Documentary remittance

Documentary remittance is another term for documentary collection. It is a banking procedure whereby the seller instructs their bank to forward documents to the buyer's bank, with instructions to release them only against payment (D/P) or acceptance of a draft (D/A).

Documentary remittance is governed by the Uniform Rules for Collections (URC 522) of the ICC. The documents transmitted may include:

• Financial documents: bills of exchange, promissory notes, cheques
• Commercial documents: invoices, transport documents, insurance certificates, certificates of origin, packing lists

Advantages of documentary remittance:

• Moderate cost: 0.1 % to 0.5 % of the amount (significantly less than an L/C)
• Simple procedure: less formalism than a letter of credit
• Documentary control: the buyer only obtains documents upon fulfilling the stipulated condition

Its limitations are the absence of bank commitment and the risk that the buyer refuses to collect the documents. It is recommended between established partners, in stable countries, for moderate amounts.