A Documentary Collection is one of the forms of payment for the goods supplied, mainly used in international trade transactions. The exporter hands over the task of collecting payment for goods supplied to the bank, which sends the shipping documents to the importer’s bank together with payment instructions. There are two main types of payment instructions:
Deliver documents against payment – The exporter’s bank gives an instruction to the importer’s bank to deliver documents to the Buyer only against payment. In the case of receipt of the Buyer’s written consent on payment, the importer’s bank processes settlement, and delivers the documents to the Buyer.
Deliver documents against acceptance – The exporter’s bank gives an instruction to the importer’s bank to deliver documents to the Buyer only against the acceptance of the draft/bill of exchange. In the case of receipt of the Buyer’s written consent to payment, and acceptance of draft/bill of exchange, the importer’s bank delivers the documents to the Buyer.
The settlement procedure is regulated by the Uniform Rules for Collections (URC) issued by the International Chamber of Commerce in Paris. Fulfillment of the above-mentioned terms is mandatory for all parties involved.
The Bank is not responsible for revising the documents, and it is not involved in the main settlement.