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  • Payment in Advance - All import duties, fees and handling charges are paid in advance. In the event there are changes to the items, quantities or the overall anticipated fees are incorrect, the entity paying up front bears additional risk. If payment in advance is required, importers should try to use a letter of credit.
  • Documentary Credit - The technical term for letter of credit
  • Documentary Collections - Instruction from an exporter (seller or supplier) to a remitting bank, normally the exporter’s local bank, to collect payment immediately or at a future date from an importer (buyer) against delivery of the relevant commercial documents.  Documentary collections function like a letter of credit, however the burden of documentation and values are supplied by the seller/exporter. Importers should still monitor these communications to ensure agreed upon costs are still being used. 
  • Open Account - An agreement between an importer and an exporter whereby goods are supplied on the understanding that payment will be effected at an agreed future date. Payment can be made after goods have been imported. This method is used when there is a high level of trust between exporters and importers. 

Templates and Tools

viewTEMPLATE - fileDonation Letter

nameTEMPLATE - Certificate of Origin.xlsxheight250

References 

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