Bank of China (Canada), entrusted by an exporter, collects payments from an importer through a foreign collecting bank upon presentation of the exporter's commercial and financial documents.

Application

Documentary collections provide more certainty to trade transactions than remittances. Documentary collections can take the form of either documents against payment (D/P) or documents against acceptance (D/A).

Features

• Documentary collections offer clients cost advantages over L/Cs.

• Documentary collections are relatively simple to process, especially compared with L/Cs.

• Risk can be mitigated through documentary collections as the importer can only take delivery of the goods after acceptance or payment.

Who can benefit from this product?

• Exporters who are comfortable with the credit status of their counterparty importers and have sufficient means to meet preparation and delivery requirements for the relevant goods.

• In a documentary collection the buyer is in a more secure position since ownership or responsibility for goods does not pass until payment has been made or a time draft is signed.