Collection is an operation often used in international settlements
In order to find out as accurately as possible whatthen this or that word from the business lexicon, it is better to apply to legislative acts. In this article we will discuss the meaning of the term "collection". This concept was reflected in article number 874 of the second part of the Civil Code. According to it, for settlement operations under the scheme of collection, the credit organization must, on behalf of its client and at its expense, make a set of actions to receive payment from the payer under the contract or its acceptance (the consent to pay is implied).
Collection is an operation that is often usedin international settlements. In this case, the exporter brings an order for collection to the servicing bank and appends accompanying documents to it. It should be noted that not every financial institution provides such services. The credit institution, in turn, sends the order to the country of delivery of the goods, to the correspondent bank, which will interact with the importer. The correspondent financial institution issues the goods to the importer, receiving payment from it, which is transferred to the original bank, and then to the exporter.
There are several types of collection - thisthe so-called clean and documentary. Documentary is almost always accompanied by the transfer of commercial or commodity documents. It is considered quite risky, since there is a time gap between the receipt of the final payment and the initial transfer of documents to the bank and the shipment of the goods. In addition, when a package of documents arrives at a correspondent bank, the importer may not have the means to pay or even be bankrupt.
What schemes are used to reduce the risk oftransactions with collection? These are the so-called operations with a pre-received guarantee from the correspondent bank. It is transferred by this credit institution to the bank that works with the exporter. And he, in turn, provides bank guarantees to the company that conducts the export.
Clean collection is an operation whencommodity documents are not transferred. Instead, financial documents (check for collection, transfer bills, etc.) are used for the operation. In this case, if a person owns, for example, a check of a foreign bank, where it is possible to receive money within a limited time, it can apply to a Russian bank for the aforementioned operation. The Russian financial institution will require the client to present a passport and fill out a number of documents. After that, the check will be taken and sent by interbank to the issuing bank. If everything is in order with the financial document, the foreign credit organization will transfer the money to the Russian bank, and it will in turn transfer it to the original holder of the check.
Also in foreign banks can be sentcurrency for collection. This operation in accordance with Federal normative act No. 173 (adopted in 2003, December 10) is among the possible transactions concluded between residents of our country. In particular, Sberbank accepts foreign money for collection in Russia.
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