Documentary collections
A documentary collection is a conditional form of payment in which the bank acting at the request of the seller (exporter/principal/drawer) undertakes to release to the buyer (importer/drawee) stipulated documents after he makes a payment or after he guarantees a payment on terms consistent with the collection instruction. The bank that intermediates in the transaction is the importer’s bank.
Documents that are presented for collection include commercial documents such as invoices, transport documents/insurance documents and other documents used in trade and service transactions with foreign countries, which are not financial documents, and financial documents such as promissory notes/bills of exchange and other documents that are the basis for payment of money.
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The types of documentary collection offered by Nordea Bank Polska SA
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depending on whether the documents relate to an import or export transaction::
import collection the object of which are documents representing goods that are im-ported to Poland; the collection instruction is received from foreign bank;
export collection the object of which are documents representing goods exported from Poland; the collection instruction is sent to a foreign bank.
depending on the type of documents against which the payment is made::
financial collection the object of which are financial documents (draft , bill of exchange)
documentary collection the object of which are commercial documents that can also be accompanied by financial documents.
depending on the method and date of payment:
cash collection when documents are released against a simultaneous payment of the collection amount ("documents against payment", abbreviated to: D/P or "cash against documents", abbreviated to: CAD)
acceptance collection when documents are released against a promise of payment of the collection amount at a stipulated date in the future ("documents against acceptance", abbreviated to: D/A). The promise to pay usually takes the form of an acceptance on the bill of exchange delivered together with the documents (exporter’s bill of exchange drawn to the importer) or the importer’s written undertaking to buy the documents.
The types of documents that are the object of collection:
1. an invoice
2. an insurance document
3. a transport document
4. other : bill of exchange, certificate of quality, certificate of origin, packing list etc.
The advantages and disadvantages for the exporter:
the advantages:
when sending the documents representing the goods, he is sure that the bank will not release them to the importer before specific conditions are fulfilled.
the disadvantages:
if the importer does not fulfill the conditions required for the release of documents, the bank will not release these documents to him and he is then forced to seek a new buyer in the country of destination for the goods.
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The advantages and disadvantages for the importer:
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the advantages:
before the documents are bought, he has the possibility to see them and based on them, he decides whether they secure his interests and whether the goods are safe and were sent in accordance with his instructions, and whether the policy gives an as-surance of the refunding of his costs if the goods are lost or damaged;
he is always free to refuse to buy the documents.
the disadvantages:
none
Documents to upload:
Documentary collection - tariff
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