Bills for Collection means the handling by banks of documents (financial and/or commercial documents) in accordance with instructions received, in order to:
- Obtain payment and/or acceptance; or
- Deliver documents against payment and/or against acceptance; or
- Deliver documents on other terms and conditions
There are two types of Bills for Collection, namely (a) Clean Collection and (b) Documentary Collection.
- Clean Collection means collection of financial documents not accompanied by commercial documents.
- Documentary Collection means collection of:
- Financial documents accompanied by commercial documents;
- Commercial documents not accompanied by financial documents.
Under a Documentary Collection, the seller ships the goods to the buyer in the importing country and hands over to the former’s bank financial, commercial and transport documents relating to the goods and their shipment. In the case of Clean Collection, only financial documents are handed over to the bank.