Documentary Collection

Documentary Collection in International Trade

Meaning of Documentary Collection, according to the Dictionary of International Trade (Global Negotiator): A method of payment under which the shipping documents relating to a particular cargo are released to the importer on payment (documents against payment D/) or acceptance (documents against acceptance D/A) of a documentary draft drawn on him by the exporter. Under collections, the exporter presents a draft together with shipping documents to a bank (the remitting bank) in his country, which then forwards the documents and draft to the collecting bank in the buyer's country. The documents enabling the buyer to take possession of the goods will only be released by the collecting bank when the buyer either pay or accepts the draft.