01 · How the glossary works

One search box and eight category filters cover every term

Each entry carries a plain definition. Where a named primary source defines the term, the entry credits the publisher and links to the exact page. Trade finance itself, for example, is defined from the US International Trade Administration's Trade Finance Guide. Our guide What is trade finance? explains it in full.

Search matches the term, any abbreviation in parentheses such as LC, D/P or SBLC, and the definition text. The category pills follow the eight verticals of this guide. Each term also has its own link anchor, so any guide can point straight to it.

02 · Rulebooks

ICC rulebooks define the core instruments

Letter of credit terms follow UCP 600. The International Chamber of Commerce approved the rules on October 25, 2006, and they have applied since July 1, 2007, according to the ICC. The glossary entry is defined from the eUCP rules. Our guide to letters of credit uses these terms throughout.

Collection terms follow URC 522, the 1995 Revision, which runs to 26 articles, with eURC version 1.1 of 13 articles, as the ICC product page sets out. The glossary entry is defined from the eURC 1.1 rules text. See also our guide to documentary collections.

Guarantee and standby terms follow two further rule sets. URDG 758 took effect on July 1, 2010, the ICC announced, and ISP98 became effective on January 1, 1999, according to the Institute of International Banking Law and Practice.

Delivery terms follow the Incoterms rules. Incoterms 2020 sets out eleven rules, EXW, FCA, CPT, CIP, DAP, DPU, DDP, FAS, FOB, CFR and CIF, in effect from January 1, 2020, according to the ICC. Our Incoterms guide walks through each rule.

03 · Industry definitions

Supply chain finance terms come from one agreed set of definitions

The Global Supply Chain Finance Forum published the Standard Definitions for Techniques of Supply Chain Finance in 2016, a joint product of BAFT, the Euro Banking Association, FCI, the ICC and ITFA. The ICC describes the text as a living document that "will require periodic updating".

The glossary takes its master definition of supply chain finance from page 8 of the Standard Definitions. Payables finance (page 45), receivables discounting (page 28) and factoring (page 39) follow the same source, as do distributor finance (page 52), loan or advance against inventory (page 56) and pre-shipment finance (page 60).

Our guides to trade finance vs supply chain finance, payables finance and receivables finance use these definitions.

04 · Law

Statute defines the negotiable instruments and electronic records

The bill of exchange is defined in section 3(1) of the Bills of Exchange Act 1882: an unconditional order in writing, signed by the drawer, to pay on demand or at a fixed or determinable future time a sum certain in money. The promissory note follows in section 83(1), and acceptance in section 17(1).

The UK Electronic Trade Documents Act 2023, in force since September 20, 2023, lists eight example trade documents in section 1(2): the bill of exchange, promissory note, bill of lading, ship's delivery order, warehouse receipt, mate's receipt, marine insurance policy and cargo insurance certificate.

Electronic records follow MLETR, which UNCITRAL adopted on July 13, 2017. Control is the functional equivalent of possession of a transferable document, as the UNCITRAL page explains. The UNCITRAL status page records 13 jurisdictions with legislation based on or influenced by the Model Law, including Singapore (2021), the United Kingdom (2023), France (2024) and China (2025, bills of lading only). See also our guides to MLETR and digital trade law and bills of exchange and promissory notes.

05 · Accounting and compliance

Accounting and compliance terms come from standard setters and regulators

Supplier finance disclosure terms come from the accounting standard setters. ASU 2022-04, issued by the Financial Accounting Standards Board in September 2022, requires a buyer to disclose the key terms of its supplier finance programs. It is effective for fiscal years beginning after December 15, 2022, with the rollforward requirement effective for fiscal years beginning after December 15, 2023. The IAS 7 and IFRS 7 supplier finance amendments apply to annual reporting periods beginning on or after January 1, 2024, according to the IFRS Foundation.

Bank capital terms come from the Basel Committee. Its treatment of trade finance sets a credit conversion factor of 20 percent for short-term self-liquidating trade letters of credit. Compliance terms come from regulators: the definition of an anti-money laundering program follows FinCEN, the US Treasury bureau.

Summary

Every term traces to the rule, statute or standard that defines it

Letter of credit terms follow UCP 600, in force since July 1, 2007. Collection terms follow URC 522, 26 articles. Delivery terms follow Incoterms 2020, eleven rules. Supply chain finance terms follow the 2016 Standard Definitions from five industry associations. Bills of exchange follow the Bills of Exchange Act 1882, section 3(1). Electronic records follow the UNCITRAL Model Law adopted July 13, 2017.

Further reading: our guides to what trade finance is, trade finance vs supply chain finance, letters of credit and Incoterms, plus who's who in a trade transaction, documentary collections and MLETR and digital trade law.

For questions on how these shifts affect existing or planned trade finance exposures, contact the Ossiano Research Desk.

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