Recommendation 17

PAYTERMS – ABBREVIATIONS FOR

TERMS OF PAYMENT

The Working Party on Facilitation of International Trade quently used in international trade, which can be em-
Procedures, a subsidiary body of the United Nations ployed when the contract of sale to which they relate
Economic Commission for Europe, included the follow- makes this appropriate;
ing project in its first comprehensive programme of work:
Recommends that the abbreviations shown in the list of
“024 Prepare an inventory of and define customary “PAYTERMS” be used in such contracts.
terms relating to payments in international sales”.
At the fifteenth session of the Working Party, representa-
In 1977, facilitation experts from Austria, Belgium and
tives attended from:
Romania – later joined by a facilitation expert from
France – initiated preparatory work for a draft recommen- Austria; Belgium; Bulgaria; Canada; Czechoslovakia;
dation concerning terms of payment. Their proposal was Denmark; Finland; France; German Democratic Repub-
presented to the twelfth session of the Working Party in lic; Germany, Federal Republic of; Hungary; Italy; Neth-
September 1980 and was adopted at that session. erlands; Norway; Poland; Romania; Spain; Sweden;
Switzerland; Turkey; Union of Soviet Socialist Repub-
As a result of consultations between the interested delega- lics; United Kingdom of Great Britain and Northern
tions and the secretariats of the Economic Commission Ireland; and United States of America. Representatives
for Europe (ECE) and the United Nations Commission on from Japan, Nigeria and Thailand participated under
International Trade Law (UNCITRAL), which took place Article 11 of the Commission’s terms of reference.
in 1981, a few drafting changes were made in the Recom-
mendation; these changes were endorsed by the Working The following specialized agencies and other
Party at its fifteenth session in March 1982, and are intergovernmental and non-governmental organizations
reflected in the present text. were also represented:

At that session, the Working Party requested the ECE Intergovernmental Maritime Consultative Organization
secretariat to make the necessary arrangements for bring- (IMCO); General Agreement on Tariffs and Trade
ing up to date the list of terms of payment when required (GATT); European Economic Community (EEC); Cus-
– e.g. to review the list in order to make the terms, their toms Co-operation Council (CCC); International Cham-
descriptions and abbreviations compatible with any har- ber of Commerce (ICC); International Organization for
monized standard terms of payment in international trade Standardization (ISO); International Union of Railways
that might be developed under the auspices of a world-wide (UIC); International Chamber of Shipping (ICS); Inter-
forum for international trade law, such as the United national Civil Airports Association (ICAA); and Interna-
Nations Commission on International Trade Law. tional Railway Transport Committee (CIT).

RECOMMENDATION I. BACKGROUND
The Working Party on Facilitation of International Trade 1. An important part of a contract of sale is the condi-
Procedures, tions under which the buyer will extinguish his debt to the
seller: the terms of payment. Lack of precision in terms
Considering that the standardization of terms of payment
of payment and different interpretations of such terms are
will contribute to the simplification of international trade
known to give rise to disputes between trade partners. For
procedures;
this reason the ECE Working Party on Facilitation of
Noting that no world-wide international forum for trade International Trade Procedures, when discussing its ini-
law has yet established such terms of payment; tial comprehensive programme of work in 1972, agreed
that there was a need for standardization in the field of
Draws attention to the “PAYTERMS” corresponding to terms of payment and agreed to initiate work in this area
those conditions of payment which are the most fre- by preparing an inventory of and defining the most
customary terms relating to payments in international
Recommendation No.17 adopted by the Working Party on Facilitation
of International Trade Procedures, Geneva, March 1982 trade. Austria, Belgium and Romania, later joined by
ECE/TRADE/142 [Edition 96.1] France, agreed to act as rapporteurs for the project.

Recommendation 17 113
 PAYTERMS – Abbreviations for Terms of Payment

2. One reason for this action was the continuous exten- of extinguishing the debt to which it relates, and normally
sion of the use of the United Nations Layout Key for trade including statements regarding time-limit for payment,
documents. The space for indicating terms of payment on method of payment (whether or not involving a guaran-
the Layout Key was limited, making the use of concise tee), the amount to be paid and the place where payment
expressions essential. Another reason was that automatic should be effected; it is understood that the terms do not
data processing for contracts of sales, orders, confirma- prejudge the legal interpretation of these statements.
tion of orders, invoices, offers, etc. required a code for
9. For the purpose of the provisions set out under 2.1
terms of payment and that the standardization of the main
and 2.2, the following expressions, defined in the ICC
terms would help in devising such a code.
Uniform Rules for Collections, apply:
3. Agreement on the Recommendation was reached by Collection: The handling by banks, on instructions
consensus. The delegation of the United States of America received, of documents as defined below, in order:
stated, as mentioned in the Report of the twenty-second
session of the relevant preparatory body – the Group of (a) to obtain acceptance and/or, as the case may be,
Experts on Automatic Data Processing and Coding – that payment, or
“PAYTERMS” would probably not be used by United (b) to deliver commercial documents against accep-
States banks unless specifically requested by the parties to tance and/or, as the case may be, against payment,
a transaction. or

4. Shortly after the adoption of the present Recommen- (c) to deliver documents on other terms and condi-
dation in 1980, the ECE secretariat was officially notified tions.
about the content of General Assembly resolution 34/142 Financial documents: Bills of exchange, promissory
giving wider responsibilities for the co-ordination of notes, cheques, payment receipts or other similar instru-
work in the field of international trade law to the United ments used for obtaining the payment of money.
Nations Commission on International Trade Law
(UNCITRAL) in Vienna. Consultations between the Commercial documents: Invoices, shipping documents,
secretariats of the two Commissions and the rapporteurs documents of title or other similar documents, or any
resulted in some minor changes in the text of the Recom- other documents whatsoever not being financial docu-
mendation. ments.

5. UNCITRAL may, in the future, initiate work on

V. REFERENCES
terms of payment used in international trade in order to
establish standard terms whereby the conditions would be ECE/FAL REC No. 7 “Numerical representation of dates,
described. Their use would result in harmonization of time and periods of time”;
international trade law through the development of stan-
ISO 2014-1976 “Writing of calendar dates in all-numeric
dardized trade practices. Should this occur, the Working form”;
Party on Facilitation of International Trade Procedures
might decide to update the present Recommendation. ECE/UNCTAD Trade Data Elements Directory
(UNTDED);

II. SCOPE ICC Uniform Customs and Practice for Documentary

Credits (UCP);
6. This Recommendation provides abbreviations for ICC Uniform Rules for Collections (UCR).
certain terms of payment, referred to as “PAYTERMS”,
for use in international trade transactions as appropriate.
VI. EXPLANATION OF SYMBOLS
III. FIELD OF APPLICATION 10. The following symbols are used in connection with
PAYTERMS:
7. The “PAYTERMS” apply to commercial transac-
tions relating to the provision of goods and/or services. “M” represents month or months (mois); it may be
replaced by the symbols “D” or “J” which represent day
or days (jour/jours).
IV. TERMINOLOGY
“AAAA” represents calendar year (année), “MM” month
8. For the purpose of this Recommendation the follow-
(mois) of the year and “DD” (or “JJ”) day (jour) of the
ing definitions apply:
month, in descending order, represented in accordance
Terms of payment: Requirements which must be fulfilled with international standard ISO 2014 and ECE/FAL
in order that a payment may be considered a valid means Recommendation No. 7.

114 Recommendation 17
 PAYTERMS – Abbreviations for Terms of Payment

“n” represents the number of M (nM) or the amount of Group 2 – Collections

percentage (n%).
2.1 Clean collection – COLLECT

VII. LIST OF “PAYTERMS” The debtor is to pay against financial documents not
accompanied by commercial documents submitted for
Group 1 – Documentary Credits collection by the creditor.

Documentary credits are governed by the ICC Uniform 2.2 Documentary collection
Customs and Practice for Documentary Credits. Note: It belongs to the parties to agree on the commercial
Note: It belongs to the parties to agree on the documents documents against which the debtor is to pay or to accept.
required under documentary credits. 2.2.1 Period of time for payment
1.1 Irrevocable documentary credits unspecified – DOCOLLECT
The debtor is to pay against or to accept, as the case may
1.1.1 Unconfirmed, period of time for payment be, financial documents accompanied by commercial
unspecified – CREDOC documents or commercial documents not accompanied
The debtor is to open an irrevocable unconfirmed docu- by financial documents submitted for collection by the
mentary credit. The period of time for payment is creditor. The period of time for payments is unspecified.
unspecified. 2.2.2 Period of time for payment
stated – DOCOLLECT/nM
1.1.2 Unconfirmed, period of time for payment
stated – CREDOC/nM The debtor is to pay at sight (0M), or to accept for payment
at the end of a period of time (1M, 2M, etc. reckoned as
The debtor is to open an irrevocable unconfirmed docu- extending from the date indicated in the collection order)
mentary credit which provides for payment at sight (0M) against financial documents accompanied by commercial
or at the end of the period of time indicated (1M, 2M, etc. documents, or commercial documents not accompanied
reckoned as extending from the date on which the docu-
by financial documents submitted for collection by the
ments are presented). creditor.
1.1.3 Confirmed, period of time for payment 2.3 Collection of documentary payments (CMEA)
unspecified – CONCREDOC
Payment is to be effected by the submission for collection
The debtor is to open a confirmed irrevocable documen- of documents as provided under the General Conditions
tary credit. The period of time for payment is unspecified. of Delivery of Goods between Organizations of the Mem-
ber Countries of the Council for Mutual Economic Assis-
1.1.4 Confirmed, period of time for payment tance.
stated – CONCREDOC/nM
2.3.1 With immediate payment and later
The debtor is to open a confirmed irrevocable documen-
acceptance – INNO
tary credit which provides for payment at sight (0M) or at
the end of the period of time indicated (1M, 2M, etc. 2.3.2 With prior acceptance – INPA
reckoned as extending from the date on which the docu-
ments are presented). Group 3 – Payment by Instalments – PARTS
The debtor is to pay in instalments, each corresponding to
1.2 Revocable documentary credits
a fraction of the total amount due. To specify the fractions
1.2.1 Period of time for payment and the corresponding dates, the abbreviation PARTS
unspecified – RECREDOC should be followed by the different fractions and corre-
The debtor is to open a revocable documentary credit. The sponding abbreviations, the fractions being separated by
period of time for payment is unspecified. commas, e.g. PARTS, 30 per cent CASH, 30 per cent 1M,
40 per cent 3M FACULTIMO. The abbreviation PARTS
1.2.2 Period of time for payment standing alone indicates that the fractions and the corre-
stated – RECREDOC/nM sponding dates are to be found in a separate document or,
in the absence of any such document, that they have not
The debtor is to open a revocable documentary credit been agreed upon.
which provides for payment at sight (OM) or at the end of
the period of time indicated (1M, 2M, etc. reckoned as Group 4 – Other types of payment
extending from the date on which the documents are
presented). 4.1 Payment of an agreed date

Recommendation 17 115
 PAYTERMS – Abbreviations for Terms of Payment

4.1.1 Payment on a fixed date – AAAA/MM/JJ The debtor is to pay 1, 2, 3, etc. months following the date
The debtor is to pay on the date indicated. of receipt of the invoice. The creditor may draw a draft
payable at maturity and present it for acceptance.
4.1.2 Date of payment determined by delivery of the
goods 4.1.4 Optional dates
4.1.2.1 Payment in advance – ANTICIP Note: The discount term can be repeated indicating
The debtor is to pay before delivery of the goods. The several different discounts for payment at different times
exact date of payment is not specified. (e.g. 3 per cent 1M, 1 per cent 2M). The final due date is
indicated by an abbreviation for a time period which is not
4.1.2.2 Payment on delivery – CASH preceded by a discount (e.g. 3 per cent 1M, 1 per cent 2M,
The debtor is to pay on delivery of the goods. 3M). The interest percentage after the final due date (e.g.
3 per cent 1M, 1 per cent 2M, 3M, 9 per cent). The
4.1.2.3 Payment to the carrier on discount or interest for delayed payment term, alone or in
delivery – REMBURS one of the combinations here indicated may be combined
The debtor is to pay the carrier on delivery of the goods. with any appropriate PAYTERM in Group 4.1.

4.1.2.4 Payment by end of month of 4.1.4.1 Discounts – DIS n% nM; ESC n% nM

delivery – ULTIMO The debtor is entitled to reduce his payment by the
The debtor is to pay not later than the end of the month in percentage shown if he makes it earlier than the date
which the goods are delivered. indicated (e.g. 3 per cent 1M).

4.1.2.5 Payment at the end of a period 4.1.4.2 Interest for delayed payment – INT nM n%
following the end of the month The debtor is to pay the indicated percentage rate of
of delivery – ULTIMO/nM interest if payment is made after the indicated date (e.g.
3M 9 per cent).
The debtor is to pay 1, 2, 3, etc. months after the end of the
month in which the goods are delivered. The creditor may 4.2 Compensatory payment – COMPENS
draw a draft payable at maturity and present it for
Payment is to be effected by setting off the amount due
acceptance.
against all or part of one or more existing or future claims
4.1.2.6 Payment at the end of a period following of the debtor against the creditor.
delivery – DEL/nM
4.3 Payment on consignment – CONSIGN
The debtor is to pay 1, 2, 3, etc. months after delivery of
the goods. The creditor may draw a draft and present it The debtor is to pay as soon as he has himself sold the
for acceptance. goods and collected the proceeds.

4.1.3 Date of payment determined by receipt of the Group 5 - Special Arrangements

invoice
4.1.3.1 Payment on receipt of the 5.1 Payment by agreement – AGREE
invoice – CASHFAC; CASHINV
The debtor is to pay according to the terms contained in
The debtor is to pay on receipt of the invoice. a separate document, e.g. in the order or order voucher, in
correspondence within the context of a government agree-
4.1.3.2 Payment on the last day of
ment or an over-all credit facility, etc.
the month of receipt of the
invoice – FACULTIMO; INVULTIMO Note: Details “stet” the place where the precise terms are
set out; “stet” may be included after the abbreviation, with
The debtor is to pay on the last day of the month of receipt
or without an oblique stroke.
of the invoice.

4.1.3.3 Payment at the end of a period following the 5.2 Payment on customary terms – HABIT
last day of the month of receipt of the invoice
– FACULTIMO/nM; INVULTIMO/nM The debtor is to pay according to the customary terms of
payment between the parties.
The debtor is to pay on the last day of the first, second,
Note: This term presupposes previous dealings between
third, etc. months following that of receipt of the invoice.
the parties with sufficiently well-known and customary
The creditor may draw a draft payable at maturity and
terms of payment.
present it for acceptance.

4.1.3.4 Payment at the end of a period following Group 6 - Without payment - NOPAY
receipt of the invoice – FAC/nM; INV/nM No payment is required for the goods or services in

116 Recommendation 17
 PAYTERMS – Abbreviations for Terms of Payment

question. There may be several reasons for this - for ments for trial, load or inspection, goods sent for repair or
example: gifts, samples, replacement goods, consign- processing, returns, etc.

Synoptic Table of “PAYTERMS”

Group 1 – Documentary Credits 4.1.2.1 ANTICIP – Payment in advance

1.1 Irrevocable documentary credits 4.1.2.2 CASH – Payment on delivery

1.1.1 CREDOC – Unconfirmed, period of time for
4.1.2.3 REMBURS – Payment to the carrier on
payment unspecified
delivery
1.1.2 CREDOC/nM – Unconfirmed, period of time
4.1.2.4 ULTIMO – Payment by end of month of
for payment stated
delivery
1.1.3 CONCREDOC – Confirmed, period of time
4.1.2.5 ULTIMO/nM – Payment at the end of a
for payment unspecified
period following the end of the month of
1.1.4 CONCREDOC/nM – Confirmed, period of delivery
time for payment stated
4.1.2.6 DEL/nM - Payment at the end of a period
1.2 Revocable documentary credits following delivery
1.2.1 RECREDOC – Period of time for payment 4.1.3 Date of payment determined by receipt of
unspecified the invoice
1.2.2 RECREDOC/nM – Period of time for payment 4.1.3.1 CASHFAC; CASHINV – Payment on
stated receipt of the invoice
4.1.3.2 FACULTIMO; INVULTIMO – Payment on
Group 2 – Collections
the last day of the month of receipt of the
2.1 COLLECT – Clean collection invoice
2.2 Documentary collection 4.1.3.3 FACULTIMO/nM; INVULTIMO/nM –
Payment at the end of a period following
2.2.1 DOCOLLECT – Period of time for payment
the last day of the month of reciept of the
unspecified
invoice
2.2.2 DOCOLLECT/nM – Period of time for
4.1.3.4 FAC/nM; INV/nM – Payment at the end of
payment stated
a period following receipt of the invoice
2.3 Collection of documentary payments (CMEA)
4.1.4 Optional dates
2.3.1 INNO – With immediate payment and later
acceptance 4.1.4.1 DIS n% nM; ESC n% nM – Discounts
2.3.2 INPA – With prior acceptance 4.1.4.2 INT nM n% – Interest for delayed payment
4.2 COMPENS – Compensatory payment
Group 3 – Payment by instalments – PARTS
4.3 CONSIGN – Payment on consignment
Group 4 – Other types of payment
Group 5 – Special arrangements
4.1 Payment on an agreed date 5.1 AGREE – Payment by agreement
4.1.1 AAAA/MM/JJ – Payment on a fixed date 5.2 HABIT – Payment on customary terms
4.1.2 Date of payment determined by delivery of the
Group 6 – Without payment – NOPAY
goods

Recommendation 17 117