Forfaiting Glossary

Glossary Items beginning with : W

Waiver Clause (Bills of Exchange)

An undertaking provided by the forfaiter to the Drawer or Endorser of Bills of Exchange sold in the forfaiting market. The Waiver is required because the Drawer remains liable for payment despite the without-recourse clause in the endorsement under the law on Bills of Exchange.

Withholding

A tax deducted at source imposed on interest or dividend payments which becomes more important when closing international trade transactions. Most trade and forfaiting documentation will contain clauses to the effect that no deductions whatsoever will be made under the respective trade instrument, or in certain cases a gross-up clause will be inserted to the effect that such tax will have to be paid by the obligor.