to pay such Scheduled Payments in accordance with the priorities set forth herein and in the Indenture, of (w) all Available Funds for the related Collection Period plus (x) Additional Funds Available, if any, for such Distribution Date plus (y) all other funds on deposit in the Collection Account, the Lockbox Account, the Spread Account and any other Trust Account that are available for payment of Scheduled Payments on such Distribution Date plus (z) any other amounts available pursuant to the Basic Documents to pay the related Scheduled Payments on such Distribution Date, and (ii) with respect to any Preference Payment Date (as such term is defined in the Policy), the related Preference Amount (as such term is defined in Section 6.2(a)).

Note: Although commonly Insured amount and Covered amount are used interchangeably, it may not refer exactly the same. An amount can be insured, but not covered, namely if the insured has not complied with the policy conditions 		lawinsider
  interest rate support, interest subsidy An arrangement between a government and banks or other financial institutions which allows the provision of fixed rate export finance at or above the CIRR. i) Line of Credit: a framework, in whatever form, for export credits that covers a series. OECD
  investment An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit. Investopedia
  investment bank An investment bank (IB) is a financial intermediary that performs a variety of services. Most Investment banks specialize in large and complex financial transactions, such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations and acting as a broker or financial adviser for institutional clients.
Some investment banks specialize in particular industry sectors. Many investment banks also have retail operations that serve small, individual customers. 		Investopedia
  invisible exports Outflow of funds from invisibles (services), listed in a country's balance of payments statement. businessdictionary
  irrevocable (documentary) letter of credit (ILC) An irrevocable letter of credit (ILOC) is an official correspondence from a bank that guarantees payment for goods or services being purchased by the individual or entity, referred to as the applicant, that requests the letter of credit from an issuing bank.
 An irrevocable letter of credit cannot be canceled, nor in any way modified, except with the explicit agreement of all parties involved: the buyer, the seller, and the issuing bank. For example, the issuing bank does not have the authority by itself to change any of the terms of an ILOC once it is issued. 		Investopedia
  Isabella clause A standard feature of a Buyer credit, it is a clause under a supply contract that separates the obligations, rights, and responsibilities under the contract from those under the associated loan agreement. It means that the buyer is legally obliged to repay the loan even in the event of the buyer disputing the delivery of the goods or services under the terms of the supply contract. In other words, problems with the contract or project do not give the borrower any right to default or delay payment on the loan or to suspend repayments. NZECO
  issuance/opening of a credit Credit issuance itself is the process by which the issuing bank authorises the confirming bank to issue a confirmation to the benefitting exporter of the credit issuance that the issuing bank’s client will make payment to them. This confirmation (made via a letter of credit) guarantees to the exporter that the importer will pay them on time and in full. In the event that the importer is unable to make that payment, the bank will cover the full or remaining value of the payment to guarantee that the exporter is not out of pocket having invested time and money in producing and shipping the goods requested in the contract. tradefinanceglobal
  issuing bank The bank or entity that opens a letter of credit at the request of an applicant/importer, or on its own name. ITFA
    Issuing bank is the bank that issues the Letter of credit at the request of an applicant and undertakes to honour a complying presentation which is in accordance with the terms and conditions of the letter of credit. NZECO
  joint and several guarantee a legal guarantee undertaken by multiple people in which any one guarantor can be held fully responsible for repaying the whole of the debt despite each guarantor only being partially responsible for that debt. collinsdictionary
  joint financing, cofinancing Two or more banks or other lending institutions together financing the same project. businessdictionary
    the provision of funds for a project, etc, from two or more sources. collinsdictionary
  joint insurance Where two or more people with separate insurable interests in the same property insure with the same insurer under a single insurance contract. In the event of a claim, neither joint insured can recover more than their individual loss nor can the insurer subrogate against either of them. The joint insurance policy recognises a relationship between the joint insureds and will usually anticipate how their insured losses will be apportioned and calculated. practicallaw
  joint venture Independent business formed cooperatively by two or more parent companies. This type of partnership is often used to avoid restrictions on foreign ownership and for longer term arrangements that require joint product development, manufacturing, and marketing. U.S. Commercial Service
    The partnership between companies or organisations. ITFA
    A partnership set up between two or more companies, usually joining specific areas of their activities together to enhance their capabilities and competitiveness in particular areas or markets or to undertake a specific project. HKEC
    A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses, and costs associated with it. However, the venture is its own entity, separate from the participants' other business interests. Investopedia
  jointly (liable) The basis on which co-obligors who have together undertaken the same obligation to a third party are considered to have assumed liability (contrast with joint and several liability, or several liability). If parties have joint liability, then they are each fully liable for the performance of the relevant obligation. Performance by one discharges the other. Joint liability applies whether or not the obligation is indivisible. It is generally desirable for the third party to bring proceedings (whether for recovery of a debt or for specific performance) against all co-obligors.  practicallaw
  jointly and severally (liable) Jointly and severally is a legal term that is used to describe a partnership or any other group of individuals in which each individual named shares responsibility equally. For example, if a judge rules that a number of people are jointly and severally liable for injuries suffered by a plaintiff, any one of those people may be pursued for payment of the full amount of the judgment.

As the word severally implies, the phrasing of some contractual agreements may specify that some parties have proportional liability. For example, a partner with a 10% stake in a business may have a liability that is proportional to that 10% investment. 		Investopedia
  landed cost The total cost of a landed shipment including purchase price, freight, insurance, and other costs up to the port of destination. In some instances, it may also include the customs duties and other taxes levied on the shipment. businessdictionary
  Aircraft Sector Understanding (ASU) The Aircraft Sector Understanding(ASU), which is a "gentlemen’s agreement", applies to officially supported export credits relating to civil aircraft. Although integrated as a sectoral annex into the Arrangement, it is a self-contained agreement, that operates with no recourse to any of the provisions of the Arrangement. The Participants to the ASU are slightly different from the Participants to the Arrangement. They are: Australia, Brazil, Canada, the European Union, Japan, Korea, New-Zealand, Norway, Switzerland and the United States. OECD
  lead bank, lead agent bank A lead bank is a bank that oversees the arrangement of loan syndication. The lead bank receives an additional fee for this service, which involves recruiting the syndicate members and negotiating the financing terms. In the Eurobond market, the lead bank acts in an agent capacity for an underwriting syndicate. Investopedia
  leasing The use of goods in exchange for periodic rentals paid to the owner. ITFA
  legal action The process of enforcing a nation's law's by proceeding within court system. One individual or entity prosecutes another for a criminal action or civil wrong doing, or to protect an individual or entity's rights from being violated. businessdictionary
  legal opinion A legal opinion recommended when dealing with unfamiliar territories given that there are local variations to the law relating to negotiable instruments. ITFA
    In commercial transactions, particularly in the context of financing, the lender will require an opinion as to the corporate capacity of the borrower and enforceability of the transaction documents the borrower is intended to enter into. This type of opinion is generally issued by the borrower's counsel or the lender's counsel, depending on the ethical rule governing the issuance of those opinion applicable to the jurisdiction. When the subject company is from a foreign jurisdiction, the opinion will often be referred to as a foreign legal opinion. Wikipedia
  legal title Clear and enforceable title representing legal ownership of an asset or property. businessdictionary
  lender A lender is an individual, a public or private group, or a financial institution that makes funds available to another with the expectation that the funds will be repaid. Repayment will include the payment of any interest or fees. Repayment may occur in increments (as in monthly mortgage payment) or as a lump sum. Investopedia
  lessee A lessee is a person who rents land or property from a lessor. The lessee is also known as the "tenant" and must uphold specific obligations as defined in the lease agreement and by law. The lease is a legally binding document and if the lessee violates its terms he or she could be evicted. Investopedia
  lessor A lessor, in its simplest expression, is someone who grants a lease. As such, a lessor is the owner of an asset that is leased under an agreement to a lessee. The lessee makes a one-time or periodic payments to the lessor in return for the use of the asset. Investopedia
  letter of comfort A letter of comfort is a written document that provides a level of assurance that an obligation will ultimately be met. In its traditional context, a letter of comfort is given to organizations or persons of interest by external auditors regarding statutory audits, statements, and reports used in a prospectus. The letter of comfort will be attached to the preliminary statements as assurance that it will not be materially different from the final version. Investopedia
  letter of credit Instrument issued by a bank on behalf of an importer that guarantees an exporter payment for goods or services, provided that the terms of the credit are met. A letter of credit issued by a foreign bank is sometimes confirmed by a U.S. bank. This confirmation means that the U.S. bank (the confirming bank) adds its promise to pay to that of the foreign bank (the issuing bank). A letter of credit may be either irrevocable, in which case it cannot be changed unless both parties agree, or revocable, in which case either party may unilaterally make changes. A revocable letter of credit is inadvisable as it carries many risks for the exporter. U.S. Commercial Service
    Any arrangement whereby an entity (the issuing bank) acting at the request and on the instructions of a customer (the applicant for the credit who is usually an importer) is to make payment to or to the order of a third party (the Beneficiary), or is to pay or accept bills of exchange, drawn by the Beneficiary. Normally governed by the UCP. ITFA
    A letter of credit is a payment instrument agreed between an exporter and an importer. The importer's bank undertakes to provide the stipulated amount by submitting the required documents. The exporter then receives their payment independently of the importer. OEKB
    A document issued by a bank guaranteeing payment, on behalf of a buyer of goods, when all the conditions stated in the letter have been met. The importer's bank is often named “the issuing bank” (or “the opening bank”), while the bank in the exporter's country is named “the advising bank” and the exporter is “the beneficiary”. Due to the nature of international dealings including factors such as distance, differing laws in each country and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. The issuing bank also acts on behalf of the buyer by ensuring that the exporter will not be paid until the bank receives a confirmation that all the terms in the letter of credit have been fully met. Therefore, it is important that exporters carefully read all the conditions and requirements, as these can sometimes be onerous. Your bank's Trade Finance Manager will be proficient in the nuances within letter of credit usage. NZECO
    A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.
 Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. 		Investopedia
  letter of intent A letter of intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. The letter outlines the chief terms of a prospective deal. Commonly used in major business transactions, LOIs are similar in content to term sheets. One major difference between the two, though, is that LOIs are presented in letter formats, while term sheets are listicle in nature. Investopedia
  liability (contractual) A liability, in general, is an obligation to, or something that you owe somebody else. Liabilities are defined as a company's legal financial debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services. Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, and accrued expenses.
 In general, a liability is an obligation between one party and another not yet completed or paid for. In the world of accounting, a financial liability is also an obligation but is more defined by previous business transactions, events, sales, exchange of assets or services, or anything that would provide economic benefit at a later date. Liabilities are usually considered short term (expected to be concluded in 12 months or less) or long term (12 months or greater).
 Liabilities are also known as current or non-current depending on the context. They can include a future service owed to others; short- or long-term borrowing from banks, individuals, or other entities; or a previous transaction that has created an unsettled obligation. The most common liabilities are usually the largest like accounts payable and bonds payable. Most companies will have these two line items on their balance sheet, as they are part of ongoing current and long-term operations. 		Investopedia
  LIBOR (London Interbank Offered Rate) London Inter Bank Offered Rate. ITFA
    The “London inter-bank offer rate” is the rate of interest at which banks borrow funds, in marketable size, from other banks in the London inter-bank market. In other words, LIBOR is the international rate at which the world's most preferred borrowers are able to borrow money. Accordingly, LIBOR is also used as a benchmark rate upon which rates for less preferred borrowers are based. For example, a large company with a very good credit rating may be able to borrow money for one year at LIBOR plus 5 basis points. NZECO
    The London Inter-bank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans.
 LIBOR, which stands for London Interbank Offered Rate, serves as a globally accepted key benchmark interest rate that indicates borrowing costs between banks. The rate is calculated and published each day by the Intercontinental Exchange (ICE). 		Investopedia
  license agreement A licensing agreementis a written contract by which a property owner permits another party to use that property under a specific set of parameters. Investopedia
  lien, asset-based security, collateral (security) A security which is supported by assets such as mortgages, car loans, credit card receivables, owned by the issuer of the security and usually placed with a trustee. ITFA
    Property or other assets that a borrower offers a lender to secure a loan. HKEC
    Assets, rights or guarantees pledged as security by the buyer or by a third party on behalf of the buyer for the extension of credit by the insured to the buyer. ICISA
    A lien is a legal right granted by the owner of property, by a law or otherwise acquired by a creditor. A lien serves to guarantee an underlying obligation, such as the repayment of a loan. If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien. Investopedia
  line of credit A framework, in whatever form, for export credits that covers a series of transactions which may or may not be linked to a specific project. OECD
    A line of credit (LOC) is an arrangement between a financial institution—usually a bank—and a customer that establishes the maximum loan amount the customer can borrow. The borrower can access funds from the line of credit at any time as long as they do not exceed the maximum amount (or credit limit) set in the agreement and meet any other requirements such as making timely minimum payments. Investopedia
  Lloyds of London Depending on the context this term may refer to - (a) the society of individual and corporate underwriting members that insure and reinsure risks as members of one or more syndicates. Lloyd’s is not an insurance company; (b) the underwriting room in the Lloyd’s Building in which managing agents underwrite insurance and reinsurance on behalf of their syndicate members. In this sense Lloyd’s should be understood as a market place; or (c) the Corporation of Lloyd’s which regulates and provides support services to the Lloyd’s market. Lloyd's Glossary
  framework credit (Means any understanding or statement, in whatever form, whereby the intention to grant credit benefiting from official support up to a ceiling and in respect of a series of transactions, linked or not to a specific project, is brought to the attention of the recipient country, the buyer or the borrower, or the financial institution.) 0
  liquidation/winding up (of a company) This is process of “winding-up” or terminating a company, usually but not always, because of insolvency. The process involves the appointment of a Liquidator to sell off all the assets of the company, paying all the liabilities of the company, so far as possible, and distributing any remaining funds, if any, to the owners (shareholders). Liquidation may be Compulsory – as a result of a Court order, or Voluntary – following a meeting and resolution of the shareholders. HKEC
    Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due. As company operations end, the remaining assets are used to pay creditors and shareholders, based on the priority of their claims. Investopedia
  liquidated damages (LDs) Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is a provision that allows for the payment of a specified sum should one of the parties be in breach of contract. Investopedia
  litigation Ultimate legal method for settling controversies or disputes between and among persons, organizations, and the State. In litigation process, a case (called suit or lawsuit) is brought before a court of law suitably empowered (having the jurisdiction) to hear the case, by the parties involved (the litigants) for resolution (the judgment). businessdictionary
  local costs Expenditure for goods and services in the buyer's country that are necessary either for executing the exporter's contract or for completing the project of which the exporter's contract forms a part. These exclude commission payable to the exporter's agent in the buying country OECD
    The expenditures incurred for goods or services (excluding any commission payable to the exporter's agent) in the buyer's country that are necessary either for the execution of the exporter's contract or for completing a project of which the exporter's contract forms a part. The proportion of local costs that can be supported on credit terms in an export transaction must not exceed the amount of the advance deposit. NZECO
    Means expenditure, excluding commissions payable to the exporter’s agent in the buying country, for the supply from the buyer’s country of goods and services, that are necessary either for executing the exporter’s contract or for completing the project of which the expoter’s contract forms part. Berne Union
  local currency In economics, a local currency is a currency that can be spent in a particular geographical locality at participating organisations. A regional currency is a form of local currency encompassing a larger geographical area. wikipedia
  loss payee clause The loss payeeis the party to whom the claim from a loss is to be paid. A loss payee can mean several different things; in the insurance industry, the insured or the party entitled to payment is the loss payee. The insured can expect reimbursement from the insurance carrier in the event of a loss. Investopedia
  loss ratio Losses incurred expressed as a percentage of earned premiums. Guy Carpenter
    A loss ratio, in general terms, is the ratio of losses to gains. It is most often put to use in the insurance industry. One example is the ratio of paid insurance claims, including adjustment expenses, to premiums earned. To demonstrate, if a company pays $80 in claims for every $160 in collected premiums, the loss ratio would be 50%.  Investopedia
  lump sum A lump-sum payment is an often large sum that is paid in one single payment instead of broken up into installments. They are sometimes associated with pension plans and other retirement vehicles, such as 401k accounts, where retirees accept a smaller upfront lump-sum payment rather than a larger sum paid out over time.
 Lump-sum payments are also used to describe a bulk payment to acquire a group of items, such as a company paying one sum for the inventory of another business. Lottery winners will also typically have the option to take a lump-sum payout versus yearly payments. 		Investopedia

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