Glossary of Trade Terms

Risk assessment	A detailed study to identify the possibilities of financial loss in an export sale as a result of default by the buyer (commercial risk), political circumstances in the buyer’s market (country or political risk), or exchange rate fluctuations in foreign currency markets (currency or foreign exchange risk).
Red clause credits	Letters of Credit (L/C) issued with special provisions or clauses (often printed in red) that allow the beneficiary to secure financial advances based upon the L/C, typically to assist in the production, acquisition, and/or shipment of the goods involved.
Revolving letter of credit (cumulative or non-cumulative)	A revolving letter of credit (L/C) provides for multiple drawings under the L/C for specified amounts over a specified time period. This type of L/C is issued in place of multiple, similar credits to the same beneficiary.