Introduction
Clean collection means the collection business of financial documents without any commercial documents as entrusted by the customer of Bank of China.
Functions
It is used for international trade settlement in two forms: documents against payment (D/P) and documents against acceptance (D/A).
Features
1. Low costs. The banking fee is relatively lower for clean collection service.
2. Safe and secure. Collecting money using the international banking network is a safer collection method as compared with direct mailing of the draft to the drawee.
3. Fast service. The collection time can be largely reduced if an "immediate credit" agreement is made between the remitting bank and the paying/collecting bank.
Target Customers
1. Small payments under trading or non-trading items.
2. Foreign currency notes (including worn notes) non-exchangeable in China.
3. Collection service for valued certificates including foreign exchange cheques, promissory note, foreign bonds, and deposit receipts.
4. Transactions where commercial documents are unable or inconvenient to be provided such as mailing samples, high tech products (software) trading, seasonal goods trading, and intangible trading such as services and technical transfers.
Application Qualifications
The applicant shall be approved and registered in accordance with the law, and hold a business license that has passed the annual inspection or other valid certificates which fully prove its legal operation and scope of business.
Process (a solid line is drawn for collection to paying bank)
1. The payee presents the collection documents to Bank of China.
2. Bank of China will mail the collection documents to the foreign collecting bank to collect payments.
3. The foreign collecting bank presents documents to the payer and the payer pays the face amount.
4. The foreign collecting bank pays the collection to Bank of China and Bank of China pays it to the payee.
Kind Reminder
1. Clean collection is used for collection of documents and valued certificates under trading and non-trading items;
2. The currency denominated in the collection documents should generally be exchangeable currency;
3. Documents marked with limitation of circulation areas are difficult to be collected;
4. Documents endorsed with transfer have the risks of fraud of being faked or altered so you should exercise due precautions;
5. Fraud usually lies in documents that are strange, of huge amount, or issued by an issuing bank which with questionable credit;
6. The large-amount documents used for investment, loans and mortgage bear more risks of fraud.
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