Co acceptance / Availization is only for Collections bills?

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questin
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Joined: 10/14/2008
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Co acceptance / Availization is only for Collections bills? or is it applicable for bills with LC also?

Tradeknowledge
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Joined: 02/22/2009
Acceptance and Aval

Under a UCP LC, only the issuer or confirmer or nominated bank may "accept" drafts and the LC would signify the "drawn on" party that accepts them. Aval is not discussed in UCP and an applicant cannot "accept" drafts.

Under a collection, a company can aval however, this does not commit nor obligate any bank in the collection process to pay the draft at maturity. 

You can find more information on www.loc.cc.

 

 

Peter M
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Joined: 09/02/2008
Well put Glenn

In addition, under a collection, a bank can (if so asked and they agree) add their guarantee to the payment of a term draft by way of an aval endorsement and the benefit of this guarantee of payment can be transferred through endorsement to other holders in due course.

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