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Documentary collection

Documentary and clean collection is intended for:

  • clients who deal in commercial transactions

Characteristics of Documentary and clean collection:

  • a classic payment instrument
  • used in domestic and foreign trade
  • business partners use it if they are not willing to do business without security, but from the point of view of the level of risk, it is not necessary for the bank to enter into a contractual relationship – as opposed to a documentary letter of credit or bank guarantee
  • this payment instrument is suitable for situations when the seller has no doubts about the willingness and ability of the buyer to take receipt of goods and pay for them, as well as about the stability of the political, economic and legal environment of the buyer’s country
  • in terms of documentary collection, the seller usually submits commercial documents to the bank proving ownership of the sent goods together with instructions specifying the terms under which the documents are to be released to the buyer
  • in terms of clean collection, the client only submits the sole financial document to the bank for collection (e.g. bill of exchange) without accompanying commercial documents
  • a collection condition for release of documents is usually release of documents in return for payment or release of documents in return for acceptance of a bill of exchange, or in return for issue of a promissory note

  1. Purchase contract
  2. Application for arrangement of collection + documents
  3. Collection instructions and the pertinent collection documents
  4. Provision of information to the debtor of receipt of documents and collection conditions
  5. Performance of the pertinent collection instructions
  6. Release of collection documents
  7. Collection performance
  8. Taking over the goods

Advantages of documentary and clean collection:

  • a product especially suitable for importers, as funds are not tied up in advance
  • the importer is certain that the goods have been sent
  • certainty for the exporter that the bank will not release documents until the buyer submits a payment order or meets other collection conditions
  • the bank does not issue documents, even if the payment is made as a clean payment, until it receives authorisation from the issuing bank
  • greater certainty of payment than in the case of clean payments
  • lower bank fee (in comparison with a documentary letter of credit)
  • simplicity of processing and security

Documentary and clean collection allow you:

  • greater certainty of payment than in the case of a clean payment
  • the buyer does not receive the documents, and goods in the case of documents of title, until the collection conditions are met

How to establish/arrange the product :

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