The Role of Trade Finance in Working CapitalCollecting Bank In a transaction involving a
documentary collection, any bank other than
the remitting bank involved in the collection
of a draft and/or documents.
Commitment Fee The fee payable on the
unutilised amount of a committed facility.
Commitment fees are usually calculated
daily and paid quarterly.
Commercial Invoice A document detailing the
goods and services that have been sold and
the payment that is due.
Committed Credit Facility An arrangement
between a borrower and a lender, whereby
the lender enters into an obligation to provide
funds upon request by the borrower, provided
the conditions precedent and any ongoing
agreed conditions and covenants in the loan
agreement have been and are being met.
The borrower pays a commitment fee on the
undrawn portion of the committed facility. Also
known as a committed line of credit.
Completion Guarantee An undertaking to
provide compensation if construction of the
project is not completed by a specific time.
Confirmed Irrevocable Letter of Credit A
letter of credit that cannot be terminated
or modified without the agreement of all
parties (irrevocable), and where a bank has
promised to honour the payment on behalf
of the issuing bank (confirmed).
Confirmed Letter of Credit A letter of credit
where a bank has promised to honour the
payment on behalf of the issuing bank.
Confirming Bank In a transaction involving a
letter of credit (L/C), the confirming bank is a
bank that promises to honour the payment to
the beneficiary on behalf of the issuing bank,
subject to the terms of the L/C.
Confirming House A company that
intermediates between an exporter and
an importer and confirms orders from the
importer for the goods, finances transactions
and accepts the credit risk involved.
Conforming Bid A bid that meets the procuring
authority’s necessary criteria. Bids which
do not comply with these criteria may be
rejected by the authority before assessment.
Consignee The party to whom or to whose
order a carrier must deliver goods at the
conclusion of the transport.
Consignment 1) Delivery of merchandise from
an exporter (the consignor) to an agent (the
consignee) under agreement that the agent
sell the merchandise for the account of the
exporter. The consignor retains title to the
goods until the consignee has sold them.
2) The shipment of goods to the buyer.
Consignment Note A document issued by
a carrier to confirm receipt of goods to be
transported to an agreed destination. This
document states the terms on which the
carrier undertakes the transport.
Consular Invoice A document required by
some countries describing a shipment of
goods and showing information such as
the consignor, consignee, and value of the
shipment. Certified by a consular official,
a consular invoice is usually used by the
country’s customs officials to verify the
value, quantity and nature of the shipment.
Contract Bond A surety bond that acts as a
written guarantee that a trade contract will
be honoured.
Contract Hire An agreement to hire/lease
vehicles for a fixed period against regular
rental payments that incorporate the
anticipated cost of maintenance for the hire
period and also the final residual value.
The lessee also has to observe a number
of other contractual obligations (e.g. not
to exceed a certain mileage). Upon expiry
of the contract period, the equipment is
returned to the contract hire company.
Contract Purchase As in contract hire but,
upon expiry of the contract period, the
lessee has the right but not the obligation
to buy the vehicle at the agreed option
purchase price stipulated in the contract.
Correspondent Banking An interbank
arrangement where one bank provides
payment and other services to another
bank, which is generally located in another
financial centre.
Counterpurchase An aspect of countertrade
in which a supplier undertakes to purchase
from a country a specified quantity of goods
or to engage services offered by the country
as a condition of securing business.
Countertrade Any form of reciprocal or
compensatory trade arrangement agreed
between an exporter and a buyer.
Covenant An agreement by the borrower to
perform certain acts (such as the provision
of financial information), to refrain from