Documentary Collections can provide the exporter and the importer with a compromise between open account trading (or payment in advance for the settlement of transactions) and documentary credits.
A Documentary Collection can offer the exporter a degree of security in the transaction which is not inherent in an open account method provided all the documents of title are handled by a bank. The bank will have control over the goods through the title documents and can arrange, for one of its overseas correspondents, to release such title only against payment or acceptance.
Australian Banks, in common with banks in many other countries, have adopted the International Chamber of Commerce rules as set out in Publication No. 522- Uniform Rules for Collections (1995 revision) Commonly Known as “Uniform Rules for Collections” or “URC”.
These rules set out the procedures to be followed by all parties concerned, including the liabilities and responsibilities of banks and customers involved with collection transactions. They endeavour to eliminate difficulties (created by differences in banking phraseology and procedures) in different countries by setting out standard practices that banks can apply.
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