Trade Finance Advisory

Documentary Remittances

Documentary Remittances or Collections are regulated by the ICC Uniform Rules for Collections (URC), publication No. 522. Much like documentary credits, documentary remittances are trade finance instruments, whereby the exporter entrusts their bank with the collection of payment for goods supplied. The exporter’s bank (also known as remitting bank) sends the shipping documents, air waybill, bill of lading, commercial invoice,

certificate of origin, insurance certificate, packing list, as well as any other documents required for customs clearance, to the importer’s bank (also known as collecting bank), together with the payment instructions.

A typical documentary collection transaction is illustrated below:

1. A sales contract is entered into by the exporter and the importer and a purchase order is accepted.

2. The exporter delivers the goods to the importer and the shipping documents are received by the exporter.

3. The exporter instructs their bank to deliver the documents to the importer against the bill of exchange.

4. The exporter’s bank forwards the shipping documents to the presenting bank.

5. The importer’s bank presents the shipping documents to the drawee (importer), who checks and accepts the Bill of Exchange.

6. The presenting bank then gives the drawee the documents and.

7. Returns the accepted Bill of Exchange to the remitting bank.

8. The remitting bank returns the accepted Bill of Exchange to the drawer (exporter).

9. The drawee (importer) presents the full set of original documents to the shipper and receives the goods.