International Conference on Eurasian Economies
1-3 July 2014 – Skopje, MACEDONIA
Paper detail
Paper ID : 1164
Status : Paper published
Language : Turkish
Topic : Law
Presenter: Prof. Dr. Adnan Deynekli
Session : 2E Hukuk I
Payment against Documents in International Trade
Uluslararası Ticarette Vesaik Mukabili Ödeme
- Prof. Dr. Adnan Deynekli (Bahçeşehir University, Türkiye)
Abstract
As compared to internal trade, international trade involves several risks, which can be specified as commercial, physical, political and legal risks. Cash against documents (documentary collection) is a type of payment method applied to reduce the legal risks in a transaction. This payment method is a reassuring way for the Importer, since he is not under any obligation to make a payment before examining the document and confirming its conformance to the terms of order. Cash against documents is more reliable than cash against goods (open account) on the one hand, but less reliable than letters of credit on the other hand. Cash against document is one of the most commonly used payment methods in international trade as it offers a cost-effective and simple system and processes faster than cash against goods. Rules regarding cash against documents are governed by International Commerce Chamber Brochure no. 522 (Uniform Rules for Collection-URC), which is a set of guiding principles with a non-statutory character. There is no specific regulation exists on cash against documents in Turkish Law. In order to apply the rules on cash against documents in a transaction, “documentary collection/cash against documents clause” should be incorporated into the text of contract. Parties to a documentary collection are the Principal (seller/exporter/drawer), the Remitting Bank, the Collecting Bank and the Drawee (buyer/importer).
JEL codes: A10
Deynekli, Adnan (2014). "Payment against Documents in International Trade" in Proceedings of International Conference of Eurasian Economies 2014, pp.974-978, Skopje, MACEDONIA.
DOI: https://doi.org/10.36880/C05.01164
