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Glossary

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 Advising bank

The bank in the exporter’s country that agrees to pay the exporter if the terms and conditions of a letter of credit have been met and if the funds have been transferred to it by the issuing bank in the buyer’s country.

 Assignment

The transfer of rights and/or obligations under a contract from one party to another. With respect to an export credit guarantee this most often applies where an exporter assigns the benefits of insurance it has obtained from a credit insurer to a bank as security for financing.

 Aval, Avalise

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.