Glossar Trade & Export Finance
Glossar (N)

Negotiable instruments

The following documents are typical negotiable instruments: bills of lading, warehouse receipts (if marked negotiable), bills of exchange, etc. which may be transferred to another party by «endorsement».

Negotiable Bill of Lading

Bill of lading transferable by endorsement. There are three possibilities, how the consignee can be mentioned:

  • to XY & Co. or their order.

  • to the order of XY & Co.

  • to order, without the name of the party. In this case the bill of lading remains to the order of the shipper until he endorses it. These types of bills of lading are usually endorsed on the reverse (Explanation see under «Endorsement»). The opposite of a negotiable bill of lading is the «straight bill of lading».

Negotiation

In banking, negotiation means the sale and purchase of bills of exchange and/or documents. In documentary operations negotiation means advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank. The negotiating bank has the right of recourse to the beneficiary of the documentary credit if cover is not received from the issuing bank, unless the negotiating bank has agreed to negotiate without recourse to the beneficiary, or has confirmed the credit. See UCP Art. 2 and 8.

Negotiation credit

Documentary credit available by negotiation. Explanation see under «Availability under documentary credits».

Non-negotiable instrument

Not a title document. Ownership of the document alone does not entitle the holder to receive the goods named therein (e.g. non-negotiable sea waybill, air waybill, forwarder's receipt, etc.).

Non-recourse financing

Form of international project financing where the banks involved assume all risks, waiving the right of recourse on the company responsible for the project.

Notify party

Name and address of a party in the transport document, usually the buyer of the goods (applicant in the documentary credit) or a forwarding agent taking care of the goods at place of arrival.

NVOCC (forwarder/operator) (= Non Vessel-Owning/Operating Common Carrier)

A carrier issuing bills of lading for carriage of goods on vessels which he neither operates nor owns.