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Foreign Documentary Collections
Foreign Documentary Collections
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What are they?
Foreign Documentary Collections allow exporters to collect payment for goods shipped. The exporter can ensure foreign customers do not take possession of the goods until they either make payment or a "bill of exchange" has been accepted
How do they work?
- Commercial or transport documents are necessary to complete the transaction: after your products ship, the documents go to us
- We monitor and check the necessary documentation to be exchanged for payment
- Upon receipt of payment, we release the documents so the buyer can take possession of the goods
- We only release documents on payment or some form of negotiable instrument, such as a draft
Benefits
- The exporter has control of the goods until the buyer pays or a "bill of exchange" has been accepted
- The exporter has financing flexibility, as foreign documentary collection is an alternative to requiring a documentary letter of credit from your buyers
Risks
- Payment is not guaranteed once goods have been shipped
- After shipping, it can be very expensive to effect recovery if the buyer does not pay
- Should only be used when trust already exists between the buyer and the seller, and they agree to the terms of the sale
- We can help assess your risks
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