Exchange of goods and services in the international market is a relatively complicated and risky process: turnover of goods and financial resources take place beyond the country borders and oftentimes is connected to concerns whether buyers and sellers are able to fulfill their commitments. SEB bank Documentary Collection (as well as Letter of Credit or Bank Guarantee) will considerably diminish your company import or export transaction risks and provide guarantees both for exporter and importer of goods.
We recommend choosing SEB bank Documentary Collection in cases, when you would like to limit the transaction risk, and:
Documentary Collection – in comparison with regular bank payment order – is more secure way of receiving payment for goods or services. Documentary Collection is cashing in amount of money from buyer in certain term in exchange for financial and/or trade documents with the assistance of a bank:
Unlike with Letter of Credit, in case of Documentary Collection the bank will not undertake commitment and responsibility for making payments.
It means that Documentary Collection does not guarantee timely payment to the seller from the buyer and does not provide a guarantee, that the buyer will receive goods. The bank is only a mediator that will keep transaction documents until the payment will be made for goods or services, as well as will remind the buyer about the payment deadline.
Documentary Collection is a separate, independent transaction from trade or other agreements – all parties involved in Documentary Collection are operating only with documents, not goods or services that there documents refer to.
Documentary Collection is a safe and internationally recognized type of payment – its operations are regulated by rules issued by the International Chamber of Commerce "United Collection regulations" Nr. 522, 1995, version (URC 522). SEB bank has a significant international trade experience – we have secured Documentary Collection transactions not only in Europe and the United States, but also in such countries as Uruguay, Pakistan, Nigeria and others.
Documentary Collection professing for standard transaction at SEB bank costs on average no more than EUR 150. Most often SEB bank service costs are covered by SEB bank clients.
For minimizing transaction risks you can also choose to use other SEB bank services – Letter of Credit or Bank Guarantee.
Read more about Letter of Credit
Read more about Bang Guarantee
Documentary Collection |
Letter of Credit |
Bank Guarantee /Pledge |
---|---|---|
Type of payment |
Type of payment |
Instrument for limiting risk |
Payment for trading documents |
Payment for trading documents |
Takes place without making a payment |
Documents are not returned to the buyer without payment or pledge to pay for goods within a certain time frame |
Documents are not returned to the buyer without payment or pledge to pay for goods within a certain time frame |
Documents can be requested only in case of guarantee payment
|
Bank does not have a commitment to pay |
Bank has a commitment to pay |
Bank has a commitment to pay |
If necessary, our bank specialist will provide a consultation to you and will help to choose the most beneficial type of Documentary Collection for your transaction:
Seller and buyer conclude a trade agreement and agree that Documentary Collection will be used as form of payment for this transaction.
In accordance with agreement conditions, the seller sends goods to the buyer.
Seller fills-out and submits to his bank transaction documents together with Documentary Collection order that lists conditions on which the bank can issue the mentioned documents to the buyer.
Seller's bank sends Documentary Collection order to buyer's bank.
Buyer's bank announces to the buyer about receipt of Documentary Collection order and informs about conditions to receive these documents from the bank. Before acceptance of documents the buyer has the right to see the documents at the bank. .
If buyer agrees to the conditions of Documentary Collection, buyer's bank transfers the documents to him in exchange for immediate payment or post-payment – by accepting that.
If buyer receives documents in exchange for immediate payment, the buyer's bank transfers the amount mentioned in the documents to the seller's bank immediately after the transfer of documents to the buyer. If documents are transferred to the buyer by acceptance of that, then the amount is transferred to the seller's bank in the agreed term.
After receipt of payment, the seller's bank from the buyer's bank transfers money to the seller.
In force from | In force to | |
---|---|---|
Documentary collection order |
25.05.2018
|
In force
|
Services | Fees |
---|---|
Import Documentary collections |
|
Handling and payment of documentary collections | 0,2%, min 100.00 EUR |
Notification of changes to documentary collection/release of documents without payment | 45.00 EUR |
Export Documentary collections |
|
Handling and payment of documentary collections | 0,2%, min 80.00 EUR |
Changes to/cancellation of documentary collection | 45.00 EUR |
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