ch4 Collection.ppt

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1、ChapterFourCollectionDefinition,partiesandtypesofcollectionProcedure,outwardandinwardcollectionRiskprotection4.1Introduction4.1.1Definition:Collectionisanarrangementwherebythegoodsareshippedandarelevantbillofexchangeisdrawnbytheselleronthebuyer,and/o

2、rshippingdocumentsareforwardedtotheseller’sbankwithclearinstructionsforcollectionthroughoneofitscorrespondentbanklocatedinthedomicileofthebuyer.AccordingtothedefinitiongivenintheUniformRulesforCollections“Collection”meansthehandlingbybanksofdocuments

3、inaccordancewithinstructionsreceivedinorderto:i.obtainpaymentand/oracceptance,orii.deliverdocumentsagainstpaymentand/oragainstacceptance,oriii.deliverdocumentsonothertermsandconditions.“Documents”meansfinancialdocumentsand/orcommercialdocuments:i.“Fi

4、nancialdocuments”meansbillsofexchange,promissorynotes,cheques,orothersimilarinstrumentsusedforobtainingthepaymentofmoney.ii.“Commercialdocuments”meansinvoices,transportdocumentsoftitleorothersimilarinstruments,oranyotherdocuments,whatsoever,notbeingf

5、inancialdocuments.4.1.2Parties1.Theprincipal(seller/exporter/drawer)Theprincipalisgenerallythecustomerofabankwhopreparesdocumentation(collectiondocuments)andsubmitsthemtohisbank(remittingbank)withacollectionorder(collectioninstruction)forpaymentfromt

6、hebuyer(drawee).2.Theremittingbank(principal’s/seller’s/exporter’sbank)Theremittingbankisthebankreceivingdocumentationfromthesellerforforwardingtothebuyer’sbankalongwithinstructionforpayment.3.ThecollectingbankorpresentingbankThisisthebankthatpresent

7、sthedocumentstothebuyerandcollectscashpaymentorapromisetopayinthefurtherfromthebuyerintheexchangeforthedocuments.Normallythecollectingbankisacorrespondentorbranchoftheremittingbankintheimporter’scountry.Ifthecollectingbankisnotlocatedneartheimporter,

8、itwillsendthedocumentstoapresentingbankintheimporter’scity.4.Thedrawee(buyer/importer)Thedraweeisthepartythatmakescashpaymentoracceptsadraftaccordingtothetermsofthecollectionorderinexchangeforthedocumentsfromthepresenting/collectingbankandtakesposses