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Glossary

 

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Back-to-Back Letter of Credit (L/C)

Letter of credit issued for the account of the buyer who is already holding an L/C in his or her favor. The back-to-back L/C is issued in favor of the supplier to cover the same shipment as stipulated in the credit already held by the buyer. Terms of both L/Cs, except for the amount and expiration date, are so similar that the same documents presented under the back-to-back credit are subsequently applied against the credit in favor of the buyer. However the buyer/beneficiary of the first credit substitutes this draft and invoice for those presented by the supplier.

 

Bank Acceptance

A bill of exchange will be drawn or accepted by a bank to pay specific bills for the customer when the bill becomes due. Depending on the bank's creditworthiness, the acceptance becomes a financial instrument that can be discounted for immediate payment.

 

Bank Draft

A check drawn by a bank on another bank payable to the seller at the request of the buyer. The check may be denominated in US dollars or most foreign currencies.

 

Bank Guarantee (BG)

Undertaking given by a bank on behalf of a customer to pay the guaranteed party a sum of money if the customer cannot or will not pay. (Not to be confused with the payment undertaking given under a letter of credit).

 

Bank Release

A document issued by a bank, after it has been paid or given an acceptance, giving authority to a person to take delivery of goods.

 

Banker's Acceptance

Short-term financial instrument that is the unconditional obligation of the accepting bank, used to finance trade-related transactions (e.g., importation, exportation, domestic shipment or storage of goods in inventory).

 

Banker's Bank

A bank that is established by mutual consent by independent and unaffiliated banks to provide a clearinghouse for financial transactions.

 

Banker's Draft

A draft payable on demand and drawn by, or on behalf of, a bank itself. A banker's draft is considered cash and cannot be returned unpaid.

 

Bankleitzahl (BLZ)

German Bank Code (similar to a routing number).

 

Base Currency

The currency chosen as the settlement currency between Fulton Bank and its customer. Unless otherwise indicated, our base currency is always U.S. dollars.

 

Base Currency Equivalent

The corresponding foreign currency being traded (e.g. purchased by or sold to) against the base currency.

 

Basket of Currencies

A composite unit consisting of weighted amounts of the currencies of a group of designated nations.

 

BBL

Barrel.

 

BCL

Bank comfort letter.

 

Bearer

A person who possesses a bearer document and who is entitled to payment of funds or transfer of title to property on presentation of the document to the payee or transferor. A buyer, for example, who presents bearer documents of title (such as a bill of lading) to a shipper that transported the goods is entitled to receive the shipment. A seller who presents to a bank a negotiable instrument, such as a check, that is payable to the bearer is entitled to payment of the funds.

 

Bearer Document

A negotiable instrument, commercial paper, document of title, or security that is issued payable or transferable on demand to the individual who holds the instrument, or one that is endorsed in blank. A bearer document authorizes the payment of funds or the transfer of property to the bearer when the bearer presents the document to the person, such as the bank or shipper, that is holding the funds or property.

 

Beneficiary

The individual or company to whom money is payable according to terms of a letter of credit.

 

BIC Code

Another name for a SWIFT Code.

 

Bid Bond / Bid Guarantee

A guarantee issued by a bank on behalf of a seller to a buyer to support the sellers bid or tender for a contract. If the sellers bid is accepted, and they fail to sign a contract, the buyer can claim compensation under the guarantee.
 

Bill of Exchange

(1) Another name for a draft. (2) A written, unconditional order, signed by the drawer and addressed to the drawee, to pay a sum of money at a fixed or future date to the order of the payee or to the bearer.

 

Bill of Lading (BOL or B/L)

A document that establishes the terms of a contract between a shipper and a transportation company, serves as a document of title, a contract of carriage and a receipt for goods.

 

Blank Endorsement

(1) The method whereby a bill of lading is made into a freely negotiable document of title. (2) Any bearer of a blank endorsed bill of lading has title to the goods and may claim them for the carrier. (3) Insurance documents can also be blank endorsed, so that any party can make a claim if necessary.

 

BLCO

Bonny Light Crude Oil. 

 

Blocked Currency

Cash deposit which cannot be transferred to another country because of local regulations or a shortage of foreign exchange.

 

Bonded Warehouse

A warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.

 

BSB

Australian Bank Code (similar to a routing number – see routing number)

 

Buy-In (Buy Rate)

The rate used when a customer is returning foreign currency for USD. The bank is “buying in” the foreign money.

 

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