Documentary collection means a set of documents pre-defined by the parties that the exporter’s bank sends to the importer’s bank.
Documentary collection may be either of the following:
- Export documentary collection, whereby the seller/exporter is responsible for the submission of documents to the bank with the instruction for payment under documentary collection. If goods have already been produced and dispatched without a preliminary agreement, the collection is a limited payment instrument.
- Import documentary collection, whereby the buyer of goods or services is the beneficiary of the documentary collection. If the documents are at the beneficiary’s bank, they will be informed by the bank. The beneficiary will have information about the documents, analyse them and forward them to the beneficiary once the payments have been reflected.