Drawer

The Drawer is a core party in international trade payment instruments, especially bills of exchange and checks. It refers to the party that issues and delivers the instrument, ordering the drawee to pay a certain amount to the payee. In letter of credit (L/C) transactions, the drawer is usually the beneficiary (exporter), who draws a bill of exchange requiring the issuing bank or a nominated bank to pay. In documentary collections (D/P, D/A), the drawer is generally the exporter, and the drawee is the importer. Use cases include: negotiation under L/C, collection settlement, issuance of bank drafts, etc. Notes: The drawer bears ultimate liability for the instrument debt; if the drawee refuses payment, the holder may recourse to the drawer. The drawer must ensure the instrument's elements are complete and the signature is genuine, otherwise the instrument's validity may be affected. Distinction from other terms: The Drawer is the person who issues the instrument, while the Drawee is the person ordered to pay, and the Payee is the person receiving payment. In an L/C, the issuing bank is the drawee and the exporter is the drawer; the two must not be confused.