Documentary Collection

Documentary Collection – is a form of trade finance. It defines the way how the Buyer should pay for the imported goods.

The procedure includs the following steps:

1. The Buyer and the Seller conclud the contract and indicate the documentary collection as a method of payment.
2. The Seller sends the goods to the Buyer and submits the export documents to his bank.
3. The Seller’s bank sends the export documents to the Buyer’s bank.
4. The Buyer pays for the goods and in return he gets the export documents from his bank.
5. The Buyer’s bank sends the payment to the Seller’s bank.
6. The Seller collects the payment and the Buyer collects the imported goods.

Ther are two types of Documentary Collection:

1. Documents against payment – the Buyer gets the export documents at the moment of making payment for the goods.
2. Documents against acceptance – the Buyer accepts the specified date of making payment and then gets the export documents.