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STAGES OF DOCUMENTARY COLLECTIONS

STAGE 1

Establishing the terms of collection

The exporter stipulates the terms of payment in his offer or agrees them with the buyer in the contract of sale.

STAGE 2

Collection order and passage of documents

When the order has been awarded or the contract of sale has been signed, the exporter dispatches the goods direct to the address of the buyer. At the same time, he arranges for all the necessary documents (invoice, bill of lading, insurance certificate, etc.) to be prepared and sends them to his own bank (the remitting bank) together with the collection order. The remitting bank sends the documents, together with the necessary instructions, to the collecting bank.

STAGE 3

Presentation of documents and settlement

The collecting bank informs the buyer of the receipt of the documents and notifies him of the terms of their release. The buyer makes payment, or accepts the bill of exchange, and in return receives the documents. The collecting bank then transfers the collected amount to the remitting bank, which credits it to the exporter’s account.