Documentary Collections check0 / 1 answered · 0 correct
Check 1
What is a major seller risk under D/A?
Risks and Practical Checks
Understand refusal, storage, documents, maturity and buyer credit risk.
Buyer refusal
If the buyer refuses payment or acceptance, banks cannot normally force the buyer to take the documents merely because a collection was sent.
Goods and storage
Perishable goods, demurrage, storage charges and customs issues can quickly become expensive if documents are not taken up.
D/A credit risk
After documents are released against acceptance, the seller may have only the buyer’s future payment obligation unless a separate guarantee or bank acceptance exists.
Collection instructions
Clear instructions on charges, interest, protest, partial payment and what to do on non-payment are important.
Remember thisCollections can reduce document-control risk but do not remove buyer credit and country risk.
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