When the government and central bank decided to cancel that bitumen in order to revive the Egyptian markets, citizens began to inquire about the distinction between documents of collection and documentary credits, which had an impact on the accumulation of goods with customs in the ports despite market demand.
First, documented credits are a form of payment used in the sale contract to safeguard both the seller (the source) and the buyer (imported).
The documentary accreditation provides a guarantee (typically at the request of the buyer bank) that the seller will receive payments before the completion of cargo shipping. This is where the distinction between the letter of guarantee and the documentary credit becomes clear in the case of the seller.
The source and importer come to an agreement, sign a contract, and promise to pay using documentary credits.
Additionally, the importer opens a document accreditation in his bank that is favourable to the source.
The request is then granted and the dependence is submitted to the Bank of Balad al-Masdar after the bank has studied the customer’s request and the terms of their dealings together.
According to the bank’s contract with the source, the imported bank provided the documentary accreditation, which was then improved as needed.
Then comes the exchange between the ship of the ship and the source, where the source gives the ship’s captain the package and receives the shipping documentation.
Second: The documentary collection sends the documents and shipping documents to the importer, which in turn verifies the conformity of the documents with the conditions of the documentary credit, then the price of the goods is sent to it.
The documents are sent to the imported bank in which the documentary accreditation opened after the completion of the payment according to the agreement between them, the importer receives the goods after delivering the shipping documents to the agent of the navigation company in the port of arrival.
The banks create coverage plans and permanently filter the relationships.
What distinguishes documentary credits from collection documents?
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