Documentary collection is a payment instrument whereby the exporter (seller) sends documents to the importer (purchaser) through the bank in order to get payment. The bank does not assume any payment obligation and plays the role of an agent/document remitter only․

Documentary collection is appropriate to use, if you trust your purchasing partner, but you want to control payment for you goods.

Below are the types of documentary collection by their payment mode։

• Documents against payment (D/P). Within the scope of the documentary collection the bank transfers the documents received from the issuing bank to the debtor for payment. Under this type of the documentary collection, the seller’s bank authorizes the buyer’s bank to provide the title documents only after the buyer has paid in exchange for the goods.
• Documents against acceptance (D/A). Within the scope of the documentary collection the bank transfers the documents received from the issuing bank to the debtor in exchange for the promissory note from the latter. This type of the documentary collection is applied when there is an arrangement between the buyer and seller on the delay of payment. The buyer receives the title documents in exchange for the written promise, on the condition that the payment for those goods will be made in future.

-commission fees of correspondent banks and postage shall be charged additionally

-incomplete quarter shall be deemed complete

Advantages of the documentary collection for the seller (exporter)

• This is a much more secure option to get payments, particularly during sea freights, when original bills of lading are not handed to the buyer unless the latter does not pay the sum or accepts the promissory note.
• It is possible to demand a payment guarantee of the promissory note accepted by the buyer’s bank.

Advantages of the documentary collection for the importer

• This option provides an opportunity to make payment for goods or accept a bill after getting familiar with the sipping documents
• Comparatively low bank rates are often applied due to the less complexity of the transaction and simplified document processing
• The bank is ready to finance transactions in case meeting relevant requirements.