Scribd Logo
Upload

Welcome to Scribd!

  • 365 views

    A Documentary Collection

    Uploaded by

    Syed Habib Sultan
    This document discusses documentary collections, which involve a seller instructing their bank to present documents related to a trade deal to the buyer's bank. There are two main types: documents against payment, where documents are released upon payment, and documents against acceptance, where documents are released upon acceptance of a bill of exchange. The key parties involved are the importer, exporter, seller/exporter's bank, collecting/presenting bank, and buyer/importer. The process follows steps where the seller ships goods and presents documents to their bank, which forwards them to the collecting bank, who then presents them to the buyer for payment and remits the proceeds back through the banks.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    A Documentary Collection

    Uploaded by

    Syed Habib Sultan
    365 views4 pages
    This document discusses documentary collections, which involve a seller instructing their bank to present documents related to a trade deal to the buyer's bank. There are two main types: documents against payment, where documents are released upon payment, and documents against acceptance, where documents are released upon acceptance of a bill of exchange. The key parties involved are the importer, exporter, seller/exporter's bank, collecting/presenting bank, and buyer/importer. The process follows steps where the seller ships goods and presents documents to their bank, which forwards them to the collecting bank, who then presents them to the buyer for payment and remits the proceeds back through the banks.

    Original Description:

    document

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses documentary collections, which involve a seller instructing their bank to present documents related to a trade deal to the buyer's bank. There are two main types: documents against payment, where documents are released upon payment, and documents against acceptance, where documents are released upon acceptance of a bill of exchange. The key parties involved are the importer, exporter, seller/exporter's bank, collecting/presenting bank, and buyer/importer. The process follows steps where the seller ships goods and presents documents to their bank, which forwards them to the collecting bank, who then presents them to the buyer for payment and remits the proceeds back through the banks.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    365 views4 pages

    A Documentary Collection

    Uploaded by

    Syed Habib Sultan
    This document discusses documentary collections, which involve a seller instructing their bank to present documents related to a trade deal to the buyer's bank. There are two main types: documents against payment, where documents are released upon payment, and documents against acceptance, where documents are released upon acceptance of a bill of exchange. The key parties involved are the importer, exporter, seller/exporter's bank, collecting/presenting bank, and buyer/importer. The process follows steps where the seller ships goods and presents documents to their bank, which forwards them to the collecting bank, who then presents them to the buyer for payment and remits the proceeds back through the banks.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4
    At a glance
    Powered by AI
    The key takeaways are that a documentary collection is a process where a seller instructs their bank to present documents related to a trade deal to the buyer's bank to either present or release documents to the buyer against certain conditions. The main types are documents against payment and documents against acceptance. The main parties involved are the seller, remitting bank, collecting/presenting bank, and buyer.

    The two main types of documentary collection are documents against payment (DP), where the bank will release documents to the buyer upon payment, and documents against acceptance (DA), where the bank will release documents upon the buyer's acceptance of a bill of exchange to pay at a future date.

    The roles of the main parties are: seller/exporter as drawer, remitting bank as seller's bank, collecting/presenting bank as agent of remitting bank in buyer's country, and buyer/importer as drawee who pays the documents or accepts the bill of exchange in exchange for the documents to clear the goods.

    Documentary Collection

    Table of Contents
    1. DOCUMENTARY COLLECTION 2

    2. THE MECHANISM OF DOCUMENTARY COLLECTION 2

    3. DEFINITION OF A DOCUMENTARY COLLECTION DOCUMENTARY 2

    4. TYPES OF DOCUMENTARY COLLECTION 2

    4.1. Documents against Payment (DP) 2

    4.2. Documents against Acceptance (DA) 2

    5. PARTIES IN A DOCUMENTARY COLLECTION TRANSACTION 2

    5.1. Importer 2

    5.2. Exporter 2

    5.3. Seller/Exporter 3

    5.4. Remitting Bank 3

    5.5. Collecting/Presenting Bank 3

    5.6. Buyer/Importer 3

    6. Documentary Collection Documents 3

    7. THE FLOW OF DOCUMENTARY COLLECTION (DOCUMENTS AGAINST PAYMENT) 4

    7.1. Steps 4

    Page 1 of 4
    Documentary Collection
    1. Documentary Collection
    A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection
    of a payment to the remitting bank (exporters bank), which sends documents to a collecting
    bank (importers bank), along with instructions for payment. Funds are received from the
    importer and remitted to the exporter through the banks involved in the collection in
    exchange for those documents. D/Cs involve using a draft that requires the importer to pay
    the face amount either at sight (document against payment) or on a specified date (document
    against acceptance). The draft gives instructions that specify the documents required for the
    transfer of title to the goods. Although banks do act as facilitators for their clients, D/Cs offer
    no verification process and limited recourse in the event of non-payment. Drafts are generally
    less expensive than LCs.

    2. The Mechanism of Documentary Collection


    3. Definition of a Documentary Collection Documentary
    Collection is the process in which the seller instructs his bank to present documents in
    relation to a trade deal to the buyers bank to present or release documents to the buyer
    against certain conditions.
    Documentary Collection is subject to the Uniform Rules for Collection, International
    Chamber of Commerce Publication No. 522 (URC522)

    4. Types of Documentary Collection


    There are two main types of Documentary Collection:

    4.1. Documents against Payment (DP)


    The bank will release documents to the buyer upon his payment of the transaction.

    4.2. Documents against Acceptance (DA)


    The bank will release documents to the buyer upon his acceptance of a bill of exchange that
    undertakes to pay at a determinable future date.

    5. Parties in a Documentary Collection Transaction


    5.1. Importer
    For customs purposes, the party who makes (or on whose behalf an agent or broker makes)
    the import declaration, and who is liable for the payment of duties (if any) on the imported
    goods. Normally, this party is named either as the consignee in the shipping documents
    and/or as the buyer in the exporter's invoice.

    5.2. Exporter
    For customs purposes, the party who makes (or on whose behalf an agent or broker makes)
    the export declaration. The exporter sells its goods to someone in another country, known as
    the importer.

    Page 2 of 4
    Documentary Collection
    5.3. Seller/Exporter
    The seller/exporter is also known as the Drawer in documentary collection. The
    seller/exporter will ship the goods to the buyer based on the sales contract and submit
    documents to his banker with instructions for collection of payment.

    5.4. Remitting Bank


    The remitting bank is the seller/exporters bank. It will send the documents to the buyers
    bank with instructions for collection of payment. Upon receipt of payment from the buyers
    bank, the remitting bank will credit the net proceeds to the seller/exporters account.

    5.5. Collecting/Presenting Bank


    The collecting bank is the agent of the remitting bank in the buyers country, its main role is
    to forward the documents and collection instructions to the buyers bank.
    The presenting bank is the bank that presents the documents to the buyer for payment or
    acceptance based on the collection instructions. Upon receipt of payment from the buyer, the
    presenting bank will This document is for information only and is designed to provide you
    with a general description of the trade products and services in Singapore. The information in
    this document relates to services offered to clients as of April 2010 and may be subject to
    change in the future; it is purely illustrative in nature and therefore does not contain or cannot
    result in any contractual or non-contractual obligation or liability of United Overseas Bank
    Limited and/or any of its affiliates. United Overseas Bank Limited Co. Reg No. 193500026 Z
    Page 2 of 3 pay the net proceeds to the collecting bank, which will in turn pay the remitting
    bank after deducting its own charges.
    A collecting bank may also become the presenting bank in the buyers country.

    5.6. Buyer/Importer
    The buyer/importer is also known as a drawee in documentary collection. The buyer will pay
    the documents or accept the bill of exchange. In return, the buyer/importer will obtain the
    documents to allow him to clear his goods.

    6. Documentary Collection Documents


    Bill of Exchange (2 copies)
    Commercial Invoice (6 copies) Made by Exporter
    Full set of B/L (3/3 copies)
    Pricing list (As per requirement)
    Weight List (As per requirement)
    Inspection Certificate (As per requirement)
    Certificate of origin (As per requirement)

    Page 3 of 4
    Documentary Collection
    7. The Flow of Documentary Collection (Documents
    against Payment)

    7.1. Steps
    Step 1: Seller ships the goods to the buyers country as per the sales contract.
    Step 2: Seller presents documents to the Remitting Bank with clear instructions for collection
    of payment.
    Step 3: Remitting Bank forwards the documents and collection instructions to the
    Collecting/Presenting Bank.
    Step 4: Collecting/Presenting Bank presents documents to the buyer for payment.
    Step 5: Buyer pays for the document or take up import financing.
    Step 6: Collecting/Presenting Bank remits the net proceeds to the Remitting Bank after
    deducting its own charges.
    Step 7: Remitting Bank credits the net proceeds into the sellers account after deducting its
    own charges

    Page 4 of 4

    You might also like