How Does It Work?
After the exporter ships the goods, it submits the loading documents and its order to its bank. Importer's bank sends the loading documents to Aktif bank which is the collecting bank. Aktif Bank submits the policy to the acceptance of the importer and adds bill of payment if it is required and finally it delivers the documents to the importer. Importer makes the policy payment when due.
1. Do not inspect loading documents.
2. Do not get into the liability of payment unless they add any bill of guarantee in the policy.
3. Do act independently from sales contract.
1.Low cost – it enables cost controlling with the help of low expenses of the banks
2.It's a simpler and easier payment method compared letter of credit.
3.Exporter can have a bank guarantee regarding the payment by demanding a bill of payment on the policy.
4. Since the importer clears the goods without making any payment, it will have the chance to control whether they are in accordance with the contract or not.
Exporter faces the risk that the importer may not make the payment for the goods although it has loaded them. (if there is not any policy with a bill of payment)