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NAFTA: North American Free Trade Agreement

Trade agreement between the U.S., Canada, and Mexico featuring duty-free entry and other benefits for goods that qualify. 


NAFTA Certificate of Origin

Used by NAFTA signatories (i.e. Canada, Mexico, and the United States) to determine if goods imported into their countries receive reduced or eliminated duty. 





Negotiable Bill of Lading

A title document to the goods, issued "to the order of" a party, usually the shipper, whose endorsement is required to effect its negotiation. Thus, a shipper's order (negotiable) bill of lading can be bought, sold or traded while goods are in transit and is commonly used for letter-of-credit transactions. The buyer must submit the original bill of lading to the carrier in order to take possession of the goods.


Negotiable Instrument

A negotiable instrument is any document, which permits one party to transfer their rights to a second party by endorsing and delivering the document to the second party. An instrument is only fully negotiable when the party transferring it receives value and the party receiving the document can obtain a stronger legal position than the party transferring the document. For example, a first party transfers their rights to the second party, who are unaware that the transaction is fraudulent and negotiates the instrument in good faith and for value. If the first party has transferred their rights against a third party, then the second party retains a valid claim against both the first and third parties. Examples of negotiable instruments in international trade are cheques, Bills of Exchange and promissory notes.


Negotiable Letter of Credit

The beneficiary can present documents to any bank that will agree to process the documents.


Negotiable Marine Bill of Lading

The carrier delivers to anyone the shipper or consignee so orders. “Consigned to order of...(name)” (i.e., someone other than buyer, perhaps freight forwarder or customs agent).


Negotiating Bank

Bank nominated on a letter of credit to negotiate the bill of exchange, i.e. check the documents, pay the seller and seek reimbursement from the Issuing bank.



The process by which a negotiable instrument such as a Bill of exchange, Promissory Note or Cheque is transferred in good faith and for value. Negotiation only occurs when the transferring party receives value. In international trade this is normally an exchange of funds or a commitment to pay.



Not elsewhere specified


Not included elsewhere


Nominated Bank

The giving of value by the nominated bank to the beneficiary for the documents presented, subject to receipt of cover from the issuing bank.


Non-Recourse Discounting

The purchase from the seller of accepted term Bills of Exchange at a discount to allow for the funding of the advance from the discount date until the maturity date of the bills. When the discount is provided on a non-recourse basis the financing bank has no recourse to the seller in the event of non-payment by the buyer or the buyers bank.


Nostro-Vostro Accounts

(1) Accounts held by correspondent banks in each others' currencies. (2) Each such account has a nostro view - the bank's money held with you - and a vostro view - your money held with the bank.


Procedure that may carried out to evidence non-payment or non-acceptance of a bill of exchange. A preliminary to a protest. Not recognized in all countries.


Notify Party

Party who is to be notified when goods arrive at their destination.


Noting (on a Bill of Exchange)

Noting is a preliminary form of protesting a Bill of Exchange - that is - an initial official statement that the bill of exchange or promissory note has not been paid.


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